Pflusk for the record I had had a drink but then most posters since seem to agree with me I particularly like the one about the UK having a finite amount of space. In fact this is the reason I became an Estate Agent. That being there will always be a shortage of property. My Dad was a town planner he knew this when he sent his son into Estate Agency in 1988 'money for old rope he said' Not always correct I think!
The other bit I liked was the comparason of the city boys somehow being qualified. Rubbish we know they are Essex barrow boys working their way up from the floor they have no qualifications other than greed.
And when I hear this morning about the ex maths teacher with 11 kids that decides it's better for the taxpayer to give him a living rather than working yes my blood does boil and No I will never apologise for people like that as all the Liberal Guardianista's like to do pulling the race card at the first hurdle because they are too illiterate to argue the point!

Lets not forget because we are such a hospitable
nation we must make room for all those millions of Polish,Romanians,Bulgarians,Refugees etc etc etc.This will create more demand and my prediction is my 3 bed semi by 2016 wil be worth 1million and I'll retire to the sun.

quote:

we are such a hospitable
nation

speak for yourself - they can all tootle off back home as far as I'm concerned. or am I not allowed to say that anymore?

I think Gimmemoney is onto a winner plan for his semi. I'll drink to that ... if Immy's left any!

Perhaps all of the country will eventually do what Morecambe seems to be doing. We love new builds so much we're bulldozing perfectly good housing to build some more. And trees across from HC? No! Get some cheap housing on there!
Which I might add would be built a damn sight quicker if five lads at a time didn't stand and point at something all day then clock off at 4!

Errr,anyone see the Daily Express front page?
Where are all the doom merchants now?!

The so called "Doom Merchants" are obviously over at The Times, who are predicting falls of 7% over the next two years...

Oh, or the Telegraph who are today reporting inflation is going to soar meaning the BOE will have less space (if any) to cut rates....

Or RICS (Royal Institute of Chartered Surveyors) that today reported that the house market is the worst its been since 1992 and set to get worse...

If you have to go to the rags, then go to the MAIl, that are reporting that FTBs are having to spend 35% of their take-home on mortgages. Oh, thats the highest level since 1991, and anyone want to remind me what happened next? Oh and quote the mail:

"Since September, the number of homes advertised for sale in estate agents' windows has jumped 42 per cent. Figures from the Royal Institution of Chartered Surveyors show the average number is now 85, the highest for nearly a decade. "

So there goes your supply and demand argument. Plenty of supply, unfortunately no-one can afford therse rediculous prices!

Got to remember, the Express will be publishing "House prices Crash" tommorrow, absolutely no credability as a newspaper. I certainly dont trust newspapers that are self-professed as "The Worlds Greatest Newspaper!"
give me a break. Perhaps the worlds worst toilet roll.

By the way, IM not a "doom Monger" I am Realist!

HC, agree fully is lunacy to demolish row upon row of classic terrace to make way for cruddy newbuilds with paper-thin walls just to placate the developers, so they can squeeze three houses in where two used to be. Makes my blood boil!

Not just that Pflusk - who the hell is buying them?
There's the new marina apartments not exactly cheap at around £190k. Then there's the Quadrant where the bus station stood with a load of apartments, town houses etc. again not cheap. Then there will be this Chatsworth Gardens thing where a grid of four roads worth of terraces bulldozed. These are undoubtedly not going to be cheap.
How are these pockets of new shiny houses with their "green spaces" and quality pavement treatments going to sell when they leave the rest of it a dump?
You will look out of your Quadrant apartment at the back of Sandylands Promenade flats etc. and for those of you who have never been down there - it aint pretty.
Madness. Yet they must be building them to be sold to someone - who?

quote:

Originally posted by holy cheeses:

quote:

we are such a hospitable
nation

speak for yourself - they can all tootle off back home as far as I'm concerned. or am I not allowed to say that anymore?

