Wednesday, April 9, 2008

Advice: If you own excess property sell it (if you can)

House price fall: what's the effect? - Studio discussion

Watch Cathy Newman's report which also includes a studio discussion with Melanie Bien from Savills Private Finance, Ed Stansfield, a property economist at Capital Economics, and Jonathan Davis of the website housepricecrash.co.uk (which describes itself as a counterbalance to the huge amounts of positive spin on the property market) offer their views on the housing market. Brilliant comment at the end by Jonathan Davis - Nice one.

Posted by crashwatcher @ 09:25 AM (1151 views)
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17 thoughts on “Advice: If you own excess property sell it (if you can)

  • That’s a killer comment that the good Mr Davis ends with! Ouch!

    Sound advice too.

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  • sold 2 rent 1 says:

    I was in the kitchen cooking last night when the mrs goes “It’s housepricecrash on the telly”

    Good show Jonathan.

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  • Financista Melanie Bien’s comment ‘Talking it down will make it happen’….WRONG…..overpricing house prices, and the tightening of mortgage lending will have the biggest impact! If talking it down was the cause then the crash would have started in 2005 or earlier when the bubble was so obviously getting out of control…….’get real’ people!

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  • This link does not seem to work ?

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  • doomwatch – I’ve just watched the video via the link 0 crushhing comments at the end by our man JD

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  • I think Jonathan Davis was the only one who looked credible and realistic. The woman looked like a fool….4% this year…we have already had 2.5%!

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  • i can’t view the video either – I don’t think my firewall likes it – can someone give us the gist of how the discussion went please?

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  • so that’s HPC mainstream via BBC, SKY and CH4 last night. ITV anyone?

    and a sideways plug for property snake at the end of this video.

    http://www.propertysnake.co.uk/
    Welcome to propertysnake.co.uk, your source for reduced house prices across the UK. Updated daily, our database currently contains 158,751 reduced prices, at reductions of up to 44.29%.

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  • God, Jonathon. You’re such a pessimist.

    😉

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  • actually they may have got in first

    Britain’s biggest house price falls
    Published: Wednesday, 9 January 2008, 11:42AM
    After a price boom lasting more than a decade, Britain’s housing market is heading downwards.

    The Tonight team reveal the areas of the country seeing the biggest falls and who stands to win or lose from the slowdown.

    http://www.propertyfinder.com

    http://www.houseladder.co.uk

    http://www.rightmove.co.uk

    http://www.housepricecrash.co.uk

    http://www.propertysnake.co.uk

    http://www.landreg.gov.uk
    http://www.itv.com/News/tonight/episodes/Britain-sbiggesthousepricefalls/default.html

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  • I really struggle to understand how a serious economist can predict a modest price adjustment.

    1) Any analysis of equity withdrawal – historic or current – shows that house prices only have to stall for it to plummet. When the market sagged slightly in the mid nineties it went negative for a while. Any analysis of the impact equity withdrawal has on the economy shows the huge effect it has – some £2000 of primary spending per household per annum.

    Without equity withdrawal we will get recession. Period.

    2) Any analysis of speculative home purchase – buy-to-let – reveals the fragile fair weather logic behind it; logic that requires house price inflation to exceed wage inflation if a profit is to be realised. If house prices are not going up strongly, people won’t invest. At the same time, the most basic analysis of the incomes of would-be first time buyers reveals that a huge proportion have been priced out by speculative activity.

    Prices therefore have to fall to a point where those of well below average income can afford to buy (and not just those of average income)

    3) Any analysis of those who are managing to buy for the first time reveals that most are doing so when they are close to their highest lifetime earning level – leaving very little scope for further advancement. Few of those who have bought for the first time in the last three or four years will have scope for contemplating a larger house. Examining the financial circumstances of those who first bought ten years ago reveals that most could not afford the house they are currently living in, had they not had the benefit of capital growth.

    The property ladder has therefore run out of rungs. Not only that, a fall in prices will not resolve the problem, as those at the lower end will still be paying as much as they can afford while not having the capital to advance.

    Six years ago the market could have corrected without too much pain, but it has gone much too far now. The correction needed to bring back first time buyers with household incomes in the third quintile will cause widespread negative equity and bankruptcy. My best estimate suggests that around 2 million households will opt for bankruptcy as a means of disposing of their debt, at a cost to the mortgage lenders of around £200 billion.

    The bubble is to big to deflate in an orderly manner – it can only burst now.

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  • UT – you are getting good at this. Excellent comments….. now if only i could get the link to work!

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  • planning4acrash says:

    And remember that mortgage companies can persue debtors 12yrs after they default. The monitor and pounce as soon as you get settled again, not telling you till that point the difference between the price they auctioned the house and what you owe.

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  • Hey TM ,UT been good at it for yr’s 😉

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  • The lady from Savills Personal Finance didn’t even attempt the usual ‘upmarket’ arguments
    1/ No shortage of buyers from overseas seeking quality properties
    2/ Flight to quality areas
    3/ City bonuses investing in property.
    4/ People moving to the country from the City helping support prices of quality properties.
    I’m quite good at billy bull when I get going – I bet she’s paid more than me as well.
    I bet she’s for the high jump today for just saying 4% off this year and sitting quietly.
    She really didn’t make a fall of 4% sound remotely credible.

    Perhaps they’ll be a highly paid vacancy coming up at Savills Personal Finance for Quality B*llsh*ter.

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  • The Savills chick was out of her depth. Poor lass was probably told at public school that if you talk
    with posh accent with confidence, people will believe you. Not this time love.

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  • ADVICE FOR THOSE WHO CANNOT SEE THE VIDEO:

    Use:
    Windows XP
    Internet Explorer 5.5 or 6
    Windows Media Player 10
    Cookies enabled (Internet Explorer security settings set to medium)
    A high speed internet connection capable of streaming at a minimum of 512kps.

    If you are at work, then you may not have the necessary permission to perform the required software upgrades, in which case you will have to wait until you get home 🙁

    I think the above is ridiculously specific (although I imagine IE 7 would work too)

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