Monday, Aug 03, 2009
House prices to fall this year, next year and so on.
BBC 'news': House prices 'to recover slowly'
'House prices in England will fall this year and next before recovering, the National Housing Federation forecasts'. - What the report actually alludes too is that they are finally waking up to the fact that property prices, like our beleagured economy, will take 10 years to recover. Even this assesment by the National Housing federation reckons that prices will be 20% higher today by 2014. Slowly, oh so slowly but surely, the realisation that the 'party' is over is sinking in. 80,000+ a month on the dole, inflation around the corner, massive spending cuts to balance the countries finances imminent....sounds like the dying days of another labour governement! Anyone for a winter of discontent?
Posted by shining wit @ 03:04 AM (2214 views) Add Comment
20 Comments
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1. paul said...
But last week, the BBC said that house prices would shoot up again this year. They promised.
2. Old_traveller said...
"Our research shows that, while house prices are falling in the short term, they will inevitably increase in the long term because of a fundamental under-supply of housing," said NHF chief executive David Orr.
Not sure if he is referring to the current lack of stock, or about the myth suggesting a lack of overall dwellings in the UK. Guess it is the latter he is referring to. If so, I wish someone, officially once and for all clarified that is not the case.
3. alan said...
"House prices in England will fall this year and next before recovering, the National Housing Federation forecasts". Surely the title should say House Prices "Fall" or "Falling"? House prices are predicted to fall this year and next! Are the BBC encouraging people to buy in the dip?
Looking at the number of SOLD boards I've seen this week, I think volumes of house sales are rising in my bit of Essex, touching the M25. I expect the statistics for July/August will be based on a larger number of sales and then everyone can be in a more informed position to judge what's happening.
4. wdbeast said...
Why does the headline read "House prices to recover slowly"?
What the article says is that prices will go down 12.2% this year and 4.6% next year, that's not a recovery!
More BBC bias.
5. David Orrs Mum said...
David Orr wins the ttitle for thickest Bull in a management position.
Thing is, hes as thick as p1gsh1t.
Never any reason for his arguments, he just bends over and talks out of his @rse.
Hes been doing it for years. ALL of his previous predictions have been completely and utterly wrong.
COMPLETELY AND UTTERLY WRONG.
The man is not worth taking notice of, and only certain people inside the crooked BBC would print his lies.
If tey did their research, they would see hes been calling the bottom of the market and saying that by next year houses would start to rise again, since 2006!!!!
6. alan_540 said...
Auntie has already had her wrists slapped for upsetting uncle Gordon dontcha know. She wouldn't want to upset him again for fear of getting a punch on the nose!
7. timmy t said...
wdbeast - and why do rising house prices constitute a recovery anyway? Surely house prices once again becoming unaffordable is not a recovery. A return to 3.5 times avg salary would be a recovery. Would people dance in the streets if family saloons went up to £60K or a loaf of bread went up to a fiver?
8. Mr Plumbase said...
So many in the chattering classes got used to making money by doing next to nothing, it's over, finished, but they want the good times to return, they know it won't kick off again for a while but making predictions for the return of the "good times" is good for keeping the spirits up in these more austere times.
A bit like the former heroin addict who thinks once he's clean, treats himself to one more shot as a little reward.
9. watching with amusement said...
I can't believe how the BBC have managed to put such gargantuan spin on this story. Significant drops over the next two years are reported as, "House prices 'to recover slowly' " and then a final statement to say that house prices are going to be 20% higher in five years time! The audacity of this article is unbelievable!
10. will said...
Now all we need to do is persuade estate agents to lower their asking prices, something they seem to have avoided in many areas.
11. shining wit said...
Alan @ 2 said....
"Looking at the number of SOLD boards I've seen this week, I think volumes of house sales are rising in my bit of Essex" - A friend of mine me last week that as soon as he put the phone down afeter accepting an offer on his home, the very next day the "SOLD" sign was placed over the for sale sign again. He also informed me that this is now the THIRD time this has happened as the previous two offers had falled through before completion!!!
I personally know two estate agents, one says things are 'better' than the worst last year (when they closed a branch) and the other one says things are as bad, if not WORSE than last year. This agents informs me that 75% of offers fall through because the finance just doesn't come through. He aslo informs me that he has properties on his books that are well over 30% down from the peak that, even with these sort of reductions, are not getting any viewings at all and he is advising those who doesn't ned to sell not to me even market them at all (He and his company, contrary to popular opinions, are quite ethical in their approach)
Never in the history of the property crash, have so many been so fooled by so few.
12. str 2007 said...
Shining Wit
What area of the country are you referring to ?
Also your last sentence.
I think you're saying your friend the Estate Agent is recommending to people that they don't market their houses in the current market.
If so, not surprising that he's having a worse year than last perhaps.
Surely if he was truly ethical he'd get people to sell their houses while there's some life in the ,market before the falls re-commence. At least that is a fairly ethical arguement that could earn him some commission.
I'd hate to think the only ethical Estate Agent in the country went bust, through lack of instructions/sales.
BTW I'm interested to know the Estate Agents cost for marketing a property.
IE Photos, Measure Up,, Floorplan & position on Rightmove. My guess is about £1k, but I'd be interested to know if your friends would divulge this info to you.
