Monday, Aug 27, 2007
Hometracks says house prices have stalled
SKY News: Market Gloom As House Prices Stay Flat
House prices stalled during August as the market was hit by higher interest rates and more cautious consumers, new figures have shown. Property information group Hometrack said it was the first time for 20 months that prices in England and Wales had failed to move ahead.
Posted by Webmaster @ 09:02 AM (1473 views) Add Comment
28 Comments
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1. david20040_0 said...
But next month they will go up so don't worry about it.
The BBC is reporting that even house prices in the US are picking up.
2. planning4acrash said...
I wouldn't be surprised by a bounce once people come back refreshed after holidays. It takes a while to see a trend.
3. Tackle2004 said...
Dream on you two the time has come. Read the rest of the forum you are both the sheeple that every body keeps on about
4. paul said...
In late 1990, the BBC and the Times held similar headlines such as "Has the crash bottomed out?" "Is now a good time to buy?" just to try to stave off the inevitable. Of course prices kept falling for another two years.
Just VIs trying to save their skins.
5. planning4acrash said...
Isn't it called a bear trap when you get a spike on a downturn? Or is it a Bull trap? I can't remember. Just as we'd be daft to call the crash on one month of falls, (we've had that a few times in the past 5yrs) so would David, for calling a rennaissance in the market!
6. uncle tom said...
One Swallow doesn't make a summer, but recent events will have lasting consequences...
I just checked out the principal BTL mortgage providers - looks like you'll struggle now to get a BTL loan for less than 8% (after factoring in fees..) - that's a true cost (deducting inflation) of about 5% - a lot more than it was a couple of years ago.
Meanwhile rents seem to be going nowhere, and the true return (on modern 3 bed estate houses) - after deducting void periods and expenses - is still only about 3%.
So for a BTL investor just to break even, house price inflation now needs to exceed consumer price inflation by 2%. They stand to be seriously out of pocket if house prices merely stand still, and in deep trouble if they fall - it's not looking very attractive, even for a die-hard optimist.
The BTL investor also now has a horrible cash flow - with mortgage interest payments running far ahead of rent receipts. The BTL lenders also seem to have reined in their maximum LTV's for this class of loan, which may limit landlords' scope for increasing their portfolios.
The UK property market is utterly dependant on very heavy buying by the BTL sector - if they go soft, the market will very quickly run out of steam.
7. waitingfor hpc said...
David - do you really trust the BBC? They are not the most respectable of news sites - and are very biased in what they show. More to the point what is the earnings to price ratio in the US compared to the Uk today?
8. cyril said...
@David - none of us can predict the future, not even you, so why tell us that next month prices will be up?
Agreed it will take a while for the rot to set in because house buying is a slow process, most people aren't very aware of what's going on in the world and they take a somewhat cavalier attitude to financial risk. But who in their right mind would borrow money to invest in housing at this point in time?
And if the market is on the way up, why did Foxtons cash in? You have to admire their timing.
9. david20040_0 said...
No I don't trust the BBC I think they are very biased towards the left.
However, these false dawns have appeared many times and it does appear that the United States is appearing to recover. If that is the case it makes a crash here more unlikely.
House prices always stall but they never drop by more than 0.1%, and 0.1% is nothing.
10. cyril said...
David you were obviously not around during the first half of the last decade.
I suggest you take a look at the graph on the homepage to see what can happen to house prices. They can go down by a lot more than 0.1% I assure you.
11. wiltshire said...
David, how do you come up with this stuff?
By your logic why isn't the appearing recovery in the US a "false dawn"???
"House prices always stall but they never drop by more than 0.1%" - have you seen the graph on the homepage of this site?
Would you care to comment on the first News Blog item of the day - "Central banks are trying to save the system.... will they succeed?" It's far harder to argue against some of the comments within that article.
12. Scott said...
David,
The US economy has a much stronger base. They have strong manufacturing sectors, listless exports and more natural resources with the ability to extort even more from other countries, courtesy of its military, just as we did in the 19th century.
In contrast, the UK is a small island with a false economy built on 1.3 billion debt and people exchanging houses with each other. They don't make many plates or car tires in Stoke anymore, Birmingham's Rover is Over, shipbuilding in Newcastle and Scotland is dead, Cornish tourism lost out to cheap holidays abroad and the mines have closed.
In short, what can hurt America can destroy us.
13. Dstars said...
O.1%? Unchanged? These figures are cobblers. What are the odds that so many areas might have exactly the same figures? And one of their figures has TWO decimal points! TWO!
