Just sell. sell. Sell ! I don’t care how.

[drbubb]

Just sell. sell. Sell ! I don’t care how.

... just sell now

===================================

 

CRASH WARNINGS on PT, etc.

 

 

The time has come.

The time is now.

Just sell. sell. Sell!

I don’t care how.

 

You can sell on your own.

You can sell by the phone.

Sell as you please, just sell now!

You can sell on the web.

You can sell from a shed.

You can sell with a agent.

But please sell. Please!

I don’t care. You can sell from a bike.

You can sell on a Zike-Bike if you like.

If you like you can sell wearing old blue shoes.

Just sell, sell SELL! Please do, do, Do!

Smart homeowner, I don’t care how.

Smart homeowner will you please SELL NOW!

 

(With apologies to Dr Seuss)

 

/posted here: http://propertytribes.ning.com/forum/topics/to-sell-or-hold

 

 

==

Other PT Threads :

 

1 / Your House price forecast for 2011 please

 

/inspired by: http://lonelyconservative.com/2009/06/dani...-please-go-now/

/link to here: http://tinyurl.com/gpc-warns

[drbubb]

On Property Tribes, you can read postings like this one:

 

"... a correction of 20% is a crash. The UK housing sector has already had one. I am not saying that each country only gets one crash. Just that the argument that the UK has been spared is false. A crash that has happened is not a crash delayed." -

 

== ==

At the risk on sounding "boring", I have sounded another warning.

 

I think that PT's property investors are vastly under-estimating the severity of the correction that the UK is facing.

 

Message to LL's :THE UK HOUSE PRICE CORRECTION HAS HARDLY BEGUN !

 

When UK-wide prices fell by 20% (per the H&N index), Greater London prices fell by only 6% (from Pds. 412,731 to 386,653, per Rightmove. For November, Rightmove has just annouce their current index is 417,279, which is above the 2007 high.) So Landlords in the London area, many of whom may think of themselves as well-tested survivors with appropriate "risk-management strategies" in place, were in reality almost unscathed, and never felt a proper correction. Gordon Brown and the BofE came to the rescue with ultra-low rates just when things were getting "interesting" in late 2008.

 

These charts might show the extent to which prices have corrected in other countries, and how small the correction has been in the UK nationally :

 

(First Posted on GF's Property thread on the Main board):

 

 

Depends on how you look at it, I suppose, Rich.

 

Greece

Ireland

 

Here's Britain from the same source:

 

Ireland is facing its property demons now. So is the USA.

Greece and the UK may still need to do so.

 

Spain

 

- Notice that the peaks in Spain are almost exactly 18 years apart !

A bigger fall than last time seems likely now.

 

In Ireland, average prices have fallen by 35%, while in the US they are down by 28%. As of October 2010, the average price of homes in the UK was 14% off its August 2007 high. While Greater London was actually 1.1% above its 2007 high, according to Rightmove.

 

The UK has so far been spared from a deeper correction thanks to: the timely arrival of ultra-low rates in late 2008, and the (rather alarming?) lack of discipline in Housing benefits. An astounding 40% of privately-owned investment properties are let to subsidised tenants, and rents there have been allowed to rise, even though average rents in the private sector. And the UK's coalition government has now realised how expensive that is, and how it is distorting the property market. Change is afoot, and we have begun to see it in prices. Rightmove has just reported a drop of more than 3% in asking prices - and that's in a single month.

 

I think the second leg down may shock many BTL investors, especially those who think that the Greater London area is somehow immune to price falls. A market cannot be propped up forever, and one of the key props (Housing benefit rent rises) is being pulled away in 2011.

