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Hpc Discussion

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Do we think that there's a HPC on the way, somewhere, sometime? Well I, for one, do. What if you were an outsider - say a journalist, just waking up to the idea - looking for information on the subject, where would you look for it? At a website called House Price Crash.co.uk, of course. What would you find? A bunch of xenophobic cretins doing their utmost to reduce the 'discussion' to their brainless standards.

There have been, in the past, many very informative contributions to the subject of this board (not that I can claim any thanks). It was a place where serious minded people seeking data and, perhaps, comfort could come to and find something of value.

Whoever now controls this site should start to think whether they want this board to be treated seriously in the real world or let it drift, aimlessly, in the direction that it has gone over the last few hours.

p

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Do we think that there's a HPC on the way, somewhere, sometime? Well I, for one, do. What if you were an outsider - say a journalist, just waking up to the idea - looking for information on the subject, where would you look for it? At a website called House Price Crash.co.uk, of course. What would you find? A bunch of xenophobic cretins doing their utmost to reduce the 'discussion' to their brainless standards.

There have been, in the past, many very informative contributions to the subject of this board (not that I can claim any thanks). It was a place where serious minded people seeking data and, perhaps, comfort could come to and find something of value.

Whoever now controls this site should start to think whether they want this board to be treated seriously in the real world or let it drift, aimlessly, in the direction that it has gone over the last few hours.

p

Sadly, immigration is becoming THE issue at this present time. Not just in relation to house prices, employment and terrorism but in relation to the overall future of this country. See thread on Mori Poll. The majority of Brits now see immigration as a hot and negative issue. For FTBs, it is a prime reason for lack of affordability and many young people are angry--and so they should be. This government has created the biggest housing bubble in history and not a word of apology or admission that it has been a terrible mistake. For the majority, immigration is NOT a race issue. Its about numbers and overcrowding whether the immigranmts waiting to come in are Bulgarians or Bavarians.

House prices are the driver of this economy. If they collapse, and they will, its all over for a decade and the following recession will be painful. Gordon's attemtps to keep it rolling by fuelling demand by increasing immigration has worked in the short term. However, unemployment will be the nemesis and as jobs dissappear the competition for the remaining wage packets will become that much more fierce even without another 600k E Europeans arriving next year.

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Do we think that there's a HPC on the way, somewhere, sometime? Well I, for one, do. What if you were an outsider - say a journalist, just waking up to the idea - looking for information on the subject, where would you look for it? At a website called House Price Crash.co.uk, of course. What would you find? A bunch of xenophobic cretins doing their utmost to reduce the 'discussion' to their brainless standards.

There have been, in the past, many very informative contributions to the subject of this board (not that I can claim any thanks). It was a place where serious minded people seeking data and, perhaps, comfort could come to and find something of value.

Whoever now controls this site should start to think whether they want this board to be treated seriously in the real world or let it drift, aimlessly, in the direction that it has gone over the last few hours.

p

I think you'll find NULabour are responsible for your distress. Unfettered immigration provokes anger from people. Sometimes this is articulated in inappropriate ways but it's a free world; something I know Tony 'Weapon's of mass destruction' Blair wants to block from us. So NULabour tries to stiffle free speech and now you are but that's hardly surprising seeing as you are a disciple. The Labour party even accuse their own most loyal servants of being terrorists (party conference). :lol::lol:

Edited by Xurbia

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I think many of the threads on this website have diversified because politics, the economy and asset prices are so intertwined.

This ethereal "smoke and mirrors" boom of Gordon Borwn´s so-called miracle economy has gone on so long that the repurcussions on the economy and society will be enormous.

Realist Bear is right - for me it is not about RACE - it is about OVERCROWDING on an island whose population density is already shocking. It should come as no surprise that the countries with the highest standard of living have the lowest population densities, Norway, Sweden, Canada, Australia etc. Compare these with the overcrowded slums of Bangladesh or Cairo to cite just a couple of examples.

Culture also comes into it - why should a country that has built up a liberal and democratic culture (okay not a perfect one but utopia doesn´t exist) find its values eroded by a group of Islamic immigrant nutters who came here for a better life and but who reject all the values which gave them a better life in the first place.

