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[ccc]

I don't think HMcTavish is in any way saying that it would be a good time for anyone to buy property.

My guess is that he is stressing about making all these arguments in an attempt to justify his own decision to do nothing about selling his own property(s) in the face of this crash.

He wouldn't buy now, nor would he sell now. Most property owners will be feeling this kind of paralysis at the moment.

Making these arguments here is his attempt to inflict paralysis on those who might stand to benefit from his.

Putting monetary pros and cons aside for a moment, I for one am really appreciating the sense of control over my own destiny that the flexibility of renting is giving me at the moment.

- Good for the wealth and good for the mental health - Like home ownership was a year or two ago.

Come on in! The water is cold, but refreshing!

(STR 2007)

Ditto. I have never owned and I am not even sure I want to.

If I do go down that route a mortgage of Zero would be preferable. However if I do decide to buy and get a mortgage then a 50+% deposit is a must.

These decisions can wait though. That is another bonus of being debt free - I decide on my plans - not the Bank. Well actually they do but that is another matter. .

[HAMISH_MCTAVISH]

I don't think HMcTavish is in any way saying that it would be a good time for anyone to buy property.

Correct

My guess is that he is stressing about making all these arguments in an attempt to justify his own decision to do nothing about selling his own property(s) in the face of this crash.

Incorrect. I have two properties, one of which my wife and I live in, the second we have allowed an aging family member to move into and live rent free due to their personal circumstances. I buy a house to live in and the only time I will sell is when I sell to downsize at retirement which is still decades away. I don't personally have any interest in short term property speculation, never have, never will. Both my properties are in an area where STR-ing would have proved to be a financial mistake, at least so far, and whilst that may change, it will most likely not change by enough to make it remotely worth the hassle to me of moving two households.

He wouldn't buy now, nor would he sell now. Most property owners will be feeling this kind of paralysis at the moment.

Making these arguments here is his attempt to inflict paralysis on those who might stand to benefit from his.

My point is only that different properties in different areas will perform differently. STR or delayed purchase will make financial sense for some people in some areas, and not for other people in other areas. Its that simple really. There is no "one size fits all" solution.

Todays price fall figures showed that Scotland as a whole lost 6% in average values in 2008. As rental yields in large parts of scotland are at around 6%, it obviously would have made no sense for many people to STR in Scotland in 2008. I am one of those people. The rent alone here would have greatly exceeded the established price fall in my area, and thats before we look at selling costs, moving costs, stamp duty, buying costs, etc etc etc.

Putting monetary pros and cons aside for a moment, I for one am really appreciating the sense of control over my own destiny that the flexibility of renting is giving me at the moment.

- Good for the wealth and good for the mental health - Like home ownership was a year or two ago.

Come on in! The water is cold, but refreshing!

(STR 2007)

Like I said, different strokes for different folks.

[ccc]

Todays price fall figures showed that Scotland as a whole lost 6% in average values in 2008. As rental yields in large parts of scotland are at around 6%, it obviously would have made no sense for many people to STR in Scotland in 2008.

And for those areas of Scotland, Edinburgh most notably, with declines of ~15% and yields of about 3% ?

It would have made MASSIVE sense STR'ing in 2007/8 ?

You do at least agree with that ?

BTW your info yesterday about interest on mortgages etc.. got me doing a few calcs. I have learnt another thing that I thought before but had never really looked at in depth. Having an IO mortgage in most circumstances is nuts !! For the reasons you pointed out. You dont touch the capital so the interest element does not reduce over time. I suppose if you invest well in the meantime you can do ok - highly risky though.

[mechos]

http://www.mechos.net/wtf

[HAMISH_MCTAVISH]

And for those areas of Scotland, Edinburgh most notably, with declines of ~15% and yields of about 3% ?

It would have made MASSIVE sense STR'ing in 2007/8 ?

You do at least agree with that ?

