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Estate agents herald the end of 18-month house market downturn

http://www.guardian.co.uk/business/story/0...1594626,00.html

Estate agents herald the end of 18-month house market downturn

· Prices expected to rise before Christmas

· Expansion in employment buoying up confidence

Larry Elliott Economics editor

Tuesday October 18, 2005

The Guardian

Britain's estate agents today call an end to the 18-month downturn in the housing market with a prediction that property will buck the trend of a weakening economy and post an increase in prices in the run-up to Christmas.

The monthly survey by the Royal Institution of Chartered Surveyors says the August cut in interest rates, coupled with the possibility of further easing by the Bank of England, has helped to boost demand for homes.

Article continues

Although prices continued to slip back last month, the pace of decline was the slowest since the summer of 2004, the RICS says. In the three months to September, the number of estate agents reporting a fall in prices exceeded those reporting a rise by 21 percentage points. That compared to a 25-point gap in August and a low point of 46 percentage points in May this year.

"Against a background of firming demand, and the possibility of further interest rate cuts, surveyors are expecting house prices to rise marginally over the next three months. The turnaround in surveyor confidence, becoming positive for the first time in 1½ years, adds to evidence that the housing market is stabilising", the RICS says.

London, which tends to be the harbinger of price movements across the rest of the country, saw static house prices over the past three months, after a period of decline that began in mid-2004 when Mervyn King, the governor of the Bank of England, sent out a warning to potential homebuyers about the high cost of property.

Elsewhere in the country, the picture was patchier. Price falls abated in East Anglia and the north, while in Scotland prices continued to rise. The pace of price falls increased slightly in the south-east and Wales, while the market turned down again in the north-west after two months of stability.

In the UK as a whole, the RICS says enquiries from new buyers rose in September for the fourth successive month. Estate agents warned, however, that the signs of strengthening demand were modest, having been stimulated by the cut in interest rates from 4.75% to 4.5% in August.

Ian Perry, RICS housing spokesperson, said: "While sellers asking for unrealistic prices are still struggling to find potential buyers, they are beginning to feel more confident as fears of a sharp fall in house prices have largely dissipated. The amount of new property coming on to the market fell in September for the first time in 1½ years.

"The upturn in demand and improved outlook on interest rates has led surveyors to predict house price rises for the first time since early 2004, though these are expected to be small. RICS expects the recovery in activity to be sustained due to continued expansion in employment, which bodes well for a stable housing market."

Other recent reports on the property market have also provided evidence that a slow recovery in prices could be happening. The Halifax, Britain's biggest mortgage lender, reported a 1.2% rise in prices last month, following a 1.9% increase in August.

Edited by shakerbaby

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Guest The Dude

Estate agents herald the end of 18-month house market downturn

http://www.guardian.co.uk/business/story/0...1594626,00.html

Estate agents herald the end of 18-month house market downturn

· Prices expected to rise before Christmas

· Expansion in employment buoying up confidence

Larry Elliott Economics editor

Tuesday October 18, 2005

The Guardian

Britain's estate agents today call an end to the 18-month downturn in the housing market with a prediction that property will buck the trend of a weakening economy and post an increase in prices in the run-up to Christmas.

The monthly survey by the Royal Institution of Chartered Surveyors says the August cut in interest rates, coupled with the possibility of further easing by the Bank of England, has helped to boost demand for homes.

Article continues

Although prices continued to slip back last month, the pace of decline was the slowest since the summer of 2004, the RICS says. In the three months to September, the number of estate agents reporting a fall in prices exceeded those reporting a rise by 21 percentage points. That compared to a 25-point gap in August and a low point of 46 percentage points in May this year.

"Against a background of firming demand, and the possibility of further interest rate cuts, surveyors are expecting house prices to rise marginally over the next three months. The turnaround in surveyor confidence, becoming positive for the first time in 1½ years, adds to evidence that the housing market is stabilising", the RICS says.

