Jump to content
House Price Crash Forum
Sign in to follow this  
Lars Bussholm

Why Hpi Is Apparently Continuing, And How We Might Wipe The Smile Off The Vi Faces

Recommended Posts

There is a lot of debate as to why HPI appears to be continuing, and the long-predicted HPC hasn’t happened yet. Bulls suggest that the reason is that affordability limits haven’t been reached, etc, etc., but I think the reason is far simpler.

I have noticed that in the past few months, some houses appear to have been re-launched with significantly higher prices. Others posters have pointed to this phenomenon recently too. Moreover, some new instructions seem to have higher than normal prices. I have to say that this is an impression, and that I can only point to one definite example, but nevertheless, I have a definite feeling that it is the case.

Now, the point is that if Estate Agents en-mass had decided, perhaps as a result of a Trade-Association suggestion, to raise the asking price of a representative selection of houses, let us say 10%, by 10%, then this would show as a rapid rise in HPI of 1%, and this could be extrapolated to a claim of 6 to 12% per annum if it occurred over 1 to 2 months survey period.

Given that the Rightmove survey is based on asking prices, then ipso facto, houses are increasing in price fast, and this is trumpeted from the ramparts to the assembled throng. Then of course, would-be buyers are spooked, and voila, selling prices go up, and you can then increase the rest and start all over again.

This is what is completely unacceptable about near-real-time asking-price surveys. Whatever words are used to justify them, they are vehicles open to self-serving market manipulation, and as such are against the interests of the consumer. In any other business, open-to-abuse arrangements like this would not be tolerated, and would probably be illegal

I therefore suggest that we lobby Parliament en-mass, with a view to persuading them that an example like this demonstrates unequivocally that legislation is urgently needed to regulate the entire housing market.

I propose:

1 That the publishing of asking-price surveys that are not retrospective by at least 6 months should be outlawed.

2 That Estate Agency selling fees should be set by Act of Parliament and should be thus regulated, and, other than perhaps having a banded structure for different values, should be de-coupled from any relationship to house selling prices.

3 That the maximum multiple of mortgagor’s (borrower’s) income that a mortgagee (lender) may advance shall be regulated by a Government–appointed organisation or ombudsman, (eg as is done for telecoms by Oftel). The mortgagee shall be required to show written evidence to the Land Registry that they have taken all reasonable steps to properly establish the mortgagor’s income. In the event that they fail to do so, then the mortgagee shall be fined a punitive sum appropriate to the means of the mortgagee, say five times the amount advanced, for example. Likewise, deception by the mortgagor shall be a criminal offence, punishable by a heavy fine.

4 That loans where the capital sum repayment is not supported by an approved associated financial arrangement, or is otherwise indefinite, or is for a period exceeding 25 years, shall be outlawed.

I think that will do for starters, and put the Fear of God up the VI’s, should it ever reach the statute books. With good lobbying it really could. Look at fox hunting, smoking, etc

If you agree, I will draft a letter based on the above, and whoever is willing can print it off and send it to their MP.

Share this post


Link to post
Share on other sites

Reminds me of the story about the Russian who had ordered a new car. The waiting list was long and he was finally given a specific delivery date a full five years in the future.

'Will the delivery be in the morning or afternoon?' he asked 'It's just that I've booked a plumber and he's coming on the same date'.

Share this post


Link to post
Share on other sites
Guest

All we need to do is to have US-style regulations for Estate Agents, in so far that you can sue the bastards like you can sue financial advisors. They'd quickly change their tune.

This is a substantial part of the problem we have.

Share this post


Link to post
Share on other sites

All we need to do is to have US-style regulations for Estate Agents, in so far that you can sue the bastards like you can sue financial advisors. They'd quickly change their tune. [megaflop]

But would customers want to pay US-style commission rates?

Share this post


Link to post
Share on other sites

At least in the US EA's have to train and take exams, show they have some brains rather than just the creditials of Smarminess and Sleaze (is that EA's who need both, or just MP's?)

mind you i haven't bought property in the USA though we did consider it at one point. Anyone out there with real experience? :unsure:

Share this post


Link to post
Share on other sites

At least in the US EA's have to train and take exams, show they have some brains rather than just the creditials of Smarminess and Sleaze (is that EA's who need both, or just MP's?)

mind you i haven't bought property in the USA though we did consider it at one point. Anyone out there with real experience? :unsure:

On the whole, U.S. EAs are no better than British ones I've worked with both). When buying a house in the U.S., I still use a real estate attorney. EAs miss all sorts of problems (or don't want to see them, in case it keeps the house from being sold).

Nor do I put much stock in those real estate exams. The ex-husband of a friend of mine passed the exam. He's a complete idiot. :D

Share this post


Link to post
Share on other sites

All we need to do is to have US-style regulations for Estate Agents, in so far that you can sue the bastards like you can sue financial advisors. They'd quickly change their tune. [megaflop]

But would customers want to pay US-style commission rates?

Probably not.

Enter - Tesco's Value estate agent :)

Share this post


Link to post
Share on other sites

Probably not.

Enter - Tesco's Value estate agent :)

Yeah, thats the way.

Tesco will probably also launch a Tesco Value Political Party soon... then they can control us all.

And then introduce Tesco Value Social Housing and Tesco 'Finest' Luxury Apartments.....

Share this post


Link to post
Share on other sites

How about a proposal that rental income cannot be offset by mortgage interest? That would reduce the number of amateur BTLs who are pushing the market up. Would give GB a nice income too...

Edited by othello

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.