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| The UK housing market: a bubble about to burst? |
Unafordable Housing
by Christopher Wren
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#1000130
of 3278
 16 Jul 2002
12:46 PM |
| There will obviously be a bust in the housing market. Our modest 60 year old 2 bedroom terrace in a not particularly fantastic part of Hatfield, probably one of the least desirable locations in Hertfordshire, is allegedly now "worth" approx £140,000. If my wife and I were faced with creating such a debt today to buy what is little more than a "machine for living in", we would probably have run away to be anti-roads protestors living in a teepee. Until we get to a situation where a modest three bedroom house can be purchased for about 3.5 times average earnings (i.e. £87,500), housing is overvalued. Buying my parents house, which was self built in the 1960's would seem to involve today the sort of mortgage which even quite recently would secure a minor country estate. Roll on the property crash!! |
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UK Housing
by Rocky
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#1000129
of 3278
16 Jul 2002
10:42 AM |
| Why take the sledgehammer of higher interest rates to resolve the fears over house prices? As we are all borrowed to the limit on our credit card(s), what would be the effect of raising the minimum re-payment on these be? |
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Housing Market
by Andrew
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#1000128
of 3278
15 Jul 2002
10:25 PM |
I live in Cornwall where demand is far in excess of supply, where a view commands high premiums and where all new developments sell off plan.
Untill the planning process is streamlined, prices can only keep rising.
If they fall, I will be looking for a new job ! |
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Housing
by Freddy
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#1000127
of 3278
15 Jul 2002
03:00 PM |
Yes the property market will adjust, not so much from any increase in housing stock but because capital will return to stocks and shares. Normal economics suggest a FTSE100 index of ~5000 in the middle part of this year, and it has recently dropped below that.
Shares are cheap, housing overpriced, by september the effects will be evident! |
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by Comrade X
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#1000126
of 3278
15 Jul 2002
03:54 AM |
Comrades,
In 1958 my parents bought an average semi-detached house in a suburb of Manchester. Their mortgage was 4.5 times annual income. So, the 3 X income mortgage is not a new phenomenon.
The same house is currently valued at around £140K, in excess of 100 times its original cost.
Are any comrades able to confirm that the average wage has increased proportionally?
Craig Alexander #125 – Good Morning.
I agree, the media does create panic – in many ways.
Is it true that in ‘other parts of the world far less people own their home’?
I have made the acquaintance of a few French, German, Swedes and Austrians. They all seem to own at least one home. The same appears to be true of America and Canada.
Perhaps you refer to non-European countries where to own a tin shack would be an impossible dream. Are there really ‘few problems’ in places like Brazil and Columbia?
Stephanie #123 – Good Morning
Is it possible that the letting market is diminishing because more people are actually buying properties?
Chuko Liang #116 – Good Morning
Perhaps regional variations in interest rates would also be helpful.
I suspect this may not sit well with the EU’s dogmatic pursuit of Single Everything. We must all make some sacrifices for the benefit of EU democracy!
The Sun rises. |
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Problem, what problem
by Craig Alexander
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#1000125
of 3278
12 Jul 2002
09:39 AM |
Yet again, the media including
the FT, have created a frenzyed panic over the housing market. The fact is that the government should do nothing.Then the rented sector would and will increase quickly. If we look to other parts of the world far less people own their home and there are few problems. However I fear, as a shrewd investor, that the government on a quest to reducing social inequality will merely penalise the rich for owning extra when addressing this supposed "problem" |
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Buy to Let
by Giles Trainer
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#1000124
of 3278
10 Jul 2002
10:49 AM |
| The bubble is unlikely to burst. Yes a few investors are going to be overstretched however many are like myself and my friends who have purchased additional property (2-20 houses) in the last 5 years with our total borrowing still within 3.5 times multiple of salary. This borrowing is therefore easily funded even without an rental income - with rental income it becomes even more lucrative. |
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Housing shortage? What housing shortage?
by Stephanie Edghill
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#1000123
of 3278
09 Jul 2002
10:20 AM |
Let's be clear. This so-called "shortage" of property has been manufactured by the buy-to-let frenzy which has allowed a growing number of speculators to each own several properties on very easy finance. In addition, banks are inviting people to remortgage for free, each time revaluing the property higher and enticing people to take on more and more debt.It is the amount of finance being offered by the banks that is the problem. Many speculators haven't got the resources to cover these additional mortgages should the letting market turn downwards - which it is already showing signs of doing (20% in the last 18 months where I have just sold my property in Kent)As in every market, when speculators become forced sellers, prices will tumble as quickly as they shot up. Just look at the stock market!
