Real Cause Of Hpc

[castroses]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

It's just pure GREED! Why do people think that they somehow deserve to double their money in five years - at the expense of some other person?

This is an ordinary bloke with his girlfriend and I can only think to describe them as greedy feckers!!!

Everyone on here can blame BOE/Gordon Brown/VIs etc ect for HPI - but I'm coming to the conclusion that it's the collective greed of individuals thats behind this - Individual greedy feckers!!

I really really really hope they don't get there 140K for this!! I can't believe they've even got the gall to ask it! Greedy twats!

[DoctorJ]

If your friend is moving to a bigger house then it will cost a lot more than 140K. Thus, there may be some necessity mixed in with the greed, perhaps.

If someone thinks that it is worth 140K then they will buy it. if not, then your friend is stuck and you will be proved right.

[Harry Sacks]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

It's just pure GREED! Why do people think that they somehow deserve to double their money in five years - at the expense of some other person?

This is an ordinary bloke with his girlfriend and I can only think to describe them as greedy feckers!!!

Everyone on here can blame BOE/Gordon Brown/VIs etc ect for HPI - but I'm coming to the conclusion that it's the collective greed of individuals thats behind this - Individual greedy feckers!!

I really really really hope they don't get there 140K for this!! I can't believe they've even got the gall to ask it! Greedy twats!

So your "friend" wants to exchange his home for £140K. He is then homeless and holding enough money to buy a two bed semi near Glasgow. Greed? He's gained nothing.

[bear call spread]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

It's just pure GREED! Why do people think that they somehow deserve to double their money in five years - at the expense of some other person?

This is an ordinary bloke with his girlfriend and I can only think to describe them as greedy feckers!!!

Everyone on here can blame BOE/Gordon Brown/VIs etc ect for HPI - but I'm coming to the conclusion that it's the collective greed of individuals thats behind this - Individual greedy feckers!!

I really really really hope they don't get there 140K for this!! I can't believe they've even got the gall to ask it! Greedy twats!

So if you was in the same position you would not sell it for more than the 70k? yeah right, sounds like sour grapes to me.

The reality is you were probably one of the "im not going to buy now prices will crash people" and cause you were wrong and your mate has done well you want to bitch about it.

Nice mate you are. I am heart broken for you.

[OnlyMe]

Greed and fear,

Both driven to extremis by central bankers pulling rates down so low they have distorted the whole economy and psychology of the participants in the economy.

It will be a very messy end, however it ends.

[castroses]

So if you was in the same position you would not sell it for more than the 70k? yeah right, sounds like sour grapes to me.

The reality is you were probably one of the "im not going to buy now prices will crash people" and cause you were wrong and your mate has done well you want to bitch about it.

Nice mate you are. I am heart broken for you.

Dear RagingBull

actually you're wrong on all counts. I have a far better house and a much lower mortgage than my friend! It's 'worth' a lot more than 140K although please note the italics since I believe current values and ides of 'worth' are insane! So sorry to disappoint you there but my grapes are SWEET!

The reason I'm pissed is that I'm thinking of the poor sods who're going to have to pay 140K for something that less than five years ago was worth only half that. It's a classic first time buyer couple type property and if this really is the going rate for it then some young couple are possibly going to be commiting them selves to debt slavery for what??? - a twenty year old 2 bedroom house!!

IT'S ALL MADNESS!

[expatowner]

Many people on here gripe on about vested interests and thats its all some kind of conspiracy.

Most of it is tosh, using partial facts and a leap of faith.

Easy credit is one of the usual hobby horses.

The story goes something like the vested interests heaped easy credit on the masses and house price inflation was the result.

Individuals greed has played a huge part in the last 10 to 15 years of HPI.

Easy credit came a long as a result of greed NOT that easy credit drove the price increases.

ie its NOT a vested interest group controlling things.

Its the greed of people.

I dont know if your friend is greedy but he is certainly caught up in the system.

[South Lorne]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

It's just pure GREED! Why do people think that they somehow deserve to double their money in five years - at the expense of some other person?

This is an ordinary bloke with his girlfriend and I can only think to describe them as greedy feckers!!!

Everyone on here can blame BOE/Gordon Brown/VIs etc ect for HPI - but I'm coming to the conclusion that it's the collective greed of individuals thats behind this - Individual greedy feckers!!

I really really really hope they don't get there 140K for this!! I can't believe they've even got the gall to ask it! Greedy twats!