You can go on talking about a crash the whole time - but there is only a limited amount you can say on the subject per se. If and when a crash gets underway then things will get exciting. But why not fill the time in identifying issues covering the wider picture - issues which may be the triggering factors behind widespread economic and social upheavals.

Edited by Caledonian-Emigre

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I think you'll find NULabour are responsible for your distress. Unfettered immigration provokes anger from people. Sometimes this is articulated in inappropriate ways but it's a free world; something I know Tony 'Weapon's of mass destruction' Blair wants to block from us. So NULabour tries to stiffle free speech and now you are but that's hardly surprising seeing as you are a disciple. The Labour party even accuse their own most loyal servants of being terrorists (party conference). :lol::lol:

People emigrating to this country are in my opinion the only ones effected by HPI. Let me explain further.

In the 80's Thatcher came along and encouraged us all to become Homeowners. This was the first stage in the whole process. She pushed "right to buy" and council tenants everywhere became homeowners. Over this period home ownership increased and so the majority of UK residents became home owners. The next phase came in 1998. All of a sudden everywhere people were making money on these homes and for the first time people were seeing homes as a viable option to making money. Some wealthier 35+ people even went out and bought up a few extra homes. The people benefitting most from this house price boom were those 45-55year olds who bought when a Detached House in London was £50k. All of a sudden they had £500k+ of equity in their house. They had made £500,000+ - this is real money if these people now decided to sell and move abroad or rent that would be cash in hand as RealistBearand others have declared on this site.

Now these 45-55year olds are (apart from orphans) the Mums and Dads of the FTB. So all of a sudden you have these youngsters who because of the boom cant get on the ladder and their mum and dads who because of the boom are suddenly in the money almost within 3-4 years. Rolling in the stuff. Cruises are at an all time high, Luxury Cars, Plasma TV's, Luxury Holidays etc etc. So what happens is that Mum and Dad decide to give Little Jimmy or Jenny £50k towards their first flat which costs £150k now because of HPI.

In a more family orientated society it should be commonsense to believe that the parents would give at least 50% of the money they earned on the property boom to their children to allow them their first step which is so difficult because of said boom. Unfortunately I think we have a more selfish older generation but it is fair to say that the wealth generated as and should in some way be filtered down through generations within a family. Should house prices remain as they are at some point those who were originally on the ladder prior to 2001 will filter their gains down to whoever is next in line.

If you believe in this scenario it is clear that the only ones who will feel the full pain of High House Prices in the UK are those families or individuals coming to this country with nothing looking to get on to the ladder with no family or relatives already on it. If you are Polish or Indian or Chinese you aren't going to be able to buy a property. No Mum and Dad is going to give you a slice of the HPI pie. So you end up renting from your British BTL (could be 2nd 3rd generation Indian British or West Indian British) and dreaming of being a property owner but house prices keep increasing beyond your grasp (4% increase year on year). A few lucky immigrants manage to get on the ladder and the mantra passed down to the 2nd generation is try and save and save and save to eventually get on the ladder.

This scenario was the same in the 70's but add to the mix Working Class. The Indians coming to the UK in the 50,60,70's were very much obsessed with getting on the ladder and this obsession still remains today with 3rd and 4th generation Indians owning multiple properties. The working class felt they would never achieve home ownership because prices were beyond their reach and then Thatcher came along and introduced "right to buy" which released masses of cheap property on to the market.

The only difference this time around is that there is no "right to buy". I feel sorry for genuine hard working immigrants coming to the UK (The ones coming for benefits can just p@ss off), HMS House Owner left the dock a few years ago and I cant see them ever getting on it, not unless Mum and Dad can throw you a line.

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This web site could be so much more, there is plenty to understand about what is happening.

But over the last year it has slowly, and recently more rapidly, descended into waffle.

Quantity has taken over from quality, much of the integrity has gone.

Easy to see why so many of the earlier posters have moved elsewhere.

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So are you saying that no one is going to buy a house unless Mum and Dad throw them a line?

So why would such an expensive and low yield investment be attractive to the BTL brigade?

Finally - why do you think the market will not correct, as all bubble markets have done previously?

Thanks.

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What if you were an outsider - say a journalist, just waking up to the idea - looking for information on the subject, where would you look for it? At a website called House Price Crash.co.uk, of course. What would you find? A bunch of xenophobic cretins posters doing their utmost to reduce the 'discussion' to their brainless standards.

