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House Price Crash Forum


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About abhisSSL

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  1. This time it could be really "different", never has the income to house price ratio been more skewed ie never have the house prices been so over-valued wrt to what the people who bought them are earning. London is running at 11-15 times the average wage. I just don't see how people would be able to pay off their mountain of debts once the job losses start mounting. Odds are that this time the stock market collapse and the housing market crash could go hand in hand - albeit with a few months lag. It would get even more interesting if the turmoil starts affecting the banks and the financial sector who might want to rein in the credit, like the credit crunch phase. That would make it even more interesting. We must never forget this is the same country which went totally bust with 2007 prices at 5-7% interest rate. Right now it is 2007 + 30-40% with 1.5-3.5 % interest rate ( on an average, depending upon your mortgage terms). Perhaps 2008 would serve as a more apt comparison than 1987 or 2003-2004.
  2. I would be happiest if my investment bank was to move out of the city, in fact I gave this suggestion to senior management,who are pondering over it. It is also a recruitment issue that the bank is struggling to hire people of calibre on what is effectively the same salary as 2006 but with housing cost 50-100% higher. I don't mind a 10% pay cut if it helps me save 50% on housing cost and another 50% of commuting costs. It makes a lot of sense for both the employer and the employee.
  3. Many thanks Suntory, I have always enjoyed reading your posts, keep up the good work. You do a yeoman's service to this forum. Historically, the BoE has lagged behind the FED by 3-6 months in case of hike, so if FED hikes it does increase the possibility of a BoE hike. So with all the BTL changes + probable interest rate hikes + global turmoil, 2016 on paper seems to offer a stark contrast to what we witnessed in 2014. Which way it will go only time will tell, but these are very interesting times indeed.
  4. http://www.globalresearch.ca/the-2015-global-housing-market-crash-property-prices-plummet-worldwide/5474123 If you are planning to buy, would be worth noting what is happening all across the world. Cannot believe that the UK would be immune to all of this and HPI can go on forever.
  5. If it had been only me I would have quit long ago. The IT contracting rate is only 10-15% lower for an investment banking IT consultant like myself in Scotland than here in London. I know because I have contracted in both places in the past. And the quality of life in Scotland is 1000-1500% times better. 2-2.5 hr long commutes everyday, greedy landlords, utterly obnoxious and supremely arrogant EAs, longer hours of work in office, ultra-competitive work environment, no time for family and kids, my cup of woes runneth over in London. Contrast this with Scotland where I used to cycle to my work location in 10 mins, I was able to live centrally and wife and I could watch a movie in a cinema hall on a weekday post work and go back home and cook as well. Can you do that in London ? The rent too was peanuts with what I pay in London. Plus the people are so friendly as well. But the problem is dependency, wife has to move her job, kid has to change school et al. Looking at the way it is going, it may not be a choice any longer, it would become a compulsion to move out.
  6. I am seriously considering taking up an IT contract out of London. The earnings in this city are only a mirage, there is no point of earning a lot more than other parts of the country if you cannot even buy a house without going under a mountain of debt. The madness has gone on way, way beyond all limits of tolerance. I can't believe it has been 2 years with 2007 +30% and yet steadily increasing, with not even a hint of correction. Why doesn't the BoE take notice of this ? Is this sustainable and is it a sign of a healthy economy that the young in this country have to go under so much of debt just to put a roof of their own above their heads and without resorting to a "help" to buy ? The only option is to quit London en-masse.
  7. Kudos to that, hope is all we can. They have trapped us from all sides 1. First increase the prices through artificial means using all possible instruments at their disposal 2. Next, offer a 5 year interest free loan up to 40% off the price which is already 40% inflated (on new builds), so in effect you gain nothing and have a mountain of debt to repay after 5 years elapse 3. Keep interest rates so low that a natural and healthy correction cannot even creep in . If you don't fall into any of these traps, then your only choice is to rent and pay your hard-earned money to a greedy and much older landlord who bought the same property at half the current valuation. And then call it a "recovery". What a tragedy !
  8. Earlier I too used to believe in that theory,and I seriously want to believe in that theory as a prospective buyer, but the prices in prime London are so disjoint from the prices in outer London that a one-to-one correlation with respect to the crash percentage need not apply. The real deal is the interest rate and they just do not want to budge with them (always invent 10 excuses to keep them down), and till the point cheap money(debt) is trailing scant supply, I wonder how we can get double digit percentage falls in outer london. Of course,I would be the happiest if proved wrong on this and really hope that I am proved wrong. Otherwise I just don't stand a chance.
  9. I don't care about prime london, I don't live there and possibly never can. It is only for the emirs and sheiks and I doubt how many emirs and sheiks look at a hpc website. Real London lives outside prime london, and unless the crash percolates to outer zones, the crash wouldn't benefit me ( and thousands others ) in any way.
  10. It hasn't sold yet, but you can sense the panic, last sold prices for 2014-2015 in the same complex are all hovering around the 600-900K mark, though I wasn't able to check for exact specifications. It wouldn't be a surprise at all if this comes down another 100K, at which level it should be at the same level as it was in 2011-2012. Remember it is widely known fact now that the prime central London volumes are at as low a level as in 2009. The rats are leaving the sinking ship, and nobody wants to jump on to rescue it. The law of gravity applies everywhere, the rate of descent is far greater than the rate of ascent. The irony of this fall is that 550K for a single bed is still utterly, utterly ridiculous. 200K and I could be interested.
  11. Lastly sentiment is the biggest driver of them all ,once prices start falling everybody is going to rush for cover.property ain't going to be hot property anymore, we need to remember it is the same country which could not withstand 2007 prices at 5% and nothing has changed at a fundamental level since then ,we just need to bide our time patiently,time to buy will come but now ain't the right time ,especially within M25
  12. And just to add with the impending job cuts,economic deceleration and slower/negative growth,it is even more inconceivable that 2007+30% could sustain much longer rate hike or rate cut. The rates are already next to nil,so how much negative could BOE go.Carney,Osborne et al can't do nothing abt this as the story unfolds,it also remains to be seen if Osborne has any interest in sustaining the London mega bubble any longer,after all the young now are going to be 5 years elder by the next election and no political leader can afford to ignore such a vast segment of voters all wanting hpc.
  13. Exactly,it has come to a point now that good news or bad news irrespective the prices would fall nonetheless ,they are so out of touch with reality.Was on a Job advert site today and companies are still paying very much the same what they were paying 5 years ago,so don't understand who is going to pay these prices and for how long,the longer 2007 + 30% runs on, the more the ppl sucked into it and the greater the shock one reality dawns.avoid property like the bubonic plague right now.
  14. Even bigger skill is to get a naive buyer to pay what the greedy seller is asking, that is where they earn their money
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