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I Am Admitting Defeat

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I am admitting defeat : The infamous crash has not happened and is not likey too, Even if prices started to fall Today, how much would they drop ? Back too 2004 levels ? They will still be overpriced, and I will still be priced out. Its over, Im beat

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I am admitting defeat : The infamous crash has not happened and is not likey too, Even if prices started to fall Today, how much would they drop ? Back too 2004 levels ? They will still be overpriced, and I will still be priced out. Its over, Im beat

er..... prices are the same as in 2004 where i live? where are you? whats the average price, whats your salary?

Edited by moosetea

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Guest Baffled_by_it_all

Oh well,

What's different between today and yesterday?

You're not up to your eyeballs in debt now and you weren't yesterday. If you really give up and keep saving. something interesting might happen.

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I am admitting defeat : The infamous crash has not happened and is not likey too, Even if prices started to fall Today, how much would they drop ? Back too 2004 levels ? They will still be overpriced, and I will still be priced out. Its over, Im beat

When the last bear turns bull....

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Guest Winners and Losers

I have been wondering lately if we are hankering after a bygone era? Most people I speak to believe that 100% IO mortgages are here to stay. That's just the way it is now. That is what you have to do to buy. There seems to be an acceptance that the rules of the game have changed. Have they changed for good? Is it too far gone to ever go back? Will this be the new way to buy houses?

It's OK DD, I had a moment of utter despair and defeatism at around the 72 post mark. You'll perk up again. You may feel OK after that until the 200 post mark. However, 3000 posts is just an indication of whoring.

Edited by Winners and Losers

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It seems pretty obvious to me prices are rising and have been for the last 3 months. Couldnt care less if there was a crash, im just getting on with my life and not expecting anything.

Even if there is a crash, house prices will rise rapidly as soon as any correction occurs, and people will moan for the next 24 years about being priced out and saying "its not fair". Thats life!

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I am admitting defeat : The infamous crash has not happened and is not likey too, Even if prices started to fall Today, how much would they drop ? Back too 2004 levels ? They will still be overpriced, and I will still be priced out. Its over, Im beat

I don't know where you live but in many places prices are still at mid-2004 levels, even below.

Unfortunately a lot depends on what happens to inflation. That will dictate where interest rates go but if IRs do go to 6-7% in 2 years time then a lot of people will be finishing up on their 2-3 year fixed rates at 4.5% and that's when the crunch will really come. Those in negative equity will have to go to SVRs which will be even higher because they won't be able to get new fixed rate mortgages at lower rates because the house is worth less.

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Yeah I am also starting to doubt that there actually will be a crash, I have my reasons though, There are plenty of For sale boards up around here and a lot of them also have big SOLD stickers across them, Also I have 3 friends whom have also just bought homes (FTBs). I think people are now just resigned to the fact that house prices are expensive now and thats just the way it is, A year ago I was convinced it was going to happen but now I am not so sure, I wouldn't personally buy property now but I won't leave it much longer either :(

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I am admitting defeat : The infamous crash has not happened and is not likey too, Even if prices started to fall Today, how much would they drop ? Back too 2004 levels ? They will still be overpriced, and I will still be priced out. Its over, Im beat

Couple from Devon were moving to Tasmania on a property programme at the w/e

The reason was house prices and because their kids wouldn't have any chance of buying in the future.

Now I've never been to Tasmania but my girlfriend has and I really don't see that it has anymore to offer over Devon, in fact a lot less.

When people are moving half the way around the world because of house prices you know that it isn't sustainable.

Yeah I am also starting to doubt that there actually will be a crash, I have my reasons though, There are plenty of For sale boards up around here and a lot of them also have big SOLD stickers across them, Also I have 3 friends whom have also just bought homes (FTBs). I think people are now just resigned to the fact that house prices are expensive now and thats just the way it is, A year ago I was convinced it was going to happen but now I am not so sure, I wouldn't personally buy property now but I won't leave it much longer either :(

The only reason for the sudden pick up this year is that people have convinced themselves, or been convinced that because there has not been a crash there will not be one. This is absolute nonsense, the chance of a crash is growing all the time as the debt mountain grows 10% pa and the economy deteriorates.

Hadn't you heard that interest rates are on the way up.

US rates from 1%-5% in under 18 months and still not containing inflation. When inflation picks up here, which it inevitably will do at some point there is no knowing where interest rates will go. 7% is just a longterm average but how many people do you know buying today could afford their mortgage if rates were 7%?

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Couple from Devon were moving to Tasmania on a property programme at the w/e

The reason was house prices and because their kids wouldn't have any chance of buying in the future.

Now I've never been to Tasmania but my girlfriend has and I really don't see that it has anymore to offer over Devon, in fact a lot less.

When people are moving half the way around the world because of house prices you know that it isn't sustainable.