Yes, and alot of it is really badly informed (or involves a misreading of the situation). Blame everything on immigration, nice easy target. Wouldn't really bother me that much but for the fact that I know that BNP (racist p****s) are loving it.

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So what happens is that Mum and Dad decide to give Little Jimmy or Jenny £50k towards their first flat which costs £150k now because of HPI

But what will mummy and daddy do about their pension shortfalls and nursing home fees - the baby-boomers are not quite geriatrics yet. They did not have to get money from their parents when they started out - they also did not have to make the supreme sacrifice of their parents - who had to risk their lives fighting for a free Europe. Indeed they are truly a selfish generation (with exceptions of course).

Yes, and a lot of it is really badly informed (or involves a misreading of the situation). Blame everything on immigration, nice easy target. Wouldn't really bother me that much but for the fact that I know that BNP (racist p****s) are loving it.

Whenever you generate huge gaps in income and imbalances in the economy it should come as no surprise that people are going to get more extreme in their voting habits - you don´t need a degree in rocket science, just look at your history books.

Alienate whole sections of society by concentrating wealth in the hands of an ever-decreasing few and they are bound to get p!ssed off.

The BNP will benefit most from the increasing economic hardships of neo-liberal UK plc - when things are going well people and different communities can get along with each other, but with city bonuses at record levels and a growing underclass of the socially deprived it looks like some sparks could fly.

Edited by Caledonian-Emigre

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Why is Xenophobia pushed as being wrong? History tells us that we don't all get along and probably never will. Middle East anyone?

Britain multicultural? My ar$e. Go to Oldham, Burnley and Bradford and you'll see that multicultural means divided communities.

Tell you what though, I'll happily allow in migrants that come here to live and work as long as we can send the white trash that have truly ruined this country in the opposite direction.

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Why is Xenophobia pushed as being wrong? History tells us that we don't all get along and probably never will. Middle East anyone?

History told us that we had always been hunter gatherers until we grew our first crop.

History told us that we could only communicate orally until we invented writing.

It's called progress. Try it, you might like it.

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Do we think that there's a HPC on the way, somewhere, sometime? Well I, for one, do. What if you were an outsider - say a journalist, just waking up to the idea - looking for information on the subject, where would you look for it? At a website called House Price Crash.co.uk, of course. What would you find? A bunch of xenophobic cretins doing their utmost to reduce the 'discussion' to their brainless standards.

There have been, in the past, many very informative contributions to the subject of this board (not that I can claim any thanks). It was a place where serious minded people seeking data and, perhaps, comfort could come to and find something of value.

Whoever now controls this site should start to think whether they want this board to be treated seriously in the real world or let it drift, aimlessly, in the direction that it has gone over the last few hours.

p

Good one mate, I couldn't agree with you more. The direction this threat is going proves your point. The forum seems to be dominated by a bunch of agony aunts cluttering every thread if useless drivel. I very seldom read any thread further than the first page.

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So why would such an expensive and low yield investment be attractive to the BTL brigade?

That is what is so frustrating about this site - no-one moves on. No-one accepts what are self-evident truths.

Instead of endlessly parroting the same old questions like 'why is an expensive and low yield investment attractive to the BTL brigade' why can't you accept (it is, after all, an undeniable truth) that ...

The BTL brigade do NOT regard BTL as an expensive and low yield investment.

They regard it as a long-term investment.

They rely on the fact that over any 25 year period you care to name property has been an excellent investment.

They rely on the fact it is a leverage investment that almost anyone can get into.

There are enough new entrants to BTL and existing BTLetters expanding their portfolios to make a significant change to the structure of the housing market.

Why, oh why, can't you accept this and move on to what you are going to do about it - instead of endlessly calling BTLetters mindless morons etc.

It doesn't matter why BTLetters have a different view of the market from you - the consequences of their actions matter. Have you noticed? You're priced out and are going to live in rented properties all your life.

History told us that we had always been hunter gatherers until we grew our first crop.

History told us that we could only communicate orally until we invented writing.

It's called progress. Try it, you might like it.

I am as un-xenophobic as the next man. Maybe more with my mixed race heritage.

