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

[BoldAsBrass]

Totally disagree.

A 'collapse' of 50% will not leave an intact banking system.

 

You seem to have completely misunderstood me - and quoted me out of context. I was replying to someone else who postulated a collapse of 50% - and I pointed out that a collapse of 50% will not leave an intact banking system.

 

That is my basic point. You can't have a 50% collapse in house prices without the UK's banking system - and economy - going down the pan. Becauser there is simply too much money lent into the housing market now. It's not like the boom in the late 80s which inflated - pretty much only in London and the South East - between 1986(ish) and 1st August 1988. The money lent into the market then was a drop in the ocean compared to the nationwide boom between (depending on your part of the country) about 1998 and 2010.

 

Totally disagree again.

We are not witnessing a structural shift in property ownership - It's just a bubble.

I expect those people in their late 30s who have built portfolios during the boom will be very poor in a few years.

 

Surely the facts speak for themselves. The market has been driven by BTL for about 7 years (or more) now. FTBs have been at record lows for years. Average age of FTB has been mid 30s for getting on for a decade in some areas. How much more evidence do you need? Even the media have twigged young people are priced out. Yet prices have not collapsed - given the absence of FTBs and the (alleged) dependence of the market on them - it seems to be a minor miracle that still 600,000 housing transactions a year are taking place.

 

Scumbags I know who have small portfolios are still looking to buy more - when the time and price is right. You can't stop this now - it's not a bubble based on absurd bank lending. It is a structural shift in property ownership.

 

When the average age of a FTB reaches 40 (37 last time I looked) would you agree then that we are seeing a structural shift? My generation married and bought houses in their early to mid 20s.

[bobbyald141]

You seem to have completely misunderstood me - and quoted me out of context.

 

Apologies if I have.

 

 

Surely the facts speak for themselves. The market has been driven by BTL for about 7 years (or more) now. FTBs have been at record lows for years. Average age of FTB has been mid 30s for getting on for a decade in some areas. How much more evidence do you need? Even the media have twigged young people are priced out. Yet prices have not collapsed - given the absence of FTBs and the (alleged) dependence of the market on them - it seems to be a minor miracle that still 600,000 housing transactions a year are taking place.

 

I still disagree. I see nothing more than a long boom fuelled by low interest rates and greed. I do not see any fundamental change that will prevent this bubble from going the same way as all the rest. What you offer as evidence above is nothing more than observations on how the bubble has effect people - it doesn't prove fundamental change.

 

As this market returns to sanity over the coming years I expect FTBs to return, BTL to almost vanish, FTB ages to fall etc.

 

 

 

Scumbags I know who have small portfolios are still looking to buy more - when the time and price is right. You can't stop this now - it's not a bubble based on absurd bank lending. It is a structural shift in property ownership.

 

It will stop. Absurd bank lending is a classic characteristic of a bubble. No permanent structual shift.

We could just agree to disagree but I believe there is some very good news concerning those "scumbags" and their portfolios just around the corner.

 

 

 

 

 

 

 

[drbubb]

Hi WiseBear.

 

It is great to see you joining the debate here... and also on PT - with such sensible comments in both places.

 

On PT I had given up, and decided to give it a rest. You have moved in and done a great jobe communicating the Bearish case.

 

I agree with the last part your comment (on PT):

I’ve been reading for a while but haven’t found it necessary to post as no one else seems to have any idea about what is coming their way.

 

I have to say that I find comments like the following ones (from the PT thread) to be almost beyond belief:

1/

"what has happened over the last couple of years is that only sellers who have had to sell have been taking hits, everyone else is just sitting pretty ."

("Sitting pretty"? More like sitting ducks. Once their equity is wiped out, they will be trapped. If cash flows are squeezed at the same time, as I expect, then many indebyed LL"s are going to be wiped out. Over the long cycle, it's: Ashes to Ashes, Dust to Dust. Only the painful learning experience emerges intact.)

 

2/

"Not every house out there would suffer identical falls in value."

