Scoobrodamus Predicts house price crash
12 November 2007, 02:00 PM
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Scoobrodamus Predicts house price crash
After what seems to be endless false dawns perpetuated by the buy to let fools. It is rapidly becoming apparent that prices will go into full crash ie minus 10% or above in April 2008.
Many buy to let investors are hanging on until the new capital gains tax laws come into force at the turn of the tax year. They will then en masse put their two-bedroom apartments on the market in order to recognize their capital appreciation. This huge oversupply will cause the whole market to collapse.
It is no longer viable to pay the mortgage on a buy to let with the rent alone.
So there you have it Scoobrodamus predicts April 2008 the beginning of the slide I think it will go 35% down.
Last edited by GOLDMAN 555; 12 November 2007 at 02:05 PM.
12 November 2007, 02:06 PM
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Forget the captial gains tax, it will be the final realisation of just how much trouble the banks are in, due to lending huge sums of money to anyone and everyone, thanks to the Governments shameless promotion of borrowing money. It's going to run into hundreds of billions.
End result? Banks will stop lending money to anyone with a surname beginning with a letter of the aplphabet, lots of people will become unviable overnight and the FTB market will collapse, which will in turn bring the whole lot down.
Will it matter to anyone that doesn't want to move in the nect 10 years or so? Not a jot. You won't be any worse of.
Will it matter to you if you are a FTB? immensly - Prices will be forced to drop to a point at which the banks are happy to take the risk of lending money again.
End result? Banks will stop lending money to anyone with a surname beginning with a letter of the aplphabet, lots of people will become unviable overnight and the FTB market will collapse, which will in turn bring the whole lot down.
Will it matter to anyone that doesn't want to move in the nect 10 years or so? Not a jot. You won't be any worse of.
Will it matter to you if you are a FTB? immensly - Prices will be forced to drop to a point at which the banks are happy to take the risk of lending money again.
12 November 2007, 02:17 PM
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Mortgage lenders are worried
Dear Andrew
It’s very, very rare for us to complain about any of the tools and gizmos that appear on editorial sites, but the “house price crash calculator” currently appearing on thisismoney is a notable exception.
This tool seems specifically designed to cause maximum alarm, and in our view is an extremely ill-considered tool for your website that should be removed immediately.
Although we note that you list “house price optimists” among your personal dislikes, I can assure you our objection isn’t because we want to paint a falsely rosy view of market prospects, just a realistic one. Encouraging people to consider that there is any prospect whatsoever of house prices reaching their 1992 levels is, frankly, irresponsible. Your calculator takes no account of general inflation and is deeply, deeply misleading. Even the most pessimistic house price forecasters are nowhere near this vicinity – and it does your readers no service at all to imply that this is any way a realistic scenario. I have alerted the Nationwide to the way in which their data is being used.
Please reconsider this unhelpful and misleading tool, which cannot possibly be regarded as reasonable.
Sue Anderson
Head of member and external relations
Council of Mortgage Lenders
And my response... Dear Andrew
It’s very, very rare for us to complain about any of the tools and gizmos that appear on editorial sites, but the “house price crash calculator” currently appearing on thisismoney is a notable exception.
This tool seems specifically designed to cause maximum alarm, and in our view is an extremely ill-considered tool for your website that should be removed immediately.
Although we note that you list “house price optimists” among your personal dislikes, I can assure you our objection isn’t because we want to paint a falsely rosy view of market prospects, just a realistic one. Encouraging people to consider that there is any prospect whatsoever of house prices reaching their 1992 levels is, frankly, irresponsible. Your calculator takes no account of general inflation and is deeply, deeply misleading. Even the most pessimistic house price forecasters are nowhere near this vicinity – and it does your readers no service at all to imply that this is any way a realistic scenario. I have alerted the Nationwide to the way in which their data is being used.
Please reconsider this unhelpful and misleading tool, which cannot possibly be regarded as reasonable.
Sue Anderson
Head of member and external relations
Council of Mortgage Lenders
Dear Sue,
Thanks for the email.
I was surprised by the content of it and some of the accusations it contained. Let me address some of the points you raise.
