Tuesday, July 13, 2010

RICS Housing Market Survey June 2010

RICS Housing Market Survey June 2010

"New instructions continue to rise, while new buyer enquiries decline". The comments from estate agents are always the most enlightening part of this report. Alex McNeil of Bramleys in Halifax said, "As an optimist, the glass is now only a quarter full."

Posted by monty032 @ 09:55 AM (2610 views)
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18 thoughts on “RICS Housing Market Survey June 2010

  • sceneclub68 says:

    Small selection from the ‘surveyor comments’ section:

    “Increasing number of new instructions coming to the market at a time when sales have dipped slightly coinciding with the world cup and Wimbledon fortnight. Lets hope it is nothing more sinister.”

    “Impossible to tell but the world cup, Wimbledon and hot weather have probably also stopped people looking for property.”

    “Election disruption, followed by the world cup, budget and then summer school holidays; it is hardly surprising that the market has been somewhat patchy to say the least.”

    There are several other mentions of the World Cup, which seems to be the excuse du jour. But surveyors shouldn’t worry, because next month the football season will start again and er…the Ashes starts at the end of November.

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  • mark wadsworth says:

    It might just plausibly be true that reducing HIPS down to the EU-imposed bare minimum has increased number of homes up for sale, in which case the Tories shot themselves badly in the foot.

    Counter-intuitively, what they should be doing is increasing administrative and tax burden on sellers (to disourage sales – hiking GCT on landlords was a good idea) and reducing administrative and tax burden on FTBs (SDLT exemptions, reintroduce MIRAS, maybe two year council tax break as well for FTBs) in order to keep that bubble going.

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  • Hey Mark, do I see a hint of sarcasm. I agree with you wholeheartedly. Perhaps the Tories have realised that in any pyramid scheme the person on the top benefits most and the others are fed the scraps. I could be completely wrong. As I have said in the past it took nearly 6 years for the property prices to reach reasonable levels. Also inflation helped a bit ie. pay rises.

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  • Yeah, the World Cup effect :rollseyes: I can’t see that stopping my woman searching Rightmove every blinkin day

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  • “It might just plausibly be true that reducing HIPS down to the EU-imposed bare minimum has increased number of homes up for sale, in which case the Tories shot themselves badly in the foot.”

    Mark, you seem utterly convinced that the Tories have an ideological agenda to ramp house prices. This really isn’t true.

    Tory ideology is family centred – a house is a home, and something you should be able to leave to your children. It is not Tory ideology to use your home as a pension or as a source of funds to pay for end of life nursing care.

    New Labour ideology is (was) me centred – a house is an asset, a savings scheme and a pension – if house prices rise then I’m OK – sod the kids..

    From the Tory perspective, high house prices are a seripous problem for the next generation, but if they fall too fast, then the negative equity aspect creates another problem for those with large mortgages. Ideally, they would like them to settle back slowly.

    New Labour’s ideology did not have a sustainable long term agenda, and their maths never did add up..

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  • mark wadsworth says:

    UT, I would like to think you are right, but wishful thinking never got us anywhere. What about the NIMBYs in the South East and the large landowners? Are these not the core Tory voters and backers?

    The whole negative equity thing is a red herring. If house prices were to halve, the total negative equity in the UK would be about £250 billion or so. (a lot of which is from MEWing so not my problem) or about one-fifth to one-quarter of all o/s mortgages. As it happens, the government has given UK banks soft loans of over £300 billion, so it wouldn’t be too much trouble to just formally waive a bit of that £300 billion is somebody in nequity moves home; in turn the bank would have to waive the shortfall on the mortgage.

    I know that this is moral hazard taken to extremes, but hey, needs must (and once prices have halved, would be a good time to introduce a Bubble Tax so it never happens again).

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  • “What about the NIMBYs in the South East and the large landowners?”

    The large landowners are usually quite keen to see bits of their land get planning permission, and NIMBY’s come from every political persuasion.

    One could, in theory, have a general mortgage writedown; but this would have to be a percentage of every mortgage, or you’d never agree a fair formula.

    I don’t think it will happen, partly because the opposition would say it was favouring the rich, the grass roots would say it was favouring the feckless, and if we print any more money in this country, it will be very hard to keep the lid on inflation and interest rates.

    Could one have a fund that enabled people to sell a house in NE without recourse? Possibly, but there could be a flood of takers, and it might be hard to finance without printing the cash.

    A limited recourse scheme, that did not encourage people to throw in the towel, but gave them a route to avoiding bankruptcy if their circumstances were otherwise hopeless; might have some merit.

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  • This is a very simple question. For the house price to remain flat, the government need to borrow/print about £200Bn each year. To repeat the 10% YoY inflation we saw last year, it needs to borrow/print £500Bn each year.

