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Cml Ups 2006 & 2007 Hpi

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UK's 2006 house prices to rise by more than anticipated - CML

LONDON (AFX) - A leading housing industry body has revised up its forecasts

for house price forecasts for 2006 and 2007 as well as its predictions on

interest rates and the extent of repossessions.

The Council of Mortgage Lenders said it expects house prices to end the year

7 pct higher than at the start, compared with a 2 pct forecast back in February.

For 2007, the CML has raised its forecast from 2 pct to 3 pct.

http://orange.advfn.com/news_UK-s-2006-hou...L_15698371.html

Full press release

Also Interest rates now expected to hit 4.75% and repos up 3K

07/06/2006

The Council of Mortgage Lenders has revised up its forecasts for housing market activity for 2006 and 2007. But, at the same time, this has also prompted the CML to up its forecast on the level of interest rates and the extent of repossessions.

The CML now expects house prices to end the year 7% higher than at the start, compared with a 2% forecast back in February. Next year, the forecast for house price inflation has been raised from 2% to 3%.

Property sales are also now set to be stronger than the CML expected back in February, prompting a rise in the forecast for this year to 1.2 million (up from the previous expectation of 0.97 million).

This increased strength is reflected in the CML's revisions to its lending forecasts. Gross lending is now expected to reach £310 billion this year (up from £285 billion previously forecast), although the CML sticks with its previous forecast of £285 billion next year. Net lending is now predicted to total £100 billion this year (up from the £80 billion forecast in February), before falling back to £85 billion next year (up from £75 billion).

Unfortunately, the very strength of the housing market is one of the reasons why the CML now expects interest rates to end both 2006 and 2007 at 4.75% rather than the 4.5% previously forecast. And this in turn feeds through to modestly higher forecasts for arrears and possessions. The CML now foresees 130,000 rather than 120,000 mortgages in arrears of over three months by the end of 2007, and 15,000 repossessions in both 2006 and 2007 (up from the previous forecast of 12,000).

Jim Cunningham, CML senior economist and author of the forecasts, observes:

"The immediate signs are that demand will remain robust over the next few months. But we take the view that confidence and activity are closely associated with interest rate movements and expectations.

"The small rise in short-term interest rates expected in the second half of this year and the rise in fixed-term rates that we have already seen is likely to result in a modest fall in the level of transactions in the second half of this year, and we expect this to continue into 2007.

"At this distance, prospects for 2008 look brighter. The more benign inflation outlook is expected to result in lower interest rates by early 2008. This in turn should support demand from home-buyers and buy-to-let investors and result in firmer house price growth."

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. There are 11.6 million mortgages in the UK, with loans worth around £1 trillion.

2. Our latest housing and mortgage market forecasts are attached.

Documents

Housing and mortgage market forecasts: 2006-2008

Contact Details

Name: Sue Anderson

Tel: 020 7440 2208

Email: sue.anderson@cml.org.uk

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UK's 2006 house prices to rise by more than anticipated - CML

LONDON (AFX) - A leading housing industry body has revised up its forecasts

for house price forecasts for 2006 and 2007 as well as its predictions on

interest rates and the extent of repossessions.

The Council of Mortgage Lenders said it expects house prices to end the year

7 pct higher than at the start, compared with a 2 pct forecast back in February.

For 2007, the CML has raised its forecast from 2 pct to 3 pct.

http://orange.advfn.com/news_UK-s-2006-hou...L_15698371.html

It is healthy for the VIs to remain optimistic that the market can go on rising forever but consumers are less optimistic (they may be becoming realistic due to IR, affordability problems, no FTBs, employment drops, worldwide economic problems and a looming US recession):

http://www.mortgageadvisormag.co.uk/YVF2IsE.html

But despite general confidence in the future economic climate, the present situation index recorded its
lowest recorded level of 90
, down from 97 in January.
Nationwide repeated the Bank of England’s warning that house price inflation should not be taken for granted, adding it expects the annual growth of house prices to slow down.

