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sam

Crash Or No Crash

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I have been reading forums such as this(hpc) for about three years now, and in the vast majority of that time i have been Bearish. I read posts on sites such as fool, pig, hpc and nearly all swing one way or the other, but i am wondering is there possibly a third option.

I have been accused by a few on this board for going one way then the other, when infact i am just going with what i see, i am not into joining gangs.

Commonsence and gut feeling tells me that this property market has no hope, but that was also true 2 years ago, and now look where we are.

I have found myself thinking in a different way lately, what people see as indecisive i see as me looking for that possible third option, i am not sure what i am talking about here, but something feels different, and i am not talking the typical "it will be different this time", i am not talking Bears and Bulls, i am not sure infact what i am talking about :blink:

What i do know is that this present cycle is amazing, and just maybe it is just far too simple a solution to expect a correction/crash, just maybe a lesser evil is required(like deliberate inflation), too many people are now caught up in all this.

Maybe we are all not as wise as we thought, maybe we thought in the correct way and came up with the wrong solution, what if saving the reckless(those who borrowed too much) is best for the UK in the long run.

There are no rules out there saying that we must be rewarded for being sensible.

This Government has not been tested yet, they took over a very sound economy that was firing on all cylinders, when the cruch finally comes and they are in a corner, do not be supprised if they try and save those that caused this mess in the first place.

If you want an example, just look back at the 70's when we had a brain drain, the Country was in a mess, so what did they do, tried to squeeze the last remaining drops out of those that had anything(97% tax in some cases).

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I agree. I wonder how many young families who've bought in way overt their heads are going to get bailed out by the government when bankrupcies pick up.

The message is loud and clear from the current government; spending responsibly and contributing to the country will get you nowhere at all.

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I have been reading forums such as this(hpc) for about three years now, and in the vast majority of that time i have been Bearish. I read posts on sites such as fool, pig, hpc and nearly all swing one way or the other, but i am wondering is there possibly a third option.

I have been accused by a few on this board for going one way then the other, when infact i am just going with what i see, i am not into joining gangs.

Commonsence and gut feeling tells me that this property market has no hope, but that was also true 2 years ago, and now look where we are.

I have found myself thinking in a different way lately, what people see as indecisive i see as me looking for that possible third option, i am not sure what i am talking about here, but something feels different, and i am not talking the typical "it will be different this time", i am not talking Bears and Bulls, i am not sure infact what i am talking about :blink:

What i do know is that this present cycle is amazing, and just maybe it is just far too simple a solution to expect a correction/crash, just maybe a lesser evil is required(like deliberate inflation), too many people are now caught up in all this.

Maybe we are all not as wise as we thought, maybe we thought in the correct way and came up with the wrong solution, what if saving the reckless(those who borrowed too much) is best for the UK in the long run.

There are no rules out there saying that we must be rewarded for being sensible.

This Government has not been tested yet, they took over a very sound economy that was firing on all cylinders, when the cruch finally comes and they are in a corner, do not be supprised if they try and save those that caused this mess in the first place.

If you want an example, just look back at the 70's when we had a brain drain, the Country was in a mess, so what did they do, tried to squeeze the last remaining drops out of those that had anything(97% tax in some cases).

Interesting post, spoilt by that final statistic (97% tax), which is rubbish.

Not quite sure of your point though. Are you saying that the current property owners will be "saved" by having a much softer landing than some predict on here? If so, I agree with that.

Unless there is a sudden spike in interest rates I believe that there will be a period of drift and stagnation. In fact we are already in it. Prices are still rising in some places and of course you get the usual headline-grabbing odd town here and there that is showing huge increases (usually because no one wanted to live in them previously but desparation has forced people to think again), but in many areas prices have tailed off and even dropped a bit. I don't see why this shouldn't continue unless other factors change, which seems to be the hope of the bears.

How much would other factors need to change? This is the key question. Inflation and interest rates and unemployment. All unknowns. A bit of inflation could actually work in favour of some of us. Salaries would increase for many, making existing mortgage payments more affordable. Interest rates could be the killer if they rise sharply. Some recent entrants to the property market could find themselves exposed though most of us who've been around for a while would just have to absorb the increase the way we always do. For this reason I'd expect any government to pull out all the stops to help prevent a big rise though they might not manage it if the external pressures were too intense.

