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Nationwide Warns That House Prices Have Hit 'turning Point'

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There is an interesting article in today's Observer business section about the Nationwide's view on the way the housing market is heading. In their view (shared by the Halifax's Chief Economist) we are at a turning point (interesting!). Of course the Estate Agents are still upbeat!

http://observer.guardian.co.uk/business/st...1739418,00.html

Britain's housing market is close to a 'turning point,' as the boost from last summer's rate cut wears off and high prices begin to bite, the Nationwide warns.

As the building society prepares to release its monthly house-price index this week, it says the winter mini-boom, which has seen five successive months of price rises, will fade before the summer.

'We're at a turning point,' said Fionnula Earley, Nationwide's chief economist. 'I think we are at the stage where affordability constraints are biting - and there are other things on the horizon that will stop people splashing out: higher utility bills, rising unemployment.'

She said Gordon Brown's move in last week's Budget to raise the stamp duty threshold by £5,000, to £125,000, would make little difference to home-buyers. 'It's not going to help at all,' she said.

Nationwide has forecast house price growth of 0-3 per cent for 2006. With the annual rate at 3. 7 per cent in February, that would mean a considerable slowdown in the latter part of the year.

Halifax chief economist Martin Ellis agreed that the pick-up was unlikely to accelerate into a long-term recovery. 'Things are treading water,' he said. 'People haven't got the spare cash to pump loads of money into the housing market.'

But, after a difficult 2005, estate agents are optimistic. 'Valuations are high, many new properties coming on to the market are selling like hot cakes,' said Christopher Hall, president of the National Association of Estate Agents, who predicted annual price growth of 5 per cent.

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Guest Winners and Losers

'Valuations are high, many new properties coming on to the market are selling like hot cakes

Who would have guessed! Not flying off the shelves now then, selling like hot cakes instead. Which is faster, shelves or hotcakes?

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Guest Winners and Losers

My local bakery just closed down.

They obviously were not selling BTL portfolio's - or hot cakes. ;)

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And the local EA has just had a buy in Spain week.

I don't know why when they have so many local houses for sale. Even the nice EA I talk to tried to sell me sh1t.

It's desperation time.

Edited by music man

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Guest Winners and Losers

And the local EA has just had a buy in Spain week.

:lol::lol:

Can't wait for the '75% off everything closing down sale week'.

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Of course the Estate Agents are still upbeat!

Quite so, the day estate agent's turn bearish is the day the four horsemen are upon us.

'Valuations are high, many new properties coming on to the market are selling like hot cakes,'

What happens if you're left holding a load of hot cakes?

Edited by BuyingBear

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This is very gloomy stuff from Nationwide. Obviously sanctioned from the top.

They sound very down.

Crikey.

Edited by Baz63

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Ahhhh, today Nationwide suits our argument so we can choose to believe the Nationwide.

:lol:

Only kidding ya. I kind of agree with them, it's hard to see much of an upside for a few years. If anything they sound like they are lobbying for an IR cut.

<_<

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Ahhhh, today Nationwide suits our argument so we can choose to believe the Nationwide.

:lol:

I realise that your post was not meant in all seriousness, but there is the old situation of someone speaking against their own interest being more believable than when they speak in their interest.

What if Tony Bliar has a press conference to say that allegations of corruption in the Labour party are false. What if he had a press conference and said that they were true? Would he say the former if it was false, would he say the latter if it ws false. I would say "yes" and "no".

Putting that in the EA domain, would an EA say that buying property is a good investment when it isn't? Would they say that buying property isn't a good investment when it is? Again, I'd say "yes" and "no".

So returning to the Nationwide, it is plausible that far more could be taken from what they say when they say things against their own interest than when they say things in their interest. So what is the Nationwide's interest?

Billy Shears

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One of my local estate agents in Cleethorpes, Bettles Miles and Holland told me last week that the only properties selling are the lower end range up to 130K. In her words, "vendors with semis and detatched properties must lower their prices if they are to achieve a sale". I asked her by how much and her response was by as much as up to 20K. That'll do for me.

I think its a sad state of affairs that people can chop 20K off so lightly, thats a hell of a lot of money, to me anyway.

We have locally thousands of properties on the market, more coming on all the time. Also lots of private boards going up for a couple of months before they go to an agent. More and more reduced too. Its happening alright, and no propping up will save it.

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I realise that your post was not meant in all seriousness, but there is the old situation of someone speaking against their own interest being more believable than when they speak in their interest.

What if Tony Bliar has a press conference to say that allegations of corruption in the Labour party are false. What if he had a press conference and said that they were true? Would he say the former if it was false, would he say the latter if it ws false. I would say "yes" and "no".

Putting that in the EA domain, would an EA say that buying property is a good investment when it isn't? Would they say that buying property isn't a good investment when it is? Again, I'd say "yes" and "no".

So returning to the Nationwide, it is plausible that far more could be taken from what they say when they say things against their own interest than when they say things in their interest. So what is the Nationwide's interest?

