This Crash Isn't Going To Happen

[plumber999]

just to say we have all been forcasting doom and gloom for years now, nothing is happening. It does still bewilder me that house prices are at historically high multiples to wages. Me and the other half are on 80 grand between us, that would just get us a SMALL 2 bed flat in london. What is going on?

[underpressuretobuy]

just to say we have all been forcasting doom and gloom for years now, nothing is happening. It does still bewilder me that house prices are at historically high multiples to wages. Me and the other half are on 80 grand between us, that would just get us a SMALL 2 bed flat in london. What is going on?

"This Crash Isn't Going To Happen"

OK, fine.

So why hang around here?

As for "we have all been forcasting doom and gloom for years now" - speak for yourself, I haven't reached my first HPC anniversary yet. Neither have you.

Edited May 8, 2006 by underpressuretobuy

[Anti_Claus]

Why not?

[Its time to buy]

never give up hope

Edited May 8, 2006 by notanewmember

[underpressuretobuy]

Why not?

Apologies if you weren't talking to me, but you know, this place is called housepricecrash.

If you think house prices are sustainable why google it in the first place?

I just wonder how people with a bullish stance end up here in the first place.

That's all.

[Guest Winners and Losers]

Apologies if you weren't talking to me, but you know, this place is called housepricecrash.

If you think house prices are sustainable why google it in the first place?

I just wonder how people with a bullish stance end up here in the first place.

That's all.

I think he may have been asking plumber99 to say why there was not going to be a crash.

[bachelor]

just to say we have all been forcasting doom and gloom for years now, nothing is happening. It does still bewilder me that house prices are at historically high multiples to wages. Me and the other half are on 80 grand between us, that would just get us a SMALL 2 bed flat in london. What is going on?

To this I say, look at the fundamentals;

Affordability gone.

Are interest rates going to stay at 4.5% forever? No.

Is wage inflation going to increase significantly enough to cover the cost of purchase? No.

Are the banks going to keep on lending money when increasing numbers of people are defaulting on payments? No.

Historically markets have always corrected themselves, what makes this one so different?

Patience is a virtue.

[Guest Bart of Darkness]

"This Crash Isn't Going To Happen"

Never?

Not in 5 years?

Not in 10 years?

Not in 25 years?

No more boom and bust, ever?

Are you predicting the end of history? Just a boom that keeps on booming, always expanding, never contracting.

As for "we have all been forcasting doom and gloom for years now" - speak for yourself, I haven't reached my first HPC anniversary yet. Neither have you.

Nor me come to think of it.

[apom]

I think he may have been asking plumber99 to say why there was not going to be a crash.

http://news.bbc.co.uk/1/shared/spl/hi/in_d...ml/county29.stm

Exeter personally

[Flat Bear]

Apologies if you weren't talking to me, but you know, this place is called housepricecrash.

If you think house prices are sustainable why google it in the first place?

I just wonder how people with a bullish stance end up here in the first place.That's all.

Because they are worried

If a couple are on 80k they could easy save a nice size deposit in say 5 years and be able to afford a reasonably large mortgage. I cant see what the problem is, or is this a wind up?

Edited May 8, 2006 by Flat Bear

[sam]

Never?

Not in 5 years?

Not in 10 years?

Not in 25 years?

No more boom and bust, ever?

Are you predicting the end of history? Just a boom that keeps on booming, always expanding, never contracting.

Nor me come to think of it.

Quite right, the thread should have read "The crash is not going to happen YET"

A crash/correction will happen, but just not soon, if i was a betting man and someone asked me when will be the right time to buy, i would put my money on 10 years.

You are going to have to be patient

[Annie]

just to say we have all been forcasting doom and gloom for years now, nothing is happening. It does still bewilder me that house prices are at historically high multiples to wages. Me and the other half are on 80 grand between us, that would just get us a SMALL 2 bed flat in london. What is going on?

