odaat

Q - I calculate property purchases according to risk / reward - turning houses over for a quick profit is too high a risk at this point in the cycle. Oil price hikes and the resulting economical impact on the economy is taken into consideration - IE inner city property purchases.

arnie2oz

Forgive me please, wise one, but I haven't a clue what you mean - could you explain in more detail?

I entirely agree. That wasn't my point.
May you live in interesting times

Don

Mike's gone very quiet which is usually a sign of abject defeat

MikeStanton

You forgot the 8th "D", "Dunces".

Yourself, Quinkana and Don are speculating, pure and simple. You are trying to build a rational case for a high probability of a drop, based on past (I typed that slowly Odaat, so that you would understand it) and incomplete data. I pray that none of you have jobs involving other people's money.

You have totally excluded a proper appreciation of low interest rates.

Yes, there is a slowdown. Yes, there will be a drop in real terms. No, I don't think there will be a crash. To repeat myself, the Oz market - which is the closest, most current example - has worse fundamentals than the UK, yet its housing market is holding up. You seem to have missed that out in your so-called analyses.

If the Oz market crashes, then let's talk.

In the meantime, please stay out in the playground, where you can do less damage.

Quinkana

You missed the 9th "D" - "Deduction".

How you would deduce from my postings that I am making an case that a crash is the most likely case, duced if I know.

What I will say is that I see the distribution of prices going into the future is very wide - and includes a crash smash. We could have deflation, inflation, stagflation - perhaps one following the other and even simultaneously (eg wages going up, goods going down or vice versa). 1970's all over again?

Badge

I dont see the point in even analysing who is wrong or pointing fingers on this thread , noone is defeated. I feel there will be a correction and Mike does not deny this. I just see a number of people putting forward theories all based on a degree of objectivity, then either on past history or deduction -speculation.

As for living in 3 homes in your life, why not. If you can afford the mortgage during hikes and your home is big enough to raise a small family then it is still possible. The home I have bought in Australia I plan to keep for 20 years min..

BM

odaat

At last: good news from the housing market - estate agents are starting to lose their jobs ....

(Filed: 21/11/2004)

Hundreds of estate agents have lost their jobs because of stagnating sales and the slump in the housing market.

Countrywide, the largest estate agent, has already shed about six per cent of its workforce - about 450 staff - and expects to make further cuts. Other agents are also laying off staff because of a 25 per cent fall in house sales over the past year.

City analysts say that it is inevitable that job losses will continue over the next few years unless there is an unexpected upturn in the market.

The cuts follow years of expansion by agencies during the property boom.

Harry Hill, the chief executive of Countrywide, said that the company had been cutting jobs through natural wastage since July. The firm, which recently issued a profits warning, has 12,000 employees.

"We have downscaled our staff by five to six per cent over the past four months and we have probably got another two per cent to go," he said.

"The market is brutally tough at the moment as there are very few homeowners desperate to sell and buyers are waiting to see if house prices will dip further.

"As a result, our agents have the worst of both worlds and are finding it incredibly difficult to make their sales and earn their commissions."

Peter Rollings, the managing director of Foxtons, said that although his company continued to prosper, job losses were occurring elsewhere. "I have had three applicants for jobs in the past two weeks who have been laid off by other London agents," he said.

"I also know of several agencies who have recently written to their staff informing them that the market is tough and that if it doesn't improve in the next few months, they will be out of a job."

Peter Bolton King, the chief executive of the National Association of Estate Agents, which represents about 10,000 agencies, said that although he hoped to see the market pick up in the new year, agents were suffering.

"In difficult times like we are experiencing now, estate agency becomes a marginal business and agents will inevitably have to tighten their belts," he said.

"If things do not get going again by spring, then we could see a situation where agents sit back and say 'do we need all these people in the office?' "
Chris Brown, a senior partner at Boxhall, Brown & Jones, an estate agent which employs 15 staff in its two Derbyshire offices, is also cutting back. "I have just had two members of staff leave the company and I certainly won't be replacing them," he said.

"We are not looking to lose anyone else, but if more people were to decide to leave, we would not replace them either.

"Any wily agent would do the same in this market. You just need to ask the staff you are left with to work that much harder but we are hoping things will pick up in the new year."

Although some estate agents continue to talk up the housing market, a recently published report by the Royal Institution of Chartered Surveyors painted a gloomy picture.

