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cocacolalight

Housing Market Back To Normal - Mervyn King

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If you dwell on this issue it is all rather depressing.

The choices are between getting into punishing debt; buying a hovel; living with relatives or renting for the forseeable future.

The best thing to do is just rent and forget buying a house as any crash (if indeed there ever is one) is still a long way off................

I've not discussed the issues in the article because its just going over old stuff time and time again and its all been said before.

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"House prices have been moving up slightly, but not particularly dramatically," Bank of England Governor Mervyn King told Parliament's Treasury Committee in London on June 29. "The housing market is back to normal."

Discuss

maybe he's just reassuring the Parliament's Treasury Committee that the market has stabilised enough since 2005 to impose a much needed interest rate rise.

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If you dwell on this issue it is all rather depressing.

The choices are between getting into punishing debt; buying a hovel; living with relatives or renting for the forseeable future.

The best thing to do is just rent and forget buying a house as any crash (if indeed there ever is one) is still a long way off................

I've not discussed the issues in the article because its just going over old stuff time and time again and its all been said before.

Yes, lets stick our heads in the sand and refuse to accept that life might not be as rosy as promised by the various posters on here.

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If you dwell on this issue it is all rather depressing.

The choices are between getting into punishing debt; buying a hovel; living with relatives or renting for the forseeable future.

The best thing to do is just rent and forget buying a house as any crash (if indeed there ever is one) is still a long way off................

I've not discussed the issues in the article because its just going over old stuff time and time again and its all been said before.

A very good post.

There is a lot more to life than worrying about whether you own some bricks and mortar. It just gets depressing if you worry about it all day. Ultimately nobody on here (unless Merv is reading) has the ability to change what is happening, so you have to go with the flow.

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Yes, lets stick our heads in the sand and refuse to accept that life might not be as rosy as promised by the various posters on here.

I don't understand what you are saying here. Could you explain?

However, having said what I said, renting is depressing as well - you know you are contributing to some slime ball's future pension, whilst paying off his/her mortgage (or at least part of it).

So either way we lose.

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I don't understand what you are saying here. Could you explain?

However, having said what I said, renting is depressing as well - you know you are contributing to some slime ball's future pension, whilst paying off his/her mortgage (or at least part of it).

So either way we lose.

Unless you are the Lender and someone is paying you interest, or you own your home outright you are always putting money in some slime-balls pocket. A landlord just has a face you can point at.

At least I can laugh at my landlord for the bad capital investment he'd made! :lol:

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I don't understand what you are saying here. Could you explain?

However, having said what I said, renting is depressing as well - you know you are contributing to some slime ball's future pension, whilst paying off his/her mortgage (or at least part of it).

So either way we lose.

I think steve is saying that the crash may not come, and things may not be alright in the end.

As for paying someone's pension, that is probably inevitable. If you are paying a mortgage, you are contributing to bank profits. Bank shares are mostly owned by pension funds, so you are contributing to someone's pension. Admittedly it feels worse if the person is a BTLer.

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Going through some old papers I came across a Fleet Street Letter from 2004 which said ignore talk of a hpc, it isn't going to happen because of

1) demand outstrips supply

2) affordabilty (low interest rates, high employment, blah, blah, blah)

Until one of the above changes, the hpc isn't going to happen.

So maybe King is right - the housing market is back to normal. Whatever normal is.

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Going through some old papers I came across a Fleet Street Letter from 2004 which said ignore talk of a hpc, it isn't going to happen because of

1) demand outstrips supply

2) affordabilty (low interest rates, high employment, blah, blah, blah)

Until one of the above changes, the hpc isn't going to happen.

So maybe King is right - the housing market is back to normal. Whatever normal is.

Don’t trust Fleet Street Publications: they are just journalists. I have seen more recent publications by them saying that the housing market is going to crash. For example http://www.fsponline-recommends.co.uk/page...&u=apfsljsp

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Don't worry about prices rising because the higher they go the bigger the correction. I'm quite happy to see a terrace rise in my area Moseley (currently at 120k) rise to 150, 180, 200k

I wont loose a seconds sleep over rising prices.

Imagine this a big game of poker however we have the advantage of being able to see the bigger picture. The pot can get raised as much as it likes, we are the ones holding the Royal Flush. The BLT Muppets and interest only FTB's are the ones with a duff set of card who are bluffing.

Keep a straight poker face and don't fold your hand no matter how high they raise you. We have the winning hand, guaranteed.

edit typo

Edited by doggadogdog

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What you have to understand, is that a price crash may never actualy show up via the sticker price in a big way, if it just stays flat for 5 years, theres your crash, this is how it normaly is, and what the government wants, for people going to take out a big mortgage and with jobs that give an anual pay rise, and your young enough to take out a long mortgage then no problem, just wait, if you are like me and and have worked 12hr days and weekends to save lots of cash, then your pretty well stuffed, as there is no investment avaliable that keeps the value of your money over time (all investment at the moment is directionless and purely speculatave, no real positive returns)

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Guest mattsta1964

I reckon it'll be next year at the earliest before we'll see any dip in house prices

Rise in IR in Japan will trigger of an upward trend worldwide

Expect home seller packs to cause problems in the market next year too

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I think what Merv was saying is that HPI (as opposed to house prices) is back to normal i.e. not going up much. Soft Landing/Hard landing? the main tyres have touched the tarmac but the front wheel and the rest of the plane (current house prices relative to earnings, inflation out look etc) is still un-balanced and a big risk.

