Place Your Bets On The Boom And Bust Uk Housing Market

[Guest Riser]

Looks like a BTL may soon be able to hedge against a UK house price crash by laying money that house prices will go down. Question is will they be too stupid to take the opportunity now before it goes odds on later this Summer?

[EDIT] Oopps doesn't get here till next Year by which time it will be too late

Place your bets on the boom and bust UK housing market

Place your bets on the boom and bust UK housing market

The Observer Heather Stewart, economics correspondent Sunday May 28, 2006

Anxious British homeowners could soon have the opportunity to hedge their bets by laying money on a house price crash as a firm set up by Yale economics professor Robert Shiller opens a new market in housing futures.

Shiller, author of Irrational Exuberance, which predicted the dotcom crash, is co-founder of MacroMarkets, which began offering investors the opportunity to bet on US housing markets last week.

He believes sharp swings in property prices could be prevented if markets provided better information about investors' predictions of future prices, and helped homeowners to hedge their investments.

'I teach finance theory, and what we tell our students is that you should diversify. For most people, their portfolio is dominated by one asset: a house,' he said.

Investors can choose to predict the future direction of price indices for 10 major US cities. 'It's an international market: people outside the US would find this an attractive proposition on the long side - and people living in the US should take the short side,' he said.

Shiller's business partner, former UBS banker Sam Masucci, said the firm hopes to bring its expertise to the British market within the next year by talking to the producers of existing housing indices, such as the Halifax and Nationwide.

'We intend to take this operation to the global market,' said Masucci.

Like many analysts, Shiller is convinced the US housing market is due a downturn - but he refuses to predict when. 'It's psychology, and psychology is very unpredictable,' he said.

Edited May 28, 2006 by Riser

[BandWagon]

And he's bringing the operation tro the UK next year.

His timing is impeccable

[JustYield]

Makes sense, I was thinking along similar lines recently:

http://www.housepricecrash.co.uk/forum/ind...ndpost&p=382029

JY

[Guest Riser]

It does not say how Shiller will hedge the bets placed with him. He may be planning to use Reits although the government recently announced they would only be available on the larger markets not AIM. If Shiller is not hedging using the stock markets then he will need a long for every short he takes, he may find it difficult to find investors prepared to long on UK house prices by next Summer.

Edited May 28, 2006 by Riser

[Smell the Fear]

It does not say how Shiller will hedge the bets placed with him. He may be planning to use Reits although the government recently announced they would only be available on the larger markets not AIM. If Shiller is not hedging using the stock markets then he will need a long for every short he takes, he may find it difficult to find investors prepared to long on UK house prices by next Summer.

If it functioned like Betfair it could work. Those on the long side just need to price it at a level that makes sense for them.

[Charles_Darke]

I suspect there won't be a shortage of people who think that house prices can only go up...

[Not a moderator]

IGIndex already offer spread betting on house prices, split into regions.

Check out IGIndex manual from page 79

[cupidstunt]

IGIndex already offer spread betting on house prices, split into regions.

Check out IGIndex manual from page 79

Yes - I've got an account with them - thought I might take a punt on House prices going down later in the year.

[brassfarthing]

Yes - I've got an account with them - thought I might take a punt on House prices going down later in the year.

It's your lucky day!

Yep this is a fantastic opportunity for all the doom-mongers on here.

You constantly say that the great crash is just around the corner. Well, just pile those deposits that you keep boasting about into this opportunity and double your money overnight.

Hurry! You don't want to get left behind all over again, surely?

Let's see the colour of your money......

Oh, why has everyone suddenly vanished....?

[BuyingBear]

Residential property is far from a transparent or efficient market, you're reliant on subjective surveys or skewed stats that can lag for months.

[alexays]

Residential property is far from a transparent or efficient market, you're reliant on subjective surveys or skewed stats that can lag for months.

I agree. You would be better shorting one or all of Barratt, Countrywide, Rightmove and Northern Rock to hedge against falling prices.

[Unexpected]

It's your lucky day!

