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Grommit

1989 Flashback

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Sorting out papers in my office, I came across some cuttings from the Sunday Times, 8th January 1989. I thought I would share a few snippets. I'm off for a week, but when I get back I'll scan them if I get a chance. I have not got time to type the whole article, but here are a few of the paragraphs. Do we recognise any of this?? History is a very good teacher.

HEADLINE "Healthy sales show life exists after the boom"

Home owners cannot expect the huge gains of 1988 in their property values, says Kerry Stephenson (journalist??), but the market continues to tick over.

"The £100,000 property which gave home owners a windfall of £1,000 a week capital gains in 1988 may only yield a modest £100 or £200 a week this year. Building Societies say the property boom is over. House builders are working harder to sell their wares. Yet some agents are still reporting brisk business"

"But even those agents who conceded that prices have swung in the buyer's favour say that this is seasonal and varies according to where you live"

"Agents are cautious rather than pessimistic about 1989 price levels, which the Halifax Building Society predicts will rise on average by 5%"

"London agents Foxtons believe that there is almost a collective wish to see the market plummet. When Black Monday arrived pundits said the market would suffer. It didn't. When interest rates jumped, again more dire predictions, but no drastic downturn. Slower sales, yes, but no crisis".

"In surrey, estate agents Carson & Co even report a record turnover in November. Developers such as Berkely Homes and Westbury say their sales are holding up so strongly they are expanding their number of offices."

"This indicator (National Housebuilding council's indicator of Ability to Buy) suggests that first time buyers in London especially, are feeling the heat. There is now speculation that some new starter homes prices will have to be cut by 10%. This reduction will not necessarily feed through to higher priced properties, although chain breaking rather than gazumping may be the buzzword this year".

"Building Society statistics show the number of new borrowers dropped by 50,000 in the last few months of 1988 compared to 1987. Even allowing for the fact that the banks are seducing customers, it is evidence that sales are down".

And now from the Times, January 11th 1989

"Property Vision, which acts for buyers, expects that the lower and middle sections of the market will look slightly sick this year. It says "At the top end of the market, while the excesses of last year may take a bit of time to be digested, there will be a firm market, even if it does not reach the frenzied state of 1988. The second rate will go back to commanding second rate prices, whereas the very small amount of quality will be as desireable as ever".

These are examples of what was being said in early 1989. The maps and figures that the Sunday Times posted were still saying price growth static or positive for most regions in the prior three months (i.e. last quarter 1988) with a spread of annual growth rates between +10% to +60% (East Midlands).

Finally a bit of up to date local stuff from a nice town in South Bucks. Mrs Grommit is watching properties like a hawk round here. Just this week, we have seen a few significant price reductions on houses that look pretty much OK. One she is watching has now dropped from £950k down to £825k over the past 9 months. One next door(ish) to us has just gone from £875 to £825. She used to work as an EA for a while years back and has been less convinced than me about the need to be out of the property market for a while. This week around here has changed all that, the changes in the market are slow and subtle. We may have gone for the £950 house last summer, glad we didn't.

Everyone have a good week. I'm off to Italy!!

Grommit

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HEADLINE "Healthy sales show life exists after the boom"

Home owners cannot expect the huge gains of 2004 in their property values, says Kerry Stephenson , but the market continues to tick over.

"The £100,000 property which gave home owners a windfall of £1,000 a week capital gains in 1988 may only yield a modest £100 or £200 a week this year. Building Societies say the property boom is over. House builders are working harder to sell their wares. Yet some agents are still reporting brisk business"

"But even those agents who conceded that prices have swung in the buyer's favour say that this is seasonal and varies according to where you live"

"Agents are cautious rather than pessimistic about 2006 price levels, which the Halifax Building Society predicts will rise on average by 5%"

"London agents Foxtons believe that there is almost a collective wish to see the market plummet. When Black Monday arrived pundits said the market would suffer. It didn't. When interest rates jumped, again more dire predictions, but no drastic downturn. Slower sales, yes, but no crisis".

"In surrey, estate agents Carson & Co even report a record turnover in November. Developers such as Berkely Homes and Westbury say their sales are holding up so strongly they are expanding their number of offices."

"This indicator (National Housebuilding council's indicator of Ability to Buy) suggests that first time buyers in London especially, are feeling the heat. There is now speculation that some new starter homes prices will have to be cut by 10%. This reduction will not necessarily feed through to higher priced properties, although chain breaking rather than gazumping may be the buzzword this year".