(if your house is down 28% and some guy in another part of the country finds his is down 42%, you are both in trouble. The real question is whether any part of the coutry is going to scape through - as London with an 8% drop did - with less than a 10% fall. I doubt it.)

 

3/

"The majority of banks only just scrapped through the last sharp drop in values and nobody who is an avid HPC fan seems to take a cold hard view of the repercussions. Ok houses are arguably overpriced in some areas and moderation would be a good thing, but huge falls in value would be devastating to the banks and the economy as a whole. It would be pretty hard for anyone to take advantageof the falls with banks going under and the economy in free fall."

(Erh... Yeah! " huge falls in value would be devastating to the banks", and that's why you want to be out of debt, and sitting with cash. Governments are not going to be able to bailout the banks a second time, without destroying their own credit ratings, so properties going to fall to a level where buyers with little credit will be able to afford it.)

 

There seems to be an attotude on PT: if you do not WANT something to happen, and you refuse to TALK about it happening, it will therefore not happen. The technical name of this attitude is Denial. Most folks on PT seem to be swimming in it.

[bobbyald141]

Hi WiseBear.

 

It is great to see you joining the debate here... and also on PT - with such sensible comments in both places.

 

Thanks, I decided to inject a little reality into their dream world - it won't make any difference of course.

 

 

There seems to be an attotude on PT: if you do not WANT something to happen, and you refuse to TALK about it happening, it will therefore not happen. The technical name of this attitude is Denial. Most folks on PT seem to be swimming in it.

 

Like this from Vanessa: I generally find that, in life, if you totally commit to something, whether it be a relationship or a strategy, it all comes right in the end.

 

You see Bubb that's all you need to do: commit to it, work hard and wait. There is no need to understand economics or finance and no need to bother with common sense. Wouldn't it be great if the world really worked like that? I think she has a nasty suprise coming soon - reality.

 

 

Also, how about this from Mark: One thing I know for sure is that there will always be boom and bust in the UK housing market, that's fine by me. It's stagnation that causes me real problems.

 

You see plunging house prices isn't a problem for wise, sophisticated landlords the real problems occur when prices just don't move. Don't you just hate it when your investments refuse to go down

 

 

 

 

 

 

 

 

[G0ldfinger]

My eldest son was heading into town on New Year's Eve and was leaving his car at home. Usually when he does this he sleeps at one of his mate's places. But, this time he said 'don't know how I am going to get home tonight' and I said; 'why aren't you sleeping at ... and reeled of the names of a few people he often stays with' and he said 'they've all moved home - no-one can afford to live away from home any more'.

Interesting anecdotal.

[drbubb]

Like this from Vanessa: I generally find that, in life, if you totally commit to something, whether it be a relationship or a strategy, it all comes right in the end.

 

You see Bubb that's all you need to do: commit to it, work hard and wait. There is no need to understand economics or finance and no need to bother with common sense. Wouldn't it be great if the world really worked like that? I think she has a nasty suprise coming soon - reality.

LOL - so true ! (that they think that way.)

 

But we have to remember a huge number of rather dim people have made fortunes by "committing" themselves to property and buying-and-holding into this bubble.

 

Each time the market dipped a bit, some deus-ex-machina in the form of a rate cut, or housing subsidy came to bail them out of difficulty, and now they believe that all their mistakes of paying too much or over-gearing will always be saved by a forgiving market that either raises, or provides rate cuts.

 

No wonder they live in "warm" denial.

 

This has encouraged a sort of moral hazard of paying too much, over-gearing, and getting over confident.

 

I think it is pretty clear where the market is headed and how these excesses end.

 

Also, how about this from Mark: One thing I know for sure is that there will always be boom and bust in the UK housing market, that's fine by me. It's stagnation that causes me real problems.

 

You see plunging house prices isn't a problem for wise, sophisticated landlords the real problems occur when prices just don't move. Don't you just hate it when your investments refuse to go down

LOL.

I can only laugh at the silliness of that remark. How can I possibly comment intelligent on it, other that to repeat what you said.

 

[Meralti]

Like this from Vanessa: I generally find that, in life, if you totally commit to something, whether it be a relationship or a strategy, it all comes right in the end.

