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Written by rosalind renshaw

Property prices rose by a tiny 01% across England and Wales to stand at £161,588, according to the Land Registry.

Reporting for February, it said house prices had barely changed from a year ago and were down by just 0.6%.

London easily outperformed the rest of the country, with a monthly price rise of 1.4% and an annual rise of 4.2%, with average property prices now £354,300.

In contrast, there were falls in several regions, including the North-East where house prices dropped 2.6% between January and February, taking the average price down to £99,385.

The Land Registry also reported that transactions rose slightly between September and December last year, to average 60,392 sales per month – up from 57,334 per month in the same period in 2010.

*House prices will continue falling in real terms over the next three years, new official figures have indicated.

The Office for Budget Responsibility released its data post-Budget, forecasting that house prices are set to dip 0.4% this year – a little greater than the 0.2% drop the OBR forecast last November.

Next year, it expects house prices to go up by 0.1%, and by 2.5% in 2014.

However, because inflation forecasts are set to be 2.3% next year and 2.5% the year after, in real terms house prices will fall.

House price inflation is forecast to overtake general inflation in 2015, when house prices are forecast to grow 4.5% and general inflation is predicted to be 3.6%.

Comments

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    Then what is he boys?

    Other than a whinger?

    • 30 March 2012 13:12 PM
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    @FBA

    Ace is right mate – Rant has only been talking to us (by that I mean all 6 of us who post here) for 4 years I think and everything else he does is online.

    Jonnie

    • 29 March 2012 17:06 PM
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    Who ever said Rant has been viewing propertys for 4 years? Calling agents for 4 years?

    Back to your old trick's of manipulating facts to suit whatver point you're trying to make!! ;)

    • 29 March 2012 15:05 PM
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    Righto,

    In perspective.

    I have no issue with Mr Rant viewing the market as he does, speculating as he does, and calculating as he does.
    Those are all matters for him and him alone.

    AND THAT IS MY POINT

    • 29 March 2012 13:42 PM
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    Can the HPC nutters get on petrol prices now you have made property crash all by your selves!

    • 29 March 2012 13:42 PM
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    How about 4 years AoS?

    Any agents out there keeping a FTB on their books 4 years? doing viewings with them for 4 years? Phoning them up week to week for 4 years?

    Or are you on your own in this one Ace?

    Mr Rant, as you shout 'charge' running forward to meet the enemy, you look back, and there, beside you is your trust agent Ace.. you have a fan.

    Wll done chap.

    • 29 March 2012 13:22 PM
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    Added by rantnrave on 2012-03-27 10:37:51

    All this money printing and inflation has however devalued the £ as a store of value. Those that predicted this and piled into gold, an alternative store of value, from 2005 have made an absolute killing. UK house prices have plummeted catastrophically when measured this way.
    ------------------------------------------------------------------------
    FBA, it's pretty clear that Rant is indicating how prices HAVE declined. Surely you should know that the whole HPC theory is against property as an investment.

    His quote further confirms that his decision not to buy, but to save since 2008 or whenver has been a good one for him and a few others.

    It definitely wouldn't have worked for everyone. I told him that earlier on this very post. But as an estate agent, I am sure you understand that everyone has their own circumstances and approach to things. Just because a buyer isn't going to pressured into purchasing within 2 - 3 months of looking, don't lose faith in them. Keep offering a good service.

    My point being is there is no wrong or right way to search for a property. I think anyone can admit (even you? ;) ) that Rants decision not to buy in 2008 has paid off thus far? He now has a decent deposit and prices have dropped 20% in his area - wise, no?

    I fail to see this picture of rant that YOU have painted. The picture he has painted of himself is completely different.

    Il ike the "miss the boat" quote - I think I heard that alot in 2006/2007 from a few men in suits! :P

    • 29 March 2012 12:45 PM
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    Rant,

    Im going to let you and FBA carry on, I do sort of agree with him but also think you should do it when you good and ready – even if you did decide to offer on something and get it agreed today I think the weeks between now and the exchange you would change your mind – I do however think you have had to change the way you calculate house price drops and this brings me onto………………………yes, its time for the Nationwide House price index!

    Storming into the BBC and HPC sites with the regularity of my dog’s morning dump (7.08am back left corner of the garden. quick scratch and cursory sniff and back in through the back door)

    Couple of things – 0.9% YOY…………….sod it lest call it 1% - that’s not very much at all is it ? Its just the sale price of the average £160 odd grand property can be influenced that much by taking a better photo and hoovering it before viewings so can we agree its not really earth shattering?

    Then there is the old stamp duty thing – im not a man for predictions on the house market as no one has ever called it right so I have no hope but I did stick my neck out on here a couple of weeks ago as I think the number of sub £250k FTB deals went through was up so there was a few cheaper places in there, im not sure but I think The North which is a) cheap as ketchup so mostly un touched by the stamp duty thing b) an area quoted as going up 0.6%

    All good stuff but I imagine it dis heartens you so the ‘new’ formula is the way forward for HPC’ers as this isn’t giving the answer you all expect

    Jonnie

    • 29 March 2012 12:35 PM
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    Dear Mr Rant,

    You are confused, aren't you?

