Property values?

[MGYoung]

Hi there,

What is the general opinion of the PH massive on house prices over the next 12 months? Not looking to move house just interested in what people think. Decrease? 2% increase? 5% increase?

I know different places will change by different amounts but just thinking about the UK as a whole.

Thanks and all the best.

[Lennylad]

personal view - but I think South Yorks will continue to rise and a a guestimate 3% increase even with a rise in interest rates

[srebbe64]

I think they're going to increase, but not by much. I'm of the view that interest rates are gonna rise.

[rsvmilly]

My view is that they'll stagnate for a year or two. They may even dip a bit but in 3-4 years time they'll start rising again.

[oggs]

rsvmilly said:

My view is that they'll stagnate for a year or two. They may even dip a bit but in 3-4 years time they'll start rising again.

So nearly time to start buying houses to do up and sell then.

[TDIPLC]

I'm the poorest in my social group, who include:
1 x Person with a property portfolio worth £300m
1 x Person with a property portfolio worth £800m (high in the Sunday Times Rich List).

Both have never previously sold a property, and both have indicated that they want to "move to cash" this year.

A client of ours is a "Banking Strategist" who mentioned to me last year that the smart people are "moving to cash" from property.

[360stimo]

MGYoung said:

Hi there,

What is the general opinion of the PH massive on house prices over the next 12 months? Not looking to move house just interested in what people think. Decrease? 2% increase? 5% increase?

I know different places will change by different amounts but just thinking about the UK as a whole.

Thanks and all the best.

Generally property prices will continue to rise ans demand far outstrips supply. Interest rates IMHO will go up again which could level of the market for a while, so if that happens, rental yields will be good anyway and you just sit things out.

Supply will never ever outstrip demand in the UK, so we are always going to have rising house prices.

Thats my opinion anyway

[The Londoner]

TDIPLC said:

A client of ours is a "Banking Strategist" who mentioned to me last year that the smart people are "moving to cash" from property.

Did you ask him to explain why?

[TDIPLC]

Yes I did. The answer was "recession coming". I hope not, but perhaps a house price correction wouldn't be thing?

What I find odd is that the banks seem to know it's coming but are still giving money away.

Edited by TDIPLC on Saturday 27th January 14:16

[lambojim]

Try buying a family house in the center of London..there are hundreds od people with over £3m to spend (in some cases alot more)- as long as the UK continues to have attractive tax deals for foreign nationals living here, not to mention the City blah blah - I think the prime central London market is going to head up even further. Any rate rise would have to be severe to effect buyers at the top end and I can't see that happening. If, however, I was holding lots of flats in Brum, M'chester, Wales etc that had gone up substantially in the last 3 years I would be running for the door and cashing in my chips. In 20 years time, I think the gap between the rich and poor is going to be even bigger than it is now. Just my 2 p worth.

Edited by lambojim on Saturday 27th January 19:31

Edited by lambojim on Saturday 27th January 19:31

[bjwoods]

TDIPLC said:

I'm the poorest in my social group, who include:
1 x Person with a property portfolio worth £300m
1 x Person with a property portfolio worth £800m (high in the Sunday Times Rich List).

Both have never previously sold a property, and both have indicated that they want to "move to cash" this year.

A client of ours is a "Banking Strategist" who mentioned to me last year that the smart people are "moving to cash" from property.

I very much doubt that they are seling ALL their properties!!!!

What they are really saying is sell the ones that are likely to be the worst performing, ie desireability, condition, location, etc, etc... as the bandwagon will drop off a bit...

They will keep the best properties.

B

[billsnemesis]

I have recently been doing some work for a bank lending on development sites and their latest valuation reports have included a line that long term bond yields are below short term rates and historically that has always been a precursor to recession

This is because interest rates are pushed up in the short term to put the reins on a boom but everyone knowns that it is a relatively short term process with rates falling in a year or two

I think prices will only crash if we have a full blown recession

But I doubt they can go much higher. Rises have been oustripping salary increases for a few years and that is what will put a lid on the average price

The one thing that is radically different about this house price boom is the influence of the central banks over interest rates. We now have three major economies (US UK and Europe) where interest rates are set by bankers, not politicians. Assuming they do their job the rate rises will be shorter and lower

The worry is that the Banks are not directly concerned with growth or recession so they might just throw us into a recession in order to keep the lid on inflation

[The Londoner]

TDIPLC said:

Yes I did. The answer was "recession coming". I hope not, but perhaps a house price correction wouldn't be thing?

What I find odd is that the banks seem to know it's coming but are still giving money away.

Edited by TDIPLC on Saturday 27th January 14:16

Could one be very cynical in thinking that that the banks are happy to give money away so that they can repossess highly geared properties at a massive discount rate when borrowers have to default?

[justinp1]

The Londoner said:

TDIPLC said:

Yes I did. The answer was "recession coming". I hope not, but perhaps a house price correction wouldn't be thing?

What I find odd is that the banks seem to know it's coming but are still giving money away.

