Don't Be Too Doomy

[DamnedEitherway]

Hi I'm a newbie

Anatole Kaletsky a man who's work I've always followed believes there are real dangers now but still seems to favour buying.

Lombard Street Research also seem to think 2007 will be a good year but 2008 will grind to a halt.

I'm considering buying a house in Ashford, Kent. There's a nice detached 4 bed for £269,950. I think this seems quite reasonable considering there'll be a high speed to link to London is two years time....

Any thoughs appreciated!

Here are the articles I mentioned :

Don’t be too doomy

What could stop house prices rising and even send them into reverse? The two obvious answers are rising interest rates, or a serious weakening of the economy leading to higher unemployment.

The second is unlikely, at least in the next two or three years, since the British economy is expected to grow steadily at least until the end of the decade. Interest rates are more of a threat. At least one more rate increase is almost certain, and if the world economy keeps accelerating there could be more. Finally, there is the level of prices themselves. Trees don’t grow all the way to the sky; there comes a point when prices are so high that any further rise would make houses unaffordable, so prices have no way to go but down.

When will this point be reached? Nobody knows. My guess is that the period of rapid adjustment from the relatively low house prices of the 1980s and 1990s is over. If so, the present relationship of prices to personal incomes — with average prices fluctuating between five and six times average incomes — will prove to be the norm. In that case, buying a house at today’s prices should prove a decent long-term investment but no guarantee of instant riches. ANATOLE KALETSKY

Also Lombard Street Research

2008 – the year the UK house price boom ends?

2007 should be another good year for the UK housing market with double-digit house price inflation, but by 2008 housing momentum is likely to get exhausted. Despite higher interest rates and accelerating house prices inflation, house prices remain affordable. Our housing affordability index fell further in Q4, posting its lowest reading in fifteen years. But it is not yet close to levels previously associated with house price overvaluation.

Consequently, housing demand remains strong. Mortgage borrowing continues to power ahead at above-trend rates. So far leading indicators, such as mortgage approvals and the RICS survey, suggest only a mild softening of demand later in the year. Meanwhile, tight supply continues to underpin buoyant house price inflation. Nationwide data show house prices advancing by 9.5% in the year to Q1 after a 9.3% rise in Q4. House price inflation is likely to stay in the low double digits this year.

The Bank of England may have little choice but to raise interest rates further. But house price inflation of 10-12% and mortgage rates topping 7.5% by the year end would push house prices into unaffordable territory. A correction on the scale of the early 1990s crash is unlikely, but 2008 could be a difficult year for the UK housing market.

[DabHand]

The background to this debate is Eurostar's decision to cut services from Ashford International station when the new Ebbsfleet station opens in autumn 2007. Eurostar is proposing to reduce the services from Ashford to Paris to peak-hour services and, more importantly, to end all services to Brussels. I want to concentrate on the Brussels services. The new service proposals for Paris and other destinations in France will be adequate to maintain proper links. However, ending the Brussels services will be a blow to the development of Ashford, which is an important part of the Government's sustainable communities programme, and to plans for development and regeneration throughout Kent and other parts of the wider south-east of England.

From http://www.theyworkforyou.com/whall/?id=20...39.0&m=1587

As for your articles?

In the first one the last paragraph which is where you expect him to define why we shouldnt be so doomy contains not one elementary statement of foundation. It starts of as "nobody knows, my guess is.." and the rest relies on that first statement to hold up. Also known as "sh1t".

The second one appears to say, yeah its gonna go pop, just not this year, so lets paaaaarty. Great basis for a 25 yr mortgage.

Keep reading the mainstream they just woke up, for every baseless half-bull article you see you'll see 10 bearish ones explaining why the future may be rather grim based on information not opinion.

[TTID]

I'm considering buying a house in Ashford, Kent. There's a nice detached 4 bed for £269,950. I think this seems quite reasonable considering there'll be a high speed to link to London is two years time....

You are Judith Wilson and I claim my five pounds.

[DaggaDagga]

Isn't Ashford where the two ex-teachers have 700 houses? If so then prices are likely to be artificially inflated by their buying, and could fall when their inevitable sell-off has to happen.

