Edinburgh Facts And Figures

[ccc]

The one-off TV comedy drama New Town satirised this group of people beautifully. Try to find it and watch it if you’ve not seen it. It was discussed on this forum many months ago; if the search facility ever worked, I’d dig out the original discussion.

Yep say a few bits of it. Could have been a documentary !

I agree there are plenty of poseurs in Edinburgh. But I have no evidence whether they are splashing their cash within or outwith their means. And neither have you or Geed presented any-even anecdotally.

I don't think you need specific examples to know about these people. You can see it everyday. In the cars people drive, the places they live in ad how much they paid for them. And I personally know a lot of them. And I imagine most people in Edinburgh do too.

[fflump]

Yep say a few bits of it. Could have been a documentary !

I don't think you need specific examples to know about these people. You can see it everyday. In the cars people drive, the places they live in ad how much they paid for them. And I personally know a lot of them. And I imagine most people in Edinburgh do too.

You can see what everyday? people in flash cars and expensive flats? No one it arguing against that. My point was that your assumption that that a large proportion of them are flirting with financial disaster seems to be based on very little.

[ccc]

You can see what everyday? people in flash cars and expensive flats? No one it arguing against that. My point was that your assumption that that a large proportion of them are flirting with financial disaster seems to be based on very little.

It wasn't my assumption - but I do in general agree with it.

It is not based on very little either. As I said I know of lots of people in this situation. The people of Edinburgh have been living hte credit bubble binge just like many others in the UK. It will have it's fair share of those living right on the edge - who appear to be doing just fine and dandy. I don't think we need to provide a list of specific examples to know this ? Do we ?! I know many myself and everyone I speak to about this instantly comes up with examples of many people they know in exactly the same situation.

I will give you the classic example I heard all the time, especially before 2008. Someone who bought a house a few years ago. Someone who was telling everyone how much 'profit' they had made of said house. You know the type - "I made 50k profit on my house in 3 years".

Then you tell them you are going for a weekend away with the lads for the football. The classic reply ? "I would love to but I can't afford it'.

These people's 'wealth' is based on very flimsy foundations. And many are sailing very close to the wind. If you need specific examples then fine. I will not be providing them, I don't think a public forum is a place for that sort of thing. And if you need more general examples ? I am sure any of us can find all number of stories about the people of Scotland, or Edinburgh or whatever in huge debt.

Do you think this situation we talk of is not taking place ?

[fflump]

. If you need specific examples then fine. I will not be providing them, I don't think a public forum is a place for that sort of thing.

ccc-I don't need their name DOB and NI number!

Do you think this situation we talk of is not taking place ?

I certainly don't deny that it exists. However,we are nearly 2 years into a period of low credit availability. You simply cannot buy a spanking new SUV on the never-never these days, nor can you remortgage your house to raise money to do it.

Likewise, silly mortgage multiples are not possible, and rates for high LTV mortgages are punitively high. The truth of the matter is if you see someone buying a £30k car or a £500k house chances are they have a good job and a lot of real cash behind them.

[ccc]

I certainly don't deny that it exists. However,we are nearly 2 years into a period of low credit availability. You simply cannot buy a spanking new SUV on the never-never these days, nor can you remortgage your house to raise money to do it.

Likewise, silly mortgage multiples are not possible, and rates for high LTV mortgages are punitively high. The truth of the matter is if you see someone buying a £30k car or a £500k house chances are they have a good job and a lot of real cash behind them.

Yes would agree - I suppose I am more talking about those who are clinging onto the things they just scrambled to get a few years ago. Lot of them about. I do think reality is starting to bite a little.

Anyway - latest Rental stats below.

Along with a story today in the Scotsman by Citylets themselves.

Rental driven up by FTB

My stats do show volumes dropping, same time as last year with everyone trying to sell - places for sale have risen sharply at the same time. Don't really see any widening of the gap between the normal range of prices though.

So what again this year - the same as the last 3 ? Gets to September. People bring them off the market. Again. Turn to 'Just rent it out instead'. This is 3 years in a row. We must be close to the point where the penny drops.

With all the chat in the media this could just be it.

[geed]

I certainly don't deny that it exists. However,we are nearly 2 years into a period of low credit availability. You simply cannot buy a spanking new SUV on the never-never these days, nor can you remortgage your house to raise money to do it.

Likewise, silly mortgage multiples are not possible, and rates for high LTV mortgages are punitively high. The truth of the matter is if you see someone buying a £30k car or a £500k house chances are they have a good job and a lot of real cash behind them.

