Wednesday, Jan 16, 2008
December marked the fifth consecutive month of falling prices, according to the Rics survey.
BBC: House price fall 'at 1990s rates'
I know this article has been posted today from other sources but I quite liked the BBC headline, its a beauty! The 5th consecutive month of falls is also a cracker.
Posted by geed @ 09:17 AM (1806 views) Add Comment
25 Comments
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1. mark said...
i like the bit when they say rates are needed to keep the market stable!!! If it was stable then prices would be affordable,,, a bubble is not stable....... again they still think people can afford over inflated prices pushed up by greedy estate agents....
2. geed said...
Just been on the RICS website and I can't find their latest report, I can only find the December 13 press release....help please.
3. Dave The Box said...
"However, he said that while sentiment had fallen sharply to a "low ebb", the underlying economic conditions are "vastly different" to those in place during the 1990s housing recession. "
Yes, they are vastly different. They are much worse! Much more debt, more lax lending, >100% LTV, 4,5, & 6 times multiples, and loads more BTL "speculators". AND, prices have risen much higher than last time.
Do people never learn the lessons from history? It crashed before so it will crash again.
4. This comment has been removed as it was found to be in breach of our Blog Policies.
5. Theboltonfury said...
can someone please help? Is it true that some parts of the country eg parts of Cheshire, Surrey etc where it is considered 'desirable' to live will be more immune to a crash than others. A friend of mine was spouting 'location, location, location' at me on the belief that high desirabilty areas are safe. Can this be true - honest answer? I live in Cheshire, and am thinking of areas such as Knutsford, Hale Barns, Wilmslow etc
6. hpwatcher said...
There are still going to be lots of folks really pushing hard for rate cuts tho'
I wonder what will happen next month.....
7. Night said...
"Rics said the next few months would be crucial to the health of the market as potential buyers wait to see if the Bank of England will reduce rates again."
Ha. Like we're all waiting for them to reduce the rates again. Should have been:
"Rics said the next few months would be crucial to the health of the market as potential buyers wait to see if HOUSE PRICES CRASH."
8. confused76 said...
Upon RICS announcement the Pound has resumed its down trend
9. confused76 said...
"Rics believes further cuts may be necessary to ensure the market remains in a "stable" condition."
It is either the house prices or the pound... hard choice for the MPC... but they can also screw both the house prices and the pound
it is very sad
10. maddison said...
With a recession in the US lower rates are almost a dead cert now. 1 year Libor is now 5.39%
11. confused76 said...
OK, but to save the housing market the BoE has to slash rates to 4% or lower (back to 2002-03 levels, i.e. when the house bubble really went on, and 2006-1H07 was more of a blip)
And the currency market is not pricing that level of interest rates yet. If that becomes the case, expect GBP/EUR = 1.00
12. Chilli said...
There should be a rate cut about now. Now that the crazy house price speculators have finally glimpsed reality they will all be looking to sell, possibly at lower prices. That is credit evaporation which could lead to a severe lack of liquidity in the economy. Besides all those industries that do well when labour and becomes cheaper and exports pick up will need loans for investment. A more balanced economy here-we-come. Or am I too optimistic?
13. Loneranger said...
"Rics believes further cuts may be necessary to ensure the market remains in a 'stable' condition."
So, when they lowered interest rates in September 2005 during the last mini-slowdown and caused the recent mini-boom of the last two years, that was stabilization then was it? Total rubbish!! VI's are rampant in RICS and should be held accountable for quoting such biased tosh!!
Beam me up spock, I've had enough of this..........
14. confused76 said...
Rate cuts will come but later in time... too late to save house prices!
http://business.timesonline.co.uk/tol/business/economics/article3195600.ece
Rate cut in doubt as jobless falls to 32-year low
15. hpwatcher said...
''Rate cuts will come but later in time... too late to save house prices!''
I hope you are right, but I can see BoE cutting rather soner rather than later. They are a spineless bunch and do just what GB tells them.
16. geed said...
