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Is It Time To Throw In The Towel

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Since joining I have cited the following key reasons as to why a crash is unlikely:

The rise of Interest Only keeping affordability alive

B2Ls providing a new 'prop' underpinning the market

The great unwashed loosing thier appetite for SM based investments , and this attitude pervades despite recent gains

Long term low interest rates (which bears always always say are about to rise)

Crucially, lack of a shock catalyist. Without a sudden catastrophic event such as rates doubling, the market just plods on. As I always say 'a Pension has premiums which arent covered by rent' yet people didnt cite that as a reason not to invest in Pensions.

The longterm bears in my view wrongly mix - up the world of pure investment with Mr Smith buying a home.

They fail to recognise that investment decisions do not drive Mr Smith and nor does a comparison with rent vs buying. Its all a lot simpler. Mr Smith just wants a place HE THINKS is his own and nothing is going to stop him appart from a sudden destructive catalyist.

The pessimists may fret over yield comparisons, but the avaerage B2Ler (yesterdays average pension contributor) knows nothing of such concepts. He just pays the mortgage like he once paid the Man from the Pru.

Also established LLs dont fret over yields and growth in the main. They are simply happy enough with the income and happy in the knowledge that over the long term they should get back more than they paid out, end of. Most certainly do not have the skill, inside knowledge or motivation to start day trading stocks. There is more to life than maximising returns when one is already comfortable.

Slow markets and low growth periods do not a crash make.

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Not so sure DB. As I read the stats from the Land Registry I see widespread red ink for last Q. In my area we went down 8.2% in the last quarter alone. If you peruse the following stats from the ODPM's figures and see the number of negatives you might agree that the crash is underway. HPCs are from hindsight, of course, so the full extent of the drop will not be known until the bottom is reached which may take 2 more years. This latest crash will probably have been caused by debt--the sheer level of it and the tightening credit markets world wide.

Here are the last Q figures:

