Citigroup predicts 10pc fall in house prices

[BrilloPad]

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.

All very good arguments (apart from number 8 which is a sure sell signal). It neglects affordability of debt(house prices opinion, debt is real). And the influence on having companies buying houses.

At a moral level, it is dreadful that young people should have to borrow beyong their limits to get a place over their head. I would put a tax on houses where the owner does not live in them, or where the owner has more than one house, or the owner is a not British passport holder or has more than one passport.

[ittony]

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

Evidently there are, because prices are falling.

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

The population maybe increasing daily (for now) but demand, being a function of the supply of credit, is falling daily. Where have you been for the last three months?

3. Lenders have to lend to stay in business.

Lenders do not have to stay in business.

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

Come on, really, where have you been?

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

Seems they already did.

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.

So, prices can never drop, because if they did drop, they'd come up again? Nice logic.

7. Building houses to let/rent is an economically unfeasible concept...

Eh?

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.

Really, what are you on? I've never heard so much rubbish. This fragile economic climate has been entirely caused by the property/credit bubble and while many other investment classes are going to suffer, nothing will be hit as hard as property.

[AtW]

Good job ittony

[shaunbhoy]

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.

Well said Diver. I and others have been trying to bludgeon these concepts into the dormant organ that AtW uses for his thought processes for years without any luck. That is why we all own property and he lives in a seedy bedsit in the West Midlands with his sorry collection of low-alcohol beverages. You can't educate pork I'm afraid, God knows we have tried.

[Churchill]

Well said Diver. I and others have been trying to bludgeon these concepts into the dormant organ that AtW uses for his thought processes for years without any luck. That is why we all own property and he lives in a seedy bedsit in the West Midlands with his sorry collection of low-alcohol beverages. You can't educate pork I'm afraid, God knows we have tried.

I find it amusing that you think that consumption of low-alchohol beverages makes someone a "lesser" man.

Educating pork? Talk about kettle, pan and black!

[AtW]

I find it amusing that you think that consumption of low-alchohol beverages makes someone a "lesser" man.

He is funny, innit?

[shaunbhoy]

I find it amusing that you think that consumption of low-alchohol beverages makes someone a "lesser" man.

Educating pork? Talk about kettle, pan and black!

Thanks for the input Churchy. Always nice to get the nerd perspective. Keep up the good work.

[AtW]

Always nice to get the nerd perspective.

You never said what you do. Not a single time you commented on technical IT matters. Clearly you are a bulltuliping manager

[Churchill]

You never said what you do. Not a single time you commented on technical IT matters. Clearly you are a bulltuliping manager

He drives round the country installing updates into Cellular base-stations - sort of a mobile Benes.

More to be pitied than despised.

[sasguru]

You never said what you do. Not a single time you commented on technical IT matters. Clearly you are a bulltuliping manager

Technical IT matters are for silly, small minded nerds who think that creating an algorithm equates to intelligence.
I know your type atw, I bet you blush uncontrollably in the presence of a woman.