UK house prices? July 2007 comment on longer term outlook and warning of potential short term 10-15% house price fall.
http://www.globalchange.com UK house price trends – recorded July 2007 – warning of possible 10-15% correction / fall in UK house prices, but in wider context of longer term more positive outlook. While house prices may fall or rise in short term, UK house prices are generally stronger than they would otherwise be because of many complex factors which include population growth, more people living alone, 100% tax relief on own homes, 18% capital gains tax on property investments, planning restrictions, shortage of land, crisis of confidence in pension funds, poor performance of UK stock market over last decade, so people investing in property instead… plus other factors. Complex area. Expect some kinds of housing to be worse hit eg small flats. Video comment on UK real estate trends by Dr Patrick Dixon, futurist and author of Futurewise, including UK buy to let, UK property investment funds. Message: invest in UK property for long term (unless you sure you can add serious value in doing up a run-down property) and make sure you have contingencies to prevent having to sell property at a bad time ie do not massively overstretch personal finances.
Duration : 0:9:48
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November 26th, 2009 at 2:34 pm
OMG this guy is …
OMG this guy is clueless!
November 26th, 2009 at 2:34 pm
maybe I should not …
maybe I should not bother commenting now on this, but the reason house prices were so high compared to incomes in July 2007 was because of a relaxation of lending criteria and an explosion of debt. Now the credit has been withdrawn back to more reasonable levels, house prices are falling back to more reasonable levels. it is not difficult to understand.
November 26th, 2009 at 2:34 pm
Good on you, Peter, …
Good on you, Peter, for keeping this video up despite the critical comments. As I said when you first posted it, I thought you were wrong about housing. Still do.
Perhaps the title needs changing again, sort-term falls of 10-15% is already quite wide of the mark, since we are already at 20% (index-linked).
November 26th, 2009 at 2:34 pm
this video was a …
this video was a wonderful snap-shot…of the housing bubble mentality…GOOD RIDDANCE…
November 26th, 2009 at 2:34 pm
Yes sure. You …
Yes sure. You heard of deflation?
Job losses, pay-cuts, businesses that could only survive in the credit-expansion boom and who borrowed more in the expectation it would continue… now under massive pressure or going under.
House price crash + Wage crash + Rent Crash.
Enjoy the education coming your way.
November 26th, 2009 at 2:34 pm
Ironically, and …
Ironically, and with hindsight, this video marks the top of the bubble, posted July ‘07.
It’s a classic example of bubble mentality. All the hollow cliches and popular misconceptions are included – prices always go up, lack of supply, it’s different this time (with regard to affordability)- perfect nonsense of course. The film maker even manages to lose any remaining credibility by changing the title after the event by adding a warning of short term price falls. Didn’t see this coming?…hmmm
November 26th, 2009 at 2:34 pm
there are over …
there are over 200,000 vacant property so wots he on about shortage?? also, why are there soo many people on housing waiting list if all these property are empty??
November 26th, 2009 at 2:34 pm
COME ON THE HOUSE …
COME ON THE HOUSE PRICE CRASH! Go you good thing go
November 26th, 2009 at 2:34 pm
Buy to let has to …
Buy to let has to be one of the most socially divisive and just plain unpleasant popular speculations ever. The participants are not content just competing with young families who(dare to)aspire to have a tiny stake in their country and security. No. They want to see their rents rise too. The fact that you think it’s OK and your “friends” are “investors” (selfish and greedy)is a harsh indictment on your character, Dixon.
November 26th, 2009 at 2:34 pm
lol…the guy in …
lol…the guy in this video was WAY OFF…
November 26th, 2009 at 2:34 pm
The Crash is Here / …
The Crash is Here / The Crash is Clear:
LONDON (Reuters) – House prices fell 1.9 percent this month alone, leaving it 10.5 percent cheaper than at the same time last year — the biggest decline since comparable records began in 1991.
The property market is now plummeting, after 10 years in which prices trebled, as banks hit by the credit crunch have tightened their lending criteria with many now requiring a 25 percent deposit for mortgages.
November 26th, 2009 at 2:34 pm
Thanks – hard to …
Thanks – hard to say – I am not really so much interested in short term speculation on house prices. My message is that we need to take a long term view. I am certainly more pessimistic about the short term than I was a year ago. But we will reach a stage, probably within the next 12 months (I am starting to see it already with property investor friends) where people think they can drive a great bargain and want to buy. It all depends on local factors, especially in the buy to let market.
November 26th, 2009 at 2:34 pm
I was waiting for …
I was waiting for the warning of a possible 10-15% drop. Perhaps I missed it. It has already fallen 12%, and I could easily see it falling another 20% or more. What’s your latest short term and long term forecast? Patrick, you may want to tune into my video on Harrison 18 year Crash cycle. It could help improve your forecasts.