 

== == COUNTRY COMPARISONS == ==

 

Leg1: Ireland-== : UK-======== : GreaterLondon : USA-=====:

High: 139.5-1/07 : 192,490 -08/07 : 412,731-11/07 : 206.52-07/06

Low : 90.3- Q2'10 : 153,477-02/09 : 386,653-01/09 : 139.26-04/09

=== -35.3% === : -20.3% ===== : - 6.3% ===== : -32.6% === :

Bounce:

High Ireland-none: 169,287 -04/10 : 429,597-06/10 : 148.91 -07/10

=== -N/A% === : + 6.4% ===== : +11.1% ==== : + 6.9% === :

Now: 90.3- Q2'10 : 163,333-11/10 : 408,248-12/10 : 147.49-09/10

chg. :-35.3% === : - 3.5% ===== : - 5.0% ===== : - 1.0% ==== :

Vs.Peak

chg. :-35.3% === : -15.1% ===== :- 5.0% ===== : -28.6% === :

 

Note that:

London is now 5.0% off its "bounce high" and is falling faster than the UK has a whole,

which is only -3.5% off its own bounce high. Will Leg 2 down be more destructive for

Greater London landlords, than for the UK as a whole?

 

[drbubb]

Here's an Irish voice, talking about the pain of the crash.

The basic rule: Blame the banks, not yourself for failing to get out in time

 

Ghost estates and broken lives: the human cost of the Irish crash

 

They stand empty across Ireland: 300,000 unoccupied homes, a silent reproach to those who built them believing that the country's economic boom would never end....

 

 

Mr O'Hara's anger is aimed at the banks, which have already been bailed out and seem destined to force the government to seek further help of some kind from Ireland's European partners. "Everyone is responsible for their own actions, but the burden is being brought to bear on the people on the end of the line. In Ireland right now, it's better to owe ¤50m than ¤50,000. The people who have sinned the most are suffering the least," he said, sitting in his cottage along the borderlands between Leitrim and Sligo, in the boggy north-west of the country. "I don't know what's coming, but I know what we've got isn't going to stay. I've lost all faith and confidence in our system."

 

Not far from Mr O'Hara's home, the "ghost estates" are well-known eyesores along the rugged landscape. And the crisis that created them has hit not just the people who built them, but those who might once have expected to move in, as well. Hundreds of thousands of homeowners have already found themselves saddled with negative equity as a result of the crash, economists estimate, with as many as one in seven families affected.

 

The toxic combination of the glut of house-building during Ireland's boom and the current dearth in demand means they have been lumbered with a property worth less than the loan they secured to buy it.

 

 

Personal indebtedness is also an issue, as are redundancy and the end of easy loans, meaning around 100,000 households are struggling to make regular repayments on the money they owe. And yet, house prices continue to fall precipitously. Together with slumping disposable incomes due to frozen wages and stubbornly high unemployment, still running at more than one in every eight adults of working age, many fear a social disaster is unfolding.

 

Even for the few who have yet to feel the pinch from the crisis, its effects on families will be felt next week, when the Budget that was brought forward yesterday yanks a further ¤15bn out of the economy through major spending cuts and tax rises.

 

Many have taken drastic action already. With youth unemployment topping 30 per cent, some have already fled abroad to seek their fortune, or at least stay above the breadline.

 

The Economic and Social Research Institute think-tank estimates that the labour market will not pick up within the next two years, pushing as many as 100,000 people to seek work abroad. In a country of just 4.5 million, that would cause a dent in potential consumer spending, as well as a level of emigration-fuelled social upheaval reminiscent of the 1980s and after the Second World War.

 

/more: http://www.independent.co.uk/news/world/eu...sh-2136104.html

 

LIVING ON A GHOST ESTATE

 

Where the problems of ghost estates really hit home, however, is at home. Think about being an owner who's living in an estate that is still a construction site. The builder has disappeared, and the estate agent says it's nothing to do with him, and most of your neighbours are renters, and their landlords paid about 70% less than you did 12 months ago. You can't let the kids out because it's just too dangerous to play outside, and you're 20 minutes' walk from the bus stop, but the bus only comes once a day anyway, and the shops are miles away, and you've lost your job and are struggling to pay the mortgage. You have been offered a job far away but can't move, and you're understandably miserable.

 

/see: http://www.tribune.ie/article/2010/apr/25/...states-will-ha/

[drbubb]

PT posters stay in denial - so I am forced to elaborate:

 

" The situation UK is very different to US, Spain, Ireland."

