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Spoony

House Prices Could Rocket Past Their Pre-Crisis Peak Next Year According To The Cebr

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The number of properties sold in England and Wales reached its highest level for three years at the end of last month, a report said today.

The Royal Institution of Chartered Surveyors, which polls its membership on a regular basis to give a picture of the state of the housing market, reported estate agents in a more buoyant mood recording just over 17 property sales on average during the first three months of the year.

The RICS survey result will raise hopes the worst of the property market slump may finally be over.

At its lowest point, RICS said its members were selling ‘less than ten’ properties every three months, a nightmare for homeowners desperate to sell.

The survey showed chartered surveyors believe house prices could go beyond pre-crisis levels within a year (Source: RICS)

Peter Bolton King, RICS global residential director, said: ‘A buoyant, healthy property market is central to economic recovery.

‘While these are still very much early signs, it is encouraging that sales are beginning to pick-up.’

The tone of their comments was more positive than it has been since the recession began.

One in five agents said house prices are rising in their region, the highest proportion since June 2010, RICS said.

Official figures have previously shown how the collapse in house prices since the credit crunch struck in 2007 has taken its toll on the economy and on property sales, leaving many people trapped in properties unable to move for fear of being in negative equity.

Housing bubble: house prices could rocket past their pre-crisis peak next year according to the CEBR

News of an improving property market comes amid predictions that house prices are set to rise again, partly fuelled by the Government’s controversial new mortgage lending scheme announced in last month’s Budget.

The Centre for Economics and Business Research predicts the cost of the average home will jump by nearly £50,000 over the next five years.

The CEBR said house prices will ‘surpass’ their pre-crisis peak for the first time next year, reaching an average of £227,000. By 2018, it predicts the cost of the typical UK home will be £267,000.

The Government’s ‘Help to Buy‘ scheme offers to guarantee 15 per cent of mortgage loans for those wanting to get onto the property ladder but who have only managed to save five per cent of the deposit they need.

There are significant regional differences in how house prices are performing, the study showed (Source: RICS)

But the scheme has already faced criticism that it will help create another housing market bubble by fuelling property prices. Critics also fear that it will mostly be used by buy to let investors.

Elsewhere the Funding for Lending scheme has already been helping to push mortgage rates down by making it cheaper for banks and building societies to borrow money.

Mr Bolton King added: ‘Thanks to initiatives such as Funding for Lending, mortgages are becoming more accessible to buyers, which is gently easing the pressure on the market and freeing up stagnant chains.’

New buyer enquiries increased last month, the survey from RICS showed (Source: RICS)

Recent figures, from the Bank of England, showed many types of mortgage deals have never been cheaper since its records began.

For example, the interest rate on a two-year fixed rate loan for a homebuyer with a deposit of only ten per cent was just 4.57 per cent.

This is the lowest-ever rate, and will save a typical homeowner with a £150,000 mortgage around £1,500 a year, cutting their monthly repayments from £960 to £840.

By comparison, the average rate was 5.93 per cent in August, the month that the Funding for Lending scheme was launched.

http://www.thisismoney.co.uk/money/mortgageshome/article-2305810/House-sales-reach-highest-level-years-prices-pre-crisis-peak-year.html#ixzz2QC7MbIk2

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In other news the Royal Institute of Chartered Surveyors have predicted that Israel could give the Palestinians back their land, Doctors could find a cure for Cancer, and in Sport, Stockport County could win the FA cup.

Edited by enrieb

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In other news the Royal Institute of Chartered Surveyors have predicted that Israel could give the Palestinians back their land, Doctors could find a cure for Cancer, and in Sport, Stockport County could win the FA cup.

And I could win the lottery this week. I'll just pack my job in, in anticipation.

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The Government's 'Help to Buy' scheme offers to guarantee 15 per cent of mortgage loans for those wanting to get onto the property ladder but who have only managed to save five per cent of the deposit they need.

Sorry if I'm splitting hairs but if a house is worth on average £165,000 and a deposit is worth 20% of that (£33,000), 5% of the deposit you need is 1% of the house's value. If all th money you can scrape together is £1650, then maybe you may have trouble keeping up the repayments on the other 99% plus interest. Should h government really be enabling this sort of behaviour?

Edit to add, 5% of 15% is even less.

Edited by Diver Dan

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Sorry if I'm splitting hairs but if a house is worth on average £165,000 and a deposit is worth 20% of that (£33,000), 5% of the deposit you need is 1% of the house's value. If all th money you can scrape together is £1650, then maybe you may have trouble keeping up the repayments on the other 99% plus interest. Should h government really be enabling this sort of behaviour?

Edit to add, 5% of 15% is even less.

