How far will house prices fall [volume 4]

[Justayellowbadge]

Ari said:

Better off then, whatever. You're not, you're worse off

You keep arguing this, with apparent certainty, without any knowledge of the exact circumstances.

[Ari]

St John Smythe said:

Again, I never said better off. You seem to have a real bee in your bonnet about this for some reason?

Oh FFS!

St John Smythe said:

But it enables you to move on and buy the home you want. We've just bought a house that I would of never dreamed of being able to buy 5 years ago. It's only due to the increase in value over 4 years of our last place that has enabled us to do that (used the equity as deposit). We really couldn't ask for better for us and our daughter so it's win, win vs renting.

Your stance appears to me that you are better off as a result of property values rising than you would have been had they not have done so by magically being able to afford a house that you wouldn't have been able to afford had prices stayed the same (despite the fact that it's actually likely to have cost you more as a result).

I'm sorry that I've not managed to convey that in the precise terms in which you approve.

(And I'm the one with a 'bee in my bonnet'! )

[anonymous-user]

Ari said:

St John Smythe said:

Again, I never said better off. You seem to have a real bee in your bonnet about this for some reason?

Oh FFS!

St John Smythe said:

But it enables you to move on and buy the home you want. We've just bought a house that I would of never dreamed of being able to buy 5 years ago. It's only due to the increase in value over 4 years of our last place that has enabled us to do that (used the equity as deposit). We really couldn't ask for better for us and our daughter so it's win, win vs renting.

Your stance appears to me that you are better off as a result of property values rising than you would have been had they not have done so by magically being able to afford a house that you wouldn't have been able to afford had prices stayed the same (despite the fact that it's actually likely to have cost you more as a result).

I'm sorry that I've not managed to convey that in the precise terms in which you approve.

(And I'm the one with a 'bee in my bonnet'! )

Wow, take a chill pill!

I haven't mentioned anything about getting 'richer' as you put it.

[turbobloke]

Ari said:

Justayellowbadge said:

I browse every now and then.

It is an astonishingly unpleasant place.

The vitriol is one thing - all btl are scum and the look forward to seeing their children starving in gutters, but the way the place rounds on anyone not of the hive mind is incredible. If anyone says anything remotely positive they are immediately called out as a troll, rentier scum or, worst of all, apparently, an estate agent.

The utter certainty displayed there is borderline mental illness.

Whilst true, there are more than a few similarly evangelically convinced that house prices are a one way bet on here ready to loudly shout down anyone who dares question...

Isn't it a matter of timescale? The chances of house prices never encountering another correction is one thing, looking at the lifetime of this government is another. Even that timescale offers no certainties but the most likely outcome is in my view a further increase in house prices generally.

Ari said:

A few of us are old enough to remember the early nineties crash...

Count me in. It had no effect on me though I appreciate it did on others. I could still service the mortgage I had at the time, plugged away as you do, and the house ended up x5 of its original cost when I moved out a decade or so later.

Ari said:

Just like then, all the evangelists are ignoring the huge elephant in the room which is that property purchasing ultimately has to be underpinned by affordability.

Affordability used to refer to one earner over 25 years, then two earners, then possibly more over a longer period of time with (iirc) multigenerational products on offer.

'Multigenerational mortgages to become the norm?'
http://www.financialreporter.co.uk/mortgages/multi...

'The 40-year-old mortgage you will pass on to your children: house price boom forces buyers to opt for two-generation loans.'
http://www.dailymail.co.uk/news/article-2537511/Th...

Alongside that, there are international buyers with very deep pockets - and ripples do spread eventually albeit with diminishing returns at greater distances.

Ari said:

The fact is that none of us actually know what's going to happen, no matter how much some scoff at others for not agreeing with their version of the future.

As above, timescale matters.

If a home-owner can contiue to make repayments, and if at the relevant future time they've paid off their mortgage(s) it's then "so what". Apart from waiting for the imminent upturn

[walm]

Ari said:

Your stance appears to me that you are better off as a result of property values rising than you would have been had they not have done so by magically being able to afford a house that you wouldn't have been able to afford had prices stayed the same (despite the fact that it's actually likely to have cost you more as a result).

I'm sorry that I've not managed to convey that in the precise terms in which you approve.

Ari - I am sorry but your comments make it appear that you are rather stupid. Or at least don't know how to add up.
Let me give you an example.

My house in Twickenham went up from £300k to £600k let's say.
AT THE SAME TIME the house I wanted to buy but couldn't afford in the home counties went up from £400k to £600k.

Now I can afford it.
So "magically" I can afford a better house than if prices had stayed the same everywhere.

Perhaps you should consider learning some elementary maths before repeatedly looking like a total muppet.

