Tuesday, Jul 25, 2006

Express delivery...of what I'm not sure

Firstrung: There\'s a bloke works down our chip shop swears he\'s Elvis..

Record property prices are set to soar for at least 10 years in a massive boost for home owners. They will see the value of their property increase by around 20,000 every year, pushing the average home to almost 400,000 by 2016, experts predicted last night.

Posted by converted lurker @ 12:00 AM (591 views)
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13 Comments

1. denzil said...

>>rising house prices are a massive boost for home owners

Call me dumb, I've certainly be called worse and my skin is thick enough to take it but why when house prices rise faster than inflation is it good news for home owners?

Reading this reminded me why I don't read dross rags like The Daily Express. It's written by idiots for idiots but what is more alarming is I bet it has a large market share.

Tuesday, July 25, 2006 10:53AM Report Comment
 

2. uncle chris said...

"And property economist John Wriglesworth agreed. "There's as much chance of Elvis being spotted on the moon as a housing slump in the near future," he said."

The words of the VI are definitely sounding more desperate. By the way, I was almost bustled out of an EA at the weekend when I asked if they dealt with repossesed houses. The was a couple in the shop at the time and the EA looked horror struck.

Tuesday, July 25, 2006 11:03AM Report Comment
 

3. kpjcomp said...

And of course all home owners are all going to be better for it?, or is that the taxman.
Anyway people I find stories like these are really good news, they really smell like their getting desperate now.
Surely the fruitcakes that read the Daily Express wont beleive it either!!, or am I been a bit gullible here?

Tuesday, July 25, 2006 11:08AM Report Comment
 

4. sebastian said...

Agree denzil. The only reason I can think for rising how prices being good for home owners is the 'feel good factor'. Apart from that, I got nothing. I love how people are happy to see others deprived of a living just so they can 'feel good'.

Something that gets to me is the reporting of negative equity. If you ask me, someone purchasing a house should acknowledge that with any purchase there comes a risk and thus be prepared for certian eventualities. If someone takes on a debt they can manage then there is no reason why negative equitity should ever bother them. It's just a shame that houses are seen mainly as an investment now.

Tuesday, July 25, 2006 11:23AM Report Comment
 

5. European-bear said...

When you take out a mortgage, you are warned that the mortgage is secured on the house and failure to make repayments could result in your house being repossessed and you loosing your house. What they should also say is that the value of houses can go down as well as up (the warning given to other investments). If then you fail to keep up with your mortgage payments you could have your house repossessed AND still be left oweing money which the bank (plus insurance agency) has the right to recover. So you could end up with no house and still in debt if house prices go down (but they never do do they?)

Tuesday, July 25, 2006 11:33AM Report Comment
 

6. The Capitalist said...

Agreed. How come my in my EA office we're reducing prices more often than we did 3 months ago, the phones have stopped ringing and more sales are falling through? I was at a barby at the weekend and asked a VI how come HPI is seen as a GOOD THING? as you say it's all to do with the feel good factor, a worn out myth which I suspect is about to turn very sour...rgds from the EA mole!!

Tuesday, July 25, 2006 11:50AM Report Comment
 

7. George Monsoon said...

Unfortunately Denzil, the general public will continue to believe what they read, and will continue to push borrowing to the very limit, thus making the rebound all the harder when it hits. This country will be amazingly lucky not to go bust.

Does anyone else get the feeling this government already knows the economy is cracked and are riding the wave with hysterical abandon, knowing that when things go pear shaped, they can retire to their security guarded mansions and count their blessings in peace?

GRRRRrrr....

Tuesday, July 25, 2006 11:54AM Report Comment
 

8. harold said...

Assuming that average earnings rise to 40,000 by 2016 (reckless assumption no. 1), banks will have a lending to earning multiple of about x10. Something tells me that this is highly unlikely to occur, not unless the mortgage length was increased to about 60 years. Assuming that people are about 30 before they are earning the average wage (reckless assumption no. 2), this means that most people will be about 90 by the time they have repaid the loan - just in time for them to flog the property to pay for (NHS) care.

Tuesday, July 25, 2006 12:25PM Report Comment
 

9. P. O. O. R said...

An interesting calculation is looking at the retail price index average for the last 10 years (1995 - 2005 figures), and then projecting the same forward for the next 10 years - Assuming a house today costs 185,000 then in 10 years the same house should cost 238,241 This would seem a more realistic and affordable growth. I also looked at my parents house who have recently had it valued - given the salaries they were on when they purchased the property which index linked are similar to mine, the valuation would have to drop by exactly 30 percent to make it comparible to when my parents purchased their house.

I wonder where the money is going to come from to allow people to afford the houses in 10 years time - Saying that should property reach these figures - just think of all the additional tax the goverment will get - thus allowing them to significantly reduce tax on earnings etc etc, making us believe that we are so much more better off than our parents!!!

Tuesday, July 25, 2006 01:21PM Report Comment
 

10. inbreda said...

"Bricks and mortar has consistently proved itself as one of the best investments there is,"

Yeah - except against shares.

And who are these experts and economists that are making these statements? Why is it that the only person or company that they are will or able to name is some retarded estate agent who makes a completely false yet unquantifiable comment?

Tuesday, July 25, 2006 01:47PM Report Comment
 

11. harold said...

"Bricks and mortar has consistently proved itself as one of the best investments there is,"

Yeah - except against shares

...and commodities, and the good thing about these is that they can be flogged sharpish if things look nasty. When will people disentangle their home from get rich quick schemes? There are a lot better ways to invest your (borrowed) money. Unfortunately it will take a major shock for people to fall out of love with cement - it's not all it's cracked up to be (no pun intended - honest).

Tuesday, July 25, 2006 02:10PM Report Comment
 

12. Time To Raise Petrol Prices said...

Contrary to what Kirsty will tell you, there is an obvious way to put the lie to the notion that property has been the best investment of the last 50-odd years..... it doesn't generate any wealth. Equities are a share in a company, a collection of indivduals doing something (presumably) worthwhile for a living, and generating money through sales of some sort, which is shared out amongst the owners of the company - the shareholders. How can a 'dumb' asset, like property (even commercial property) make more money than equities, when it doesn't produce ANY wealth, either directly or indirectly? After all, rents on on property have to come from somewhere, and where is that? From the sweat of the workers, whose efforts are reflected in the share price!

Tuesday, July 25, 2006 04:46PM Report Comment
 

13. inbreda said...

Very true. If you buy shares, and they go up in value, you can add a stop loss to protect your profit. With houses - particularly given how extensively MEWed most people are - if the value starts going down, the best you can do is put it on the market and hope that it sells before it falls below what you paid for it. The only way of increasing your chances of keeping the profit, ironically, is to cut your price aggressively.

And then there will be the people that, having realised prices are falling, will want to sell but will not be able to repay the difference between house price and mortgage. Oh, how that would be a sinking feeling!!

Tuesday, July 25, 2006 04:59PM Report Comment
 

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