Sunday, April 22, 2012

HousePriceCrash?

New house price increase of 7.7pc fuels fear of a bubble

"Amid a credit crisis caused by excessive debt, much of it secured to overpriced property, the Government is encouraging laxer lending to people with no history of repaying debt so that they can buy overpriced property."

Posted by cornishman @ 05:29 PM (4249 views)
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14 thoughts on “HousePriceCrash?

  • novice pete says:

    oh! lovely! so we’re all going to be rich then?


    http://heatherlindayoung.files.wordpress.com/2011/02/teletubbies.jpg


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  • “Office for National Statistics (ONS) figures show flat or falling prices across the housing market as a whole but include a surprise surge in new house prices. Government intervention to help first-time buyers may have had the unintended effect of inflating debts young homebuyers take on while the real beneficiaries are builders.”

    I’m sure this blog pointed out that schemes like Firstbuy are really a subsidy for housebuilders instead of first time buyers. It’s not easy to dispel the suspicion that the government knew this perfactly well when they floated this scheme as well.

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  • novice pete says:

    Bankers & Government officials meet the people for a one on one debate.


    http://fc05.deviantart.net/fs13/f/2007/115/4/9/Alien_Vs_Teletubbies_by_Icelanderus.jpg


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  • “It’s not easy to dispel the suspicion that the government knew this perfectly well when they floated this scheme as well.”

    Quite.

    Just as the rather odd panic buying of fuel induced by the government regarding the potential fuel tanker driver’s strike seems to have bumped up the GDP figures for this quarter and prevented a ‘recession’.

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  • Don’t be fooled by this. New build prices are up on aggregate because they’ve changed the mix ie from flats to houses.

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  • ontheotherhand says:

    Wow. That article gets straight to the point. Has Ian Cowie always written like this? I think it’s great.

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  • BBBBut

    The blue graph is going down.

    Is somebody fudging????

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  • Dill, thats what i suspect too – a shift in the mix. If you go back 4 or 5 years inner city appartments were being snapped up in their thousands by not so savvy BTLers. Now that bubble has burst larger houses make up a greater share of new properties sold. Any analyst worth their salt would look into this before drawing conclusions.

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  • mark wadsworth says:

    Re what Dill says, yes, I’ve read that many a time e.g. here

    http://www.cityam.com/latest-news/redrows-family-focus-pays

    Also, they seem to be building relatively more Down South where houses are more expensive e.g. here

    http://www.cityam.com/latest-news/bellway-profits-jump-robust-london-growth

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  • Just checked the ONS methodology: mix adjusted “Once a year new weights are calculated based on the previous three years’ transactions. Two sources of transactions data are used. For England and Wales, Land Registry data (mortgage purchases
    only) are used to determine weights down to the level of ACORN classification, new/old property, property
    type, local authority/county. SML data is then used to further split these weights by first-time buyer/former
    owner occupier and number of rooms/bedrooms. For Scotland and Northern Ireland there is no equivalent
    Land Registry data available, so only SML transactions data is used.”

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  • I work in the construction industry, the word on the street or rather the site is that the government is helping the industry to try and dump the tens of thousands of unsold city centre flats that are still on the developers books, they can’t shift them for a profit so our wonderful government is giving the industry a helping hand.

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  • stillthinking says:

    Does show that the average person will borrow whatever value they can, and have no belief in a market correction.

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  • The long comment here is worth reproducing in full:

    “Fake walls, sheet floors, plastic pipes”

    “New houses have been built like that for at least 15 years. Lightweight C-section steel frames; plasterboard each side.
    Modern houses don’t even use timber, they use engineered I-beams made of an OSB web and finger jointed offcuts for the compression top. Only the bottom section is a single run of timber. Composite glue-laminated structures are used internally in place of steel RSJ’s. The first floor is 22mm T&G chipboard (used to be 18mm) to allow wider spacing of the I-beams (less cost). The T&G joints are glued and the chipboard glued to the I-beams. Once the glue has set,they cut a hole where the staircase goes through. Wiring and plastic CH pipes go through pre-indented ‘knock-outs’ in the I-beam web, no skill or cutting needed, just bash them out with a hammer.

    If you are unlucky the CH pipes will be *not* fitted with strain reliefs when they turn through 90 degrees. If not, then the natural tendancy for the pipe to try and straighten puts a lateral load on the o-ring of a push fitting located close to the bend. This *will* leak after 3 to 5 years. The only way to access the leak is cut a hole in the ceiling or make a hole in the upstairs floor. The latter should be done with a router with a special jig that cuts a nice round hole allowing the cut-out to be reglued in with a special template.
    In practise, many ‘plumbers’ will just hack out a section of chip-board. I have even seen the after effects where a real in-out-quick bodger has used a club hammer to smash a hole in the chipboard; the remains jammed back into place with a few bits of 2×1. Properly installed plastic pipework should last as long as copper, but no-one really knows what the life is of an EPDM O-ring in a push fit connector. There are plenty of stories of idiots using junior hacksaws to cut the plastic pipe; this *will* damage the O-rings, but you won’t know for a few years.

    If you are lucky the final bits of pipe connected to the hot tank and radiators are copper with a hidden push-fit connector joining the plastic. Other installations might run the pipes down from the first floor inside the false partition walls or between the inner block leaf and the plasterboard (which these days is *never* given a plaster skim, just tape and fill the joints), so that they exit behind the radiator.

    The ground floor will be glued chipboard floating on a layer of expanded polystyrene boards. In high traffic areas, or if any leaks occur, the chipboard will start to move and the polystyrene will break up. Fixing this is nigh-on impossible since the internal partition walls are built after the flooring was installed.
    (So put your washing machine and dishwasher in the garage where leaks will not cause damage).

    ridge and hip tiles are fitted using the dry-fit system where galvanised nails and EPDM seals are used in place of mortar bedding. If you are unlucky, some cheapskate subby will have used ordinary bright steel nails, which will last about 10 years, if that.

    And to round it off you may be unlucky to have a potterton condensing boiler that will need a new circuit board every two years until it reaches the age of about 8, by which time no-one will want to repair it. It’s replacement will of course involve making a real mess of your kitchen and when you try to remove the kitchen tiles (and a lot of cheaper newbuilds don’t even have any kitchen tiling), you will destroy the plasterboard.

    Alternatively you could buy a 60’s or 70’s property and freeze during cold weather, or get a character property and spend as much again dealing with dry rot, collapsed drains, massive heat loss, flooding (river and other peoples shit), high insurance.”

    OMG. Looks like one has (eventually) either to buy a property that is at least 30 years old, or build your own.

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  • Having funded a large number of resi developments since it all went wrong in 2008 I can tell you
    – Number of new builds is a fraction of what it was.
    – No apartments being in the north except where lenders have no other choice.
    – High quality housing schemes have been supported selectively.
    and finally like it or not demand for new build schemes is very high. Like with cars some people just have to buy “New” at whatever price. Its not a bubble because as Dill first pointed out the mix in property types/locations has changed skewing the figures. Secondly volumes are still so low to be insignificant in context of the overall market.

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