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" Austerity Fears Spark Jitters In Housing Market"

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http://www.ft.com/cms/s/0/290f2ba0-d879-11df-8e05-00144feabdc0.html

Austerity fears spark jitters in housing market

By Daniel Thomas, Property Correspondent

Published: October 15 2010 16:42 | Last updated: October 15 2010 17:52

Economic austerity measures have already begun to destabilise the housing market ahead of the government’s spending review next week.

The results of a poll carried out on behalf of the FT in a national survey conducted by the Royal Institution of Chartered Surveyors suggest the housing market is coming under pressure, in particular in areas expected to bear the brunt of job and spending cuts.

More than 40 per cent of Rics member surveyors said there had been a rise in instructions to sell homes and fall in buyer inquiries as a result of fears over the government’s package of tax rises and spending cuts.

Three-quarters said the cuts had already begun to have an impact on market sentiment.

A quarter of surveyors said that public sector workers, who face job cuts and pay constraints, had either put off buying property or were more willing to sell.

Estate agents in Wales – a stronghold of public sector employment – were by far the most negative, with almost half saying that government workers were being restrained by the threat to their jobs.

More broadly, the Rics member surveyors showed the threat of private sector job cuts was also having an effect on the housing market, with a fifth of those in the survey saying there had been a rise in forced sales because of unemployment, or the prospect of worsening job conditions.

Wales again emerged as a hotspot for these fears, with almost half of those surveyed saying that there had been more sales instructions and a fall in buyer inquiries owing to fears over government actions.

The poll results come as the government has removed other state-funded props to the housing market, such as shared equity products that helped first-time buyers and key workers to buy properties.

Simon Rubinsohn, chief economist at Rics, said: “Talk of a fiscal squeeze is beginning to have a negative impact on sentiment towards residential property in many parts of the country.”

This underpins a sharp rise in new sales instructions that has begun to create a buyers’ market.

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The Rics survey showed that the stock of unsold property per surveyor rose to an 18-month high, from 67.8 in August to 69.1 in September. Last month, 22 per cent more chartered surveyors reported a rise than a fall in new instructions, up from 12 per cent in August.

Worries over the strength of the economic recovery are also putting downward pressure on prices, as buyers wait to see how the market plays out.

Mr Rubinsohn added: “Few jobs have been lost in the public sector to date and as a result there have been few signs of a pick-up in distress sales. The key issue both for the economy and the housing market will be how well the private sector responds to fill the gap left by a smaller state.”

Edited by Tired of Waiting

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What happened to that peak in stock in 2008 - was there a big boom? Or did they all get pulled from the market?

That peak in supply was the main cause of that big HP fall then, until the spring 2009, IIRC.

But notice that we are at 70 now, and that peak was 90. We are not too far below. (That chart horizontal axis is at 55.)

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Maybe if the RICS blowhards comlain enough they can persuade the government to stop cuts, for foreign bondholders not to ditch the currency and keep their elevated pyramid scheme going.

Heck why not throw everything their way - money supply, monetary policy, public spending, private spending - all must be flushed through their member's books to save the economy.

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Maybe if the RICS blowhards comlain enough they can persuade the government to stop cuts, for foreign bondholders not to ditch the currency and keep their elevated pyramid scheme going.

Heck why not throw everything their way - money supply, monetary policy, public spending, private spending - all must be flushed through their member's books to save the economy.

I don't think the coalition will keep propping up HPs. Too many signs in this new downwards direction. Including Shapps speech this week. We may have some nice surprises on Oct 20 and on Budget 2011.

The poll results come as the government has removed other state-funded props to the housing market, such as shared equity products that helped first-time buyers and key workers to buy properties.

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Good, the sooner this correction is allowed to do its work, the sooner we can all start being productive again.

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Good, the sooner this correction is allowed to do its work, the sooner we can all start being productive again.

yes and the sooner those legions of public sector interfering busibodies and beurocratic jobsworths have too look for a proper job in the real world. like the rest of us, without the public sector silver spoon, the better, for everyone- especially my kids.

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Yes, of course, everything is because of 'austerity fears'.

Even leaving aside the fact that 'austerity' is looking rather less austere by the day, are people really so bloody stupid that they can't figure that property is simply priced too highly for the general public to afford and HAS to fall sharply, relative to lower order consumer goods and salaries???

