Re: Crash.Good time to move back
 

I strongly advise you read a classic book on mob behaviour and access to credit / debt called " The South Sea bubble - a very English deceit".

The book records " the mother of all bubbles" as a result of peoples miopic view on markets and greed - the goverment of the day, royalty, big business, banks and the media were all bribed or sold vested interests in the scam for the sole purpose of profiting from the mob frenzy to buy in a rising papaer market, even though they could not afford the risk.

The bubble was fuelled by the very south sea company allowing the mob to borrow - cheap - money with promise's of profit without having to produce anything.... just like lending institutions of today allow the Mob to borrow ever larger amounts which fuel the behaviour to buy more and secure the debt on a fixed assett such as property. The mob has not learned or changed much in the last 3 centuries .... ;)

The crash and burn will follow a similar pattern as well ....

As for "which part of the community will suffer the most" - when prop prices fall dramatically ? .... Those with some capital who swallowed the hype and purchased on maximum gearing and minimum deposit.

The will have focussed on profit in the short term ,and no exit strategy to service debt if prices fall.... namely BTL investors who purchased cheap poor quality property in poor economic zones where property has doubled if not tripled in price in less than 5 years. They cannot afford to "run from debt" as they will have secured the BTL loans on security i.e. the family home - they will be stuck with negative equity debt which could last years.

FTB with minimum assett's will have little to lose but the deposit and a bruised ego, they can drop the keys off and go back home or renting.

heres a tip .... good time to invest in repossession companies, auction houses, second hand furniture stores and debt collection agencies.

odaat.

Re: Crash.Good time to move back
 

Really - not a very nice group of people are we. So just to suit you and your needs you would like to see a major house crash with all the misery that goes with it as it is often those on low wages who have managed to get a foot on the rung in the hope of bettering themselves who will get hit the hardest. The smug gits as you call them - which I am sure you feel I typify but yet I have 'done up' as its called 6 houses in 20 years. Started with absolutely nothing. Worked a 7 day week throughout. Did not have a social life as the children and a roof was priority. Not many 20 somethings want to do that these days. Too bloody lazy.

Anyone who has gone abroad and then wants to return on their terms regarding wanting to buy property cheaply should try and look in the mirror and really see what is there. No one asked you to move from the UK if thats where you started from. No one is asking you to come home politically or economically. I do not see a call for expats to return because YOUR COUNTRY NEEDS YOU. Stay where you are as your return will I doubt be relished.

Why don't you ask the ageing population how they feel about your wishes. With the pension system in a mess many only see the value in their homes as a way of feeding themselves in to old age.

I have no gripe way one or the other. I fully recognise an adjustment is required (read what I said) but I would never wish to see those on the bottom even further down the drain.

This is typical of a low morals value society in action.

And regarding the facts and figures and sermon type passages that are strewn across this thread I doubt much daylight is available from where the head resides just now.

RANT OVER!

Re: Crash.Good time to move back
 

Impressive rant, did you manage to take a breath or pause - my good wife could not have done better, and she is goood :D

Re: Crash.Good time to move back
 

Nope still don't see myself. So you have worked hard etc etc, done up houses etc and are sitting comfortably happy in the knowledge that your properties are worth a large some of money in today's inflated market.

Meanwhile first time buyers are stuffed and are being asked to borrow up to 18 (yes 18!!!!!) times their salary to get on that 1st rung (and I don't remember it being so 20 years ago??). 93% of UK towns are outside their reach for owning.

Rather than see them get started you would rather hold on to what you think you have earned and let them struggle with no hope of getting even a small place. Isn't it your duty as parents to help them get started :scared:

Next time one of these 20 somethings vomits on your lawn after a night binge drinking Bacardi Breezers think that if he/she had even a faint hope of getting on the property ladder they might have stayed in for once.

Me - well my reason for coming home for coming home is because I can and because I have been moving around the UK and world making money from doing up houses for some time now and I know a falling market fuelled by greed when I see one.

If house prices rise or stay the same I will still be able to cash buy no probs, it just means not as many properties in need of redevelopment will get done by me.
But when I do buy my own place to live in I'll make sure I'm not near a curry house, pub or night club - all that sick gets stuck in my rotor blades :) :)

K.S.

Re: Crash.Good time to move back
 

I see, so its OK for you to move around the world making money on the back of house price increases but not OK for you to return and pay your way like everyone else. Who is the greedy one? Looked in the mirror lately?

