UK House price charts?

bhatnagar.ashish001 · Aug 3, 2011

Mt self ashish bhatnagar .I like it. You guys are sharing nice sharing of thoughts.Thanks for sharing it.

Atilla · Aug 3, 2011

bhatnagar.ashish001 said:
Mt self ashish bhatnagar .I like it. You guys are sharing nice sharing of thoughts.Thanks for sharing it.

Live Vastu- The Vastu of Modern Era

Vastu is all about creating positive energy in the environment for well-being of people. It’s primarily associated with location, and structure of buildings. Though demolition is suggested as one of the most common solutions for removing vastu defects, I am strictly against this notion of demolition as we can remove the vastu defects through some other means.

Were you in the army before you became Mr Vastu?

Knockem down and rebuild them! :-0

Good to see you feel there is hope for psychology. :cheesy:

Personally, I find love cures all things.

Pazienza · Aug 3, 2011

Atilla said:
Live Vastu- The Vastu of Modern Era

Vastu is all about creating positive energy in the environment for well-being of people. It’s primarily associated with location, and structure of buildings. Though demolition is suggested as one of the most common solutions for removing vastu defects, I am strictly against this notion of demolition as we can remove the vastu defects through some other means.

Were you in the army before you became Mr Vastu?

Knockem down and rebuild them! :-0

Good to see you feel there is hope for psychology. :cheesy:

Personally, I find love cures all things.

Even syphilis?

Atilla · Aug 3, 2011

Pazienza said:
Even syphilis?

If you knew true love - you wouldn't have syphilis.

But if I recall, your understanding of love is a little off-skew...

Mr butt & cheek lover that you are... :cheesy:

Pazienza · Aug 3, 2011

Atilla said:
If you knew true love - you wouldn't have syphilis.

But if I recall, your understanding of love is a little off-skew...

Mr butt & cheek lover that you are... :cheesy:

It is true Atilla, I love the crack so much sometimes I wonder if I'm Irish...

Johnkarner · Aug 11, 2011

Hi guys i want to inform you that I have heard news about uk market that -UK residential property prices fell by 0.8% in September but are 6.1% higher than a year ago, according to the latest figures from the Department of Communities and Local Government.

Atilla · Aug 11, 2011

Johnkarner said:
Hi guys i want to inform you that I have heard news about uk market that -UK residential property prices fell by 0.8% in September but are 6.1% higher than a year ago, according to the latest figures from the Department of Communities and Local Government.

Yep there are quite a few info providers...

http://www.bbc.co.uk/news/business-12076365

I like land registry one, as it is based on actual sale price.

Atilla · Aug 11, 2011

forker · Aug 11, 2011

I am dubious about the house market recovering next year. In the context of the cost of living, squeezed economy, and the avg household debt.

Atilla · Aug 11, 2011

forker said:
I am dubious about the house market recovering next year. In the context of the cost of living, squeezed economy, and the avg household debt.

House prices are sticky downwards. May fall a little over winter but they will keep up with inflation and slush of money in the system.

Inflation is approaching 5% in a stagnating deep recession. Once the markets pick and global economy picks up, a house is about the most useful tangible asset people can have or invest in.

One can either live in it or let it to generate income. It will store its value.

Predictions about housing crash are yet to be substantiated. Especially in London and the South East. Time will tell.

Johnkarner · Aug 12, 2011

Cool chart, this sounds like a interesting idea, thanks for this information.

anley · Aug 12, 2011

Atilla said:
One can either live in it or let it to generate income. It will store its value.

You can live in it.

But it will not always generate an income over expenses and price depreciation.

It won't always store value. Sure the price won't go below zero but it can easily go lower than the purchase price.

All in all, as I said in another thread the years of house price appreciation are long gone and it's mathematically impossible for them to rise much over the next several decades. Think compounding and then you'll understand.

But this is good news because look where ever higher property prices has done to the US and UK economies? Imagine what a great position everyone would be in if prices had only risen by inflation over the last 20 years. More disposable income, more money in their pension funds, wife wouldn't have to work, plenty of money for great holidays etc etc.

Ever higher property prices do untold economic and social damage but of course the majority think rising prices are great but most of them are too foolish to think otherwise.

forker · Aug 12, 2011

Atilla said:
Predictions about housing crash are yet to be substantiated. Especially in London and the South East. Time will tell.

