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The Times Further The Cautious Message


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Their conclusion however continues to be that we are on course for a "soft-landing":

"David Page, of Investec, said the house market was approaching a phase where prices have not risen on a year-on-year basis, but activity levels are also seeing a modest increase. “The outlook is for prices dipping slightly but without any serious retracement,” he said.

"Howard Archer, of Global Insight, said sellers remained reluctant to drop their prices significantly to meet lower prices now being demanded by buyers. The lack of distressed sales meant that prices were likely to stay subdued for an extended period of time, he said."

So all these sellers will just have to take their properties off the market and buckle down to ride out a bearish market? Surely once they realise that the house they want to move into has dropped in value, they might be prepared to reassess their asking price?

What happens when chains break down and sales fall through, will sellers just go "ho-hum" and stick it back on the market at the same price?

What about EAs? How long can they continue to have dozens of overpriced houses on their books that will never sell? Surely sooner or later they will have to inject some realism into the market, since they only make their money on sales.

The economics of the "soft landing" scenario I can understand, but once you start looking at it from the micro/behavioural level it doesn't add up.

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Wealthiest areas suffer biggest house price falls

By Gabriel Rozenberg, Economics Reporter

FALLS in house prices in London and the South East could spread, analysts said yesterday after a survey by Halifax showed sharp regional differences in costs.

While on average house prices have been static in the first half of the year, they have been falling in the wealthiest parts of the country. Prices fell by 1.1 per cent in London in the second quarter, taking the annual rate of decline in the capital to 2.5 per cent, according to Halifax’s report.

In the South East, prices fell 1.2 per cent in the first quarter, meaning that prices have fallen by 0.6 per cent, in the past year.

A 1.6 per cent quarterly drop in prices in East Anglia was also recorded, although the annual rate of inflation there remains 1.7 per cent. Prices fell by 0.9 per cent in the North of England in the quarter.

For the benefit of TTRTR, who may not be able to see this from Sveden.

Mighty London is on the way down (but you knew that from HPC, before the Times even smelt the story).

Looks like we just have Wales and Northern Ireland to hold things up.

Oh dear...

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Guess it won't be long now until the sensationalist tabloids start printing headline tales of panic and woe.

Good to see some efforts made by The Times here, to sensibly inform us.

(Dated 8th July)

http://business.timesonline.co.uk/article/...1684644,00.html

I think they have to print this "soft landing" or "subdued" or "stagnant" because if they print what is really happening people really would s*it themselves. At the moment there is enough sentiment that everything is "OK" for them to get away with it. Its only when a lot of people start seeing it happen around them they wont be able to say it, thats when we will see it kick off. But when is the question.

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he lack of distressed sales meant that prices were likely to stay subdued for an extended period of time, he said."

Mmmm, perhaps I should have remained a Bull. My main argument for the non - crash camp was that a dramatic economic shock isnt present.

I hope you lot are right, Im about to let my last B2L complete for a song. The buyer (investor :blink: ) is dragging his heals so I called his bluff earlier and gave it the old "you've 1 week to complete or I will sell to another buyer" :o It worked, he now promises to exchange and complete within the week. Fingers crossed. Dont want any gloom in the papers until then ;)

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Here in south Wales, the prices have been holding up. In the valleys, three friends of mine, who were all looking to buy a house, couldn't because the morgage lender woudn't allow them to borrow £70,000 (average) to buy the property. Wages here are not that great, with price-to-earnings being about 4.5 to 5x. Theres been a lot of Persimmon/Redrow/Barret building activity around here. Building cardboard shoebox homes on plastic estates for FTBers, as all the decent homes are too expensive for them. :(

I STR a year ago so I could develop houses, for FTBers, but I wouldn't buy a nice house today, not with these prices. I'll sit it out, earn a living, and buy when the prices have corrected.

IMO, (With my basic knowledge of economics), this debt-fuelled society seems to pump the economy harder and faster than ever before. It seems that a correction and recession is inevitable, it's just part of the debt culture that the U.K, USA etc has gotten itself into. Any comments...

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Their conclusion however continues to be that we are on course for a "soft-landing":

But the opening paragraphs feel a little more aggressive than the norm.

The Halifax data is being used here to it's best.

It's comforting to see the gradual media shift through the grey areas between 'No Fall' to 'Soft' to 'Crash'.

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Guess it won't be long now until the sensationalist tabloids start printing headline tales of panic and woe.

Good to see some efforts made by The Times here, to sensibly inform us.

(Dated 8th July)

http://business.timesonline.co.uk/article/...1684644,00.html

Same old b****cks from the halifax economist Martin Ellis though: "The economic fundamentals underpinning the housing market are sound.” Bit bored of hearing this sort of nonsense... :blink:

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