Guest absolutezero Posted August 2, 2010 Share Posted August 2, 2010 The good news is that the government .. would also like to see HP coming down (gently, of course) by about 25%. What gave you that idea. All I see in this respect is Cameron and Clegg sticking their fingers in their ears and going "wibble". Quote Link to comment Share on other sites More sharing options...
Confounded Posted August 2, 2010 Author Share Posted August 2, 2010 What gave you that idea. All I see in this respect is Cameron and Clegg sticking their fingers in their ears and going "wibble". Changes to the housing benefit rent calculation rules, capital gains tax at a flat rate of 28% and changes to tax breaks to second home owners are the sort of policies that go under the radar but will have significant impact on the housing market going forward. They did not pull the trigger on a quick housing market crash by changing capital gains taxes and giving people until next April to sell under the current 18% regime but I have seen lots of evidence the Tories are trying to slowly dismantle Gordon Browns house price bubble based economy. Quote Link to comment Share on other sites More sharing options...
Guest absolutezero Posted August 2, 2010 Share Posted August 2, 2010 Changes to the housing benefit rent calculation rules, capital gains tax at a flat rate of 28% and changes to tax breaks to second home owners are the sort of policies that go under the radar but will have significant impact on the housing market going forward. They did not pull the trigger on a quick housing market crash by changing capital gains taxes and giving people until next April to sell under the current 18% regime but I have seen lots of evidence the Tories are trying to slowly dismantle Gordon Browns house price bubble based economy. Let's hope they do that before the coalition falls apart. Quote Link to comment Share on other sites More sharing options...
sbn Posted August 2, 2010 Share Posted August 2, 2010 Clever EAs using this site to have their counter arguments ready when clients express doubt or scepticism? What a horrible abuse of this site that would be. Sarcasm? That would a very valid use of this site and totally in line with the wishes of most posters wouldn't it? Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted August 2, 2010 Share Posted August 2, 2010 What gave you that idea. All I see in this respect is Cameron and Clegg sticking their fingers in their ears and going "wibble". http://www.housepricecrash.co.uk/forum/index.php?showtopic=147307&view=findpost&p=2624404 Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted August 2, 2010 Share Posted August 2, 2010 (edited) Changes to the housing benefit rent calculation rules, capital gains tax at a flat rate of 28% and changes to tax breaks to second home owners are the sort of policies that go under the radar but will have significant impact on the housing market going forward. They did not pull the trigger on a quick housing market crash by changing capital gains taxes and giving people until next April to sell under the current 18% regime but I have seen lots of evidence the Tories are trying to slowly dismantle Gordon Browns house price bubble based economy. Exactly. Plus the FSA trying to restrict mortgages. All these actions are just confirming the new gov.'s stated intention of diverting more credit towards companies, and to bring HP prices down by 25%, as Treasury officials told mortgage industry "experts". Industry experts believe the Government is more focused on helping businesses than it is on supporting the housing and mortgage markets. Speaking at a Money Marketing round table last week, Barclays director of ... Much more in this very dense news article. http://www.moneymarketing.co.uk/mortgages/coalition-ready-to-let-property-values-fall/1015197.article I had to read it twice, to believe it! We also had a thread on this Forum, 2 weeks ago, about that news: http://www.housepricecrash.co.uk/forum/index.php?showtopic=147307&view=findpost&p=2624404 Edited August 2, 2010 by Tired of Waiting Quote Link to comment Share on other sites More sharing options...
NEO72 Posted August 2, 2010 Share Posted August 2, 2010 Clever EAs using this site to have their counter arguments ready when clients express doubt or scepticism? What a horrible abuse of this site that would be. Oxymoron surely? Quote Link to comment Share on other sites More sharing options...
xux42 Posted August 2, 2010 Share Posted August 2, 2010 Oxymoron surely? No not really - most are dumber than a stick. Its the clever ones who come here to 'know thy enemy' that concern me. You can bet your bottom dollar that there are thousands of cynical EAs out there buying and selling cyclically while telling their clients throughout that "there has never been a better time to buy". Mind you, you'd have to be a right plank to fall for that line, so maybe rarity of financial wisdom is the real problem. Quote Link to comment Share on other sites More sharing options...
