Monday, Oct 15, 2007
Somebody needs to give Judith a very basic lesson in Economics!
Times Online: Property prices jump as owners rush to sell before Hips handicap their chances
Average property prices surged 2.7 per cent last month as owners of higher- value homes rushed to market to avoid compulsory home information packs (Hips). Experts are predicting more turbulence in the months ahead as the residential property market tries to absorb the effects of stalling buyer confidence, tighter mortgage terms and the probable extension of the Hips regime.
Posted by tyrellcorporation @ 01:41 PM (1512 views) Add Comment
24 Comments
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1. Mikelivingston said...
I don' this is a problem with the economics.
What it means is that the average asking price has been raised because lots of people in higher value homes are trying to dump them all at once. This looks like the start of a crash in the £800k plus bracket.
2. Blooperman said...
the only way I can square this notion is by thinking that the extra-large number of 3-beds on the market raises the average price. Note that this can happen even if the average price of a 3 bed house has gone down. the problem with journalese is that it is not worth listening to, as a definition or a basis for comparison or even simple context is hardly ever given.
3. tyrellcorporation said...
I agree, in Exeter there has been a flurry of houses for sale in the very nice Georgian and large 1930's detached sectors. This is pretty unheard of as they seem to normally just pass down through the generations and never really come onto the market. A definite sense of 'cashing in at the top' is occuring here.
4. Scallywag3 said...
Poppycock. no one with a high value house is going to rush its sale forward to save of a few hundred pounds on HIPs
They quite simply see the crash coming and getting out while they can achieve a high price,
5. robh said...
I was going to buy a one hundred thousand pound six litre V12 car that does 4 to 8 miles a gallon and costs a thousand pounds for a service ... but then I found out that it needed a road tax ... it gave me pause for thought I can say!
This HIPS business is really beyond a joke, its a few days price rise on the house ... well it was :)
6. Drewster said...
The issue with HIPS is that they are paid by the seller, not the buyer. Apparently quite a lot of sales come from people who put their houses up for offer to "test the market". For example an older couple living in a nice part of southwest London, with all the kids finally moved out, decide to test the market. They discover that their house is worth a small fortune so they agree to sell up and move to the seaside. Without these indecisive sellers, the whole market will supposedly grind to a halt.
That's the VI spin anyway. The truth is that the market would be grinding to a halt anyway, just as it has done in America where there are no HIPS to cloud the issue!
7. Safeazowziz said...
Don't forget the gross up in prices that include the deposit (usually 15%).
8. david20040_0 said...
A 2.7% increase in one month!!! Whoa that is a huge rise. Slowdown, what slowdown that is massive leap.
9. deepak said...
More seriously speaking are these those BTLer who were in the market for long term. (pun intended)
And now they will be paying 18% CGT instead of 10% after 6April 2008.
Also as they are not making any money on BTL due to interest rate rise. Now they will not be making capital profit also
10. crash bandicoot said...
I think that rightmove may be experiencing a "distilling" of their average house price. As the more realisticaly priced houses are sold - boiled out of the rightmove "flask". The overpriced houses remain and push up their average price for month after month.
11. Alexd said...
No one seems to have commented on the misleading nature of the statistics used here.
The article is about a jump in average asking price due to an increase in more expensive properties coming to market. If there is a greater proportion of high value properties on the market, then sure, the average asking price will suddenly jump up. Somehow, I doubt the figures were corrected on a like for like basis.
It is not hard to see ways of quoting averages of whatever you want to proove. With most statistics coming from people with vested interests in selling houses, I suspect that statistics are more often skewed in favour of house prices rising.
12. stillthinking said...
The rich are seriously perverting the figures. I hadn't thought of the higher end homes going to market, I thought it was just a pure deceit by the media. Anyway, the crash is coming along and nothing to do but wait for 4 years until the bottom.
13. Robbie said...
Does anyone else think that the figures based on asking prices are a little bit misleading? After all should we not be focusing our attention on actual house price sales, instead of price expectations?
