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apom

Reality Check.

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1: There is no housing shortage.

2: There will be no inflation to pay of your Mortgage.

3: 200%-300% is not sustainable inflation, it is speculation.

4: If House Prices were sustainable, then this is how much they would have cost 8 years ago and they wouldn't have crashed just before.

5: No, the market has not changed over the last ten years.

6: No, credit is not cheaper, self certifing and lying about your salary is fraud. As is pretending that you have a repayment vehicle for your IO mortgage.

7: If it will take about a decade of every penny of your take home pay to pay the capital that you have borrowed then an IO mortgage is not a neat way to afford a home.

8: When the economic leaders of the planet get themselves together, call themselves the IMF and specifically warn about the uk housing market you should listen, perhaps a little more then you would listen to the halifax.

9: It is not an invalid point to suggest that all booms have gone bust.

10: If you think the market is stable, look at those investing in it. How many have post doctorate degrees in rocket science.

11: 8 years ago a dinky run down terracce in devon was just about £40,000 now people seem to thinkthat it should be worth £160,000 and just because someone is prepared to borrow like a crazy person (6 and 7) to buy it does not make it worth that much.

12: Every boom market has failed and at the point of failure it will have had bulls believing in it fully. They will have arguments as to why their market is different, every time since writing was developed they have been wrong.

I hope this was useful.

The market is a joke and today I broke it to someone that it would take over a decade for them to pay of their capital debt for their IO mortgage. They had no idea, none.. They were struggling with their interest. this makes up the greatest proportion of FTB's strategies

With the BBC suggesting that 1,000,000 people might go bankrupt I would point out that a population 60 times that includes children, pensioners and the majority of people who bought their homes pre boom.

Houses are not affordable.

Edited by apom

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1. Agree, but in some areas there is a shortage of good quality housing in which people on decent salaries want to live (not chav infested).

2. Agree in the short term since the BOE are targeting inflation but 25 yrs is a long time and much can happen.

3. There is lots of speculation by BTL but it is also a response to lower IR's.

4. Its simply a response to low IR's and low monthly repayments.

5. True but IR's have.

6. Enough said.

7. Been discussed to death on this forum. I think if you understand them, expect your salary to increase (not just hope!), are a good investor or will inherit then they can be a good tool.

8. Everyone is a VI of some sort. I think they were trying to talk it down or take of the excess.

9. I think you can only say this with hindsight. Some assets prices increase due to increase demand and remain high you only call it a boom and bust after the fact.

10. I agree that most professional investors have either left the party or decided its too late to have some fun.

11. The selling price is what its worth. If it sells for £160,000 in someones opinion its worth that much no matter what you or i think.

12. As with 9 you need hindsight. If there is a crash in the next few years it will be described as a typical boom bust if not then an adjustment to new market conditions (lower IR's)

"Houses are not affordable."

They are affordable because people are buying them even at these inflated prices, as to whether they are good value for money thats another story....

(all IMHO)

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Guest Alright Jack

1: There is no housing shortage.

I think there is a shortage of decent family housing.

2: There will be no inflation to pay of your Mortgage.

:lol::lol::lol:

There is one born every minute. What do you think 13.8% pa monetary expansion is?

3: 200%-300% is not sustainable inflation, it is speculation.

You're correct in one sense but bare in mind that the mountain may not come to muhammed, but will likely meet it part of the way. See 2 above.

4: If House Prices were sustainable, then this is how much they would have cost 8 years ago and they wouldn't have crashed just before.

Again, home prices are out of whack with the real economy. Almost certainly the rebalancing will be that the real economy will inflate to meet homes rather than homes retrench nominally.

5: No, the market has not changed over the last ten years.

Yes it has. There are oceans of cash trying to find somewhere to go.

6: No, credit is not cheaper, self certifing and lying about your salary is fraud. As is pretending that you have a repayment vehicle for your IO mortgage.

Like anyone really cares. You can't take an entire nation to court and put them in prison.

7: If it will take about a decade of every penny of your take home pay to pay the capital that you have borrowed then an IO mortgage is not a neat way to afford a home.

The pound won't even exist in a decade. We're merging with the euro soon and the coming sterling crisis will be the opportunity to sell it to the public.