    _________________________________________
    Added by rantnrave on 2012-03-27 10:37:51

    All this money printing and inflation has however devalued the £ as a store of value. Those that predicted this and piled into gold, an alternative store of value, from 2005 have made an absolute killing. UK house prices have plummeted catastrophically when measured this way.
    __________________________________________

    Normal people buy a house to live in, because they like it and can afford it, they like the road, like the area etc. Some even grow to 'love' their homes.

    If you ever do buy one (which looks unlikely) you will be forever obsessed with what it is worth. Then you die..

    Instead of buying one house that you truly adore at a negotiated price that you can afford on the current market, you busy yourself gathering knowledge about global affairs, national affairs, national stats from banks, rm, RICS, etc. Tou worry yourself to death that you might be a few £k out of pocket.

    You cannot fool me Mr Rant. you are not a buyer in any way shape or form. You look more to me like a military officer leading a 'charge' but when you look round, no-one has followed you. Charging to your own demise alone.

    You come here for solace, for people to agree with you, but they do not, and so you persist. You need people to agree with you so you can justify your thoughts to yourself. Here is the wrong place. We act for sellers, not buyers.

    Three this week came on the market with me under £250k, were there just 1 day, all sold and all within a whisker of the 'realistic' asking price. The market is moving old chum.

    Would you like the phone numbers of those FTB's I sold to this week so you can explain to them how foolhardy they are and being under 40's are potentially destroying your strategy?

    As I said, I wish you well with your strategy, just don't miss the boat is my advice.

    • 29 March 2012 11:54 AM
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    Where am I saying I want to buy a house as an investment? I want to buy a home, pay it off asap so I don't have debts over my head. You'll find few people more opposed to the idea of property as an investment than the HPC lot...

    Or is this a Fun Boy Agent joke I have failed to get? Some of them are mildly entertaining, I will admit. You might have lost me on this one though.

    I think I'll need something stronger than aspirin.

    • 28 March 2012 20:38 PM
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    To repeat again Mr Rant...

    The point you seem to miss every time is this:

    Buying a home is a choice. It is the roof over your head, your security of tenure, your place to live, your castle, your love nest, your family seat, etc.

    It is not and was not supposed to be an investment for making money.

    Yes Sir, you may well be banging your head against a brick wall.

    Wa nice chatting about it though. May I suggest Asprin?

    • 28 March 2012 17:10 PM
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    How on earth you've read all that into my posts Fun Boy, I will never know... I'm stunned that after so many rounds of sparring that we've had that you think that is where I'm coming from. Actaully, to be honest, I'm a little disappointed that you've misinterpreted so much, not that you will be bothered in the slightest by that.

    It seems to me that you are living in the only part of the UK to still experience house price falls. You are also of the only age group that has yet to see any negative sides to high house prices.

    From that basis, in numerous of your posts on this thread and others, you are equally assuming to speak for many others for whom those two set of circumstances are different.

    Since house price inflation doesn't generate any extra wealth, it separates people into those who benefit from it and those who suffer from it. It is not a win-win. I've no doubt which side you are in. This is the side that has been most portrayed in the media over much of the last decade. There is a totally different side though, whose point of view I have been trying to articulate. Many others on this site who don't always agree with what I post can at least see that. I had thought you could too, but I see I've got that wrong. Ah well...
    (bangs head into wall and exits stage left)

    • 28 March 2012 17:00 PM
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    There you go again Mr Rant,

    You have gone from the very insular "me, me, me" over to speaking on behalf of ALL the under 40's in the entire nation.

    It is only my humble opinion but.....

    I think you should stick to your strategy and see if it pans out for you.. but importantly, keep quiet about it.

    You seem to be unable to fathom that YOU are not typical of all under 40's.

    Everyone needs to live somewhere, with Mum n Dad, friends and relies, rent, squat, buy, etc. You have your ideas, others have theirs.

    The point you seem to miss every time is this:

    Buying a home is a choice. It is the roof over your head, your security of tenure, your place to live, your castle, your love nest, your family seat, etc.

    It is not and was not supposed to be an investment for making money.

    You have read and watched too much property porn Mr Rant. You have totally missed the point of buying a house. It is not a way to make money.

    You compare the family home value to that of a bar of gold.

    As I said Mr Rant, only a humble opinion of mine...but....

    I think you are influenced by reading information directed at 'real' property investors with portfolios of property and applying your findings to that one purchase you may one day make, and failing to marry the two ideas.

    By the rate you are going I think the most expensive purchase you will ever make will be your car. But then again, you may argue to lease it would be better. In that case, your most expensive purchase ever may well be that holiday I mentioned.

    Let it be... go on, enjoy it.

    • 28 March 2012 16:42 PM
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    Apart from all the over 40s I mentioned in my last post you mean?

    By your reckoning, I should be rejoicing then that the most expensive purchase I am going to make in my life has rocketed in price over the last decade. I'll just pop open the champagne...

    Out of interest how, many adults in their early to mid 30s and under do you regularly interact with?