Yep this is a fantastic opportunity for all the doom-mongers on here.

You constantly say that the great crash is just around the corner. Well, just pile those deposits that you keep boasting about into this opportunity and double your money overnight.

Hurry! You don't want to get left behind all over again, surely?

Let's see the colour of your money......

Oh, why has everyone suddenly vanished....?

No, it is you who is the lucky one. Doom mongers like you should buy more property. Buy as much as you can. You will surely double your money in just a few short years.

[brassfarthing]

No, it is you who is the lucky one. Doom mongers like you should buy more property. Buy as much as you can. You will surely double your money in just a few short years.

I'm no doom-monger, and I don't need or want any more property. I like living in my house, and that's enough for me. The markets may rise, the markets may fall. Same with house prices. Whatever. I'll carry on living here quite happily, whatever happens to the economy. If my house halved in value, no problem. The next house I move to will also be 50% of its previous price, so why should I worry?

But seriously, the great majority of people on here who are convinced that the great crash will happen, or even that it is already happening, should be delighted to learn that they can win tons of cash by using this new service.

All your troubles are over.

[BuyingBear]

I'm no doom-monger, and I don't need or want any more property. I like living in my house, and that's enough for me. The markets may rise, the markets may fall. Same with house prices. Whatever. I'll carry on living here quite happily, whatever happens to the economy. If my house halved in value, no problem. The next house I move to will also be 50% of its previous price, so why should I worry?

That's great, a lot of people are in that position, if anything a fall in prices would make a larger property proportionally cheaper. However, it's quite a leap to then suggest that people rush out now and pay over the odds for some dump on an IO mortgage that consumes half their salary.

[brassfarthing]

That's great, a lot of people are in that position, if anything a fall in prices would make a larger property proportionally cheaper. However, it's quite a leap to then suggest that people rush out now and pay over the odds for some dump on an IO mortgage that consumes half their salary.

What I'm recommending is that the nihilists and doom-mongers here take advantage of the service described by the OP.

I'd never recommend an IO mortgage. It's got to be repayment or nothing.

Half your salary? My mortgage takes care of well over half my salary. About 60%.

As for "paying over the odds", well how do we know if it's over the odds? If you're prepared to pay the amount, it's not over the odds. But you should only buy because you like a place. People on here are obsessed with the idea that property is just a financial investment. It should be a place to live first and foremost. If you really like a flat or house, just go for it and make it your home. Don't worry about dips and rises in interest rates and values.

[Guest]

There's no such thing as a doom-monger, because one man's doom is another man's pool party with big busty babes.

Let's be straight about this. I resent the "doom monger" tag, and all users using the expression should be banned.

[BuyingBear]

What I'm recommending is that the nihilists and doom-mongers

This shows you how far we've come, if you advocate decent homes affordable to working people and a reasonable market where people can move up the ladder you are considered a nihilist and doom-monger.

I ask you, who actually benefits from high house prices? First-Time-Buyers? Existing home owners that cannot afford a larger home? Or those now saddled with massive mortgages and moving costs that are strangling the general economy?

The only benefactors are banks, estate agents & HM Treasury.

[binkybonka]

The thing is that the majority of people just will not be bothered about the ups and downs.

It's the top of the market - SELLLLLLLLLLLLLLLLLL!

It's the latest cocktail party talking point and was in 1989 but those that didn't listen and used their rents to buy even more cocktails are now drinking even more cocktails thanks to the rents fron their mortgage free properties.

And in the sun!

[Market Observer]

Yes - I've got an account with them - thought I might take a punt on House prices going down later in the year.

Now that IG are no longer taking new bets on the housing market, the best place to go is www.spreadfair.com!

[Market Observer]

IGIndex already offer spread betting on house prices, split into regions.

Check out IGIndex manual from page 79

IG index are no longer taking new bets on UK house prices. But there is a market where you can spread bet on UK house prices at www.spreadfair.com. This one is the equivalent to betfair that was mentioned on this thread. It is an open order book with no middleman and hence is fairer than the normal spread betting process.