[ClaphamGT3]

I come back to my recurring theme that too many are predicating their argument on the basis that owner occupation will remain a significant component of the housing market moving forward. It is possible that events could play out in such a way that, within a generation, well under half of all homes in the UK are owner occupied, with a continued downward trend towards a point where homes can only be owner acquired via inter-generational transfer or on receipt of significant capital gain; owner occupation funded out of earned income could be an anomalous economic blip consigned to the history of the mid/late 20th and early 21st century

[anonymous-user]

walm said:

Ari said:

Your stance appears to me that you are better off as a result of property values rising than you would have been had they not have done so by magically being able to afford a house that you wouldn't have been able to afford had prices stayed the same (despite the fact that it's actually likely to have cost you more as a result).

I'm sorry that I've not managed to convey that in the precise terms in which you approve.

Ari - I am sorry but your comments make it appear that you are rather stupid. Or at least don't know how to add up.
Let me give you an example.

My house in Twickenham went up from £300k to £600k let's say.
AT THE SAME TIME the house I wanted to buy but couldn't afford in the home counties went up from £400k to £600k.

Now I can afford it.
So "magically" I can afford a better house than if prices had stayed the same everywhere.

Perhaps you should consider learning some elementary maths before repeatedly looking like a total muppet.

He'll still be back in a couple of pages.

[NomduJour]

ClaphamGT3 said:

I come back to my recurring theme that too many are predicating their argument on the basis that owner occupation will remain a significant component of the housing market moving forward

Conversely, the driver for that scenario is that prices don't stop rising.

[ClaphamGT3]

NomduJour said:

ClaphamGT3 said:

I come back to my recurring theme that too many are predicating their argument on the basis that owner occupation will remain a significant component of the housing market moving forward

Conversely, the driver for that scenario is that prices don't stop rising.

But for very different reasons. If the market shifts from a user model to an investor model, where the investor is looking for predictable long term revenue from an asset-backed investment and is prepared to move into the market at scale, then that could take a large proportion of housing out of the reach of owner occupiers

[turbobloke]

ClaphamGT3 said:

NomduJour said:

ClaphamGT3 said:

I come back to my recurring theme that too many are predicating their argument on the basis that owner occupation will remain a significant component of the housing market moving forward

Conversely, the driver for that scenario is that prices don't stop rising.

But for very different reasons. If the market shifts from a user model to an investor model, where the investor is looking for predictable long term revenue from an asset-backed investment and is prepared to move into the market at scale, then that could take a large proportion of housing out of the reach of owner occupiers

That's already happening to a degree is it not, and makes sense as a mid- to long-term development, though I suspect that the heartfelt love affair with bricks and mortar will continue to be expressed via multiple purchasers using multigenerational products and so maintain a presence for a while yet.

[NomduJour]

Middle England isn't ready to live somebody else's house yet.

[sugerbear]

ClaphamGT3 said:

NomduJour said:

ClaphamGT3 said:

I come back to my recurring theme that too many are predicating their argument on the basis that owner occupation will remain a significant component of the housing market moving forward

Conversely, the driver for that scenario is that prices don't stop rising.

But for very different reasons. If the market shifts from a user model to an investor model, where the investor is looking for predictable long term revenue from an asset-backed investment and is prepared to move into the market at scale, then that could take a large proportion of housing out of the reach of owner occupiers

I could see that with new build developments, but big institutional investors want predictability so can't see them buying up old housing stock which are near in some cases coming to the end of their life and have largely unknown potential costs associated with them. Houses require

If it was that easy to make money housing associations would be able to get loans and buy up every last house in the UK. Why would banks ever lend on domestic housing again, they could just scoop up large sections of the housing market and rent the houses out with the capital they would have lent on mortgages.

Nope, the reason they don't is because they know that housing and rents are like any other market and there are significant risks. Boom and bust hasn't ended.

[ClaphamGT3]

sugerbear said:

ClaphamGT3 said:

NomduJour said:

ClaphamGT3 said:

I come back to my recurring theme that too many are predicating their argument on the basis that owner occupation will remain a significant component of the housing market moving forward

Conversely, the driver for that scenario is that prices don't stop rising.

But for very different reasons. If the market shifts from a user model to an investor model, where the investor is looking for predictable long term revenue from an asset-backed investment and is prepared to move into the market at scale, then that could take a large proportion of housing out of the reach of owner occupiers

I could see that with new build developments, but big institutional investors want predictability so can't see them buying up old housing stock which are near in some cases coming to the end of their life and have largely unknown potential costs associated with them. Houses require

If it was that easy to make money housing associations would be able to get loans and buy up every last house in the UK. Why would banks ever lend on domestic housing again, they could just scoop up large sections of the housing market and rent the houses out with the capital they would have lent on mortgages.