"Building Society statistics show the number of new borrowers dropped by 50,000 in the last few months of 2005 compared to 2004. Even allowing for the fact that the banks are seducing customers, it is evidence that sales are down"

:lol::lol::lol:

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Journalists, economists, investors and polititians are consistently making plain wrong predictions - but that doesn't stop them making even more wrong predictions and arrogantly trumpeting their opinions as fact.

I've worked with these over-confident and delusional types in IT - they make endless bad decisions but will never admit they were wrong, and when it finally catches up with them they move onto another project to do it all over again. Very dangerous people to have in your company, especially if they weasel themselves into important jobs.

The truth is no-one knows what's round the next corner. You need to base your decisions on your own observations and make a choice either way. Anyone relying on suspect newspaper headlines or the opinions of potentially deluded journalists when taking the biggest financial gamble of their life is crazy.

Edited by HPCheese

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This makes interesting reading

Copyright 1989 Guardian Newspapers Limited

The Guardian (London)

March 22, 1989

Halifax gloomy despite big profit

By TERESA HUNTER

The 1988 property boom helped the Halifax Building Society to a record year, with net lending increasing by 73 per cent, pushing profits up 32 per cent to Pounds 461 million.

The society also increased its market share with the Halifax now lending one in seven mortgages.

But a sharp turnaround in the mortgage market in the final quarter of the year has left the Halifax even more gloomy about the prospects for the housing market over the coming twelve months than it was a month ago. It believes that on average there will be no increase in house prices across the country, whereas in February it predicted national house price rises of 5 per cent by the end of 1989.

Halifax chairman, Richard Hornby, warned of a difficult year ahead: 'Interest rates will be higher and real income growth lower. These point to a slower growth of lending. There will be little change in national house prices between the beginning and end of 1989, but we foresee significant regional variations.'

House prices would fall in Greater London, the South-east and East Anglia but continue to rise in parts of Humberside and Yorkshire, giving an average national rise of 'nought'.

The Halifax's annual results compare favourably with a 17.5 per cent increae in profits by its major competitor the Abbey National, which earlier this month reported a 31 per cent increase in net lending.

Whhile stockmarkets remain uncertain, savings have flooded into building societies. Deposits with the society increased by 59 per cent to Pounds 5,055 million during the year to January 31.

The rapid depression of the housing market after intererest rate increases pushed the Halifax's recently acquired estate agency chain into the red. The society has spent Pounds 167 million on 611 estate agency branches.

It declined to say how much the estate agencies had lost, but its various subsidiaries made a combined loss of Pounds 3 million.

More to follow.....

As does this...

Copyright 1989 Times Newspapers Limited

The Times (London)

March 12 1989, Sunday

Issue 8587.

753 words

Northern lights lead the charge; Property

CAROLINE MCGHIE

SOUTHERNERS huddled around the cooling embers of last year's property boom might shiver all the more to hear that home fires are burning merrily throughout northern England.

The north is still flushed with last year's price rises, still talking about them with the same frequency they discuss the weather, and is absolutely confident of a strong market in the year ahead.

Figures to be published by the Halifax Building Society next month are likely to show that the north is the only area of the country which is not dawdling in this quarter. Approximate rates of increase for the 12 months to March will show that house prices in the north have gone up by 25%, in Yorkshire and Humberside by 45%, and in the northwest by 30% to 35%.

'It is quite a clear picture. People think the market is all about London. Anyone who looks at the market in depth knows that isn't the case, ' said Gary Marsh, manager of the Halifax research unit.

Some towns such as Sunderland felt the first heat of the boom as recently as two months ago. Few tears are shed for southern colleagues. 'It's our turn. We can hardly believe it. We haven't seen price rises like this for so long we have forgotten what it is like, ' is what they say.

This boom lacks the vicious nature of its southern counterpart. It hasn't yet caused serious hardship for first-time buyers. Neither has it panicked people into borrowing mortgages the size of telephone numbers.

The Halifax research shows that throughout the area the house-price-to-income ratio is between a manageable 3.2 and 3.8. In East Anglia it is 5.5 and in the southwest house prices are as high as six times the incomes of the buyers. With average house prices in the north about Pounds 40,000 and salaries not lagging so far behind the rest of the country, the area obviously represents good value for money.

The ripple effect from the south has not been the only factor. Falling unemployment and economic recovery have teased up the flames of the boom. Christopher Orme, of Strutt and Parker's Harrogate office, talks about 'serious salaries' coming into play.

Commercial office space in Leeds, the financial heart of the north, is now hard to get.

