How far will house prices fall [volume 4]
Discussion
vescaegg said:
It's a lot for sure but I'm only going on his story. He said his neighbour sold for £599 and I don't know why he would lie.
Thing is though, 5 years in the London housing market is like 50 years in other parts of the country.
Hackney though I'd definitely say its 50% gentrification too. Shame they can't kick all the gangs out while they add the eco hipster cafes. I'd still not want to walk around my mates late at night at all.
I actually live in tower hamlets, luckily one of the nicer bits, and would have no issues walking around at any time, and to be honest feel the same about any of the bits of hackney a frequent.Thing is though, 5 years in the London housing market is like 50 years in other parts of the country.
Hackney though I'd definitely say its 50% gentrification too. Shame they can't kick all the gangs out while they add the eco hipster cafes. I'd still not want to walk around my mates late at night at all.
Pork said:
If you're in the position to buy a home in the area you want to live, that will suit your immediate needs, I'd agree. What if all you can afford is an unsuitable place which will cost you double what a similar rented place would cost and would almost certainly lose value when IRs rise? Not to mention cost more when IRs rise.
Some may not think its worth the risk or the additional cost just to say you own it for now and will be able to leave it to someone (the government for the most part) when you croak.
It's a valid point, and I was thinking more along the lines of the former than the latter, but any house purchase is inevitably a compromise. It's really a question of when suitable becomes unsuitable, and everyone's circumstances and expectations are going to be different, but if your in the position to buy a place that you could settle down in for 5 to 10 years then sitting round waiting for prices to dip is potentially a mistake. When/if that happens who knows if you'll be able to get a mortgage or where rents will go.Some may not think its worth the risk or the additional cost just to say you own it for now and will be able to leave it to someone (the government for the most part) when you croak.
gibbon said:
I actually live in tower hamlets, luckily one of the nicer bits, and would have no issues walking around at any time, and to be honest feel the same about any of the bits of hackney a frequent.
Most of East London is dodgy and grim, isn't that part of the appeal for the keeping-it-real brigade?okgo said:
Your advice is probably OK outside of SE and London. I would not want to buy now in the London area.
20k is nothing and understandably your position is different. But to look at stuff now, which for me in SW London area is 30% up year on year, nothing suggests now is a good time.
The thing is, it never seems to be a good time does it? If prices are going down, it's a falling market, not a good time to buy. If prices have been going up for a sustained period, it's all about to crash, not a good time to buy.20k is nothing and understandably your position is different. But to look at stuff now, which for me in SW London area is 30% up year on year, nothing suggests now is a good time.
vescaegg said:
fido said:
1987, 1997, 2001, 2008, .. funny how we never think it's going to crash because "it will be different this time".
Again isolating London, but did it crash in any of those? And by crash I mean crash not just slow up. Certainly didn't do anything of the sort in 2008. Source: Savills Spotlight on Prime London Residential Market Autumn 2014.
vescaegg said:
Again isolating London, but did it crash in any of those? And by crash I mean crash not just slow up. Certainly didn't do anything of the sort in 2008.
2009 was a massive slump in the south-east (I didn't follow the prices outside this region) e.g. a flat in Putney/Wandsworth could be had for £400k but would easily fetch >£600 today. Don't forget we had massive government intervention (£375billion of QE and interest rates dropped to 0.5%) and the BRIC money has piled it on the subsequent currency devaluation.Magog said:
I honestly can't understand the mentality of going short on the housing market. If you are in a position to buy, then buy, you are always going to need somewhere to live, and the downside risks of being priced out of the market indefinitely are massive. I don't think there are many on this thread who would do down the achievement of buying a family home to live in, even if you do end up buying at the top of the market. As for new builds, that's simply a matter of taste, some people love them, others don't. The quality of them is highly variable.
Agreed. And yes I agree with what you say about new builds, a matter of taste for sure. I do think they get a bad rap in some quarters, mainly as they seem to be regarded as unfashionable among sections of the middle class who have to have a period property. My experiences are positive but each to their own. fido said:
2009 was a massive slump in the south-east (I didn't follow the prices outside this region) e.g. a flat in Putney/Wandsworth could be had for £400k but would easily fetch >£600 today. Don't forget we had massive government intervention (£375billion of QE and interest rates dropped to 0.5%) and the BRIC money has piled it on the subsequent currency devaluation.
