Think house prices will rise now.. read this...

[new_trader]

I want to trade up but I thought there is no way I would want to sell in this market. Out of curiosity I rang an Estate agent to find out what my flat would be valued at and to my utter...utter astonishment he gave me a figure that put it at around 2008 prices...if it was shares instead of property I would have said SELL EVERYTHING NOW!! This is madness...I don't know what people are talking about in regard to a house price crash. Prices have gone from ridiculously stupid levels to just plain stupid levels, that is all. We are nowhere near sensible and very far from affordable. My prediction is that once the hype is gone, and everyone is bored of talking about the recession, the economy and house prices, the fools who bought now will find that their house is worth much, much less than what they thought was a bargain price. It would worry me if house prices didn't fall further. There just aren't enough trees available for the money needed to print to keep this bubble inflated.

 

[0007]

I want to trade up but I thought there is no way I would want to sell in this market. Out of curiosity I rang an Estate agent to find out what my flat would be valued at and to my utter...utter astonishment he gave me a figure that put it at around 2008 prices...if it was shares instead of property I would have said SELL EVERYTHING NOW!! This is madness...I don't know what people are talking about in regard to a house price crash. Prices have gone from ridiculously stupid levels to just plain stupid levels, that is all. We are nowhere near sensible and very far from affordable. My prediction is that once the hype is gone, and everyone is bored of talking about the recession, the economy and house prices, the fools who bought now will find that their house is worth much, much less than what they thought was a bargain price. It would worry me if house prices didn't fall further. There just aren't enough trees available for the money needed to print to keep this bubble inflated.

Agree with your broad analysis. Also:
1. "he gave me a figure that put it at around 2008 prices." - that may not mean a lot if he's desperate to get you on his books. Houses in my locality are still at 2008 levels - but nobody is buying them at those prices - the ones that sell are lower.

2. If you've got mortgage borrowing that you're comfortable with (insofar as that is ever possible!) then if you want to trade up, now could be a good time as the actual discount in hard cash will be greater on the more expensive property and you are likely to get a better deal anyway as more expensive props are generally more difficult to sell. But of course this only applies if that's what you were gonna do anyway. I'd be very tempted to sell out if the price is ok & rent while I have a think. No hurry at the moment.

 

[new_trader]

Agree with your broad analysis. Also:
1. "he gave me a figure that put it at around 2008 prices." - that may not mean a lot if he's desperate to get you on his books. Houses in my locality are still at 2008 levels - but nobody is buying them at those prices - the ones that sell are lower.

2. If you've got mortgage borrowing that you're comfortable with (insofar as that is ever possible!) then if you want to trade up, now could be a good time as the actual discount in hard cash will be greater on the more expensive property and you are likely to get a better deal anyway as more expensive props are generally more difficult to sell. But of course this only applies if that's what you were gonna do anyway. I'd be very tempted to sell out if the price is ok & rent while I have a think. No hurry at the moment.

I am in a bit of a quandary. I could see what was coming and have been waiting for it. I cleared my mortgage about 5 years ago and have been saving prudently (saving...silly me ay?) and waiting for the right time to upgrade. I have considered the renting angle but then that is money lost just like property value. I am completely debt free at the moment so now it is a case of quality of life Vs price. I am certain prices will continue on a downward trend for the next 2-3 years at least.

One thing I will say, the worst thing that can happen to this current government and the madman in charge is that they win the next election. The worst of this economy will not begin until after the next election. Public spending cuts, Tax hikes, Interest rate hikes....they are all coming and WILL herald the era of austerity in Britain, you mark my words. I don't know if I will want to stay here for that. The illusion of wealth created through inflated asset prices will not be back for more than a generation at least.

 

[Technically Fundamental]

The illusion of wealth created through inflated asset prices will not be back for more than a generation at least.

HAHAHAAHAHAHAHAHAAH


What the f will we have left?

 

[new_trader]

HAHAHAAHAHAHAHAHAAH


What the f will we have left?

A house will return to being what it was always meant to be ie/ A place you live.

It won't be used as cash machine to borrow money to buy things you can't afford. Not for a long, long time. It takes on average, one generation to 'forget' the mistakes of the past. That is what it will take this time, at least. History does repeat.

 

[Technically Fundamental]

A house will return to being what it was always meant to be ie/ A place you live.

It won't be used as cash machine to borrow money to buy things you can't afford. Not for a long, long time. It takes on average, one generation to 'forget' the mistakes of the past. That is what it will take this time, at least. History does repeat.

