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Believing What You Want To?

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It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

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Guest Charlie The Tramp
Nominal house price will not go down. Central bank will inflate all currencies as much as necessary to prevent this, which given the scale of the problem means hyperinflation down the line.

Real house prices, measured in honest money or against any commodity, have been crashing for at least the last two years, and accelerating.

You will be in trouble if we end up with deflation. ;)

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It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

The governemnt and top bankers dont want prices to come down not yet, they want to make sure 80% of the pop can't afford buy getting people to spend more that they earn then you ll see a bust, and youll see banks increase there land ownership which has been happening over the past 50 years.

There is a lot of land in this country that can be used to build homes yet the government dont want too, in this way they keep the economy going by creating a circle of spending. Home ownership = individuals with land which the government dont really want you to have, thats why you have so many land laws.

They want your money they want you to spend, renting = employment = spending =Dependency or surf to large companies, BTL owners are in the same boat but they dont know it BTL gains your income they spend your income = creates jobs.

If you want your kids to have a roof over their heads in the future then you need cheap housing but thats not want they want you too have because you will then not become so dependent on them.

This is rthe best way of stealing your land from you, with out you knowing it.

Edited by crash2006

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With continued high demand, stimulated by a continuing net inflow of population

Yet this hasn't also stopped prices (and consequently demand) dropping in Ireland. Since 2003 Irelands population has been boosted by 4% by inward immigration. In the UK, only by 1.6%.

All the apparently factual support 'reasons' are only conjectures that can be tested by what actually happens in future.

The expert hired by the government to look at the housing market, David Miles, concluded that roughly 40% of house price rises since 1995 are due to 'expectation of future rises' ie: bubbly factors. This suggests that prices could drop if that expectation first fades and then reverses.

The shape of the UK's house price HPI graph is similar to that of other countries such as the US and Ireland where prices are now falling. If the underlying reason why house prices grew was caused by the UK's unique relationship to house price demand, there would be no reason for such a correlation. The reason that the rises in HPI have been co-ordinated across very different markets globally is very simple, they have in common excess demand fuelled by excess money.

At least, that is a theory. Again, it will be tested by what happens now that global credit is drying up.

The Halifax is now offering 6.55% on a deposit account (requires deposit size of 100k) and Nationwide has issued a 1 year bond at 6.7%. Both of these offer mortgages at 6%. Work it out. They are doing this because then need money to come in now from savers, because they can no longer securitize new mortgages. The game is up.

The demand created by a tidal wave of 'free money' will dry up. When this hits BTL you cay say 'sayonara' to a large part of the entry level market for housing in this country.

Again, all theoretical. But there is a deep underlying logic to this argument that you won't find in conjectures masquerading as 'fact', like the ones in your OP.

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It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

There *should* be a HPC because in a meritocratic society a hard day's work *should* bring with it greater rewards than just happening to be born before someone else.

Of cause that's not actually what you are asking, but at the end of the day after the macro-economics have played out, we will have to come back to this if we want our successful capitalist economy to continue functioning.

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Whilst I personally don't think (and I hope like hell) that hyperinflation won't happen, I think you're making the mistake of thinking that the powers that be actually give a toss how it would affect the likes of you and me...

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Guest Charlie The Tramp
We will definitely end up in deflation. All hyperinflations eventually end up in deflation. The only choice is whether to get the hyperinflation or not, and central banks have just shown their true colors. Alea jacta est.

Examples please.

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Guest DissipatedYouthIsValuable
It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

Don't be a twit

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It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.[/quote

you need specsavers....

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It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

High net immigration has not stopped the US house market going kaput.

How do you know that there are 'insufficient properties to meet demand' ? The price of rents on property suggest that is not the case. While HPI is usually a case of too much money chasing too few homes, I suspect our current housing bubble is caused more by the first element of the equation than the second. Pump enough credit into a market and the sky is the limit for prices. Turn off the supply and prices will go down. There may be millions of people out there who want to buy a home but if they can not get a mortgage then they can not bid up prices. At the moment all the credit taps are being tightened so I do not think we will have long to wait to see the property market going into reverse.

