Sunday, Jun 13, 2010
Possible signs of changing sentiment
Independent: Why house price increases are nothing to write home about
Commentary on the state of the property market from a variety of sources. Overall, the article is a bit short on substance but I suspect that this is a sign that worries about the property market are beginning to return. Not surprisingly, Financial Planner gives the most bearish prediction: 'Jonathan Davis, chartered financial planner and spokesperson for Housepricecrash.co.uk, describes the upturn this spring as "the peak of the biggest suckers' rally in history" and forecasts that house prices will plummet by up to another 10 per cent by the end of this year.'
Posted by quiet guy @ 05:36 PM (1162 views) Add Comment
7 Comments
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1. Downsizingdiva said...
However, arguments to support the ongoing health of the housing market are equally valid – and they begin with the most affordable interest rates in history at 0.5 per cent. "My view is that base rate will stay this low until well into 2011, which should dispel any fears of price falls," says Ray Boulger, senior technical director at John Charcol. "So long as rates stay low, I forecast house price rises of around 7 per cent between now and the end of the year."
Good old Ray - ever the optimist...
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3. phdinbubbles said...
"The latest Land Registry figures also revealed an upward movement in prices of 0.2 per cent during April, the sixth consecutive month of house-price rises, taking the average property value to £165,596."
Not according to the LR figures shown on this site, which are -0.6% for March and -0.3% for Feb.
Frank amusing
4. mr g said...
From the article "Homeowners looking to their property as their pension"
Is there such a species still? (Irony)
I've always been amazed at how short sighted these people are. I assume that many don't own a second property and therefore intend to release equity by downsizing or an equity release plan on the property in which they live.
If this is correct, I wonder how many have actually thought through how much money this will raise?
Say they realise £100K by either method, at current interest rates that won't produce much per annum, an annuity will pay £5/6K per year therefore they immediately have to start spending their capital which won't last long if they have an extravagent life style or, shock / horror, they have to cut back on expenditure to preserve capital.
Yet another example of how many people live on fantasy island, divorced from reality.
5. Pig said...
'In May, however, asking prices stood at an average £237,134, a far cry from Land Registry figures of completed sales at £165,596."
Is there a graph somewhere comparing asking with actual price ? Would be interesting to see how peoples expectations have evolved next to economic reality. I don't know if this is usual or not but the discrepancy here seems particularly high - a reality check would mean an instant 30% drop in prices...
6. techieman said...
Mr G - not only that but if these folks are "asset rich; income poor" then their new found "wealth" excludes them from some benefits (eg pension credit). So they end up in a smaller place but in net terms no better off. Do they stop to consider that..... hmmm i wonder?
7. mr g said...
@Techieman "Do they stop to consider that..... "
Highly unlikely, the only things that a lot of people consider are Big Brother and XFactor.