bil

At the moment recession doom and gloom is sexy. People seem to revel in the prospect of imminient disaster, and talking it up can make it worse. The markets are partly smoke and mirrors, in the same way that a cinefilm isn't really continuous action.

In what way precisely is it the worst thing since the 60s ? I'm curious to know which criteria you selected, and why.

Here there are quite a few sold signs out. Today I counted 44 signs, 11 of which were marked sold.

I will be impressed by agents closing when you can show me there are now less of them than there were say ten years ago.

andyrich666

one of my account manager's bought a Daimler 56 plate new for 80K, they didnt have the right colour for the car in stock, so he had it repainted in red (was blue) for 7k, the car now books at roughly 25k some 18 months - 2 yers later, that is some serious depreciation.

I thought if that was my flat id be sickened, all that is a poxy car - unreal

poshnbucks

bil

Yeah, don't you wish you had that much money to chuck around? That kind of money would sure as hell buy me happiness.

toyboy23

Most definitely.

I think the rate at which they sell is what should be noted. Where I am it’s rare not to go from the ‘For Sale’ sign to the ‘Sold’ sign in a week. Quite often the first sign placed is the ‘Sold’ sign.

Comments such as “one UK house valued at 210 in 2003 sold this week for 140” are ineffectual without the detail of the area, the seller’s situation etc. You don’t have to think especially hard to realise that the UK is not one small marketplace, and that all UK houses can’t be considered the same.

As for estate agents closing, I am soooo upset. You only need two or three agents around a typical UK town, and it wasn’t that long ago that that was the norm. Of course, you don’t actually NEED an agent at all.

And yes, that is a poxy car!

billgates

Yeah, we're only talking it up, it's not really happenning.

http://business.timesonline.co.uk/to...cle4339850.ece

It's only just started.

andyrich666

How many houses are new and unsold in Spain - is there any references to this ?

bil

Would you mind awfully reading EXACTLY what I said?

I said talking it up would make things worse. I never, anywhere said that there isn't a problem, or that talking it up created the problem.

OK?

toyboy23

Dear dear dear… Nobody is saying that it is not happening at all.

I have strong feelings (and obviously others do) that ‘talking it up’ is simply not helping, and almost certainly making it worse in various ways. As just one example, let’s say two people are going out to view property today (UK or Spain) both in a good position to make an offer. The first spent ages yesterday reading all the doom and gloom online and in the papers, the second did not.

How differently will they handle their viewings and their offers? The same applies to their respective sellers of course. Who will successfully conclude their property deal?

Glass half full? Glass half empty? Feel free to be completely and utterly negative about the future if that is your desire.

I prefer being realistic, and will always attempt to gain an understanding of the facts and real issues surrounding a topic, and not merely surmise on how awful life can get. Negativity tends to be self-fulfilling.

El Capitan

Surely the buyer and the seller in your example will both do their homework on the market and know their respective points of strength. A buyer who really wants a property will pay what it takes to get it before someone else buys it. Nothing new there. A buyer who is looking to make a few bucks on an investment will probably either not be viewing or will be ready to make what some call a silly offer, like half the asking price. Being realistic, whatever is said re "doom and gloom" in the papers is only part of a buyers or sellers homework. Being realistic, as always, the value of a house is the price you can get a buyer to pay, not the value you thought or wished or were told you "should" be able to get. The true value of a house also has nothing to do with the size of the seller's mortgage.

billgates

I'm not surmising on how awful the current crash in house prices in both Spain and UK is, nor do I feel negative about it. I, like you, prefer to be realistic about life, not "completely and utterly negative about the future".

A major drop in prices has been required for so long. Anyone looking to move house now should be happy that prices are plummetting. If a seller has to knock 20% off the unrealistic price that they or their agent thinks their house is "worth" then that seller should also knock 20% off the offer price that their new prospective house is "valued at".

Everyone's a winner except the agents and government who collect less fees and tax.

Of course, if the seller is simply selling up to fund their retirement in the sun then it isn't really fair that the poor buyer should have to pay for a grossly inflated mortgage just so the seller can live a more comfortable life by the pool.

A house should be just that: somewhere to live. Not a payment vehicle for a lavish retirement at everyone else's expense.

A small minority of people might get hurt when they realise that they should have saved for their retirement instead of relying on endless property inflation but most people will benefit from reduced prices and actually be able to afford to buy their own home.

The future is bright. The future is affordable housing.

bil

"A house should be just that: somewhere to live."

So you feel that no-one should be allowed to make any money from selling their house, and that the free market should be constrained?

Why not simply advocate State ownership of all land?

billgates

Not quite, but I do believe that the government could and should have done something to prevent this unrealistic property bubble.

If banks had stuck to the tried and tested principles of three times salary for mortgages and a sensible deposit then house prices would never have gone the way they did. FTBs would still be able to afford a home without saddling themselves with a lifetime of debt.

I've nothing against anyone making money out of their house - just build an extension or add an extra bedroom. Whatever. It's the rampant speculation that is wrong. The Buy-To-let mortgages that were really only Borrow-To-Let because they were sold with huge mortgages. The new "owners" were only interested in speculation and making a quick profit. All that really happened was that so many people jumped on the bandwagon and suddenly everyone just had to get on the property ladder at any cost.

People were stupid.

Why did the banks really lend people 125% mortgages?
They didn't care what the people earned or whether they could actually afford to repay the loan. The banks just knew they were onto a good thing because it was pushing house prices up and up, and when the poor buyer defaulted on the mortgage, then the bank could clean up by repossessing the house and selling for an even greater profit.

Pure greed on the part of the BTL idiots and the banks, and the only real losers were the FTBs who were pressured into buying into an inflated market but who are finally realising that now it is time to wait.

Can anyone really believe that house prices jumping from 3 times salary to 8 times salary is an acceptable way for a "free market" to behave.

You could argue that the bank of England should not be able to adjust interest rates to control inflation. Isn't that simply interfering with your same "free market"?

gallerie9

When I brought my first house, it was one and a half times your wages and that was a struggle.

I do think that banks are to blame, buy lending such unrealistic mortgages they have caused this problem.

How many people under the age of 45 with kids can possibly save for a pension on an average wage ?

And by the way I know atleast 5 men who had saved with private pensions that have failed to give them the returns they were promised and they are now reaching there pensionable ages and the only real asset they have is there homes.

billgates

I think the final paragraph of this article is spot on.

http://business.timesonline.co.uk/to...cle4340340.ece

"The faster house prices fall, the faster they will reach a bottom and the faster the level of transactions, which is so important for the broader economy, can return to normal....."