Estate Agents! Advice....

[coppercrutch]

Just read this now...and I will address the points

 

The 4% figure - this is a "seasonally adjusted" figure. I don't know what the methodology behind that is.

 

The ESPC figures - what are you prattling on about? I have already "given you the honour" of commenting on those figures - more specifically, your misinterpretation (deliberate, or through ignorance) of them.

 

The Land Registry figures - I've had a quick look back at what you posted. Nothing springs to mind to comment on, other than perhaps the fact that within that limited range, none of the quarters have seen an annual drop.

 

What is there to misinterpret about the ESPC figures? The numbers are going down and unless this quarter shows the highest average sale price EVER we will see YOY falls. Not much to misinterpret there...

 

As for the land register(Scotland) figures "Nothing springs to mind to comment on"...

 

What about a 14+% fall in average sale price over the last 9 months...

 

Considering "Edinburgh prices won't fall" and we are "not seeing price falls in Edinburgh" just now wouldn't you think that figure is rather startling ?

 

You can wait around for the YOY figures to catch up if you want. The rest of us can already see where they are going.

[coppercrutch]

BTW some more articles from a few of the broadsheets this morning.

 

http://www.independent.co.uk/news/business/news/disaster-faces-estate-agents-as-housing-crashes-825765.html

 

http://www.guardian.co.uk/money/2008/may/11/houseprices.creditcrunch

[Sherlock]

Given that this thread is already littered with pedantry, can we stop using English terminology to describe our land registration organisation, which is of course the Land Register (of Scotland).

 

Actually, our land registration organisation is the Registers of Scotland.

 

Yours, pedant.

[Bonnie Prince Charlie]

Actually, our land registration organisation is the Registers of Scotland.

 

Yours, pedant.

 

Well said sir, but I fear they do not listen.

[Chip Douglas]

Actually, our land registration organisation is the Registers of Scotland.

 

Yours, pedant.

 

Pedantry to the very last detail, I like it.

 

I, of course, was referring to the land register in context, rather than Registers who are responsible for the land register, amongst other things.

[Sherlock]

Pedantry to the very last detail, I like it.

 

I, of course, was referring to the land register in context, rather than Registers who are responsible for the land register, amongst other things.

 

The Land Register only refers to newer plan-based system of registration and doesn't include the old Sasine recording of deeds.

 

The Sasine register is, of course, still a valid property register to this day (for those subjects changing owners without monetary considerations etc) and as such, cannot be excluded when discussing land registration.

 

Yours, pedant.

[coppercrutch]

Some more articles. The worm is finally turning. People are coming out with sensible reasoned chat. Has taken its time though. Some of us numpty part time economists have seen this coming for years...

 

http://www.independent.co.uk/news/business/comment/stephen-king/stephen-king-as-safe-as-houses-how-harsh-realities-are-dispelling-the-home-market-myths-826288.html

 

"People are led to believe that homes are automatic generators of additional wealth. This argument is mostly spurious"

 

"As safe as houses. No place like home. An Englishman's home is his castle. Our language is replete with positive references to housing. It's almost as if we're programmed to believe, from a very early age, that housing is somehow "safe"."

 

"The level of misunderstanding about housing is really rather shocking. Many people believe, for example, that renting involves throwing money down the drain whereas buying via an interest-only mortgage does not."

 

"It's generally true, of course, that house prices rise over time"

 

 

And now an interesting poll fromt he BBC. According to this small sample more people want prices to fall than to rise. Seems those with vested interests have been far better in getting their opinion across than the vast majority. Not surprising when you think most editors/owners of Newspapers/TV stations probably own at least one property and are delighted with how much money they have 'made' on it....whilst most of those wanting prices to fall are just starting out in a career and have little influence.

 

http://news.bbc.co.uk/1/hi/business/7395041.stm

 

"Barely a fifth of people want house prices to rise"

 

So please can we put an end to the ridiculous 'Edinburgh is different' argument? It really is embarrassing. Have a look at post 542 and then think about why Edinburgh will be different. It won't. In fact it may be one of the hardest hit areas.

 

If you dont believe me have a look at the following stories about Sydney, Australia. Also have a google for stories about Property crashes in Hong Kong and Japan, not exactly places with a huge oversupply of free land and houses...

 

http://www.news.com.au/dailytelegraph/story/0,22049,23680992-5013110,00.html

 

"HOUSE prices in some parts of Sydney have almost halved as battling borrowers struggle to keep up with increasing interest rates"

 

"The Sydney housing market is in a bind - we have a shortage of housing and huge demand but that isn't going to stop prices declining further. I think we'll see prices fall by another 10 per cent this year - and that's without another interest-rate rise."

 

Sure we dont have interest rates as high as in Oz. However, in the UK even though the BoE is reducing the central rate most lenders are actually increasing theirs.

 

With the situation we are in just now the whole 'But there is a huge demand for homes in this lovely place so the price wont fall here' argument is close to pointless.

 

Just look at Sydney for the proof.

 

[Chip Douglas]

The Land Register only refers to newer plan-based system of registration and doesn't include the old Sasine recording of deeds.

 

The Sasine register is, of course, still a valid property register to this day (for those subjects changing owners without monetary considerations etc) and as such, cannot be excluded when discussing land registration.

 

Yours, pedant.

 

This I know but I didn't want put everyone to sleep.

 

[Peebo]

What is there to misinterpret about the ESPC figures?

 

If you don't know what I am refering to, my response to your posts analysing the ESPC figures is few pages back. Since you replied at the time, I assume you had read it, but then again, perhaps not.

 

The numbers are going down and unless this quarter shows the highest average sale price EVER we will see YOY falls. Not much to misinterpret there...

 

Time will tell what the next quarterly figures are. Personally, it's not a figure that I would want to predict. As an aside, though, I am not too sure what would be that unusual (current trends notwithstanding) about the new figures showing "the highest average sale price EVER" - for many years, the price trend has been an upward one, so shirely the record was regularly being smashed? Perhaps not.

 

As for the land register(Scotland) figures "Nothing springs to mind to comment on"...

 

What about a 14+% fall in average sale price over the last 9 months...

 

Considering "Edinburgh prices won't fall" and we are "not seeing price falls in Edinburgh" just now wouldn't you think that figure is rather startling ?

 

The figures are self-evident, and I didn't feel the need to demonstrate my mathematical prowess by calculating the change in prices.

