Prices Fall In Edinburgh

[dances with sheeple]

The Scotsman seems to be pulling out all the stops on their reporting of The Housing Crisis. This morning they've got

Capital house prices tumble for the first time in 37 years

First Edinburgh house-price fall since 1971

Brickbats for Brown's stamp duty masterplan

Here's a couple of good quotes from the second story:

I may actually have to spend some money on a solid copy of the paper as a souvenir.

It really looks like the ESPC have decided to tell it like it is in an effort to get the market moving. I suspect that after this coverage the market really will start moving, but vertically downwards.

Thanks for the links, heartwarming stuff, the VI`s are really on the ropes now. Looks like getting volumes up is the main game in town? Sadly most sheeple will take their cues from these articles and try and sell about six months to a year too late to make anything on their "investment". The Vi saying FTB`s need to think about "commiting" to the market soon is sickening, you might as well commit suicide, I hope most of these heartless money men go bust. So stone built family homes in Edinburgh will hold their value will they? I somehow doubt it. They will always be more sought after than newbuilds and tenements, but I don`t think valuations plucked from Peter Pan`s **** are sustainable.

[dances with sheeple]

I hear you, very frustrating.

I was *this* close to asking the woman on the bus this morning why she'd just ruined her daughter's future. From the sounds of it, the woman was a plonk. It's these plonks that have helped the boom; too stupid and willing to take out easy money. A nice big deposit requirement should stop them from causing too much more harm.

You see this is the danger point. There will soon be aggression aimed at people who have stayed out of the market and will be percieved as "cleaning up" off the back of other peoples misery. Even sheeple who aspired to having ten bTL`s will think we are scum. There is always going to be some big bruiser who`s mum or somebody has lost out on property and a HPC fan mouthing off in public is just the excuse they need. I keep my thoughts to myself for the main part, even with people I know well, this subject is just far too emotive. I may have a wander round Bruntsfield though with a smirk on my face pretending I`m looking at buying up repo`s or something, that would be funny.

[guitarman001]

That's why I tend not to say too much more on it now. Best to bask in your glory in silence and let them wonder how you could afford the house you'll get in a couple of years' time seeing what we went through now

[Guest An Bearin Bui]

Thanks for the links, heartwarming stuff, the VI`s are really on the ropes now. Looks like getting volumes up is the main game in town? Sadly most sheeple will take their cues from these articles and try and sell about six months to a year too late to make anything on their "investment". The Vi saying FTB`s need to think about "commiting" to the market soon is sickening, you might as well commit suicide, I hope most of these heartless money men go bust. So stone built family homes in Edinburgh will hold their value will they? I somehow doubt it. They will always be more sought after than newbuilds and tenements, but I don`t think valuations plucked from Peter Pan`s **** are sustainable.

Yes, I spotted that too. The moral decreptitude of these people who make their living from property knows no bounds. They are on a par with the Enron executives who were selling up while telling pension funds to continue buying in. Just scum. The advice given out is purely aimed at lining their own pockets. Property investment 'advisors' should be subject to exactly the same rules as anyone giving any other type of investment advice and they should have to disclose their own property interests when giving advice.

There are two example I'll always remember from this boom: 1. I remember listerning to the Radio Scotland morning show about 18 months ago at the peak of the boom in Edinburgh. They had a 'financial advisor' on whose 'advice' was that first-time buyers should borrow as much as they can, interest-only if possible, to get a toe on the ladder. He literally said that they should get on now before it was too late because prices only ever go up so you can re-mortgage later. 2.) A couple I know who are both in insecure jobs and just had their first baby - they owned a 1-bed flat bought in 2005 and were looking to trade up to get an extra bedroom. They were 'advised' by a mortgage-broker to keep the first place and let it out ('get someone else to pay your mortgage') and then buy the new place anyway. We were out at dinner and being regaled with this tale of their financial savvy and how there was a shortfall between the mortgage and rent on the first place but it's OK because 'someone else is paying the mortgage' ( ). This was so obviously an example to me of irresponsible advice where the mortgage broker was pushing two mortgage deals on them (1 BTL, 1 owner-occupier) for his own bonus rather than just let them pursue their original idea of selling up to move.

