[Closed] 'Boom' here we go (bubble burst content)

1 month drop?

We're doomed...

As someone saving to get on the property ladder, long may they fall!

Next month: House prices rise by 1%!

My advice- never invest in the stockmarket.

This isnt news- not yet ...... Its only been a month.

Mmmm, tis confusing isn't it?

https://uk.finance.yahoo.com/news/average-house-price-rises-record-070920484.html

There's a bubble?

Where I live, you can buy a flat for less than the price of a Ford Focus.

1 month drop?

We're doomed...

The first of many I'd say - dropped despite the lowest interest rates ever and the apparent rush of BTL'ers to get in there before the stamp duty hike, (something that should have actually pushed up prices).

"Won't someone think of the STW BTL landlords"

The median starting salary for graduates in 2014-2015 was £28,000 - up from £27,000 in 2013-14 and a continuation of the steady increase from £25,000 in 2010-2011, £26,000 in 2011-2012 and £26,500 in 2012-2013.Sep 9, 2015

Maybe they will fall enough that they are only 4x the salary of the average graduate.....

There will be a lot of people crying and losing it all if that happens though

Mmmm, tis confusing isn't it?

https://uk.finance.yahoo.com/news/average-house-price-rises-record-070920484.html

Those are Nationwode figures, the new data I posted is from the Land Registry, the only data you can rely on I'd say.

piha - Member

Mmmm, tis confusing isn't it?

https://uk.finance.yahoo.com/news/average-house-price-rises-record-070920484.html

This is an interesting point - the first report which shows a fall it taken from data from the Land Registry that has actual sale prices, the second which shows a rise is from Nationwide, one of the bigger mortgage providers in the UK.

Nationwide are notorious for inflating figures, although not as bad at the reports based on asking prices - they managed to maintain there was a rise in prices throughout most of the end of the 2000s with a straight face because they only based on asking prices - the fact that places were selling in days on 2005 for the asking price (or even more) and being advertised in 2009 and taking 6-12 months to sell at 90% of asking wasn't mentioned.

If they have started to fall slightly I would congratulate the BOE and even the Tories (first time for everything) we (the UK) can't afford a crash, or until now a reduction because our banks spreadsheets relied on them to be liquid - seems now even RBS is reorganised we can afford to engineer a slow re-balance.

Those are Nationwode figures, the new data I posted is from the Land Registry, the only data you can rely on I'd say.

I always thought the Land Registry figures were issued 3 months late- the most reliable due to being analysed thoroughly, but 3 months out of date.
Have they got with the program, or something?

Where I live, you can buy a flat for less than the price of a Ford Focus.

About quarter of a million quid by all accounts.

Where I live, you can buy a flat for less than the price of a Ford Focus.

Well where I live a 1 bed flat is £160k, 2 bed flat £230k and 2 bed house £300k

Sustainable?

one of them daft rs rx ones that ken block is so keen on.

Nope.

2.0 TDCi Titanium X 5d - List price £24,635

[url= http://www.rightmove.co.uk/property-for-sale/property-40272489.html ]http://www.rightmove.co.uk/property-for-sale/property-40272489.html[/url]

There are normally a few flats kicking about near me in the £18 - £20k bracket.

Mini crash was expected by many after the tax changes as btl buyers were rushing to buy last month. Didn't seem to happen here though. Last week's property auction prices were as high as ever if not higher. Let's see what happens over the next 6 month's but I wouldn't bet much on them dropping a lot.

My in laws house in leafy Surrey was put on the market at £875000.
We all thought this was really optimistic but you never know.
Their best offer was £830000. I think the market is determining prices rather than estate agents. The offer though made their house the most expensive 3 bed in the area. It's a typical old persons house where everything needs redoing.

Is this the crash that's been about to happen since 2007 or a new one?

Will it come with a search function that works?

