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lewissheridan

Bbc News - Housing Market 'to Slow In 2006'

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Did anyone see this item @ bbc.co.uk/news ?

The housing market will slow in 2006 but will not crash, according to an economic think tank.

The Centre for Economics and Business Research (CEBR) forecast house prices would rise by 4.4% in 2006, compared to 5.1% growth in 2005.

Last summer's interest rate cut will buoy the market in early 2006 but later in the year a slowing economy will hit house prices, the group predicted.

But a crash will not happen as housing demand exceeds supply, the CEBR said.

Forecasts

We expect activity in the housing market to remain buoyant through the first half of 2006

Jonathan Said, CEBR

The CEBR's forecast is roughly in line with those issued by banks and building societies.

Halifax, the UK's biggest mortgage lender, and Nationwide both said prices would rise by 3% during 2006.

But market sceptics, such as Capital Economics, have predicted a small fall in house prices in 2006, as a prelude to bigger drops in 2007 and 2008.

But the majority of forecasters agree with the CEBR that the first half of 2006 will probably see renewed vigour in the housing market but that this strength will start to ebb away later in the year.

"We expect activity in the housing market to remain buoyant through the first half of 2006 supported by a relatively benign macroeconomic environment," Jonathan Said, economist at the CEBR, explained.

"But the market may weaken in 2007. A slowdown in the US housing market will threaten world economic growth next year; this will have a knock-on effect here in the United Kingdom, and we expect this will take a further edge off our property market," Mr Said added.

Longer term, though, the group noted that house prices will be supported by demand for property continuing to outstrip supply.

What do people think of this analysis ? Seems to be a thing about the supply not meeting the demand therefore no crash, no significant drops, and a continual steadying of prices with an overall estimate of a 4.4% increase in 2006!!

How high is high ? how on earth can first-time buyers possibly afford to buy ? I can't work it out, funnily enough everyone I know who are older than me think it's right for house prices to be this high!!

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Did anyone see this item @ bbc.co.uk/news ?

What do people think of this analysis ? Seems to be a thing about the supply not meeting the demand therefore no crash, no significant drops, and a continual steadying of prices with an overall estimate of a 4.4% increase in 2006!!

How high is high ? how on earth can first-time buyers possibly afford to buy ? I can't work it out, funnily enough everyone I know who are older than me think it's right for house prices to be this high!!

If property is clearly out of reach from many FTBs & a growing number of BTLr's who's going to keep buying ???

Noddy ?

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This supply vs demand argument gets used far too much. If the average house price was £1m with the average salary at £24k the VIs would still say "Demand outstrips supply, so no crash".

If there was more demand than supply why is there so many dam properties on the market???

I check rightmove now and again, and the number of properties coming on the market has been incredible (I get those e-mail updates). Also, i'm finding I have to look though about 50% more pages to view the properties...

I will, however, agree that more single-person housholds does reduce supply/increase demand, so the prices may not fall back to the long term average, but will level out slightly above. Maybe.

Edited by Jason

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There's more rich folk than ever before, with more money than ever before and they will keep buying property. All it needs is the 20% who own 80% of the wealth to keep buying and the market will stay up.

If globalisation continues to happen and the wages of the average person/economic immigrant tend to fall, then it isn't going to help their buying position is it ?

Maybe, people may have to wait along time before they can buy a property, but until they can they will have to rent, which just supports the whole BTL propsition - just reinforcing the view of those rich folk buying all that property.

It may well be that you have to wait to inherit money, before you can afford to buy and if you don't then you may well have to rent for life. I guess it means that people should work and save hard all their lives so that they can give a leg up to the generation that follows - a bit old fashioned an idea eh ?!

It might not be fair, but it's how life used to be in previous generations. It may be we are returning to the long term trend of being a renting society - I think there are a few posters on here who also believe that.

Ho hum, life goes on I guess.

:D

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This supply vs demand argument gets used far too much. If the average house price was £1m with the average salary at £24k the VIs would still say "Demand outstrips supply, so no crash".

If there was more demand than supply why is there so many dam properties on the market???

I check rightmove now and again, and the number of properties coming on the market has been incredible (I get those e-mail updates). Also, i'm finding I have to look though about 50% more pages to view the properties...

I will, however, agree that more single-person housholds does reduce supply/increase demand, so the prices may not fall back to the long term average, but will level out slightly above. Maybe.

Exactly. Demand may outstrip supply, but if those who are 'demanding' property can't afford to buy it, then it doesn't matter. In a hypothetical situation, if all studio flats cost £2 million, and all FTBs earnt £24,000 pa then even if they all WANTED to buy a studio flat that still wouldn't mean banks would lend them the money to do so. Of course, it's far more likely they'd all then decide just to stay home with Mum and Dad in their spare room (which is actually the same size as the studio flat anyway).

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There's more rich folk than ever before, with more money than ever before and they will keep buying property. All it needs is the 20% who own 80% of the wealth to keep buying and the market will stay up.

If globalisation continues to happen and the wages of the average person/economic immigrant tend to fall, then it isn't going to help their buying position is it ?

Maybe, people may have to wait along time before they can buy a property, but until they can they will have to rent, which just supports the whole BTL propsition - just reinforcing the view of those rich folk buying all that property.

It may well be that you have to wait to inherit money, before you can afford to buy and if you don't then you may well have to rent for life. I guess it means that people should work and save hard all their lives so that they can give a leg up to the generation that follows - a bit old fashioned an idea eh ?!

It might not be fair, but it's how life used to be in previous generations. It may be we are returning to the long term trend of being a renting society - I think there are a few posters on here who also believe that.

Ho hum, life goes on I guess.

It does,..... and....

Oh,..... my ...... god..

thank you..

bless you.. I see it all now..

bless..

Just want to destroy one part of your argument..

Read it..

If youneed my assistance.. if anyone does..

man I am drunk.. lol..

and..

ahhhhhhaaaaaaaaaaaa hhhhaaa hhhaaaaaaaaaa hahah hhahhhaa

bless you :D

Okay.. think sober.

If as they say that the up north bits are a year behind the south in the market then cool.

you have not seen it yet.

trust me, in the last year in Devon you will not be singing your tune.

trust me.

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Exactly. Demand may outstrip supply, but if those who are 'demanding' property can't afford to buy it, then it doesn't matter. In a hypothetical situation, if all studio flats cost £2 million, and all FTBs earnt £24,000 pa then even if they all WANTED to buy a studio flat that still wouldn't mean banks would lend them the money to do so. Of course, it's far more likely they'd all then decide just to stay home with Mum and Dad in their spare room (which is actually the same size as the studio flat anyway).

The idea that the supply and demand balance sets the price of something is easy for people to grasp and so they think they understand the market.

What's not discussed enough is the different kinds of demand. In the housing market there is both housing demand (the desire to live somewhere) and speculative demand (the belief that prices are rising). The combination of these two kinds of demand led to very high prices in the last few years. But how much of the demand was speculative?

Speculative demand is not just confined to the activity of property flippers etc. It includes any process whereby people's belief in rising prices leads them to pay higher prices. So, for example, every single example of an FTB over the last few years paying an extra 5 or 10k to ensure they "got on the ladder" is a case of speculative demand. Most people's gut feeling, when they think back over recent history, anecdotes, TV and other media hype etc. will be that a large part of recent demand has indeed been speculative.

Of course the important point is that speculative demand can evaporate as soon as people stop believing in rising prices.

frugalista

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I really do not know why anyone takes the slightest notice of ANY "official" report about property. Such reports are nearly always commissioned or "researched" by entirely vested interests, and frankly the people doing them have no more grasp on relevant info than the average poster on this forum, and sometimes a good deal less.

I'm thinking of forming my own think tank and calling it "The Institute of Housing Policy Research". I'll buy a degree from a Canadian quick-buck "university"....(a degree in Housing Resource Management!) and call myself the Chief Economist. Then I can send anything I like to the BBC, Channel Four and any newspaper and they will publish it immediately, with no ring-back to check my facts, research, qualiifications or even whether my organisation exists at all.

I simply do not know how all these surveys manage to earn so many people a good living. You might as well have a nation of Mystic Megs for all it is worth.

Pure fluff and not worth the paper it is written on.

VacantPossession

Edited by VacantPossession

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I really do not know why anyone takes the slightest notice of ANY "official" report about property. Such reports are nearly always commissioned or "researched" by entirely vested interests, and frankly the people doing them have no more grasp on relevant info than the average poster on this forum, and sometimes a good deal less.

I'm thinking of forming my own think tank and calling it "The Institute of Housing Policy Research". I'll buy a degree from a Canadian quick-buck "university"....(a degree in Housing Resource Management!) and call myself the Chief Economist. Then I can send anything I like to the BBC, Channel Four and any newspaper and they will publish it immediately, with no ring-back to check my facts, research, qualiifications or even whether my organisation exists at all.

I simply do not know how all these surveys manage to earn so many people a good living. You might as well have a nation of Mystic Megs for all it is worth.

Pure fluff and not worth the paper it is written on.

VacantPossession

Brilliant! Do it. Just add the words "and Socio-economic" after "Policy" and before "Research" to ensure the left leaning, financially illiterate (innumerate?) media such as the BBC and certain papers and other media outlets feel more comfortable publishing your stuff and you are away!

I am sure you could ask HPCers to contribute to your first paper...

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There's more rich folk than ever before, with more money than ever before and they will keep buying property. All it needs is the 20% who own 80% of the wealth to keep buying and the market will stay up.

If globalisation continues to happen and the wages of the average person/economic immigrant tend to fall, then it isn't going to help their buying position is it ?

Maybe, people may have to wait along time before they can buy a property, but until they can they will have to rent, which just supports the whole BTL propsition - just reinforcing the view of those rich folk buying all that property.

It may well be that you have to wait to inherit money, before you can afford to buy and if you don't then you may well have to rent for life. I guess it means that people should work and save hard all their lives so that they can give a leg up to the generation that follows - a bit old fashioned an idea eh ?!

It might not be fair, but it's how life used to be in previous generations. It may be we are returning to the long term trend of being a renting society - I think there are a few posters on here who also believe that.

Ho hum, life goes on I guess.

:D

But you're missing an important point - people need housing. And those people who need housing may not always be in a position to pay for the rent. When a large amount of wealth and assets are concentrated in the hands of the few the social obligation and responsibility of those few is great. And people complain about taxes now! Just wait until the 'have not' generation is ageing and needy! Maybe you'll look back on these years in a slightly more enlightened way...

Ho hum, life goes on I guess.

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  • 343 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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