The Next Property Boom, How Long...?

Discussion in 'The Intelligence Cell' started by heard_it_all_before, Nov 20, 2008.

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  1. Hi,

    Can't find the link from the Yorkshire Post, but the next UK property boom is already being firmly cemented into the future UK calendar.

    Figures from sources like Shelter, Help the Homeless and several other agencies are saying that by 2020 we are going to need another 2 million homes in the UK. An average of 250.000 houses per year, but curently only 150.000 are being built, and that number is going down as more and more builders go bust.

    To that end, my next Boom and Bust prediction will be 2023

    :D :D :D
     
  2. Probably about right, history does repeat itself.

    A few months ago I was speaking to a young colleague who genuinely believed buying property was a one way bet.
     
  3. 2026 +- a couple of years.
     
  4. Yes think your both probably in the right time frame, just long enough for people to think it cant possible be that bad to get into the bust boom syndrome again.
     
  5. May I remind you that Cyclops promised an end to the cycle of "boom and bust"
    So you are all wrong!
    What we are experiencing at the moment is a "period of re-adjustment"
     
  6. Fantastic - Just when I will have paid off my mortgage. My house will be worth a mint. It already trebled in value over the last few years, imagine what it could be worth in 15 years time. Of course I'll have to stay away from those "Release the equity in your house" loan companies. How anyone could think that they were a good idea is beyond me - "I borrowed £500 pounds secured on my house - Loans Direct/4U/Sharks now own my house".

    I predict we will be back in this position again by latest 2030, as history repeats itself once again.

    Ish
     
  7. Yep, just in time for my mortgage to be paid off. Happy days.
     
  8. The theory that it's tied into an 18 year cycle seems to be gaining in popularity.

    Money Week

    But a lot depends on just how bad this current recession/depression becomes. There would appear to be an outside chance where we may end up in the same predicament as Japan following the deflation suffered in the 90's leading to the "Lost Decade." We may well end up just skipping a cycle :(

    Economist
     
  9. No DS answer.

    For the property to recover to the market value prior to the decline. It has to reach its zero equity zone (usualy what the owner paid for it). And then even further before we see them back at the original Pre-Bust market value. Purchase price plus equity.

    The current Bust is different to the Bust of the 90's as interest rates haven't gone skywards. The hold up now is the inability of buyers to source loans. And more to the point, being able to get a deposit big enough to satisfy the lenders. People want to buy, they just can't get the money.

    It goes for all big purchases. Houses, cars, caravans, second homes, boats etc etc. Markets that are reliant upon affordable credit are suffering. I was in M&S in Camberley on Tuesday, and anyone could quite easily be fooled that there is actualy no problem at all, as there were loads of people pushing supermarket trolleys around the store that were full of clothes, and that was before the 20% discount sale on Wednesday.

    Yes people are losing jobs, but on the whole, people still have money and are still spending it.
     
  10. Interesting point:

    "The current Bust is different to the Bust of the 90's as interest rates haven't gone skywards"

    I'd add a yet.

    Somewhere along the line interest rates are going to have to go up. This would be necessary to make it an attractive proposition for foreign investors to loan us the all the lovely money that Prudence Brown needs. Otherwise how we going to spend our way out of this one. If only someone would have thought to apply the other bit of Keynesian policy, the bit about saving in the boom part of the cycle.
     
  11. Hi,

    Bearing in mind that Mortgage acquisition was slightly harder in the late Eighties early Nineties than what it has been through the early Noughties. And linked into the fact that many folk have mortgages that are in some cases 5 times there annual income, I can't see interest rates hitting the same peak as in the nineties recession.

    From a lessons learnt point of view, everyone that I know that had a mortgage and survived the interest rates of 15%, stayed put and was never tempted by the cheaper credit that hit the market thereafter.

    The greed of those that did is now what is destroying our economy. It boils my blood when I read in the papers of the costly lengths that the Govn't is expected to go to just to bail out all the greedy barstewards that just had to have everything, and had to have it now. The question is, will those greedy feckers learn there lesson, and the answer to that is, No, Not if the lesson isn't learnt the hard way.
     
  12. Unfortunately you're tying in interest rates to property ownership. The economy will come first.

    We are just at the start of the job cuts, and unlike the 90's/Dot-Com bubble of 2000ish every sector of the economy is taking a real good kicking at the moment. A while back I would have said 40% of the stock market and 30% of houses (Based purely on historical averages). Now I'm not so sure, stock market is 42% down from peak, houses at auction (i.e. the only houses selling are 30% down.) We're only one year into the "re-adjustment," and still no light at the end of the tunnel.

    Even some pundits are now predicting prices to drop 50%.

    Moneyweek again

    Try telling your average punter his house has dropped 15% in value and could halve over the next 3 years and you just get denial. "Not my house - it's special."

    Brown will try to lesson the pain in the economy first. High inflation has the added benefit of shrinking debt.

    i.e. owe 10000 sheckles at today's rates. Inflate until you have halved the value of the sheckle so your debt is now only 5000 sheckles in real terms.

    So I would guess a deflationary recession, followed by, If we're lucky high inflation or possibly stagnation.

    Interest rates will go which ever way it needs to pull it off.
     
  13. Maybe someone needs to tell the public that are cramming the high streets and supermarkets.

    People are spending money, simple as. But all we here in the media is so called experts moaning that Retail figures are down. Retail wants humongous profits, more greed.

    The year ending Mar 2008 M&S made £1.13 billion pre tax profits. Outrageous. March 2009 they are expecting to make 'only' £630 million. More whinging from the Board as profits are down, is £630 million not enough to keep the share holders happy...?

    All that I see is the consumer finally getting produce at a fair price, as opposed to being ripped off as in the past. To me this means that the Retailers need to get used to lower profit margins as opposed to consumers being expected to pay through the nose just to keep share holders annual dividends large.
     
  14. That'll be a touch of denial :)



    Or one last blowout on the plastic.

    More likely I'm just a pessimistic old sod. Then again I've got an offer under consideration on a Repo at 32% off peak price so I'm fairly happy with the situation so far. Should have the mortgage paid off in 12 months. If the offer gets turned down I'll wait twelve months and just buy outright.
     

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  15. Nice graph, very accurate.

    Problem with the property these days is that every cnut was mesmerised by Sarah Beeny's monster sized Jugs, and they all thought that it was fecking easy.

    Time all the losers had created a 'Portfolio', they then realised that the smart feckers were the ones that sold them the property's in the first place. They were smart because they bought them for penuts during the recession of the early 90's, all as reposessions.

    If they're not sat smoking big fat ones on a beach in Dubai, they'll be waiting to swoop and buy them all back, probably early next year...!