Unemployment in Yorkshire and Humberside has dropped from 10.6% of the adult population last January to 8.3% this January. (Harrogate has a figure as low as 4% though unemployment in Rotherham sticks at more than 16%). In the northwest too, unemployment has fallen from 14.1% to 9.6% between June 1986 and January this year.

Newcastle and its commuter belt out towards Hexham are now positively expensive. Wallheads Nationwide Anglia has nothing left for under Pounds 30,000 and you pay Pounds 115,000 for a four-bedroom estate house. Newcastle's strong market means derelict land and office space are being snapped up.

Blackhorse Agencies says an estate house here costs Pounds 115,000 though there are still Pounds 25,000 terraced houses in the bleak West End.

Really cheap houses are still to be had in Sunderland, where Wallheads has had a scramble for houses in the past two months. Price increases of 2% a quarter have billowed to 10% in the past two months.

You can still get a little three-bedroom house with solid fuel central heating in Seaham or Murton for under Pounds 10,000. The Hartlepool estate agents Norman Hope & Partners say the equivalent can be bought in Stockton or Middlesbrough though four-bedroom detached houses cost Pounds 85,000.

The poorer inner-city areas of Hull have also taken off in the past few months, following the lead of the smarter suburbs to the west and north. Houses are being bought almost overnight from agents Dickinson Davy & Markham.

Unmodernised wrecks still cost Pounds 12,000 at auction but modernised they command more than Pounds 20,000. Four bedrooms and a double garage cost about Pounds 120,000.

In the northwest sellers are still reeling from the 50% increases last year. Thirties semis now cost around Pounds 55,000 in Blackburn and sell within two weeks according to Geoffrey Taylor & Co. There are houses for Pounds 5,000 to Pounds 7,000 in Blackburn, Accrington and Burnley.

G A Property Service in Carlisle and Penrith has had similar increases in prices. A modern large detached house in a village near Carlisle might cost Pounds 125,000 while the bread and butter terraces fetch Pounds 18,000. Penrith, closer to the Lakes, is slightly more expensive though you can still buy a barn here for Pounds 30,000.

An absolute gem this one :lol:

Copyright 1989 Newspaper Publishing PLC

The Independent

February 10 1989, Friday

Business and City ; Pg. 22

High interest rates 'could bring down house prices'

high interest rates may lead to a fall in house prices in real terms, as well as bringing about a reduction in activity in both the housing and mortgage markets, the Bank of England says in the Quarterly Bulletin.

However, it points out that house prices have seldom fallen in nominal terms and the last time it happened was in the early 1950s. The reason is that potential sellers tend not to lower prices but to hold out longer or withdraw their houses from the market.

One consequence of slowdown in the housing market is likely to be an improvement in labour mobility, the Bulletin says. This is because there would be a narrowing in regional house price differentials

Although the growing sensitivity of households to interest rate changes suggests that the rate of growth in consumer spending will slow significantly this year, the Bulletin says it is hard to gauge the precise impact. Although past buoyancy of spending was related to housing activity, there are reasons for doubting that there are strong direct links between the housing market and spending on non-durable goods and services.

ho hum

Copyright 1990 Guardian Newspapers Limited

The Guardian (London)

March 7, 1990March 7, 1990

276 words

Houses selling at basement prices

By LARRY ELLIOTT, Economics Correspondent

THE annual rate of house price inflation fell from 3 per cent to 1.6 per cent last month its lowest for eight years as high interest rates continued to sap confidence from the property market, Halifax Building Society said yesterday.

According to the society's monthly index, house prices rose by 0.3 per cent in February, well down on the increase in the same month last year.

Although the monthly increase was the first since July last year, the Halifax said the downward trend had not been arrested and it expected prices to remain depressed for the rest of 1990 before recovering next year.

House prices normally recover in February after dropping in January, and prices fell by 0.3 per cent on a seasonally adjusted basis, according to the index. Halifax economists believe the increase in mortgage rates announced in mid-February will further deter potential buyers, particularly since an early cut in bank base rates is so improbable.

Prices are still under greatest pressure in southern England but the rapid increase in the North-west, Yorkshire and Humberside last year is almost played out.

New home prices have been particularly hard hit by the high interest rates. Prices fell by 0.4 per cent last month and were on a par with those of a year ago.

Developers who started to build in the boom conditions of 1988 have found few buyers, forcing them to slash prices.

But, with mortgage lenders striving to attract young customers, prices for first-time buyers rose by 0.4 per cent last month.

In the next few months, the Halifax expects house prices to fall in actual terms for the first time since 1982.

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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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