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Hello,

I've been lurking around for about a year, waiting & hoping for a crash.

I'm almost 30, still living at home, would love to get a place of my own but am not prepared to rent as it would have a big impact on my ability to save. Eventually I would really like to buy & will hopefully have a significant deposit to put down when I do.

Really impressed with this site, it's definitely helped me to keep the faith - Thank you! :)

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Just came across the site recently.I'm a 30yo FTB in Leicestershire and have just put an offer in at the asking price for a house at 129950.the vendor purchased the place a year ago for 128950 and was'nt entertaining offers.I was about to sleepwalk into a financial [email protected]!*k before I discovered your wonderful site.So instead Im going to keep my deposit,save circa £250 a month in mortgage costs and chill the hell out.Gentlemen,To Evil! :D

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Interesting.

"It is available for a one-time fee dependent on the value of your home. For an average-priced property the fee would amount to less than £20 per month for the life of the contract."

Contract appears to be 7 years, which would make it under 1700.

Sounds to good to be true. I wonder what the catch is.

The catch is that "Lock-in Value Equity Ltd" isn't regulated by the FSA and I would therefore suspect this is a massive scam. The scheme has no guarantee and credibility seems to be reliant upon "we have a substantial capital backing". Hmmmm... I can it now... shell out your £1700 and then in 2 years time you try and sell only to discover that Lock-in Value Equity Ltd has already been wound-up...

This company is bound to end up on Watchdog.

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Hello everyone, just joined the site, was recommended by a colleague. I work in financial services and have just bought a new-build which we move into in July. We have 4 investment properties, a holiday home in Cyprus and a lorry load of debt :P Looking forward to meeting you all

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Great web site - I was beginning to feel like I was imagining it all, our friends and family are convinced my husband and I are having some sort of midlife crisis because we've sold the house and are now renting (waiting for the crash).

On a more flippant note, does anyone have an acronym for us?

STR - l To Renters.

:)

http://www.housepricecrash.co.uk/glossary.htm

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Hello fellow posters,

Since completing a maters degree in Finance, I now work for one of the major VIs discussed in this site. Despite this, there are a number of reasons why I hope this market falls flat on it's face:

1) I have now become a prospective first-time-buyer, but can't get a look in thanks to the ridiculously overpriced market, forcing me to remain living with my parents.

2) I have witnessed the sheer greed and idiocy of the buy-to-let brigade, and the snobbery associated with it. I've had to put up with people gloating about the value of their homes, they suffer dillusions of granduer.

3) I can't stand these property programs on TV. Last week I saw some guy from London blow 850 grand on a home that looked like I built it. I also laugh at the ones where they buy a home to do up, yet they end up wrecking it with their lack of building knowledge - always exceeding their budget, and still scrape a profit thanks to the rising property market.

4) Those debt consolidation adverts irritate me. People stupid enough to blow all the cash they haven't got on extensions, flash cars and holidays, deserve everything they get.

5) I laugh at everybody that has jumped on the property investment bandwagon, since becoming ever-so fashoinable and giving rise to ignorant fools like Kirstie Allsop, who's entire livelihood has been built on the rising market.

The funny thing is that the state of the economy simply cannot support such unsustainable growth. I see ignorance and stupidity all around me. People kidding themselves that there won't be a crash when all evidence points to one. I can't wait for the moment when everyone realises they've made a big mistake, and I can buy my first home at a fair price.

I look forward to discussing the topic further with you guys,

Rough Diamond.

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Hi, have been reading the site for a while but have only just signed up. I'm 29 and live in an area of the south east where entry-level property is 10 times my salary (and I earn an above-average salary :( ) I would love to buy a house and start a family but everything is on hold at the moment until prices drop and I'm no longer priced out of having a normal life :(. Have been noticing significant tiny changes in public sentiment about house prices, though, and one of the reasons I finally registered to be able to post is to share some of them with the site :)

Zaranna

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Hi everyone,

I joined a few days ago after months o lurking. I found out about this sit in the French paper "le Monde" and i'm so glad I did.

I actually made my first post a few days ago giving examples of the insane prices in my area (Sheffield).

I am currently renting after having narrowly avoided buying in the mad Spring of 2004. Having experienced the previous HPC in 1990-91, I have become convinced that house prices ar going to tank big time in the next 12 to 18 months.

My only wish is that my wife will come to accept my analysis and stop obessing about 'having' her ow house.

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Hello fellow posters,

Since completing a maters degree in Finance, I now work for one of the major VIs discussed in this site. Despite this, there are a number of reasons why I hope this market falls flat on it's face:

1) I have now become a prospective first-time-buyer, but can't get a look in thanks to the ridiculously overpriced market, forcing me to remain living with my parents.