You are allowed to say that, but the fact that you are, means - as far as I'm concerned - you're misguided.

quote:

Originally posted by Gimmemoney:
Errr,anyone see the Daily Express front page?
Where are all the doom merchants now?!

pmsl!!

Daily Express. Yes house prices may have gone up 0.4% seasonally adjusted..in DECEMBER. Why are they reporting this in February? They also failed to mention, the previous month was a 0.7% fall!

One months figures do not make a boom or crash!

Interest rates will fall to 4.5 by year end.
Inflation did not reach the level expected so far leaving the way for another cut in May.
Unemployment is still low.Supply cant keep up with demand.The ups and downs of the stock market will point investors to put their money in property.It's all looking so good

quote:

Originally posted by Gimmemoney:
Interest rates will fall to 4.5 by year end.
Inflation did not reach the level expected so far leaving the way for another cut in May.
Unemployment is still low.Supply cant keep up with demand.The ups and downs of the stock market will point investors to put their money in property.It's all looking so good

That may well be, but overpriced property means affordability is still a problem.

Gimmie, are you Alastair Darling's official spinmeister or are you just heavily into UK property with lots to lose? OR both?

You really do need to get your head out of the clouds, as well as starting to read a better newspaper than the Express if you want to find out what conditiobn the UK economy is in. Lots of news AGAIN today about how not to expect rate cuts... Inflation is ABOVE target which means if anything, they should be raising rates. And if they arent, what does that say about the economy? Which way do YOU reckon the employment figures are going to go over the next 12 months?

It's a contentious subject.

quote:

you're misguided.

no, I'm just honest

In fact Plusk a market crash over here would suit me as I could sell my property abroad which is rising in value and buy over here instead.I cant take anyones opinion seriously over this issue as,like I said before,many so called experts far more qualified than yourself called it wrong 4-5 years ago.For every piece of news that supports a crash your'll also find one that says opposite.Whichever way it goes I cant lose so I'll keep smiling.How about u Plusk,do u own property over here?

Strange times we are in at the moment, I've had two instances of gazumping this week so don't think we're in a recession just yet. The truth is that nobody knows how things will turn out, we all know how they should according to statistics and past experiences but the market and economy are too fickle to call.

quote:

Originally posted by holy cheeses:

quote:

you're misguided.

no, I'm just honest

This is perhaps not the forum to discuss this kind of issue (although it is a 'homes' forum), but let me just say this: if your 'honest' view would be policy, I myself would have to "tootle back home".

An opinion from a non-expert…
We should differentiate between people who are buying a home and investors. The later should be trying to read into what’s going to happen in the next year or so in terms of price. For the former, perhaps other considerations will be more important. After all, as far as I know nobody will come round your home and chip 20% off it because prices dropped by 20%. Sorry, mate but I have to take that room away…
If the home buyer (not investor) finds a place that meets his or her criteria (location, affordability, school catchment area, views, etc) and that place is not exactly a 3 bed semi similar to thousands on the market. Then, (s)he’s faced with the option of missing out on the ideal property in the hope it will be cheaper later on. (That’s in my neck of the woods is very similar to gambling. It might happen it might not happen.) So, how risk averse that particular person is will be of paramount importance. By the way, when I mention risk here I refer to the risk of not getting the ideal property and not the financial risk.
People can discuss and hope prices will go up or down. Some will postpone the purchase others will not. It all depends on the individual circumstance and to say one or the other view is wrong is to over-simplify the issue.
From my point of view, buying a home is different from buying a financial product simply because one will derive pleasure in living in his or her ideal home and that has a price. Ok, I understand that others might find it extremely exciting to look at how much they’ve gained or lost since they bought their property but the question then is: Are they just confusing a home with a financial product?

quote:

if your 'honest' view would be policy

Homes forum - all the millions will need homes - I think we'll get away with the odd sentence on it.

My opinion is just an opinion - I don't think there's a chance of a policy of that importance ever being based on just somebody's personal view.

