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music man

Housing 20% Overvalued

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Firstrung are using the same analysis as previously placed on this site.

If two 'reputable' professional institutions are saying that asking prices are on ave. £200K+ (Rightmove) and Nationwide say the ave. selling price is under £160K then it follows that houses are 20% overvalued before taking into account future developmments.

I can't find the HPC link at the mo.

http://firstrung.co.uk/articles.asp?pageid...=1363&cat=1-0-0

Edited by music man

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Firstrung are using the same analysis as previously placed on this site.

If two 'reputable' professional institutions are saying that asking prices are on ave. £200K+ (Rightmove) and Nationwide say the ave. selling price is under £160K then it follows that houses are 20% overvalued before taking into account future developmments.

I can't find the HPC link at the mo.

http://firstrung.co.uk/articles.asp?pageid...=1363&cat=1-0-0

Rightmove's figures are somewhat of a joke now that their methodology has been exposed. Seeding the stats with loads of 100 million pound bedsits suggests that anything Rightmove may say about prices are as exaggerated as their listing prices! :lol:

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This is ancedotal, but I have a problem with the 20% figure. In 2001 houses here was priced at £150k. Today they are priced at £400k. A 20% overprice would make it £320k which is still way overpriced.

The more expensive the house, the more it will come down by. EAs have had a field day over valuing houses. When the crunch comes, don't be suprised if houses come down between 20% and 60%

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This is ancedotal, but I have a problem with the 20% figure. In 2001 houses here was priced at £150k. Today they are priced at £400k. A 20% overprice would make it £320k which is still way overpriced.

The more expensive the house, the more it will come down by. EAs have had a field day over valuing houses. When the crunch comes, don't be suprised if houses come down between 20% and 60%

That is very bold. :o

It would amaze me, but I can see a chance. I think we'll all sufferbadly if this happens.

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That is very bold. :o

It would amaze me, but I can see a chance. I think we'll all sufferbadly if this happens.

I have to agree with the 20-60%. As HPI has been around 130% since about 1996 giving half of that back would be a mild correction. The dips following the peaks seem to be about 50% according to Nationwide's chart on this website's home page.

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I have to agree with the 20-60%. As HPI has been around 130% since about 1996 giving half of that back would be a mild correction. The dips following the peaks seem to be about 50% according to Nationwide's chart on this website's home page.

I have my own little "measure" of affordability of houses, calculated over a long time working for the same manufacturing company (not in same job though!). It's based on what I paid for a house in 1984, and my wages. Essentially I was on 5K a year then and a 2 bed house cost about 27.5K. We bought as a couple with a 3 x joint salaries mortgage.

Thus, the factory worker wages / 2 bed house / buying as couple affordability index is about 5.5 times. These days, the same factory worker gets about 14K, therefore a 2 bed house should be about 77K.

In my area (suffolk), the prices have come down a bit recently, the 2 bed house was about 125K, but now 115K, even so, according to my index, they are still 33% overvalued.

Obviously higher price houses may come down more, and less priced houses less, but I agree with the 20-60% figure, depending on house size.

OK, it's only my own affordability index, based only in my area, but, it worked out roughly the same in the mid 90's (pre rises again), then the factory worker got 9K, and the 2 bed was about 48K.

BV

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Firstrung are using the same analysis as previously placed on this site.

If two 'reputable' professional institutions are saying that asking prices are on ave. £200K+ (Rightmove) and Nationwide say the ave. selling price is under £160K then it follows that houses are 20% overvalued before taking into account future developmments.

I can't find the HPC link at the mo.

http://firstrung.co.uk/articles.asp?pageid...=1363&cat=1-0-0

D`ya now I`m starting to regard smartnewhomes data as more and more relevant, not just because they announced a 4% fall last year I just think their data is cleaner, less stepped on by the pushers seems a good analogy :P Also ther data refers to the BTL crowd more..

http://firstrung.co.uk/articles.asp?pageid...articlekey=1284

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I don't mind tellin' you all that if houses are only 20% overvalued then I am down and out for good. I'd need a 40% reduction at least to even be in the running for anything.

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I don't mind tellin' you all that if houses are only 20% overvalued then I am down and out for good. I'd need a 40% reduction at least to even be in the running for anything.

Exactly. A 20% crash will still leave house unaffordable for most. 20% to me is a soft landing.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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