Yes. Obviously if an area like edinburgh has a decline of 15% in a year, and rent is 3%, then even by the time you include the stamp duty, buying fees, selling fees and moving costs, you'll be better off STR-ing. But if it takes 3-4 years to decline that much, or if you called it a couple of years too soon, then it can be different situation altogether, particularly for median level properties.

And to be fair, not all of edinburgh meets those criteria, and certainly most of scotland does not.

BTW your info yesterday about interest on mortgages etc.. got me doing a few calcs. I have learnt another thing that I thought before but had never really looked at in depth. Having an IO mortgage in most circumstances is nuts !! For the reasons you pointed out. You dont touch the capital so the interest element does not reduce over time. I suppose if you invest well in the meantime you can do ok - highly risky though.

Totally agree. I/O should be a specialist product for particular circumstances. It's not a good option at all for most people.

Also FYI, the numbers I gave you yesterday on the rent vs mortgage thing, on the rent side of the equation didn't include inflation, which can be a massive increase over 25 years, and often large even over 5 or 10 years. Not relevant to yesterdays discussion, but relevant when you start looking at lifetime costs or the opportunity costs of investing if people think they are saving via renting and investing the balance, etc, etc, etc. Again, purely FYI.

Edited February 17, 2009 by HAMISH_MCTAVISH

[HAMISH_MCTAVISH]

http://www.mechos.net/wtf

I just like a good debate.

[copper crutch]

And for those areas of Scotland, Edinburgh most notably, with declines of ~15% and yields of about 3% ?

It would have made MASSIVE sense STR'ing in 2007/8 ?

You do at least agree with that ?

BTW your info yesterday about interest on mortgages etc.. got me doing a few calcs. I have learnt another thing that I thought before but had never really looked at in depth. Having an IO mortgage in most circumstances is nuts !! For the reasons you pointed out. You dont touch the capital so the interest element does not reduce over time. I suppose if you invest well in the meantime you can do ok - highly risky though.

I am new on here but your figures of a 15 percent drop are way off the mark, i will give you an example oof a 2 bedroomed flat at Springfield Street in Edinburgh, sold for 230 new 3 years ago, i seen a home report on one in this development that was valued at 125k, another example a 2 bed at pilrig heights sold new for 220k, sold recently for 115k, the deflation is more extreme in certain areas however on these examples your conservative 15% drop is miles out, more like 40% is the actual figure.

[HAMISH_MCTAVISH]

the deflation is more extreme in certain areas however on these examples your conservative 15% drop is miles out, more like 40% is the actual figure.

For these examples you would be correct. But these examples form a tiny percentage of the market.

The whole market is accurately reflected by the average price statistics, which are released monthly and will include your examples.

[dances with sheeple]

I am new on here but your figures of a 15 percent drop are way off the mark, i will give you an example oof a 2 bedroomed flat at Springfield Street in Edinburgh, sold for 230 new 3 years ago, i seen a home report on one in this development that was valued at 125k, another example a 2 bed at pilrig heights sold new for 220k, sold recently for 115k, the deflation is more extreme in certain areas however on these examples your conservative 15% drop is miles out, more like 40% is the actual figure.

I think he is meaning the official stats are somewhere about 15% down? You are right, these new-build type flats are showing the way we are headed. 100k for a flat is madness anyway, especially with the over supply we have now. It won`t last. Anybody getting a sniff of this sort of price would be better to take it while they still can.

[dances with sheeple]

For these examples you would be correct. But these examples form a tiny percentage of the market.

The whole market is accurately reflected by the average price statistics, which are released monthly and will include your examples.

Hamish, what do you think is going to affect the mind of a potential seller more, a flat next door going for 100k off it`s peak price, or a bunch of stats which they don`t really understand, and suspect are manipulated? It`s all about sentiment.Watch the fear take hold in Aberdeen this summer as Edinburgh and Glasgow disappear round the U - bend.