So what is your point with respect to the values of Edinburgh house prices?

[fflump]

ccc,

While reality is biting for many, more still as protected by historically low interest rates. These show no sign of rising any time soon due to tightening of government spending and weak recovery. This period of low IRs will enable a lot of folk to get out of jail, so to speak.

If I had to bet on Edinburgh house prices over the next 3 years it would be growth of 0 to -5% over the 3 yrs. Couple that with annual inflation of 3-4% and you are looking at up to 15% fall in real terms. That may even be repeated over the following 3 years (i.e. a real term drop of 30%). If you can keep our job (and many won't) then 3-4 yrs time may be the time to buy.

[geed]

Irrational to want to have a nice car and a house in a nice area for one's family? I don't think so. Is it not possible that they are just richer/in a better paid job than you? You have no evidence that the targets of your ire are being financially imprudent.

"Irrational to want to have a nice car and a house in a nice area for one's family?" If it is beyond your financial means, then of course it is.

"Is it not possible that they are just richer/in a better paid job than you?" Having a well paid job or plenty of money in the bank does not change my fundamental stance on the perception of financial prudence. I have money in the bank, I run my own business and I would be percieved by many to be in a stable financial situation - not richer and not in a better paid job as you put it but financially stable and living within my means. This point is crucial as it is not about how much cash you have now it is about servicing your debts and paying your way for the next 5 years until things turn around hopefully for the better. Can you guarantee your income over this period? Have you factored inevitable interest rate rises over the next 5 years? etc..

I have a reasonable understanding of what has gone on over the last 10 years in this country like many of us have who frequent these boards. It was unsustainable and the vast majority of the British public were absolutely unaware of what was going on and the potential pitfalls of a never ending stream of cheap credit. I have no sympathy for these people. When it comes to your finances, YOU are responsible and it is up to you to ensure that you are making secure and sustainable choices for you and your family. Snapping up cheap credit with no thought to the future was irresponsible. I did not do this, I have no debts, a cheap but reliable car, I rent, my clothes are probably a little scruffy (I should spend a bit more on myself!), we have stopped eating out, we have been on a 2 week holiday already this year (paid for and not a credit card in sight), I have savings,/investments. How rich I am or how much money I earn is only slightly relavent, it is how I manage my finances that is key. No one owns my @rse!

The prospects of losing ones job is high at present (very few jobs are safe), the prospect of house price falls is high, the prospect of this recession dragging on for years is very very real. This is why the exuberance I see in folk purchasing houses at these prices, and taking out HP contracts on shiny new BMW's in this climate is plain irrational no matter what your job or salary. Many of my generation have never experienced a recession, have never had to tough it out and therefore have never had to go without there impressive pads, plasmas and Porsches.

I think I have made my point, and I thing ccc gets it!

Edited July 20, 2010 by geed

[dances with sheeple]

"Irrational to want to have a nice car and a house in a nice area for one's family?" If it is beyond your financial means, then of course it is.

"Is it not possible that they are just richer/in a better paid job than you?" Having a well paid job or plenty of money in the bank does not change my fundamental stance on the perception of financial prudence. I have money in the bank, I run my own business and I would be percieved by many to be in a stable financial situation - not richer and not in a better paid job as you put it but financially stable and living within my means. This point is crucial as it is not about how much cash you have now it is about servicing your debts and paying your way for the next 5 years until things turn around hopefully for the better. Can you guarantee your income over this period? Have you factored inevitable interest rate rises over the next 5 years? etc..

I have a reasonable understanding of what has gone on over the last 10 years in this country like many of us have who frequent these boards. It was unsustainable and the vast majority of the British public were absolutely unaware of what was going on and the potential pitfalls of a never ending stream of cheap credit. I have no sympathy for these people. When it comes to your finances, YOU are responsible and it is up to you to ensure that you are making secure and sustainable choices for you and your family. Snapping up cheap credit with no thought to the future was irresponsible. I did not do this, I have no debts, a cheap but reliable car, I rent, my clothes are probably a little scruffy (I should spend a bit more on myself!), we have stopped eating out, we have been on a 2 week holiday already this year (paid for and not a credit card in sight), I have savings,/investments. How rich I am or how much money I earn is only slightly relavent, it is how I manage my finances that is key. No one owns my @rse!

The prospects of losing ones job is high at present (very few jobs are safe), the prospect of house price falls is high, the prospect of this recession dragging on for years is very very real. This is why the exuberance I see in folk purchasing houses at these prices, and taking out HP contracts on shiny new BMW's in this climate is plain irrational no matter what your job or salary. Many of my generation have never experienced a recession, have never had to tough it out and therefore have never had to go without there impressive pads, plasmas and Porsches.

