Wednesday, Dec 30, 2009
Government support continues.....
Times: House prices rise 0.9% in November
Let's get this straight: UK taxes are now are keeping this big bubble inflated, as the governement battles to keep interest rates artificially low....what a mess!
''House prices rose for the sixth month in succession in November, taking the average house price in the UK to almost the same level as a year ago. Official Land Registry figures put the monthly rise at 0.9 per cent, to £161,554. That is 0.3 per cent below the average price of £162,023 in November last year.''
Posted by hpwatcher @ 01:35 PM (1205 views) Add Comment
13 Comments
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1. brickormortis said...
Can someone in the know please detail how these "average" prices are calculated? Am I right to assume it is a mean average of the price of the houses which are sold? Is there anyway of finding the average change for the stats quoted by county?
I can' thelp but think that those people in the upper market are moving about a bit but no first time buyers actually on the market?
Would a better measure not be the volume and average price of a first time buyer house? House prices in Shropshire are NOT going up. In fact, those reduced for "quick sale" remain unsold.
Surely we need to start dissecting why the average price appears to be going up instead of simply resonponding to this "fact". I do appreciate that many people are buying and selling houses now, but his sort of drivel will drive the numpties into buying houses that they can only afford on low interest rates.
Also, I had a thought today, if interest only mortgages stay widely available, then interest only with no repayment mechanism other than 15 year capital appreciation, might become the norm thus sustaining a big portion of the price bubble. What do you think? I mean, I am king of the crash, I have wanted it and predicted it for many many years, but just lately, I am really doubting it. I can't help but think that the government must screw over whoever to keep them high even if a generation are taxed to the hilt.
Somebody, please restore my faith. Am I going mad? Is all this a dream? AM I the stupid one?
2. Robo said...
brown has to keep this madness up he has know opption he ran the country on what the banks had made your house worth people borrowed and borrowed from the false values then when they could not afford the payments they moved to credit cards till it all went bust what a mess is an understatement rising values on a bankrupt country defies any normal thinking un like america which run its econemy on housing values just like the uk they just started the madness earlier so they went bust first bringing everbody back into the real world when it was a wake up call that you cannot run the world on silly over inflated house values prices must be 20 years ahead of themselves in the uk unlike america were they have dropped below normal inflation and recovery in people being able to buy a house over the normal 25 year mortgadge my start unlike brown who whats another boom on tax payers money god help us all
3. smugdog said...
Well Bricko, It seems that you HAVE made the wrong call, obviously you and many more
here have been beaten, many have yet to admit it.
Will you now join Gordon's band of merry souls or suck on that bitter pill for ever more?
4. alan_540 said...
Keep the faith. Be patient. Buy when you feel you are getting value for money and feel confident repaying a 25 year loan (in terms of job security). Bear in mind prices took a decade to wind up so don't be surprised if they take that long to fall back - we're only 2 years in don't forget and also bear in mind the policies trying desperately to prop prices up prior to the election by or before May. Do not buy anything before the election!!! And if possible wait another 18 months after the election to see the effect of new "austerity policies" (whether Tory or (God forbid Labour!!!)).
That's my honest opinion, meant with the best of intentions.
5. bidin'matime said...
Agree with Alan - wait 18 months after the election before making a decision.
6. hpwatcher said...
Will you now join Gordon's band of merry souls or suck on that bitter pill for ever more?
The same merry souls heading towards currency crash and years of depression.
7. mountain goat said...
@Smugdog - you fear us because we realise that houses (including the ones your business is selling) are not good value for money. This was true 3 years ago, just as it is today.
@Alan - governments are trying to keep their sick economies breathing and their hp bubbles afloat whether they have upcoming elections or not, from China to USA. I don't expect anything from the election, but I look forward to the financial markets questioning our country's solvency after all these bailouts.
Brickormortis - replacing the private sector with publicly financed stimulus measures can only be done as an emergency. The can has only been kicked down the road but in time the garbage must be cleared up. I don't want to be owning a 25 year mortgage on a house unsustainably priced near the top of the bubble with this uncertainty ahead.
8. quiet guy said...
"Smugdog - you fear us ..."
That's a bit strong mountain goat! To me, it says more about your feelings about smugdog than his feelings about this alleged "fear." The correction in 2007 took far longer than most property bears imagined and the recovery was pretty astounding, all considered. I'm still a bear but admit that the government has been more effective in keeping up prices than I've had thought possible a few years ago. As I have said before, we need to get the election out of the way plus a breather before the next trend becomes clear.
9. icarus said...
It's not just houses, it's asset prices in general. Writedowns and re-structuring of mortgage and commercial property debt, financial sector debt and credit card debt are the only way that credit, borrowing and the real economy will pick up again, but instead governments and banks decided to prop up all these assets and avoid the inevitable bloodletting, thus merely suspending the problem - there are still toxic assets and undercapitalised banks, credit scarcity and a dearth of willing, creditworthy borrowers.
Look at all the measures the UK, US and others of the 'Anglo-Saxon' persuasion have taken to boost all asset prices -. direct asset purchases, indirect asset purchases (stuffing banks with reserves for 'lending' money that actually ends up in share and other asset purchases) mark-to-make-believe accounting, zero interest rates via QE and other means.
Governments had to choose between writedowns (good for the economy, bad for the financial 'system') and propping up assets. For them this was a no-brainer - "bank assets and capital must be supported so that banks can lend" (to whom??) - it's more like "so banks can trade themselves out of trouble because there's little political support for more direct support for them".
What we are stuck with is a low-grade depression. A recession is characterised by inventory cycles, requiring government stimulus to create the demand to absorb excess capacity. Depression is characterised by the hangover from credit bubbles (as in the Gatsby decade of the '20s) and 'balance sheet compression' - deleveraging and saving and the need for writedowns.
How will this pan out? Government props can't go on indefinitely. Could be that a combination of apparent green shoots and growing deficits will put pressure on governments to withdraw stimulus measures and a new dip could follow. Chances are this will be a www depression - bumping along at the bottom.
10. hpwatcher said...
the government has been more effective in keeping up prices than I've had thought possible a few years ago.
With the help of QE they have simply kept interest rates artificially low; it's simple. But, the market and the weakess of the fundamentals will assert themselves sooner or later.
11. quiet guy said...
@hpwatcher
"With the help of QE they have simply kept interest rates artificially low; it's simple"
Respectfully, no it's not simple. The government has actively intervened to prevent over extended mortgage debtors from the consequences of their badly judged contractual commitments. Government interference in the market makes it much harder to make effective long term financial planning whether you're contemplating buying a house or growing a business. At the moment, the rules are being being tilted in favour of property speculators with all the economic risks that entails. If it's so simple, please tell me what will happen to house prices and interest rates in the next two years?
12. techieman said...
hi smuggy..@ 2
Beaten? Battles and wars spring to mind. in any case respect to you and, right or wrong, have a HNY.
13. tom101 said...
What other measures can the government(s) apply to sustain house prices / prop up economy? We've had QE, low interest rates, secret loans etc.... but what next?