Tuesday, July 9, 2013

From latest RICS monthly survey

House prices to keep on rising, say Rics members

Can this really happen? Average 4% annual house price growth for the next 5 years, that would be a whopping 21.7% increase by 2018!

Posted by wdbeast @ 07:01 AM (3147 views)
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27 thoughts on “From latest RICS monthly survey

  • No vested interests here, move along, nothing to see here.

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  • happy mondays says:

    It can only go up ! So 20% in 5 yrs, That Sh*t hole house in south Maidstone valued at £200,000 will be Worth nearly a Quarter of a million in 2018.. Sayonara England, this green & pleasant land.. Or alternatively it could all go tits up 🙂

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  • Its nice sunny days like this I can look back from Ireland with a smile.

    http://www.daft.ie/searchsale.daft?id=723788

    Oh, yes the UK is different! Yes they can print money and use it as a political tool, which is great if you are in the majority.

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  • happy mondays says:

    Khards, does the boat come with it !

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  • Khards – was that site always “daft” or on the way up was it “cheap” / “sensible” / “normal” / “bit high” / “really high” / “ridiculously high” / “bubble” / “mega bubble” / “f*ck me”/ “Long live Anglo” /”Those silly Euro bstards” / “froth coming off” / “normal service to be resumed soon” / “ermmmmm……” / “finding a bottom” / “ermmmmmmm…….” / “dont be daft” / “daft” :).

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  • RICS want 4% a year from us over the next few years. That’s more than inflationary pay rises that no one is actually getting at the moment and RICS want it ALL for themselves. No spare then for any other living costs (taxes, food, heating, clothes) By their own measures and earnings multiples housing is still unaffordable for the 99%.

    And when interest rates rise?

    Has anyone got a camel ?

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  • Where are the IR rises that everybody on here has been banging on about?

    Libertas – care to comment?

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  • Last week the BOE practically declared IRs will not increase for the next 2-3 years so a 20% rise over the next 5 years isn’t a surprise forecast for those with vested interests.

    Met up with a group of old friends last weekend (not seen some since left uni 15 yrs ago) and said I was still renting. When the inevitable ‘renting is dead money’ came back I just didn’t have any fight left in me to argue. I think the gov’t, BOE, FLS and HTB have finally beaten me and I know feel I should buy a house quickly…

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  • One thing you can be sure of is that the further from mean prices drift, the harder the correction will be.

    BTW, Just found a nice video of Carney down at the BOE..

    Here is the rest of the BOE committee

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  • when will the plates fall?

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  • “Met up with a group of old friends last weekend (not seen some since left uni 15 yrs ago) and said I was still renting. When the inevitable ‘renting is dead money’ came back I just didn’t have any fight left in me to argue. I think the gov’t, BOE, FLS and HTB have finally beaten me and I know feel I should buy a house quickly…”

    +1

    Losing the will here.

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  • The new incentive scheme to help existing homeowners get bigger houses (upto £600k) with interest free loans hasn’t kicked in yet.
    The bubble may burst one day, but it’s had a pretty good chance to and hasn’t really.
    USA economy now seems to be picking up a bit.
    If you can afford a place of your own with potential for improvement or an extension that you won’t grow out of and be forced to move then you probably won’t regret it in a few years.
    Even if you haven’t got kids yet, go for best school catchment area and pay the premium, if you have the choice.

    I got back in a couple of years ago and although the market hasn’t done a great deal in last couple of years I’ve easily got more equity than I’d have paid in rent or interest payments.

    It’s not right but you just have to accept it’s how the ‘system’ works and get on with your life.
    ‘They’ will destroy everything before they let house prices crumble.
    I expect !

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  • USA economy now seems to be picking up a bit.

    Are you serious about that?

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  • mark wadsworth says:

    STR2007, it appears I have run out of excuses for Mrs W after five years and we will be buying again in about a year.

    It just breaks my heart to have to hand over hundreds of thousands of quid for a few square yards of earth (plus about £80,000 for what the bricks are worth, I’m happy to pay for a nice building). The whole thing is mad.

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  • letthemfall says:

    MW and STR2007

    It’s a grim situation. I calculate that I would be better off buying if prices don’t move or go up. However, prices only have to fall by just under one percent a year for renting to work out cheaper. This assumes I can get a fairly cheap mortgage (and that my estimates of other costs are more or less right). If I had to pay a SVR buying would be more expensive.

