PeteBrant

Entirely depends on the ability of first time buyers to continue to buy property. If you take out the bottom rung, the rest of it will follow. Hence more properties being built, longer term mortgages etc.

rfowler

I am a first time buyer and find it very hard to get on the ladder, house prices in my area start from £250,000

john banks

I think there will be a crash.

rfowler

but people been saying that for the last 6 years and nothing and instead the prices have gone crazy

davegtt

rfowler, Your right people have been saying that for years now. but the key to what John said was he thinks there will be a crash, none of us can give a guarenteed answer for you, you buy a house when you feel the time is right if you can afford to do so, at the end of the day its being bought as your home to live in etc, its value shouldnt matter to anyway unless you were intending to sell

rfowler

Yeah your right mate, but i hope it does crash especally in london..

The Snug Rhino

in the south east there are more people than homes and no new developments standing empty.

people have been yelling crash for years now....makes me laugh that there are poeple out there in rented homes waiting for the crash.......unless the country is invaded by aliens it isnt going to drop back 6 years!


this same thread come sup EVERY 6 months with the same stats on why a crash is bound to be round the corner.....and still they rise.

john banks

We could argue that if little is different about this housing bubble compared with any previous bubble, then the fact it has gone on longer and got even bigger than most expected will result in a bigger bust. Historically, towards the end of most bubbles there are hysterical increases in prices with everyone saying that this trend rewrites the previous rules of boom-bust.

With the really high borrowing, it is only the interest rates propping it all up. The rental yields from property are very low indeed - there are incredible rental bargains going at present. The first time buyers aren't there. The wages aren't keeping up. To me it looks like the biggest asset bubble ever.

Just because it hasn't happened yet, just because we are all complacent so that we are starting to tell ourselves it can continue indefinitely, that is the dangerous period historically. I haven't really thought it would crash until recently. I could well be wrong and will be leaping back into the market in the spring. If the same houses are for sale that have been for sale since this spring then maybe there will be bargains.

I don't know about the South East, but the Scottish market doesn't tend to historically be as volatile yet there are loads of houses not shifting, developments standing empty and the discounts are appearing. Historically, the South East could collapse quite quickly though? Usually everything is rosy just before?

rfowler

now its all heating up ..

john banks

I didn't mention that we had to discount our property to sell, and similar ones locally that didn't discount hung around for about 9 months and then finally sold below their offers over prices. This is on a development that two years ago had people camping in tents outside the showhome to buy when the next 6 or 8 houses were released.

Houses in Cupar which was noted to be the fastest growing area in the whole of the UK in 2005 IIRC (most of the rest were also Scottish towns) are also lingering on the market. Development of 10 nice houses is up - some are "RESERVED" by potential buyers that can't sell their own houses. NONE are occupied. They are desirable to my eyes, but they aren't selling. This is quite abnormal.

A deceased relative's house in Lancs has not shifted for the whole of this year, but doesn't seem unattractive.

rossyboy

iTrader: (8)

House prices have gone up here in Aberdeen by 20% in the last year, which is just madness, but its all down to lack of supply. I just bought my first property and hope to hell its not at the market peak!

Only 2 things will cause a crash - vast increase in supply or vast increase in interest rates. Dont forget we now have 1,000,000 poles to house, so buy to let is helping to keep the prices up.

Suresh

A collapse in demand on the buy side would also **** it all up of course. A lack of investor or consumer confidence for example could cause this. Investors and consumers are fickle creatures and could be easily spooked by something as harmless as harbingers of doom and gloom constantly recounting their stories and rumours on internet bulletin boards.....

rossyboy

iTrader: (8)

More likely on the investor side as people will always need somewhere to live.

Suresh

Yes, but FTBs will stay at home or carry on renting if they think the market is going to tank and people wanting to trade up will similarly put those plans on hold. Spreading panic that the market going to crash can be a self-fulfilling prophesy.

The market is not going to crash.

john banks

If a market is so brittle that panic is enough to crash it, then doesn't that suggest it is rather over-valued?

Suresh

I'm not an expert John, but isn't exactly trivial things such as waning consumer confidence that contribute to full-blown recessions? If Joe Public thinks he's going to lose his job and find it difficult to get another one, then he will probably stop spending (or just remortgage, buy an X5 with the proceeds and hang the consequences)

Terminator X

iTrader: (7)

Won't happen, those days have long gone fella.

TX.

Trout

iTrader: (1)

There are only four currency/market combinations that have appreciated consistenly over the past 100 years and surprise, surprise the sterling/FTSE; Dollar/Dow and Yen/Nikkei are none of them - they have all depreciated with inflation wiping out any true capital growth.

At a microeconomic level this is fine - at a macro economic level, we are pretty much stuffed!

lozgti

How can these people afford to rent on the minimum wage and if they want to buy,how do they expect to get a mortgage?

This is based on the suggestion that a majority of immigrants are shipped in to do menial jobs that fat UK residents don't fancy doing i e hard work

There is something missing in this big economic plan.Sure it will come to the surface soon and we can all see what the catch was

rossyboy

iTrader: (8)

They fit ten into a one bedroom flat

rfowler

You speaking from experiance..

rossyboy

iTrader: (8)

There's an idea, I'll rent out the flat to 10 poles at £150 a month each. £1500 pcm for a 1 bed flat, sorted

john banks

Which are the four Rannoch?

I was under the impression that the FTSE had grown in real terms over the last 100 years, but does it depend on what measure of inflation is used? Similar argument on house prices until recently?

lozgti

So an almost certain rise is on the way again and an expected second rise shortly thereafter.

I see the mortgage companies are all pulling the plug on a lot of the good deals and people are being advised to get any remaining deals before November.

Seems they are looking ahead then

Leslie

There seems to ba a lot of financial fiddling going on in industry these days. The trouble is it will suddenly fall apart and we shall be in a terrible world recession. You won't be able to keep up with interest rates then.

Les

lozgti

According to figures today,mortgage lending has gone up this month,re mortgaging gone up,house prices have gone up.Again.

So much for the interest rise dampening the market!!!

Has the Bank of England got to deliver a significant knee to the groin to everyone rather than piddly rate rises or what?

john banks

As someone who has sold and is renting, I'm relaxed about the ongoing house price increases as I have the view that it is just inflating the bubble further. Liquidity might be difficult when it starts to deflate, so I'd rather get out just before than try to estimate the peak.

Just my view, house prices will probably double and I'll be left behind

lozgti

Well the Bank is obviously having no influence whatsoever unless something serious is done.

There seem to be two economies running side by side in this country(or parallel)

1.Down South,property mayhem and too few properties.Property boom time

2.North of the Watford Gap,nothing is really happening.More For Sale boards up than willing buyers.Property slowdown time.

john banks

There also seem to be two measures of inflation - one the real level which is high evidenced by housing/council tax/transport costs and the other that is a fudge that is kept low? The disparity is what is feeding the housing bubble?

lozgti

It is a very odd state of affairs for the housing market to be mentioned every single day in the newspapers and on the radio news,tv news etc.

I think the press are sometimes as bad as the agents.Bigging it up and worrying the masses is good news to keep people interested.....better still,if it does go wrong,great stories will be there for the press to feed on for ages.They are in a win win situation and a very big part of the problem (IMO)

And yes,the inflation rate.Bears no resemblance whatsoever to the true state of affairs