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Housing Market Dip Only Temporary. Say Rics.

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From the BBC:

http://www.bbc.co.uk/news/business-30024257

A dip in activity in the UK housing market and slowing property prices will only be "temporary", surveyors say.

Demand from new buyers slowed for the fourth consecutive month in October, the Royal Institution of Chartered Surveyors (Rics) said.

Sales also declined during the month in all but a few regions of England and Wales, Rics said.

However, surveyors said they were confident the market would pick up in the medium term.

The survey suggested that buyer inquiries had fallen in all regions of England and Wales. As a result, sales also fell in every region except south-west England, Yorkshire and Humberside.

Simon Rubinsohn, chief economist at Rics, said that potential buyers across the UK were being a "little more cautious" owing to stricter rules surrounding mortgage applications.

Other surveys have suggested that fears of a potential rise in interest rates had curtailed some demand from buyers.

However, there had been a "post-referendum bounce" in activity in Scotland during October, Rics said. Northern Ireland was also seeing a continued recovery.

Right. Because personally I was crapping myself about buying a house without knowing what was happening with Scotland. Now I know they're still with us, I'll go and stretch myself to the limit on debt to buy a shoe box.

We don't need more props to save the market. We need more referendums.

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Surely the use of the word 'will' is outrageous ?

There is no 'will' about it - complete conjecture.

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Official RICS press release text

UK house price growth slows to May 2013 momentum as demand slips for fourth consecutive month

RICS UK Residential Market Survey, October 2014

House price momentum in the UK continued to slow and new buyer demand tailed off in October, according to the latest RICS Residential Market Survey.

Nationally, new buyer demand slipped for the fourth consecutive month with London bearing the brunt of the decline, as 62% more surveyors reported a fall in new buyer demand across the capital. Meanwhile across the rest of the UK dipped to a net balance of -18%.

As a result of the weaker trend in buyer interest, sales expectations are now at their lowest point since the beginning of the year and the picture regarding near term price expectations is not dissimilar. Significantly, Scotland and Northern Ireland have the most optimistic view on house prices in the run up to Christmas (net balances of 36% and 37% respectively).

Meanwhile, stock coming onto the market remained virtually unchanged in October (a net balance of -2%) continuing the trend which has been in place for much of the past year. As a result, even with the dip in demand, much anecdotal evidence from surveyors points to an ongoing challenge in securing adequate new instructions.

At a national level, the slow-down in buyer activity in the sales market stands in marked contrast to the lettings market, where tenant demand continues to grow strongly. Over the last quarter, this has particularly been the case in East Anglia, the north of England and Scotland and rent expectation remain generally firm with respondents’ anticipating an increase of around 2.5% over the next twelve months across the whole of the country.

Our analysis

The flatter trend in the market is partly a reflection of potential buyers becoming a little more cautious about making a purchase as more stringent lending criteria has made it harder to access mortgage finance. An increasing awareness of the approaching general election also appears to be contributing to the softer market if the responses to the latest survey are anything to go by. However, with new instructions still flat at a headline level as has been the case for most of the last year it seems implausible that the dip in demand will result in very much of a decline in house prices.

Meanwhile, demand to rent property is growing as the sales market slows and this, coupled with a drop in supply of new stock to let, is helping to underpin the rental outlook for landlords pretty much across the whole of the country.

Edited by rantnrave

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if mortgages are harder to get, im absolutely sure its not because of cautious borrowers.

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Full text:

Simon Rubinsohn

Chief Economist (RICS)

13 Nov 2014 FOR DISCUSSION

UK house price growth slows to May 2013 momentum as demand slips for fourth consecutive month

http://www.rics.org/Global/10.%20WEB_%20Oct%202014%20RICS%20UK%20Residential%20Market%20Survey.pdf

House price momentum in the UK continued to slow and new buyer demand tailed off in October, according to the latest RICS Residential Market Survey.

Nationally, new buyer demand slipped for the fourth consecutive month with London bearing the brunt of the decline, as 62% more surveyors reported a fall in new buyer demand across the capital. Meanwhile across the rest of the UK dipped to a net balance of -18%.

As a result of the weaker trend in buyer interest, sales expectations are now at their lowest point since the beginning of the year and the picture regarding near term price expectations is not dissimilar. Significantly, Scotland and Northern Ireland have the most optimistic view on house prices in the run up to Christmas (net balances of 36% and 37% respectively).

Meanwhile, stock coming onto the market remained virtually unchanged in October (a net balance of -2%) continuing the trend which has been in place for much of the past year. As a result, even with the dip in demand, much anecdotal evidence from surveyors points to an ongoing challenge in securing adequate new instructions.