== == ==

 

XXX, have you never heard the old saying: The most expensive four words in finance are: "This time is different."

 

The UK has followed the 18 year cycle many times - go and get a copy of Fred Harrison's book, and you can learn more about that. To say that it will not happen this time, may be the most dangerous type of complacency. Be careful.

 

BTW, no one has yet take onboard my arguments, and tried to refute my explanation that:

 

+ The UK started its downturn later than other markets,

+ So sentiment was still mostly intact, and bank losses were of a lesser amount (than in the US and Ireland) when the crisis hit,

+ The UK was the first major country to move into Quantitative Easing, pushing down rates dramatically in late 2008/ early 2009,

+ Ultra-low rates "saved" the Uk property market, and over-indebted landlords, while it came too late for the US and Ireland to save their property markets. (Sentiment was already broken, and banks were already up-to-their-ears in bad property loans.)

+ The Labour government happily supported increases in housing benefits, since they knew it would help to prop up a wobbly property market

 

In effect, the UK government and the BofE "wimped out" and refused to take the pain that other countries like the US and Ireland were taking. The time-delay was only possible because Britain had a bigger and longer-lasting property bubble than those countries. That is, it was reflective of an overlong bubble and therefore a weakness, not inherent strength.

 

The crash has not been averted, it has only been delayed, and leg two down in the property crash has now started. There will be trouble for property owners no matter what, but if rates go up in in the midst of a price slide, there will be a huge disaster in the UK - Worse than Ireland, worse than the US.

 

The UK's economy has been to dependent on financial and property speculation. Now that those sectors are under pressure, we will see that there will be years of weakness.

 

Far from "rubbing my hands with glee", I am more than a little shocked at the level of naive complacency that rules on this website. Is it really so hard to open your eyes to the problems being suffered by highly geared property speculators in other countries?

 

Even though Mr Brown and his colleagues managed to prop up the market for a few months to aid their election chances, that doesn't really mean the UK is immune to gravity. No angels in the sky have issued UK landlords a permanent pass.

[drbubb]

( PLEASE ACCEPT THAT THIS THREAD IS NOT AN ATTACK

on RichG, who seems like a good guy, who is looking to the future with an open mind,

and is preparing for a downturn. However, I do use his posts sometimes, because he does engage the debate.

That does not mean that I think he will get into trouble. He may be as prepared as he sounds like he is.)

 

... the following was first posted on GF's property thread on the Main board...

 

Oh dear doom and gloom we are all doomed!

 

Dr Bubb I have explained quite simply on propertytribes that I agree with you UK property prices are likely to fall. I've also explained why I don't see this as a threat to astute property investors, but an OPPORTUNITY. Still you seem determined to ignore what I and a number of others have said. It's a very British trait (not a good one) to wallow in the failure of others, or the anticipated failure in this case. Yet you aren't British. You will be disappointed because whatever the market does, there will be astute investors who make a profit. Many of those people reside on Propertytribes.

Yes, I suspect that many are. And they just do not know it yet.

 

The "opportunity" will not come until most see the "disaster." That's the way it works in a big cycle downturn. People need to learn first that it is dangerous to buy the dips. That hasn't happened yet.

 

Rich,

I never attacked you or any individual.

What I do think is dangerous is the attitude of complacency which says: "we are different - we are safe."

I think LL's in the UK are not safe, and are very vulnerable, far more than most know.

 

If you are prepared and ready, that's great. Why not help others face the reality, and prepare too.

 

Just holding on, and hoping for the best, will not be enough IMHO.

 

SP banned bad news, and deleted bearish posts, and they actively enforced denial. PT is much healthier than that and Vanessa and other there encourage both points of view. But many PT posters do not like that, and call anything with the smallest amount of bearish commentary "boring." I have decided to post there less as a result.

 

There is enough cyclical material there already, and those that want it should be able to find it.

 

What I would like to see is: people on PT chipping in with a informational tidbits which show the deterioration of the market as it is happening. That is not happening yet. Most are still bolstering each other, telling them that they should not worry. My point is; THEY SHOULD WORRY. The smart ones and open minded ones should be able to see that, and will encourage truth-telling, not complacency.