Confounded Posted August 10, 2010 Author Share Posted August 10, 2010 As in TMT thread http://www.bbc.co.uk...siness-10915210 Quote House prices are starting to fall, the latest survey by the Royal Institution of Chartered Surveyors (Rics) has said. It is the first time since July last year that its monthly survey has detected a downturn in prices. Rics said this was because more homes were being put up for sale, while enquiries from potential new buyers had fallen for the second month in a row. Buyers are still finding it hard to get a mortgage, while fear of unemployment is putting off others, Rics added. "The fall in the Rics house price measure is broadly consistent with most other recent data that has been released," said Rics spokesman Ian Perry. "Significantly, the forward-looking price expectations numbers suggest that this softer trend will continue through the second half of the year. "However, agents are still generally optimistic about sales activity, which should benefit from more realistic pricing of properties," he added. 'Prices to fall' The survey was based on questions to only 242 surveyors around the UK, who also work as estate agents, but the Rics report has traditionally had its finger on the pulse of the property market. While 64% of those surveyed had not seen any change in local house prices during the preceding three months, those who had seen rises - 11% - were outnumbered by the 25% who had seen prices drop. Recent surveys from both the Halifax and the Nationwide have also shown that the upturn in house prices, which started in the spring of 2009, has been cooling off. That rise had been driven largely by a shortage of homes being put up for sale, but now the balance of supply and demand has reversed. Rics said its members expect the downward pressure on prices to continue. "Expectations for house price increases have also turned negative, with 28% more surveyors expecting prices to fall over the coming months," Rics said. Quote Link to comment Share on other sites More sharing options...
Pent Up Posted August 10, 2010 Share Posted August 10, 2010 Surely we are there now. Look the the biggest price reduction thread (can't be arserd to find link) 30%+ reductions in the heart of Essex! People are getting scared. It may not be widespread yet but we are there. Quote Link to comment Share on other sites More sharing options...
Confounded Posted August 10, 2010 Author Share Posted August 10, 2010 Surely we are there now. Look the the biggest price reduction thread (can't be arserd to find link) 30%+ reductions in the heart of Essex! People are getting scared. It may not be widespread yet but we are there. The only thing that can bring us back from the fear phase is value within the market, people better be praying that wage inflation erodes a good chunk of the 40% needed to bring to fair value. Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted August 11, 2010 Share Posted August 11, 2010 It is an early call but I believe the fear phase has just started. Of the areas I monitor a dramatic change in the market has occurred in the last month. Several of these markets fall into the hot market category where they nearly erased 2008 falls by early summer. With the new coalition showing little sign of wanting to falsely support the market it looks like the final phase of the healing process has begun. Have you had the chance to listen to yesterday's Radio 5 programme on house prices? It was excellent. Another big step forward, toward the much needed correction of housing costs. ( BTW, I think we should try to use this wording more frequently: housing costs. It is a cost of living: High = bad. Low = good! ) Quote Link to comment Share on other sites More sharing options...
