Location, Location Location is back tomorrow. So how will Kirstie and Phil handle the housing crash? Will they move with the times and acknowledge the crash or will it be more housing denial.The Channel 4 website suggests denial. It seems that Kirstie thinks that stamp duty might be the problem:
"All this talk about the credit crunch is a red herring. The problem is not falling house prices but falling transaction levels, down by 26 per cent nationally. If supermarkets suddenly sold 26 per cent less groceries what would that say about our economy?"
Let repeat that - the problem is not "falling" prices but falling transaction levels". Kirstie goes on to explain:
"my (i.e. Kirstie's) first flat had a £72,000 purchase price – with £720 Stamp Duty. At today's prices, that flat would be worth £325,000, so the Stamp Duty should be £3,250. But instead it is £9,750! This sum represents nearly a third of the minimum 10 per cent deposit insisted on by banks at the moment.
The market simply cannot continue to be used as a bottomless pit of money by the government, it is being milked dry and the resulting stagnation is bad for everyone."
If only the government stopped charging stamp duty, transactions would be higher and everyone would be better off.
Actually, I was with you Kirstie until that last point. How would renters be "better off" if transactions were higher? Do renters suddenly see their rent fall as transactions go up? Personally, I reckon that a stagnating market is good for renters. If it is harder to sell, more properties come onto the market, and increased supply pushes rents down.
So lets hear it for stamp duty; the higher the better.
9 comments:
She might well be right that with lower transaction costs the market would clear quicker, but in a market heavily dependent on bidders having access to credit, the drying up of credit means we reach the bottom of the trough quicker.
She is mad isn't she? She thinks someone can afford an extra £253,000 with no problems, but an extra £262,500 makes all the difference...
Well, it's probably just financial self-interest forcing her into denial a bit. Happens all the time.
She'll probably wake up and start making programmes about how to maximise the sales value of that house you have to get rid of on a shoe-string budget..
The market for TV programmes about property probably depends more on the volume of transactions than whether the price trend is up or down. Price trend up, it's about how to make a profit. Price trend down, it's about how to not lose money.
It's transaction volume that I'd guess has a closer relation the size of the audience..
jdc makes an excellent point.
SDLT is a wicked tax, but like all taxes on property (being in fixed supply) it is borne economically by the vendor (i.e. higher SDLT pushes the price down accordingly) so the first-time buyer is totally indifferent. If you are selling-to-buy it hits you, or if you are selling up.
I explained why right at the bottom of this post.
Let me know if there's an episode where someone she meets goes bezerk and starts beating her with whatever they find to hand. Until that gets aired, I don't intend to watch more of her drivel.
Her deceitful focus on deposits rather than mortgage principle makes me wish we could declare her a witch and burn her at the stake.
I wonder why she doesn't say £325,000 - with a 10% deposit that's £1706 per month in interest payments alone. Who can afford that and still thinks my old flat is acceptable?
Yup she's a witch. It's a shame people can't sue for such disingenuous financial advice.
I'd love to see a rival channel do a "where are they now?" of the people she helped last season.
Nick
Nick that is a fantastic idea for a programme! By the time you've tracked them down in 6 to 12 months, there'll be some super misery stories to tell.
Such a nice blog. I hope you will create another post like this.
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