How far will house prices fall [volume 5]
Discussion
V6Alfisti said:
I have always said prices in quite a few London areas rolled back to 2015/2016ish. (Every area is different, and some won't have done this).
]
I made a 2013 price offer on a recently reduced flat in EC1 yesterday. ]
Response today “f
k off, fk off, and fk off again” 
I know the agent and he was happy to give that verbatim.
number2 said:
Joey Deacon said:
The HousePriceCrashers must be going mental. For months they have been calling peak and expecting massive falls [snip]
Months? Their lives have been on hold for over a decade waiting for what they think is the right price. Most probably aren't in the market to buy anyway... always waiting for that undefined price signal...That said, nowadays I have some money and I’m making a big move into BTL because the game is so clearly and utterly rigged.
All of this printed money is going to find its way into assets and the government are pouring kerosine on the flames with schemes like this and the stamp duty cuts. The middle classes all want to trade up and now the FTB end will take off too.
There’s going to be fireworks in the property market now!
Edited by dmahon on Tuesday 6th October 18:25
NickCQ said:
US has a somewhat similar system with the GSEs but you need proper fixed income investors on the backend that are willing to sign up for 30 year fixed rate risk rather than retail punters who are not willing to lock their money away for that period of time. However, your 25 bps spread will not be enough to cover the cost of the government guarantee and origination / servicing costs - I would at least double it.
These guys (https://www.perenna.co.uk/) are trying to do it using pension / insurance company money.
Very interesting, i can see it becoming quite popular, and i can see an element of retail investment considering the now natural rolls on resi mortages. My suggested haircut of 25 tick was simply random number generation on my point for the sake of illustrating the point, i am sure you are correct on it being much wider.These guys (https://www.perenna.co.uk/) are trying to do it using pension / insurance company money.
An interesting idea though in the current low yield high cash environment.
number2 said:
By what relevant metric are they absurd? They are just prices and people are paying them.
That's true, but the market for houses is a little different to other widgets in that when this widget gets more expensive, some widget buyers have more money to spend on widgets. Not to mention that you have to either own or borrow this particular widget.In a normally-functioning market, the average earner should be able to afford the average house, with small variations depending on how much people have spent versus saved in their life to date. We are miles away from that.
NickCQ said:
number2 said:
By what relevant metric are they absurd? They are just prices and people are paying them.
That's true, but the market for houses is a little different to other widgets in that when this widget gets more expensive, some widget buyers have more money to spend on widgets. Not to mention that you have to either own or borrow this particular widget.In a normally-functioning market, the average earner should be able to afford the average house, with small variations depending on how much people have spent versus saved in their life to date. We are miles away from that.
number2 said:
NickCQ said:
number2 said:
By what relevant metric are they absurd? They are just prices and people are paying them.
That's true, but the market for houses is a little different to other widgets in that when this widget gets more expensive, some widget buyers have more money to spend on widgets. Not to mention that you have to either own or borrow this particular widget.In a normally-functioning market, the average earner should be able to afford the average house, with small variations depending on how much people have spent versus saved in their life to date. We are miles away from that.
dmahon said:
number2 said:
Joey Deacon said:
The HousePriceCrashers must be going mental. For months they have been calling peak and expecting massive falls [snip]
Months? Their lives have been on hold for over a decade waiting for what they think is the right price. Most probably aren't in the market to buy anyway... always waiting for that undefined price signal...That said, nowadays I have some money and I’m making a big move into BTL because the game is so clearly and utterly rigged.
All of this printed money is going to find its way into assets and the government are pouring kerosine on the flames with schemes like this and the stamp duty cuts. The middle classes all want to trade up and now the FTB end will take off too.
There’s going to be fireworks in the property market now!
Edited by dmahon on Tuesday 6th October 18:25
Personally I would avoid BTL. 4-5% gross yield is typical, and not all costs can be offset (unless you operate as a company). Certainly not you are a high rate tax payer and need a mortgage.
Add in that bad tenant can easily cost you many many thousands and other investments look way better.
Other than BTL my main investments have been in well known global equity funds, and they have easily outperformed property for the past 5 years. Factor in the tax breaks and it's been a no brainer for me.
number2 said:
If we assume the recent(ish) past is the only future then perhaps. However, circumstances change and the housing market shouldn't be considered in isolation. What's 'our' goal - to make sure everyone who wants a home has one that at least meets their basic needs, or to make sure everyone can qualify for finance to buy a property that they want?
It would be nice to take some of the windfall / intergenerational lottery out of the housing market. I say this selfishly as an under 30 with far too much cash and debt tied up in a pretty average flat.Wealth from home equity is sort of a money illusion anyway, in that you have to plough it back into the next home and hope it's still there when you step off the ladder at retirement.
okgo said:
Hither Green seemed to be well on the way, lots of people I know have moved there.
Compared to stholes like manor park in east london, Hither green far nicer. 9 mins to London Bridge and a genuinely nice community and good primarily school, compared to a very Islamic area areas that are still cheaper in east which does put people off.98elise said:
How many "scumlord" posts did you make?
Personally I would avoid BTL. 4-5% gross yield is typical, and not all costs can be offset (unless you operate as a company). Certainly not you are a high rate tax payer and need a mortgage.
