Wednesday, Jul 22, 2009
Is now the time to buy?
Fleet Street Letter: UK property: Is Now the Time to Buy?
Recent newsflow from the UK housing market has become much less negative in the last few months, leading some commentators to speculate that the market has already reached the bottom. In this piece we examine the latest evidence and look at future developments that will shape the property market going forward.
Posted by warren @ 11:00 AM (658 views) Add Comment
4 Comments
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1. paul said...
Oh dear - you've used that phrase 'going forward'.
2. mrflibble said...
Nice to see this one trotted out...
'First time buyers are the lifeblood of a thriving housing market'
Best not forget that too, as FTB's are the hand that feeds the housing market...
It seems the more sensible commentators are suggesting that prices will head South for at least 12 months. The only question we don't have an answer to is - how fast? If the falls are to be real slow such that dead rental money minus savings interest equals loss in equity plus loan interest then one may as well buy now, if one is waiting to buy, equally one may as well sit out and not bother. If the previous fall pace is to be resumed, pre spring bounce, then sitting out will be a must. We can forget inflation worries here as inflation is not an overnight event and there will be plenty of time to see and react to inflation. The interesting puzzlement for me is how fierce the uptick has been or how weak the falls have been, at least in some areas. With the daft prices being asked for it's feeling feels like 2007 all over again.
So we are heading down again, but where from, the unrealistic prices of 2007 or the more realistic prices of early 2009? If it's the former then we have to get back to the latter point first, which could take some time, especially if the falls are slow. Death by a thousand cuts or proper Capitulation? Guess we'll know in time for Christmas...
3. bluebeach said...
I like your views MrF.... have you been here before in a past life?!
4. growler said...
Mcflibble:
I agree
My work is long-term projects and for the life of me, I cannot see any driver that will lift demand for 4-5 years - apart from significant government interference and huge additional subsidy. Since the headlines are full of how we cannot afford and more - plus that we also must cust existing plans - tells me there is no way and people will get into the housing market unless they have to for jobs or whatever. We're in for serious cuts, growing unemployment and if we're not careful, a sterling crisis that will precipitate some inflation and thus interest rate policy.
All the figures point to the fact that the market is literally only white noise background stuff. Just like real white noise, a small sound trace is intelligible and even recogniseable, but it's a long way from HD 5.1 digital audio and a clean picture.
We're in for capitulation of sorts - and I agree; by Christmas we will see some significant falls.