 

You see Bubb that's all you need to do: commit to it, work hard and wait. There is no need to understand economics or finance and no need to bother with common sense. Wouldn't it be great if the world really worked like that? I think she has a nasty suprise coming soon - reality.

 

Odd isn't it? How some people see activities that make money like being in a relationship. I think that they are almost opposites. Investing is about making making money, thereby becoming better off materially. Maybe it's just me but relationships usually cost you something and you gain something non-material. Either that or they don't last. I suspect that property will prove to be a false friend/lover for many.

 

Perhaps they should read more, articles like this.

 

If Bank of England base rates move up to 5%, charging rates on most current buy-to-let mortgages will be around 8% or 9%, leaving a number of borrowers unable to cover their mortgage payments with rent income. .

[drbubb]

Odd isn't it? How some people see activities that make money like being in a relationship. I think that they are almost opposites. Investing is about making making money, thereby becoming better off materially. Maybe it's just me but relationships usually cost you something and you gain something non-material. Either that or they don't last. I suspect that property will prove to be a false friend/lover for many.

 

Perhaps they should read more, articles like this.

That is maybe true from a male's perspective.

Maybe the opposite is true for females: THEY invest emotionally, and get back financially.

Men invest financially, and get back emotionally.

 

That can be "healthy" for some. But I think I prefer a bit more equality - and I am enjoy that now.

 

I am afraid that Vanessa and some other female property investor is going to get a big surprise when the emotions they have invested in their properties are rewarded with years of losses. They will be screaming for the government and the courts to "get back" their losses. Sadly, the world does not work like that

[warpig]

Sorry I didn't realise you replied.

 

Well this is it, the banking system will collapse at some point, either in nominal or real terms, depending how the government deal with the level of debt and contagion in the system. They are clearly over invested in over valued assets across the world. It doesn't have to start here, the collapse is likely to be a result of contagion from somewhere like Ireland where the UK is heavily invested. My gut feeling is, when it goes, it will fall fast as the bottom end of the market isn't supported by FTB's. Once asset values have `reset` and the banking facilities have been `rebuilt`, this is when FTB's will be able to afford to buy, at normal salary multiples with sensible sized deposits. The only justice in all of this, is it will be FTB's that are least effected by the financial crisis as they haven't lived long enough to accumulated any debt, good luck to them!

 

I appreciate what you're saying about the supply of houses in the UK, but I am of the firm opinion the coming collapse of the housing market has nothing to do with the supply/demand of houses, it has everything to do with the level of credit extended to home buyers and the facilities that offer them. In as much, the future of the UK housing industry is at the mercy of the current economic crisis and I don't think there's any doubt it is going down, as a minimum in real terms.

 

Sorry I still disagree. I feel the only reason it appears that way, is because the `Baby Boomers` are at the end of the their mortgage life on their primary property and have plenty of equity to leverage in to additional properties... The mortgage industry wheels must keep turning, as this is all they do and in my opinion, they will continue to lend to the `least worst` customers first. Even if the banking collapse was 30 years away, house prices would need to correct much sooner, as the market isn't being fed from the bottom and there is a limit to even the Baby Boomer's appetite for property.

 

A 'collapse' of 50% - with an intact banking system and FTBs able to buy (then) with relatively small deposits and reasonably available credit - is what seems idyllic to me. I wouldn't use Ireland or the USA as any sort of a guide myself. I can't see unsold new builds stretching to the horizon anywhere in this country. And, with our draconian planning laws, never will.

 

You describe the current situation as untenable. It has been tenable for about 7 years where I live. FTBs were priced out by BTL scum years and years ago. Even the credit crunch has barely changed house prices - just volumes. And with 48000 mortgage approvals last month - we still have 600,000 housing transactions a year. Okay, not a million, but this reduction in volume has not been accompanied by a similar reduction in price.

 

No, we are witnessing a structural shift in property ownership. I don't think it's a baby boomer thing particularly. It's a 'those that have money' thing. I know a few people in their late 30s who have built portfolios. It's a change - that's all. A cycle if you will. A hundred years ago the working class did not own property. In the post war years it became relatively common for working class people to own property. We seem to be going full circle - in 20 or 30 years the working class will all be renting again (perhaps).