Yes Its not affordable for a lot of people but then again *A LOT* of people can afford houses at these prices especially in joint mortgages, most other people who cannot afford to buy will just continue to rent, The only was there is going to be a crash is if the Interest rates rise rapidly, a slow Interest rate rise or more houses being built will just cause the prices to level out or come down a little in my opinion. I am no expert on the economy and don't pretend to be, I'm just a normal lad with some common sense :blink:

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remember the golden rule - ask home owners if they could afford to buy their house now.

the answer is invariably 'no', which means the market as a system cannot keep running

it's the economics, stupid...

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Guest Winners and Losers

it's the economics, stupid...

No need for name calling, stupid. ;)

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I am admitting defeat : The infamous crash has not happened and is not likey too, Even if prices started to fall Today, how much would they drop ? Back too 2004 levels ? They will still be overpriced, and I will still be priced out. Its over, Im beat

Typical doom-mongering. :rolleyes:

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Yes Its not affordable for a lot of people but then again *A LOT* of people can afford houses at these prices especially in joint mortgages, most other people who cannot afford to buy will just continue to rent, The only was there is going to be a crash is if the Interest rates rise rapidly, a slow Interest rate rise or more houses being built will just cause the prices to level out or come down a little in my opinion. I am no expert on the economy and don't pretend to be, I'm just a normal lad with some common sense :blink:

You say that a lot of people can afford houses at these prices.

I disagree, certainly from the point of a FTB. Any FTBs buying now can't really afford to buy the property, they are taking a gamble. They are buying on IO with no thoughts to how the property is going to be paid off, they are buying with fixed rate mortgages, 2-3 years at 4.5% with no thoughts of whether they could afford the mortgage at 6-7% in 2-3 years time when the deal finishes. They are buying with no thought for how they might have kids and one of the couples give up work to bring up a family and pay for everything on one salary.

Current house prices are unaffordable for most people, they are just choosing to ignore the fact and buy anyway.

Edited by munimula

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Yes Its not affordable for a lot of people but then again *A LOT* of people can afford houses at these prices especially in joint mortgages, most other people who cannot afford to buy will just continue to rent, The only was there is going to be a crash is if the Interest rates rise rapidly, a slow Interest rate rise or more houses being built will just cause the prices to level out or come down a little in my opinion. I am no expert on the economy and don't pretend to be, I'm just a normal lad with some common sense :blink:

Remember that every year that prices stay high represents a massive withdrawal of money from the economy. At the start of a boom there are winners and losers i.e. people with houses are laughing (Well they mew like there is no tomorrow - that is another debate) but as the boom goes on more and more people are spending more and more money on houses and mostly buying off people that have paid massive amounts for housing. These high prices will be to the determent of all other industries.

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Guest boredwaiting

I'm resigned to this fact aswell...

with recent rises it looks like the property market has some steam in it yet and maybe enough momentum to carry it through a stagnation that has been talked about.

For me the property market is finished, i don't think i will own my own house (at least while it's cheaper to rent...).

I have no expectation to own my own house anymore...

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It's OK DD, I had a moment of utter despair and defeatism at around the 72 post mark. You'll perk up again. You may feel OK after that until the 200 post mark. However, 3000 posts is just an indication of whoring.

Awww W&L... and at 2K posts you seemed like such a nice girl!

:P

-Pye

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It seems pretty obvious to me prices are rising and have been for the last 3 months. Couldnt care less if there was a crash, im just getting on with my life and not expecting anything.

Even if there is a crash, house prices will rise rapidly as soon as any correction occurs, and people will moan for the next 24 years about being priced out and saying "its not fair". Thats life!

Fundamentals are still moving in the direction of a crash. Interest rates will rise eventually. People are less and less able to afford property. Rental yields are more and more insufficient to the point where articles on BTL say that you should hope to get a rental amount that covers most of your mortgage. The more rental yields are insufficient, the more prices will have to move down once prices are stagnant or decreasing so that rental yield becomes the only return on investment. Bankruptcies are increasing. More and more oversupply of rental flats.

So what's happening? What we're seeing IMHO is a demonstration of how important sentiment is in the property market. Sentiment is able to keep prices up as one after another all the legs holding up the chair of high house prices are knocked out. But sentiment is the one factor that can change quickest in the housing market.

Billy Shears

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You say that a lot of people can afford houses at these prices.

I disagree, certainly from the point of a FTB. Any FTBs buying now can't really afford to buy the property, they are taking a gamble. They are buying on IO with no thoughts to how the property is going to be paid off, they are buying with fixed rate mortgages, 2-3 years at 4.5% with no thoughts of whether they could afford the mortgage at 6-7% in 2-3 years time when the deal finishes. They are buying with no thought for how they might have kids and one of the couples give up work to bring up a family and pay for everything on one salary.

Current house prices are unaffordable for most people, they are just choosing to ignore the fact and buy anyway.

that's a very poignant view. My Mum and Dad have a mortgage on a property they bought in 1988 and they made sure they left £100 a month just in case interest rates increased. IR's did increase to the point their mortgage was twice what they were paying originally. My Mum was telling me how they really struggled and what a nightmare it was. My Dad is just a HGV driver, not a high earner by any standards.

It's a tale i personally want to learn from.

