Sunday, Feb 24, 2008
Blair's company gets bearish
Observer: House prices will fall 8% in 2008, and keep dropping
House prices will decline by 6% in 2008, and continue falling next year, as anxious homeowners rush to cash in their gains, analysts at JP Morgan warned this weekend. Just three months after predicting that prices would stagnate, JP Morgan's chief UK economist said the evidence now looked 'pretty bleak'.
The number of new mortgages approved (a good predictor of future demand) has fallen for the seventh month in a row, to the lowest level since 1995.
Posted by little professor @ 08:30 AM (899 views) Add Comment
10 Comments
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1. japanese uncle said...
Blair's company can better be expressed as 'Bliar's lifetime sahibu'
2. Orwell said...
Does that include the 17.5% tha tthey have already fallen in London?
3. paul said...
sahibu?
I do find it puzzling how economists are able to "constantly revise" their forecasts without anyone saying "Hey! Haaang on. Your forecasts are just plain unreliable!"
4. uncle chris said...
You mean the company providing Bliar's backhanders. I'm fed up of hearing about him. The man is a devious liar, and in my opinion, a war criminal responsible for the deaths of hundreds of thousands of Iraqi's. The only European position that man should be given is a less than comfy cell at the Hague awaiting trial.
5. Interlocutor said...
Chris, ever thought of taking on a private prosecution? Not sure Matrix will back you though.
6. stillthinking said...
Maybe Blair is the one who told them how bad its going to be. He does know the Labour party well, and if you want to know what headless chicken are going to do, get yourself one, don't study chicken farming.
7. mark wadsworth said...
They're being too optimistic, if you ask me, they should be saying "Only 6%".
Who in their right mind would buy a house expecting it to fall in value by 6%? Bearing in mind that the cost of renting is less than 6% of property values, a tenant is actually ahead of the game after a year, he's paid less in rent that the property fell in value, a purchaser is about 12% down (6% interest plus 6% fall in value).
8. sacred contracts said...
If people are attempting to sell to "cash in" then they aren't going to be accepting low offers are they... so there is an extremely good chance they simply won't sell.
Anyone have reliable figures for the number of properties unsold?
I'd love to know how much its changing.
9. Richard said...
Sooo many will be forced to sell, I work for a subprime lender and the number of people with 0% equity after taking out one home owner loan after another to clear expensive credit cards ..... its absolutely crazy. Credit cards spending is an addiction for many, would you give money to a crack addict?? Of course not - the mentality is that of a drug dealer .... squeeze them for all they are worth - then dump em on the NHS.
Lenders are effectively feeding a bad habit of reckless spending - by consolidating that credit they do help some people - but on the other hand they just let others - the irresponsible spenders just clear those cards so they can spend all over again until they are utterly peniless and about to lose their home.
Of course .... 0% equity 6 months ago = negative equity now. Our economy is screeching to a hault as a result .... or perhaps even worse .... slam on the brakes ..... nothing happens = brick wall senario.
10. Planning4acrash said...
Factor in 4% RPI inflation, and 6% "soft landing" is a 10% CRASH!! Homeowners should assume crash positions and prepare themselves for a race to the bottom!!!