2) I have witnessed the sheer greed and idiocy of the buy-to-let brigade, and the snobbery associated with it. I've had to put up with people gloating about the value of their homes, they suffer dillusions of granduer.

3) I can't stand these property programs on TV. Last week I saw some guy from London blow 850 grand on a home that looked like I built it. I also laugh at the ones where they buy a home to do up, yet they end up wrecking it with their lack of building knowledge - always exceeding their budget, and still scrape a profit thanks to the rising property market.

4) Those debt consolidation adverts irritate me. People stupid enough to blow all the cash they haven't got on extensions, flash cars and holidays, deserve everything they get.

5) I laugh at everybody that has jumped on the property investment bandwagon, since becoming ever-so fashoinable and giving rise to ignorant fools like Kirstie Allsop, who's entire livelihood has been built on the rising market.

The funny thing is that the state of the economy simply cannot support such unsustainable growth. I see ignorance and stupidity all around me. People kidding themselves that there won't be a crash when all evidence points to one. I can't wait for the moment when everyone realises they've made a big mistake, and I can buy my first home at a fair price.

I look forward to discussing the topic further with you guys,

Rough Diamond.

Its frustrating because it takes so long.

Patience is a virtue.

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Hi, just wanted to say that I think this is a great site.

I would be a potential FTB, 30yo, from Ireland and living in London. Had a savings target in mind for a deposit and reached it recently. Had a quick look around at the market both here and in Ireland, found this site and quickly decided that the current situation did not warrent the hassle of getting out of bed on a Saturday for a FTB.

So thank you HPC for saving me the hassle of even a single viewing!

Happily renting in London for the moment, it is so much easier (and ofter cheaper) to rent now than when I moved to London first in 2000. Plus I recommend the tactic that somebody mentioned here of checking to see when potential landlords bought their property to avoid a recent BTLer.

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Hello all

Have posted a couple of times before, but felt I ought to do the right thing and make an introduction here. I'm 40, STR'ed in 2004 and live abroad. I also work in an estate agents and I'm doing my best to introduce a level of realism into discussion of the market here. The reality is that the market in Spain (I'm in the Canaries) has stagnated over the last year, with all the cheaper properties shifting pretty quickly but anything over 300,000€ (that's about 206,000 pounds) sitting on the shelf for years. Mixed bag in terms of demand but even here the buy-to-let brigade seem to be hitting a brick wall - in the last two months we've had many more properties coming on for long term rent but there just aren't any renters out there to fill them. I have been telling landlords that they shouldn't expect to fill their rental properties straightaway (particularly not at the rate they want to charge) and also anyone with property to sell that if it's over the threshold mentioned above the chances are they'll be waiting a long time. I tell them there are problems in the UK economy which will have a knock-on effect here both in terms of potential rentals and also for tourist businesses.

On a personal note, my boyfriend and I haven't bought because the prices just seem unrealistic here, like everywhere else. It has made it tricky at times, as my boss has been known to be exceedingly bullish, but I'm gradually opening his eyes to the economic reality that surrounds us. Even if prices adjusted, I don't know if I'd buy here - apart from all the taxes you pay when you purchase property, we're renting a beautiful place in the countryside and have no need to move.

Love the debate on the site, especially after months of thinking how crazy house prices were and are.

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Hi, I've been lurking on this site since October 2004, so I thought it was about time I registered. I found this site after reading the This Is Money forums; the wife and I were considering moving out of London at the time.

I've learned a lot in that time about the housing market, and economics in general. It has also influenced me in terms of my attitude to the housing market; I was persuaded by the arguments and even bought the book 'Bubbles and how to survive them' by John Calverley.

We ended up moving from London to Manchester and STR'd about a year ago, banking a six-figure profit in the process. We then thought we were in a great position, receiving hundreds of pounds a month in interest which effectively paid nearly half the rent, waiting to buy when the market slowed down.

However, the reality is that our rented house is not quite what we want in terms of location and other things, and our landlord has put the house on the market (overpriced) so we need to be out in a couple of months. We have cats so moving around all the time isn't ideal, which is why we are in the process of buying.

Our experience of the market in Manchester over the past year (which is how long we have been looking) is that yes, when we first started looking, the market was slow and most of the places we looked at had been on the market for a very long time (and some are still on); only in the less desirable areas was the market more buoyant. Towards the end of last year is when the whole market seemed to be stagnant, which is when we seriously started to look. We tried a tactic of making 'silly' 90% offers on large properties but discovered that greedy vendors were holding on waiting for the market to pick up.

