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underpressuretobuy

Motley Fool Article On Sky News

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Apologies if another HPCer has already spotted this but I was shocked by this article.

Firstly because the headline 'House Prices to Rise in 2006 & 2007' are so much like everything else we see in the press.

Secondly because this article is obviously based on a press release from the Council of Mortgage Lenders -but the journalist has actually decided to argue with what they are saying!

The result is a surprisingly bearish article. :D

Surprising Sky News Article

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The fact that net lending has been DECLINING for the last few years says it all. Down from 101bn to 75bn in just 3 years. That's 25% of their business dissappearing. The mortgage market is simply shrinking and not booming as the CML are trying to have the sheeple believe.

Deception abounds thse days? :angry:

Edited by Realistbear

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Wasn't this written by Cliff D'Arcy?

He's a HPC beliver, a very large percentage of his writing is trying to convince the masses that there will be a HPC. He's also an STRer and one of the few journalists who challenge the usual spin. He has probably titled it this way to get the attention of BTLers and FTBers that are about to take the plunge (lets face it, he doesn't need to convince us of a HPC).

I wouldn't be at all supprised if he visits this site.

BBC economics editor Evan Davis is the only other person I can think of to do the same.

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I while back Evan Davis wrote a very good piece on the BBC web site about why everytime retail sales fall, it isn't obligatory / desirable for the BOE to lower rates.

A pitty the rest of his team (He's Economics Editor IIRC) don't produce stuff of the same quality.

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Since the New Year Sky News has been increasingly bearish on UK property prices with several items arguing against the VI line. Probably why they are the News channel of the year!

Unfair to say it's just this year. MF seem like a bunch you know what's what.

There was an atricle 12th May 2005:

When I'll Buy Property

Report by Maynard Paton

The property market is just like any other. It has its bull and bear phases and can succumb to excessive greed and fear in equal degree. In my opinion, the current boom looks to have ended and it's only a matter of time before we see some real pain. As someone renting a house, I'd obviously like to return to homeowning when the market hits rock bottom. Here are the statistics I'll be monitoring:

1. House price to income: According to the Halifax, the average UK property in May 1989 -- the top of the last housing boom -- was worth £70,246 and equivalent to five times the average salary. But by March 1996 -- at the start of the current bull run -- the average price had fallen to £62,835 and the income ratio had fallen to three times.

Halifax data indicate the average house price in 2004 was £162,493 and was worth 5.4 times the average wage. If history repeats itself, house prices could again fall to just three times salaries -- at which point I'd be rushing to re-enter the market. I reckon a multiple of three times salaries could see the average UK home valued at around £110,000 within the next seven years.

2. Repossessions: You'd have been hard-pressed to find a repossessed home last year. According to the Council of Mortgage Lenders, there were just 6,230 -- the lowest number since 1981 and representing a tiny 0.05% of the country's 11.5m outstanding mortgages.

But back in the dark, recessionary days of 1991, 75,540 properties were repossessed -- equivalent to 0.77% of the country's then 9.8m outstanding mortgages. Sounds callous I know, but in hindsight the distressed homeowners of the early Nineties offered great opportunities to buy property on the cheap. Thus I'd ideally like to return to the property ladder when mortgage defaults revisit the levels of 1991 -- 0.77% of today's outstanding mortgages equals 89,000 repossessions.

3. Mortgage equity withdrawal: One particular phenomenon of a property boom is the mass conversion of housing equity into cash (or in reality, debt). According to the Bank of England, borrowed money secured on housing -- but not spent on housing -- ran at 7.7% of national post-tax income during the late Eighties boom. So-called 'MEW' then reached a new peak of 8.6% in late 2003.

However, the intervening years saw much less in withdrawals. Indeed, having been scarred by the effects of negative equity in the early Nineties, homeowners on aggregate made additional payments to reduce their mortgages during 1995 and 1996. In effect, the rate of equity withdrawals fell below 0%!

When today's homebuyers call a halt to their debt binge and start reducing their borrowings, I reckon that could be a great time to borrow heavily and go house hunting. I'll therefore be visiting the Fool Mortgage Centre and local estate agents when the MEW rate slumps back to 0%

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I went to an event last week where Evan Davis spoke for about an hour regarding the state of the economy over the next year.

In short, his view was 'about two thirds optimistic and about one third pessimistic'.

It was a very good talk, but he didn't mention house prices at all.

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I went to an event last week where Evan Davis spoke for about an hour regarding the state of the economy over the next year.

In short, his view was 'about two thirds optimistic and about one third pessimistic'.

It was a very good talk, but he didn't mention house prices at all.

I have to admit that Evan's articles are far less frequent, but he is also a STRer. He wrote an article about a 18 months ago called 'Why I'd like a house price crash'. He certainly approaches the subject in a far more calm manner than Cliff D'Arcy, which (IMO) makes him a better journalist to convince the masses of a HPC. Sometimes I feel that Cliff's articles are too much (if your reading Cliff, I still love ya!).

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BBC economics editor Evan Davis is the only other person I can think of to do the same.

He's great. Didnt he do an article on why HPI is not a good thing? :unsure::unsure::unsure::unsure:

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  • 302 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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