[drbubb]

THE SHOE SHINE BOYS

 

...I can remember clearly a friday night out in a popular local town in 2008 and EVERYONE i spoke to over the course of the evening was a property developer a property speculator a property landlord a property --------- etc etc etc.

...that was the REAL "SHOE SHINE BOY" moment for me.

 

 

The Shoe Shine boy stopped shining shoes, and instead became an estate agent,

and built up a portfolio of 12 Buy-To-Lets using his credit cards.

 

 

He was looked upon as "brave" and "entrepreneurial", as all the other shoe shine boys followed him in his choice of career.

 

And as the stood around having drinks, they thought all was fine, and could see nothing wrong with the state of the economy. They laughed at those who worked in normal jobs, and thought they were "wage slaves" and simply lacked the brains and the courage to go into property investing.

 

 

As the game slowed down, they started teaching course, living off "the glow" of their past success, and bringing fresh "suckers" into the game, even though the risk/reward was now very poor, and the market was having its last gasp.

 

Just as the game was coming unstuck in 2008, they were all saved by a reckless decision to cut rates to ultra low levels. After a brief wobble, more were attracted to the game, and prices recovered most of what they had lost.

 

The former shoe shine boys told each other: as long as we are making positive cash flow, we will be fine. Don't worry : The government will save us again, if we get squeezed.

 

 

As they toasted each other, and spoke of their next BMV deal, the sun was setting... and some new dark forces were walking the streets. Some would not make it home safely to their warm beds that night.

[00timebandit00]

I imagine it is very difficult to convince an ex shoe-shine executive his/her new found wealth wasn't a direct result of a global fluke.

[drbubb]

I imagine it is very difficult to convince an ex shoe-shine executive his/her new found wealth wasn't a direct result of a global fluke.

From a thread on PT - where they seem to think timing is impossible:

 

"Generally, market timing is a mug's game, with all the academic credentials of reading chicken's entrails. Investors tend to buy when the market is expensive, when rationally they should be buying as the market falls - as it gets cheaper."

 

I emphatically DISAGREE.

 

The timing methods used by most folks do not work. The worst system of all, is reading the newspapers and doing what is suggested by pundits in the press. If you read those articles, you will become very complacent, and jump in at/near the top. On the other extreme, after the market has fallen it will be easy to become overly fearful, and wind up unable to buy near the lows.

 

A better way, is to think for yourself. study the market cycles, and learn to read sentiment, and buy when the psychology is negative and the fundamentals are improving. March 2009 was s good example of a time when fundamentals had improved (thanks to ultra-low rates), but most market participants were still very fearful.

 

The market situation today in the UK is characteristic of a good selling opportunity, not far off the peak. Fundamentals are getting worse, following a cyclical pattern, but people remain very complacent. The coming downside may surprise many IMHO.

 

Alongside your cyclical views, it is good to follow a bellwether, like UK Builder shares prices. They have a strong tract record of leading the market, usually by 6-12 months, so you can use their trends as a confirming signal that your cyclical forecasts are on track. Most UK builders peaked in about Sept. 2009, suggesting we might see a peak in UK property prices around Q1-2010. When a key share like Barratt / BDEV crossed below its 1-year Moving Average in February 2010, that was another confirmation that a major downtrend may have been starting.

 

These signals work well for me, even though some other (who are not used to reading charts). complain the signals are "complicated." To experienced user of cyclical indicators, it is often possible to have strong agreement about where we are in the cycle. For instance, I find Fred Harrison's cyclical pronouncements highly credible.

[pyewackitt]

VERY interesting chart here from Moneyweek.

 

Net Lending vs. Nationwide prices:

 

http://www.moneyweek.com/news-and-charts/e...ding-00011.aspx

 

What is says it what everyone already knows, that volumes of sales have crashed whilst prices remain high. The question is how long this can last for.

 

- Pye

 

 

[Sonic]

VERY interesting chart here from Moneyweek.

