Jump to content
House Price Crash Forum
Sign in to follow this  
AvidFan

Flood Of Homes For Sale Threatens Prices

Recommended Posts

http://www.thisismoney.co.uk/mortgages-and-homes/house-prices/article.html?in_article_id=510135&in_page_id=57

Flood of homes for sale threatens prices

By Dan Atkinson

25 July 2010

Fears of a looming slide in the already fragile housing market are likely to be heightened this week.

Stuttering mortgage business, linked to a flood of homes hitting the market after the abolition of Home Information Packs (HIPs), is expected to hit property prices.

Bank of England figures for lending to individuals in June are due on Thursday and are expected to be weak.

'The market is going sideways in terms of price and activity,' said George Buckley, chief UK economist for Deutsche Bank. 'I suspect the number of mortgage approvals in June may actually be lower than the 49,815 seen in May.'

That itself was down on the 51,856 average for the six months to April.

The abolition of HIPs, under which vendors were required to pay for a 'sellers' report' on a property, is thought to have encouraged more people to put their homes on the market.

This, coming at a time when earnings growth is sluggish, when lenders are more reluctant to make advances than in the past and when the public sector is facing huge job cuts, could well prove bad news for house prices.

HIPs were unpopular with many sellers as they were costly and rarely accepted by buyers as evidence of the condition of a property. Their abolition by the Government is thought to have brought more homes on to the market.

Beyond this there are concerns that, despite a 15% price fall in real terms between August 2007 and April 2009, houses are still too costly and that a second price tumble is due.

Peter Dixon, strategist at Commerzbank, said: 'There are three ways to value houses. One is the price compared to average earnings. On that basis, they are still expensive. Two, as an investment compared to equities, for example. On that basis also they are still expensive.

'Finally, one can value them in terms of the affordability of payments. Thanks to low interest rates - and on that basis alone - they are cheap.'

Share this post


Link to post
Share on other sites

He's perhaps German so I think this was lost in translation:

"'The market is going sideways in terms of price and activity,' said George Buckley, chief UK economist for Deutsche Bank. 'I suspect the number of mortgage approvals in June may actually be lower than the 49,815 seen in May.' "

Going sideways? :P

EDITED

Sorry missed this one too:

"'Finally, one can value them in terms of the affordability of payments. Thanks to low interest rates - and on that basis alone - they are cheap.'"

Oh dear Peter. What planet are you living on? Until then you were doing so well. I give you 3 out of 5, must try harder.

Edited by Redcellar

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.