bearORbullENIGMA Posted July 2, 2007 Share Posted July 2, 2007 I listed a number of facts to support my case of why I think there will be no HPC. All I have got back is drivel. What numpty moderator has allowed these replies to a rationally presented arguement. Don't you see you are all a herd with an emotional stake in a HPC? This is why there will be no HPC, not until the last bear turns bull. Through buying and selling property since 1997 i have gone from a 2 bed flat with a 90K mortgage to a 4 bedroom detached house with a 100k mortgage and 350K equity... The majority of people on here believe in a crash only because they want a house so badly....it's sad really. Papillon ps Any logical case for a HPC welcome. And I promise not to resort to the inanae babbling of the previous posters who have replied to me. Aw....didn't you like my mucky mary's video then? Quote Link to comment Share on other sites More sharing options...
Sour Mash Posted July 2, 2007 Share Posted July 2, 2007 I listed a number of facts to support my case of why I think there will be no HPC. All I have got back is drivel. What numpty moderator has allowed these replies to a rationally presented arguement. Don't you see you are all a herd with an emotional stake in a HPC? This is why there will be no HPC, not until the last bear turns bull. Through buying and selling property since 1997 i have gone from a 2 bed flat with a 90K mortgage to a 4 bedroom detached house with a 100k mortgage and 350K equity... The majority of people on here believe in a crash only because they want a house so badly....it's sad really. Papillon ps Any logical case for a HPC welcome. And I promise not to resort to the inanae babbling of the previous posters who have replied to me. Well done - in a period of sustained and substantial price rises on property you've managed to make money on property! You myst be some kind of genius, give yourself a huge pat on the back (whoops, you already did) But I do take your point that many people here do seem to have a remarkable emotional stake in seeing a HPC, possibly born out of having missed the boat and a feeling that some sort of economic crash will help them. However, that doesn't mean it's not going to happen. Irrespective of the absolutely crazy prices at the moment, very many people are also up to their necks in unsecured debt. Interest rates are finally being raised to curb inflation and the money markets are increasing the price of long term lending anyway. The gobal credit bubble is bursting and with it will go the housing market. There's a very strong chance that a nasty recession will follow, especially since at least two recessions have been staved off now by the provision of 'cheap money' and inflating the money supply. Quote Link to comment Share on other sites More sharing options...
Guest Cletus VanDamme Posted July 2, 2007 Share Posted July 2, 2007 (edited) I listed a number of facts to support my case of why I think there will be no HPC. All I have got back is drivel. All your points in your OP would be true if credit continues to flow like the burst banks of the Don. But we know that can't happen indefinitely; when the credit dries up, where's the money going to come from? However, when the crash comes those that do have plenty of cash will clean out the UK property market (people like Tchenguiz are waiting in the wings to do precisely that, as well as smaller fish), accelerating the UKs return to a Victorian rentier society, so your final point I do agree with. Edited July 2, 2007 by Cletus VanDamme Quote Link to comment Share on other sites More sharing options...
jackalope Posted July 2, 2007 Share Posted July 2, 2007 Can't you allow CO to post back here instead? Better to stop the bull drain than allow trolls like papillon on board.A bit off topic, so you can remove this if you like. Why is he a troll? Just because he doesn't think there will be a HPC? Quote Link to comment Share on other sites More sharing options...
Guest Cletus VanDamme Posted July 2, 2007 Share Posted July 2, 2007 Why is he a troll? Just because he doesn't think there will be a HPC? no, 'cos he copied and pasted the same post into a number of other threads Quote Link to comment Share on other sites More sharing options...
Guest Charlie The Tramp Posted July 2, 2007 Share Posted July 2, 2007 Why is he a troll? Just because he doesn't think there will be a HPC? A troll, that`s news to me, maybe I missed something here. Quote Link to comment Share on other sites More sharing options...
Flick Posted July 2, 2007 Share Posted July 2, 2007 Yup, there's a lot of good reasons there for HP's to continue. Surely there must be a correction at some point, but guessing by how much and when is a fools game, as many (and I include myself there) have found out. Anyone thats sat it out for the last 3 years paying rent has very little chance of seeing a return on their patience. Quote Link to comment Share on other sites More sharing options...
