There won't be a crash

GreatApe

westernpromise wrote: »

some sort of tax attack could be mounted on home owners with, as we've seen with SDLT, baleful effects rippling out across the whole market.

The inheritance tax is now a big issue, its not yet highlighted much but its going to be a big drag on London

For instence if you look at this house

http://www.rightmove.co.uk/house-prices/detailMatching.html?prop=53604532&sale=88148682&country=england

It sold for £70k in 1995 so it would have had no IHT on it.
In fact a person could have died owning two of those homes and still been in the zero band for 1995

The house sold again just last year for £860k so the IHT bill would have been £214k a sum of money that would possibly have to come from selling the london property rather than keeping it. That is £214k out of the London market. If a person owned two such homes they would have to hand over to the tax man £558k in IHT tax

So we have gone from a situation of a person owning two homes in zone 2 in 1996 having to pay no IHT to now the same person owning the same two homes in the same area in 2006 having to pay £558k in IHT

Conrad

I was aghast yesterday afternoon to find the development I've been waiting ages for had a queue of people camped outside it ready for today's launch. I came home in right old tiss, and almost camped overnight there myself as only 28 properties being launched in this phase, but I could not face an overnight on a dark wet bridge. We live an hour away.

Eventually decided to go there this morning and joined the even longer queue, very disheartened.

Cut a long story short we were issued numbers 4 hours later then spent 3 hours in a cramped marquee waiting to be called to the sales office.

All the while as each number was called, sold stickers were applied to one property after another. We were pretty disgruntled early on as we and the other 200 people there soon realised most of us would lose out. The sense of dread and of it being a total waste of time and stress was palapable. Some people were highly agitated.

By a stroke of luck we just got the very one we'd wanted for weeks, but just after our slot everyone else was turned away empty handed.

And note there was no show property to see and very limited information.

It turned out some folk had been camped there two days and nights.

A big worry was that an investor might reserve several but luckily not.

Crazy market

Keezing

Conrad wrote: »

I was aghast yesterday afternoon to find the development I've been waiting ages for had a queue of people camped outside it ready for today's launch. I came home in right old tiss, and almost camped overnight there myself as only 28 properties being launched in this phase, but I could not face an overnight on a dark wet bridge. We live an hour away.

Eventually decided to go there this morning and joined the even longer queue, very disheartened.

Cut a long story short we were issued numbers 4 hours later then spent 3 hours in a cramped marquee waiting to be called to the sales office.

All the while as each number was called, sold stickers were applied to one property after another. We were pretty disgruntled early on as we and the other 200 people there soon realised most of us would lose out. The sense of dread and of it being a total waste of time and stress was palapable. Some people were highly agitated.

By a stroke of luck we just got the very one we'd wanted for weeks, but just after our slot everyone else was turned away empty handed.

And note there was no show property to see and very limited information.

It turned out some folk had been camped there two days and nights.

A big worry was that an investor might reserve several but luckily not.

Crazy market

Nice story.

Obviously in reality everyone would be given the opportunity to bid and the price would be driven up.

chucknorris

Keezing wrote: »

Nice story.

Obviously in reality everyone would be given the opportunity to bid and the price would be driven up.

I suspect not, part of the marketing hype would probably have been 'get in quick and buy it now'! Personally I wouldn't get involved in that sort of process. From the developer's point of view, a bird in the hand is worth two in the bush.

Keezing

chucknorris wrote: »

I suspect not, part of the marketing hype would probably have been 'get in quick and buy it now'! Personally I wouldn't get involved in that sort of process. From the developer's point of view, a bird in the hand is worth two in the bush.

There's 200 people in the queue. The bird is in hand regardless.

I enjoyed the story though.

economic

i would never buy something that expensive i didnt know full details of.

norm_

Does this bear any similarities?

Excerpt from an article by Allister Heath written 2 August 2006 on Japan's house price crash.

As the dollar slumped against the yen, making Japanese goods more expensive, demand for Hondas and Walkmans dropped and Japan was plunged into recession. The Bank of Japan responded by slashing interest rates and injecting huge amounts of money into the economy. Growth took off again, fuelled by cheap money; but excess liquidity started to spill over into property and share prices. The authorities, lulled into a false sense of security by low consumer-price inflation, maintained rock-bottom interest rates for far too long, allowing a grotesque property and equity price bubble to develop. The Bank of Japan eventually removed the punchbowl in 1989 but by then it was too late. The bubble burst and Japan’s economic miracle came to an end. The collapse was exacerbated by the behaviour of Japan’s dysfunctional banks, which had lent heavily to property investors: as land prices slumped, bad debts exploded and the banks faced catastrophe.

UK stocks are at record highs, interest rates have been at records lows for nearly a decade, property is climbing year on year not matched by wages, household debt is reaching 2008 levels again. All echoing the events of Japan's bubble.

chucknorris

Keezing wrote: »

There's 200 people in the queue. The bird is in hand regardless.

I enjoyed the story though.

No it isn't regardless, it is the whole sales pitch (which you have overlooked)!

The 200 people are not being ignored, they ignited the flame of the initial offers!

AnotherJoe

The main sign a crash is imminent wil be when everyone agrees that there won't be a crash.

chucknorris

AnotherJoe wrote: »

The main sign a crash is imminent wil be when everyone agrees that there won't be a crash.

Yeah exactly, shoe shine boys giving stock tips, we aren't quite there yet I think, but the stock market is looking a bit toppy.