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Kotc & Other Bulls - Reasons Why Hpc Won't Happen?


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1) Glamourous BTL's will always be able to protect their interests, as they have invested in property. Now we all know that this time around property investment is a sure winner - there's no possibility of making any losses at all. In fact, the more invested, the more there is to gain... its called gearing you know.

2) No one worries about debt, because the interests rates will remain low for the next 350 years or so. And even with the debt at the moment, there's always one more credit card or bank to approach when looking to spend a few more pounds on that property, car, or holiday.

3) Now dont forget MEW's. With this trick, you can release even more free cash that suddenly appears as by magic which can be used to invest in yet more property. A case of WIN, WIN and WIN.

4) I know that there were property crashes in the past. But this time it is different. It has been predicted by those in the know, and giving their completely independents thoughts on the matter that the property market will stabalise, that is to say that prices will plateau for a significant period, and then rise again. I know that this goes against every single stock market model since records began, but it is different this time, i swear.

5) The average FTB is a lazy f**ker who should do more to get on the market. Eventually the message will get through to them, and they will tuck their shirts in, and do some graft. In that way, the market will pick up again, and we should look forward too a healthy spring bounce.

6) Just by adjusting the asking price of a house, up by £25k or so, is an easy way of generating yet more income. After all, i own a property, i deserve thousands more for it. And by doing this creates an endless supply of demand. In fact, estate agents are struggling to keep up with the onslaught on buyers, and property is simply flying at the moment.

7) Nationwide says that the house market is healthly, by stating that the seasonly adjusted figure is 0.4%. Nationwide can display this figure with confidence, even though there is a net decrease in the average figure. The adjustments were made because it is christmas and that, and there is nothing to worry about. Trust me.

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Sish,

i detect an element of sarcasim in your post :D and as much as i would like to see all happen in favour of a HPC, one simple principle has never been wrong,

for as long as credit is cheap, the house price bubble would keep growing stonger, its sad to say but, with the absence of a trigger (expensive borrowing costs) STR, FTB´s should contemplate living in rented accomodation for 3 - 6 years, may be even more. The truth is statistics points to a crash but the timing is almost impossible to predict - so don´t hold your breath.

Do

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with the absence of a trigger

http://www.cracker.com.au/Viewthread.aspx?...ategoryid=11061

Professor David Miles, chief UK economist at Morgan Stanley and author of the Treasury-commissioned report into long-term fixed-rate mortgages, said the growing perception that housing is overvalued could be sufficient to tip the market into a sharp slide.

'A significant fall in nominal house prices is not implausible,' Miles said. 'It does not require some trigger such as a rise in interest rates or unemployment. Expectations of a degree of overvaluation becoming widespread can itself be a factor driving prices down.'

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Is credit always going to be cheap though? Bills have a way, (a bit like fate) to come and bite you on your ass when u aint looking.

In the last crash, there were interest rates of 10-15% which really hurt alot of people financially.

However, the amounts borrowed in this era outshine debts levels borrowed last time around. Ie compare mortgages that people have now compared with 10 years ago, and add to that credit card debts that people have got because of this cheap borrowing.

The net result is that you dont need interest rates of 10-15%, in fact just the smallest increments will really start to bite.

Add to that the times when fixed term mortgages run out.....

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ZZ

I know its been quoted by various "experts" what the true outcome would be of the bubble but, as far as i am concerned, common sense supercedes all of these opinions. i´ll explain my logic;

For as long as money is cheap prices would not fall bellow a certain profitability threshold. At the moment i estimate that threshold to be about 10%-ish (depending on what part of the country).

This is because at that level a certain supply- demand equilibrium would be reached between buyers and cash rich "investors" piling in for meagre 6% returns.

Hence a fall of 10% (or there abouts) over time can hardly constitute a crash. I suspect the current bubble requires a hard ***** (oops) :lol: which can only come on the form of a hike in the expence of credit.

Do

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Is credit always going to be cheap though? Bills have a way, (a bit like fate) to come and bite you on your ass when u aint looking.

