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House Prices Could Fall Back A Long Way After Their Excessive Rises

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http://www.telegraph.co.uk/money/main.jhtm.../14/ccom114.xml

"Last week the penny finally dropped about the housing market. The Halifax numbers were awful. A 2pc fall on the month was bad enough, but this came after earlier large falls.

Over the past three months prices have fallen by almost 6pc - which translates into an annualised rate of decline of over 20pc. That is the fastest on record. But how large will the total drop in prices be?"

Are many of the comments from fellow HPCers ?

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http://www.telegraph.co.uk/money/main.jhtm.../14/ccom114.xml

"Last week the penny finally dropped about the housing market. The Halifax numbers were awful. A 2pc fall on the month was bad enough, but this came after earlier large falls.

Over the past three months prices have fallen by almost 6pc - which translates into an annualised rate of decline of over 20pc. That is the fastest on record. But how large will the total drop in prices be?"

Are many of the comments from fellow HPCers ?

Even the bears here laugh at me when I say 80+%.

I am not an economoist, but I know a good psychic

;)

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http://www.telegraph.co.uk/money/main.jhtm.../14/ccom114.xml

"Last week the penny finally dropped about the housing market. The Halifax numbers were awful. A 2pc fall on the month was bad enough, but this came after earlier large falls.

Over the past three months prices have fallen by almost 6pc - which translates into an annualised rate of decline of over 20pc. That is the fastest on record. But how large will the total drop in prices be?"

Are many of the comments from fellow HPCers ?

My guess is 3.5x average wage + 20% = around £125K for average house

So A LONG WAY TO GO!

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the whole thing is a joke.

personally i think this could take years. Fortunatly i have plenty of time.

yep not much doom and gloom it seems today.

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Even the bears here laugh at me when I say 80+%.

I am not an economoist, but I know a good psychic

;)

That would be a big crash. But 50% would still leave me with double what I paid for my house in 1995 (49k - value at over 200k at the peak) so it doesn't seem so much in those terms. For 80%+ you would need a depression, not a recession with unemployment above 5 million; not impossible given the reliance on banking and housing in the economy.

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Even the bears here laugh at me when I say 80+%.

I don't.

I take it very seriously.

How dare you go lower than my 73.6% (& rising) without my permission.

I demand recognition for all those lonely months I spent at 70%!

There's no justice on this forum. ..... mutter mutter

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That would be a big crash. But 50% would still leave me with double what I paid for my house in 1995 (49k - value at over 200k at the peak) so it doesn't seem so much in those terms. For 80%+ you would need a depression, not a recession with unemployment above 5 million; not impossible given the reliance on banking and housing in the economy.

No you wouldn`t, a prolonged credit crunch, massive personal debt, and layoffs in banking, building, leisure, and general un-needed service industry would do the trick. Maybe that would put unemployment to five million though :ph34r:

I think what I am trying to say is that we are going to get the depression, too much in the economy revolves around the "miracle", as said on here many times house prices may be the least of our worries, 80% drops are easily imaginable (for me) now.

edited for afterthought.

Edited by dances with sheeple

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Over the past three months prices have fallen by almost 6pc - which translates into an annualised rate of decline of over 20pc. That is the fastest on record. But how large will the total drop in prices be?"

Can someone explain to me what the 'translates into an annualised rate of decline of over 20pc' means please?

I can usually understand quite complicated concepts - it's always the basic stuff that trips me up :(

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Why +20%?

As the economy shrinks -- and as house prices sink -- wages too will sink....... plus numbers of the dole will rise -- so it makes sense to put in and extra "+20%" decline -- as it all shrinks - real income shrinks too... thus it goes down even further........

Edited by eric pebble

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if all credit ends, basic terraced houses will be changing hands 10k or less.

Quite likely.

Pre-war my partner's grandfather bought his home for cash.

He had a modest income, seven children, & saved.

The value of a house will be of minor concern in a few years time.

Edited by Laura

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Why +20%?

My undestanding was that, when banks/BS were lending responsibly, their expectation was for a 20% deposit: If you asked for more than 80% as mortgage they offset their additional risk by a MIG.

And, yes, 80% seems quite a reasonable drop if people end up having to buy houses with saved cash only (quite a possiblility if the mortgage industry continues to circle the drain, or, indeed, goes down it)

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if all credit ends, basic terraced houses will be changing hands 10k or less.

