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UK House prices: News & Views


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Remember this entity from hpc? (until he joined the banned, but for a reason that made sense).

Nearly 9000 MSE posts & all because he bought in 2007 (& is programmed to defend that loudly until his death).

 

Hamish McTavish:

Housing is a critical component of GDP. There can be no sustainable recovery whilst asset prices are falling.

 

http://forums.moneysavingexpert.com/showthread.php?p=45874357#post45874357

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My eldest son is 22. "Son, when the time comes to think about buying a property for the first time, make sure you bear in mind the relationship between the price of houses and the price of gold."

 

"Okay Dad - I've had a look and, just now, houses are pretty cheap compared to the gold price - way below the average in fact."

 

"There you are then son, now is the time to buy."

 

"But Dad, I can't afford a house because I haven't got enough gold/money or money/gold to buy one?"

 

 

 

I didn't realise - and nor did anyone else at that time - that the correct course of action was to sell your house, buy gold, wait, wait, wait and wait a bit more until gold went up enough to make the waiting worthwhile, sell your gold and buy a house - and have a load of extra money too.

Right now I'm thinking of taking 100k out of my offset mortgage account and buying gold with it.

:blink: Maybe you should send your lad over to GF's to read a few charts...or else he may be repeating the mistakes of his father in the future.

I'm not having a dig at you here BAB, but I think you need to read the signs a bit better and ditch the 'common sense'.

 

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair. It was average house prices in ounces of gold, it was 2004- it was 724, it was 2011- it was 162, it was knowing when to sell, it was knowing when to buy, it was a dead simple chart as simple as a traffic light, it was red, amber, green, not even fancy trading, it was buy and hold and rent, it was a....no brainer. It was posted 2 posts above this as if by magic. It was downloaded and printed off and stuck on the bathroom wall.

 

'If you get this one right laddie, you'll be a man my son' Don't follow leaders, watch the parking meters.

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... isn't the value of a house only important relative to it's desirability to other house owners, not their ability to pay that value based on their income?

 

Doesn't this mean that the value of property becomes detached from earnings? Maybe I am missing something...

For existing property owners, who can sell property they already own, to buy a new one-

your comment makes some sense.

 

But not for FTBers

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For existing property owners, who can sell property they already own, to buy a new one-

your comment makes some sense.

 

But not for FTBers

 

But does the market need FTBers? If the number of houses is not increasing and the number of people are not increasing then there is no need for FTBers at all. When people die their house goes to their family. Those who own continue to do so, those who don't can't. I don't think we are there yet, but isn't this a possible scenario at some point?

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But does the market need FTBers? If the number of houses is not increasing and the number of people are not increasing then there is no need for FTBers at all. When people die their house goes to their family. Those who own continue to do so, those who don't can't. I don't think we are there yet, but isn't this a possible scenario at some point?

 

The number of people is increasing at NET ~200,000 per year according to latest figures.

 

The NET number of new properties is way way less. (Estimates say we need 250,000 per year for 20 years, including all the ones we are losing each year).

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The number of people is increasing at NET ~200,000 per year according to latest figures.

 

The NET number of new properties is way way less. (Estimates say we need 250,000 per year for 20 years, including all the ones we are losing each year).

 

Ok so demand is exceeding supply. Doesn't that just help to keep property in the hands of the rich and unattainable for everyone else?

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:blink: Maybe you should send your lad over to GF's to read a few charts...or else he may be repeating the mistakes of his father in the future.

I'm not having a dig at you here BAB, but I think you need to read the signs a bit better and ditch the 'common sense'.

 

It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair. It was average house prices in ounces of gold, it was 2004- it was 724, it was 2011- it was 162, it was knowing when to sell, it was knowing when to buy, it was a dead simple chart as simple as a traffic light, it was red, amber, green, not even fancy trading, it was buy and hold and rent, it was a....no brainer. It was posted 2 posts above this as if by magic. It was downloaded and printed off and stuck on the bathroom wall.

 

'If you get this one right laddie, you'll be a man my son' Don't follow leaders, watch the parking meters.

 

I'm trying to make the point that if you think of house prices in terms of gold - a young person should buy NOW! But they can't because all they have is money (not gold) and they haven't got enough of it to buy a house. So, the house/gold thing is completely irrelevant.

