Wednesday, September 26, 2007

HPC gets an airing on daytime radio

Moneybox live

Our very own spokesman for housepricecrash on Radio 4. I've been trying to find a good link for this. This will take you to the web page, but I will try to post the direct links in the comments so that it can still be found in a week's time.

Posted by dohousescrashinthewoods @ 04:47 PM (1932 views)
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17 thoughts on “HPC gets an airing on daytime radio

  • dohousescrashinthewoods says:

    The transcript can be accessed directly here.

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  • Let it roll…….

    The main banks are still trying to hand out mortgages like sweeties!!!!
    I’m just back from overhearing a hard-sell in an HBOS bank, as I queued to bolster their funds..
    It was to some unfortunate young lassie – with stud in her nose & an interestingly-coloured hairstyle. She was checking in her family allowance.
    The teller, after a rather unsubtle introduction, encouraged her (three times within my hearing) – to speak to their expert about taking out a mortgage. This was, at present, on her nonexistent property!!!.

    Three cheers for this particular potential sucker – she declined – God bless.

    My question is:
    How many – with no brains, no money, no potential resources – are still taking up the challenge?? New Jerusalem???? Not this generation!!!!

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  • There’s a fascinating historical insight from Richard Hair of the NAEA (National Association of Estate Agents), paraphrased below:

    “In the last housing recession 1989 – 1994 a lot of people had an over-inflated opinion of their property. When they received lower-than-expected offers they said “right, I don’t want to sell my house at that figure, I’m going to let it out instead and wait for the price to rise again”. Subsequently they found two years later that actually they were selling it for 15 or 20% less.”

    This is a well-known human instinct: holding out because you can’t bring yourself to admit that you were wrong. Amateur share-traders make the same mistake (like the poor folks who still hold Northern Rock shares).

    What it means for the housing market in the short-term is that the market will stagnate: turnover will be lower and fewer properties will come onto the market; those that do come onto the market will be over-valued and will languish for months without selling. Estate agencies will close as turnover slumps; your local high street might have a new pawn shop where that estate agents used to be. In a couple of years time, people will finally give up and sell; that’s when we’ll start to see lower prices coming through to the official figures. For the next two years though we can probably expect stagnation and very low turnover. Anyone care to agree or disagree?

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  • financial planner says:

    Recording in HPC In The Media

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  • Drewster – I for one amazed how long the UK hass gone without a hpc. But educating myself on this site, I have at least come to realise why I was so wrong to STR so early. But while I think the market could snowball without any ‘major’ influence it does worry me that if people hold onto their property “until prices go up again” then we may be left with a stagnation.

    My hope is that the credit crunch is going to force enough sales (and I never thought forced sales were a necessity) to begin the snowball effect.

    I hope so, but now more than ever I’m worried it could go either way

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  • Larry Pickleman says:

    I had, but have no longer ANY interest in buying property in the UK. The dream is over and I line the pockets of scum.

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  • It can only go one way. The articles about brown envelopes and sealed bids have already gone away.

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  • Just heard this Moneybox live. I think even the bull in the panel could not say with confidence to INVEST.
    Even when Satan does not want to stay in hell time to move out quickly.

    I have also downloaded the “File on 4” episode. Call me cenacle but it gives me a soothing feeling. I have also downloaded on my phone to hear it again and again.

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  • A colleague of mine has just pulled out of a house purchase after his surveyor valued it at 10% less than the £250K intended sale price, needless to say the vendor is not impressed. Fortunately after his survey he has thought twice about the intended purchase and decided to wait and see what happens as the market cools.

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  • In the past couple of months I’ve noted some changes in the local EAs.

    – all window displays now have ‘filler’ ads about them and how well they’re doing, rather than properties
    – properties in the window are often now on A3 spreads instead each one being A4
    – despite being a happy renter, 2 local agents have sent me flyers asking me if I’m interested in selling in the last 2 weeks (asking me, not the landlord, great customer records, eh?)

    Is business getting tighter? Well 2 local EAs merged in the summer, and last week Strutt&Parker merged with LaneFox

    It will be interesting to see how quickly their vested interest switches to trying to unblock any stagnation

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  • Thanks, a really good post!

    My friend’s son had a prospective flat surveyed. The survey found lots of structural faults, as it’s part of an old house, and turned up the fact that the S London flat was purchased for £70,000 less only 15 months ago. The son thought about it for a few days, but was told some other punter had made an offer, anyway. A lucky escape!

    Whether house prices drop sharply in April (my prediction) or not, there is no escaping clueless housebuyers who make one of life’s biggest decisions on a whim!

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  • My God, even the most bullish mortgage lenders are turning bear

    good job, jonathan!

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  • inbreda,

    I should clarify that although I think the market will stagnate for a couple of years, it’ll go into freefall after that. Sales volumes are already declining (just as in America) and only those people who really need to move actually do so. FTBs will be on strike and the BTL crowd will avoid trading because they don’t want to admit defeat. After a couple of years the amateur BTL crowd won’t be able or willing to subsidise their tenants any more and the whole market will tumble. At the same time, the sub-primers who bought recently will start to see their finances fall apart and repossessions will pick up. Ultimately property won’t become affordable again until late 2009 at the very earliest and most likely 2010-11. Bit disappointing as I’ll be nearly 32 by then!

    I too have been amazed at how long prices have kept rising, but just as tech shares seemed overvalued in the late 1990s, “irrational exuberance” affects all markets alike. Like you I’ve learned a lot from this site and the articles posted here.

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  • I’m not convinced that there will be a long period of stagnation. BTLs are already panic selling. A lot have been holding on despite IR rises because although they’re subsidizing the rent “the price always goes up innit”. Landlord.co.uk has commented on this, and I’ve got a lot of anecdotal evidence of BTLers I know, and people who know BTLers that say many of them are panicking and selling up quick if they can.

    Now it seems that prices are not going up, many BTLs are being forced to get out and quick. Not just because value is falling, but because they’re spending a couple of hundred quid per flat per month to pay a mortgage on an asset that is not rising in value that fast, and quite possibly is dropping in value. The smarter ones will sell quick and lock in any profits made over the past few years. This will take the market price down and make the economics for those who continue to subsidize rents on the basis of capital growth even worse. And once prices are clearly falling, even if the dumber BTLers don’t realise they’re heading for negative equity, their lender surely will. They’ll whack up mortgage rates if need be to tip the balance and force a quick sale. They don’t want to be left with a property worth less than the loan either, especially given the fact many of these lenders are short of cash themselves (NR is certainly not the only one, just the first to hit the skids).

    The snowball is already rolling now. Risk has been underpriced for too long, and now with a rapid re-evaluation, even BoE interest cuts won’t help mortgage holders since few banks will pass those onto customers when they need the cash for themselves. In fact, many of the mortgage companies would quite like a lot of their customers to bail out and move to another bank now that mortgages are widely seen as toxic assets.

    Bubbles rely on a constant injection of cash, and the cash has dried up. Even if people are still stupid enough to buy, few are stupid enough to lend to them even if they had the cash to lend, which they don’t.

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