I can't see much happening round here (Reading), with Crossrail and the new town center prices have been going up 20% in the center, and they're currently ripping up fields to build 1000's of new houses. So someone's confident.

zippykona - Member

My in laws house in leafy Surrey was put on the market at £875000.
We all thought this was really optimistic but you never know.
Their best offer was £830000. I think the market is determining prices rather than estate agents. The offer though made their house the most expensive 3 bed in the area. It's a typical old persons house where everything needs redoing.

Mum was an estate agent for years and still talks my ear off about it, only an opinion but hers was that as well as market forces dictating prices, their is a huge amount of market expectation - as I moaned above, 10 years ago at the height of the pre-crash bubbble asking prices were pretty much selling prices or even above - the market was almost driven by the fact people were asking £x and getting it within days, so the next lot of seller just asked for even more.

Today, away from London and to a lessor extent the South East as a whole the expectation is that sellers will need to take an offer and in some places where it's still taking weeks if not months to get the first sniff of a buyer sellers are accepting low bids (local supply and demand notwithstanding) perhaps some sellers are expecting to take an offer so over-stating the asking price.

I hope and expect that prices will gently re-balance over the next few years, with supply growing from new builds and if even 5% of BTL magnates decide to sell up will start the process - with Brexit settled one way or other soon and Europe on the mend (hopefully) we can expect a rate rise next year it might gather some steam - yes some people will lose and be crying about the unfairness of it all, but property owners have been on the winners side of the coin for a very, very long time and we paid a very heavy price since 2008 to make sure they were.

yes some people will lose and be crying about the unfairness of it all, but property owners have been on the winners side of the coin for a very, very long time and we paid a very heavy price since 2008 to make sure they were.

Woooaaaahhhh there, before you condemn people, don't forget that those young people that falling prices might help, are exactly the same as those young people who managed to buy 12months earlier.

The baby boomers will always be safe because they bought their house for 2 Wurthers originals and a button in 1960something and owe nothing.

They've been stagnant or rising at a lower rate now for 9 years (London being an exception). A crash seems unlikely. In fact I just googled for "house price graphs" to illustrate that point, brings up all sorts of weird and wonderful expert predictions from 2008.

That's a cheap flat, PP.. would be pretty easy to become a landlord at that price...

That's a cheap flat, PP.. would be pretty easy to become a landlord at that price...

or you could sell your car and live mortgage free?

This one is at the end of the street I grew up in. It was a bit of a shitehole then but has been poshed up a bit over the years as a result of the right to buy scheme. My parents house is visible in the second photograph. There are loads of these for sale at the moment.

[url= http://www.s1homes.com/End-Terraceds-for-sale/2016042209505612.shtml ]http://www.s1homes.com/End-Terraceds-for-sale/2016042209505612.shtml[/url]

You wouldn't believe what £300k would buy you here.
The benefits of living in an economically deprived area.

Go on show us !

i would take that report with a pinch of salt. it probably includes the 3/4million and upwards properties that are hanging a round a bit longer or going for just under or around ‘sensible’ asking prices. but for the commuter belt small family homes or flats it’s business as usual in the south east.
my small flat in zone 3 London has gone up 10% in the last 16months (judging by the sold prices of a couple of properties in my small block)
might be a different story in the north.
it’s still cheaper than renting.

£199k, converted water mill in Yorkshire, big house + with the original bits still in there! Didn't sell, went to auction in the end, no idea if it sold there but it didn't appear on the land registry so I guess not.

[img] [/img]

http://www.zoopla.co.uk/property-history/old-kilton-mill/mill-lane/skinningrove/saltburn-by-the-sea/ts13-4aj/36163762

Go on show us !

A pink toilet seat and some extremely suspect decor....

[url= http://www.rightmove.co.uk/property-for-sale/property-36310686.html ]http://www.rightmove.co.uk/property-for-sale/property-36310686.html[/url]

Woooaaaahhhh there, before you condemn people, don't forget that those young people that falling prices might help, are exactly the same as those young people who managed to buy 12months earlier.

that's me - i bought a house a year ago, but even so I'd welcome a few year's worth of flatlining to help my contemporaries catch up a bit.

anyway, all this talk of rises and falls is basically moot on such a massive scale. You can move 2 miles across the city and the environment changes completely - it's irrelevent to talk about what is happening in a region as a whole, or even in one city.