 

Net Lending vs. Nationwide prices:

 

http://www.moneyweek.com/news-and-charts/e...ding-00011.aspx

 

What is says it what everyone already knows, that volumes of sales have crashed whilst prices remain high. The question is how long this can last for.

 

- Pye

 

Wow!

 

 

[00timebandit00]

In a nutshell, this collapse in NML suggests UK house prices are standing at the cliff face. If they were to follow net lending trends, residential property values could be about to halve.

 

From the graph it looks like a loss in value of over half would bring prices back in line.

 

[purechatterbox]

In my opinion maybe the crash is brought by the mindset of the people that real properties will appreciate in value. Because of this belief investments for real and estate properties fluctuates. That is why lots of houses were already built but is not yet occupied. And economics the rule is the greater the supply of the product is compared to its demand, the lower its price would be.

[BradleyWong]

... the rule is the greater the supply of the product is compared to its demand, the lower its price would be.

Yeah - Supply and demand rule

[drbubb]

Vanessa's Question of the week: The property "wealth creation" industry

 

Following the news that one of the most high profile property "gurus", Rhett Lewis, was declared bankrupt last week, I am posing the above question.

 

Rhett claimed he could make people property millionaires in a year. Clearly, that has been proven not to be the case.

 

 

Many people recommended Rhett Lewis and had affiliate programmes with him. Will their reputation be tarnished as a result? How many times can they get away with recommending someone who then lets their "list" down?

 

People now need a 25% deposit. (using finance). No grey areas. This significantly diminshes the number of people who can get involved in property.

 

Will those companies offering NMD deals, leads, portfolio building services, etc. need to change their business model? Many of them have suddenly become experts on lease options and offer education for these. I do not regard that as changing business model as it still attracts people with no money for deposits, meaning that they can only focus on a lease options strategy, which is not a healthy way forwards IMHO.

 

Will these wealth creation gurus have to adapt their marketing to attract high net worth people?

 

Or will there always people who believe the hype and do not do any due diligence on the company or the industry?

 

Does this mean opportunity for those companies that have always touted 25% deposits and have operated in an ethical manner? I think it does.

 

Are we entering a new era of "get rich slow"?

 

What does the tribe think?

 

== == == == ==

(My Reply):

 

Yes. The game is over.

Here's an excerpt from what I have posted elsewhere on PT:

(from UK Crash - Avoided or just Delayed?)

 

"I think the debt-fuelled Landlords in the UK are missing the very important fact, that they have been operating in the favorable environment of a long cyclical upswing, starting back in 1994 or 1995. In effect, property investing has been like a government supported industry, where those investing in the sector have been assisted by loose lending, plus generous and rising housing benefits. The result is that something like 42% of private landlords are renting their properties to housing benefit recipients, and those payments were not handled in a discipline way by the state. That is now changing, and credit is tightening too. Moreover, interest rates are probably at or near their cyclical low point.

 

From where we are, the UK is going to find itself capital-starved, along with many other western countries. Britain cannot afford the luxury of having so much of its scarce capital tied up in a "non-productive" sector, financing mere property investment. My view is that landlords are going to have to pay more for their debt, and they will also find the state much less generous with housing benefits. The days of wine and roses are over. Property-owning is going to be a tougher business for years to come. Landlords are going to be on the receiving end of many of the painful changes in the market. Some will object and say: "I will not be adversely effected, because I do not rent to "publicly assisted" tenants. But such thinking misses the point. The rental market for private tenants is not hermetically sealed. If rents are forced down by a cap on benefits, then then rents in the entire market will be lower. As an example: if assisted tenants move out of "more desirable" areas of London, then that will increase vacancies and supply in that area. Rents will be likely to fall, especially if this change is accompanied by job losses. This sort of "crunch" looks very possible in 2011, and I do not think that most landlords are adequately prepared for it. Longer voids, will probably mean cash flow pressures, and more forced property sales."

 

My advice: Get out while you still can do so at good prices, or at least: Lighten up, and dramatically reduce your debt exposure. Personally, in Hong Kong I have sold 9 out of 10 properties, and made a "dash for cash."