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It is healthy for the VIs to remain optimistic that the market can go on rising forever but consumers are less optimistic (they may be becoming realistic due to IR, affordability problems, no FTBs, employment drops, worldwide economic problems and a looming US recession):

http://www.mortgageadvisormag.co.uk/YVF2IsE.html

But despite general confidence in the future economic climate, the present situation index recorded its
lowest recorded level of 90
, down from 97 in January.
A masterpiece of selective quoting from RB. From the same article he could have selected the headline and first two paras, as below, but chose to ignore those as he didn't like them:
"
Consumers remain confident in housing market
Consumer confidence in the future of the housing market grew for the second consecutive month in May, continuing the positive outlook seen at the start of this year. According to Nationwide’s monthly confidence index, those questioned expect house prices to rise 2.8% over the coming six months, up from an anticipated 2.3% increase in April’s index. But despite general confidence... ""

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A masterpiece of selective quoting from RB. From the same article he could have selected the headline and first two paras, as below, but chose to ignore those as he didn't like them:

"Consumers remain confident in housing market

Whats a "consumer" in there eyes? Someone who's buying or also someone who would like to buy?

If just the former, then if they weren't confident they wouldn't be buying.

What about all the "would be buyers" who are not confident?

Edited by OzzMosiz

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Whats a "consumer" in there eyes? Someone who's buying or also someone who would like to buy?

If just the former, then if they weren't confident they wouldn't be buying.

What about all the "would be buyers" who are not confident?

Good question. The answer is probably that Nationwide's "research" is as much balderdash as realist Bear's loose remix of it. <_<

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UK's 2006 house prices to rise by more than anticipated - CML

LONDON (AFX) - A leading housing industry body has revised up its forecasts

for house price forecasts for 2006 and 2007 as well as its predictions on

interest rates and the extent of repossessions.

The Council of Mortgage Lenders said it expects house prices to end the year

7 pct higher than at the start, compared with a 2 pct forecast back in February.

For 2007, the CML has raised its forecast from 2 pct to 3 pct.

http://orange.advfn.com/news_UK-s-2006-hou...L_15698371.html

Full press release

Also Interest rates now expected to hit 4.75% and repos up 3K

07/06/2006

The Council of Mortgage Lenders has revised up its forecasts for housing market activity for 2006 and 2007. But, at the same time, this has also prompted the CML to up its forecast on the level of interest rates and the extent of repossessions.

The CML now expects house prices to end the year 7% higher than at the start, compared with a 2% forecast back in February. Next year, the forecast for house price inflation has been raised from 2% to 3%.

Property sales are also now set to be stronger than the CML expected back in February, prompting a rise in the forecast for this year to 1.2 million (up from the previous expectation of 0.97 million).

This increased strength is reflected in the CML's revisions to its lending forecasts. Gross lending is now expected to reach £310 billion this year (up from £285 billion previously forecast), although the CML sticks with its previous forecast of £285 billion next year. Net lending is now predicted to total £100 billion this year (up from the £80 billion forecast in February), before falling back to £85 billion next year (up from £75 billion).

Unfortunately, the very strength of the housing market is one of the reasons why the CML now expects interest rates to end both 2006 and 2007 at 4.75% rather than the 4.5% previously forecast. And this in turn feeds through to modestly higher forecasts for arrears and possessions. The CML now foresees 130,000 rather than 120,000 mortgages in arrears of over three months by the end of 2007, and 15,000 repossessions in both 2006 and 2007 (up from the previous forecast of 12,000).

Jim Cunningham, CML senior economist and author of the forecasts, observes:

"The immediate signs are that demand will remain robust over the next few months. But we take the view that confidence and activity are closely associated with interest rate movements and expectations.

"The small rise in short-term interest rates expected in the second half of this year and the rise in fixed-term rates that we have already seen is likely to result in a modest fall in the level of transactions in the second half of this year, and we expect this to continue into 2007.

"At this distance, prospects for 2008 look brighter. The more benign inflation outlook is expected to result in lower interest rates by early 2008. This in turn should support demand from home-buyers and buy-to-let investors and result in firmer house price growth."

