Tuesday, Feb 27, 2007
UK House Prices continue to Rise whilst the US Housing Market Slumps
Goldseek: UK House Prices continue to Rise whilst the US Housing Market Slumps
The UK housing market has proved remarkably resilient by notching up a further gain for January of 1.3% (Halifax) , whilst the US Housing market continues to go from bad to worse as the sub prime mortgages time bomb goes off, resulting in a slump that looks set to be the worst since the Great Depression of the 1930's.
The UK housing market looks set to continue to be supported, even at these elevated levels,
Posted by david @ 01:53 AM (175 views) Add Comment
12 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Ianbeale said...
looks to me from the graph that that houses are stretching affordability limits in the modern low interest rate era and are testing new ground where on two previous occasions (98 and 04) it has been beaten back - add the extra 0.25bp rise that is already priced into money markets and it l look a lot worse - add a couple more on as per the tone of mervs recent communications and it gets very dodgy - conclusion do not buy a house they are overpriced
2. Taffee said...
BUT...the buy-to-let figures simply don't stack up anymore....when the penny drops,they will be dumped on the market
3. Ttimgg said...
The force driving the house price boom in the US, and probably here, is SECURITISATION. Mortgage brokers can sell on their mortgages to hedge funds, and hence to pension funds. This means that a). They do not bear the risk of default, b). They have sufficient reserves to make more loans, indefinitely. They get a fee for every mortgage arranged, so there is an incentive to make as many loans as possible. This forces lending to the limit of affordability, under the prevailing economic conditions.
When conditions change, the whole house of cards collapses. House price crash is the least of the problems (?) The real damage is that the pension funds are left with trillions invested in worthless trashy bits of paper, because of massive morgage default.
The current smash in the US is awsome and horrifying in equal measure. "Carnage" and "Bloodbath" are words used by the sober ecomic press. Its like watching a train crash - its horrible, but you can't keep your eyes off it.
4. harold said...
"The UK housing market looks set to continue to be supported, even at these elevated levels"
Dream on David.
5. Davros said...
One of the previous articles posted yesterday mentioned 1 in 10 mortgages are now 100% mortgages and the numbers of first time buyers are at a historic low, however this bloke argues that affordability is OK.
It's all very well quoting theoretical measures of affordability, however the reality is completely different.
6. Elpapasito said...
Come on everybody. Where is the response to this article? It seems very sound to me. That graph is amazing! This is why prices have defied gravity.
His/her argument actually indicates a future scenario which is far less rosy than the one he/she is predicting.
So good economic growth and expansion of the EU and masked inflation keep the price of houses high in nominal terms (nominal meaning cash value adjusted for 'official' inflation)
So when the US economy goes into the worst recession since 1930s which european country feels the cold draught first and hardest? The UK of course. When our economy falters where do all the economic migrants go? Home of course. When money supply inflation can no longer be masked what happens to inflation and hence interest rates? Up of course. And when these 3 things occur what do we get? HPC of course.
EP
7. David said...
Have you looked at the graph in the article, very interesting.
Unfortunately it does look like UK house prices can be supported at the these levels due to banks offering ever higher multiples and interest rates still very low.
I still maintain we will not see a house price slowdown until interest rates hit 6.5%, before that I think you are the one that is dreaming.
8. Justsold said...
Interesting graph. Suggest it is added to the set on this site.
9. Dohousescrashinthewoods said...
After all, when uncle Sam walks dives into a recession, his coat tails will be right behind him.
I can't see any amount of immigrants, shortages or teletubby BTL programmes keeping us up.
Short of fiddling the numbers, we will follow as eggs is eggs. Oh, sorry, we ARE fiddling the numbers.
10. Davros said...
I'm sorry, you can't just invent a measure of affordability when people are forking out 80% of their take home pay on mortgage payments.
Everyone knows houses are overpriced, so stop trying to justify the unjustifiable.
11. Justsold said...
The % of take home pay people fork out on a mortgage is a function of their salary, the tax they pay, and the interest rate on the mortgage.
The graph on this site covers three of these variables.
Interesting.
It would be interesting to see a graph which covered all 3 (given that the tax burden has, I believe, been going up.
As to whether sensible people should risk forking out a big part of their take home pay when interest rates are so low (as they can, and probably will go up).........
12. Speculatorone said...
Can anyone help me. When posting a comment it take for every to appear ion main blog? Is there any way of speeding it up?
Thanks