1. hpwatcher said...

Yes, you read it right folks! One month of negative growth in those house prices and the propaganda now comes thick and fast. Expect many, many more articles like this - until sentiment has turned in favour of house prices.

House prices are now the UK's No. 1 form of currency.

3. mrflibble said...

Less of the negativity there hpw, you need to spare a thought for the hard working mortgage payers as you live out your life in serfdom.

5. sibley's love child said...

Nice to see that HPC's ex-resident uber-bull, Sibley, has 'done an Elvis' by reappearing on the Express' comments page. Still spouting the same tripe I see.

Nice article by the way, is this a classic example of a contrarian indicator then?

7. uncle tom said...

I think we've been here before..

http://i39.tinypic.com/auzjwy.jpg

9. house said...

I was not going to comment for fear of someone picking on my missing words. You know who I mean but if you spare a second thought though you will realise that the 20% increase is over 4 years ie. approx. 4.5% per annum cumulative. I thought the RPI was in this region. Therefore from now on they are expecting prices not to go down but keep up with RPI. Any thoughts on this.

11. brickormortis said...

This is f**king brilliant. Two gems:

1) "The growth is due to continue with a 5.4 per cent increase in 2013 followed by a 3.9 per cent rise in 2014." How the f**k can you calculate in such times 3.9% in 2014? That's 4 years down the line! If there is one thing we know about regressional forecasting, it is that it is not an easy science to apply and with such asccuracy - wow!

2) "The figures suggest the housing market will weather the storm of ­public spending cuts, which had raised concerns that the sector could face another downturn". How did they work that one out? Flipping a coin?

Now what's it to be on Thursday? Rate rise?

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15. uncle tom said...

"House prices will drift dowards for ten or twenty years like in Japan"

Mark,

I've chewed this one many times, and I think not.

So many details are different between the Japanese way of doing things and ours that you can't begin to draw parallels; but on the core question 'will UK prices slide slowly down, crash and level, or crash and rebound before settling?' - I still favour the third scenario as being by far the most likely.

For prices to drift down there needs to be a general affordability in the market; a point that was passed here a long time ago. We have many millions living in houses that they can only afford because they bought them when they were far cheaper.

As there is no reason to expect the next generation to be intrinsically higher earning, and a likelihood that only a minority will be able to obtain family assistance with their home purchase, there is clearly an instability in the market; one that I believe is too great to correct gradually.

As prices are seen to fall, probably quite slowly at first; the reluctance of lenders to offer easy deals will be reinforced, and joined by an increased reluctance on the part of potential FTB's and potential upsizers to play their hand.

I envisage a significant exodus of BTLers, and the shortage of rental property to become acute; possibly pushing nominal yields to 10% or more in some districts. Young people will stay with their parents on an increasing scale, and new govt restrictions on HB spending will further contract the demand side of the market.

Taken together this presents a buyer's market that is likely to lead to increasing price falls. The last govt's measures to delay repo's will reach the end of the road, and repo sales will start to define the market.

The first dip of this downturn did not see a general capitulation on the part of vendors; it was perceived that the banking crisis had caused the dip, and that normality would return once that had been sorted.

Now, I think, we will see gathering price falls leading to capitulation. Why? Because people will not blame the downturn on external factors, but on the over-pricing of the market itself.

At some point prices will fall low enough for some wealthy opportunists to play their hand, and chase the market some way back up again, but then I expect a further drift down to lower levels still, maybe a further recovery, and then another low..

..what happens then depends very much on how successful this govt is on population control, and on getting new homes built.

Overall though, I see a downward zig zag - not unlike the inflation adjusted gold price after it's peak in the early 80's (but on a longer time scale) or the Dow Jones in the early thirties.

17. hpwatcher said...

House prices will drift dowards for ten or twenty years like in Japan.

I think the point is that they will increase - but only due to inflation.

19. uncle tom said...

"and on PREVENTING new homes FROM BEING built"

You're an eternal skeptic Mark - I'll wager that when this govt's term is up, we'll have seen more living space constructed than in the previous five years.

Look at the post-war history of construction in this country - Tory governments build loads of houses, while Labour ones have an obsession with knocking down houses and building cr*appy flats..

21. uncle tom said...

Mark,

The post-war Labour government had grand plans to build Soviet style mega apartments, but in the event did little more than build loads of pre-fabs.

The next Tory government then gave us most of the New Towns.

Then the sixties Labour government became obsessed with slum clearance, replacing them with buildings that quickly became high rise slums.

When the Tories were returned to power, they called a halt to the slum clearance schemes (where homes were effectively confiscated, with compensation levels that were sometimes less than £50 per house) - but carried on building.

The next Labour government made no big initiatives on housing, and construction levels dropped by a third.

Then the Tories returned, and while construction levels remained static, demolition all but came to a halt; and the quality of property, both new and old, rose dramatically. During this period, most new homes had three beds or more.

Then Labour came back, failed to make adequate provision for new development land, and encouraged urban tower blocks; counting one bed flats as being statistically the same as a three bed house. The construction industry was bombarded with new regulations, pushing up the cost of construction. Meanwhile Prescott, with his ill thought through 'pathfinder' scheme, proceeded to knock thousands of houses down, without really knowing what was going to replace them

Now we have the Tories are back...

So, which party has the better track record on housing?

23. Rental John said...

Regurge from the Daily Star... www.dailystar.co.uk/news/view/147113/House-price-crash-is-over-say-economists/

25. techieman said...

But UT : "I envisage a significant exodus of BTLers, and the shortage of rental property to become acute; possibly pushing nominal yields to 10% or more in some districts. "

If thats the case that underpins things, if / when yields get that high. However i wonder what will happen with the repo'd BTLs themselves, will banks turn to the Lettings market, in which case yields wont necessarily rise.

27. sibley's love child said...

Martin Gahbauer, chief economist at Nationwide, said: "It will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward prices may be in store." (Mortgage Solutions link posted by debtfree)

or

Martin Gahbauer, chief economist at the Nationwide building society, said: “It’s not a double dip and it’s not a massive boom..." (Express article)

29. uncle tom said...

techie,

I doubt the banks will try to let out their repo's - so much easier to liquidate and close the book..

Mark,

The paradox of modern politics is that many of the left-right stereotypes are going into reverse - we have got rid of an arrogant, snobbish, unprincipled Labour govt that worshipped the god of personal greed, and have voted in a Conservative coalition that is proving to be the complete opposite..

31. hash browne said...

Well going by their previous track record, this is a good indicator that we're heading for another crash.

http://www.express.co.uk/posts/view/1850/House-prices-to-soar-again

I particularly love this line "They are estimating that the average price of a house will go up from £187,000 today to £225,000 in 2010."

So the "doomsayers" are wrong are they? We'll see.

Does anyone have a MyExpress login?

Mine won't work for some reason and I've been dying to post this link on there!!

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