That's because people in comfortable positions financially and are looking to upscale or downscale are holding onto false pretence of value. These are folks that have either paid their house off or can comfortably afford mortgage payments. An additional extension of the later would be a buffer savings account. What percentage of the population is in this bucket!
On the other hand you have folks that live day to day and are "just" managing mortgage payments. The loss of a job or increase in cost of living will lean these folks towards defaulting creditors lower on the list of importance. The economy isn't growing enough to create jobs and the cost of living is going up. Energy prices are fuelling the increase of food, clothing, technology etc.
It is just a matter of time in this climate where folks in the second bucket cannot default any longer and have no choice but to default their mortgages. Eventually the only way out is forced sale or bankruptcy.

The crash may yet to be substantiated. The fuel for the crash in the mix now. The % of wealth in held by the minority and therefore it isn't impossible to conclude that the majority of the population resides in the second bucket. The only question is where is the weighted average of debt to repayment capacity ratio.

Atilla · Aug 13, 2011

forker said:
That's because people in comfortable positions financially and are looking to upscale or downscale are holding onto false pretence of value. These are folks that have either paid their house off or can comfortably afford mortgage payments. An additional extension of the later would be a buffer savings account. What percentage of the population is in this bucket!
On the other hand you have folks that live day to day and are "just" managing mortgage payments. The loss of a job or increase in cost of living will lean these folks towards defaulting creditors lower on the list of importance. The economy isn't growing enough to create jobs and the cost of living is going up. Energy prices are fuelling the increase of food, clothing, technology etc.
It is just a matter of time in this climate where folks in the second bucket cannot default any longer and have no choice but to default their mortgages. Eventually the only way out is forced sale or bankruptcy.

The crash may yet to be substantiated. The fuel for the crash in the mix now. The % of wealth in held by the minority and therefore it isn't impossible to conclude that the majority of the population resides in the second bucket. The only question is where is the weighted average of debt to repayment capacity ratio.

Forker / Anley, I do understand your considerations and do not dispute them at all. However, there is also the other side of the coin in terms of foreigners finding it cheaper to buy properties in the UK (ie Asians including new purchasers from Russia and China). The supply of houses is still very inelastic and London and SE has a shortage in comparison to popullation and demand etc.

Yes in the short term prices likely to stagnate. However, reflecting on housing in the last 40 years it has been consistently going up and I fail to see how that will change with slush of money in system.

I am not a Buy-to-Let investor. Just an average body trying to maintain value of assets. As per previous posts whilst in the short term real values may depreciate I know of many people in London earning silly monies (£400-800 per/day contracting fees) as well as new investors wanting to buy.

So penciling in inflation (at 5%+) - with the exception of property and gold how else can one hedge against inflation?

I'm looking at shares too but dividend and cash generative companies are hard to come by and even their +dividends aren't covered or one is not assured sufficiently to warrent placing large monies into these companies - especially in light of deteriating market share to foreign competition.

On balance one property to live in and one for portfolio diversification will do for now. But in the absence of clear alternatives I see farm+land and property as the better investment against turbulent future ahead - something to generate income for retirement as well as leaving something for the children - if we don't spend inheritance on cruises and pimped up wheel chairs first...

anley · Aug 13, 2011

Atilla said:
Yes in the short term prices likely to stagnate. However, reflecting on housing in the last 40 years it has been consistently going up and I fail to see how that will change with slush of money in system.

It's all to do with the effects of compounding that's why the years of house price inflation are over, probably for the next 50 years.

Take any property, its price has probably risen by 7-12% over the last 25 years. Now take that same property today and compound at 7-12% over the next 25 years. Do that and you'll see why property cannot go up. It's all to do with mathmatetics and nothing to do with property, foreign money or cheap credit (which has gone for the next 10 years anyway).

Yes, there might be foreign buyers, but not as many as people make out ('foreign property buyers in their droves' always makes a good story). But even they will balk at paying such high prices, sort of like paying £50 for a can of coke. You might have £10,000 in your pocket but that doesn't mean you'll pay up.

Remember, most rich people are rich because they're not stupid and if foreign buyers like the idea of 'cheaper' foreign property there are plenty of places better than London or the south east to buy and ALL with better chances of making money, the US for one, Spain as another and plenty of developing South east Asian countries and towns/citys/resorts.