London, which tends to be the harbinger of price movements across the rest of the country, saw static house prices over the past three months, after a period of decline that began in mid-2004 when Mervyn King, the governor of the Bank of England, sent out a warning to potential homebuyers about the high cost of property.

Elsewhere in the country, the picture was patchier. Price falls abated in East Anglia and the north, while in Scotland prices continued to rise. The pace of price falls increased slightly in the south-east and Wales, while the market turned down again in the north-west after two months of stability.

In the UK as a whole, the RICS says enquiries from new buyers rose in September for the fourth successive month. Estate agents warned, however, that the signs of strengthening demand were modest, having been stimulated by the cut in interest rates from 4.75% to 4.5% in August.

Ian Perry, RICS housing spokesperson, said: "While sellers asking for unrealistic prices are still struggling to find potential buyers, they are beginning to feel more confident as fears of a sharp fall in house prices have largely dissipated. The amount of new property coming on to the market fell in September for the first time in 1½ years.

"The upturn in demand and improved outlook on interest rates has led surveyors to predict house price rises for the first time since early 2004, though these are expected to be small. RICS expects the recovery in activity to be sustained due to continued expansion in employment, which bodes well for a stable housing market."

Other recent reports on the property market have also provided evidence that a slow recovery in prices could be happening. The Halifax, Britain's biggest mortgage lender, reported a 1.2% rise in prices last month, following a 1.9% increase in August.

Whoopee...****-a-doodle-do....it must be true then....seriously, we will get reports like this......isn't it now apparent that the only true reporting which holds any currency now is ANECDOTAL evidence of what is happening in your own locality?. To quote Grouch Marx " who are you gonna believe, ME or your own eyes?" Media reporting is useless. They say this one day, that another. Who believes them anymore?

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Whoopee...****-a-doodle-do....it must be true then....seriously, we will get reports like this......isn't it now apparent that the only true reporting which holds any currency now is ANECDOTAL evidence of what is happening in your own locality?. To quote Grouch Marx " who are you gonna believe, ME or your own eyes?" Media reporting is useless. They say this one day, that another. Who believes them anymore?

Dude I certainly dont, nor doubt many post here to believe them, however many out there will and it sickens me to see them led like bleating innocent Bo Peeps lambs to the financial slaughter house.

Little Bo-Peep, she has lost her sheep,

And will not know where to find them;

They are over the height and out of sight,

Trailing their tails behind them!

Little Bo-Peep woke out of her sleep,

Jump'd up and set out to find them:

"The silly things! they've got no wings,

And they've left their trails behind them!

"They've taken their tails, but they've left their trails,

And so I shall follow and find them!"

For wherever a tail had dragged a trail

The grass lay bent behind them.

She washed in the brook, and caught up her crook.

And after her sheep did run

Along the trail that went up the dale

Across the grass in the sun.

She ran with a will, and she came to a hill

That went up steep like a spire;

On its very top the sun seemed to stop,

And burned like a flame of fire.

But now she went slow, for the hill did go

Up steeper as she went higher;

When she reached its crown, the sun was down,

Leaving a trail of fire.

And her sheep were gone, and hope she had none.

For now was no trail behind them.

Yes, there they were! long-tailed and fair!

But to see was not to find them!

Golden in hue, and rosy and blue,

And white as blossom of pears,

Her sheep they did run in the trail of the sun,

As she had been running in theirs!

After the sun like clouds they did run,

But she knew they were her sheep:

She sat down to cry and look up at the sky,

But she cried herself to sleep.

And as she slept the dew down wept,

And the wind did blow from the sky;

And doings strange brought a lovely change:

She woke with a different cry!

Nibble, nibble, crop, without a stop!

A hundred little lambs

Did pluck and eat the grass so sweet

That grew in the trail of their dams!

She gave one look, she caught up her crook,

Wiped away the sleep that did blind her;

And nibble-nibble-crop, without a stop

The lambs came nibbling behind her.

Home, home she came, both tired and lame,

With three times as large a stock;

In a month or more, they'll be sheep as before,

A lovely, long-wooled flock!

