Friday, Apr 10, 2009
Express ramping? Who would've thunk it?
Daily Express: New hope on house prices
BRITAIN’S battered housing market is looking up as record low interest rates, bargain prices and more readily available mortgages tempt back buyers, experts said last night.
They predicted that the bottom of the market will be reached in the next few weeks and a recovery could be on the cards before the end of the year.
Stuart Law, CEO of Assetz, said: “All indicators now suggest that we are closing in on the bottom for house prices. Price falls, increasing buyer interest, historically low interest rates and early signs of increased lending are all beginning to have an effect. If things continue as they are, I expect to see monthly price rises across the board by the end of the summer.”
Posted by little professor @ 12:29 AM (1953 views) Add Comment
28 Comments
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1. paul said...
Of course their regular readers must remember that the Express' property experts said this two months ago too, two months before that and so on.
Then again they do forget how rubbish the Express is each week and still buy it again ...
2. shining wit said...
Stuart Law - Expert ! A bit like calling Eddie Large a comedian, Gordon Brown inspirational or Oswald Mosely a race relations guru.
People simply don't get it so I'll spell it out. The banks simply do not have the resources to support property prices at the current levels
In 2007 the UK property market was supported with over £700 billion from international money markets, these have largely remained closed since the beginning of 2008. It doesn't take a genius to work out that if the banks wish to remain solvent they cannot lend much at today's levels and make a profit. They want prices to fall by at least another 25% so they have a vague chance of being able to balance their books.
3. Frank Bell said...
The Express headlines in 2004/05 were always forecasting Doom and Gloom for Equities, house prices and General Economy.
What's the odds that they are 2 years early in forecasting a recovery in house prices this time?
4. A Spade Is A . . . . . . Um . . . . . . . . . Spade! said...
How will further price drops help the banks? Oh, I know. When they repossess people and sell those properties at a loss, they can simply write off even more losses! Oh yeah, that'll help them alright, NOT!
In case anyone hasn't noticed, new investor money is already returning to the housing market and much of this money is coming from overseas. The low house prices coupled with a cheap pound has seen investors buying up property for months. The cheapest properties on the market are selling and when these have gone, unless they are replaced with even more cheap properties, they will have no alternative, but to buy the remaining more expensive properties and what does that mean? Well house price rises of course! If a 1-bed house sold last week for £80k and this week the same size place sells for £82k, that means prices are moving back up. It's not rocket science. If enough fence sitters out there that have a job & a deposit believe the hype and decide to buy, then a snowball effect could happen and prices will start to rise. We should all be really positive about this, shouldn't we? You know, a stabilising of the housing market might actually be the beginging of the stabilisation of the economy, which is a good thing right?
You know that saying "If you believe you with fail or you believe you will succeed, you will be absolutely right", well I think after 18-months of doom and gloom, perhaps it's time to start thinking more positively. The world will keep turning and tomorrow will be another day! :-)
5. watchingthewheels2 said...
whoops.......wrong comment to wrong article....sorry.
6. Mr Plumbase said...
I find this sort of reporting a bit sad, in the same way I'd find it sad that a once sturdy person is now a senile bedwetting old man.
7. Mick said...
When will we have a newspaper that reports more house price declines then house price rises
And what's happening with the 3x earnings ratio house prices don't match this yet.
House price recovery I don't think so.
8. Mick said...
When will we have a news paper that reports on house price declines and not just house price rises
And what happened to the 3x earnings ratio
House prices are no where near this yet
House prices rising I don't think so
9. Blockernz said...
Property experts?? More like Turkeys voting for Xmas!
Mr Cluttons Estate Agent "The bottom of the market is close to being called and the cost of borrowing is only going to rise. This could be the last really good opportunity to take advantage of the downturn.”
Cost of borrowing is only going to rise... so hurry up and take out a huge mortgage now! ffs.. Any one with any sense will wait for the cost of borrowing to rise first, which will really put the screw on what people can pay and drive down prices. I'd much rather borrow £200k at 6% than £300k at 3%.
As for this Assetz guy,.. he just seems to be a running joke. Hardly and independent expert.
