July 13, 2009

House prices continue to fall

Glory be – the estate agents will be singing hallelujah tonight – a ‘Sold’ sign has gone up a few doors down my road. One of those Sold signs is such a rare sight nowadays, that they must be collectors’ items. I don’t know about you – but I haven’t seen one of those for months. And even this one is not exactly a cast-iron sale. All they have had is an offer. But that doesn’t stop estate agents talking up the market.

I don’t know about your locality - but it seems property prices are not going up here. Last time I looked, there was no halt in the downward curve and no sign of the housing slump turning the corner anywhere in the UK. All available statistics seem to bear this out. It’s tough to get a loan – and house prices still seem to be eye-wateringly expensive. If I buy a piece of Chipboard from Homebase, I don’t expect it to keep on going up in value – or somehow miraculously adding value to my home. But if the cheap chipboard is called kitchen units – then apparently it DOES add value. The idea of aging, second hand values simply does not seem to apply to housing.

Obviously this is pure baloney. But the myth seems to work as people don’t just buy houses – they tinker with them. All in the hope of adding value and benefiting from a quick house sale. I’m not sure why we all believe houses are a good investment. After all we have a millstone of a mortgage around our necks. You even get taxed for buying and selling your own home nowadays through stamp duty. And then the government takes 40% of the value away as Inheritance tax.

But every week I still find myself highly amused with the property news. You probably get a free local paper too with misleading house photographs and hilariously high prices? Once you have glanced through one or two issues, you can value any house in your locality to within the nearest £10,000, which seems to be the smallest unit of currency that estate agents work on.

If I had a cheap Next suit I could set myself up as an estate agent tomorrow. The only snag is that nobody – and I do mean nobody is buying houses any more. Obviously I live in a different world to that inhabited by the people who write real estate forums you will find them talking a good story. But it is only hot air. It’d as though everybody in the country has realised the absolute absurdity of the housing market. A house is a place to live in. There is no point whatsoever in hoping and expecting house prices to rise when it is much better for everybody if they fall.

Think about it. If you really must sell your house to get a better one – then a bigger, better house will be closer in value to yours. Maybe one day soon we’ll realise that a second-hand house is exactly that – something old, careworn and used. And we won’t be surprised when it goes down in value – we’ll expect it to!

House prices continue to fall

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