UK Housing Boom - Is the Party Over?

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Old Jan 21, 2008, 11:32am   #1
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UK Housing Boom - Is the Party Over?

We've just published a new T2W article called "UK Housing Boom - Is the Party Over?" by Jay Lakhani.

Quick Summary: Recently the IMF said that the UK’s property was overvalued and this could result in a spectacular slump. The “time bomb” is ticking and could explode at any time...

PS. Don't forget to rate the article after you've read it and share your comments on this thread.
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Old Jan 21, 2008, 4:03pm   #2
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Originally Posted by T2W Bot View Post
This is a forum thread for discussing the Knowledge Lab Article, "UK Housing Boom - Is the Party Over?".

If the article's forecast turns out correct then Gordon Brown will be finished. Couldn't happen to a nicer chap.
0007 -
"A Gentleman should not be seen before mid-morning unless he is returning home from the night before"
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Old Jan 21, 2008, 5:11pm   #3
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An excellent article, good read I thought, will gormless Gorden and captain Darling get theirs, I do hope so
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Old Jan 21, 2008, 5:42pm   #4
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I am not sure that I agree with all of this article. I can see that repossessions will increase and that prices may fall but a couple of factors are missing from this article that will have an effect on all of this. This is the fact that the UK population is growing a lot by immigration and is expected to continue much faster than original government estimates and these people need housing. The second is that in London property is being bought up by Eastern Europeans and at a quite alarming rate. The key issue being that in certain areas demand is still greater than supply and as London is the centre for all pricing origin of housing throughout the UK then it is entirely possible that we wont see the apocalyptic crash that everyone else is predicting.

The other consideration is that when the Buy to Letters start jumping ship those with cash can walk in and take over and there is a lot of cash about with certain people. I know quite a few who are waiting to pounce if and when the decline happens. People have to live somewhere and if it is not in their own house then it has to be rented and in my view the demand for rented property is likely to go up not down.

But who knows this is just my view and I know that anyone who attempts to predict the economic future is almost always, and without exception, invariably wrong.

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Thanks! The following members like this post: Lee Shepherd , Omegatrd
Old Jan 21, 2008, 6:59pm   #5
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Not only is the party over, but all the beer is gone and so is your girlfriend!

I couldn't agree more with the articale in relation to the USA market. We are done. We're talking bank runs and bread lines. The Dollar index is currently recording a price of 76.5dx 82.61ux, but if you cross reference the prices with global product pricing, the actual value of the USD is 0.9260

Ok, do you understand this? The price of Gbp is about 1.9502, the price of Cad is 0.9735, the price of Aud is 0.8732, the price of Chf is 0.9106

What this tells us is that most currencies are trading around parity, but the price of USD is over valued by a factor of 8161% OK, we have borrowed so much more than our net worth that the dicreptancy shows up in the cummalative USD pricing.

Ok, let this sink into your head. Most currencies trade around parity, USD is at 76.2 the price of USD is going to plummet untill it reaches parity then adjust from there.

All that talk about martial law and a USD collaspe is very real. Americans are to stupid to quantify the situation or intelligent to even care. We're losing 20% of USD value every year and this isn't even calculating the balance sheets.
There are rumors that 50% of our most reputable banks are already defaulting on loans, but this hasn't affected us yet because there being bailed out by foreign banks.

We're already collapsed, if the majority of Americans had a clue what was going on theysay the grocery stores would be cleaned out in a matter of days. Holdings in Silos is down by 11% this year, not to mention a bad harvest last year along with even lower Silo holdings from the previous years.

All those rumors about FEMA concentration camps are true. They have camps built for when the bank runs start and after food has been cleaned off the shelfs.

Alot of conspiricy buffs think there is a NEO-con power play 'playing-out', but what these 'buffs' don't understand is that if the economy collapsses, there won't be any food or money. This whole consolidation of power isn't happening just for the sake of Control, but for the fact that Americans are not prepared for this type of event and even trying to prepare the population for this type of event would make it happen that much faster.

There is only a limited amount of resources to prepare people.

The day that America relaxes on it's military posture is the day that our dollar ultimately plummets and people will see no value in America, only risk.

Why would some one invest in the USA when China, Singapore, Hongkong, Russia, Mexico all have better standing Balance Books.

You'd have to be a complete idiot to invest large amounts of money in this country.

As an American the smartest thing you can do is attempt to remove all your capital and convert it to metals and hold it in a bank vault or Safe at home, because I guarantee by the time reality hits you won't have anywhere or any product to put it in.

All the data being released is scewed, the actuall unemployment rate is closer to 12% then the recorded 4%, there total liars.

We're about to enter a nightmare here in America. The NAU is going to try and take over the USA thanks to there manifested collapse. There is going to be so much confusion that the safest place to be will be 'out of the markets'.

Anything USD based is worthless. Sell your stocks, sell your bonds, get rid of your dollars.
All your money is going to be locked and regulated after the collapse.