Could that be called a crash though in the traditional sense? Perhaps a slow down. Did Wandsworth ever actually get massively cheaper than it was in a period period? What was the £400k before? Was it at £600k then fell? If so then fair play I didn't know but I dont remember hearing it. fido said:
2009 was a massive slump in the south-east (I didn't follow the prices outside this region) e.g. a flat in Putney/Wandsworth could be had for £400k but would easily fetch >£600 today. Don't forget we had massive government intervention (£375billion of QE and interest rates dropped to 0.5%) and the BRIC money has piled it on the subsequent currency devaluation.
From that time:http://moneyweek.com/uk-house-prices-will-plummet-...
Magog said:
I honestly can't understand the mentality of going short on the housing market. If you are in a position to buy, then buy, you are always going to need somewhere to live, and the downside risks of being priced out of the market indefinitely are massive. I don't think there are many on this thread who would do down the achievement of buying a family home to live in, even if you do end up buying at the top of the market. As for new builds, that's simply a matter of taste, some people love them, others don't. The quality of them is highly variable.
I take the view, wrongly or rightly, that buying a period property is an extra layer of security in that as with land they can't 'make' more of them.Oh and I dislike new builds.
too young to know - but have we been in this position before or are we in uncharted waters
5/6 years back we had one of the biggest financial crashes in a century. The solution has been phenomenonal QE and interest rate reductions to pump money into the economy.
That money has pumped the market notwishstanding the fact that the Eurozon, the UK's biggest trading partner, is once again tanking. Germany once again on the brink of recession. Rates in negative territory.
Yet in the UK we have average prices topping 6,7,8x average salaries and people falling over themselves to buy. Great for the sellers who have flipped in the last few years... but what about the buyers... how maxed out are they?
The pain from the crash will be felt after the next GE with further cuts, and likely tax increases in certain areas.
People are continually mentioning how the Govt cannot afford to let the bubble pop. Question is.. what is the level of systemic risk. If there is a shock to the market, how much further can the Govt intervene??
Every day there are increasingly worrying signs. One in particular a few days back about Lloyds planning thousands more job cuts amid a general trend that people predict will see UK Banks shutting 75% of their high st branches over the next decade. Can the UK absorb that level of unemployment. Can we cope with another shock?
5/6 years back we had one of the biggest financial crashes in a century. The solution has been phenomenonal QE and interest rate reductions to pump money into the economy.
That money has pumped the market notwishstanding the fact that the Eurozon, the UK's biggest trading partner, is once again tanking. Germany once again on the brink of recession. Rates in negative territory.
Yet in the UK we have average prices topping 6,7,8x average salaries and people falling over themselves to buy. Great for the sellers who have flipped in the last few years... but what about the buyers... how maxed out are they?
The pain from the crash will be felt after the next GE with further cuts, and likely tax increases in certain areas.
People are continually mentioning how the Govt cannot afford to let the bubble pop. Question is.. what is the level of systemic risk. If there is a shock to the market, how much further can the Govt intervene??
Every day there are increasingly worrying signs. One in particular a few days back about Lloyds planning thousands more job cuts amid a general trend that people predict will see UK Banks shutting 75% of their high st branches over the next decade. Can the UK absorb that level of unemployment. Can we cope with another shock?
Justayellowbadge said:
Exactly. Didn't happen at all. menousername said:
...in the UK we have average prices topping 6,7,8x average salaries and people falling over themselves to buy. Great for the sellers who have flipped in the last few years... but what about the buyers... how maxed out are they?
Well house prices may be at those multiples of average salary, but I don't believe banks are lending out those multiples, and yet people are still buying houses. There's a two speed job market, it's become increasingly polarised. Those in the bottom bracket probably aren't going to be doing much buying, but those with higher incomes can afford houses at their current prices, the money and demand exists in the economy to support them, IMO. NomduJour said:
... but it will, the only questions are how and when.
How can it though? There are probably 50 people for each house in London if prices tanked. That alone would push prices straight back up again due to the competition. The rest of the country crashed and there was no demand to pile in at even slightly lower prices. There is in London. Hell if prices crashed I'd probably buy another place in town. Again so would many others, which means prices would go up again!vescaegg said:
NomduJour said:
... but it will, the only questions are how and when.
How can it though? There are probably 50 people for each house in London if prices tanked. That alone would push prices straight back up again due to the competition. The rest of the country crashed and there was no demand to pile in at even slightly lower prices. There is in London. Hell if prices crashed I'd probably buy another place in town. Again so would many others, which means prices would go up again!Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff