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Estateagenttoday: Price correction to hit parts of UK as expert warns “Don't buy at peak”

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Price correction to hit parts of UK as expert warns “Don't buy at peak”

28 August 2018

https://www.estateagenttoday.co.uk/breaking-news/2018/8/warning-of-a-correction-to-come-and-dont-buy-property-at-peak-price

 

A property management company is warning that some areas of the UK could be in line for a price correction this autumn - and that purchasers should be careful not to buy at peak price.

“I think some areas are now facing a correction in prices” warns David Alexander of property management firm D J Alexander.

Although he says this will not be as bad as at the time of the financial crisis in 2007 he adds that investors need to be aware of the wide variations in prices across the UK “and tailor their spending accordingly.” 

And he adds: “You wouldn’t invest in a share that was at its all-time peak so equally I would caution against buying property that was at its highest ever level.”

His company has analysed house price movements over the past 20 years and says it’s a story of two halves. 

Average house price growth from June 1998 to September 2007 was an eye-watering 172.4 per cent; but there’s been an increase of only 20.2 per cent in the 11 years to June 2018.

Across the countries of the UK the greatest increase recorded was in England which saw average property prices rise by 25.8 per cent between September 2007 to June 2018 with Scotland next at 5.7 per cent and Wales at a mere 5.2 per cent. 

Within the English regions there were considerable differences in increases with London the highest rising by 59.8 per cent since September 2007.

Eastern England increased 39.9 per cent and the South East by 36.4 per cent;  Yorkshire and Humber average property prices have risen by 7.6 per cent over the same period and in the North East prices have actually fallen 7.9 per cent. 

“I think that most people would be surprised to find that the average house price has risen by just 20.2 per cent since September 2007” says David Alexander. 

“Given the time it took to climb back from the 2007 price fall it is interesting to note that many areas of the UK have not experienced large price increases and there is less fervour and frothiness to the marketplace compared to the early noughties” he says - although he notes that this is not the case across the whole of the UK “and some areas clearly look a bit top heavy with prices having increased substantially once more.”

He says there are clear signs of the market flattening in London and the South East and he warns: “I would expect this to continue for some time to come, perhaps even a few years as prices correct and become more in line with the marketplace and with reality.”

While the rest of the UK may not be as bad - and he highlights Edinburgh and Manchester as bucking the trend and likely to see good price growth - he says there are lessons from the past which show that high price rises are not always good.

“The enormous growth in average property prices between June 1998 and September 2007 – which was as high as 218.7 per cent in the South West to 180.3 per cent in the South East – was not a healthy period for the property market as it created a view that property could never fail” he believes. 

“The seven-year period before prices recovered from the 2007 fall is an indication of just how out of kilter these prices were with the marketplace” he concludes. 

DJ Alexander was established in 1982 by David Alexander and currently manages over 5,000 properties.

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14 minutes ago, rantnrave said:

Average house price growth from June 1998 to September 2007 was an eye-watering 172.4 per cent; but there’s been an increase of only 20.2 per cent in the 11 years to June 2018.

In other words: eye watering increase followed by pumped (re)inflation since.

So eye-watering is the new norm.

Till it isn't.

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6 hours ago, rantnrave said:

Price correction to hit parts of UK as expert warns “Don't buy at peak”

28 August 2018

https://www.estateagenttoday.co.uk/breaking-news/2018/8/warning-of-a-correction-to-come-and-dont-buy-property-at-peak-price

 

A property management company is warning that some areas of the UK could be in line for a price correction this autumn - and that purchasers should be careful not to buy at peak price.

“I think some areas are now facing a correction in prices” warns David Alexander of property management firm D J Alexander.

Nice find!

Good to see the industry press getting increasingly bearish :)

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DJ was head of the pre 2008 - you can't go wrong with property Edinburgh will never have a crash fanzone.

He was also in cahoots with a developer who was pushing Edinburgh "high end" property type sales. The company collapsed.

If you can be arsed searching this was a big topic of conversation on the Edinburgh sub section back in the day.

