Tuesday, Apr 28, 2009
Missing the gloating?
FT: House price smugness remains a distant memory
Dinner party chat about house prices now seems very mid-noughties but has been picking up again given signals that an end to the slump could be in sight.
House values may no longer be a vetoed topic but those looking for the green shoots should keep digging. It is too early to say spring has begun for house prices.
Affordability might be improving, but increasing unemployment and the straitjacket of mortgage availability seems destined to put pressure on prices in 2009.
During the five years of the 1990s crash, prices rose in almost a third of the months during innumerable false dawns and brief rallies. Similarly, home owners should be wary of seeing a sustained recovery in the recent data.
Posted by little professor @ 02:45 AM (703 views) Add Comment
13 Comments
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1. Alaninstockport said...
Slowly but surely mainstream opinion is becoming "we've not reached the bottom yet". This is despite desperate attempts by vested interests in talking the market up in recent weeks.
I think commentators are beginning to emerge from the denial stage at long last.
20% drop so far, another 30% to go before we bottom out by the end of 2010 ready for a genuine bounce back in spring 2011.
Any comments in this predction?
2. doomwatch said...
It's nice to see the author is finally seeing sense, probably from talking to real experts instead of believing the UK small island
supply lie pushers.
3. mark wadsworth said...
Agreed. "We sold to rent in late 2007" smugness is far more deeply gratifying, and I know for a fact that it really hacks people off when I drop it casually into the conversation.
4. Maddison said...
Nearly sold to rent in 2007 but didnt couldnt convince the wife. But I am not much worse off as a result so far. Here is why.
I upgraded by 100,000 so 20% fall has meant a loss of 20,000 so far.... it is likely that previous house has lost more value
avoided a double move saved £2000
equivalent rental for same house was costing £1000 per month more than I was paying in mortage
to put the equity of some 300k in a bank account would have been taxed at 40% giving me an additional income of £750 assuming rate of 5% err that is not case anymore. Also I had looked at icesave and may have put some in there. The stress would be awful!!!
additional spending on house is offset by the fact that it is not rented. ownership premium I would call it
Got a tracker mortgage after initial deal expires of 1% over base...
5. Hammered said...
That smugness should even be a goal for some in society is a sad reflection of where we have got ourselves. I don't give a sh!t about what my next door neighbour is driving, whether he's making or losing money on his house, how many holidays he's had this year etc and likewise I do not care what he thinks of me. I do not foist knowledge of my spending preferences, deliberately or subtly onto my neighbours, friends or family in the shallow hope of collecting some invisible admiration based on my material wealth. We'd find that our nations resources are allocated far more efficiently if everyone took that point of view.
6. timmy t said...
MW - I'm in the same boat as you. You can see people look at you as if to say "yes but it's not YOURS is it... I mean you don't actually OWN it... are you poor?". They need to realise that you can rent and have a fabulous house with no capital loss, for less than if you want to buy. Of course I would rather buy, so I can do what I want with my house and have that extra security, but I don't want to buy that badly.
7. inflation is eating my savings said...
smugness doesn't have long term satisfaction.
I recommend using all the love in your heart for the poor people who cannot sell.
Whilst making aggressively low offers.
8. str 2007 said...
Given how you're initially treated as a tenant.
Firstly they assume your a bankrupt, gambler who's lost the lot or criminal.
Secondly they tuck you up with an inventory that misses half the problems.
Thirdly supply you with a house that the previous tenant no doubt had to pay to be professionally cleaned and clearly hasn't been.
I shan't go on any further, but suffice to say you don't get treated the same in this market with £1000 per month to spend as you would do if you went into a BMW showroom with £1k p/m budget.
Currently I'd rather be renting but the incentive is now purely financial.
How on earth you could put up with renting 'out of choice' in this country is beyond me.
Further as houses become more affordable the BTLers are going to really struggle if they don't sharpen up their 'customer services' dept. somewhat.
Seriously, if I was parting someone with £12k a year the least I'd do is supply them with a small welcome pack of essentials and a welcome note. I'll wager less than 1% of landlords currently offer such an easy and cheap offering to their CUSTOMERS.
9. timmy t said...
str - we rent from a business - they came around the day after we moved in with a huge bunch of flowers and a 'welcome to your new home' card signed by all the staff. Probably cost about 50 quid but got us off to a great start. Compare that with where we moved from - I had to threaten legal action before they would give us our deposit back in full, because there were leaves on the garage floor. Small changes to rental legislation in the UK would help reduce further house price inflation.
10. letthemfall said...
I must admit I'm quite a fan of renting, though a decent place and landlord helps a lot. There is no maintenance to do. Anything goes wrong and you just pick up the phone. No worries about someone building a multi-storey next door or the neighbours turning out to be from mars - moving much cheaper (even if hassle). And no depreciating asset into which you've put every last penny you had. Mind you, rents do feel really expensive when you're shelling out, but then we have a more sophisticated financial outlook here, don't we?
11. str 2007 said...
timmy t
You're lucky if you get treated like that, but as you say your previous experience shows the other side.
letthemfall
Have you looked through your small print. Both of ours have included keeping the gutters clean for goodness sake.
As far as the small print goes they get the tenant to be responsible for just about everything if possible. I think they see the deposit as theirs for general maintenance at the end of a tenancy (which they won't carry out if they can get away with it).
Personally I hate it and can't wait to get our own place.
IMO the current set up in this country is an absolute disgrace.
12. letthemfall said...
str2007
I don't think there's anything about the gutters, though we do have to mow the lawn - bit of a chore. Some agreements can be a bit mean I know. One of these days I'll buy a house again I expect, when they're not asking the crazy prices they're still asking at the moment. Not looking forward to frequenting EAs again though.
13. shipbuilder said...
I think that you should always meet the landlord face to face before renting, if possible and make sure someone, if not yourself, is there who is a good judge of character.
As in most things in life, a decent person should generally be a decent landlord and will ignore a lot of the picky stuff in a standard tenancy agreement. We seem to have a good landlord at the moment who just wants rent and the house kept in decent nick, and we are happy to, gardening and all. Although nothing serious has gone wrong so far, he has been very accommodating and helpful.
My mate's a landlord and his helpfulness extends as far as ignoring unpaid rent for a month or two if his tenant has fallen on hard times, without taking the p*ss. There are always decent people about.