.........you don't mention the town....but a 2 bedroom house in Glasgow average is £135,000...and a semi £253,000

see attached... http://www.home.co.uk/guides/house_prices....ocation=glasgow ....their selling price does not appear on the face of it over valued.....

[Mr Yogi]

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

Sorry mate, but you're probably 100% WRONG!

Your friend's house is 'worth' exactly what someone is prepared to pay for it. Not a penny more, not a penny less. In all probability he will sell it in the next month or so at around his asking price - then you'll know what it is worth.

House price inflation is a function of supply and demand, just like in any other market. Demand is driven by many factors, such as readily available cheap credit, the expectation of making a profit, competition from buy-to-let investors, as well as the more mundane 'needing a roof over one's head'.

When demand exceeds supply, the price rises. When supply exceeds demand, the price falls.

And that's it. End of.

Your friend is not being 'greedy' by wanting to sell his house at it's current market value, he is exhibiting perfectly normal behaviour. If you were to come to sell your house I am sure that you would want to achieve the best price you could - I know I would!

I agree with you entirely that the current level of house prices is unsustainable and that they are likely to fall dramatically over the next few years. If and when this happens it will be because demand drops to a level below supply, for any number of underlying reasons. This assertion however, takes nothing away from the fundamental truth that if your mate can get £140k for his house this month, then that's what it is worth this month!

Next month, or next year; who knows?

Edit - I too worry about young couples being able to afford to buy the type of house you are talking about - the type of house that I and my contemporaries were able to buy in our early twenties on a single salary and still afford to go to the pub most nights.

However, no-one is forcing young couples to buy at the current prices. If they are as convinced as you and I are that prices will fall then they will wait, save up, and buy when prices are cheap again.

If they believe that prices will go on rising then they will take the plunge in the hope and expectation of making a killing.

Some will win, and some will lose - twas ever thus.

Edited July 4, 2007 by Mr Yogi

[expatowner]

Gee Yogi your smarter than the average bear!

Honestly, well put.

[jimmyjazz]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

It's just pure GREED! Why do people think that they somehow deserve to double their money in five years - at the expense of some other person?

This is an ordinary bloke with his girlfriend and I can only think to describe them as greedy feckers!!!

Everyone on here can blame BOE/Gordon Brown/VIs etc ect for HPI - but I'm coming to the conclusion that it's the collective greed of individuals thats behind this - Individual greedy feckers!!

I really really really hope they don't get there 140K for this!! I can't believe they've even got the gall to ask it! Greedy twats!

correct. J.K. Galbraith in his book "A brief history of financial euphoria" reaches the same conclusion as did another Scot Charles Mackay in his book "Extraordinary Popular Delusions and the Madness of Crowds"

I would recommend both these books as summer reads if you havent already read them.

ps Galbraith was Canadian but he was Scottish too

[Selling up]

Your friend is not being 'greedy' by wanting to sell his house at it's current market value, he is exhibiting perfectly normal behaviour. If you were to come to sell your house I am sure that you would want to achieve the best price you could - I know I would!

...

However, no-one is forcing young couples to buy at the current prices. If they are as convinced as you and I are that prices will fall then they will wait, save up, and buy when prices are cheap again. If they believe that prices will go on rising then they will take the plunge in the hope and expectation of making a killing.

Agreed, Yogi.

A sale is a game for two players: The seller's objective is to try to achieve the highest price consistent with a satisfied customer. The buyer's objective is to try to obtain the goods for the lowest price. I think this guy is doing what a seller is expected to do. It's the buyers who aren't taking the trouble to play their part effectively.

[lulu]

So if you was in the same position you would not sell it for more than the 70k? yeah right, sounds like sour grapes to me.

The reality is you were probably one of the "im not going to buy now prices will crash people" and cause you were wrong and your mate has done well you want to bitch about it.

Nice mate you are. I am heart broken for you.

Yes that is how the property market is supposed to work. everyone should "buy now before it is too late".

Anyone who didnt buy in 1998 is a fool and an idiot, now many are priced out and somehow it is their own fault for delaying their purchases for other reasons (maybe they were still in school, on short term contracts or maybe just didnt fancy buying).

Society in Britain is screwed and a large part of it is down to greed on a far worse scale than we saw in the late 80's

[southsea13]

Yes that is how the property market is supposed to work. everyone should "buy now before it is too late".

Anyone who didnt buy in 1998 is a fool and an idiot, now many are priced out and somehow it is their own fault for delaying their purchases for other reasons (maybe they were still in school, on short term contracts or maybe just didnt fancy buying).