Confounded Posted August 11, 2010 Author Share Posted August 11, 2010 Have you had the chance to listen to yesterday's Radio 5 programme on house prices? It was excellent. Another big step forward, toward the much needed correction of housing costs. ( BTW, I think we should try to use this wording more frequently: housing costs. It is a cost of living: High = bad. Low = good! ) Yes I caught up with it last night, great program. Any idea of the listener volumes? It had a feel of late 07 early 08 about it in terms of a tipping point and I am pretty confident the way is being prepared for the fear phase. It was great there was a professional landlord on running through the classic bubble cycle. I was amazed how much air time he got but I think they did not know how to stop him! Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted August 11, 2010 Share Posted August 11, 2010 Yes I caught up with it last night, great program. Any idea of the listener volumes? No. Good question. It had a feel of late 07 early 08 about it in terms of a tipping point and I am pretty confident the way is being prepared for the fear phase. It was great there was a professional landlord on running through the classic bubble cycle. I was amazed how much air time he got but I think they did not know how to stop him! Exactly, the same chart you have in the OP. It was excellent. And he confirmed the points made before, by TimeBandit and the accountant, about the "gullible" people that jumps in too late in the cycle, near the peak, paying too much. Brilliant. I think by then the presenter was... surrendering. He was, finally, starting to accept that he had been... well, gullible! And this is the polite, considerate word for it! By our forum standards, probably the mildest! Quote Link to comment Share on other sites More sharing options...
Confounded Posted August 12, 2010 Author Share Posted August 12, 2010 Welcome to the fear phase. also Local house that has been on the market since 2008 and started at £795k has just dropped another £80k to £495k. It is Grade II needing a lot of work and is not representative of the whole market but I am sure had it been sold in 2007 it would have gone for £700k + date event 11 August 2010 * Price changed: from 'Guide Price £575,000' to 'Guide Price £495,000' [Found by n/a] 26 April 2010 * Price changed: from 'Guide Price £650,000' to 'Guide Price £575,000' 21 May 2009 * Price changed: from 'Guide Price £750,000' to 'Guide Price £650,000' [Found by n/a] 11 April 2009 * Price changed: from 'Guide Price £795,000' to 'Guide Price £750,000' [Found by n/a] 23 October 2008 * Initial entry found. [Found by n/a] Quote Link to comment Share on other sites More sharing options...
200p Posted August 12, 2010 Share Posted August 12, 2010 People shouldn't be scared or fearful of house price falls. It would make no sense. If bread prices fall, or petrol prices fall do I become scared, and run for the hills? If council taxes fall do I complain to my MP? If shares fall 50%, do I start jumping out of the window? If gold fell 50%, do I start crying? No I rebalance the portfolio because these falls have been prepared for BEFORE purchase. Ah ,I get it. It's not so easy to rebalance if one's portfolio is 100% in one asset class, and your income stuck into channelling into the asset, for the next 30 years. Quote Link to comment Share on other sites More sharing options...
Lagarde's Drift Posted August 12, 2010 Share Posted August 12, 2010 People shouldn't be scared or fearful of house price falls. It would make no sense. If bread prices fall, or petrol prices fall do I become scared, and run for the hills? If council taxes fall do I complain to my MP? If shares fall 50%, do I start jumping out of the window? If gold fell 50%, do I start crying? No I rebalance the portfolio because these falls have been prepared for BEFORE purchase. Ah ,I get it. It's not so easy to rebalance if one's portfolio is 100% in one asset class, and your income stuck into channelling into the asset, for the next 30 years. Yes, easier way to think about it is this: You would cry if you had leveraged so much to buy bread / shares that you need to work 25 years to pay off the debt. And if you are IO, then... well, cry more! Quote Link to comment Share on other sites More sharing options...
Meat Puppet Posted August 12, 2010 Share Posted August 12, 2010 If shares fall 50%, do I start jumping out of the window? Some probably should have if only for the sake of their honour. Quote Link to comment Share on other sites More sharing options...
scottbeard Posted August 12, 2010 Share Posted August 12, 2010 People shouldn't be scared or fearful of house price falls. It would make no sense. If bread prices fall, or petrol prices fall do I become scared, and run for the hills? If council taxes fall do I complain to my MP? If shares fall 50%, do I start jumping out of the window? If gold fell 50%, do I start crying? People don't borrow £200,000 to buy shares, bread or petrol. Except in 1929, when they did borrow to invest in shares, and did jump out of windows when they crashed 90%. Quote Link to comment Share on other sites More sharing options...
