Saturday, Oct 20, 2007
What planet are they on???
Assetz: House prices to rise by 27 - 40% over next 5 years
The average house price will rise to £302k in the next five years. This is equivalent to 7% p.a.
The IMF recently stated UK property was overpriced by 40%; however we all know what would happen if prices dropped by this much - there simply wouldn't be enough property to go around.
The rules of supply and demand would dictate that it is impossible for prices to fall to this low level before increased demand stabilizes prices.
Property is not overvalued and we are likely to see significant growth in the years to come driven by the inability of housebuilders to build enough property due to planning restrictions.
Posted by little professor @ 05:03 PM (1506 views) Add Comment
22 Comments
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1. Veritas said...
Who are these guys (or guy)? Does the ownership of a "flash" website in itself now generate gravitas and make you a seasoned expert and property professional.?
Assetz -never heard of them. What's their purpose, other than to continually puff up the market.
2. taffee said...
what this **** doesn't seem to get is that when prices fall demand and motivation to buy actually decrease.
In 1996 my partner couldn't sell a 2 bed flat in bexley borough for £18,000!....until recently people were falling over themselves to buy at £180,000.
When the ftse hit 3300 in 2003 people were calling for capitulation to 1800 before things bottomed out.
3. Letthemfall said...
Wishful thinking from an economic illiterate? Or just cynical defence of their feathered nest?
4. Ava said...
The gentleman or lady expressing his/her opinion will have to do his homework a bit longer. Does not sound as though he/she knows an iota about micro (macro?)economics. Property prices not overvalued in the UK, indeed! Uninformed and biased statements like that make anybody's day.Unaccountably.
The British Library is around the corner.
5. denzil said...
Big up the assetz massive innit.
6. Jason74 said...
From where I'm standing, this seems like rubbish. However, who would have thought that prices would have started rising again within a few Months of the Sept 11th attacks ? (and have roughly doubled since in my part of the world!). Who would have thought that we would have seen a return to booming prices in the last two years (until recently) after the 2004-5 slowdown.
The line that "the market can stay irrational longer than you can stay solvent" is surely pertinent in the madhouse that has been the UK housing market over the last few years, and obscene though it is, we can't rule out it continuing a good while yet
7. David Smith's Sub Prime. . . said...
Well, I am an expert, and I dictate that there is no Sub Prime................................
8. Bmac260756 said...
Now I'm really starting to enjoy myself!
It's fun to watch VI's like this continue to spout absolute rubbish to catch the very last of the unaware before the end of HPI is announced in the Sun and on Richard and Judy.
Magic!!
9. uncle tom said...
What a pompous little idiot this writer is - do I need to explain in detail to readers here why his notion that falling prices will boost demand is a nonsense - I hope not..
10. inbreda said...
It's true guys - apparently when prices go up it increases demand, thus pushing prices up, and if prices come down it increases demand thus pushing prices up, therefore prices cannot physically come down, which is proof that house prices only ever go up.
Oh, yeah, and when he says "if prices dropped by this much - there simply wouldn't be enough property to go around. " he's absolutely right. I think it was Keynes that first pointed out the relationship between the price of an asset and the number in existence. Everybody knows that if house prices fell then all the houses would start disappearing, like on star trek, there'd be a humming noise, and all the houses would go blurry, before disappearing. They probably end up in a black hole or on another planet far far away, but nobody really knows for sure.
The only thing the experts have been able to work out for absolute definite is that house prices cannot physically come down, and that soon you will be able to exchange a small bedsite for all the gold in the world.
11. Davros said...
Stuart Law, genius. Smarter than Alan Greenspan and the IMF put together.
I'd be intrigued to know where the extra 40% of money is going to come from, if a million people in Britian are using credit cards to pay their mortgages and buy to let is already a loss making enterprise?
