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UK House prices: News & Views

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David Miles, the one BoE member that correctly forecast 20% house price falls (over 2 years) back in 2008 has now said.....

 

House prices to rise for years, says BoE's David Miles

 

http://www.telegraph.co.uk/finance/economics/9153363/House-prices-to-rise-for-years-says-BoEs-David-Miles.html

 

Now, what is his reasoning?

 

That's right, restricted supply and rising population! :lol:

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The answer why the "recovery" is slow is simple yet unpleasant because nobody wants to hear it:

 

As in 1992 and 2001, the recession of 2008-09 was not allowed to run its full course. Therefore the massive and unsustainable imbalances in the economy are still present, still being propped up, and they are preventing efficient allocation of resources. The global economy will continue along a path of long term wealth destruction as long as the short term pain is continually avoided by monetary and fiscal policies.

Nice in theory, but would you have been happier to see economies crash and burn, as the 'system' was 'purged'? :huh:

 

Sorry, I can't take this article seriously with stupid statements like that. Broadbent obviously lives in a macro-economic Keynesian model and rather than in the real world.

 

And then, aren't you also living in your own macro-economic model? ;)

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Young will have to wait longer to buy as new house price boom is on the way, says Bank of England

All 10 regions in England and Wales record monthly price rises this month

Warnings that the recovery remains patchy and market is still 'very sensitive' to external influences

Average price of home in Kensington and Chelsea tops £2MILLION

First-time buyers face 'double blow' with end of stamp duty holiday and 3% target price leap

 

 

Read more: http://www.dailymail.co.uk/news/article-2117065/House-price-boom-2012-Young-wait-longer-buy.html#ixzz1pdN5Tx5S

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That's a bit of a narrow-minded biew.

 

What happens when these families' children want to buy their own homes and start their own families? They won't be able to afford a home, or if they do it'll likely be a 1br shoebox that they'll be tied to for years.

 

High house prices prevents all sorts of social mobility. The NINJAs become trapped and stay at home into their 30s and beyond. It's a crap state of affairs that impoverishes the young.

 

You are absolutely right, what I should of said is, in talking with the neighbors non of them care!

 

I totally agree with your statement and wish that the average house was 3.5 x the average wage with no stamp duty and high house mobility and turnover again.

 

Unfortunately with loads of MPs on the BTL band wagon everything that can be done to sustain high and unaffordable house prices will be done!

 

The only way to solve this IMVHO, is to change planning laws drastically and provide many more houses that people want to live in not 2bed shoe box flats.

 

How can you justify £5-7 k per acre farm land which at the stroke of a pen IE planning permission being granted increase in value to 1m per acre +.

 

This shows the chronic lack of supply of fresh land which is outside of the large developers land banks!!!!!!!!!!

 

They know exactly what they are doing as prices started to fall in 2008 they drastically cut off supply of new houses to reduce the fall in house prices. They cut overheads. IE made staff redundant and then sat on land banks just selling their more smaller uneconomical sites/parcels of land off to smaller builders.

 

This fall in supply is like Opec cutting production as oil demand falls it keeps the market price higher by drip feeding in rather thar over supply!!!

 

These big boys hold the land banks and therefore hold all the aces, they will only increase new house supply after demand rises with ising prices!

 

The big builders will ride the storm out and come out smelling of roses!

 

The guys sat on the side for 10 years waiting for 50% falls will come out smelling of sh!t

 

The only possible way was /is to invest in G/S as a rising asset against £/$ as the governments print QE etc to ease monetary liquidity. As demonstrated by GF house prices in ozs gold chart.

 

Staying in Sterling and hoping for house price falls is a losers game!

 

My bullish stance on gold is growing weaker by the day as I watch a strong recovery starting to come through!

 

Maybe we have hit the bottom!

 

Regards

 

ML

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The reason the big builders have ridden this out is, of course, low interest rates.

 

In the late 80s some of the big builders went bust - because they could not service their debts as interest rates rose.

 

Nowadays there is a huge concerted effort between government, the banks and the big builders to keep all the balls in the air. So far, it has worked.

 

I do wonder if (when?) the merry go round will stop - for how much longer will investors have the money to buy gilts paying rock bottom rates.

 

Surely we only need interest rates to go up a little for the whole edifice to come tumbling down? Maybe not - maybe this is a 10 to 20 year correction where a generation misses out on home ownership and property gradually moves into the hands of investors.

 

One thing seems to be certain to me - nothing is going to change unless and until the younger generation priced out of home ownership and either forced to pay high rents or live with Mum and Dad gets angry and starts shouting the odds.

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The reason the big builders have ridden this out is, of course, low interest rates.

 

In the late 80s some of the big builders went bust - because they could not service their debts as interest rates rose.

 

Nowadays there is a huge concerted effort between government, the banks and the big builders to keep all the balls in the air. So far, it has worked.

 

I do wonder if (when?) the merry go round will stop - for how much longer will investors have the money to buy gilts paying rock bottom rates.

 

Surely we only need interest rates to go up a little for the whole edifice to come tumbling down? Maybe not - maybe this is a 10 to 20 year correction where a generation misses out on home ownership and property gradually moves into the hands of investors.

