Wednesday, July 25, 2007

Short, sharp and to the point… Sir Landlord, post this on your site!!

A housing perspective

Quote a couple of uncontentious figures, connect two dots... the London housing market can only go in one direction: DOWN

Posted by confused76 @ 12:32 AM (856 views)
Please complete the required fields.

4 thoughts on “Short, sharp and to the point… Sir Landlord, post this on your site!!

  • There is no link – has it been turned off? I wonder why?

    Please complete the required fields.

  • It’s an interesting article and painfully correct. I’m no bull but if you factor in the interest rates during the two periods mentioned then even though income to price ratios are 3 and over 10 then because of the low interest rates the repayments from the period of 3 * salary and 10 * salary are significantly less extreme. However, in my very humble opinion allowing house prices to run amok because of a period of low interest rates is utter madness and will create a disaster if rates rise significantly again.
    I do still struggle to see where the crash will come from as at this point in time I don’t see interest rates tipping 7% causing forced sales. I still see a period of froth being blown from house prices of up to 10% and then either tiny rises or falls which will look and smell like stagnation.
    I would like to be wrong and see a really big slap in the face to financial services sector and money markets who appear to have taken leave of their senses over the last 5-10 years.

    Please complete the required fields.

  • dohousescrashinthewoods says:

    Denzil, I believe the case for a crash at less than 7% is on the basis of leverage.
    To oversimplify, if it took 7% to crash a 3x leverage, 6x leverage would only require 3.5%

    Clearly it’s not that simple, but the point is that masses more debt creates a lower IR pain threshold/tipping point. I wouldn’t be surprised to find out next spring that a crash kicked off in earnest this autumn.

    Please complete the required fields.

Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>