Property values collapse in April

[Kurt Barlow]

39 minutes ago, Frank Hovis said:

The 90s "crash" was actually a long slow drawn out process.  Prices began to fall in 1988 with the withdrawal of MIRAS for multiple occupiers and within four years a friend's flat (three bed in Clapham) was sold for £60k having been bought for £90k.  This was a motivated sale but asking prices generally held up for years because people had this idea that their property was "worth" such and such because it was in 1988.   The stagnation continued for years with the real bargains being in 1994-96 when all those pinning their hopes on a bounce had capitulated and accepted that the lower prices were now the market prices.

The lesson that I draw from this is: ignore any considerations of "missing the boat"; it doesn't happen.  This is an oil tanker which is moored up for years and years.

If this is the genuine start of big falls (and per my above post, I doubt that) then there is absolutely no need to hurry, the best buying point may well be eight years' into the future like last time.

89-91  was the bulk of the crash. Thereafter prices deflated slowly down to the 96-98 low.

If we get another proper crash it should come fast in the early stages.

[Frank Hovis]

1 minute ago, Kurt Barlow said:

89-91  was the bulk of the crash. Thereafter prices deflated slowly down to the 96-98 low.

If we get another proper crash it should come fast in the early stages.

I'm not being contrary but the long freeze usually comes first as people refuse to recognise that their desired selling price won't happen.  And whilst volumes are markedly down I don't think that we're in that phase yet.

People are fine with their houses remaining for sale but unsold for several years; I think my parents' took three years.

The banks will be under huge political pressure not to start repo-ing after the billions they received in bail-outs.

 

So... what is the case for the crash being fast in the early stages this time?

[TheCountOfNowhere]

4 minutes ago, Frank Hovis said:

Increase in number with some levy forced upon the supermarkets to increase the volumes going through the foodbanks.

 

Well done with the tracking tool.

Let them eat tesco cake!!!!

 

The key is the young people.  At some point the tories/labour will want their votes en-masse and will throw everything at getting them.

Housing is THE no 1 issue now.

We have a housing crisis...the young just haven't worked out why....YET

 

 

If I manage to get a website up and running with the property lion tool you'll all be the 1st to know, till then it's twitter or nowt.

P.S. The BoE wont raise rates tomorrow....or will they.  We'll soon find out.

[Frank Hovis]

There's no rise priced into the forward LIBOR curve so not happening; though at 0.25% a pop I don't think it matters at this stage.

The US is the one to watch; aggressive rate rising and monetary tightening at the same time is going to be.... interesting.

Once real US rates get to 2% above sterling rates we have no choice but to start following their every footstep unless we genuinely wish to crash our currency.

[Kurt Barlow]

5 minutes ago, Frank Hovis said:

I'm not being contrary but the long freeze usually comes first as people refuse to recognise that their desired selling price won't happen.  And whilst volumes are markedly down I don't think that we're in that phase yet.

People are fine with their houses remaining for sale but unsold for several years; I think my parents' took three years.

The banks will be under huge political pressure not to start repo-ing after the billions they received in bail-outs.

 

So... what is the case for the crash being fast in the early stages this time?

A proper crash would be as I suggested. Of course this doesn't take account of the ever increasing govt interference as you rightly suggest. That said the banks appear to be going to town on IO mortgages. I would have thought that if there is enough equity and the holder can afford to pay they would have been best off leaving them alone.

[TheCountOfNowhere]

11 minutes ago, Frank Hovis said:

There's no rise priced into the forward LIBOR curve so not happening; though at 0.25% a pop I don't think it matters at this stage.

The US is the one to watch; aggressive rate rising and monetary tightening at the same time is going to be.... interesting.

Once real US rates get to 2% above sterling rates we have no choice but to start following their every footstep unless we genuinely wish to crash our currency.

US Fed rate is 1/2 hikes from this, i.e. 2/3 months

The BoE are mad if they wait any longer.

 

Anyways, right on cue....

"Halifax dismisses fears of housing market crash despite fall in prices"

A crash is denied...so the crash begins.  Fear and the C word in one headline.

 

https://www.theguardian.com/business/2018/may/08/uk-house-prices-fall-halifax

11 minutes ago, Kurt Barlow said:

A proper crash would be as I suggested. Of course this doesn't take account of the ever increasing govt interference as you rightly suggest. That said the banks appear to be going to town on IO mortgages. I would have thought that if there is enough equity and the holder can afford to pay they would have been best off leaving them alone.