 

As for me finding the figures startling, what makes you think that that is the case? Moreover, what have these quotes got to do with me??

 

 

You can wait around for the YOY figures to catch up if you want. The rest of us can already see where they are going.

 

You're confusing me, again - are you now suggesting that you hold the majority view? I thought you were one of the enlightened few, preaching sense to the economically-ignorant masses?? Has your missionary programme worked already???

[coppercrutch]

I thought you were one of the enlightened few, preaching sense to the economically-ignorant masses?? Has your missionary programme worked already???

 

Yes you are correct.

 

My work is almost done. The media will take over in the near future. I just hope some people on this thread have taken my advice.

 

ESPC properties for sale or to rent.

 

13 Mar 2008 - 6400

 

21 Apr 2008 - 8593

 

12 May 2008 - 9325

 

Just who are going to buy all of these places....

 

Just who is going to get a mortgage to buy these places, even if they want to.........

 

Just what is going to happen when people HAVE to sell these places....

 

Excellent news in the long term. In a few years people who are simply wanting to buy a HOME to live in will hopefully be able to. Best thing that could happen to this country. This news should be welcomed, not feared.

[Coco]

Things appear to be getting very bleak in the new build market. I wonder if the many developments in Edinburgh proposed will ever get built.

 

Redrow PLC RDW Interim Management Statement

 

RNS Number : 2391U

 

Redrow PLC

 

13 May 2008

 

 

 



 

Redrow plc

 

13 May 2008

 

INTERIM MANAGEMENT STATEMENT

 

Redrow is releasing the following statement regarding current trading and its financial position' date=' which

constitutes an Interim Management Statement for the period from 1 January 2008 to 12 May 2008 as required by

the UKLA's Disclosure and Transparency rules.

 

As we had highlighted in our Interim Results announcement on 28 February, and in previous trading updates, our

expectation that 2008 will represent a more difficult trading environment than experienced for many years has

materialised. Both sales activity and net selling prices have come under increased pressure due to the

prevailing market conditions and in particular the severe restriction in the availability of mortgage finance.

 

As a result, the trading environment has deteriorated to an even greater extent than we had anticipated at the

time of our Interim Results announcement. As at the end of April, our order book in the Homes operations was

26.5% down on last year. In the second half of our financial year, net reservations to date have been

running at just under 50% below the levels secured in the same period last year. This partly

reflects our cautious approach to the use of part exchange and shared equity or deferred consideration

incentives.

 

Lending criteria continue to tighten as the range of mortgage products becomes further restricted with more

onerous loan to value requirements and increased borrowing rates and fees. Mortgage approvals are showing sharp

declines as compared with the prior year data which, coupled with heightened concern about the ongoing credit

squeeze in recent weeks, has further eroded home buyer confidence. Until recently, cancellation rates have

been running at just over 20% but we have experienced a marked increase since Easter. It is becoming

increasingly difficult to predict accurately reservation and cancellation rates.

 

Taking the above factors into account, legal completions in the financial year in the Homes operations are

currently expected to be approximately 10% below our previously expressed view. We also indicated in February

that net selling prices after incentives were under pressure and this has intensified as we have gone through

the Spring market. This will be reflected in weaker gross margins on homes sales in the second half of our

financial year which will be partly offset by improved overhead recovery. We still expect that our full year

land sale profits will be at a similar level to last year.

 

To manage these developing pressures, our short term business strategy is focused on stringent control of our

cost base and effective management of cash flow. Site and office overhead costs in the business remain tightly

controlled to reflect lower levels of activity and we have made additional headcount reductions in the last few

months. Our strength in central procurement coupled with our long term partnering approach with our suppliers

and sub-contractors is delivering build cost reductions.

 

We are continuing to take a very selective approach to land transactions until the outlook for the housing

market becomes clearer. Our main area of activity in terms of land relates to identifying longer term land

opportunities and promoting our forward land bank through the planning system. Once the market returns to more

normal levels of activity, we anticipate there will be pent up demand and a shortage of outlets to meet the

Government's aspirations for delivery of new homes. This should be a positive for the industry in the future.

 

 

As a result of our size, Redrow secures benefits from its strong executive team working closely with their

valued and experienced colleagues at the operational level. We employ short lines of communication to

ensure commitments to infrastructure expenditure and release of units for construction are tightly managed.

However, the recent further deterioration in the sales market will influence work-in-progress levels at the

year end such that we now expect our gearing as at June to be slightly higher than we had previously

expected. We are currently operating with net debt levels well within our committed bank facilities of £480m

which are available until at least October 2009.

 

The market conditions we are experiencing are largely being driven by mortgage availability. It is difficult to

assess how long the sharp reduction in sales activity will persist or the extent to which house prices will be

affected. We continue to pursue all opportunities to generate value for shareholders in the medium term. We are

maintaining the focus on our design led approach to product that we believe will drive value and will

differentiate the Redrow business when confidence returns and markets improve.

 

 

Enquiries:

 

Neil Fitzsimmons, Chief Executive Redrow[/quote']

[coppercrutch]

For those who are interested...RICS property market report for March...

 

http://www.rics.org/Practiceareas/Property/Residential/Market/hms_march2008_r_150408.htm

 

Report for March is released today. Actual PDF file not available yet. BBC has the highlights though.

 

 

http://news.bbc.co.uk/1/hi/uk/7397579.stm

 

"In the latest survey from the Royal Institution of Chartered Surveyors (Rics), 95.1% more surveyors saw house prices fall than rise in April"

 

"The Rics survey, showing price falls more widespread than at any time since 1978, is further confirmation that house prices in the UK are now declining after a decade long boom"

 

"Rics said that regions where prices had still been rising until recently have now been caught up in the general decline.

 

In Scotland, which had bucked the UK trend, the house price "balance" also turned negative last month"

 

Game over. Price falls more widespread than anytime in the last 30 YEARS !!

 

Nah people are right - we are not going to see a 90's style crash here.

 

It is going to be much, much worse. Don't say you weren't warned....

[coppercrutch]

Report attached below:

 

http://www.rics.org/NR/rdonlyres/E770D17C-C687-43B4-8B9C-B6C1EFFB7B2D/0/hms_april_2008_.pdf

 

Interesting how they work out the figures. Don't know the details. (SCOTLAND IS ON PAGE 7)

 

Seasonally adjusting it to end up with a negative figure. Even though 29% reported a rise and 20% reported a fall. I suppose as this is the busy time of the year that is seen as way below average.

