Is Scottish Property Now The Most Overvalued In The Uk?

[ccc]

Very interesting. Theres been a few posts lately trying to write off the Scottish performance as a time delay. Glad we can finally put that myth to rest.

Scotland out performed the rest of the UK in the last 2 crashes, and will most likely continue to outperform in this one as well.

The idea that there is some kind of time delay that kicks in at the border is frankly ridiculous, it's all part of the UK economy.

See post #25.

The reason for the time delay is the ridiculous denial that goes on up here. The English and Northern Irish seem far more able to accept reality. Up here we seem convinced by the 'Scotland is different' nonsense.

That is the only myth around here.

BTW - your logic above is flawed in the extreme. On one hand you say we are all part of the same economy so a time lag is 'ridiculous'. However at the same time you also think that Scotland will 'outperform' the UK as a whole.

Are we all part of the UK economy or not ? Because if we are then by your own logic we will be just as hard hit as those down South. You can't have your cake and eat it.

You completely contradict yourself.

[Deleriad]

Nationwide Q2 2008 report:

Nationwide Q2

Only Scotland avoids annual house price declines

Annual percentage change for UK = -4.0%

Annual percentage change for Scotland = +0.6%

Nationwide Q3 report:

Nationwide Q3

House prices are lower than a year earlier in all 13 UK regions

Annual percentage change for UK = -10.3%

Annual percentage change for Scotland = -7.1%

-----------------------------------------------------

Scottish prices started falling a quarter later than the UK as a whole. We are not talking about peaks here. We are talking about when the recorded falls commenced.

Seriously have I missed something here....

OK, I see where the confusion lies: Scotland started registering *annual* price falls a quarter later than the rest of the UK because it had grown more quickly in the previous months therefore needed to fall further.

It started registering *quarterly* price falls about the same time. However, it's quarterly price falls over the last 6 quarters have been, lower or equal to the UK as whole.

Hope that helps.

[ccc]

OK, I see where the confusion lies: Scotland started registering *annual* price falls a quarter later than the rest of the UK because it had grown more quickly in the previous months therefore needed to fall further.

It started registering *quarterly* price falls about the same time. However, it's quarterly price falls over the last 6 quarters have been, lower or equal to the UK as whole.

Hope that helps.

I do think it is an important point though. The big rises in England were up to 2005/06 really. From then until 2007 Scotland & NI were the markets that were still shooting ahead. Remember all those stories about Ardrossen and Irvine having the highest rises in the whole of the UK ?

From personal knowledge a one bedder in Gorgie went from 85k to 125k from 2006 to 2007 alone !!

The Scottish market had its final boost a good bit later than the UK as a whole did. I therefore think we are behind the curve when it comes to falls.

Q1 2008 we still had a quarterly YOY increase of over 6%.

I fully expect our YOY figures to be overtaking, or at least level with the UK as a whole, by Q2 2009.

Time will tell.

[HAMISH_MCTAVISH]

See post #25.

The reason for the time delay is the ridiculous denial that goes on up here. The English and Northern Irish seem far more able to accept reality. Up here we seem convinced by the 'Scotland is different' nonsense.

That is the only myth around here.

BTW - your logic above is flawed in the extreme. On one hand you say we are all part of the same economy so a time lag is 'ridiculous'. However at the same time you also think that Scotland will 'outperform' the UK as a whole.

Are we all part of the UK economy or not ? Because if we are then by your own logic we will be just as hard hit as those down South. You can't have your cake and eat it.

You completely contradict yourself.

Oh good grief.

I'm going to say this one more time, really slowly, because apparently you have a hard time understanding.

Scotland.....

Didn't.....

Have....

Price rises.....

as big.....

as England or Northern Ireland.....

on Average........

Do you get it yet? Is that simple enough for you to understand?

THE AVERAGE HOUSE PRICE IN SCOTLAND AS A WHOLE, DID NOT REACH AS HIGH A MULTIPLE TO AVERAGE EARNINGS AS THE AVERAGE HOUSE PRICE IN ENGLAND OR N.I.

The fact that prices in any small area you may look at are ridiculously high, does not in any way impact the fact that as a national scottish average, prices remained more affordable than in England.

If it's the same economy, but prices are already more affordable, then they have no reason to fall as far, or as fast. Honestly, a two year old could understand this, I don't see why you have such a hard time with it.

