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| The UK housing market: a bubble about to burst? |
Re - Help
by Burry
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#1000160
of 3278
 24 Jul 2002
11:26 AM |
I don’t think that negative equity is your problem. After all you are going to live in your house.
The question is can/will you be able to afford the payments & are there other options?
I think that there are other options.
I personally don’t like cities, or even apartments & I think that cities are a horrendous place to bring up children in.
Give me an isolated piece of land and I will be happy & healthy, but that is a personal opinion and one I have lived by all my adult life, except for a short stint in Paris.
The isolated piece of land is not so far fetched as it may seem, building is an option which people do not seem to contemplate. When building you own house, prices are closely related to costs and costs are related to quality. The bubble is out of the equation.
Speaking of the devil, bubble, she will burst, timing is the only variable. |
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A message for Help
by Shareholder
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#1000159
of 3278
24 Jul 2002
10:25 AM |
I had a big mortgage and was made redundant 3/4 times in the 70/80s. We had a young family and we went without many things to pay the mortgage. Believe me , it was not a pleasant time.
Life is for living and you only get one chance, don't over commit yourself and struggle financialy for years.
If negative equity returns , buyers could lose a lot of money, I am experiencing that now with the stockmarkets, after being led into shares by our educated politicians.
My advice, get out of London and live where it costs less, is more pleasant and far cheaper.
For £190,000 you can buy a very nice house elsewhere, and have less stress and hassle, Or the same house for far less.
You will only be the age you are now once. Enjoy it!
If you have assets in old age , or any age , then they will find ways to tax the money from you to finance their mad cap schemes.
If you lose your income , from your job, then believe me life becomes a nightmare, you don't sleep worrying about paying the mortgage and losing your home.
When you die Gordon steals 40% in IHT to finance his vote buying spree.
Now they are talking about tax when you sell as well as buy a house. They call it stamp duty. Gordon will get his sticky fingers on the money locked up in house values sooner or later.
Visiting W. Germany many years ago I was surprised how many well paid executive level and middle management workers lived in rented accommodation.
They spent their money on cars and entertainment and eating out and foriegn holidays instead of struggling to pay mortgages for years.
Hope this helps!!
Get a property that will suffice and live your life, then get out of that awful city. |
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HELP
by I want a home
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#1000158
of 3278
24 Jul 2002
09:50 AM |
I am a first time buyer.
I earn £35000 a year.
I have borrowed £168000(at fixed rate 5.5% for the next five years) and have a deposit of £22000.
I am buying a £190000 property in South London.
I cannot afford to take the risk of losing 10-20% if prices crash (tying myself to negative equity for the next ? years).
However, I have waited two years to save a deposit thought until now that I was going to be priced out of the market if I did not get on and buy. Besides which I am sick of throwing money away on rent.
Should I be listening to the 52% who say I am foolhardy and pull out, or are they all looking for a fall in prices?! |
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More boom
by Dr Penney
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#1000157
of 3278
23 Jul 2002
08:03 AM |
With retrenchment of the equity markets and the pressure on pension funds to have sufficient assets at all times we have already seen significant uplift in bond prices. This means lower medium and long term yields, which in turn can mean lower term mortgage rates.
The Bank's MPC only change short rates.
Although presently most peoples mortgages are variable rate it seems likely that the boom could continue for a while (beyond the decimation of the equity markets)as people take advantage of the continually cheaper term fixed rates.
The effect might be even more pronounced as people realise that their equity holdings in ISAs (and PEPs) and other funds are dropping like stones and property is still ticking up. |
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Market manipulation
by Burry
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#1000156
of 3278
23 Jul 2002
12:22 AM |
What a pity, the real loser’s are as usual Joe “public” while politicians play musical chairs with the responsibility for letting this almighty mess get out of hand in the first place.
It seems that the UK Government is getting to grips with the source of the problem of speculative house prices, more precisely they have identified the source of the problem, and as yet, they have done nothing concrete except promise action.
While the offer of Housing has been artificially limited by town halls withholding planning permission, prices have spiralled out of control.. Future easing of planning permission to satisfy demand will let prices will fall to a natural level of cost + reasonable profit, about 50% of today’s prices.
If the Government is tempted to maintain restrictions on planning permission so that prices do not fall then the disservice to the Country will be enormous, wages will rise so as to permit people to pay for a roof over their head. Business will have an added incentive to move abroad to less expensive areas of the world.
I still think buying a 60 foot yacht a better investment that an overpriced apartment. In the USA there are very good offers coming on the market. |
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house price stability problem
by dr. o. elgin
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#1000155
of 3278
22 Jul 2002
11:16 PM |
| although the governement will do all it can to prevent a drop in house prices, as that will result in a fall in that part of consumer demand which is driven by equity release, price stabilisation is difficult to achieve. Reason: the component of demand for housing which is speculative (expecting growth in prices) will disappear when prices remain flat. That is to say, flat prices imply a drop in demand. It can be done, but it will not be easy. |
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There will be no crash
by Dame Nelly Melba
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#1000154
of 3278
22 Jul 2002
12:49 PM |
| Further to my earlier comment, I would like to say that I don't believe there will be a house price crash, rather a period of price stability. Unlike past crashes we are not likely to be hit by crippling interest rates deployed to control retail price inflation. Such monetary policies force a market crash, but this time I believe natural market forces will by brought to bear to curtail a totally unsustainable situation. |
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Housing
by Dame Nelly Melba
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#1000153
of 3278
22 Jul 2002
12:38 PM |
| I believe that we will use a natural market correction regarding rapid UK House price inflation. As housing becomes less affordable the point will be reached when first time buyers will simply change plans and leave the market. Ultimately price inflation will stop, and a period of stability will ensue. |
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the uk housing market
by vijay
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#1000152
of 3278
21 Jul 2002
04:53 PM |
I read all the replies and found this to be a very fascinating forum.