[denarii]

bubb why belabour the point? we have had a 15 year cheap money asset bubble and records have been set by much metrics as comsumer debt/ gdp, wealth divide, house price to income, etc. if you dont believe bubbles pop then bubb is not going to change your mind with logical argument lol

[drbubb]

bubb why belabour the point? we have had a 15 year cheap money asset bubble and records have been set by much metrics as comsumer debt/ gdp, wealth divide, house price to income, etc. if you dont believe bubbles pop then bubb is not going to change your mind with logical argument lol

 

You are probably right... I may be wasting my time with this.

 

The size of the fall that is coming, and the impact on the BTL "business" will be truly awesome IMHO.

I really think that exiting the business will be a smart move for most people, or maybe paying off virtually all

debt is the next best choice.

 

Of course, most MUST deny it, since they simply cannot accept the scale of change they may be facing.

It reminds me of flashing warnings about stock prices in late 2007 / early 2008.

[drbubb]

Its spread across most of todays news papers, finally rates are going up!!! BoE warns, could go as high as 5%...hurray!!!

 

Not so good for people on large variable rate mortages but it was coming.

Housing market crash accelerates from here.

bye bye economy (it died in 2008)

 

Interest rates will hit 5%, warns Bank of England

 

Families should brace themselves for a huge increase in interest rates to ‘normalised’ levels of around 5 per cent, a senior Bank of England official warned last night.

Sell while you still can... There may be loads of defaults and other bad news in 2011

[drbubb]

INFLATION's IMPACT on UK PROPERTY: Sounding yet another Warning ( on PT )...

 

"The faster inflation rages, the better for anybody who has borrowed a lot of money eg Governements."

 

Hi Tim,

My STRONG feeling is that there is a widespread misunderstanding of the dynamics of inflation and how it will impact upon property prices.

 

Before I explain to you why I disagree with those who say that property prices will be helped by rising inflation, let me ask you a question: How has FALLING inflation over the last decade or two impacted upon property prices?

 

The answer is: Falling inflation HELPED to push up property prices, because interest rates fell at a time when average incomes were rising. It would be inconsistent to think the reversal of that trend (ie rising inflation, and stagnant incomes) will help property prices.

 

I think rising inflation will HURT property prices, because interest rates are likely to rise faster than incomes and rents. You can use common sense and see that if rates rise faster than rents, then it is unlikely to be good for property.

 

Sure, rising inflation was good for UK property prices in the 1970's and 1980's, but that was a different type of inflation. The UK was benefitting from the rising price of North Sea oil, incomes were rising, and DEMAND PULL inflation was occurring in the UK. That sort of inflation operated by rising incomes, and rising demand for property pulled rents and property prices higher at a time at a time when interest rates were lagging behind.

 

The type of inflation that the UK is experiencing now is COST PUSH inflation. A weak currency, and the rising cost of essential imports like food and energy are pushing prices up. But incomes are stagnant. And rents have mostly been supported by reckless government subsidies, like excessive Housing Benefits.

 

Do you really think incomes will rise much on 2011 and 2012? There are likely to be many job losses, and incomes will likely lag behind inflation. People will be forced to pay more for food and energy, and will have less money for househodl expenses like rents and mortgage payments. That is hardly going to be good for property.

 

If any estate agent tells you that "inflation will be good for property prices", tell him to strap on a red nose if he fails to understand the difference between Demand Pull inflation, and the Cost Push inflation that the UK is now locked into.

 

If rates rise as much as I expect them to in the next few years, I would think that at least half of those who have stretched and geared up (at 80% and higher LTV's) to buy property at "bubble" prices, are going to find themselves in financial difficulties.

 

I have just noticed that Singing Pig is now "off the air." I used to warn people there aabout speculating on property, and suggest that they look at Gold and Gold shares. My posts were widely dismissed. And I expect my warnings on PT to be dismissed and rubbished by many here. But for the time being, I shall go on sounding them.