The price sounds reasonable on the face of it. But not if it's newbuild, with a postage stamp-sized garden and 4 bedrooms in the space of 3 or even 2.

[Guest DissipatedYouthIsValuable]

Hi I'm a newbie

Anatole Kaletsky a man who's work I've always followed believes there are real dangers now but still seems to favour buying.

Lombard Street Research also seem to think 2007 will be a good year but 2008 will grind to a halt.

I'm considering buying a house in Ashford, Kent. There's a nice detached 4 bed for £269,950. I think this seems quite reasonable considering there'll be a high speed to link to London is two years time....

Any thoughs appreciated!

Here are the articles I mentioned :

Don’t be too doomy

What could stop house prices rising and even send them into reverse? The two obvious answers are rising interest rates, or a serious weakening of the economy leading to higher unemployment.

The second is unlikely, at least in the next two or three years, since the British economy is expected to grow steadily at least until the end of the decade. Interest rates are more of a threat. At least one more rate increase is almost certain, and if the world economy keeps accelerating there could be more. Finally, there is the level of prices themselves. Trees don’t grow all the way to the sky; there comes a point when prices are so high that any further rise would make houses unaffordable, so prices have no way to go but down.

When will this point be reached? Nobody knows. My guess is that the period of rapid adjustment from the relatively low house prices of the 1980s and 1990s is over. If so, the present relationship of prices to personal incomes — with average prices fluctuating between five and six times average incomes — will prove to be the norm. In that case, buying a house at today’s prices should prove a decent long-term investment but no guarantee of instant riches. ANATOLE KALETSKY

Also Lombard Street Research

2008 – the year the UK house price boom ends?

2007 should be another good year for the UK housing market with double-digit house price inflation, but by 2008 housing momentum is likely to get exhausted. Despite higher interest rates and accelerating house prices inflation, house prices remain affordable. Our housing affordability index fell further in Q4, posting its lowest reading in fifteen years. But it is not yet close to levels previously associated with house price overvaluation.

Consequently, housing demand remains strong. Mortgage borrowing continues to power ahead at above-trend rates. So far leading indicators, such as mortgage approvals and the RICS survey, suggest only a mild softening of demand later in the year. Meanwhile, tight supply continues to underpin buoyant house price inflation. Nationwide data show house prices advancing by 9.5% in the year to Q1 after a 9.3% rise in Q4. House price inflation is likely to stay in the low double digits this year.

The Bank of England may have little choice but to raise interest rates further. But house price inflation of 10-12% and mortgage rates topping 7.5% by the year end would push house prices into unaffordable territory. A correction on the scale of the early 1990s crash is unlikely, but 2008 could be a difficult year for the UK housing market.

I think the very best thing you could do after the mass viewing with 34 others is put in a sealed bid for 3X the asking price and make sure you get a variable rate endowment mortgage of 125%, and after spending the extra 25% on cars, see if you can withdraw some mortgage equity to buy a Spanish Villa at last year's asking price.

[Guest DissipatedYouthIsValuable]

Hi I'm a newbie

Anatole Kaletsky a man who's work I've always followed believes there are real dangers now but still seems to favour buying.

Lombard Street Research also seem to think 2007 will be a good year but 2008 will grind to a halt.

I'm considering buying a house in Ashford, Kent. There's a nice detached 4 bed for £269,950. I think this seems quite reasonable considering there'll be a high speed to link to London is two years time....

Any thoughs appreciated!

Here are the articles I mentioned :

Don’t be too doomy

What could stop house prices rising and even send them into reverse? The two obvious answers are rising interest rates, or a serious weakening of the economy leading to higher unemployment.

The second is unlikely, at least in the next two or three years, since the British economy is expected to grow steadily at least until the end of the decade. Interest rates are more of a threat. At least one more rate increase is almost certain, and if the world economy keeps accelerating there could be more. Finally, there is the level of prices themselves. Trees don’t grow all the way to the sky; there comes a point when prices are so high that any further rise would make houses unaffordable, so prices have no way to go but down.

When will this point be reached? Nobody knows. My guess is that the period of rapid adjustment from the relatively low house prices of the 1980s and 1990s is over. If so, the present relationship of prices to personal incomes — with average prices fluctuating between five and six times average incomes — will prove to be the norm. In that case, buying a house at today’s prices should prove a decent long-term investment but no guarantee of instant riches. ANATOLE KALETSKY

Also Lombard Street Research

2008 – the year the UK house price boom ends?