I really hope all these financial 'advisors' and mortgage brokers are hoist with their own petard when the crash comes and lose their jobs and are repossessed of everything they've ever owned. :angry:

[dances with sheeple]

Yes, I spotted that too. The moral decreptitude of these people who make their living from property knows no bounds. They are on a par with the Enron executives who were selling up while telling pension funds to continue buying in. Just scum. The advice given out is purely aimed at lining their own pockets. Property investment 'advisors' should be subject to exactly the same rules as anyone giving any other type of investment advice and they should have to disclose their own property interests when giving advice.

There are two example I'll always remember from this boom: 1. I remember listerning to the Radio Scotland morning show about 18 months ago at the peak of the boom in Edinburgh. They had a 'financial advisor' on whose 'advice' was that first-time buyers should borrow as much as they can, interest-only if possible, to get a toe on the ladder. He literally said that they should get on now before it was too late because prices only ever go up so you can re-mortgage later. 2.) A couple I know who are both in insecure jobs and just had their first baby - they owned a 1-bed flat bought in 2005 and were looking to trade up to get an extra bedroom. They were 'advised' by a mortgage-broker to keep the first place and let it out ('get someone else to pay your mortgage') and then buy the new place anyway. We were out at dinner and being regaled with this tale of their financial savvy and how there was a shortfall between the mortgage and rent on the first place but it's OK because 'someone else is paying the mortgage' ( ). This was so obviously an example to me of irresponsible advice where the mortgage broker was pushing two mortgage deals on them (1 BTL, 1 owner-occupier) for his own bonus rather than just let them pursue their original idea of selling up to move.

I really hope all these financial 'advisors' and mortgage brokers are hoist with their own petard when the crash comes and lose their jobs and are repossessed of everything they've ever owned. :angry:

if the Edinburgh market collapses big time, and I can`t see anything that could stop it now?, many punters are going to try some kind of legal reddress against people who have advised them? going from "houses only go up" to "you are financially ruined for life" is too big a turnaround for many people, I think they will be galvanised to action, hopefully it will spread up and down the country, scaring the shit out of EA`s, surveyors, and other "advisors" for decades to come. This one is too big to just swallow the NE and purse your lips for a few years?

[Shiney]

if the Edinburgh market collapses big time, and I can`t see anything that could stop it now?, many punters are going to try some kind of legal reddress against people who have advised them? going from "houses only go up" to "you are financially ruined for life" is too big a turnaround for many people, I think they will be galvanised to action, hopefully it will spread up and down the country, scaring the shit out of EA`s, surveyors, and other "advisors" for decades to come. This one is too big to just swallow the NE and purse your lips for a few years?

Trouble is the 'advisors' will say they were just stating the truth. House prices have only ever gone up. Last week I was speaking to a recently retired Edinburgh solicitor who informed me that there's too much money around and there has never been a property market crash in Edinburgh. It was the truth.....

.......until now

[benj]

Last week I was speaking to a recently retired Edinburgh solicitor who informed me that there's too much money around and there has never been a property market crash in Edinburgh.

I assume he meant "there's too much money around for the market to crash", rather than "there (was) too much money around which caused a huge speculative bubble".

This "37 years without a fall" statistic is really quite alarming. It means it's not just the cheap-suited hair-gelled twenty-something EAs who have no experience of a falling property market - it's ALL of them. At least, all of them who are under the age of 50, which I'd say is the vast majority.

That's assuming that they spent their whole careers working in Edinburgh, of course... but to be honest, that's what seems to happen around here. There are people living in Edinburgh who don't know where Haddington is.

[Bardon]

Trouble is the 'advisors' will say they were just stating the truth. House prices have only ever gone up. Last week I was speaking to a recently retired Edinburgh solicitor who informed me that there's too much money around and there has never been a property market crash in Edinburgh. It was the truth.....

