Thursday, February 8, 2007

The Supply Lie Exposed!

The Supply and Demand Conundrum in The UK Housing Market

If existing home owners cannot buy there must be an issue here. HPC - here we come!

Posted by bubblicious @ 09:16 AM (770 views)
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2 thoughts on “The Supply Lie Exposed!

  • Well, the mention of ‘accountant’ seems to have turned everyone else off – maybe they are all more interested in the MPC decision. However, my eye was caught both by this (I’m an accountant myself) and by the mention of existing homeowners not being able to move up – this is a point I raise from time to time, as I am sure that this can cripple the market and bring about HPC even without IR rises.

    The piece neatly does the arithmetic (dont worry, not too demanding for you lawyers out there..) and demonstrates how this would work in practice.

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  • Another thing is it links back to the First Rung piece from yesterday which suggsted that Haart had a called a peak to London prices. What Haart were actually saying is that there is a lot of demand, they need supply. Estate Agents make their money by matching buyers and sellers in order to create a transaction. If they do not have enough sellers, they are limited in the number of transactions they can complete and therefore the revenue/commission they can make. Remember, this is still a bricks, mortar and labour based business. Fixed costs need to be covered and if you cannot do the voume, your revenue goes down and so do your profits.

    There may just be some trouble ahead for Estate Agents.

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