What are your thoughts on the UK housing market?

dowletter

Junior member
18 0
Now that the property bubble in the UK has burst, property prices have declined 15-20% in parts of the country. Where do you see the market going in the near term?

Long term Britain is set to increase it's population to some 70 million people on what's already a cramped island and with the lack of new housing being built, do you think now is the time to consider buying?
 

counter_violent

Legendary member
9,666 2,464
No

Its the same in most of the developed world...ageing population...the baby boomers have come of age and are now stopping spending and probably gearing more towards saving for retirement.....there aren't sufficient numbers of people coming up for the housing market to recover anytime soon ...add in rising unemployment and wage cuts...and more public sector cuts in general over the coming years to pay for all this over borrowing to rescue banks and the like....so at best I think we have a flatline situation going forwards for a good number of years.

There is talk in the US that middle income earners are now considering walking away from property as it has halved in value....the rational being a $1,000,000 home being worth say 500k current market....they can afford to pay the mortgage....but now questioning why they would bother....the question now seems to be ...bad credit rating v 500k. :) makes you think ! If they do decide to default in any great numbers...this loss is passed directly back to the lenders....and so starts wave 2 of bank bail outs...or is it wave 3 or 4 ...iv'e lost count.
 
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N Rothschild

Legendary member
5,296 603
i will be selling my home start of 2010 as imo prices will not see previous levels any time soon...
 

abottoml

Active member
111 3
I think sideways for 5-10 years or so too, and perhaps a little further down over the next year or two. It seems to me that the problem, in the short term at least, is that new mortgage costs are still relatively high (owing to a weirdly steep bond yield curve at the moment). This yield curve should flatten out in next six months or so, and bring down mortgage costs and help find a floor in property prices.

As for Britain being cramped; Britain has one of the lowest percentages of it's land mass allocated for residential housing in the whole of Europe. I don't know how this myth of "paving over the countryside" got started, but I suspect the landed aristocracy started it so that the plebs didn't interfere with their fox hunts. I wouldn't want to live in Milton Keynes, but most who live there like it, and I think Britain needs more new cities like good old MK to alleviate the shortage of housing across the island as a whole.
 

normbeef

Well-known member
358 48
I think sideways for 5-10 years or so too, and perhaps a little further down over the next year or two. It seems to me that the problem, in the short term at least, is that new mortgage costs are still relatively high (owing to a weirdly steep bond yield curve at the moment). This yield curve should flatten out in next six months or so, and bring down mortgage costs and help find a floor in property prices.

As for Britain being cramped; Britain has one of the lowest percentages of it's land mass allocated for residential housing in the whole of Europe. I don't know how this myth of "paving over the countryside" got started, but I suspect the landed aristocracy started it so that the plebs didn't interfere with their fox hunts. I wouldn't want to live in Milton Keynes, but most who live there like it, and I think Britain needs more new cities like good old MK to alleviate the shortage of housing across the island as a whole.

Totally agree... the planning system in the UK is a JOKE... the local planning authorites are nothing but a bunch of Jumped up little pr**ks who were probably bullied at school trying to get their own back on society..


As for Green belt ... they are happy to let a constant destruction of the country by horse people who dump knackared caravans all over the place.. and the dumping of old trucks and tyres etc... but just try and get planning for a new house in the green belt... unless its somthing that looks like its from the middle ages... then forget it...

w*nkers

glad I dont have to put up with them any more....
 

Martinghoul

Senior member
2,690 276
I like this chart (this is from FT Alphaville)... Sorta says it all. I mean with this sorta leverage you don't need much of a haircut to get killed.

 
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Hollu$

Member
67 0
I've only recently turned 21 - I would look at buying a small house or flat for myself right now as everything is low. But I would struggle to get a mortgage as I am a student.
But its wild how much everything has dropped. I live at home with my parents and in the street that we live in, the prices go between £750k - £2/3 million. The penthouses are around £750k whereas the houses are £1mil +.
Some of NUFC footballers live in the flats, and recently one sold for £415k. Whereas when we moved here 2 years ago, the same flats were going for £750k.
 

Atilla

Legendary member
19,035 2,678
My personal view is that the housing market is recovering. We've just purchased our 2nd property and already out and about getting new kitchen visiting B&Q & Wicks, Ikea etc etc... We've made the offer Feb 09, exchanged in June & completed in July.

Coupled with a knock down price the house valuation survey valued the property £12.5K below our accepted offer price. As you can imagine we feel we got an absolute bargain. :D(y)

I should add we have been looking for approx 2 years and two previous places where we made offers got rejected. Subsequently both parties came back approx a month later accepting by which time with the constant 1-2% monthly falls we then had moved on to better bargains - bigger property at less price. IN FACT THE PACE OF PRICE FALLS HAS BEEN TREMENDOUS to our advantage.

Currently the property we have purchased is having damp treatment, to be followed with a good lick of paint internally and externally. Some attention to windows and guttering then we can move in. Then we are looking at decorating to taste. Best part of the move. New floors, curtains, furniture and so forth.

To cut a long story short house purchases are the biggest multiplier in an economy and just as the 1929 recession was brought to an end by housing boom I believe it will be likewise again.