Society in Britain is screwed and a large part of it is down to greed on a far worse scale than we saw in the late 80's

I`m not too sure about the greed. I guess in principle it`s maybe less than the `80s, BUT because of the huge amounts of money floating around it is worse in practice.

[Orbital]

So if wanting more money is greed, then surely we are all guilty.

STR? Cashing in on others losses - clearly greed!

Renting? Saving money by renting - greedy!

Asking for a pay rise? OMG so greedy.

BTL? Geesh may aswell move to Hell and be done with it.

Of course the critics here are all just about to sell your own properties at 50% below market value because it would be greedy not to, you are then going to donate the shirts off their backs and move to work with deprived children in the slums of Brazil. Well good luck to you, the world needs people like you.

On the other hand, maybe, just maybe, the rest of us are trying to make lives for ourselves in a competative world.

[markyh]

Sorry mate, but you're probably 100% WRONG!

Your friend's house is 'worth' exactly what someone is prepared to pay for it. Not a penny more, not a penny less. In all probability he will sell it in the next month or so at around his asking price - then you'll know what it is worth.

House price inflation is a function of supply and demand, just like in any other market. Demand is driven by many factors, such as readily available cheap credit, the expectation of making a profit, competition from buy-to-let investors, as well as the more mundane 'needing a roof over one's head'.

When demand exceeds supply, the price rises. When supply exceeds demand, the price falls.

And that's it. End of.

Your friend is not being 'greedy' by wanting to sell his house at it's current market value, he is exhibiting perfectly normal behaviour. If you were to come to sell your house I am sure that you would want to achieve the best price you could - I know I would!

I agree with you entirely that the current level of house prices is unsustainable and that they are likely to fall dramatically over the next few years. If and when this happens it will be because demand drops to a level below supply, for any number of underlying reasons. This assertion however, takes nothing away from the fundamental truth that if your mate can get £140k for his house this month, then that's what it is worth this month!

Next month, or next year; who knows?

Edit - I too worry about young couples being able to afford to buy the type of house you are talking about - the type of house that I and my contemporaries were able to buy in our early twenties on a single salary and still afford to go to the pub most nights.

However, no-one is forcing young couples to buy at the current prices. If they are as convinced as you and I are that prices will fall then they will wait, save up, and buy when prices are cheap again.

If they believe that prices will go on rising then they will take the plunge in the hope and expectation of making a killing.

Some will win, and some will lose - twas ever thus.

I agree.

Just checked thids morning with the girl next door who is buying my house for £194k and all seems well, about 4 weeks from exchange fingers crossed. But I bought this house for £55k in 1996 so will pocket £144k+ cash in the bank.

But the rungs of the ladder are to far away to make a decent jump up to a 4 bed which are £300k without doing a 3 bed stop gap with double stamp duty & solicitors costs within 5 years so we are kind off forced (As in forced by sensible choice) to STR and wait for the market to drop.

But we arn't greedy. If we dont sell at the market rate then we could get stuck renting forever.

M

[huw]

I agree.

Just checked thids morning with the girl next door who is buying my house for £194k and all seems well, about 4 weeks from exchange fingers crossed. But I bought this house for £55k in 1996 so will pocket £144k+ cash in the bank.

But the rungs of the ladder are to far away to make a decent jump up to a 4 bed which are £300k without doing a 3 bed stop gap with double stamp duty & solicitors costs within 5 years so we are kind off forced (As in forced by sensible choice) to STR and wait for the market to drop.

But we arn't greedy. If we dont sell at the market rate then we could get stuck renting forever.

Quite. Just say you were idiotic altruistic enough to sell for half the current market rate--how would you feel when the buyer flips after six months and cashes in?

Buyers (and their lenders) set prices. An asking price is only crystallised when a bid is made.

[Selling up]

So if wanting more money is greed, then surely we are all guilty.

STR? Cashing in on others losses - clearly greed!

Renting? Saving money by renting - greedy!

Asking for a pay rise? OMG so greedy.

BTL? Geesh may aswell move to Hell and be done with it.

One of Orbital's better posts!

Couldn't agree more.

[oracle]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

it! Greedy twats!

considering you seem to have a great health serice up there,what with deep-fried mars bars and suicide-doctors...I'm surprised anybody is that stupid to remain!!!

[Bearback]

I dont think the cause of a HPC is greed, because people have always been greedy, even in 1988, 1990, 1991, 1992...... and every other single year.