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, the Country was in a mess, so what did they do, tried to squeeze the last remaining drops out of those that had anything(97% tax in some cases).

The thing is that the house price bubble is global and I can't see anything other than a crash. When people talk glibly about investing in Morocco, Estonia and even Argentina(!) we are seeing a market where all sense has gone, where the last of the fools are throwing their money away. As per my recent topic "anatomy of a house price crash" I think we are close to it now.

Edited by othello

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The third option could be long term stagnation. 10 or more years which will give those not on the ladder the chance to save and to also see salary increases bridge the current gap.

It would also suit many home owners that wnat to get onto the next rung.

But unless the BoE or the government make changes, leaving the choice to consumers, ie British public, will only see steady increases, particularly in and around major cities.

I'm a bull not through choice just from what I am witnessing. Long term stagnation would suit me even though I own a btl. My aim to own a 4 bed detached would be easier since they are valued higher than both my properties conbined.....just.

Very good point though Sam. But what are those wanting long term stagnation going to call themselves? Maybe an animal that hibernates :D

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Everything I see out there in the scary world is contradictory. Jobs are being lost, new build is being thrown up, immigrants are streaming in still, houses are going for a fortune, so where will it end?

It'll all end in tears - it must do - there's no way for it not too... but when? Will it just all suddenly come sliding to a halt one day as people realise no one in the UK has a job anymore, that the economy is really messed up beyond repair and we'll all be doomed cos of oil/bird flu and whatever else will get thrown in too.

Will it be an interest rate rise that brings it to its knees?

Will a good dose of bird flu help?

I spose a watched trigger never boils.

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Everything I see out there in the scary world is contradictory. Jobs are being lost, new build is being thrown up, immigrants are streaming in still, houses are going for a fortune, so where will it end?

It'll all end in tears - it must do - there's no way for it not too... but when? Will it just all suddenly come sliding to a halt one day as people realise no one in the UK has a job anymore, that the economy is really messed up beyond repair and we'll all be doomed cos of oil/bird flu and whatever else will get thrown in too.

Will it be an interest rate rise that brings it to its knees?

Will a good dose of bird flu help?

I spose a watched trigger never boils.

I think the trouble with this forum is that it encourages such a negative outlook. I seriously think that things are no worse, and in many cases better, than they have been at several points in our recent history, yet before the rise of the internet, we never clustered in these groups to weep on each others' shoulders.

This isn't to belittle the misfortunes of others, I genuinely feel sorry for FTBs at the moment. I just think that the mania for TV shows concentrating on property development and house sales and HPI are themselves largely responsible for this anxiety and panic that many of you people seem to feel. The way the bears talk, this could be a ward in a psychiatric hospital for sufferers from manic depression.

When you're reduced to hoping for "a good dose of bird flu" then I think you need to get professional medical help yourself, or at least take a long hard look at yourself. Property prices is not the be-all and end-all. If you think that property is bad value at the moment, then don't enter the market. If you want to enter the market but can't, then you have to decide how important it is to you. If it is VERY important then you have only one realistic option, and that is to find a way of getting what you want. This might mean changing your expectations of where you want to live, or it might mean looking at ways of increasing your income, or pooling your resources, or going for a different mortgage product, or whatever.

What you shouldn't do is just wring your hands and hope that half the population will be killed by bird flu. Learn to be positive. Take some steps towards your dream rather than sit in the corner, moaning about the perceived good fortune of others.

Here's what to do. Write at the top of a piece of A4 paper what your current position is. At the bottom of the sheet, write what you want to achieve, or what your target is. Then fill in the space in the middle the steps you're going to employ to get there, and how you will measure the success or otherwise of each step. You might have to split the goals up into sub-goals. By doing this you will get a realistic picture of how you can move forward, and over what sort of period you can do it. It's used by businesses and project managers all the time. Known as BOMM (Base, objective, method, measure).

Have a plan. It's much better than just thinking how terrible your life is and how much better off everyone else is.