[copper crutch]

I think he is meaning the official stats are somewhere about 15% down? You are right, these new-build type flats are showing the way we are headed. 100k for a flat is madness anyway, especially with the over supply we have now. It won`t last. Anybody getting a sniff of this sort of price would be better to take it while they still can.

They are selling at these prices, you can get a 3 bed for 150k that was selling for 335k 3 years ago down at western harbour, prices down nearer 60% on new.

[copper crutch]

However there are conflicting stats around the place that say prices have risen. http://www.mortgagestrategy.co.uk/cgi-bin/...h=401&f=402

[mechos]

... this summer as Edinburgh and Glasgow disappear round the U - bend.

Lovely metaphor!

Unblock that pan!

Purge that crap!

Syphoning suction and the clearing of backed up solids (BTL portfolios) causing an inevitable overshoot.

[dances with sheeple]

Lovely metaphor!

Unblock that pan!

Purge that crap!

Syphoning suction and the clearing of backed up solids (BTL portfolios) causing an inevitable overshoot.

Don`t tell Hamish.

[ccc]

I am new on here but your figures of a 15 percent drop are way off the mark, i will give you an example oof a 2 bedroomed flat at Springfield Street in Edinburgh, sold for 230 new 3 years ago, i seen a home report on one in this development that was valued at 125k, another example a 2 bed at pilrig heights sold new for 220k, sold recently for 115k, the deflation is more extreme in certain areas however on these examples your conservative 15% drop is miles out, more like 40% is the actual figure.

I was just being generous for the sake of Hamish.

I think he fails to realise the stats only show those few houses that actually sold. The rest are still up for sale or are being rented out instead. ONCE these finally sell their prices will be added to the figures and this will be reflected in the average prices.

I do my own tracking of sales/asking prices and these have dropped across the board in Edinburgh by at least 10%. Never mind what the few that sell actually go for.

I also think people underestimate that your big family houses are also getting hit big time. I have personal experience of this.

In general I reckon if you have a house to sell in Edinburgh right now ?

Take at least 15% off 2007 prices and then you may have a chance of selling it. Of course there will be the few that get lucky but they are not in large numbers. There are also the new builds like you describe above. These are a whole different ballgame. I expect end prices 75% down on 2007.

This is the reality of Edinburgh and everyone that lives here and keeps an eye on it knows. The EA's know themselves and are even starting to push the 'Realistic pricing' buttons on vendors.

I can't see anyone who STR in Edinburgh in 2007 doing anything but coining the savings in big style. As long as they hold steady. Even if they did jump in today they would have made a hefty saving.

Anyway - welcome to this interesting forum !!

[copper crutch]

I was just being generous for the sake of Hamish.

I think he fails to realise the stats only show those few houses that actually sold. The rest are still up for sale or are being rented out instead. ONCE these finally sell their prices will be added to the figures and this will be reflected in the average prices.

I do my own tracking of sales/asking prices and these have dropped across the board in Edinburgh by at least 10%. Never mind what the few that sell actually go for.

I also think people underestimate that your big family houses are also getting hit big time. I have personal experience of this.

In general I reckon if you have a house to sell in Edinburgh right now ?

Take at least 15% off 2007 prices and then you may have a chance of selling it. Of course there will be the few that get lucky but they are not in large numbers. There are also the new builds like you describe above. These are a whole different ballgame. I expect end prices 75% down on 2007.

This is the reality of Edinburgh and everyone that lives here and keeps an eye on it knows. The EA's know themselves and are even starting to push the 'Realistic pricing' buttons on vendors.

I can't see anyone who STR in Edinburgh in 2007 doing anything but coining the savings in big style. As long as they hold steady. Even if they did jump in today they would have made a hefty saving.

Anyway - welcome to this interesting forum !!

Thanks i find this subject of great interest, i dabble a bit myself in property i just secured a 1 bedroomed flat today for 45k, it had a home report on it valueing it at 92k, it was initially sold for over 100 2 years ago, prices are falling faster than you realise, there are predatory off the market deals being done at a minimum of 25% below valuation all the time.