2007 should be another good year for the UK housing market with double-digit house price inflation, but by 2008 housing momentum is likely to get exhausted. Despite higher interest rates and accelerating house prices inflation, house prices remain affordable. Our housing affordability index fell further in Q4, posting its lowest reading in fifteen years. But it is not yet close to levels previously associated with house price overvaluation.

Consequently, housing demand remains strong. Mortgage borrowing continues to power ahead at above-trend rates. So far leading indicators, such as mortgage approvals and the RICS survey, suggest only a mild softening of demand later in the year. Meanwhile, tight supply continues to underpin buoyant house price inflation. Nationwide data show house prices advancing by 9.5% in the year to Q1 after a 9.3% rise in Q4. House price inflation is likely to stay in the low double digits this year.

The Bank of England may have little choice but to raise interest rates further. But house price inflation of 10-12% and mortgage rates topping 7.5% by the year end would push house prices into unaffordable territory. A correction on the scale of the early 1990s crash is unlikely, but 2008 could be a difficult year for the UK housing market.

I think the very best thing you could do after the mass viewing with 34 others is put in a sealed bid for 3X the asking price and make sure you get a variable rate endowment mortgage of 125%, and after spending the extra 25% on cars, see if you can withdraw some mortgage equity to buy a Spanish Villa at last year's asking price.

[svag]

Hi I'm a newbie

Anatole Kaletsky a man who's work I've always followed believes there are real dangers now but still seems to favour buying.

Lombard Street Research also seem to think 2007 will be a good year but 2008 will grind to a halt.

I'm considering buying a house in Ashford, Kent. There's a nice detached 4 bed for £269,950. I think this seems quite reasonable considering there'll be a high speed to link to London is two years time....

Any thoughs appreciated!

Here are the articles I mentioned :

Don’t be too doomy

What could stop house prices rising and even send them into reverse? The two obvious answers are rising interest rates, or a serious weakening of the economy leading to higher unemployment.

The second is unlikely, at least in the next two or three years, since the British economy is expected to grow steadily at least until the end of the decade. Interest rates are more of a threat. At least one more rate increase is almost certain, and if the world economy keeps accelerating there could be more. Finally, there is the level of prices themselves. Trees don’t grow all the way to the sky; there comes a point when prices are so high that any further rise would make houses unaffordable, so prices have no way to go but down.

When will this point be reached? Nobody knows. My guess is that the period of rapid adjustment from the relatively low house prices of the 1980s and 1990s is over. If so, the present relationship of prices to personal incomes — with average prices fluctuating between five and six times average incomes — will prove to be the norm. In that case, buying a house at today’s prices should prove a decent long-term investment but no guarantee of instant riches. ANATOLE KALETSKY

Also Lombard Street Research

2008 – the year the UK house price boom ends?

2007 should be another good year for the UK housing market with double-digit house price inflation, but by 2008 housing momentum is likely to get exhausted. Despite higher interest rates and accelerating house prices inflation, house prices remain affordable. Our housing affordability index fell further in Q4, posting its lowest reading in fifteen years. But it is not yet close to levels previously associated with house price overvaluation.

Consequently, housing demand remains strong. Mortgage borrowing continues to power ahead at above-trend rates. So far leading indicators, such as mortgage approvals and the RICS survey, suggest only a mild softening of demand later in the year. Meanwhile, tight supply continues to underpin buoyant house price inflation. Nationwide data show house prices advancing by 9.5% in the year to Q1 after a 9.3% rise in Q4. House price inflation is likely to stay in the low double digits this year.

The Bank of England may have little choice but to raise interest rates further. But house price inflation of 10-12% and mortgage rates topping 7.5% by the year end would push house prices into unaffordable territory. A correction on the scale of the early 1990s crash is unlikely, but 2008 could be a difficult year for the UK housing market.

Go for it and good luck

[House of Lords]

You are Judith Wilson and I claim my five pounds.

Or do you think Andy Jones has re-joined now he's been rumbled?