[BoldAsBrass]

Sorry I still disagree. I feel the only reason it appears that way, is because the `Baby Boomers` are at the end of the their mortgage life on their primary property and have plenty of equity to leverage in to additional properties... The mortgage industry wheels must keep turning, as this is all they do and in my opinion, they will continue to lend to the `least worst` customers first. Even if the banking collapse was 30 years away, house prices would need to correct much sooner, as the market isn't being fed from the bottom and there is a limit to even the Baby Boomer's appetite for property.

 

Ah well, guess we'll just have to wait and see. I hope you're right - because I want my kids to have a decent standard of living and not be in hock to some parasitic banker for their whole lives.

 

I'm still not convinced by the idea that it is baby boomers who have been buying the BTL property. Obviously some have - maybe even a lot have. I'm a boomer but few of my friends, over the years, have ended up as multiple property owners. But our world view is formed by our own experience as well as what we glean from the media.

 

Two examples spring to mind ... I have a nephew who is 31. He has a mate who seems to have made some money running a graphic design agency. I met him at a christening the other day - he owns 4 BTL - he is not saving anything in a pension and told me he is hoping to selll the business and retire when he is 40.

 

A guy I do some work for from time to time is an IT consultant (one of the ones who earns really serious money). He too has a small portfolio and last time I saw him was considering putting money into a small development a mate of his is doing.

 

All I can see going on at the moment is that those with money are still investing in property and those without are renting it off them. I really wish it were different, but it is going to take legislation to restrict property ownership before that happens and, unfortunately, in this country, hell will freeze over first.

[tallim]

...

All I can see going on at the moment is that those with money are still investing in property and those without are renting it off them. I really wish it were different, but it is going to take legislation to restrict property ownership before that happens and, unfortunately, in this country, hell will freeze over first....

 

Don't assume that this is always a bad thing, at the moment, this is the only thing giving me access to housing at costs from 7 or 8 years ago, for some reason my landlord wants to use his capital to make it cheaper for me to rent from him than buy at today's prices using a mortgage. As a double bonus I'm now free to use my capital for other purposes and I don't have exposure to a market that I don't want to (UK Property Prices). Landlords may have contributed to the boom, but they also provide the answer for escaping it.

[drbubb]

Well this is it, the banking system will collapse at some point, either in nominal or real terms, depending how the government deal with the level of debt and contagion in the system. They are clearly over invested in over valued assets across the world. It doesn't have to start here, the collapse is likely to be a result of contagion from somewhere like Ireland where the UK is heavily invested. My gut feeling is, when it goes, it will fall fast as the bottom end of the market isn't supported by FTB's. Once asset values have `reset` and the banking facilities have been `rebuilt`, this is when FTB's will be able to afford to buy, at normal salary multiples with sensible sized deposits. The only justice in all of this, is it will be FTB's that are least effected by the financial crisis as they haven't lived long enough to accumulated any debt, good luck to them!

I Agree.

 

What is interesting, is that the discussion on the PT thread has now moved on from breast-beating denial towards pondering the realities.

 

Here's a post just made there:

 

TAM, your:

"most homeowners simply cannot sell below what they paid for their homes as they owe the banks more than they paid for them"

 

I expect many forced sales, with banks that "overlent", offering loans of more than 75%LTV facing many foreclosures, and then maybe putting those properties up for sale. That is exactly what is happening in the USA, Spain, and Ireland. What makes you think the UK will escape this? It is a common thing after the bursting of such a massive bubble.

 

"if the scenario you predict did occur then the banks would take another severe beating and it would probably make the credit crunch look like a picnic..."

 

Yes. That is exactly right. The UK whimped out in late 2008/ early 2009 and was the first to more to ZIRP, delaying the inevitable. The crash was delayed, not averted. Uk property owners were given a marvelous "dead cat bounce" to sell into- and I have been recommending that people do just that. My wise advice (if it is that?) has been rubbished by many here, but in 2-3 years, if not sooner, I reckon virtually everyone on PT will wish they had taken the advice.

