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Chuffy Chuffnell

House Prices Will Stabilise Next Year

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House prices to fall 4 percent before stabilising - Reuters poll

http://uk.news.yahoo.com/house-prices-fall-4-percent-stabilising-reuters-poll-171441231.html

House prices will fall another 4 percent before stabilising next year as a tough economy dampens demand and nervous sellers stay away, a Reuters poll showed on Wednesday. The results of the poll of 23 market watchers, taken over the past week, will make grim reading for homeowners who bought their property at the height of the boom four years ago and have already seen around 20 percent wiped off the value since then.

"We suspect that consumers' squeezed purchasing power, tightening fiscal policy, a softening labour market and worries over the economic outlook will limit potential buyers and weigh down on house prices," said Howard Archer at IHS Global Insight. "These factors are seen outweighing the support to house prices coming from extended very low interest rates."

Banks have been reluctant to lend, imposing harsh conditions on new mortgages, and despite record low interest rates, demand has tailed off as the economy stutters out of a deep recession and as tough government austerity measures bite. Housing is a bedrock of consumer wealth in Britain and average house prices tripled during a property boom in the 10 years to 2007. That bubble, which many denied even existed, burst.

Prices, which were virtually flat in the first half, are expected to fall 1.5 percent this year as a whole and flatline next year, according to the poll. That compares with forecasts in a June poll for a 2.0 percent drop in 2011 and stable prices in 2012. House prices in London, where demand nearly always tends to outstrip supply, are expected to rise modestly next year. U.S. house prices, which have plunged by more than a third since the bubble burst four years ago, are also expected to fall further, before rising modestly in 2012, according to a Reuters poll published earlier this month.

British house prices fell 1.2 percent in August, mortgage lender Halifax said earlier this month, while their house price to earnings ratio -- a key affordability measure -- fell to 4.4 in August, its lowest since April 2009. The Bank of England is not expected to raise its benchmark lending rate from a record low 0.50 percent until 2013 at the earliest.

"The market is beginning to look very attractive, certainly from the point of view of funding an existing mortgage, although the barriers to new entrants remain high," said Peter Dixon at Commerzbank. "Not only are houses expensive relative to incomes but lack of credit availability means that first-time buyers have to put down prohibitively high deposits."

And things are unlikely to get better anytime soon as the poll showed monthly mortgage approvals, a good gauge of future housing market activity, at around 50,000 in six months, and just nudging up to 55,000 in 12 months. That was unchanged from a poll taken in June, and is less than half the average of 104,000 seen in 2007 before the market crashed.

Housebuilder Taylor Wimpey said on Monday sales in recent weeks had been encouraging, and peer Barratt Developments said last week it expected to make further progress in a tough housing market. Estate agents were holding an average of 78 unsold homes, according to property website Rightmove. That did not stop Park Place in Henley-on-Thames, west of London, selling last month for 140 million pounds, making it Britain's most expensive home and worth the same as about 600 average priced homes on the website.

Respondents felt house prices were generally still a little overvalued, rating them a median six out of 10 where one was extremely undervalued and 10 was extremely overvalued -- unchanged from June's poll. "The fact that house prices haven't moved much over the last year is a good indication that current prices are close to fair value," said Ray Boulger at mortgage advisor John Charcol.

===

Strange thing is.. where in the article does it say 4 percent? Muddled reporting once again. Anyway, loving the optimism for 2012. :rolleyes:

Edited by Chuffy Chuffnell

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I think they're right. Already mortgage approvals are creeping up, they don't need to get up to 70k before we'll see HPI, 55-60k should be an indicator of HPI within 6/12.Gross lending is up as equity rich homeowners swap houses with each other for higher prices with the same monthly outgoings. Once the banks have paid back their SLS money they'll start to increase lending to the 30 somethings who didn't get on the bandwagon last time,The extra debt will be shown in GDP figures that mean we'll avoid a double dip.

There is no rebalancing. Plan A is the same as it ever was under N.Labour. HPI and to hell with the consequences

Edited by jaspers

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Loving it...

Absolute poppycock scare mongering.... House prices will not fall further.... The UK, especially the south east of England is too crowded. There is not enough good housing stock to go around. If first time buyers don't or can't buy the bargains that are out there at the moment, savvy property investors will for rental income.