[pyracantha]

Oh good grief.

I'm going to say this one more time, really slowly, because apparently you have a hard time understanding.

Scotland.....

Didn't.....

Have....

Price rises.....

as big.....

as England or Northern Ireland.....

on Average........

I think I read somewhere that Scotland rose by about 145% over 10 years and England by about 191% for the same time span. I am not sure how average earnings for Scotland compare with England - anyone? Assuming they aren't too dissimilar then yes it's correct to say homes in Scotland have been more affordable.

I am not entirely sure, for at least the forseable future, people will be looking to borrow up to a 3.5/4.5/XX multiplier to determine what house they go for and what offers are made/accepted. I get the impression reading across this site that something like a 30% reduction from peak bubble price is what people are looking to buy at and few buyers will want to go up to their lending limit because of a general distrust/fear of how this is going to all pan out.

Perhaps the comment we will be hit as hard as the south is in as much as the % reduction from peak value. Clearly in absolute values this will be less than in England. So Scotland and England prices go up and down, it's just that the Scottish peaks and troughs are smaller.

[HAMISH_MCTAVISH]

So Scotland and England prices go up and down, it's just that the Scottish peaks and troughs are smaller.

Absolutely correct.

Also to answer your other point about confidence and multiples, over 25% of workers in Scotland are employed by the State, and therefore have far higher job security than with most private sector employers. This is a far higher percentage than England, and whilst it raises questions about the long term viability of scotland as an independant economy, it works very well as a buffer to unemployment and confidence loss in the present situation.

[Democorruptcy]

Scottish prices have been rising faster than England since mid 2003 therefore they have further to fall.

[ccc]

THE AVERAGE HOUSE PRICE IN SCOTLAND AS A WHOLE, DID NOT REACH AS HIGH A MULTIPLE TO AVERAGE EARNINGS AS THE AVERAGE HOUSE PRICE IN ENGLAND OR N.I

I get it. I understand this is relevant because we are discussing house prices 'as a whole'.

Please tell me though - how many people do you know that have ever bought a house in 'Scotland as a whole' ?

I will tell you the answer - ZERO.

People buy houses in different places. That is why news articles trying to compare 'Scotland as whole' to London are ridiculous.

So your logic:

Places with higher peaks will have bigger falls, and vice versa. I totally agree.

SO BY YOUR OWN LOGIC Edinburgh, Glasgow, Aberdeen, Perthshire and much of Ayrshire will be some of the hardest hit areas in the entire UK. Whereas places like West Lothian and Fife will be some of the least affected.

Please agree with the above point in bold or stop wasting our time. Because you will be arguing with yourself.

Thanks

[geneer]

Oh good grief.

I'm going to say this one more time, really slowly, because apparently you have a hard time understanding.

Scotland.....

Didn't.....

Have....

Price rises.....

as big.....

as England or Northern Ireland.....

on Average........

Do you get it yet? Is that simple enough for you to understand?

THE AVERAGE HOUSE PRICE IN SCOTLAND AS A WHOLE, DID NOT REACH AS HIGH A MULTIPLE TO AVERAGE EARNINGS AS THE AVERAGE HOUSE PRICE IN ENGLAND OR N.I.

The fact that prices in any small area you may look at are ridiculously high, does not in any way impact the fact that as a national scottish average, prices remained more affordable than in England.

If it's the same economy, but prices are already more affordable, then they have no reason to fall as far, or as fast. Honestly, a two year old could understand this, I don't see why you have such a hard time with it.

You found HPC in dec 08.

Yeah, you'll be the expert mate.

Jesus, it took you nearly year to decide to be in denial.

[HAMISH_MCTAVISH]

You found HPC in dec 08.

Yeah, you'll be the expert mate.

Jesus, it took you nearly year to decide to be in denial.

You found HPC in 2005, and by your own posts had already been moaning about impending doom for quite some time by then.

For reference, had you bought in let's say 2004, and enjoyed the relatively low, and then extremely low, interest rates we are now seeing, your lifetime cost of purchase would almost certainly be much lower than if you buy at the current crashes bottom (predicted to be 2004 prices for Scotland) and then pay the higher interest rates as the economy recovers. And thats before we add in the tens of thousands you'll have wasted on rent in the meantime, and the tens of thousands in lost opportunity cost for investing after your mortgage is now not paid until 5-7 years later!!!!!!!!!

