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Van

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Everything posted by Van

  1. The crap spewed from EAs etc that certain areas are protected from a crash because of good schools, transport etc is such total drivel. Prices will drop back in proportion to how much they increased, unless there have been specific changes in the local area to justify a higher price. Simply being "in a nice area" doesn't really cut it. There are lots of "nice areas". These areas will fall - maybe at a later date than the less salubrious areas, but fall they will.
  2. whether or not the larger house falls by as much percentage-wise is a qualititive judgement and no one really knows how it will pan out. It depends on the local market. In my area, the top end of the market has been "ahead" of the lower end, in that prices began levelling off and falling earlier for larger houses (anything above £230k+) than for the lower end properties (understandable, given that FTB/BTL chase the lower end of the market). It is likely, then, that the lower end of the market is more highly geared and will suffer more in a crash. But then apparently there are more singles person household these days, which should help support the lower end. It's swings and roundabouts. You do highlight the point that a crash will make trading up cheaper (but not necessarily EASIER), however.
  3. VacantPosession, I agree. The vested interests will attempt to convince you that a recovery is "just around the corner". It is amusing reading the headlines from the last crash, the number of articles through 1988-1994 that say "Housing market to recover next year" or somesuch rubbish. The market will only begin to recover when all possible interest has been driven from it and the idea of property may be worth more in the future is furthest from peoples' minds (present company excepted, of course).
  4. I don't know what drugs Hometrack are taking, but they have made a serious whoopsy. According to their historical monthly reports, the peak was June 2004, where the average price was £251,300, and has fallen each month since, but the average price now stands at £271,800. this is either a typo or some serious sleight of hand they are trying to pull. See for yourselves: June 2004 Page 4. Greater London - £251,300, +0.4% (from May 2004) July 2004 Page 3. Greater London - £250,200, -0.4%. August 2004 Page 4. Greater London - £249,500, -0.3% September 2004 Page 4. Greater London -£271,800, -0.7% Is this a typo? Or have they moved the goalposts? Why have they not yet released their London report for September?
  5. The weekly update: Sept 24 --------- Price band lower limit No of houses volume % of market change from last week Total value of price band Value % of market £100,000 1 0.20% 0 £100,000 0.08% £125,000 20 3.96% -1 £2,500,000 1.96% £150,000 41 8.12% 5 £6,150,000 4.81% £175,000 40 7.92% 3 £7,000,000 5.48% £200,000 41 8.12% 0 £8,200,000 6.42% £225,000 103 20.40% -3 £23,175,000 18.14% £250,000 49 9.70% -6 £12,250,000 9.59% £275,000 83 16.44% 1 £22,825,000 17.87% £300,000 19 3.76% -3 £5,700,000 4.46% £325,000 22 4.36% 2 £7,150,000 5.60% £350,000 20 3.96% 4 £7,000,000 5.48% £375,000 28 5.54% -2 £10,500,000 8.22% £400,000 38 7.52% 3 £15,200,000 11.90% New houses on the market: 48 Net change: 3 Total houses for sale: 505 Total value of houses for sale: £127,750,000 Average asking price: £252,970 Change on last week: £181
  6. Right. Shares trading at or below net asset value are the basis for value investing as preached by Graham, Buffett et al. I wouldn't mind a tip, Sledgey. PM if you want! (Could do with it today after what EZJ has done this week).
  7. Hometrack usually release a London report as well as an overall UK report. The full UK report for September has been released, but, confusingly, sits alongside the old August report for London. Am I just being cynical in thinking that Hometrack are delaying the Sept London report because the figures will be absolutely s***e?
  8. Cash is king right now. Where will the money go now now that property is dead? Debt repayment.
  9. Yes, I mentioned a few weeks ago a couple of EAs in my old postcode were putting all their new instructions onto Rightmove with SSTC, though it was blatently obvious that they were not under offer. This sort of practice really gets on my tits.
  10. Deepening gloom in London. Average percentage of of asking price achieved now down to 93.3%, and worsening all the time. Average viewings per sale is up, time to sell is up, fewer buyers, more sellers, increasing mortgage costs, and new FSA regulation just around the corner... The crash is well and truely in full swing. Rejoice.
  11. We shouldn't try to analyse this too much - it's an Evening Standard report and as such is poor journalism almost by default. It serves it's purpose, though! More bearish headlines, please!
  12. Coming out and say what a property is actually worth, and predicting that it will fall to that value (or even overshoot downwards) are two different things. Most experts and analysts rightly err on the side of caution and predict that some sort of correction is in order. I remember very vaguely a quote at the height of the stock market boom one particularly lofty analyst or somesuch person said the Dow was probably "worth about 4500", but of course didn't actually say that he'd thought it would correct to that level. Show your full hand, and you'll definitely be labelled a doom-monger!