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With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

IMHO, house prices won't "magically" come down, but I find it beyond the bounds of possibility to believe that either "nothing will ever go wrong again, global economic shocks are a thing of the past, and the roses will bloom forever", or that when something truely major happens* the exceptionally inflated UK housing market will be able to ride it out untouched.

Boom and bust is with us to stay, and to pretend otherwise is nothing but the purest folly.

* Despite all the wild predictions, the current credit situation may well not be it. For what it's worth, my money's on something with the words "oil" and "Iran" in the title, and like the vaste majority of posters on here, I'll be wrong. But it'll be something...

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Boom and bust is with us to stay, and to pretend otherwise is nothing but the purest folly.

To an extent, but as long as mortgage loans are restricted efficiently and comprehensively to 3.5 + 1x taxable or otherwise demonstrable income then house prices are relatively safe. Do away with that and offer 5 or 10 x then boom and bust is guarenteed.

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It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

To right prices will not come down due to wishfull thinking, its market forces which will reduce prices and those forces are now in place.

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Very few people here have answered my question directly, which doesn't surprise me. As I say I have no stake in the argument. I am neither a landlord, tenant nor a mortgagee. I paid off the mortgage on my 2-bedroom terraced house four years ago (in less than four years - beat that). I haven't traded up simply because I don't need anywhere bigger to live. Call me a 'twit' if you wish, but I'm certainly a damn sight more intelligent than the rest of you when it comes to personal financial management. I also live in a city which hasn't experienced the ludicrous price rises of the Home Counties and other more 'fashionable' places, so if prices do fall here in Coventry it won't be a 'crash'.

Have fun and keep smiling :)

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Very few people here have answered my question directly, which doesn't surprise me. As I say I have no stake in the argument. I am neither a landlord, tenant nor a mortgagee. I paid off the mortgage on my 2-bedroom terraced house four years ago (in less than four years - beat that). I haven't traded up simply because I don't need anywhere bigger to live. Call me a 'twit' if you wish, but I'm certainly a damn sight more intelligent than the rest of you when it comes to personal financial management. I also live in a city which hasn't experienced the ludicrous price rises of the Home Counties and other more 'fashionable' places, so if prices do fall here in Coventry it won't be a 'crash'.

Have fun and keep smiling :)

Oh dear, it won't happen to my area argument. :rolleyes:

Coventry has seen a far greater growth than the more expensive areas of Warwickshire, which as you pointed out in an earlier post have always been expensive. Coventry on the other hand has not always been expensive, and although it has improved slightly during these boom years my personal belief is Coventry is destined for some of the largest falls in the area.

Only time will tell but at least you have done the sensible things of clearing your mortgage so you can sit and watch this unfold.

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Very few people here have answered my question directly, which doesn't surprise me. As I say I have no stake in the argument. I am neither a landlord, tenant nor a mortgagee. I paid off the mortgage on my 2-bedroom terraced house four years ago (in less than four years - beat that). I haven't traded up simply because I don't need anywhere bigger to live. Call me a 'twit' if you wish, but I'm certainly a damn sight more intelligent than the rest of you when it comes to personal financial management. I also live in a city which hasn't experienced the ludicrous price rises of the Home Counties and other more 'fashionable' places, so if prices do fall here in Coventry it won't be a 'crash'.

Have fun and keep smiling :)

I am neither a landlord, tenant nor a mortgagee - maybe an estate agent or mortgage adviser?

but I'm certainly a damn sight more intelligent than the rest of you when it comes to personal financial management - how do you come to this conclusion? Why can you assume you are more financially intelligent than all the HPC'ers out there. If you knew how much money a lot of the HPC'ers have stashed away it would make your measly amount look like small change. It's a shame you resorted to this tactic.

And finally, have you even bothered to read any of the replies or other posts on this site since your membership?

I'm not saying I'm an expert but I saw my brother and my father both lose their houses in the last crash. And my now wife did too. I see all the signs I did then, but most people just don't want to think about it because it's too much of a doom scenario.