Edited by TDIPLC on Saturday 27th January 14:16

Could one be very cynical in thinking that that the banks are happy to give money away so that they can repossess highly geared properties at a massive discount rate when borrowers have to default?

It depends whether you believe banks have more interest in morals or profit.

That is each persons own opinion.

However, if anyone has ever paid a £25 fine for going £5 overdrawn then this may sway this opinion, and the balance of evidence somewhat...

I dont think you are being cynical at all.

[paracetamol]

bjwoods said:

TDIPLC said:

I'm the poorest in my social group, who include:
1 x Person with a property portfolio worth £300m
1 x Person with a property portfolio worth £800m (high in the Sunday Times Rich List).

Both have never previously sold a property, and both have indicated that they want to "move to cash" this year.

A client of ours is a "Banking Strategist" who mentioned to me last year that the smart people are "moving to cash" from property.

I very much doubt that they are seling ALL their properties!!!!

What they are really saying is sell the ones that are likely to be the worst performing, ie desireability, condition, location, etc, etc... as the bandwagon will drop off a bit...

They will keep the best properties.

B

They do this because being a cash buyer in a recesion was what probably allowed them to be sat on a multi million property porfolio. So by having cash for the next recession is nice...

[TDIPLC]

paracetamol said:

They do this because being a cash buyer in a recesion was what probably allowed them to be sat on a multi million property porfolio. So by having cash for the next recession is nice...

Yes. They'll probably increase their net worth by 25-50% in one fell swoop.

Bad news for the rest of though.

[M400 NBL]

I expect property prices to rise in the SE, particularly in London.

I doubt anything will change that for at least a couple of years, except for significant IR rises. By significant I mean >2% on top of the recent .75% hike.

[aceparts_com]

Credit tightening will cause a housing crash; nothing to do with supply and demand as outside London there is plenty of supply otheriwse people would be living on the streets.
Facts to consider:
1) it's usually cheaper to rent a property than even have an interest only mortgage
2) Once property prices have stopped 'rising' owners will find it incredibly difficult to move to lower rate mortgages due to low equity. Many will be stuck on unaffordable standard variable rates (7.5% etc)
3) It only takes a proportion of the selling properties to set the rate for the rest of the market
4) we're coming to the end of a low inflation/low interest rate cycle.
5) Affordability is at an all time low.
6) First time buyers are now only 10% of the market where they have always been 50% in the past
7) Banks don't give a hoot about the future value as you will be responsible for the outstanding debt if the house is repo'd
8) Everyone with a vested interest in the market bangs on about how prices are climbing; estate agents, banks, bbc! etc....
I'll be back with more reasons. Oh, if prices are going to only ever go up (as predicted by all those with vested interests) how will my son (17 months) ever buy a property? Who will work in Tescos if workers can't afford to live locally.

IMHO the property market is screwed. It's been allowed to climb too high too fast and no ones sure what to do to bring some sanity back? Let inflation take off again?

[TDIPLC]

aceparts_com said:

Credit tightening will cause a housing crash; nothing to do with supply and demand as outside London there is plenty of supply otheriwse people would be living on the streets.
Facts to consider:
1) it's usually cheaper to rent a property than even have an interest only mortgage
2) Once property prices have stopped 'rising' owners will find it incredibly difficult to move to lower rate mortgages due to low equity. Many will be stuck on unaffordable standard variable rates (7.5% etc)
3) It only takes a proportion of the selling properties to set the rate for the rest of the market
4) we're coming to the end of a low inflation/low interest rate cycle.
5) Affordability is at an all time low.
6) First time buyers are now only 10% of the market where they have always been 50% in the past
7) Banks don't give a hoot about the future value as you will be responsible for the outstanding debt if the house is repo'd
8) Everyone with a vested interest in the market bangs on about how prices are climbing; estate agents, banks, bbc! etc....
I'll be back with more reasons. Oh, if prices are going to only ever go up (as predicted by all those with vested interests) how will my son (17 months) ever buy a property? Who will work in Tescos if workers can't afford to live locally.

IMHO the property market is screwed. It's been allowed to climb too high too fast and no ones sure what to do to bring some sanity back? Let inflation take off again?

I'm generally inclined to agree with you.

When the current ease of going bankrupt with degraded repercussions is thrown into the mix, I wouldn't be surprised if the market took a turn for the worse.

When the banks start taking a hit they will increase their lending criteria which may create a credit crunch.

Bankruptsies and reposessions are currently at a very high level and are forcast to increase.

[martin hunt]

I agree with aceparts and others, I see an end to this house price madness and it looks bleak for some...

All I see is prices for houses I looked at 2 or 3 years ago out of reach of me now (and I earn a good screw) and are still on the market 12 months or more of being put on, the exception is the high house prices???

Here in Plymouth the houses priced above the £750k bracket seem to sell quite quickly, where as the ones upto about £600k stay on sale for ages.

I must admit, I am contemplating selling mine now and buying it back in 2 years time at a knockdown price.....