    The most bullish people I know about UK house prices are those in their 40s. Having gotten on the property ladder during the trough of the last cycle, on the whole house prices have only risen throughout their working life. Their kids are still too young to be considering buying a place, so they don't think about how uncontrolled house price inflation has made it much harder for their offspring to leave the nest and get started in life.

    There are folk in their 50s and 60s however who are starting to see that high house prices are hurting their adult children. Those that have still got 25 year-old offspring living with them might even be prepared to forego some equity if it meant their children would finally move out. I have heard at least one member of the Boomer generation acknowledging the fact that she hasn't got many grandchildren yet because the price of family-sized accommodation in the UK is out of reach to many young families.

    • 28 March 2012 15:53 PM
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    Repeat for you Mr Rant,

    This is what I am trying to explain to you dear chap. You seem to be of this strong belief that everyone in the UK is seeing the housing situation through the same negative glasses that you have on.

    trust me, they are not.

    • 28 March 2012 15:35 PM
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    So far, less than four years after returning to the UK in Spring 2008, so under 10% of my life.

    If the present trends in my area continue and I save as I have been, I'll be a cash buyer of a reasonable family-sized home before I'm 40. If prices start moving upwards before then, that might encourage me to buy. I see absolutely no indication of that though.

    The alternative scenario is that I bought in 2008, when everyone was still saying "prices only ever go up" "buy now before you miss the boat" and all that drivel. I would by now be four years into a 25 year commitment and have seen half of my deposit wiped out.

    So this is my world. I do know plenty of folk over 40 however who are very happy with having been born the right side of one of the greatest transfers of wealth from young non home-owners to older home-owners that this country has seen. My generation though has not benefitted from endless house price inflation - they are the ones taking on the debt to fund that on behalf of those already on the ladder (people like you and Ray Evans, who it would seem to prefer think that the record amounts of unearned equity out there is being supplied by fairies).

    My peers do not sit around dinner tables drinking wine and talking about how much money their house has made. Those that have bought in recent years with super-sized loans lie awake at night worrying how they can keep paying the mortgage now job security is on the line and SVRs are increasing. You might forgive them if they aren't all smiles...

    • 28 March 2012 14:31 PM
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    Yes Mr Rant,
    Wear your badge with pride.

    Now a little lookie at your last post (look with me, if you will).

    How often do we see your use of "I" or "I am" "my" or "me". 11? more?

    This is what I am trying to explain to you dear chap. You seem to be of this strong belief that everyone in the UK is seeing the housing situation through the same negative glasses that you have on.

    trust me, they are not.

    Give a thought that you might be rowing your own boat with admittedly a few unfortunate others, but you are a minority. Live with it lad, and get on.

    Have a nice holiday, buy yourself a nice car, go out and enjoy a sunny afternoon, but above all, please start enjoying yourself and stop pestering the world with your insular problem.

    If you know a few unfortunates who find themselves in negative equity AND WANT TO MOVE !! (it must be both to be a problem) then I feel sorry for you and for them. Them, because of their situation, you, because of your limited social circle. If you know a few homeowners who are perfectly ok, happy with their mortgage repayments and happy in life, I will retract that.

    It is more than possible that people who borrowed up to the hilt at the wrong time AND purchased at the wrong time may have the issue you worry of. But...dear chap.. they are not the majority of people in the UK. They are a very unfortunate minority. AND THEY ARE NOT YOU.

    You still cannot answer me.

    What % of your adult life are you prepared to be an HPC'er? Which by all accounts, and I have said before, is much better described as a 'non-buyer'.

    What % of your life have you been an HPC'er to date?

    This 'price' situation is manifestly bigger in your own head than anywhere else I can see.

    You cannot answer these questions can you? It do hope you don't live an entire life of misery. You need to put it all behind you and make your start on being a 'grown-up).
    Buy the house you like at a figure you can afford. You are now dabbling around price changes of £1000 or £2000 a year up or down for the next few years. Im sure you can negotiate a safe figure on any purchase you might make.

    Stop being a silly billy

    • 28 March 2012 14:02 PM
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    I know several people in the scenario I described. You clearly don't and move in circles with those who haven't been hit by this never-ending economic slump.

    Just because something is not happening in your neck of the woods, does it mean you can assume the same is true for the rest of the country?

    I'm not waiting for the house price crash to start where I am. I am waiting for it to finish. Prices are down over 20% so far over the last four years and still falling. Waiting that out has allowed me to build up a very significant deposit as prices come down. I'm paying off my mortgage before I've even borrowed it.

    If that makes me the sad moral abject failure that you are keen to paint me as, then great. I'll wear that badge with pride.

    • 28 March 2012 12:23 PM
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    Oh Dear Mr Rant, you have such a negative outlook, and such a poor opinion of people who go before you.

    Do you assume your Mr & Mrs 'Overstreached' purchased in 2006/07 witha 99% mortgage, only to see 20% of their house value drop?

    Does this make a difference? I doubt it, not unless they are selling up.

    Do you also assume your Mr & Mrs 'Overstretched' purchased a house or flat they absolutely hated? They didn't view it, love it, offer on it, go through 8 to 12 weeks due diligence and complete the purchase. In your mind they purchased a 'shoe box' they hated.. erm OK!

