10%---20% Decline- no chance! IT'LL BE MUCH WORSE!
The markets at the end, rises in the market are being announced but I can only see one direction.
Worked for an estate agent. The owner of the chain told me he’d be selling his property portfolio soon.
This bubble burst will be horrendous!
Back in the day, £20,000 to £70,000 mortgage. Its 10x now in some cases.
Rates wouldn't have to rise that much.
In terms of percentage increase say if rates were 10% and they went up an additional 4% then that equates to a 40% increase. To get the same effect; rates have gone up from 3.5% to 4% already and that is a percentage increase of 14%. If rates went up to 4.9% then that would create a 40% rise. Same effect since the last crash.
The impact would be worse as people have 5times+ more debt.
Don't forget the plastic industry. UK credit card debt is greater then Europe put together.
House prices will burst, save your money now and buy buy buy those repossessed homes! Then WAIT :!:
At the latest, I think by the end of summer, property prices will start to slow down immensely. Last summer was a good time for all estate agents as all the backlog of sales (from the Iraq war) came through then.
I don't think this summer will be that great, even if it is then by September prices should start to turn.
The first time buyers are out by 40%, the only mentality that is keeping this market steady, is the buy-to-let investors, the uneducated buy-to-let investors that is. Fine there’s demand but it is mentality of the herd, others are doing it-I'll do it!
Once buy-to-let capital finishes along with a few rate hikes the market will dry up.
I know a lot of smart people who are clearing their property portfolios. I’ve started as well. Fine the market has a few rises left in it, but you can’t tell exactly when the rises will finish.
The worst-case scenario prices fall by 20%. The best-case scenario prices fall by 30-40%.
When you take into account the taxation issues of liquidating property portfolios there is a very decent argument for not messing about with same. It is very much a question of timescale.
You might also wish to consider property not in isolation.Much of the money that has gone into it has been brought about by the inadequacies found in other forms of investment. Those inadequacies are still very much with us.It is also worth considering that this moneyflow will also have been taken on as a long term hedge fund strategy for many people within the context of the aforementioned inadeqacies..
Fact is, property is no more predictable than any other market.
Demand may well slow down and may have already done so.However, I observe that housing supply certainly in my area of interest now looks the lightest I have seen for two years. You can't have a crash if these two factors remain in balance. That will only happen if the supply side increases dramatically. I would take the probability that that will not happen suddenly and if it does not then there is every likelihood that instead of crash we will see a more gradual pinning back of prices simply underperforming inflation.
Think best property investments are now found abroad in places like Croatia.
Seems the buy to let market in UK is no winner at the moment and I have heard that a lot of it is already on the market.
I believe that some of the SB's do a property index but haven't investigated this as a possible hedge.
Chump, u make an excellent point about the fact that our money is being deliberately channeled into property and equities. With interest rates so low there is of course a big incentive for investors to seek higher risk investments to improve returns as well as borrowing and spending rather than saving. These current bubbles are keeping our economy seemingly prosperous but I think this will lead to big problems in the longer term. As inflation can no longer be hidden and yields rise these bubbles will collapse. I think the problem is far, far worse in the US.
If I may continue this thread, there are 18 property seminar companies in the UK and if you look at what happened to PPP up north and look POD (Portfolios of Distinction) who ask you for £50k, they all have the same formula: Buy-off plan and get a discount, they get a 1-2% from the developer and the brokers and lawyers get new business without having to advertise, they sift through the brainy ones and sting the thick ones. That simple
Inside track basically make become a member and offer you discounted property. They advertise very heavilly to get people to attend their meetings, They never put their address in adverts, will only be around as long as the muppets keep singing up thinking their going to lear a secret. Why dones't anyone get it, if you know a secret you keep it. Not advertise it to share. Its all about tapping in on peoples greed, which is fulled by the press and the speculative story about property prices going up and up.
There are 18 companies like InsideTrack but their formula is uniform and the business methodology is all the same, discount properties, tied lawyers and brokers that will produce for you wage slips, that will allow you to get away with a Self-cert 90% loan to value. The developers put your legal fees and stamp duty into inflated prices then offer you a discount. Hello
Hi there, I read an investigation about these 'property seminars 'in 'Which' magazine. Their conclusion was basically that they were not worth the money and that people could get much of the information for free themselves.
It also mentions that the course material provided by one of the more famous American companies, is really aimed more at the US market, with only a supplement provided for the British one.