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I think the trouble with this forum is that it encourages such a negative outlook. I seriously think that things are no worse, and in many cases better, than they have been at several points in our recent history, yet before the rise of the internet, we never clustered in these groups to weep on each others' shoulders.

This isn't to belittle the misfortunes of others, I genuinely feel sorry for FTBs at the moment. I just think that the mania for TV shows concentrating on property development and house sales and HPI are themselves largely responsible for this anxiety and panic that many of you people seem to feel. The way the bears talk, this could be a ward in a psychiatric hospital for sufferers from manic depression.

When you're reduced to hoping for "a good dose of bird flu" then I think you need to get professional medical help yourself, or at least take a long hard look at yourself. Property prices is not the be-all and end-all. If you think that property is bad value at the moment, then don't enter the market. If you want to enter the market but can't, then you have to decide how important it is to you. If it is VERY important then you have only one realistic option, and that is to find a way of getting what you want. This might mean changing your expectations of where you want to live, or it might mean looking at ways of increasing your income, or pooling your resources, or going for a different mortgage product, or whatever.

What you shouldn't do is just wring your hands and hope that half the population will be killed by bird flu. Learn to be positive. Take some steps towards your dream rather than sit in the corner, moaning about the perceived good fortune of others.

Here's what to do. Write at the top of a piece of A4 paper what your current position is. At the bottom of the sheet, write what you want to achieve, or what your target is. Then fill in the space in the middle the steps you're going to employ to get there, and how you will measure the success or otherwise of each step. You might have to split the goals up into sub-goals. By doing this you will get a realistic picture of how you can move forward, and over what sort of period you can do it. It's used by businesses and project managers all the time. Known as BOMM (Base, objective, method, measure).

Have a plan. It's much better than just thinking how terrible your life is and how much better off everyone else is.

I have said similar things several times, minus the business plan part!

There are ways of getting onto the property ladder which Joe publis is using now and always will do.

Overtime, change of lifestyle (maybe temporary), 2nd job, cheaper location, less bedrooms etc. These are some of the sacrifices many have made to buy a home, myself included. But for me, working extra hours was well worth it because I made enough money to renovate my place exactly how I wanted. It was far more rewarding than getting drunk or eating out every night.

Joe public will make sacrifices whcih is the reason a hpc will not happen. If anything, most people these days are looking for property requiring modernisation which means there will none left for hpc bears when they have realised that prices won't plummet.

Forget the Jones living in their detached house. That will come with time. Be realistic and you can afford to buy. I had the opportunity to buy a 3 bed house from my sisters mother-in-law for £62k in 1999. It needed plenty of work but like many of you I just couldn't commit. 2 years later I bought a 2 bed split level maisonette for £93k which is worth more now than the property I missed out on. With the work required for the 3 bed house, I have made about the same profit on my home in less time.

I thought I made a mistake and missed the boat back in 1999. But I hadn't and neither have you. Don't touch new build apartments and be prepared to make sacrifices and get your hands dirty and you may look back one day and say 2006 wasn't actually so bad after all.

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most people these days are looking for property requiring modernisation which means there will none left for hpc bears when they have realised that prices won't plummet.

:lol::lol::lol:

Houses here are simply worth what morons are able to borrow. Morons are going to be able to borrow less soon due to global credit tightening, the start of which we have seen already, with fixed rate mortgage rates surging upwards.

This is just the start and anyone who buys now, getting a large amount of credit is taking a massive risk.

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Houses here are simply worth what morons are able to borrow.

Change the word morons to "consumers".... this is reason a hpc won't happen.

In the eyes of the britsih public, property is WORTH the high asking price, and it WORTH making sacrifices to fulfill their dreams of home ownership.

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Change the word morons to "consumers".... this is reason a hpc won't happen.

In the eyes of the britsih public, property is WORTH the high asking price, and it WORTH making sacrifices to fulfill their dreams of home ownership.

Not when they can't afford to buy it any more as the service costs on the finance are too high.

Also against a background of rising unemployment, together with house price corrections occuring elsewhere in the world, due to rising credit costs, sentiment will turn quickly here too.

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Yes, that final statistic is rubbish.