Here in Bristol, an area gets a rep for being cheap and not too stabby, so all the first time buyers pile in, so prices in that square mile or so go up by 20-30% in about 3 years. Then it's out of reach for the FTBs, who look to the next area they can afford that might be ok. All this activity on 2-bed terraces could easily be outweighed by price drops on a few £2million mansions on the other side of town, but that might as well be on the other side of the world for all the difference it makes to an FTB. And vice-versa, of course.

Woooaaaahhhh there, before you condemn people, don't forget that those young people that falling prices might help, are exactly the same as those young people who managed to buy 12months earlier.

I bought a place last year and for the greater good I'd welcome a big (massive) fall in house prices. Makes no difference to me as instead of like a lot of people, buying the biggest F-off pad I could stretch to, I bought well within my means and even with a big hike in interest rates, could easily afford the repayments.

High house prices encourage speculation in property, lack of investment in industry/exports and drains peoples incomes to the extent the economy and housing market becomes stagnant. The sooner people realise this then the better we will do as a nation.

[i]A pink toilet seat and some extremely suspect decor....
[/i]

Wow, Perchy....the closest town to me that might have a trad house like that is Dorking. If that was in a reasonable part of Dorking, the asking price would be circa £1.75m

agent007 - Member
High house prices...drains peoples incomes...

What he said.

mswife and i will probably move next year, but it'll financially ruin us, effectively removing us from the economy for a decade or 2.

new bikes? nope.

meals out? chinny reckon.

weekends away? - hopefully we'll remember when we [i]used[/i] to do those things.

It says...

"House prices in all the regions in England and Wales [b]apart from London and the East[/b] fell in March, according to new data from the Land Registry. "

which doesn't seem like amazing news, since it's London and the East where most people are struggling to find somewhere to live.

just think of all that London/SE stamp duty paying for the rest of the country

[i]Londoners now pay more than 40 per cent of the total stamp duty collected in the UK with one borough alone — Westminster — contributing more than Scotland, Wales and Northern Ireland put together, official figures revealed today.[/i]

A pink toilet seat and some extremely suspect decor....

http://www.rightmove.co.uk/property-for-sale/property-36310686.html

Here's a comparison for a property that is similar looking (period villa) in the southeast .... sunny Brentwood, Essex ... 40mins from london on trains every 10mins... when crossrail comes in, trains are will be every 5/6mins and journey times more like 30mins, I think

http://www.rightmove.co.uk/property-for-sale/property-53786092.html

mswife and i will probably move next year, but it'll financially ruin us, effectively removing us from the economy for a decade or 2.

new bikes? nope.

meals out? chinny reckon.

weekends away? - hopefully we'll remember when we used to do those things.

Maybe buy somewhere smaller or move somewhere cheaper, it's why I live in the Midlands and my parents live in Surrey!

This is well worth a read about the damage already being done to London's wider economy. Bearing in mind London and SE are the drivers of UK economic growth, it's a bit daft for us to have driven London house prices beyond affordability... the country as a whole suffers for the benefit of London homeowners...

[url= http://www.economist.com/news/21697575-faulty-land-use-regulation-throttling-capital-londons-property-woes-are-getting-worse ]House prices throttling London[/url]

Economists might welcome a shift from low- to high-value industries, but property prices threaten its continuance. Academics say they have been forced to move out of town. The share of employed people in inner London working in professional scientific, research, engineering and technology jobs has fallen from 6.6% to 5.4% since 2011. Public services struggle. “It’s almost impossible to hire young teachers who don’t live with their parents,” says one head. And it is not just young teachers who are throwing in the towel: between 2011 and 2014 the number of twenty-somethings fell by 3%, reversing long-term growth.