Notes to editors

1. The Council of Mortgage Lenders' members are banks, building societies and other lenders who together undertake around 98% of all residential mortgage lending in the UK. There are 11.6 million mortgages in the UK, with loans worth around £1 trillion.

2. Our latest housing and mortgage market forecasts are attached.

Documents

Housing and mortgage market forecasts: 2006-2008

Contact Details

Name: Sue Anderson

Tel: 020 7440 2208

Email: sue.anderson@cml.org.uk

Sorry - don't normally read you posts. Was it anything interesting ? :D

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Good question. The answer is probably that Nationwide's "research" is as much balderdash as realist Bear's loose remix of it. <_<

Don't forgetr the main point of the article (which I highlighted):

But despite general confidence in the future economic climate, the present situation index recorded its lowest recorded level of 90, down from 97 in January
.

They are saying that despite a general feeling of well being about the economy the present situation (that is: now) is relfecting the lowest recorded level. A drop from 97 to 90 is the point here.

It is better to get to the bottom line and leave out the introductory material if only a short quote is being used. If I had just quoted the bits you like the main point would have been missed. <_<

Edited by Realistbear

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Good question. The answer is probably that Nationwide's "research" is as much balderdash as realist Bear's loose remix of it. <_<

Nationwide nearly always show the lower end of HPI and seem to be closer to reality with their preictions. I do, however, see how Nationwide, who are one of the largest VIS, can annoy property bulls with their assessments. I personally like Nationwide and may use them when I start buying property again.

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Don't forgetr the main point of the article (which I highlighted):

Yes, I find most people choose to highlight the main point of their articles by putting all the irrelevant information in the headline and first two paras, and then sticking it in there in that all-important third para. :blink:

It may have been the main point for you with your highly selective bear goggles on, but the article is actually about consumers remaining confident in the housing market (as they subtly hint in the large-type, bold red headline)

It is better to get to the bottom line and leave out the introductory material if only a short quote is being used. If I had just quoted the bits you like the main point would have been missed. <_<

Not saying you should quote it all, but if you're going to be selective to such a degree that you are quoting one line from an article that largely contradicts the conclusion you seek to draw from it, then you can expect a bit of cynicism in response...

Edited by Magpie

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Well, I have to say the CML are being very optomistic. I believe there was a mini boom because the public expected lower interest rates - you can see this in the media since last summer.

I fail to see this momentum continuing when the public are expecting high rates, even if those higher rates are a rather small increase.

We'll soon see in a few months...

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Well, I have to say the CML are being very optomistic. I believe there was a mini boom because the public expected lower interest rates - you can see this in the media since last summer.

I fail to see this momentum continuing when the public are expecting high rates, even if those higher rates are a rather small increase.

We'll soon see in a few months...

I don't think the CML are very optimistic, Halifax is up 6% so far this year and Nationwide 5%. So about 7months and 1-2%, ie an average increase of 0.2% per month for the rest of the year.

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I don't think the CML are very optimistic, Halifax is up 6% so far this year and Nationwide 5%. So about 7months and 1-2%, ie an average increase of 0.2% per month for the rest of the year.

don't prices normally slip after Sept?

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don't prices normally slip after Sept?

No they tend to rise more slowily. FWIW as I had it open these are the number of times since 1983 IE about 23 points, that prices NSA have fallen in each month

jan 	16feb	5mar	0apr	1may	4june	2july	6aug	10sept	7oct	8nov	7dec	12

And these are the average MoM price increases/Decrease

Jan	-0.5%Feb	1.2%Mar	1.7%April	1.5%May 	1.1%June	1.1%July	0.6%Aug	0.2%Sept	0.5%Oct	0.5%Nov	0.5%Dec	-0.2%

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I worked with Sue Anderson at the CML about 15 years ago for a week's work experience when I was at school.

Lovely lass, but deadly dull institution to work for.

Why do we care? They're just there to reflect current opinion, they're not economic gurus or trailblazers. They probably just pluck figures out of the air based on current "sentiment".

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Worth a quick roundup of the house price indices -

120jbf9.jpg

and the corresponding SA corrections

120jdhv.jpg

Edited by spline

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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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