Reply to: Have I mentioned house prices are going up?

[Old Greg]

Property is rising in London 19% a year.

Buy now whilst you still can people. For gods sake don't miss the opportunity to buy these at current give away prices.

You have been warned.

I've sold up and moved into tulips - it's the next best thing.

[shaunbhoy]

Indeed. The "prices rise forever" argument seems to rely mostly on the increasing demand

Yes,
but nobody puts that argument forward except for imbeciles like beaker's mate.

[DimPrawn]

Property is rising in London 19% a year.

Buy now whilst you still can people. For gods sake don't miss the opportunity to buy these at current give away prices.

You have been warned.

[Sysman]

He said "oh I didn't know property could go down in value"

I mean, what can you say to that?

Proof that Hotel bellboy /shoe shiner thing has kicked in.

It reminds me of the early 1980s, when I couldn't sell my house, so ended up paying for it when I wasn't living there. Some git told me "There's nothing safer than bricks and mortar".

It's time to get shut if you can, or prepare to hang on for a good few years.

[GreenerGrass]

Unfortunately if there is a crash, it'll probably go hand in hand with a recession and then we might all be out of work. We just need an IT boom to happen at the same time as a hose price crash.

Yes, be careful what you wish for.

And I seriously believe a water shortage next summer could trigger a hose price crash, people will be banned from washing cars, watering their gardens, etc.

[wendigo100]

He said "oh I didn't know property could go down in value"

I mean, what can you say to that?

How about: "You stupid c***."

[beaker]

I mentioned to a friend I was thinking of buying a flat in west London

"Oh property is such a good investment" he said

Then I said I wasn't sure because I may only be there for 1-2 years then move overseas and that if the price went down, I would be screwed really

He said "oh I didn't know property could go down in value"

I mean, what can you say to that?

[VectraMan]

One of today's papers (FT I think) reckons that the amount of mortgages offered by the banks will be halved as they tighten up lending criteria. If true, that's your demand component removed.

Indeed. The "prices rise forever" argument seems to rely mostly on the increasing demand, yet that assumes an infinite amount of credit for those that want it. Never was the case, and certainly isn't now.

There was another BBC News story about small business suffering due to less availability and higher rates of lending, thanks to all this. That can't be good.

Unfortunately if there is a crash, it'll probably go hand in hand with a recession and then we might all be out of work. We just need an IT boom to happen at the same time as a house price crash.

[sasguru]

I saw some program while in Ireland and they were saying the bottom of the cycle was an average 34% drop. Example's Norway, Spain, USA and previous UK drop. So 30% looks like a good point to start looking for something.

Punters in Ireland are already offering 25% below asking price for property. Currently, there is nothing selling over there but prices have not really fallen yet. Everyone is holding on, word on the street is banks are taking over property from defaulters and renting it back to them. Hoping to avoid a crash in property prices and negative equity.

This may work in the short term but Ireland has a large number of people involved in the construction industry. With zero sales and very low new property starts the construction industry have started to let people go. This will increase the number of defaulters in the BTL market when the unemployed migriant workers exit the country.

The UK market is not so exposed, the increase in interest rates, a reduction in money supply, an increase in unemployment or something else could trigger the fall but I am not seeing anything to trigger the fall yet.

One of today's papers (FT I think) reckons that the amount of mortgages offered by the banks will be halved as they tighten up lending criteria. If true, that's your demand component removed.

[alreadypacked]

Now we wait. The only problem is judging the bottom to buy again. I would say when the fall is around 30%, then pile back in and become a millionaire on the next cycle.

Boomed, I tell yer ...

I saw some program while in Ireland and they were saying the bottom of the cycle was an average 34% drop. Example's Norway, Spain, USA and previous UK drop. So 30% looks like a good point to start looking for something.

Punters in Ireland are already offering 25% below asking price for property. Currently, there is nothing selling over there but prices have not really fallen yet. Everyone is holding on, word on the street is banks are taking over property from defaulters and renting it back to them. Hoping to avoid a crash in property prices and negative equity.

This may work in the short term but Ireland has a large number of people involved in the construction industry. With zero sales and very low new property starts the construction industry have started to let people go. This will increase the number of defaulters in the BTL market when the unemployed migriant workers exit the country.

The UK market is not so exposed, the increase in interest rates, a reduction in money supply, an increase in unemployment or something else could trigger the fall but I am not seeing anything to trigger the fall yet.

[VectraMan]

Now we wait. The only problem is judging the bottom to buy again. I would say when the fall is around 30%, then pile back in and become a millionaire on the next cycle.

30% fall in about 2 years time would work out quite well for me. Yes please.

[Sysman]

Also interesting to note that with all the HIPS nonsense, it's been reported today a decrease in the number of properties for sale as sellers wait and see. Less supply = higher prices, so maybe that is having a temporary propping up effect.

Just yesterday one of the Sunday papers was reporting that 4 bed houses were being put on the market as "3 beds plus study" to avoid HIPS.

That's probably going to come out in the stats as "price for 3 bed houses jumps".

[sasguru]

Now we wait. The only problem is judging the bottom to buy again. I would say when the fall is around 30%, then pile back in and become a millionaire on the next cycle.

Boomed, I tell yer ...

[Bagpuss]

Are you saying London prices were rising at 19.1% in July and falling by 0.1% in Aug or that prices in August are only rising 19% and have fallen 0.1%?

I can't believe that prices can go for +19 rise to -0.1% in 4 weeks?

If so, by the end of the year, houses in London will be under a pound. I'll take all of Mayfair please. Stick a hotel on Parklane if you will.

They rose by 2% in July according to the notoriously inaccurate Department of Communities and Local Government (DCLG) survey, based on selling prices, including houses marketed months before, so more an indicator of May and June i.e before the last rate rise. In August they fell in London by 0.1% according to Rightmove, based on current asking prices. Righmove's data will be more accurate and up to date and factors in rate rises. The boom is over, in London anyway.

[wendigo100]

Are you saying London prices were rising at 19.1% in July and falling by 0.1% in Aug or that prices in August are only rising 19% and have fallen 0.1%?

I can't believe that prices can go for +19 rise to -0.1% in 4 weeks?

If so, by the end of the year, houses in London will be under a pound. I'll take all of Mayfair please. Stick a hotel on Parklane if you will.

August was a funny month because that's when the American dodgy lending debacle was at it's highest.