    Why do you thing they are overstretched?

    You see Mr Rant, you keep comparing your miserable money worry life to other people. You assume everyone is rowing in the same river, in the same direction and often in the same boat as you. Your boat being named HMS Money Misery.

    It simply isn't the case Mr Rant.

    You see my world through your own misery glasses and cannot fathom how people are simply getting on with life, enjoying life, having families, being mums, dads, grandmas, granddads, enjoying food, friends, holidays like Easter, Christmas, etc. Just enjoying life matie.

    It must gaul you that there are folks out there who do not get up in the morning and race to their PC to see what the global markets are doing and contemplating how this might impact on the value of their house.

    You are ploughing a very narrow furrow Mr Rant, but if that makes you happy, that is your life.

    As your campaign went from months to years, did it not make you unhappy that you seem somewhat foolish?

    A little advice, if you want to spend your life being miserable about money, the rest of the world will:

    a) let you be this way
    b) Ignore you
    c) laugh behind your back, at your expense, as you let your life ebb by with these traumatic worries.

    Good luck to you old son.
    Hope you get all you want. It's Christmas soon. Write to Santa.

    • 28 March 2012 11:52 AM
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    Sitting in negative equity in a shoebox property on the edge of town that you and the Mrs overstretched your finances to buy is however living the high life...

    • 28 March 2012 10:02 AM
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    You got me there honest John.

    I used to spend all my afternoons looking out of the window (ala joke) but now I leave that job to the younger ones.

    Now this extra year you are waiting?

    How many years have you waited already? How will you feel if there is minimal or no change in prices by the end of that year?

    What % of your adult life are you prepared to devote to waiting? What % of your life (normally at the older end) were you planning to enjoy mortgage and or rent free?

    What age do you expect to die?

    Pick an age and strat doing the sums. It will boggle your mind.

    Also... Have you ever thought that a good deal of property stock was built before you were born and will no doubt be there after you are dead? You cant take it with you, can you.

    So the effect is... your deliberations are in fact in respect of financing the custody of a property in reality.

    If £1 notes are that important to you, good luck to you John. If you re-think your life measure, stop measuring your happiness by supposed wealth but more in terms of content happy times, you may take a differing view.

    Maybe too much Alan Sugar, Richard Branson et-al media exposure has skewed your ideas on what it really means to be happy.

    Honest mate, dead id dead, the period of time you have before that (called life), it not a dress rehersal, it is your one shot around. Have fun matie, enjoy it, and please try to stop worrying too much about the elusive £1 note.

    • 28 March 2012 09:56 AM
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    Fun boy agent, id rather wait for prices to fall a nother year by another £20 k or more it beats paying the extra mortgage payments over the long term ! LOL, just one question to you, how much of your life time do you spend looking out that window ?

    • 27 March 2012 21:45 PM
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    Some great exchanges on thIs thread.

    I can picture rant cooped up in his rental hideaway counting his pennies, and I can also see the joy on my clients faces when they finally become homeowners

    Nobody knows what's around the corner with house prices but my own feeling is that the inflation genie is purposely being let out of the bottle by the Boe to try and deflate the country's £5 trillion debt (personal, corporate, government). The idea being that printing money is a way of deleveraging this debt. So a return to the 1970's basically. So expect a loaf of bread to cost a tenner, average wage to be £100k and average house price to be £350k within 5-10years.

    • 27 March 2012 19:30 PM
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    Have you ever set foot outside of the South East of England Fun Boy? It's easier than ever before now they're relaxed the visa restrictions...

    • 27 March 2012 17:20 PM
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    Depends how much the market is manipulated PeeBee. In this scenario, there would be a considerable advantage to the vendor who undercut his/her competitors and charged £9.99 for a bag of Smokey Spider flavoured Monster Munch.

    You wouldn't be the first poster here by the way whose reply to me has included the phrase Bog Off. Unusual spelling you've opted for though...

    • 27 March 2012 17:18 PM
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    Not that it is any of my business, but...

    I do wonder at the HPC idea.. I have seen people posting in this respect for a few years now, but no crash.

    I just wonder what age they want to be when paid up.
    I try to balance this with what age they expect to have achieved upon death.

    Will it be 50? 60? 70? 80?

    Then I think what % of their lives are they going to spend 'waiting' for the 'crash' if it ever comes, and what age they want to be when 'paid up'.

    I expect the average HPCer had no interest in buying a house between the age of 0 - 25. What % of their life is this? (that will depend on when they die, I know)

    How long will they be retired? What % of their life will this be? (again depends on when they die).

    If and when they buy, what % of their life will be paying a mortgage?

    What % of their life will be left when they are finished paying?

    What % of their life are they paying rent?

    What % of their life will they be living in a home they can call their own?

    Biggest of all, what % of their life have they wasted by posting on here instead of doing the good old traditional thing, buy the house they want at the market price, at a repayment level they can afford, and get on with paying it off.

    You cant live in a gold bar?

    Newsflash: HPCer wastes 5.25% of his life trying to save £10k.

    • 27 March 2012 17:14 PM
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    "If all shops started selling bags of crisps at a tenner each, then they wouldn't sell many of them. If that's all one shop was selling, then they'd be struggling to stay in business!"