    Brown’s response was simple, because he had an election, so he didn’t give a shxt about anything else. Cameron’s response is also simple – he doesn’t want to print money anymore, because it is REALLY a CRXPPY idea!

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  • mark wadsworth says:

    UT, fair points on NIMBYs, and I hope you are right but fear that you are quite wrong.

    “Could one have a fund that enabled people to sell a house in NE without recourse? Possibly, but there could be a flood of takers, and it might be hard to finance without printing the cash.”

    Yes of course. I’ve done the numbers. Even if prices halved and everybody in nequity moved home and had the excess bit waived, it would cost about £250 billion to £300 billion (we can easily get this cost down by disallowing MEW debts; or expecting borrowers and banks to take the first x% of the loss on the chin). Which, coincidentally, is slightly less than total Special Liquidity Scheme + Credit Guarantee Scheme + money invested in Lloyds/HBOs and RBS. And we could do a bit of netting off with the money that banks have deposited at BoE under the whole QE malarkey. Get the cost down a bit more by asking banks to do debt-for-equity swaps.

    Whatever it nets down to is b*gger all compared to total national debt + unfunded pension promises.

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  • “or expecting borrowers and banks to take the first x% of the loss on the chin”

    = limited recourse.

    Perhaps 25% rightdown for the lender, and 25% converted into an unsecured loan; indexed at 4% over BoE base and progressively recovered through the PAYE system as a 5pc income tax surcharge on income over £15k, or until otherwise paid off; any outstanding amounts chargeable to the estate after death.

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  • Why can’t we edit these posts..

    it’s ‘write down’ of course..doh!

    (Re-captcha: ‘in overview’ – spooky!)

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  • MarkW,

    Perhaps the government know that the crash is inevitable; so they are trying to speed it up, so as to “kitchen-sink” it and blame the previous government?

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  • mark wadsworth says:

    @ House, I’m not being sarcastic or even cynical. I’m only trying to guess what the Lib-Con backroom boys are cooking up (and indeed what I would be suggesting if I were one of their backroom boys).

    @ UT, that is another way of doing it – but the general principle is “It Will Not Be The End Of The World”, it’s all manageable. As to all the lucky people who snap up all these cheap properties, to prevent it all happening again we can introduce a Bubble Tax 🙂 the proceeds of which will help repay any debts that the government runs up doing all this 🙂 🙂

    @ Drewster, they are running out of time; to get away with this prices would have to crash by the end of this year, any price falls after that will get blamed on the Lib-Cons.

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  • “Perhaps the government know that the crash is inevitable; so they are trying to speed it up, so as to “kitchen-sink” it and blame the previous government?”

    I think they know there is a substantial risk of a crash, but I’m not sure they buy the “inevitable” argument.

    I think MW is right when he says the market needs to crash very soon if the govt is to blame Labour and have people fully buy the story.

    What is more important is that the crash is over and done before the next election, and in many respects that demands a swift crash and not a lingering slide.

    The political imperative is somewhat at odds with the agenda that many would consider the better way. Personally, I think the big bang is both inevitable and ultimately the better way forward, and my concern is that the govt could be tempted into costly and futile measures to arrest the fall..

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  • I also think a quick correction is best – at least it stops first time buyers paying over the odds for a roof over their heads. Those who find themselves in negative equity will have to knuckle down and pay down their loans or just wait it out.

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  • Surely if they were after a quick crash they’d have had CTG on 2nd and BTL at 40% and introduced it a year from now.

    That would have robably crashed the market.

    It could be argued it was their policy that did it, but the policy itself would have been aimed at the ‘rich’ (on papaer at least) so therefore would have been an overall vote winner in itself (as most people aren’t rich).

    I therefore conclude that they’re living in a fools paradise where by they think they can support prices to the next election.

    Or, they don’t think slowly diminishing house prices will effect the way way people vote.

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  • need-a-crash says:

    “Or, they don’t think slowly diminishing house prices will effect the way way people vote”

    I think that is the key. Low IRs, softly softly approach to repos, strong inflation will all mean the nominal value of property will only slide gently downwards and no-one will particularly notice. We’ve already had 3yrs of stagnation since the peak in 2007, so another 3-5yrs of this with inflation at 5% and we’ll have had the “crash” that everyone on here talks about.

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  • Some choice surveyor comments =)

    “William Leschallas MRICS,
    Jackson-Stops & Staff, Burford,
    Oxfordshire, 01993 822661 –
    The budget has certainly dented
    the property market over the last
    few weeks since the Prime
    Minister and Chancellor warned
    us all of what was coming.
    Hopefully now it is out of the
    way people can turn their minds
    once more to buying residential
    property.”

    Rephrased: People have just been warned by the country’s leaders what dire straights our finances are in, but given that people are generally stupid and have goldfish memories, they will have forgotten this just one month later and can get back to trading houses again therefore making me more money.

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