Another important point to rtemember about buying foreign property for investment reasons when the currency is down is what happens if you want to sell and the currency is UP. For example, if you're Swiss right now the exchage rate is great for buying UK assets. So you buy in London and make 20% over the next 5-10 years but Sterling then goes up by 33% over the next 5-10 years (Sterling always goes from good to bad over 5-10 year periods). End result you've probably lost money and nobody please mention hedging as it's very hard to do for the average person (counter party risk being the number 1 reason).

The better strategy for the Swiss right now is this - rent a big van, come over to the UK and buy everthing you need for your hom, new tvs, clothes, tinned food, sofas, beds, everything and anything. Then you get great prices with no exchange rate risk over the years.

Anyway, I';ve gone on too much. Main point is compounding, do your figures on your own property, compund them over 25 years at 7-12% and I think you'll be amazed at how much your property will be worth, which is why it's not going to that value.

Atilla · Aug 13, 2011

anley said:
It's all to do with the effects of compounding that's why the years of house price inflation are over, probably for the next 50 years.

Take any property, its price has probably risen by 7-12% over the last 25 years. Now take that same property today and compound at 7-12% over the next 25 years. Do that and you'll see why property cannot go up. It's all to do with mathmatetics and nothing to do with property, foreign money or cheap credit (which has gone for the next 10 years anyway).

Yes, there might be foreign buyers, but not as many as people make out ('foreign property buyers in their droves' always makes a good story). But even they will balk at paying such high prices, sort of like paying £50 for a can of coke. You might have £10,000 in your pocket but that doesn't mean you'll pay up.

Remember, most rich people are rich because they're not stupid and if foreign buyers like the idea of 'cheaper' foreign property there are plenty of places better than London or the south east to buy and ALL with better chances of making money, the US for one, Spain as another and plenty of developing South east Asian countries and towns/citys/resorts.

Another important point to rtemember about buying foreign property for investment reasons when the currency is down is what happens if you want to sell and the currency is UP. For example, if you're Swiss right now the exchage rate is great for buying UK assets. So you buy in London and make 20% over the next 5-10 years but Sterling then goes up by 33% over the next 5-10 years (Sterling always goes from good to bad over 5-10 year periods). End result you've probably lost money and nobody please mention hedging as it's very hard to do for the average person (counter party risk being the number 1 reason). In this example - if the £ rises then when the Swiss sells he gains from exchange rate moves. He loses if £ falls further.

The better strategy for the Swiss right now is this - rent a big van, come over to the UK and buy everthing you need for your hom, new tvs, clothes, tinned food, sofas, beds, everything and anything. Then you get great prices with no exchange rate risk over the years. This is a very good idea... Like shopping in France for wine and cheese loading up the car before return back to UK

Anyway, I';ve gone on too much. Main point is compounding, do your figures on your own property, compund them over 25 years at 7-12% and I think you'll be amazed at how much your property will be worth, which is why it's not going to that value.

Thank you Anley,

I understand the compounding issue and have punched in a few figures into an excel model up to 2020 with different capital and income growth figures and % approximate to 4.5 - 5.5 % depending on conservative or aggressive figures.

Expecting 7-12% growth per year on property in current climate is unreasonable. 1-3% I see as more plausible in current climate with inflation running at 5% +.

However, coupled with rental income the figures look reasonable around 5%.

I'll maintain assets and continue with current investment diversification and get on with life as is.

Also looking at dividend covered cash generative shares at the moment. Will appraise investments and may switch based on returns. So far so good - steady as she goes...

anley · Aug 13, 2011

1%-3% is all most people are going to get I believe, because of the mathmatical effect of compounding. But then take natural inflation into account of 1%-3% a year and then add in the costs involved with owning a property and there's no rises for the forseable future.

But this shoukdn't really matter to most people if they realise the first and most important goal of a property is somewhere to love and perhaps even raise a family.

Trouble is that most have been brainwashed to thinking property is the easy way to make money, all you have to do is buy, hold and then in x years your house/flat will be worth a fortune. Perhaps that was true for the last 20 years but not for the next.

Also, on the effects of compoudning so many don't understand its long term effect. Look at train fares and/or energy prices which always seem to go up by around 5%-10% a year. Compound those sorts of rises over 10 years and a ticket to London from say Birmingham starts to cost several hundred pounds (and that's the cheapest one).