I think it is meant to be 5% of the purchase price which is 25% of the deposit they need ( if 20% were usually needed )

Your sentiments are still correct though its just another way of extending 'purchasing power ' to the vast swathes of people who are unable to participate in the demand side due to unaffordability .

The same old assumption is that by stretching themselves whilst young they will easily afford to keep up later but for that you need wage or house price inflation ( although the latter has to be infinite and involve them exiting which only works for them not the system as a whole )

Edited by Sir Harold m

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Should h government really be enabling this sort of behaviour?

No. For years now they've openly dealt themselves 4 Aces on behalf of home-owners on every hand, without much of a grumble from non-owners.

First 3 years of the crunch discussion was so frequently about the victims who had bought 2004-2007 and how they'd been lured into it lol. Some people finally waking up they're the ones being slaughtered by policy, as well as generations coming through. Instead of a few 'heart-breaking' / 'tragedy' mugs who had over-paid and over-borrowed and should have lost out. Excuse after excuse for why they had done so; believing the media and property porn, their parents, 'doubling prices was all they'd ever know so unfair for them to expect otherwise.'

Younger independent people who have no bomad, get hit with student fees, and a future where you're expected to be grateful for Shared-Ownership, FLS to help you, Home-Buy. Having allowed prices to hyper-inflate during the boom, then refusing to allow correction with QE, probably over £1 trillion of total support, interest rates slashed, political pressures to make banks follow forbearance, political pressure to make banks 'work properly' by lending to 'people who need it'.

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Usual group gathering to discuss economy on newsnight yesterday, got round to HTB and housing market, most thought it was a great idea, no one asked the "once we start how do we stop" question or pointed out that if its successful those following behind will need even greater help to get on board.

Same sort probably thought housing benefit was a good idea when introduced, few hundred £million to put a roof over people's heads, few decades later the costs are thirty odd £billion and no one knows WTF to do about it.

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I don't remember this CEBR 'think-tank' calling on punters to get out of the market before the crash of 2008.

Same goes for the FT lot.

Bunch of charlatans.

thats right, they are the crew that said house prices average would be £210K odd....before the crash.

They didnt see it coming....indeed they are my top customer for the Bloo Loo Precision straight edge graph predectionizing tool

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I think it is meant to be 5% of the purchase price which is 25% of the deposit they need ( if 20% were usually needed )

Your sentiments are still correct though its just another way of extending 'purchasing power ' to the vast swathes of people who are unable to participate in the demand side due to unaffordability .

The same old assumption is that by stretching themselves whilst young they will easily afford to keep up later but for that you need wage or house price inflation ( although the latter has to be infinite and involve them exiting which only works for them not the system as a whole )

But even the repayments on the 85% plus interest are going to be steep, and the government are presumably going to want to get their 15% back, unless they are just going to unofficially put that on the long-finger and never expect them all to be fully repaid à la student loans.

Buyers, first-time or otherwise, I suspect, would rather just buy a house with the minimum of jiggery pokery from the government. I predict that HTB will be another failure in real terms but will allow the Laboural Conservocrats to show that they are 'doing something'.

Edited by Diver Dan

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But even the repayments on the 85% plus interest are going to be steep, and the government are presumably going to want to get their 15% back, unless they are just going to unofficially put that on the long-finger and never expect them all to be fully repaid à la student loans.

Buyers, first-time or otherwise, I suspect, would rather just buy a house with the minimum of jiggery pokery from the government. I predict that HTB will be another failure in real terms but will allow the Laboural Conservocrats to show that they are 'doing something'.

I beleive the current scheme wants the government paid back @ 5 years with increasing interest until it is..CPI+1% or something like that every year.

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In other news the Royal Institute of Chartered Surveyors have predicted that Israel could give the Palestinians back their land, Doctors could find a cure for Cancer, and in Sport, Stockport County could win the FA cup.

I wouldn't be so quick to dismiss the possibility of London/SE prices exceeding their peak in the near future. We've had hundreds of billions of pounds of debt monetisation, interest rate suppression in the teeth of inflation/near zero rates, massive bank bailouts, unlimited central bank liquidity to the banks and now outright government support for mortgage lending.

Prices - which have managed to remain stubbornly high in the teeth of economic stagnation - can certainly go up against that backdrop.

This is what happens when you denominate prices in fiat currency - massive manipulation of the fiat by the issuing authority can enable asset price manipulation.

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OK.. well remembered. But prices in my area (Bucks), have been rising all year. According to Land reg, the average price is up £7000 in Jan 2013 compared to Jan 2012. I give up now. I am going to buy abroad with a view to moving out there when I retire. I can afford to buy I have plenty saved but I don't see why I should risk my hard earned savings on a UK overpriced box which will correct - one day. But when? How long can the government keep up this chirade?

Edited by Spoony

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  • 243 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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