 

One thing seems to be certain to me - nothing is going to change unless and until the younger generation priced out of home ownership and either forced to pay high rents or live with Mum and Dad gets angry and starts shouting the odds.

 

BOE has openly said stuff you savers !!!

 

We like the debtors and will do everthing to help them!

 

I think we will slowly move to a German style rent system with high debts property values slowly being erroded by inflation of wages !

 

The only hope for people on the sidelines is the 120b in intrest only mortgage debts which are comming up for remortgage. :blink:

 

Oh no problem sir you are 55 here is a forty year mortgage plan ! :lol::o

 

Regards

 

ML

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One thing seems to be certain to me - nothing is going to change unless and until the younger generation priced out of home ownership and either forced to pay high rents or live with Mum and Dad gets angry and starts shouting the odds.

 

Or gets waaay more entrepreneurial. Helps to redevelop rundown, and on their arse areas.

 

And chooses to live in places in the UK where houses are really cheap (25, 20, 15k and below)...

 

There are thousands of very cheap (and getting cheaper) houses etc in the UK.

 

They just happen to be in places where jobs, development and entrepreneurs are in short supply. And socialism strangles everything.

 

There are approximately 800, 000 empty properties in the UK. Most are habitable with a bit of refurbing.

 

Not all of them are in Burnley neither...

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Or gets waaay more entrepreneurial. Helps to redevelop rundown, and on their arse areas.

 

And chooses to live in places in the UK where houses are really cheap (25, 20, 15k and below)...

 

There are thousands of very cheap (and getting cheaper) houses etc in the UK.

 

They just happen to be in places where jobs, development and entrepreneurs are in short supply. And socialism strangles everything.

 

There are approximately 800, 000 empty properties in the UK. Most are habitable with a bit of refurbing.

 

Not all of them are in Burnley neither...

 

But if you've been brought up in Guildford, if your parents, siblings, grand-parents, aunts, uncles, cousins and, of course, your friends - all live in the area - why should you have to move to Burnley or Preston or Bolton to buy a run down terraced house in a crime invested area ...?

 

I'm pleased to say my eldest lad has recently decided he needs to make a lot of money - that a 'good job' is not enough. So he's worked his nuts off for 3 months - literally every waking moment when he has not been working - learning new skills and already has 10 clients providing him with payments each month. Not big money by any means - but if it takes him 5 years to get to a 1000 clients he will be earning serious dosh.

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But if you've been brought up in Guildford, if your parents, siblings, grand-parents, aunts, uncles, cousins and, of course, your friends - all live in the area - why should you have to move to Burnley or Preston or Bolton

 

Do they want an 'affordable house' or not? If so then they either:

 

A) go where the affordable houses are

 

B ) work hard and smart and suss out how to earn more money. You pay a higher price for a house in the area you feel a connection to

 

C) or carry on earning lower money and renting in the area you feel a connection with

 

Ultimately your personal choice.

 

to buy a run down terraced house in a crime invested area ...?

 

So every cheap house in the UK is 'rundown' and 'in a crime infested area'? This is simply not true. Only expensive houses are in areas that are not 'crime infested'?

 

As a buyer you have to do your due diligence yes. However just because a house is cheap doesn't mean it's in a shitheap.

 

With bubble blowout power a lot of houses are reverting to their former prices and below. And not just because they're in rundown areas either. This to me always looks like an opportunity for a lot of people.

 

The sooner housing costs come down in price the better it will be for the UK. Housing costs being the biggest outlay for the vast majority of people. However sometimes you've got to do the more 'practical' thing. Move somewhere cheaper. Or put up with how things are where you are.

 

What happens if you want an expensive house in a crime-infested area?

 

(Move to Peckham? New Cross? Thamesmead? Hackney? Walthamstow? (all in London))...

 

And there are some nice houses and parts of those areas too.

 

I'm pleased to say my eldest lad has recently decided he needs to make a lot of money - that a 'good job' is not enough. So he's worked his nuts off for 3 months - literally every waking moment when he has not been working - learning new skills and already has 10 clients providing him with payments each month. Not big money by any means - but if it takes him 5 years to get to a 1000 clients he will be earning serious dosh.

 

Good on him and good luck. That sort of 'self-actualisation' is a valuable skill in itself. Clearly he has chosen point B ).

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Looking for a great investment? Overpay your mortgage

By Phil Oakley Mar 15, 2012

http://www.moneyweek.com/personal-finance/mortgages/a-great-investment-overpay-your-mortgage-21100

Fine.

Provided it is in the right location, and not overvalued

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Now that the Horses have bolted ...

 

http://www.guardian.co.uk/money/2012/mar/20/nationwide-interest-only-mortgages [Tuesday 20 March 2012]

 

Nationwide tightens up on interest-only mortgages

Nationwide slashes LTV on its interest-only deals, raising fears it will leave thousands of borrowers as 'mortgage prisoners

 

Nationwide building society has slashed the maximum loan-to-value (LTV) ratio on its interest-only mortgages from 75% to 50%, leading to fears that interest-only deals will eventually disappear, and leaving thousands of "mortgage prisoners" unable to switch to new deals.