downandout Posted July 2, 2007 Share Posted July 2, 2007 Papillon - good post. I'm sure that most of your points will have been discussed on here at some time in the past and in great detail, but me being a new member as well gives me the opportunity to address them all over again. If we all agreed that house prices were going to crash 50% on the 9th September, there wouldn't be a lot of point having a discussion forum. A lot of the issues you raise are also the subject of a indepth discussion and analysis that no one can go into on one post but here goes. Firstly the shortage. Supply is also a product of demand, it's no good looking at one in isolation. Take away some of the demand, you take away some (or all) of the shortage. Increasing population through immigration. You have to look at whether this is a short term or long term trend. A lot of people who have entered the country and are in the market for a house are attracted by the strong economy, there is no reason why this can't be reversed just as quickly. There is also the question of emigration. This could easily increase to a level that exceeds imigration The move to greater owner occupation as percentage of housing stock is already reflected in the price. This will change if it becomes financially unviable to buy, rather than rent, which it could be argued is the situation we are already in. The two bread winners argument kind of conflicts with the point you make about separation and divorce. The majority of the older generations wealth is tied up in property. By remortgaging to provide others with a deposit fuels an unsustainable bubble. I'm not sure about your point regarding globalization increasing our wealth. We are now competing with other countries with lower cost bases and higher productivity. The increasing amount of foreign wealth coming into the country could quite easily be reversed when they switch to the next 'fashionable' destination. Plus, the actual amount is relatively small in comparison to the overall value of housing stock. Land is a finite resource and it stands to reason that the value of land will increase if the population continues to increase. But the main argument for a crash is that house prices have risen far too high far too quickly. The illiquidity of houses can just as easily work against house prices. Take for example a road of similar houses, it only takes one to be sold at a greatly reduced price and the whole lot are marked down. The increase in BTL kind of conflicts with your point about the move to greater home ownership. The two are essentially opposed and one will have to give sooner or later. If you take first time buyers out of the equation, you really are going to struggle to maintain property prices. BTL landlords would like to hold on to their properties for the long term. But if demand falls a lot won't have a choice. There is also the question of whether the return on a BTL investment will justify the amount of cash invested, this seems to depend entirely on capital appreciation now. The 'miracle' economy that you describe has all the hallmarks of a boom and a bust always follows a boom. Think of the knock on effect on house prices that will have. Interest may be comparatively low compared to 15 years ago, but a lot of people who have bought houses at current prices have seen the interest rate nearly double. False predictions don't mean it won't happen. I remember the dotcom boom, people were saying that valuations were too high well before the crash and this proved to be the case albeit after prices had continued to rise. Basically, a lot of what you have said used to be a good reason to buy property for the long term but does not in anyway preclude a massive fall in property from happening in the not too distant future. The point is that all of these factors combined together have resulted in an unsustainable bubble that will burst. Then, who knows, property may start rising again and people who buy now might get their money back in another 5, 10 or 50 years. Quote Link to comment Share on other sites More sharing options...
wyldman100 Posted July 2, 2007 Share Posted July 2, 2007 house prices will continue to rise ..... slightly above the rate of inflation I love this notion, where do they get it from? This is just complete wishful thinking, how does a housing market know or care what the rate of inflation is? Quote Link to comment Share on other sites More sharing options...
papillon Posted July 2, 2007 Author Share Posted July 2, 2007 you've only managed to accumulate 350K equity after 10 years of 'playing houses' Hope you didn't give up the day job. Most who owned one property worth 150K with a 90K mortgage back in '97 would have seen the same returns without having moved...mates of mine who 'played houses' over the past ten years have had higher tax bills in a year than your total equity My point is I bought and sold when circumstances allowed me - not to make a living from it. I am an average Joe who made the equity by chance. 350K is a huge amount of money for me and would take me a lifetime of saving a huge amount of my salary each year to accumulate!! A huge number of people with families are in the same position. I am sorry for the misfortune of others who have not bought. i wa not patting myself on the back just stating a fact. (another example of the sheeple mentality on here) Anyway the main point from the morgan stanley arguement: 1. "A significant fall in real house prices is quite likely at somepoint in the relatively near future, but it could yet be a year or two away." Are you bears really going to be here in two years time? (make it three- these professionals never get it right) Granted there may well be a HPC in 2010-11, but by that time I think you will all have given up on this site and be shells of the people you once were. This site reminds me of the prophets of doom with sandwhich boards saying the end is nigh. By the way whats the point of having a discussion site if you do not allow anyone on here with a contrarian view? Good night sheeple. Ps: i think I will open a topic on how many people here actually own their own house, do you think there is a correlation between lack of ownership and bear/Bull opinions? Quote Link to comment Share on other sites More sharing options...
PropertyGuru Posted July 2, 2007 Share Posted July 2, 2007 Guys, I do apologise. Last night, I partook of a fabulous steak and ale pie - with a very rich gravy, plenty of mash and some leeks. Several large glasses of sancerre later, I unfortunately let rip an enormous flatus of such incredible stench that my entire party were asked to leave the Ivy and never return. To compound matters, I inadvertently left my palmtop connected to the internet, and the fart, taking advantage of the confusion, logged on to house price crash as 'papillon' and started posting the virtual equivalent of a gigantic boff. Sorry. Quote Link to comment Share on other sites More sharing options...