Or would those people prefer to see the prices of day to day essentials rocket and the restoration of cheap and easy credit to make up the difference between income and expenditure in order to try to prop up property prices? What sort of solution or long term prospect is that?

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Fear is the best accelerant to push a collapsing market toward the abyss. You can almost smell the acrid stench of fear everywhere you look as stomachs churn and gurgle ending in a gut renching fetid explosion producing a stench so foul that it would cause offense even in the bowels of hell itself.

"House price collapse--can you smell the fear?"

Edited by Realistbear

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(...) are people really so bloody stupid that they can't figure that property is simply priced too highly for the general public to afford and HAS to fall sharply, relative to lower order consumer goods and salaries???

(...)

Yes.

.

Edited by Tired of Waiting

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Yes, of course, everything is because of 'austerity fears'.

Even leaving aside the fact that 'austerity' is looking rather less austere by the day, are people really so bloody stupid that they can't figure that property is simply priced too highly for the general public to afford and HAS to fall sharply, relative to lower order consumer goods and salaries???

Or would those people prefer to see the prices of day to day essentials rocket and the restoration of cheap and easy credit to make up the difference between income and expenditure in order to try to prop up property prices? What sort of solution or long term prospect is that?

I couldn't have said it better..

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Fear is the best accelerant to push a collapsing market toward the abyss. You can almost smell the acrid stench of fear everywhere you look as stomachs churn and gurgle ending in a gut renching fetid explosion producing a stench so foul that it would cause offense even in the bowels of hell itself.

"House price collapse--can you smell the fear?"

..we've been willing on this fear for a while now. The media have been reluctant to join in. So it depends on which side of the coin you're on.

As for me I don't see no fear at all...certainly compared to 2007/2008.. then I could taste the fear.

Today..nope.. sorry...... the fear is not yet being smelt..lets see if 20 Oct would at least start briging a little odour - just a little..

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..we've been willing on this fear for a while now. The media have been reluctant to join in. So it depends on which side of the coin you're on.

As for me I don't see no fear at all...certainly compared to 2007/2008.. then I could taste the fear.

Today..nope.. sorry...... the fear is not yet being smelt..lets see if 20 Oct would at least start briging a little odour - just a little..

It doesn't really matter - boiled frogs instead then, no big deal

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it is coming i can feel it everyday people are looking at each other trying to work out who is gonna fall first and even the media dont belive there own spin anymore you can see in the reporters faces that they are floging a dead horse and they know it. Its just a question of time now my freinds and your patience will soon be rewarded

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True. But it would take a little longer.

indeed, this is the emotive issue

however, it also means they are prepared to continue doing the loss making BTL thing and subsidising my lifestyle, in strict terms I think I am better off for it, but iot doesn't feel so great

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indeed, this is the emotive issue

however, it also means they are prepared to continue doing the loss making BTL thing and subsidising my lifestyle, in strict terms I think I am better off for it, but iot doesn't feel so great

Very good point.

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..we've been willing on this fear for a while now. The media have been reluctant to join in. So it depends on which side of the coin you're on.

As for me I don't see no fear at all...certainly compared to 2007/2008.. then I could taste the fear.

Today..nope.. sorry...... the fear is not yet being smelt..lets see if 20 Oct would at least start briging a little odour - just a little..

Yep. 3 days to go now. Then next day tabloids. Then the Sunday papers on it.

It will be very interesting to PropertyBee Rightmove on the days and weeks after Oct 20.

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I work in an office of 500+ and the vast majority are blissfully ignorant (I do try). They will only get scared if the BBC etc tells them to be.

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It doesn't really matter - boiled frogs instead then, no big deal

Boiled frogs are better. They sit there, realise too late and die, whereas a frightened frog will act before injury.

Frightened people will downsize or STR which is helpful but not as good at hammering the market as bargains due to bankruptcy and eviction because people don't realise that financially they are 'dead men walking'.

Its all good, one way or another the property market is going down big time.

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I work in an office of 500+ and the vast majority are blissfully ignorant (I do try). They will only get scared if the BBC etc tells them to be.

Phoney War phase.

But in this one you need maths to see it.

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  • 150 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
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