Thursday, Jan 29, 2009
"Huge pent-up demand"
Guardian: More boom and bust ahead in housing market
"The risk of another housing bubble is huge," said chief executive of Shelter, Adam Sampson. "Demand has not gone away and, once mortgage lending comes back, there is a danger that huge demand will be unleashed and the increase in house prices will be very sharp indeed."
He called on Gordon Brown to put together a fiscal stimulus package for the construction sector, to meet future demand and save thousands of jobs in the industry.
Posted by little professor @ 05:26 PM (1275 views) Add Comment
11 Comments
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1. shining wit said...
Probably, the population of britain is obsessed with the property ladder. Who else would be so stupid to allow a posh sloanie and a balding, gym obsessed estate agent, to give them advice to "buy now, you know property only ever goes up!", like asking a drunk will drinking 3 bottles of Thunderbird a day ruin my diet!
I think it's going to take at least 10 years before we see any significant moves up in the property market as it is going to take at least twice that to pay for the "great bank robbery" that Gordon "Ronnie" Biggs and Alistair "Buster" Edwards have co-ordinated (let us not forget Tony "I may be a liar but at least I can smile doing it" Bliar).
2. Bloke001 said...
Er, I think that demand has gone away, actually.
3. Rm96696 said...
If there's all this demand that is only repressed by the non availability of mortgages and a shortage of accomodation, why is it that rents are crashing even faster than house prices? Or is it that, if people can't get a mortgage,they prefer to sleep on the street rather than rent?
Frankly this man's thinking doesn't seem to reflect reality.
4. guiriduro said...
Lets see - house price collapse, mass lay-offs, migrated economic migrants, bankruptcies, negative equity, a generation rightly scarred with credit drought memory - I think, after several years of that, when lending and prices do return to sensible levels, the dynamic will be very different, the buyer will be a far more dangerous animal, play their hand very carefully and strategically in full knowledge that the credit conditions could grind to a halt and the nature of the risk they are taking on by getting a mortgage. To be honest, this will push the undershoot of prices - when a lot of sellers and forced sellers return, even under better lending conditions, the overall direction of the market will be down in all but the most desirable areas, until the calm conditions are well and truly long established. I don't see a return of general price-growth for 12-15 years.
5. Markus said...
I heard that crashing markets tend to turn back up again when the propagandists trying to talk them up have given up. According to this forecast (and all other indicators), we'll have a very nice long holiday from house price madness. Just sit back, relax and listen to the jolly thumps as the prices come crashing down.
6. P. Riddy said...
Boom and bust has nothing to do with demand, it has to do with the profligerate growth and contraction of money supply. They sucked people in on the upside with this argument, and are trying it on the downside after being thoroughly discredited.
7. plato said...
Maybe he's looking at the longer trend.
Nationwide's senior economist, Martin Gahbauer, said: "The price of a typical house fell by a further 1.3% in January, as the deepening economic recession and financial market turbulence continued to weigh on housing market sentiment and activity."
But he added that the three-month rate of change, which is generally seen as a smoother indicator of short-term trends in prices, had improved for the fourth month in a row.(Copyright © Press Association 2009)
8. the haunted said...
The only way to avoid this is to keep borrowing in line with wages and keep a maximum of 90% LTV. If the lending of 2007/2008 comes back then the sh1t will hit the fan all over again.
9. shining wit said...
2 Markus at 5.....
"Just sit back, relax and listen to the jolly thumps......" - What has Kirsty moved in upstairs?
10. Nanstallon said...
If I were the great dictator, I'd rule that lenders could only lend 50% of value (on a conservative valuation) on security. If they wanted to lend any bigger percentage, it would be unsecured and the banks would take the risk. No insurance against default would be allowed. By restricting the amount of money available for house purchase, this would keep prices sane and stop the absurd speculation that has so obsessed the Brits. In fact, Britain needs to really crash and suffer some hardship; make the idiots realise that money has to be earned and not 'won' by pyramid schemes and scams. This country has for too long been a spiv smartalec culture.
11. honest valuer said...
There is no such concept as "pent up demand" - just demand at a given level of supply at all price levels. Anyone using this term does not understand the fundamentals of basic economics.