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Uk House Prices Not About To Plummet

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http://www.reuters.com/article/RealEstate0...692284420070626

LONDON (Reuters) - British property prices are not about to fall sharply despite fears over rising interest rates, the chairman of the Bank of England's property advisory forum said on Tuesday.

The central bank has hiked rates four times since August and is widely expected to lift them again next month, raising concerns that the robust housing market could falter due to constraints on affordability, rising debt and insolvencies.

"Everyone assumes base rates going up has got to be bad for the housing market -- and of course it is -- but there are broader issues," said Credit Suisse European real estate investment banker Ian Marcus at the Reuters Real Estate Summit in London.

Marcus also chairs the BoE's Property Forum, which advises the central bank on conditions in the market.

"Affordability and employment, which are long-term drivers, are at long-term averages, demographics are in favor and supply/demand is out of kilter, so I remain as confident as I can be that I don't think residential prices are going to plummet in any shape or form."

Surveys have shown that mortgage approvals -- an indicator of future house prices -- have eased in recent months but that price inflation has remained firm.

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http://www.reuters.com/article/RealEstate0...692284420070626

"Affordability and employment, which are long-term drivers, are at long-term averages, demographics are in favor and supply/demand is out of kilter, so I remain as confident as I can be that I don't think residential prices are going to plummet in any shape or form."

Translated this means "SELL!" said Credit Suisse European real estate investment banker Ian Marcus at the Reuters Real Estate Summit in London.

He's saying this because all his mates and clients need someone to sell to for the final cash out.

If you doubt what I say, ask a professional like Larry Williams who uses exactly this kind of statement from this level as a contrary indicator. http://ireallytrade.com/

Edited by dom

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Good news; this means there's no reason not to keep raising rates.

You got there before me MarkG.

With the chairman of the Bank of England's property advisory forum saying rate rises are not going to hit house prices and Sir John Gieve (Deputy Governor) saying that getting inflation under control is more important than sustaining economic growth then I think it is fair to say that several more rate rises are definitley on the cards.

These two guys are singing from the same hymn sheet, the Governor is voting for a rise and the swaps market is showing 6.25% by early next year. HPC - bring it on!

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I think this guy has got it about right

Because of the demand issue, prices are unlikely to "plummit", with which, I take it means go down considerably, but they could edge lower.

If prices/rents are to stay at MAXIMUM AFFORDABILITY because of demand their falls would be in line with how much people can afford to borrow or how much the bank will allow them to borrow together with how much capital is freely available.

I dont think the pent up demand can be entirely dismissed as there are a number of people actually waiting for an adjustment to purchase, there are even a few on this forum.

It really depends on the extent of the credit tightening and change in disposable incomes of the buying/renting group.

I think an initial fall of around 10% could happen very quickly, which would be insignificant, to bring prices down to 2006 levels but without significant raises in interest rates and a lowering of disposable incomes futher falls would be limited.

Some areas of oversupply would ofcourse go down more and quicker and even area currently seen as "desirable" could change if a recession was to effect the economics of the area.

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You got there before me MarkG.

With the chairman of the Bank of England's property advisory forum saying rate rises are not going to hit house prices and Sir John Gieve (Deputy Governor) saying that getting inflation under control is more important than sustaining economic growth then I think it is fair to say that several more rate rises are definitley on the cards.

These two guys are singing from the same hymn sheet, the Governor is voting for a rise and the swaps market is showing 6.25% by early next year. HPC - bring it on!

.....the rate rises are an attempt to counter CPI in which housing does not feature..........

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Morley eyes property market slowdown

Wed Jun 27, 2007 1:55 PM BST By Laurence Fletcher

LONDON (Reuters) - Investors have already seen the best of the capital returns from the UK property market and it is hard not to see the market slipping back, one of Europe's biggest property fund management firms said on Wednesday.

"Clearly the capital growth we've had in the past is behind us. Things are pretty flat, and people are unclear if it will stay fairly flat or whether it will fall," Nick Mansley, director of property strategy and indirect investment at Morley Fund Management, said at the Reuters Real Estate Summit in London.

"Some parts are showing rising values and some parts are showing falls. It (the property market) will be influenced by swap rates and rising yields, which have risen so rapidly. The market can't shrug these off ... It's difficult to see the property market in the UK not slipping back."

Britain's commercial property market, buoyed by the low cost of borrowing and strong demand from institutional and retail investors, has returned 18-19 percent in the past two years, according to index compiler Investment Property Databank.

Rising interest rates in the UK have made the yields -- the rental income relative to the capital value -- offered by commercial property less attractive.

However, Mansley said UK interest rates were unlikely to remain above 6 percent for a sustained period, which would help support property prices, while UK property offered a relatively secure income stream.