 

"The net balance of surveyors reported moderate price

declines.

New buyer enquiries fell for the fourth consecutive month,

but a slightly slower pace. New vendor instructions remained

more or less stable after falling sharply in the previous month.

Surveyor confidence in the price outlook fell to the lowest

level in the survey’s history. Surveyor confidence in the sales

outlook improved and is now positive."

 

So If I am reading it correctly their outlook for PRICES is extremely poor. Whilst their outlook for SALES is not as bad.

 

Prediction - Houses still selling but for far less than they previously did ?

 

Have a look at their predictions (Dashed Line) for the next 3 months on the graph to the right hand side. Ouch.

 

And this is over the busy time of year. Where is this likely to go when it gets quiet and people still need to sell houses.....

[coppercrutch]

Things appear to be getting very bleak in the new build market. I wonder if the many developments in Edinburgh proposed will ever get built.

 

I am thinking about that as well. Thing is all that land has been bought already IIRC. Do they just stop building ? They NEED revenue though so what can they do ? Just keep on building and eventually just resort to slashing prices to get any sale ?

 

For anyone interested have a look at google maps and take a scan along the waterfront. Go along down by Newhaven and right along to Granton and Silverknowes. The land set aside for new flats/houses is HUGE. I don't even think they have built 20% of the planned number yet. Remember the overall total was something like 18,000 IIRC.

 

Oh BTW mortgage lending figures lowest for 33 Years !!

 

http://news.bbc.co.uk/1/hi/business/7397788.stm

 

Add to this surveyors reporting price falls more widespread than anytime in the last 30 YEARS !!

 

Anyone who thinks Edinburgh is going to be 'immune' from this is actually mental. They need help from a qualified phsycologist. They are delusional.

 

My prediction of real falls between 30-50% remains on track IMO. In fact the way it is going I would not be surprised to see it go further.

 

A 30% nominal fall would mean a nice 2 bed flat in a semi-decent area of Edinburgh costing about 120k. Being honest that still seems pretty expensive. I wont be buyign until you can get those for less than 100k.

 

I think this crash could take us back to year 2000 figures. I certainly hope so. Sensible prices to get a roof over your head. Good news in the long run, as I have been trying to tell people all along....

[Peebo]

Anyone who thinks Edinburgh is going to be 'immune' from this is actually mental. They need help from a qualified phsycologist. They are delusional.

 

I think a psychiatrist would be of more use in such cases.

[coppercrutch]

I think a psychiatrist would be of more use in such cases.

 

You may be right.

 

Seems even the staunchley "It won't happen in Scotland" Evening News are having to face reality !!

 

Scottish house prices fall for first time as slowdown bites

 

 

http://edinburghnews.scotsman.com/latestnews/Scottish-house-prices-fall-for.4076548.jp

 

Note how they still can't bare to say 'Edinburgh' though. That would be too much at this minute. Won't be long though...

 

Maybe they are starting to realise that chumps like DJ Alexander have simply been using their paper as a free advert to pedal their 'advice'.....

 

Another interesting article below:

 

http://www.timesonline.co.uk/tol/news/politics/article3923351.ece

 

Government's secret fears over housing market exposed by minister gaffe

 

Seems the Government know how bad it is going to get as well. This 'mistake' is very convenient. Just yesterday there was a poll by the BBC that showed more people wanted price falls than rises. Today the inflation figures showed a huge jump.

 

CPI - 3% rpi - 4.2%

 

This would make another drop in interest rates unlikely, but not impossible. It has not worked in the US anyway. Interest rate drops here haven't been passed on by lenders either. There is not much point in dropping them. In fact they will probably rise within the next 6 months as inflation starts to really kick in.

 

Bottom of Caroline Flints document states “It is vital that we show at this time of uncertainty we show (sic) that we are on people’s side"

 

How convienent. Now being on the 'people's side' looks like it involves sitting back and watching house prices come down to reasonable levels....

 

All fits so perfectly it is almost like it has all be planned.....

 

30-50% in real terms for Edinburgh.

 

And yes, you did hear it here first.

[flecktimus]

You may be right.

 

Seems even the staunchley "It won't happen in Scotland" Evening News are having to face reality !!

 

Scottish house prices fall for first time as slowdown bites

 

 

http://edinburghnews.scotsman.com/latestnews/Scottish-house-prices-fall-for.4076548.jp

 

Note how they still can't bare to say 'Edinburgh' though. That would be too much at this minute. Won't be long though...

 

Maybe they are starting to realise that chumps like DJ Alexander have simply been using their paper as a free advert to pedal their 'advice'.....

 

Another interesting article below:

 

http://www.timesonline.co.uk/tol/news/politics/article3923351.ece

 

Government's secret fears over housing market exposed by minister gaffe

 

Seems the Government know how bad it is going to get as well. This 'mistake' is very convenient. Just yesterday there was a poll by the BBC that showed more people wanted price falls than rises. Today the inflation figures showed a huge jump.

 

CPI - 3% rpi - 4.2%

 

This would make another drop in interest rates unlikely, but not impossible. It has not worked in the US anyway. Interest rate drops here haven't been passed on by lenders either. There is not much point in dropping them. In fact they will probably rise within the next 6 months as inflation starts to really kick in.

 

Bottom of Caroline Flints document states ?It is vital that we show at this time of uncertainty we show (sic) that we are on people?s side"

 

How convienent. Now being on the 'people's side' looks like it involves sitting back and watching house prices come down to reasonable levels....

 

All fits so perfectly it is almost like it has all be planned.....

 

30-50% in real terms for Edinburgh.

 

And yes, you did hear it here first.

 

Reports for Edinburgh.I think you have still got a long way to go for your 30-50%

 

Edinburgh ? Scotland

Lindsay Duguid BSc FRICS

McNeill Maguire & McCreath

There is limited activity at the lower end of

the market. The middle market is steady

with slight increases in prices paid over

valuations. There is good demand a the top

end where the supply is relatively limited

and a number of these properties are not

reaching the open market!

Edinburgh ? Scotland

Anthony Perriam MRICS

Rettle and Co.

