Reply to: Doom and gloom

[Squatch]

My god!!!!

It's so frightening!

Soon My houses will be worth less than I paid for them

Like yeh!

Where in the UK are houses likely to be worth less than they were ten years ago ?
House prices/values do not fall, the annual increase in value may slow or fall, but the value of Land/property has been rising since the dark ages. The only way that the values could fall is if the population and therefore the demand for housing decreases to a stage where there are more properties than people.

http://www.businessweek.com/magazine...ef=patrick.net

US house prices are already down an average 7.7% over 1 year with Merrill Lynch calling for another 30% drop over the next 3 years. So 37% + 13% inflation over that time period = a total loss of 50%. Good luck.

[BrilloPad]

Some interesting stuff on Radio4 this morning from some fairly level headed types in a debate about economic forecasting. Summary was all forecasts are basically bulltulip as there are so many unknowns.

They also said as it stands the UK economy isn't really showing any signs of distress ( the IT job market confirms this at the moment ) so we shouldn't panic and start slashing interest rates and possibly induce bigger inflation problems.

In the US the Fed is run by investment bankers and it is the investment banks who are in deep tulip and they are taking panic measures to protect their own. The wider economy and the general public are secondary in these decisions.

the banks always get money out of the proletariat one way or the other. e.g. any interest cuts would be unlikely to be passed on. so eventually the wider economy will be affected.

add in rising oil and food prices.

[rootsnall]

Some interesting stuff on Radio4 this morning from some fairly level headed types in a debate about economic forecasting. Summary was all forecasts are basically bulltulip as there are so many unknowns.

They also said as it stands the UK economy isn't really showing any signs of distress ( the IT job market confirms this at the moment ) so we shouldn't panic and start slashing interest rates and possibly induce bigger inflation problems.

In the US the Fed is run by investment bankers and it is the investment banks who are in deep tulip and they are taking panic measures to protect their own. The wider economy and the general public are secondary in these decisions.

[DimPrawn]

Other misleading clichés uttered at such times are “the old rules no longer apply” and “traditional remedies no longer work”.

S Brittan FT Online

"It's different this time."

[AlfredJPruffock]

Oi - Buck Up Mate

I dont believe what I read in the Papers
Exagerrating This - Exagerrating That -
They never have a good time
So lets - Have a Good Time


Many years ago we had a family friend of Lithuanian Jewish descent who had picked up a smattering of idiomatic English expressions.

One of these was “buck up”.


Looking at much of the comment on the credit crunch, I feel like saying that myself.

Surely we know by now that market economies do not move in a straight line but are subject to periodic setbacks of varying strength.

The late Christopher Dow in his mammoth study, Major Recessions, defined these as occasions when gross domestic product showed a clear absolute fall between one year and the next. The UK has experienced five of these since 1920: 1920-21, 1929-32, 1973-75, 1979-82 and 1989-93.

Output fell in these by a cumulative 10 per cent relative to trend. Allowing for the subsequent recovery periods, the net effect was to reduce trend growth from 3 to 2 per cent a year.

Not a pretty story, yet hardly enough to justify many wishful-thinking commentators claiming each time that the final crisis of capitalism is at last upon us.

What is more irritating is the way members of the financial elite also like to bathe in pessimism and say to each other: “The crisis is worse than you think” and then speculate on which will be the next enterprise to succumb. Other misleading clichés uttered at such times are “the old rules no longer apply” and “traditional remedies no longer work”.

S Brittan FT Online

[Squatch]

HIPs make no difference. We are in a recession which will last for at least another 2 years. Expect another 15%+ drop in prices. Cash is king. Put your money in ING Direct or precious metals because stocks will collapse.

[TimberWolf]

Agreed again. But that's my point - it's not the HIPs that caused all this, if market was a buyoant as in 2006 then this extra £500 would not matter.

Yes, agreed.

As for market prices then I think you may find that any seller can sell at market price pretty easily - problem is that sellers want to sell at some peak market price that is in the past, yet they want it now.

Yes, sellers want to sell at the peak if possible, just as buyers want to buy as low as possible. We all want a good deal and I don't have a problem with that. We're not quite singing from the same song sheet here, but close enough

Before I sign off I spotted a possible source of misunderstanding. I took it as red that the HIP was purchased long before a buyer was found. Of course it’s not good to renege on a deal because of a HIP. I’m referring to the cost of a HIP when, or long before, a house is put to market, with no buyers in sight (and in today’s market possibly never to be found without major drops in the asking prices). I assume this is how it works. Anyway enough already.