Another colleauge at work has been trying to sell their property for the last 1 and a half years. Last week they had three viewings one after another and the first viewer came in with an offer £5K below asking price (2.3%) which was accepted. The buyer by the way is a cash buyer.

Rightmove have also announced similar stats where difference between asking and offer price is falling from 11% to 9%. Bear in mind these stats are lagging indicators.

I think over the autumn and winter period there is obviously going to be some slow down but bargain hunters are out there and recovery is well in sight. Next spring will be busier than this year imo.


All this aside, there is imo - impending inflation in the system. I don't see deflation at all. All the cash that has been pumped in to the economy will ultimately end up in the devaluation of currencies and movement of capital and revaluation of commodity & asset prices. There is no doubt in my mind just as after the oil shock of the late 70s house prices will rise. In inflationary periods tangiable assets will maintain value. In contrast I feel equity returns will be highly risky and limited in gains due to continuted conservative expenditures.

Finally, we are planning on letting the London property and possibly selling it near the olympics time around 2011-12. Living in Redbridge and only few miles from Olympics site we are feeling very optimistic about the regeneration of North East London.

In summary - as an active participant in the housing revival I am very bullish on property. Next year will be even better than 2009. (y)
 

davidcamm

Junior member
23 1
I think sideways for 5-10 years or so too, and perhaps a little further down over the next year or two. It seems to me that the problem, in the short term at least, is that new mortgage costs are still relatively high (owing to a weirdly steep bond yield curve at the moment). This yield curve should flatten out in next six months or so, and bring down mortgage costs and help find a floor in property prices.

As for Britain being cramped; Britain has one of the lowest percentages of it's land mass allocated for residential housing in the whole of Europe. I don't know how this myth of "paving over the countryside" got started, but I suspect the landed aristocracy started it so that the plebs didn't interfere with their fox hunts. I wouldn't want to live in Milton Keynes, but most who live there like it, and I think Britain needs more new cities like good old MK to alleviate the shortage of housing across the island as a whole.
Yes I agree, if you ever fly across England looking down you would think it was some place with a few dotted villages amongst all of the greenery and Farmland, conservation areas! I read a report a couple of years ago that only 5% of the land is actually built on. If they gave another 5% of land for housing needs the place would still look like small villages from the air and we could all enjoy the extra space as well as the countryside.

I think some wealthy toffs are preventing this from happening to kepp property prices high and our lovely Boom, Bust economic cycle that benefits them.
 

davidcamm

Junior member
23 1
In Manchester My Brother had trouble selling their homes, one was valued at 130K UK but she sold after 1 year for 95K. my brothers home was valued at 95k but 18 months later he only got 1 offer of 52k
he has still not sold it and only 5 people ever cam to look.

My Sis just bought a home June 2009 listed at 195k a year ago, then 180k and finally they got it for 160k.

I think UK homes have further to drop, most experts are still predicting 15% drop this year. more importantly this will not rise for many years as in previous bubbles.

My Friend in Phoenix just bought a 7 bed 4 bath $1million 5000 sq ft home with Pool for just $380k
 

Atilla

Legendary member
19,035 2,678
In Manchester My Brother had trouble selling their homes, one was valued at 130K UK but she sold after 1 year for 95K. my brothers home was valued at 95k but 18 months later he only got 1 offer of 52k
he has still not sold it and only 5 people ever cam to look.

My Sis just bought a home June 2009 listed at 195k a year ago, then 180k and finally they got it for 160k.

I think UK homes have further to drop, most experts are still predicting 15% drop this year. more importantly this will not rise for many years as in previous bubbles.

My Friend in Phoenix just bought a 7 bed 4 bath $1million 5000 sq ft home with Pool for just $380k

Quicker prices adjust quicker markets will get going. I note three sales from your personal experience. Discounts vary on property and location.

We obtained 27% discount on our property purchase from what it was advertised originally. I consider this a bargain. It is possible we may from top to bottom have a 35% drop and some analyst talk about 40-50% adjustment. I reckon these are perhaps a possibility for North England but most unlikely for the South. The crux of it is that we are much nearer the bottom now than the middle or the top imo.

Just as the bubble is over done likewise for due pessimism. Spring & summer purchases of houses will in the next 12months lead to extra expenditure - dare I say green shoots of the economy are here. Anybody who waits 5 years for confirmation will miss the bargains.

Remember there is the World Cup in 2010 and Olympics in 2012. For the first time in a long while I'm feeling optimistic. I've been doom and gloom since 2006.


There is no mention of inflation in all this analysis either. That will be a significant factor in years to come.

More land may be given to building if planners approve - but that has to be balanced againts torrential rains - raising sea levels - climate change.

Over 5 million people in England and Wales live in properties that are at risk of flooding from rivers or the sea. Environment Agency - Home

Coupled with rising popullation who live separated lives and economic migrants who breed much faster than endegenous popullace.

Finally, people will eventually start moving and swapping location out of purely the necessities of life arrangements.

Just for the record all you chaps out there predicting 4-5 years housing market stagnation are so very wrong imho. :cool: :cheesy:
 

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