Reply to: oh dear: House price recovery 'could take ten years'

[BrilloPad]

We can take some small comfort from the fact that the value of CyberTory's house remains unaffected.

can defy the laws of gravity

[DiscoStu]

We can take some small comfort from the fact that the value of CyberTory's house remains unaffected.

[BrilloPad]

House prices were driven by reckless lending - very few people can buy houses upfront all-cash payment, if bank's won't lend more than 3x salary (or disposable income) then only other sales will be from abroad (not many) and BTL to those who have cash (not very many either). If banks were not lending at high multiples house prices would have never risen so much, well, that and low interest rates in US/UK that help inflate the bubble.

Indeed. The Greenspan put caused current issues. Trying to abolish the natural boom/bust cycle by banning bust. You just cant fight nature.

That and 125% mortgages.....

[AtW]

House prices were driven by reckless lending - very few people can buy houses upfront all-cash payment, if bank's won't lend more than 3x salary (or disposable income) then only other sales will be from abroad (not many) and BTL to those who have cash (not very many either). If banks were not lending at high multiples house prices would have never risen so much, well, that and low interest rates in US/UK that help inflate the bubble.

[Fred Bloggs]

For some years I think the extra costs due to weak pound would be a much bigger concern.

For us too. Next year it will be a holiday in the UK instead of the US or Europe.

[Pickle2]

If estate agents are so clever and can predict the future, why didn't they cash in and close up a year ago at the top of the bubble?

I think the foxtons guy did exactly that!

[Doggy Styles]

I'm not so sure 3-4 multiples of income are as valid today. Isn't a multiple of disposable income a better measure? I mean, twenty years ago people had to plan to buy white goods, whereas now China churns these out for about tuppence. Just as you can't have to much credit floating around, too much unused disposable income has to be mopped up by something too, shirley?

I don't buy white goods very often.

And twenty years ago I could afford fill up my car with petrol, use the gas-fired central heating during the winter, and have electric lights on in the evening.

3-4 times salary still sounds about right, plus deposit.

[AtW]

For example, I believe passports are going up to ~£130 each. So a family of four like us pays £500 before we book a holiday. I think my first passport cost me £8.

For some years I think the extra costs due to weak pound would be a much bigger concern.

[Fred Bloggs]

I'm not so sure 3-4 multiples of income are as valid today. Isn't a multiple of disposable income a better measure? I mean, twenty years ago people had to plan to buy white goods, whereas now China churns these out for about tuppence. Just as you can't have to much credit floating around, too much unused disposable income has to be mopped up by something too, shirley?

Fair point but then again we used to get (almost free) gold plated final salary pensions, free dentistry, free life assurance and we didn't have to pay all sorts of stealth taxes like we do now. For example, I believe passports are going up to ~£130 each. So a family of four like us pays £500 before we book a holiday. I think my first passport cost me £8.

[Doggy Styles]

I always thought estate agents were those who are too stupid to get a job anywhere else. The "Tim Nice But Dim" types.....

Nice?

[BrilloPad]

If estate agents are so clever and can predict the future, why didn't they cash in and close up a year ago at the top of the bubble?

It's just one person's opinion and as worthless as mine.

I always thought estate agents were those who are too stupid to get a job anywhere else. The "Tim Nice But Dim" types.....

[SantaClaus]

Homeowners will have to wait a decade before property prices return to 2007 levels, a leading estate agent said yesterday.

If estate agents are so clever and can predict the future, why didn't they cash in and close up a year ago at the top of the bubble?

It's just one person's opinion and as worthless as mine.

[lilelvis2000]

Considering that 2007 prices were over-inflated this is a non-story.

IMHO house prices are still over-inflated. Its only the whiners who bought at the peak, who consider the house as a pot of money to use to buy Audi sports cars that are complaining.

Everybody else that bought their house to actually live in, is alright. And the numb skulls that built all those silly flats which are mainly empty, could always rent them out to the thousands that are waiting for council housing.

this is one seriously messed up country.

[Francko]

Difference is that in Japan they like to save. In England first chance we get will be spend spend spend.

Japan still has high standard of living despite the "15 lost years"

[BrilloPad]

Are you sure? I remember Japan having problems like us 20 years ago - loads of debt against worthless colateral - but that caused 15 years of stagflation.

Stagflation sounds a bit rude, doesn't it.

Difference is that in Japan they like to save. In the West first chance we get will be spend spend spend.

Japan still has high standard of living despite the "15 lost years"