House price crash? Not here in Scotland there’s not!

[Murdoch MacDonald]

House price crash? Not here in Scotland there’s not!

By: Murdoch MacDonald

Ayrshire, Scotland, 16 November 2008--HERE in south-west Scotland, house prices fell by 2.3% in the three months to 31 October 2008.

Yes, a paltry 2.3%.

Hardly the end of civilisation as we know it, is it?

Certainly not even evidence of a house price crash that some doom-mongers seem convinced that we are in the midst of.

Especially when you consider that, in spite of the current gloom in some quarters, house prices here are still a heartening 7.1% higher than they were a year ago.

Up in Glasgow, figures also lend weight to the view that economic Armageddon is not yet upon us.

There, house prices actually rose by 6.4% in the last three months, and are currently 4.1% higher than they were this time last year.

Professor Donald MacRae is chief economist at Lloyds TSB Scotland, who produced these figures.

He comments: “The Scottish housing market is showing sensible adjustment rather than a precipitous collapse.”

Wise words.

So, don’t panic, Captain Mainwaring, don’t panic!

The only thing we have to fear is fear itself.

www.AyrshireScotlandBusinessNews.com

 

[Former Member 1]

House price crash? Not here in Scotland there’s not!

By: Murdoch MacDonald

Ayrshire, Scotland, 16 November 2008--HERE in south-west Scotland, house prices fell by 2.3% in the three months to 31 October 2008.

Yes, a paltry 2.3%.

Hardly the end of civilisation as we know it, is it?

Certainly not even evidence of a house price crash that some doom-mongers seem convinced that we are in the midst of.

Especially when you consider that, in spite of the current gloom in some quarters, house prices here are still a heartening 7.1% higher than they were a year ago.

Up in Glasgow, figures also lend weight to the view that economic Armageddon is not yet upon us.

There, house prices actually rose by 6.4% in the last three months, and are currently 4.1% higher than they were this time last year.

Professor Donald MacRae is chief economist at Lloyds TSB Scotland, who produced these figures.

He comments: “The Scottish housing market is showing sensible adjustment rather than a precipitous collapse.”

Wise words.

So, don’t panic, Captain Mainwaring, don’t panic!

The only thing we have to fear is fear itself.

www.AyrshireScotlandBusinessNews.com

Very fair points. Although as house prices out pace earnings by some considerable margin there clearly IS an issue, and a serious one at that. Sensibly, the price of your house is of no consequence so long as it provides you with an appropriate degree of shelter and you can meet the payments for it.

The panic comes from the use of houses as cash cows to be milked on a daily basis.

Frankly, the market (price wise at least) needs to fall about 10% then freeze for 5-8 years while people get a chance to stabilise their debts, wages catch up with house prices and younger buyers are able once again to get onto the market. It may well be that that fall has to be averaged across the UK; and price collapses may well be necessary in places like London where quite frankly the bricks and mortar are not worth the money.

I'd expect to see some degree of collapse in places like Edinburgh and I suspect that will hit some sectors of the market more than others. But I don't really expect to see the same turmoil as you might easily observe outside Scotland.

But of course it's all nothing new; we've been through all this before two decades ago...

Now is a time of opportunity; not threat!

 

[Gordon N]

My take on this subject is that the issue is not the price/value of houses right now, it is more the availability of finance to buyers. With this being the sticking point it doesn't matter how much your house is valued at, if a potential buyer cannot raise the finance - it ain't going to sell! (Which in a weird way means if it can't sell at it's value, is it really worth that much?)

Just my two pennys worth...

Regards,

Gordon

 

[Former Member 1]

My take on this subject is that the issue is not the price/value of houses right now, it is more the availability of finance to buyers. With this being the sticking point it doesn't matter how much your house is valued at, if a potential buyer cannot raise the finance - it ain't going to sell! (Which in a weird way means if it can't sell at it's value, is it really worth that much?)

Just my two pennys worth...

Regards,

Gordon

Well of course the availability .... and the affordability of finance is really at the heart of the whole problem.

I'm kind of caught in the middle here myself. The flat I'm living in just is one that I bought as a pension... My intention was to live in it for 18 months, tenant it and move on... I intend to build something and had actually hoped to be shifting early next year. But I'm going to hold off as I can see a dip coming in the next 18-24 months which will work to my advantage... I won't have to sink myself in as much debt to get what I want.

At one point about 14 months ago this place was 'valued' at £110K, now they're saying circa £85K. Personally I think it's worth (in real life terms) maybe £40K but it's all academic. I don't expect to sell it any time soon.. In fact I don't intend selling it for 20-25 years... Which means its 'value' is just a number!

 

[Third Sector Lab]

A house is somewhere to live and not an investment...that's my view.

One thing the credit credit has effected is the ability of employees to choose jobs based upon their individual merit rather than proximity to their house. If you see a new job in a new city it's very difficult to up and move now, that coupled with crippling rail prices means a fairly stagnant job market.

 

[Adventurelife]

I am no expert on house prices far from it. However, I have experienced the highs and lows of being a property owner having bought my first property back in the 80's when I was just 20.

What strikes me is opinions on the property market at this time are just that, opinions. No one really knows what is going to happen to house prices but I will agree that the trend will more than likely be down.

The overall state of the economy will be the driving force I suspect. If the number of unemployed goes north of 3 million we are in for a bad ride and house prices like everything else will have to suffer.

My opinion, and it is nothing more is that house prices are going to fall a fair bit due to the lack of funding and the gap between average earning and average house price.

It is just an opinion though so I could be wrong. The only facts I have are property I got valued a year and a bit ago has just been revalued at over 30% down. Also two business friends who's business is property are seeing huge reductions in the value of their portfolios. This is been balanced by the opportunities that are being presented at massive amounts under valuation for those that are cash rich and can purchase without borrowing or on minimum borrowing.

As always as happened the last time, many will get burned and some will prosper, and the majority will just carry on as normal.

Peter

 

[Gordon N]

As always as happened the last time, many will get burned and some will prosper, and the majority will just carry on as normal.

Wise words Peter, I have to say I think your right, I just hope I fall in to one of the later two categories!

Regards,

Gordon