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Chill Headwinds Blast Through The Housing Market

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A nice piece from JD in there to balance the VIs.

House prices are either on the edge of a precipice or merely floating gently downwards, depending on which commentator you believe. But next to no one is predicting that the next move in house prices is up.

"The headwinds are negative at present," says Martin Gahbauer, Nationwide's chief economist. "We still have low numbers of sales. As for mortgages, although they are more available than they were a year or so ago, they are nowhere near as numerous as before the credit crunch. What's more, since the summer we have had an oversupply of property compared to the number of buyers, and that generally means a softening in price.".

These chill headwinds will extend to the wider economy in 2011. "There are the much-talked-about public sector spending cuts, which will affect the economy, particularly in the North, Wales and Scotland. And then, of late, we are seeing an uptick in unemployment again," says Martin Ellis, a housing economist at the Halifax.

...

However, some commentators are suggesting that we are just starting out on a second dip in the housing market, the first of which started three years ago with the run on Northern Rock.

"Currently, house prices are falling by the equivalent of 10 per cent a year. Rightmove says asking prices have slipped another 6 per cent, and there is little mortgage lending going on because many of the banks are insolvent. This is part two of the housing market crash," said Jonathan Davis, an economist and managing director of Jonathan Davis Wealth Management. "The idea that somehow a few foreign buyers in prime central London will underpin the whole UK housing market is nonsense. During the first leg of the crash, for instance, prices in Kensington and Chelsea fell by the same as, if not more than, elsewhere. Overall, unemployment is on the rise, which should lead to more repossessions. And then we have inflation to factor in, which, long term, should eventually lead to higher interest rates and more homeowners in difficulty," Mr Davis said.

http://www.independent.co.uk/money/mortgages/chill-headwinds-blast-through-the-housing-market-2164163.html

Edited by Pent Up

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"The headwinds are negative at present,"

So the housing market's got a tailwind then :rolleyes: . Don't worry he's a chief economist so it's only to be expected

Edited by billybong

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  • 277 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%



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