Evidence of progress please. I see very little. I do see lots of evidence that different races/religions etc do not seem to get on with each other. The body count must be in the billions by now that proves this.

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So what happens is that Mum and Dad decide to give Little Jimmy or Jenny £50k towards their first flat which costs £150k now because of HPI.

In a more family orientated society it should be commonsense to believe that the parents would give at least 50% of the money they earned on the property boom to their children to allow them their first step which is so difficult because of said boom. Unfortunately I think we have a more selfish older generation but it is fair to say that the wealth generated as and should in some way be filtered down through generations within a family. Should house prices remain as they are at some point those who were originally on the ladder prior to 2001 will filter their gains down to whoever is next in line.

I agree, we have a more selfish older generation , lets not forget the type that will say "well it was tough to get onto the property ladder when I was young" so will therefore not even entertain the thought of helping their offspring at the expense of their newfound lifestyle.

but how does your scenario work if Mummy & Daddy have 2 or more Children ( I have 2 siblings) I would doubt that even with a massive equity increase from their homes that they would be able to stretch to 50% of the cost of a first timer property for each of their offspring.

So...... do they help maybe one of the children, if they can, or do they not bother, and enjoy the cruises and plasma TV's ?

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So are you saying that no one is going to buy a house unless Mum and Dad throw them a line?

So why would such an expensive and low yield investment be attractive to the BTL brigade?

Finally - why do you think the market will not correct, as all bubble markets have done previously?

Thanks.

Hi Badlad

If you look at the UK housing market apart from a few STR and those on Housing Benefit or young people/students most of us own our own homes. Those young people will have parents with family homes. As those children reach an age where they are becoming FTB Mum and Dad no longer need a 4 bedroom detached. Mum and Dad therefore downsize and take a massive chunk of equity with them. They then distribute this to the children. The children use that sizeable deposit to buy first home. Second time Buyers who brought their flat 3-4 years ago sell their flat to FTB and buy Mum and Dads family home.

As for BTL people they will hold on to their properties and realise the capital growth as Marina says over 25years they have doubled their investment. They will rent to growing numbers of immigrants and STR people and FTB whose Mum and Dad decided to STR :ph34r:

Why dont I think the bubble will burst. Well I have a feeling this bubble is like one of those tyres that fills with foam whenever it is punctured. There are a number of changes that have taken place in the market. I will list some of them but there are so many I might miss a few:

1. Single Dwellers have increased (Divorce, Single Parents etc)

2. People have decided to buy holiday homes in the UK - lots of second homes - These homes are taken out of the market

3 Loss of confidence in Pensions. Most people now talk of property as investment, they look at it with a long term perspective. Many have taken dips in the market into account when working out their 25 year plan. Some may have no choice but most will never sell and fight hell and high water to keep their property investment because they have been told that in the long term the fugures work.

4 BTL - The new hobby of the middle classes. The Upper classes have been doing it for hundreds of years but now cheap lending and ease of borrowing as well as the increased affluence of baby boomers has led to the emergence of a new house buying game. Most of these BTL's are in it for the long term and understand that yields will be small in the first 5 years and in fact many have worked in a loss for the first half of their investment.

5 Immigration. Apparently 600k next year and thats legal immigration, double that for the right figure. We've always had immigration but not to this level and new EC additions will allow Eastern Europeans to enter freely.

6 Lack of new property being built - the figures say 47,000 home shortfall every year and thats not taking into account illegals and second home buying.

7 Lack of land. Something not mentioned when talking of the US Property Market. In the US most people drive from A to B, there is no real focus around public transport hubs such as rail stations etc. Land is plentiful and building materials cheaper. As such their are never ending development opportunities over there and they can just build, build,build.

In the UK we are a small island already heavily populated. The NIMBY's are increasing in power and almost a third of land in the UK is owned by a select few who never plan to sell. Brownfield sites have been done. There are no longer empty warehouses in Manchester or Bristol. Its all been done. Where next?

8 When something is in short supply and demand is forever increasing the prices will never fall. Oil was once $3 a barrel it now stands at $73 a barrel. How do you feel that a market where demand outstrips supply will go down and go against economic principle?