Which one is the solicitor?

Three men are walking along the train tracks. As they walk they discover that the bridge has collapsed.

The first man says: “It is not our business. I don’t want to get involved.”

The second and third men decide that they need to inform the appropriate authorities.

They leave the first man to his walk and run up the train tracks to the Station. They see that a train is being boarded and readied for departure. Quickly, they find the Station Master and tell him what they discovered.

The Station Master has a quick conference with some of his employees and turns back to the two men and says: “Thank you for the information we will take it into consideration.”

“What?” says the second man angrily “you need to do something!”

“If I interfere with the trains departure then I would have to give all my passengers their money back,” explains the Station Master.

Some very large employees of the Station Master move towards the second man – their intent is clearly one of intimidation. The second man is frightened away and goes about his own business.

This leaves the third man, who, while intimidated and harried by the Station Masters employees, leaps onto the train platform and tells the passengers to get off the train. He tells them the very real fact that the bridge is down, and that to ride this train could mean their very own destruction.

The Station Master and his employees calm down the situation by explaining that the third man is clearly a foolish man who has no real knowledge of trains and therefore is simply just a scaremonger and nothing more.

Now, the question, which I pose to all of you, not just the solicitior, Which man are you? 1st, 2nd or 3rd.

[Jadoube]

That's assuming that they spent their whole careers working in Edinburgh, of course... but to be honest, that's what seems to happen around here. There are people living in Edinburgh who don't know where Haddington is.

I was born in Edinburgh and would need to check the map to find my way to Haddington. Mind you its a long lifetime since I was last there.

[Bardon]

Transcript from the Enquiry into the Train Crash at the collapsed bridge, just prior to entry into the City of Edinburgh

Judge: “Madame Foreman do you have a verdict?”

Jury Foreman: “We do your Honor”

Judge: “Proceed”

Jury Foreman: “In the case of the 1st Man: we find him not guilty of any criminal act, moral perhaps, but that is beyond the purview of this court.”

Judge: “Hmmm… continue.”

Jury Foreman: “In the case of the 2nd Man: we find him not guilty of any criminal act. The second man can, perhaps, look at himself in the mirror without revulsion.”

Judge: “Thank you, next”

Jury Foreman: “In the case of the 3rd Man: we find him not guilty of any criminal act. The third man acted with bravery and did all he could to save life and limb. He is to be commended for his actions.”

Judge: “I agree wholeheartedly.” The judge nodding approvingly at the 3rd man seated at the defense table.

Jury Foreman: “In the case of the Station Master: we find him not guilty of any criminal act. The Station Master acted in accordance with company procedures. His duties entailed an on-time departure, a safe and comfortable boarding environment and the safety of his own employees. The Station Masters responsibility to the passengers ended with the boarding procedure.

Judge: “I see….” Raising his eyebrows, “continue”

Jury Foreman: “In the case of the Station Masters Employees: we find them not guilty of any criminal act. The employees acted at the direction of their superior, the Station Master. The impression expressed by the second man that they (the employees) were intimidating him was of entirely of his own making. With consideration to the third man, they did not roughhouse him in any way, and therefore have committed no crime.

Judge: “Thank you... please go on”

Jury Foreman: “In the case of the Ticket Sellers: we find them not guilty of any criminal act. Their business with the passengers and the trains’ departure ended at the conclusion of that initial transaction.

Judge: “Hmmm…” not convinced. “Surely, Madam Foreman, someone must be guilty of something? What about the Fourth Man? The man found at the scene of the wreck by rescue workers. The Fourth Man was digging through the wallets of the dead, removing gold teeth with pliers, pulling wedding bands from the dead and dying fingers of the victims. Surely, he of all people is guilty of some crime?”

Jury Foreman: “No your Honor, In the case of the Fourth Man: we find him not guilty of any criminal act. It appears that the Fourth Man had a prior relationship to the passengers. It was he, the Fourth Man, who loaned the passengers the money to purchase their tickets to ride the train in the first place. The Fourth Man is guilty of no crime because he was simply attempting to salvage what he could from what he was owed -- as is his right under the law.