 

... another poster there, JM, says this:

 

Currently, I am super cautious. IMO, the mindset that if I am not planning to sell, it does not matter what happens to property values is flawed logic. It's like owning a bond that is loosing its OMV, but is still providing coupon or rent but is still an asset that will break your back and teeth if you DO have to sell. The problem is that life changing events can force a sale and property has become an overly cash intensive business. In the days of 100% finance, I bought a lot and knew that I won't loose hard cash if $hit hits the fan. There is always bankruptcy and I invested in other asset classes through SEP's that have bankruptcy protection. It was almost a riskless proposition with the exception of tarnishing my credit which can be easily rebuilt with couple of good deals. I got wiser in my later years and offloaded before the titanic.

[tallim]

Browsing through unsold residential auction lots and I spotted this one;

 

15 Bevan Court, Dunlop Street, Warrington

 

 

http://www.houseprices.co.uk/e.php?q=15%2C...ngton&n=100

 

Bought new on 27/09/2006 for £205,000

 

Bought on 30/10/2008 for £155,000

 

Available as unsold at Auction with a guide-price of £65,000-£75,000

 

http://www.auction.co.uk/residential/LotDe...amp;S=L&O=A

 

Maybe landlords can't sell?

[drbubb]

Browsing through unsold residential auction lots and I spotted this one;

15 Bevan Court, Dunlop Street, Warrington

. . .

Bought new on 27/09/2006 for £205,000

Bought on 30/10/2008 for £155,000

 

Available as unsold at Auction with a guide-price of £65,000-£75,000

Maybe landlords can't sell?

That's a hefty drop.

Will foreigners go on propping up London prices??

 

(A)

...if £ the continues to appreciate, this may take the edge off the foreign buyers' market in London...

No danger of that now.

Q4 GDP -0.5%!

http://www.bbc.co.uk/news/business-12272717

Bang goes the interest rate rise.

 

Dip, dippery.

Dip, dippery.

Dip, dip, de-roo.

A double-dip is coming.

and it's good for you !

 

"The UK's economy suffered a shock contraction of 0.5% in the last three months of 2010, figures have shown.

 

The severe weather hit activity in the quarter, but the Office for National Statistics (ONS) said even if the weather impact had been excluded, activity would have been "flattish".

 

The Chancellor, George Osborne, said the numbers were disappointing.

But he added the government would not be "blown off course" from its austerity programme.

 

The figures are set to raise concerns over prospects for the economy, with large public spending cuts expected to come in this year.

 

The BBC's economics editor Stephanie Flanders said people were right to worry about where the UK's growth would come from in 2011, especially as higher-than-expected inflation had dealt a further blow to household budgets.

. . .

'Horrendous'

The contraction took economists by surprise, as forecasts had been for growth of between 0.2% and 0.6%.

The construction industry was a large contributor to the fall, with activity decreasing by 3.3% in the quarter."

 

A surprise ? I think not.

This post anticipated the dip:

FALLING EMPLOYMENT - suggest falling incomes may lead to pressure to cut Rents

Some relevant charts

(2)

.

The employment rate for those aged from 16 to 64 for the three months to October 2010 was 70.6 per cent, down 0.1 on the quarter. This is the first quarterly fall in the employment rate since the three months to April 2010. The number of people in employment aged 16 and over fell by 33,000 on the quarter to reach 29.13 million. The number of people employed in the public sector fell by 33,000 on the quarter to reach 6.01 million while the number of people employed in the private sector was unchanged on the quarter at 23.11 million. The number of people working full-time fell by 58,000 on the quarter to reach 21.17 million.

/source: http://www.statistics.gov.uk/cci/nugget.asp?id=12

 

(3)

UK has big risk of double-dip in employment and wage rates

/source: http://www.finfacts.ie/irishfinancenews/ar...e_1019481.shtml

(

What happened in Dublin is not coming to London to anything like the same degree. The currency will go first.

The drop is not finished in Dublin.