This is cited on their site as a survey but no indication of methodology is provided. But here's the methodology: Find a way to pretend that prices, despite skiploads of shit and high interest rates finally biting into dense brains, are only dropping by infinitesimally small amounts.
For we all know that when house prices rise they make great bounding leaps of 20-30% in a single month, but when they fall people drop their prices from 100,000 to 99,900; for a drop of a hundred quid per 100,000 really brings in those reluctant buyers. I mean, Imagine saving 500 quid on a 500,000 house? Who could resist that?
14. Realist said...
David - is this recovery in the US housing market the same as your "the markets will recover by Weds" from a couple of weeks ago?
15. david20040_0 said...
Name one time in the last 7 years where house prices have dropped by more than 1%. They haven't.
You not looked at the Dow Jones today, it is mega up.
16. Pecker said...
The dow hasnt even opened???
17. Realist said...
You need to look a little further back than 7 years for financial trends, even if you were born in 2004.
18. wiltshire said...
"Name one time in the last 7 years where house prices have dropped by more than 1%. They haven't." You're suggesting they therefore never can/will drop ever again?? In which case you're right, we're wrong and we're all wasting our time discussing anything on this site. We should be visiting "Get-your-snout-in-the-trough-cos-the-good-times-can-never-stop.com"
19. taffee said...
dow may rise but thats 'cos big us stocks are global.
House prices in my area dropped 50%(particularly flats) in the last recession....in fact one flat went at auction for £16,000 and that was 70% drop...that was within m25 as well!
average wages are a myth too.......top wages have increased whereas the average of the average have bearly risen in 5 years
20. paul said...
Name one time in the last 7 years when the price of credit has gone up. It hasn't.
I err, wouldn't call that "mega up" either.
21. Ihopeitgoeswithabang said...
David - "House prices always stall but they never drop by more than 0.1%, and 0.1% is nothing."
Please stop my sides are hurting with laughter!
Would you seriously take that point of view 'forever'.
You quote 7 years lol - as a reason for your quote! 7 years! omg how old are you 10?
The cycle of boom and bust involves a little more time than 7 years ! lol.
Sometimes you say some reasonable stuff and point of view is always welcome in any debate.
But that is just a stupid thing to say and it kinda makes u look like u will say anything for the sake of it.
22. Wilee said...
@ 11. David said "You not looked at the Dow Jones today, it is mega up."
Eh? The market hasn't even opened yet, that was Friday's close and
there's a lot of eagerly anticipated news on housing due.
How do you know this at 11:49AM GMT ?
see http://www.marketwatch.com/
"Before the Bell....."Housing holds market's key"
23. ck one said...
Won't say much as we have all said it before...but... Enjoy history, this web site will become one of the most observed and respected sites over the next 6 to 12 months. The market is turning, a flat month in the middle of summer says it all really.. Wait till we hit mid November and the backlog of properties starts building.
We Insane ones who have stayed out of the market over the past years will be hailed as gurus with supernatural powers! All kneel and praise at the altar of housepricecrash.co.uk!
24. Magnifico said...
ck, wasn't it Magnifico ( in name as well as deeds) who said HPC with the smell of roasted chestnuts, a good few months ago?
25. deepak said...
I think the prices will go up next month. The reason being that all these surveys are based on asking price.
And due to the introduction of HIPs for three bedroom properties. There could be a flurry of properties on the market which will lead to an artificial hyke in prices for next month.
And David, House prices in US are not growing, lot of the houses are selling at bargain prices. You could get BOGOF offers and even better in the US today.
People stand on the steps of court and buying $250,000 houses (condos) for $80,0000. Its carnage. Check out msn.com for details.
26. Symo said...
I don't care, it's going to happen anyway. Just out of interest Barrat are now mailing everyone on the brand new estate on which I live in exeter. Errr not to worry but they are trying to get rid of their properties at below original asking price. Shome mishtake shurely eh David?
27. Ah-so said...
Housing "gloom". Why "gloom"?
28. Dipesh said...
Hey everyone,
I have studies the graphs and looked at the data from the previous years. I believe that there will be a dip in the property market prices however I can’t see it as being as detrimental to the prices as it has done in the past. In short I wouldn’t call it a crash.
England is quite a small place and homes are in limited supply. I think this is a factor which limits the extent of a potential ‘crash’. However the dip in prices I believe will come soon and my non expert prediction is that it is unlikely on the whole that the prices will go lower that 10%-15%.