12. Ilejustwait said...
easy credit is now over no more easy money
recession on its way
repossesions on the way up
banks are in trouble
interest rates at its lowest, ( but not for long )
property investors thinking twice
etc etc etc
and can you believe house prices are on the way up !!!, im not going to get any sleep tonight through worry !!! ha ha ha, thats the best joke thats been said yet, nice one
13. stillthinking said...
I think that prices wouldn't have to drop very far before people jumped on the wagon. There are lot of people waiting for somewhere to live. The nature of the crash is going to depend on the steepness of the drop. If prices go down gradually they probably won't go down very far, because the few UK working population who intend to have children won't risk the chance.
If they crash violently then everybody will stand by and watch. This is what I hope happens to be honest. I do feel a bit sorry for the idiots who bought recently but we are facing the loss of the UK of a living environment. Although the UK has bad weather and is full of (not so much now of course) UK people, its not so bad. When people think their new borns are better off somewhere else that is the end.
I think that if I am lucky enough to have kids I don't want them to grow up in a bad weather country with enormous immigration, social unrest, requirement to import food, and a housing shortage, but probably thats just me.
14. deepak said...
Can you take people like these to court for fraud. Fuelling speculation.
Because history has shown statements like these make people think prices will always go up. Loads of people get into housing when they should not.
Like all the incitement laws ( Incitement to hate, incitement to etc etc) could we not have a law for "Incitement to house buying" when some one does not have the means to afford.
15. brightonrentfodder said...
As in the last crash, everyone was speculating about when the fall in prices would stop. If you don't know that, then its unlikely you'll take the
risk of buying, as in the BBC program last week, ("the truth about property") the journalist said, "what if prices fell for the next 13 years?"
looking at the graph, why not? also if we hit a depression, you're not likely to have any dosh to buy anyways.
16. Jonb said...
If you look round their site, you will see that they are a VI. They offer some sort of property investment service which claims to make you so much money out of a £5,000 investment that you will be able to retire in 8 years time.
17. inbreda said...
stillthinking - excuse me if I am mistaken but I get the sense of extreme arrogance in your posting. Am I right in thinking that what you have just said is that you don't want to bring your kids up in a place of high immigration? and that as an alternative you'd emigrate?
Doesn't that make you an immigrant and therefore part of the problem?
Why should you and you alone be able to do this?
I don't get it?
18. Landedgentry said...
-27 to -40% over the next 5 years.
19. uncle tom said...
Inbreda - there is nothing arrogant about immigration making huge numbers of people consider emigrating, but it is a damning verdict on the government of this country.
Clearly these people would be well advised to choose a destination country where their presence as an immigrant will not cause housing pressures and cultural conflict.
20. new_order said...
Damn right Uncle Tom. 300 Poles come to this country every day, 500 born-Brits leave this country every day. Has it really come to this?
21. stillthinking said...
I want to live somewhere most people speak English and the writing on stuff in the shops is in English. I am already effectively living in a foreign country. My area has very few UK people.
So when I consider emigrating I will, in fact, in my case, be going to a more English country than this one. The USA, Canada and Australia all share my attitudes and culture much more than my local area in London. This a plain truth. If I want my children to share my culture then I don't have a choice considering I don't have any kids at the moment, and in ten years London is certainly no longer credibly a city for people of the UK, quite aside from the overcrowding.
People who support immigration so much also seem to support some kind of exit control just in case people want to leave. Kind of strange.
22. Ihopeitgoeswithabang said...
Immigration is fine provided it is controlled. The problem with this government is that it has washed it's hands of that responsibility. Does it really matter who lives here or not? It is surely just a case of trying to make sure that population increases are controlled and hence the stability of the country. Whats the point in having an immigration Policy restricting the number of 'immigrants' and then enlarging the EU and letting a couple of million people into the country in a few years.
Anything thats uncontrolled can lead to instability. Whether its immigration or housing. Immigrants are a big factor in house pricing. I mean whats the point of having a BTL property unless u have someone to let to! a million or so immigrants in the last couple of years has enabled BTL to continue to expand.