But what will she say, if, one fine day,

When they've got their bushiest tails,

Their grown-up game should be just the same,

And again she must follow mere trails?

Never weep, Bo-Peep, though you lose your sheep,

Tears will turn rainbow-laughter!

In the trail of the sun if the mothers did run,

The lambs are sure to run after;

But a day is coming when little feet drumming

Will wake you up to find them--

All the old sheep--how your heart will leap!--

With their big little lambs behind them!

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Guest Bart of Darkness

A quick look through this site's FAQ will show how often the end to the last slide was called (and often how early).

You ain't seen nothin' yet!

Edited by Bart of Darkness

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Is this what's called a "dead cat bounce" then?

Honestly, sometimes it's very lonely being a bear. Everyone keeps telling me I was wrong to sell my house (in July this year, I thought I'd waited too long as well). Even though prices had definitely slipped since that time the previous year, now they seem to be moving slightly up again... Who the f*ck is buying at these prices?? :(

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Is this what's called a "dead cat bounce" then?

Honestly, sometimes it's very lonely being a bear. Everyone keeps telling me I was wrong to sell my house (in July this year, I thought I'd waited too long as well). Even though prices had definitely slipped since that time the previous year, now they seem to be moving slightly up again... Who the f*ck is buying at these prices?? :(

Idiots are

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Expansion in employment - so all these jobs being created will offer a salary of around 50k enabling people to get on the property ladder, and what positions RICS to be able to pass informed comment about the makeup of new jobs being created.

Why does this Larry Elliott bloke persist in promoting the latest soundbite from an increasingly desperate business sector - its just lazy journalism at its worst - he hasnt even thought through what he's put his name to

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Is this what's called a "dead cat bounce" then?

Honestly, sometimes it's very lonely being a bear. Everyone keeps telling me I was wrong to sell my house (in July this year, I thought I'd waited too long as well). Even though prices had definitely slipped since that time the previous year, now they seem to be moving slightly up again... Who the f*ck is buying at these prices?? :(

My mums mate is buying, 120% over 35 years.

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My mums mate is buying, 120% over 35 years.

That sounds like a lot. You mean that's the total interest paid on the place over the 35 years? (35 years!) Or can you get 120% mortgages these days? (cripes, that'd mean... no, silly, surely? sorry, it's late, carn't think straight)

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Hope he's a looker and likes giving complete strangers a lift in their cars coz it's gonna take a lot of effort to pay that mf off!

Work out how much it's gonna cost him in total after 35 years and send the answer to him on a postcard... ;)

That would make a nice house-warming gift I'm sure! :lol:

I was abit misleading there, by mums mate i mean friend / workmate

:)

The postcard idea sounds just right, i dont like him or his gf, partly because they are thick as pigsh*t but mostly because they are more chav than ... well someone very chavvy, credit cards to buy a £250 mobile .. that sort of thing.

Still ... each to thier own

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You will see these "False Dawns" being announced again and again as prices slide.

The tiny shread of credibility that EAs have will be torn to bits by this repeated misinformation

SHAME on the Guardian for the misleading title, since the article is more accurate than the Headline

Calm everyone. Remember all you have learnt. Remember the HPC press cuttings from the last crash - constant talk of recovery in prices throughout 89, 90 and 91 but all the while the falls were accumulating. Remember the Nationwide and Halifax historical data showing the odd rebound here and there for a quarter during 89 before things continued the (downward trend).

I see there is a new paper on the HPC home page from ABN Amro - http://www.housepricecrash.co.uk/pdf/falsealarm.pdf

They see no relief in store and nice to know all the concerns we on HPC have re inflation, rates, HPs and the wider world economy are echoed by an investment bank.

Patience.

Edited by Tempest

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That was a very interesting link, thanks for that. Some nice charts.

The divergence between consumer spending and house prices is very striking !

It makes a good case that these mortgage approvals are actually new BTL. If consumers are spent up in the shops, how can they afford houses as well ?