But of course, you're the expert!!!!!!!

Edited January 8, 2009 by HAMISH_MCTAVISH

[ccc]

You found HPC in 2005, and by your own posts had already been moaning about impending doom for quite some time by then.

For reference, had you bought in let's say 2004, and enjoyed the relatively low, and then extremely low, interest rates we are now seeing, your lifetime cost of purchase would almost certainly be much lower than if you buy at the current crashes bottom (predicted to be 2004 prices for Scotland) and then pay the higher interest rates as the economy recovers. And thats before we add in the tens of thousands you'll have wasted on rent in the meantime, and the tens of thousands in lost opportunity cost for investing after your mortgage is now not paid until 5-7 years later!!!!!!!!!

But of course, you're the expert!!!!!!!

Oh dear...

Anyone renting between 2005 and 2010, IMO, will do anything but 'waste money'.

Rents have already fallen in Edinburgh by over 10%. Of course this wont be in the figures for a while but I am letting you know now. What a guy eh !!

As an example of 'wasted rent' let em give you this personal anecdotal.

Bird I worked with. Sold house in Fife and bought another one early last year. I told her to wait. Would not listen - 'Renting is dead money'. I tried to explain but to no avail.

She recently found out that a similar house in the same small developemnt in Perthshire sold for 100k less about a month ago.

Cost of renting similar house for year = £9000

Extra cost of buying house instead of renting for just one year = £250,000 (Include the expected interest over the next 20 years.)

So for this example of a person I know, renting for one year would have saved her £241,000

Of course I am sure there are plenty of people who are in the opposite situation. However it is all about timing. Anyone renting between 2005 and 2010, who has a good grasp of their finances, will be onto a 6 figure saving.

I plan on saving about 250k myself. Even if I only manage saving 100k that is not exactly bad.

Of course I may be wrong. Looking increasingly unlikely though.

[The McGlashan]

Oh dear...

...

Anyone renting between 2005 and 2010, IMO, will do anything but 'waste money'.

Rents have already fallen in Edinburgh by over 10%. Of course this wont be in the figures for a while but I am letting you know now. What a guy eh !!

As an example of 'wasted rent' let em give you this personal anecdotal.

Bird I worked with. Sold house in Fife and bought another one early last year. I told her to wait. Would not listen - 'Renting is dead money'. I tried to explain but to no avail.

...

I plan on saving about 250k myself. Even if I only manage saving 100k that is not exactly bad.

Of course I may be wrong. Looking increasingly unlikely though.

Excellent post, many thanks.

Perhaps we can start turning the old saw 'renting is dead money' into 'paying interest is dead money'.

It's also worth adding that leasing property confers benefits such as not paying for maintenance, decorating, buildings insurance and the like.

[HAMISH_MCTAVISH]

Oh dear...

Of course I may be wrong. Looking increasingly unlikely though.

WOW.

Not only are you wrong, but clearly you still have a hard time with understanding simple points, and we can also now add basic maths to the mix.

The point was clear, you failed to comprehend it.

But congratulations on learning how to use the big red letters whilst you run off on one of your irrelevant red herring rants.

Maybe one day you can also learn the difference between emotive opinions and statistical facts.

[HAMISH_MCTAVISH]

Excellent post, many thanks.

Perhaps we can start turning the old saw 'renting is dead money' into 'paying interest is dead money'.

It's also worth adding that leasing property confers benefits such as not paying for maintenance, decorating, buildings insurance and the like.

Aye McGlashan, but thats not the point that was being discussed. Without sidetracking this into either of our personal biases over lifetime rent v buy and social considerations thereof, or our unique circumstances........ For almost everyone else the following is true.

If you're going to buy a house anyway, and your choice is simply between buying in 2004 at 2004 prices, and buying in 2010 at 2004 prices, then the only real consideration becomes interest rates over life of loan, and additional costs (rent, lost opportunity cost on investment later in life while paying a mortgage instead of living mortgage free). Maintenance costs are a small factor, but tiny in the bigger scheme of things.

The bigger factor is rates, a fixed number of years of working income in a lifetime, and how many of those years are lived rent/mortgage free thus allowing for alternative investment of those funds.

Edited January 8, 2009 by HAMISH_MCTAVISH

[ccc]

WOW.