Judge: “I see…” he said patting his breast pocket, feeling his own ticket safely tucked away there. It gave him a sense of pride and satisfaction that he could not fully explain. Yes, the jury had found correctly – we need the Fourth Man, Hell; he needed the Fourth Man. Without the Fourth Man, who could ever afford the price of a ticket on the next train to Edinburgh?

“Have you found anyone guilty in this disaster?”

Jury Foreman: “Oh, yes your Honor we have: we find the passengers themselves guilty. In a free society the passengers willingly borrowed money for their tickets, purchased their tickets, and then boarded the train. They did so, even though an actual eyewitness (the Third Man) to the collapsed bridge on the track ahead showed up at the Station, prior to boarding the train, and warned them of the danger. The passengers made a choice. Some got off the train but most stayed. The choice was their own and therefore they have only themselves to blame.”

Judge: “Thank you Madam Foreman. Your verdict has been entered into record. I think we are done here.” Yes, he thought, thinking of the riches to be found in Edinburgh, those passengers simply boarded the wrong train – but that won’t happen to me – I’m much to clever for that.

Sound of gavel striking desk

[benj]

Transcript from the Enquiry into the Train Crash at the collapsed bridge, just prior to entry into the City of Edinburgh

Awesome work. I take my hat off to you, sir!

[south_side_sceptic]

I'll share a recent encounter on a night out when one of the people round the table was a Financial Advisor. He helpfully explained to me that there isn't really that much of a fall and its all a question of sentiment. When I pointed out the "rise" figures for Scotland were squewed (sic) by the rise in Aberdeen and the fact its lower values that are disporportionately disapperaing he dismissed it.

He also thankfully explained (me being a layman and clearly unable to grasp how you value things despite being a chartered accountant and working in corporate finance where the very point of our work is helping establish the value of a deal) that a house has 3 prices:

1. The price people will sell at (right now he acknowledged people are selling below previous sale figures as mortgage deals tighten and bills increase)

2. The price people will pay (again tighter lending and the need for bigger deposits reduces this - not really sentiment then?!?!)

3. What a house is actually worth (stop laughing)

I asked him to expand on the last one and got a load of waffle that just because someone sells a flat that would have gone for £200k a year ago for £150k doesn't mean it is not "worth" £200k

[Bardon]

edinburgh may fall,but I have it on good authrority that morningside will never,ever,ever go down.

dont forget to sell your shares in the rail company quick....

[benj]

I'll share a recent encounter on a night out when one of the people round the table was a Financial Advisor.

He also thankfully explained that a house has 3 prices:

How could he fail to mention the possibility of valuing a house by calculating the net present value of the rental income minus the ongoing maintenance investment and the cost of finance?

(I suppose anyone can call themselves a Financial Advisor. Doesn't mean their advice is any good.)

[south_side_sceptic]

How could he fail to mention the possibility of valuing a house by calculating the net present value of the rental income minus the ongoing maintenance investment and the cost of finance?

(I suppose anyone can call themselves a Financial Advisor. Doesn't mean their advice is any good.)

On the plus side he was actually a nice bloke and I do feel a bit bad for that post. Still he was clearly waffling and unable to admit to the fact we're at the start of a fall. Seems a common problem in Scotland...

[dances with sheeple]

On the plus side he was actually a nice bloke and I do feel a bit bad for that post. Still he was clearly waffling and unable to admit to the fact we're at the start of a fall. Seems a common problem in Scotland...

Still, sheeple have probably been going to this guy for advice for years. In his professional life he is a dangerous individual.

[Mancghirl]

Had a drink with a mate of mine who is a lawyer on Sat evening - haven't seen him in months. He normally works crazy hours doing conveyancing but said work had dropped off totally. He said the upside was that he was working 9 to 5 for the first time in his professional life (he has a young family) but it made him very nervous in terms of job security. Said his chums in other legal firms in Edin and the Glesga were all telling the same story. He also advised to be prepared to sit it out and watch the falls, as forced sales were beginning to happen. Told him I was happy to sit tight and save cash.