It wouldn't need all credit to end. Sh*t areas have always had sh*t property values. It was only a few yars back that Newcastle council were selling dumps off for 50p a piece. £20K for flats in Gateshead was common - I once bought one for less than 12K - it had no structural problems at all and only needed a new boiler before I could let it. Not a totally crap area either but not exactly my cup of tea. As another poster pointed out the other day. Places like that are always cheap because you can get a nicer place for not much more so most people skip that rung of the ladder.

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Guest An Bearin Bui
Can someone explain to me what the 'translates into an annualised rate of decline of over 20pc' means please?

I can usually understand quite complicated concepts - it's always the basic stuff that trips me up :(

If the market has fallen by 6% in one quarter (= three months) then projecting that rate of decline forward would mean an annual fall of 6% x 4 quarters = 24%. Pretty scary figures but then again the market was rising at 20% per annum on the way up and no-one found it scary then (except HPC-ers).

Good article by the way - just a shame about the stupid comments at the end of it that are in total denial about reality. The same numpties trotting out the same tired mantras: 'the government must do something!" or "I bought in 1922 and have managed to make money so all this talk of falls is overblown" or "Roger Bootle is like a stopped clock - he 's right twice a day" etc etc ad nauseam. Seems like a lot of people out there are still happy living in cloud cuckoo land... :rolleyes: :angry:

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It wouldn't need all credit to end. Sh*t areas have always had sh*t property values. It was only a few yars back that Newcastle council were selling dumps off for 50p a piece. £20K for flats in Gateshead was common - I once bought one for less than 12K - it had no structural problems at all and only needed a new boiler before I could let it. Not a totally crap area either but not exactly my cup of tea. As another poster pointed out the other day. Places like that are always cheap because you can get a nicer place for not much more so most people skip that rung of the ladder.

im talking normal terraces for 10k. the jones terrace.

the burnley-esque types of terrace you mention will be just burned down, rat infested disease traps. urban blights.

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If the market has fallen by 6% in one quarter (= three months) then projecting that rate of decline forward would mean an annual fall of 6% x 4 quarters = 24%. Pretty scary figures but then again the market was rising at 20% per annum on the way up and no-one found it scary then (except HPC-ers).

Many thanks

I did wonder if that was what it meant but wasn't sure.

I'm not really a dullard :unsure:

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If the market has fallen by 6% in one quarter (= three months) then projecting that rate of decline forward would mean an annual fall of 6% x 4 quarters = 24%. Pretty scary figures but then again the market was rising at 20% per annum on the way up and no-one found it scary then (except HPC-ers).

Good article by the way - just a shame about the stupid comments at the end of it that are in total denial about reality. The same numpties trotting out the same tired mantras: 'the government must do something!" or "I bought in 1922 and have managed to make money so all this talk of falls is overblown" or "Roger Bootle is like a stopped clock - he 's right twice a day" etc etc ad nauseam. Seems like a lot of people out there are still happy living in cloud cuckoo land... :rolleyes: :angry:

You forgot the compounding. Your extrapolation of 24% is wrong.

100 * 0.94 * 0.94 * 0.94 * 0.94 = x

100 * 0.76 = y

y <> x

Edited by humanoid76

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It will vary with depending on interest rates but I think they'll stabilise at whatever price would be 0% yield + 20%.

Probably an undershoot before that happens though.

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Guest An Bearin Bui
You forgot the compounding. Your extrapolation of 24% is wrong.

100 * 0.94 * 0.94 * 0.94 * 0.94 = x

100 * 0.76 = y

y <> x

Get over yourself - obviously compounding would change the figure but I was explaining how Roger Bootle had arrived at his figure of over 20% annualised rises. So Roger Bootle is the person you need to contact with your O level Maths equations.

Now run along back to maths class before Teacher finds out you've been playing hooky on the internet again... :rolleyes:

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im talking normal terraces for 10k. the jones terrace.

the burnley-esque types of terrace you mention will be just burned down, rat infested disease traps. urban blights.

150k mortgage, 10k property value!! Has anybody else noticed 40% of the properties for sale on rightmove are terraced and in Burnley?

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  • 395 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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