http://news.bbc.co.uk/1/shared/spl/hi/in_d...html/houses.stm

Northumberland £149,225 -8.8%

Cumbria £143,851 -1.6%

Tyne And Wear £132,526 -0.3%

Stockton-On-Tees £128,643 -5.0%

Darlington £125,556 -5.6%

Durham £114,329 -4.3%

Redcar And Cleveland £109,289 -11.2%

Middlesbrough £108,982 4.7%

Hartlepool £98,770 -5.2%

East Riding Of Yorkshire £154,431 -4.5%

West Yorkshire £138,242 -1.1%

South Yorkshire £126,326 -1.4%

North Lincolnshire £122,869 -2.7%

North East Lincolnshire £102,179 -1.9%

Rutland £228,672 -7.7%

Leicestershire £170,145 -3.5%

Northamptonshire £158,537 -3.5%

Lincolnshire £147,659 -1.9%

Derbyshire £147,537 -3.5%

Nottinghamshire £146,871 -2.0%

City Of Derby £137,082 -0.3%

Leicester £134,130 0.3%

City Of Nottingham £119,797 -5.2%

Worcestershire £184,936 -3.3%

Warwickshire £184,860 -3.4%

Shropshire £184,664 -3.1%

Staffordshire £161,232 -0.1%

West Midlands £146,903 0.3%

Wrekin £140,819 1.2%

Stoke-On-Trent £89,910 -5.6%

Cheshire £185,036 -1.6%

Warrington £156,929 -4.5%

Greater Manchester £134,935 -2.1%

Merseyside £132,854 0.3%

Lancashire £128,806 -1.9%

Halton £127,289 -5.3%

Blackpool £119,112 2.8%

Blackburn With Darwen £98,762 -2.1%

Moray 101,031 -6.1%

Clackmannanshire 100,282 -6.8%

North Ayrshire 98,127 -1.9%

North Lanarkshire 96,363 1.7%

East Ayrshire 92,883 -10.3%

Orkney Islands 88,463 -10.3%

West Dunbartonshire 88,299 -7.4%

Shetland Islands 83,663 4.4%

Eilean Siar 75,640 -8.2%

Edinburgh, City Of 176,526 1.1%

East Renfrewshire 168,132 -8.8%

East Dunbartonshire 160,331 -8.6%

East Lothian 152,826 -7.5%

Stirling 144,367 -4.0%

Midlothian 134,238 -0.5%

Scottish Borders 130,622 -7.9%

Aberdeenshire 127,195 -3.4%

Highland 125,711 -3.4%

Glasgow City 124,370 -0.6%

Argyll And Bute 119,923 -5.9%

Isle Of Anglesey £145,033 -12.2%

Newport £144,790 -5.0%

Flintshire £142,754 -4.8%

Denbighshire £140,981 -1.9%

Swansea £139,153 -1.1%

Carmarthenshire £137,252 0.1%

Bridgend £133,572 -1.7%

Torfaen £120,546 -0.4%

Caerphilly £115,784 -1.5%

Neath Port Talbot £102,936 -2.6%

Rhondda Cynon Taff £93,453 -2.7%

Merthyr Tydfil £89,920 -4.8%

Blaenau Gwent £82,491 -7.4

Dorset £226,010 -0.5%

Devon £212,600 -0.3%

Wiltshire £209,024 -3.5%

Cornwall £203,006 -2.5%

Bournemouth £202,293 2.2%

Gloucestershire £201,799 -0.5%

North Somerset £185,780 -4.6%

Somerset £183,850 -1.5%

South Gloucestershire £182,959 -2.5%

City Of Bristol £178,116 0.6% -0.9%

Torbay £174,208 -2.0%

Swindon £155,868 -2.3%

Brighton And Hove £222,241 0.6%

West Sussex £221,415 -2.2%

Essex £212,460 -0.9%

Kent £206,628 -0.4%

East Sussex £198,541 -3.0%

Reading £196,094 -2.0%

Isle Of Wight £181,138 -0.6%

Milton Keynes £175,337 -0.6%

Thurrock £169,523 -0.6% -1.5%

Southampton £161,716 -1.3%

Portsmouth £154,803 0.6%

Medway £154,231 -2.1%

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........ The longterm bears in my view wrongly mix - up the world of pure investment with Mr Smith buying a home.

They fail to recognise that investment decisions do not drive Mr Smith and nor does a comparison with rent vs buying. Its all a lot simpler. Mr Smith just wants a place HE THINKS is his own and nothing is going to stop him appart from a sudden destructive catalyist.....

Here's some news for you Dogbox : "Mr Smith" can't afford to buy, he's been priced out.

Geddit ? ;)

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Here's some news for you Dogbox : "Mr Smith" can't afford to buy, he's been priced out.

Geddit ? ;)

at the last peak morgage interest payments almost reached the same as the average

persons salary after tax. Mr smith has been priced out but if he lies they can buy IO

and live on mrs smiths salary. IMHO Prices have the potential to go higher, IO on 200k

is 10k per year, mr smith takes 16k home a year, things will crash but there some

potential to go higher if credit is relaxed further.

However were still in limbo, i made a choice late 2004 to wait and see (just before

prices stagnated) . Looking at the bigger picture things are in limbo for a reason noone

knows what the reason is, but the economic fundimentals havent changed and prices have

stayed level, less transactions but in 2006 i am offered higher salary mutliples and am

allowed to borrow more money, but interest rates are higher? *confused*

Edited by moosetea

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Since joining I have cited the following key reasons as to why a crash is unlikely:

The rise of Interest Only keeping affordability alive

B2Ls providing a new 'prop' underpinning the market

The great unwashed loosing thier appetite for SM based investments , and this attitude pervades despite recent gains

Long term low interest rates (which bears always always say are about to rise)

Crucially, lack of a shock catalyist. Without a sudden catastrophic event such as rates doubling, the market just plods on. As I always say 'a Pension has premiums which arent covered by rent' yet people didnt cite that as a reason not to invest in Pensions.

The longterm bears in my view wrongly mix - up the world of pure investment with Mr Smith buying a home.

