State of the UK housing market - Doom level: ATW raises eyebrow

[scooterscot]

As long as house prices stagnate, the number of houses on the market reduces thus keeping them up. I see no reason for a huge crash, because people simply wont sell their houses and will just stay where they are instead.

Wait until interest rates are 8%, they'll soon change their minds.

[cosmic]

Wait until interest rates are 8%, they'll soon change their minds.

That would be a death wish for the economy

[chopper]

Wait until interest rates are 8%, they'll soon change their minds.

I don't see why interest rates are heading for 8% though? It is 20 years since they were anywhere close, and 26 years since they were actually 8% or above. As an economic tool for offsetting inflation, it wont help where inflation has been caused by a devalued currency rather than an overheating economy. The last thing the UK economy needs as we head to Brexit is for the BoE to encourage people to not spend.

I wouldn't be surprised if interest rates didn't actually go down again rather than up the next time they adjust it.

[shaunbhoy]

I don't see why interest rates are heading for 8% though? It is 20 years since they were anywhere close, and 26 years since they were actually 8% or above. As an economic tool for offsetting inflation, it wont help where inflation has been caused by a devalued currency rather than an overheating economy. The last thing the UK economy needs as we head to Brexit is for the BoE to encourage people to not spend.

I wouldn't be surprised if interest rates didn't actually go down again rather than up the next time they adjust it.

No point talking sense to scoots. He has half the intellect of a Snickers. It will go so far over his empty head you'd need a telescope to witness it.

[DimPrawn]

Wait until interest rates are 8%, they'll soon change their minds.

I've drawn two perpendicular lines on an interest rate chart and we are fine thanks.

[scooterscot]

I don't see why interest rates are heading for 8% though? It is 20 years since they were anywhere close.... I wouldn't be surprised if interest rates didn't actually go down again rather than up the next time they adjust it.

Where to begin. Interest rates only have one direction to go and it's not down. If they stay down forever then the bank has declared the currency worthless and you might well return to bartering.

Interest rates were consistently flat during the great depression and then shot up in the space of a few short years. We've been in a depression for some while now, no wage rises, rich getting richer poor poorer, reduced mobility... etc Today the length of low rates shall not be so long as the world is much smaller not to mention well connected.

It is very clear from below what occurs to house prices when rates are in a downward trend. Now I don't know when vice versa is about to kick in. In fact we may see people continue to put money in property as the stock market correction gets underway. Nonetheless, when I see that hockey stick against house prices, shivers are sent down my spine. And the only reason prices did not collapse way back in 08 during the banking crisis was because of money printing. Banks should have failed but were saved.

A 30-40% correction is inevitable.

[DimPrawn]

Of course if the BoE base rate went up to 6%, we would see a fairly large price fall, possibly 30% fall from current levels.

But if you look at that long term price chart is just screams, "buy as much as you can, as early as you can", because even the biggest pullbacks are tiny in the grand scheme of things...

It's the best inflation protector known to man AND you can live in it and enjoy it!

[contractorinatractor]

Of course if the BoE base rate went up to 6%, we would see a fairly large price fall, possibly 30% fall from current levels.

But if you look at that long term price chart is just screams, "buy as much as you can, as early as you can", because even the biggest pullbacks are tiny in the grand scheme of things...

It's the best inflation protector known to man AND you can live in it and enjoy it!

Given we know the debt-fuelled pre-2008 situation was regrettable, including for housing, I think most would look at 2002-2008 and think "that's mad".

The main beneficiary of this was the banking sector, not the so-called house owners, who in reality are renting until the house is truly theirs. Let's not forget repossessions were very high in number for a few years after 2008.

My main concern in the next crisis is: now that income inequality is so high housing stock may be swallowed up by the rich during the next major crash.

Scootsy may spout some crypto driven but he is fundamentally correct about a major correct being on the horizon. P/E ratios are ridiculous for many junk companies. The only thing I can see foiling a major crash could be some magic QE-style economics magic that further postpones the inevitable.

[DimPrawn]

My main concern in the next crisis is: now that income inequality is so high housing stock may be swallowed up by the rich during the next major crash.
.

That is one of my plans, yes, and so what?

[scooterscot]

Not just London, same in Edinburgh - could buy back the apartment I sold or similar for about £40k less. Me short is going well so far

Top London home prices 'falling fastest' amid UK slowdown

Detached homes in London fell in value by more than £50,000 in a year, according to official figures, driving the slowdown in UK house price growth.


Typically, this type of property cost £903,088 in May last year, but fell by 6.1% to £847,998 by this May, Land Registry figures show.


The prices of other property types in the capital also fell, but by less.


Annual property price rises overall in the UK slowed to 1.2% in May, from 1.5% the previous month.


The fact they are still rising at all is thanks to price increases in homes outside London.