Billy Shears

It could be that they are terrified of an increase in IRs. Pleading poverty could add to the pressures for lower IRs

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Ahhhh, today Nationwide suits our argument so we can choose to believe the Nationwide.

:lol:

Only kidding ya. I kind of agree with them, it's hard to see much of an upside for a few years. If anything they sound like they are lobbying for an IR cut.

<_<

Another Bear full of Bull

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I hope so!

The mini boom in Watford has gone bananas and types of house that went for 200-210 in january, now seem to be up to 229 in some cases, even the crap 'paint over the skank' ex buy-to-lets.

This is after close to two years of largely static or slightly lower prices. Reminds me of Spring 2004 where EAs seemed to add 10k a week to prices.

The strange thing is, back in 2004 there was still a retail mega-boom, unemployment rises were small, and everyone I know wasn't moaing 24/7 about money and their debt/huge mortgages/cost of living. I blame the banks for coming up with evermore insane destructive lending practices.

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To me what this signifies is that they have had a preview of the figures and they are not looking too good.

:D

I think you may very well be right, but also that the outlook for the rest of the years figures isn't too good either.

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GY hopefull

the 20k was never on to come off for those that haven't sold and realised the gain, thats the way it works.

CrashedOutAndBurned

Watford stagnant second half 04 and all 05. Spring 06 show an increase. IMO this will not last long soon both asking and selling prices will be falling in Watford, probably 25 to 30%.

Pablo Silver or Lead?

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Guest Riser

Ahhhh, today Nationwide suits our argument so we can choose to believe the Nationwide.

:lol:

Only kidding ya. I kind of agree with them, it's hard to see much of an upside for a few years. If anything they sound like they are lobbying for an IR cut.

<_<

I have always been happy to use Natinwide data :D

Signal_NationalQ405.gif Houing market at "Turning Point" - Sell signal for housing

post-1619-1143368335.gif

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"Sell today and move away,

Dont return 'til buying pays" (ie= is less expensive than renting)

This makes perfect sense. But... what would you do in this situation? We have seen the perfect house. It's unique so pretty impossible to value, and has the additional buildings we require. The living space is small and going simply on room size we can get a lot more for our money elsewhere but this is a rural location within an AONB and a National Park. It's perfect for us, but of course, way too expensive. Do we offer low? Walk away and forget it (very difficult but not impossible)? Or just bide our time and see what happens to it? I'd be really interested in comments folks :)

I have always been happy to use Natinwide data :D

Signal_NationalQ405.gif Houing market at "Turning Point" - Sell signal for housing

Is there an up to date version of that graph?

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Has anyone considered just how much better the nationwide graph will look if / when they announce another monthly fall in a few days time ?

Turning point !

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Guest Riser

This makes perfect sense. But... what would you do in this situation? We have seen the perfect house. It's unique so pretty impossible to value, and has the additional buildings we require. The living space is small and going simply on room size we can get a lot more for our money elsewhere but this is a rural location within an AONB and a National Park. It's perfect for us, but of course, way too expensive. Do we offer low? Walk away and forget it (very difficult but not impossible)? Or just bide our time and see what happens to it? I'd be really interested in comments folks :)

Is there an up to date version of that graph?

The graph is updated quarterly and includes the lastest figures Q4 2005 I will update the National and reqional charts again when the next quarterly figures are released in the next couple of weeks.

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There is an interesting article in today's Observer business section about the Nationwide's view on the way the housing market is heading. In their view (shared by the Halifax's Chief Economist) we are at a turning point (interesting!). Of course the Estate Agents are still upbeat!

http://observer.guardian.co.uk/business/st...1739418,00.html

Britain's housing market is close to a 'turning point,' as the boost from last summer's rate cut wears off and high prices begin to bite, the Nationwide warns.

As the building society prepares to release its monthly house-price index this week, it says the winter mini-boom, which has seen five successive months of price rises, will fade before the summer.

'We're at a turning point,' said Fionnula Earley, Nationwide's chief economist. 'I think we are at the stage where affordability constraints are biting - and there are other things on the horizon that will stop people splashing out: higher utility bills, rising unemployment.'

She said Gordon Brown's move in last week's Budget to raise the stamp duty threshold by £5,000, to £125,000, would make little difference to home-buyers. 'It's not going to help at all,' she said.

Nationwide has forecast house price growth of 0-3 per cent for 2006. With the annual rate at 3. 7 per cent in February, that would mean a considerable slowdown in the latter part of the year.

Halifax chief economist Martin Ellis agreed that the pick-up was unlikely to accelerate into a long-term recovery. 'Things are treading water,' he said. 'People haven't got the spare cash to pump loads of money into the housing market.'

But, after a difficult 2005, estate agents are optimistic. 'Valuations are high, many new properties coming on to the market are selling like hot cakes,' said Christopher Hall, president of the National Association of Estate Agents, who predicted annual price growth of 5 per cent.

So a major mortgage lender announces the turning point in a bearish article.

The same week that the head economist of America Express announces that the bubble is to burst..

Didn't hsbc tell it's investors to keep out of housing..?

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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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