That would make the banks "landlords" and they'd lose money when the prices collapse.

Best to get rid and lend on them.

[TheCountOfNowhere]

22 minutes ago, Frank Hovis said:

I'm not being contrary but the long freeze usually comes first as people refuse to recognise that their desired selling price won't happen.  And whilst volumes are markedly down I don't think that we're in that phase yet.

People are fine with their houses remaining for sale but unsold for several years; I think my parents' took three years.

The banks will be under huge political pressure not to start repo-ing after the billions they received in bail-outs.

 

So... what is the case for the crash being fast in the early stages this time?

US interest rate rises/QT collapsing the £ and forcing up rates, even 1% will do it.  Or...maybe just the insane prices.  Bubbles are bubbles, when people wake up to them it's carnage.

I dont think we're seeing a crash yet but we're definitely not seeing a great time to buy a house !!!!

You think banks will be under pressure from public opinion not to repo BTL properties and sell them at sane sensible prices that people can afford ?

Such repos in vast numbers will be trumpted as a great thing, a government success, by the MSM.

17 minutes ago, Frank Hovis said:

There's no rise priced into the forward LIBOR curve so not happening; though at 0.25% a pop I don't think it matters at this stage.

The US is the one to watch; aggressive rate rising and monetary tightening at the same time is going to be.... interesting.

Once real US rates get to 2% above sterling rates we have no choice but to start following their every footstep unless we genuinely wish to crash our currency.

Sorry, I see you said 2% above, for maybe 12 months away.

I personalyl think TPTB have already to QT/raise rates worldwide and many are in for a shock.

The bank collapse was stage managed, so will the return to "normal"

[Frank Hovis]

I'd love you to be right @TheCountOfNowhere, I reallly would.

I think it's that I'd been seeing a crash as "imminent" for many years and eventually my belief in a natural and inevitable correction being just around the corner has dwindled.  I took a lot of my interest out of the question four years ago by buying; though I did retain sufficient hope of a crash that I bought well below my budget.

If there is the hoped-for big crash then I will be loooking at buying into ideal home territory; if there isn't well I'm happy where I am. 

[Kurt Barlow]

27 minutes ago, TheCountOfNowhere said:

US Fed rate is 1/2 hikes from this, i.e. 2/3 months

The BoE are mad if they wait any longer.

 

Anyways, right on cue....

"Halifax dismisses fears of housing market crash despite fall in prices"

A crash is denied...so the crash begins.  Fear and the C word in one headline.

 

https://www.theguardian.com/business/2018/may/08/uk-house-prices-fall-halifax

That would make the banks "landlords" and they'd lose money when the prices collapse.

Best to get rid and lend on them.

I don't buy that.

If someone has an IO  mortgage at less than 50% LTV then there is sufficient equity to cover any likely crash. In the meantime the bank can charge then their mortgage APR until the property is sold.  

[satch]

1 hour ago, Frank Hovis said:

I'd love you to be right @TheCountOfNowhere, I reallly would.

I think it's that I'd been seeing a crash as "imminent" for many years and eventually my belief in a natural and inevitable correction being just around the corner has dwindled.  I took a lot of my interest out of the question four years ago by buying; though I did retain sufficient hope of a crash that I bought well below my budget.

If there is the hoped-for big crash then I will be loooking at buying into ideal home territory; if there isn't well I'm happy where I am. 

Pretty much every year there is one month where prices fall by a large amount .... a few years ago IIRC it was -2.6% on the Halifax index in a month where prices normally increased. TOS were cheering, the crash has started, soon we can buy cheap from all the suckers who overpaid .... mugs who should have STR .... next month they were back up. Even Mr Renter, Bruce Banner gave up and secretly bought a house last year and is now crowing about the price increasing by 10%.

This is a false dawn and probably the only hope is more USA interest rate rises to force a UK rise .... but even this will take years to have any effect IMHO. Prices where we are have gone up by 40% in the last four years so a 30% fall will take nominal prices back to 2014 ... still stratospheric compared with 2003. As already mentioned currently 75% of people love HPI and the 25% tend to be those who do not have a property.

Personally having bought in 2014 I would like prices to fall massively so I could buy a bigger property with some of my extra capital (I bought because the return on capital no longer covered the rent as the various deals finished). However I am sure that in certain areas of London prices will collapse ... Battersea and all those new tower block flats (TOS will see this as 'the crash' as Asian investors lose money and proof they were right and still end up buying' normal properties' but for twice the nomial price but maybe with a minor result in real terms).