[drbubb]

(RESPONDING to a post on my PT thread ):

 

Thanks for those considered points, REI. I don't think we have any significant disagreement on the facts. But maybe I should clarify some of my comments:

 

+ LTV clauses: I can agree that you know better than I - and only a small minority of residential land may have LTV covenants. But I think you will agree that some LL's are subject to such clauses. What percentage do you think it may be?

 

+ 42% rented to housing benefit tenants- I am probably the source of the confusion. The statistics is not mine. I picked it up on the web, from an article posted on HPC, I believe. The statistic that I recall was: 42% of privately owned properties are rented to housing benefit clients. This makes housing benefits far more important - nearly half the market - than if just 4% of LL's had some exposure to this sector, where rents are being reduced or capped.

 

+ I think you will agree than banks lending more and more money against essential the same limited stock of houses adds little to the prioductive capacity of the UK. The great villain Briown used housing (and public sector hiring) to keep economic growth going. I think the coalition is too smart to keep this cancer growing.

 

+ Falling HB rents - I think you agree with me that forcing HB rents down will tend to reduce the level of rents in the entire market. Falling employment will be another negative factor.

 

I do agree that as fewer people buy, rental demand rises. But guess what? Properties that were vacant and for sale eventually get taken off the market and offered for rent. So some of that rising DEMAND for rentals is met by a rising SUPPLY of properties to rent.

 

A more important factor may be this: NEGATIVE GROWTH in household formations. I don't believe we have seen this yet, but I think it is coming. As the second leg down in the recession hits, people will find it more difficult to live on their own, and many people without jobs and/or on reduced housing benefits will move in with friends and family. First, the growth of households will slow, and then it may even become negative. If we see this, it will have a very negative impact on property prices.

 

+ London vs. UK - People seem to take for granted that London will always shine relative to the rest of the UK. Perhaps not. If the banking sector shrinks, and/or taxes on the wealthy rise, the number of wealthy and high income people wanting to live in London will fall.

 

I live in Hong Kong, and what I am seeing here is that London bankers are seeking jobs here rather than staying in London. Part of the reason is taxes. Another part is the business environment is better in Asia.

 

I see big changes in the year ahead. By the end of 2011, I think a majority of UK property investors will understand that a prolonged slide is underway.

[wee Jinky]

http://www.guardian.co.uk/business/poll/20...ket-houseprices

 

never seen sentiment this low before

 

I stuck my neck out in 2007 and said 50-60% drop from peak

I stood amazed at the manipulation of Govt and banks

and the gullability of the people to believe them

I even questioned my own beliefs (for a while)

 

you can fool all of the people some of the time etc etc

 

more positive now than ever where we are headed

 

[drbubb]

http://www.guardian.co.uk/business/poll/20...ket-houseprices

never seen sentiment this low before

POLL RESULTS - in case it gets wiped:

 

The Royal Institution of Chartered Surveyors says house prices will fall by no more than 5% next year.

Is it right?

10.8% Yes, the worst is over for the market

89.2% No, there'll be more bad news to come

 

[drbubb]

I AM NOT THE ONLY BEAR

 

I get the idea that the mainstream media may be getting ready to jump on the Bearish bandwagon

It only makes sense...

 

UK HOUSE PRICES SET TO PLUNGE NEXT YEAR

House prices could fall by up to 7 per cent in 2011

 

By Sunday Express Reporter .. December 26,2010

 

HOUSE prices could fall by up to 7 per cent in 2011, economists believe.

Howard Archer, chief UK economist at IHS Global Insight said: “While we do not expect house prices to crash, we do expect them to gradually lose about 10 per cent from their peak 2010 levels by the end of 2011. This implies that house prices are likely to fall by a further 6 to 7 per cent during 2011.”

 

He put his gloomy prediction down to rising unemployment, moderate wage growth, increasing fiscal squeeze, low consumer confidence and difficulties getting mortgages.

He added: “Much will depend on mortgage availability, the amount of houses coming onto the market and how well the economy holds up as the fiscal squeeze increasingly kicks in.”

