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UndercoverElephant

Worst/best* Case Scenario Over Next Two Years

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Clearly this forum is full of bears talking about how bad it's gonna be. I am interested in people's worst-case-scenario belief over two years (assuming you want prices to fall. *If you don't want prices to fall, it'll be a best-case-scenario instead (less falls).

So the question is this: within the bounds of what is reasonable/possible, what is the smallest possible drop in house prices you can envisage from today's level? Or is there a serious possibility they could go up over that period?

I'd have started a poll but couldn't figure out how to do so on this board.

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Prices are already down 10% from peak (Well, 11.22% according to Halifax)

I would expect the minimum drop from now to be another 10% but something would need to happen to strongly support prices (like a big relaxing in mortgage availability), however I would expect another approx 20% fall (I anticipate about 1/3rd off from peak prices)

The worse case is well, anything... This would obviously involve a severe recession; the question is what would bring us out of it?

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best case:

house prices down 40% within 2 years. mortgage lending begins. unemployment remains low.

new house buyers kick start retailers. overall down time. 3-4 years. many btls get burned.

local authority buys failing btl (at a 60% loss to btl investors) to house coming repo'd families.

worse case:

failed attempts to prop up artificially inflated market for political gain. massive loss of taxpayer funds.

large devaluation of the £. rapid commodity inflation. rising unemployment. political vacuum. bnp gain strengths.

next stop. my sig.

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Least worst case is a long deep recession till erm a very long time , and slowly declining standard of living forever and everybody will be paid £1000 an hour , but bread will be £700 per loaf. Its happened before I heard stories of people in the 70s who were paid £5 a week , and thought it was alot.

Worst case is state failure, with increased cost of energy needing to import more and doing nothing economically useful , ie we scrape a tiny bit of the money swirling round the stock exchange in the city. And we become zimbawe mk2, Everybody will be paid £10X10^32 , a loaf of bread will cost £10X10^33, penny sweets will no longer be called penny sweets. they will be called £10X10^28 sweets.

I'm erring towards state failure, as the UK economy has just had China/India drop a bar of soap infront of it in the mens showers in a prison.

I mean if Germany with its exporting economy and surplus economy is shrinking what hope does the UK have?.

Edited by kennichi

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Best case- house prices down another 30% minimum, economy rebalances and everyone lives happily ever after.

Worst case- government inflates way out of short-term trouble and we end up in some kind of Mad Max Apocalypse.

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Worst case- government inflates way out of short-term trouble .

thought that was already happening, s how about you have another crack at that , with your worst case being the your best case?

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So the question is this: within the bounds of what is reasonable/possible, what is the smallest possible drop in house prices you can envisage from today's level? Or is there a serious possibility they could go up over that period?

I think it's nailed on that prices will continue to drop for a while yet, 6-12 months, at least another 10% off is the smallest drop I can imagine. I can't see anything being able to stop this now.

A bear trap around the middle of next year could see prices stable, and knowing how foolish the british population appear to be, that could kickstart price rises again.

I need to buy and soon, for family reasons. So selfishly I would like huge drops very quickly so I can get into the market. After that I would hope some sanity returns to the market and the future will be modest inflation linked rises, but I wouldn't mind if they falled further. Once I buy something I can afford easily then I don't care if I go into negative equity as my job is relatively safe.

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Two years from now, 3 years from the peak would be best case 25% from the peak, worst case 50%.

Here is an analysis of what is likely over the entire bear move, depending on how long it takes to get to the bottom:

Years to trough from 2007 peak:.....8.................5.................3

Earnings adjusted total price chg:...-56%..........-56%...........-56%

Earnings adjusted p.a. price chg:....-9.8%........-15.1%........-23.9%

Nominal p.a. earnings growth:.........4.5%..........4.5%............4.5%

Nominal p.a. house price chg:........-5.3%.........-10.6%........-19.4%

Nominal total house price chg:.......-35.1%.........-43%.........-47.7%

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best case is another 10%, worst case is houseprices fall by another 40% (against today's money), anything more than the worst case isnt possible in todays money. 50% falls would push the government into printing ALOT of money, create more inflation and kill the currency, the worse things get the more the government will print/hand out because large scale deflation across bigger assets is to be avoided at all costs..

