Monday, Aug 13, 2007
Asking prices at uber-crash speed
Home.co.uk: Confident sellers shrug off rate hikes.
Prices of homes on the market are rising at their fastest rate since Nov06
Asking Prices for homes in England and Wales are up 1.3% this month and
are up 7.7% year-on-year (YoY).
Greater London average Asking Price is now above £350,000 for the first
time.
Asking prices have risen in all England’s regions, Scotland and Wales since
July.
Posted by tinecu @ 08:59 AM (141 views) Add Comment
8 Comments
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1. Davros said...
This is at odds with what's happening in the real world. In Cornwall, estate agents a practically empty and viewings are few and far between.
2. planning4acrash said...
Just because you ask, doesn't mean you get. How will BTL'rs and home owners be able to finance this if top rated corporations can't re-finance with the credit crunch? These sellers are obviously oblivious to the land registry stats, which show that ACTUAL UK sold prices rose just 0.2% in the last quarter, a fall of 0.4% in real terms if you compare it to 2.4%, CPI or a fall of 0.925% if you compare it against an RPI of 4.5%. Combine that with low to negative yields on rent and you can see why investors will not pile into property in flight from stock market falls, which have been precipitated by defaults on mortgages in the first place! This is the edge of crash territory. Sentiment will change soon, leading to a buyers market, as bank accounts begin to progressively yield more property and property goes, slowly but surely, south, due to high prices, lack of finance and cost of the remaining finance.
The real giveaway from these stats is that asking prices have risen in places that are experiencing a fall in sale prices. There will be a log jam of unsold properties if sellers don't accept lower prices. These properties will flood the market when sellers realise that the market has changed or when they panick when they are forced onto a higher fixed rate loan or onto standard variable rates soon.
Has anybody seen that for sale signs seem to be popping up more at the mo?!
3. Hotairmail said...
I don't know the details of how they put together these stats but their averages could be hiding a lot. Don't forget HIPs have only just come in - but for 4 bedroom houses only. Has this had a disproportionate effect on people with larger houses putting their properties on the market to beat the latest HIPs deadline?
4. C'mon Correction said...
Yes, loads more for sale signs here in South Wales. I'm expecting house price decreases here within months.
5. Alan said...
so...with all the floods, IR rise and HIPS the asking prices went.... UP ?
OK, I'm baffled!
6. Tinecu said...
The land reg stats are not mix adjusted and the lower figures suggest to me that its the BTL market at work. i.e. cheaper end properties that were still selling strongly....about 6-9 months ago.
7. inbreda said...
"Confident sellers shrug off rate hikes."
More like "Ignorant sellers fail to realise that no-one will be able to afford their over-inflated sale price now that rates have gone up. But they will learn in due course"
8. doomwatch said...
If you read the last paragraph, there's some very bearish hints:
Apart from the distinct possibility that some mortgage lenders may face collapse, the
most likely upshot of this severe credit crunch on the UK housing market is that
cheaper mortgages will be much more difficult to get. Poor credit ratings in particular
will attract fewer and fewer offers at higher rates of interest and all mortgage
lenders will be forced to introduce much more stringent checks on the data the
applicant provides.
Credit tightening always happens when lenders have had their ‘fingers burnt’
and are therefore more wary of risky lending. Re-mortgaging will also be more
expensive and fewer ‘agreements in principle’ will mean fewer buyers in the market
and perhaps more distressed sellers...