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Economy 'to Dampen House Prices'

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Economy 'to dampen house prices'

The sluggish UK economy is likely to mean that house prices will not see any "meaningful" recovery for some time, two separate surveys suggest.

There will be no "sustained" upturn until mortgages become more available, the Royal Institution of Chartered Surveyors (RICS) says.

Meanwhile PricewaterhouseCoopers has warned further price falls are likely in 2009 and 2010.

The comments of both groups come despite reports of recent price rises.

However RICS did suggest that there was some optimism among surveyors that prices would go up in the short term.

Latest house price surveys suggest some stabilisation in the market, with the Nationwide suggesting that UK house prices have risen in three of the past four months, leaving them nearly 6% higher than they were in February.

But PwC's economic outlook said that with mortgage levels subdued and UK unemployment looking likely to continue rising for some time, "average UK house prices are likely to fall further between 2009 and 2010".

"Despite some recent reports of rises, we are not out of the woods yet and buyers should take a long-term rather than a short-term view," it said.

And it warned that by 2020, even if there had been five years of strong growth, house prices could be lower, in real terms, than 2008 levels.

'Uncertain conditions'

The RICS monthly survey for June suggested that there was some short-term optimism - with more surveyors expecting property prices to rise than fall for the first time since May 2007.

Some 6% more chartered surveyors expected price increases than price falls - compared with 11% more expecting falls during May's survey.

Low housing availability and increasing interest from would-be buyers had driven this optimism, it said.

However, it added that although there were signs of improvement, it was "unlikely that there will be a sustained upturn while mortgage lenders remain risk adverse".

"A lack of stock on the market is providing a platform for modest price increases," said RICS spokesman Jeremy Leaf.

"While supply remains tight, the market may continue to show tentative signs of firming but instructions are starting to increase in some regions and this could dampen any meaningful recovery as long as economic conditions remain quite so uncertain."

The reports came as the Communities and Local Government (CLG) Select Committee said that a government scheme to kick-start the UK mortgage market was not working.

The £50bn asset-backed guarantee scheme (ABS) was "doomed to fail", MPs said.

http://news.bbc.co.uk/1/hi/business/8148528.stm

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Same story on BBC ceefax. However I just turned on BBC Breakfast News. This could not have been reported more differently. It started along the lines of "House prices are likely to continue to rise" - or something similar.

Same organisation, same story, 3 different outlets. One is completely different in tone to the other two. Is there anything behind this or are they just p1ss at reporting ?

The more I watch BBC News the more I am certain it is full of BTL 'developers'.

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Same story on BBC ceefax. However I just turned on BBC Breakfast News. This could not have been reported more differently. It started along the lines of "House prices are likely to continue to rise" - or something similar.

Same organisation, same story, 3 different outlets. One is completely different in tone to the other two. Is there anything behind this or are they just p1ss at reporting ?

The more I watch BBC News the more I am certain it is full of BTL 'developers'.

thats because they have "go over to our housin correspondent" who is their expert, who,instead of reporting facts, interprets surveys made from guesses from "experts", usually people whose job depends on what they are studying.

Thye do this all the time, a player may well be making a detailed statement about intent, then, cos its a bit boring, they will go over to their "correspondent", usually while the speach is being made, and get the "facts".

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Same story on BBC ceefax. However I just turned on BBC Breakfast News. This could not have been reported more differently. It started along the lines of "House prices are likely to continue to rise" - or something similar.

Same organisation, same story, 3 different outlets. One is completely different in tone to the other two. Is there anything behind this or are they just p1ss at reporting ?

The more I watch BBC News the more I am certain it is full of BTL 'developers'.

BBC Scotland obviously didn’t get the memo to tone down the “green shoots†agenda, but the truth is in the detail Linky:

Business shows 'signs of revival'

Scotland's businesses have shown some signs of greater confidence, according to a survey by the Bank of Scotland.

The half-yearly report has revealed that companies were more hopeful of an increase in sales and orders than they were six months ago.

However, many firms expected profits to fall and have said that recruitment and investment plans remained on hold.

The survey followed 2,500 UK companies and recorded their views on their prospects for the coming year.

Scottish firms expecting an increase in sales rose to 36% with 31% braced for a fall, making a balance of +5%. That compares with a balance of -25% at the beginning of the year.

Despite fresh hopes for a rise in sales, the survey said profits were likely to remain under pressure with four out of ten companies expecting them to tumble.

There was some improvement in the number of businesses expecting to increase staff levels.

Of the firms surveyed, 17% expected to take on staff while 24% planned to reduce their workforce, making a balance of -7%. That was an improvement on the balance of -27% in the last survey.

Exporters appeared to be faring better than domestic companies with more than a third saying they expected to increase exports.

The report said business confidence had improved in all sectors.

The Bank of Scotland's head of commercial banking, Donald (Wan) Kerr, said the survey indicated a levelling off in the downturn rather than a return to strong growth.

He said: "For the time being, profits will remain under pressure and investment will be on the backburner. And that means businesses will need support in order to ensure the momentum of any recovery."

Some dubious interpretation of the data here by the BBC. Oh and I made a small edit - did you spot it?

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