Monday, Nov 19, 2007
Tipping point has passed
Frstrung: Average national house prices drop by 0.7% (£1,656), with all regions bar London falling - Rightmove
The depressed state of the housing market has resulted in sellers dropping their asking prices by an average of 0.7% (£1,656) this month. The net effect is that prices have remained at a standstill for the last 4 months, reducing the annual rate of increase to just 7.9%. Rightmove expects this slowdown to continue, and forecasts that overall prices will be flat at 0% in 2008. We expect more price falls in December and in the first part of next year, before a more stable financial environment and underlying demand lead to some minor price gains later in the year.
Posted by converted lurker @ 06:43 AM (928 views) Add Comment
14 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. Davros said...
House prices will be a handy 0% next year, not a fall. What are the chances of that?
2. Jason74 said...
Looks like things are starting to move. That said, still no downward movement in London. Will it manage to escape relatively unscathed this time around ?
3. voiceofreason said...
Wow ! Amazing how these vested interests have changed their tune on a sixpence.
"... However, this will not lead to a further price surge such as that following the possibly premature rate drop in August 2005."
"... Miles Shipside comments: “The Bank of England will want to be sure that a rate cut will not
lead to another surge in house prices, having mistakenly thought they had inflationary
pressures under control when they dropped rates in 2005.” "
"... “If you have to sell, then seriously consider dropping your price and
taking an offer now rather than holding out. You could end up being offered even less in a
few months’ time."
The Democratic Republic of London continues to detach itself from the rest of the UK. I bet the 7.8% yearly figure would be more like 2% without London. (Kensington & Chelski up 52% yoy)
I still think there should be a separate currency inside the M25, with an exchange rate of 5 London pounds for every 1 real pound :-)
4. tyrellcorporation said...
'...before a more stable financial environment and underlying demand lead to some minor price gains later in the year.'
Where's the stable environment coming from???!!!???!!! Utter claptrap. With a million people coming off their fixed rates in the coming months the situation is going to get significantly more UN-stable.
5. Jason74 said...
Some truth in that VoR, although the rest of the UK economy would probably struggle without the income generated in London. Serious question though . . . . .what should people wanting to buy in London do, given the way it does seem to be a seperate market from the rest of the UK. Also, will it stay that way ?
6. converted lurker said...
Compare and contrast the message from Miles to a year ago, he is urging vendors to sell now or regret later - Wow! I'm fascinated to watch at what point the markets 'get' the fact that RM is a one trick pony that is overvalued to the power of ten.
7. Ihopeitgoeswithabang said...
Overall Prices will be flat at 0%. Rubbish. Prices either visibly go up or down depending on sentiment.
They never stay flat.
Their reasoning behind there being no major price reduction is the VERY SAME reason used about 6 months ago as a reason why prices would increase year on year by 10% +. Regardless of a lack of housing people actually have to be able to afford to buy it in the first place.
I have no idea where they think the 'more stable financial environment' is coming from. Wait and see what happens to our fairytale economy when housing price inflation is not driving it anymore.
Miles Shipside:
"or indeed over-priced in some areas"
---- I think he will find that it is over priced in ALL AREAS !!!
8. little professor said...
The West Midlands saw the biggest fall, of 2.4 per cent, followed by the South East at two per cent and Yorkshire and Humberside at 1.9 per cent.
9. the reaper said...
'before a more stable financial environment and underlying demand'
is that the underlying demand from the shrinking consumer and govt sectors?
10. C'mon Correction said...
Strip out Greater London and you get a yoy increase of just 4.2% (same as RPI) - The V.I.' s would have you believe that the market has been booming over the last year, not so. The V.I.'s want us to believe that the market will be flat next year, so taking their misplaced optimism - that would translate to falling prices.
Strip out Greater London and you get a monthly decrease of 1.36%, annualise that and you get approx -16% nationwide house price falls.
So it is easy to state that Rightmove figures indicate that -
**** UK HOUSE PRICES WILL FALL 16% NEXT YEAR OR 21% INCLUDING INFLATION. ****
(I know this is really simplified and doesn't take into account seasonal and is for houses outside of london etc, but is exactly what V.I.'s and newspapers do to create headines)
11. wiltshire said...
I refer to it as 'The Economic Republic of London'!
12. Icarus said...
Prices are supposed to be falling only very slowly, so MS's idea of using the price falls to trade up is nonsense. If prices fall 1% and you trade up from a £500,000 (£495,000) to a £800,000 (£792,000) house the 1% fall will save you just £3,000, which will be more than wiped out by two transaction costs. Add the fact that some EAs are saying that posher houses are retaining their value despite price falls at the lower end of the market.......
13. crash bandicoot said...
Overall price rises will be at 0% for the start of 2008 followed by minor price gains at the end of the year, when mummy will bring out a tray of rock cakes and a jug of ginger beer and make the nasty monster go away. And we will all live happily ever after.
Sound like a fairy story?
14. uncle tom said...
One has to smile - they know that HPI is finally going to go negative on a YOY basis - but they just can't face up to saying it..