Add in that bad tenant can easily cost you many many thousands and other investments look way better.
Other than BTL my main investments have been in well known global equity funds, and they have easily outperformed property for the past 5 years. Factor in the tax breaks and it's been a no brainer for me.
Funds are great, but BTL gives you nicely termed leverage. Personally I would avoid BTL. 4-5% gross yield is typical, and not all costs can be offset (unless you operate as a company). Certainly not you are a high rate tax payer and need a mortgage.
Add in that bad tenant can easily cost you many many thousands and other investments look way better.
Other than BTL my main investments have been in well known global equity funds, and they have easily outperformed property for the past 5 years. Factor in the tax breaks and it's been a no brainer for me.
Just back from my 6 week ban for upsetting someone. This is as bad as facebook for good-think enforcement.
Back in the SW mining world. We are flying x10 with nitrous oxide and 10 bar boost. We have never been so busy ever. It is incredible. I know some people on here were calling me "things" for varying my view on a weekly basis, over the last 6 weeks, accounting for that, we have been busy, more busy and now flat out. I've got all sorts of projects on. More and more new builds. The big site I've got have are banging out 3 phases in the time they would have done about 1 and a bit. Investors are pitching in. I've got 3 very big luxury mansions with holes under them and a guy selling a block of flats with a massive shaft in the front garden. My last (6 weeks ago) assessment was that the residential stuff was slow, but developers and new builds were flying. Now it's all flying.
I was stood yesterday (social distancing) around a dug out shaft with 3 blokes talking about how mad the building industry has gone. I can't speak for the rest of the country, but down here property is at fever pitch. I remember calling the estate agents bullstters for saying it was mental and we weren't seeing it, but it's worked it's way through conveyancing and it is flying.
Interestingly, I gather a fair few bounceback loans have found their way into BTL. I gather the market for these is strong. Everything has a sold sign.
The hospital is still empty, I haven't had any calls for supply teaching, which is good, because I don't need it. I have done more work since lockdown than we did in the whole of last year. Interestingly, the hot tubs place has pretty much done the same thing, also the guys selling "eco campers" (VW conversions) are selling tens of these. They are flat out.
It seems all of the funny money is still circulating and certain sectors of the economy, namely things relating to property and things relating to leisure are flying. My BIL took over a very well known soft surfboard factory and since lockdown, they've been more busy. Either surf hire places restocking their boards with funny money, or people wanting boards with their furlough spare time, etc. It is quite a thing to contemplate what is happening.
When is it going to stop.... That's what we are all asking. I was asking that last time and it's just carried on more and more, busier and busier.
If the funny money is going to stop, the musical chairs game will stop shortly afterwards. It seems to me that certain people are making a fortune in this. For the first time in a while, I can say that if this keeps up, I will be earning VERY good money. Surely, that can't happen though?!?!?
how will this be paid for?
Surely, we're going to have a proper period of inflation now.
To summarise. WTF?
Back in the SW mining world. We are flying x10 with nitrous oxide and 10 bar boost. We have never been so busy ever. It is incredible. I know some people on here were calling me "things" for varying my view on a weekly basis, over the last 6 weeks, accounting for that, we have been busy, more busy and now flat out. I've got all sorts of projects on. More and more new builds. The big site I've got have are banging out 3 phases in the time they would have done about 1 and a bit. Investors are pitching in. I've got 3 very big luxury mansions with holes under them and a guy selling a block of flats with a massive shaft in the front garden. My last (6 weeks ago) assessment was that the residential stuff was slow, but developers and new builds were flying. Now it's all flying.
I was stood yesterday (social distancing) around a dug out shaft with 3 blokes talking about how mad the building industry has gone. I can't speak for the rest of the country, but down here property is at fever pitch. I remember calling the estate agents bulls
tters for saying it was mental and we weren't seeing it, but it's worked it's way through conveyancing and it is flying. Interestingly, I gather a fair few bounceback loans have found their way into BTL. I gather the market for these is strong. Everything has a sold sign.
The hospital is still empty, I haven't had any calls for supply teaching, which is good, because I don't need it. I have done more work since lockdown than we did in the whole of last year. Interestingly, the hot tubs place has pretty much done the same thing, also the guys selling "eco campers" (VW conversions) are selling tens of these. They are flat out.
It seems all of the funny money is still circulating and certain sectors of the economy, namely things relating to property and things relating to leisure are flying. My BIL took over a very well known soft surfboard factory and since lockdown, they've been more busy. Either surf hire places restocking their boards with funny money, or people wanting boards with their furlough spare time, etc. It is quite a thing to contemplate what is happening.
When is it going to stop.... That's what we are all asking. I was asking that last time and it's just carried on more and more, busier and busier.
If the funny money is going to stop, the musical chairs game will stop shortly afterwards. It seems to me that certain people are making a fortune in this. For the first time in a while, I can say that if this keeps up, I will be earning VERY good money. Surely, that can't happen though?!?!?
how will this be paid for?
Surely, we're going to have a proper period of inflation now.
To summarise. WTF?
Burwood said:
NickCQ said:
Ari said:
If you 'step off the ladder' at retirement, where do you live?
A smaller house in a cheaper place? Sell the London house, buy in Devon and have a couple of quid left over.
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