March has been a remarkably busy month

with prices holding across all but the

mortgage sensitive ?family? sector. Fewer

?off market? transactions could summon a

caution at the upper end of the spectrum,

not yet witnessed in the city.

[coppercrutch]

Reports for Edinburgh.I think you have still got a long way to go for your 30-50%

 

Edinburgh ? Scotland

Lindsay Duguid BSc FRICS

McNeill Maguire & McCreath

There is limited activity at the lower end of

the market. The middle market is steady

with slight increases in prices paid over

valuations. There is good demand a the top

end where the supply is relatively limited

and a number of these properties are not

reaching the open market!

Edinburgh ? Scotland

Anthony Perriam MRICS

Rettle and Co.

March has been a remarkably busy month

with prices holding across all but the

mortgage sensitive ?family? sector. Fewer

?off market? transactions could summon a

caution at the upper end of the spectrum,

not yet witnessed in the city.

 

Come on Flecktimus. Two comments. One from Rettie & Co who are in cahoots with DJ Alexander. A PROVEN bull****ter when it comes to property in Edinburgh.

 

But hey if you would rather listen to their comments over the overwhelming mounting evidence that is fine....

 

Of course you are right - there is a long way to go to 30-50%. Depending on the next set of ESPC/Land registry figures we could be seeing YOY falls of about 5%. Maybe more.

 

Add to that the RPI inflation figures over the same period (Circa 4%) and you could have an overall fall of about 9%.

 

And that is before people are even aware of what is going on......

 

IMO 30% real falls are a virtual certainty. All I am caring about is how much further it goes beyond that point.

[flecktimus]

Come on Flecktimus. Two comments. One from Rettie & Co who are in cahoots with DJ Alexander. A PROVEN bull****ter when it comes to property in Edinburgh.

 

But hey if you would rather listen to their comments over the overwhelming mounting evidence that is fine....

 

Of course you are right - there is a long way to go to 30-50%. Depending on the next set of ESPC/Land registry figures we could be seeing YOY falls of about 5%. Maybe more.

 

Add to that the RPI inflation figures over the same period (Circa 4%) and you could have an overall fall of about 9%.

 

And that is before people are even aware of what is going on......

 

IMO 30% real falls are a virtual certainty. All I am caring about is how much further it goes beyond that point.

 

I am sorry but you just cant have all your own way.You are just like a politician picking out the bits that suit you.You give us a link to prove your point and then when we look at the information you have provided its all wrong because it doesn't suit your agenda.

 

Just cant win with some people.

[coppercrutch]

I am sorry but you just cant have all your own way.You are just like a politician picking out the bits that suit you.You give us a link to prove your point and then when we look at the information you have provided its all wrong because it doesn't suit your agenda.

 

Just cant win with some people.

 

Eh

 

My link shows the following:

 

"In Scotland, which had bucked the UK trend, the house price "balance" also turned negative last month"

 

This is the first time this has happened. This is big news. If you would prefer to listen to a couple of individual opinions that is fine. Up to you. Pretty fooish IMO. You have to remember the more people that buy houses, the more valuations they require, which in turn means................

 

These people's opinions are not entirely neutral. I do trust them a lot more than Estate Agents but their income is based on valuations. Sales go down = Valuations go down. Not rocket science.

 

And as for be being like a politician. Why don't you remember the following.

 

I have been saying all this since last summer. Back then I DID NOT HAVE THE FORTUNE TO HAVE ARTICLES LIKE THIS SUPPORTING MY ARGUMENT being published every day in the press.

 

I am slowly and surely being proven right, the media is slowly catching up to reality.

 

So what? You think I am not going to pick out what I want to in order to support my argument...

 

Anyone else is free to post anything stating the opposite unless I am mistaken.

 

Fact is what I have said was going to happen is happening right now. I have simply been telling the people the truth before the media decides to do the same.

 

And look at the responses I get for doing that......

 

But don't worry I can cope. In a few years when I buy a place mortgage free for a reasonable price, I will be more than compensated.

[Rosewood]

Been following this thread with great interest over the past few months. A lot of good debate. Just wondering CC, how long do you reckon it'll take for house prices to fall the 30%-50% you are predicting? Also is there any sector you think will be more prone to the falls than others i.e. flats, houses etc.

 

Cheers

[Peebo]

These people's opinions are not entirely neutral. I do trust them a lot more than Estate Agents but their income is based on valuations. Sales go down = Valuations go down. Not rocket science.

 

Since you are often keen to analyse the motivations (and psychology...) beside certain comments, quotes and posts, I'd be interested in any expansion you can make in this particular angle. With regard to surveyors, (making the assumption that they make their money from conducting valuations of property), how do you think they will fare in a market where selling prices are falling?

 

Will they suffer as a result of this, as they number of sales fall (eg less mortgage approvals) and, thus, there is less demand for their product?

 

Or will they actually benefit, as sales numbers rise (eg perhaps through people wanting to sell now before the perceived value of their property drops further)?

 

Or is it perhaps the case that their is no direct correlation to house price levels and the prosperity of surveyors, and that their opinion is, in fact, actually worth listening to?

 

What do you reckon?

[coppercrutch]

Been following this thread with great interest over the past few months. A lot of good debate. Just wondering CC, how long do you reckon it'll take for house prices to fall the 30%-50% you are predicting? Also is there any sector you think will be more prone to the falls than others i.e. flats, houses etc.

 

Cheers

 

Howdy. I have no idea of timing. If we enter a Japanese style period it could take 10+ years of slow painful falls.

 

However the sheer pace that this is all picking up would indicate perhaps a faster fall. The internet was not around in the last crash so I think information is far more easily available.

 

Again how these falls take place is another matter. Nominal falls or real falls due to inflation ? Probably a combination of both is most likely.

 

The average house price vs Average salary ratio is about 3-4 times hostorically.

 

So I will simply be waiting until the average Edinburgh house is 4 times the average salary before I even think about jumping in. (About 120k compared to 210k as they are just now). If this does not happen I will not jump in. Simple plans are always the best.

 

Most booms overshoot on the way up and undershoot on the way down. This housing boom has certainly overshot on the way up so my logical thinking is that the opposite will happen. Again I like simplicity. It tends to work well.

 

Again I will say I have no Professional qualifications about this. Just simple common sense and a LOT of digging.

 

MY SIMPLE THEORY - I am simply certain that the last 5 years have been ABNORMAL rather than NORMAL. I think that is a fairly safe bet following a lot of investigating into the subject.