Confounded Posted August 12, 2010 Author Share Posted August 12, 2010 People shouldn't be scared or fearful of house price falls. It would make no sense. If bread prices fall, or petrol prices fall do I become scared, and run for the hills? If council taxes fall do I complain to my MP? If shares fall 50%, do I start jumping out of the window? If gold fell 50%, do I start crying? No I rebalance the portfolio because these falls have been prepared for BEFORE purchase. Ah ,I get it. It's not so easy to rebalance if one's portfolio is 100% in one asset class, and your income stuck into channelling into the asset, for the next 30 years. This is what scares me about this bubble the most. The natural turn for this bubble was late 2004 but new lending practices by the banks and a drop in interest rates took house prices into a mega bubble. Had the bubble been allowed to pop prior to general elections in 2005 far fewer people would have overpaid (only 2 years worth of house buyers). Because of the repeated intervention it has just led to a colossal number of people overpaying for the home. My judgement is we entered bubble territory in 2002 and it looks like people will have paid more than 4X their income for 10 years. As taught very early on in school maths the area under the graph is very important! Income to house price ratio Quote Link to comment Share on other sites More sharing options...
Georgia O'Keeffe Posted August 12, 2010 Share Posted August 12, 2010 (edited) This is what scares me about this bubble the most. The natural turn for this bubble was late 2004 but new lending practices by the banks and a drop in interest rates took house prices into a mega bubble. Had the bubble been allowed to pop prior to general elections in 2005 far fewer people would have overpaid (only 2 years worth of house buyers). Because of the repeated intervention it has just led to a colossal number of people overpaying for the home. My judgement is we entered bubble territory in 2002 and it looks like people will have paid more than 4X their income for 10 years. As taught very early on in school maths the area under the graph is very important! Income to house price ratio integration makes me all hot, its so god damn sexy when a woman talks about doing it by parts Edited August 12, 2010 by Tamara De Lempicka Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted August 13, 2010 Share Posted August 13, 2010 This is what scares me about this bubble the most. The natural turn for this bubble was late 2004 but new lending practices by the banks and a drop in interest rates took house prices into a mega bubble. Had the bubble been allowed to pop prior to general elections in 2005 far fewer people would have overpaid (only 2 years worth of house buyers). Because of the repeated intervention it has just led to a colossal number of people overpaying for the home. My judgement is we entered bubble territory in 2002 and it looks like people will have paid more than 4X their income for 10 years. As taught very early on in school maths the area under the graph is very important! Income to house price ratio Good chart. ( Though that biggest coloured area on the right should not be in red, but on sh!te Brown! ) Quote Link to comment Share on other sites More sharing options...
Sonic the Hedge Fund Posted August 13, 2010 Share Posted August 13, 2010 The impression I get from a UK perspective is the government have decided to let property go and concentrate on keeping interest rates as low as possible so those in jobs can support their debt burden and businesses can borrow and hopefully grow supporting jobs. Falling house prices will be included in CPI and will be the deflationary drag required to allow low interest rates to be used for longer than otherwise. I agree with this totaly - Coalition have chosen the Housing Market to be the fall guy. The evidence of this goal is stacking up: a stated an aim to keep IRs low rents are already included in CPI removal or reduction of various HPI props (Housing benefit, HIPs, Stamp duty holiday, Mortgage relief) introducion of policies that negatively impact housing demand (CGT rise, Second home tax) policies to increase supply (Booting empty nesters out of social housing, tax incentives to planning authorities) Quote Link to comment Share on other sites More sharing options...
repetitive bleats Posted August 13, 2010 Share Posted August 13, 2010 i'd love to see the Brighton version of that chart. Average wage house price £250k with an average wage of just over £25k.... Quote Link to comment Share on other sites More sharing options...
Tired of Waiting Posted August 13, 2010 Share Posted August 13, 2010 i'd love to see the Brighton version of that chart. Average wage house price £250k with an average wage of just over £25k.... Good point. Quote Link to comment Share on other sites More sharing options...
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