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Guest Charlie The Tramp

Good Article

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Guest Charlie The Tramp

Good Article in the blog

HPC Canceled don`t bet on it.

Who says? None other than Mervyn King, the governor of the Bank of England. Last week, King played property pundit -- and a bullish one as well. ``Housing activity appears to be picking up to its long run average,'' he said in a speech in Birmingham, England.

His optimism is premature. The housing-market crash of the early 1990s was stretched over years, not months. In the U.K., unemployment is rising. So are personal bankruptcies. And growth has slowed dramatically. The British property market still faces a rocky year.

King is entitled to claim credit for steering the British housing market toward a soft landing. Yet it is too soon to say the job is finished. Markets have a nasty way of snapping back at anyone who claims victory over them -- and U.K. property isn't immune to that.

House prices, like in any market, never move in a straight line. They didn't during the housing crash of the early 1990s. According to ABN Amro figures, house prices dropped sharply in 1989, rebounded at the start of 1990, before resuming their decline. There were three false rallies, followed by more falls, before it stabilized in 1993.

There is no reason the market shouldn't be following that pattern right now.

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And in June 2004 King said....

"After the hectic pace of price rises over the past year it is clear that the chances of falls in house prices are greater than they were. So anyone entering or moving within the housing market should consider carefully the possible future paths of both house prices and interest rates."

Anyone else worried by his lack of consistency? :angry:

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  • 301 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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