Thursday, May 22, 2008
Nationwide sees 40% drop in residential lending and now predicts house prices will fall
Citywire: Nationwide predicts single-digit drop in house prices
The percentage fall in house prices will be limited to single digits this year, says the Nationwide Building Society in stating a 5.2% rise in full-year pre-tax profits. The building society was more optimistic than some doom-sayers in the property market who have said house prices could fall by more than 10% while Halifax, the UK's largest lender, has forecast mid-single-digit falls.
Posted by jack c @ 10:28 AM (1090 views) Add Comment
15 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. doom&gloom said...
What the hell are 'mid-single-digit' falls all about anyway? Why are all the mainstream housing market commentators saying EXACTLY the same thing?! In cahoots?
Nationwide and Halifax have CONSISTENTLY underrated both house price rises and house price falls over the past few years. On that basis, I will stick my neck out and say falls will be 'double-digits'. There. Between 11% and 99%.
2. last_days_of_disco said...
The quaterly drop in prices in most areas based on the land registry figures is 5% (exclude London, which I think will trail by a quarter). Am I missunderstanding the land registry figures but if in one quater we lost 5% in what people really are willing to pay (and this includes the fraudulent actions of new builders), then surely in 4 quarters (i.e. a year) we are looking at a 20% drop. I did this calculation in a few seconds using very simple reasoning. I can't see how we could be heading any other way. What is going to rescue prices. It could be worse of course, but not better.
3. paul said...
Being a retail bank residential mortgage market forecaster must be an easy job.
Make a wildly optimistic forecast, then revise it just when it starts to be exposed as an utter fantasy.
4. letthemfall said...
What this really means is that Nationwide has made another arbitrary guess at price changes, whle trying to sound as optimistic as possible in the hope that the punters will go on buying a grossly overinflated asset. Another case of overpaid bankers talking rubbish, doing an indifferent job and gradually destroying value.
5. harold said...
And the Nationwide have no interest in painting a rosy picture?
6. need-a-crash said...
I guess like the government you'll probably find their internal forecasts talk of "10% falls at best". Much as I'd like to say Nationwide and Halifax commentators are stupid I think it's more a case of media spin.
7. jack c said...
Fionnuala Earley of Nationwide predicted house price rises of 4% for 2008 (with Scotland leading the way) as recently as Dec 2007.
Fionnuala is very quiet at the moment
8. Rm96696 said...
Expecting building societies to forecast a large drop in house prices is a bit like expecting an auto manufacturer to forecast a large increas in road deaths. When will we see the first forecast for a triple digit fall in prices?
9. dude said...
It won't be long now before the 'green shoots' metaphor is rolled out again. We'll have got to the bottom, and are turning the corner. I imagine we will be doing a lot of turning in 2009 as the election starts to loom.
10. eyeoftheweasel said...
It would be interesting to compare Nationwide's externally published predictions with the figures that they use in internal meetings. I suspect the latter might be a bit more accurate.
11. mark wadsworth said...
What D&G says - "double digit falls" looks like a safe bet. I personally reckon in the order of 15% a year for two or three years.
12. shipbuilder said...
This is exactly as happened in the US - VIs calling the bottom of the market and talking about imminent 'recovery' month after month.
It's probably rather like us calling the top every month, in fact.
13. mark wadsworth said...
I admit to having called the top about six years ago.
Funnily enough, the award for calling the top of house prices goes to Alistair Darling - scroll down to last paragraph in this Times interview.
The Badger also gets an award for calling the top of the credit bubble, two days before Northern Crock bank-run (altho' he probably had inside knowledge) in this interview with The Telegraph.
14. the haunted said...
Pig farmer reports that the costs of pork will not fall.
15. iguana said...
Clearly with that level of profit, Nationwide can now afford to update the 'blue graph' on the home page, and having come clean to some extent about the true position of the market, they could be a little more truthful. A good starting point would be to reshape the exponential red line increase, they might even consider a revision of the peaks of the last two years.