I said as far as *I'm* concerned... me personally, meaning it wouldn't really matter to me if the country turned a lot less hospitable. I'm not actively seeking everyone to be turfed out but if the hoards of people coming over were to end...

I'm not for shutting the country off from everyone wanting to come here, it's just got a bit ridiculous, especially considering the hoohah needed to go and work in America or Australia.

How bizarre.In reply to the last post by HC I wrote a less then complimentary post regards all those from overseas coming over here.However it seems its been taken off.How pathetic that in this PC world you are even censored on a forum about homes.Why dont we all just give up our homes and let them move in!!bet the liberals would love that !!

quote:

Originally posted by Gimmemoney:
Why dont we all just give up our homes and let them move in!!bet the liberals would love that !!

What a wonderfully nuanced view.

Immy21

We are only at the beginning of the credit crunch the effects of which are only just becoming apparent and will be felt for many years. It was a long ride to the top and it will be a long ride to the bottom. -30% entirely possible (however the last crash only averaged -17%, but reduction of -30 to 45% were very common in the Midlands London and the South).

Anyone who doesn’t accept that UK property price may fall substantially, is operating in a ‘hope over history/reality’ little Englander naïve, inexperience Jonny come lately, dream like bubble!

Globally there is a tightening of credit underway (following the post 911 credit party of all credit parties). Central banks base rates are disconnected from mortgage rates, the yen ‘carry trade is unwinding’ and lenders are reviewing both their lending rates and criteria.

In the USA

No recession (Yet), plenty of jobs and relatively low interest rates. Can any one recall a time when sentiment in the property market turned from so positive, to so negative, so quickly and in such benign economic circumstances? (The market there peaked in late 2005/early2006).

The US is between a rock and a hard place, put interest rates up = big trouble, put interest rates down = big trouble. Never before have other countries had a bigger influence on the US’s economic destiny (China, Russia, the Middle East and Venezuela). Bush has been asleep on watch, distracted by Iraq (Saddam should have been retained as a counterbalance to Iran). Greenspan = boom and bust. Even if the Fed starts to reduce rates (as has now happened) the course is already set for the property market to fall a lot further. Will the US go into recession I don’t know, but we haven’t had one for a long time and I can’t believe we’ve done away with them forever.

In Europe

Its likely Euro zone i/r will go up again by year end. IMO this will cause real problems in all property markets that have been driven by discretionary/speculative investors e.g. Ireland/Spain and ex Eastern block countries.

In the UK

None of this will of course affect the UK, as we live in a new paradigm, of New Labour where debt and consumption is the new saving, investment and thrift. No boom and bust here Gordon Brown promised us that 9 years ago. We genuinely have never had it so good. Taking on huge debts to invest in Buy to Let in the latter stages of the boom has no risks, as we all know property only ever goes up. So what if our kids have to pay £140k for a one bed flat whilst earning only £25k a year (5.5 x income) and not be able to afford to trade up to a family home as the rungs on the ladder get ever wider. In our day that flat may only have been £25k but we only earnt £9k pa (2.7 x income!).

We must keep this free money ‘wealth’ creation going at all cost, otherwise Gordon Brown will not be able to ascend the throne (which he has now done) or worse still Labour may loose the next election.

To keep this thing going we need to find every possible way of encouraging people to take on ever increasing amounts of new debt to invest. Here’s a few ideas

Interest only with no capital repayment vehicle
Self cert fraudulent liar loans
4,5,6 and 7 x income multiple loans
30, 35 and 45 year mortgage terms
Low start teaser interest rate mortgages that go up after an initial period
Borrow the deposit on a credit card
Get the deposit paid/cash back on completion for a Florida holiday from the developer
Kids (25 to 40 year old) borrow deposits from parents
Parent guarantee the mortgage
125% loan to price sorry value
Etc, etc………

But the lenders are already offering all these, h’mm we the money lending marketing guy’s are going to have to get a lot more creative.

It’s a good job the UK doesn’t have a sub prime sector and that we don't use the 'new equity' in our homes to subsidise our lifestyles, after all that’s what done for the US.....

