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Rightmove New Report (GOOD NEWS)


Wiseman
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Reading it at the moment. Favourite and worrying comment at the moment...

Miles Shipside, commercial director, says: “This proves that the falling asking prices

Rightmove reported in its last release were not just a flash in the pan. The Bank of England

can’t raise the cost of borrowing five times in 9 months without something happening.

While it took much longer than people expected, it’s now hitting the housing market at the

sharp end – and asking prices have been declining in each of the last five weeks.

Its worrying as it usually accepted that it takes a lot longer than 9 months for interest rate changes to be noticed by most people. And the increases are not that great considering I can still find 5 year fixed rate mortgages at 1% less than the same suppilers base rate.

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Hmm... Average London property price fell £13,000 in one month.

I hope all the speculators who were sitting around counting their paper profits each month when the market was rising, and extrapolating the figures over 12 months or more and thinking they were rich are now extrapolating these rates of losses in the same way. It's only fair.

Those who were saying "I'm gaining £5,000 a month on my property! So in a year that will be £6000!", are hopefully now saying "I'm losing £13,000 a month on my property! That's £156,000 a year".

If the current values of monthly falls in London were to be sustained for a year then London property prices will have crashed by nearly 53% by this time next year. And we all know how much "new-paradigm speculators" love extrapolating trends.... ;)

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I do not think anyone here will be suprised by these figures. We have seen the anectdotal evidence for weeks on this board. For the first time now, what we have already known or at least suspected is now reflected in a set of "official" figures. I must say it exceeds my expectation. -4% in London. Wow!! The crash could come much faster than we all think.

It feels doubly satisfying that these figures come hard on the heels of Kirsty's outrageous rant two days ago. No doubt she will blame the figures on this website for the slowdown.

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I can't get over the SIZE of some of these London falls:

Hammersmith - 9.9%

Ken&Chelsea - 8.8%

City of Wesminster - (don't pay too much attention to this) 8.3%

Merton - 6.5%

You'd associate those sort of figures more with a crash in full swing rather than just the initial stages. Okay, so these are only asking prices, but what I think it represents is (especially in less expensive boroughs) that sellers have recognised that the market is now falling. A lot of kite-flyers have woken up to the fact the market will never reach their ludicrous asking prices and are now quickly having to cut the 10% or so "froth factor" off.

So, Anne Spackmann, do you still think those London boroughs have already had their "soft landing" as you wrote only a few weeks ago??

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While I believe that this is good news if true, I have doubts about it.

Firstly, the point that rightmove are making is that interest rates are too high and they want to apply pressure to the BOE to reduce them.

Secondly, July and August are traditionally very slow months for property sales and one month of price drops do not make a crash.

Finally, Rightmove use the market price as the indicator (ie. the price that the vendor first advertises their house for sale). This could simply indicate that vendors are more realistic about sale prices and are achieving market value from the punters.

Lets see what the papers make of it! :D

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Before we get too carried away we need to remember rightmove only record the initial asking price. Many of these lost touch with reality recently and the figures don't show subsequent cuts to the initial asking price of the properties. So I think that it's really just the sellers being a bit more realistic from day one.

Most interesting was the supply and demand graphs, with supply outstripping demand for the second month in a row.

All in all it's good news with a tinge of appealing to the BOE not to raise rates again.

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Before we get too carried away we need to remember rightmove only record the initial asking price. Many of these lost touch with reality recently and the figures don't show subsequent cuts to the initial asking price of the properties. So I think that it's really just the sellers being a bit more realistic from day one.

Most interesting was the supply and demand graphs, with supply outstripping demand for the second month in a row.

All in all it's good news with a tinge of appealing to the BOE not to raise rates again.

Hey - I just said that. Are you copying me?

P.s. Elvis, have you been spotted on the Moon recently?

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Not copying, I wrote my reply and then it took an age to log in to post it, meanwhile your post went up. I did apologise afterwards but that crossed with your second post with mine just beating yours. One reason this may be happening as that the forum is rather slow in responding so it's more likely to happen here than the old forum.

And yes I've definitely been spotted on the moon, which I believe shortens the odds of a crash.

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I think the downturn started after Easter. RM's figs. are quite similar to LR's and think there is definitely a pattern developing. I believe we will only see negative growth in London for the foreseeable future. I don't find these figures suprising at all. Who ever believes prices will stagnate are simply kidding themselves. One does not have to be an economist to predict what will happen next. Commonsense is all that is required ;)

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What will hopefully happen now is we'll get some nice negative headlines in the tabloids based on the RM report. They won't be able to resist it. It will only take one chav-rag to publish a front page headline along the lines of "Property crash in Full Swing! .... Pirces fall by upto 10% in a month in some boroughs!"

Then the real panic will set in.

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I was impressed by the coverage in The Times - a nib on p2.

I'm fairly sure that the opposite "property jumps 2% (4-5% in London) in five weeks" would have got a bit more of a reaction (as the last Nationwide figures did).

Perhaps the editor felt this is not "news" - property is overpriced and falling, tell us something we don't know.

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What will hopefully happen now is we'll get some nice negative headlines in the tabloids based on the RM report. They won't be able to resist it. It will only take one chav-rag to publish a front page headline along the lines of "Property crash in Full Swing! .... Pirces fall by upto 10% in a month in some boroughs!"

Then the real panic will set in.

I have been thinking about this for a while now. If the headlines did say that a property crash is underway, would people sell up and crystallise a loss?

My guess is that people only sell when they have to - ie unable to make payments, loss of job, relocation, etc.

What are your thoughts?

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Yes your correct chandellina, most people will not sell jsut because prices are going down but there are a significant number of sub groups that will cause the reduction these being...

People who have self-certed and start to feel the pinch, if they face negative equity they may feel that getting out near the top is prefereable to hanging on.

People moving jobs, or to a different area.

Recent BTL's who find they cannot rent the property and face financing a property from their own money.

As the market drops more and more peolpe enter into these 3 groups.

Having been looking at property in the last year I was suprised to see a high percentage of property chain free or vacant. Somebody here at work is selling his fathers house and he will take what he can get for it, at todays prices that would be £250,000 but he'd take £100,000 if that was what the market said it was worth.

If the market does go down then people will be just as reluctant to get on the ladder as they are currently keen to get on. This will force prices down.

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I have been thinking about this for a while now. If the headlines did say that a property crash is underway, would people sell up and crystallise a loss?

My guess is that people only sell when they have to - ie unable to make payments, loss of job, relocation, etc.

What are your thoughts?

I think your right but that make payments, loss of job, relocation is a significant section of the market.

Because of the high prices the number of people unable to make payments will be higher than normal.

Thing is history has proved time and again that crashes do happen.

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People won't sell up and lock in a loss unless they have no choice.

The driver will be the general reluctance of buyers to buy into a falling market - in particular their lack of willingness to overstretch to buy into a falling market. This is pressure pushing prices back to comfortable income multiples.

Also, lenders will not want to lend risky amounts (high income multiples) secured on devalueing assets.

"It's income multiples, stupid" - as someone might once of said ;)

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