Price rises have been slowing and will continue to do so until they go into negative, which is very soon!

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Guest AuntJess
It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

They won't do that. ^_^ They WILL come down, IMO, according to public sentiment. Not just the few posters here, but hundreds of thousands of people around the UK, who will be affected by a myriad of factors now 'coming to the boil'.

You make two assumptions yourself there (see underlining) where is your proof? :huh:

Edited by AuntJess

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Very few people here have answered my question directly, which doesn't surprise me. As I say I have no stake in the argument. I am neither a landlord, tenant nor a mortgagee. I paid off the mortgage on my 2-bedroom terraced house four years ago (in less than four years - beat that). I haven't traded up simply because I don't need anywhere bigger to live. Call me a 'twit' if you wish, but I'm certainly a damn sight more intelligent than the rest of you when it comes to personal financial management. I also live in a city which hasn't experienced the ludicrous price rises of the Home Counties and other more 'fashionable' places, so if prices do fall here in Coventry it won't be a 'crash'.

Have fun and keep smiling :)

I think you ask a reasonable question, my guess that house prices can fall are:

House prices have risen more than people can really afford to pay for them, ie much faster than wages.

They have done this because it has been easier to take out larger loans. The interest rates have been low, mortgage multiples have risen, celf sert mortgages etc.

So i think it all boils down to affordability. If interest rates go up, people will not be able to afford a large loan to buy a house and some people will not be able to afford to pay the loans that they have taken out. Result lower number of buyers and forced sales, thus in my head that = falling prices. If house prices start falling a little bit and people think they will keep falling then who is going to buy?

That is my theory, and that is my take of what is happening in the USA.

I know you haven't said it, but I could ask if you think house prices are going to keep rising 10% a year with wages rising at say 3% ?

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I'm an electrical engineer in a country which has a severe skill shortage in that area, not an estate agent or a broker, where there are more than enough.

Yes I have read plenty of the posts here. I don't mind being called a 'twit' or anything worse than that when I'm one of the few people in this country with postive equity and who doesn't have to fork out on rent for someone else's mortgage either. My biggest monthly expenditure is council tax (on which I get the 25% discount of course).

To answer Confounded's posting, Warwick & Leamington have experienced far higher rates of growth than Coventry in the past eight years, Rugby even more so in the past few years, though they all form part of the same economic area.

As I have said in another thread, my own homes of Abingdon and Oxford have always been too expensive to me and always will be, so I'm a bit fed up with all the hysteria.

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Guest vicmac64
I'm an electrical engineer in a country which has a severe skill shortage in that area, not an estate agent or a broker, where there are more than enough.

Yes I have read plenty of the posts here. I don't mind being called a 'twit' or anything worse than that when I'm one of the few people in this country with postive equity and who doesn't have to fork out on rent for someone else's mortgage either. My biggest monthly expenditure is council tax (on which I get the 25% discount of course).

To answer Confounded's posting, Warwick & Leamington have experienced far higher rates of growth than Coventry in the past eight years, Rugby even more so in the past few years, though they all form part of the same economic area.

As I have said in another thread, my own homes of Abingdon and Oxford have always been too expensive to me and always will be, so I'm a bit fed up with all the hysteria.

Hysteria!! Hey you ain't seen nothing yet!! ha ha The hysteria is about to start when companies start offloading employees in the face of a fast approaching recession.

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It occurs to me from going through threads on this site that a lot of people are willing a crash to come like they are waiting for some kind of messiah.

With continued high demand, stimulated by a continuing net inflow of population and insufficient new properties being built to meet that demand, other than hope and anedotal 'evidence', on what basis do you believe that property values will decrease?

PS I have no stake in the argument one way or the other. I just can't see prices coming down on the basis of wishful thinking.

You need to undertand supply and demand first, before you make these assumptions.

Buy some good books and start learning.

Maybe get a subsciption to "The Economist", because they're one of the few high quality magazines that have debunked all these myths about supply shortgage /interest rates etc.

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