Friday, Mar 20, 2009
More and more confirmation of 40% falls
Bloomberg: U.K. Homes Face ‘Unprecedented’ Drop, Bernstein Says
March 20 (Bloomberg) -- U.K. house prices face an “utterly unprecedented” decline of 40 percent in nominal terms, as interest rate cuts fail to slow the momentum of decline, according to analysts at Sanford C. Bernstein in London.
“A 40 percent nominal house price fall is utterly unprecedented in the U.K.,” analysts led by Bruno Paulson wrote in an e-mailed note to investors today. Prices have already declined 20 percent, it said." end quote.
How refreshing to have 40% drops due to loan to income ratios confirmed more and more eventually it will sink in that prices are coming down in line with incomes and as the FSA said earlier this week will stay at 3 x's income or lower to ensure they do not go up until they go up in line with wages
Posted by sybil13 @ 04:18 PM (606 views) Add Comment
4 Comments
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1. tyrellcorporation said...
In Exeter houses are flying off the shelves. A huge accelerated influx of cash-rich londoners are apparently using their city job losses as an opportunity to opt for a zero mortgage de-facto early retirement. Doesn't help me and my family very much!
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3. bystander said...
"that an eventual larger rebound is warranted"@ Goldman Sachs. Interesting use of the word 'warranted', by whom might I ask?
4. str 2007 said...
Agreed level of activity high in South Hampshire, not Londoners buying up though, I just think they're a bit daft.
I doubt prices will rise, just the number of sales. But this activity is IMO purely based on the fact that money is cheaper than it's ever been before.
If you look at a repayment mortgage (as against interest only) then the repayments are still quite high.
The trouble with this labour government is they knee jerk react to things without making sure the measures are in place for the knee jerk reaction to do any good.
Example.Take over Northern Rock because its business model has collapsed and the irressponsible lending (125%) has got out of hand. And what happens, NR carry on selling that product for a further 6 months.
They drop interest rates to next to nothing. This should allow people to clear down debt. But they don't ban IO mortgages before they do it, so as fast as one lot are clearing down debt, another lot are taking on IO mortgages and running it back up again only to create problems 2 years down the road.