It is different this time Posted July 2, 2007 Share Posted July 2, 2007 Here is a list of why there will be no HPC Welcome to HPC great post, I keep telling them that 'it is different this time' but they just don't believe me. I hope they'll believe you and get on that property ladder before it is too late. Quote Link to comment Share on other sites More sharing options...
frugalista Posted July 2, 2007 Share Posted July 2, 2007 Any logical case for a HPC welcome. And I promise not to resort to the inanae babbling of the previous posters who have replied to me. Here's an argument for you. How do you know that all the factors you've mentioned have not already been priced in to the UK property market, with a sizeable lump of speculative demand on top? Most of the factors you mention have been in place for years. Four years ago for example interest rates were lower, all the factors you mention were present and prices were around 25-30% lower than now. Perhaps the factors were priced in already by then, and the rest is speculative? Many of the factors you mention have some truth in them, but their real effect is as platitudes, i.e. how they convince people that prices only ever go up. There are many signs of an out of control property investment mania. Don't you think one of the main factors in current property prices is speculative demand? frug. Quote Link to comment Share on other sites More sharing options...
DrBob Posted July 2, 2007 Share Posted July 2, 2007 Papillon has documented a few sensible arguments against a house price fall, so deserves a sensible response. Here are a few reasons why I think there will have to be a house price fall (in my view, 30-40% in real terms, 10-20% in nominal terms, over 5 years): - Interest rates are rising, making mortgage repayments less affordable - Once house prices begin to fall, the economy will suffer and the pound will fall in value as markets price in the expectation of lower interest rates. Because we import most of our goods, a weaker pound means higher inflation. This limits the ability of the BoE to lower interest rates in a recession - they will be unable to 'save' house prices - The factors which have lowered inflation (and therefore allowed lower interest rates) over the last 10 years will disappear: China will be forced to gradually revalue their currency, driving costs of imported goods higher, oil and other commodity price rises will feed through into goods, energy costs will rise when carbon trading/limits take off) - Non-discretionary costs (e.g. gas bills, petrol costs, council tax) are rising disproportionately to income, leaving less money for mortgage repayments - Credit costs are rising (e.g. rising treasury yields, markedly lower prices for CDOs), making it more expensive for mortgage lenders to lend (even for a specific interest rate) - Rents on newly-purchased buy to let properties are inadequate to cover mortgage interest payments, let alone the costs of repairs, voids etc. - Inflation is historically low, meaning that mortgage repayments no longer fall rapidly in relation to income - Although interest rates are historically low, house prices are so inflated that mortgage costs are nearly as high as they were (as a proportion of income) when interest rates were 14% - Buy to let'ers are investors, and once their investment is no longer making money, they will be more inclined to sell than those who live in their properties - There is plenty of empty land in the UK, and once the government makes the political decision to allow more building, residential land prices will fall substantially - Households have become smaller. As housing becomes more unaffordable, more people will take the lifestyle decision to flatshare / move back in with family to save costs, driving down both rental income and house prices - Media sentiment has turned, and will drive more and more to sell (and more and more to postpone/cancel buying) Again, these are just a few from the top of my head. I still think it is reasonable to buy if you have a secure job, are buying a pleasant house (NOT a flat) in a good area, which you are prepared to stay put in for 10 years and if you can still afford the mortgage if interest rates rise by 2% or if your partner stops working. Buying property as an investment at this stage in the cycle is asking for trouble. Quote Link to comment Share on other sites More sharing options...
papillon Posted July 2, 2007 Author Share Posted July 2, 2007 no, 'cos he copied and pasted the same post into a number of other threads As a new poster I could not post on the main discussion board or start a new topic!!!!! After posting on the other boards it allowed me to then post it as anew topic!!!! Unbeleivable paranoia. I rest my case, this site only tolerates the Bear mentality. Someone writes they don't believe there will be a HPC - gives some reasonably logical arguements, does not resort to insults, and then are insulted and called a troll. You are living in a dream world created by yourselves where you cannot tolerate any other non bear views. Quote Link to comment Share on other sites More sharing options...
