Realistbear Posted June 13, 2006 Share Posted June 13, 2006 http://www.themovechannel.com/News/2006/June/13a.asp Contrary to seasonal expectations, the Capital’s housing market is struggling to get buyers interest, reveals the latest asking price index report from Home.co.uk. Despite an overall rise of 0.4% in asking prices for England and Wales, indicating a seasonal boost in seller confidence, Greater London prices fell by 0.9% in the second quarter of 2006. London’s home-owners may, however, derive comfort that they are not in the North East which saw a dramatic 4.6% fall over the same period. Regional housing markets The regional average asking prices for June 06 showing gains and losses for Q2. Scotland £151,149 +3.8% Wales £186,276 +3.1% East Midlands £194,238 +2.2% South West £253,022 +2.0% South East £270,485 +0.8% North West £187,594 +0.6% East £253,386 -0.3% Yorkshire and Humber £168,833 -0.5% West Midlands £198,883 -0.6% Greater London £302,400 -0.9% North East £165,681 -4.6% Laspeyres Indices based on Weighted Arithmetic Mean of Regional House Prices. The report examines this worrying trend in England’s leading market, in detail. By comparing mix adjusted data for Central and Greater London, the innovative, new index illustrates that London’s so called ‘mini-boom’ has been highly centralised and appears to have already lost momentum. In general, asking prices in Greater London continue a two-year, downward trend. The fall in asking prices for houses in the North East suggests a significant turning point. Until recently, this regional market had been one of the strongest performers and had not shown a substantial price correction following the 2003/4 property boom. Asking prices only recently reached a maximum in November, 2005, approximately 17 months after peaking in London. Price erosion in the North East increases the likelihood of similar falls in Yorkshire, Wales and the North West. Should such corrections occur in these remaining, strong performing regions, and the London and South East market continue to be subdued, the state of the UK housing market will enter a critical phase. Moreover, such developments are likely to be exacerbated by any rise in interest rates, which several commentators suggest are inevitable. The severe slowdown in the US housing market, brought about by inflation fighting interest rate hikes by the Federal Reserve, presents some difficult decisions for the central banks around the world. The European Central Bank has already followed suit by raising its benchmark interest rate on the 8th June by a quarter point, to 2.75%. The Home.co.uk Asking Price Index uses current price data, which incorporates the usual discounting activity that takes place as sellers try to attract enquiries. Conversely, the national house price index produced by Rightmove records initial asking prices and therefore tends to be indicative of sellers’ aspirations. Comparing the two indices, over the last year, suggests a growing mismatch between sellers’ initial expectations and the price required to attract buyers, argues Home.co.uk. The barrage of bearish news the markets have had to deal with over the last few weeks is bound to take its toll. As money is sucked out of the system London will feel the brunt as the City is heavily dependent on the markets who employ the workers who buy the houses. How long before the lay-offs begin in the City? Quote Link to comment Share on other sites More sharing options...
Waitingforthesun Posted June 13, 2006 Share Posted June 13, 2006 The barrage of bearish news the markets have had to deal with over the last few weeks is bound to take its toll. As money is sucked out of the system London will feel the brunt as the City is heavily dependent on the markets who employ the workers who buy the houses. How long before the lay-offs begin in the City? So far, my impression is that employment in the City remains very strong, especially compared to France UK attracts many workers (both skilled and unskilled) from all over Europe because of its good labour market, and not enough housing are built (only 200,000 per year - compared to 400,00 per year in France) I think the HPC will come from raising interest. So far, unemployment is far too low to have an impact (although it may change in the future) Quote Link to comment Share on other sites More sharing options...
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