The Housing Market Is Hanging On By A Thread Signals High End Real Estate

[Atilla]

Look at what happened to property prices in Northern Ireland...a loss of over 54% ! :-0

But the forkwits will tell you the U.K doesn't do property crashes...last time I checked Northern Ireland is a part of the UK...but to tell you the truth under all this Brexit I've lost track myself

NT you missing the point. It is simply about supply & demand. Whilst the US & EU were having issues 2007/8 - property asset prices were storming ahead in Asia including Australia (and BRICS were doing well). London hardly registered and recovery was really a V-type correction in UK property market. Much of it supported by migrants, foreign investors/buyers and lower interest rates, easy money yes.

The economic cycle is with us but as with capitalism (without changing the subject) can not handle any slowdown in profits. Capitalism is inherently unstable seeking continuous growth in profits etc.

Same thing happened in Spain as in Irelan ie with the PIGS. The boom and bust was avoided or perhaps postponed but easy money policy did work.


imho What we need now is some fiscal policy to bring in tax revenue and redistribute that to infrastructure projects and manufacturing around the country to provide the platform for UK to be able to compete in international markets.

Bit of inflation here should help to eradicate the debt burden too.


To answer the question of the thread however, to get back on track - the UK housing is not hanging by a thread but ticking along nicely with an increase in supply a requirement for continued stability and dampen excessive price rises.

 

[forker]

Central Banks cause the property bubbles by suppressing interest rates

gardian article

"The report, called Finding Shelter, cites statistics showing that 85% of prime London property purchases in 2012 were made with overseas money. "

"Civitas says the problem is not confined to the top end of the market and that overseas buyers are also acquiring less expensive newbuild homes. It says that over the past two years only 27% of new homes in central London went to UK buyers, while more than half were sold to residents of Singapore, Hong Kong, China, Malaysia and Russia."

In the run up to 2007, Russia and Singapore had interest rates of 6%, Malaysia was just under 3%, Hong Kong was over 4%, and the UK was over 4%. None of the countries listed had suppressed interest rates so how does one explain the cause? this leads onto your next point:

it was Gordon Brown who helped fuel the UK property bubble and subsequent bust in 2007

Admittedly, Gordon is a basket case with him selling our gold reserves the way he did. That being said, he was responsible for freeing brownfield land for new homes and gave people a change to shared ownership but this wasn't a driver to inflation, it was a reaction to it. Availability of land is one of the key drivers in the shortage of property. It could be argued that Gordy could have slowed foreign investment through taxes. It also could be argued that he could have removed tax credits to landlords (controversial as they provide rental liquidity).

Gordy is a good point you raise however you fail miserably in your delivery where you associate his help with this "bust" as you call it in 2007. Gordon was not the architect of subprime securities categorised as investment grade. Nor was he responsible for the lack of liquidity on international capital markets. He also wasn't responsible for banks, such as those in Ireland,for holding too much risk in a single asset class. Ultimately we can only conclude that you talk a good turd which is evident with your elegant follow through:

it was Gordon Brown who pushed interest rates down to almost 0%

in 1997, Gordon announced that the bank of England have operational independence over monetary policy (including setting interest rates). Stating he pushed them down to almost 0%, well, the only comment i have on this is the irony in your following statement:

My experience tells me that you and others in this thread haven't got the foggiest idea of what you are talking about.

one more thing, i need to correct you on something:

misguided belief that the days of boom and bust are over.

Perhaps i should put it in layman's terms so you don't regurgitate the turds that flow so easily for you

"Does not apply globally anymore"
does not translate to
"believing the days of boom an bust are over".

Your interpretation of what i have said is no different than me telling you measles doesn't kill globally anymore. Your interpretation then follows as the days of people dying of measles are over.
:whistling

 

[cantagril]

Houses are selling just fine thankyou no one needs a scam property buying site when the demand is so high and retail prices are through the roof! No one is having a problem selling houses right now.

Absolutely, the currently boomlet is imo the exact right time to be sellin' your dwellin'.

As to buying, weeeell, I'd suggest being a tad more circumspect. I vividly remember what happened with the demise of Multiple Mortgage Tax Relief under that paragon Nigel Lawson. The thing was phased out over some time, during which period, house prices started to decline but rallied as the expiry date drew near. My aunt sold her house very well on the very last day (1990 ish?) to a couple working in marketing and finance. As I recall, the housing market then basically fell off a cliff and it seemed that nobody could sell anything for several months. The yuppy couple both lost their jobs and the property was sold on for about 40% less than the price they paid before they'd been in it a year.

I didn't mind as I was able to buy my own first house at a huge discount. It didn't increase in value for something like 5 years but I wasn't really bothered as for me it was a place to live rather than an investment. ...in any case, the first wife ending up getting it, along with half the cat.

....and now we have an approximately parallel situation: an economy in the cesspit with all semblance of control abandoned and the happy new house owners who'll be waking up on April Fool's day 2021 when the Stamp Duty Holiday has ended.

Looks like a trigger to me.

 

[mpups]

Absolutely, the currently boomlet is imo the exact right time to be sellin' your dwellin'.

As to buying, weeeell, I'd suggest being a tad more circumspect. I vividly remember what happened with the demise of Multiple Mortgage Tax Relief under that paragon Nigel Lawson. The thing was phased out over some time, during which period, house prices started to decline but rallied as the expiry date drew near. My aunt sold her house very well on the very last day (1990 ish?) to a couple working in marketing and finance. As I recall, the housing market then basically fell off a cliff and it seemed that nobody could sell anything for several months. The yuppy couple both lost their jobs and the property was sold on for about 40% less than the price they paid before they'd been in it a year.

I didn't mind as I was able to buy my own first house at a huge discount. It didn't increase in value for something like 5 years but I wasn't really bothered as for me it was a place to live rather than an investment. ...in any case, the first wife ending up getting it, along with half the cat.

....and now we have an approximately parallel situation: an economy in the cesspit with all semblance of control abandoned and the happy new house owners who'll be waking up on April Fool's day 2021 when the Stamp Duty Holiday has ended.

Looks like a trigger to me.

Thanks for sharing your experience. Its good to know the background to these historical price changes, I knew nothing of this. Sorry to hear about the cat

 

[cantagril]

Thanks for sharing your experience. Its good to know the background to these historical price changes, I knew nothing of this. Sorry to hear about the cat

The more years one hangs around the more that enriches one's perspective.

As an example, I watched Black Monday unfold on a trading screen back in '87 - actually though, it was Brown Tuesday because the shit didn't hit the fan until 24 hrs after it toasted the US. Anyway, having spent the day frozen in front of the screen, I went home and rang my Dad who was heavily invested in all sorts of Blue Chips. I told him all about the bloodbath and asked him what he was going to do. "I think I'll have some more wine." he said...and with that, the matter was closed.

In what seemed to be an indecently short time, the market was back up to where it'd been pre-crash. When I later asked him how he had been so cool, he explained that he had been a young man in 1929 when the market crashed then and his own father had said almost exactly the same thing and of course the market had indeed recovered though it took a few years.

...and yes, losing 50% of my favourite feline was indeed a tragedy but I'm a half-a-cat-is-better-than-none kind of chap so I did eventually get over it - and besides, I was relieved of 100% of my less than favourite wife so it definitely wasn't a completely unmitigated disaster.