What are your thoughts on the UK housing market?

[Technically Fundamental]

500%?
inflation... demographics... is it now a desirable area according to estate agents? whats the av salary of residents? any developments in the vicinity that could add value?

 

[Trader333]

any developments in the vicinity that could add value?

Yes a large number of Polish and other Eastern European people arrived.


Paul

 

[chump]

We've also had them here Paul,but I'll tell you this from the 90's to now aggregate rents have perhaps moved between 50 to 100% depending upon the type of property. So let's say you had a student able to rent a room at £40 10 years ago today he's renting at £60 and perhaps at at £75 depending on the property.

An average terrace that was at £275/300 now at £450 to £500.

Now if you're saying you had a 3 bed house that was at £275 and you've packed 12 poles and a turk into it well what can I say (except get rid of the Turk) and get a good plumber

 

[counter_violent]

Why would anyone now want to come here...we have the biggest debts ( cue tax hikes ) and no jobs...(NO JOBS) and no banks willing to lend at favorable rates and a hefty deposit to boot...makes no sense at all for property to rise in price.

 

[Technically Fundamental]

Why would anyone now want to come here...we have the biggest debts ( cue tax hikes ) and no jobs...(NO JOBS) and no banks willing to lend at favorable rates and a hefty deposit to boot...makes no sense at all for property to rise in price.

Supply dwindles because people in negative equity etc so competition between cash buyers who want investments for rentals?

That or doctoring.

 

[Trader333]

makes no sense at all for property to rise in price.

Markets rarely make sense in my view.


Paul

 

[Technically Fundamental]

Could be selective sampling lol.

 

[chump]

Markets rarely make sense in my view.


Paul

Markets always make sense in my view ,but i do have difficulty at the time in understanding what that sense may be.This is what we have hindsight for

 

[chump]

As an aside housing had some good news today which may not yet have been registered.

http://www.ft.com/cms/s/0/299c1b48-b1cc-11de-a271-00144feab49a.html

This should have an effect of keeping borrowing costs down beyondthe point in time I think they would have otherwise risen. As I have said earlier I think ,given seasonality, it was a make or break issue for property that those borrowing costs be kept low at least through the first half of 2010.
It's even possible that this may encourage the market through the weak season from now to next March as it might just be felt at the sharp end in some lower cost offerings on mortgages. I think quite a few lenders have been wary about lending because they couldn't see how low costs were going to be maintained going forward..perhaps now they can see light on that issue that could encourage them to relax a bit more than they have so far this year.

 

[Technically Fundamental]

110bn between all UK banks is that? Can't see how that's anything but a ploy to get people into gilts.

 

[Atilla]

Dont take my disagreeing with your opinions personally. I just think house prices are going down based on my opinion that we still haven't experienced most of the fallout from last year. I think there will be another correction in the market to deal with all the money pumped in which when coupled with unemployment and interest rate hikes will land us right back to square oneish. I'm not saying that confidence hasn't been restored for a lot of people but when the fundamentals kick in then things could really swing around.

Also I take every bit of data compiled by government(esque) agencies with a spoonful of salt.

BTW if there is no mention or rumour of some sort of price fixing/ number fiddling scandal in the next 2 yrs I'll "eat my hat".

Confidence returning to house prices, says RICS - Telegraph

Maybe not in US and Spain but UK different market.

In fact whole kettle of different fish... :cheesy:

For the record the inflation that will befall us in the next 2-5 years will ensure house prices have some way to go

 

[meanreversion]

Discussions about property are always extreme. A couple of years ago, there was no ceiling, and now we've seen the froth come off, it's fashionable to predict another 20-30 pct decline. However I have a sneaking suspicion that those looking for a big sell-off want it to occur in order that they may buy. I have several friends who are looking to buy and are waiting for the final leg in the sell-off (if indeed it comes).

Don't forget - the UK government is committed to home ownership (as in the US). It is immensely tax efficient compared to anything else. And, we all need somewhere to live. These are strong factors in favour of home ownership - ESPECIALLY in an ultra-low interest rate environment.

 

[timetotrade]

The government might be committed to home ownership, but if this report in The Times is correct, the same can't be said for the FSA.