14. Mybrainhurts said...
She has simply failed to understand what the report says. She thinks it says the price of 1 and 2 bedroom houses will fall 5% when HIPs become applicable to them. ("Rightmove, the property website, predicts that prices could drop by 5 per cent for one and two-bedroom homes when they can no longer be sold without a Hip.") What it actually says is that the average of ALL houses will drop by 5% when this happens, but this distortion will be pretty much corrected in the following month.
15. planning4acrash said...
Stillthinking. I agree with you and I'm physically feeling depressed right now. I've studied, got a very good job, earn way above the average, and I still can't afford to even think about having a home. Call it a crisis in masculinity, but in your late 20's after being fed junk about how a good education will get you somewhere I am not in a position to provide. Makes you feel pretty damn useless. It is such a shame that speculators have been allowed to turn home buying into a wealth machine, why can't homes be places people live in? Its toxic CDO's that have allowed sub-prime to get out of control, and this crisis should be viewed of as an example of hyperinflation. Like, get a wheelbarrow (or truck load) of pounds to buy a house one day and you need two trucks of of £'s the next year. It is a vast depreciation of the spending power of our currency, but rising house prices makes it appear positive to homeowners. This game is addictive and as tricksy and antisocial as smoking. As such I propose banning it in public places! I want to protest. I want to march down the mall telling corporate lenders to p$ss off and be responsible with their lending for good, and for that to be enforced by parliament, proper credit checks on affordability should be a legal requirements for normal mortages and audited valuations and 130% yield should be a legal requirement for buy to let mortgages to ensure that the sector is about yield and not about capital appreciation. This would also give the government a chance to cut taxes because regulations are far more economically efficient than subsidies for providing affordable housing. So, for you neo-liberal free-marketeer's, regulation of the market will cost you, but it will cost society less and be more economically efficient. Unfettered free markets are not economically efficient and merely serve to make the rich richer and the poor destitute.
16. Bitofanewboy said...
Dear all
I'm not a financial wizard or a property developer. One thing I am certain of is that statistics can say anything. If a man has a leg in an oven and one in a fridge, on average, he is quite comfortable. Am I right in thinking that the acid test is what peoplae are paying i.e. the land regsitry. I would appreciate the feedback.
Bitofanewboy
17. Si said...
I'm gutted for myself because I can't buy a house.
I'm gutted for my friends because a lot of them have recently bought (one 100% IO)
I can't understand how a responsible government could let this situation occur.
18. happyrenter said...
The number of houses coming onto the market here in Winchester has shot up in the last month, especially in the 650k+ bracket (good old rightmove search results coming from top down) so I'm not surprised the asking price is rising, it's an upward weighting on the average, not a real rise.
I don't buy it as HIPs, it's just reading the writing on the wall. Asking prices are dropping in the properties already in the 350-650k region. One has fallen from 595k to 445k, still not under offer after 3+ months.....still not worth it either, crash or no IMHO.
19. planning4acrash said...
Absolute Happyrenter, its not a relative fall that matters, its prices coming into line with earnings that matters. This requires a property market meltdown. I fear that buy to let people will be out on the street protesting before us housepricecrashers get a chance to invade parliament square!
20. tyrellcorporation said...
I just did a quick calculation of rent vs buying with the 4 bed I'm in at the mo as next door has just been sold (Exeter, Devon). Using an average repayment fixed at 6.5% for 25 years the monthly mortgage payments for the property are...boing!...£2254. I currently rent the place for £950 a month! Insane!
Looking through the local EAs websites though it still makes very depressing reading. I feel we're at the start of the slowdown just like in the summer 2005, and we all know what happened then!
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22. alan said...
Sorry to disagree with such a well respected website (by journalists), but I just don't see prices going up by 4.7% in my area south of Chelmsford (see south-east map). A lot of properties just haven't sold, judging by the sale boards. Time on the market is up!
There are also a number of properties that have been slightly reduced, too. Sorry, I think prices are moving down, slightly - not up.
23. planning4acrash said...
David Smith, I hope you aren't planning on selling me a toxic mortgage now?! I do hope that question was a joke!
24. David Smith's Sub Prime. . . said...
No.
You say you earn a lot..
I wondered. My friend earns £295 for a half day and £595 for a full day, £900 at least if the Court pays and he wins ....