On Monday IPD told the Reuters Real Estate Summit that the UK market was set to deliver low double-digit percentage returns this year

Mansley also said flows into UK property funds had been affected by investors locking in gains, and by the availability of other property funds investing in Europe and worldwide.

EUROPE

Mansley said Morley, which runs over 30 billion pounds in property assets globally and which grew its continental European business by half last year, was cautious about Spain, which has recently seen property stocks fall on concerns over a possible slowdown after years of boom.

"In Spain, from a top-down view, the risks have increased substantially, and pricing is keen," he said.

"The market is perfectly strong and it has got all the growth dynamics, but investors have to be fully aware it could slow in the face of housing market and construction sector weakness."

He also said that while French property in general remained attractive, he had reservations about the German property market, which has attracted investors thanks to an economic recovery after years of stagnation.

"It's by no means an absolutely clear 'buy' market ... The fundamentals have improved, no doubt about it, after the problems of the early 1990s. There is improving (economic) competitiveness, and the economy is in a much stronger position.

"But it's still a low-inflation economy ... You can get 5.5 percent yield, but people neglect the fact there is little or no income growth and there may be some significant costs in 10 years' time."

Mansley also said Morley's European portfolios have reduced exposure to Irish and Central European property from around 80 percent, when the group began expanding into Europe several years ago, to around 30-40 percent currently.

"We've been reducing the relative position and in absolute terms ... It's still a significant position, and we still see them as high-growth markets."

http://*******.com/34wfum

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The fact that this geezer from the BOE said the housing market is not about to plummet is hardly surprising or significant ( he'd be in trouble if he said anything else ). The significant point is that he felt the need to say this - who is he trying to convince ? The more they shout DONT PANIC the more people will be convinced that there is something to panic about.

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http://www.reuters.com/article/RealEstate0...692284420070626

LONDON (Reuters) - British property prices are not about to fall sharply despite fears over rising interest rates, the chairman of the Bank of England's property advisory forum said on Tuesday.

The central bank has hiked rates four times since August and is widely expected to lift them again next month, raising concerns that the robust housing market could falter due to constraints on affordability, rising debt and insolvencies.

"Everyone assumes base rates going up has got to be bad for the housing market -- and of course it is -- but there are broader issues," said Credit Suisse European real estate investment banker Ian Marcus at the Reuters Real Estate Summit in London.

Marcus also chairs the BoE's Property Forum, which advises the central bank on conditions in the market.

"Affordability and employment, which are long-term drivers, are at long-term averages, demographics are in favor and supply/demand is out of kilter, so I remain as confident as I can be that I don't think residential prices are going to plummet in any shape or form."

Surveys have shown that mortgage approvals -- an indicator of future house prices -- have eased in recent months but that price inflation has remained firm.

Good excuse for BOE to put rates up and blame this guy.

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This ones is. (look carefully @ the property on the right, the For Sale sign is visible).

House who's price is about to plummet

Lol. Bet they wish they'd put it on a few months earlier . . .

Although if they get a huge insurance payout and find someone willing to take on a renovation project they could even come out on top.

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Lol. Bet they wish they'd put it on a few months earlier . . .

Although if they get a huge insurance payout and find someone willing to take on a renovation project they could even come out on top.

They will have trouble getting flood insurance in the future, I can see flood cover being a thing of the past.

BUY ON A HILL.

Head for the hills.

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http://www.reuters.com/article/RealEstate0...692284420070626

LONDON (Reuters) - British property prices are not about to fall sharply despite fears over rising interest rates, the chairman of the Bank of England's property advisory forum said on Tuesday.

The central bank has hiked rates four times since August and is widely expected to lift them again next month, raising concerns that the robust housing market could falter due to constraints on affordability, rising debt and insolvencies.

"Everyone assumes base rates going up has got to be bad for the housing market -- and of course it is -- but there are broader issues," said Credit Suisse European real estate investment banker Ian Marcus at the Reuters Real Estate Summit in London.

Marcus also chairs the BoE's Property Forum, which advises the central bank on conditions in the market.

"Affordability and employment, which are long-term drivers, are at long-term averages, demographics are in favor and supply/demand is out of kilter, so I remain as confident as I can be that I don't think residential prices are going to plummet in any shape or form."

Surveys have shown that mortgage approvals -- an indicator of future house prices -- have eased in recent months but that price inflation has remained firm.

And this, according to the BoE, is good news?

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For some strange reason this has reminded me of the BSE crisis. When the first stories about BSE started filtering though - the governement used to wheel out its Chief Veternary Officer to reassure the masses. Month after month and year after year he was wheeled out stating categorically that there was absolutley no possibility of BSE crossing the species barrier to humans. Of course we all know what happened next.

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Morley eyes property market slowdown

Wed Jun 27, 2007 1:55 PM BST By Laurence Fletcher

LONDON (Reuters) - Investors have already seen the best of the capital returns from the UK property market and it is hard not to see the market slipping back, one of Europe's biggest property fund management firms said on Wednesday.