    You may think that - but if the price is dictated by the market - and the market is dictated by the powers that be - then those who enjoy "a canny bag of Tudor" (you won't 'get' that one I'm sure...) will be FORCED to pay the "market price", will they not?

    Look at Pringles. Not so long ago they were about a quid a pop (pardon the pun...) NOW - as lately as last night Tesco had them up at £2.48 a tube! If you are REALLY lucky you can get them BoGoF. I wonder if they are selling more than 40% of the volume they were when they were only a pound?

    Anyway... it's all a matter of opinion, rant - isn't it? For what it's worth, I happen to share the same opinion as you (for a change...) - but we wouldn't know unless that Euro Legislation came into force - would we?

    Watch this space... ;o)

    • 27 March 2012 17:10 PM
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    If all shops started selling bags of crisps at a tenner each, then they wouldn't sell many of them. If that's all one shop was selling, then they'd be struggling to stay in business!

    • 27 March 2012 16:58 PM
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    rant: Looking to your analogy...

    Renting a DVD vs. renting a house.

    Similarities - the word "renting".
    Differences - the whole shebang.

    You watch a DVD. It goes in the 'watched DVD' cupboard - or gets returned to Blockies, as you suggest. It may come out again in a year or so to be re-watched. You may of course lend it to someone (apparently illegal - but it happens...), which gives it another cause for coming out of the cupboard. One way or another, it was a luxury purchase (or rental, as the case may be...) - cheaper than renting a seat or two at the local flea-pit, though...

    Renting a house - different boiling vessel of piscine lifeforms altogether. BUYING a house - a majorly different concept - even to renting, never mind hiring a flick. It is a lifestyle choice - but one which can be influenced by factors outside of the control of the individual.

    Same with the crisps in your original analogy - but at least you get some nourishment out of them. That being said, if the local shopkeeper sticks them in the window at a tenner a bag you will laugh all the way to ASDA where you can buy six bags for a quid. If ALL shops, however, put them up for sale at a tenner a pop (following Euro legislation #1141423111(Part XXXVII) - Requirement for Minimum and Uniform Pricing of Potato-Based Crunchy Foodstuffs Act 2012...) - THEN what?

    Answers on a postcard, please... ;o)

    • 27 March 2012 16:18 PM
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    Would it not also be true Jonnie that the vendor would be even more happy if prices had increased ten times on the street, especially if salaries hadn't grown nearly as much.

    The fact that he now needs to borrow far more money to buy the four-bed property would barely cross his mind...

    • 27 March 2012 15:28 PM
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    Seems to me that the second half of your post PeeBee is merely highlighting the human traits of greed and desire to conform. Alas, over the last decade or so, reckless lending has fuelled the greed in the housing market in favour of those who were already on the ladder. At the same time, a very biased media in favour of high house prices has utterly failed to highlight the dangers of leveraging personal finances to buy an overpriced asset. This sorry state of affairs has significantly contributed to the current economic and social mess the UK finds itself in. And it's not people your age that are finding these things out the hard way.

    (I am not suggesting your lads are driven by either of these traits by the way - I am sure you have kept them on the straight and narrow as they contemplate making the biggest purchase of their lives).

    You've joined a couple of dots re the crisps analogy. "You would rather RENT a bag of crisps for a high proportion of the cost of buying them - then give the crisps back and buy a bag of your own."

    The 'high proportion' is what I question here. The analogy of renting and returning food can only go so far (although walking into town on Saturday, numerous examples of where young people returned food the night before can be found on the streets round my way). Lets instead go with the more conventional idea of renting a DVD or buying the movie outright.

    In this analogy, ten years ago, it cost £2 to rent the move for the night, or £10 to buy it outright. Now, if it costs £3 to rent the movie, or £25 to buy it, then the ratio of renting to buying has changed. Popping in to Blockbusters, I see a massive stack of the new James Bond movie to buy at the £25 price tag. This pile has barely gone down in recent times, despite lots of flashy promotional signs pointing to them. I'm taking a punt that at some point the ratio will revert closer to what it was before and those DVDs will cost substantially less to buy. In the meantime, I rent.

    Bringing this back to the housing market, the more I read and look into what took place over the last decade, the more I am convinced of this idea. Some will no doubt say that renting is always dead money. I disagree with that though. Done at the correct time, it can lead to a very substantial pay-off in the long-term.

    That's what I'm expecting and so far it is proving to be a wise decision, especially when I look at the position of a lot of my peers who blindly followed the 'house prices only go up' and 'you can't go wrong with bricks and mortar' brigade. Well, their house prices have mostly gone down and their personal finances have taken a pummeling thanks to bricks and mortar.

    • 27 March 2012 15:08 PM
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    Rant,

    The vendor that bought for £40k probably wont care, if, lets say that property is a three bed semi and a four bed detached in the same road is £60k as it was in 1987

    …………….cost to change and all that

    Jonnie

    • 27 March 2012 14:50 PM
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    rant: sorry to gatecrash what is obviously a cracking bonding session between you and our Jonnie (and I have always said that you would be the HPCer I would most likely want to bond with myself [sorry, Sibley's...] so I am only slightly jealous... ;o) ) - but I would like to take you back a week or so to a threrad which has now dropped off page 1 and so far remains unanswered...

