“…not an ‘if’, but ‘when’.”
In the next few months, I intend to explore some of the lies myths surrounding the UK housing swindle market, using multiple sources for my research. It’s a personal journey I’ve been on, from the self-deceptive prosperity teaching, to out of control debts, and finally an awareness of social injustice to the poor.
Cliff D’Arcy writes for the Motley Fool – Why The Next Housing Crash Will Be Worse! and gives 10 reasons:
- We overspend without care
- Our bills are soaring
- Mortgage debt is massively higher
- Non-Mortgage debt has exploded
- Mortgage equity withdrawal has soared
- Wage inflation is modest
- The savings ratio has plunged
- Interest rates are low
- The state safety-net has vanished
- Private insurance cover is pants
These reasons are just scratching the surface of what is a huge, growing, financial monster. I’m hoping to pull in as many sources as possible and put them into a concise article right here on Abandon All Fear.
The other evening I met up with a good friend I had not seen for a long time. He was the one who had introduced me to the book Rich Dad, Poor Dad, and I looked to him as a source of inspiration for learning the secrets to getting rich. At the time, it was as the British housing market was taking off. Everyone was talking about getting into property, more so in the church than anywhere else.
The story was different 3 years later. My friend had bought a property in the North, he had lost money on the sale. In fact he wasn’t the only person who lost money on property in my church, there were many buying into housing race and wealth creation, without any financial intelligence or understanding of market forces. Yet the self-propaganda continues amongst many. I listened to my friend tell me that he still thought property would rise, and how it’s still the best place to invest. I listened as he explained to me we have an influx of immigrants coming into the country which is driving prices up. He had a good argument, and 3 years ago my only choice would be to agree. But this time I was ready with some answers…
I agreed that there were many more people coming into the country than going out, however the market itself relies on confidence and the availability of people to buy. There is a limit on how far prices can go up, because there is a limit on people’s incomes. Not enough people can now afford to buy a house, and of those that do, they are stretching themselves to the limit. Bankruptcies are at record levels, and further increases in the interest rate will create millions more. Where bankruptcies rise so do repossessions, and where there repossessions, there is an urgency for the banks to cut their losses and get property off their books = price drop.
As I already stated, all markets work on confidence. Something that my friend could agree with me on is that the best time to sell is when everyone is buying, the best time to get out is when everyone is getting in. Everyone jumped on the property boat and it is now looking like a boat that will capsize.
People are struggling to sell, because they won’t bring their prices down, some are determined to make at least 30% profit, others who bought recently are simply trying minimise loss on their ridiculously priced mortgage. For both of these groups it’s taking them upto 18 months or more to sell, something in itself which would never have been heard of 10 years ago.
All it requires is a loss of confidence in property, just as everyone rushed in and the price shot through the roof. All it requires is everyone to panic and rush out which will have the opposite effect. I intend to present the evidence and show that this scenario is not an ‘if’, but ‘when’.
Tags: Abandon All Fear T-Shirts Rich Dad Poor Dad Property Prosperity Teaching Wealth Creation Buy-To-Let Investments Housing Market Mortgage Debt Bankruptcy
Abandon All Fear 