8: When the economic leaders of the planet get themselves together, call themselves the IMF and specifically warn about the uk housing market you should listen, perhaps a little more then you would listen to the halifax.

I think you should really ignore central bankers. They do not have the public interest at heart.

9: It is not an invalid point to suggest that all booms have gone bust.

Sure, but predicting how the bust will work its way through the economy is the hard bit. I think a sterling devaluation is headed our way very soon. It will be far more severe than in 1992 because there is far more debt in default. To believe cash will be king in this environment is really brave!

10: If you think the market is stable, look at those investing in it. How many have post doctorate degrees in rocket science.

I agree that a bubble exists in real estate. But I also believe a bubble exists in sterling itself. It is time to sell BOTH. Past time actually.

11: 8 years ago a dinky run down terracce in devon was just about £40,000 now people seem to thinkthat it should be worth £160,000 and just because someone is prepared to borrow like a crazy person (6 and 7) to buy it does not make it worth that much.

There is no standard of value to be found in the currency. Credit and money in this system are one and the same thing. Thus, any borrowing, regardless of how wreckless, has the same debasing effect on the value of the currency.

12: Every boom market has failed and at the point of failure it will have had bulls believing in it fully. They will have arguments as to why their market is different, every time since writing was developed they have been wrong.

I hope this was useful.

The market is a joke and today I broke it to someone that it would take over a decade for them to pay of their capital debt for their IO mortgage. They had no idea, none.. They were struggling with their interest. this makes up the greatest proportion of FTB's strategies

With the BBC suggesting that 1,000,000 people might go bankrupt I would point out that a population 60 times that includes children, pensioners and the majority of people who bought their homes pre boom.

Houses are not affordable.

To re-itereate, I do not believe real estate to be any more over bought than sterling.

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1. Define shortage. How many houses is 'enough'?

2. What, prices and wages are going to remain absolutely constant for the next 20-30 years?

3. Depends upon the time period. When my Grandad started work he probably got thruppence a week. That wouldn't buy you much of anything these days, not just housing.

4. A house is worth what someone is willing to pay for it.

5. Perhaps not fundamentally, but an independent BoE who can credibly keep inflation down through the threat of IR rises means interest rates could well stay low relative to their historical average.

6. Those people still have to pay back the debt at some point or declare themselves bankrupt.

7. Depends upon your personal circumstances.

8. I listen to advice and information from lots of sources, take into account their vested interests, then make my own mind up.

9. Tautological. It could only be a boom if it was followed by a bust.

10. I'm currently writing a PhD thesis (not in rocket science) and bought a house recently. I'm not "investing" though, I'm buying a home.

11. I repeat, a house is worth as much as someone is willing to pay for it.

12. Again tautological and requiring hindsight. I'm sure there were plenty of bears telling Henry Ford that demand for his cars would soon peak and then prices would crash...

I hope this was useful.

The market is a joke and today I broke it to someone that it would take over a decade for them to pay of their capital debt for their IO mortgage. They had no idea, none.. They were struggling with their interest. this makes up the greatest proportion of FTB's strategies

With the BBC suggesting that 1,000,000 people might go bankrupt I would point out that a population 60 times that includes children, pensioners and the majority of people who bought their homes pre boom.

Some of them bought them during previous booms, sat them out, and are doing just fine. Not everybody loses their home in a crash.

Houses are not affordable.

IYHO :ph34r:

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A house is worth what someones willing to lend you to buy it!!

Wages havent rocketed in 8 years.

On the front line of small business conditions have been pretty constant for years- whack you prices up to buy an overpriced house and be out of business in a week.

The emperor really does have no clothes.

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House Prices and Monetary Policy: A Cross-Country Study1. The 65-page treatise covers 35 years and housing cycles in 18 different countries including the UK and Ireland.

We find that real house prices are pro-cyclical and tend to reach a maximum near business cycle peaks, often after a prolonged period of buoyant growth in activity has raised output above its potential level and inflation pressures have begun to emerge. Subsequently, real house prices fall for about five years and their previous run-up is largely reversed. Real GDP growth slows during the first year or so after house prices peak as do growth rates of private consumption and investment.

House price booms are typically preceded by a period of easing monetary policy with rates bottoming out about three years before house prices peak. Rates then reverse quickly (after the peak) in response to falling GDP growth

Fed Study 65 page pdf.

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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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