Forget the ESPC AND EEN they promote the EA point of view, and its in there interest to talk up the market.

As i previously said you are way way to conservative with your percentages, the depreccion has not even started yet we are only at the recession stage.

As for people with RBS Shares they are the real losers in this inpending Deprecion. If you are buying anything in property now unless there is a minimum 50% discount i am not interested.

Look at D.J Alexanders Portfolio, they are being offered off the market now at 50% less than that mug paid for them.

[copper crutch]

I was just being generous for the sake of Hamish.

I think he fails to realise the stats only show those few houses that actually sold. The rest are still up for sale or are being rented out instead. ONCE these finally sell their prices will be added to the figures and this will be reflected in the average prices.

I do my own tracking of sales/asking prices and these have dropped across the board in Edinburgh by at least 10%. Never mind what the few that sell actually go for.

I also think people underestimate that your big family houses are also getting hit big time. I have personal experience of this.

In general I reckon if you have a house to sell in Edinburgh right now ?

Take at least 15% off 2007 prices and then you may have a chance of selling it. Of course there will be the few that get lucky but they are not in large numbers. There are also the new builds like you describe above. These are a whole different ballgame. I expect end prices 75% down on 2007.

This is the reality of Edinburgh and everyone that lives here and keeps an eye on it knows. The EA's know themselves and are even starting to push the 'Realistic pricing' buttons on vendors.

I can't see anyone who STR in Edinburgh in 2007 doing anything but coining the savings in big style. As long as they hold steady. Even if they did jump in today they would have made a hefty saving.

Anyway - welcome to this interesting forum !!

Id be surprised if they dropped to your 75% prediction i actually think we are at the bottom end of the ladder in terms of new build re sales, why i say this is at the last auction i attended in Glasgow there was ( standing room only ) and all the vultures were there, i thought the pilrig one could be bought for 95k, but unfortunatly there were loads of bidders forcing it up to 115k, ( i was very upset it went for such a high price ) Wester harbour the same 100k i thought for a nice 2 bed, but it also was forced up to 125k.

Still a good 60% down on new build sale price, so as much as id like to agree with your 75% price reduction, it wont happen as the vultures with money are stopping them dropping by any more than this, so id say the 60% drop is the bottomed out price.

The sad thing is there are still properties on the ESPC At near 2007 levels, they are being fooled into a false sense of security by the EA, and the Remax mob of conmen who are commision based.

[ccc]

Id be surprised if they dropped to your 75% prediction i actually think we are at the bottom end of the ladder in terms of new build re sales, why i say this is at the last auction i attended in Glasgow there was ( standing room only ) and all the vultures were there, i thought the pilrig one could be bought for 95k, but unfortunatly there were loads of bidders forcing it up to 115k, ( i was very upset it went for such a high price ) Wester harbour the same 100k i thought for a nice 2 bed, but it also was forced up to 125k.

Still a good 60% down on new build sale price, so as much as id like to agree with your 75% price reduction, it wont happen as the vultures with money are stopping them dropping by any more than this, so id say the 60% drop is the bottomed out price.

The sad thing is there are still properties on the ESPC At near 2007 levels, they are being fooled into a false sense of security by the EA, and the Remax mob of conmen who are commision based.

You could be right. However this whole thing has played out exactly the same way in previous bubbles. Those who think they are getting a bargain dive in. A year later they wish they had not. It is said much more money was lost in the years following the 1929 crash than the crash itself - for this very reason.

Have a look at the US crash of today for a prime example. Many 'bargains' of last year are now much lower, and with no sign of a let up in price falls.

Can i ask where your one bedder for 45k is ? If 2 bedders in Grantona re still going for 125k where the ****** is your one

Remember in 2003 one bed flats in Gorgie were about that price. They were not seen as cheap back then and wages have not increased a huge amount. My brother got one for that price around that time and only one other person was interested. Didn't need a huge amount of work either.