Evan Davies was interviewing some Irish peeps on why there was a massive housing boom in Dundalk. One girl said the reason for the massive boom in Dundalk was because the town was in between two big cities - Belfast AND Dublin. Evan Davies then commented hasnt Dundalk always been between Dublin and Belfast.

[Englebert]

Sorry mate, but you're probably 100% WRONG!

Your friend's house is 'worth' exactly what someone is prepared to pay for it. Not a penny more, not a penny less. In all probability he will sell it in the next month or so at around his asking price - then you'll know what it is worth.

House price inflation is a function of supply and demand, just like in any other market. Demand is driven by many factors, such as readily available cheap credit, the expectation of making a profit, competition from buy-to-let investors, as well as the more mundane 'needing a roof over one's head'.

When demand exceeds supply, the price rises. When supply exceeds demand, the price falls.

And that's it. End of.

Your friend is not being 'greedy' by wanting to sell his house at it's current market value, he is exhibiting perfectly normal behaviour. If you were to come to sell your house I am sure that you would want to achieve the best price you could - I know I would!

I agree with you entirely that the current level of house prices is unsustainable and that they are likely to fall dramatically over the next few years. If and when this happens it will be because demand drops to a level below supply, for any number of underlying reasons. This assertion however, takes nothing away from the fundamental truth that if your mate can get £140k for his house this month, then that's what it is worth this month!

Next month, or next year; who knows?

Edit - I too worry about young couples being able to afford to buy the type of house you are talking about - the type of house that I and my contemporaries were able to buy in our early twenties on a single salary and still afford to go to the pub most nights.

However, no-one is forcing young couples to buy at the current prices. If they are as convinced as you and I are that prices will fall then they will wait, save up, and buy when prices are cheap again.

If they believe that prices will go on rising then they will take the plunge in the hope and expectation of making a killing.

Some will win, and some will lose - twas ever thus.

"And that's it. End of."

Yogi, a somewhat patronising post dontcha think? You sound like a very complacent bear to me...if you are a bear.

[Sour Mash]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

It's just pure GREED! Why do people think that they somehow deserve to double their money in five years - at the expense of some other person?

This is an ordinary bloke with his girlfriend and I can only think to describe them as greedy feckers!!!

Everyone on here can blame BOE/Gordon Brown/VIs etc ect for HPI - but I'm coming to the conclusion that it's the collective greed of individuals thats behind this - Individual greedy feckers!!

I really really really hope they don't get there 140K for this!! I can't believe they've even got the gall to ask it! Greedy twats!

You think that they should sell for less than they could get for it then? Would you sell an asset for less than it was worth?

You really need to get over your obvious bitterness at having missed the housing bubble boat. Hopefully when it busts you'll have the cojones to buy even when you failed to do so in a sustained period of rising prices and economic prosperity.....

[bpw]

my Pigs analogy is even more apt in this case .....

[HPC Convert]

Story of a friend of mine:

Late 30's, police officer.

Bought a 2 bedroom semi in town near Glasgow for 70K, 5 years ago. It's approx 20 years old - he hasn't done anything to it other than mimimum maintenance in last 5 years.

Now he's put it up for sale at 140K.

NOT in a million years is it worth that!!!

It's just pure GREED! Why do people think that they somehow deserve to double their money in five years - at the expense of some other person?

This is an ordinary bloke with his girlfriend and I can only think to describe them as greedy feckers!!!

Everyone on here can blame BOE/Gordon Brown/VIs etc ect for HPI - but I'm coming to the conclusion that it's the collective greed of individuals thats behind this - Individual greedy feckers!!

I really really really hope they don't get there 140K for this!! I can't believe they've even got the gall to ask it! Greedy twats!

You need to get real. What are they meant to do? Say they can sell at £140k and want to move to somewhere else for £140k. Do they say "Oh no, this is profiteering, i will sell for £100k" and then they walk across town and pay £140k for the next house. I dont think so and you would not do it either.

[DoctorJ]

Evan Davies was interviewing some Irish peeps on why there was a massive housing boom in Dundalk. One girl said the reason for the massive boom in Dundalk was because the town was in between two big cities - Belfast AND Dublin. Evan Davies then commented hasnt Dundalk always been between Dublin and Belfast.

Excellent. Nice one Evan

......and I can't believe that the OP is still getting baited on this thread 2 days after posting

Edited July 4, 2007 by DoctorJ