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Randall Herbert

The Lighthouse Of The Hp Bubble

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My benchmarks for the inevitable crash were few, simple but fairly well thought out.

A couple of them are: the demise of B&Q and builder profits, the lighthouses of the current property Bubble.

Those lighthouses have been turned off for some time now and the sirens have been wailing as well.

Sentiment oh sentiment.

The number of desperate last gasp ill informed bull posts on HPC over the past few weeks has grown to record levels even by HPC standards. A clear sign of desperate BTL'rs trying to bale out the foundered good ship HP Bubble?

As I have said before.. Why would an ordinary individual post Bullish advice in the current economic down turn on this particular genre of forum? Unless hoping to influence and tempt ordinary house buyers to rejoin the massive crippling debt merrygo round at a point when even the most hardened of Bulls must deem it a lost cause? Do these same people have a few rental properties not rented out or their false capital is being eroded day by day, week by week by any chance?

Get an overpriced mortgage on an overpriced property now at your peril.

The problem with that advice is that there is nothing to lose by heeding it. Can you say the same about:

"BUY BUY! BUY A PROPERTY NOW OR YOU'LL NEVER GET ON THE PROPERTY LADDER AGAIN!!!" type of TTRTR/Property Guru/BBB advice?

You have the tools at your disposal. Choose a life......not debt.

Edited by Randall Herbert

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Nail on the head I think Randall.

Prime example Marketeer.

Buyer beware, if you a thinking of buying before you do look back on this board and read his posts.

Edited by OnlyMe

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Nail on the head I think Randall.

Prime example Marketeer.

Buyer beware, if you a thinking of buying before you do look back on this board and read his posts.

Purely by coincidence I found myself walking around my local B&Q superstore today after work for the first time in six months. DEAD quiet.......... DEAD quiet.....

Sale items everywhere, one checkout assistant on duty out of ten positions ... IN A SUPERSTORE at 6.30 pm on a FRIDAY NIGHT??

Might take a run down on Saturday to see how it shapes up as well.

If B&Q is dead, what does that say about property speculation?

Party is over.

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In the crash of 1989 Shad Thames was held up as one of the worst places hit, 50% drops. During the iraq war quite a few foreign investors got itchy and tried to dump their flats or off plan purchases but I'm not seeing any of this. No signs of a crash there or the rest of central london where I've been looking. Seen a lot more under offers in the last three months.

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Perhaps even more chilling: Argos for the first time ever have an ongoing "sale." 5 pounds cash back for every 50 pounds spent.

The US GDP hit 3.8% growth in the last reported quarter. That means continuing higher interest rates which locks the Bank of England into the same policy or face a sterling crisis. The US treasury secretary said there is no housing bubble in the US but did comment that certain areas would have problems (East and West Coast hot spots). England, on the other hand, has a nationwide bubble with every area affected by the house price craze.

How long before the EA's wake up and start doing what they did after the Great Crash of the early 90's and begin talking the market DOWN to stimulate business? I remember in those days that they would break chains by getting everyone to drop 20% in price etc.

:D

In the crash of 1989 Shad Thames was held up as one of the worst places hit, 50% drops. During the iraq war quite a few foreign investors got itchy and tried to dump their flats or off plan purchases but I'm not seeing any of this. No signs of a crash there or the rest of central london where I've been looking. Seen a lot more under offers in the last three months.

Central London is kept bouyant by foreign investment not struggling UK FTBs. Its what is happening in the Shires that indicates things are starting to unwravel. In my area (West Midlands) the EA windows are full of "new prices" meaning "price reduced." Unmistakeable signs that the market is headed to the downside. The only thing keeping it from a free fall is high employment--but that seems to be chnaging.

Edited by Realistbear

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I keep hearing the B&Q barometer being mentioned ...... but I don't see how its such a clear cut sign of impending doom ??

Surely as the economy weakens and property prices fall, people will :

..... stop calling on tradesmen and start fixing things DIY style ?

..... start seeing a house as a home as opposed to an investment and so spend more on decorating etc ?

..... spend more on their homes in a futile attempt to maintain its deteriorating value ?

