I have just spent a pleasant Rugby afternoon at Franklin's Gardens watching Northampton Saints thrash Bedford Blues 41-8. It was particularly enjoyable because I had been invited to watch the game from the Director's box and at half-time fell into convesation with a fellow guest who happened to be a Board Director of, well lets just say, one of the biggest EA chains in the country.

He admitted that they had the worst Q3 and Q4 that he could ever remember and that prices were falling rapidly 'across the board'. He explained that the market was being pinched from both ends; at the bottom of the market FTBs had all but disappeared and at the top it was completely stalled because no one could afford the price of big houses and that the 'gaps between the rungs' on the property ladder were now unbridgeable for virtually everyone.

I asked about the 'Spring Recovery' and he stated that it was a 'less than 20% chance' that we would see this. Interestingly he said 'everyone will know by the end of January what will happen to the property market and it will not be good'.

Red BAron,

What do you call a property ladder with no rungs?

A pair of stilts.

Going to take an enormous amount of super glue to keep them propped up.

Interesting he mentioned the end of January - considering the delay in the stats the only thing that is likely to reported is the falls from prior months from late autumn onwards, this lag could pressage pretty negative figures going all the way through the spring period if anecdotal evidence of the size of actual falls over the last few months is anything to go by.

Must of been a hell of an interesting conversation!

When you met did you say you where in property too.. and at the end of the conversion did you mention HPC.co.uk

Well you did not have to be a rocket scientist to work that out. It`s the time when the debt chickens come home to roost, and the roller coaster gathers momentum.
Mervyn is watching the CC spending very closely this holiday season.

I'm actually an STR although I was careful not to mention this. I simple expressed an interest in the market and that I was 'thinking of marketing a property in 2005'.

The response from him was pretty pragmatic - these guys know they have to talk the market down if they want to make sales and their commissions and his was a big organisation with a huge staff headcount.

Does anyone know how the CC spending is calculated?

Is it total cc debt or transations based?

Just wondering whether to buy everything on cc instead of debit card (but still pay it off in full each month) and make my 2p worth difference to the figures

I would think that the BoE are given and require detailed information by the lenders of the credit situation.
That increases in cc debt show more is being borrowed than repaid, that is what Mervyn is worried about.
Yes beerhunter, take Charlies advice buy everything on your credit card and repay each month in full. Shows you your accurate spend each month with added security. Only use your debit card for crash withdrawals, that advice came from my bank manager.
Mervyn has no problem with those who repay in full, six weeks free borrowing, thank you very much.

Knight's cross with oak leaves for the Red Baron, good work!

I have no problem with knowing my spending each month.. I have a spreadsheet which does that daily.. and has 3 years history.. so I know average spends, track trends.. and predicates the next few years.. so I know where I will be as a FTB.. and its great to remain focused

I will be doing anyway.. six weeks free borrowing means another £5 more interest made each month

HPC is addictive!.........even TTRTR says he can't resist the mental challenge of dealing with '' the negative comments''
So here I am again......back only 2 days after trying to escape the lure of this website.......COAB and ZZG and Topher are its mainstays and without them i'd never have made it through another year's HPI torture......I thought i was going to lose it when we had the dead cat bounce here in Jan and feb after a quiet autumn 2003 but thank f*** it 's all been downhill for OOs ever since.........

Your "Horse's Mouth" is right, I think.

But it isnt in Property Stock prices yet.

"COAB and ZZG and Topher are its mainstays and without them i'd never have made it through another year's HPI torture"

I am confused...
Where's the torture? It's in your head, not in your wallet.
Remember, it is cheaper to rent. Learn to think for yourself,
and the torture will go away

In other words, the chances of a spring bounce are slimmer than Twiggy's thigh. Great story, RB!

The only thing that is going to happen this spring is that the number of houses for sale is going to double while interest rates continue increasing.

Look out for some good stuff from Rightmove's Miles Shipside on that very subject in Monday's papers.

I've had a wee preview, and it's excellent.

RB,

I hope that's not BS.
If you don't mind I'm going to e-mail it to some 'friends'.

Great anecdote Red!

2004 has been full of so much bad news, 2005 HAS to be full of good news to even things up....HPC here we come :-)

Interesting conversation Red Baron. I must check back with the EA I know in Swansea and get him to spill some more words of wisdom also.

It is interesting how much of the Media often quote Roger Bootle's/Capital Economics' '20% fall over the next 2 years' in any report on house prices now. Of course, as any person with a brain knows, this is most likely a very conservative viewpoint of how big the coming CRASH will be.

Although it is nice to think of a 100K house falling to 80K and then offering 90% of asking price... but I still hold to my guns of 40%, 50% and even higher falls occurring across the UK in the coming years.

Do we know if its 20% real or nominal?

In 89 to 94 it was 17% real and 37% nominal.

Shouldn't that be the other way round?

Sorry
yes

Any idea what Roger's vision is?

Actually, come to think of it - no. I will have to do some Goggling. I should dig out some text from his recent book though shouldn't I.

I think it's probably nominal. Anyway, with inflation so low, real or nominal, won't be a huge amount of difference between them.

With RPI currently 3.4% (I propose we put CPI up Gordon's %rse), we should be looking at 11% RPI or so to summer 2008 ie 4 yrs from peak.

20% nominal = 31% real - conclusion - UP YER BUM ROGER!

More like 35% nominal and 46% real due to the abject fear that will kick in once those prices start tumbling. Again, the difference between this crash and the last 3 (73, 79 and 89) is inflation - there isn't any (much).
Where is BBB anyway? Gone into hibernation until 2010 when he can tell us HPs are rising - even I'll agree with him then!

Off course if you continually say things are going to crash eventually you could be right.
In the meantime (3 years) prices have on average risen say another 20 to 30 percent.

[quote name='OnlyMe' date='Dec 18 2004, 11:33 PM' post='46152']
Red BAron,

What do you call a property ladder with no rungs?

A pair of stilts.

Going to take an enormous amount of super glue to keep them propped up.

Interesting he mentioned the end of January -


End of January is traditionally the time of year when everybody realises they are still totally skint AFTER their first pay packet of the new year..

Somewhat scary thread.

Convictions of being right back in '04, when prices already seemed ridiculous.

Here we are, nearly 4 years on, the same things are being said, this time the credit crunch and the cycle are kind of on-side but... will the falls even take prices back to '05 levels, that's the question, nevermind '04, '03 and whatever towards what I'd personally perceive as fair-ish value.

Reading this thread is really sobering.