Monday, Nov 19, 2007
David, go to hollywood!
Times: Home economics: a loss of market confidence
"Sometimes, though, Rics is in danger of creating a situation that its members are keen to avoid and its head-office economists do not expect: a loss of market confidence, leading to a sharp fall in house prices." "A report by Michael Saunders, of Citigroup, called Bye-Bye, Buy to Let, argues that the economic fundamentals have turned firmly against buy-to-let. Rental yields are below mortgage rates, in some cases, decisively so � the number of available buy-to-let mortgage products has fallen by 40% since July, and many landlords will fear the days of easy capital gains are now over." David, listen to the economists, the professional ones, not the clowns forced to write in mainstream papers for a living
Posted by confused76 @ 12:03 PM (488 views) Add Comment
3 Comments
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1. drewster said...
So David is basically admitting that the entire housing market is built on confidence?
Dave then tries to argue that it's all ok really: "The Rics survey is quite volatile, to move from a positive balance of 21% to a negative one of 22% in the space of five months is going some".
- Obviously he hasn't heard of the credit crunch that unfolded over the summer. Most of us expect this is only the beginning. The Kellogs adverts were right, Britain really is going [credit] crunchy nuts!
2. New User 2007 said...
Can anyone tell me if it is normal for The Times to not put comments up? I have noticed that a few of mine do not appear...I sent the response below in a few hours ago, and it has not gone up.
"Rates were lower in 2004-05 as I recall. Also, income multiples still had some way to go. On top of that, banks were still eager to lend (given 50% of the price increase has been liquidity driven and one cannot buy without being given the money, this factor is VERY hard to ignore). All these factors have disappeared just as the broader economy is deteriorating.
Add in that 1.7m fixed rate mortgages will be re-mortgaged over the next 12 months (taken out between Sept 2005 and Sept 2006) and payments will jump by between 20% (for those in the top 20% i.e. they will go from around 5% to around 6%) to 30% (for the bottom 10-20% i.e. sub-primers).
The odd nature of many sellers is that they have seen their house price rise by tens of thousands, but £300 will kill them. The thing that stands out to me is that if there is a massive shortage, why have all these houses on the market not been snapped up?..."supply has risen a bit", even as new instructions have fallen.
What happens to supply in April will be interesting."
3. the northerner living in oz said...
*** we are at the start of the first quarter of a four part game ********