Those who cling on in the city do so at a cost. Between 2008 and 2014, Londoners’ disposable income (ie, after housing costs) fell by 4%, a steeper decline than in any other part of England (see chart). According to the Centre for London (CFL), a think-tank, the disposable income of private renters in inner London dropped by 28% between 2001 and 2011.

A few anecdotes too: it's already getting harder to find work in London...

1. I've left London after living there for 15 years because I can't afford the rents or to buy and salaries are pretty much where they were in 2008 when house prices were not far off half what they are now (+ I couldn't find a job at a time when allegedly the economy is growing)
2. A friend of mine similarly can't get an interview, let alone a job..
3. Another friend has been made redundant and they're moving her company to Edinburgh and Cheltenham. She says she's too expensive for them to employ her now. She worked in an ad agency - advertising being something the UK is world-class in and a major contributor to our GDP so a bit silly to tear it apart for the sake of house prices.

It's all got rather silly... in SE26 where I used to live, 2-bed flats have gone from £250 to £450 since 2013 - 80%! increase when wages have barely moved. Meanwhile the economy flatlines because so many workers have so little money left after paying their housing costs and pensioners have lower incomes because interest rates are so low, and pension funds are struggling to meet their liabilities for the same reason...

The game now is to spot Osborne's next stimulus that he tries to disguise as 'helping FTBers and hard working families'

The game now is to spot Osborne's next stimulus that he tries to disguise as 'helping FTBers and hard working families'

Hmm, yes he's been an absolute muppet in this respect.

Still he appears to be finally listening to the younger generation, or if you're a cynic you could say he's seen an opportunity to rake in lots of extra tax from the BTL brigade.

As the baby boomers start to die off then politics will shift and if the voices of the housing 'have-nots' and the younger generation will have to be listened to for any future government trying to win a general election. You can feel it happening already.

"[i]1. I've left London after living there for 15 years...[/i]"

Fifteen years of not buying because there's a crash coming and it's better to wait ?

The top end of London prices are falling, significantly so.
But I wouldn't necessarily assume that will ripple through the system as a whole (although I'd rather it did do so).
Mainly because all governments will do whatever they can to keep the housing market going - as there is very little else to power the economy.
With negative interest rates on the horizon, housing may still be a decent investment. I often think the only thing that will stop central banks and politicians from stoking the housing market is some type of revolution, when people take to the streets and hit Westminster (which may not be so far off).
Sad state of affairs for anyone wanting to start a family in the South East.

The top end of London prices are falling, significantly so.
But I wouldn't necessarily assume that will ripple through the system as a whole (although I'd rather it did do so).

Wouldn't be surprised, remember that old phrase, something like 'when London sneezes, the rest of the country catches a cold'?

There are 3, actually 4, interested parties in maintaining high house prices:
The estate agent, for their healthy commission.
The seller, for getting a glimpse of their paper 'wealth' and helping them justify an even bigger debt ( see next)
The lender, for lots and lots and lots and lots and lots ( shall I go on?) and lots of lovely income.
And,
The Government, stamp duty and other treasury income and the continuation of the illusion of wealth, which keeps the masses from revolting.

Simple maths will show that the buyer is outnumbered by some rather powerful influences.

agent007 - Member

'when London sneezes, the rest of the country catches a cold'?

London eats everything, and the rest of the country takes the shit.

Very confused by my local market, houses are being put on way higher than recent sold prices and in guide bands e.g 200k-240k. Houses are selling in days, pretty despondent after 10 years of saving

Very confused by my local market, houses are being put on way higher than recent sold prices and in guide bands e.g 200k-240k. Houses are selling in days, pretty despondent after 10 years of saving

Where in the UK are you? I think the London house price rises may now be filtering across the rest of the UK. I hope I'm wrong, but I don't see this bubble bursting, I see it growing over the next five years.

Eastbourne - south east.

My advice- never invest in the stockmarket.

To be fair, long term investments in the stock market have shown steady growth for more than 20 years.