 

If I am wrong I am wrong. I hope not though because a future where the average person cannot buy the average house is a doomsday scenario if ever I heard one.

 

And yet many call me a 'Doom-monger'. Still not had a reasonable explanation of that one....

[coppercrutch]

Since you are often keen to analyse the motivations (and psychology...) beside certain comments, quotes and posts, I'd be interested in any expansion you can make in this particular angle. With regard to surveyors, (making the assumption that they make their money from conducting valuations of property), how do you think they will fare in a market where selling prices are falling?

 

Will they suffer as a result of this, as they number of sales fall (eg less mortgage approvals) and, thus, there is less demand for their product?

 

Or will they actually benefit, as sales numbers rise (eg perhaps through people wanting to sell now before the perceived value of their property drops further)?

 

Or is it perhaps the case that their is no direct correlation to house price levels and the prosperity of surveyors, and that their opinion is, in fact, actually worth listening to?

 

What do you reckon?

 

I think their opinion is worth listening to. I stated that above. However I think you cant deny they must have done well in the last 5 years. More sales equals more surveys yes ? Unless I have missed something !! If they make the majority of their money from something else feel free to let me know. I am not an expert in surveyors and what they do.

 

So if I was a surveyor I would prefer a time with lots of sales, as this may be better for my back pocket. In a falling market the number of sales will fall. I think that is pretty obvious. Even taking into account forced sales etc....

 

I did hear something interesting about surveyors in the last crash. They started to be extra cautious with valuations due to potential court cases if they overvalued ? I can't remember the details maybe you know ?

[Peebo]

I think their opinion is worth listening to. I stated that above. However I think you cant deny they must have done well in the last 5 years. More sales equals more surveys yes ? Unless I have missed something !! If they make the majority of their money from something else feel free to let me know. I am not an expert in surveyors and what they do.

 

So if I was a surveyor I would prefer a time with lots of sales, as this may be better for my back pocket. In a falling market the number of sales will fall. I think that is pretty obvious. Even taking into account forced sales etc....

 

I did hear something interesting about surveyors in the last crash. They started to be extra cautious with valuations due to potential court cases if they overvalued ? I can't remember the details maybe you know ?

 

Nah, I don't know about general cautiousness, but I do know valuations can expose them to legal problems; it makes perfect sense that in a falling market they may be less bullish, and thus perpetuating the self-fulfilling prophecies of cyclical economics.

 

More generally, I was just interested in your opinion, so thanks for that. It makes intuitive sense that prices and sales levels (and thus, number of valuations conducted) may rise and fall together. However, as you know yourself, property is a strange commodity, and I don't know whether or not that is statistically true.

[flecktimus]

Eh

 

My link shows the following:

 

"In Scotland, which had bucked the UK trend, the house price "balance" also turned negative last month"

 

This is the first time this has happened. This is big news. If you would prefer to listen to a couple of individual opinions that is fine. Up to you. Pretty fooish IMO. You have to remember the more people that buy houses, the more valuations they require, which in turn means................

 

These people's opinions are not entirely neutral. I do trust them a lot more than Estate Agents but their income is based on valuations. Sales go down = Valuations go down. Not rocket science.

 

And as for be being like a politician. Why don't you remember the following.

 

I have been saying all this since last summer. Back then I DID NOT HAVE THE FORTUNE TO HAVE ARTICLES LIKE THIS SUPPORTING MY ARGUMENT being published every day in the press.

 

I am slowly and surely being proven right, the media is slowly catching up to reality.

 

So what? You think I am not going to pick out what I want to in order to support my argument...

 

Anyone else is free to post anything stating the opposite unless I am mistaken.

 

Fact is what I have said was going to happen is happening right now. I have simply been telling the people the truth before the media decides to do the same.

 

And look at the responses I get for doing that......

 

But don't worry I can cope. In a few years when I buy a place mortgage free for a reasonable price, I will be more than compensated.

 

You Quoted Edinburgh 30-50% drop, you gave us a link to prove your point. I posted what was said about the Edinburgh property market .

Obviously you didn't read the report you quoted because as usual you went for the headlines..

Not my fault that the two Edinburgh RICS surveyors are in your opinion not of good standing.

But of course all the other RICS surveyors making up the report will be telling the truth:eek:

[Bigsmak]

Still reading this thread and I still think CC is so full of himself that he might be chopping of bits of his own fingers and toes and actually eating them!

 

I still don't think (IMO) that prices will fall 30-50% and I do think that city centre, better quality properties will hold their value in Edinburgh. There is a huge demand for good city centre living and therefore there will be a huge demand for good properties.

 

Some Edinburgh properties will definitely be more hit, all depends on Location + Quality of the property.

 

As I said earlier, I have just sold up after being a home owner for over 10 years. I have owned two city centre properties and made quite a nice bit of cash. As of Friday I will be debt free with a nice little car and a substantial wad of dosh in the bank which I will be investing wisely. I am still worried about renting somewhere, but the next 12 months will tell all. So I made the decision several months ago (before reading this thread CC, just so you don't chomp down another pinky!! ) and I think it was the right one as I believed that I would be selling in a few years anyway.

 

Interesting times ahead.

[Rosewood]

Howdy. I have no idea of timing. If we enter a Japanese style period it could take 10+ years of slow painful falls.

 

However the sheer pace that this is all picking up would indicate perhaps a faster fall. The internet was not around in the last crash so I think information is far more easily available.

 

Again how these falls take place is another matter. Nominal falls or real falls due to inflation ? Probably a combination of both is most likely.

 

The average house price vs Average salary ratio is about 3-4 times hostorically.

 

So I will simply be waiting until the average Edinburgh house is 4 times the average salary before I even think about jumping in. (About 120k compared to 210k as they are just now). If this does not happen I will not jump in. Simple plans are always the best.

 

Most booms overshoot on the way up and undershoot on the way down. This housing boom has certainly overshot on the way up so my logical thinking is that the opposite will happen. Again I like simplicity. It tends to work well.

 

Again I will say I have no Professional qualifications about this. Just simple common sense and a LOT of digging.

 

MY SIMPLE THEORY - I am simply certain that the last 5 years have been ABNORMAL rather than NORMAL. I think that is a fairly safe bet following a lot of investigating into the subject.