Nor is it finished in the UK, where it is just beginning.

 

Where are this "wealthy foreigners" going to come from (with many countries headed into economic slowdowns) ?

And why should they choose the UK, if the tax regime begins to change?

[Van]

 

That's actually the 7th worst quarterly performance since 1990 and worse than Q2 2008, when GreatCrash#1 was just getting underway.

 

Stagflation is here.

 

 

 

[drbubb]

That's actually the 7th worst quarterly performance since 1990 and worse than Q2 2008, when GreatCrash#1 was just getting underway.

Stagflation is here.

Or Worse: A depression may have begun.

This report should shock the housing bulls. But it probably will not... Not yet.

 

I reckon we will watch fear creep into the market : Slowly at first. Then some news will awaken everyone.

Perhaps it will be a shockingly bad drop in house prices sometime in Q1.

 

[drbubb]

RENTS UNDER-PRESSSURE - A logical expectation

 

"Bank of England chief Mervyn King: standard of living to plunge at fastest rate since 1920s <H2>Households face the most dramatic squeeze in living standards since the 1920s, the Governor of the Bank of England warned, as he reacted to the shock disclosure that the economy was shrinking again.

Families will see their disposable income eaten up as they "pay the inevitable price" for the financial crisis, Mervyn King warned.

With wages failing to keep pace with rising inflation, workers' take- home pay will end the year worth the same as in 2005 — the most prolonged fall in living standards for more than 80 years, he claimed."

/source: http://www.telegraph.co.uk/finance/economi...ince-1920s.html

 

A landlord would have to be either: incredibly greedy, stupid, or both to think he is going to find it easy to get rent rises in an environment like that.

A more logical expectation would be rent cuts, which may have started already:

 

"In December, the average UK rent dropped by 1.2% to £684 per month - the lowest average since July 2010 according to the figures.

. . . Rents fell fastest in Wales, down 2.6%, while the average rents in the south east and London decreased by 2.5% and 2.3% respectively."

/source: http://www.mortgageintroducer.com/mortgage...n_11_months.htm

 

Was it just a "seasonal thing", or the beginning of a downturn? We should know soon.

 

"The boom in rental growth is likely to be at an end, think-tank Capital Economics has warned.

Property economist Paul Diggle says the boom is on its last legs and warned that if its unemployment forecasts are correct, more tenants will be struggling to pay rents. Eviction specialist Landlord Action disagreed that rents would go down, but said its instructions relating to rent arrears increased by 12% over the last year, and now comprise 80% of its cases.

. . .

“A recent report by Shelter indicated that two million households have resorted to paying their rent or mortgage with a credit card in the past six months, a situation that is clearly unsustainable.

“Similarly, the Q4 survey from the Association of Residential Letting Agents reported a rise in rental payment problems, and there are good reasons to think that these problems will intensify in the next few years.” The economist said that reforms to LHA which start in April and which will cap benefits paid to tenants in private rented accommodation, will put further downward pressure on rental growth.

 

Diggle said: “Many of the reasons why more tenants will have difficulty paying their rent will also lead to borrowers facing problems meeting mortgage payments."

/source: http://www.introducertoday.co.uk/News/Stor...e=news_features

 

2011 is likely to be "The Year the squeeze on Landlords" starts. Look at the last decade or so, and it is obvious, UK and London landlords have had it "too good for too long" and a period of Yin may follow the profitable Yang.

[drbubb]

UK LANDLORD's are great at Denial...

 

Do you really think rents can hold up, if the UK sees "the sharpest drop in wealth since the 1920's"?

Perhaps you think that Mervyn King is wrong in expecting that to happen, and if so: Why not say so?

 

QUOTE / Richard Greenland said / on the PropertyTribes website :

Simple case of supply and demand Nathan. When the demand for fuel outstripped supply petrol prices went stupid. They still are pretty stupid and the weakness of the £ doesn't help. Did people suddenly stop buying petrol? No, they paid the increase.

UNQUOTE

 

Actually, that is not true.

Have you ever heard of Stockton, California?