The median starting salary for graduates in 2014-2015 was £28,000 - up from £27,000 in 2013-14 and a continuation of the steady increase from £25,000 in 2010-2011, £26,000 in 2011-2012 and £26,500 in 2012-2013.Sep 9, 2015

Nice. In that time my pay has been below the lowest year quoted on there, and I've never received the full 1% public sector pay rise in that time.

Oh, to be young again!

one of them daft rs rx ones that ken block is so keen on.
About quarter of a million quid by all accounts.

Given that a regular WRC Fiesta is in the region of £400,000 it's safe to bet the RS RX would be a bit more expensive.

Makes no difference to me as instead of like a lot of people, buying the biggest F-off pad I could stretch to, I bought well within my means and even with a big hike in interest rates, could easily afford the repayments.

Depends, circumstances change, I've just lost my job, makes **** all difference having a mortgage X multiples of your salary when your salary drops to 0.

High house prices encourage speculation in property, lack of investment in industry/exports and drains peoples incomes to the extent the economy and housing market becomes stagnant. The sooner people realise this then the better we will do as a nation.

Whilst I agree entirely, there's a [s]fine line[/s] [b]yawning chasm[/b] between 'speculation' and 'buying the house you want/need'. If you've got a wife and 2 kids, they you're going to buy a 3 bed house. This isn't the monty python Yorkshireman sketch, it's reality, a 1 bed flat isn't going to work for you however affordable.

Cripping everyone in their 30's with negative equity won't in any way punish the baby boomers as you seem to want to do, and isn't going to help the economy because for every buyer of a cheap house there would be a 20 or 30 something with negative equity, not able to move around for work, not able to invest in their companies etc.

The best all round solution for everyone is price stagnation, if prices remain stable and we inflate our way out of it over time then no one loses out

North Kent here, just within M25 and prices are still rising. People are saying it is because of the Oyster card being introduced last year on public transport.

Bought a house 5 years ago for 215, added a 65 extension and it is probably worth around 400 now.

I work in a special needs school and it is a nightmare to find staff.

If it brings down a few BTL'ers who profit from rental trap families I won't say it's too bad. In the UK we think nothing of profit/make money from people trapped in high living costs. Karma. There should be responsible Capitalism (if that is even possible nowadays)

Bought a house 5 years ago for 215, added a 65 extension and it is probably worth around 400 now.

I work in a special needs school and it is a nightmare to find staff

What would you rather have, a house worth £270k and a surfeit of well qualified job applicants who live locally or a 400k house?

Bought a house 5 years ago for 215, added a 65 extension and it is probably worth around 400 now.

"My advice- never invest in the stockmarket.
To be fair, long term investments in the stock market have shown steady growth for more than 20 years."

Woosh ! Straight over your head. The little downward 1% (or more)blips you experianced along the way woul have te op in blind panic sell sellsell mode

The best all round solution for everyone is price stagnation, if prices remain stable and we inflate our way out of it over time then no one loses out

Exactly. Lots of people, myself included have only just got on the property ladder. Any drop in prices would mean a massive loss and trap me in this house. When a house price drops the banks do lot loose its the owners deposit the gets eaten up so the 10% drop.

The best all round solution for everyone is price stagnation, if prices remain stable and we inflate our way out of it over time then no one loses out

Not so exactly... take a read through the pension am I screwed thread, plenty of people relying/needing a decent house growth and a cheap retirement location to move to in order to fund retirement.

I'd have to say it's gone too far for an everyones a winner/nobody looses scenario to happen.

Threads like this explain the high proportion of English accents on Mull and Skye. Who wouldn't escape the SE if they could?

Living in the economically depressed W of Scotland and working in the public sector, my wife and I can afford a car each and a detached house with a 25 year mortgage that will be cleared on time. We're not rich but massively cheaper housing leaves us with enough disposable income to actually live a comfortable life, go on holiday, eat out and buy nice things for the kids. The house will be theirs, debt free, when we die.