I think I have made my point, and I thing ccc gets it!

So do I, and many others I`m sure. Excellent post on common sense, a sense which is lacking in many punters in Edinburgh and throughout the UK. We will soon see what happens when the tide goes out.

[noodle doodle]

The prospects of losing ones job is high at present (very few jobs are safe), the prospect of house price falls is high, the prospect of this recession dragging on for years is very very real. This is why the exuberance I see in folk purchasing houses at these prices, and taking out HP contracts on shiny new BMW's in this climate is plain irrational no matter what your job or salary. Many of my generation have never experienced a recession, have never had to tough it out and therefore have never had to go without there impressive pads, plasmas and Porsches.

I think I have made my point, and I thing ccc gets it!

It's weird that you oppose buying houses and would rather rent, but slate people for effectively 'renting' their cars on HP rather than buying them outright. Given that cars drop in value from the moment you sit in the drivers seat it would seem the financially prudent option. A lot of people i know do this, when the option to purchase arises they just go "nay, it's a year old and shagged out, I'll rent another new car thanks", and if their finances change they just rent a sh*tter car.

[ccc]

It's weird that you oppose buying houses and would rather rent, but slate people for effectively 'renting' their cars on HP rather than buying them outright. Given that cars drop in value from the moment you sit in the drivers seat it would seem the financially prudent option. A lot of people i know do this, when the option to purchase arises they just go "nay, it's a year old and shagged out, I'll rent another new car thanks", and if their finances change they just rent a sh*tter car.

HP - The 'purchase' part gives a clue as to what is involved...

http://www.buyacar.co.uk/buy_a_car_help/car_finance_and_personal_loans/article_hire_purchase_loans_car_finance_2688.jhtml

I think you are talking abot getting a car on a lease ? Very different to HP unless I am mistaken.

HP on a car is borrowing money, plus interest, to purchase it over a period of time. Leasing is essentially hiring it. Although many now do have the option of buying after a certain period.

[ccc]

It's weird that you oppose buying houses and would rather rent

You think Geed opposes buying houses and would rather rent ? I am sure he will return to confirm this - but I imagine Geed, like most people, think buying houses is perfectly reasonable if they are at a perfectly reasonable price.

If a Ford Fiesta was going to cost you 30k would you by it ? That is essentially what people were being asked to do with a Gorgie one bed flat at 130k.

[noodle doodle]

HP - The 'purchase' part gives a clue as to what is involved...

http://www.buyacar.co.uk/buy_a_car_help/car_finance_and_personal_loans/article_hire_purchase_loans_car_finance_2688.jhtml

I think you are talking abot getting a car on a lease ? Very different to HP unless I am mistaken.

HP on a car is borrowing money, plus interest, to purchase it over a period of time. Leasing is essentially hiring it. Although many now do have the option of buying after a certain period.

ah, my bad, leasing is what my friends do then.

I get the 27 bus...

[geed]

So do I, and many others I`m sure. Excellent post on common sense, a sense which is lacking in many punters in Edinburgh and throughout the UK. We will soon see what happens when the tide goes out.

"So do I, and many others I`m sure".....Lets hope so

[geed]

It's weird that you oppose buying houses and would rather rent, but slate people for effectively 'renting' their cars on HP rather than buying them outright. Given that cars drop in value from the moment you sit in the drivers seat it would seem the financially prudent option. A lot of people i know do this, when the option to purchase arises they just go "nay, it's a year old and shagged out, I'll rent another new car thanks", and if their finances change they just rent a sh*tter car.

Hi Noodle...I think ccc has explained my position and used a nice analogy. To confirm, I want to buy a house!

Also my advice if you want to be "financially prudent" when purchasing/leasing a car is to stay well clear of shiny new car showrooms and buy yourself something a few years old preferably with a manufacturers warranty on it.

The disclosure of the fact that your freinds prefer to have brand new cars every year just adds weight to my previous post. A brand new car every year......blo0dy hell we have a lot to learn!

Edited July 20, 2010 by geed

[ccc]

ah, my bad, leasing is what my friends do then.

I get the 27 bus...

Well I bike it so I am no expert on these things either.

I do agree on HP for cars. Mental. At least borrowing money for houses there is a chance they will go up in 'value' the long term - forgetting about the shorter term.

Then again, do the same with a car and keep it in pristine condition - could be a classic in 50 years.

[fflump]

"Irrational to want to have a nice car and a house in a nice area for one's family?" If it is beyond your financial means, then of course it is.