10. Philip9134 said...
if you read the comments at the bottom it will show that most of the comments do not agree with the article, one pearl of wisdom which took my eye was " Overpriced by 100%. I'm saying a 200k house should be 100k. So increasing by 100k by 100% is 200k...". I think that this was the editor.
11. Sybil13 said...
CEBR in August 2008 were predicting 30% increase in 2009 - 2011 by Feburary 2009 http://www.aboutproperty.co.uk/news/house-prices/house-prices-in-2013-could-fall-2003-level-$1265537.htm were predicting 40% falls and stagnation . " CEBR forecasters see a 25 per cent drop in prices from the coming level and a 40 per cent drop in total – with stagnation through 2010 and 2011 and prices still below 2003 in 2013. THAT WAS A MONTH AGO did I miss something that would make their February prediction irrelevent?
12. Wisebear said...
Is this the same Daily Express that in 2007 had the headline: House Prices to Double in a Decade?
That's not going too well is it.
"The banks simply do not have the resources to support property prices at the current levels"
Spot on!
13. rm96696 said...
Why are inflated house prices considered a good thing? Maybe the "hope" should be that they collapse back to normal levels.
14. techieman said...
"Hope sees the invisible, feels the intangible, and achieves the impossible."
15. britishblue said...
The regular readers and contributors to this forum have probably more experience than any in identifying why the market was going to crash. Maybe together we should devise a balanced scorecard in which the naive and easily influenced can look at and see whether what they read in the papers actually makes it a sensible time to buy a house or whether it is just excessive ramping. I am sure there are some economists amongst us that could devise a model. But here goes on a few inputs to the model
1. A quarterly moving average, that shows that all three major house price indices have moved into the positive. (The three indices being the Nationwide, The Halifax and the Land registry). Not sure what this is at the moment - probably in the -4% region.
2. A quarterly moving average which shows that unemployment has leveled or has decreased.
3. When actual property transactions hit a certain monthly level. At the moment they are a little over 30,000. There must be some analysis that could be done from the last housing slump that showed that at a certain point of property transactions the property market leveled as a percentage of the previous peak.
Etc, Etc......
I am sure there are many, many other factors that could be put together as a balanced scorecard. Our numbskull press and vested interests pick up on isolated short term factors and give a spin on them. But it is a combination of factors that will drive the market down further or put a stop under it.
16. little professor said...
17. shining wit said...
A Spade Is A . . . . . . Um . . . . . . . . . Spade! @ 4said...
"new investor money is already returning to the housing market and much of this money is coming from overseas." - Is that why there are record numbers of un let office space, rental properties and both of the revenues from these have fallen progressively in the past 18 months. BTL is nearly dead and good riddance.
"If enough fence sitters out there that have a job & a deposit believe the hype and decide to buy, then a snowball effect could happen and prices will start to rise. We should all be really positive about this, shouldn't we? You know, a stabilising of the housing market might actually be the beginging of the stabilisation of the economy, which is a good thing right?" _ Yes it would be, but this won't happen for at least 2 YEARS matey. No matter what the 'experts' say, the real experts (like the clever people on this site who spotted the problems, predicted the crash and now are accuratly telling you that prices have at least 25-30% MORE to fall) are saying something else.
I suspect that this blog is going to be increasingly occupied by relatively new posters who are VIs wanted to put their 'positive' spin here.
To anyone listening this is what I want:
A property market that moves with inflation . Why does this country want to be able to use the property market as a means of income. Leaches suck blood. Property VIs suck the life out of our economy. Go out and start a business, employ people and sell things/services. Buying and selling our HOMES should not be the centre of our economic drive! Or get an education and become a useful member of society.
A Spade Is A . . . . . . Um . . . . . . . . . Spade.........Yes and an estate agents is a pimp and a property TV presenter a whore. Making money out of property is a good thing. Making property unaffordable, so decent, hard working people can't afford them is a crime!
Mr Spade, stop listening to Mr Assetz, VI think tanks, the Daily Mail and Express, Chubby sloanie TV presenters and start taking note of the people who called the property bubble and the subsequent crash.