Not only are you wrong, but clearly you still have a hard time with understanding simple points, and we can also now add basic maths to the mix.

The point was clear, you failed to comprehend it.

But congratulations on learning how to use the big red letters whilst you run off on one of your irrelevant red herring rants.

Maybe one day you can also learn the difference between emotive opinions and statistical facts.

1) I am wrong ? What about ? I know the person in question. Are you saying I am lying ?

2) What basic point do I fail to understand ? Considering I have been studying the Scottish property market in detail for over two years I would like to know. None of us know everything.

3) Please explain what is wrong with my maths.

4)Irrelevant facts ? Like someone losing 250k by following the sort of advice a wannabe 'expert' like yourself spouts. I would say that is more relevant than anything you have ever said on this site.

5) Are you a 'property developer', estate agent or bought in the last 6 months ? Would be interesting to know. Maybe you are just on the wind up.

Thanks.

[ccc]

Aye McGlashan, but thats not the point that was being discussed. Without sidetracking this into either of our personal biases over lifetime rent v buy and social considerations thereof, or our unique circumstances........ For almost everyone else the following is true.

If you're going to buy a house anyway, and your choice is simply between buying in 2004 at 2004 prices, and buying in 2010 at 2004 prices, then the only real consideration becomes interest rates over life of loan, and additional costs (rent, lost opportunity cost on investment later in life while paying a mortgage instead of living mortgage free). Maintenance costs are a small factor, but tiny in the bigger scheme of things.

The bigger factor is rates, a fixed number of years of working income in a lifetime, and how many of those years are lived rent/mortgage free thus allowing for alternative investment of those funds.

Can you please direct us to this time machine. You really spout such nonsense don't you ?

Sorry to break this to you but most people in this World don't own time machines. That means that buying at 2004 prices (In 2004) is out of the question for most of us.

If you are selling your time machine that would be great. Thanks.

Edited to add brackets

Edited January 8, 2009 by ccc

[ccc]

I get it. I understand this is relevant because we are discussing house prices 'as a whole'.

Please tell me though - how many people do you know that have ever bought a house in 'Scotland as a whole' ?

I will tell you the answer - ZERO.

People buy houses in different places. That is why news articles trying to compare 'Scotland as whole' to London are ridiculous.

So your logic:

Places with higher peaks will have bigger falls, and vice versa. I totally agree.

SO BY YOUR OWN LOGIC Edinburgh, Glasgow, Aberdeen, Perthshire and much of Ayrshire will be some of the hardest hit areas in the entire UK. Whereas places like West Lothian and Fife will be some of the least affected.

Please agree with the above point in bold or stop wasting our time. Because you will be arguing with yourself.

Thanks

This thread is about whether Scottish property is overvalued or not. Answer the above question in bold or stop wasting our time. This is the second time I have asked. If you ignore again then I think we can all have confirmation that you are either a) On the wind up or Delusional.

This site is for reasonable debate and discussion. Not bawzacks on the wind up.

Thanks.

[ccc]

Excellent post, many thanks.

Perhaps we can start turning the old saw 'renting is dead money' into 'paying interest is dead money'.

It's also worth adding that leasing property confers benefits such as not paying for maintenance, decorating, buildings insurance and the like.

Sorry. Apparently I am talking guff. Please disregard my post. Our friend Hamish has gone back in time to alter this. Apparently it never happened. I really should go and tell the bird in question that all this is in her head.

[geneer]

You found HPC in 2005, and by your own posts had already been moaning about impending doom for quite some time by then.

For reference, had you bought in let's say 2004, and enjoyed the relatively low, and then extremely low, interest rates we are now seeing, your lifetime cost of purchase would almost certainly be much lower than if you buy at the current crashes bottom (predicted to be 2004 prices for Scotland) and then pay the higher interest rates as the economy recovers. And thats before we add in the tens of thousands you'll have wasted on rent in the meantime, and the tens of thousands in lost opportunity cost for investing after your mortgage is now not paid until 5-7 years later!!!!!!!!!

But of course, you're the expert!!!!!!!

I found HPC in december 05 you cheeky scamp. 1 and 3/4 years later house prices started tanking.

Anyhow, never mind 2004. Why not 2000? Why not 1998?

Sorry HM, but as stated you're demonstrably well behind the curve mate.