the end is a bit nigher Posted July 2, 2007 Share Posted July 2, 2007 My point is I bought and sold when circumstances allowed me - not to make a living from it. I am an average Joe who made the equity by chance. 350K is a huge amount of money for me and would take me a lifetime of saving a huge amount of my salary each year to accumulate!!A huge number of people with families are in the same position. I am sorry for the misfortune of others who have not bought. i wa not patting myself on the back just stating a fact. (another example of the sheeple mentality on here) Anyway the main point from the morgan stanley arguement: 1. "A significant fall in real house prices is quite likely at somepoint in the relatively near future, but it could yet be a year or two away." Are you bears really going to be here in two years time? (make it three- these professionals never get it right) Granted there may well be a HPC in 2010-11, but by that time I think you will all have given up on this site and be shells of the people you once were. This site reminds me of the prophets of doom with sandwhich boards saying the end is nigh. By the way whats the point of having a discussion site if you do not allow anyone on here with a contrarian view? Good night sheeple. Ps: i think I will open a topic on how many people here actually own their own house, do you think there is a correlation between lack of ownership and bear/Bull opinions? (papillon @ Jul 2 2007, 10:24 PM) Another great arguement. Yes I am muppet that started off with a 2 bed 90K flat in 1997 and through buying and selling select properties, without even renting them out now lives in a 450K 4 bed detached house with 350K equity. IR's go up to 6.5....7%...8% who cares? There are thousnds of people out there like me who were trading up and using their savvy to buy the right houses while muppets like you were predicting a crash in 2003.04, 05 etc... When the muppets on here start saying there will not be a crash that is when I will believe there will be. Muppet Papillon (yes french for butterfly, move from house to house gorging on equity) Ahhhh........another one lucky enough to buy at the start of the boom and think they have made money through being a property investment expert 'buying and selling select properties'. What is your secret to investment in property then? Oh yes, luck. And of course you're probably too young to remember the 89 - 92 crash. I love the arrogance of people like you. Property used to be somewhere to live. Nowadays it's a reflection of how clever people have been with their 'investments'. Have you managed to invest in a pension too or is your property your pension? BTW, there's only one 'e' in argument. Just thought I would add the above from your other post seeing as you couldn't be bothered to reply. BTW, have you considered that maybe we have formed our own opinions and stuck with them despite them being contrary. You on the other hand have been lucky enough to ride the wave and unless you extracate yourself from your current property, will fall flat on your sorry little *rse very soon, because you really don't understand, do you? Quote Link to comment Share on other sites More sharing options...
bearORbullENIGMA Posted July 2, 2007 Share Posted July 2, 2007 i actually agree with a lot of his points....but still think he was trolling..... it's the intention behind the contrarian view.... he was definately trying to rile people & stir things up...... but i definately think we should be more open to bull comments & beliefs....after all there hasn't been a crash yet..... Quote Link to comment Share on other sites More sharing options...
the end is a bit nigher Posted July 2, 2007 Share Posted July 2, 2007 i actually agree with a lot of his points....but still think he was trolling.....it's the intention behind the contrarian view.... he was definately trying to rile people & stir things up...... but i definately think we should be more open to bull comments & beliefs....after all there hasn't been a crash yet..... I just thought he was a thick **** who had found out how to copy and paste. Funny when the gist of his argument was that we are doom-sheeple. Quote Link to comment Share on other sites More sharing options...
joey Posted July 2, 2007 Share Posted July 2, 2007 (edited) Here is a list of why there will be no HPCThere is a shortage of supply of UK housing. This will continue to push prices up. The UK population is continuing to increase through immigration increasing demand for UK housing. This will continue to push prices up. The majority of the population in the UK has a mind set that will always want to ‘own’ their house. This will continue to push prices up. In the 1970’s 80’s families consisted of one bread winner, average house prices were proportional to the average salary of the sole breadwinner. In the late 80’s and nineties and increasingly more so now there are two bread winners per family, average house prices will be proportional to the average salary of joint breadwinners. This will continue to push prices up. Divorce and separation rates have increased dramatically in the last 20 years, there are many more family units fuelling demand. This will continue to push prices up. A large majority of the previous generation has amassed great wealth, and is now acting as guarantor for their offspring or in many cases providing 25% deposit for their offspring. They are sharing their wealth. This will continue to push prices up. Through globalization real wealth has increased dramatically over the last 20 years in the UK. This will continue to push prices up. There is an increasing amount of wealth coming into London from abroad which is radiating outwards throughout