If I lived in the SE and was only paid slightly more in 'London Weighting', had transferable skills and was being financially crippled by my mortgage, I'd seriously consider moving north if there was a similar job available and family circumstances allowed. The fresh air, natural trails and endless scenery are just a bonus.

Exactly. Lots of people, myself included have only just got on the property ladder. Any drop in prices would mean a massive loss and trap me in this house.

Trapped? Why, do you not like the place? Are you planning to sell in the next year or two? If you're not then it's just a loss on paper and shouldn't really bother you. If you decide to move to a bigger place then you'd be a winner too since this would have fallen in value larger than the loss on your place.

There's several mortgage companies now who have negative equity solutions, effectively offering a negative equity mortgage that will allow you to move house and take the money you owe on your old mortgage with you. If there was a crash, most other lenders would probably follow suit to take account of market conditions.

If I lived in the SE and was only paid slightly more in 'London Weighting', had transferable skills and was being financially crippled by my mortgage, I'd seriously consider moving north if there was a similar job available and family circumstances allowed. The fresh air, natural trails and endless scenery are just a bonus.

I'm very jealous of a good friend, whose wife inherited a house in Scotland, where they now live with their two young kids.

The whole of the South East is rapidly turning into Greater London. It's depressing.

The government want to promote the Northern Powerhouse idea to take some of the pressure off the South East, but in reality as long as 200k immigrants are moving to London each year (net), the problem of overpopulation is just going to get worse.

[img] [/img]

[i]"... and this is back in the dim and distant past, son, when people used to think of houses as something you lived in, and not part of an investment portfolio, and didn't endlessly drone on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on and on about property price increases, as if it was a religion. It was a simpler and happier time..."[/i]

I'd seriously consider moving north if there was a similar job available and family circumstances allowed. The fresh air, natural trails and endless scenery are just a bonus.

Weather is a genuine factor though, I reckon. It really is quite a lot drier in the SE than it is here in the west. Plus sandy soils make for drier trails too.

Don't move north. Its rubbish! No decent trails. No nice scenery. The people are horrible. No good pubs, or owt

Its grim!

Stay put in London. It looks great!

downshep - Member
...If I lived in the SE and was only paid slightly more in 'London Weighting', had transferable skills and was being financially crippled by my mortgage, I'd seriously consider moving north ...

London is a black hole, with the M25 as the event horizon.

no-one ever leaves.

Not so exactly... take a read through the pension am I screwed thread, plenty of people relying/needing a decent house growth and a cheap retirement location to move to in order to fund retirement.

True, but handing out free money in the form of unsustainable house price inflation isn't the solution to that, it's telling them not to buy another Audi and put some money into a pension.

Trapped? Why, do you not like the place? Are you planning to sell in the next year or two? If you're not then it's just a loss on paper and shouldn't really bother you. If you decide to move to a bigger place then you'd be a winner too since this would have fallen in value larger than the loss on your place.

Say I own a £500,000 house (actually reading back the price is irrelevant, it could be a £50,000 3 bed in the nastier parts of Glasgow), a nice 3bed in the suburbs of Reading, on an 80% LTV mortgage. And it's value drops by 20%, not an unreasonable 'crash'. I would then have no equity and not be able to move even if I wanted/had to. Few people probably want to move, but sometimes they;
-have more kids
-have kids at all
-meet their soulmate and need to move on from the batchelor pad.
-need to downsize due to losing/changing jobs
-divorce
-get injured and need a bungalow
-have a 5 year plan that involved moving anyway (see the number of "i did London for 5/10/15 years" comments).

There's several mortgage companies now who have negative equity solutions, effectively offering a negative equity mortgage that will allow you to move house and take the money you owe on your old mortgage with you. If there was a crash, most other lenders would probably follow suit to take account of market conditions.