 

/source: http://www.zimbio.com/pictures/2k7XHtagIlr...res/BILO0PkC0K8

 

Stockton was called "Ground zero in the sub-prime crisis." The suburban city was located an equi-distant 100 miles from San Francisco, San Jose, and Sacramento (I think those were the three cities), and there were many homes built there because land was cheap. So people bought suburban dream homes, and then drove 1 to 1 1/2 hours to work in or near one of those cities.

 

When oil prices shot up in 2007-8, people could no longer afford the gasoline to drive such long distances. Some sold their homes and moved out, forcing home prices down. Others began to default on their mortgage loans. This was especially obvious in Stockton. But it happened throughout the US suburban areas.

 

In fact, the oil price run-up was a principal (but largely-unrecognised) cause of the financial crisis. The UK was less impacted by high oil, because of the better mass transit links (commuter railways and subways and busses), and also UK people tend not to drive such long distances as many Americans do.

 

But the UK is now about to see similar pressures on rents and mortgage payments as Austerity hits. It would be senseless to deny it, and foolish not the plan for it, especially when Mervyn King is giving such a clear warning of what is to come in the UK.

[drbubb]

H@rseSh/te spoken here:

 

"Even the recent shock drop in UK GDP could prove to be good news for investors in London residential property - assuming that the recovery resumes relatively swiftly. The shock has without a doubt pushed back future interest rate rises, while a weaker Sterling will continue to attract cash rich foreign investors. There should also be some more exciting property deals available to experienced parties that are prepared to look and work hard enough"

 

What utter nonsense!

Weaker GDP, and what Gov.King has called the "biggest drop in wealth since the 1920's & 30's", are not going to help rents, housing demand or house prices.

 

Try speaking truth, if you want business from intelligent folk in places like HK.

 

I am tired of the ridiculous bullish spin that those with vested interests put on every bit of news!

 

(as posted): http://propertytribes.ning.com/forum/topic...-spell-a-growth

[drbubb]

Battling BS II:

 

"Rental growth in London is very strong at present and I expect that trend to continue this year albeit perhaps at a slower rate of growth than 2010's stunning uplift."

 

Martin, What do you base this on?

I believe it is out of date.

SEE:

rents are now being reported as falling.

(1)

rents fall for first time in 11 months

(2)

Boom in rental inflation 'coming to an end'

Sadly, most people here do not seem to recognise pure spin when they read it.

 

Let's revisit this in 6months, and again in 12months, and see who is correct.

 

RESPONDING to / Martin Skinner said:

Hi Nathan,

 

You clearly don't agree with my assessment and sit in the "Roger Bootle mega bear" camp (whereas I don't) which is fine but you don't need to be rude when commenting.

 

The ONS GDP results have been volatile to say the least and subject to numerous (typically upward) revisions recently so my view and that of the editor of Property Week who has no "vested interests" as you put it is that the -0.5% reported could well move back up a shade or two.

 

A relatively typical recovery pattern has been followed for some time now and I personally don't believe we're heading for a double-dip. People are understandably nervous and therefore sentiment is particularly volatile so the negativity is overdone in the wake of one quarters report.

 

Rental growth in London is very strong at present and I expect that trend to continue this year albeit perhaps at a slower rate of growth than 2010's stunning uplift. Transaction levels have also risen (albeit from a very low base) and I've recently had an offer on one of my flats that signficantly exceeds the price I paid for it near the peak of the market - one that just a few months ago I was actually worried about being in significant negative equity. Ballymore and other developers I know are also selling a LOT of units at very strong prices in Asia, not to mention Candy & Candy who have resumed sales of their units in both high volumes and at quite astonishing £psf prices so I'm confident I'm not overegging it when I express some confidence in the local market I've been investing in for 10 years.

 

Always happy to listen to alternative perspectives and I fully accept there are plenty of downside risks out in the world right now - one chap at the E&Y conference today said that economists had never been in so much demand and yet had so little confidence their forecasts would prove accurate (and I'll be the first to admit I'm not even an economist). Try and keep it clean though please.

 

/see: http://propertytribes.ning.com/forum/topic...source=activity