the UK economy. This will continue to push prices up. Liberated economies with the ‘new rich’ are looking at places to put their money. The UK housing market is a prime spot. This will continue to push prices up. Land is a finite resource, like oil the price will increase exponentially long term. This will continue to push prices up. Unlike the stock market the UK housing market is very illiquid, if people cannot get a greater price for a property then they bought it for then the majority of people will not sell, limiting supply. This will continue to push prices up. There has been a huge increase in BTL landlords. Swathes of middle class families have invested in BTL and have limited supply. This will continue to push prices up. Yes FTB's have dropped to 8.9%, so what do they do, they rent. This provides BTL landlords with more income and after they have bought up all the 2 bedroom apartments they are moving on to 3/4 bedroom semi's and detached. he amount of housing that will be owned by BTL landlords will continue to increase longterm. The majority of BTL landlords will be holding on to their properties for long term to provide a regular pension income in the future. They will not be panicked as many have secure jobs with high incomes which will see them through any hard times if IR's rise This will continue to push prices up. When you buy and sell a 'home' you do not pay any tax on it making it a convenient investment vehicle. This will continue to push prices up. Mortgage suppliers and banks have relaxed their lending criteria and even if they tighten it up the market will remain way more liquid then it has in previous generations. The UK economy has boomed for nearly 15 years now and will continue to do so: GDP - 2.9% Q1 2007, Industrial Production +0.4% in April, Consumer Prices up 2.5% YoY, unemployment at 5.5%, rates at 5.5%, FTSE at record highs, Sterling through the roof and the least protectionist, most business oriented climate in the world. This will continue to push property prices up. Unemployment in the UK is still falling. This will continue to push prices up. Interest rates, even though they are rising, are still very low and are predicted to peak at 6.0 – 6.5%. This is still a historically low figure. This will continue to push prices up. There is a huge supply of first time buyers waiting in the wings, who have been saving their deposit over the years and will continue to drip feed into the market when they can afford to. This will continue to push prices up. There have been so many false predictions of a house price crash since 2000. A HPC is not going to happen. It’s now June 2007, there have been a number of IR rises since august and the latest figures show that HPI increased by 0.9% increasing annualized inflation to 11.1%. The false doomsayers will continue to push prices up. Of course I believe you will not get the double percentage annual returns of the past 8-9 years, however house prices will continue to rise in low single digit growth or slightly above the rate of inflation. There will be a huge generation of people who will never be able to afford a house, sad as this may seem….what is wrong with renting? Papillon Thoses are just off the top of my head, i'm sure you guys can think of more. Regards shortage of housing I would agree with this argument except London and the South East crashed during early 90s (started 89) quite badly there was a severe shortage of rentals with the high density population in the South East. Also the argument would hold in Tokyo one of the most densly populated cities in the world. Prices there plummted. If everyone owned their home in the UK I would agree they would fight tooth and nail to keep it. Now we have housing which is speculative with some people owning upto 700 and also another spanner in the works loads of overseas buyers who will quickly offload if there is a downturn. We had the oil rich Arabs buying up London in the 70s. To alot of people if things got bad they would be happy just to get out with aprofit and that could be still with a 50% drop in the price, that drop would really annoy the neighborsa sit will drop their house value as well. The old brigade of landlords and those that understand yields will keep their BTLs long term,but the amateurish brigade who don't understand auction procedures, bought off the plan in the last 2 years we are already seeing a high flood of BTLs coming onto the market who either can't get guaranteed rentals promised by the developers or getting nasty letters from the banks. We had the highest number of FTBs waiting in the wings after the last crash they waited from 1988 to 1996 and came into fore upto the 2003. This was the last part of the babyboomer generation buying their first home born upto 1964). This generation had good savings no debt as had free education nor ridiculous credit debt. House prices peaked 1988 they crashed upto 30% and upto 50% & 60% in places. They came back to 1988 prices in 1999-2001. Property is illiquid and can be quite hard to offload when things get bad, just a couple of repossesions in your street or nearby can bring the house quite sharply. Don't get caught in a block of flats if prices drop these are worse hit. Shares are liquid you get out very quickly and make money if the market is going up or down, you need alot of experience in this field. A high number of babyboomers will be cashing up to pay for their retirement starting 2008 those born 1945 or afterwards. I agree buy a house if its mortgage repayments are close to rental payments and you can afford them with a view of living in it for at least 10 years. Edited July 2, 2007 by joey Quote Link to comment Share on other sites More sharing options...