This is not a problem if you live in property, bought 4 or 5 years ago and have made a point of repaying the debt, rather than taking on more. But I fear the national statistics for the last 2 years prove that the former are in the minority. So for me, it looks like the lessons of the last negative equity trap are going to be repeated all over again. |
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house prices
by john
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#1000122
of 3278
08 Jul 2002
10:03 PM |
Of course House prices will always go up .The banks willsee to that .As soon as prices start to slow they will come out with yet another scheme to extract more from less.We are about to see how.Will it be the 100 year loan or the six times salary ?Maybe the share with five others scheme.
easylec@msn.com |
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Buy to Let
by C.
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#1000121
of 3278
08 Jul 2002
06:23 PM |
| Whilst the long-term supply of houses may be lower than demand, it does not explain why prices have risen so fast in recent years nor prevent prices being too high. The main reason why demand exceeds supply has been buy-to-let investors buying properties without having anything to sell. Rents are down 20% in most areas. Equilibrium will not be restored until some BTL speculators sell their properties. This seems to be starting to happen see this month's Hamptons monthly report. |
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I'm forever blowing bubbles
by c
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#1000120
of 3278
08 Jul 2002
02:20 PM |
The fact that UK house prices are rising fast (15-20% over the past year) does not necessarily mean that they are going to fall fast. There is more demand than supply, although clearly not in London's buy-to-let market. The cost of renting, not buying in London, is therefore bound to fall.
QED.
As ever, please feel free to take issue with little
c. |
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High house prices
by Giles
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#1000119
of 3278
08 Jul 2002
12:59 PM |
| The root cause of high prices in the south east is the green belt policy. But not to have it would result in most of London and the home counties being concreted over. Surely not the answer. Should we not address the reasons for migration to the south east...and transfer significant resources to the north and west of the UK? If we try to build our way out of the problem we will create many more problems. |
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Housing Boom
by Mark Weeks
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#1000118
of 3278
05 Jul 2002
11:38 PM |
The sad reality of the current housing boom is that it's here to stay.
In London 'Red' Ken has sold his soul to the devil by entering into a 'partnership' with the property developers. We will see the supply of housing held way back from actual demand. Only the very rich [or very important] will have access to decent homes - the rest of us will be consigned to developments on the outer reaches courtesy of 'planning gain' [blood money] agreements negotiated by Ken's Kronnies. |
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Do not interfere!!
by john
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#1000117
of 3278
05 Jul 2002
02:55 PM |
for goodness sake, leave the market alone!! interference, (stamp duty, limiting borrowing, excessive building) simply distort the market. There is NOT a shortage of housing, it is simply mis matched - too many large houses, not affordable. That will gradually reduce their prices (basic supply & demand) too many starter homes off the buyers market ie owned by landlords. This is changing as the buy to let sector contracts.
There is not a problem here at all. people simply have to choose according to affordability. And no, you do not have a "right" to purchase property as a first time buyer in any particular area.
Stop trying to suggest solutions to a non existing problem that will simply distort the market further. |
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Housing market
by chuko liang
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#1000116
of 3278
05 Jul 2002
01:49 PM |
| Look, we don't need yet more soulless estates of identical jerry-built boxes sprawling over green countryside and destroying the character of fine old villages. That way leads to an environment which is misery for all. Surely the answer, alongside brownfield development incentives, is to alter the North-South disparity by giving tax breaks etc to companies that relocate to areas where house prices are low. Besides the advantages of economic regeneration, everybody would benefit by having more choice about where to live and work, rather than being forced to crowd into the hotspots of the South East. If it worked, we could perhaps demolish some of the hideous housing estates that are blighting the South. If we could also find and shoot the architects/housing developers responsible, that would be a bonus. |
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