According to the survey, national house sales were down 25 per cent from last year, their lowest level in nine years. New inquiries by prospective housebuyers also fell for the sixth consecutive month.

Estate agents, of whom there are estimated to be 30,000 nationwide, earn their income through the commission paid by a vendor when a house is sold. The commission is a percentage of the house price and can vary from one per cent to five per cent, depending on the agency. The average commission rate is about three per cent.

Milan Khatri, the head of economics at the Royal Institution of Chartered Surveyors, said that an imminent revival in the market was unlikely. "If interest rates rise again, which we could well see early next year, then the market will weaken further," he said.

Ed Stansfield, a property analyst at Capital Economics, an independent financial consultancy, said that further job losses were inevitable. "Sales staff are not exactly rushed off their feet at the moment and some of the bigger chains will certainly be making contingency plans," he said.

"I am sure that significant cutbacks will be happening in some companies. The next couple of years are clearly going to be a less comfortable time for the sector than we saw during the recent boom."

Estate agents who lose their jobs in the coming months will find little cheer from recruitment agencies. Estate Agency Personnel, a company based in north London, places employees with more than 1,500 agents in London and the South East, but, according to Ian Dobrin, the managing director, it has experienced a big drop in demand from clients. "Business has slowed down hugely in the past couple of months," he said.

"The agents that we deal with are waiting to see if the market picks up in the new year and as a result, they are not considering recruiting until January at the earliest." Mr Dobrin said that fewer vacancies meant that estate agents were looking only for experienced staff and that it was "virtually impossible" to find positions for trainees.

The recruitment freeze is no secret within the industry. Chris Wood, the owner and director of PDQ estate agents in Cornwall, said that an increasing number of his competitors were trying to cut costs.

"You would never get them to admit it, but I know of many agents across the country who are actively not recruiting, and others that are actually putting pressure on their agents to leave," he said.

Although there are lean times ahead, agents are not expected to face redundancies on the level of the recession during the early 1990s, when house prices dropped by up to 20 per cent between 1989 and 1995, prompting a crash in the market.

Rupert Sebag-Montefiore, the managing director of FPD Savills, said: "We are a long way from the situation of the last recession when we and many other agents had to cut back dramatically on staff.

"Estate agents only tend to take that kind of action when they begin to make a loss, and that is not the current situation despite the slowdown."

At Castles estate agents in Hornsey, north London, the four full-time agents have been reduced to three full-time employees and one part-timer.

John Antoniou, one of the full-time agents, said that the company was looking closely at its costs as the number of house sales continued to fall. "Office bankings are well down on last year, and although none of us are about to leave, we are not going to be recruiting anyone in the near future."

kathml

Why is it that when prices fall in London it then becomes the most important thing in the world
In most of the rest of the country while sales have slowed prices are still rising all be it more slowly
Itis amusing that the ones who are getting hurt are the idiots who over borrowed to get on the BTL bandwagon
Over the years we've two properties which are let out very profitably giving a steady stream of income neither was bought as BTL but were acquired for other reasons also the maximum loan taken out was 30%

BTW Farmland in the UK has risen by 50% in the last year

robertd

I hope they do have jobs looking after other peoples money,intrest rates are not low at the moment if you have a big dept,i would like to put down a bet which i have said before with you,name your price, prices will fall in the uk from peak to bottom by 40%. Australia will fare better due to prices being less, and debt in Oz being less than the UK,there is a depresion on its way if you have your head up your a--, take it out and see sense, the AU dollor also will be near 2 to 1, who was saying it will be 4 to 1 ???
Rob(soon to be 40% poorer)

MikeStanton

Let's talk

...once you've established facts and carried out some sound analysis, not just picked-up the usual hysterical ramblings.

odaat

[QUOTE=MikeStanton]Let's talk

...once you've established facts and carried out some sound analysis, not just picked-up the usual hysterical ramblings.[/QUOTE

Stanton - you are like Lord Chamberlain waving a piece of paper and stating "peace in our time" ....

Rather than go down the predictible path of intelectual masterbation that you excell at - why not read what is happening where it matters - what the banks are saying ....

" BARCLAYS Bank will this week become the first big mortgage lender to warn homeowners that property prices could fall sharply over the next two years — by as much as 20%.
It will tell the City that house prices will drop by about 8% next year, wiping more than £12,000 off the value of the average property, as part of a two-year fall that could see prices drop by a fifth."