So your solution to the housing crisis is to advocate 100%+ mortgages again to people with zero deposits this time? And you'd do that in a falling market? If you're over the age of 9 you might remember what prompted the last 'bubble' in 2007. At least last time there was the reasonable assumption that 5% equity this year was going to mean 10% next year so the banks only risk was that you would fail on repayments within the first few months/years.

I've not looked into it, but frankly if any banks are offering those terms again they deserve to fail!

Threads like this explain the high proportion of English accents on Mull and Skye. Who wouldn't escape the SE if they could?

Living in the economically depressed W of Scotland and working in the public sector

Not me, i dont fancy " the economically depressed W of Scotland and working in the public sector” if that was everyones utopia then those areas of the country would be overrun with people.

me and 20million others seem to like it down here.

So your solution to the housing crisis is to advocate 100%+ mortgages again to people with zero deposits this time? And you'd do that in a falling market? If you're over the age of 9 you might remember what prompted the last 'bubble' in 2007.

No, I just said it was an option and if the OP has borrowed sufficient sums of money that he's going to struggle if prices drop 10, 15, 20% then he really hasn't done his financial homework very well.

And there stems the whole problem, people wouldn't need 100% mortgages if prices were affordable would they? Something a good correction in prices would address.

Sorry but if you've bought a house in the last few years (me included) and expect the prices to keep getting ever higher, and don't expect things to crash from time to time then you're living in the land of make belief.

The best all round solution for everyone is price stagnation, if prices remain stable and we inflate our way out of it over time then no one loses out

I wouldn't be hoping for inflation any time soon if I were you - Central Banks across UK, US and EU and Japan have thrown billions and billions of Pounds, Dollars, Euros and Yen into the system in the form of QE and held interest rates at emergency levels for nearly a decade to try and get consumers spending and get some inflationary pressure going and we're still barely out of deflation... The house price boom in London and SE was also an attempt at encouraging consumers to spend... but as you can see from The Economist article above, it's reducing consumer spending and incomes - the opposite from the desired effect.

As house prices continue to rise and interest rates stay low I'm cutting my spending more and more to try and get a decent deposit together + I've taken a pay cut when I left London and have a lower disposable income as a result - my parents are living off a fixed income and are spending less as the interest on their investments is so much lower than expected, and friends can't find work at all - meaning no income, meaning spending less...

So many people believe that house prices will only ever go up that they're sticking everything they have into mortgages, and none of it into actually buying the stuff which produces economic growth (and inflation)

Basically, high house prices and policies aimed to get us spending have incentivised exactly the opposite effect to thaT intended...

Any first-time buyers getting into the current market will have very little left at the end of the month so for long as prices stay as high as they are (or continue to increase) then we can expect lower inflationary pressure, not more...

It's all a bit silly...

Our mortgage is not huge as we have received some help from family and been lucky with previous purchases.
I know current value is irrelevant and we have no intention of selling.
Only planned move is back to France next year.

Where I live, Hertfordshire, everyone is getting extensions done. That was a sign of a housing bubble last time round, although this time around, it might be motivated by the need to build an annex for the 30 year old kids.

Given I've just had an offer accepted on a bigger flat in London I'm hoping the bubble doesn't burst anytime soon - especially as I need to sell my current flat!

Any first-time buyers getting into the current market will have very little left at the end of the month so for long as prices stay as high as they are (or continue to increase) then we can expect lower inflationary pressure, not more...

It's all a bit silly.

I agree entirely, but the horse has bolted, closing the stable door now doesn't help. All those 1st time buyers (me included), with 80% mortgages have already spent the money*, it's gone and it's not coming back short of mass defaulting (then it's the banks, and therefore everyone else problem with higher interest rates).

Whilst inflation isn't guaranteed, it's still a long term solution to the problem. Combined with addressing the actual issue (we've not built enough houses) to put supply and demand back in balance and keep things stable. If there were enough houses, prices won't rise, and economic stimuli like low rates and QE wouldn't push up prices.

House prices at 5x incomes isn't a good thing and obviously is an even worse thing the younger you are. But f****** over 25-30something to help 20-25's isn't going to help.