I feel the same say. What is going on? Not sure, but we're going to give it a few more years before we take the plunge. We've been waiting a while (years) and it seems like ages but we feel it's worth hanging on. We feel buying at the wrong time could make a whole different to our lifestyle, and waiting a couple more years to find out is worth it (prices are stagnant in the area we're looking at).

[TWT]

just to say we have all been forcasting doom and gloom for years now, nothing is happening. It does still bewilder me that house prices are at historically high multiples to wages. Me and the other half are on 80 grand between us, that would just get us a SMALL 2 bed flat in london. What is going on?

Hi,

We just had the timing really badly wrong.

Now that said, I do not know your age, but with 80K combined if you have a bit of a humble lifstyle (no mercedes, enormous flat screen, 10 pair of shoes.... you could still buy better than a 2 bed.

Although I agree at current price that would be very stupid, well hummm, no actually you seem to be convinced that it will never fall. In this case sorry but just buy but I think you are wrong.

TWT

[Realistbear]

just to say we have all been forcasting doom and gloom for years now, nothing is happening. It does still bewilder me that house prices are at historically high multiples to wages. Me and the other half are on 80 grand between us, that would just get us a SMALL 2 bed flat in london. What is going on?

It happening where I live. ODPM says 7% down last Q and things look like there getting worse with all the unemployment going on in the West Midlands. Lots of "price reduced" in EA windows etc.

Look at it from this perspective: 2003 and 2004 prices going up in double digits. 2005 the market grinds to a virtual stop. 2006 will see the prices drop overall as higher IR, unemployment, affordability issues, bankruptcies al taken their toll. The market is tired and it is time for a massive correction as the UK property market always has booms followed by a bust.

[ʎqɐqɹǝʞɐɥs]

just to say we have all been forcasting doom and gloom for years now, nothing is happening. It does still bewilder me that house prices are at historically high multiples to wages. Me and the other half are on 80 grand between us, that would just get us a SMALL 2 bed flat in london. What is going on?

did you know that the earth isnt round?

[Kayser Soze]

Quite right, the thread should have read "The crash is not going to happen YET"

A crash/correction will happen, but just not soon, if i was a betting man and someone asked me when will be the right time to buy, i would put my money on 10 years.

You are going to have to be patient

Of course the crash is going to happen. Give it long enough.......wait a mo', look theres Lord Lucan having lunch with Elvis

[homeless]

1, 2 berth caravan

2 roaming internet connection

3 nice beach

sorted

I am actually beyond the desperation point now, i have surpassed the point of even caring what house prices do and am looking at alternative lifestyle now instead.

if you cant tune in then drop out

there will come a time when a shanty town will start to build up in the odd little place and start to grow, and then we will have a third world country situation on our hands in the uk, and what the government gonna do? burn 10s of 1000s of workers out?.

once it happens there will be no stopping it.just need the desperation to build a little bit more.

Edited May 9, 2006 by homeless

[Once in a lifetime]

Perfect set up.

From 1921 to 1929, the Dow Jones rocketed from 60 to 400! Millionaires were created instantly. Soon stock market trading became America’s favorite pastime as investors jockeyed to make a quick killing. Investors mortgaged their homes, and foolishly invested their life savings in hot stocks, such as Ford and RCA. To the average investor, stocks were a sure thing. Few people actually studied the fundamentals of the companies they invested in. Thousands of fraudulent companies were formed to hoodwink unsavvy investors. Most investors never even thought a crash was possible. To them, the stock market “always went up”.

http://images.google.co.uk/imgres?imgurl=h...6lr%3D%26sa%3DG

[Bingley Bloke]

we have all been forcasting doom and gloom for years now

As far as I'm concerned high house prices are doom and gloom.

[Pete95]

I dont see a crash about to happen.

1) Affordability: Ok prices are VERY high, but to be fair theres a lot of people out there who want to buy, many of whom have a resonable about of savings (£30-£50k), and fairly good salaries. This is always confirmed whenever we see a "how much do you earn, and how much savings do you have" thread on here. So prices probably dont need to fall significantly for a fairly significant number of new buyers to enter the market.

