Petem95

But it hasn't. You failed to mention the 2008-9 property crash where prices fell in the region of 27% (a bit more adjusted for inflation). Look at the houseprice P-to-E ration:

http://www.telegraph.co.uk/finance/p...s.html?image=4

Again prices did crash. I have bought property at auction and repossessed property since then. One repo at almost 50% less than the previous buyer paid 9 years earlier when the price is adjusted for inflation, so you can't say that wasn't a crash. The point is prices have not been allowed to keep falling to find their true level.

Also people discussing how far prices would fall would likely have been correct had government measures not been brought in to prop up the market (lowest interest rates in the UK ever, for the last 5 years, funding-for-lending, help-to-buy - nobody would have predicted all that as you'd hope the Conversatives would be more sensible).

In the governments defense it's not just the UK government who are trying to boost consumer spending by flooding the economy with cheap credit (thus fueling house prices), but the end result is always the same - bust.

jonc

The link you posted is a graph that represents affordability of houses to income, not average house prices so it not that relevant! But if you want to use it, well it go some way to support my argument since the graph shows no rises from 2009!

We saw a dip in 2008 the property market where inflation adjusted average prices fell by about 20% (Nationwide BS). Take a good look at the graph below, the national average house price is currently at the levels seen in 2003 and cheaper than what it was in 2007, inflation adjusted of course. When not adjusted for inflation we're at the peak level see in 2007.



You stated that you bought a repossession 50% lower than what the previous buyer paid 9 years earlier. That is no indication of a crash at all since you bought that property at an auction where as the previous, I'm guessing, buyer didn't and bought it via conventional means. You can't compare auction prices with that of prices advertised in estate agents and then say that is conclusive proof of a crash!!

We can compare stats and figures all you like, but if you compare that to the stock market in the same period in 2008, the FTSE 100 index fell nearly 50%, that is what you call a crash.

tony de wonderful

Using the RPI makes no sense at all as a way to normalise the house prices.

Dingdongler

How would you define 'their true level'?

ditchmyster

iTrader: (7)

There will always be people that over stretch themselves and end up loosing their house which then goes for auction at a knock down price. I don't think that house prices are so inflated, it's peoples expectations / desires that are inflated.

Our own TDW is a perfect example of this, living in a rented flat but now wants to buy a house at the top end of his budget, been perfectly happy living in a flat for X amount of time but when comes time to buy, I want 3 bed semi in a nice area with big gardens front and back etc,etc and it's never enough. Instead of getting on the ladder in a more affordable property and biding their time people always want to shoot for the stars, and that's what feeds the machine for the rest of us, I think it's based on greed, it's like ordering the belly buster in a restaurant to show off to your mates, when egg chips and beans would have done the job.

Not getting at you TDW just using you and the vast majority of prospective house buyers as an example.

I'd sooner have a nice terraced or a flat and be able to comfortably afford it than over stretch myself and end up loosing my house.

fatscoobfella1

iTrader: (1)

Great post....Ditch speaks the truth..


That said,hasnt historically a starter home always been 3 times the national average annual wage,give or take a few quid ?

So...Isnt the national average wage something like £26,000?.... Meaning something around the £80k mark would be the max that a FTB would look at paying..

Not a lot around at that kinda money...

f1_fan

iTrader: (9)

Greed is good or didn't you know that? Thatcher's generation are perfectly illustrated by the UK housing market.

I remember when I used to work in the world of large corporates there were many colleagues forever telling each other how great it was that their house had risen another x thousand pounds in the last so many months and how they were 'considerably richer than thou' etc. etc.

No matter how many times I tried to explain to them that unless they were going to sell up and live in a tent it didn't make a blind bit of difference as they were always going to need somewhere to live so whether it was 'worth' £1m or £10K was largely irrelevant they just couldn't get it.

Mind you that's the mindset of many people who work for large corporate organisations... say no more!

Chip

Petem95

Stock prices are always going to be more volatile than the prices of assets such as housing because you can buy and sell almost instantly. There is some debate as to whether the falls you are referring to are actually classed as a stock market 'crash' however. Prices may have fallen 50% in that bear market, but the steepest falls were 21% in one week, which is nothing like as severe as the 1987 crash.

Here is a interesting article for you from Economics Online with regards to UK housing trends, using information from various sources.

http://www.economicsonline.co.uk/Com...se_prices.html

Refers to the most recent house price crash in the UK between 2007-9, but also I'd forgotten price were starting to fall again in 2011 as banks were unwilling to lend so mortgages became harder to get, but by 2012 funding-for-lending flooded the mortgage market with cheap liquidity, and than HTB on top in 2013 made it even easier and helped change sentiment so that speculators began to return to the market.

tony de wonderful

HTB is also a clear market signal that the state is willing to back price.

joz8968

iTrader: (13)

I keep saying this.

If you're buying a property with the endgame intent of 'prospecting' on it, then unless you actually flog it and considerably 'downsize' for a much cheaper joint at some point in the future - for example, after paying off its mortgage and/or at pension age - then you don't get to release and enjoy any of its accumulated equity. (Anything else is just for "clock my pad!"-based posing/posturing. Good for them )

I also can't understand why such people don't 'get' this simple-to-grasp aspect.