“The group view that is now built into Barclays’ plans is that prices will drop by 20% over the next two years,� said Christopher Smallwood, Barclays’ chief economic adviser. “People say that house prices can adjust gradually but I would be very surprised if that happened.�

Smallwood also questioned the Bank of England’s view that house prices could fall without damaging high street spending. The Bank said earlier this month that house prices would fall “modestly� and this would leave consumers unscathed. Barclays’ view is that a drop in the housing market will hit consumer confidence and affect spending.

The warning is significant because it is thought to be the first such prediction from a leading mortgage lender with a vested interest in the property market. Barclays, which owns Woolwich, the former building society, is the country’s fifth largest mortgage lender with loans totalling £62 billion.

Barclays has prepared its analysis of the housing market for a trading statement to be made to the stock market on Thursday. It joins other data producing a growing gloom about house prices.

A survey published by Hometrack, the property information company, found that prices have fallen by 0.6% over the past month with homes in central London, West Sussex and Surrey suffering the biggest drops. Cheshire was the only area to avoid falling prices. This was the fifth successive monthly fall.

“This month’s house price fall confirms, beyond doubt, that the housing boom is well and truly over,� said John Wriglesworth, economist at Hometrack. However, he is not predicting a significant fall in the market next year.

Countrywide, one of Britain’s biggest estate agents, also warned last Friday that house sales had slumped recently as buyers waited to see if prices were falling.

The Royal Institution of Chartered Surveyors (RICS) added to the gloom with a survey of its members showing the largest number of respondents reporting price falls since December 1992.

Jeremy Leaf of the RICS said: “Buyers are still nervous, which is not surprising given the quick-fire interest rate rises over the summer. But the professionals on the ground believe that confidence will not deteriorate further over the coming months as the underlying factors, jobs and the wider economy, remain stable.�

Both lenders are now preparing their predictions for next year and are expected to forecast low levels of growth during 2005.

Last week executives at other mortgage firms reacted with surprise to Barclays’ prediction. One said: “It is a very odd thing to do as the more weight that is given to the possibility of a market crash, the more likely it is to happen. We thought that Mervyn King (governor of the Bank of England) was trying to pour a little cold water on the market but Barclays’ motive is far less clear.�

Labour party strategists will be keeping a close watch on the market as a sharp fall in house prices in the run-up to a general election could have devastating consequences for the government."

I will make you a bet Stanton -
" I bet a refurbished and modernised 3 Bed semi valued at 275K within "ACORN" based area's in any city of UK will be valued at 20% less by Nov. 2006, I will go further and suggest the property would probably *sell* 20 - 40% present value"

And pppllleeeasssse .... do something about your "analysis" fetish, school boy swot cred is well and trully out of date boyo....

Gremlin

All this psuedo-intellecutal soothsaying is pointless. Years ago there was a prediction that house prices had climbed as high as they were going and that the next thing on the horizon would be a crash. Some of my neighbours even sold up and moved into rental to cash in. Sadly of course, rather than cashing in, they are now probably priced out.

Not saying that anyone's view on here is wrong, just that the so-called experts have got it wrong so many times before on pensions, endowments, split capitals, equity release for pensioners etc, that how on earth is Joe Bloggs supposed to make sense of it all? Furthermore, as the 'experts' opinion is so polarised, what makes one financial expert's opinion anymore valid than another's?

Time will tell.

Velouria

agreed. i was in the uk for eight years between 1996 and august of this year. i bought a house in 1998, watched it double in price in four years, sold it in 2002 and was priced out of the market (even though i was on a decent wage). i had been hearing that the house prices were coming down for the longest of times, but unfortunately could never see any evidence of it around me. time will indeed tell.. it wont happen overnight, thats for sure.

MikeStanton

Gremlin's post has it in a nutshell - far more reasonable than your inept ramblings. And Gremlin isn't taking any particular side. If you want to choose a bank, why not choose the Bank of England? Perhaps not, its views aren't in line with yours.

By the way, there is a 'u' in masturbation.

How very appropriate.

odaat

eeeeek, a spelling mistake :scared:
trust the board swot to pick it up .... and miss out on the main issue, a profit making private bank with 62 billion invested in home loans concurs that prices in the residential property market are heading for a *fall*.

As for the BOE - does the words Mervyn King, "prices are heading for a correction" quote and 5 interest rate hikes in 12 months mean anything

wake up boyo the drums are sounding and there is a bloodbath about to happen in the UK prop market ....

*peace in our time*