I can assure you that This is Money is not in the practice of desiging tools specifically to 'cause maximum alarm'.
This is Money targets themes of interest to its readers and users, and produces tools that put them in the picture.
The house price crash calculator is aimed at allowing readers to experiment with theoretical scenarios on property prices using information that Nationwide has put in the public domain. To suggest that readers will believe house prices will return to 1992 levels because it is an option on a calculator underestimates our readers.
And in terms of it being a realistic scenario, I'm sure you're aware of the various examples of prolonged slumps in property in developed countries in modern history - the sustained slumps in Japan (more than a decade) and Hong Kong (more than seven years) spring to mind.
The reason the calculator goes back to 1992 was that it was the nascent stage of the most recent UK house price boom to give them the maximum amount of information on this theme.
You should also know that the calculator is the latest in a long series of tools we are producing for the site - others include a house price boom calculator (a reverse of the existing calculator, that allows people to see how much their property value has risen). Others will be appearing on the site soon.
You mention the remark in the dislikes in my blog biog. As you can probably see, these likes and dislikes are a bit of light-hearted fun.
I can assure you that my No.1 prority is producing a balanced and respected website. The views I or any other member of the team holds in no way sways reporting or presentation of news and comment is always clearly ring-fenced.
That's maybe why This is Money has become a key destination online for property market news - readers seem to like the breadth and balance of our analysis. You may have missed the extremely incisive and well balanced commentary last week from our property correspondent, who, incidentally, predicts house prices will keep on rising (also - please note the reader comments praising Simon for such a 'balanced' article)...
Is there going to be a house price crash?
I'm surprised to see the CML so jittery about confidence in the market and very surprised by this attempt to bring the mortgage industry's influence to bear on an independent, editorial website.
Rather than censoring our output, our preferred approach is to publish as much information as possible and allow readers to make their own call - including their views on our approach to content production - via "Reader Comments" on the site and via the blogosphere. It's for those reasons the calculator will remain on the site.
Kind regards,
Andrew
Editor
I was surprised by the content of it and some of the accusations it contained. Let me address some of the points you raise.
I can assure you that This is Money is not in the practice of desiging tools specifically to 'cause maximum alarm'.
This is Money targets themes of interest to its readers and users, and produces tools that put them in the picture.
The house price crash calculator is aimed at allowing readers to experiment with theoretical scenarios on property prices using information that Nationwide has put in the public domain. To suggest that readers will believe house prices will return to 1992 levels because it is an option on a calculator underestimates our readers.
And in terms of it being a realistic scenario, I'm sure you're aware of the various examples of prolonged slumps in property in developed countries in modern history - the sustained slumps in Japan (more than a decade) and Hong Kong (more than seven years) spring to mind.
The reason the calculator goes back to 1992 was that it was the nascent stage of the most recent UK house price boom to give them the maximum amount of information on this theme.
You should also know that the calculator is the latest in a long series of tools we are producing for the site - others include a house price boom calculator (a reverse of the existing calculator, that allows people to see how much their property value has risen). Others will be appearing on the site soon.
You mention the remark in the dislikes in my blog biog. As you can probably see, these likes and dislikes are a bit of light-hearted fun.
I can assure you that my No.1 prority is producing a balanced and respected website. The views I or any other member of the team holds in no way sways reporting or presentation of news and comment is always clearly ring-fenced.
That's maybe why This is Money has become a key destination online for property market news - readers seem to like the breadth and balance of our analysis. You may have missed the extremely incisive and well balanced commentary last week from our property correspondent, who, incidentally, predicts house prices will keep on rising (also - please note the reader comments praising Simon for such a 'balanced' article)...
Is there going to be a house price crash?
I'm surprised to see the CML so jittery about confidence in the market and very surprised by this attempt to bring the mortgage industry's influence to bear on an independent, editorial website.
Rather than censoring our output, our preferred approach is to publish as much information as possible and allow readers to make their own call - including their views on our approach to content production - via "Reader Comments" on the site and via the blogosphere. It's for those reasons the calculator will remain on the site.
Kind regards,
Andrew
Editor
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