2. Andychap said...

"Going forward, many of the key drivers of the market remain positive. The economy is healthy, demand for housing is strong, and house prices continue to rise."

What if as suggested the economy was not healthy, and first time buyers were warned in the article to think carefully before buying . Are they saying what we all know ?.

4. Surfgatinho said...

I'm sure I just saw the ticker on Sky News say mortgage lending down 10% in December!
Anyway, what is the logic of their argument? - Everybody's predictions were wrong about last year so we're going to make a prediction about this year! Duh!

6. The Capitalist said...

As a part-time EA "mole" in the Thames Valley, I can report that last weekend was very busy with applicants registering and lots of viewings. I'm at a complete loss why this should be so after the IR rise and threat of more to come - any ideas?

8. sold 2 rent 1 said...

I agree.
No crash for 2007. We will see peak prices though.

Spoke to my mate in NZ this morning. If you think our housing market is defying logic then theirs is mental

Base rate is at 7.25 and house prices still rocketing.
Every last bear is turning into a bull.

The US HPC is gathering momentum but it is taking its time

2008 is when it starts.

10. sirgoogle said...

The problem with the whole House price speculation bubble and the fact it continues to "defy logic" is the complete distrust we all now have of the stock market and previously secure things such as Bonds and Endowments. This mistrust is justified what with the tech bubble and ENRON. Nobody trusts the figures they see - banks and firms lie through their teeth. Govts make up figures. Property is the last bastion of trusted investment in the world. It is something you can actually touch. The Crash when it comes will cause a lot of misery and will probably herald in some revolutionary changes on the part of the public and they way they invest for the long term (or not).

12. Chillilizard said...

What the hell else are they going to say. Lets face it, if these guys ever start predicting a housing crash, they will be out of a job.

Its as 'vested interest' as it gets.

14. Nohpc said...

I agree NZ houseprices crazy. It does show that maybe UK prices are not quite as bad as you think.

16. Squirrell said...

NZ is unbelievably stupid. In Auckland or Wellington you are looking at a 3-4% yield on a basic 3 bedroom home and interest rates are over 8%. I did some calculations on how my weekly outgoings would be affected by buying the house I rent. The mortgage payments (exc principal) + maintenance + taxes + rates + insurance + transactional costs entail a 3 fold increase from renting to buying. I would have needed a 6.5 % capital gain just to break even!!! NZ truly is in the shit, UK i'm not sure - at least rent covers most of a mortgage.

18. george monsoon said...

Infliation is climbing
unemployment is no the up.
Interest rates are going up, but as yet not making much of an impact, so likely to rise further..
USA housing market is floundering..

I don't really give a toss what this article says, because anyone with an IQ greater than Jade Goodie can see that something is going badly wrong around the world.

I am genuinely worried about the future, and although we have no real evidence of a global catastrophe yet, I believe its only a matter of months away and could be triggered if the USA take military action on Iran.

20. Davros said...

> Inflation if predicted to fall towards the end of 2007.

Alright smart arse. By who, mortgage lenders or estate agents?

The markets certainly arn't factoring in any fall at the end of 2007. Who would you believe?

> Interest rates felt to be close to the peak of their cycle and to fall again in the next few years.

According to who? Britains recent interest rates were at historic lows.

22. Surfgatinho said...

"Inflation if predicted to fall towards the end of 2007" Ha, ha, ha, ha! Ooh I think I've split my sides. This is coming from the people who didn't see 3% CPI coming!

24. george monsoon said...

nohpc

Hang on a minute matey, Unemployment is going up.. fact!
interest rates are rising, or have I been dreaming for the last year.
Inflation just hit the 3% barrier despite all the spin to fudge the figures..

I think you may be dreaming..give yourself a pinch, just to check.

26. Dohousescrashinthewoods said...

Agreed, George, I bet there was a painful amount of massage required to get it down to 3% - after all, it's a very convenient number. I wonder if Mervyn saw the pre-massaged version - 3.3%, 3.5%?

I don't doubt 3% is a dubious as they could bear to go: we would have seen 2.9% if they could manage it. With NL being highly dubious at the best of times, I expect the "fair" figure (even on the CPI fudge) to be a lot higher.

28. Dugmug said...

Nohpc:

Quarterly unemployment figures are indeed down, as are figures those on benefits. But, to quote Dr John Philpott, Chief Economist at the Chartered Institute of Personnel and Development, "The quarterly rise in employment masks a 52,000 fall in employee numbers ... explained by more people in self-employment plus more being supported on government schemes. The number of full-time employees in fact fell by 105,000 [and there was a] rise in the number of temporary employees [with] 26,000 moving into temporary jobs because they could not find permanent jobs [as well as] a 74,000 rise in the number of economically inactive people (i.e. those outside the jobs market) including 40,000 more who, though inactive, say they want a job." I don't think these poor people are in any position to keep the economy, or HPI, going.

As for inflation, all the news of the last couple of days say Xmas spending was up, the cost of goods is rising, and unions will be arguing for better pay deals - I don't think lower inflation in energy costs will do enough to counter these other inflationary pressures, and anyway oil costs will only stay lower if the middle east situation doesn't get worse (would you bet your shirt on that?). We are also tied into a global economy that has had the USA's spending as its main driver, and their bubble is already bursting.

Am afraid I'd also question the relevance of interest rates going down "in the next few years" as this is too long a timescale to stop a downturn occuring now - Britiain's housing market is incredibly susceptible to even short-term changes in interest rates because we have such a high proportion of people on variable rate (ie. not fixed-term) mortgages compared to the rest of the world (as highlighted by David Miles' report for the Treasury in 2004).

30. Steven_l said...

'I believe its only a matter of months away and could be triggered if the USA take military action on Iran' (george monsoon)

Any trouble in the major oil producers, a coup in Nigeria, Venezeula and Iran trying to bully OPEC, etc would probably cause more inflation and end up leading to even higher interest rates. Lebanon and Israel aren't even oil exporters but the speculation from that conflict got us up to $78 / barrel, and now interest rates are rising as a result.

I can't see the USA or Israel attacking Iran unfortunately though. If they did you could be talking about $120 a barrel and major economic chaos, which would in the long run either crash our housing market or cause so much inflation that wages would catch up.

32. inbreda said...

NoHPC - interest rates have risen 50% in the last three and a half years, and are likely to carry on up. That's gotta hurt

34. This comment has been removed as it was found to be in breach of our Blog Policies.