[AtW]

The point that I am not getting across to you is that I and most others believe that we may be in for some rocky times in the next months and perhaps years in the housing market.

Agreed.

People may just sit tight rather than having a punt that they can sell at todays prices. Like them or not, people wanting to sell at market prices, or above, make up a significant proportion of sellers.

Agreed again. But that's my point - it's not the HIPs that caused all this, if market was a buyoant as in 2006 then this extra £500 would not matter. But if you are not inclined to sell, then suddenly you look for easy excuses and HIPs are sure #1 target.

As for market prices then I think you may find that any seller can sell at market price pretty easily - problem is that sellers want to sell at some peak market price that is in the past, yet they want it now.

[AtW]

I am actually inclined to believe TimberWolf that for many sellers this extra £500 is causing more bother than it should - and that's exactly the problem with UK housing market - sellers, as well as buyers, banks who lend them money, have all lost all sense when it comes to house ownership - that's why this country will his much more serous troubles unlike central Europe.

[TimberWolf]

I don't think HIP can depress the market, even though it should certainly prevent time wasters from putting their house "on the market" without having any serious intention to sell it for market price - they "punt" it as you put it in hope to get high ridiculous offer.

I used the term punt and it wasn’t in the sense of ‘ridiculous offers’. Just a sale at market prices. The point that I am not getting across to you is that I and most others believe that we may be in for some rocky times in the next months and perhaps years in the housing market. People may just sit tight rather than having a punt that they can sell at todays prices. Like them or not, people wanting to sell at market prices, or above, make up a significant proportion of sellers.

[Diver]

A HIP can last for years, with only minor and minimal cost amendments over time. If you increase the energy performance of your house, then it is worthwhile to update the HIP as it makes the property more attractice to buyers.

[AtW]

I don’t know how long HIPs last though.

1 year I think? I'd agree that HIPs should have lasted 3-5 years, at least 3 - also include some other stuff that currently every buyer would have to pay money for even before final decision buy/not buy is made, but this was watered down by solicitors and real estate people.

[TimberWolf]

My god!!!!

It's so frightening!

Soon My houses will be worth less than I paid for them

Like yeh!

Where in the UK are houses likely to be worth less than they were ten years ago ?
House prices/values do not fall, the annual increase in value may slow or fall, but the value of Land/property has been rising since the dark ages. The only way that the values could fall is if the population and therefore the demand for housing decreases to a stage where there are more properties than people.

I'm not arguing about the long-term trend. My point was that the cost of a HIP could affect the housing market if people that would otherwise have put their houses up for sale won’t, if they feel that house prices are falling. They may wait it out rather than risk losing money paid for a HIP. If HIPs last for some extended length of time, and don’t need regular updating and further cost, then their cost is less relevant. I don’t know how long HIPs last though.

[AtW]

The issue was whether HIPs could depress an already slowing housing market, not whether ridiculous amounts of money are being made. That’s an irrelevance. No house up for sale means no money made, ridiculous amounts or otherwise.

I don't think HIP can depress the market, even though it should certainly prevent time wasters from putting their house "on the market" without having any serious intention to sell it for market price - they "punt" it as you put it in hope to get high ridiculous offer.

Here is example: I rented very nice house locally for a few years, really lovely place, cheap rent too, but the company decided to sell it (they are selling most local properties), so I had to move. Now the guy who bought it paid something like £230k, too much in my view. So, what he did next? He put in new kitchen and did a couple more things, and then put it onto the market for ... £350k! Bulltulips really, like what, where the feck is rationale here - you put in new kitchen and put on sale next day for 50% more money?

Anyhow, that tw@t, did not sell the house - he had to drop the price a couple of times, but it's still empty - I think he really screwed up as the house is empty for almost 2 years now, he did not get any rent and the market is taking serious downturn now, so I doubt he will actually get his money back. I hope he gets bankrupt - not because he overbid me, but because that's the fate that should fall on all speculators.

[Diver]

The issue was whether HIPs could depress an already slowing housing market, not whether ridiculous amounts of money are being made. That’s an irrelevance. No house up for sale means no money made, ridiculous amounts or otherwise.



Not me, nor I imagine has anyone else.

My god!!!!

It's so frightening!

Soon My houses will be worth less than I paid for them

Like yeh!

Where in the UK are houses likely to be worth less than they were ten years ago ?
House prices/values do not fall, the annual increase in value may slow or fall, but the value of Land/property has been rising since the dark ages. The only way that the values could fall is if the population and therefore the demand for housing decreases to a stage where there are more properties than people.