How far will house prices fall [volume 4]
Discussion
Just to add, heard a story on the news saying last year 1 million people used a payday loan to pay their rent or mortgage. Quite shocking, seems a lot of people have got themselves into a pickle.
http://www.myfinances.co.uk/mortgages/2013/01/04/o...
http://www.myfinances.co.uk/mortgages/2013/01/04/o...
MycroftWard said:
I agree with those saying that the current zero interest rate environment is preventing some downward correction in prices. It's in the governments interest to maintain this situation and I feel that as long as they do house prices won't fall significantly if at all.
Perhaps a more interesting question now is: When will interest rates rise? Not for at least several more years I shouldn't think, not until the economy shows some signs of life. Probably not before the next election.
[Personal selfish view]Perhaps a more interesting question now is: When will interest rates rise? Not for at least several more years I shouldn't think, not until the economy shows some signs of life. Probably not before the next election.
Hopefuly at least another five or more years.
[See also the Japanese experience]
scenario8 said:
[Personal selfish view]
Hopefuly at least another five or more years.
[See also the Japanese experience]
I'm assuming you're young then (and without wishing to know, have little savings)?Hopefuly at least another five or more years.
[See also the Japanese experience]
If you're a pensioner or nearing pension age, and/or have savings, IRs cannot rise soon enough!
Without wishing to resurrect the tedious debate too much as older generations tend to react poorly to hearing it but having witnessed house price inflation soar through my twenties and having saved like buggery and having taken out enormous debt to purchase a modest home previous generations at my level within society would have deemed beneath them I don't want the double whammy of huge exposure to debt AND interest payments to double or treble, thanks.
I appreciate older generations would like better returns on their cash savings. I'd prefer they hadn't enjoyed 30 odd years receiving truly fantastic returns on their bricks and mortar homes (sorry, I mean well considered and fully planned "investments").
Sadly, pensions having pretty much disappeared i shaln't be hoping for higher rates when I hit my late 60s or early 70s either as I doubt I'll be in the market for annuities and will have to rely on downsizing and high property values to fund my old age. So, right up to the point of having liberated some cash I'll want low rates, then immediately afterwards I'll be crying out for higher rates, too.
That's if I'm lucky, of course.
I appreciate older generations would like better returns on their cash savings. I'd prefer they hadn't enjoyed 30 odd years receiving truly fantastic returns on their bricks and mortar homes (sorry, I mean well considered and fully planned "investments").
Sadly, pensions having pretty much disappeared i shaln't be hoping for higher rates when I hit my late 60s or early 70s either as I doubt I'll be in the market for annuities and will have to rely on downsizing and high property values to fund my old age. So, right up to the point of having liberated some cash I'll want low rates, then immediately afterwards I'll be crying out for higher rates, too.
That's if I'm lucky, of course.
scenario8 said:
Response
But because you bought an overpriced asset doesnt mean they should stay that way. [/devils advocate]Pensioners wont benefit from HPI unless they get out the market (which mostly means they've passed away or have to sell to pay for care) - keeping IRs low benefits no one long term, despite it feeling like its needed right now. The sooner the reality of the past decade of madness is addressed and corrected, the better....and we can all get on with life. As it stands, we have a society obsessed with money and house prices, which I dont think is helping anyone.
Digga said:
Let's just hope Ed Balls never gets his hands on the contrlls then, because the bond markets would not react kindly to his brand of div-maths meets Soviet economics. Labour is the single, most likely, Black Swan event that could shoft the balance on rates IMHO.
For obvious reasons (i.e. the definition of a Black Swan event), Labour is not a Black Swan event.Pork said:
As it stands, we have a society obsessed with money and house prices, which I dont think is helping anyone.
Can't really argue with that, seems to be a by product of capitalism and vested interests in property, not sure what you do about it.I think house prices can remain nominally static and things can still correct though we need wage inflation - at the bottom and middle not just for those in the board rooms. The problem is the potential number of low/medium skill workers is high due to effects of globalisation so there's downward pressure there, it's all gone a bit skew whiff. Looks like we're slowing moving towards some sort of neo-Victorian wealth distribution society, nice.
Edited by MycroftWard on Friday 4th January 16:03
anonymous said:
[redacted]
It's January so it must be nearing the annual Weybridge musical chairs multi million pound house re-listing season. It's been a while since you've given us regurgitated fodder to laugh at Mr Tonker.How many seven figure sales have there been round your way in the last couple of years? It'd be a marginally diverting few minutes to break each of them down by percentage of original sale price against offer price - and by weeks on the market.
jonny70 said:
I thought estate agents benefit from high house prices!
The way society sees house prices, it seems EVERYONE benefits from high house prices.Infact, IMO, the only poeple to benefit are banks and house builders, for everyone else, there is no upside at all (save for maybe bragging rights).
Pork said:
jonny70 said:
I thought estate agents benefit from high house prices!
The way society sees house prices, it seems EVERYONE benefits from high house prices.Infact, IMO, the only poeple to benefit are banks and house builders, for everyone else, there is no upside at all (save for maybe bragging rights).
Pork said:
I still think they are ridiculously overpriced, if that counts?
Wil they crash? Probably not, but for the wrong reasons. People still, wrongly, believe that high house prices are a good thing. It helps big business, no one else. Until that changes, the government will stop at nothing to see the crazy level of house prices are maintained.
How does it help big business?Wil they crash? Probably not, but for the wrong reasons. People still, wrongly, believe that high house prices are a good thing. It helps big business, no one else. Until that changes, the government will stop at nothing to see the crazy level of house prices are maintained.
If everyone in the country is funneling more of their wage packets into paying for the debt of over priced brick and mortar. Then how does it benefit big business? If so much of the economy and debt is tied up to housing then surely there will be less investment in the economy? You cant import or export houses so if the economy is effected by overpriced hosue prices , then how does this benefit business as it means there is less to export?
Also if joe average is spending more than he should in servicing debt of overpriced bricks and mortar then he spends less on food/restaurants/clothing/cars/gadgets/shiney stuff etc (a lot of which is produced by big business ,so how does it help? as surely means them will sell less)
If accommodation costs are overpriced then it may means big business will have to pay workers more to employ them to work for tthat big business (ex im sure if the average house was 100k then peole in principle would accept earning a slightly lower wage than they do now as their man cost (housing will be cheaper, this is sort of retroactive speaking)
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