I/R will be going up, as will unempolyment. There are many more BTL's (second/third home owners of Uk and holiday homes) out there than currently recorded. Due to under reporting because of tax evasion and mortgage fraud. I know many friends and associates that 3 years ago were boasting about their off plan villas in Spain, Florida etc and their 2 bed uk buy to let pension properties. With out exception they've all gone very quiet. On the occasion I do engage them in conversation about 'how much they are making' in either rental yield or capital appreciation minus all costs including liquidation, they are remarkably frank about how dissapointed they are. The all say it's much more time consuming, stressful and costly (being a jonny come lately property barron) and they are going to sell, when the market picks up. Oh dear I bet they dont wait that long.

Pablo Silver or Lead?

Edited by Pablo-silver or lead?

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The choices are between getting into punishing debt; buying a hovel; living with relatives or renting for the forseeable future.

There are other alternatives.

I lived on a canal boat from 1998 to 2000, cost 14K and it really was a nice way to live. I sold that and lived abroad for 4 years before returning to the UK and now live in a nice touring caravan (air con, central heating, hot shower). I pay between £200 and £350 per month (depending on the site) which includes water, electricity, rubbish removal, drainage and a gardening contractor to maintain the grounds (council tax, tv licence, and other house related bills are obviously not applicable). In the past 7 years I have missed out on the housing boom but on the other hand I have saved over 100K and paid 7% of my salary into a pension; I cannot think of any reason why I would want to own a house in the UK.

I don't have any debt, live in a hovel, rent or live with relatives.......you just have to think outside the box.

PS. Some people might compare living in a caravan to living in a hovel but before you dismiss, it go and have a look at what is available brand new for 16 to 20K.........they really are luxurious compared to what was available 10 to 15 years ago. The sites I stay at are holiday sites, most have a shop, games room, clean, well maintined shower block and some have a restaurant, swimming pool and tennis courts, the use of which are included in the site fee.

Edited by walker127

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"House prices have been moving up slightly, but not particularly dramatically," Bank of England Governor Mervyn King told Parliament's Treasury Committee in London on June 29. "The housing market is back to normal."

quoted in http://www.nzherald.co.nz/section/story.cf...jectid=10389727

Discuss

Mervyn King, the Governor of the Bank of England, said yesterday: "Relative to average earnings or incomes, or anything else you could look at, house prices do seem remarkably high."
(Telegraph.co.uk Thursday, 11th May 2006)

Will Mervyn take a leaf out of Richard M. Nixon's book and simply say that his earlier statement is now "inoperative." :lol:

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Mervyn King, the Governor of the Bank of England, said yesterday: "Relative to average earnings or incomes, or anything else you could look at, house prices do seem remarkably high."
(Telegraph.co.uk Thursday, 11th May 2006)

Will Mervyn take a leaf out of Richard M. Nixon's book and simply say that his earlier statement is now "inoperative." :lol:

The BoE are fond of using big, bold talk to spare us rate rises. It won't work forever.

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There are other alternatives.

I lived on a canal boat from 1998 to 2000, cost 14K and it really was a nice way to live. I sold that and lived abroad for 4 years before returning to the UK and now live in a nice touring caravan (air con, central heating, hot shower). I pay between £200 and £350 per month (depending on the site) which includes water, electricity, rubbish removal, drainage and a gardening contractor to maintain the grounds (council tax, tv licence, and other house related bills are obviously not applicable). In the past 7 years I have missed out on the housing boom but on the other hand I have saved over 100K and paid 7% of my salary into a pension; I cannot think of any reason why I would want to own a house in the UK.

I don't have any debt, live in a hovel, rent or live with relatives.......you just have to think outside the box.

PS. Some people might compare living in a caravan to living in a hovel but before you dismiss, it go and have a look at what is available brand new for 16 to 20K.........they really are luxurious compared to what was available 10 to 15 years ago. The sites I stay at are holiday sites, most have a shop, games room, clean, well maintined shower block and some have a restaurant, swimming pool and tennis courts, the use of which are included in the site fee.

Do you have to keep moving between sites every few weeks/months? Many sites have a winter close down, what do you do then?

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Do you have to keep moving between sites every few weeks/months? Many sites have a winter close down, what do you do then?

Some sites say we can only stay 4 weeks maximum but most don't care how long we stay as long as I pay every week. My job involves moving around the country anyway so that suits me fine.

I don't work in the winter, I have a small 26ft yacht I bought 3 years ago for £9K in Malaysia so me and my girl go and live on that for 5 months. Its a bit basic and needs a few repairs but I enjoy working on it and we managed to sail to Thailand and back last year for the first time.

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"House prices have been moving up slightly, but not particularly dramatically," Bank of England Governor Mervyn King told Parliament's Treasury Committee in London on June 29. "The housing market is back to normal."

It's back to normal is it? So an ordinary person on an ordinary wage can afford an ordinary home, can they? Well I be blowed! In that case I'm off down the EA's later for my £75K two-bed semi!!!

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"Back to normal" alright.

£10bn required every month in new debt to prop the pig up, meanwhile REAL investment, and the REAL economy, REAL earnings, REAL savings get clobbered by inflation.

Fools.

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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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