Remember IR cuts will fuel imported inflation. They cannot slash rates if they want to control infation, if the BoE make the decision to let inflation rip (even further than it is now) like in the US, then we are in trouble.
17. European-bear said...
It does not matter if rates are slashed to 1%, if the banks have tightened their lending criteria so that you need a 10% etc etc, much fewer people will be able to buy and demand will dry up. In addition, falling interest rates will not help a falling market (want to catch a falling knife) as rising interest rates do not neccessarily stop a rising market
18. bystander said...
"The Prime Minister announced in December that he would meet Nicolas Sarkozy of France and Angela Merkel of Germany in London to formulate a better early-warning system for financial crises.
Pressure from Mrs Merkel is said to have led to the eventual inclusion of Mr Prodi, so that all four leading EU economies were represented.
A spokesman for Mr Juncker, the long-serving Eurogroup president, said that he was not concerned about other EU countries meeting in small groups, provided that decisions were not made affecting all the members.
Referring to Britain’s decision not to join the euro, he said that Mr Juncker “has noticed that the UK by its own choice is not sitting at a table where decisions are taken regarding currency and finance, so he has to take a few initiatives to stay in the game”."
The above is taken from an article in todays timesonline, and follows another article yesterday saying that Crash was taking a trip to China to discuss trade etc. I would not be surprised if Crash orchestrates a move into Euroland and that UK will be using the Euro in a matter of months (hopefully agreed at a higher exchange rate than the one we are now on). He is an incompetent fool, but sly like a fox. This Nu-liebor got us involved in Afghanistan and Iraq, even though the vast majority of the population were against any such action, and I would be very surprised if we were asked for our opinions about dropping the pound for Euro. Just a thought.
19. dbnazz1 said...
Confused 76
The UK economy is caught in aa perfect storm. whichever way the bank acts the economy is stuffed. So in my opinion the scene is now well and truly and the play has already begun.
20. hpwatcher said...
''Remember IR cuts will fuel imported inflation''
Of course, but BoE have created the expectation of lots of rate cut to come...also the public image of GB is at stake - the biggest boom & bust politician in history!
21. Factgasm said...
Too knackered to make an incisive remark except to quote that marvelous exposition of artistic excellence from that 90s girl band Shampoo . . . . .
Uh oh we're in trouble something's come along
and it's burst our bubble yeah yeah
uh oh we're in trouble gotta get home quick
march on the double
we've been out all night
nd we haven't been home we're walking through
the back streets all alone
the party was great yeah we were really thrilled
and when we get in we're gonna get killed
we couldn't get a cab 'cause we ain't got to money
we missed the last train bus but the night bus
never come we're eight miles from home
and it's starting to
Uh oh we're in trouble something's come along
and it's burst our bubble
yeah yeah uh oh we're in trouble book us a ticket
on the next space shuttle yeah yeah trouble
we tried to steal a car but we soon realised
we got down the road none of us could drive
a police car came along and they took us for a ride
and when we get home we're gonna get gonna get fried
uh oh we're in trouble yeah yeah uh oh we're in trouble
uh oh we're in trouble something's came along
and it's burst our bubble yeah yeah
oh oh we're in trouble book us a ticket
on the next space shuttle
22. geed said...
Darling and Gordie definitely created the "expectation of lots of rate cut to come". Infact Gordie was almost certain of rate cut prior to this months hold, yet the bank denied him. The BoE may be just a little more independant than we think.
They are under huge pressure to cut but if they practice independant, competant fiscal policy (i.e... not listen to the politicians, the rags and real estate groups), no matter what happens in the future at least in their legacy they can state that they did not bow to political/corporate pressures and maintained their remit of targetting inflation during 2008.
23. crash bandicoot said...
geed I think that you are right.
But as long as he can say "we are making tough decisions" Gordon will follow this and spin it into being his idea. He will really show no mercy if he has to cover his own a55.
24. little professor said...
Headline has changed to:
House price gloom 'recalls 1990s'
25. geed said...
you have a lovely voice Factgasm and such a provoking name...
Remember a Politician is a "Legal criminal".