Friday, Mar 28, 2008
Nationwide hints at a HPC
BBC: Further slowdown in house prices
The Nationwide said house prices had now fallen for five months in a row and predicted prices would fall further.
Nationwide chief economist Fionnuala Earley admitted that this was a change to its earlier forecast that there would be no overall change in prices by the end of this year.
"A clear change in sentiment since the late summer has led to the sharp slowing in house price growth, prices are now 1.5% lower than three months ago," she said.
Posted by yoyo1 @ 07:48 AM (1032 views) Add Comment
20 Comments
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1. it_is_going_with_a_bang said...
"But with lower house price growth expected now and in the future,"
Still can't get that 'growth' word out of a sentence. With their annual increase down to 1.1% they had better start looking for new words. Hmmm I wonder what positive negative could be used?
As usual the fix for everything is lower interest rates. Bla Bla. If you are taking out a mortgage over 25 years what is a temporary lowering of rates going to do? Having watched rates being hiked and borrowers in the US and UK being stuffed with huge payments especially after their teaser rates have expired it is definitely a case of Borrower Beware.
I remember when I got a mortgage in 1993 I had to prove to the Bank that I could cope with rates at least 2% to 3 % higher than what I was borrowing, to allow for the uncertain future.
2. yoyo1 said...
This one deserves a BIG CHEER! Perhaps Fionnuala would be kind enough to tell this site what their revised estimates are for 2008. It's nice to have accurate records.
3. monty032 said...
Look at the time series of house prices at the end of Nationwide's PDF file, rather than the headline percentage figures. This seems to be beyond most semi-numerate journalists. Unless the month-by-month falls reverse next month and we see a 1% gain for April, we will finally have a annual price fall.
A recent comment on this web site was that once we see actual annual price falls, the vested interests will be trying to concentrate on multi-year price rises instead. Fionnuala has already started. Instead of her £30 a day gain for the last five years, here's a figure of my own: a £45 a day LOSS over the last five months.
She does however recognise that expectations of future price rises may have been a factor in high demand over the past few years. Do you really think so?! A human being is a more complex factor of production than a lathe - we have future expectations. What effect do you think annual price falls from April are going to have on demand?
4. uncle chris said...
The actual Natiowide title is "No bounce in house prices this Easter". Oh dear, maybe buyers are delaying their spending splurge because of the cold weather, the rain, the sunshine, the Olympics or maybe leaves on the line. OR MAYBE THERE IS JUST NO MONEY LEFT IN THE PIGGY BANK !!!! Get used to it buyers - time to move from the denial stage straight to the panic stage.
Two friends of mine, whose houses have now been on the market for over a year despite 10%+ cuts in the original asking price are fast approaching the panic stage. I certainly have to reign in my "told you so"s at the moment as they would undoubtedly draw terse responses.
5. sold 2 rent 1 said...
uncle chris,
"time to move from the denial stage straight to the panic "
The order of emotions is
denial fear desperation panic capitulation despondancy depression
I think we are moving into fear.
There is a long way to go before depression in 2010-2011
6. paul said...
Wahey.
Fionnnalllulla says "The MPC will bring forward its rate cut to April".
Is that an order, Captain Earley?
7. Loneranger said...
'Annual house price inflation has fallen to its lowest rate for 12 years'
Aaagghhhhh! What an obvious play on words! '...house price inflation has fallen...... ' correct me if I am wrong here but shouldn't this report be stating 'house price deflation has increased'.
It really is getting a bit desperate from these VI reporters, quite laughable really.......
8. Davros said...
The 'estimates' are extrapolating a line from the previous 2 months. Genius.
9. Dark_horse said...
Unless it's just me, Nationwide's website seems very slow at the moment. I imagine the fearful are getting stuck into the data...
10. theboltonfury said...
s2r
i think many sellers are at different stages. Ones that have just awoken from their economic slumber are starting the process at panic before skipping straight to despondancy. Fear was so 2007
11. sold 2 rent 1 said...
Surely despondancy must be a 50-70pc HP drop. We are not there yet.
12. Debtfree said...
paul...
Fionnnalllulla seems very confident, who on earth does she think she is. Nationwide put rates up 0.5% and have the cheek to say the BOE is going to cut rates.
Thats right, lets encourage the BOE to cut rates while other countries are reducing food exports due to surging inflation.
Its a world gone mad.
13. Sold My Soul To The Never Never Never said...
If Ms Earley says that "The MPC will bring forward its rate cut to April", What good will that do? They have just increased rates on some of their deals by up to half a percentage point point as they don't want the business anymore.
14. geed said...
Fantastic. Houses according to the Nationwide are only 1.1% higher than this time last year. Monumental stuff HPCer's. Love the blue line on the graph.
Fionanannananallnna says that base IR's are going down soon yet base IR's have twice been reduced in the last 6 months and NW have increased there lending rates of their tracker deals. As usual she is talking cobblers, by virtue of NW's actions they have proven that the base IR is now disconnected from lending rates, more specifically LIBOR.
15. theboltonfury said...
crumbs - if they go down 70% I can buy outright with my deposit. That's if Brown hasn't made them worth less than one of my socks by then!
16. mark wadsworth said...
Is that 1% nominal annualised growth? That's 3% less than inflation, so a real fall. Yippee! Thank heavens I sold-to-rent two months ago. The words 'sheer blind luck' don't come close.
17. Alan said...
This was discussed on today's Today programme in quite a bearish manner.
18. shipbuilder said...
This makes all that optimism over the Rightmove stats look a bit stupid now, doesn't it?
19. quiet guy said...
All the vital signs seem to be heading the way we want but let's not get carried away. The effect of prices dropping by (say) 0.5% per month is equivalent to approximately a 6% drop in a year - that's a start but it's not a crash. I've a suspicion that the next phase in the market will mostly be a stalemate with buyers priced out and sellers unwilling to compromise.
20. Matt_the_hat said...
Guys steady as she goes....
We all know the difference between real and nominal on this site, however this is the ace up the goverments sleeve. Keep house prices stable in "nominal" terms and inflate away the problem with underestimates of inflation. Watch your saving/deposits now before our friend Crash pick pockets them!!