Monday, Sep 21, 2009

David Smith knows basic economics! Higher transaction costs = fewer transactions

Times: Hips hobble house sales

A key question in the housing market is whether the shortage of properties on agents’ books is temporary, to be shortly followed by a big increase in supply for voluntary and involuntary reasons, the latter including rising unemployment. There are many reasons why owners have been reluctant sellers, but one is the so-called “Hips hurdle”. In the past, a fifth of sales were “speculative”, with sellers putting their property on the market to see what they could get and, if they found something they liked, move. These no longer exist, and we are now operating at half the stock levels of 2008, with two-thirds the applicants. Perhaps the answer is that we have moved to a permanently lower level of buying and selling activity. And government intervention is partly to blame.

Posted by drewster @ 03:20 AM (785 views)
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7 Comments

1. techieman said...

"we have moved to a permanently lower level of buying and selling activity." - ah a new paradigm. Of course!!

"New housing starts have bounced back strongly, jumping by 66% in the April-June quarter. Work on mothballed sites has restarted and the builders are talking about acquiring new ones." -oh so more bullsh1t or is that bullish news?

For the bulls (kp are you reading?) the house builders are more confident that the demand is there, for the bears the housebuilders are more confident that the demand is there.

Are house builders always right? Did TW buy another builder right at the peak and see its shares go from a fiver to 5p?

Confusing innit!

Monday, September 21, 2009 07:51AM Report Comment
 

2. paul said...

HIPS were introduced some time ago and haven't been a problem. I wonder if he'll predict the credit crunch next week?

Monday, September 21, 2009 07:56AM Report Comment
 

3. techieman said...

sorry "oh so more bullsh1t or is that bullish news? " should read

"oh so more bullsh1t (or is that bullish) news? "

Monday, September 21, 2009 08:11AM Report Comment
 

4. it_is_going_with_a_bang said...

I think he's missed the basics here. The whole process of moving costs thousands - maybe an average of £10,000 on a house - often more. When galloping property inflation was paying that bill ( not just the HIPS ) then all was fine.

Now it needs to paid for from the pocket and not the Property Inflation Cashpoint. Strangely now people have to able to afford to move not so many can. HIPS is only small issue and hardly worth moaning about.

I would imagine his next article will ask for zero taxation on all aspects of the property industry coupled with 0.1% interest rates so that his beloved property market can ramp up again.

Monday, September 21, 2009 09:27AM Report Comment
 

5. tyrellcorporation said...

@it_is_going_with_a_bang.

I was slightly tempted by a house a few months ago as it was clearly a good deal compared to others in the same area. It was only when I realised that there was a further £11k to simply hand over to Gordon Brown to hose-pipe onto his vast field of burning oil wells that I stayed my hand. Thankyou Gordon for your absurd fiscally dragging taxes as that probably saved me from a dreadful decision!

Monday, September 21, 2009 09:52AM Report Comment
 

6. David Hurst said...

Another non-article from the childlike Smith. What will he be predicting next - that winter is coming?

Monday, September 21, 2009 10:58AM Report Comment
 

7. This comment has been removed as it was found to be in breach of our Blog Policies.

 

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