At a national level, the slow-down in buyer activity in the sales market stands in marked contrast to the lettings market, where tenant demand continues to grow strongly. Over the last quarter, this has particularly been the case in East Anglia, the north of England and Scotland and rent expectation remain generally firm with respondents’ anticipating an increase of around 2.5% over the next twelve months across the whole of the country.

Our analysis

The flatter trend in the market is partly a reflection of potential buyers becoming a little more cautious about making a purchase as more stringent lending criteria has made it harder to access mortgage finance. An increasing awareness of the approaching general election also appears to be contributing to the softer market if the responses to the latest survey are anything to go by. However, with new instructions still flat at a headline level as has been the case for most of the last year it seems implausible that the dip in demand will result in very much of a decline in house prices.

Meanwhile, demand to rent property is growing as the sales market slows and this, coupled with a drop in supply of new stock to let, is helping to underpin the rental outlook for landlords pretty much across the whole of the country.

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Read it, it's the usual biased BBC propaganda, the "surveyors" , whoever "they" are ,said its a temporary blip, not RICS, and people still wonder if the BBC is impartial? :rolleyes:

The BBC, as usual, looking for a "positive" spin, probably went through the individual RICS surveyor reports and found a couple who said that it was a temporary dip.

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John Maynard Keynes in 1927:
“We will not have any more crashes in our time.”
H.H. Simmons, president of the New York Stock Exchange, Jan. 12, 1928:
“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
Irving Fisher, leading U.S. economist, The New York Times, Sept. 5, 1929:
“There may be a recession in stock prices, but not anything in the nature of a crash.”
And on 17, 1929:
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
W. McNeel, market analyst, as quoted in the New York Herald Tribune, Oct. 30, 1929:
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
Harvard Economic Society, Nov. 10, 1929:
“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”

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UK house price growth slows to May 2013 momentum as demand slips for fourth consecutive month

....

However, with new instructions still flat at a headline level as has been the case for most of the last year it seems implausible that the dip in demand will result in very much of a decline in house prices.

So new instructions are flat and demand continues to fall. So on the VIs oft quoted supply and demand criteria prices must continue to fall.

(Accepted that in reality lending is the main factor in determining house prices)

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They are correct, a fall in prices will only be temporary, in the same way that price rises will only be temporary. how long that temporary will last i dont know.

Its a typical try and convice themselves it'll be all right in the end piece

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They are correct, a fall in prices will only be temporary, in the same way that price rises will only be temporary. how long that temporary will last i dont know.

Its a typical try and convice themselves it'll be all right in the end piece

No, they're quite wrong! The UK is bankrupt. The fall in prices will be permanent just like the decline in UK living standards.

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It sets the scene for George's Autumn statement. Presumably some kind of temporary prop is required as the market seems to have rapidly cooled. Whether the falling fixed rates will be enough to spark demand I don't know.

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John Maynard Keynes in 1927:
“We will not have any more crashes in our time.”
H.H. Simmons, president of the New York Stock Exchange, Jan. 12, 1928:
“I cannot help but raise a dissenting voice to statements that we are living in a fool’s paradise, and that prosperity in this country must necessarily diminish and recede in the near future.”
Irving Fisher, leading U.S. economist, The New York Times, Sept. 5, 1929:
“There may be a recession in stock prices, but not anything in the nature of a crash.”
And on 17, 1929:
“Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months.”
W. McNeel, market analyst, as quoted in the New York Herald Tribune, Oct. 30, 1929:
“This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan… that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years.”
Harvard Economic Society, Nov. 10, 1929:
“… a serious depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall.”

Love it! Been hearing a lot of similar nonsense lately.

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if mortgages are harder to get, im absolutely sure its not because of cautious borrowers.

That point could come though. They're already having to teaser rates to record lows to try and find last of the buyers.

You know, the buyer victims who forever have outbid my family and friends by 10s and 100s of thousands of pounds. No one in my family will be buying at these stupid high prices vs incomes / income prospects.

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From the BBC:

http://www.bbc.co.uk/news/business-30024257

Right. Because personally I was crapping myself about buying a house without knowing what was happening with Scotland. Now I know they're still with us, I'll go and stretch myself to the limit on debt to buy a shoe box.

We don't need more props to save the market. We need more referendums.

Simon Rubinsohn, chief economist at Rics, said that potential buyers across the UK were being a "little more cautious" owing to stricter rules surrounding mortgage applications.

Other surveys have suggested that fears of a potential rise in interest rates had curtailed some demand from buyers.