9 The Media. A new series of Property Ladder, Location, Homes under the Hammer, Try before you buy etc etc. Property programs are big business now. They became popularised by Carol Smilie in the mid to late 90's and now they are as popular as ever. Without exception every program paints a positive picture of property buying. Every young couple stretch themselves and make a quick £30k+.

10. IKEA. Ok so we had MFI and DFS in the 70' and 80's but they were never as popular as IKEA. These places are popping up everywhere now and at a recent opening in North London they had to call the police in to stop near riots. They offer young people aspirational living that can only really be achieved by owning your own home. Everybody you speak to thinks their some kind of interior designer.

11. Cheap Borrowing. I remember in 2000 the base rate was 6%, today after the increase it stands at 4.75%. Banks are also offering 5x multipliers. Although this sounds shocking the average mortgage repayment still remains at 40% of wages. This is affordable to most.

12 Intelligent finance. People have more choice and are more informed and as such can tie themselves into long term fixed rate mortgages to protect against any future IR hikes. They are also switching mortages and searching for better deals after theirtie in periods.

Many more but you get the idea.....These are unique situations that have led to the current property boom and will I believe in my opinion lead to a slow and steady increase without any severe crash.

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Do we think that there's a HPC on the way, somewhere, sometime? Well I, for one, do. What if you were an outsider - say a journalist, just waking up to the idea - looking for information on the subject, where would you look for it? At a website called House Price Crash.co.uk, of course. What would you find? A bunch of xenophobic cretins doing their utmost to reduce the 'discussion' to their brainless standards.

There have been, in the past, many very informative contributions to the subject of this board (not that I can claim any thanks). It was a place where serious minded people seeking data and, perhaps, comfort could come to and find something of value.

Whoever now controls this site should start to think whether they want this board to be treated seriously in the real world or let it drift, aimlessly, in the direction that it has gone over the last few hours.

p

Yes you will find the odd bolshy thread however i think this is born out of frustration.

I have been checking this site for a while and the standard of rational discussion and on relevant important facts is still valid and very imformative in my opinion.

If it were not for HPC my graps of macro, micro, and global economics would be nowhere near the level it is now. I think it has and continues to be a great service for FTB's, STR's, Bulls and OO's alike.

Keeep up the good work.

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I agree, we have a more selfish older generation , lets not forget the type that will say "well it was tough to get onto the property ladder when I was young" so will therefore not even entertain the thought of helping their offspring at the expense of their newfound lifestyle.

but how does your scenario work if Mummy & Daddy have 2 or more Children ( I have 2 siblings) I would doubt that even with a massive equity increase from their homes that they would be able to stretch to 50% of the cost of a first timer property for each of their offspring.

So...... do they help maybe one of the children, if they can, or do they not bother, and enjoy the cruises and plasma TV's ?

Yes I agree. People here are saying "Yes but I never had to borrow off of my Mum and Dad to buy my first home"....OK but did your Mum and Dad have £300k equity? You see it works like this...no boom...no money. So you made £150k extra out of the boom. Thats great news but of course I'm paying £65k extra for my flat :( OK well I have 2 children so here have £50k each towards your first place ;) The flat they buy might be £150k or it might be £250k it depends on where they want to live and what job they do. More common these days in Brighton is "OK sonny your off to University heres £50k towards that 2 bedroom student flat for £150k. Your mortgage is £500 so rent your room out to a student mate of yours for £300 a month and you pay £200. When you finish Uni you can have the flat so sell it and take the equity or carry on renting it or go travelling and rent it out....your choice". I know lots of students in Brighton have had parents do this for them and help them on to the ladder.

As for nursing homes/nursing care isnt that based on income/savings etc and wouldnt it make sense for inheritence tax reasons to give a large proportion of your estate away 7 years before you pop it.

Also if you own a house with loads of equity in it dont the nursing homes bleed you dry of it. Wouldnt it be better to give it away before that happens.

With regards Pension shortfalls arent they improving now with better market conditions. I dont know too much about pension shortfalls and of course you wouldnt lend money to your kids if you felt it would leave you in poverty but perhaps giving away some of it would be good for the soul and good for Inheritence tax reasons.

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Marina,

What is your suggestion then? I hear you shouting about how BTL has changed things and that I'll be renting forever.

I dissagree with you on almost every point.

