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It's Started To Happen

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Looks like the HPC has just started.

Interest rates up a full point over the last year. A growing realisation that not only are rates not coming down, they could even go higher. Tougher credit restrictions. BTL yields falling below annuity rates. Pursed lips and a big intake of breath from the BOE.

And most important of all there's an unmistakeable change in media sentiment. The "bubble" and "crash" words are suddenly everywhere; newspapers, TV, MSN...even Sarah Beeny speaks the unspeakable. Overnight it's become respectable to ask the crash question.

Right now is like the seventh round in the Foreman/Ali fight, the bull Foreman has thrown most of the punches and made all the running. But it's slowly dawning on the audience that Foreman looks physically and emotionally exhausted. And what was thought impossible by all the pundits has started to look very possible indeed.

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Ha! Nice comparison!

I'm starting to get that feeling too, it's just happened in the last few months. Last night I was told by my brother that I was "throwing money away" by renting when I could get a mortgage of about £340,000. My rent is cheaper than the interest on that mortgage... His argument was that property "only ever goes up in value".

The sooner the crash happens, and it will, the sooner people stop using cliches. It's also better for the economy to have a smaller crash now than a bigger one later, but I guess I'm the only person in my family who views it like that. My brother also said that I should listen to economists rather than relying on my own opinion. I'm marrying one who shares my opinion!

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We've been here before in 2005, if anything there is more pressure on the demand side of housing than ever before, and the supply side is as bad as ever.

We're still running at double-digit HPI YoY, I wouldn't bet against this monkey. The market can stay irrational longer than you can stay solvent

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True, but unlike 2005 we have *** and increasing inflation pressures.

I feel this is the time and if not, I will get my coat ;)

We've been here before in 2005, if anything there is more pressure on the demand side of housing than ever before, and the supply side is as bad as ever.

We're still running at double-digit HPI YoY, I wouldn't bet against this monkey. The market can stay irrational longer than you can stay solvent

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True, but unlike 2005 we have *** and increasing inflation pressures.

I feel this is the time and if not, I will get my coat ;)

I agree, this won't be your father's crash, it never is. This time around we'll have the 300,000 new BTL landlords in 2006 fleeing for the exit, and they're unlikely to form an orderly queue!

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Looks like the HPC has just started.

How many times have I seen this since I started looking at this site over 3 years ago? Wish it were true, but no evidence.

Normally prices do show some evidence of actually falling before people posts "it's started". For example, "house at the end of my road was on the market for £240k, but is has been reduced to £230k. It's definitely started".

I have been thinking this for years, but with every house price increse, the inevitable burst is getting closer and more inevtiable.

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Such totty actually exists? Most want a nest at any price.

Yes, but she is Slovenian, where the mortgage culture doesn't exist. In Slovenia, you rent until you can afford to buy, perhaps with the help of a loan but not a mortgage.

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My brother also said that I should listen to economists rather than relying on my own opinion. I'm marrying one who shares my opinion!

I think the pool of brides matching your criteria is about to get much larger :lol:

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We've been here before in 2005, if anything there is more pressure on the demand side of housing than ever before, and the supply side is as bad as ever.

We're still running at double-digit HPI YoY, I wouldn't bet against this monkey. The market can stay irrational longer than you can stay solvent

Sorry, but supply & demand doesn't wash with me. If this was the case my rent would have gone up at the same rate as HPI.

And my sister was a BTLer back in the late EIGHTIES when it all came crashing down - she sold at a loss before it all got worse...same supply & demand argument back then didn't stop it tanking.

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It's also better for the economy to have a smaller crash now than a bigger one later

This statement may have been true in 2001, but we've gone waaay past that stage now!

Edited by Pete95

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Yes, but she is Slovenian, where the mortgage culture doesn't exist. In Slovenia, you rent until you can afford to buy, perhaps with the help of a loan but not a mortgage.

Ohh... I have quite a thing for sultry Slavic types, and she's a true believer as well. You're a lucky boy, I'm just sorry I didn't get there first ;)

edit: any sisters?

Edited by BuyingBear

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Still positive YoY, so no, it hasn't started yet. Hopefully soon, but not yet.

Reported prices are a lagging indicator. A change in sentiment must precede a change in price, and there's a huge groundswell of media negativity building right now. At the moment the popular commentary has just allowed for the possibility of a crash, within a week or two the tone of the articles will switch to the assumption that a crash is inevitable and they'll start speculating about how deep the crash will be. Right now is the beginning of the end for rising prices.

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Guest d23
Q107 will be seen as the turn, in hindsight.

would it be the 1% monthly (12% annualised) HPI that would be the lead indicator for that statement?

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Ha! Nice comparison!

I'm starting to get that feeling too, it's just happened in the last few months.

Definitely agree with you. Something has definitely changed. Outside London there is a lot more supply, and things seem to be sticking for months if not years. Inside London even the agents admit ist is crazy and can never last.

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Guest Yeahbutnocrash
Ha! Nice comparison!

I'm starting to get that feeling too, it's just happened in the last few months. Last night I was told by my brother that I was "throwing money away" by renting when I could get a mortgage of about £340,000. My rent is cheaper than the interest on that mortgage... His argument was that property "only ever goes up in value".

The sooner the crash happens, and it will, the sooner people stop using cliches. It's also better for the economy to have a smaller crash now than a bigger one later, but I guess I'm the only person in my family who views it like that. My brother also said that I should listen to economists rather than relying on my own opinion. I'm marrying one who shares my opinion!

A lot of commentators say that 7% IR's could be getting towards crash territory so we still have a bit to go based on that

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