The figure was actually 98% according to this article from Timesonline :P

But according to firstDirect, a bank: "In 1978/79 the top rate of tax on earned income was 83 per cent on income above £24,000 a year."

edit: Top rate 98% (unearned income), 83% (earnings).

JY

Edited by JustYield

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But according to firstDirect, a bank: "In 1978/79 the top rate of tax on earned income was 83 per cent on income above £24,000 a year."

JY

Remember that there were more tax bands in those days, and 24K 28 years ago was a very high salary. I was at university in 78 but my first job, in 1975, earned me £17 pw, or £884 per year.

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Here's what to do. Write at the top of a piece of A4 paper what your current position is. At the bottom of the sheet, write what you want to achieve, or what your target is.

1. Not a home owner

2. Read housepricecrash.co.uk

3. Bird 'flu

4. ?

5. Profit!

;)

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I have been reading forums such as this(hpc) for about three years now, and in the vast majority of that time i have been Bearish. I read posts on sites such as fool, pig, hpc and nearly all swing one way or the other, but i am wondering is there possibly a third option.

I have been accused by a few on this board for going one way then the other, when infact i am just going with what i see, i am not into joining gangs.

Commonsence and gut feeling tells me that this property market has no hope, but that was also true 2 years ago, and now look where we are.

I have found myself thinking in a different way lately, what people see as indecisive i see as me looking for that possible third option, i am not sure what i am talking about here, but something feels different, and i am not talking the typical "it will be different this time", i am not talking Bears and Bulls, i am not sure infact what i am talking about :blink:

What i do know is that this present cycle is amazing, and just maybe it is just far too simple a solution to expect a correction/crash, just maybe a lesser evil is required(like deliberate inflation), too many people are now caught up in all this.

Maybe we are all not as wise as we thought, maybe we thought in the correct way and came up with the wrong solution, what if saving the reckless(those who borrowed too much) is best for the UK in the long run.

There are no rules out there saying that we must be rewarded for being sensible.

This Government has not been tested yet, they took over a very sound economy that was firing on all cylinders, when the cruch finally comes and they are in a corner, do not be supprised if they try and save those that caused this mess in the first place.

If you want an example, just look back at the 70's when we had a brain drain, the Country was in a mess, so what did they do, tried to squeeze the last remaining drops out of those that had anything(97% tax in some cases).

You seem to be ascribing beliefs and theories to others that do not exist.

I also see that you subscribe to the idiots theory of economic cycles. 'Because a crash has not occurred yet, this constitutes strong evidence that a crash will not happen'.

The house bubble has lasted longer than a reasonable person might expect. This is because lenders have lowered their lending criteria. There was a time that you had to demonstrate honest intent, a reasonable record and the capacity to meet monthly payments in order to get a mortgage. These days a lender is only likely to refuse you a mortgage if you have been bancrupted more than 3 times or are serving a life sentence for armed robery.

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Have a plan. It's much better than just thinking how terrible your life is and how much better off everyone else is.

I don't think everyone else is better off than me. I'm aware that they're not. Just waiting for them to catch up.

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Have a plan. It's much better than just thinking how terrible your life is and how much better off everyone else is.

I don't think she was thinking that!

Here's what to do. Write at the top of a piece of A4 paper what your current position is. At the bottom of the sheet, write what you want to achieve, or what your target is. Then fill in the space in the middle the steps you're going to employ to get there, and how you will measure the success or otherwise of each step. You might have to split the goals up into sub-goals. By doing this you will get a realistic picture of how you can move forward, and over what sort of period you can do it. It's used by businesses and project managers all the time. Known as BOMM (Base, objective, method, measure).

And you are on.. which planet?

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I don't think she was thinking that!

And you are on.. which planet?

Read her post again. Like a lot of people on this forum she sounds like she's wringing her hands in despair and saying how awful things are, rather than facing reality, which is that we're chugging along pretty much as normal, with house prices going through an uneventful period, perhaps rising a bit here, falling a bit there.

Be positive, be proactive. Take control of your future by planning it. If you think there will be a crash, fine, factor that in, but have a Plan B in case things just bump along for a while, which is what I expect them to do.