 

I bought my first property just after gold went from nearly $800 to $250 - at which point houses suddenly looked expensive compared to gold. If I hadn't bought then, I'd have had to wait 30 years for the same thing to happen again. 30 years in which I've lived my adult life, raised my children, had a roof over our heads etc. You really can't live your life waiting for some relationship between gold and property to occur.

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I'm trying to make the point that if you think of house prices in terms of gold - a young person should buy NOW! But they can't because all they have is money (not gold) and they haven't got enough of it to buy a house. So, the house/gold thing is completely irrelevant.

 

They might not be able to buy a house now, but they can still "buy".... by putting that near deposit into gold. With 5% down payments here in NZ, and wobbly inflated house prices, why would you buy a house... and why wouldn't you buy gold instead... or at least put half your savings into gold. Nice staedy 20% odd annual gains, and even better in real terms if the housing market deteriorates.

 

Gold/ houses wouldn't be irrelevant if you thought gold presently was in a bull market.

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In 2004 I worked in the UK and everyone was asking me "do you buy, when will you buy"? I did some research, and came to the conclusion that this was an absolutely absurd thought, so my answer was "heck no!"

 

A gold bullion investment is momentarily buying five times(!) more house than back in 2004.

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In 2004 I worked in the UK and everyone was asking me "do you buy, when will you buy"? I did some research, and came to the conclusion that this was an absolutely absurd thought, so my answer was "heck no!"

 

A gold bullion investment is momentarily buying five times(!) more house than back in 2004.

Any chance of a London house prices in gold update, GF?

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The number of people is increasing at NET ~200,000 per year according to latest figures.

 

The NET number of new properties is way way less. (Estimates say we need 250,000 per year for 20 years, including all the ones we are losing each year).

The number of households grew as household size shrank, but that trend may be set for reversal

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The number of households grew as household size shrank, but that trend may be set for reversal

 

That's really not likely in the UK (I recently read the number per household is actually forcast to drop over the next ten years).

 

While it would make sense to me, (actually chatted with the in-laws about potential pooling of resources in the future) it seems for most of the UK to be unthinkable. Totally different mentality here.

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I'm trying to make the point that if you think of house prices in terms of gold - a young person should buy NOW! But they can't because all they have is money (not gold) and they haven't got enough of it to buy a house. So, the house/gold thing is completely irrelevant.

No, its hardly irrelevant. The young person may be deciding between putting their fiat into gold or into something else; looking at the ratio can help them make the decision.

 

I bought my first property just after gold went from nearly $800 to $250 - at which point houses suddenly looked expensive compared to gold. If I hadn't bought then, I'd have had to wait 30 years for the same thing to happen again. 30 years in which I've lived my adult life, raised my children, had a roof over our heads etc. You really can't live your life waiting for some relationship between gold and property to occur.

The gold:home ratio is one indicator. Its not the only market indicator to watch when buying or selling gold or property; and it certainly shouldn't be used to dictate when you buy a personal primary residence. However, it would significantly guide my decisions about buying investment property.

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No, its hardly irrelevant. The young person may be deciding between putting their fiat into gold or into something else; looking at the ratio can help them make the decision.

 

Only if they were barking mad. If I had done that 30 years ago I would never have bought a house and never have acquired the only bit of money I've ever acquired.

 

 

The gold:home ratio is one indicator. Its not the only market indicator to watch when buying or selling gold or property; and it certainly shouldn't be used to dictate when you buy a personal primary residence. However, it would significantly guide my decisions about buying investment property.

 

Again, if you'd been watching it over the last 30 years you would never have bought property in the mid 90s and missed out on spectacular property gains.

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Only if they were barking mad. If I had done that 30 years ago I would never have bought a house and never have acquired the only bit of money I've ever acquired.

 

 

 

 

Again, if you'd been watching it over the last 30 years you would never have bought property in the mid 90s and missed out on spectacular property gains.

I think if you had been paying attention in the 90's-to gold as well as property-you would be singing from a different hymnbook now. Sure we all must live somewhere but even so...have a look at the chart '95-'11.

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx'>http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

 

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Moreover property may be soon to fall but I don't think that is on the cards for gold in the same way.

The best strategy would be to have chopped and changed along the way. You'd be mortgage free now, probably.

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Yep !

 

 

Might be a good idea.

Especially, if you can buy a home with profits, and hold onto core capital

Think I might be tempted to buy a home today with gold if I was in the US and it suited my timeline. Unfortunately I am not and it doews not. So i have to sit on my hands and see what happens.