    On the thread "Households more hopeful about property prices" (16 March), you stated:
    "...I can buy some relatively uninspiring two-bed houses round my way right now, with cash. I am choosing not to though, because they are clearly overvalued and slowly falling in price.

    Don't confuse those who can't buy a house at today's prices with those who wont.

    The newsagent round the corner from me can price their packets of crisps at £10 each if they want. If I have a tenner in my wallet, it doesn't mean I am going to buy those crisps though."
    ...to which my response was:
    "Interesting analogy. You would rather RENT a bag of crisps for a high proportion of the cost of buying them - then give the crisps back and buy a bag of your own...?"

    You see - THIS is my interpretation of the situation you find yourself in. You WANT to buy - of that I have little or no doubt - but you are putting aside the human element of the decision-making process and letting economic theorem guide you instead. If it works for you, then all the better. One thing is for certain and that is that you will never say otherwise.

    There are those - and as you know 50% of my own brood currently fall into this category - that simply cannot afford to buy what they want: where they want to buy it. (In actual fact the other 50% of the fruit of my loins cannot either - so he and his good lady have compromised, and bought the best they can. Like we all used to do back in the day.) But of those that CAN; there are a proportion of them which are keeping the market turning over, and buying property for what the market dictates its' worth is at that time. The LR report you and this article refers to states that this proportion has risen year-on-year by 5.33% - not an insignificant statistic and in any event warrants more than the "rose slightly" than the story credits it with.

    You say below "I think a seller who bought a 3-bed semi for £40K in 1987 wouldn't be so keen to sell it for £40K today? So, to a certain extent, vendors do take things like inflation into account." I would suggest that when it comes to buying and selling property, Jo Public takes into account what they paid; and what they need to pay in order to make the next move. The two figures are relative to each other - and to the current market (the "current" market being 'whenever'...). Human nature is based upon greed, matey - that is why there are wars. If next door sells for £41k - then you want £42 grand - and so it spirals.

    I liken it to the price of chips.

    Have you noticed that your local chippy puts the price up once a year or so because potatoes are apparently in short supply? But three months later - when the supermarkets are doing 'buy one get six free' deals on bags of spuds and still can't shift them all, that the price of chips don't go down to where they were?

    Then - the bloke who owns the chippy pulls up in his new Range Rover... funny old world, innit! ;o)

    Anyways - you response to the observations above would, as always, be welcomed.

    • 27 March 2012 14:16 PM
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    I think a seller who bought a 3-bed semi for £40K in 1987 wouldn't be so keen to sell it for £40K today? So, to a certain extent, vendors do take things like inflation into account.

    Not sure where you read that looking at all these different measures has convinced me that houses are now cheap as chips. Quite the opposite. It's convinced me that there's still a way before the market bottoms out, whether you measure prices in £, Euro, barrels of oil or herds of cattle.

    • 27 March 2012 11:06 AM
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    @Rant,

    Alright, I get your point, and you are of course right – its just no one is listening to this ‘way’ of doing it, especially the sellers who still use the old way of wotssit worth today if I sold it compared to x months ago, the difference is my gain / loss

    Look, you want lower house prices and what im saying is that you haven’t got them the old way so there is now this way of calculating it and Rant, if it make you feel happy then good on you mate and I suppose you could talk your self into accepting prices have already dropped dramatically based on this calculation which I know hits your happy button, in fact get the numbers in the sum right and by your own standards you should be out viewing today.

    Jonnie

    • 27 March 2012 10:56 AM
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    There's lots of ways you can measure a crash in house prices Jonnie.

    Nominal cash in Pounds is obviously the biggie and in certain parts of the country prices don't seem to have budged much since the peak. Joe Public is mostly aware of this one because it's the only measure that the mainstream media pay much attention to.

    Someone can then point out that measured in real terms (ie, compared to inflation), the money invested in that property is however losing value.

    If you are however starting out with Euros, then London property has lost a chunk of value since 2007, as seen by the number of foreigners piling in.

    All this money printing and inflation has however devalued the £ as a store of value. Those that predicted this and piled into gold, an alternative store of value, from 2005 have made an absolute killing. UK house prices have plummeted catastrophically when measured this way.

    Personally, I think the one measure that doesn't get enough coverage is looking at average salaries. This kind of takes the first two measurements into consideration. The Halifax and Nationwide do also record house prices in this way, ie, asking how many times the average salary does the average UK property cost.

    This comparison is useful, because it means the current boom and bust can easily be compared to previous cycles. In this case, purchasing at the mythical average UK house price today still requires a higher multiple of salaries than the peak of the 1989 bubble. That alone indicates to me any way that UK house prices have a considerable fall still to come.

    • 27 March 2012 10:37 AM
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    Okay,

    I get all this ‘real’ house price thing, I know you can calculate it in some way etc but it does seem to me like some of you HPC’ers have had to change the way you calculate it as the ‘old way’ hasn’t worked out as you expected.