Buy to let is a unique occurance funded by equity release, soft, easy lending and low interest rates. Lending never stays easy forever, interest rate DO rise as well as fall.

Developers and EA's want to sell as much property to whoever they can find to buy it, whether or not the property is really affordable or a good bet is irrelevant- just sell and move on. If the developer/ EA can convince enough people to buy then the plan works.

Buy to let isn't backed up by any kind of business plan, it's all back of a fag packet stuff based entirely around the plus side of the cost benefit analysis- anything that is a negative point is ignored or dissmissed. Property shows on TV are driving the whole market with their rosy, it never rains in property land outlook.

If you have a finely balanced BTL business going on what happens if you loose you job? what happens if interest rates rise and your rental payments don't cover the mortgage? what happens if you have 6 months between tenants? If you have plenty of money to run your BTL then you can cover all this eventualities. If you have funded it all from dipping into your existing mortgage to deposit your BTL mortgage you don't have the liquidity to cover shortfalls- in this case you need to sell up fast or risk loosing your home as well as your BTL. If a BTL lanlord loses their job or find their incomes squeezed paying for a BTL that sits empty or a BTL who's rent falls short of the mortgage they are in trouble. If interest rates do rise then they have to pay more for their own home and raise the rent to cover their BTL- but there is over supply in the rental market so increasing your rent makes getting a tenant in harder.

Look at the wider economy- wages aren't rocketing, businesses are under pressure to reduce prices and cut costs. Government is running out of money to keep inventing public sector jobs and fund capital building which creates employment. We are under huge pressure from other countries in terms of manufacturing and service type jobs.

I am priced out at this time. I will only have to rent forever if I seriously believe the whole housing bandwagon can keep rolling in isolation to the economy and irrespective of what people actually get in their wage packets, irrespetcive of interest rates. I would also have to ignore what has happened in the US- a market whose housing bubble looks very much like the UK's

I don't believe in magic beans and I don't belive that house prices can balloon way beyond what people really earn- in their pocket. Housing and a positive economic outlook is all about confidence- once confidence goes south the money supply gets tight- people worry about the future and hang onto their money- service and leisure industries loose jobs very quickly.

I remember the last recession very well with negative equity and businesses droping like flies. In these circumstances a BTL investor gets a double whammy. It's all well and good saying BTL is long term but that assumes that a BTL investor will always be able to stay in the game- sometimes your personal circumstances change very quickly and you have little choice on what happens.

I can see that for a lot of BTL the consequences of things going wrong would be pretty horrid so I understand why anyone who points out the negatives needs to be ignored or dissmissed.

A lot of priced out FTBers don't have to rent- renting off a private landlord is wasting money which can be saved towards a deposit of their own There are hundreds of thousands of people hunkered down with parents or family saving money and waiting. Even if all the property is grabbed by the BTLer human nature is a fickle thing and a lot of people will simply refuse to become your tenant. The whole BTL ethos looks to me like an attempt to turn the clocks back to the 19th century where the plebs pay the squire to live in his houses. That changed and so might BTL.

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Do we think that there's a HPC on the way, somewhere, sometime? Well I, for one, do. What if you were an outsider - say a journalist, just waking up to the idea - looking for information on the subject, where would you look for it? At a website called House Price Crash.co.uk, of course. What would you find? A bunch of xenophobic cretins doing their utmost to reduce the 'discussion' to their brainless standards.

There have been, in the past, many very informative contributions to the subject of this board (not that I can claim any thanks). It was a place where serious minded people seeking data and, perhaps, comfort could come to and find something of value.

Whoever now controls this site should start to think whether they want this board to be treated seriously in the real world or let it drift, aimlessly, in the direction that it has gone over the last few hours.

p

If a journalist is only now waking up to the idea of a house price crash then they aren't going to last long as a journalist. You can't deny that Xenophobia is now starting to play a large part in politics full stop, this also covers the whole house price crash debate.

Are you just annoyed that we don't all hold the same liberal opinions as you?

http://newsforums.bbc.co.uk/nol/thread.jsp...1&edition=1

(if that link doesn't work, check out the BBC forums for "Should there be restrictions on new migrant workers?"