 

If I am wrong I am wrong. I hope not though because a future where the average person cannot buy the average house is a doomsday scenario if ever I heard one.

 

And yet many call me a 'Doom-monger'. Still not had a reasonable explanation of that one....

 

Thanks for the response. While I am living abroad at the moment I still own a flat in the centre(ish) of Edinburgh so it's a situation I'm keeping a close eye on. Personally I wouldn't be too upset to see prices drop (by how much I'm not really sure) as I have no intention of selling the property any time soon. Like you I'm saving over here so that when I come home in a couple of years I've got enough to buy a new house without selling the flat.

 

I can't see how a fall in prices can be bad for your 'average joe' even if they do own their own home. They can either wait for the next boom in X number of years time before selling or sell when prices are low and buy another property that will also have fallen in value. Therefore they shouldn't lose out.

 

The people that will lose out are those who 'property develop' based on watching too many shows with Sarah Beeney but that's their problem.

[coppercrutch]

Thanks for the response. While I am living abroad at the moment I still own a flat in the centre(ish) of Edinburgh so it's a situation I'm keeping a close eye on. Personally I wouldn't be too upset to see prices drop (by how much I'm not really sure) as I have no intention of selling the property any time soon. Like you I'm saving over here so that when I come home in a couple of years I've got enough to buy a new house without selling the flat.

 

I can't see how a fall in prices can be bad for your 'average joe' even if they do own their own home. They can either wait for the next boom in X number of years time before selling or sell when prices are low and buy another property that will also have fallen in value. Therefore they shouldn't lose out.

 

The people that will lose out are those who 'property develop' based on watching too many shows with Sarah Beeney but that's their problem.

 

Exactly !! And these people have bought a poor investment so nae luck. These thinsg happen. Lower house prices are a great thing for the vast majority. Shame people have been brainwashed for so long. I do think reality is starting to sink in though. About time too.

 

PS Nice position to be in saving up cash in the Caymans.

[coppercrutch]

Still reading this thread and I still think CC is so full of himself that he might be chopping of bits of his own fingers and toes and actually eating them!

 

I still don't think (IMO) that prices will fall 30-50% and I do think that city centre, better quality properties will hold their value in Edinburgh. There is a huge demand for good city centre living and therefore there will be a huge demand for good properties.

 

Some Edinburgh properties will definitely be more hit, all depends on Location + Quality of the property.

 

As I said earlier, I have just sold up after being a home owner for over 10 years. I have owned two city centre properties and made quite a nice bit of cash. As of Friday I will be debt free with a nice little car and a substantial wad of dosh in the bank which I will be investing wisely. I am still worried about renting somewhere, but the next 12 months will tell all. So I made the decision several months ago (before reading this thread CC, just so you don't chomp down another pinky!! ) and I think it was the right one as I believed that I would be selling in a few years anyway.

 

Interesting times ahead.

 

Come on Bigsmack give me a break !! I have been getting called all sorts since I started telling people what I thought last year. I was going totally against the grain, except for a few select other posters.

 

Now that it looks like I may be spot on - why shoudln't I be a little chuffed.

 

As for your point above I totally agee. I don't see lovely detached houses in Ravelston going for 50k anytime soon !! I do however believe all property will fall by a fair amount. The nicer places by less, the poorer places by more. Simple logic is always the best !!

 

Maybe a nice detached house in Raveslton will see a 20% fall. Not a big deal for most owners up there I imagine.

 

Maybe a new build 2 bed flat in Granton will see 50% falls. Probably quite a big deal for those having just bought them as an investment !!

[Bigsmak]

Come on Bigsmack give me a break !! I have been getting called all sorts since I started telling people what I thought last year. I was going totally against the grain, except for a few select other posters.

 

Just kidding with you man.... But be careful that sometimes your posting style can occasionally alienate people. If you really want to educate someone with your viewpoint, you shouldn't berate their beliefs, you should embrace these and work together to find a correct answer. People respond better to co-operation than having things stuck down their throat.

 

Good luck with your quest! I am still not convinced you are right but I'm happy to wait and see what happens!

 

[coppercrutch]

Just kidding with you man.... But be careful that sometimes your posting style can occasionally alienate people. If you really want to educate someone with your viewpoint, you shouldn't berate their beliefs, you should embrace these and work together to find a correct answer. People respond better to co-operation than having things stuck down their throat.

 

Good luck with your quest! I am still not convinced you are right but I'm happy to wait and see what happens!

 

 

I am not the only one !!

 

My education on this thread is purely altruistic. If I am proven correct that will be very nice of course. I just hope someone takes my advice, looks back in a few years and is well chuffed with their decision. That would be all good.

 

I think within 6 months I won't have to do this anymore. The change in the last 6 months has been incredible. I don't see how it can stop now.

[coppercrutch]

BTW a quote from myself back on March the third when asked what my 'strategy' was.

 

Have savings in SAFE places. For example NS and I that are linked to inflation and not interest rates..

 

Opinion today from the Governor of the BoE:

 

http://news.bbc.co.uk/1/hi/business/7400074.stm

 

The outlook for UK inflation has "deteriorated markedly", the Bank of England governor Mervyn King has said.

 

Mr King said inflation would probably stay above the government target of 2% for two years, hampering the economy.

 

He added that house prices were set to fall further, though no one could be certain how far they would decline

 

I have been telling people to get into these certificates since I got into them last October. They are tax free, backed up by the treasury and are linked to inflation. So that means if the BoE decides to drop, or hold interest rates whilt inflation kicks off your savings will do pretty well. However if you have your savings in a normal account they will not. And as long as I hold them for at least a year I can switch out of them whenever I want if bank interest rates get better.

 

Now this is not a 'told you so' post. This is simply a vindication of the steps I have taken with my own money. Also the advice I have given has been free and better than most 'experts' would give you. I hope some people have listened.

 

You can still get these certs but the rate you get has gone down.

 

You only get 0.25% above the RPI rate rather than the 1.25% previously.

 

So if you bought back then you are getting 5.45% TAX FREE on your savings at present. And you could put in up to 30k. And this would be backed up by the treasury.

 

If you buy them now you will be getting 4.45% TAX FREE on your savings. Still not bad and probably better than most high interest savings accounts. And as safe as you can be.

 

I am not sure where to put my money anymore !! Any ideas ?

 

As for gold that is not for the faint hearted...