They fail to recognise that investment decisions do not drive Mr Smith and nor does a comparison with rent vs buying. Its all a lot simpler. Mr Smith just wants a place HE THINKS is his own and nothing is going to stop him appart from a sudden destructive catalyist.

The pessimists may fret over yield comparisons, but the avaerage B2Ler (yesterdays average pension contributor) knows nothing of such concepts. He just pays the mortgage like he once paid the Man from the Pru.

Also established LLs dont fret over yields and growth in the main. They are simply happy enough with the income and happy in the knowledge that over the long term they should get back more than they paid out, end of. Most certainly do not have the skill, inside knowledge or motivation to start day trading stocks. There is more to life than maximising returns when one is already comfortable.

Slow markets and low growth periods do not a crash make.

Oh I do think rates will rise, I don't think anyone expects falls! The size and duration of said rises is open to debate.

I'd be very wary of taking one quarter's figures in isolation - even during the boom years of 2003-4 things were slower at the start of the year, and the last quarter's published figures do show a slight rise in UK prices and a hell of a lot of variation even across neighbouring areas.

Above all I'd be wary of the vested interests around these parts who are busy in their bedsits trying to convince the UK that house prices are crashing, rather than stable on average.

The next Land Registry figures will be interesting to all. They are indeed data free of BS but not free of errors alas - I know of a couple of reversed digits which gives the classic error divisible by 9!

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Here's some news for you Dogbox : "Mr Smith" can't afford to buy, he's been priced out.

Geddit ? ;)

WP, countless times Ive had this retort since joining the forum and I always reply that a £15000 IO mortgage costs c£20.00 per day which is affordable for most.

At least you dont have to find a 25% deposit like my parents generation did. They tell me it took years to save that kind of money!

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Since joining I have cited the following key reasons as to why a crash is unlikely:

The rise of Interest Only keeping affordability alive

B2Ls providing a new 'prop' underpinning the market

The great unwashed loosing thier appetite for SM based investments , and this attitude pervades despite recent gains

Long term low interest rates (which bears always always say are about to rise)

Crucially, lack of a shock catalyist. Without a sudden catastrophic event such as rates doubling, the market just plods on. As I always say 'a Pension has premiums which arent covered by rent' yet people didnt cite that as a reason not to invest in Pensions.

The longterm bears in my view wrongly mix - up the world of pure investment with Mr Smith buying a home.

They fail to recognise that investment decisions do not drive Mr Smith and nor does a comparison with rent vs buying. Its all a lot simpler. Mr Smith just wants a place HE THINKS is his own and nothing is going to stop him appart from a sudden destructive catalyist.

The pessimists may fret over yield comparisons, but the avaerage B2Ler (yesterdays average pension contributor) knows nothing of such concepts. He just pays the mortgage like he once paid the Man from the Pru.

Also established LLs dont fret over yields and growth in the main. They are simply happy enough with the income and happy in the knowledge that over the long term they should get back more than they paid out, end of. Most certainly do not have the skill, inside knowledge or motivation to start day trading stocks. There is more to life than maximising returns when one is already comfortable.

Slow markets and low growth periods do not a crash make.

I see various reasons why HPC didn't happen last year and until now this year, which are very different from the ones cited by you. Two major reasons were,

1) a huge liquidity released by japanese banks into the world financial markets, in fact 2005 was the year when asian housing markets saw their biggest jump in house prices

2) the august rate cut which was seen as an assurance by the public that this govt won't let an HPC happen.

The soon these two diminish we will see a full blown HPC, it's time to just wait and watch and not to throw in the towels.

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I see various reasons why HPC didn't happen last year and until now this year, which are very different from the ones cited by you. Two major reasons were,

1) a huge liquidity released by japanese banks into the world financial markets, in fact 2005 was the year when asian housing markets saw their biggest jump in house prices

2) the august rate cut which was seen as an assurance by the public that this govt won't let an HPC happen.

The soon these two diminish we will see a full blown HPC, it's time to just wait and watch and not to throw in the towels.