[sleepwello'nights]

4 hours ago, Kurt Barlow said:

I read this this morning.

https://www.nationwide.co.uk/about/house-price-index/headlines

Nationwide are stating that April saw a 0.2% rise in house prices.

Can someone explain the disparity between the two indexes? I assume they are representative across the UK?

Can I add this link to show the methodology used in various indices. https://www.theguardian.com/money/2012/may/03/house-prices-different-indices

The explanation given earlier by @TheCountOfNowhere is more specific on the two indices you asked about.

[TheCountOfNowhere]

14 hours ago, satch said:

Pretty much every year there is one month where prices fall by a large amount .... a few years ago IIRC it was -2.6% on the Halifax index in a month where prices normally increased. TOS were cheering, the crash has started, soon we can buy cheap from all the suckers who overpaid .... mugs who should have STR .... next month they were back up. Even Mr Renter, Bruce Banner gave up and secretly bought a house last year and is now crowing about the price increasing by 10%.

This is a false dawn and probably the only hope is more USA interest rate rises to force a UK rise .... but even this will take years to have any effect IMHO. Prices where we are have gone up by 40% in the last four years so a 30% fall will take nominal prices back to 2014 ... still stratospheric compared with 2003. As already mentioned currently 75% of people love HPI and the 25% tend to be those who do not have a property.

Personally having bought in 2014 I would like prices to fall massively so I could buy a bigger property with some of my extra capital (I bought because the return on capital no longer covered the rent as the various deals finished). However I am sure that in certain areas of London prices will collapse ... Battersea and all those new tower block flats (TOS will see this as 'the crash' as Asian investors lose money and proof they were right and still end up buying' normal properties' but for twice the nomial price but maybe with a minor result in real terms).

Prices become more extreme with every passing month, everyone accepts it's a massive bubble.

Bubbles invariable pop.

The doom sayers only have to be right once and at some point, right they will be.

We find outselves in an extraordinary situation. 10 years of money printing and low IRs, the economy is a mess, life unaffordable, no wage rises for many, government throwing everything at keeping prices up, the young unable to afford basic shelter and yet house prices at all time highs and apparently shooting up MoM. i

It wont take much to finally collapse the bubble.  What that means for any of us is another matter.

I'm amazed it's gone on this long.

 

 

[TheCountOfNowhere]

15 hours ago, Kurt Barlow said:

I don't buy that.

If someone has an IO  mortgage at less than 50% LTV then there is sufficient equity to cover any likely crash. In the meantime the bank can charge then their mortgage APR until the property is sold.  

In London....perhaps not.

Over levered BTLers....again, perhaps not.

A BTL friend of mine declared himself a millionaire recently. He  now has £1M of property equity.

When you subtract the £800K I/O mortgage debt tho, the picture is not so rosy, that £200K gain could disppear in a few months.

 

[Melchett]

Wasn’t there a whole forum devoted to this topic once?

HPC? I’ll believe it when I see it.

[TheCountOfNowhere]

The good news keeps coming

 

http://www.cityam.com/285526/london-house-prices-predicted-keep-falling-market-has-worst

51 minutes ago, Melchett said:

Wasn’t there a whole forum devoted to this topic once?

HPC? I’ll believe it when I see it.

Yes, we've all moved here to get away from the trolls.

[TheCountOfNowhere]

BoE hold interest rates AGAIN.

They are f**king liars, plain and simple.

They are robbing a nation blind and no one seems to be able or willing to stop them.

Time to get out the UK

[swiss_democracy_for_all]

Count, the only way there can be a crash of the epic proportions you are seeking is if the UK economy goes Greek and we have the IMF involved. Soup kitchens on street corners, riots, violence, the army deployed to keep the peace and the UK banking system exposed as bust again(and what would be the global consequences of that?)  Is that really a desirable outcome? Friends and family of yours, and you, would be caught up in it.

They've been lying and kicking the can down the road for so long now, piling in people from abroad to keep their BTLs filled and the GDP figures slightly positive, subsidising employment with tax credits, dreaming up prop after prop after prop. The money printing genie is out of the bottle now, it won't go back in. 

Careful about getting what you wish for. 