[Andy Jones]

No, I'm still here. Trading under my own name. I did warn you that they'd come back and strap your jacket back up if you continue...

ANDY

[DamnedEitherway]

The background to this debate is Eurostar's decision to cut services from Ashford International station when the new Ebbsfleet station opens in autumn 2007. Eurostar is proposing to reduce the services from Ashford to Paris to peak-hour services and, more importantly, to end all services to Brussels. I want to concentrate on the Brussels services. The new service proposals for Paris and other destinations in France will be adequate to maintain proper links. However, ending the Brussels services will be a blow to the development of Ashford, which is an important part of the Government's sustainable communities programme, and to plans for development and regeneration throughout Kent and other parts of the wider south-east of England.

From http://www.theyworkforyou.com/whall/?id=20...39.0&m=1587

As for your articles?

In the first one the last paragraph which is where you expect him to define why we shouldnt be so doomy contains not one elementary statement of foundation. It starts of as "nobody knows, my guess is.." and the rest relies on that first statement to hold up. Also known as "sh1t".

The second one appears to say, yeah its gonna go pop, just not this year, so lets paaaaarty. Great basis for a 25 yr mortgage.

Keep reading the mainstream they just woke up, for every baseless half-bull article you see you'll see 10 bearish ones explaining why the future may be rather grim based on information not opinion.

Thanks for you comments and the article. I'm aware of the cutbacks to the Euro services. Whilst that's disappointing and the possibility of futher cuts worrying, I think the high speed commuter link to London is going to be the main benefit to the area. It will be expensive though so I expect higher end properties to gain the most and this is as high end as I want to stretch!!

A four bed detached house for a reasonable price, where you can hope on the train and be in London in less than 40 minutes sounds a reasonable bet to me. At the same time the countryside is around the corner and the beach is 15 minutes drive !

Yes I agree there is a good chance the market could fall back next year (5-10%) but equally they may not - they may just stall again ... and they may rise another 10% in the mean time.

Just like to say also - i'm definitely not a 'Wilson'!! Do I sound bullish enough ? I don't think so!

And thanks to the Mortgage broker for the advice too but I won't be over extending myself.

[DaggaDagga]

Thanks for pointing out all the huge advantages of living in beautiful Ashford-on-the-floodplain. That sounds like a terrific bargain. Can I buy 5 please?

PM Me with details of where your shop is, you can email me a brochure if you want.

[DamnedEitherway]

Sorry wasn't trying to sound like too much of a speculator, i'm just looking for a home for my family. If I buy it won't be as an investment (ie. I don't expect the house to rise more than the money I'm saving renting).... more of an insurance policy (just in case things get really stupid! ie. they take off into the stratosphere). When you're on the housing ladder with a buffer you can just forget about it all because it doesn't matter anymore. Sitting it out on the sidelines is painful.

[PropertyGuru]

Sorry wasn't trying to sound like too much of a speculator, i'm just looking for a home for my family. If I buy it won't be as an investment (ie. I don't expect the house to rise more than the money I'm saving renting).... more of an insurance policy (just in case things get really stupid! ie. they take off into the stratosphere). When you're on the housing ladder with a buffer you can just forget about it all because it doesn't matter anymore. Sitting it out on the sidelines is painful.

where do they come from????

[Guest grumpy-old-man]

I think the very best thing you could do after the mass viewing with 34 others is put in a sealed bid for 3X the asking price and make sure you get a variable rate endowment mortgage of 125%, and after spending the extra 25% on cars, see if you can withdraw some mortgage equity to buy a Spanish Villa at last year's asking price.

definetly the best answer so far imo.

edited - apologies to the original poster if you are indeed genuine.

ps - don't buy.

Edited April 27, 2007 by grumpy-old-man

[Rubbernecker]

It's a shame that when somebody in this sort of predictament posts on here they just get mainly stupid comments. If you can afford it and are planning on staying there then go for it.

I have been a bear for years but maybe i am the most stupid bear at buying at the top of the market but i found a 3 bed with garage and nice big garage and extension possibilities in Basingstoke that we can afford so we have gone for it. We are FTB's and done our homework and we can afford this on one salary if we have babies and buy now and still have our luxuries like my horse. Maybe it will go down in value, maybe it wont but its £300 for the rent and my thoughts are that we can stay there for a long time.

