Boomed! £1K a month for nothing

**bobhope** · 29 January 2007, 08:20

Is the Centre for Economics and Business Research a codename for Gordo's mates? This kind of stuff is really tiresome. Anyone with a modicum of common sense can say house prices are looking toppy by any measurement you care to name:

1) Prices well above long term trends
2) Rental yields in London are sub 4%. Cost of money is ~6%
3) You need a lot more than an average (median) salary to buy the average home.

All indicators point to overvaluation.

That's not to say prices won't rise in 2007, but to go on record saying that they "should" is ludicrous. Certainly to say they'll accelerate in 2010, which is when the major demographic forces start to kick in (baby boomers sell up and begin dying off or vice versa) is foolish.

**DimPrawn** · 29 January 2007, 08:22

It is almost accepted that in 2015, houses will double in price EVERY day.

You heard it here first.

**wendigo100** · 29 January 2007, 08:43

Every year we say that house prices have topped, and the next year they shoot up to new levels.

One reason is that demand is going up because of immigration and more people living alone.

But a big reason is that, every year, borrowing money is becoming easier. This has resulted in an unprecedented debt bubble. There will be fun when that bursts!

**The Lone Gunman** · 29 January 2007, 08:55

Originally posted by wendigo100

But a big reason is that, every year, borrowing money is becoming easier. This has resulted in an unprecedented debt bubble. There will be fun when that bursts!

I would agree with that. As long as there is high demand prices will rise. The only way it will stop is when people can not afford to buy, which will happen when banks and building societys get cold feet on the lending front. It is not in their interests (pun intended) to stop lending. <hovis music> When I were a lad....</hovis music> you could only borrow 1.5 times salary. Now people are borrowing 5 or 6 times salary and with self cert mortgages they can declare salary to be any amount they think they can sustain payments on.

Now thats gonna hurt in the morning.

**BrilloPad** · 29 January 2007, 09:00

When the last bear has turned to a bull, thats when it will crash.

**Bear** · 29 January 2007, 10:30

Mooooooo

**AtW** · 29 January 2007, 10:32

Ok, I am convinced - I am going to get self-cert morgage in between buying print paper and milk from other shops on high street.

**Lucifer Box** · 29 January 2007, 10:34

Originally posted by bobhope

Is the Centre for Economics and Business Research a codename for Gordo's mates? This kind of stuff is really tiresome. Anyone with a modicum of common sense can say house prices are looking toppy by any measurement you care to name:

1) Prices well above long term trends
2) Rental yields in London are sub 4%. Cost of money is ~6%
3) You need a lot more than an average (median) salary to buy the average home.

All indicators point to overvaluation.

That's not to say prices won't rise in 2007, but to go on record saying that they "should" is ludicrous. Certainly to say they'll accelerate in 2010, which is when the major demographic forces start to kick in (baby boomers sell up and begin dying off or vice versa) is foolish.

Bob, everybody knows that house prices will rise forever. Fill yer boots.

**rootsnall** · 29 January 2007, 10:41

Originally posted by andrew_neil_uk

When the last bear has turned to a bull, thats when it will crash.

I've been a hardened bear for years but just bought a big house so now a bull !

Boomed! £1K a month for nothing