Whenever a state runs out of money and things go to poo and they always print to pay debts. Zimbabwe, Weimar, etc etc....

Edited by moosetea

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worse case:

failed attempts to prop up artificially inflated market for political gain. massive loss of taxpayer funds.

large devaluation of the £. rapid commodity inflation. rising unemployment. political vacuum. bnp gain strengths.

next stop. my sig.

Thanks Fred, that Argentina video is incredible, brought tears to my eyes. :o

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best case- maybe a couple of years of stagflation before a recovory in American land values finally puts the whole thing to bed. 35-50% decline in housing big but managable unemployment etc. :lol:

Worst case, Deflation setting in early next year continued bailouts and denial from the .gov, massive losses across all asset classes, huge unmanagable unemployment overwhelming the state into 2010+ culminating in WW3:EAST VS WEST. Which we lose, we are then crushed beneath the brutal heel of mandarin tyranny in a surreal post apocalyptic nightmare state. The only chance of advancement for the young in this new regime is to please our Asian overlords by competing in the new gladiatorial bloodsport that pits man against the feral mutants that terrorize the corrupted coutryside in the millenium thunderdome... well you can guess the rest. :ph34r:

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Thanks Fred, that Argentina video is incredible, brought tears to my eyes. :o

"Don't cry for me Argentina..."

...I'll get my coat....

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If we have deflation can we have debt reduced by what ever amount the deflation is?

I'll quite happily take a wage cut of 3-4% if my debt gets cut by an equal or greater amount. Cut my mortgage debt by 6% YOY and I'm happy, deflation really isn't a problem.

If the money never really existed so what if we get deflation. It just needs to be managed correctly.

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Worst case scenario - giant planet eating alien devours planet.

Best case scenario - we build giant spaceship and put all the EAs, Meedja luvies, Bw ankers and other dross on said ship and shoot them out into deepest space prior to the planet being devoured and hence giving us a period of peace from them prior to our demise.

Very worse case scenario - aliens invent Time machine and come back and destroy the planet 10 years ago as revenge for us inflicting EAs & Co upon the Universe!

As you can see, I have thought long and hard about your initial post.

Hmm, this is a Trekkie Stargate type Space-Time Conudrum.

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Worst case is a long deep recession till erm a very long time , and slowly declining standard of living forever and everybody will be paid £1000 an hour , but bread will be £700 per loaf. Its happened before I heard stories of people in the 70s who were paid £5 a week , and thought it was alot.

Best case is state failure, with increased cost of energy needing to import more and doing nothing economically useful , ie we scrape a tiny bit of the money swirling round the stock exchange in the city. And we become zimbawe mk2, Everybody will be paid £10X10^32 , a loaf of bread will cost £10X10^33, penny sweets will no longer be called penny sweets. they will be called £10X10^28 sweets.

I'm erring towards state failure, as the UK economy has just had China/India drop a bar of soap infront of it in the mens showers in a prison.

I mean if Germany with its exporting economy and surplus economy is shrinking what hope does the UK have?.

Altered slightly to reflect my own view.

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best case:

house prices down 40% within 2 years. mortgage lending begins. unemployment remains low.

new house buyers kick start retailers. overall down time. 3-4 years. many btls get burned.

local authority buys failing btl (at a 60% loss to btl investors) to house coming repo'd families.

worse case:

failed attempts to prop up artificially inflated market for political gain. massive loss of taxpayer funds.

large devaluation of the £. rapid commodity inflation. rising unemployment. political vacuum. bnp gain strengths.

next stop. my sig.