....Also I am surrounded by many of the 20 something's you describe who would not give a flying fart for the prospect of responsibility and house ownership. Getting shitted on whatever they can lay their hands on is the order of the day. I was there 25 years ago. But if you are serious about acheiving something you might have to make sacrifices. Few do but its seems not to stop the moaning and graoning. When we first started out all we could afford was a tiny little hole in a run down town in a not nice area where I would not want my children living. But hey - we did it and actually look back with fondness. The media has opened up the world of have's and have nots. Youngsters see a nice 3 bed semi in a leafy glade in a nice part of town and assume that is the first rung on the road to a new life. Invariably it is not... and its not until someone sits the aspiring people down to say "you might have to buy a property in a poorer area as I am afraid an FTB is a bit too much money in West London, or Buckinghamshire." Reality TV it aint. Its called life. Move where a balance of life versus earnings means afforadability. Perhaps another country. European mainland is nice I here. (NOT)

But if you really cannot afford a property do not always blame the owners or wish bad things for the owners. They simply sit and let it happen all around them. If affordability is an issue perhaps you need to look at the wider picture. Who runs the country. Who decides what you get paid. Who organises the price structuring. Who did you vote for. Do you know why. Do you understand what is going on. Do you know what your long term potential in your country really is. Do you really think you deserve a property and why. What have you done to deserve one. Do you work hard.

Many questions. Except it comes down to the same thing.

Greedy people like YOU are not required!

Re: Crash.Good time to move back
 

Sandrapaul,
I think you have lost the plot a bit .... :)

Yes K.S. acts out as a profiteer, he is diligent enough to be two steps ahead of the mob. His mind is focussed on profit not politic's. Like it or not - we live in a free market society and the likes of KS will make a killing as the UK prop market collapses and debt misery catches many thousands and squeezes them till the pips burst.

The mean side in many will be exposed and it is going to be bloody.

A fair and just value system where all are given a fair share is a long ago myth I read when I was in short trousers.

Its all about having a winning plan, separating personality from principle when it comes to cold hard business. KS is offering you an insight into what has always been here - opportunity to make a bundle of money. :beer:

Re: Crash.Good time to move back
 

I am just a moralist. And its one thing doing it (making money out of those that are unfortunate)...completely another actually enjoying it, revelling in it.

And yes I understand money/profit and loss. I run my own business so should do. But life is not always just about money. Some lose perspective on life and I think its right here in the thread. And when thats gone you have nothing.

P

Re: Crash.Good time to move back
 

Gouging is not pretty - nor is a slaughter house - but if there were none, not even Gougers, willing to buy what price then?

Re: Crash.Good time to move back
 

I don't like the silly rise in house prices any more than the next person. But I don't understand the tendency to blame SELLERS for the trend - surely it's BUYERS who drive up prices? If they weren't willing to act like lemmings and mortgage themselves to the hilt, sellers wouldn't be able to sell at their silly prices.

I think the problem is the situation has gone on for so long that someone is going to end in tears. If the trend continues, buyers will continue to make their lives a financial misery; if there's a major correction, some of the posters here will rub their hands in glee at the thought of property barons wringing their hands - but it's people just like them who will suffer (those who bought in the past 3 years, who might end up in negative equity).

Re: Crash.Good time to move back
 

House price crashe ..... !

Experts forecast falls of up to 30%. Clare Francis and Jessica Bown find out how you can protect yourself

AN estimated 300,000 homeowners could find themselves in negative equity by the end of 2006, according to Capital Economics, a research group.

Homeowners have been warned to brace themselves for house-price falls of up to 30% after the Financial Services Authority (FSA), the City regulator, warned that the risk of a big decline in property values posed a threat to the economy.

In its annual Financial Risk Outlook, the FSA said it expected the economic environment to be “relatively benign� this year. But it added there were short and long-term risks that could threaten this — and cited the weakening housing market as one of the main dangers.

The FSA is warning that consumer confidence would be adversely affected, which would lead to a slowdown in consumer spending. Unemployment would rise as industries such as construction, estate agents and retailing came under pressure. All these factors would have a negative impact on the stock market and consumers could see the value of their investments fall, as well as their homes.

There are already signs that the housing market is slowing. Many estate agents and housing-market indexes have reported falls in property values over recent months.

The Royal Institution of Chartered Surveyors said that property values fell for the fifth consecutive month in December, although the drop was the smallest for three months.

The institution said it expected prices to continue falling for the next three months, after which the market will begin to recover, taking the average house price 3% higher this year.

Halifax’s latest house-price index showed that values rose slightly in December, following two months of falls. The bank reported that the cost of the average home had gone up 1.1% to £162,086, although it said this was likely to have been a temporary blip. While it is not forecasting a house-price crash, Halifax believes values will fall by 2% this year.

