Friday, Mar 28, 2008
"March"ing on to a full blown HPC
Daily telegraph: UK house prices drop for fifth straight month
"The building society said that the March fall represented a "sharp slowing" and dragged the quartely drop in prices - considered a less volatile gauge of the market - down to 1.5pc. As recently as October prices over three-months had grown 1.5pc, signalling how rapidly the situation has deteriorated."
Can't really add to this article. Back to reality with a bump. VIs: Lets not pretend it's a surprise
Posted by growler @ 10:05 AM (941 views) Add Comment
13 Comments
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1. Pelethar said...
Yep great stuff. There was a 0.7% rise in April 07, so another modest monthly fall will leave them with a negative YoY figure. Something tells me they will manage to come up with a small rise in April. As has been pointed out elsewhere though, Fionnula is already talking about the two year and five year growth figures.
She is one of the most influential commentators around, and her opinions are always widely reported, so I think it's a real step change for her to have finally accepted there will be annual price falls this year - especially as she has been so insistent to the contrary in the past. I can't wait to see what she will be saying by the summer if things carry on as they are, or get worse.
2. Icarus said...
Nice one, Fionnuala. You got it wrong so now you're saying you did identify the downside risks that have now materialised. The main risk was 'turmoil in the financial markets', which you identified as early as...er....November.
3. inbreda said...
There will be 'amateur' property developers out there that will have been trying to sell their laminate-flooring hovels for 6 months now, who will be reading headlines like this with a lump in their throat. There will be some that will be completing their latest laminate flooring projects only to find that the property is valued at less than they bought it for. The realisation that laminate flooring can make you rich ONLY if you can find a bigger idiot than yourself will be dawning on many of these people. They will be trying to get their old jobs back - or retiring on the riches they've already made - but they will not be in the market to buy any more property. Another 6 months and I think we will really see the effect of this.
4. mark said...
Notice they say they
Fionnuala Earley, Nationwide's chief economist said: "The outlook for UK house prices is clearly more downbeat than at the time of our November forecast. Some of the downside risks we identified then have become a reality - most notably the continued turmoil in the financial markets."
This is utter rubbish the last several months they have been talking market up, amazing how they BS things to look they are right all the time...
5. Icarus said...
Fionnuals - the only reason there hasn't been a HPC yet is that Nationwide and other lenders aren't providing the funds to enable buyers to do the deals that would bring down the prices.
6. Landedgentry said...
It's beautiful being right.
Time for BTL "investors" to eat some humble pie, realise their dreams of easy money and riches are now truly dashed.
7. hpwatcher said...
Call an estate agent though and you will get the same old sh*te, about how things are picking up. Spring bounce etc.
Lying bas*ards.
8. hpwatcher said...
Another 6 months and I think we will really see the effect of this.
good riddance etc
9. growler said...
@hpwatcher
I posted this elsewhere, but it seems relevant here
The sad thing is that we don't learn in the UK. I moved here in 1971 having been brought up elsewhere in Europe. My family over there struggle to understand the UK market and how extremely volatile it is and what causes it - since at the end of the day we're not that far apart.
I'm no gambler either, family first. But it was right palce, right time for me (this time!). I had to move withint he UK due to a job move in June. I chose to rent as it was pretty obvious what was happening. I do feel sorry for those people having to sell for other reasons. And to be honest, I hold the financial institutions responsible - not the estate agents. People are naturally gullible and the things that drive you to buy a lottery ticket (which is wasted money) is the thing that drives the housing market. Optimism and self-interest. Even if you're a family man (as I am) you always think "have I done ok on the house", "did I get out at the right time" etc etc.
My view: It's a house to LIVE in - and we should find ways to prevent the money makers from having the ability to abuse the market. You can't blame estate agents and buyers from optimism and enlightened self interest. But you can regulate mortgage finance criteria and this is a big driver. I see it like a "money supply" issue with the finance men running the Royal Mint. Supply of housing stock is a red herring to deflect away from sheer hyperinflationary growth in the "residential property market money supply". As any basic micro economist knows, an inelastic supply curve sees sharp rises and also sharp falls. In Germany - lending criteria doesn't really change by much at all. Housing market as a result also very stable. Lets hope their mortagage industry doesn't recruit too many fired UK executives.
We're in for a HPC, and as well as getting a good deal on a house, I am hoping UK PLC learns the lesson - but I expect to see that graph do the rollercoaster for years to come
10. harold said...
Telegraph: House price drop
BBC: slower house price inflation
And to think that we are forced to pay for Aunty's spin.
11. hpwatcher said...
You can't blame estate agents and buyers from optimism and enlightened self interest.
I'm not blaming them for that, I'm blaming them for the lies they tell.
It things are shit, then just say things are slow etc and not try and make out things are great....but they just won't do that. According to one I just spoke to this morning, EVERYTHING we have seen over the past few weeks - including the credit crunch etc - is all down to the media alone.
They were quite happy when the media was talking things us, and prices were increasing. Bas*tards one and all.
12. titaniccaptain said...
@hpw
They were quite happy when the media was talking things us, and prices were increasing. Bas*tards one and all.
that should be read out on the 9 oclock news mate
13. Fence said...
inbreda said..."...laminate flooring...."
Excellent comments! Maybe this be known as the "laminate flooring" boom? "Laminate - a thin veneer designed to give the impression of something more substantial and of greater worth"!