*you can keep saying it in a variety of derogatory ways all you like Agent007, home ownership isn't speculative, it's a necessity, if I want to live near where I work it's £300k for a 2 bed terrace or sleep under a bridge. And I'd like to keep living in it without getting caught in a trap between rising interest rates, negative equity and low inflation, which seems to be your suggestion?

*you can keep saying it in a variety of derogatory ways all you like Agent007, home ownership isn't speculative, it's a necessity, if I want to live near where I work it's £300k for a 2 bed terrace or sleep under a bridge.

Whilst inflation isn't guaranteed, it's still a long term solution to the problem.

Central Banks have made a heroic effort to stave off deflation and get some inflation going and pretty much failed. I wouldn't say inflation isn't guaranteed, I'd say it's actually highly unlikely. Japan have been having a go for 20 years and failed... If we were going to have some inflation, surely we'd have seen it by now?

Ageing population, peak stuff, stagnant real and disposable incomes, excessive housing costs (mortgage or rent), rising awareness of the need to save for our pensions... I'm not sure what the drivers of inflation over the long-term are going to be.

Saudis are pumping like crazy to get the oil out of the ground and turn it into a sovereign wealth fund before the oil becomes worthless black sticky stuff - so can't see oil prices going back up anytime soon, which would likely provide inflationary pressure.

More of a theoretical solution than a likely one...

From recent moving experience (rental), for an economy that "requires" a mobile labour force ("Get on your bike", longest commutes in Europe), we're stuffed.

Unless your total income is well north of the average, there is seems to be a large amount of f-all possibility of mobility of labour.

Mix cack transport, a small affordable housing pool and what seems to be increasing difference between contracted and "actually required to keep your job" hours and you've got a perfect storm to prevent a mobile workforce.

To me, the housing market is being run as a twisted ponzi scheme and at some point, if the material cost of building your house is much > that the market value, it will get corrected downward.

"As long as I'm alright, everyone else can f-'em selves". British through and through.

"As long as I'm alright, everyone else can f-'em selves"

Some of this sentiment is, I reckon, just naked fear. It's not that people are 'alright', more that they're screwed if prices fall or even just stop increasing.

So many people are eyeballs deep in a massive mortgage and have planned their whole finances around the assumption they can use their house as some kind of store of value/source of future income (spending all their disposable and saving nothing, maxing out on credit cards on the assumption of equity withdrawal, downsizing to pay for retirement, BTL for retirement), that a fall in house prices will mean really serious financial trouble for them - won't be able to sustain current lifestyle and impoverished retirement.

It's rather scary how dependent people and the overall economy are on maintenance of such high house prices... and this I think is one of the main reasons why BoE and Osborne appear so damn desperate to keep prices inflating... they'll be looking at hard data and seeing the underlying debt levels and probably feeling somewhat concerned...

"As long as I'm alright, everyone else can f-'em selves". British through and through.

bitter much?
there are property bubbles all over the world, it’s not peculiar to the UK.

68% of Brits own their own home, so falling house prices are very far from a good thing. The negative impacts on the broader economy far outweigh the "positives" for those looking to buy/upgrade.

Central London prices have been falling since the big hike in stamp duty, we could rent for 7 years before equalling the stamp duty.

As for average incomes there are so many stats - £25k or £40k (depending on whether you include only full time positions) or £65k for average family with kids

House prices are supported by significant immigration - you can't have 300,000+ net migration every year and not expect it to push up/sustain house prices - even if these people aren't buying they need to rent so feeling BTL market

Anyone sold up yet?

Y'know, took the money and ran off to Croatia to buy a kibutz in the mountains?

No?

Ok, whose first then?

🙄

What's going to happen once we leave the EU and you get the holy grail of being able to boot all the immigrants out then Jammers?

Free house for every British citizen!!!! Hurrah for the Empire!!!

Free house for every British citizen!!!! Hurrah for the Empire!!!

'Oh shit, the housing market's collapsed!'