2) Immigration: Also as if often mentioned very high levels of immigration are of course having an effect - these people all have to live somewhere, and this ever increasing demand is having an effect on prices.

3) BTL: Far too many people have got BTL's, and just take a look at other forums - people are still thinking its a good investment, and in many cases I cant really argue...

IMO for house prices to fall we need a combination of things - rising interest rates (but IMO they wont rise significantly), a fall in immigration - this looks unlikely under Labour - and some laws to deter BTL, again not likely to happen

[BillyShears]

I dont see a crash about to happen.

1) Affordability: Ok prices are VERY high, but to be fair theres a lot of people out there who want to buy, many of whom have a resonable about of savings (£30-£50k), and fairly good salaries. This is always confirmed whenever we see a "how much do you earn, and how much savings do you have" thread on here. So prices probably dont need to fall significantly for a fairly significant number of new buyers to enter the market.

The question is not whether there are people out there prepared to buy, but whether there are sufficient numbers of them.

2) Immigration: Also as if often mentioned very high levels of immigration are of course having an effect - these people all have to live somewhere, and this ever increasing demand is having an effect on prices.

Again, the question is not just how many people there are out there that want housing, but how many of them can afford housoing at various price levels. No point saying that 10,000 people have moved into your city if they can't afford to rent your 1K/mo flat. Especially if oversupply in the job market depresses prices.

Just quoting "immigration" as a reason to support high house prices is no more sensible than the article in the Leicester local paper saying that the expansion of the shopping centre would bring more people to the area who would then increase demand for expensive newbuild flats. It would increase demand if these new workers could afford to buy/live in them, and we all have a fair idea how much people working in shops, even managers, get paid.

3) BTL: Far too many people have got BTL's, and just take a look at other forums - people are still thinking its a good investment, and in many cases I cant really argue...

IMO for house prices to fall we need a combination of things - rising interest rates (but IMO they wont rise significantly), a fall in immigration - this looks unlikely under Labour - and some laws to deter BTL, again not likely to happen

This is the crux of the matter. BTL is still seen as a good investment, and house prices are seen as going up. Therefore people can figure in capital appreciation into their BTL sums. But this is bubble/pyramid thinking. The only way that BTL'ers will make a decent return, over and above putting the money in a good bank account, is to be able to sell their property at some time in the future to a bigger mug. Or, prices need to keep rising. This is not sustainable. What's more, for prices to keep going up, there need to be people buying houses for BTL, or to live in, so that prices are set. The more houses rise in price, the harder it is going to be to recruit more people. And once prices start going down again, as they will, then without an expectation of capital gains, the price at which a BTL property will make financial sense will plummet.

When you say that you can't argue with BTL being a good investment, can you run some figures for us and compare them to leaving the money in the bank? I bet you have to rely on capital appreciation or unrepresentative yields to make it work out.

Also, there are reasons why house prices should have gone up recently, a significant loosening of credit. We've had threads noting that mainstream mortgage providers such as the Halifax have started offering (on their website as an estimate of 'how much you can borrow') 5x mortgages. There has also been a loosening of mortgages for BTL that covers the last quarter. I can't remember all the details, but there was a relaxation of both the amount (% of property prices) that the mortgage lender would lend on a property, and also the number of properties that could be held in a "portfolio".

But, I don't think that the market is guaranteed to be at the top. We can see an example of how much worse things can get in Ireland. As I've said before, I see no reason why it shouldn't get that silly here.

And, as often mentioned, to get a price crash, we need forced sellers. And viewing things objectively, the more people that pile in at the top of the market with affordability stretched to the utter limit, the more people we're going to see going to the wall, and having their repossessed properties auctioned for low prices. There has been a good example of this recently in my area where a repossessed house was sold for much less than the previous market price. I'm wondering what will happen when that price appears more publically.