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I think if you had been paying attention in the 90's-to gold as well as property-you would be singing from a different hymnbook now. Sure we all must live somewhere but even so...have a look at the chart '95-'11.

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx'>http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

 

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Moreover property may be soon to fall but I don't think that is on the cards for gold in the same way.

The best strategy would be to have chopped and changed along the way. You'd be mortgage free now, probably.

 

AFAIR, during the 90's gold was seen as a dog, it had been falling in price for years and years. The only people buying it were the kids trying to look like rappers :lol: (guess they are laughing now, if they didn't pawn it that is)./

 

Oh and houses were really cheap mid 90's too.

 

Didn't it just keep on falling into the early noughties?

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I think if you had been paying attention in the 90's-to gold as well as property-you would be singing from a different hymnbook now. Sure we all must live somewhere but even so...have a look at the chart '95-'11.

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx'>http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

 

http://www.kitco.com/scripts/hist_charts/yearly_graphs.plx

Moreover property may be soon to fall but I don't think that is on the cards for gold in the same way.

The best strategy would be to have chopped and changed along the way. You'd be mortgage free now, probably.

 

I guess we're not going to agree on this.

 

My eldest son is nearly 23. He has about 15k to his name. I'm trying to imagine the conversation ...

 

"Dad, I've decided to invest my 15k (all the money I have in the world - acquired from savings accounts my parents put money into all my life, topped up with birthday and Christmas money from parents, grandparents, aunts etc - topped up with a recent present from an Aunt who was terminally ill) into gold."

 

 

"Hmmm, so you're not worried that the gold price could halve tomorrow? Or that it can be an extremely volatile market and, when you want the money for something useful (as opposed to owning a bit of shiny metal) that you might not get back all the money you put in? I'd say son, with the benefit of a bit more knowledge of how the world works than you, that you would be nuts to risk your money in that way. Better off hanging on to it until the day you want to settle down and use it as a deposit on a house ... or use it to start a business."

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I guess we're not going to agree on this.

 

My eldest son is nearly 23. He has about 15k to his name. I'm trying to imagine the conversation ...

 

"Dad, I've decided to invest my 15k (all the money I have in the world - acquired from savings accounts my parents put money into all my life, topped up with birthday and Christmas money from parents, grandparents, aunts etc - topped up with a recent present from an Aunt who was terminally ill) into gold."

 

 

Minor alteration:

"Dad, I've decided to invest my 15k (all the money currency I have in the world - acquired from savings accounts my parents put money into all my life, topped up with birthday and Christmas money from parents, grandparents, aunts etc - topped up with a recent present from an Aunt who was terminally ill) into gold."

 

....the dislocations that have accumulated in the present system of elastic money are most certainly larger than they were at the start of the Great Depression in the 1930s. With the policy establishment beholden to the standard macro-paradigm and unlikely to give up the tool of elastic money or their belief in the manageability of the economy, we will witness the nationalisation of money and credit. As overleveraged private institutions will find it difficult to expand their balance sheets further, lending and borrowing will increasingly be conducted by state entities, such as the central bank and state-owned financial institutions. States will also increasingly use the printing press to fund their expenditures. Large-scale debt monetisation will occur under the cover of policy ‘stimulus’ (‘quantitative easing’), a process that is already well advanced. This must ultimately lead to an inflationary meltdown.

 

While it appears exceedingly unlikely that a more benign outcome is still possible, the only hope is that, as the catastrophe unfolds, the market will re-monetise the precious metals, in particular gold, and when state paper money collapses once again, an entirely private monetary system will arise, based on privately-run gold depots and privately-run international payment system. This would provide a stable, de-politicised system of hard-money for an increasingly international division of labour to replace the current patchwork of highly unstable local state paper monies.

http://papermoneycollapse.com/book/chapter-outline/

 

I don't the writers are making this up BaB, do you?

Change is not easy for some. For most it is almost impossible & so they support the system that is 'killing' them, as maintaining the status quo is their life goal; whatever the cost.

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AFAIR, during the 90's gold was seen as a dog, it had been falling in price for years and years. The only people buying it were the kids trying to look like rappers :lol: (guess they are laughing now, if they didn't pawn it that is)./

 

Oh and houses were really cheap mid 90's too.

 

Didn't it just keep on falling into the early noughties?

Well it started to fall off in 96, which was the signal for buying property, I guess.

 

2000-01 was the low.

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