The housing boom

How do fruit sellers / random people in London afford to Live in London?

do you reckon they own a family property thats been passed down for years? Only explaination
 
sunama said:
Unless prices take an unprecedented nosedive in the next few months, I doubt that a house price crash will be "imminent".
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Its hardly unprecedented when its happenned after every other boom. 10 years really isnt that long - I worked in financial services in the 80's and 90's and remember the last crash very vividly. The fact is a crash only affects you if you're over committed and cant afford the mortgage. You dont HAVE to sell at the bottom of a crash and go into negative equity, but now more than ever people are close to the wire anyway. Problem is loads of people who are too young to remember interest rates at 10-15% assumed when they bought their house at 4% that rates wouldnt go up much. It wont take much to tip a lot of people over the edge.

Might not be imminent as in the next 12 months, but if there isnt a crash it will be the first time in financial history that a crash hasnt followed a boom, and we've certianly had the boom.
 
Surely the main driving force behind the housing boom is demand, because there simply aren't enough houses in the country? And if they are then they're not being well utilised.

I want a house damnit!
 
My fiance's parents have just packeted £300,000 a few weeks ago from the sale of their 4 bedroom house.

The initial price was for £310,000 but since they just wanted to just sell up and get over to France to retire, they accepted the £300,000. They bought it 20 years ago for £40,000 so have made a good few quid in the long run.

If the house would have still been on the market now, even only after a few weeks, the house would have dropped to around £290,000 so they were very lucky.
 
i can envisage a crash happening in the next 2-3yrs, the market relys on first time buyers and if they cant afford to buy the market will slow down and decline, interest rates will rise. As has been said a lot of people now are living beyond their means putting things on credit cards and credit, a lot of businesses are struggling atm and laying ppl off
 
I believe my brother made about 40k on his house, which was pretty awesome.

All he did was sort the garden out and re-decorate and after 4 years sold it.
 
a lot of people make money from property investment. Most of the time though its made through renovation / conversions, the rest of the time its made through rentals or rare cases like the area has quickly become commercialised and people are desperate to buy there.

You will find though that the average joe wont be making money on there home, no matter how much they payed for it X years ago. Solely because they will just buy something for the price of there old home, unless of course there downsizing. For example FRED buys a house in 1990 for £60,000 - He sells it in 2007 for £100,000. He will go and buy something for £100,000 or possibly more if he decides to re-mortage.

I do see a crash on the verge none the less and being an estate agent, i do worry.
 
AcidHell2 said:
No I don't no what's going to happen nor do you, how can you say a crash is imminent?

when it comes to the housing market it's all personal opinion.
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It is and it isn't. If you look at the example I gave, of the sudden upsurge in personal unsecured debt over the last 6 months then that is a definate indicator that people generally are finding themselves under financial pressure. I agree that, within itself, it's not wholly indicative, but when you start to look for other clues within the housing market itself, such as mortgage approvals down significantly, reduced house prices, houses staying on the market for longer than ever before selling then a different picture begins to emerge. Add to that the 50% increase in home repossessions and you surely must see that the housing market is under incredible strain - housing is incredibly overvalued and a correction is due.

As someone said on The Times web site yesterday, there has never been a boom in history without a corresponding bust. Of course how big that bust will be is debateable ;)
 
I remember reading some rubbish newspaper headline in Cambridge which had the massive title and then tiny subtitle thus:

Disaster in Cambridge as Housing Bubble Bursts!!!!111
An average 0.3% fall in house prices in the Cambridge area over the last four months has led to concerns...
 
There is a guy not far from us that had his house on the market for 2 years before he sold it. After inflation and duty increases over that time, he made no more money than he would have done if he had sold it 2 years ago.
 
Jono said:
Surely the main driving force behind the housing boom is demand, because there simply aren't enough houses in the country? And if they are then they're not being well utilised.

I want a house damnit!
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That's where you're wrong, there are enough houses in the country - there are more than one hundred thousand homes sat empty now. Lack of housing stock is not the problem, the problem is that the available stock has been hugely overpriced.
 
The Mad Rapper said:
That's where you're wrong, there are enough houses in the country - there are more than one hundred thousand homes sat empty now. Lack of housing stock is not the problem, the problem is that the available stock has been hugely overpriced.
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And yet 3 million new homes by 2015(?) won't be enough?
 
The Mad Rapper said:
It is and it isn't. If you look at the example I gave, of the sudden upsurge in personal unsecured debt over the last 6 months then that is a definate indicator that people generally are finding themselves under financial pressure. I agree that, within itself, it's not wholly indicative, but when you start to look for other clues within the housing market itself, such as mortgage approvals down significantly, reduced house prices, houses staying on the market for longer than ever before selling then a different picture begins to emerge. Add to that the 50% increase in home repossessions and you surely must see that the housing market is under incredible strain - housing is incredibly overvalued and a correction is due.

As someone said on The Times web site yesterday, there has never been a boom in history without a corresponding bust. Of course how big that bust will be is debateable ;)
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well no as these things are still very very small, yes it's on the increase, but it's still a very few number. Thus it's not big enough to affect the market. Houses still sell like hot cackes. Its just that some people over price there house nad thus it stays on the market.

I'm not syaing there wont be a bust, but as far I'm concerned it's not imminent.
 
AcidHell2 said:
well no as these things are still very very small, yes it's on the increase, but it's still a very few number. Thus it's not big enough to affect the market. Houses still sell like hot cackes. Its just that some people over price there house nad thus it stays on the market.

I'm not syaing there wont be a bust, but as far I'm concerned it's not imminent.
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Well we shall see I suppose ;)
 
Sagalout said:
Might not be imminent as in the next 12 months, but if there isnt a crash it will be the first time in financial history that a crash hasnt followed a boom, and we've certianly had the boom.
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Yes. Agreed.

This is a speculative bubble and there is a 100% guarantee that prices will fall or remain stagnant (until wages catch up, to a certain extent, thus reducing in real terms when inflation is considered). We all know that this will happen. The question originally being asked though, was when.

IMO, there wont be much downward movement for at least the next 12 months, however, if prices dropped by 20%, say, in 12 months, that would be unprecedented and this is the scenario I was referring to.

Its quite possible for prices to hold/increase for the next few years.
 
darreny said:
i can envisage a crash happening in the next 2-3yrs, the market relys on first time buyers and if they cant afford to buy the market will slow down and decline, interest rates will rise.
...
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Buy to let investors are gradually replacing the first time buyers.
 
For all those saying the crash is not imminent are you currently trying to sell a house?

I am and I tell you from the initial valuation of £125k (for a modern 2 bed semi in a nice area) I have already dropped the price to £115k and still had no calls or visits.

The market is starting to turn and I am desperately trying to offload my house and carry on renting as I am at the moment.
 
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