Billy Shears

[Duncan Murray]

First of all HELLO! Been watching these forums for a while now, thought I would add my 2p's worth!

I live in Solihull in the West Midlands and about a year ago I was sure a crash was going to happen too *but* the houses round here still seem to be selling well, There are a lot of For sales signs everywhere but most of them have big SOLD stickers over them. This doesn't do anything for my confidence! I think it may have to do with the fact that Solihull and Knowle are rich areas therefore both the demand and money are present but It does go to show that the market is still active.

I would love to see house prices come down so that one day I might be able to get my own place, At the moment I would not even think about it as I am so unsure about whats going to happen. The only way I can see a crash/correction happening is if Interest rates suddenly rise. The thing is what impact will that have on our society as a whole? Its a scary thought!

Duncan

[karhu]

Come on guys. This boom is all about low interest rates. Forget the rest, it's for the birds. People are stretched to the limit on mortgages that are seriously interest rate sensitive and dependent on low interest rates. Are we serious that UK has become a far richer place over the last few years . Everything we see is based on cheap money.

Interest rates are now going up for sure. This is it, the end of HPI. This is not the time to give in, but to get seriously bearish.

[Flat Bear]

I dont see a crash about to happen.

1) Affordability: Ok prices are VERY high, but to be fair theres a lot of people out there who want to buy, many of whom have a resonable about of savings (£30-£50k), and fairly good salaries. This is always confirmed whenever we see a "how much do you earn, and how much savings do you have" thread on here. So prices probably dont need to fall significantly for a fairly significant number of new buyers to enter the market.

2) Immigration: Also as if often mentioned very high levels of immigration are of course having an effect - these people all have to live somewhere, and this ever increasing demand is having an effect on prices.

3) BTL: Far too many people have got BTL's, and just take a look at other forums - people are still thinking its a good investment, and in many cases I cant really argue...

IMO for house prices to fall we need a combination of things - rising interest rates (but IMO they wont rise significantly), a fall in immigration - this looks unlikely under Labour - and some laws to deter BTL, again not likely to happen

Much, much, better than your average Bull post, especially first 2 points and nicely timed

You are right with affordability, the guy that started this thread, if you believe he is not a troll, is complaining about not be able? to afford a house with a joint income of 80k!!!!!!!! and hes been looking to buy for years so deposit is pretty good as well!!!!!! You can buy homes for less than £400,000, honest. You are also right about this sites average salary which is impressive, so there are very few who can not afford to buy posting on here. I thought there were many people earning less than £20,000 but recently I am putting this into question. If this is the truth it would mean we are not in a bubble at all and there are many people (such as original poster) who could comfortably buy even if prices went up another 20% or even more.

But if this is the case I will need to look a how much I pay my employees and have a reality check on how much I earn! and why do I pay soooo much tax??????

Your 2nd point is also very valid but pales into insignificance with your affordability arguement.

Best Bull arguement ive seen on HPC. (If you post much more like this I will have to convert)

Edited May 9, 2006 by Flat Bear

[Rachman]

Can't buy on £80K a year. Allowing for a 5% deposit, that's realistically about £350K on a property and it's easily affordable - I did that on one equivalent salary without the tax breaks of two and had to fund two people.

You can easily buy a house, if you went somewhere like Peckham you can buy a 5 bed house (try Marica Road - 2 year old 5 bedders, SE1) . I looked at a 4 bed house that needed admittedly redoing in the better bits of Putney for £360K in 2005, there are houses in Clapham for that, if you move further out, it's simply not a problem, I viewed lots of houses round Highbury for £350K (needed work, but nothing structural).

I think you may be being a little unreasonable, that money will buy you a two bed flat in Fulham, West Hampstead, anywhere near the City, Islington, you name it.

You won't be able to afford a stucco fronted mansion house in a desirable postcode on £80K a year, I doubt from scratch you could afford one on less than £750K a year. But that's life.