Hope so. First timers have been squeezed out. Thats trouble in itself. Unless you're rich of course.

 

[0007]

I cleared my mortgage about 5 years ago and have been saving prudently (saving...silly me ay?) and waiting for the right time to upgrade.
You're well placed. Just sit & wait. (You know what happens to traders who jump in too soon)

One thing I will say, the worst thing that can happen to this current government and the madman in charge is that they win the next election.
That is the Domesady scenario which I pray doesn't occur. Thank God Gordo bottled it before - we'd still have 4 yrs to go otherwise!

The worst of this economy will not begin until after the next election. Public spending cuts, Tax hikes, Interest rate hikes....they are all coming and WILL herald the era of austerity in Britain, you mark my words.
True.

There will be rewards for those with patience.

 

[Technically Fundamental]

WTF is the to=ry plan of action?

 

[the blades]

WTF is the to=ry plan of action?

To spend a lot less money (that we don't have).

UTB

 

[Technically Fundamental]

To spend a lot less money (that we don't have).

UTB

How?

 

[Martinghoul]

A house will return to being what it was always meant to be ie/ A place you live.

It won't be used as cash machine to borrow money to buy things you can't afford. Not for a long, long time. It takes on average, one generation to 'forget' the mistakes of the past. That is what it will take this time, at least. History does repeat.

Regretfully, I disagree... People should be able to remember, but they just don't.

To me, that's what the whole 'moral hazard' argument is all about. You're letting people forget the pain too quickly, so they think that what they experienced was just a momentary hiccup. They then go back to doing the stupid things they were doing before. This is what we're observing now in many areas, not just property prices.

It truly boggles the mind...

 

[montmorencyt2w]

HAHAHAAHAHAHAHAHAAH


What the f will we have left?

Our splendid manufacturing industry of course!

 

[montmorencyt2w]

To spend a lot less money (that we don't have).

UTB

Except probably on upgrading our nuclear weapons, to fight enemies that we don't have, in wars that we could not win.

 

[zambuck]

....all funded by money we don't have......

....Classic Capitalist System.....do all on credit.....pay later...!

...And that was what the Credit Crunch was all about...escalated by people who borrowed to the hilt....splendidly aided by the Banks and Estate Agents...!

...For those who kept it at a sensible level are doing just fine....!

 

[Hoggums]

The problem zambuck is that every Tom, Dick and Harry jumped on the property band wagon in the last 10 years. You couldn't go anywhere without people talking about their property as their pension which resulted in a huge bubble in prices.

Today we still face the majority crowd who are still of this mindset - I'll hold on because property always gives a good return in the long run.... Prices will go back up and it'll give me a good retirement.

The problem with this thinking is the sheer volume of people with this mindset who are still invested. They are not going to stay invested forever, which is going to cause greater supply for the next 20-30 years as these properties are sold from their portfolios. In order for these people to realise their retirement dreams the supposed wealth that their houses contain needs to get transfered from someone else to them.

Simply speaking - the buying of BTLs needs to continue over the next few decades at the same rate as it did in the last decade - otherwise prices will not be supported and the whole system will implode.

Just exactly where is this money going to come from?

 

[montmorencyt2w]

T
Just exactly where is this money going to come from?

Not an insuperable problem. I believe Mervyn has the printing presses working overtime these days.

 

[Hoggums]

True - but that isn't wealth as the cost of living relative to your increased house price will be so much worse.

 

[0007]

Not an insuperable problem. I believe Mervyn has the printing presses working overtime these days.

and that's how Gordo (Mandy?) will write off the enormous debt - through inflation which will be the consequence.

 

[chilltrader]

of course prices are going to rise, but not of flats, only houses (big ones)

reason? rich foreigners wanting a cheap GBP house....

"cheap GBP" is the key.

 

[zambuck]

Hoggums

What you say is very correct and I also agree that lots of people have jumped on the bandwagon thinking that property will be their pension.

For all those invested in 90's, that still hold true. They are sitting on huge equity - probably around more than 60% of the value. This in itself a great asset as far as banks are concerned. So for those people, this downturn is a great opprtunity to add further assets.

But those who thought the same and bought at peak and at 110%, their dream has collapsed.

People with money and assets today are able to, as a cash buyer, negotaite a price that is 80 to 90% of the value. In some case even more.

As long as I am in 40% to 60% ratio, I will be more than OK. Everyone has their own ratios about this.

Obviously I have no ablity to predict what will happen in 5 years time or for that matter in next 10 years. But one has to take a calculated risk - Nothing ventures Nothing gained...!!