It's part of the bear's make-up that he/she gives up all belief in his/her ability to influence their own life. Sad to see. You'll learn the hard way, like I eventually did.

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Interesting post, spoilt by that final statistic (97% tax), which is rubbish.

“It will squeeze the rich until the pips squeak.” - Denis Healey, Labour Chancellor of the Exchequer from 1974-1979

"I warn you that there are going to be howls of anguish from those rich enough to pay over 80% on their last slice of earnings". - Denis Healey, Labour Party Conference 1973.

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I think the trouble with this forum is that it encourages such a negative outlook.

Only if you're thinking within a 'house prices up = good, house prices down = bad' paradigm, which most people on here aren't. This forum has made my outlook far more positive and I love it. :D

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Only if you're thinking within a 'house prices up = good, house prices down = bad' paradigm, which most people on here aren't. This forum has made my outlook far more positive and I love it. :D

Exactly! A house price crash is the best news we could have. If house prices come down, the country will go back to work and people can start owning their properties again.

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Only if you're thinking within a 'house prices up = good, house prices down = bad' paradigm, which most people on here aren't. This forum has made my outlook far more positive and I love it. :D

Negative in the sense that there has to be some sort of financial meltdown. That's a very drastic way of solving anything. If interest rates shoot up to the point that those who recently bought are shown to have overstretched themselves (which I think is the bear's logic) than a number of things will happen.

Firstly, the great majority of homeowners who've been in for a while will find that they have enough of a cushion to get by. This is how it has always worked in the past, and will do so again.

Second, of the marginal mortgage payers, those at risk, most will survive. Very few people willingly leave their own home to solve a financial problem especially as in the great majority of cases, defaulting on a mortgage and facing repossession is actually no solution whatsoever. In fact it usually makes things worse.

There will indeed be some people who do default, and eventually, their homes will be back on the market. Along with the nervous state of the market, yes, prices will go down. Unfortunately, with the higher interest rates you long for, many of the bears will be no more willing or able to enter the market in any case. Paying for an high-priced house with a cheap mortgage is no harder or easier than paying for an low-priced house with an expensive mortgage.

What you're looking for is low-priced housing and cheap mortgages. Aren't we all? It's very unlikely to happen. And if it did, I can assure that the current bears would have plenty of competition for buying these cheap houses. And with a lot of people entering the market at the same time, well, you know what will happen, don't you?

A full-blown crash, if it happens, won't solve your problem. All it will give you is a burst of schadenfreude. Nice while it lasts, OK, I can understand that, but it won't actually get you into a good house at low cost. That's why I think it's a negative attitude. It's like kicking the cat to make you feel better. It doesn't actually work, but just pretends to for a short period.

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The third option could be long term stagnation. 10 or more years which will give those not on the ladder the chance to save and to also see salary increases bridge the current gap.

.....and WHY would a LL want that????

..there's no money to be made in it is there....and they want LOTS of it NOW!!!!!!!!

STAGNATION JUST ISN'T AN OPTION,IT WILL TANK ONCE THERE IS A REALLY OBVIOUS PLACE TO MAKE BETTER RETURNS.

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We have not had a crash, or a correction in the market simply because the Government have borrowed their way through what would have been the last turndown, scheduled for early 2001, but cancelled due to September 11th.

If people cannot see that, and understand that a Government that is borrowing money, and spending it in the economy to finance the wages of the population, and can still believe that it is sustainable for eternity, then they need to get themselves into the Dr Who's Tardis, go back to 1965 and get a proper education whereby you earnt your qualifications on merit, and not on the current system of social engineering.

Gordon Brown borrowed, and leased under PFI, his way out of the last recession, however he did not make inroads when it came to the upturn in terms of repayment, the Capital Employed has not been an investment, its been a downright disaster with negative returns on a grand scale.

The recession is looming, its coming to a town near you, and if you are anywhere near overborrowed today you will be kissing your ars3e goodbye tommorow.

The family jewels have been sold, we are now between a rock and hard place, the smoke is clearing, the illusion is exposed, the new dawn awakens, its curtains for the miracle economy, and its time to make the repayments.

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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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