  13. Surely it isn't that complicated? Houses sell more during spring/summer than autumn/winter, so each month's figures are adjusted up or down according to how historically busy that particular month usually is. This makes month on month figures more meaningful, rather than raw figures that can produce some absurd results (ODPM's July "rise", for example).
  14. Problem is, as with all socialist governments, an inability to efficiently relocate factors of production as well as the free market. Labour have increased the tax burden, and are now wasting it on NHS managers and Whitehall penpushers in an effort to keep the unemployment figures down. This has resulted in higher taxes to pay for non-productive government jobs, and a culture of rewarding failure in the private sector.
  15. US interest rates are set to increase, which will strengthen the dollar. Euro rates are also set to increase as the eurozone recovers from its economic slump. Both of these will weaken the pound, increasing the price of our imports and cheapening our exports- result: inflationary pressure and still higher UK interest rates. It has been argued here before that our high interest rates have effectively protected us against inflation, and especially the rising price of oil. This week's US rate increase to 1.75% is significant, as are the hawkish statements from the Fed that they will likely keep increasing their rates at regular intervals.
  16. The mortgage advisor, of course. To be fair, he did say that it was linked to the stockmarket and that you should look at the returns over the long run, and historically the stockmarket has grown by more than 7% annually (which I think is only true if you look at it with reinvested dividends). Of course, what really matters is the real rate of return. I don't blame him for not going into this, as I suspect this level of breakdown is way above the average schmuck. Mortgages are confusing enough already for the first time buyer!
  17. I assume she had an interest-only mortgage with an ISA as the repayment vehicle. Had one of these meself for 3 years. Was told I could expect 7% growth pa on the ISA. After three years it was worth somewhat less than the cash amount I had put in!!
  18. £159k, are you sure Sledgey? I make it £624,500 (9,000 x 1.25^19). Adam Bear, please tell me the loan rate hasn't been fixed at 25% since 1985!! Compound interest, eh?
  19. Good graph, Strat! It should be remembered that a house is still a primarily a home for most people, and when under financial stress, people will cut back on other non-essential spending first. Distressed selling doesn't happen overnight, but only when there's no other option.
  20. The prophets of doom are gathering. The fat lady is in rehersal. Doesn't this just scream "NEGATIVE EQUITY" to you? It's a classic catch 22 situation - I can't afford to pay the mortgage, so let's sell the house. Oh look - selling the house will leave me 50k in debt. Sod that, I'll just sit tight. I'm trapped in negative equity hell! Oh dear, looks like unemployment is on the rise, too.. Aren't we all in agreement that forced sellers will drive the market down faster than a lead balloon? I am feeling uber-bearish today.
  21. House prices are NOT the BoE's main concern, and neither are a few overstretched idiots at the fringes of the market. Core inflation is on the rise, which will eventually feed through into higher HCIP.
  22. The BoE do seem to be voting almost unanimously these days - always a 9-0 or 8-1 decision in favour or against. Quite different from the last months of Steady Eddie's tenureship, where split decisions were commonplace. I fully expect them to vote 9-0 to keep rates on hold next month too, and then a decisive 9-0 or 8-1 in favour of a rise in November, since traditionally they keep rates on hold in December.
  23. Keefter, I applaud your patience and refusal to jump into an overheated market, but unlike you, I don't think an FTB on an average salary should, straight away, be able to buy the average house. FTBs now have seemingly forgotten the thing called the housing ladder - the effect of inflation on debt erosion, which enables you to afford a larger house even as your real income stays the same, as inflation gradually reduces your nominal debt in real terms. Now, too many FTBs want to be able to buy the house of their dreams at the first go. It shouldn't work this way. Many people say that the housing ladder no longer exists, with inflation so low these days, and so you should buy the house you are going to live in for the next 25 years - I disagree. I tend to see the low inflation economy as representing a "flattening" of the ladder - the same number of rungs still exist, because the housing stock is still the same, except the ladder is not so steep. Someone, eventually, has to be able to buy the properties represented by the top rungs, and if nobody can afford to, then the whole price structure and differentials will have to adjust accordingly. What this means in practice, is in low inflation environment, there will be a constantina effect on house prices, since the housing ladder is effectively a function of debt erosion.
  24. Yep, LL, as I said in an earlier thread, unemployment tends to lag the overall economic cycle. Unemployment was historically very low even as house prices began falling in the last crash. It's when house prices start falling that the feel good factor evaporates, we stop spending and shops and businesses start laying people off all over the place.
  25. Whoopie! "Go faster" stripes for all and sundrie!
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