    The problem I see is that people owning a house now (especially the ones most of you want to sell to you at a price you are happy with) wont give it a thought, based on this if they have a place worth £200,000 now then they could sell it in three years at £200,000 to them they will not have lost.

    ………………..they will of course had three years of living where they want to live, enjoying things like decorating and adding a nice vase of twigs in the hall (yes, im in on this HPC joke) and in most cases had 36 months of paying off a mortgage and not thinking the landlord might give them notice at any moment or an LPA receiver takes the place over because the BTL market that you all tell me is collapsing takes another victim, they will also have enjoyed a low monthly payment due to low rates, might have even over paid their mortage as they are not all daft and saved a bit too as saving is not the sole preserve of HPC’ers.

    Any way, what the hell do I know, ive never made a prediction on the way prices are going to go and I don’t spend any time researching it, scouring the web for ‘bear nibbles’ or stuff like that as I know I will be 100% wrong, just like everyone else has been to date.

    Jonnie

    • 27 March 2012 09:53 AM
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    50 billion quid printed every 3 months equals totally phoney, fake economy. When this Robert Mugabe approach ends, so will the economy and things will get interesting.
    One thing for sure that has a very bleak future is the housing market and prices.
    The predictions given here are just damage limitation wishes.

    • 26 March 2012 19:58 PM
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    If you can offer a more concise explanation that answers Jonnie's question and explains the difference between real and nominal prices then go for it Ray...

    Based on previous exchanges concerning your understanding of the subject matter, I wont hold my breath...

    • 26 March 2012 19:45 PM
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    @rantnrave on 2012-03-26 14:58:34

    "I'll finish this ramble off............"

    Ramble in words? Exactly!

    • 26 March 2012 17:20 PM
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    "there are many who are pricing realistically"

    Round my way there are a lot more who aren't, and I'm not in the SE!

    There is a general acknowldgement that this is the deepest economic crisis the country has faced in nearly a century and that property cannot have continued to rise at double digit rates. 5% a year increase since 2007 is therefore the compromise that significant number of vendors seem to have settled on with their asking prices. Sold prices tell a totally different story.

    I wont begin to bore you with the numerous details of my peers who have bought since 2005 and are really regretting it.

    • 26 March 2012 17:18 PM
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    Same ole folk spouting off then, saying then same ole stuff, I wonder at some of them, you must be bored now or do you just not have life. Very funny peolple.

    • 26 March 2012 16:56 PM
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    Absolutely. ANYONE pushing for peak prices where prices have fallen is out of touch. At the same time, there are many who are pricing realistically.

    I appreciate it works for you, but it would be flawed by many of my friends around me (and others), who would be looking to get their own FTB place.

    It's a titanic battle for someone on an average salary, paying the average rent, with fuel and food rocketing (as you rightly said), general cost of living is forever growing and interest rates at an all time low.

    By the time all of their essential monthly expenditure has been met, there is very little money left to physically put into their low rate savings accounts.

    They would be happier and better off longterm if their rent was replaced by a mortgage.

    Your theory could work for someone with a decent deposit already in the background. But for someone with very little (or nothing!) in savings, it's unlikely to have a happy ending.

    Maybe this is a short term thing though. Pre-2007 we lived in a world of 'buy now, pay later'. To be fair, some of my friends (we're in South East) would be in a better position now, had they not adopted that philosophy a few years back.

    Martin Lewis speaks a lot of sense and is trying to get into our schools. We should be doing everything possible to get him in.

    • 26 March 2012 16:53 PM
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    Depends if house prices are rising or falling where the FTB is. Also depends on the ability of the FTB to save.

    Assuming the FTB is renting, their best scenario is if they can save while house prices around them are falling. Thus their deposit increases AND the amount they need to borrow is getting smaller. They can be earning interest on their deposit at the same time too. Combined, these three factors can offset the cost of renting.

    This is pretty much where I'm at and I calculate I've made a net saving of close to six figures by doing this rather than buying when I came back to the UK in 2008. As I say, this would not work as well in every region of the UK (yet!).

    Anyone in today's inflationary environment who is hoping to downsize and holding out for peak prices in an area where they are falling needs their head examined in my opinion, or at least take a course in basic economics...

    • 26 March 2012 15:19 PM
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    Rant : "As the length of time that they refuse to drop their asking price turns into years, they lose hundreds of Pounds each month off the purchasing power of their desired sale price as the cost of everything else keeps going up. Still, they're "not giving it away"."

    I hear you, but how does that tie in with you previously suggesting buyers are better off renting, when they are splashing out many hundreds of pounds in rent each month and thousands of pounds per year?

    Both cases echo big similarities, in reverse.

    • 26 March 2012 15:05 PM
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    These aren't simple times Jonnie... It's highly unusual that wage growth doesn't keep up with general inflation, but that's where things currently stand at. It's a sign of how much of a mess this country is in. The vast majority of us are getting poorer and poorer the longer this goes on.

