Thursday, March 8, 2007

Rental myths debunked

Increased house prices causing a renters' paradise - Gumtree

This is an unusal source of information but highly credible IMHO, real evidence of a cash squeeze everywhere;, lodgers, mortgage payers buy to let investors, the increased money supply appears to have slashed and burnt already..quick answer, keep on printing?

Posted by converted lurker @ 12:52 AM (464 views)
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5 thoughts on “Rental myths debunked

  • Correct me if I’m wrong, but just a few years ago wasn’t couch surfing considered homelessness rather than a fun new craze sweeping the country.

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  • Wannabeemigre says:

    “The research, commissioned by the UK’s busiest flatshare website, reveals that one third (30%) of mortgage holders admit that they are struggling to make repayments, with one in eight (12%) considering taking in a lodger to help offset creeping costs.”-if this is true and 1/3 of mortgage holders are already struggling what would happen if interest rates went up 1%-not inconceivable given that we are importing our inflation……………………………

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  • Fascinating.

    If there really are that many people saving for a deposit and watching for a crash – then once it starts (the HPC) they will all sit tight and wait for it to bottom. I believe that this, coupled with the mass information we have on house prices will have the effect of accelerating the HPC.

    Once it does bottom (when the consensus is reached that it has bottomed) I predict a rapid rise as the pent-up buying power at the bottom of the market kicks in and we see hyper inflation again – but probably not reaching the peak again.

    The key will be predicting the bottom – and I believe that the bottom will be a lot lower than last time. The key to this is that nobody will want to buy in a falling market unless they really have to. The fact that some have been waiting for 5 – 8 years means that they will quite happily sit for another 1 – 2 simply to remove the equivalent of 10 years debt of f the morgage while it bottoms. These FTB will probably actually try to pull the market down to such a low that they almost do not have a mortgage (cash buyers) meaning that the market will be very hard for sellers.

    Any sellers out there therefore think. Sell at the peak and beat the rush. Once the masses start to call HPC a glut of property will appear and the trend will be unstoppable.

    The difference for this HPC (compared with the late 80s/early 90s) will be the presence of indexes (if you know how to read them) and websites like Rightmove. This will have an effect on the market akin to the introduction of electronic trading.

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  • dohousescrashinthewoods says:

    sirgoogle, I’m inclined to agree – the bottom could be a lot lower. Lots of people want houses and lots must be standing on the sidelines, keeping themselves squeezed into a tiny space.

    After the participants of this present madness have been slaugtered and hung out by the market, there is likely to be a psychological backlash of prudence which could keep the market subdued for many years. Coupled with a credit squeeze, people may be unable to borrow much in future.

    We do well not to buy now, but we may well not make many gains after the bottom. I can imagine property heavily underperforming as an asset class for the next decade, during which time people will buy homes (not investments) and there will probably be a stock market bubble instead. So if you’re looking for gains now seems a good time to get out and stay out of property.

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  • converted lurker says:

    Good report this, glad you liked it guys, comes from a slightly different angle. Yes they (gumtree) have their own V.I.etc, but it shows that, despite the money flooding the system over the past 5 years (or longer) things are bizarrely very tight for a huge section of those priced out…even priced out of renting which has not increased in cost much since 2002!

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