The Housing Trap: ANOTHER ONE!!

Phirefly

Self fulfilling prophecy?

BrandNewDay

A_Nice_Englishman wrote: »

Well, they helped drive the market up with all those 'paint a radiator and make 10 grand' programmes....

I am really looking forward to seeing how the next seasons of the property development program goes... I can't remember the name of it. You know, the blonde woman tells people they're being silly to put a chandeliere in the utility room, they ignore her, they find out that they've got beetles eating the beams, she scolds them for not having paid for a full survey, they fight over what color the radiators should be, she tells them they should have put in an extra bath, they ignore her, and they go £50,000 over budget, yet still make money because the market was zooming along while they were bogged down in plumbing problems. Anyway, I've seen people on there make money even though they were total idiots. It should be funny to see what happens when the opposite happens.

Phirefly

macaque wrote: »

The media like to build things up and then demolish them. They have done this to countless celebrities so why not the housing market?

Interesting analogy. We were having this exact conversation over cheese on the weekend. We've had peaks and troughs before but we've never had anything like the stranglehold on the psyche of the man in the street by the media as we do now, and property is their latest fodder. Its frightening to see how easy it has been for the media to spin the collective conscience back the other way....

dannyboycey

macaque wrote: »

The media like to build things up and then demolish them. They have done this to countless celebrities so why not the housing market?

The media will do little more than sway sentiment to one side or another. It's not their fault that prices have peaked - it's a combination of irresponsible lending (and borrowing), and simply the natural progression of a cycle. It's not all doom and gloom either - the UK could really benefit from a sustained downturn in prices.

hgllgh

If there is no downturn, the gap between rich and poor will grow and grow leading to damaging long term consequences for the UK. Crime for example will increase as the UK becomes a land of "haves" and" have nots". It's fairly common knowledge that the youth of today are completely disillusioned when it comes to property as they feel they have absolutely no chance of accessing the property market.

Wickedkitten

We're getting ready to move to Gloucestershire, and I've been looking at houses there on rightmove for the past 2 months. Out of the 8 that I have saved, none of them have sold in the past 3 months and almost all of them have had at least a 5k reduction in price.

CYBERCIDERSAVER

I think the media have a larger role to play than is being suggested.

Without a huge rise in unemployment I find it hard to imagine where the desperation will come from. And the huge numbers of FTB wannabes are waiting in the wings to snap up properties should there be even a modest drop in prices.

But as a FTB wannabe, I am having it drilled into me on a daily basis about the rocky state of the financial sector due to "sub prime" lending and how the american housing market has collapsed and the gloomy outlook for the UK.

And it makes me think.

I ain't buying now even if I could afford to.
and with a small drop, the news willl be full of how far will it go.

So even if hoses do become "affordable" to me I may not buy then in case the market drops further.

So the fear I have (based on what the media have told me) could mean (if others follow suit) a further drop because of people staying way.

Surely economics cannot ignore people power. As has been said, look at the run on Northern Rock.
Had the knowledge of it's BOE lending not been made public, rather it simply forecast lower profits due to "higher market borrowing" then I am sure most people wouldn't have taken their money and run.

Well, that rambling reply makes sense to me!!! Better get tea, nearly time.

dolce_vita

CYBERCIDERSAVER wrote: »

I think the media have a larger role to play than is being suggested.

Without a huge rise in unemployment I find it hard to imagine where the desperation will come from. And the huge numbers of FTB wannabes are waiting in the wings to snap up properties should there be even a modest drop in prices.

But as a FTB wannabe, I am having it drilled into me on a daily basis about the rocky state of the financial sector due to "sub prime" lending and how the american housing market has collapsed and the gloomy outlook for the UK.

And it makes me think.

I ain't buying now even if I could afford to.
and with a small drop, the news willl be full of how far will it go.

So even if hoses do become "affordable" to me I may not buy then in case the market drops further.

So the fear I have (based on what the media have told me) could mean (if others follow suit) a further drop because of people staying way.

Surely economics cannot ignore people power. As has been said, look at the run on Northern Rock.
Had the knowledge of it's BOE lending not been made public, rather it simply forecast lower profits due to "higher market borrowing" then I am sure most people wouldn't have taken their money and run.

Well, that rambling reply makes sense to me!!! Better get tea, nearly time.

Yes. I agree.
A rambling post.

But you have nonetheless hit upon the very sentiment that will drive the market down i.e. "why should I buy now when prices will be cheaper next week"

This coupled with tighter lending will lead to price falls in the coming months and years.

You say economics cannot ignore people power, but I would say it's the other way around. Economic fundamentals will win the day. They always do.

So blaming the media is just shooting the messanger.
They are mere puppets and are owned by the same people for whom boom and bust is the order of the day.

throughout history there have been many booms in all sectors of the economy.

Here is a list of all the ones that ended with a "soft landing"...........




































Did you count them all?

Generali

CYBERCIDERSAVER wrote: »

Surely economics cannot ignore people power.

You're absolutely right. Any market is just an aggregation of a lot of individual decisions. If a lot of those individuals decide to buy tomorrow rather than today, demand can drop very quickly.

Whether that can be driven by a few TV programs is a different matter.

mr.broderick

Phirefly wrote: »

Interesting analogy. We were having this exact conversation over cheese on the weekend. We've had peaks and troughs before but we've never had anything like the stranglehold on the psyche of the man in the street by the media as we do now, and property is their latest fodder. Its frightening to see how easy it has been for the media to spin the collective conscience back the other way....

I pi.s.sed myself when i read this...