In the last crash, there were interest rates of 10-15% which really hurt alot of people financially.

However, the amounts borrowed in this era outshine debts levels borrowed last time around. Ie compare mortgages that people have now compared with 10 years ago, and add to that credit card debts that people have got because of this cheap borrowing.

The net result is that you dont need interest rates of 10-15%, in fact just the smallest increments will really start to bite.

Add to that the times when fixed term mortgages run out.....

Shish,

i´m sure with time the debt thing would kick in and, a minority of home owners (or bank tenants as i like to call them) are pressured to sell, lose their homes .......etc But the truth is that there is a vast number of cash rich individuals with a burning desire to own their own home (you and I for example) as well as the likes of BBB, LJ who would keep prices above a certain threshold.

The only hope for HPC is for a genuine decrease in affordability.

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ZZ

I know its been quoted by various "experts" what the true outcome would be of the bubble but, as far as i am concerned, common sense supercedes all of these opinions. i´ll explain my logic;

For as long as money is cheap prices would not fall bellow a certain profitability threshold. At the moment i estimate that threshold to be about 10%-ish (depending on what part of the country).

This is because at that level a certain supply- demand equilibrium would be reached between buyers and cash rich "investors" piling in for meagre 6% returns.

Hence a fall of 10% (or there abouts) over time can hardly constitute a crash. I suspect the current bubble requires a hard ***** (oops)  :lol: which can only come on the form of a hike in the expence of credit.

Do

That is cr*p.

Price falls more than 10% have been already observed in many areas without your hypothetical scenarios. Also you are forgetting the sentiment that could drive prices down. There need not be an increase in the credit expenses.

And the total economy of the country also will decide house prices including unemployment figures.

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Sish,

i detect an element of sarcasim in your post :D and as much as i would like to see all happen in favour of a HPC, one simple principle has never been wrong,

for as long as credit is cheap, the house price bubble would keep growing stonger, its sad to say but, with the absence of a trigger (expensive borrowing costs) STR, FTB´s should contemplate living in rented accomodation for 3 - 6 years, may be even more. The truth is statistics points to a crash but the timing is almost impossible to predict - so don´t hold your breath.

Do

Credit is not "cheap" if debt levels have increased. The problem with this bubble is that people have been duped into believing credit is "cheaper" whereas the opposite is true because the object of the credit has risen in real terms beyond any benefit of the "cheap" credit can provide.

Example: better to owe 100k paying 7% interest than 300k paying 4% interest.

Its blinding obvious to me and I am surprised that some do not see it. This present bubble has been caused by "cheap" credit coupled with irrational exuberance (iiresistble urge to buy more than can be afforded in the believe that the thing purchased cxan only rise in value).

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Prices drop suddenly by 10%,

and the BoE panics, cutting rates by 25 bp, several times until HP's stabilise,

creating a "soft landing".

Prices start rising again and the EAs say "we told you so."

BTL pensions and more people afraid of missing out jump back in.

By October 2005, we see a Double Top, before the REAL CRASH comes

October 2005, what you mean just a few months before the advent of the resi SIPP? dream on. You're not one of those guys who pushes his HPC prediction back every year are you Doc? I

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June is when we'll know.... By then the soft landing or downward spiral will have started... as for now... it's definitely looking like a soft landing...

I'm currently living in the week in surrey and driving to SE19 to do a refurb with my brother.... the number of sold signs we see on the hour drive is MAD!! There are LOADS... the market has definitely pick up... just a matter of how long this bounce lasts... weeks or months..

ta ta

H

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So what you are saying KOTC is that "SIPP" alone are going to prop up the market?

I am surprised by the quiet of the Bulls... <_<

Yeah, bulls! I'm still waiting to hear a well constructed bullish argument that's backed up with some solid evidence and good reasoning. At the moment I reckon that the odds are stacked in favour of the bears, but would love to hear something that actually has some economic weight behind it from the bulls.

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  • 439 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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