Question about house prices

Slam62 said:
Now is the peak, sell.
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People have been saying this for years, in fact if you'd listened to people on here 10-15 years ago you may not have bought but could have been halfway through your mortgage now.

And what would be the point of selling anyway if it's a family home not an investment?
 
To me, this is a rather interesting time to be in the housing market. On one hand we're in the middle of a massive bubble and history has shown that these only last for so long. However, there are very few indicators that this bubble might collapse any time soon.

What I do know is that we're on high terror alert and if someone terrible were to happen in London, the housing market would suffer a blow akin to a straw house being blown down by a wolf.
 
Diddums said:
To me, this is a rather interesting time to be in the housing market. On one hand we're in the middle of a massive bubble and history has shown that these only last for so long. However, there are very few indicators that this bubble might collapse any time soon.

What I do know is that we're on high terror alert and if someone terrible were to happen in London, the housing market would suffer a blow akin to a straw house being blown down by a wolf.
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You mean like it did in 2005, or when the heart of the city was blown up by the IRA?
 
Diddums said:
To me, this is a rather interesting time to be in the housing market. On one hand we're in the middle of a massive bubble and history has shown that these only last for so long. However, there are very few indicators that this bubble might collapse any time soon.

What I do know is that we're on high terror alert and if someone terrible were to happen in London, the housing market would suffer a blow akin to a straw house being blown down by a wolf.
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What was the impact after the 2005 attacks?
 
robfosters said:
What was the impact after the 2005 attacks?
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I don't know why I stated that as a fact when it was meant to be a question :confused:

Let me try again: what would the effect of a terrorist attack have on the London housing market?

And now for some coffee (started work at 6 this morning, yay).
 
Prices historically are on an upward trend. They always will be while population is increasing. Only a dip in population will stop their rise or cause a drop (or massive increases in inyerest rates causing massive reposessions - but that would be short term impact).

Brexit is a possible dip but I doubt it would cause enough of a dip to imoact the housing market much.
 
House prices round my way have risen to the point that sales are no longer taking place anywhere near as quick as they used to, people have just got so greedy.

I bumped into my estate agent last night that i bought my house from last year and he confirmed this as such, things are flat because prices are to high.

A house we nearly bought last year but the seller pulled out, was up for 260, in a bidding war we ended up at 265. They pulled out and its now on at 300.. 40k rise in 13months.
 
UTmaniac said:
Quick, get your houses on the market before Brexit and Osborne's predicted ~18% drop!

http://www.bbc.co.uk/news/business-36344425
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I would suspect, some of that drop might be in London, with superrich investment types and foreign firms not buying for a while until they see what direction the wind blows.
I doubt the trickle down effect will affect 99% of the people on this forum, no matter what George thinks.
 
Hikari Kisugi said:
I would suspect, some of that drop might be in London, with superrich investment types and foreign firms not buying for a while until they see what direction the wind blows.
I doubt the trickle down effect will affect 99% of the people on this forum, no matter what George thinks.
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Yep. The other thing is (whilst some measures do try and account for this, Zoopla Index for example) are based on sales.

If the current stock of houses being transacted are at the higher end of the market (or biased towards expensive London new builds, which are targetted at foreign investors) then it will be far more volatile.

The ONS produce an excellent House Prices bulletin.

http://www.ons.gov.uk/economy/infla...se-price-index-by-new-and-pre-owned-dwellings

Figure 9 shows the disparity between new builds and existing properties.

In June 2016 the ONS will mover onto a more accurate index, with a test version below

http://www.ons.gov.uk/economy/infla...ngthesingleofficialhousepriceindex/2016-03-30

Section 4 gives the improvements. It also points out that the Land Registry index uses a geometric mean which (if you haven't come across it before) gives more weight to higher values i.e. higher end london property.

You can see the consequence in Figures 1 and 2.
 
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Scam said:
I love the way they insist they want lower house prices yet at the exact same time threaten people with lower prices should we leave the EU. Such a hypocritical clown :rolleyes:
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So true.

As a home owner it is obviously not in my short term interest for house prices to go down, long term it wont make much of a difference because I do not plan on selling.

Osbourne and his crew know how the fear of a house price reduction will potentially cripple Brexit, but on the other hand they 'say' they want it.

I am not an economist, but how the hell can the Government influence the reduction of house prices without ******* off a large proportion of the population? Usually the Conservative voting majority.

An interest rate increase is the obvious tool, but with personal debt in the UK at an all time high and wage growth effectively stunted, a movement of 1% or more could cause a massive problem for a lot of families that literally live hand to mouth on a monthly basis.

Also how much of a house price reduction would we see? As Scam mentioned, the issue that most people have is a deposit of around 10% to even get on the housing market, not the mortgage payments which are usually less than rental.

The average house price is around 300k? So a 10% reduction reduces the desposit needed from 30k to 27k, plus solicitor fees etc? I dont see this making a massive difference to the average FTB?

The reality is that the housing market needs an almighty crash to make it relevant for the situation of a FTB. Too many people are invested in the idea that this cant and shouldnt happen.
 
Scam said:
Meh, I don't believe that and get bored of hearing it as a "catch all" cause of the housing crisis.

I'll just leave this here: http://blogs.reuters.com/breakingviews/2016/05/17/chancellor-uk-housing-crisis-isnt-supply-problem/
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Nice article. Similar point matteh made in post#75.

The second paragraph is what I was getting at earlier:
Relative to income, house prices have never been as unaffordable as they are today – the ratio of average home prices to median incomes in England and Wales is nearly three standard deviations above its long-run mean. In a normal world, the current level of home prices would be seen once every 370 years. That looks pretty much like a bubble.
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assumptions of normality are flawed, the author of that piece should have learned that post financial crisis... blindly applying a Gaussian to this stuff and making claims about 'every 370 years' is just utter nonsense

you also need to look at more than just the raw prices vs salaries but also the cost of borrowing, across 20+ years interest adds a significant cost

prices might well need to come down/be corrected but the idea there is an obvious bubble, at least based on those sorts of arguments, is really dubious
 
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The Mad Rapper said:
Precisely. The only concern for any home owner should be whether or not they can service their mortgage to end of term.
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A lot of people do dispose of their asset at retirement.

Many people are approaching retirement right now. It might be the asset that supports them going forward.
 
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