 

The rule change means borrowers will have to stump up a deposit of £80,773 to afford an average home in England and Wales on an interest-only basis.

 

The lender, which lowered the LTV for interest-only borrowers from 85% to 75% in April 2011, said the policy was a response to similar changes by other lenders.

 

Industry insiders said Santander's decision in February 2012 to reduce its maximum lending on an interest-only basis to 50% LTV led to borrowers flocking to Nationwide for interest-only deals.

 

Martyn Dyson, head of mortgages at Nationwide, said: "A number of major lenders have recently restricted their criteria for interest-only mortgages, and Nationwide needs to be able to manage application levels in a prudent and sustainable manner. The group is therefore amending its policy to a maximum of 50% LTV."

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I've always said this.

Most importantly it will give you a cushion of a smaller mortgage and more equity when interest rates go back up.

 

Agreed, you can get lulled into a false sense of security with low rates, fogetting how much debt 'one' may actually have behind those low monthly repayements.

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I've always said this.

Most importantly it will give you a cushion of a smaller mortgage and more equity when interest rates go back up.

 

And a better deal from the lower LTV.

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You must be loaded up to the gills in bdev now right JD?

Thursday and Friday action took us well in to your buy zone.

 

Well well, that was back when BDEV was below 90p.

 

BDEV now at 150p

 

Interesting looking back, isn't it? :lol:

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Agreed, you can get lulled into a false sense of security with low rates, fogetting how much debt 'one' may actually have behind those low monthly repayements.

 

 

 

I keep telling my wife this!

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Well well, that was back when BDEV was below 90p.

 

BDEV now at 150p

 

Interesting looking back, isn't it? :lol:

Yes I remember you took this comment completely the wrong way.

 

As I remember you replied something along the lines of when the facts change I change my mind so I take it you didn't buy then?

 

Or did you then change your mind again without telling anyone so you could come back and crow by misinterpreting my orginal post yet again?

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When there are market moves like this, I change my target prices, what do you do?

 

Looking now, I think I might grab some if they get near 50p

 

The low was 67p as I recall... did you change your mind again and buy in at 67p rather than waiting for 50p?

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The low was 67p as I recall... did you change your mind again and buy in at 67p rather than waiting for 50p?

 

I wish :lol:

 

Yes I remember you took this comment completely the wrong way.

 

Yep, hands up, I did. I took it as a dig at the time (as it could have been read) although, AFAIR, I actually admitted that at the time.

 

One of the difficulties of not speaking face to face is that posts can be easily interpreted the wrong way.

 

I only brought it up today as I saw the price and thought it was an interesting example after Sine270's thread about what could have been (especially as BDEV has been used as an indicator by some over the years).

 

http://www.greenenergyinvestors.com/index.php?showtopic=16156

 

The point I was trying to make was, we really cannot know what the future holds, even though sometimes it seems so clear at the time, and the old saying ~"step in when others fear", does seem to pay off, sometimes.

 

Besides, if I hadn't taken all the advice and insights of the posters here so seriously, I could be a bl**dy millionaire by now! :lol: :lol:

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Addressed to JD:

The low was 67p as I recall... did you change your mind again and buy in at 67p rather than waiting for 50p?

I will respond too...

 

Purely from a chart perspective, I think that Barratt will work its way a bit higher.

 

BDEV.L / Barratt Development ... update

 

72680674.png

 

- an old post:

 

...I do have to agree that this looks like a major breakout for Barratt

 

bdev.png

 

It is impossible to know where it will stop, because it has moved into a fresh range, and BDEV will need to form its own top ... in its own time.

 

X : 069.20p : 01.Dec.2010

A : 120.60p : 13 May.2011

B : 064.91p : 19.Aug.2011

? : 146.90p : 23 Feb.2012 (so far)

X-to-A : 51.40p

B-to-? : 82.--p (159.5%)

Target : 83.--p (161.8%) : 148p ??

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A third of a million families may be forced to sell their homes this year as endowment policies fail to deliver

Many who will get a payout of little more than £25,000 — far short of the capital they owe on their home

 

 

Read more: http://www.dailymail.co.uk/money/news/article-2121250/Up-360-000-families-forced-sell-homes-year-endowment-policies-fail-deliver.html#ixzz1qQuR6PHz

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A third of a million families may be forced to sell their homes this year as endowment policies fail to deliver

Many who will get a payout of little more than £25,000 — far short of the capital they owe on their home

 

 

Read more: http://www.dailymail.co.uk/money/news/article-2121250/Up-360-000-families-forced-sell-homes-year-endowment-policies-fail-deliver.html#ixzz1qQuR6PHz

 

Except 25 years ago, when they took out the mortgage, £25k was a bloody good LTV deposit. (Av house price when they took out the deals back then was less than £40k)

 

Guess they'll just have to remortgage for the remaining £15k while rates are at their lowest ever (before they rise). Hardly a reason to sell, but might just affect a few at the margins.

 

Always thought they were a bad idea myself. Letting someone else gamble your money is always going to be a risk.

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