I was very suprised that some of the main factors that caused the last boom and crash have been totally ignored.
in the last boom nigel lawson reduced the interest rates to 7.5% chasing a sterling mark relationship. We seem to be doing something similar at the moment.
We enterd ERM as a matter of politicaL dogma against the advice of people like alan walters - remember him?
We seem to be hell bent on wanting to join euro. certainly this goverment is and so was most of the cabinet in margaret thachers time. as to whether euro will survive our entry is another matter. we all seem to be concentrating on what would happen to us if we join euro. has nobody thought of what will happen to euro if we join euro. we have considerably different culture and our economy is hardly the size greece!
The goverment has ceded responsiblity for the health of economy to the bank of england who has been given one tool, interest rates. does this sound familiar? isn't this the reason why we had nearly 15% interest rates for over a year leading to one of the biggest recessions
in my view governments do not have morality, or common sense. They have dogma created usually in the prime ministers or chancellers child hood. in case of thatcher it was the war. in case of tony blair it appears to be his happy youth in france !
Media do NOT tell the truth.
it is all about what makes sell more copies. (FT excepted of course)
Governments do not care whether you go bankrupt or not. if you get into trouble the ministers will say, it only affects minority and that they are all adults and should not have been so greedy.
As far as my view on the current housing market. Most of the 'boom' is simply a recovery from a bust. there is a bubble because there is always an overshoot.
crucially i do not expect interest rates to become extremely volatile. we need an economy in semi permanent state of recession in order to join euro and that is what we are going to get.
with consumers overextended in their borrowing , the market will reach a peak which may still be another year then followed by maybe 20 years of stagnation, with prices increasing by no more then inflation, possibly even less as the froth is taken out of the market.
Does this sound similar to continental property markets only a few years ago? To me sounds like a classic euro economy. I see property as being the worst possible investment over the next 2 decades.
So all of you mortgaging to the hilt, remember better be prepared to pay the debt over a long time, and do not think you are neccessary going to be able to retire on the capital gain,
that is unless we get kicked out of euro or the euro collapses, in which case we will be back to boom and bust instead of all bust.
I look forward to all the comments
vjay@vijayshah.co.uk |
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UK housing
by bnair
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#1000151
of 3278
21 Jul 2002
02:22 PM |
| It will be crashing soon. The property clock is at 12 o clock. It is not sustainable when investment bankers are retrenched in financial and commercial centers and the global economy looks fragile with weakening US economy. Smart money have sold in the UK--those I know have sold in Finsbury Park and in Canary Wharf. |
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BOOM!
by AAAAAAArgh!
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#1000150
of 3278
20 Jul 2002
07:24 PM |
The low interest rates and high employment rates are to blame for the current boom.
FACT 1: Thanks to the Tories inflation has been low and steadily descending for over a decade.
FACT2: The growth in the UK has stagnated over the last six months and company profits have been hit hard!
This means unemployment and BOOM! |
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House prices and land
by Carl
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#1000149
of 3278
20 Jul 2002
10:06 AM |
I grew up in the countryside in Continental Europe. Our farm consisted of 5 acres. My father took an unproductive piece of land and turned it in a cottage industry, employing over 25 local people, including apprentices. When I went back to the village three years ago, it had thrived while enhancing its countryside appeal.
Development in no way needs to imply degradation. Quite the opposite. Of course, if people continue to think in black and white (e.g. one large building estate and car parks OR the green belt - nothing more intelligent), development may destroy the countryside. |
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House prices and Robert Beckman
by John Smithee
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#1000148
of 3278
19 Jul 2002
10:13 PM |
I have read the replies to the house price bubble discussion with great interest.
I have been interested in house prices even since I bought a book entitled "The Downwave - how to survive the second great depression" by Robert Beckman from Foyles bookshop in Charing Cross Road, London in 1984.
Robert Beckman was the first economist and investment analyst to discuss the house price bubble, which he equated with the Tulip bubble of 17th century Holland.
Robert Beckman went on to write "Crashes" and "Housequake" where he updated his views on the house price bubble in the UK.
Whilst Robert Beckman has now retired to Monaco, his views on the house price bubble are still of interest.
The technology, dot.com and stock market bubbles have all burst. When the house price bubble in the UK bursts, support for Tony Blair's New Labour Government together with capitalism will collapse.
If you want to understand what the future holds for house prices just look into the history of house prices in the USA during the 1930s. |
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get tough
by john
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#1000147
of 3278
19 Jul 2002
03:51 PM |
I am sick of green belt being dessicrated by scum gypsies. what a disgusting existence. the tip they leave. Sort them out, and also the 750,000 empty homes in the UK. put some money into them, and if it keeps the scum from ruining our "green belt" then good money well spent.
The answer is use what we have already. |
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elgar's variations or rather perversions
by chuko liang
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#1000146
of 3278
19 Jul 2002
03:28 PM |
The green belt is not there is stop ordinary people owning land. It is there to stop land being acquired and ruined by organisations with whom ordinary people cannot compete.
Do you really want this once green and pleasant land to be turned into a giant housing estate punctuated only by the occasional car park?
Get a life.
Chuko |
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