However, a number of commentators regard the FSA’s 30% slump scenario as highly probable.

Neil Woodford, who runs Invesco Perpetual’s Income and High Income funds, said: “I think there will be a big correction in housing. Over the next three years, falls of 20% to 30% would not be extreme. In fact, I can see circumstances where prices could fall by more than 30%.�

Durlacher, an investment bank, also foresees a slump of about 30% in the next few years, and Capital Economics is forecasting falls of about 20%, with a 7% decrease predicted for this year.

If prices do plummet to this extent the FSA estimates that the number of homeowners who fall into mortgage arrears will increase from 83,000 now to about 345,000 :scared: by the middle of next year. However, the impact is not expected to be as great as the last time house prices fell sharply.

Negative equity will only be a problem for those who need to sell, but the worst-affected will be those who have been relying on the wealth in their property for other aims such as paying school fees or supplementing retirement income.

David Pannell at Durlacher said: “About 70% of homeowners expect to use their house as part of their pension, but if property prices drop people will start to look at other places to invest. Public confidence has already been hit by the equity bear market, mis-selling scandals and a general distrust of the financial industry, so I think a lot of homeowners will be cautious and look to cash investments, such as cash Isas and structured products that offer capital protection.�

One of the best bonds that offers full capital protection is from Citibank. If the FTSE 100 rises by 30% or more in the first three years, the plan closes and you receive your initial investment plus 30%. Otherwise, it pays 130% of growth in the index over six years from February 18.

More adventurous investors could hedge against falling property prices and offset any drop in the value of their home.

Goldman Sachs, an investment bank, offers covered warrants that allow you to bet on the Halifax house-price index.

Warrants give you the right to buy or sell an underlying asset at a specific price (the strike price) on a set date. Call warrants give you the right to buy; put warrants give you the right to sell.

The average house price is currently £162,086 according to Halifax.

Suppose you think your home is worth the average amount and you think the price will fall. You could buy a put warrant that gives you the right to “sell� the index at £160,000 in June 2006.

You need to buy 100,000 warrants to gain exposure to one unit of the underlying asset. So if your home is worth the same as the Halifax index, you would require 100,000 warrants. If your home has a higher value, you would need more. One put warrant cost 15.6p last week, so you could have bought 100,000 warrants for £15,600.

Suppose that the value of the average property falls 30% to £113,500. The warrant’s value would be the gap between the strike price and the actual price, or 46.5p (the difference between £160,000 and £113,500, divided by 100,000).

You have 100,000 warrants, so your holding would be worth £46,500 — the same as the fall in your property’s value. But you must deduct your initial outlay of £15,600 Most homeowners, however, will be looking for simpler ways to minimise the impact of falling house prices.

If you have an interest-only mortgage you should look to remortgage to a repayment loan, because part of your monthly payments will then go towards repaying the capital, which will reduce your exposure to falling property prices. Several lenders also allow you to make overpayments so you can accelerate the rate at which you clear your debt.

You should also review your investment portfolio to ensure that your money is not solely tied up in the stock market and residential property.

Justin Modray at Bestinvest, an adviser, said: “It is important to have a mixture of non-correlated investments such as commercial property, cash, bonds and commodities as well as equities and residential property. The value of your investments could still fall, but your losses should be minimised.�

Re: Crash.Good time to move back
 

Profit - good. :)
Greed - bad. :(
We live in a capitalist society - profit is vital to that.

It is greed that has fuelled house prices in the so-called civilized world and it will now come back to bite all involved on the ass.

Tescos make a profit, so do the petrol companies etc etc but if they ask silly prices there comes a point when folk say 'no more'. It happened a few years ago with UK fuel prices when people said 'enough'.

If all prices are kept at a level where they can be afforded by the majority then it all works OK. Push beyond that limit simply because you can is greedy and you will reap what you sow and I as far as that goes I am morally in agreement with you.

I work hard and take what I think I am worth. If only others (inc. banks, building societies, estate agents :mad: and many home owners) took what they needed rather than what they can get away with these bubbles wouldn't occur.

But hey that's human nature isn't it and someones crisis is someone elses opportunity and it always has been that way?

K.S.

Re: Crash.Good time to move back
 

London - 5% drop in house prices
Monday 31st January
11.40am



House prices in London fell for the seventh consecutive month according to a report from Hometrack, and housing economist John Wriglesworth predicts they will continue to fall, giving a 5% drop over 2005.

Mr Wriglesworth said, “London has been hit hard by the price falls over the past six months, and this month shows no signs of an imminent recovery. The Bank of England’s decision to maintain interest rates at their current level has brought a degree of confidence back into the market, but we will continue to see modest falls in the coming months as the market adjusts to a new, more sustainable level."