The report states that one third of new mortgage loans were self-certified. The implications for the housing market and wider economy are pretty dire if FSA actually push ahead and ban self-cert mortgage loans at this time.

 

[chump]

LOL..so you mean it's bad for property and mortgages if people can't just make it up themselves rather than have the information provided by a statement from their accountant ?

 

[timetotrade]

IMO the FSA should have imposed restrictions on self-certs many years ago. "Horse" and "bolted" springs to mind, and at a time when the economy is still in a precarious state.

My concern is, if one third of the mortgages written have been given to people who can't afford them, what will happen to the property market when interest rates eventually increase and those same folk need to remortgage or want to move house?

 

[spreader_legger]

I have been consdering investing some cash in property, but fear we may still be in for another fall.
My brother showed me a 5 bedroom flat the other day for 160k with a rental yield of 8%.

Perhaps the States is a better bet given that they are ahead of the curve. I've been getting some dodgy emails offering 4 bedroom houses in Michigan for 30k. They promise yields of 25%! I realise these are likely to be scams .... but perhaps US is worth having a look at? Obviously finding a reputable letting agent would be essential as there I would not have continuous access to thew property. Any location strike you guys as being particularly lucrative? Naturally a lot more research will be necessaryin this endeavour.

cheers

 

[chump]

I have been consdering investing some cash in property, but fear we may still be in for another fall.
My brother showed me a 5 bedroom flat the other day for 160k with a rental yield of 8%.

Perhaps the States is a better bet given that they are ahead of the curve. I've been getting some dodgy emails offering 4 bedroom houses in Michigan for 30k. They promise yields of 25%! I realise these are likely to be scams .... but perhaps US is worth having a look at? Obviously finding a reputable letting agent would be essential as there I would not have continuous access to thew property. Any location strike you guys as being particularly lucrative? Naturally a lot more research will be necessaryin this endeavour.

cheers

What you need to consider about those super duper offers is simply this. Some of that US property is actually worth nothing (or less ,yes that's right) ,because no one's going to rent it anytime soon meanwhile the taxes keep rolling along and the structure is itself is subject to delapidation costs.Those taxes by the way are in % terms to capital cost of the property very high compared to anything you would find in the Uk for example.

If you really want to be in property then your rule should not be to simply look for what appears to be the cheapest compared to it's past price. It should be find the cheapest value you can find in the best location.
I've always liked property adjacent to major employment prospects like hospitals for example.

Now I've said all that I still don't like property at this time.

 

[spreader_legger]

yeah I figured as much. Although these guys have also guaranteed first year rental .... I guess if the yields these guys were quoting were so good, everyone would be investing.

As for prospects for housing in general, Blanchflower's statements this morning didn't inspire much confidence. Although rentals would easily cover mortgage repayments, one may need to be prepared for house prices to fall further, at least over the short-term. Don't know if these would fall by another 25% however.

 

[SAINT]

“This stock market looks awfully like a bubble to me again,” he said. “Where’s the evidence in real economy, where are the firms that are hiring folk?” Blanchflower said.

House prices can't always be a law unto themselves. They have to eventually represent the underlying economy. Xmas will help to boost lagging indicators such as retail, consumer confidence but the real test for the UK and the GBP will come in 2010.

The majority of consumers in this country get their economic outlook from the rose-tinted mainstream media, so if they say we are out of recession then the masses keep spending.

You have to look at the interest rate picture also. Once the deflation ends, we would possibly see rapid inflation and the conundrum of raising rates in a stuttering recovery.

 

[Atilla]

“This stock market looks awfully like a bubble to me again,” he said. “Where’s the evidence in real economy, where are the firms that are hiring folk?” Blanchflower said.

House prices can't always be a law unto themselves. They have to eventually represent the underlying economy. Xmas will help to boost lagging indicators such as retail, consumer confidence but the real test for the UK and the GBP will come in 2010.

The majority of consumers in this country get their economic outlook from the rose-tinted mainstream media, so if they say we are out of recession then the masses keep spending.

You have to look at the interest rate picture also. Once the deflation ends, we would possibly see rapid inflation and the conundrum of raising rates in a stuttering recovery.

We are looking to hire about 10 people...

Recovery is real... Budgets being released through November...