"Is it not possible that they are just richer/in a better paid job than you?" Having a well paid job or plenty of money in the bank does not change my fundamental stance on the perception of financial prudence. I have money in the bank, I run my own business and I would be percieved by many to be in a stable financial situation - not richer and not in a better paid job as you put it but financially stable and living within my means. This point is crucial as it is not about how much cash you have now it is about servicing your debts and paying your way for the next 5 years until things turn around hopefully for the better. Can you guarantee your income over this period? Have you factored inevitable interest rate rises over the next 5 years? etc..

I have a reasonable understanding of what has gone on over the last 10 years in this country like many of us have who frequent these boards. It was unsustainable and the vast majority of the British public were absolutely unaware of what was going on and the potential pitfalls of a never ending stream of cheap credit. I have no sympathy for these people. When it comes to your finances, YOU are responsible and it is up to you to ensure that you are making secure and sustainable choices for you and your family. Snapping up cheap credit with no thought to the future was irresponsible. I did not do this, I have no debts, a cheap but reliable car, I rent, my clothes are probably a little scruffy (I should spend a bit more on myself!), we have stopped eating out, we have been on a 2 week holiday already this year (paid for and not a credit card in sight), I have savings,/investments. How rich I am or how much money I earn is only slightly relavent, it is how I manage my finances that is key. No one owns my @rse!

The prospects of losing ones job is high at present (very few jobs are safe), the prospect of house price falls is high, the prospect of this recession dragging on for years is very very real. This is why the exuberance I see in folk purchasing houses at these prices, and taking out HP contracts on shiny new BMW's in this climate is plain irrational no matter what your job or salary. Many of my generation have never experienced a recession, have never had to tough it out and therefore have never had to go without there impressive pads, plasmas and Porsches.

I think I have made my point, and I thing ccc gets it!

OK so you live within your means, as I am sure is everyone who posts in a place like this. Life is all about balance-expenditure vs. saving, risk vs. reward, flexibility of renting vs. stability of owning etc etc. We all make a call as to what is the right balance. The problem with some posters on HPC (not necessesarily anyone here) is that they are waiting for a level of HPC that will never happen. If you place a value on property that is lower than the majority then you will never own as there will always be someone willing to pay more.

A drawn out recession will be painful but paradoxically will mean that a sharp drop in nominal house prices is less likely becuase there won't be a spike in interest rates any time soon. There is more likely to be a further drift down in real prices over the next few years IMO.

[ccc]

OK so you live within your means, as I am sure is everyone who posts in a place like this. Life is all about balance-expenditure vs. saving, risk vs. reward, flexibility of renting vs. stability of owning etc etc. We all make a call as to what is the right balance. The problem with some posters on HPC (not necessesarily anyone here) is that they are waiting for a level of HPC that will never happen. If you place a value on property that is lower than the majority then you will never own as there will always be someone willing to pay more.

A drawn out recession will be painful but paradoxically will mean that a sharp drop in nominal house prices is less likely becuase there won't be a spike in interest rates any time soon. There is more likely to be a further drift down in real prices over the next few years IMO.

That may be true. However that is exactly what happened on the way up. No reason why it can't also happen on the way down. Doesn't matter if someone thinks 60k is good value for a one bed Gorgie flat.

If they have watched it slide down year after year with no sign of it stopping ? For the masses it doesn't matter if it is 'good value' or not. The general public have no idea of what constitutes good value or not. They will see it falling and be scared of jumping in. Just like people were scared of missing out on the way up.

I don't think prices will fall 50% from here. However it would not totally shock me. Another 30% or so is required for long term fair value IMO. What happens after ? Who knows.

[dances with sheeple]

OK so you live within your means, as I am sure is everyone who posts in a place like this. Life is all about balance-expenditure vs. saving, risk vs. reward, flexibility of renting vs. stability of owning etc etc. We all make a call as to what is the right balance. The problem with some posters on HPC (not necessesarily anyone here) is that they are waiting for a level of HPC that will never happen. If you place a value on property that is lower than the majority then you will never own as there will always be someone willing to pay more.

A drawn out recession will be painful but paradoxically will mean that a sharp drop in nominal house prices is less likely becuase there won't be a spike in interest rates any time soon. There is more likely to be a further drift down in real prices over the next few years IMO.

The bit in bold relies on a shortage of property and an abundance of spending power, neither exists at the moment.