Yes, i could afford a tiny 1 bed flat if i stretched myself- but if/when IR's increase i don't want to end up not being able to afford my mortgage. So many people are going to get caught out when IR's increase, even by 0.5%.

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I still think there might be a crash, but I've also had my suspicion that it may not occur for a long time yet, for one reason:

To try and sum up the one reason why I think there may not be a crash, or even a significant reduction in prices (I'm not saying there won't be, this is just a model which might explain why there might not be):

People are paying too much for houses, but they won't realise this until they retire in 25-30 years time, with too little savings to be comfortable, and having lived a working life without the same level of economic advantage as their parents. So in a nutshell, the "feedback loop" is too long. It is about 30 years. People won't see the actual outcome until then, and so in the absence of being able to think themselves forward into the future (as most people are unable to do), there is no driver for them to see that they are paying too much, and hence it will continue. If they could be transported into the future by a "ghost of christmas future", and see themselves economically burnt out, they'd realise that they should be spending far less on property, and hence the price would fall. I suppose another way of looking at it is that they can't value property correctly, because the models they are using are just wrong for the current era.

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The Govenment has created a relatively stable economy for years but the UK will always be at the mercy of macro-economic events

There is no way the Government/BOE can shield us from these and the UK is storing up trouble with such high debt levels

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...

Even if there is a crash, house prices will rise rapidly as soon as any correction occurs, and people will moan for the next 24 years about being priced out and saying "its not fair". Thats life!

Not so. A correction will not be immediate and people won't pile back in if they believe they can buy cheaper by waiting. After the last crash, we entered a trough that took YEARS to recover. I bought a flat in 1996 when EAs couldn't give them away. Property was a dirty word. It's amazing how fickle investors and speculators can be; a few years before that we were seeing the same headlines as we are today about a buoyant property market, only to be replaced with news of repossessions soon after.

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The Govenment has created a relatively stable economy for years but the UK will always be at the mercy of macro-economic events

There is no way the Government/BOE can shield us from these and the UK is storing up trouble with such high debt levels

You think this is a stable economy??

GB has run a massive deficit right the way through some of the best years we're likely to have for a while (maybe he should have been running a surplus??) on the excuse that he'll only borrow to invest. all well and good, but if you don't invest that money in something that makes the UK more productive (increases revenues, GDP, jobs, taxes) then he's effectively MEWing out of the UK net worth..... that is not a stable economy.

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Couple from Devon were moving to Tasmania on a property programme at the w/e

The reason was house prices and because their kids wouldn't have any chance of buying in the future.

Now I've never been to Tasmania but my girlfriend has and I really don't see that it has anymore to offer over Devon, in fact a lot less.

When people are moving half the way around the world because of house prices you know that it isn't sustainable.

Not ever having been to Devon I can't really compare. But I live in Tasmania and, basically, it's what you would expect of a place with 480,000 people in total with 200,000 in the largest city (itself very spread out) and the rest of the population fairly dispersed.

The tallest office building in Tasmania is about 15 storey. The largest operating nightclub in Hobart fits 500 people inside. Concerts usually mean open air performances of B grade acts or has beens (though there is the occasional exception). The council getting new parking meters really was front page news in the major paper. So not too exciting but locals tend to like it that way. :)

We've been put on the map a bit lately though with the Beaconsfield Mine disaster which has drawn worldwide attention. More familiar in the UK might be the Incat ferries (not sure what the operator calls them but that's what we call them) on the English Channel run which are built here.

The single biggest industry in $ terms in Tasmania is the massive electrolytic zinc works - third largest such plant in the world (the other two aren't that much larger). Other notable things are numerous large hydro-electric dams, extensive forests (40% of which are reserved World Herritage Areas and National Parks), an internationally significant producer of ferro alloys, fish farms and a relatively high employment dependence on tourism.

And of course the Tasmanian Devils and Tigers. :P

With house prices at about 6.6 times income and the employment vulnerability due to tourism, I can't see that coming here on account of house prices makes a lot of sense. Coming here because you like bush walking or trout fishing or think you'll be the one to find a living Tassie Tiger (they're generally accepted as extinct though many believe otherwise) maybe, but not because of house prices.

If you wanted to move half way around the world to buy a house then Adelaide would make more sense - same prices as Hobart (Tasmania) but a much bigger city (1 million people), better paid jobs etc. Adelaide is VERY hot in summer though.

Edited by Smurf1976

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I am confused too :blink:

Bearish news are stockpiling about real estate markets in US, Spain, Australia... One could really hope the HPC is at next corner :)

But Bullish news about the UK housing make make me doubt: if one single 0,25% rate-cut is suffisent to re-ignite the market, perhaps it means that the market is much more solid than we tought, and in line with current fundamentals (very low interests rate).

Of course, I still hope IR will eventually go op tp their historic average, but I do not know this vicious circle could be broken:

IR Up => Economy and house price slow => IR cut => Economy and house price on the up again => IR Up => Economy and house price slow.... :huh:

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  • 302 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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