Citigroup predicts 10pc fall in house prices

[AtW]

Only if Brown keeps his sticky grasping fingers out of my investments

In a country where tax is paind on using TV or fishrods it should not really be suprising they will tax something else, after all the Americans revolted because of taxation.

[Diver]

In a country where tax is paind on using TV or fishrods it should not really be suprising they will tax something else, after all the Americans revolted because of taxation.

The Americans have always been revolting

[AtW]

The Americans have always been revolting

Yes, but then they rebelled for good...

[Diver]

The Doom and Gloomer's cause most of the panic in the marketplace.

1. There are not enough houses available to cover the demand for property.

2. The population is increasing daily, as is the demand for houses.

3. Lenders have to lend to stay in business.

4. In real terms the value of property will never drop as long as demand outstrips supply

5. They will never build enough new houses to cope with demand

6. If the governments allowed house values to drop too far, and Lenders to stop lending, there would be a massive housing shortage because it would become economically unfeasible for construction companies to build houses that they could not sell.

7. Building houses to let/rent is an economically unfeasible concept. only local and central government have the resources and commitment that is needed to make this long term strategy viable. Private companies/investors are not willing to wait 50 years or more to see a profit on investments.

8. The new currency on the market is property. land and property investment is also the only sure pension or endowment option in todays fragile economic climate.

[ittony]

Even at double that I'd still have a tidy profit.

You'd better have, because it's going to be quadruple that.

[AtW]

8. The new currency on the market is property.

Yes, and just like dollar it will plunge down.

[Diver]

Yes, and just like dollar it will plunge down.

If you and a thousand other people need a house and there are only two hundred houses for sale, how much more are those two hundred houses worth.
If you can't afford that house, you and the eight hundred that couldn't afford to buy, have to rent or lease. if there are so many people looking to lease or rent, how much do I put the lease/rent up. how much is the value of my buy to let going to rise because there are so many people wanting to lease/rent/buy it.

It's called economics. Google it

[AtW]

If you and a thousand other people need a house and there are only two hundred houses for sale, how much more are those two hundred houses worth.

What you are failing to understand that valuation is subject to much higher volatility than number of houses and number of people. Economic cycles are unavoidable, you can just try to delay them, but the longer you delay the worse the fall or better the recovery will be.

[Diver]

What you are failing to understand that valuation is subject to much higher volatility than number of houses and number of people. Economic cycles are unavoidable, you can just try to delay them, but the longer you delay the worse the fall or better the recovery will be.

What you are failing to understand, is that a roof over your head is a necessary as food and water in the cold wet British climate.
The people that will be affected in the long term, are those who need to buy or rent. Those that need a mortgage.

Those that have the money, the high income earners and the wealthy will still pay the asking price for the property they need.
Those on lower incomes will not get or will not be able to afford the property or mortgage and will be forced out of the marketplace.
We who already own property to let; will not be affected because people still need that roof over their head.
Those wanting to get onto the buy to let ladder will find that they can not afford to do it (mortgage payment > rental income) and it will thin the market out a bit and make it easier for those with money to buy up even more properties as low income borrowers lose their houses through repossession and the Lenders auction them off quickly and cheaply to recover capital.
Capital investment in these cheaper properties will be realized over the long term, and by then the economy will have cycled again making the capital investment a greater profit than just relying on savings interest. and a much safer option than relying on playing about with stocks etc.

[AtW]

What you are failing to understand, is that a roof over your head is a necessary as food and water in the cold wet British climate.

Sure. But wasn't this the case during last property only recently? What makes you think that somehow new paradigm was found during New Labour reign of tax terror that cancels out fundamental laws of economics?

What goes up, comes down - it's as simple as this. People will still have their homes (if they keep up with repayments), but they will also have negative equity until next house pricing bubble comes around.