I sold at the height of the market, rented for a while, then purchased a property in 2009. I spent a futher £80'000 refurbishing/extending the property and in Sept 2010 the estimated value still gave me a decent profit. The estate agent and the my high street mortgage company, both estimated the property estimate value at the same increased price. The house next door to mine sold a couple of months ago after being on the market a short while and this house had not been refurbished/extended/decorated, and the buyer paid around 25% more than I paid for my house in 2009.

Therefore, don't news hype me headlines like "houses to fall an extra 4%".

As the old cliche says "location, location, location".

:lol:

(from the article's comments section)

Edited by Chuffy Chuffnell

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What do they mean by Stabilise ? will they rise to a price or fall to a price and stay at that price ?

House prices always move if they are not moving up they are moving down.

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"The fact that house prices haven't moved much over the last year is a good indication that current prices are close to fair value," said Ray Boulger at mortgage advisor John Charcol.

===

BOULGER YOU ARE A FAT C *NT!!!!!!!!!!!!!!!!! & A F ...G AR$ HOLE!!!!!!!!!!!!! :angry: :angry: :angry: :angry: :angry:

Jeeezzz I LOATHE that fat C NT!!!!!!!!!!!!!!!!!!!!!! :angry: :angry: :angry:

Edited by eric pebble

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BOULGER YOU ARE A FAT C *NT!!!!!!!!!!!!!!!!! & A F ...G AR$ HOLE!!!!!!!!!!!!! :angry: :angry: :angry: :angry: :angry:

Jeeezzz I LOATHE that fat C NT!!!!!!!!!!!!!!!!!!!!!! :angry: :angry: :angry:

Couldn't have put it better myself... when he says things like that it truly makes my blood boil, particularly as he's always the "expert" invited on those programmes and is allowed to get away with it by the interviewer. There was a tiny chink in his armour when he was up against JD recently (the clip is on JD's website), but it still wasn't the slaughtering that Ray deserves.

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"The fact that house prices haven't moved much over the last year is a good indication that current prices are close to fair value," said Ray Boulger at mortgage advisor John Charcol.

On the other hand and perhaps more likely is the possibility that it's a good indication that current prices are on the brink of the next leg down.

On balance and considering the appalling state of the UK and worldwide economy I wouldn't like to be in a position that relied on prices being either stable or going up.

One thing that often happens in markets is that after a flat period prices can move a lot, either up or down. So if Mr Boulger thinks prices are fair value and by implication he thinks the direction from now on is up then he'll likely be out and about and buying? Well is he?

Of course the scope for government malinvestment is huge and even today on the radio there was mention of introducing a law to evict children over a certain age (21?) from their parents house probably to bolster the rental/housing market. Stop at nothing hardly describes it but on the other hand it's truly desperate stuff.

Edited by billybong

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Cost of living rising

Wages falling (relatively)

Unemployment rising

GDP contracting

Seems logical to me that house prices should rise.

Rise? You bear, SOAR!

Triuth is many over priced empty houses while we all live in a shed in the garden, I am starting to believe that this is what the country would prefer, god forbid that the cost of living should fall, I mean, that would mean that I'm not worth it after all?

In 2007 I could afford to buy a house, I just couldn't afford to live in it, the way to make it work was to put an IO mortgage my (fake) name and rent the place to DSS.

There it is.

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Rise? You bear, SOAR!

Triuth is many over priced empty houses while we all live in a shed in the garden, I am starting to believe that this is what the country would prefer, god forbid that the cost of living should fall, I mean, that would mean that I'm not worth it after all?

In 2007 I could afford to buy a house, I just couldn't afford to live in it, the way to make it work was to put an IO mortgage my (fake) name and rent the place to DSS.

There it is.

I feel it in the wind....

Things are going to get a LOT worse..... We are heading for SERIOUSLY DIFFICULT times..... :rolleyes:

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Please clarify as possible?

Serious?

Pop on the news and hear about Americas latest attempt to recover. Flick the channel to hear about Greece and Italy. Then open the newspapers and read the pages about Spain far from out of the woods.

Then take a look at the UK and ask "why are we so different?"

AND Mr 0% said

Cost of living rising

Wages falling (relatively)

Unemployment rising

GDP contracting

I'll add to that the constant downgrading of growth figures such as the IMF here

Housing prices are just going to flat line.

Excuse me, .... ...... ...... ...... ROFL

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  • 276 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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