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I Told You So

I Can Smell It In The Air

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Not long now, I think the last few weeks have been pivotal;

Shock drop off in lending during Feb

Acceptance even by the media that rates are not going to fall, even a few economists predicting rises

US rates still have at least 0.5% to go

Japan rates to rise first time for 5 years

ECB to hit at least 3.00% maybe more

CPI back up to 2.0%

Smells like a crash, has all the ingredients of a crash, only one missing a little splash of

An interest rate rise

Resulting in the first stages of a crash, drawn out over the next few years, leaving property 30% to 40% off todays prices.

Nigella couldn't do better :D

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Not long now, I think the last few weeks have been pivotal;

Shock drop off in lending during Feb

Acceptance even by the media that rates are not going to fall, even a few economists predicting rises

US rates still have at least 0.5% to go

Japan rates to rise first time for 5 years

ECB to hit at least 3.00% maybe more

CPI back up to 2.0%

Smells like a crash, has all the ingredients of a crash, only one missing a little splash of

An interest rate rise

Resulting in the first stages of a crash, drawn out over the next few years, leaving property 30% to 40% off todays prices.

Nigella couldn't do better :D

Don't forget a pinch of rising unemployment, a sprinkle of crashing car sales, some VI hype for a little spiciness and slowly bring all to the boil until it all goes "Pop!"

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Smells like a crash, has all the ingredients of a crash, only one missing a little splash of

An interest rate rise

All I can smell is sausages and onion – the smell of a crash has been lingering for far to long – how many hot dinners are you going to smell before you wipe a house crash of your smug lips

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how many hot dinners are you going to smell before you wipe a house crash of your smug lips

My guess is about another six months worth before interest rates start rising.

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There was a worrying IR chart on the BBC yesterday showing a diminishing IR cycle in the UK. If you were a chartist you'd be convinced we were at the top of the current cycle and the next move would be down - similar in a way to the famous 'You are here' house price chart, it made me nervous.

If IR's drop 0.5% or more a lot of people are going to jump in and sustain the madness, and that's all that needs to happen to postpone a crash. Brown's reiteration of "no more boom or bust" yesterday also suggests this is what he's thinking - keep the party going another few years till after the election.

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My guess is about another six months worth before interest rates start rising.

I don’t know –it’s a hard one – all balancing on interest rates – on one hand you have a economy that’s not doing that well so the rates should be cut – but inflation could rise (although I doubt it as it would have by now) and they would raise IR’s by 0.25 % - but IR’s have already been there and it didn’t crash then

So what do you think will make them raise IR’s and by how much

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I was only thinking this morning...I feel good today...I feel really good today, I have a feeling, a gut feeling that this long awaited decline in prices is beginning to show. There are houses now which are beginning to show the inseeist winseeist signs of being an absolute bargain :D

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If IR's drop 0.5% or more a lot of people are going to jump in and sustain the madness, and that's all that needs to happen to postpone a crash. Brown's reiteration of "no more boom or bust" yesterday also suggests this is what he's thinking - keep the party going another few years till after the election.

Exactly the same thought crossed my mind when I heard him say that.

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Brown is not in control of world IR and they are all headed up and there is not a thing he can do about it. If he drops 'em its a sterling crisis with a vengeance. If the pound tanks (it dropped almost 100 points today on the housing data from the US) enemy number 1 takes off-inflation caused by higher import prices--esecially fuel. If he stands pat the same thing will apply only later--after the rest of the world has more competitive rates.

Gordon has got us all between a stone and a rigid place I am afraid. It just proves that the economic cycle cannot be beaten. The HPI/MEW orgy is over and now is the time to start paying for it.

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Sorry not this year, I'm afraid you will have at least another five years of dead money to pay in rent before its worth buying again.

Missing the boat is tough, and those that bought five years or more ago can easily hedge the bet with a 10yr fixed rate loan.

5years and you will find yourself coming out into the highest interest rates for decades.

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Sorry not this year, I'm afraid you will have at least another five years of dead money to pay in rent before its worth buying again.

Better than paying twice as much dead money in interest to the bank.

5years and you will find yourself coming out into the highest interest rates for decades.

Excellent news. Many people here will be able to buy a cheap house for cash, and their savings will be earning lots of interest in the meantime.

Or wasn't that what you meant?

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Resulting in the first stages of a crash, drawn out over the next few years, leaving property 30% to 40% off todays prices.

:D

And of course that will happen in isolation to the rest of the economy meaning that all those FTB's who are hoping for a crash will still have jobs to enable them to buy.......won't it? I meam a 30-40% reduction in house prices wouldn't result in mass unemployment would it? What do you think?

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Better than paying twice as much dead money in interest to the bank.

Excellent news. Many people here will be able to buy a cheap house for cash, and their savings will be earning lots of interest in the meantime.

Or wasn't that what you meant?

Dammit! You beat me to it! :lol:

On another note - Laurejon: your avatar is great! Makes me giggle everytime :lol:

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And of course that will happen in isolation to the rest of the economy meaning that all those FTB's who are hoping for a crash will still have jobs to enable them to buy.......won't it? I meam a 30-40% reduction in house prices wouldn't result in mass unemployment would it? What do you think?

