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Ft: Housing Market Revival May Be Short-lived

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Good afternoon all...

Bearish article from the Financial Times. It does end on a positive note from Mr Archer from Global Insight (Gobbie Idiot). Alas, these VI spinners are everywhere.


Separate reports on Wednesday showing disappointing mortgage data, a dip in consumer confidence and a slowdown in house price growth seemed to indicate the UK housing market revival could be short-lived.

Bank of England figures showed British mortgage approvals falling to a seven month low in April from 106,000 from a downwardly revised 114,000 in March, the lowest since September last year.

The GfK survey showed an unexpected dip in British consumer confidence in May slipping to -5 from -4 in April. Analysts had forecast a steady reading of -4. The survey also showed that Britons were less inclined to commit to major purchases with the index measuring this declining to +8 from +11, a five month low.

The latest data suggest that expectations of a rise in the cost of borrowing may be taking its toll on the property market and household spending.

Howard Archer of the Global Insight consultancy said: “The Bank of England data suggest that housing market activity may be starting to lose some momentum.”

Nationwide reports sluggish growth

Despite a strong start to the year from a range of housing indicators, Nationwide, the UK’s biggest building society, meanwhile on Wednesday reported a slowdown in house price inflation.

The building society said prices grew by just 0.2 per cent in May, much less than analysts had expected, taking the annual rate of growth down to 4.7 per cent from 4.8 per cent in April.

The average price of a UK home now stands at £164,632, according to the report.

House buying activity, above trend increases in the number of mortgages approved and a mini boom in London have all fuelled talk of further house price growth, but there were now signs that the market was cooling, Nationwide said.

Fionnuala Earley, Nationwide’s Group Economist, pointed to stretched affordability and expectations of interest rate rises from the money markets. Ms Earley said: “The impact of demand will depend crucially on whether the Bank of England actually raises interest rates. In our view, the decision is still very close.

“For now, the effects of hawkish interest rate expectations in the financial markets on fixed mortgage interest rates and press reports pointing towards the possibility of higher rates, should contribute to a cooling of house price growth” .

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Mervyn King, Bank of England governor, warned earlier this month that the “level of house prices still seems remarkably high relative to average earnings or average incomes or anything else you could look at”.

Mr Archer cautioned against reading too much from one month’s set of figures but said the data was nevertheless “supportive of our long-held belief that house prices will ease back into an extended period of relatively modest rises over the coming months.”

The next edition of the Financial Times House Price Index, which aims to smooth out variations in monthly house price data, is published on June 9.


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Nice find.

All we need now is some of this in the morons papers.

Just wait till the average muppet knows house prices are falling, and then see just how fast theyshut down spending when their prize asset is falling in value.

All coming to a town near you soon...

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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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