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Housing market
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Johnc


Posts: 138
Joined: Jan 2007
Post: #41
02-09-2008 10:34 AM

Given that fuel and housing are both seen as essentials, does anyone else find it ironic that when fuel goes up everyone moans while when it comes down everyone applauds. But its the total opposite with housing.

I also feel that there is an over fixation with this whole subject. Okay I own my own house and i'm sure its gone down in value in the past few months, but as i'm not planning to sell it in the near future so what. Admittedly those that are impacted (negative equity, unable to meet rising mortgate repayments or getting a mortgage at all) it is very serious, but things like fuel and food hits everyone, particularly those most vulnerable, and it doesn't get anywhere near as much media coverage

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brian


Posts: 2,002
Joined: Apr 2005
Post: #42
02-09-2008 10:39 AM

Well said John. I agree 100%
Most people should welcome a more realistic house price market.

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Londondrz


Posts: 1,538
Joined: Apr 2006
Post: #43
02-09-2008 10:44 AM

Brian I disagree I am afraid. Most people who own a home would not like to see their most expensive assett loose value. I agree that the housing market in the UK is way overvalued however it still does not sit well to find out that you house has gone down in value.

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brian


Posts: 2,002
Joined: Apr 2005
Post: #44
02-09-2008 11:42 AM

I also own a property and I understand owners do not want to see their property go down in value but as you say they are wildy overvalued at present.
I recently sold a very run down Victorain 1 bed room flat fot GBP 175k.
Property built about 1870 so what is the reason for these very high prices. No building costs, needs to be totally renovated.
Surely we need to go back to the time when a house was a home first if the price increased so be it but it should not be an investment.
If you are selling and buying at present no problem , if you are just buying perhaps best to wait , only if you are selling and renting will you lose.
Once this current shake up is finished let us hope prices do not go barmy again , however I somehow doubt it people have short memories.
Not sure what if anything should be done to assist people in real problems , mainly those who purchased in last 18 months or so. I do feel sorry for them , I know the writing was on the wall but the lenders were still thusting money down their throats which in most cases were more debts than they should have taken on.

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Tim Lund


Posts: 255
Joined: Apr 2008
Post: #45
08-09-2008 10:27 PM

[Moved from SE23 Topics: Forest Hill Pools]

I don't expect to persuade too many people here, and it may be a bit off topic, since this the argument is about economics.

Michael recently wrote:

Quote:
there is no reason to believe that the housing market in 2012 will not be healthy once more.


I could agree with him, but I think he means by a healthy market one where there is money to be made by expanding the supply. But what if (a) the population of London stabilises, or even declines and / or (b) people choose in various ways to live with more people per dwelling unit? You'd still have a healthy market, in the same way you can still have healthy markets in other consumer durables, but local authorities would no longer be able to raise revenue by increasing the supply. We've had decades of over-supply brought on by inflated prices, and the touching belief (I remember hearing it from my grandfather) that you can't go wrong buying property.

Re the population of London, my view may be jaundiced by having worked in the City for nearly 30 years, and not having seen much to justify its mystique. Financial markets - like property markets - serve a purpose, but it's possible to get obsessed by them. Where I am working currently, there are acres of empty desk space, with much of the work which would have been done by their occupants earlier in my career now done in Singapore or India. We've all also noticed fewer Polish plumbers, who have gone home now their own economy is more attractive than ours, and property prices aren't so silly. So don't expect continued immigration to reflate the bubble. In short, long term sustained growth in London such as we have been used to is unlikely to resume.

Re household sizes, a quick google elicits that the average household size fell from 4.6 in 1901 to 2.43 in 1996 - and it seems to be accepted wisdom that it will fall below 2.0 by 2025. How sad is that? Are people really going to continue to become more isolated from each other, and suffer the pain of unnecessary housing costs for the joy of living alone for ever? Sartre might have said that hell was other people, but we don't have to be as self-obsessed as him. And what if we're not, and we manage to get back to say an average of three to a household? Suddenly we have a many times bigger over-supply of housing than we already perceive.

The bright side is that being connected to the tube system by 2012 and the relative good value of SE London, we are in a better position than other parts, but still I am fairly confident that, adjusting for inflation, house prices will be lower than today's levels.

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brian


Posts: 2,002
Joined: Apr 2005
Post: #46
09-09-2008 01:32 PM

Tim
You could be mainly correct although I still believe this island far too crowded. I would welcome a Chinese 1 baby policy. Well done China they reckon that 300 million births did not happen and China's population would be 1.6 billion and not 1.3 billion.
Our good new Mayor wrote today that there are too many people in the world and one would not like to argue with Boris.
I agree nothing wrong in a price fall, but would be helpfull if happened overnight , this long drawn out drop is the problem.
Apparently down roughly to 2006 prices , well above all years before.
This has to happen , it should have occurred before but the lenders kept lending on stupid criteria. HMG should forbit mortgages of over 80%.
I suppose I am less concerned because I move less than average. I have moved this year but last move 1985.
Houses should be for living in not for investment.

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