IMF Warning - UK housing

**DimPrawn** · 4 April 2008, 07:36

Global Warming? - Maybe not

http://news.bbc.co.uk/1/hi/sci/tech/7329799.stm

Global temperatures this year will be lower than in 2007 due to the cooling effect of the La Nina current in the Pacific, UN meteorologists have said.

The World Meteorological Organisation's secretary-general, Michel Jarraud, told the BBC it was likely that La Nina would continue into the summer.

This would mean global temperatures have not risen since 1998, prompting some to question climate change theory.

Yep. More C02 means higher global temps. Oh look, temps have not risen since the late 90's when it all started with Scientists looking for funding for "research".

Oh well, stick the "Carbon" taxes on to the proles anyway.....

PS - What this has to do with house prices? Go figure!

**Turion** · 4 April 2008, 07:39

Originally posted by BlasterBates View Post

IMF Warning

Are they wrong?

Is the UK different?

This is very easily feasible. Their 30% will mean an average price of £137k. This is still way more that 4 x average salary. (traditionally the house prices trade in the range 3-4 x salary).

A 40% drop in real terms is more likely over the next 5 years. With 4% annual price inflation this will equate to a drop of about 20% in monatory terms, so does not look so bad. However in affordability will be boosted by 40%, with an average house price of £120K or less (in todays money).

**BlasterBates** · 4 April 2008, 07:55

I've heard the presenter of "Location location location" is having his houses reposessed. Apparently Kirsty was by his side as he went to court.

**Fred Bloggs** · 4 April 2008, 08:48

Longer term you cannot buck the market. If 1st time buyers cannot afford a house as has been the case for the last 2 to 3 years at least, then the market HAS to correct itself sooner or later. In the area where I live, the average wage is £18k per annum and the average house price is ~£180k (or it was in January when these statistics were announced in the local press). So even in a typical 2 earner household, prices have a long way to fall to reach the long term norm. Presently, a small 2 bed terrace in our area is around the £110 to 120k mark. It has to come down to ~£80k or soto be affordable. And it will.

In many parts of the UK I see little or no price inflation being possible for the next 7 to 10 years. And that is a GOOD thing.

**DimPrawn** · 4 April 2008, 09:01

I've been monitoring the market around villages near Swindon for about a year or so in the £700 - £800K region.

Quite a few of them have been up for sale for a long time and now the prices are already coming down £50 to 75K in the last couple of months.

They can't sell even at that price.

I can see the same houses sold 4 or 5 years ago for less than £300K.

http://www.nethouseprices.com/index.php?con=sold_prices

**BlasterBates** · 4 April 2008, 09:03

Originally posted by DimPrawn View Post

http://news.bbc.co.uk/1/hi/sci/tech/7329799.stm

Global temperatures this year will be lower than in 2007 due to the cooling effect of the La Nina current in the Pacific, UN meteorologists have said.

There is actually a striking correlation between house prices and global temperatures, perhpas this should be researched more thoroughly. Is CO2 really the cause?

**The Lone Gunman** · 4 April 2008, 09:18

The house price crash will only happen if there are enough owners who are overstretched on their mortgages.

The biggest threat is the lenders themselves. Cheap rates are disapearing fast so people whos fixed raters are coming to an end may have a problem.
Next is the interest rate. If it goes up (and up) then again people will not be able to service their mortgages.

Otherwise there will be no crash. Those who can afford it will just sit on their property instead of selling.
There is still a housing shortage in the UK.

If the sellers decide (are able) not to sell then the market will just wait for the buyers to realise that prices are not going to fall and then there will be a massive rush to buy before it takes off again.

If it stagnates or falls then get into BTL. People will still need somewhere to live so rents could get silly.

**expat** · 4 April 2008, 10:34

Originally posted by The Lone Gunman View Post

...
If it stagnates or falls then get into BTL. People will still need somewhere to live so rents could get silly.

Cue AtW explaining why that can't happen....

**The Lone Gunman** · 4 April 2008, 10:37

Originally posted by expat View Post

Cue AtW explaining why that can't happen....

I know, its like shouting "pull" when you have a 12 gauge in your hand.

IMF Warning - UK housing