[The Old Tolbooth]

Been following this thread with great interest over the past few months. A lot of good debate. Just wondering CC, how long do you reckon it'll take for house prices to fall the 30%-50% you are predicting? Also is there any sector you think will be more prone to the falls than others i.e. flats, houses etc.

 

Cheers

 

I can't see the prices falling by 50% Rosewood, experts are predicting around a 5% - 15% fall in most areas, with worst case scenario being 35%, but even that is extreme.

 

The main problem is lenders tightening their lending criteria.

 

Last year if someone approached me for a mortgage, I was 99% sure I could do something for them, this year it is completely different and I have turned down more people than ever before for a mortgage.

 

There really needs to be some middle ground somewhere.

[Rosewood]

I can't see the prices falling by 50% Rosewood, experts are predicting around a 5% - 15% fall in most areas, with worst case scenario being 35%, but even that is extreme.

 

The main problem is lenders tightening their lending criteria.

 

Last year if someone approached me for a mortgage, I was 99% sure I could do something for them, this year it is completely different and I have turned down more people than ever before for a mortgage.

 

There really needs to be some middle ground somewhere.

 

Totally agree with that John but the banks aren't willing to take the risks at the moment and you can almost understand why given the way they had their fingers burnt on the sub-prime mortgage fiasco.

 

I can't see it changing any time soon either given the never ending line of banks at the who are taking massive write downs on their investments. I've seen the impact in Cayman as well as the number of hedge funds that have run into trouble out here is quite disturbing. This is where the big banks try and hide their losses as well

 

I also agree that I don't think the house prices will dip quite as low as the 50% figure that has been mentioned but it is not outwith the realms of possibility.

[The Old Tolbooth]

Totally agree with that John but the banks aren't willing to take the risks at the moment and you can almost understand why given the way they had their fingers burnt on the sub-prime mortgage fiasco.

 

I can't see it changing any time soon either given the never ending line of banks at the who are taking massive write downs on their investments. I've seen the impact in Cayman as well as the number of hedge funds that have run into trouble out here is quite disturbing. This is where the big banks try and hide their losses as well

 

I also agree that I don't think the house prices will dip quite as low as the 50% figure that has been mentioned but it is not outwith the realms of possibility.

 

Absolutely!

 

It would take a very serious crash, but it's definitely possible that's for sure.

 

If lenders took a more sensible approach in the first place like Nationwide, or Coventry, then we wouldn't be in this mess, however greed took over.

 

If only Adam and Eve didn't take that bite!

[Radio Ga Ga]

How do we believe....

 

 

Scottish house prices have risen again, according to the latest information from Lloyds TSB Scotland.

 

The Scottish House Price Monitor showed that quarterly figures to the end of April rose by 2.3%, giving an average house price of ?163,639.

 

Source -

 

http://news.bbc.co.uk/1/hi/scotland/7401073.stm

[coppercrutch]

How do we believe....

 

 

Scottish house prices have risen again, according to the latest information from Lloyds TSB Scotland.

 

The Scottish House Price Monitor showed that quarterly figures to the end of April rose by 2.3%, giving an average house price of ?163,639.

 

Source -

 

http://news.bbc.co.uk/1/hi/scotland/7401073.stm

 

 

Was just about to post that myself !! Just where do they get these figures from....

 

No danger Edinburgh prices have risen 12% in the last year. Simply not true. Maybe TSB uses figures from asking prices rather than sales prices ?

 

The change in the last year from offers over to fixed price would then indicate an increase. When in reality it is a fall.

 

That is the only way I can see these figures being like this. Even the evil ESPC figures only show a 1% rise YOY to this quarter. The Land registry shows a fall IIRC.

 

A 12% rise against these 2 is rather a strange outcome !!

 

Believe who you want anyway. I like to look at reality. The staggering number of for sale signs in the city is all the 'sign' I need.

 

Pardon the pun.

[Peebo]

Was just about to post that myself !! Just where do they get these figures from....

 

No danger Edinburgh prices have risen 12% in the last year. Simply not true. Maybe TSB uses figures from asking prices rather than sales prices ?

 

The change in the last year from offers over to fixed price would then indicate an increase. When in reality it is a fall.

 

That is the only way I can see these figures being like this. Even the evil ESPC figures only show a 1% rise YOY to this quarter. The Land registry shows a fall IIRC.

 

A 12% rise against these 2 is rather a strange outcome !!

 

Believe who you want anyway. I like to look at reality. The staggering number of for sale signs in the city is all the 'sign' I need.

 

Pardon the pun.

 

Yeah, no doubt you are right about that. FACT.

[coppercrutch]

Yeah, no doubt you are right about that. FACT.

 

The article below is from the same time last year, using the same TSB details:

 

Easier May 2007

 

"In the three months to 30 April 2007, the quarterly price index for the average domestic property in Scotland rose by 6.8 per cent to give an average mix adjusted Scottish house price of ?154,344. On an annual basis, Scottish house prices have risen by +11.9 per cent. Average prices have now risen steadily for 75 consecutive months"

 

So they are comparing 154,344 with 163,369

 

They say prices have risen 11.6% in a year.....

 

A rise of 11.6% from 154,344 would be ?17,904. That should take this years average to ?172,248.

 

Clearly lies or have I missed something ? I am sure you will happily tell me within seconds if I am wrong Peebo......

[Peebo]

The article below is from the same time last year, using the same TSB details:

 

Easier May 2007

 

"In the three months to 30 April 2007, the quarterly price index for the average domestic property in Scotland rose by 6.8 per cent to give an average mix adjusted Scottish house price of ?154,344. On an annual basis, Scottish house prices have risen by +11.9 per cent. Average prices have now risen steadily for 75 consecutive months"

 

So they are comparing 154,344 with 163,369

 

They say prices have risen 11.6% in a year.....

 

A rise of 11.6% from 154,344 would be ?17,904. That should take this years average to ?172,248.

 

Clearly lies or have I missed something ? I am sure you will happily tell me within seconds if I am wrong Peebo......

 

You arthimetic is as impressive as it is accurate. However, before I start joining in with accusation of lies, I would personally wait to see the actual report, and the data contained in it.

 

Perhaps the base figure (for the comparable quarter) has been adjusted...

[coppercrutch]

You arthimetic is as impressive as it is accurate. However, before I start joining in with accusation of lies, I would personally wait to see the actual report, and the data contained in it.

