From: "John Smith" 
Newsgroups: uk.finance
Subject: Re: Property Prices are still moving higher in the midlands
Date: Sat, 12 Jul 2003 12:30:35 +0100

I think the ripple effect is very apparent now with prices in London and the
SE being flat - even falling in London so I am told - but still rising in
places like the North and Wales.

J.


"a0000000000"  wrote in message
news:beoomj$7ti$1@hercules.btinternet.com...
> I have an simple economic model based on long run consumer ratio averages
> and the correlation between other markets.  It has been predicting a 25%+
> fall is required for the last 12 months in the South East/London.  Given
the
> recent moves in the property market elsewhere it would not surprise me
that
> it also applies to other regions.
>
> Property prices tend to ripple out from the most active market, the South
> East, where the market has been flat to negative in central London.  The
> bubble has started to burst.
>
> The residential property market is just that a market and with such high
> property prices at the first time buyer end of the market there is a
> substantial imbalance in supply and demand that is not being reflected in
> the prices.  I do not know why this is happening but I suspect that it is
> because supply has dwindled as speculators in the buy-to-let market manage
> to retain even empty property on low interest rates.
>
> BTW the top of the last property cycle was marked by property prices in
> Norfolk doubling in a 12 month period.  Anecdotally I was told that has
just
> happened !!!
>
>
>
>
> "John Smith"  wrote in message
> news:yROPa.9527$nP.3892@newsfep4-winn.server.ntli.net...
> > I don't claim to be a financial guru let alone a financial crystal-ball
> > expert. What I can tell you is my own experience. A couple of years ago
I
> > had two years when I earned 60K a year  - I was very lucky but I also
> worked
> > for two years solid without a break doing 60 or 70 hour weeks - but
since
> > then I have not worked in 20 months as the industry I am in, the IT
> > industry, has been decimated.
> >
> > The irony is that the reason I was doing all that work was to get a
> deposit
> > for a house but, just as I was about to buy, houses around by me started
> to
> > soar up in price. Houses that were 70K 2 years ago are now going for
160K,
> > if they were 200K they are now going for nearer 500K. The reality is
that,
> > even if I was still on the big bucks, I would find it difficult to buy a
> > house where I live and I live in West Wales - not exactly the SE of
> England.
> >
> > The average house price versus the average wage is the killer as far as
I
> > can see. It is too high and surely cannot stay that high. The second
> thing,
> > and I have learnt this over the past year having done alot of research,
is
> > that low interest rates do not mean that house prices are cheaper -
sadly,
> > millions appear to have been fooled by this. Low interest rates means
low
> > inflation and low inflation means the debt takes much longer to erode.
> >
> > Personally, I think if we get away with a 30% fall in the next 2 - 3
years
> > we will be very lucky. I personally 'feel' the fall will be at least
40%.
> > Just a hunch but a hunch based on the fact that my particular industry,
> the
> > IT industry, which was one of the better paying service sector
industries
> > has been wiped out in the UK due to Government policy - virtually all
the
> IT
> > workers I know are out of work and have been for some time. I think
there
> is
> > a great mass of self-employed people out there in the UK economy whose
> small
> > service sector businesses have not been generating income for 12 months
or
> > more but who do not show up as unemployed.
> >
> >
> > J.
> >
> >
>
>