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RichM

The Night Is Darkest Before Dawn

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OK, quite a few whingers, backsliders, heretics, and mutineers on the site of late. Some extremely boring "well it hasn't happened yet, you're dumb, there won't be a crash" posts too. All very droll

So time for RichM to step up to the plate and sort the whole show out. Listen up, team:

POINT ONE - TRYING TO PIN THIS ON SOMEONE IS POINTLESS

It was New Labour

It was Gordon Brown

It was the banks

It was the Estate Agents

It was the surveyors

It was the bloated baby boomers

It was Thatcher

It was the BBC/Channel Four

It was Kirtie Allsopp

It was the CPRE (a recent favourite)

It was the immigrants

It was the Dot com crash

It was George Bush

It was Julie Andrews together with the cast of Brookside

It was all of them, it was some of them, it was none of them. It doesn't really matter. Yes, plenty of people have a vested interest in ramping property. But that's irrelevant now. Where we are is bang smack in the middle of a huge asset bubble. MILLIONS of people are involved in the property market. They understand as much about the causes of this present situation as I understand about the workings of Formula One car.

The collective mindset of millions of "homeowners" is a pretty powerful thing. You cannot shift that mindset overnight (unless your name's Mervyn King and you have comprising photos of the rest of the MPC ;) )

Talk of campaigns, pressure groups, marches, etc etc is all a waste of time. You won't be able to convince many people it's a tragedy that the house they bought for £100K is now worth £400K.

Our trump card is that this is a market - and market forces will eventually sort the situation out.

POINT TWO - LET'S ACKNOWLEDGE JUST HOW RIGHT WE'VE BEEN SO FAR

Yup, it hasn't crashed yet. And?

Two years ago there wasn't a cloud in the sky. Many folk on here were ridiculed for suggesting that we were due a fall and that our economy was built on sand. I remember the discussion around the debt issue - MEWing was contributing 10% of consumer spending. Our consumer-based economy was going to go tits-up the moment people couldn't borrow any more on their property. What happened next?

We're now fairly heavily into a retail recession, oil is a constant menace, unemployment is leaping at the fastest rate since the early 90s, manufacturing is on its knees, the public sector spending binge is unsustainable, and no one has even woken up yet!

POINT THREE - JUST BECAUSE IT HASN'T CRASHED YET DOESN'T MEAN IT WON'T IN THE FUTURE

This is a new paradigm. Low IRs are the single biggest cause of the property boom, and the single biggest thing keeping it going. They are kidding people that things are OK. They are also the thing that is going to make this so very, very painful.

Personal debt is still growing at a rate of 10% a year - that is about £10 billion pounds a month on houses, BTLs, and plasma screen TVs. Yet there is no chance of inflation eroding the burden of that debt. If it ever does, IRs are heading back up. It's a horrendous trap, and people are only just beginning to wake up to it.

Who's going to bail the housing market out? No one. Gordon Brown couldn't even allow SIPPS to include residential property for crying out loud, he hasn't the cash to bail out hundreds of thousands of heavily indebted FTBers, BTLers, etc.

POINT FOUR - GET A GRIP AND SIT TIGHT

I earn as much as my dad does now, aged 26 - my Dad is 30 years older. He was able to support a wife and two children on his one salary. There is no way I could do that now. For FTBers it makes sense whatsoever to buy right now. It is plain foolish.

If you STRed, I don't know what to say. Depends on when and where you did it. You may have missed the very top - but so what. Leave the last 10% to the market.

The madness might go on, but it will make sense no sense at all. There is no housing ladder, it is shot to bits. We're just waiting for a trigger to set this thing off.

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Thanks Rich, that's better.

They understand as much about the causes of this present situation as I understand about the workings of Formula One car.

Can you run me through that explanation you gave me earlier about the downforces produced by the front wing and how it can adversely affect cornering if the tyres aren't correctly matched to the surface temperature of the track?

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Guest Bart of Darkness

was this a subtle dig at charlie the tramp ?

Too subtle for the likes of me.

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was this a subtle dig at charlie the tramp ?

No

Thanks Rich, that's better.

Can you run me through that explanation you gave me earlier about the downforces produced by the front wing and how it can adversely affect cornering if the tyres aren't correctly matched to the surface temperature of the track?