Neither of the 2 fears quoted are going to go away so how do they think things are going to get any better,

Another fear will be near or static wage rises, especially when the employers start taking recent inflation stats into account.

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Tuesday, 18 September 2007

'10% chance' of house price crash

There is a one in 10 chance of a 1990s-style housing market crash in the UK, according the Royal Institution of Chartered Surveyors (Rics).

Rics has lowered its expectations for house prices over the next 12 to 15 months to no change from 3% growth.

http://news.bbc.co.uk/1/hi/business/7000598.stm

No obvious trigger again vs insane high prices... ?

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RICs guy + views from

Matthew Pointon, property economist, Capital Economics
Martin Ellis, housing economist, Halifax
Richard Donnell, research and insight director, Hometrack
Scott Corfe, head of macroeconomics, the Centre for Economics and Business Research
Lucian Cook, director of residential research, Savills
Robert Gardner, chief economist, Nationwide

http://www.ibtimes.co.uk/uk-house-prices-slowdown-what-housing-market-experts-think-1474705

It's really hard to be sure what explains the slowdown. It may be that people perceive that credit has been less available thanks to the FPC announcements and so on, but if you look at the availability of credit it hasn't actually tightened that much. But that may not be the perception.

There are two sides to the lending equation... I'm not interested in buying at bone-head high prices, even if other VI complacently think are fairly valued, even if there are teaser deals of 0.99% out there. No explanations necessary - just need consequences of malinvestment to begin hitting the market and on those who have expected forever hpi / equity locked in forever.

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Outlook doesn't seem that good for those expecting a 'champagne-super-ripple' from London, to regions as far out as Sheffield - imo - at this early stage of London stalling.

The data also showed new buyer demand slipped for the fourth consecutive month, with London bearing the brunt of the decline, with 62 per cent more surveyors reporting a fall in demand in the capital. The rest of the UK recorded a net balance of -18 per cent.

As a result of the weaker trend in buyer interest, sales expectations are at their lowest point since the start of the year.

http://www.thisismoney.co.uk/money/mortgageshome/article-2832801/House-price-growth-slows-weakest-level-18-months-driven-largely-widespread-falls-London.html

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Outlook doesn't seem that good for those expecting a 'champagne-super-ripple' from London, to regions as far out as Sheffield - imo - at this early stage of London stalling.

I've posted about this anecdotal before: a friend who works in an investment bank (not a banker) was encouraged by his wife to buy a second property. According to her they were lucky that as a perk of working in the investment bank they got free financial advice. The advice they received (early this year) was that there was a small window of opportunity to be able purchase a 2nd property given their circumstances. I didn't have the nerve to ask why this was. Maybe MMR, I don't know. So they bought a half million pound house an hour's commute from London, where their rental property is and where he works. They were very pleased with themselves. As this completed in spring I'd say it looks like it was possibly bought at peak prices. Despite the fact they are good friends I'd be happy if the value dropped significantly as I am on the "other side of the trade".

Edited by ticket2ride

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I've posted about this anecdotal before: a friend who works in an investment bank (not a banker) was encouraged by his wife to buy a second property. According to her they were lucky that as a perk of working in the investment bank they got free financial advice. The advice they received (early this year) was that there was a small window of opportunity to be able purchase a 2nd property given their circumstances. I didn't have the nerve to ask why this was. Maybe MMR, I don't know. So they bought a half million pound house an hour's commute from London, where their rental property is and where he works. They were very pleased with themselves. As this completed in spring I'd say it looks like it was possibly bought at peak prices. Despite the fact they are good friends I'd be happy if the value dropped significantly as I am on the "other side of the trade".

So I am hoping we have already had the main ripple. The reflation, yield chasing, belief in the most simpleton reasoning for forever HPI, seems to have so quickly led to a frenzy of repeat malinvestment (run up to 2007) with all lessons forgotten. Positions like that must have been repeated many times over past 2 years.

Would not surprise me the banks pulling their own complacent workers (bankers and just support staff) into it, leveraging up - maybe a test to sort the smart from the dumb - they can be replaced, if we get hpc. If, as some suggest, hpc is what the banks eventually want, for fresh volume lending. These buyers of past couple of years of the type you outline, their positions are so extreme on the other side, doubling down at half-million pounds as a 'smart' move investment, treating money/debt as an irrelevance vs property, to my own cautious outlook, not seeing value whatsoever.

There's a 50 year+ old solicitor practising in Central London, one of the main senior partners in his firm, decades of specialising in property, who is caught up with loads of BTLs with West Brom, hoping the class action will go his way. Oblivious to such tightening behind the scenes, others been doubling down to worship property.

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