Safe as Houses?

[TimberWolf]

2.6% drop over all UK areas for the year, which isn't too bad considering the state of the economy, but 4% drop in the Midlands and 8% drop in the north east. But, factor in that fiat money paid to house sellers is depreciating even more rapidly, and that's quite a drop.

http://www1.landregistry.gov.uk/uplo...11_sb5ar16.pdf

Safe as houses maybe, but not if your house (or Brummy flat) is in the UK.

[TimberWolf]

Hartlepool = 18% drop, average house price = £79K.

[Freamon]

A bigger problem is the 11% drop in transaction volumes over the last 12 months.

[doodab]

This is good news. There seem to be a lot less property / diy shows on tv these days and a lot more escapist nonsense. That's what i like to see.

[wim121]

What goes down must come up.

The simple fact, is we are in a bust. The next boom time in the boom and bust cycle, houses will be even more expensive. Property is the only real way long term, to beat inflation and even make a mass profit.

With over 20 immigrants settling in the UK every minute and the birth rate, continuing to exceed the death rate, even as the baby boomers die off over the next couple of decades, the UK will become even more crowded and property as well as land, even more valuable.


Houses are very safe, so long as you can afford them and keep your money in them for the long haul if required.

[Kanye]

What goes down must come up.

Or you could take the opposite and more sensible view of what goes up what must come down.



We had a decade long boom and we have a loooong way to go to revert to anything like mean.

Of course there is massive demand for housing, but the prices they go for are almost entirely based on what the banks will be lend.

Hell will freeze over before we go back to the levels of bank lending seen during the boom.

Outlook for property is very bleak indeed IMO.

[TiroFijo]

It's bricks n mortar innit! Pension sorted.

[MarillionFan]

It's bricks n mortar innit! Pension sorted.

WHS

The value of property should now be analysed around affordability of rent. Think of it as a bricks n mortar dividend.

A report by Shelter has done an analysis of affordability of the rental market by region

Private Rent Watch Report 1 - Analysis of local rent levels and affordability - Shelter England

Which is based of the VOA statistics for private rents.

Privatel Rental Market Statistics - Statistical Release - 29 September 2011 - Valuation Office Agency

A little bit of further analysis, which I'm going to try and do later is rental yield to average property price by region. (Unless someone can find it already).

[conned tractor]

WHS

The value of property should now be analysed around affordability of rent. Think of it as a bricks n mortar dividend.

A report by Shelter has done an analysis of affordability of the rental market by region

Private Rent Watch Report 1 - Analysis of local rent levels and affordability - Shelter England

Which is based of the VOA statistics for private rents.

Privatel Rental Market Statistics - Statistical Release - 29 September 2011 - Valuation Office Agency

A little bit of further analysis, which I'm going to try and do later is rental yield to average property price by region. (Unless someone can find it already).

So, what's affordable, I'm sure I read somewhere that peeps are spending around 50% of their income on a roof over there head. Although I can't find out the article now.

Don't forget the skew in the floor on rental prices introduced by DHS rental allowances - if allowances were to be reduced then the floor introduced by this would also move. I don't think this has any basis of affordability.

[wim121]

Or you could take the opposite and more sensible view of what goes up what must come down.



We had a decade long boom and we have a loooong way to go to revert to anything like mean.

Of course there is massive demand for housing, but the prices they go for are almost entirely based on what the banks will be lend.

Hell will freeze over before we go back to the levels of bank lending seen during the boom.

Outlook for property is very bleak indeed IMO.

The same thing was said after people jumped out of skyscrapers in the 1930's, "never again will we let the stock market control us or lending and debts spiral out of control", but the boom bust cycle has repeated itself at a very predictable interval, on average every three decades.

For someone looking to beat inflation, bricks and mortar is best. Most people take on a house for 20-40 years at least as they make mortgage payments on it. Comparing house prices over the past century, isnt realistic as 50-100 years ago, land was readily available and centralised housing around cities wasnt as bigger factor as it is nowadays.

Conversely, lets look at the ratio of house prices to rentals. Here we can see in Britain, over the past thirty years, there are regular peaks and dips, related to market lows and highs:


We havent escaped the boom bust cycle this past century and one could debate, doing so would harm our global wealth permantely.