Sunday, Nov 29, 2009
"We will see a big bource by March"
Independent: Foundations laid for a housing recovery
The duo will publish their house price indices this week, both forecasting a 10 per cent annual increase by February or sooner
Posted by confused76 @ 04:19 PM (2510 views) Add Comment
20 Comments
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1. will said...
Nope - I couldn't find it anywhere in this article - mention of affordability. The truth is the 'average worker' in this country has had it,
the corrupt politicians and bankers have seen to that. Some of them should visit the poorer parts of our inner cities where nearly a third of the UK never owns a home. The 'housing ladder' has become a 'loft ladder' where only those at the top can afford to buy.
Our politicians should hang their heads in shame. It is up to them to see to a fair society, but they have their heads so far up the bankers arses that they have failed us. When they come knocking on my (rented) door come canvassing time next year, I wouldn't like to be on the receiving end of my wrath.
2. hpwatcher said...
Does this sound like DEFLATION?
C'mon Bellweather......
3. phdinbubbles said...
Aside from the language he uses to describe price rises/falls (which demonstrates his prejudice), there isn't a single argument made in the piece as to why prices might increase dramatically and why this crash should be different to the last one. And his three 'expert' quotes are from Integra Property Service, Nationwide and Savills. Hmmmmmmmmmm
4. alan said...
As the £ drops against other currencies, I can see a possibility of very expensive houses rising in price. Prime positions in London are about ego and not affordability. Bonds require a bit of caution, after Dubai. Shares are likely to fall - so why not?
The rest of the country including Greater London are a different proposition. Outside Central London, its a tale of lost jobs, no pay rises and lower bonus payments. Turnover is hardly likely to rise, a 20% deposit is required unless you want to pay a penal rate of interest.
So, we come to affordability...food prices up, imported goods up. Opportunities for overtime and savings down. House Prices outside central London to fall by 1% a month till spring is my humble opinion.
5. Alfie said...
What are these people on who make these 'predictions'?
All the bankers, politicians and estate agents have their pensions tied up in property so thats where their priorities lie. What about the those losing jobs and the massive debt that the future of Britain have to pay back... oh of course they dont care because they will be lapping it up in their jacuzzi whilst looking at their property portfolios like a porno mag.
6. wally said...
No mention of FTB which seems key to any sustained recovery. Cash rich buyers have been identified as driving the current upswing, but surely that can only last so long. The arguments in this article point to a return to falling prices.
7. markj69 str05 said...
I like this quote:
'The building society's chief economist, Martin Gahbauer, says: "House price expectations can often be an important short-term driver of house prices and market activity because rising price expectations provide an incentive for potential buyers to bring forward their purchases. Indeed, the sharp drop in prices experienced in 2008 was preceded by a significant drop in consumer expectations for house price inflation." '
So, let me get this right. Lets all start talking up house price expectations, and everyone will believe it. Hmm that sound like a great strategy, must work, i think i'm sold on it, just need to find a house that's right, oh, and someone to lend me the money to buy it!
8. the number cruncher said...
On the deflation/inflation debate:
I had a meeting with my senior investment banker friend this afternoon, who is working for a 'major bank'
She told me that the consensus view of her colleagues is they expect stagnation/recession for 5 years then hyperinflation - it will take that long to work it through the system
And guess what - does not matter who you vote for, she believes the political parties are irrelevant to the major economic processes
This is a huge shift of view since our last meeting, where she was quite bullish about the long term.
9. Eternal Sceptic said...
I have to assume this is wishful thinking, rather than a serious article. No where can a serious commentary be found on the housing bubble, mainly because the govmint is squandering the future to abuse their power for yet another term. No doubt this is to ensure their banker buddies give them sweet little sinecures when they have troughed enough as politicians. I have yet to see a rational reason for preserving the bubble at any price. The whole country seems to be in noddyland. Climate change(irregardless of cause), looming energy shortages and the probability of rampant inflation of food prices is totally off the agenda. There is a slowly gathering consensus that a western style way of living is in serious danger of being no longer sustainable, yet these topics are buried. We are informed that oil reserves have been grossly overstated, and the science behind the human influence on global warming is false science- but so long as there is cheap lager and endless soaps, the bulk of the populace is anaethesised for yet another day. Consequently these serious issues are deeply buried amongst the trivia that masquerades as news. I feel there is a more than even chance we are sleepwalking into a nightmare.
10. icarus said...
I would like to ask one of these experts whether a combination of England's winning the World Cup and hot, late-summer weather would push house prices upwards.
11. Bob said...
Is lego still on the market?
12. hpwatcher said...
