when will the bubble burst?

[nick mercedes]

Average asking price for UK home exceeds £250,000 for the first time | Money | The Guardian

Given so many people have given up the thought of ever being able to buy their own house, who are the buyers leading to house price inflation??

 

[swannymere]

Given so many people have given up the thought of ever being able to buy their own house, who are the buyers leading to house price inflation??

The people on the second or third rung of the property ladder.

 

[grober]

It's the availability of money surely that's improved. It's all linked to the giant Ponzi scheme that is the UK property market. Sure the average price has gone up to £250,000---- but what is that "£250,000 " worth internationally now? Perhaps the start of all this can be linked back to a time when the traditional mutual house lenders were overtaken by the banks as mortgage lenders and "responded in kind" to remain competitive. This involved lending people money you don't actually have on the strength of increased equity should things go wrong. The Gnomes in Zurich tend to notice these things- the economy "built on a house of cards" model does not appeal much to them. The international smart money prefers to invest in more traditional areas involving hordes of little people working their butts off for a bowl of rice a day and nicking the natural resources of third world countries to do it. It was ever thus. The ordinary folks in the UK can only look on and wonder. The gnomes and negative equity its a bitch!

 

[Charles Morgan]

It's the London effect rippling through, which is driven largely by foreign buyers, for whom the weakness of sterling acts as a lovely incentive.

Add in almost no repossessions compared to the last recession (15% nominal vs 1% nominal interest rates plus more forbearance), little housebuilding in the areas most in demand and yes it all looks expensive if you are starting out, but if you own a home, at even 3% mortgage rates - hardly above inflation - you can pay down that debt pretty smartly.

First time buyers however...

 

[davidjpowell]

Governments latest lending wheeze to bribe people to buy new homes, is presumably beginning to show signs of working.

The majority of the increases will be in the South (particularly London) where the market is active. Across the North it's still pretty dysfunctional.

PS - Press release by Rightmove. It's not going to be negative.

 

[Deleted member 6183]

'asking prices'

 

[C240Sport97]

It's the London effect rippling through, which is driven largely by foreign buyers, for whom the weakness of sterling acts as a lovely incentive.

very true in Prime Central London, less so in other areas.

 

[Dryce]

First time buyers however...

First time buyers were in trouble even before the current crisis - it's just that the system had adjusted to offer the funny money no deposit and interest only and self certified mortgage products to artificially lubricate their sector of the market.

 

[Satch]

Oh that bubble. I thought you meant the really big one waiting to go with more than a gentle pop.

More like a huge bang in fact

Fitch says China credit bubble unprecedented in modern world history - Telegraph

 

[fredT]

I doubt it will burst, best case (for me, as I haven't bought yet) it will flatline. But I think it will continue higher. Governments around the world are not tightening the belt just yet, the printing is in my opinion not going to slow and and exploding inflation isn't that far fetched.

Edit: IF the bubble burst, we are toast

 

[John Jones Jr]

little housebuilding in the areas most in demand

Heard the same several times over from property developers.

 

[finisterre]

the bubble will not burst so much as sag and wobble with growth popping up like air under badly hung wallpaper. For the next thirty years.

which is fine.

 

[nick mercedes]

What would happen if it did burst though?

Would any of te banks survive?

 

[grober]

Well that " Ol mutual" the Co-operative Bank won't -at least in its original form. That's the Co-operative Bank that was going to take over quite a few branches of Lloyds TSB a couple of months ago in the big sell off courtesy of the EEC . The FSA with its "finger on the pulse" once more! Bet that guy running the CO-OP is wishing he stayed the "heir apparent"at Kingfisher now.

 

[crockers]

We are going through belt tightening austerity measures....hmmm how comes govt debt has doubled from 700bn to neatly 1.4trn. We are doomed and destined to be another Argentina.