 

The gradual slide in prices is likely to be confirmed on December 31, when the Nationwide is expected to report that house prices fell by a further 0.5 per cent month-on-month in December, after a 0.3 per cent drop in November.

The Bank of England is predicted to report on January 4 that mortgage approvals for property purchases were stable at 47,000 in November compared with a total of 47,185 for October.

However, this figure is substantially less than the 70,000 to 80,000 level that is considered consistent with stable house prices.

 

/more: http://www.express.co.uk/posts/view/219424...lunge-next-year

 

[drbubb]

" There are plenty of bargains around - but investors need to hunt them out...

Skilled investors will make money in property regardless of whether the market is moving up, down or sideways."

I disagree.

There are a huge number of investors around "hunting bargains", so if something is cheap, it is probably cheap for a good reason.

 

Have you never heard the statement: "Everyone is a genius in a Bull market." Basically, you have had a long, long bull market in UK property from 1994-2007... and for those investing in London: from 1994-2010. It has been easy to make money.

 

My view is that we have now entire the Second Leg Down in a property Bear market, which will hit property everywhere, including London. Most property investors on PT are too young to remember a real Bear market. And I reckon that this one will be FAR WORSE than the bear market of 1990-1994.

 

It is not going to be easy to make money in property in the next 3-5 years. Conditions will be very different than most here have seen. Instead of encouraging inexperience young people to jump in at the top, you should be suggesting that she do her research, and look back at the property Bear markets of the past, as well as those raging in Ireland, Spain, and the US. Few in those countries are making money, because prices are falling too fast, and buyers are scarce, even as it is difficult to find good tenants.

 

===================

Stephen Fay ACA said:

 

Nathan

 

I couldn't disagree more. There are plenty of bargains around - but investors need to hunt them out. If you are simply relying on the market moving then I do agree that waiting may be better - the rationale being that general prices are likely to be lower next year.

 

Skilled investors will make money in property regardless of whether the market is moving up, down or sideways. Care is required to select the right properties, and pay the 'right' prices. Timing the low-point in the UK property market is rather difficult!

 

Regarding selling ... my worst property has dropped in value by 20%. My best have dropped 5-7%. Most are on lifetime trackers maying 1-2% over BOE & LIBOR. I've ploughed my profits back into substantial maintenance works & boosting cash reserves ... and paying down 2 particular mortgages that are on an SVR at 5.5%.

== == ==

 

/source: http://propertytribes.ning.com/forum/topic...58Comment107539

[denarii]

Have you never heard the statement: "Everyone is a genius in a Bull market." Basically, you have had a long, long bull market in UK property from 1994-2007... and for those investing in London: from 1994-2010. It has been easy to make money.

 

My view is that we have now entire the Second Leg Down in a property Bear market, which will hit property everywhere, including London. Most property investors on PT are too young to remember a real Bear market. And I reckon that this one will be FAR WORSE than the bear market of 1990-1994.

 

It is not going to be easy to make money in property in the next 3-5 years. Conditions will be very different than most here have seen. Instead of encouraging inexperience young people to jump in at the top, you should be suggesting that she do her research, and look back at the property Bear markets of the past, as well as those raging in Ireland, Spain, and the US. Few in those countries are making money, because prices are falling too fast, and buyers are scarce, even as it is difficult to find good tenants.

 

what is that charlie munger quote, 'never invest in a market where everyone in it has a phd, as you will never make a dime'

 

i think he was referring to derivatives, but he may as well have been referring to uk proprerly after a 10 year but to let bubble, where any half wit can compare the rental yield to the mortgage cost and fill in a mortgage application. lol

[drbubb]

what is that charlie munger quote, 'never invest in a market where everyone in it has a phd, as you will never make a dime'

 

i think he was referring to derivatives, but he may as well have been referring to uk proprerly after a 10 year but to let bubble, where any half wit can compare the rental yield to the mortgage cost and fill in a mortgage application. lol

I agree.

There is way too much capital tied up in BTL, and that cannot be good for the country.

 

The funny thing is: they all think they are buying property at 25-30% "Below market value."