    Let's consider the chap with the £200K house. To keep this example straightforward, let's say he is a cash buyer. He has enough money to buy a house for £200K, or he could buy a hundred 'widgets' with that same amount. He opts for the house, but five years later decides to sell up and buy the widgets. He gets £200K back from the house sale, only to find that the cost of widgets has increased over that time. His £200K will only now buy 80 widgets. In summary, house prices have fallen relative to widgets over that period, even though in nominal cash terms the price of houses has stayed the same.

    If he is selling the house to fund the purchase of a larger property, then the costs of widgets is less relevent here. So, it is really the downsizers that need to keep an eye on inflation when it comes to timing the sale of their house and whether to drop their asking price.

    At the other end of the spectrum is the FTB. The prices of widgets are going up and his (or her) salary is static. Thus, he is spending more and more of his money on widgets and has less leftover each month to save for a deposit. If the 'widget' is theatre tickets, then the FTB can cut those out of his budget and carry on saving as before, even though his/her salary isn't increasing. If the widgets are essentials, such as food and fuel to get to work, then the FTB cannot cut back on those so easily. This is the situation we currently have.

    I'll finish this ramble off by saying that a lot of the inflation we are experiencing now is a result of low interest rates, which have devalued the £ and made it more expensive for us to import food and fuel. Mortgage payers can at least point to the lower repayments that falling interest rates have given them, thus offsetting higher fuel and food costs. An FTB on the other hand, trying to save a deposit is getting a lower return on their savings, facing the same price increases in essentials and facing higher rents. So, the nirvana as you describe it isn't coming back until FTBs are empowered by lower house prices AND wage rises above inflation. Some would see this as a great chance to invest in BTL, but as described above, the ability for a tenant to pay rents when food and fuel costs are increasing and wages aren't is significantly diminished.

    • 26 March 2012 14:58 PM
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    @Rant,

    You and I have discussed this before haven’t we? You are somewhat of a pioneer on EAT in calculating house prices this way

    Once upon a time a drop in house prices was when (to use Will’s higher number of 15%) the average house price went from say £200,000 to £170,000 over whatever period that was a 15% drop. Of course back then if a chap bought a house for £200,000 and sold it 5 years later for £200,000 he would say he hadn’t lost anything now we have a complex formula to tell him he’s a fool and has lost money based on numerous things like inflation, wage growth (his, his buyers of the average…………..who knows?!) the price of gold, return on ISAS? And god know what else

    Now we have this new way with the bits above bundled in – are you now telling a poor EA like me that the Nirvana you have so articulately and consistently sold us over the years of a big, old fashioned drop in house prices combined with an army of Thousands of HPC’ers buying property and restoring volumes Is not now going to happen?


    Jonnie

    • 26 March 2012 14:19 PM
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    In such a scenario, stagflation makes it difficult for FTBs to get on the property ladder even as house prices fall. Saving a deposit becomes increasingly difficult as fuel and food costs increase whilst wages do not.

    At the other end of the spectrum are those planning to downsize and release equity from the sale of their house to top up their pension. As the length of time that they refuse to drop their asking price turns into years, they lose hundreds of Pounds each month off the purchasing power of their desired sale price as the cost of everything else keeps going up. Still, they're "not giving it away".

    • 26 March 2012 14:17 PM
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    I am generally bearish, but this sort of poor journo hack economics is utter rubbish:

    "However, because inflation forecasts are set to be 2.3% next year and 2.5% the year after, in real terms house prices will fall."

    This only applies when WAGE inflation rises in line with CPI/RPI. Wages are pretty much static at the moment [on average], so what we have is STAGFLATION, the worse case of goods & services going up at 5-15%, and wages static.

    • 26 March 2012 13:51 PM
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    The number of transactions being reported here looks likely to be heading for a sharp downturn too:

    QUOTE
    The British Bankers Association (BBA), whose members dole out almost two-thirds of mortgages to British home buyers, said mortgage approvals for new homes fell more sharply than expected in February. BBA members approved 33,103 applications for mortgages on new dwellings in February, down sharply from 37,977 in January, and well below the 37,250 the market had been expecting

    • 26 March 2012 11:39 AM
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    Absolute poppycock, balderdash, guff, hogwash, piffle, blah!

    House prices double every seven years, always have, always will!

    • 26 March 2012 11:16 AM
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    Up £43 from last month, so actually an increase of 0.02%. If there has been a pick-up in activity re FTBs and the stamp duty, then this comprehensive index of February's sold prices hasn't picked it up.

    Some real variation in the annual price changes here:
    Hartlepool -15.3%
    Durham -8.1%
    Middlesborough -7.1%
    Flintshire -6.6%
    Lancashire -6.0%
    Nottingham -5.4%
    Birmingham -5.3%
    ...
    Kensington & Chelsea +9.4%
    City of Westminister +12.3%

    April's data could be particularly interesting, although we'll have to wait until late on in May for that.

    Full report here:
    http://www1.landregistry.gov.uk/upload/documents/HPI_Report_Feb_12_th14ds1.pdf

    • 26 March 2012 09:56 AM
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    Forecasts Snorecasts. No-one has a clue what is going to happen, that is my forecast. House prices are still too high and keep getting artificially bumped up. Average house price should be 3-4 times average salary. The North East seems spot on.

    • 26 March 2012 09:32 AM
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