18. Tenyearstogetmymoneyback said...
Good comment by shining_wit @ 2
"In 2007 the UK property market was supported with over £700 billion from international money markets"
What needs to be added is that most of the money was borrowed in the form of short term loans of two or three years.
So when they come up for renewal the Chinese etc simply say "Give money back now", leaving the banks
with no choice but to go begging to the Government.
The sad thing is I am still convince that the Northern Rock Crisis could have been averted, simply by increasing
their interest rates to the point where there were queues of people waiting to deposit their money.
Having just been doing my end of year accounts (conclusion - equities are a waste of time) I have been
thinking about this. When a house goes up in value (allowing the "owner" to go out and buy a flash car or similar)
the money has to come from somewhere. I can only conclude that it is from mugs like myself who save more each month
than my car is worth. With interest rates so low we might stop to bother saving then all the MEWers really will be stuffed.
:- Duncan
19. Tenyearstogetmymoneyback said...
britishblue @ 15
Or alternatively just look at the graph on the homepage.
You can even see where my Username comes from (1989 - 1999)
:- Duncan
p.s I think that your moving average would have to be over alot more than 3 months.
3 years would be more realistic. I think we need to have an entirely unrelated bubble
(like technology) before it is time to have another House Price bubble.
20. waitingfor hpc said...
guys- they SELL papers, with 70% home ownership - a lot of people need some good news. they see the headline and buy the paper! This is about selling papers and not the facts!
21. enuii said...
In response to Mr Spade investing in property from overseas is a double and probably a triple edged sword as what is envisaged as a bargain may well fall victim to currency fluctuations and local economic conditions; just ask anyone trying to sell a villa in spain!
We could also throw in the native politicians and their ever changing view on taxation but that is an entirely unpredictable quantity.
22. wiltshire said...
Daily Express readers must be barmy to keep reading this sh*te when it's utterly apparent their story is wrong today, a similar story last week/month was wrong and next week/month's similar story will also be wrong. In the same way that Mr Laws is continually proved wrong with each of his predictions.
23. hpwatcher said...
UK obsession with house prices......
24. crash bandicoot said...
british blue, rather than indicators what is needed by the greater house buying public is the realisation that all of your mortgage borrowings need to be paid back, with interest, from your earnings. The ignorance of this one fact - supported by the house prices only rise theory - has caused the whole mess that we are now in.
25. sold out said...
"BRITAIN’S battered housing market is looking up as record low interest rates, bargain prices and more readily available mortgages tempt back buyers, experts said last night.
They predicted that the bottom of the market will be reached in the next few weeks and a recovery could be on the cards before the end of the year."
Experts all consisting of EA thickos and of couse Mr Lawz.
These clowns only expertise seems to be in ramping up the property market and they are so clever that despite the fact that none of them saw the peak in July 2007 they are able to predict the bottom of the market within "weeks".LOL.
We may see over the next couple of months a bit more activity and prices remaining stable or even rising slightly, BUT once all of the other factors feed into the economy over the summer then the carnage will continue, i am certainly not as clever as mr Lawz in predicting the bottom of the market in to a specific week, but it wont happen in 2009 that is a dead cert in my humble opinion.( maybe 2010 or 2011 or 2012 or..............?
26. Greenshootsandleaves said...
'Record low interest rates' are as likely to tempt back sensible buyers as the current oil price is of persuading anyone that they should put down a deposit on a gas guzzling 4x4.
27. dude said...
10 days late...
28. mander said...
Did they not heard of FSA new regulations? 3.5 income-to-loan value? Who are the banks lending to then? Credit worthy persons?
0.5 interest rates will equate in massive job losses simply because the pound lost 30% of its value against the dollar and the euro which makes imports more expensive but companies in this recession cannot put the price up to cover this. Companies will cut jobs to cover pound weakness. Property market especially speculation does not create jobs. Construction does it but it has been stopped because they are trying to maintain an acute housing shortage in order to maintain current value of houses.
Understandable that people with interest in property will talk the housing market up...