London house prices:
Annual rise from Jan 2004 to Jan 2005
-1.1%

Hometrack London house price inflation
forecast for 2005
-5.0%

Consensus estimate for National (UK)
house price rises for 2005
0.0%



Hometrack's January survey of the London housing market reveals an average house price fall of –0.4%, following the two previous monthly drops of –0.9% each. This is the seventh consecutive month that house prices in London have fallen with the average London price now standing at £262,900, down from a peak of £275,900 in June 2004.

Activity is down again this month with the number of sales agreed falling by -11.2% (-3.6% in December’s survey). The number of new buyers registered (demand) has fallen by –16%, while the number of properties listed (supply) has fallen by –7.8%. Hometrack’s unique Demand Index shows a surplus of supply relative to demand for the seventh month running.

Properties are taking slightly longer to sell (6.8 weeks compared with 6.7 weeks in December’s survey), while the average number of viewings per sale has reduced again this month to 14.2 (14.5 in December’s survey).

Sales price as a percentage of asking price has decreased slightly this month to 91.8% (91.9% in December’s survey), indicating that buyers are continuing to negotiate attractive discounts of over 8% of the asking price.

This month seven boroughs remained stable or reported price rises compared with just two last month. The top five were Ealing (0.1%), Greenwich (0.0%), Hammersmith & Fulham (0.0%), Haringey (0.0%) and Havering (0.0%). The worst performing boroughs were Barking & Dagenham (-2.0%), Bromley (-1.4%), Hackney (-1.1%), Richmond-upon-Thames (-0.9%) and Wandsworth (-0.8%).

Re: Crash.Good time to move back
 

Interest rate hike 'likely on polling day'
By Philip Thornton, Economics Correspondent
31 January 2005


Voters should be braced for a hike in interest rates as they walk to the general election polling booths, a respected independent think tank warns today.

Strong economic growth in the new year following the unexpected rebound in the final quarter of 2004 will be enough to prompt the Bank of England to tighten monetary policy, the National Institute for Economic and Social Research (NIESR) said.

The NIESR expects the economy to grow by 0.8 per cent in the first quarter of this year, after the 0.7 per cent in the previous quarter that defied forecasts of a meagre 0.4 per cent.

The Bank traditionally prefers to move interest rates in months such as May that coincide with its quarterly inflation report. The first estimate of GDP is published on 22 April, a fortnight before the Bank's Monetary Policy Committee sets interest rates on 5 May - the odds-on favourite date for a general election.

Martin Weale, the institute's director, said: "The fourth quarter's figures must increase the chance of an interest rate increase in May." That decision would be a demonstration of the strengths of the Bank's independence on monetary policy, as it would doubtless send shockwaves through the Treasury.

Mr Weale said he believed that rates should already be at 5 per cent because of the inflationary pressures building in the economy. "A number of developments have occurred in recent months that provide further stimulus for the economy," he said. Market interest rates had fallen, oil prices had weakened and equity prices have risen sharply.

The institute said the economy would grow above trend over the coming two years, with GDP growth of 2.75 per in both 2005 and 2006. Its forecasts factor in a slowdown in consumer spending, from 3.3 per cent last year to 1.4 per cent in 2006, offset by a rebound in exports.

However the picture was less rosy for the public finances. NIESR warned that Gordon Brown, the Chancellor of the Exchequer, would have to raise taxes by £13bn in the next parliament to solve a structural deficit in the public finances. The figure, which is equivalent to more than 4p on the basic rate of income tax, comes just a week after the Institute for Fiscal Studies identified an £11bn shortfall.

Rebecca Riley, an NIESR economist, said the Chancellor had only a one in five chance of meeting his golden rule to balance the current budget over the economic cycle. She said that under the Treasury's forecast the cycle would end in 2006, by which time the Government would have racked up a deficit of 0.1 per cent of GDP, or £13bn in current money.

She said that the Government could ensure that it met the rule - which dictates that the Government must only borrow to fund long-term investment across an economic cycle - by saying that the cycle ended at the end of last year. But this would leave the UK starting a new cycle with a large deficit for 2005-06, making it urgent that the Government raised taxes.

Re: Crash.Good time to move back
 

The next sequence in the pattern .... consumer credit leaps upwards again.

Re: Crash.Good time to move back
 

Hi odaat

I was wondering as a non-economist bod, so not too savvy, will first time buyers ever get a look in again, in the same way as they have done in the past and not by big deposits or helped along by generous parents?

M :)