House Price Crash Website

mystic_trev

lynzpower wrote:

Trev though, why would over supply create a crash

Sorry, this sort of thing is quite new to me, im learning!!

Lynz - If you work on the old "supply and demand" assumption, a bigger supply will bring prices down. A number of people (myself included) think that the one or two Interest rate rises by the end of the year will cause the Housing market to "stall" and then dip by the begining of next year.Add to that a flood of properties coming onto the market to beat the HIP'S deadline and you've got a recipe for disaster. All (of course) IMVHO

hitman_uk

sorry for being thick but what is HIP'S?

nelly_2

hitman_uk wrote:

sorry for being thick but what is HIP'S?

Its what you sway to the beat man




http://www.google.co.uk/search?hl=en&q=hips&meta=

lynzpower

Again back to HIPS ( im pro-hips btw)

Would YOU OR ANYONE YOU KNOW THAT ISNT A INVESTOR OR POSTER ON HERE ETC put thier home on the market to avoid the hips deadlines. Im just a bit about this, as in discussions with freinds and family, no one really knows about them. My parents who read the daily mail everyday had never heard of them & they have been avid buy and sellers, and v interested in property. Lots of my mates who have bought and considering selling recently, never heard of them. Dont know if this is *us* being so into discussing property that might be over inflating the issue amongst ourselves?

Hips= home information packs

Ian_W

BobProperty wrote:

That's all that happen last time with the removal of double MIRAS. Double MIRAS didn't apply to a lot of people. Of those it did apply to, I suspect a significant number of the people could still have managed to pay for a mortgage without one lot of MIRAS on part of their mortgage. BUT it was the effect it had on market sentiment. Everyone had bought and no-one could sell apparently. Suddenly (and it was in only about 6 months as I remember it) this wonderful investment called property was no longer wanted and prices fell. Why did it suddenly stop being such a good investment? I think fear of unemployment and interest rates which equals risk and affordability. Why so suddenly? I don't know, but we seem to like to pick out an excuse or trigger like double MIRAS removal. Are there any parallels to today?

Bob, I do now understand why you think HIPs could collapse the market given the analogy with MIRAS. However, I'm afraid that's just plain wrong IMO and saying MIRAS sank the market is akin to saying re-arranging the deckchairs did for the Titanic.:rolleyes:

MIRAS, for those who weren't about was tax relief on the first £30K of your mortgage interest and was whittled away through the 90's and ended completely in April 2000. Married couples were taxed as an entity at that time so were only entitled to 1 MIRAS relief whereas non-married couples [far fewer than to-day] with a joint mortgage could claim 2. In the 1992 budget the Chancellor announced this would end in August of that year and it did cause more activity but hardly a spike in prices such as to finish the market.

We actually sold to a couple in that position and agreed to complete dispite the chain not being ready, we moved in with my MIL, so I do remember - trust me on that one.;)

The fact is that prices started to fall in 1989, way before double MIRAS was an issue and nationally had fallen by about 12%, in London by double that by the end of 1991. Why? Interest rates had by then reached 10% and unemployment had increased by about a third from 7 to 11% [though to be fair it didn't peak 'til 93].

Of far more significance, less than a month after the MIRAS deadline, was Black Wednesday [12.9.92] when Norman Lamont was forced to leave the ERM but not before increasing IR from 10 to 12 and finally to 15% before giving up. Sure the 15% was very short lived but a whole 2% increase [no namby pamby quarter points in those days!] to 12% stayed for a good while and left most mortgage payers in pretty dire straights. In those days fixed and discount rates were only just starting and most, probably 90%+, were on SVR which like now was 1-2% above base rates. So most peeps were actually facing IRs of 13-14% on their mortgages. I was laughing having just signed up for an 11.5% fixed on the new place we'd then completed on, though I did end up buying out of it when IRs came down to more normal 7-8% rates later in the 1990s.

The icebergs last time out were very high IRs co-inciding with a very quick increase the numbers unemployed. If both those happen again I would expect a HPC but despite both looking as if they're on the way up we're at nowhere like the extremes of last time around. Unemployment is on the up but it's under 6% which is lower than the starting point in 1989 so that's a long way to go and so have IRs from 4.5%.

Of course you can be cynical and say the Govts manipulates the figures - But don't be naive with it - Governments have always manipulated the stats. NL didn't invent it, even if they have raised the bar.