I couldn't agree more. I think the common factor above is what is going to reignite buyer confidence?

I'd say nothing other than big price falls preceding some return of confidence in the financial environment, which will precede any stabilisation let alone future increase. The first is clearly in progress, no sign of the second, third is just a twinkle in some future chancellor's eye.

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Clearly this forum is full of bears talking about how bad it's gonna be. I am interested in people's worst-case-scenario belief over two years (assuming you want prices to fall. *If you don't want prices to fall, it'll be a best-case-scenario instead (less falls).

So the question is this: within the bounds of what is reasonable/possible, what is the smallest possible drop in house prices you can envisage from today's level? Or is there a serious possibility they could go up over that period?

I'd have started a poll but couldn't figure out how to do so on this board.

As I'm sure everyone knows, prices crash from lows not highs. In 2 years, after 20%+ falls from peak and talk of "well that wasn't so bad after all" we will see the start of the real leg down: all bets off until 2012 at the earliest.

A 2 year horizon is not really relevant to this cycle.

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As I'm sure everyone knows, prices crash from lows not highs. In 2 years, after 20%+ falls from peak and talk of "well that wasn't so bad after all" we will see the start of the real leg down: all bets off until 2012 at the earliest.

A 2 year horizon is not really relevant to this cycle.

I've never heard that phrase before. Could you expand upon it / explain it, please?

Peter.

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best case- maybe a couple of years of stagflation before a recovory in American land values finally puts the whole thing to bed. 35-50% decline in housing big but managable unemployment etc. :lol:

Worst case, Deflation setting in early next year continued bailouts and denial from the .gov, massive losses across all asset classes, huge unmanagable unemployment overwhelming the state into 2010+ culminating in WW3:EAST VS WEST. Which we lose, we are then crushed beneath the brutal heel of mandarin tyranny in a surreal post apocalyptic nightmare state. The only chance of advancement for the young in this new regime is to please our Asian overlords by competing in the new gladiatorial bloodsport that pits man against the feral mutants that terrorize the corrupted coutryside in the millenium thunderdome... well you can guess the rest. :ph34r:

Mandarin Tyranny sounds to me a bit like an orange mugabe.

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A 2 year horizon is not really relevant to this cycle.

It's relevant to me. I want to own a house by then because I want to start preparing it for the post-2012 apocalypse I'm expecting. I don't want to rent for four years. I need a property where I can start working on the soil quality, keeping chickens and installing renewable energy generators. Can't do that in rented accomodation.

EDIT: I have just about enough deposit + mortgage availability to buy what I'm after right now...but there seems little point in doing so, especially if if I leave it a couple of years it means I'll be able to afford those improvements I want to make.

Edited by UndercoverElephant

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It's relevant to me. I want to own a house by then because I want to start preparing it for the post-2012 apocalypse I'm expecting. I don't want to rent for four years. I need a property where I can start working on the soil quality, keeping chickens and installing renewable energy generators. Can't do that in rented accomodation.

Rented and mortgaged, owned and unowned might very well be part of history.

Just who exactly do you think is going to be doing contract enforcement when Brown (or whoever) is at the IMF with the begging bowl?

No money for state sector = no state sector.

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Rented and mortgaged, owned and unowned might very well be part of history.

Just who exactly do you think is going to be doing contract enforcement when Brown (or whoever) is at the IMF with the begging bowl?

The IMF won't have any money either.

No money for state sector = no state sector.

Oh, there will be a state sector. We aren't going back to pre-Roman times. Not yet, anyway.

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Just who exactly do you think is going to be doing contract enforcement when Brown (or whoever) is at the IMF with the begging bowl?

Blackwater /Armor Group or any other PMC group you choose to mention.

no messy problems with asking the Army to shoot looters....

Edited by linuxgeek

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Best...£20k x 3 + £6k deposit = £66k first time buyer property.

Worst...the £ in your pocket is worth the same as the 1p in your purse. ;)

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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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