 

Perhaps the base figure (for the comparable quarter) has been adjusted...

 

That can be the only explanation.

 

However when you release a report stating prices have risen a certain amount, when they clearly have not (Based on their own figures) they should at least point out how these are worked out and what sort of 'adjustments' have been made.

 

Otherwise it is at the very best exceptionally misleading...

[Peebo]

That can be the only explanation.

 

However when you release a report stating prices have risen a certain amount, when they clearly have not (Based on their own figures) they should at least point out how these are worked out and what sort of 'adjustments' have been made.

 

Otherwise it is at the very best exceptionally misleading...

 

What it looks like to me, is that a press release has gone out and has subsequently been quoted in the media, while the actual report itself, as far as I can tell from a quick scout around, has not been published.

 

If that is the case, a few hours delay is not particularly unusual. However, in this digital age, where people pour over every little detail they can find, a few hours is obviously a long time.

 

I would expect that when they report is published, the calculation of the figure in question will be clear; the methodology behind the data may not be. If you still think they are lying, then I am sure they would pleased for you to point out their mistake.

[coppercrutch]

What it looks like to me, is that a press release has gone out and has subsequently been quoted in the media, while the actual report itself, as far as I can tell from a quick scout around, has not been published.

 

If that is the case, a few hours delay is not particularly unusual. However, in this digital age, where people pour over every little detail they can find, a few hours is obviously a long time.

 

I would expect that when they report is published, the calculation of the figure in question will be clear; the methodology behind the data may not be. If you still think they are lying, then I am sure they would pleased for you to point out their mistake.

 

I have had a look at previous publications and no 'actual' report can be found. I think perhaps they just release the 'press release' and that is it. If you can find an actual report I would be very interested !!

[Peebo]

I have had a look at previous publications and no 'actual' report can be found. I think perhaps they just release the 'press release' and that is it. If you can find an actual report I would be very interested !!

 

Perhaps it isn't released via any channels immediately accessible to the general public. We may have to rely on your "For Sale" sign count after all.

[coppercrutch]

Perhaps it isn't released via any channels immediately accessible to the general public. We may have to rely on your "For Sale" sign count after all.

 

Head anywhere in Edinburgh. Have a look around you. LOOK FOR THE SIGNS. Literally.........

 

Then ask yourself when the last time you saw this many properties for sale. Not in the last 10 years anyway IMO. I personally think that is a great gauge of the current situation. Ask people you know from work, or family and friends who are trying to sell their house. See what they think about these articles saying "Scotland is different and everything is ok here !!"

 

I imagine they think they are bull.

 

 

Scotland, Edinburgh, the UK it is all goosed. To different extents in different areas of course. The most out of kilter with reality with be the worst/best hit. That is pretty logical IMO.

 

It is all getting a little too easy now with all this help from the media !!!

[Peebo]

Head anywhere in Edinburgh. Have a look around you. LOOK FOR THE SIGNS. Literally.........

 

Then ask yourself when the last time you saw this many properties for sale.

 

Last spring.

 

Ask people you know from work, or family and friends who are trying to sell their house. See what they think about these articles saying "Scotland is different and everything is ok here !!"

 

I imagine they think they are bull.

 

I know people whose work exposes them to the local property market, and while I don't think any of them would agree with that statement, their experience is that, in the main, the craziness of the Edinburgh market continues.

 

It is all getting a little too easy now with all this help from the media !!!

 

It is true that there are many articles, figures and commentaries out there that support a lot of what you are saying, your selective (and occasionally bizarre) use of the material does your arguments no credit. Your dismissal of certain articles, evidence and views simply because you don't agree with them is quite laughable, at times.

[coppercrutch]

Last spring.

 

 

 

I know people whose work exposes them to the local property market, and while I don't think any of them would agree with that statement, their experience is that, in the main, the craziness of the Edinburgh market continues.

 

 

 

It is true that there are many articles, figures and commentaries out there that support a lot of what you are saying, your selective (and occasionally bizarre) use of the material does your arguments no credit. Your dismissal of certain articles, evidence and views simply because you don't agree with them is quite laughable, at times.

 

I don't even know where to begin. The ESPC has way way more properties for sale than it has EVER had. Ask one of your friendly experts about that one. I was told from a member of the ESPC himself.

 

And as for the usual 'craziness' that is just 100% nonsense. If there is the usual 'craziness' then why do over half of people have to go to fixed price...

 

Last year you would be lucky if there were 10% at fixed price...

 

PS - You only go to fixed price in Scotland if you are having difficulty selling or want a really quick sale, but I assume you know this....

 

Edinburgh is goosed. Your attempts to claim the opposite are very valiant, but doomed to failure.

 

Ah well. All I can do is point out the truth.

[Peebo]

I don't even know where to begin. The ESPC has way way more properties for sale than it has EVER had. Ask one of your friendly experts about that one. I was told from a member of the ESPC himself.

 

And as for the usual 'craziness' that is just 100% nonsense. If there is the usual 'craziness' then why do over half of people have to go to fixed price...

 

Last year you would be lucky if there were 10% at fixed price...

 

PS - You only go to fixed price in Scotland if you are having difficulty selling or want a really quick sale, but I assume you know this....

 

I am just telling you what they tell me (even some members of the ESPC, no less!! I never claimed they were "experts", merely people whose professional life exposes them to that field) - 100% nonsense it may be.

 

Edinburgh is goosed. Your attempts to claim the opposite are very valiant, but doomed to failure.

 

Again, you are prattling - when have I have ever claimed that?

[coppercrutch]

I am just telling you what they tell me (even some members of the ESPC, no less!! I never claimed they were "experts", merely people whose professional life exposes them to that field) - 100% nonsense it may be.

 

Fair enough. I wouldn't trust most of these people though !! They do not say negative things about the market lightly however. That is why I trust what I have been told. I imagine these sort of realistic EA's are in a sever minority !!

 

 

Again, you are prattling - when have I have ever claimed that?

 

You have said over and over that I am talking nonsense with my predictions !!

 

Anyway out of interest what are your thoughts on the potential of 30% plus real falls in Edinburgh ?

 

BTW just saw on Scotland today they reported todays Llyods TSB news. They didn't bother to report on the Surveyors opposite news on Tuesday however...

 

Living in delusion land like the rest of this country !!