We had nearly 20% drops and no recovery in volumes without rate hikes, house prices never recovered, the statistical pool just got smaller. The massive sea change for the majority in a city like Edinburgh is that you can`t just put anything on the market and get offers over and sealed bids any more, in fact it is very very hard to shift property at anything like prices people think they are worth. Long way down from here IMO, not necessarily slowly.

[fflump]

That may be true. However that is exactly what happened on the way up. No reason why it can't also happen on the way down. Doesn't matter if someone thinks 60k is good value for a one bed Gorgie flat.

If they have watched it slide down year after year with no sign of it stopping ? For the masses it doesn't matter if it is 'good value' or not. The general public have no idea of what constitutes good value or not. They will see it falling and be scared of jumping in. Just like people were scared of missing out on the way up.

I don't think prices will fall 50% from here. However it would not totally shock me. Another 30% or so is required for long term fair value IMO. What happens after ? Who knows.

You are right that sentiment and momentum can play a big part in any asset price. Other factors are important too though-in places like Gorgie there will be renewed support for prices from the BTL sector once the numbers stack up. If no one wants to buy then the rental market will be very strong.

As for 30% drop in real prices offering fair value-I agree to some extent. However the prevailing interest rate environment is equally important in dictating value and affordability.

[ccc]

in places like Gorgie there will be renewed support for prices from the BTL sector once the numbers stack up. If no one wants to buy then the rental market will be very strong.

You see I have heard this from numerous people. However the facts do not back it up. In 2003 the rental yield for Gorgie properties was probably double what it is today. My brother got a one bedder in decent nick for 45k. There was one other person bidding for it. That was it. No hoards of BTL'ers waiting in the wings.

BTL'ers will be just as wary of buying something dropping in price as anybody else. Real landlords will not. However they are few and far between. And even back in 2003, when all the signs were pretty much perfect for the 'expert' landlord' very few were interested.

Time will tell. However I have heard all the theories before and they have failed before. Not to say they will again but history has a habit of repeating on itself.

[Pole]

Edinburgh must be the most overpriced place in Europe. Don't get me wrong I really like it, but the quality of housing is very poor (compared to other similar cities in Europe), the weather is often dreadful and the place is not as exclusive as you may think - very dirty, appaling quality of road surfaces, no parking space (even in good areas), etc.

Most of those old 'pricey' tenements were built for relatively poor manual workers 100 years ago. They stink, have no cellars, no balconies, very primitive glazing and staircases are usually very grim. Then there's mice and rats infestations - they're all over the place.

And still, it's not a bad city to live - there's lots of good people there and some great institutions, but houses offer extremely poor value for money. I would feel humiliated a bit if I had to pay for living in one of those stinking shoeboxes for £100k.

But I guess I wasn't raised here so I haven't had a chance to develop that snobish approach to postcodes and areas. Some of the locals care more about postcodes than the actual quality and convenience of the house or area.

[Scunnered]

This is what we are up against, the Edinburgh yuppies where the term "financial restraint" brings on a sudden speech impediments, temporary stuttering and severe dyslexia.

This may be of some relevance. Scotsman: Bankruptcies on the rise as more affluent feel the pinch.

THE number of Scots being made bankrupt has jumped again, according to figures published yesterday suggesting affluent Scots are increasingly mired in serious debts.

There was a 4 per cent rise in the number of Scots going bust in the three months to the end of June, according to the Accountant in Bankruptcy (AIB).

...

However, the figures suggest a continued shift in the profile of the average debtor in Scotland, with homeowners and those in employment accounting for a growing proportion of insolvencies.

...

[fflump]

Most of those old 'pricey' tenements were built for relatively poor manual workers 100 years ago. They stink, have no cellars, no balconies, very primitive glazing and staircases are usually very grim. Then there's mice and rats infestations - they're all over the place.

And still, it's not a bad city to live - there's lots of good people there and some great institutions, but houses offer extremely poor value for money. I would feel humiliated a bit if I had to pay for living in one of those stinking shoeboxes for £100k.

Not completely sure about the initial inhabitants in my pretty typical (rented) tenement flat in Bruntsfield, but with elaborate cornicing, marble mantel piece and maid's bell's connecting to the kitchen, I very much doubt the intended market was poor manual workers. They would be crammed into the old town back then.

As for being a stinking shoe-box, I can't agree. I lived for many years in cambridge where the equivalent £250-£300k property is a 700 square foot 2-up 2-down victorian terraced house initially built for railways workers. Compared to these my flat is palatial both in floor space, period features and ceiling height.

[espc]

Hiye ESPC.

Any idea when the monthly figures for June are coming out?

Almost a week late now.

http://www.espc.com/June-2010.html