..... stop spending on "luxery" type purchases and more on "necessity" type ?

To me DIY centres have always been places the more thrifty and cost-conscious consumers go to ??

So in a recession wouldn't B&Q gain as many customers as they lose ???

Also, isn't a general decline in the fortunes of "megastores" a major factor - are the small independant DIY stores struggling right now, or are they slowly stealing all the B&Q customers ??

???

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UK Builders shareprices look as if they closed Friday on the EDGE of a precipice

Why did the Dow have such big gains yesterday? Is it likely to lose it all on Monday?

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I keep hearing the B&Q barometer being mentioned ...... but I don't see how its such a clear cut sign of impending doom ??

Surely as the economy weakens and property prices fall, people will :

..... stop calling on tradesmen and start fixing things DIY style ?

..... start seeing a house as a home as opposed to an investment and so spend more on decorating etc ?

..... spend more on their homes in a futile attempt to maintain its deteriorating value ?

..... stop spending on "luxery" type purchases and more on "necessity" type ?

To me DIY centres have always been places the more thrifty and cost-conscious consumers go to ??

So in a recession wouldn't B&Q gain as many customers as they lose ???

Also, isn't a general decline in the fortunes of "megastores" a major factor - are the small independant DIY stores struggling right now, or are they slowly stealing all the B&Q customers ??

???

I wish it was that simple.....

but.

as the economy weakens people tend to want to stretch out the laminate floor for another year or so because £500 on DIY is more than the budget will stretch to....especially as the mortgage payments have gone up by £200 a month,bills have gone up by £20 a month,petrol has gone up by £20 a month.....and so on.

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So in a recession wouldn't B&Q gain as many customers as they lose ???

In the area I do most of my property buying in the B&Q store is frequented by about 85% home DIYers, 15% local tradesmen.

Most tradesment use local sources that are cheaper. B&Q is convenient for plasterboard etc but builders prefer building yards - quicker no nonsense service and no dealing with the public.

I personally use B&Q for some building materials, homebase for showers, the local JEM centre for larger quantities of building materials, howdens for my kitchens and a plumbers merchant for baths.

B&Q will always do reasonably well, especially as a takeover is in the pipeline.

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I wish it was that simple.....

but.

as the economy weakens people tend to want to stretch out the laminate floor for another year or so because £500 on DIY is more than the budget will stretch to....especially as the mortgage payments have gone up by £200 a month,bills have gone up by £20 a month,petrol has gone up by £20 a month.....and so on.

B&Q is the one stop shop for the Amateur property flipper/BTL'r. If you know nothing about property, want to dabble, where better to go than B&Q in order to laminate a 50k+ profit onto a water sodden remote terraced grey box in Wales?

Builders and tradesmen (real ones) will always get a better deal at their local builders merchants on account.

It hasn't just been the keen DIY'er outlet of choice for the past few years, its much more involved in the bubble than that. Hence the B&Q crash!

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I've just flicked thru the Torygraph and it's consistently bearish today, across several articles (one of which is in the news blog).

In my area (south-east) things still seem to be going full steam ahead with restaurants packed etc ... though I live in an affluent 'older' town with many youngsters priced out years ago, and I guess few people living locally are struggling on the first rung of the ladder.

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My benchmarks for the inevitable crash were few, simple but fairly well thought out.

A couple of them are: the demise of B&Q and builder profits, the lighthouses of the current property Bubble.

Those lighthouses have been turned off for some time now and the sirens have been wailing as well.

Sentiment oh sentiment.

The number of desperate last gasp ill informed bull posts on HPC over the past few weeks has grown to record levels even by HPC standards. A clear sign of desperate BTL'rs trying to bale out the foundered good ship HP Bubble?

As I have said before.. Why would an ordinary individual post Bullish advice in the current economic down turn on this particular genre of forum? Unless hoping to influence and tempt ordinary house buyers to rejoin the massive crippling debt merrygo round at a point when even the most hardened of Bulls must deem it a lost cause? Do these same people have a few rental properties not rented out or their false capital is being eroded day by day, week by week by any chance?

