LiveAndLetBuy Posted July 20, 2009 Share Posted July 20, 2009 ...The trigger for the largest wave of falls will be the end of the Stamp Duty holiday in September, the market for houses valued between £175,000 and £250,000 will die completely then. We will see falls of 2% and more every month between September and March 2010 at the very earliest. While I agree that September will see prices start to fall again, I'm not sure that the end of stamp duty holiday will be the cause of it. It might help push prices down in the 125-150k range as the tax break will be applied to properties below 125k, but there'll be less downward pressure on houses in the 175k-200k range. Besides, stamp duty is only a one-off payment of 1% in that range: chicken-feed to most people Quote Link to comment Share on other sites More sharing options...
Agentimmo Posted July 20, 2009 Share Posted July 20, 2009 While I agree that September will see prices start to fall again, I'm not sure that the end of stamp duty holiday will be the cause of it. It might help push prices down in the 125-150k range as the tax break will be applied to properties below 125k, but there'll be less downward pressure on houses in the 175k-200k range. Besides, stamp duty is only a one-off payment of 1% in that range: chicken-feed to most people I know a couple that have a £400K house. They have just inherited £200K from the death of the wife's father. Guess what they plan to do ? Yep, buy a house. ie. trade up. ASAP. I explained gently that if they mistimed it, in the current market a £600K house could fall 20-30% and wipe out the inheritance. A lifetime's savings from the old Dad. They are still going ahead. Indeed, there are still enough property lemmings out there to keep the beast alive for a few more heartbeats. Quote Link to comment Share on other sites More sharing options...
Even Keel Posted July 20, 2009 Share Posted July 20, 2009 (edited) The vast majority of people will remain in employment. Even if unemployment hits 15% that's still 85% left in work and earning. Reasoning like this always makes me smile "Unemployment" is nowhere near 15%, but nowhere near 85% of people are earning. The unemployment rate is the merely the percentage of economically active (in work or looking for work) people who are not working. The economically inactive, such as those on disability/sickness benefits, stay at home spouses, students, drop-outs, make up a far larger and growing proportion of the population. The current unemployment rate is a mere 7.6% In addition to the unemployed, a further 20.9% of the working age population are neither employed nor looking for work. Oh, and don't forget the children and pensioners who need to be supported somehow.... They say you can't escape death or taxes, but debt and demographics are pretty unavoidable too. edited to provide the statistics: ONS Data Edited July 20, 2009 by Even Keel Quote Link to comment Share on other sites More sharing options...
LiveAndLetBuy Posted July 20, 2009 Share Posted July 20, 2009 I know a couple that have a £400K house. They have just inherited £200K from the death of the wife's father. Guess what they plan to do ? Yep, buy a house. ie. trade up. ASAP. I explained gently that if they mistimed it, in the current market a £600K house could fall 20-30% and wipe out the inheritance. A lifetime's savings from the old Dad. They are still going ahead. Indeed, there are still enough property lemmings out there to keep the beast alive for a few more heartbeats. I agree that it sounds like they're jumping into property too soon (I notice it's the wife who inherited the money ) but outside of this forum, most people are thinking in terms of 10% falls at most from now on. Many people would accept that if it meant getting the "home of their dreams" that little bit sooner. Quote Link to comment Share on other sites More sharing options...
crashologist Posted July 20, 2009 Share Posted July 20, 2009 I know a couple that have a £400K house. They have just inherited £200K from the death of the wife's father. Guess what they plan to do ? Yep, buy a house. ie. trade up. ASAP. I explained gently that if they mistimed it, in the current market a £600K house could fall 20-30% and wipe out the inheritance. A lifetime's savings from the old Dad. They are still going ahead. Indeed, there are still enough property lemmings out there to keep the beast alive for a few more heartbeats. Crikey Quote Link to comment Share on other sites More sharing options...
francis Posted July 20, 2009 Author Share Posted July 20, 2009 There are very few houses coming onto the market for the simple reason that most people would not contemplate purchasing at the moment because of their own worsened financial situation or because of fears for it in the future, no matter how much they might need to with growing families etc. Really? Anecdotally I am aware of a lot of people who have bought recently, are buying or plan to do so. I don't think the British really fear for the future. That's the lemming mentallity kicking in. Personally I'm crapping myself about buying! It's a huge financial commitment and you get one shot at jumping into the market at the right time. But then I'm massively in the minority. But this Winter, many of this year's redundant will be in severe financial difficulties, especially those with other large debts, such as credit cards. How do you know? Why aren't people feeling the pinch now? Why do you think it will kick in in the winter, but hasn't started now? There is no credit available to buoy the current inflated price of houses and they are simply going to have to fall to the point where people can afford to service the mortgage and also to do the spending which a healthy economy requires to flourish. Agree with the principle, but where is the evidence for the lack of credit? Steadily mortgage LTV is reducing. There is as much advertising as ever for unsecured loans and credit cards. And the shopping centres and high streets are still rammed with shoppers at the weekend (with shopping bags full of crap). Quote Link to comment Share on other sites More sharing options...
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