Friday, Jul 13, 2007
C'mon, sensible talking at last!
Telegraph: UK property could face 'severe crash' in 2008
Just change "could" into "will" and thery you have the perfect storm. "While there have no been no clear signs of problems in the buy-to-let market, Mr Sharratt warned: "With the buy-to-let sector yet to be tested in a serious downturn, the risk remains that this sector could serve to amplify any slowdown in the broader market." Yes, like we in this site have been saying for a year.
Posted by confused76 @ 04:25 PM (810 views) Add Comment
20 Comments
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1. Bearfacts said...
20% overvalued - is he having a laugh ?! - 50% overvalued according to the OECD sounds about right - infact I'd venture its more like 60-70% overvalued.
2. dohousescrashinthewoods said...
Still wagging the story of a "prolonged slowdown"
Ladies and gentlemen, no boom in history has ever - ever - been followed by a slowdown.
Boom and bust - like horse and carriage. If you leave fundamentals behind the market will soon see to it that you get back to them. Dot-com? No, it's different this time. Supply and demand. The Internet is a new paradigm.
3. sold 2 rent 1 said...
It is very unlikely that a crash of 20% will happen in 2008.
Prices will only peak at the end of 2007.
There needs to be a recession and a jump in unemployment before we see big falls.
I still think 50% in real terms between 2008 and 2012 is real possibility.
4. dobber said...
s2r1,
The crash is already underway, just look at the share price falls of Persimmon, Barratt Developments, Taylor Wimpey, Bovis etc..
The crash for the man in the street is just not apparent yet, due to our friends the EA's
5. Davros said...
Same old same old.
Yes, it's the boom and flat theory. Unlike USA, Ireland, Spain to name a few, we're going to see stagnation.
You'd have thought that someone who's paid so much would come up with something more original than the same old employment and lack of supply arguments.
6. Stoatgobbler said...
Quite right dobber, and those EAs are starting to worry - I bet most of them didn't know their phones could make outgoing calls until 2 months ago. I'm getting 5 calls a day for prime central London gear - and that's the bit that's meant to be fine!
7. Orwell said...
Very true, it's the estate agents who least for a short while managed to hold the effectively. What is a bucket of water full of holes.
8. japanese uncle said...
'Overvalued by 20%' what a rubbish! Should read 'overvalued by 120%'.
9. Orwell said...
Very true. It's the estate agents who worked least for a short while manage to hold up what is effectively a bucket of water full of holes. Also, the slowdown will not become apparent to the man in the street until he either has to sell his property very quickly in a much tighter environment or someone sells it for him.
10. Anon-and-on said...
What will GB do now i wonder? Obviously he knows it's coming too.
Latest news on the intentions of distancing UK from US policy perhaps means another conflict is about to happen. Great to have some - thing / one to blame it on.
11. Scott said...
dobber is right. We buy food every day. If the price of food dropped we would notice the same day or the next day. We do not buy and sell property every day, so you doom mongers will need to be more patient.
12. speculatorone said...
Yes and my local scummy estate agents are still increasing the prices of new properties to the market.
They just refuse to take in that interest rates have gone up and their existing properties are not selling.
All this does is give vendor's false hopes.
13. confused76 said...
Speculator-1
EAs compete on price to secure the mandate. they have to bid the highest
check at propertysnake.co.uk you will find properties on the market for 100+ day and all sort of reductions prior to sale
14. Captain Sensible said...
20% chance of a 20% fall. True, more like a 50% chance of a 50% fall. But, for any less numerate BTL investors out there, taken at face value the research still shows that there's a 1 in 5 chance (about the same as winning a pound or two on a scratchcard - which happens pretty often) of losing 200k on every million pounds of property (at current value) that you own. As this happens, the pressure of interest rate rises increases your costs at the other end of the equation. The millionaires from the last dot.com boom are those who saw the writing on the wall and got out early - leaving the rest of the suckers (the 'tomorrow things must pick up' brigade) to pick up the pieces. Get out now or pay the price!
15. speculatorone said...
confused76
I hear what you are saying and understand.
However reference my post on this site the other day regarding propertysnake; in my area, there are 3 postcodes I have been checking reduced prices regularly. At the beginning of last week each had approx 12 pages of reduced properties all with 100+ days. Now 2 postcodes have no properties and 1 has about 1.5 pages. Someone answered my post and stated Rightmove had taken legal action to stop the website? Does anyone know anymore about this?
16. wiltshire said...
Speculatorone - all I know is that when I first saw Propertysnake mentioned on this site there were around 160K homes on there. This increased practically daily until it stood at about 220k then dropped overnight to 74k.
I don't know for sure but obviously Rightmove own the copyright in the data on their website and a site like Propertysnake certainly isn't in their interests so they must have ensured information from their site was removed from the Propertysnake site. Party poopers!
17. Little Professor said...
It's true, the owners of propertysnake (who are in fact the same people behind GHPC) have comfirmed that rightmove set their lawyers on them. They are in negotiations to get the data back up, but I don't hold out much hope.
18. planning4acrash said...
There were a few hundred thousand price drops on property snake a while back and it fell back to about 50k or below all of a sudden. Never mind however, its a sinking ship, plugging the holes makes it sail further, letting it sink deeper.
19. george monsoon said...
I am sure someone will find a hole in the system to continue plugging the price drops, possibly Rightmove, when they have no alternative but to push the reductions...
To late all you EA's .. its crashing and its going to gain momentum very, very quickly..
20. Jackdaw said...
The propertysnake difficulty - is a real shame - what happened to freedom of information?
In contrast USA property multiple listing sites show foreclosures and the balance owed to the lender.
The recent price increases in food and oil must surely translate into inflation and trigger more IR increases sooner rather than later and hopefully provoke a downturn in property prices. Also - wage increases - due in part to the influx of migrant workers to the UK - are likely to remain low. Unlike the boom of the 70's the UK labour market does not have any significant clout - and - with most of the population up to their eyes in debt - there will little stomach for a withdrawal of labour. Personal debt - a powerful political ally - offers immense opportunities for control - until it tips borrowers into default - but with lenders considering - ever more 'generous' terms for borrowing the bump could still be a few corners away. The media producers of property programs encouraging all into becoming 'developers' hasn't helped - along with the EA's talking up the market at every opportunity. The oft quoted "demand for housing is high" is only valid if funding is available - as witnessed by bloated 'for sale' inventories.