And it seems at the moment that they were right, as in the past couple of months everything we looked at seems to have sold. Acquaintances of mine who have been trying to sell for months have suddenly got reasonably high offers. One of the properties we offered on even went into a bidding war!

To be honest, from an OO point of view I don't care what happens to the market, as we can easily afford the place we are buying and it is a nice house in one of the best areas of Manchester.

I still think that houses are overvalued and will eventually fall in real terms to about 3x wages; it's just a question of when. As long as affordability is good (low interest rates) then there is nothing to force vendors to drop prices substantially. As someone said, people hate losses more than they love gains, which is probably why nominal price falls take so long to happen.

I'm actually still hoping for a crash as I would like to BTL in future, when the numbers make sense. I've pencilled in 2011 for buying my first BTL property...

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Hello all,

found the excellent 'houseprice crash' flash animation whilst looking for UK housing and economic info and realised I'd found a home from home, when I followed the links to this site. I've been lurking for a month or so, but thought it would be polite to join and say 'hi'. BTW was at home this week watching the Rightmove 'average price' thread unfold. What a rollercoater ride that's turning out to be, just hope it makes it to the national press - kudos to everyone involved with that. From the number of hits that thread is getting I'd say you're onto something, either that or there's lots of others like me out there.

Sympathy to all the FTBs out there. I've done my fair share of renting in the past, simply couldn't bring myself to pay silly prices for home ownership in the late eighties, much the same as people on this board now, I would guess. A few friends did succumb, though, and were seriously burned. Bought a couple of years after the last crash, only to watch prices continue to dip gently, and then pick up to their current la-la land levels.

Been an OO for 15 years, but have never subscribed to the 'rising house prices make me rich' view, and have never understood how people can withdraw equity against an unrealised asset - I'm squirreling as much cash as possible away to pay off the mortgage early, hopefully this year - not claiming bragging rights here, just indicating what a FTB can do on a slightly higher than average salary if you don't follow the herd. From a selfish point of view, I'd be more than happy to see a HPC in order to reduce the price differential making bigger/better property more affordable for me. Strange how 99% of people can't see this argument....

The economic situation (not an economist, but would claim a little common-sense!) now is different to then, but the feeling is similar, especially seeing rabbit hutches being advertised at silly money.

Add to that:

1) rocketing personal debt (CC; mortgages at ridiculous multiples, often IO; equity withdrawal), just as the banks are writing off substantial bad debts and squeezing credit.

2) global interest rates rising - probably no more cheap money off the carry trade from Japan as reported today (think this one will catch a lot of people napping). The next MPC decision will be interesting.

3) substantial hikes in tax, energy and fares leaving less disposable income.

4) uncertainty over oil - rises will obviously filter through to the consumer in all areas - again less disposable income.

5) rising (and disguised) UK unemployment.

6) high street downturn - people not spending, but also in my area, commercial rental rates have been increased to the point where longstanding traders have closed up shop - also, anyone in the area walk down Hatton Garden and try and count the number of commercial 'for rent' boards....

7) loads of new build blocks going up, visible from my train commute into London.

Wouldn't necessarily call myself a bear, though - just a realist.

Cheers all,

TLM

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Yes, indeed - managed to catch them at Brixton Academy last year :)

Translate it, though, and you get a fair description of how VIs operate..... ;)

TLM

Missed the Academy gigs (sold out) but saw them in Dublin and Leeds.

You know youre getting on when youre seeing the same band 15 years later :(

Just waiting for Kurt to come back so I can see Nirvana again :rolleyes:

Trompe l'oeil -the halifax index of house prices :lol:

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Hi

Am new member to HPC and background is that I am a Fund Manager in the City who owns no housebuilder shares but constantly receives a stream of bullish research on the housing market. Am also fed up with price silliness as my neighbour sold the land in their garden for £320k to a developer who built a 350sq m house on it so I have swapped view over South Downs for view of roof of the new monstrosity. Needless to say, said developer drives a Ferrari and has enough money to run his own polo team!! Am hoping he gets come uppance when prices melt down and his quick turns become long term investments at much lower prices.

Having lagged early last year, the share prices of the housebuilders took off last year as the City perception is definately that a HPC has been avoided and we are off to the races again. To give an example, the price of the largest housebuilder, Persimmon, has risen by a staggering 66% since the start of November to an all time high. Almost all of the housebuilders to report figures recently have met expectations and have commented that they see signs of confidence returning to the market.

I have long been a believer that we are headed for a crash. In fact, one well known US fund management house has researched ALL previous bubbles in history and they define a bubble as any asset class that moved more than two standard deviations away from its long term average. In the history of time, there have been 28 of them (tulips, south sea bubble, nasdaq etc) and in ALL cases, they have corrected back to their long term average fairly violently. According to their studies, UK house prices are the 29th such incidence of this occuring....

