Friday, May 23, 2008
It's not different here
Scotsman: Housing slump may hit less hard in Scotland but it will still be a blow to buyers
Stories reporting how the credit crunch is likely to affect the Scottish housing market currently all tend to say the same thing.
The headline on one such story in The Scotsman yesterday was typical: Scots to escape worst as UK house prices set to fall 7 per cent.
In other words, while there may be house price woe south of the Border, we will be all right up here.
I'd like to think that will be true, but I fear it won't.
Posted by little professor @ 12:32 AM (540 views) Add Comment
12 Comments
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1. titaniccaptain said...
The Crash will spread like a cancer accross the border..............i.e. who will pay 200 Grand for a 3 bed house in scotland when they can pay 130 grand just across the border in the falling north of England?. Then when the house price just across the border (i.e. in dumfries) falls to 130 grand who will pay 200 Ten miles north? repeat cenario till you reach the shetlands.
2. titaniccaptain said...
Ok Dumfries isnt the best comparison but you get the idea
3. gone-to-colombia said...
Ok, I think it works like this - the crash is coming, you can have it now or wait a while. Wait longer and the faster, more painful and deeper it will be.
If you need to sell in Scotland better sell now while you have a chance.
4. drewster said...
We're seeing a classic emotional response to HPC. There are seven stages:
1. Shock stage: Initial paralysis at hearing the bad news.
2. Denial stage: Trying to avoid the inevitable.
3. Anger stage: Frustrated outpouring of bottled-up emotion.
4. Bargaining stage: Seeking in vain for a way out.
5. Depression stage: Final realization of the inevitable.
6. Testing stage: Seeking realistic solutions.
7. Acceptance stage: Finally finding the way forward.
Right now we're somewhere between the shock / immobilisation and denial stages. People are too shocked to believe what's happening, they're just sitting tight and hoping the whole thing will blow over. Some people are in denial, desperately clutching at positive news stories. Hopefully it won't be long before people start bargaining, and finally accepting a realistic solution.
(Source: http://changingminds.org/disciplines/change_management/kubler_ross/kubler_ross.htm)
5. Ijjhall said...
@Drewster
I agree with you but that said many on this site predicted that estate agents wouldn't let themselves go under on the back of greedy clients demanding unrealistic prices -yet 150 are closing a week. Call it what you like but the stubborness/denial phase (at least judging by the static prices in estate agents round my way) is well entrenched..
6. Fed Up said...
Typical garbage vested interest from 'The Scotman'. It won't happen here - yeah right.
7. Steve99 said...
What do do they mean? 'A blow to buyers' ?? dont they mean a blow to sellers? this is what buyers want.
8. Adrian said...
@gone-to-colombia. I think its almost too late for that, housing are selling really slowly where i live in scotland. Most I see have been on the market pretty much all year and there is so little interest. To top that off, a number of over priced new builds are about to flood the market here as well. Housing waiting lists have increased by a huge amount and ive noticed the Housing Associations has taken on some of the builds that were previously private developments.
9. a saver said...
Nice to see an article acknowledging that HPC will happen in denial-ridden Scotland, even if it is stating the obvious - that the tightening mortgage market is national and must affect selling prices. But again that old chestnut that it's somehow bad news for buyers..
Tried to warn my sister but she went ahead and bought in Dundee and has delayed selling her house in Fife while she gets some improvements done (hello that's just a gift to the buyer). If a well educated couple like them (PhD and MSc) believe(d) Scotland is crash-proof, what chance the rest of the population?
10. Tara747 said...
" What do do they mean? 'A blow to buyers' ?? dont they mean a blow to sellers? this is what buyers want. "
EXACTLY. I am so fed up of HPC stories in the media being presented as bad news for buyers when they are all GREAT news! Hee hee hee!
11. Geed said...
The Scotsman is owned by Johnstone Press and they rely heavily on the Edinburgh property cartel of Solicitors for advertising fees. As a result you will never see bearish story printed in their rags, see this story posted today on the forum...
http://www.guardian.co.uk/media/2008/may/23/dmgt.pressandpublishing
The Scotsmans stories on the housing market are pure propaganda. The ESPC ( bunch of Solicotors/estate agents) have over 9700 properties on their books, this time last years it was nearly half that number. From Mar 07 to Mar 08 property only rose 1.2% in Edinburgh and at March 08 was 8% down on the peak of July 07. Do the research, Edinburgh/Scotland is tanking no matter what these pr!cks say. Jubbly!
12. montesquieu said...
Scotland is in a grip of a communal delusion at the moment: that it is somehow 'special' 'better' 'smarter' than England. It's the over-confident flip side of the chippy insecurity which is its normal condition. (They voted in the Nats last year to run the Scottish Parliament, - now calling themselves the 'Scottish Government' This is a symptom of this delusion).
Living back in Scotland for a couple of years in the early naughties I was struck by two things: the sheer extravagance of almost everyone who owned a house, whose homes had shot up in value (as they saw it) and were in full house as ATM mode; and second the shameless handout mentality of the rest who felt just as entilted to the latest consumer goodies as the other lot, except the government should fund it all. (The rates of disability benefit are shocking: eat enough chips, become chronically obese, and get a free car on the mobilty scheme is an acceptable strategy).
I speak as a Scot: it'll all end in tears. There simply isn't the real money in the economy to sustain Scottish house prices at their current levels, not enough real wealth being generated, not enough people on sufficient salaries to multiply up under current rules to pay anywhere near the asking prices. And there's nothing Alex Salmond can do to milk the Barnett formula further to keep things afloat.
Scotland was late to the bubble last time and escaped the worst of the crash in 89 (though contrary to popular belief it WAS hit to a significant extent). This time it was in at the beginning. My bet is on Scotland being hit worse this time than England, because of all the factors above.