Same with energy, at the rate the energy companies are going in excess of 50% of salaries will soon be needed to pay to keep your house warm. And for the poor and many pensioners this is probably already the case.

See, small money can take 5%-10% as it's not much but as soon as the figure rises above a certain amount the 5%-10% becomes an enormous figure which grows totally out of control, and then gets even more out of control and so on.

Train fares, leccy prices, property, it doesn't matter what it is, the power of compounding means that there are ipper limits. So at the end it's all to do with simple mathmatics.

PS. Another interesting thing about property prices is this quote -

"UK property is just an economic recovery away from disaster."

The quote sort of contradicts itself but it's probably true. If/when the UK's economy recovers rates will rise, probably to a more natural level of 3%-4% which will in turn massively ramp the mortgage repayments on many many property owners and hence cause major problems.

But no you say, if the UK economy recovers then property will go up. Well, it is possible but I wouldn't be too sure of that.........

neil · Aug 13, 2011

anley said:
1%-3% is all most people are going to get I believe, because of the mathmatical effect of compounding. But then take natural inflation into account of 1%-3% a year and then add in the costs involved with owning a property and there's no rises for the forseable future.

But this shoukdn't really matter to most people if they realise the first and most important goal of a property is somewhere to love and perhaps even raise a family.

Trouble is that most have been brainwashed to thinking property is the easy way to make money, all you have to do is buy, hold and then in x years your house/flat will be worth a fortune. Perhaps that was true for the last 20 years but not for the next.

Also, on the effects of compoudning so many don't understand its long term effect. Look at train fares and/or energy prices which always seem to go up by around 5%-10% a year. Compound those sorts of rises over 10 years and a ticket to London from say Birmingham starts to cost several hundred pounds (and that's the cheapest one).

Same with energy, at the rate the energy companies are going in excess of 50% of salaries will soon be needed to pay to keep your house warm. And for the poor and many pensioners this is probably already the case.

See, small money can take 5%-10% as it's not much but as soon as the figure rises above a certain amount the 5%-10% becomes an enormous figure which grows totally out of control, and then gets even more out of control and so on.

Train fares, leccy prices, property, it doesn't matter what it is, the power of compounding means that there are ipper limits. So at the end it's all to do with simple mathmatics.

PS. Another interesting thing about property prices is this quote -

"UK property is just an economic recovery away from disaster."

The quote sort of contradicts itself but it's probably true. If/when the UK's economy recovers rates will rise, probably to a more natural level of 3%-4% which will in turn massively ramp the mortgage repayments on many many property owners and hence cause major problems.

But no you say, if the UK economy recovers then property will go up. Well, it is possible but I wouldn't be too sure of that.........

Agreed.....property is not always the way to wealth. Irelands false boom and then bust was caused, largely, by property speculation (sourced from TV programme on Irish collapse - whole estates unsold and crumbling - similar echoes in Spain).Articles will no doubt appear advising people to rent, put their spare cash away until they judge it right to buy near the bottom of a house price decline ?

esscubed · Aug 17, 2011

Only a few weeks ago analysts from PWC announced they think real house prices (taking into acct inflation) may not have hit 2007 levels by as late as 2020...

@Attilla - your reasoning all includes a sustained economic recovery, but this crisis has been global and it changes the rules massively as we cannot rely on trade in other parts of the world to allow us to claw back economic growth, we are all struggling simultaneously.

And regards London and SE feeling upbeat, those areas have historically a) had higher growth rates than the rest of the country (less well off areas such as the north east and scotland tend to lag anywhere between 5 and 15 years before they see similar market movement) and b) they are not enough to turn the figure for the UK as a whole positive on their own.

London house prices in particular are a terrible indicator of economic/housing market recovery, it always experiences the largest price increases and decreases, including in the last year having nearly 10% price increases when many other parts of the country are still in decline. This has been particularly skewed by the temporary stamp duty freeze on homes up to £1m that ended in Dec 2010.

http://www.guardian.co.uk/business/2011/jul/12/high-street-spending-housing-market

the full report from PWC
http://www.pwc.co.uk/eng/publications/research_archive_uk_economic_outlook.html

I think you may have lost another £200 bet here...

esscubed · Aug 17, 2011

PWC report requires registration, attached for ease...

Good thread btw!

UK House price charts?

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