However, just when 2005 looked like it would be the top, suddenly the data has started turning positive again.

Can anyone out there rationalise the following figures for me? Housing transactions and mortgage approvals have suddenly shot back up to 2003 levels. What is really weird about this is that consumer confidence has crashed post the Christmas splurge, unemployment is picking up, voluntary redundancies and loan defaults are going through the roof. This would not normally be a great background to increase ones confidence in going out and buying a house and yet transactions have suddenly spiked.

Anyone able to solve this apparent conundrum? City as a whole is usually pretty efficient at pricing shares which makes me worry that I am missing something.

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I think the strength of this bubble comes from the number of people who believe they are benefiting from it. And the relatively very small number of people who perceive it as a bubble.

The more the housing market rallies the more violently it will have to correct as buying-in becomes ever less affordable. There is a point where affordability is out of reach for all of those who do not own.

This bubble is uniquely large (over £trillion) if it were to collapse the UK would lose asset value equivalent to half our GDP maybe more. We would still need to generate the income to pay for many of these purchases at their full market price. That is the nature of a mortgage. In most other historical bubbles the majority of the money must be invested up front. With this bubble the money has been promised over a 20 year period in the form of mortgage repayments.

In 1997 total personal debt for the UK stood at £500 billion, in less than ten years that figure has increased by over £700 billion to an astounding £1,200 Billion.

Servicing that debt at 5% requires each of the UK’s 28.8 million workers to repay (£1,200,000,000,000 / 28,800,000) * 0.05 = £2,083.33 per annum.

This is where the drop in retail you have talked about originates from. People cannot afford to spend any more because they are still paying for things they bought in the past. We are approaching critical mass as the inability for people to spend slowly costs them their jobs and their ability to repay the debt. The personal debt is still growing at 100 billion per annum.

As long as this personal debt continues to grow you will see house builders reporting a roaring trade. However I feel a relatively huge portion of the money funding their industry will be written off as bad debt in the future, I believe these shares will one day surprise everyone with a massive downturn seemingly out of the blue. Recent growth in GDP has come at the expense of future growth.

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Hi

I have long been a believer that we are headed for a crash. In fact, one well known US fund management house has researched ALL previous bubbles in history and they define a bubble as any asset class that moved more than two standard deviations away from its long term average. In the history of time, there have been 28 of them (tulips, south sea bubble, nasdaq etc) and in ALL cases, they have corrected back to their long term average fairly violently. According to their studies, UK house prices are the 29th such incidence of this occuring....

welcome FM123, I'm quite new here myself . This research you mention is fascinating. I would however suggest you repost this in the main forum as not many users browse the welcome thread.

Also do you have any links to this research about bubbles?

regards

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Guest Winners and Losers

Hello,

I've been lurking around for about a year, waiting & hoping for a crash.

I'm almost 30, still living at home, would love to get a place of my own but am not prepared to rent as it would have a big impact on my ability to save. Eventually I would really like to buy & will hopefully have a significant deposit to put down when I do.

Really impressed with this site, it's definitely helped me to keep the faith - Thank you! :)

I love Beaker! Welcome, belatedly!

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Can anyone out there rationalise the following figures for me? Housing transactions and mortgage approvals have suddenly shot back up to 2003 levels. What is really weird about this is that consumer confidence has crashed post the Christmas splurge, unemployment is picking up, voluntary redundancies and loan defaults are going through the roof. This would not normally be a great background to increase ones confidence in going out and buying a house and yet transactions have suddenly spiked.

Anyone able to solve this apparent conundrum? City as a whole is usually pretty efficient at pricing shares which makes me worry that I am missing something.

Hi FM123,

Good post.

I agree, it's puzzling that most of the traditional economic indicators are pointing downwards, yet the housing market seems to be picking up.

Mr. Average would confirm that the outlook for jobs, debt and inflation is bleak. Mr. Average is beginning to feel the pinch.

IMO Mr. Average is not buying at the moment.

So who is buying? Maybe it's the people who don't participate in consumer confidence surveys, those who are not in fear of redundancy, and not juggling debts, maxed-out on cards, etc.

Who are these people? BTL landlords / middle-class parents buying for children at university, perhaps.

What I suspect we are seeing is a credit squeeze starting at the bottom of the pyramid.

This is affecting Mr. Average and thousands who, like him, have (relatively) small borrowings: leaving those higher up the pyramid, with larger borrowings, comparatively unaffected.

Perhaps it really is true that it's easier to borrow a large amount of money than a little!

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