She told me that the consensus view of her colleagues is they expect stagnation/recession for 5 years then hyperinflation - it will take that long to work it through the system
Interesting; it is plausable, though does BOE have the balls to increase interest rates to prevent inflation?
I think there will be a few more shocks, but I expect major currencies to start to collapse next year.....
13. sybil13 said...
http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6926451.ece
".....On Friday, Nationwide, the UK’s biggest building society, said in its interim results that it expects prices to fall next year....
......Halifax forecasts house prices will be unchanged in 2010. However, Martin Ellis, its chief economist, said that “clearly there is ... risk [of house prices falls], for example, if we do not emerge from recession”. ......"
http://news.bbc.co.uk/2/hi/business/8369848.stm
"Nationwide Building Society has reported a big slump in profits and delivered a gloomy forecast for the UK economy and the housing market"
14. estrader said...
@6 - " "House price expectations can often be an important short-term driver of house prices and market activity because rising price expectations provide an incentive for potential buyers to bring forward their purchases"
It seems the plan is to spook those who have the cash (from whatever source) into buying property to keep the party going for as long as possible. They are the only people who have the choice to bring purchases forward and the manipulators in charge need it to be done before the General Election. These idiots go on and on about houses being a great investment and that prices are purely a supply and demand issue if not, then it is foreign investors and now they are saying that sentiment is the driving force...what a farce..
15. cyril said...
This article is pure drivel, not worthy of any comment.
16. Jackofalltrades said...
A house is worth what a potential buyer wants to pay for it,not what some charlatan of an estate agent says its worth.
So en masse every potential purchaser should follow this rule.
If the offer is not accepted and the house owner cant sell,and this happens en masse then we have reached new phase in the housing market. House ownership will be the preserve of the wealthy, all the parasites who thrive on it will perish,and somebody will have to develop good affordable social housing.Soon
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18. fallingbuzzard said...
Complete drivel. Bang on
19. Chris said...
As an Estate Agent, you could say I have a vested interest in a recovery, but the truth is that it's getting tougher and the number of sales are increasing!
Why is that?
The problem is that more property is selling than new properties coming onto the market. Estate agents rely on turn over more than house prices. Sure the more expensive a property, the more commission can be earn't, but over the last few years, agents have got around lower selling prices by raising their fees so in percentage terms, we still achieve the same amount per property sale. What put many agents out of business was the lack of sales, but now we face a very different problem, almost no new properties are coming onto the market!
Sales are happening quite nicely with our company selling a healthy number of properties. Not 2007 levels, but better than 2008 also.
The trouble is that most estate agents are now running low on stock and the valuers/ listers are under huge pressure to get more on their books. The easiest way to do this is to over-value the property and this is exactly what is happening and in a major way. We have also started seeing interest in property we have had on our books for nearly 2-years. Example, a landlord bought a flat from us in 2007 and in Feb 2008 decided to sell it! Couldn't because prices were falling, but because it was rented out and paying the mortgage, he left the price where is was, rather than follow asking prices down. Because all the cheaper flats in the area have now been sold, buyers have no alternative but to look at his flat at 2007 prices. He's had only 2-viewing between Feb 2008 till Sept 2009, but 5-viewings between Oct & Nov 2009. Signs that prices are rising because of agents over-valuing new stock.
We are also seeing some vendors putting their asking prices up, even though they haven't sold at the lower price! Idiots, but it's happening!
Supply and demand are forcing prices up and while many home owners are sitting back waiting for prices to rise to 2007 levels again before placing their homes onto the market, the shortages will remain, which in turn is driving prices even higher.
If buyers are suddenly cut off from funding again by the banks, then prices might slow again, but if not, prices will continue rising.
This is an honest appraisal of things here in the Midlands.
20. bellwether said...
Hi HPW. The statement that we are in a deflationary environment is based on individual incomes and corporate earnings which are both significantly reduced since 2007 and the relative unavailabilty of credit.
The stock markets are struggling to work out what this means. By Feb last year they saw huge deflation and at present they seem persuaded that central banks can reinflate the bubble, or at least make cash the worst thing to be holding.
I think the outlook is unclear, and like almost everyone who has anything useful to say on this site would agree with that. Focusing on the UK I personally see us either struggling unsuccesfully with deflationary forces for many years with a gradual decline in values of all assets including land as Japan experienced over the past couple of decades - despite QE, or I see a hyper inflation and a currency crisis which leads to deflation in the end. In the UK I tend towards the later outlook in the medium to long term and the former in the short medium term,
We do incidentally have more in common than you think. I personally think Sterling is a hugely vulnerable currency esp if we go down the route of keeping land and house prices artificially high - which we might. To this extent most of my savings are out of sterling all together.