Wednesday, Aug 16, 2006
Estate agent admits market could slow
Daily Telegraph: Housing market at risk if rate rises continue next year
Christopher Sporborg, chairman of estate agency chain Countrywide, has warned that the housing market could slow if the Bank of England continues to raise interest rates next year.
Posted by bigwavedave @ 09:36 AM (155 views) Add Comment
10 Comments
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1. inbreda said...
Well, if Christopher Sporborg, chairman of estate agency chain Countrywide, has warned that the housing market could slow if the Bank of England continues to raise interest rates next year, we'd best jolly well write to the MPC and ask for a rate cut.
After all, we wouldn't want countrywides profits-off-the-back-of-a-duped-public-and-impoverished-FTBs to fall from its currently snug level of £62.7 MILLION!!!!!
Surely there's enough evidence here for a right minded individual to take Mr Sporborg outside and give him a kicking for being so selfish!
2. Cstanhope said...
It is NOT the job of the Bank Of England to prop up the Real Estate Sector. But these guys seem to think it is. I did not see a mad rush to protect the Salaries of IT Professionals before the IT job market slump at the start of the millenium.
Actually that ended up being a good thing as it stabalized the industry, made it more effecient, the same needs to happen to teh housing Market.
3. paul said...
Mervyn Kings reaction will be telling. He's taken a laissez faire attitude towards runaway house price inflation. Lets see his true colours when house price inflation goes into reverse.
4. Bfskinner said...
but i thought there was no risk. Are houses not the best investment ever that can only go up up and away?
BFS
5. kpjcomp said...
£62.7 MILLION!!!!!, wow with that money you might be able to buy a house in London.
6. J. B. M. C. said...
When do people on this site envisage that house prices will go into reverse?
As a person hoping to buy in London I've yet to see evidence of this. In fact, quite the opposite, most properties within my budget have risen over the past 3-4 months. I guess, I'm trying to establish whether I should buy now or commit to another 6 months rental agreement.
7. bidin'matime said...
JBMC - if you don’t mind the risk of sitting on negative equity watching prices fall all around you, then go ahead and buy. All the economic evidence points to prices falling to well below their present levels, but we all have to live with the fact that they may rise further in the meantime.
It's exactly that fear, that prices will continue to rise and leave you behind, that drives people to take the plunge and buy, which is what drives the market in a bubble. Once people stop believing that prices will only rise, they will fall. Look at the graphs - they are always pointy at the top and rounded at the bottom - things crash quickly, but recover slowly. I gambled on finding the bigger mug right near the top of the dotcom boom - and lost... I'm not making that mistake again.
8. uncle chris said...
To be honest JBMC, most of us were expecting the downturn to have started last year. It is underway in many parts of the country, but London appears to be a different kettle of fish.
It hasn't helped that 3000+ city workers received bonuses in excess of one million pounds in the spring. No doubt a rush to buy expensive homes has supported the market somewhat, as has the influx of wealthy russians, arabs & americans since the UK government threw open the borders. Other supporting factors include lax lending rules by the banks (now being tightened) and the BTL bandwagon (see other posts).
I would imagine most here (including myself) would recommend you continue renting - chances are that you will get more for your money anyway, as the renters amongst us will confirm. Let the BTLs subsidise you :-). If I have the odd moment of madness and think of buying, I just take another look at the house price graph on the front page of this site and it soon knocks some sense into me.
9. Magnifico said...
.... about the graph Uncle Chris. I think the feature that stands out the most is the anomaly of the flattened peak of the last year.
Never seen anything like this before.
I do hope you're right but I can't help but wondering whether the market conditions have changed for good.As I said before, look at the HPC video by Chris Parker when the graph is shown under the heading ' What happens next?'. It makes a sobering viewing.
10. J. B. M. C. said...
Thanks for your comments peeps, much appreciated.
After reading your comments (and the moneyweek article posted today) I'm going to sit tight for the next 6 months.