Monday, Feb 19, 2007
Unexpected drop in house price inflation
Reuters: Rightmove: House Prices up 11.5% in Feb
Asking prices for homes rose an annual 11.5 percent this month, the weakest reading in four months, in a sign the market is stabilising.
Rightmove said February's gain was the weakest for that month in the survey's five-year history. "With prices still at record levels and rising interest rates, sellers are showing signs of realising that buyers' resources have a limit," said Rightmove commercial director Miles Shipside. "It looks like a good call that the Bank of England has
resisted two consecutive rate rises as one increase appears to have struck the right balance."
Posted by little professor @ 06:36 PM (165 views) Add Comment
19 Comments
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1. little professor said...
Headline: average asking house price up 0.9% in Feb, giving an annual rate of increase of 11.5%
Beyond the headline:
East Anglia average asking price DOWN 0.5% in Feb
Wales DOWN 1.9%
North DOWN 1.4%
West Midlands DOWN 0.7%
Only London/Southeast, East Midlands and Yorkshire reported significant rises in Feb. As usual, London with annual house price inflation of 22% is distorting the figures.
http://www.rightmove.co.uk/pdf/p/hpi/HousePriceIndex19thFebruary2007.pdf
2. paul said...
Overall, house prices are still rising.
So more rate hikes are needed - easy.
3. tyrellcorporation said...
"It looks like a good call that the Bank of England has resisted two consecutive rate rises as one increase appears to have struck the right balance."
Desperate sicophants! Yuk!
4. glorious sunshine said...
Why are more rate hikes needed Paul?
What is wrong with house price rises as long as they are steady and inline with inflation?
5. paul said...
Why are more rate hikes needed Paul?
What is wrong with house price rises as long as they are steady and inline with inflation?
Sorry to burst your bubble, sunshine. The pound's looking wobbly (we can't have that) and as for inflation and interest rates ... (clears throat) ...
We've been broken down
To the lowest turn
Being on the bottom line
Sure ain't no fun
But if we should be evicted
From the home
We'll just move somewhere else
And still carry on
Hold on, hold on
Hold on, hold on
Baby
Hold on, hold on
Hold on
The only way is up, baby
For you and me now
The only way is up, baby
For you and me now
Now we may not know
Where our next meal is coming from
But with you by my side
I'll face what is to come
Boy, I wanna thank you
For loving me this way
Things may be a little hard now
But we'll find a brighter day
Hold on, hold on
Hold on, hold on
Hold on, hold on
Hold on, Won't be long
The only way is up, baby
For you and me now
The only way is up, baby
For you and me now
Hold on, hold on
Hold on, hold on
Hold on, hold on
Hold on, Won't be long
The only way is up, baby
For you and me now
The only way is up, baby
For you and me now
The only way is up, baby
For you and me now
The only way is up, baby
For you and me now
6. tyrellcorporation said...
LOL, priceless Paul! :) GS is desperately flicking through old copies of Smash Hits for a retort...
7. inbreda said...
Just a thought everbody peeps...
I'm not sure that sellers are in the habit of "realising that sellers pockets have a limit". I simply don't believe their greed is subsiding without very good reason. Some suggestions...
A couple of interest rate rises has caused a bit of panic and some owners, sensing the top of the market, are dumping their stock. This could be the start of a snowball.
A couple of interest rate rises and people are feeling the pressure of excessive debt and are actually having to sell their property to stay afloat. Maybe it's already MEW'ed to the max.
That would be FORCED SALES.
Did I really say that?
8. tyrellcorporation said...
I know quite a few people in trouble with mortgage payments and general debt. With poor retail figures recently I would be surprised if this is the start of a meltdown created by severe belt-tightening.
9. Cheekie Charlie said...
"What is wrong with house price rises as long as they are steady and inline with inflation? Sunshine - Theres not such a thing as a soft landing! For what its worth, you don't need to be an economist to realise by now that the economic cycle has turned! Interest rates where originally lowered to stave off recession after the dot com bubble and 9/11. This has been a historical period of very low global interest rates and its already ending. Unfortunately UK plc hasn't learned from its past mistakes and a large partof the economy has relied on unsustainable house price inflation and easy credit (debt).
10. nearly30 said...
Could quite well have a point tyrellcorporation!
People may be getting a bunker mentality - hoping that if they can still at least pay the over-inflated and re-re-re-mortgage payments - they will be ok.
Not such a good plan though is it - if this has a knock on effect on the highstreet and jobs start going!!!
Our economy is - what - over 50% services after-all!!
On a wierd moment of the week - my bank phoned me to complain that I had too much money in my current account!!!
Yes - you heard me - wondered if I would like to put it in one of their savings 'products' - and then offered me a credit card!!!!
Has this happened to anyone else.
Can we read anything into this kind of behaviour from the banks?
11. little professor said...
Nearly30 - yep, i've had the same experience - bank stating that I had too much money in my current account and asking to set up a savings account for me. And yes, also offering me a credit card! This was Barclays.
12. David20040_0 said...
Up they go again and I am proved right yet again, but no one will respond to me.
13. nearly30 said...
What is going on?
Mine was NatWest!
Anyone with a banking background willing to elaborate?
Don't mind the savings prompt - but a bit strange pushing the credit!!
I don't do credit!!
14. paul said...
The banks make money when people sail close to their credit line, with charges and fees. Their intention is to remove some of your buffer so that you sail a little closer to the rocks and they can sting you for charges.
Glorious Sunshine's gone all quiet.
Maybe he got distracted by the pictures of Kylie (or Jason?).
15. autopilotengage said...
"What is wrong with house price rises as long as they are steady and inline with inflation?"
Nothing at all padawan bear, only problem is, they've been rising far, far in excess of inflation for 10 years or so and are now a long, long way from their long term equilibrium; all because of the global liquidity glut. Correction is needed to restore balance in the force.....
Wonder why the government aren't falling over themselves to increase the housing supply so that all those priced out 20 somthings, supporters of the "blair babes", don't turn on them next election? I'd wager it's because they know what's coming and they need do nothing and they're frightened of over supply when the correction comes.
The Barker report clearly wasn't worth the paper it was written on to the cabinet and was nothing but a posturinng exercise.
16. Davros said...
"What is wrong with house price rises as long as they are steady and inline with inflation?"
This won't please the investors will it?
17. d'oh said...
"What is wrong with house price rises as long as they are steady and inline with inflation?"
So inflation is 12% is it GS. Well, those interest rates had better rise, rise rise. Poor Merv is under the illusion they are 2.9%.
18. Chilli said...
My turn!!!!!!......:D
"What is wrong with house price rises as long as they are steady and inline with inflation?"
Well if housing prices are a function of supply vs demand then a x multiple to average wages, means that housing is really really expensive. Therefore demand is really really high. Which means we are all living in overcrowded roach infested shacks.
And of course, if there is an increase in supply in order to correct this situation... then a whole generation of people go into negative equity and spend the next decade paying it all off.
GS - i believe your original sentiment was 'what was wrong with houses keeping pace with inflation' - in general I agree, its the way it should be.
Love the lyrics btw.
19. Davros said...
David20040_0 said...
Up they go again and I am proved right yet again, but no one will respond to me.
Give it a break!! Did they not fall 2% in Wales?? See it can happen..