    I don’t intend to stay where I am for more than a few years, and prices are much weaker in the parts of the country I want to live. So not an easy decision for me, especially as I rent a nice place.

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  • mark wadsworth says:

    LTF, exactly, that required fall of 1% or 2% a year to justify renting worked fine for a couple of years, but now prices are bl00dy well creeping up again, heck knows for how long.

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  • My Boy just turned 23 and he’s started looking at properties for the very first time – sizeable deposit plus 0.5% staff rate mortgage and I’m now thinking “oh stuff it if you can’t beat em join em” but it’s still a world gone mad !

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  • Hi Mark & LTF
    Difficult decisions indeed.
    The biggest decider for me was the uncertainty of renting. I got my notice unexpectedly (small BTLer getting out), I know someone (nice people) who’re now in their 3rd rental property in as many years due to getting unexpected notice.
    It’s just too precarious and stressfull when you’ve got kids.
    If you can really make you’re deposit work harder on the stock market than a tax free leveraged investment you can live in then fairplay. But that still doesn’t help you when you get 2 months notice to find a new home.

    If you think there are still big falls ahead (and there could be) then hold on, but for me it wouldn’t be worth penny pinching over potential 1-3% annual falls as you can regaine most of that with some home improvements.

    Mark
    Given the price range you were likely to be looking in from conversations in the past I’d be looking to get on board before the next government sponsored housing turbo boost, not after.

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  • Hi Jack
    Incredible when you think of it that even with a 0.5% mortgage the interest on a 200k mortgage is £850 odd a month !
    And that with a £50k deposit will get you a basic 3 bed semi in reasonable areas in the South East, nothing more, in fact just a flat in alot of areas.
    FUBAR

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  • Its seems like a lot of regulars here are finally giving in and are looking to buy.

    So the big crash will probably start next year then 🙂

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  • letthemfall says:

    Hi str2007
    Yes, if you’re having to move every year or so that is a real pain. I’m fortunate in that my rent is very stable (so far anyhow) and I’m not keen on paying the costs of buying for just a few years before I move again, unless of course values were to increase a fair amount, which they may, but more likely won’t by very much (?). I think price falls will occur in the future, although now I can offer no serious thoughts on when this might be. Could be by inflation in the end, if some are to be believed.

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  • As a long time reader of this forum I would just like to say don’t give up too early. I STR in Sep 2003!! in the belief a crash was inevitable. This was after watching my own property double in value over a 3 year period. I’ve held on in the belief that a crash will happen and I will get better value for money when I buy back in.

    So just because the BOE says it won’t raise interest rates during this or vnext year, who believes them? I certainly don’t. There will always be an excuse as to why rates have to go up. In fact it gives me more confidence when they say things like that as it will be very difficult for them to stick to it. That said, I share everyone’s frustration.

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  • IMO price falls are most likely in the first couple of years of a new government as artificial stimulus will be withdrawn as soon as Election is put of the way.
    As I see it, the artificial stimulus is being introduced to fuel the housing market for a positive election outcome for the conservatives.
    Naturally by furling that there will be fresh business created for the rest of the economy associated with housing and a trickle down effect there after.
    Once stimulus gets withdrawn and interest rates creap up even a little then the brakes will come on. But that could be 3-4 years and 20% increase away.
    And whose to say they don’t increase the level of housing stimulus with larger financial interest free incentives.
    Once they’ve started it’ll be hard to stop.

    I’d suggest your position should be at least neutral. You’re currently ‘short’.

    To get neutral I’d suggest getting a house and renting it out. You might have to lie on your application form and pretend you’re going to live in it, as they also have that angle covered as BTL mortgages are only available to Homeowners!
    It goes without saying that the numbers must add up re: income/expenditure.

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  • Sorry predictive text interfered a bit there.

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  • Investing in a house even for the income isn’t very neutral, especially if you try to fiddle things. When I buy it will be to live in. Whether houses can really go up by 20% is hard to envisage given that wages are not going up. The govt would have to offer free housing loans to all as you say. Well, I suppose it could happen; why not make things even more crazy?

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  • LTF
    Difficult to get a neutral position I know, and I wasn’t advocating criminal activity, although you could argue that the ‘system’ not allowing a tenant to put a stake in the ground is very unfair and biased.
    It’s not as though the BTL house is in anyway financially secured against the homeowners main residence therefore it’s supposing a tenant is some kind of financially untrustworthy second class citizen which is nonsense in the majority of cases.

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