Beware of bargains.

IMO - A 2 bedder in one of these wasteland developments in Granton will be a bargain at around 40-50k. Nothing more. That area will be a mess for at least another 5-7 years. Probably much longer.

[ccc]

Anyone see Reporting Scotland tonight ?

Their usual impartial.... .... look at the market up here.

Nationwide figures last month ? Main news story. Focussed on the fact there was a QoQ rise. The fact this was only 0.1% was not even mentioned.

Halifax figures two weeks after ? Not even mentioned. Maybe something to do with the fact their QoQ figures showed a 0.1% rise.

Land Registry figures last week ? Not even mentioned. These figures showed some serious falls across many parts of Scotland, along with the opposite to be fair. Still you would think they would mention the RoS figures.

Lloyds TSB figures ? Main story this morning. Lots of areas showing rises apparently. The fact that Lloyds wouldn't even give the sample size of this was also not mentioned. Who do BBC ask for their opinion ? Yes - you have it right - no less than 4 estate agents.

They did say that this was too soon to start talking about green shoots. Well yes I would agree with that. Seeing as a 10 year boom has only just had about 6 months, officially, of falls so far !!

What was the business presenters outlook on things ? Well she reckoned that with interest rates so low people may decide to pay off their mortgages and buy other places as investments...

Not exactly sure how low interest rates help you simply pay off your mortgage, well for the average person anyway - as the average mortgage debt must be close to 100k ?

Also if they are buying a property as an investment, they will probably have to stump up a 30% deposit.

So yes her views were perfectly reasonable - if you happen to be the sort of person with £150k burning a hole in your back pocket.

I love the denial in Scotland. It is really quite embarresing.

[TTD]

..... The sad thing is there are still properties on the ESPC At near 2007 levels, they are being fooled into a false sense of security by the EA, and the Remax mob of conmen who are commision based.

How do you know their EAs aren't begging them to reduce prices, and it's not the owners that are burying their heads in the sand..... and;

I thought all EAs (Rettie/Savills/Stewart Saunders, and RE/MAX) and solicitor/EAs (ESPC/GSPC etc) WERE commission-based. Or did I miss something?

[Guest An Bearin Bui]

I am new on here but your figures of a 15 percent drop are way off the mark, i will give you an example oof a 2 bedroomed flat at Springfield Street in Edinburgh, sold for 230 new 3 years ago, i seen a home report on one in this development that was valued at 125k, another example a 2 bed at pilrig heights sold new for 220k, sold recently for 115k, the deflation is more extreme in certain areas however on these examples your conservative 15% drop is miles out, more like 40% is the actual figure.

Yikes! Someone who's more bearish than ccc! You'll fit in well here on housepricecrash.co.uk anyway, unlike the eternally returning bulls who keep on coming back to tell us that those of us who were in our 20s at the peak of the most insane property bubble in history lost money by not buying in 2005 despite the ensuing 20% (or 50% from your evidence) drop in house prices...

Edit to say: why are you investing in property though if you're so bearish on it? If you can get a place now at 50% discount, what makes you think prices will rise again any time in the next decade? 1990-1999 was a dead decade for property investors and I would surmise that 2008-2018 will be the same for people investing now. I suppose people argue that property is a hedge against inflation but lots of things are: stocks, bonds, a high-interest savings account, the yellow stuff etc. Beats me why people are still so keen on property after the past decade of madness...

Edited February 17, 2009 by An Bearin Bui

[copper crutch]

You could be right. However this whole thing has played out exactly the same way in previous bubbles. Those who think they are getting a bargain dive in. A year later they wish they had not. It is said much more money was lost in the years following the 1929 crash than the crash itself - for this very reason.

Have a look at the US crash of today for a prime example. Many 'bargains' of last year are now much lower, and with no sign of a let up in price falls.

