Monday, May 11, 2015

And so it begins....

Independent: House price boom to follow Tory victory

Estate agents predict "bun fight" over London Prime. Well they would wouldn't they?

Posted by chrisch @ 05:12 PM (5648 views)
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20 Comments

1. cyril said...

Newsflash - "Estate Agent predicts house price rises" Shock Horror. In other news a bear went to the toilet in the woods
I like the way they predict 19.3 per cent growth in house prices over the next five years. That point 3 makes it sound much more scientific.

Monday, May 11, 2015 06:26PM Report Comment
 

2. enuii said...

As a percentage of the entire UK, how many people other than newspaper hacks are interested in the price of 'prime' London property.

Oh, that's easy to work out as 18% of London's 8.6 million alleged population live in 'Prime' London which equates to roughly 2.4%.

Good look to them, after all your house is a) an investment, b) your pension and c) whats left will pay for your care home when 'wealth' is irrelevant as you hopefully haven't got a clue whats happening to you.

Monday, May 11, 2015 11:17PM Report Comment
 

3. libertas said...

When you look at the house price chart on the HPC timeline, it shows that the trough after 2008 matches well with the timing of the 1989 crash recovery.

For all of you who have waited for the bottom, you missed it. Get on the train and expect a crash about 18 years after 2008, i.e. 2026 or a bit later. But if you spend the next 16yrs paying down a mortgage, you will own most of the house by then and will not notice the crash.

Note, the next elections should be, 2020 and 2025. So long as they keep to that timetable and house prices keep rising, they will probably get elected right up until 2030. Particularly if Scotland separates, because then England will be tory dominated. It the Tories get greedy and go for an early election in a couple of years, to cement their majority in the face of a strengthening economy, they could face an election in 2026 or 2027 rather than 2025, which would be a disaster for them, because they will then be blamed for a cyclical downturn, just as Labour got blamed for the downturn in 2008, though they did not help by using up the Country's resilience by tapping its reserves.

Monday, May 11, 2015 11:18PM Report Comment
 

4. Derbymark said...

Libertas, you would not know how to read a chart properly even if it was labelled with the dates of the next crash. I have read your ramblings on here too many times now not to comment.

Take a crash course on Elliott Wave, which labels normal bull markets in 5 waves. For your misguided information the crash of 2008 was a mere wave 4 correction. If you look at the house builders, big stock listed estate agents and the average house price chart over the last 20 years we are in a classic wave 5 and a topping one at that.

Stop feeding crap to everybody on here, it does not matter what government are in power during the next financial crisis, the power of deleveraging will revert prices very swiftly back below the long run mean creating a new cycle in the years to come. If you really want to sound clever in your ramblings then go away and research the long term deleveraging cycle, learn how to read a chart properly and then come back and talk sensibly.

Monday, May 11, 2015 11:43PM Report Comment
 

5. cuddlybear said...

Libertas@3

The coalition changed the law so the Prime Minister cannot go to the polls early (nothing to stop the current government undoing that change I suppose)

But I am increasingly leaning these days to the next crash being 2026ish which I suspect would result in election results as you predict

Tuesday, May 12, 2015 08:32AM Report Comment
 

6. jack c said...

@ libertas "If the Tories get greedy and go for an early election in a couple of years, to cement their majority in the face of a strengthening economy" (Monday, May 11, 2015 11:18PM)

Unless I'm missing something the introduction of fixed term parliaments renders your statement void.

Tuesday, May 12, 2015 08:57AM Report Comment
 

7. mark said...

only if people can pay the price, otherwise there will be a standoff for years and estate agents will eventually be visiting their charity for handouts

Tuesday, May 12, 2015 09:34AM Report Comment
 

8. tom101 said...

"Unless I'm missing something the introduction of fixed term parliaments renders your statement void."

Wonder whether this rule will be changed back to the previous one?

Tuesday, May 12, 2015 10:09AM Report Comment
 

9. nickb said...

Libertas
Yes you are absolutely right, the average FTB will be borrowing 10x + of their incomes to get on a supposed housing ladder, and if not BTL will definitely keep the market afloat. Those same would be FTBs are going to pay the sky high rents that would justify ever-increasing prices until 2026, even when there is a government that will let the market rip all across the UK economy ie extension of zero hours contracts and job insecurity across the board! Hurrah! onwards and upwards to 2026!
N

Tuesday, May 12, 2015 10:23AM Report Comment
 

10. pete green said...