****** that's depressing. :lol:

But to be fair he seems to have been stung badly and at least has a semi reasonable view of things these days. the

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Could I be possibly be witnessing my first ever negative sentiment come self fulfilling prophecy price falls in my life in the next few years. Unlike a few others on here that might think rising rates, S24 or Brexit might be the downfall of the housing market I see them as but triggers, but negative sentiment, that's the baby, hard to reverse that bugger once it takes hold.

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Another similar headline in the guardian this morning. 

https://www.theguardian.com/business/2018/aug/29/one-in-three-chance-of-london-house-price-crash-says-expert-poll

'expert' sentiment seems to be changing to negative. 

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4 minutes ago, regprentice said:

Another similar headline in the guardian this morning. 

https://www.theguardian.com/business/2018/aug/29/one-in-three-chance-of-london-house-price-crash-says-expert-poll

'expert' sentiment seems to be changing to negative. 

Obviously Brexit paranoia but - International buyers put off by Brexit uncertainty could drive prices down 1.6% next year - imagine the horror of a massive 1.6% price crash. Can't bear the thought. 

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13 hours ago, inbruges said:

..... but negative sentiment, that's the baby, hard to reverse that bugger once it takes hold.

Sentiment and emotion are such powerful things when it comes to markets, they can drive or stop/reverse one quite easily.... and they are like container ships, not easy to turn, but when they do you know about it, and its hard to change back. 

 

Its what i've been waiting for a change in. And i'm now thinking August 2018 is the new peak (new August 2007)

 

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5 minutes ago, Monkey said:

Its what i've been waiting for a change in. And i'm now thinking August 2018 is the new peak (new August 2007)

Nationwide August data out on Friday - first chance to see if you're right...

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2 hours ago, rantnrave said:

Nationwide August data out on Friday - first chance to see if you're right...

It'll be up, but show a decline end of in Septembers report. If that makes sence

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6 minutes ago, bushblairandbrown said:

What is the motive for articles like this? If it was stocks I'd assume the author was shorting or had some put options. But I don't know a way of shorting the housing market other than not owning one. 

Please see my post above. He was one of the biggest cheerleaders pre 2008 in Edinburgh. Then got seriously stung. Im he is ok and still worth a serious whack - but I think he was caught out with his overwhelming arrogance at the time that he knew better then monkeys like us on sites like this. He found out he didn't.

Since then I've not read much of his stuff - a few bits here and there -  but for an EA he is generally fairly reasonable.

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1 hour ago, ccc said:

but for an EA he is generally fairly reasonable

Thought you'd be more scathing of him ccc! Seems to me like he's still up to his old tricks...

Quote

While the rest of the UK may not be as bad - and he highlights Edinburgh and Manchester as bucking the trend and likely to see good price growth - he says there are lessons from the past which show that high price rises are not always good

Disclaimer: I am one of a long list of people who have been been shafted by DJ Alexander at some point. He didn't even use lube...

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2 minutes ago, b_real said:

Thought you'd be more scathing of him ccc! Seems to me like he's still up to his old tricks...

Disclaimer: I am one of a long list of people who have been been shafted by DJ Alexander at some point. He didn't even use lube...

Fair enough :D

I just suppose I see him as less of a total tool than I did back in the day. That's a compliment for an EA - isn't it.

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1 hour ago, b_real said:

Thought you'd be more scathing of him ccc! Seems to me like he's still up to his old tricks...

Disclaimer: I am one of a long list of people who have been been shafted by DJ Alexander at some point. He didn't even use lube...

 

On 28/08/2018 at 12:29, rantnrave said:

Price correction to hit parts of UK as expert warns “Don't buy at peak”

28 August 2018

While the rest of the UK may not be as bad - and he highlights Edinburgh and Manchester as bucking the trend and likely to see good price growth - he says there are lessons from the past which show that high price rises are not always good.

 

It is interesting he says this at a time when the heat is coming out of the Edinburgh market, no not falling yet, but more flats selling via direct negotiation rather than having closing dates ;)

It is true the Edinburgh market tends to be more stable than UK overall.

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  • 149 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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