The property bulls were trying their hand at this kind of pointless retrospective point scoring back in december 07.

The same clowns who, back in 07, were calling the soft landing as a done deal.

Appearing in the dying hours of 08 and aggresively declaring scotland immune as UK prices fall quicker and harder than ever before does make you good sport for the troops though.

I'm sure you will give them hours of fun as you unintentionally ressurect the roundly discredited gamut of memes, cross-eyed theories and the amusing excesses of denial which have been gathering dust in the HPC back archive for a while now.

Comedy gold.

Edited January 8, 2009 by geneer

[geneer]

WOW.

Not only are you wrong, but clearly you still have a hard time with understanding simple points, and we can also now add basic maths to the mix.

The point was clear, you failed to comprehend it.

But congratulations on learning how to use the big red letters whilst you run off on one of your irrelevant red herring rants.

Maybe one day you can also learn the difference between emotive opinions and statistical facts.

WOW. Some ones feeling a bit angry.

Its ok H. We understand. You're not the only one who's gobbled down the spoon fed cut n paste estate agent tripe the media's been serving to the sheeple for the few couple of years. No need to feel so bad about it.

Consider us your support group. We'll see you through.

[HAMISH_MCTAVISH]

Can you please direct us to this time machine. You really spout such nonsense don't you ?

Sorry to break this to you but most people in this World don't own time machines. That means that buying at 2004 prices (In 2004) is out of the question for most of us.

If you are selling your time machine that would be great. Thanks.

Edited to add brackets

Another red herring. You've been posting on here since 2005, and in your posts state you've been moaning about house prices for even longer than that. You have a job, and therefore could have bought long before now. Had you just shut up and bought a house in 2004 or even 2005, instead of moaning on interminably about the prices and waiting for a crash, and then the end of the crash, you would financially be massively better off by the end of your life. Simple point.

[ccc]

WOW. Some ones feeling a bit angry.

Its ok H. We understand. You're not the only one who's gobbled down the spoon fed cut n paste estate agent tripe the media's been serving to the sheeple for the few couple of years. No need to feel so bad about it.

Consider us your support group. We'll see you through.

I think you are right. I may have been a little harsh on Hamish. I am probably more annoyed that the drivel the media are spouting is clearly getting through to some people. These people will drag out this mess for longer than is required. Yet they still don't get it. They imagine they can keep this bubble going for ever and we will soon forget about it all. Do they not realise that 2007 and 2009 are like chalk and cheese ?

Well as anyone who has read about these things knows - nobody - ever - in the Worlds history - has managed to stop a bubble bursting.

I don't really think Broon & Darling are the men to break this trend....

Hey we may all be wrong.

[ccc]

Another red herring. You've been posting on here since 2005, and in your posts state you've been moaning about house prices for even longer than that. You have a job, and therefore could have bought long before now. Had you just shut up and bought a house in 2004 or even 2005, instead of moaning on interminably about the prices and waiting for a crash, and then the end of the crash, you would financially be massively better off by the end of your life. Simple point.

My word. This post has taken your delusion to a vast whole new level.

"just shut up and bought a house"

That is exactly the sort of thing I can imagine Gordon Brown muttering under his breath...

Maybe I want to buy a house at a time of my choice ? That ok with you ?

[HAMISH_MCTAVISH]

They imagine they can keep this bubble going for ever and we will soon forget about it all. Do they not realise that 2007 and 2009 are like chalk and cheese ?

Who on earth is talking about keeping a bubble going? Prices have fallen in 08, and will fall again in 09. The bubble has been well and truly popped.

Well as anyone who has read about these things knows - nobody - ever - in the Worlds history - has managed to stop a bubble bursting.

Nope, but it doesn't mean it won't reflate again. History shows us it will. Repeatedly.

History also shows us that it makes little difference where in the price cycle you buy, you'll still do very well in property over any given 30 year timespan.

[HAMISH_MCTAVISH]

Maybe I want to buy a house at a time of my choice ? That ok with you ?

You can buy whenever you like, or never. I couldn't care less.

Doesn't change the facts though. Had you bought in 04 or 05, instead of moaning about prices being too high, you'd financially be better off by retirement than by waiting and buying after the crash.

I notice you've now been avoiding that point for quite a while.

Edited January 8, 2009 by HAMISH_MCTAVISH