Im calling it.....
- Thread starter Dr House
- Start date
Aviva Investors runs just shy of £300bn, and one of their four main asset classes is real estate. Furthermore a quick basic search on "real estate" and Aviva Investors on Linkedin shows c.200 staff. They're not exactly going to be novices are they...
First of all this is a PR piece by Aviva General Insurance (specifically the home insurance department).
This has nothing to do with the investment/pensions arm. This is not a forecast but a commentary piece on changing households.
Secondly, the entire report is about extrapolating what has been seen in the last 10 years. There is no expert judgement about what will actually happen.
http://www.aviva.co.uk/media-centre/story/17626/return-of-multi-generational-households-as-two-in-/
Whoever it was earlier in the thread that mentioned this, they heard it wrong.
The final two quotes
Marketing home insurance. Nothing more than that.
I would even bet this report was not created in-house but by a marketing agency.
This has nothing to do with the investment/pensions arm. This is not a forecast but a commentary piece on changing households.
Secondly, the entire report is about extrapolating what has been seen in the last 10 years. There is no expert judgement about what will actually happen.
http://www.aviva.co.uk/media-centre/story/17626/return-of-multi-generational-households-as-two-in-/
Whoever it was earlier in the thread that mentioned this, they heard it wrong.
The final two quotes
Marketing home insurance. Nothing more than that.
I would even bet this report was not created in-house but by a marketing agency.
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Err I'd be going for a 3 bed semi around Birmingham at 250k (I assume this isnt FTB territory) . Generally Id like houses to be cheaper, but not too bothered as long as interest rates don't massively rise (ie 10 to 20%) as soon as I buy one
I'll probably buy around September unless the proverbial hits the fan
Edit: muon beat me to it.
This is from the insurer. It was the insurer to which I was referring. It's a lazy press release. "If current trends continue, this is what will happen". I'm assuming that isn't how Aviva Investors run their business?
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Edit: muon beat me to it.
This is from the insurer. It was the insurer to which I was referring. It's a lazy press release. "If current trends continue, this is what will happen". I'm assuming that isn't how Aviva Investors run their business?
Fair enough, it does look like a marketing ploy. But on another note, do you genuinely believe that Aviva Insurance wouldn't be allowed access to, or be advised by, Aviva Investors on real estate matters?
Edit: muon beat me to it.
This is from the insurer. It was the insurer to which I was referring. It's a lazy press release. "If current trends continue, this is what will happen". I'm assuming that isn't how Aviva Investors run their business?
It's not intending to be a forecast. I'm sure Lindsay would be embarrassed if her words were cited as expert judgment for the future of house prices.
It's just a PR piece by the marketing team, very likely commissioned from a marketing agency.
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London will have over 10 million people by the end of next year. That's 1.5 million gain! Lots of jobs, good pay, very low property debt to value ratio and a high amount of properties without mortgage means it is very stable. LTV is so low in London it is the complete opposite of any property bubble.
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I was being tongue in cheek. Bare in mind this whole discussion about Aviva came about from an 'I heard that...' post. I know it wasn't ever intended to be a forecast of future house prices. I was pretty sure of that before I looked the story up.
Aren't you being a bit coy there? You've chosen to ignore loan to income ratio, instead choosing to focus on LTV. Both are important when calculating the potential impact of an interest rate rise. Loan to income is high in London. The rapid rise in prices also masks a further problem; those who have purchased in London in recent years do tend to have very high LTVs and very high loan to income ratios, making those people (and other potential first time buyers) very susceptible to interest rate rises.
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A ratio of 3 is not high. Look at property bubbles historically LTI has been over 18! If anything it is further reassurance of how stable it is! Also FTB LTI is capped to 4.5 ratio. Despite this the average is less, typically around 3.5-4 not much different from the rest of the UK.
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Hmm what happened to Tokyo?
London is massively overpriced, there are tens of thousands of family houses valued at over a million quid,
When goes it will really go, most must be owned by speculative investors, or highly leveraged property developers.
In this country there are literally millions of people living in houses they bought but could not afford today even on a good salary.
Indicates to me that the people buying are not average families looking for a long term home.
Got a source for that? During a housing bubble, debt is 18 times earnings? I'd be surprised if that's true...
I was under the impression that LTI had risen steadily since the 80's and is now at a historic high, as this graph made using CML and Nationwide data would suggest:
Here's one that uses CML data, divided by region:
Interestingly, that second graph suggests London is a good bit higher than 3.
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Tokyo was giving out loans over 18 times income! With the mortgage ratios so heavily controlled it is very hard to get into trouble. It is impossible to be highly leveraged.
That's nothing! Now go look at the graphs for a property market that actually crashed. It is way higher, every single one of them. The BoE have got it spot on with this one. Capping mortgage ratios has made a bubble impossible. You need large amounts of debt to drive a bubble that isn't possible in the UK.Got a source for that? During a housing bubble, debt is 18 times earnings? I'd be surprised if that's true...
I was under the impression that LTI had risen steadily since the 80's and is now at a historic high, as this graph made using CML and Nationwide data would suggest:
Here's one that uses CML data, divided by region:
Interestingly, that second graph suggests London is a good bit higher than 3.
Gotcha. We're talking at cross purposes. I assumed that when you wrote 'London isn't in a bubble' you meant 'London will keep rising and won't crash'. You didn't. What you meant was that it won't suffer a catastrophic collapse.
I doubt anyone would disagree with you.
I doubt anyone would disagree with you.
I don't think they are being bought by speculative investors. There's an ample supply of home buyers in London who can afford a £1 million house.
It will continue to rise. It will be less than it was since it rebounded from the credit crunch but it will still continue at a fair pace. This will be driven by high amounts of immigration and further shortfall in the number of properties being built.