P.S Some us just hate everyone anyway, no matter what creed or colour :-)

Edited by Jimothy

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The BTL brigade do NOT regard BTL as an expensive and low yield investment.

Marina,

1) Since when were you spokesperson for the 'BTL brigade'?

2) How could you possibly know such a large and varied group of people regard BTL as an investment?

You seem to be basing your whole anti-HPC argument on the imagined beliefs of an enormous number of people, the actions of which cannot be predicted by anyone, least of all you (no offence).

Even if there are large numbers who do feel the way you suggest - which I doubt - there will be more than enough eager to off-load their portfolios as soon as they feel the market turning (i.e. now). As the realisation spreads further, the rest of the 'brigade' will follow (through choice or repossession) afterwards.

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Thanks for your response. Please see my comments...

Hi Badlad

If you look at the UK housing market apart from a few STR and those on Housing Benefit or young people/students most of us own our own homes. Those young people will have parents with family homes. As those children reach an age where they are becoming FTB Mum and Dad no longer need a 4 bedroom detached. Mum and Dad therefore downsize and take a massive chunk of equity with them. They then distribute this to the children. The children use that sizeable deposit to buy first home. Second time Buyers who brought their flat 3-4 years ago sell their flat to FTB and buy Mum and Dads family home. But this isn't happening is it? FTB's are at 11% of the market - record lows..

As for BTL people they will hold on to their properties and realise the capital growth as Marina says over 25years they have doubled their investment. They will rent to growing numbers of immigrants and STR people and FTB whose Mum and Dad decided to STR :ph34r:Will immigrants have the money to pay the rent of these properties? Will the NIMBY's allow HMO's in their cul de sacs? What about the rising unemployment figures. People may want to hold on to their property but they may not be able to - please look at the amount of personal bankruptcies and repossession stats - increasing rather rapidly.

Why dont I think the bubble will burst. Well I have a feeling this bubble is like one of those tyres that fills with foam whenever it is punctured. There are a number of changes that have taken place in the market. I will list some of them but there are so many I might miss a few:

1. Single Dwellers have increased (Divorce, Single Parents etc)

2. People have decided to buy holiday homes in the UK - lots of second homes - These homes are taken out of the market

3 Loss of confidence in Pensions. Most people now talk of property as investment, they look at it with a long term perspective. Many have taken dips in the market into account when working out their 25 year plan. Some may have no choice but most will never sell and fight hell and high water to keep their property investment because they have been told that in the long term the fugures work.

4 BTL - The new hobby of the middle classes. The Upper classes have been doing it for hundreds of years but now cheap lending and ease of borrowing as well as the increased affluence of baby boomers has led to the emergence of a new house buying game. Most of these BTL's are in it for the long term and understand that yields will be small in the first 5 years and in fact many have worked in a loss for the first half of their investment. Do you really think BTL's are in it for the long term? they may say they are at the moment but how long will they be able to cover voids? Will the rent cover the mortgage? IR's are now rising....

5 Immigration. Apparently 600k next year and thats legal immigration, double that for the right figure. We've always had immigration but not to this level and new EC additions will allow Eastern Europeans to enter freely.

6 Lack of new property being built - the figures say 47,000 home shortfall every year and thats not taking into account illegals and second home buying.

7 Lack of land. Something not mentioned when talking of the US Property Market. In the US most people drive from A to B, there is no real focus around public transport hubs such as rail stations etc. Land is plentiful and building materials cheaper. As such their are never ending development opportunities over there and they can just build, build,build. Please forgive me but this is complete and utter rubbish. There is not a lack of land at all in the UK. Planning laws need to be updated, but if you think there is a lack of land - take a quick stroll in Kent or Sussex. If your point was correct - there would not have been a US Property bubble in the first place, would there?

In the UK we are a small island already heavily populated. The NIMBY's are increasing in power and almost a third of land in the UK is owned by a select few who never plan to sell. Brownfield sites have been done. There are no longer empty warehouses in Manchester or Bristol. Its all been done. Where next? NIMBY's increasing in power? Actually I think you'll find it's the priced out who are increasing in number - when those numbers increase enough to affect elections, planning laws will change.

8 When something is in short supply and demand is forever increasing the prices will never fall. Oil was once $3 a barrel it now stands at $73 a barrel. How do you feel that a market where demand outstrips supply will go down and go against economic principle? Look at the US property market. You've contradicted yourself.

