Wednesday, Feb 07, 2007
Live in London? Sell sell sell !!
Firstrung: London house prices have peaked as haart calls top of the market and urges sellers to sell now
Haart estate agents market reports are mostly notable for their bullish levels of optimism. This report differs in several key apsects; firstly in suggesting sellers should sell now Paul Smith of haart could be calling the top of the market.
Posted by converted lurker @ 06:20 PM (166 views) Add Comment
10 Comments
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1. Bobsta said...
An estate agent urging people to put their property on the market? Wow... whatever next?!
2. A said...
Where do they live when they sell their house?
3. Nohpc said...
sell up and do what? live on the streets?
4. sold 2 rent 1 said...
This is a ploy to get more sellers onto their books and keep prices static as well as increase sales volumes.
"Levels of January applicants were up 30 per cent in haart's London branches compared to the same time last year. With demand now heavily outweighing supply. "
They realise that if prices go any higher there will be a crash.
Unfortunately prices will go higher (for the next 6 months or so) and there will be a crash.
This is the winner's curse phase.
If the crash starts summer 2007 it will be large
If we have rising prices at 10% until 2008 then it will be gigantic
5. Nohpc said...
Can't see prices rising 10% this year. If they do then any correction would likely to take this into account which is fine by me. Very interesting tactics from Haart.
6. george monsoon said...
I haven't given the article my time. If the brief description says it all, then I say "what Twaddle"
7. talking rot said...
NoHPC
I seem to recall Haart urging people to invest in BTLs a few years ago. Maybe Haart are right and they are urging people to sell their investment properties, not their homes. Alternatively, those sharp people who are happy taking risks, may wish to sell their grossly overpriced home and then rent for a year / 18 months, while they watch the market tumble.
Haart seems a profitable company and companies aren't profitable if they are run by dimwits.
8. C'mon Correction said...
I agree talking rot. It is aimed at BTL as an investment. The yields are so low compared to risk, that BTL can no longer be classed as a sound investment. I wonder how BTL ranks amongst other investment vehicles currently. The smart money will be getting out quick, invest in something else and then if property is your thing, then buy back into it at the end of the bust in about 5-10 years.
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10. dohousescrashinthewoods said...
sold 2 rent 1, I think you are right.
I have been forming an opinion from reading this blog of late that a housing crash will be triggered by credit conditions, not any of the factors that get "Kirsty Allsopped" about.
Here's my reasoning:
- Inflation happens when more money is chasing the same amount of goods (money supply).
- The credit boom (liquidity bubble) has generated huge money supply, triggered by low interest rates.
- Lax lending means more people got hold of mortgages (read money supply) and go after the same housing stock.
- More buyers, more money supply so inflation happens (HPI)
The conclusions are these:
- If credit becomes harder to get, less people will be approved for mortgages, so less buyers.
- This happens through rising interest rates and through banks tightening lending, which appear to be happening simultaneously.
- That is similar to what happened in the great depression - credit tightened, money supply dropped, the market ground to a halt.
- As money supply and therefore buyers evaporate you get deflation: aka HPC.
So, other things being equal, the cycle of the global liquidity/credit bubble might be what determines the UK HPC.
Given that inflation is rising, banks are losing hand over fist to defaults and US sub-prime mortgages are (apparently) set to implode around the end of this year, the scene is set for a rapid tightening of credit. Cue HPC.
If lenders plan and act fast now, perhaps it will be this year. If they don't see it until it hits them, they might knee-jerk at the end of the year, causing the gigantic crash you suggest.