bdon Posted July 2, 2007 Share Posted July 2, 2007 Papillon - good post. I'm sure that most of your points will have been discussed on here at some time in the past and in great detail, but me being a new member as well gives me the opportunity to address them all over again. If we all agreed that house prices were going to crash 50% on the 9th September, there wouldn't be a lot of point having a discussion forum.A lot of the issues you raise are also the subject of a indepth discussion and analysis that no one can go into on one post but here goes. Firstly the shortage. Supply is also a product of demand, it's no good looking at one in isolation. Take away some of the demand, you take away some (or all) of the shortage. Increasing population through immigration. You have to look at whether this is a short term or long term trend. A lot of people who have entered the country and are in the market for a house are attracted by the strong economy, there is no reason why this can't be reversed just as quickly. There is also the question of emigration. This could easily increase to a level that exceeds imigration The move to greater owner occupation as percentage of housing stock is already reflected in the price. This will change if it becomes financially unviable to buy, rather than rent, which it could be argued is the situation we are already in. The two bread winners argument kind of conflicts with the point you make about separation and divorce. The majority of the older generations wealth is tied up in property. By remortgaging to provide others with a deposit fuels an unsustainable bubble. I'm not sure about your point regarding globalization increasing our wealth. We are now competing with other countries with lower cost bases and higher productivity. The increasing amount of foreign wealth coming into the country could quite easily be reversed when they switch to the next 'fashionable' destination. Plus, the actual amount is relatively small in comparison to the overall value of housing stock. Land is a finite resource and it stands to reason that the value of land will increase if the population continues to increase. But the main argument for a crash is that house prices have risen far too high far too quickly. The illiquidity of houses can just as easily work against house prices. Take for example a road of similar houses, it only takes one to be sold at a greatly reduced price and the whole lot are marked down. The increase in BTL kind of conflicts with your point about the move to greater home ownership. The two are essentially opposed and one will have to give sooner or later. If you take first time buyers out of the equation, you really are going to struggle to maintain property prices. BTL landlords would like to hold on to their properties for the long term. But if demand falls a lot won't have a choice. There is also the question of whether the return on a BTL investment will justify the amount of cash invested, this seems to depend entirely on capital appreciation now. The 'miracle' economy that you describe has all the hallmarks of a boom and a bust always follows a boom. Think of the knock on effect on house prices that will have. Interest may be comparatively low compared to 15 years ago, but a lot of people who have bought houses at current prices have seen the interest rate nearly double. False predictions don't mean it won't happen. I remember the dotcom boom, people were saying that valuations were too high well before the crash and this proved to be the case albeit after prices had continued to rise. Basically, a lot of what you have said used to be a good reason to buy property for the long term but does not in anyway preclude a massive fall in property from happening in the not too distant future. The point is that all of these factors combined together have resulted in an unsustainable bubble that will burst. Then, who knows, property may start rising again and people who buy now might get their money back in another 5, 10 or 50 years. thank you! Quote Link to comment Share on other sites More sharing options...
A Fool & His Borrowed Money Posted July 2, 2007 Share Posted July 2, 2007 Here is a list of why there will be no HPCThere is a shortage of supply of UK housing. This will continue to push prices up. The UK population is continuing to increase through immigration increasing demand for UK housing. This will continue to push prices up. The majority of the population in the UK has a mind set that will always want to ‘own’ their house. This will continue to push prices up. In the 1970’s 80’s families consisted of one bread winner, average house prices were proportional to the average salary of the sole breadwinner. In the late 80’s and nineties and increasingly more so now there are two bread winners per family, average house prices will be proportional to the average salary of joint breadwinners. This will continue to push prices up. Divorce and separation rates have increased dramatically in the last 20 years, there are many more family units fuelling demand. This will continue to push prices up. A large majority of the previous generation has amassed great wealth, and is now acting as guarantor for their offspring or in many cases providing 25% deposit for their offspring. They are sharing their wealth. This will continue to push prices up. Through globalization real wealth has increased dramatically over the last 20 years in the UK. This will continue to push prices up. There is an increasing amount of wealth coming into London from abroad which is radiating outwards throughout the UK economy. This will continue to push prices up. Liberated economies with the ‘new rich’ are looking at places to put their money. The UK housing market is a prime spot. This will continue to push prices up. Land is a finite resource, like oil the price will increase exponentially long term. This will continue to push prices up. Unlike the stock market the UK housing market is very illiquid, if people cannot get a greater price for a property then they bought it for then the majority of people will not sell, limiting supply. This will continue to