BTW this is in the South East as well!

[TTID]

When you're on the housing ladder with a buffer you can just forget about it all because it doesn't matter anymore. Sitting it out on the sidelines is painful.

It does matter if you're in negative equity. What if prices crash this year? What will become of your family then?

Sitting it out on the sidelines is great fun, if the home that you want is becoming £1000 cheaper every month!

punctuation

Edited April 27, 2007 by TTID

[Guest grumpy-old-man]

It's a shame that when somebody in this sort of predictament posts on here they just get mainly stupid comments. If you can afford it and are planning on staying there then go for it.

I have been a bear for years but maybe i am the most stupid bear at buying at the top of the market but i found a 3 bed with garage and nice big garage and extension possibilities in Basingstoke that we can afford so we have gone for it. We are FTB's and done our homework and we can afford this on one salary if we have babies and buy now and still have our luxuries like my horse. Maybe it will go down in value, maybe it wont but its £300 for the rent and my thoughts are that we can stay there for a long time.

BTW this is in the South East as well!

I don't understand you, the £300 rent bit, is this what you were paying & now you have bought? how much did the 3 bed house cost you in basingstoke if you don't mind me asking ?

[PropertyGuru]

I don't understand you, the £300 rent bit, is this what you were paying & now you have bought? how much did the 3 bed house cost you in basingstoke if you don't mind me asking ?

It cost him £1.

because it only exists in his head

[Rubbernecker]

Sorry grumpy old man i meant the mortgage is £300 more a month than rent on our tiny flat.

I guess we decided that if we found somewhere we could live and stay to ride out any negative times and we could afford it we thought sod it. I was feeling worried about another 3 years of renting and the prices still going up to i guess.

We paid 220k for it

I expect i will be flamed but just wanted to give a balanced view. I have been addicted to this site for years and just cos we have bought doesnt mean i won't pop on here occasionally as besides it gives a good overview of the economy

[Rubbernecker]

It cost him £1.

because it only exists in his head

Why does it only exist in my head? And i am a Her by the way

[DaggaDagga]

We paid 220k for it

Sounds OK, if not newbuild or ex-council. If either of those then you've just flushed your cash away.

[Rubbernecker]

Sounds OK, if not newbuild or ex-council. If either of those then you've just flushed your cash away.

Well it 26 years old and not local authority. A friend of mine has an Aunt who has bought the exact same house a couple of doors down and paid 233k (ours has a paved driveway and nicer decor than theirs) so am hoping its not a bad price that we have paid but who knows what's round the corner.

[Guest grumpy-old-man]

Sorry grumpy old man i meant the mortgage is £300 more a month than rent on our tiny flat.

I guess we decided that if we found somewhere we could live and stay to ride out any negative times and we could afford it we thought sod it. I was feeling worried about another 3 years of renting and the prices still going up to i guess.

We paid 220k for it

I expect i will be flamed but just wanted to give a balanced view. I have been addicted to this site for years and just cos we have bought doesnt mean i won't pop on here occasionally as besides it gives a good overview of the economy

ah, ok then.

Obviously I can't comment on your purchase of your property but as someone else pointed out what about negative equity ?

my missus was badgering me to buy when we returned from France, I kept using the same maths to show her:

if we buy at 250k (approx price of a 4 bed detached cardboard one ) & the price goes down 10% in a year we have lost 25k in the 1st year

if we rent a 4 bed detached (which we have now) in the same area (ossett) @ £800 per month, that's £9600 per year

now if hpi is 0% at best then we pay £9600 to rent or lose 25k in a year. She didn't ask me again. Obviously she is taking my word (& 2 years spent on this site) that prices will prob fall about 10% per year imo.

it's a no-brainer as they say & sorry if this is not the news you want to hear.

[DamnedEitherway]

Of course i'm geniune. Why wouldn't I be. Why grumpy old man if you are neither a bull nor a bear should I not buy ?

To the Ashford on a floodplain guy... London seems to be doing ok last time i checked.

[DamnedEitherway]

Thanks Rubbernecker. I was indeed hoping for some friendly advice rather than lots of 'who's this dork' comments.