13. happy mondays said...
@ 9
you mean,turning up in a bmw wearing a a spiv suit, opening cupboard doors, windows,etc, walking around with a large tape measure, that they have no idea how to use, scribbling crap info on note pads.. I would say they charge as much as they can squeeze.
14. growler said...
@6: watchign with amusement
The Times is even worse than the BBC. Their article is titled
"Housing market to return to growth by 2014: Shortage of new homes will fuel a 20% rise in house prices in the next five years but many will stay in negative equity"
http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article6737078.ece
Which given that the facts would therefore be a peak-to-trough of nearly 40% is incredible to draft a headline nicely forgetting 2 years of extremely poor investment.
But as I/we've said before: our journalist friends are also properdee pundits owning their own little portfolio. Can we really be surprised. My view: tax the capital gain on property. Why should every other investment growth be taxed - yet property speculation not?
15. lambstotheslaughter said...
NHF 2007 +40% by 2012, NHF 2008 +25% by 2013, NHF 2009 +20% by 2014 - about as accurate as a stopped watch - but at least that is right twice a day.
"Fortune-telling is the practice of predicting the future, usually of an individual, through mystical or supernatural means and often for commercial gain. It often conflates with the religious practice known as divination." - Wikipedia
Watch out Mystic Meg - these guys could be muscling in your patch any time soon :)
16. shining wit said...
2 str 2007 @ 9 said...
I really don't want to say the area the estate agent is in but it's not the southeast. I'm sure they are not the only ethical Estate Agents in the country as there are so many of them. They get the flak because people expect them to hold prices down as they are the last line of defense but who can blame them helping prices up when they are on a percentage.
The recommendation not to sell if you don't need to is understandable because the market will become bloated with overpriced properties that simply wont sell. As an estate agent it must be hard telling someone you sold a property to only 3 years ago that it's possible worth less than they paid for it. It's information/advice that doesn't go down to well. There are also some thick idiots that would gladly pay over the odds because the are too dim to know what the market value actually is. The old adage that a house is only worth what someone is willing to pay for it was never truer.
The cost of marketing a house is another 'how long is a piece of string' scenario. I know for a fact that the company has let 1/3 of the staff go (mostly natural wastage), has closed one branch (although they still have to pay the lease and it's not sublettable) and the costs of software/rightmove/other commitments were entered into, some with 5 year contracts, that haven't allowed for any cost reductions. The company will (probably) survive but this ying/yang of boom and bust is disastrous for any business. Estate Agents may make a bucketful in the good times but the bad times are dreadful (not that many of us will feel sorry for them). Estate agents are now in hand to mouth survival mode. This particular agent is better than most. They take loads of photos, have a good website, have floorplans, videos, proper descriptions and even go back and take more external shots if the originals were taken on a dull/rainy day.
This agent mantains that, despite the positive spin being milked for all it's worth, prices where they are still falling, mortgages are extremely hard to come by, even for the those with plenty of equity or 10% deposits, and the rental market is becoming difficult because the glut of new properties appearing from those whop really want to sell but know they will have to get themselves into negative equity territory if they sell now.
And all this with 0.5 % interest rates and a government that's been printing money, and selling gilts and bonds like never before.
We're all living in a fantasy supported by an unelected Prime Minister who completely mismanaged the economy in his previous role.
17. paul said...
"Printing money? What harm could it possibly do?"
18. tenyearstogetmymoneyback said...
Having just seen the Sold STC For Sale thing happen to the house at the end of the road,
and experienced it myself during the 90s I just had an amusing thought.
STC should become STM Subject to Mortgage.
As it was when I suceeded in selling in 1999 I told the estate agent that there was no way
that they were changing the For Sale sign until the contract was signed.
More recently I was looking in the estate agents near my Mum (in Bristol). Unlike some
they don't cover the prices on the sold listings in the shop. Several of the houses for sale
appeared far better value than the sold ones. It is quite possible that the ones which were
sold were back in 2007. As Shining Wit commented @13 it must be difficult to tell someone
that their 4 bed detached is worth less than a 3 bedroom semi was two years ago.
19. paul said...
Oops sorry that belongs in the QE thread.
20. mark wadsworth said...
@ Old Traveller "Not sure if he is referring to the current lack of stock, or about the myth suggesting a lack of overall dwellings in the UK.'
As to 'lack of stock', there is clearly far too little new house building in the UK, and has been since the 1950s. If the economy is growing by 3% a year, then we would expect to go on 3% longer holidays, own 3% larger TV sets, own 3% more washing machines, live on average 3% longer every year (which we probably do) so why is it beyond the pale to suggest that our housing stock increases by 3% every year, i.e. 600,000 new homes?
As to 'lack of overall dwellings', there are plenty of dwellings for everybody to be housed comfortably, but it is predominantly occupied by older people, baby boomers, who bought it for a song thirty-plus years ago, who not only refuse to trade down but don't want any more houses to be built because that would reduce the scarcity value of their own homes, or as they express it "Destroy the character of our village/eat up the Hallowed Green Belt/lead to urban sprawl/lead to overcrowding", while the next generation is stuck with renting or paying four times income for a flat too small to start a family in.
These baby boomers aren't big fans of Land Value Tax either ...