push prices up. There has been a huge increase in BTL landlords. Swathes of middle class families have invested in BTL and have limited supply. This will continue to push prices up. Yes FTB's have dropped to 8.9%, so what do they do, they rent. This provides BTL landlords with more income and after they have bought up all the 2 bedroom apartments they are moving on to 3/4 bedroom semi's and detached. he amount of housing that will be owned by BTL landlords will continue to increase longterm. The majority of BTL landlords will be holding on to their properties for long term to provide a regular pension income in the future. They will not be panicked as many have secure jobs with high incomes which will see them through any hard times if IR's rise This will continue to push prices up. When you buy and sell a 'home' you do not pay any tax on it making it a convenient investment vehicle. This will continue to push prices up. Mortgage suppliers and banks have relaxed their lending criteria and even if they tighten it up the market will remain way more liquid then it has in previous generations. The UK economy has boomed for nearly 15 years now and will continue to do so: GDP - 2.9% Q1 2007, Industrial Production +0.4% in April, Consumer Prices up 2.5% YoY, unemployment at 5.5%, rates at 5.5%, FTSE at record highs, Sterling through the roof and the least protectionist, most business oriented climate in the world. This will continue to push property prices up. Unemployment in the UK is still falling. This will continue to push prices up. Interest rates, even though they are rising, are still very low and are predicted to peak at 6.0 – 6.5%. This is still a historically low figure. This will continue to push prices up. There is a huge supply of first time buyers waiting in the wings, who have been saving their deposit over the years and will continue to drip feed into the market when they can afford to. This will continue to push prices up. There have been so many false predictions of a house price crash since 2000. A HPC is not going to happen. It’s now June 2007, there have been a number of IR rises since august and the latest figures show that HPI increased by 0.9% increasing annualized inflation to 11.1%. The false doomsayers will continue to push prices up. Of course I believe you will not get the double percentage annual returns of the past 8-9 years, however house prices will continue to rise in low single digit growth or slightly above the rate of inflation. There will be a huge generation of people who will never be able to afford a house, sad as this may seem….what is wrong with renting? Papillon Thoses are just off the top of my head, i'm sure you guys can think of more. In Response, A reminder why there will be no soft landing in 2007, 08, 09... 1:18 in http://uk.youtube.com/watch?v=kAXLdaV_QJ4 And here also. http://uk.youtube.com/watch?v=nBnKh6B2cMw Hope This Helps You Alot In Seeing The Error Of Your Short-term Thinking. Quote Link to comment Share on other sites More sharing options...
grey shark Posted July 2, 2007 Share Posted July 2, 2007 Papillon has documented a few sensible arguments against a house price fall, so deserves a sensible response.Here are a few reasons why I think there will have to be a house price fall (in my view, 30-40% in real terms, 10-20% in nominal terms, over 5 years): - Interest rates are rising, making mortgage repayments less affordable - Once house prices begin to fall, the economy will suffer and the pound will fall in value as markets price in the expectation of lower interest rates. Because we import most of our goods, a weaker pound means higher inflation. This limits the ability of the BoE to lower interest rates in a recession - they will be unable to 'save' house prices - The factors which have lowered inflation (and therefore allowed lower interest rates) over the last 10 years will disappear: China will be forced to gradually revalue their currency, driving costs of imported goods higher, oil and other commodity price rises will feed through into goods, energy costs will rise when carbon trading/limits take off) - Non-discretionary costs (e.g. gas bills, petrol costs, council tax) are rising disproportionately to income, leaving less money for mortgage repayments - Credit costs are rising (e.g. rising treasury yields, markedly lower prices for CDOs), making it more expensive for mortgage lenders to lend (even for a specific interest rate) - Rents on newly-purchased buy to let properties are inadequate to cover mortgage interest payments, let alone the costs of repairs, voids etc. - Inflation is historically low, meaning that mortgage repayments no longer fall rapidly in relation to income - Although interest rates are historically low, house prices are so inflated that mortgage costs are nearly as high as they were (as a proportion of income) when interest rates were 14% - Buy to let'ers are investors, and once their investment is no longer making money, they will be more inclined to sell than those who live in their properties - There is plenty of empty land in the UK, and once the government makes the political decision to allow more building, residential land prices will fall substantially - Households have become smaller. As housing becomes more unaffordable, more people will take the lifestyle decision to flatshare / move back in with family to save costs, driving down both rental income and house prices - Media sentiment has turned, and will drive more and more to sell (and more and more to postpone/cancel buying) Again, these are just a few from the top of my head. I still think it is reasonable to buy if you have a secure job, are buying a pleasant house (NOT a flat) in a good area, which you are prepared to stay put in for 10 years and if you can still afford the mortgage if interest rates rise by 2% or if your partner stops working. Buying property as an investment at this stage in the cycle is asking for trouble. Thats a good post Dr Bob wasted on this thread , although it got a bit soft near the end , particularly the last paragraph . Quote Link to comment Share on other sites More sharing options...
