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January's Bump Analysed

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UK property is good value - if you have money to burn
Firstly, let's not get too carried away with the Nationwide figures. Hometrack's January survey, released on Monday, showed a tiny 0.1% monthly gain in house prices, and suggests that prices are still down 1% year-on-year.
And even if you take Nationwide's reading at face value, the average house price is still only at the same level as it was in July. The latest rise has merely clawed back the ground lost over the past six months.
The fact that the number of sales agreed fell by 13.7% over the month seems to back up the idea that prices have been pushed up by a small number of unusually expensive deals.
But there are only so many City bachelor pads and cottages in the Cotswolds one stockbroker can live in. And as for the buy-to-let option -
if they're all as smart as they'd like us to think they are, they'll be able to find far better places to invest their money. Like Japan for instance. Or gold
And for anyone who still thinks the housing market is in fine fettle, we'd refer you to the annual results from "specialist" mortgage lender Kensington.
As you can tell by the word "specialist", combined with the faux-posh name, Kensington is one of those companies that lends money to people that no one else will touch.
The group had a good year in 2005, because although gross mortgage lending fell by 4% across the year,
"the specialist mortgage market continued to grow faster than the overall mortgage market."
So to sum up, in 2006, you can expect to see more over-indebted people with poor credit ratings trying to pay off their overdrafts by putting their homes at risk of repossession. And all the while, unemployment is steadily grinding higher.
That doesn't sound like a recipe for rising house prices to us.

Shaky underpinnings? Who will run first when the market turns just a little south into negative equity territory? (If it isn't there already with the dodgy 125% shylock loans).

Edited by Realistbear

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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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