In fact there going to try and get rid of actaul money in a few years, if you think it's hard to have actuall assets, you havne't seen anything. They want to convert all you money in to credit, instead of having 400k to you name, you'll have 400k Credits to your name and you won't be able to withdrawl it all at anytime. They'll want to know where it's going (terrorist), why you need it and time lines to when it will be available.

And if you are delayed in making a payment, you whole account will be locked.

This is no B.S.

I have more to say, but need a break.

Don't trust your goverment.

"So what else is on your mind, besides 100-proof women, 90-proof whiskey, and 14-carat gold?"
-Lee Marvin/The Professionals
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Old Jan 21, 2008, 7:21pm   #6
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Paul, how can the Eastern Europeans afford London property? I thought they were poor people and coming to this country looking for work, happy to work below minimum wage?
The markets can stay solvent longer than you can stay irrational.
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Old Jan 21, 2008, 7:24pm   #7
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There are a lot of very rich ones around and they are buying multiple properties, mostly Russians.

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Old Jan 21, 2008, 7:35pm   #8
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Ah! I was under the impression that all the foreign money was now "in cash", waiting for the impending crash, before buying it all back.
The markets can stay solvent longer than you can stay irrational.
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Old Jan 24, 2008, 12:40pm   #9
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There aren't very Eastern Europeans with sufficient funds to make any real dent on the London Property market. Most of these people are here to make some money and then scoot off home with enough to buy a property in their own country.

The best guage of what's going on is a look out of your own window. Where I live in West london there was a time not so long ago where you couldn't go for 5 minutes without seeing one of those Foxton's Estate Agents-branded Mini Coopers running around on viewings. Now, you'll be lucky if you see one a week. The market's on its knees.

No potential buyer is going to pile in until they believe the market has reached or is within striking distance of the "bottom". I mean, would you buy a £500K house today with, say, 5% knocked off when if the papers are to be believed, you'll be able to get the same place for £450K or £400K next year ? No, neither would I.

Any Russian with lots of money would probably realise that London's had its day and that Hong Kong and perhaps, germany are the places to be in at the start of a boom.
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Old Jan 24, 2008, 1:04pm   #10
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Very true. I set up a removal and storage company in London 8 years ago and have been lucky with timing.

Things are slower than ever. Not just for us but everyone I speak to in the business. Also, we carried out stacks of removals for Foxtons until September last year when I told them we would do no more as they owe us a small fortune. We are now in the process of taking them to court.

The owner sold out for around 400 mil last year to a private equity company. Very clever man as he called the top and kept the lease of his prime locations so even if Foxtons went tits up he will have his property to fall back on ( just in case he loses his millions spreadbetting ).
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Old Jan 25, 2008, 7:18pm   #11
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I am always sceptical of any so called Pundits predicting doom and gloom......sorry no disrespect to Jay...

I remember Jupitar Effect when whole world was going to end and I was very sad that I might never get to own a house or have my own car etc etc....

I have more that I dreamed then.....

Just read all and do what your learned decisions says...

After all you are all traders, intelligent and street wise.

You don't need anyone saying things otherwise....

Be cautious, but also be brave in taking decisions....After all fortune favours brave and Nothing ventured, nothing gained are my mottos...!

I am certainly NOT worried in this spate....It is not fundamentals, but panic and sheep mentality that is deciding the markets.

If I had followed the predictions in 90's, I would have remained a single property owner....

Last edited by zambuck; Jan 25, 2008 at 9:10pm.
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Old Jan 25, 2008, 7:26pm   #12
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Originally Posted by Trader333 View Post
There are a lot of very rich ones around and they are buying multiple properties, mostly Russians.

...Yes....I sold one to a Russian...better than locals....

...If he likes, he buys....He said...!

The most futile and disastrous day seems well spent when it is reviewed through the blue, fragrant smoke of a Havana Cigar.
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Old Feb 6, 2008, 4:37pm   #13
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Interesting article.... I can see some logic behind the reasoning on this. yes i have seen many jump into the buy to let bandwagon, the yield are not great, and I am sure you can get better investment returns elsewhere. Crash! I doubt if it will come, but a correction yes, it is on cards. I am looking to sell my buy to let portfolio, and get back in 2/3 years time!

i can see banks getting in trouble and yes the personal debt is up........ and going up! so really it is all common sense - prices do not move in one straight line.
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Old Feb 10, 2008, 9:49am   #14
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I agree to some extent with the author, however I believe the UK situation is different to US. The housing market in UK is sustainable. Yes the growth in London will slow down or there may be a correction in the near future, however in the long run property is the best option.
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Old Apr 10, 2008, 1:52am   #15
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Have a look at this video;

Yanks being paid to vacate their homes! Well London is not far and then the rest of the world. Is the picture gloomy!

Yes it is. The Party is surely over. Agree with some comments that property and shares are all long term investments, but it is all about timing. You dont buy at the peak.
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