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House Price Crash Forum

Property And The Fsa


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HOLA441

Would a stockbroker be able to come on TV and say 'ICI looks affordable, invest for the long-term?' Would you have a TV program where a share guru is helping an investor buy shares in an illiquid microcap. Eg investor rings up broker, to buy £10,000 worth of of shares in XYZ plc, when the quoted price offer price is 20p. Reply is that for 50,000 shares you'd have to pay 21p. Guru says go for it, because in a few years time the shares could be worth £1?

Should all comment and speculation on future house prices be regulated by the FSA, and any program, website or publication doing this likewise have to be regsitered?

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HOLA442

Would a stockbroker be able to come on TV and say 'ICI looks affordable, invest for the long-term?' Would you have a TV program where a share guru is helping an investor buy shares in an illiquid microcap. Eg investor rings up broker, to buy £10,000 worth of of shares in XYZ plc, when the quoted price offer price is 20p. Reply is that for 50,000 shares you'd have to pay 21p. Guru says go for it, because in a few years time the shares could be worth £1?

Should all comment and speculation on future house prices be regulated by the FSA, and any program, website or publication doing this likewise have to be regsitered?

Yes, he can state his opinion and he can be wrong. If he doesn't back it up with sound fundamentals investors would probably stop listening.

But the FSA has a full handbook of rules that covers standards, regulatory processses, price and information disclosure and redress. Representatives have to take exams.

More importantly, individuals and firms found in breach of the rules can be struck off the register and banned from conducting investment business in the future.

Quite rightly these rules are in place for the protection of investors,

I would love their mandate extended to cover property markets.

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HOLA443
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HOLA444
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HOLA445
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HOLA446
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HOLA447

Imp - houses are, for many people, are highly geared product. If you get it wrong, you losing everything. I think people buying property should remember that - particularly if they're buying now, with zero or minimal down-payment.

I can buy a car as a highly geared product. Doesn't turn it into an investment which requires FSA approval and I will lose money on it.

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HOLA448

The point is, should unqualified presenters and journalists be allowed to talk up the market, without any regulation? Should they be able to encourage people to make financial decisions that could wipe them out? Television in particular is a powerful medium. At the least, shouldn't every property program have a warning, that the value of a house can go down as well as up, that in certain cases a falling price can lead to negative equity?

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HOLA449

Forgive my dilusional world, but if people stopped thinking of property as in investment, but rather as a home, we would all be happier. If this happened there would not be a problem with some unqualified person giving their opinion whether a home was worth £50,000 or £500,000, just as there is no problem now with Jeramy Clarkson saying he would buy an Aston Martin for £100,000 but to him a Ford Mondeo is not worth £10,000.

Granted, a house is normally your most expensive purchase, but you can still pick up a home for less than £20,000 and a car for more than £250,000.

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HOLA4410

Journalists and the like are covered by an exemption in the Financial Services and Markets Act so they can say what they like (although I note the likes of Bloomburg cover themselves with a disclaimer).

I work in regulatory compliance and you wouldn't believe the amount of hoops we have to jump through to place a simple advert in a newspaper. I don't believe financial journalists or pundits should be allowed to promote their ill formed views without some sort of competency requirements. Most financial services companies will quite happily deal directly with the public who have been persuaded to invest by some twit in a newspaper rather than insist they go and seek professional advice first. Mind you then we come on to advisers, best not get me started there......

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HOLA4411

No, houses aren't an investment. They are a home. If only people would remember this.

I agree they should be a home, but as you know property is now considered an investment by many.

A zero risk, capital guaranteed investment with unlimited upside if you listen to some.

As soon as it starts to look unaffordable, they relax the credit rules to make sure everyone can 'invest' in some form or another.

The only warning given is "your home may be reposessed if you don't keep up with your mortgage payments".

Every estate agents leaflets should carry the warning "House prices may go up or down."

Every Mortgage application should state "Interest rates may go up as well as down."

They'll wait until the crash plays out though, for fear of being blamed.

I think you're right. It's not until it's too late that they'll start to pretend they're concerned.

Edited by Sisyphus
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HOLA4412

I agree they should be a home, but as you know property is now considered an investment by many.

A zero risk, capital guaranteed investment with unlimited upside if you listen to some.

As soon as it starts to look unaffordable, they relax the credit rules to make sure everyone can 'invest' in some form or another.

The only warning given is "your home may be reposessed if you don't keep up with your mortgage payments".

Every estate agents leaflets should carry the warning "House prices may go up or down."

Every Mortgage application should state "Interest rates may go up as well as down."

I think you're right. It's not until it's too late that they'll start to pretend they're concerned.

this is a start... http://www.tiscali.co.uk/money/features/es...regulation.html

with respect to whether housing should be considered an investment, I think this question runs to the very heart of the HPC debate. Whatever the rights and wrongs of it, the fact is that this opinion is ubiquitous among my peers and colleagues, many of whom are not financially unsophisticated - admittedly the ones who are financially unsophisticated tend to be those who currently espouse the investment line the most.

"A zero risk, capital guaranteed investment with unlimited upside" indeed! :unsure:

you know, this boom has been so big, gone on for so long, and been so stubborn... I can't help thinking that the crash will be a biggie... commensurately large... Japan style.

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