So if HIPs come in when IRs are going through the roof and unemployment is increasing by 30% I agree with Bob, they'll collapse the market. :doh:

mystic_trev

lynzpower wrote:

Again back to HIPS ( im pro-hips btw)

Would YOU OR ANYONE YOU KNOW THAT ISNT A INVESTOR OR POSTER ON HERE ETC put thier home on the market to avoid the hips deadlines. Im just a bit about this, as in discussions with freinds and family, no one really knows about them. My parents who read the daily mail everyday had never heard of them & they have been avid buy and sellers, and v interested in property. Lots of my mates who have bought and considering selling recently, never heard of them. Dont know if this is *us* being so into discussing property that might be over inflating the issue amongst ourselves?

Hips= home information packs

Lynz - I've been looking further into the introduction of HIP's. It would appear that many EA's will be organising the HIP on the vendors behalf i.e a "package deal" and including it in their fee. When you think about it this is the most sensible way of doing it. I also assume their fees will be going up somewhat!!!!

jyonda

I reluctantly agree with Ian W why would a Hips charge of 600-1000 scare off anyone already potentially paying much greater sums in stamp duty? It may affect the price of a property by 600-1000 (a drop in an ocean) but that's it and anything else would just be wishful thinking unless it's the proverbial straw.

realwildone

I think most of you miss the point.

HIPS will stop people who put their house on the market with no intention of selling it. Your HIPS has a maximum shelf life and will need updating. EA may say they will cover the fees but if you take your house of the market you will have to pay up to £1,000 back to the EA.

You all saw what a difference a 25bp reduction did to the house market. Then imagine what 2 x 25bp increase will do to the market.

YouGov did a survey predicting that there were possiblely a million people considering bankruptcy. Debt is really out of control. Two hicks this year will push a lot over the top. Thats a lot of forced sellers.

BTL has fallen flat as it just does not make economic sense. These people who have bought 2 or 3 houses will be paticularly vulnerable to a few interest rate rises as they will have the rise 2 or 3 times with little chance of passing the increase to their tenants. Put that together with a falling market and there are a lot of troubled people.

I personally remember the 90's crash and things to me seem exactly the same. The market is being ramped up by the builders and EA's and people have been falling for the hype.

I don't want to sell my house. I do have shares and whilst a lot of shares have fallen in value the builders have been hit really hard and this is the fright of inflation. If the market is worried about inflation we should all be.

F_T_Buyer

realwildone wrote:

I think most of you miss the point.

HIPS will stop people who put their house on the market with no intention of selling it. Your HIPS has a maximum shelf life and will need updating. EA may say they will cover the fees but if you take your house of the market you will have to pay up to £1,000 back to the EA.

You all saw what a difference a 25bp reduction did to the house market. Then imagine what 2 x 25bp increase will do to the market.

YouGov did a survey predicting that there were possiblely a million people considering bankruptcy. Debt is really out of control. Two hicks this year will push a lot over the top. Thats a lot of forced sellers.

BTL has fallen flat as it just does not make economic sense. These people who have bought 2 or 3 houses will be paticularly vulnerable to a few interest rate rises as they will have the rise 2 or 3 times with little chance of passing the increase to their tenants. Put that together with a falling market and there are a lot of troubled people.

I personally remember the 90's crash and things to me seem exactly the same. The market is being ramped up by the builders and EA's and people have been falling for the hype.

I don't want to sell my house. I do have shares and whilst a lot of shares have fallen in value the builders have been hit really hard and this is the fright of inflation. If the market is worried about inflation we should all be.

Well said. I just find it such a shame people are still falling for the hype, and taking on too much debt.

I also blame the media (and Kirsty Allsop), and in particular the BBC who constantly put any glossy finish to every piece of spin news that is released.

Edit:
Oh, and I don't think HIPS will be responsible for falling house prices - yet i'm sure it will be blamed. I can imagine Kirsty Allsop (from Splinta) saying it wouldn't have crashed if HIPS weren't introduced.

tee_pee_2

is it me or is reading that website a bit like watching those American engelists with losts of "praise the lord" and patting each other on the back for being so wise.

( NO offence meant to Evangelists- I meant it in reference to the hype of the people writing the posts)