And I'm guessing some people promise to themselves to take the aforementioned course of action, but never do... "I love this house... Lived in it all my life... I'll never leave, etc..."

Ergo, why stretch yourself in the first place and compromise your quality of life, all for the sake of the status symbol of having 'a much nicer pile of bricks' surrounding you..........

joz8968

iTrader: (13)

...But I've answered my own question: 'status symbol'. That's so UK-centric.

Sad really.


All that said, then if you're ****ing loaded and/or sorted for life, all the above doesn't matter one jot lol

Turbohot

Houses/properties for the status symbolism isn't UK-centric, Joz. It's like that everywhere. Bigger your house is, bigger your danda is.

hodgy0_2

Status symbol - what a load of bollox, the fact is it is great to have a nice big house, big rooms, lovely high high ceilings, an enormous and fantastic garden, with garages, sheds and more sheds, all in a beautiful part of the world.

You only have one life - who wants to live in a **** box with 50" plasma and a shiny BMW on the road outside

Turbohot

To be honest, I agree with this. making your pad as good as you can, or have a pad as good as you can afford is just a personal preference. Spacious house doesn't always remain to a personal preference for personal joy, though. It sometimes gets used to impress others. Mother-in-law's spacious 16th Century house was bought by a son of some business tycoon. He failed to run his own businesses and his inherited money ran dry, but continued to live in it and threw lavish parties that he and his high life missus could not afford; for the sake of his love for his status and high life. Now they're having move to a smaller place with their 50" Plasma and their shiny Range Rover.

f1_fan

iTrader: (9)

A nerve has been touched

Dingdongler

For some it might be a status symbol but by no means most people. Stretching yourself might be to buy a house in a particular street you like, or because it's close to a school or a tube or because you want a bigger garden for the kids to play in etc.

Nothing wrong with that, it's up to an individual how they spend their money after all (even if its borrowed money)

joz8968

iTrader: (13)

Sure. I didn't necessarily mean exclusively to the UK. But mentioned the UK, as it's relevant to this thread.

It's just that as a people, we do seem to have this strange obsession with 'proving' ourselves to our peers by means of 'displaying' our wealth.

joz8968

iTrader: (13)

I agree that, if you can genuinely, comfortably afford it (now AND for future protection) then having a 'nice' house is of course desirable, for all the reasons pointed out by Ding e.g. comfort, love of the area/amenities, general 'chillage', etc.

But surely not at the expense of stretching one's finances to the hilt. Of course, not everyone does this; but certainly some people do. But why would you? Strange.

chocolate_o_brian

iTrader: (22)

Or subtly dropping hints on a car forum you mean

I'm thinking of buying a Beemer but only have 40 inches of diagonal TV measurements and ********* next door.

joz8968

iTrader: (13)

lol


I love big tellies and cars. As they provide great entertainment.

By comparison, a large 'floor area' is grossly overrated IMO.

hodgy0_2

Well quite,

If I wanted a status symbol - I would buy a white range rover sport

And the biggest luxury in my life, apart from property - is the fact that my wife has never worked, and has been a fantastic mother and homemaker, for the last 16 years

As a familly it has probably cost us the best part of a Million £'s in lost salary

(She gave up a very very well paid job to become a mum)

Cars are the biggest waste of Money IMO - and TV's, great, but I like to live my life not watch other people living it

f1_fan

iTrader: (9)

Christ on a bike, I think I'm going to be sick

fatscoobfella1

iTrader: (1)

Well your upto 10,000+ posts.....Live that life!!

joz8968

iTrader: (13)

lol

[sheepishly glances at own post count]

hodgy0_2

Lol, someone's go to keep an eye on what life's idiots are up too

Hug the enemy after all

ditchmyster

iTrader: (7)

Oops I think I opened a can of worms.

Nothing wrong with aspiring to do better I just think people should do so within their means.

Last time I went house hunting in the Uk I had a decent sized bag of cash and was looking at big fancy houses as you do, fortunately I came to my senses during the process and bought two more modest houses one outright and the other with a decent sized deposit and made sure that all the bills and mortgage could be well afforded on one salary should anything untoward happen, my reasoning being that there are plenty of people that can afford a £150 /200k house but not so many that could afford a £500k house so thought i'd have an easier time should I ever need to sell and probably lose less cash based on percentages, a form of spread betting if you like, also by owning one outright we'd always have somewhere to live.

Other people don't seem to think like this, it's all this bigger is better malarky buy a fahooking huge place with 5 bedrooms when there's only two of them. I'd sooner have an earner and a crash pad and not have to work for a living.

Dingdongler

Yup, makes a lot of sense. After all, why not have somebody like TDW pay you not to kick him out of a house so you can chillax and enjoy life?

ditchmyster

iTrader: (7)

Yep 30 degrees here today been at the seaside all day sunning and swimming about to eat some fancy artichokes i've been growing in the garden.

Life is gooooooooooooooooooood.

Lydia72

Perhaps one of the poor sods who can't sleep in their doorway of choice due to the anti-homeless spikes?