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Five Years Of Pain, Apparently


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This is the first article I have seen where they mention that the correction is currently happening...

"He said: 'Given the disparity between regional property prices and regional earnings growth we think the boom has run too far in those regions that have been seeing the most rapid growth recently. That is why we are expecting these regions to experience the biggest downturn in the current correction.'"

Well done Capital Economics (Roger Bootle's crowd),seems they're one of the few out there we can trust.

CE do provide professional advice on the state of the housing market.

If you do ever decide to get into BTL it may be worth paying for their services. I wouldn't be uncomfortable paying £3k a year for some decent research.

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Saxon Brettell, director of Cambridge Econometrics, said: 'Eight was the figure that it reached in 1988/89 for London and London fell rapidly from eight times income to four times income

Of course the difference then was that wage inflation was high, so the correction back to 4x salary was not as painful as it could have been in, say, a low inflation economy if the same correction occured....

... if wage inflation was zero, th eprevious reversion to 4x would have casued a price fall of 50%.

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Five-year house price slowdown

And how many of those five years do they think will go by before people start to question why they should pay 200k now for a house that will be worth 120k in a couple of years time.

This time round the falls in house prices will not be masked by high inflation, they will be out in the open for all to see on sites such as nethouseprice. So much for a soft landing I believe this time the crash will be brutal.

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And how many of those five years do they think will go by before people start to question why they should pay 200k now for a house that will be worth 120k in a couple of years time.

This time round the falls in house prices will not be masked by high inflation, they will be out in the open for all to see on sites such as nethouseprice. So much for a soft landing I believe this time the crash will be brutal.

God I hope so. In one of the Times supplements today they've featured a grinning couple who have 9 BTLs and want to buy another. Their total debt is £600,000 and they make £800 a month profit. These are the people who need to be utterly wiped out to serve as a warning to others.

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Five-year house price slowdown

Why do people still have such difficulty with the concepts of "Velocity" and "Direction".

With price falls getting larger and more frequent over the next few years, the speed of change in house prices is "accelerating". Nothing is "slowing down".

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In one of the Times supplements today they've featured a grinning couple who have 9 BTLs and want to buy another.  Their total debt is £600,000 and they make £800 a month profit.  These are the people who need to be utterly wiped out to serve as a warning to others.

If they took the £600,000, didn't buy any properties, but just put the money in the bank, they'd make around £3,000 a month in interest on it. And they wouldn't need to pay for a new boiler when the bank's central heating failed.

(btw - I know that it's not actually viable to do this, but it just highlights how small £800 a month profit is against £600,000 of (borrowed) capital. )

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  • 442 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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