Monday, Oct 20, 2008
Not where I live ...
The Telegraph: House prices are close to affordable levels, reveals survey
""We think that house prices could bottom out mid to late next year," she said. "
She's clearly spent the last month in a vacum crunching her numbers for the report.
Posted by jonathan @ 12:23 AM (875 views) Add Comment
21 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. sosoon said...
Absolutely shameless
2. str 2007 said...
I struggle to believe this survey.
3. Cantonf said...
this survey is based on nothing. prices will fall and fall - probably more than 50% in UK in the next years. we will see prices starting go up when delevaregaed is complited and inflation will start agin under a different economic system mainly based on public spending
4. phdinbubbles said...
They do seem to realise that prices will languish at the bottom and won't bounce back quickly, so they're not quite as delusional as some others out there. However, I think there's more chance of persuading the flat earth society of the error of their ways than some commentators, journalists and 'researchers' about house price affordability.
5. Will said...
Not much price movements where I am, just low volume of sales.
6. tyrellcorporation said...
LOL... In Exeter prices are generally where they were before the Credit Crisis was even mentioned - they haven't budged in my price bracket and if anything they've risen for +£500k houses.
This survey is laughable.
7. karlos said...
"But Ms Choyleva said many employees are cutting their costs by reducing wages rather than staff numbers."
...which Ms Choyleva paints as a positive. Surely this will reduce affordability levels? Duh.
8. Chilli said...
I get the feeling these guys are just doing the math; interest rates dropping, now how much disposable income does the average sucker have?
The old delusion about ever increasing house prices has been demostrated to be false (yet again). And within memory of the vast number of plebs out there (memory of a fish not withstanding).
If house prices recover I'm seriously going to start wondering if we are in george orwell's 1984, where doublethink is the chief practice.
9. Collywolly said...
close to affordable levels = still unaffordable
10. uncle tom said...
I think this is another one of those clowns who looks at the interest payments instead of the capital debt.
The bottom could well be next spring in the US and next summer/autumn here. Thereafter, the US will probably consolidate and slowly recover, but in the UK, the fall will be greater, and the secondary consequences are likely to be long and painful.
11. titaniccaptain said...
House prices affordable?????????????? to who??????? the average u.k. citizen is up to his eyeballs in debt............so who is going to afford to move up the property ladder????????no one
12. richc said...
If you look at the methodology employed by Lombard Street, it's hard not to conclude that this woman is an IDIOT. She should be kicked out of the economics profession, and the fact that other economists aren't challenging her just brings the whole field into even more disrepute. When calculating the "affordability", they only look at the how well the consumer is able to pay the first month's payment of the mortgage. By definition, then, houses will always appear more "affordable" in a low inflation / low interest rate environment. In reality, though, the fact that wages are also growing more slowly just means that the burden of the mortgage is being shifted torwards later in the term of the mortgage rather than actually being reduced. In high inflation / high interest rate environments, an older mortgage would have been inflated away to such a point that it takes up very little of the consumer's income. This isn't happening now. To disregard this effect is asinine. If you look at the total cost of the mortgage over the life of the mortgage and what percentage of your income you must use to buy a house, houses have never been anywhere near this unaffordable in the past. Fundamentally, her model mistakes nominal interest rates for real interest rates -- something any first year economics student would be failed for doing.
13. shipbuilder said...
I can remember many on here praising Lombard Street for the accuracy of their house price inflation figures a while ago.
14. letthemfall said...
Being an economist can't be a bad job. You get paid pretty well and can say pretty much what you like. These "affordability indicators" were being used last year and before to justify the record house prices. Now that we have just come close to a banking collapse, have record debts in western economies, a web of complex derivatives still to be unravelled, we are told that we will have a brief recession and house prices will then resume their upward rise. Curious.
15. Davros said...
They predicted - 3 to 4% at the start of the year, so they're already way way off. Then 5% the year afterward. Now it's more than double that.
Not really predicting is it?
16. sold 2 rent 1 said...
shipbuilder
"I can remember many on here praising Lombard Street for the accuracy of their house price inflation figures a while ago."
You are correct. That statement is still valid.
Unfortunately I have only the small image of the LSR graph
As I said earlier in the year the pattern of 3 troughs in the index of 1974, 1981 and 1992 over 18 years will be palyed out between 2008 and 2011.
This shows the acceleraton of change as we head into the singularity.
Trough 1 (2008) hit 82 then bounced is identical to the 1974 trough.
Expect affordability to improve further and the index to go back to over 100 by spring 2009 (ie houses to fall further and IRs to be lower)
Index is 93 at the monent.
My guess is the index will peak in early 2009 and plummet into Trough 2 around summer 2010 (give or take 3 months either way).
Oil at $400 in spring 2010 will be the main cause for plummeting affordability
Peak 3 should be in around early 2011 and Trough 3 around autumn 2011.
This is the final bottom in the index where we have the end-of-money.
17. Daniel said...
I wont be buying until they return to 2000 prices.
If FTB's stop buying, they will do.
18. sold 2 rent 1 said...
It is VERY important to remember that this index is very useful but the analysis by mainstrean economists that is total garbage.
This index WILL be used in spring 2009 to declare that houses are once again cheap by mainstrean economists.
But the economists are not factoring in unemployemnt soaring to 4m or more.
They are not factoring in oil going to $400 a barrel or more.
Currently IRs play the biggest factors in the afforability index.
But by mid 2010, it will be unemployment and the cost of food and energy.
19. dohousescrashinthewoods said...
ROTFL. She's wrong.
20. sold out said...
close to afffordable level = close to unaffordable level
House prices will be affordable again but not yet, nice try VI's.
21. timmy t said...
Anyone who reckons there is less potential for forced sales than there was in the early 1990s needs medical help.