Unfortunately the 18 year cycle theory could break down because affordability is so low. If we had had a proper private debt deleveraging then so be it. But we did not and that is a game changer - see Japan etc. Also there will be a mid term crash in about 2019 which may be as big as a full blown crash due to the financial shenanigans of late. Throw this onto global standardisation of asset bubbles and environmental constraints and possible super cycle effects then we are in some respects in uncharted waters as to what will happen.

This could all be wrong if productivity and wages go up considerable - and the 18 year cycle has bee very resilient in historical terms - but I see no evidence of this, but is ever I could be wrong. Black Swan & all that.....

Tuesday, May 12, 2015 10:52AM Report Comment
 

11. jack c said...

tom101 - it went through via an act of parliament however my understanding is that the prime minister is obliged to establish a committee to review the operation of the Act and to make recommendations for its amendment or repeal, if appropriate. The committee must be established between 1 June and 30 November 2020, and the majority of its members must be members of the House of Commons.

Tuesday, May 12, 2015 12:03PM Report Comment
 

12. hpwatcher said...

Reports of 2019 or 2026 are extreme examples of wishful thinking. The fact is that the economy is turning down RIGHT NOW. The tory election boost is likely to be a fairly brief affair - the underlying fundamentals are just as awful - just look at the UK.. Cuts anyone?

Tuesday, May 12, 2015 02:33PM Report Comment
 

13. Dees said...

There are a lot of new houses being built and the FTBs have plenty of opportunity to fund the inflated prices of the housing market, with rising interest rates being put off enough I think we will see some big changes in the next 1-2 years in the market.

I think someone is having a laugh if 2008 was supposed to be the bottom of the crash, something that goes up by ten and then comes down by 10% in a limited area doesn't equal any type of crash in my view

Tuesday, May 12, 2015 05:13PM Report Comment
 

14. libertas said...

How can a fixed term Parliament be enforced?

What are you going to do, arrest politicians for resigning or losing a vote of no-confidence? Do you just plough on regardless even if you lose your majority or lose support of the Commons?

The one rule about laws is, that they have to be enforceable. If they are not, there is no way of enforcing them. Though in the example of a politician calling an election whilst popular, the law may hold more weight, but not much.

Tuesday, May 12, 2015 10:29PM Report Comment
 

15. libertas said...

hpwatcher, for a bull market to be maintained, there has to be a constant slew of bad news or the market does not correct and gets ahead of itself. The blow off top occurs when everybody has bought in. For a short period they push to new highs with no resistance, but at the top, everybody has staked everything and there is nothing left to stake, so the boom stalls and bears take over.

NickyB, house prices can keep rising without multiples changing, because multiples multiply and folk gain more and more equity. I explained recently how this process gets ahead of itself, like in 1989 and 2008, with the correction bring one back down to meet first time buyers again.

Tuesday, May 12, 2015 10:33PM Report Comment
 

16. Derbymark said...

Libertas - a blow off top occurs when humans think they are missing out when they see a big rise in price. Joe public piles in often at the very top and lose their shirt when they realise they have bought the top.

For a blow off top, the public must suddenly become aware of a blow off top formation or the dynamics of the market change suddenly to create the change in human behaviour. In this property bubble I am afraid those stages have passed already, the media frenzy has been and gone, interest rates have gone to almost zero and every last man and his dog is already a landlord.

I am not quite sure where your blow off top will come from and please don't start the rubbish and negative interest rates, that is just a sign of desperation, if prices were to go to the moon they would already have done so with current policies, in fact that probably was your blow off top.

Tuesday, May 12, 2015 11:09PM Report Comment
 

17. tom101 said...

Jack c Thank you for the explanation

Wednesday, May 13, 2015 12:05AM Report Comment
 

18. clockslinger said...

Hooray, the nation is saved from socialist, benefit scrounging poverty. Thank you Tory voters everywhere.

Wednesday, May 13, 2015 06:56PM Report Comment
 

19. mombers said...

@14 read the Act, there's no question of forcing anyone to do anything. All it means is that Parliament either has to pass a vote of no confidence with a simple majority or 2/3rds have to vote for an early election. Technically the Tories could call an early election on the former route but would look pretty foolish giving themselves a vote of no confidence and the public would be very cynical if they did. In the second case they would realistically have to have a 2/3 majority already, in which case they would be highly unlikely to gain any seats in an early election

Friday, May 15, 2015 11:32AM Report Comment
 

20. nickb said...

Libertas,
How can prices and rents increase exponentially forever whilst incomes don't match those increases? Has it occurred to you that people also need to eat? "multiples multiplying" - that guff has been debunked more than once on here already.
N

Saturday, May 16, 2015 03:03PM Report Comment
 

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