November 26th, 2009 at 2:34 pm
Thanks. Most people …
Thanks. Most people live in their properties so selling has complex issues attached including family well-being, and most people are buying property intending to own it for a very long time. Your selling point applies mainly to retiring people looking to realise capital who may have to sit tight with equity release etc until market settles (most have no mortgage) + buy to let landlords (but their rentals have increased significantly last 12 months (>10% in some areas) as people delay buying.
November 26th, 2009 at 2:34 pm
The Property market …
The Property market is and always has been cyclical. All that has happen is that it moved past the peak in the cycle in August 2007. If you had seen the cycle top coming, you could have sold out before the peak. And now it is likely to keep sliding until at least 2011-12, and the next several months may be particularly devasting.
The Bulls who ignored cycles, will now pay for that oversight. And those who understand them, and use them well will be the big winners.
November 26th, 2009 at 2:34 pm
DDBB,
You are on …
DDBB,
You are on the right track. “The UK is an island… small, no space.” Is not analysis, it is a myth. We have just come thru a Winner’s Curse period. Fred Harrison called it right years ago. Click on my name to see how he did it.
November 26th, 2009 at 2:34 pm
You may be right – …
You may be right – who knows. But if that happens there will be likely rebound boom the other side. Easy to lose money dipping in and out of housing market as stages in short term cycles are hard to read and costs of buy / sell huge. First time buyers may want to delay but need to be careful… life is complex. People need homes at particular times, properties they really like come up – will they again? Over 25-30y ears whether one bought at top / bottom market becomes far less significant.
November 26th, 2009 at 2:34 pm
A fall of only 10 …
A fall of only 10 to 15%, you will be lucky… my own prediction is a 12 to 15% drop in 2008 and a 15 to 18% drop in 2009 followed by a 5 to 10% drop in 2010 before levelling out in 2011… so a 32 to 43% drop over 3 to 4 years… those of you who brought during this housing boom may be in slight trouble unless purchased before 2000 that is…. the housing market is a cycle it goes up and it goes down… however this time it has got a long long way to fall.. oh dear…
November 26th, 2009 at 2:34 pm
Thanks – important …
Thanks – important of course to watch whole video. UK housing very complex and cannot be summarised in a 3 minute soundbite (popular YouTube length). So I recorded up to max 10 mins allowed by YouTube, but really still too short. Some people only watch first 3m of 10 so miss wider context, which is why annotations relating to content further in the video now appear in first secion. Weakness of all videos of course – with text the reader can skim read to get the whole sense of the argument.
November 26th, 2009 at 2:34 pm
Thanks – see …
Thanks – see comment above. Patrick
November 26th, 2009 at 2:34 pm
What a shocker, …
What a shocker, especially from a futurist. Little more than a stitch together of the bubble theories.
Not surprised you’re backtracking (with the new stickies) and trying to emphasise that these MAY be LONG TERM factors that will sustain the bubble.
YOU FORGOT CREDIT AVAILABILITY. House prices are crashing. They will most probably do so until at least 2010.
It takes something to make David Smith ($40 oil Times economist) look relatively capable of accurate economic forecasts. Well done!
November 26th, 2009 at 2:34 pm
“recruitment …
“recruitment becomes impossible”, really? In which parallel world? We are facing stagflation – rising prices, suppressed wages and no real growth. That means unemployment, see today’s news for evidence. No, we will see a fall in living standards and people will accept whatever work they can get, even a pay cut. I witnessed this is the early nineties.
November 26th, 2009 at 2:34 pm
Yes the CPI is a …
Yes the CPI is a convenient way for the government to talk about a lower rate of inflation than the reality which is closer to RPI – usually around 1% more than CPI. Yes government employees tend to drop behind those in companies – a universal trend over many decades. But the good news is that history shows eventually there are catch ups with larger than inflation increases. Reason is that otherwise point comes where recruitment becomes impossible. Government / NHS is in same labour market.
November 26th, 2009 at 2:34 pm
Inflation would …
Inflation would wipe out debt if government would stop lying and masking the realized rate of inflation. Wage increases of 2%, or 1.9% if you are a nurse, will not erode debt like you suggest. The consumer will instead be squeezed from both ends.
It’s worth realizing that although for some countries (Norway)the link between energy consumption and GDP is vague for most it is not, especially developing nations. The economic model you condone only functions in a world of cheap energy.
November 26th, 2009 at 2:34 pm
Yes things are very …
Yes things are very hard for those on lower incomes right now. On “greedy banks and hedge funds”, once again we need to see the whole situation. Take HSBC – 75% of all the shares of the bank are owned by pensioners or by those saving for their own pensions in future. Pension funds receive 75% of all the post-tax profits of all UK banks – and the same 75% from oil companies. The rest of those shares are owned by people saving up for things in future.