"Clearly the capital growth we've had in the past is behind us. Things are pretty flat, and people are unclear if it will stay fairly flat or whether it will fall," Nick Mansley, director of property strategy and indirect investment at Morley Fund Management, said at the Reuters Real Estate Summit in London.

"Some parts are showing rising values and some parts are showing falls. It (the property market) will be influenced by swap rates and rising yields, which have risen so rapidly. The market can't shrug these off ... It's difficult to see the property market in the UK not slipping back."

Britain's commercial property market, buoyed by the low cost of borrowing and strong demand from institutional and retail investors, has returned 18-19 percent in the past two years, according to index compiler Investment Property Databank.

Rising interest rates in the UK have made the yields -- the rental income relative to the capital value -- offered by commercial property less attractive.

However, Mansley said UK interest rates were unlikely to remain above 6 percent for a sustained period, which would help support property prices, while UK property offered a relatively secure income stream.

On Monday IPD told the Reuters Real Estate Summit that the UK market was set to deliver low double-digit percentage returns this year

Mansley also said flows into UK property funds had been affected by investors locking in gains, and by the availability of other property funds investing in Europe and worldwide.

EUROPE

Mansley said Morley, which runs over 30 billion pounds in property assets globally and which grew its continental European business by half last year, was cautious about Spain, which has recently seen property stocks fall on concerns over a possible slowdown after years of boom.

"In Spain, from a top-down view, the risks have increased substantially, and pricing is keen," he said.

"The market is perfectly strong and it has got all the growth dynamics, but investors have to be fully aware it could slow in the face of housing market and construction sector weakness."

He also said that while French property in general remained attractive, he had reservations about the German property market, which has attracted investors thanks to an economic recovery after years of stagnation.

"It's by no means an absolutely clear 'buy' market ... The fundamentals have improved, no doubt about it, after the problems of the early 1990s. There is improving (economic) competitiveness, and the economy is in a much stronger position.

"But it's still a low-inflation economy ... You can get 5.5 percent yield, but people neglect the fact there is little or no income growth and there may be some significant costs in 10 years' time."

Mansley also said Morley's European portfolios have reduced exposure to Irish and Central European property from around 80 percent, when the group began expanding into Europe several years ago, to around 30-40 percent currently.

"We've been reducing the relative position and in absolute terms ... It's still a significant position, and we still see them as high-growth markets."

http://*******.com/34wfum

...sounds like propaganda from people with an agenda......

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The fact that this geezer from the BOE said the housing market is not about to plummet is hardly surprising or significant ( he'd be in trouble if he said anything else ). The significant point is that he felt the need to say this - who is he trying to convince ? The more they shout DONT PANIC the more people will be convinced that there is something to panic about.

Yes you're dead right.

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The fact that this geezer from the BOE said the housing market is not about to plummet is hardly surprising or significant ( he'd be in trouble if he said anything else ). The significant point is that he felt the need to say this - who is he trying to convince ? The more they shout DONT PANIC the more people will be convinced that there is something to panic about.

A bit like "the chairman has announced the managers job is safe"

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For some strange reason this has reminded me of the BSE crisis. When the first stories about BSE started filtering though - the governement used to wheel out its Chief Veternary Officer to reassure the masses. Month after month and year after year he was wheeled out stating categorically that there was absolutley no possibility of BSE crossing the species barrier to humans. Of course we all know what happened next.

What happened next was a series of bearish predictions to the effect that BSE would cause a holocaust that would claim the lives of thousands, hundreds of thousands, or even millions of British lives (depending on whose predictions you believed). In fact, the death toll in the UK from vCJD to date has been 167.

I hope that false alarm outcome doesn't repeat itself with the housing market - I want a crash!

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http://www.reuters.com/article/RealEstate0...692284420070626

LONDON (Reuters) - British property prices are not about to fall sharply despite fears over rising interest rates, the chairman of the Bank of England's property advisory forum said on Tuesday.

The central bank has hiked rates four times since August and is widely expected to lift them again next month, raising concerns that the robust housing market could falter due to constraints on affordability, rising debt and insolvencies.

"Everyone assumes base rates going up has got to be bad for the housing market -- and of course it is -- but there are broader issues," said Credit Suisse European real estate investment banker Ian Marcus at the Reuters Real Estate Summit in London.

Marcus also chairs the BoE's Property Forum, which advises the central bank on conditions in the market.

"Affordability and employment, which are long-term drivers, are at long-term averages, demographics are in favor and supply/demand is out of kilter, so I remain as confident as I can be that I don't think residential prices are going to plummet in any shape or form."

Surveys have shown that mortgage approvals -- an indicator of future house prices -- have eased in recent months but that price inflation has remained firm.

You Hope.

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