Oh hold on, wait a minute...

between 26% to 48% of the UK mortgage market last year was sub prime (depending how you define it)! And to compound the problem Britons are Mewing (taking on new debt secured on their homes) at a rate of over £50 billion a year. That's equivalent to 4% of GDP!

Perception of risk, easy credit (debt) and the fallacy of the one way bet::

Over the last 5 to 6 years many people have borrowed the kinds of sums of money (relative to their incomes) that only 5 to 6 years earlier, either wouldn’t have been lent to them (due to tighter criteria) or they wouldn’t have been prepared to borrow (due to the perceived risk of overstretching themselves).

Well something then happened to the lenders and now anyone ‘with a pulse’ seems to be able to borrow £100, £200 or £300k. Obviously lenders are in business to lend, so they reassess their risk profiles, lower the barriers to entry, relaxing deposit to loan and earning to price ratios. As for the borrowers of the last 6 years, they’ve only ever seen property prices rise and mortgage rates (as opposed to interest rates) headlining at between 2 and 4% (more of that later). Over time (and bombarded by Daily Express headlines and Channel 4 programmes that property is a sure fire one way bet) the sense of risk that buyers (1st, 2nd , 3rd and buy to let/second home owners) had about overstretching themselves is replaced with a “it makes sense to borrow the max to get on the ladder/make that investment now, before we miss the boat”.


Discretional demand (won’t to buy as opposed to need to buy is circa 70% of the market) just like paper equity, towards the end of a bull run when sentiment turns, it can just evaporate overnight!

Things are different this time:

It’s a popular urban myth that it was interest rates going up to 15% that caused the last crash and that (although not impossible at some time in the future) is not on the cards in the UK at present.

However what actually happened back then was this. Most mortgage borrowers were quite happy to borrow at interest rates of around 8% (I know it seems crazy today). When I/R went up briefly to 15% (they then came down quickly to around 13.5%). Mortgage rates increased to around 13.5% but quickly fell back to 11.5%.

Splitting the difference (13.5 and 11.5%) = 12.5% is (relative to what people were happy to borrow at 8%)

AN INCREASE of circa 50%.

Over the last 6 years or so people have been happy to borrow huge amounts of money because the effective mortgage rate available to them in the market (by rate tarting on say 2 year fixes) was around 2 to 3%. People are now churning off those fixes in their 100,000’s and finding the landscape has changed. You may now be able to borrow 125% of the value of your next Buy to let property and spend the difference on a new BMW X5, and a 1 week property investment trip Bulgaria, but rates have gone up. Many of the 2 year fixed rate deals are now 4.5 to 5.5%.Splitting the differences again (2 to 3%) = 2.5% and (4.5% to 5.5%) = 5%

AN INCREASE of circa 50%. It looks the same to me.

The difference between the last time and now, is that this time people have much bigger mortgages relative to their incomes, they have more unsecured debts and there are many more people stretched by entering the buy to let game without understanding their potential exposure.

Apologies for the poor structure/wandering nature of this post but the basis for some of the naïve drivel posted in this and other threads need challenging.


The Sage of Omaha Mr Warren Buffet once said………….

“You only know who’s swimming naked, when the tide goes out”

Where's my trunks……Has anyone got a tide table………..?

PS. I declare a vested interest as I have been investing in UK and international property for 25 years.

FWIW my observations are that the market is quite lively but at sensibly reduced prices - it's difficult to say what they are. That may be helped by unseasonably warm weather.
I'm told stocks and property are looking shaky and money is moving into art and jewellery, old fashioned portable wealth.

It will be interesting to see if heavy seas put a dampener on the market long term. My perception is the engine house of property desire, London, will continue to attract a premium at the first sign of capability and take the rest of the country with it. Whether that next boom will be 3 years, 5 or 15 who knows? It would be nice if it was never but short of another full-on global conflict it's hard to see bricks and mortar out the picture entirely.