9 The Media. A new series of Property Ladder, Location, Homes under the Hammer, Try before you buy etc etc. Property programs are big business now. They became popularised by Carol Smilie in the mid to late 90's and now they are as popular as ever. Without exception every program paints a positive picture of property buying. Every young couple stretch themselves and make a quick £30k+.

10. IKEA. Ok so we had MFI and DFS in the 70' and 80's but they were never as popular as IKEA. These places are popping up everywhere now and at a recent opening in North London they had to call the police in to stop near riots. They offer young people aspirational living that can only really be achieved by owning your own home. Everybody you speak to thinks their some kind of interior designer.

11. Cheap Borrowing. I remember in 2000 the base rate was 6%, today after the increase it stands at 4.75%. Banks are also offering 5x multipliers. Although this sounds shocking the average mortgage repayment still remains at 40% of wages. This is affordable to most. What if rates go up again? And again?

12 Intelligent finance. People have more choice and are more informed and as such can tie themselves into long term fixed rate mortgages to protect against any future IR hikes. They are also switching mortages and searching for better deals after theirtie in periods. What if they have to move? The person buying their house will have to pay the new mortgage rate. The seller will have to as well. They could rent their old property out, but they will still need to pay a higher interest rate for their new mortgage.

Many more but you get the idea.....These are unique situations that have led to the current property boom and will I believe in my opinion lead to a slow and steady increase without any severe crash.

I haven't countered all your points - as they've all been discussed on this forum many times before. But your argument seems to be based on opinion and little bits of BBC type news that you've repeated. There is very little substance in your points at all, and certainly nothing new.

Please accept my apologies if my response is less than polite, but we've been over this sooooooo many times.....

Off you go down the pub now ;)

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Thanks for your response. Please see my comments...

I haven't countered all your points - as they've all been discussed on this forum many times before. But your argument seems to be based on opinion and little bits of BBC type news that you've repeated. There is very little substance in your points at all, and certainly nothing new.

Please accept my apologies if my response is less than polite, but we've been over this sooooooo many times.....

Off you go down the pub now ;)

My argument about the US was that the supply actually kept in line with the demand and land allows developers to increase the supply even further if needs be. In the UK we are restricted by supply. My argument was that the US market is completely different to the UK market. The US market rose artificially simply because of cheap borrowing where as in the UK it is so much more than just that.

That land you are strolling around isnt coming on to the market anytime soon. Roughly around 50% of land in the UK isn't even registered. Quite a bit is owned by the National Trust and the Crown but almost a third is owned by aristocrats. Now I'm not saying that they won't sell in the future if planning restrictions are lifted but it makes sense for them to hold on to land whilst demand increases and they are going to want so much for it that the developments are going to be really pricey. Check out this interesting article http://www.timesonline.co.uk/article/0,,2092-1974693,00.html

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Thanks for that link - interesting article.

90% of us live on 10% of the land indeed. That statistic has been discussed before on here but it never ceases to amaze me. I stand by my point, that we are not running out of land... and when enough people make their protest known something will be done about it.

However, I still feel property in the UK will correct quite dramatically. Speculation is quite often irrational and the moment a little panic sets in, a larger panic will quickly follow. You will still get the poor old sods chasing the market down, just like last time.

When my friends tell me, "You must be mad to buy property!" That is the time I will buy a house ;)

My argument about the US was that the supply actually kept in line with the demand and land allows developers to increase the supply even further if needs be. In the UK we are restricted by supply. My argument was that the US market is completely different to the UK market. The US market rose artificially simply because of cheap borrowing where as in the UK it is so much more than just that.

I understand your point. But the fact that the US increased supply with demand did not stop their own bubble developing. The US market is indeed different to ours - in the fact that it has evolved into various geographic bubbles. Cheap borrowing also pumped up the UK market and if we get another rate hike by the end of the year things will evolve quite rapidly. The UK is, more or less, just one bubble that will no doubt pop. In our "low" inflation environment (well low wage inflation anyway!) the drops will be more dramatic.

The question is when, not if.

A bubble is a bubble is a bubble. No amount of over-analysis will ever change this. All bubbles pop.

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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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