Get an overpriced mortgage on an overpriced property now at your peril.

The problem with that advice is that there is nothing to lose by heeding it. Can you say the same about:

"BUY BUY! BUY A PROPERTY NOW OR YOU'LL NEVER GET ON THE PROPERTY LADDER AGAIN!!!" type of TTRTR/Property Guru/BBB advice?

You have the tools at your disposal. Choose a life......not debt.

It’s an interesting idea that we can gauge the state of the Housing Market through the activity of DIY stores. Along with other things, it does help to get a general ‘feel’ of the ‘state of things’. Other things that can help us get an idea of the ‘state of things’ could be:

Activity of Other Retail Outlets

These might include garden centres; carpet shops; furniture shops and even high street shops.

General House building activity in an area.

If a lot of house building is taking place, at least the builders are anticipating continued activity. Although they could be wrong. However, if no new builds are going up, it gives the impression that even the builders are anticipating a bad time ahead.

Number of ‘Sold Signs’ that can be seen on the roadside.

A contentious one this. There have been allegations, on this site, that EA’s are sticking ‘Sold signs’ on unsold properties to create the illusion of an ‘active market’. Not sure whether this is right. However, I have seen many ‘Sold Signs’ that have been up for months.

Conversations

E.G. at work; at the dinner table; in pubs and so on.

I went to the B&Q Warehouse in Rochdale this afternoon. The general impression that I got from this afternoon is that the housing boom ‘has not yet turned to bust in the North West’. I have an interest in house prices falling because I am currently saving up to buy one. I will not pay the current prices because I don’t believe that they can be sustained in the long term. They are ridiculously high and represent very poor value for money.

As I entered the B&Q car park, I noticed that about one third of the parking spaces were occupied. Several people were coming out of the store with things such as ‘curtain rails’ and rolls of wallpaper and such. I expected to see more people inside the store due to the fairly large number of cars outside. However, I have seen it much busier.

There were four checkout operators, each with a queue of 3-4 people waiting to be served. There were few offers. Mainly things such ‘air conditioning units’ and ‘de-humidifiers’.

On my way home I noticed numerous ‘Sold Signs’ and a large amount of new builds in progress. I passed the local Garden Centre on the way to Todmorden. It has two car parks. A large one and a small one. Both were full and cars were parked for a good way down the side of the road.

Last Saturday night, I went out to a pub with the family for my mothers 80th birthday. When I went to the bar, the conversation was all about houses and the various projects that people were undertaking. My sister was also telling everybody about all the new builds and self builds that were going up in the Rossendale area.

Things like these give me the general impression that the house boom has not quite run its full cycle in the NW yet. However, with the national trends showing a gradual slowdown, I think the North West will soon follow suite. It will be very interesting to see what things are like in Feb-March next year. However, my own hunch is that it could be late 2007/early 2008 before we start to perceive a significant downturn.

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On my way home I noticed numerous ‘Sold Signs’ and a large amount of new builds in progress. I passed the local Garden Centre on the way to Todmorden. It has two car parks. A large one and a small one. Both were full and cars were parked for a good way down the side of the road.

Last Saturday night, I went out to a pub with the family for my mothers 80th birthday. When I went to the bar, the conversation was all about houses and the various projects that people were undertaking. My sister was also telling everybody about all the new builds and self builds that were going up in the Rossendale area.

Things like these give me the general impression that the house boom has not quite run its full cycle in the NW yet. However, with the national trends showing a gradual slowdown, I think the North West will soon follow suite. It will be very interesting to see what things are like in Feb-March next year. However, my own hunch is that it could be late 2007/early 2008 before we start to perceive a significant downturn.

OH is from your neck of the woods and unfortunately the boom still seems to be in full swing up there as it didn't start until about 12 months ago. It really must be one of the last places in the UK to boom.

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My yardstick to measure a crash, is Estate Agents closing branches and shops.

I always do the searches when I get on-line.

but being such a fragmented market that won’t advertise failure, it’s a hidden statistic.

Last crash it was surprising how many went under!

It completely changed the high street layout. (which was nice)

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  • 333 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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