Guest Charlie The Tramp Posted July 2, 2007 Share Posted July 2, 2007 As a new poster I could not post on the main discussion board or start a new topic!!!!! After posting on the other boards it allowed me to then post it as anew topic!!!! Maybe you should have read this pinned thread at the top of the Main Forum. There is good reason why we do this. http://www.housepricecrash.co.uk/forum/ind...showtopic=21810 BTW Bullish posters have been upgraded on this Forum Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted July 2, 2007 Share Posted July 2, 2007 Here is a list of why there will be no HPCThere is a shortage of supply of UK housing. This will continue to push prices up. So why aren't rents rising? The UK population is continuing to increase through immigration increasing demand for UK housing. This will continue to push prices up.. So why aren't rents rising? The majority of the population in the UK has a mind set that will always want to ‘own’ their house. This will continue to push prices up.. So why aren't rents rising? In the 1970’s 80’s families consisted of one bread winner, average house prices were proportional to the average salary of the sole breadwinner. In the late 80’s and nineties and increasingly more so now there are two bread winners per family, average house prices will be proportional to the average salary of joint breadwinners. This will continue to push prices up.. So why aren't rents rising? Divorce and separation rates have increased dramatically in the last 20 years, there are many more family units fuelling demand. This will continue to push prices up. Come to think of it, rents are falling. A large majority of the previous generation has amassed great wealth, and is now acting as guarantor for their offspring or in many cases providing 25% deposit for their offspring. They are sharing their wealth. This will continue to push prices up. . So why aren't rents rising? Through globalization real wealth has increased dramatically over the last 20 years in the UK. This will continue to push prices up.. So why aren't rents rising? There is an increasing amount of wealth coming into London from abroad which is radiating outwards throughout the UK economy. This will continue to push prices up.. So why aren't rents rising? Liberated economies with the ‘new rich’ are looking at places to put their money. The UK housing market is a prime spot. This will continue to push prices up.. So why aren't rents rising? Land is a finite resource, like oil the price will increase exponentially long term. This will continue to push prices up.. So why aren't rents rising? Unlike the stock market the UK housing market is very illiquid, if people cannot get a greater price for a property then they bought it for then the majority of people will not sell, limiting supply. This will continue to push prices up.. So why aren't rents rising? There has been a huge increase in BTL landlords. Swathes of middle class families have invested in BTL and have limited supply. This will continue to push prices up.. So why aren't rents rising? Yes FTB's have dropped to 8.9%, so what do they do, they rent. This provides BTL landlords with more income and after they have bought up all the 2 bedroom apartments they are moving on to 3/4 bedroom semi's and detached. he amount of housing that will be owned by BTL landlords will continue to increase longterm. . Even with yields below basic savins rates? The majority of BTL landlords will be holding on to their properties for long term to provide a regular pension income in the future. They will not be panicked as many have secure jobs with high incomes which will see them through any hard times if IR's rise This will continue to push prices up.. I have a secure job with a high income. Why don't I go into BTL? Oh yeah, because rents aren't rising. When you buy and sell a 'home' you do not pay any tax on it making it a convenient investment vehicle. This will continue to push prices up..I agree with this bit. But it's cheaper to rent at the moment (did I mention rents aren't rising?) and buy at a later date. Mortgage suppliers and banks have relaxed their lending criteria and even if they tighten it up the market will remain way more liquid then it has in previous generations.. Banks just want to make money. They will tighten their lending criteria if it looks like they might not get their money back. This will push prices down. The UK economy has boomed for nearly 15 years now and will continue to do so: GDP - 2.9% Q1 2007, Industrial Production +0.4% in April, Consumer Prices up 2.5% YoY, unemployment at 5.5%, rates at 5.5%, FTSE at record highs, Sterling through the roof and the least protectionist, most business oriented climate in the world. This will continue to push property prices up.. So why aren't rents rising? Unemployment in the UK is still falling. This will continue to push prices up.. So why aren't rents rising? Interest rates, even though they are rising, are still very low and are predicted to peak at 6.0 – 6.5%. This is still a historically low figure. This will continue to push prices up. . Rising IRs to push up prices? Hmmm.. There is a huge supply of first time buyers waiting in the wings, who have been saving their deposit over the years and will continue to drip feed into the market when they can afford to. This will continue to push prices up..More likely they'll clear off to another country There have been so many false predictions of a house price crash since 2000. A HPC is not going to happen. It’s now June 2007, there have been a number of IR rises since august and the latest figures show that HPI increased by 0.9% increasing annualized inflation to 11.1%. The false doomsayers will continue to push prices up.. Negative sentiment to push up prices? Of course I believe you will not get the double percentage annual returns of the past 8-9 years, however house prices will continue to rise in low single digit growth or slightly above the rate of inflation... So why aren't rents rising? There will be a huge generation of people who will never be able to afford a house, sad as this may seem….what is wrong with renting?.Yes. Especially as rents aren't rising Papillon Thoses are just off the top of my head, i'm sure you guys can think of more. Quote Link to comment Share on other sites More sharing options...
King Stromba Posted July 2, 2007 Share Posted July 2, 2007 The only way i can see there being no house price crash now, is if the government intervene in some dramatic way. I havnt counted this out, despite it being unlikely, based on the fact that Gordon is a knob head. Quote Link to comment Share on other sites More sharing options...
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