But at today's prices the BTL bastards can't be making any money at all ?

So perhaps it really is the SIPP effect, combined by the cut in IRs. Should IRs have to rise again (even by a small amount I would suggest), and the SIPP rules changed because of poor Government finances ...... then BTL may dry up again and the housing market should go into freefall.

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Guest Riser

Just the calm before another storm... and then there is the small matter of inflation today.

Agreed, this story is just pure spin to try and limit damage from the release of todays high inflation figures. I suspect tonights BBC will report record inflation around 2.8% then follow the story wth this garbage about the housing market set for recovery despite the economic down turn, they may even try to back it up by mentioning yesterdays Rightmove figures, they are so predictable.

Blairs Broadcasting Coorporation will have been warned by Brown that if the housing bubble bursts it will take the economy with it. The bubble is driven by sentiment so the BBC have a responsibility to maintain confidence in the market. However, the bubble is down to Brown not the BBC and the longer they help inflate it the worse the crash will be, probably a factor in Larges decision to resign from the MPC yesterday. It will be interesting to see if Blair is prepared to let the bubble burst just to stop Browns challenge for PM :ph34r:

Soaring petrol prices are set to drive the annual rate of inflation to its highest level since March 1996.

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Remember people can't afford the debt.

If they can.. the economy can';t afford the reduced spending that their debt entails.

The country might lower interest rates and that may help prices recover.

But the long term damage of low interest rates and high debt can only be ignored by the people..

Not by the country itself.

I dispair..

and don't forget.. we see more negative house prices comments then we see possitive and where a year ago we latched onto every "negative" in a sea of "Possitives"..

We now see the odd "Possitive" in a sea of "negatives" and the small panic and strees builds in us.

Don't forget also that the mismanagement of this country has put you in a financial position that is massivly stress inducing..

I sometimes look at my salary.. divide it by three.. and that is a salary that would have had in in this position 7 years ago..

7 years ago it was less then the minimum wage.

today it is above average.. not easy to hit in devon at 32.. I can tell you..

Edited by apom

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That was a very interesting link, thanks for that. Some nice charts.

The divergence between consumer spending and house prices is very striking !

It makes a good case that these mortgage approvals are actually new BTL. If consumers are spent up in the shops, how can they afford houses as well ?

But at today's prices the BTL bastards can't be making any money at all ?

So perhaps it really is the SIPP effect, combined by the cut in IRs. Should IRs have to rise again (even by a small amount I would suggest), and the SIPP rules changed because of poor Government finances ...... then BTL may dry up again and the housing market should go into freefall.

One aspect of btl I can't quite get my head round, and I'd be interested in anyone else's views - and it is relevant to the thread!

If I buy a house I mortgage my future income stream; fine, it's my choice.

Someone btls. They mortgage someone else's income stream. If those people stay at home, emigrate, buy their own place - ie if they don't play the game like good little cannon fodder - the btl mortgage is left hung out to dry.

In other words btl can only work if the next generation continue to be priced out and continue to rent. If housebuilding increases/prices fall - even perhaps a fairly small improvement in ftbs' positions - then btl could go into a vicious downward spiral as the conditions needed to make it work will fall away. Then it will be game over.

In other words btl only works because of grotesque capital appreciation, so grotesque capital appreciation has become a self-fulfilling prophecy, which is why btlers say (or the evidence shows) they don't care about yield. Which is fine on the upside.

Any thoughts?

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This is an unusually cr&p article from Larry Elliott, who's generally pretty sceptical and fair-minded. A clue - on the same page of the Graun he's written two other articles, so maybe it was a busy day; and of course some sub-editor will have picked the misleading headline.

What it amounts to is this - RICS says that prices are falling less quickly than they were. That's all. Panic over.

What's more ominous is the appointment of another of Brown's stooges to the MPC ....

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Guest Time 2 raise Interest Rates

I must be missing something here 21% more surveyors said prices fell,

and this is good news?.

:blink::blink:

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  • 302 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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