Nope, the reason they don't is because they know that housing and rents are like any other market and there are significant risks. Boom and bust hasn't ended.

There is a strong emerging market for stock transfer of existing portfolios. Not 1st choice for institutional investors, you're right but a lot of o/s money and secondary funds Are active in this area. London Las are already selling blocks of street properties quite regularly.

Wrt to RPs, they're not getting involved because they can't. They don't have the covenant strength and are constrained in what activity they can and can't undertake. Most reputable lenders and investors still consider the RP sector to be toxic.

[walm]

Forgive me, "RP"?

Wait - "rental property"?

[Mr Whippy]

anonymous said:

[redacted]

Either way, the future is bleak for everyone. Either:

Socialism creeping outwards, housing likely to become socialised = inequality for all in a different way. All about who you know, rather than private enterprise being a reward. Nice.

NIRP and all your earnings disappearing on assets that will rise in value to take up any potential free wealth, essentially designed to leave you without a capability to save money to ever live in a way outside of a debt based mechanism. You are now a slave to the super wealthy banks with no route out.



I hope books make it to the 2050s and beyond, then your children and grandchildren can find out that it was you and your parents who sold them out for a fantasy of feeling wealthy today, while actually you were being shafted by banks in a global pyramid scheme

[BluePurpleRed]

walm said:

Ari said:

Your stance appears to me that you are better off as a result of property values rising than you would have been had they not have done so by magically being able to afford a house that you wouldn't have been able to afford had prices stayed the same (despite the fact that it's actually likely to have cost you more as a result).

I'm sorry that I've not managed to convey that in the precise terms in which you approve.

Ari - I am sorry but your comments make it appear that you are rather stupid. Or at least don't know how to add up.
Let me give you an example.

My house in Twickenham went up from £300k to £600k let's say.
AT THE SAME TIME the house I wanted to buy but couldn't afford in the home counties went up from £400k to £600k.

Now I can afford it.
So "magically" I can afford a better house than if prices had stayed the same everywhere.

Perhaps you should consider learning some elementary maths before repeatedly looking like a total muppet.

Hmm some fudging going on here, not comparing like for like. Let me counter with an example of my own where I do the same but the figures are also 100% true.

Owning a house in Tooting that is worth £300k. This goes up to £600k, £300k win right? No.

The house I want for my family in Balham has also doubled from £600k to £1.2 million. Google 5 bed terraces in SW12 area like Balham High Rd, this is what they go for at the LOW end of the scale. Bonkers.

In the time of the increase lets say someone with a good job in the City went from having an 80k job to even £120k ( hey they are keen and work hard)

So they house they had was around 3X earnings but now what they want is 10X. OOPS. Unless you shuffle off this mortal coil (your estate benefits), downsize or emigrate you really don't get the benefits of massively increasing house prices.

Also the stuff in your life like cars, holidays, beer etc isn't going up that much. So wages won't either. So instead of having a house with very little appreciation where it went £300k to £350 and the one you want to raise a family is £600k to £700k. That's actually BETTER for everyone that wants to live somewhere and not have an investment they happen to use to keep the rain off. Also the banding on stamp duty doesn't relfect more and more houses moving into higher brackets ( which is what everyone moans about with GCSE and A Level marking ) so its very expensive to move too

So instead of being able to spend on nice stuff like a nice car ( or as this is PH clear off the mortgage in double quick time in 12.5 years ) you now have a giant mortgage with affordability looking iffy if rates ever get back to 6% during the 25 years.

[okgo]

But plenty do move further than 1 mile down the road, so cash in on their gains from the London market.

[Mr Whippy]

BluePurpleRed said:

So instead of being able to spend on nice stuff like a nice car ( or as this is PH clear off the mortgage in double quick time in 12.5 years ) you now have a giant mortgage with affordability looking iffy if rates ever get back to 6% during the 25 years.

Houses being used for speculative investment is hurting the economy because people will spend excess wealth on their nice home for their family as a priority, and then not buy other things instead which actually fed the economy... ie, cars, white goods, etc.

Your post is a perfect example of that attitude.


High property prices benefit no one except people who own more than one because they buy them for investments.

Everyone else gets screwed because unlike a lot of assets, everyone needs a house and there is a finite supply.


It's just conservative cronyism. IF the government let house prices crash, and then they protect the poor with 'homes' and let the speculators burn, then it'd be a sign the government care.
But for now they just want to make sure their wealthy mates stay that way at your and everyone elses expense.

[Justayellowbadge]

Mr Whippy said:

It's just conservative cronyism.

As those stagnant house prices 1997-2010 attest.

[ClaphamGT3]

walm said:

Forgive me, "RP"?

Wait - "rental property"?

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