It's all to do with surface area to volume ratios, STF.

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oh. my mistake. it was the bit above that got me thinking.......

Yes, there are at least two typos in my original post. It is late and I am a bit tired.

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smell the fear is worse. you can almost smell it.

dont think about it.

best not to.

if your wife gets a whiff of it its all over. you may as well head for beachy, creamy head. on a nice vespa.

in your mind the bullseye big gamble failure, fading drum roll will be in your head as you rev up the feeble italian motor.

and into the sexual abyss.

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I know it doesn't matter, but your list of culprits ought to have included

It was the Vendors

in your list. I'm still think there will be a major correction. The thing probably holding things together is the easy supply of money. Globalization is the force mantaining our first world life style. There are hundreds of millions of third world poor who have entered the money economy. Many are good savers and their hard earned money flows into the global property bubble. So add

It was the thrifty third world savers

to list. I'm confident about the medium/long term world economy. Including the UK. IMO the global property bubble will correct, not as dramatically as ghouls wish. It might take energy/rising IR to start this. This is more guess/feel but it seems we are in a gentle deflationary age. There is plenty of land and cheap workers in this world, its only energy thats globally in a short supply.

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would this be a good time to mention solar power ?

Well I meant "energy" as in the convenient form consumers have got used too. I have faith that property bubble will resolve itself. It seems every month the property hot spots shift further into developing lands. Recently I have seen glossy sunday supplements extolling Estonia, Dubai, Argentina. Next thing will be India, China at which point your third world savers will stop saving and join enthusiastically in the property game. Its the global side of the bubble that hasn't played out yet.

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RichM

A well timed reality check.

The more I see collective denial, VI spin and HPC devotees wavering, the more I know it is going to be different this time, very different! The collective ignorance, denial and amnesia of the vast majority places the enlightened in a very lonely place.

If I knew it was going to be the same as last time, I would find it strangely reassuring in a “been there survived and actually prospered last time” kind of way. This time it will be different and I find the enormity of the coming “Correction” and the fallout it will cause will have devastating consequences for our society.

Pablo Silver or Lead?

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Hi all,

We have to move.

Our EA had said they 6 serious buyers lined up to look at our property at the asking price.

So far no one has come to see our place.

I hate EAs. Roll on the crash.

Killerbee

Up the Bees

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Guest Winners and Losers

My 'pension adviser' tells me that there is no such thing as a 'crash'. What happens is that the overpriced property that sold for XYZ down the road at the peak, would now only sell for XYZ (less). So, he declares, property prices don't actually fall, they just go back down to what they should have been in the first place.

OoooKkkk. Um, I think that means that the property price has fallen. Geeesh.

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POINT FIVE

House prices up at fastest pace since '04, RICS

:huh:

Rubbish... I still look out my window and see the same properties for sale that have been for so many months..

Lies, damn Lies and Statistics..

these average house price whatnots can't even get close on what the average is..

the penchance people in this country have for the most obvious smoke to be blown up their collective bottoms never ceases to amaze me..

They will be so surprised when the market goes belly up.. as all have throughout time.

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I agree that there will be a crash but i just can't believe what i'm seeing at the moment.

Example- A good friend has just sold his house in 2 days to a cash buyer for full asking price! (Highest EA valuation of 3). The market (unbelieveably) still looks like its got a bit of life in it yet.

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Well said that man, RichM is the kind of fellow who would keep his head when all around him are losing theirs.

"If you can bear to hear the truth you've spoken

Twisted by knaves to make a trap for fools"

Kipling.

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Guest Fiddlesticks

I agree that there will be a crash but i just can't believe what i'm seeing at the moment.

Example- A good friend has just sold his house in 2 days to a cash buyer for full asking price! (Highest EA valuation of 3). The market (unbelieveably) still looks like its got a bit of life in it yet.

Where was this?? Remember that until they've exchanged contracts nothing is certain.

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A crash will not happen because it ain't happened yet.

And it's important to point out that house price crashes and recessions only occured in the past because our wise leaders wanted them to. They engineered economic downturns you see - it was all part of their long term strategic planning you see!

Now the all powerful ones know that the only way is up, it's time you all faced the facts that prices will not drop. NEVER EVER EVEN IF!

Edited by gruffydd

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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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