[TheCountOfNowhere]

6 minutes ago, swiss_democracy_for_all said:

Count, the only way there can be a crash of the epic proportions you are seeking is if the UK economy goes Greek and we have the IMF involved. Soup kitchens on street corners, riots, violence, the army deployed to keep the peace and the UK banking system exposed as bust again(and what would be the global consequences of that?)  Is that really a desirable outcome? Friends and family of yours, and you, would be caught up in it.

They've been lying and kicking the can down the road for so long now, piling in people from abroad to keep their BTLs filled and the GDP figures slightly positive, subsidising employment with tax credits, dreaming up prop after prop after prop. The money printing genie is out of the bottle now, it won't go back in. 

Careful about getting what you wish for. 

That's where it's headed. 100% guaranteed,  Desirable no, likely Yes.

For  Soup kitchens...read food banks, we're already there.

Meanwhile the f**kers rob people blind and deny people basic shelter and an affordable life.

The sooner this house of cards falls down and the British people make their feelings known the better for society.

We are bankers slaves.

[TheCountOfNowhere]

looks like I am escaping from the UK in the nick of time.

What a  joke of a government/country we live in.

[Frank Hovis]

6 hours ago, TheCountOfNowhere said:

BoE hold interest rates AGAIN.

They are f**king liars, plain and simple.

They are robbing a nation blind and no one seems to be able or willing to stop them.

Time to get out the UK

The LIBOR curve always calls it correctly IME so that shouldn't have been a surprise.  August also looks unlikely.

[MrPin]

Funny how the student loan rates went up. I guess somebody does make money out of it.

[Hail the Tripod]

On 09/05/2018 at 15:07, Kurt Barlow said:

89-91  was the bulk of the crash. Thereafter prices deflated slowly down to the 96-98 low.

If we get another proper crash it should come fast in the early stages.

If IRs jump to 16% again, I think we’ll see precipitous falls!

[Don Coglione]

10 hours ago, TheCountOfNowhere said:

The good news keeps coming

 

http://www.cityam.com/285526/london-house-prices-predicted-keep-falling-market-has-worst

Yes, we've all moved here to get away from the trolls.

C*unt, it is you who is the troll.

You have effectively been chased from HPC for incessantly posting shite to fit your own agenda, which is massively at odds with reality. As an utter fantastist, you claim to have moved to a chateau in France, but then "came back." You claim to have trebled your net worth to more than £2m "in the bank" over the last ten years, despite having no understanding of the way that investing in the stock market works and, clearly, you have not benefited from the massive gains in the UK property market. If you really do have over £2m "in the bank", you are even more stupid than your posting style would suggest. Given the amount of time that you spend posting repetitive, self-affirming, shite on social media, I cannot imagine you are running a successful business, similarly you lack the intelligence to be employed in a position that would pay sufficiently to enable you to amass such a level of personal wealth.

This site is populated, in the main, by financial pragmatists and realists. As you depart for the make-believe safe space that occupies your mind today, make sure that the door doesn't smack you on the arse on the way out. Complain to Spunko all you like, this place (and the wider world) is a better place without you.

Merry Christmas.

[ashestoashes]

27 minutes ago, Ponty Mython said:

C*unt, it is you who is the troll.

You have effectively been chased from HPC for incessantly posting shite to fit your own agenda, which is massively at odds with reality. As an utter fantastist, you claim to have moved to a chateau in France, but then "came back." You claim to have trebled your net worth to more than £2m "in the bank" over the last ten years, despite having no understanding of the way that investing in the stock market works and, clearly, you have not benefited from the massive gains in the UK property market. If you really do have over £2m "in the bank", you are even more stupid than your posting style would suggest. Given the amount of time that you spend posting repetitive, self-affirming, shite on social media, I cannot imagine you are running a successful business, similarly you lack the intelligence to be employed in a position that would pay sufficiently to enable you to amass such a level of personal wealth.

This site is populated, in the main, by financial pragmatists and realists. As you depart for the make-believe safe space that occupies your mind today, make sure that the door doesn't smack you on the arse on the way out. Complain to Spunko all you like, this place (and the wider world) is a better place without you.

Merry Christmas.

like being mauled by a norwegian parrot (dead)

[Wight Flight]

2 hours ago, Hail the Tripod said:

If IRs jump to 16% again, I think we’ll see precipitous falls!

If only for the three hours that they reached that rate for last time but seems to be indelibly etched in everyone's memory as some kind of long term event. The same memory that conveniently forgets the three years of 15% wage inflation.