If there was a 40% crash tomorrow, I could buy for CASH, I'd definitely take my chances with a deep recession if that happened. However I think the more likely scenarios are either mixture of rising inflation and interest rate rises over the next 5-7 years or a Japanese style long slow slide with low interest rates for 15 -20 years.

Not much fun which ever way you look at it, really!

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If there was a 40% crash tomorrow, I could buy for CASH, I'd definitely take my chances with a deep recession if that happened. However I think the more likely scenarios are either mixture of rising inflation and interest rate rises over the next 5-7 years or a Japanese style long slow slide with low interest rates for 15 -20 years.

Not much fun which ever way you look at it, really!

Yep if you have the cash then great. I suspect that there are quite a few STR's who are in the same position and who are behind this HPC thing. However, it is the gullible FTB's who would need a job and a mortgage who have been sucked into this "30-40% crash is the answer to all our problems" who I feel sorry for. A HPC is possibly the worse thing that could ever happen to them - as we speak they have no house of their own, following the crash, they will have no house and quite probably no job either. These people would be far better hoping for a slow decline in real house prices over the next 5 years or so.

Edited by nodumsunreader

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Yep if you have the cash then great. I suspect that there are quite a few STR's who are in the same position and who are behind this HPC thing. However, it is the gullible FTB's who would need a job and a mortgage who have been sucked into this "30-40% crash is the answer to all our problems" who I feel sorry for. A HPC is possibly the worse thing that could ever happen to them - as we speak they have no house of their own, following the crash, they will have no house and quite probably no job either. These people would be far better hoping for a slow decline in real house prices over the next 5 years or so.

Just for the record, I'm not an STR!

An HPC is not really the worst thing that can happen to an FTB. Assuming as you do that a HPC will cause a recssion, then consider thes. During the last recession unemployment reached 10%, that compares with 80% of potential FTBers priced out NOW.

I'm not saying that a recession is a good thing, but it's all swings and roundabouts really as a young person these days - screwed whichever way you turn.

Also I'm not so sure a long slow slide is so good either - look at Japan 20 years of deflation.

deflation + debt = VERY BAD!!

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If there was a 40% crash tomorrow, I could buy for CASH, I'd definitely take my chances with a deep recession if that happened.

Exactly. And a recession would push so many people over the brink that prices would probably drop far more than 40%.

Why anyone with maybe 100k in the bank would worry too much about being laid off is beyond me. I almost got laid off from my job a few weeks ago: after the initial surprise it was a case of 'big deal: I get free money and can either look for a new job at a higher salary or just go live abroad'.

That's the nice thing about not being in debt. You don't have to give a crap.

Credit is slavery. Big mortgages in a rising interest environment is suicidal.

Edited by MarkG

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I don’t know –it’s a hard one – all balancing on interest rates – on one hand you have a economy that’s not doing that well so the rates should be cut – but inflation could rise (although I doubt it as it would have by now) and they would raise IR’s by 0.25 % - but IR’s have already been there and it didn’t crash then

So what do you think will make them raise IR’s and by how much

Wrong.

It all balances on employment.

Unemployment goes up at the end of a housing boom.

I'd love to know how rising unemployment is going to sustain this bubble.

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Exactly. And a recession would push so many people over the brink that prices would probably drop far more than 40%.

Why anyone with maybe 100k in the bank would worry too much about being laid off is beyond me. I almost got laid off from my job a few weeks ago: after the initial surprise it was a case of 'big deal: I get free money and can either look for a new job at a higher salary or just go live abroad'.

That's the nice thing about not being in debt. You don't have to give a crap.

Credit is slavery. Big mortgages in a rising interest environment is suicidal.

Not a boast but I have got 100k in the bank a wife 2 baby’s and I still don’t no what to do some of the time scales posted are just impossible it cost me £1150 pm just to rent a decent house in a nice area talk of waiting 2-5 years would be a waste of money what do you suggest :(

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it cost me £1150 pm just to rent a decent house in a nice area talk of waiting 2-5 years would be a waste of money

And how much would mortgage interest and maintenance for the same house cost?

I don't know about where you live, but around here I'd guess it would cost around twice as much as renting. If that's the case, you're saving money every day if house prices are static or falling.

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Exactly. And a recession would push so many people over the brink that prices would probably drop far more than 40%.

According to the Nationwide figures prices only fell around 18% in nominal terms (£££) during the last crash/recession. (UK average)

This is DESPITE rates going from 8% to 15% in 1989 and staying high for three years.

...and despite the ERM disaster from 1990-1992.

... and despite Black Wednesday when we finally pulled out of the ERM.

... and despite 10% unemployment.

Or do you include a correction for inflation in your 'far more than -40%' prediction?

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as we speak they have no house of their own, following the crash, they will have no house and quite probably no job either. These people would be far better hoping for a slow decline in real house prices over the next 5 years or so.

as a potential ftb....if its quite possible that I would lose my job following a crash I'd prefer NOT to "own" a house rather than "own" one...wouldn't you?

Edited by feltsorryfor

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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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