Its going doon, I tell ya!

[dances with sheeple]

If the media and the ESPC are now talking things down, and I suppose reality forces them to, then that is the crack in the dam.Like it or not most sheeple seem to get their info from the Scotsman (it`s sinking time) and the evening news (half decent bog roll if you are desperate) so there must be many a punter in Edinburgh SHITEIN themselves. The forrests of signs will be going up now. It will be brutal.

[ccc]

If the media and the ESPC are now talking things down, and I suppose reality forces them to, then that is the crack in the dam.Like it or not most sheeple seem to get their info from the Scotsman (it`s sinking time) and the evening news (half decent bog roll if you are desperate) so there must be many a punter in Edinburgh SHITEIN themselves. The forrests of signs will be going up now. It will be brutal.

That is exactly the analogy I was thinking. I don't think people outwith Edinburgh can quite truly understand how deeply entrentched the 'House prices in Edinburgh WILL NEVER go down' mantra was. It was like a blooming religion - across the board. That has now, in one day, been demolished.

Think of everyone you been telling to stay out of the market. Think about how many of them have gone in regardless simply because 'Well yes it may stagnate and we may not make any profit - but prices won't fall they never do here so we won't lose anything'.

That does not exist anymore. Everyone now knows house prices in Edinburgh do fall. Think of all the 'investors' who have seen Edinburgh as the 'safe bet' amongst all this 'gloom'. They now know that Edinburgh is not different afterall. Sales were down over 60% BEFORE this news. I am intrigued to see how low the sales figures can actually go. The 'busy' time has just ended too until next Spring. I can see sales down 80% or something similar. Now that is scary. Well not for us anyway.

Another story from the Evening News today:

'Hagglers' bring down prices for City prices

Have a look at this quote:

"And experts are forecasting that further price deflation of between five and ten per cent will be seen for the next 12-18 months, with the average price expected to dip well below £200,000 before the end of the year"

Saying 'deflation' as they still can't bare to say 'FALL' !!

Anyway they reckon prices will fall 'well' under 200k. You have to remember these guys predictions have been way under reality so far. So what are they predicting by the end of the year ?

Let's take 190k - being very conservative:

Fall from peak Jul 2007: 228k - 190k.

That is a fall of 17% in nominal terms. Over the course of 18 months - based on official inflation figures - that is about 25% real falls !! In Edinburgh !!

******ing hell. Seems all that denial has really just pushed Edinburgh off a cliff in the long run.

We only need this to carry on until the end of 2009 and we could be down to 25% nominal and about 40% real falls even by then…

If this all carries on until 2010-12 as expected then even better.

Happy days. As long as I keep my job !!

Edited September 3, 2008 by ccc

[dances with sheeple]

That is exactly the analogy I was thinking. I don't think people outwith Edinburgh can quite truly understand how deeply entrentched the 'House prices in Edinburgh WILL NEVER go down' mantra was. It was like a blooming religion - across the board. That has now, in one day, been demolished.

Think of everyone you been telling to stay out of the market. Think about how many of them have gone in regardless simply because 'Well yes it may stagnate and we may not make any profit - but prices won't fall they never do here so we won't lose anything'.

That does not exist anymore. Everyone now knows house prices in Edinburgh do fall. Think of all the 'investors' who have seen Edinburgh as the 'safe bet' amongst all this 'gloom'. They now know that Edinburgh is not different afterall. Sales were down over 60% BEFORE this news. I am intrigued to see how low the sales figures can actually go. The 'busy' time has just ended too until next Spring. I can see sales down 80% or something similar. Now that is scary. Well not for us anyway.

Another story from the Evening News today:

'Hagglers' bring down prices for City prices

Have a look at this quote:

"And experts are forecasting that further price deflation of between five and ten per cent will be seen for the next 12-18 months, with the average price expected to dip well below £200,000 before the end of the year"Saying 'deflation' as they still can't bare to say 'FALL' !!