Can i ask where your one bedder for 45k is ? If 2 bedders in Grantona re still going for 125k where the ****** is your one

Remember in 2003 one bed flats in Gorgie were about that price. They were not seen as cheap back then and wages have not increased a huge amount. My brother got one for that price around that time and only one other person was interested. Didn't need a huge amount of work either.

Beware of bargains.

IMO - A 2 bedder in one of these wasteland developments in Granton will be a bargain at around 40-50k. Nothing more. That area will be a mess for at least another 5-7 years. Probably much longer.

I cant disclose where i bought because when i buy, i already have an investor lined up to buy from me, at around a 30% discount to value, its how i make my living, personally i dont hold any properties.

Since the market started tumbling business has been brisk to say the least.

In terms of Granton Harbour, who knows you could be right nothing is out of the question at the moment, although there are worrying signs that the market is recovering.http://edinburghnews.scotsman.com/topstories/New-hope-for-house-prices.4986703.jp

[copper crutch]

Yikes! Someone who's more bearish than ccc! You'll fit in well here on housepricecrash.co.uk anyway, unlike the eternally returning bulls who keep on coming back to tell us that those of us who were in our 20s at the peak of the most insane property bubble in history lost money by not buying in 2005 despite the ensuing 20% (or 50% from your evidence) drop in house prices...

Edit to say: why are you investing in property though if you're so bearish on it? If you can get a place now at 50% discount, what makes you think prices will rise again any time in the next decade? 1990-1999 was a dead decade for property investors and I would surmise that 2008-2018 will be the same for people investing now. I suppose people argue that property is a hedge against inflation but lots of things are: stocks, bonds, a high-interest savings account, the yellow stuff etc. Beats me why people are still so keen on property after the past decade of madness...

Thanks i think this forum is fantastic, anyway i dont personally hold any property i buy then sell right away, i only buy once i have an investor lined up to buy from me, so the more discount i buy at the more i make.

IMO Anyone who bought in 2005, and got the capital growth up too mid 2007, has now lost all that growth and more, prices realisticly are back to 2002 2003 prices.

The problem is the Estate Agents, are still advising clients to market at 2007 prices, my one concern is the lack of properties actually on the market.

If banks start lending again, and buyers appear from there bunkers, there is a shortage of properties to buy, this could create another bubble.

If you drive around the city it is clear there are hardly any for sale boards, there are more to let signs than for sale signs, this to me is a worrying trend, that could start the conveyor again and see prices shooting up.http://edinburghnews.scotsman.com/topstories/New-hope-for-house-prices.4986703.jp

[copper crutch]

How do you know their EAs aren't begging them to reduce prices, and it's not the owners that are burying their heads in the sand..... and;

I thought all EAs (Rettie/Savills/Stewart Saunders, and RE/MAX) and solicitor/EAs (ESPC/GSPC etc) WERE commission-based. Or did I miss something?

No it is the Estate Agents i know for a fact because i have to deal with them on a daily basis, they dont listen when i tell them the truth of the actual depreciation.

To be fair when they are doing valueations for prospective sellers, it is the one who tells the seller they will get the highest price usually gets the gig.

So in effect the biggest liar gets the job, thats why the Remax property pirates are getting such a big slice of the pie, they are international class liars, they just look up the sales historys in the street look for the one that sold for the highest price and stick 10 percent on the top.

Here lie eth the problem, the customers generally just go along with it.

[dances with sheeple]

No it is the Estate Agents i know for a fact because i have to deal with them on a daily basis, they dont listen when i tell them the truth of the actual depreciation.

To be fair when they are doing valueations for prospective sellers, it is the one who tells the seller they will get the highest price usually gets the gig.

So in effect the biggest liar gets the job, thats why the Remax property pirates are getting such a big slice of the pie, they are international class liars, they just look up the sales historys in the street look for the one that sold for the highest price and stick 10 percent on the top.

Here lie eth the problem, the customers generally just go along with it.

The pie is cold though because they can`t be selling much? how are they staying afloat? did they save their money during the good times?