If it might be so bold I would say point 1 is a total red herring. I have seen any number of economic theories given on here that never come to pass. See all those in 2004 and early 2005 re the Dollar and Bond markets :rolleyes:

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If it might be so bold I would say point 1 is a total red herring. I have seen any number of economic theories given on here that never come to pass. See all those in 2004 and early 2005 re the Dollar and Bond markets :rolleyes:

So what you are saying is that amount of money available in the market is nothing to do with the sustained HPI. At a time when house prices were going up at the rate of 30 - 40% pa in emerging economies (china, india etc.) I wouldn't be too surprised to see a flat market in the UK which is full of HP obsessed people. And then there were constant talks of further rate cuts, with some economist predicting rates to go down as low as 3.5%. All of this contributed towards sustaining the housing market.

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Ok Mr Dogbox.

I have to say if obvious cracks don't start to show by spring next year, i'll start to get a little restless. But i expect one of two things to happen, interest rates rise making BTL more unviable, hence turning sentiment. Or interest rates don't rise, and sterling falls.

Either way, buying now is not a good idea.

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Can someone explain HOW Flash Gordon can stop our BoE guys from raising Interest rates, whilst the rest of the world are putting theirs up SUBSTANCIALLY, and coming out of this smelling of roses? :rolleyes:

This ASSET BUBBLE is WORLD WIDE! Other countries are feeling the effects of it and REACTING TO IT! They will inflict a little pain for a better long-term. If we dont do something about it, then UK PLC is gonna be worthless! Then WE WILL be going to POLAND to get work and sending money back home here!!!!

TB

Edited by teddyboy

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The longterm bears in my view wrongly mix - up the world of pure investment with Mr Smith buying a home.

Got to agree with you on that - if people cared enough about fair prices to say no, the market would never have got to this stage

the demand for housing is amazingly inelastic, and as long as banks come up with creative ways of making monthly payments affordable - there's plently of people who will happily take on the debt.

when BMW launched in Japan they had a hard time because their cars were far more expensive than locally produced cars - however they soon found that the locals would happily buy BMW at their prices on finance provided the monthly repayments were low - people didn't really care the fact that it took many more years to pay off.

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Since joining I have cited the following key reasons as to why a crash is unlikely:

The rise of Interest Only keeping affordability alive

B2Ls providing a new 'prop' underpinning the market

The great unwashed loosing thier appetite for SM based investments , and this attitude pervades despite recent gains

Long term low interest rates (which bears always always say are about to rise)

Crucially, lack of a shock catalyist. Without a sudden catastrophic event such as rates doubling, the market just plods on. As I always say 'a Pension has premiums which arent covered by rent' yet people didnt cite that as a reason not to invest in Pensions.

The longterm bears in my view wrongly mix - up the world of pure investment with Mr Smith buying a home.

They fail to recognise that investment decisions do not drive Mr Smith and nor does a comparison with rent vs buying. Its all a lot simpler. Mr Smith just wants a place HE THINKS is his own and nothing is going to stop him appart from a sudden destructive catalyist.

The pessimists may fret over yield comparisons, but the avaerage B2Ler (yesterdays average pension contributor) knows nothing of such concepts. He just pays the mortgage like he once paid the Man from the Pru.

Also established LLs dont fret over yields and growth in the main. They are simply happy enough with the income and happy in the knowledge that over the long term they should get back more than they paid out, end of. Most certainly do not have the skill, inside knowledge or motivation to start day trading stocks. There is more to life than maximising returns when one is already comfortable.

Slow markets and low growth periods do not a crash make.

Spot on....people thought of nothing throwing £400 quid a month away into a pension black hole to people like equitable...even if some people have small yields they don't care. People have lost faith in pensions. For some BTL is today's equivalent to stuffing cash under your mattress.

My own personal theory is that bears hate it when doing something that is relatively quite simple like BLT does so well, it's not sexy enough compared to the stock market. They especially hate it when someone they think is common does well, especially northern blonde's as I remember from one Property Ladder.. that really got them uptight.

Edited by mercsl

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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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