Anyway they reckon prices will fall 'well' under 200k. You have to remember these guys predictions have been way under reality so far. So what are they predicting by the end of the year ?

Let's take 190k - being very conservative:

Fall from peak Jul 2007: 228k - 190k.

That is a fall of 17% in nominal terms. Over the course of 18 months - based on official inflation figures - that is about 25% real falls !! In Edinburgh !!

******ing hell. Seems all that denial has really just pushed Edinburgh off a cliff in the long run.

We only need this to carry on until the end of 2009 and we could be down to 25% nominal and about 40% real falls even by then…

If this all carries on until 2010-12 as expected then even better.

Happy days. As long as I keep my job !!

Slipping that in to get the sheeple rattled. They might as well have said CUT YOUR F*CKING PRICE YOU SHEEPLE F*CKWITS, THESE VOLUMES ARE KILLING MY BUSINESS. This from the cynical cartel who lured many an innocent into the biggest bubble of all time with all their p*sh on the way up. I fear many a person in Edinburgh has built their whole IDENTITY on the price of their hovel. Social services will have their work cut out mopping up all the attempted suicides and depression cases.

Edited September 3, 2008 by dances with sheeple

[ccc]

Slipping that in to get the sheeple rattled. They might as well have said CUT YOUR F*CKING PRICE YOU SHEEPLE F*CKWITS, THESE VOLUMES ARE KILLING MY BUSINESS. This from the cynical cartel who lured many an innocent into the biggest bubble of all time with all their p*sh on the way up. I fear many a person in Edinburgh has built their whole IDENTITY on the price of their hovel. Social services will have their work cut out mopping up all the attempted suicides and depression cases.

Totally agree. Also how many cocktails they drink on a Friday night. What sort of handbag they have. What sort of convertible they drive...

Problem being - take away the real wealth in Edinburgh (and there is a fair bit) and many of the people in Edinburgh who have these things only have them on credit.

Oh well...

[roblpm]

Have to say that the sample was so low (400 houses sold) that the figures are surely meaningless. Will be much more interesting to see if edinburgh/scotland catches up with all the other indexes.

[Mancghirl]

Totally agree. Also how many cocktails they drink on a Friday night. What sort of handbag they have. What sort of convertible they drive...

Problem being - take away the real wealth in Edinburgh (and there is a fair bit) and many of the people in Edinburgh who have these things only have them on credit.

Oh well...

Ain't that the truth. I had the misfortune to get dragged into one of those 'trendy' bars on George St by a mate a few Fridays back. Was not as busy as I had expected but seemed to be populated with office working 20/30 somethings stupid enough to pay £7 for a drink. I can more than afford it, but it held no interest for me. Lots of silly wee lassies showing off their fake tans and Gucci bags to each other and hair gelled boys trying to impress them.

I made my excuses and went for a few G & Ts in the Waverley Bar with some other friends. No piped music, mobile phones, cocktails or office nights out. Free crisps too. That Landlord is a genius.

[geed]

I've just posted on the First Edinburgh Fall story:

The Hootsmon (JPR) is merely following its property advertising paymasters' orders. ESPC have finally realised that playing Wile E. Coyote running in thin air off the top of the cliff does not generate sales and therefore commissions. They therefore have to persuade sellers to drop prices to generate sales.

The most expensive word in finance is different, as in: "It's different in Edinburgh" or "It's different this time."

Perhaps some of the financial illiterates who have been berating CCC for the last year will have the good grace to apologise? Somehow I doubt it.

So it was you was it...

[geed]

Have to say that the sample was so low (400 houses sold) that the figures are surely meaningless. Will be much more interesting to see if edinburgh/scotland catches up with all the other indexes.

Down from 500 the previous month, or 20%. Prices were up 7% or so in July were they not? it does seem a massive fall after a massive rise. All signs of a stable, resilient Edinburgh housing market

It is amazing how fickle broke Real Estate agents can be!