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Prices To Stay Firm

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Prices to stay firm

Now is a good time - not least because the signals are mixed. And with interest rates up five times in 11 months - and more rises forecast - our house-price fixation is fast approaching neurosis.

Is this guy a poster?

But the big question for us property-obsessives is whether this impending slowdown is a temporary blip, or the start of a bigger slide in prices? And, last week, this crucial question was framed by the latest missive from Gordon Brown.

The Prime Minister announced that the UK will build 3m new homes by 2020 - so "affordable homes are within the reach of not just the few, but the many". That amounts to around 250,000 house completions every year, for the next 12 years.

On the basis of supply and demand, Brown is on the right track. If you increase the supply of housing, prices are likely to fall - or, at least, the rate of growth of prices.

That would not only soothe an overheated market, but would make housing more affordable too - which is good news for everyone.

But there is about as much chance of Brown's housing vision coming to pass as there is of him eloping with Cherie Blair.

Beyond the verbiage, let's have a look at Brown's record - given that even back in in 1997, he was calling for an expansion in the housing supply. By 2001, only 162,000 homes were completed - the lowest figure since 1924. The figure has grown since, but reached only 175,000 last year.

Over the same period, the demand for new houses, as measured by the number of new households, grew by an average of at least 250,000 a year. The real figure could be much higher - given the patchiness of our immigration data. That is why prices have surged so much, and beyond the reach of countless youngsters.

So what of the future? Brown's triumphant headline numbers imply house building will grow at 3.7 per cent per annum over the coming years. That's actually below than the current rate of growth. And I predict house-building will indeed slow over the foreseeable future. The reason is basic politics. The rate at which houses are built is closely connected to the granting of planning permission. Brown claims such permission will now be granted faster.

Really? Labour and the Tories are now locked in a battle for the centre ground of British politics. So is the Prime Minister really going to risk annoying all those "swing voters" in the semi-rural, edge-of-town seats which, while ripe for property development, will in fact decide the next general election?

I think not. And that's the main reason why the growth of house prices, while slowing down, will stay quite firm. There'll be no crash - just more spin from Brown, and more misery for first-time buyers.

He makes some good points.

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You make a good point about Gordons dilema with regard to planning difficulties affecting the "swing voters".

Is fair to say he has stated his intention with regard to housing numbers but we will all have to wait and see if he can achieve anything like those numbers with at least two elections to win on the way.

I think whether he is successful in building these houses / units will have more to do with the UK / world economy than his political intentions.

The economy in the UK seems fairly sound at the moment, employment figures are reasonable with still low (but creeping higher) inflation.

No more boom and bust has been his slogan.

Will his slogan last another 10 years to allow him to build all these places in an attempt to bring the prices down?

Maybe but only time will tell, and in many cases people dont want to wait 10 years to find out.

I think that unless the economy dies on its feet then these prices are here to stay. There'll be no crash - just more spin from Brown, and more misery for first-time buyers.

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You just copied the original post! :lol:

I think this completley misses the point, It won't be Gordon Brown who has the final say on HPI it's gone too far, it will be the markets and the markets are already pricing in over 6%.Personally I see the pain going one way at the moment and thats with the indebt masses, only a fool of an FTB would buy right now.

You make a good point about Gordons dilema with regard to planning difficulties affecting the "swing voters".

Is fair to say he has stated his intention with regard to housing numbers but we will all have to wait and see if he can achieve anything like those numbers with at least two elections to win on the way.

I think whether he is successful in building these houses / units will have more to do with the UK / world economy than his political intentions.

The economy in the UK seems fairly sound at the moment, employment figures are reasonable with still low (but creeping higher) inflation.

No more boom and bust has been his slogan.

Will his slogan last another 10 years to allow him to build all these places in an attempt to bring the prices down?

Maybe but only time will tell, and in many cases people dont want to wait 10 years to find out.

I think that unless the economy dies on its feet then these prices are here to stay. There'll be no crash - just more spin from Brown, and more misery for first-time buyers.

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prices are dropping already... not in some areas, but to massive amounts in others.. verified annecdotal evidence...

The value of an asset rises if too many folks want it but there is a limited supply, the value falls if not enough folks want it but there is an abundance of said asset. :unsure:

Hometacks latest report shows buyers drying up but sellers numbers ramping up, it doesn't take the brain of Einstein to predict which way the ship is now heading. :huh:

The argument used by bulls that wages will come up to meet prices is laughably, if that were the case then a 3 bed semi would be £1,000,000 and a Ford Mondeo would be £100,000, as I could say but in 2050 you could afford it. ;)

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prices are dropping already... not in some areas, but to massive amounts in others.. verified annecdotal evidence...

If it's verified, then it isn't anecdotal.

Verified data, please ?

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Just more wishful thinking. At the end of the day this is just one blokes opinion and opinions are like ar**holes - everyone's got one. Have we entered a new paradigm where the economic cycles that have always operated no longer operate - have we b*****ks.

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Liam Halligan talks about supply and demand sustaining prices but:

We have fewer homeless than we did 30 years ago.

Rents as a percentage of house values have plummeted.

Reposessions are rising rapid.

First time buyers cannot afford to buy houses.

Real incomes are falling

Over the same period, the demand for new houses, as measured by the number of new households, grew by an average of at least 250,000 a year. The real figure could be much higher - given the patchiness of our immigration data.

If the number of new housholds grew by 250,000, why are there so many empty new build flats. A flat might not be ideal accomodation for some people but if there is so much demand one would expect people to be queuing up to rent these places.

The arguement about the formation of new households is based on immigration figures and yet Liam then says there is no reliable data. He also has offered no information about emigration.

Is Liam Halligan told what to think by Edmund Conway?

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The problem with the article is that he totally accepts the line the govt is putting out that we have a housing crisis because of insufficient demand. That is one small element of the problem but the fact is we don't have a housing crisis. We don't have mass homelessness, indeed we have plenty of homes left empty for all or part of the year.

What we have is a housing affordability crisis because of speculative demand. the govt know that but can't talk about it without either explaining why they let it happen, or seeming to encourage a crash. so the government focuses on supply, and hopes that the market has a soft landing, or crashes at a convenient moment that doesn't lose them an election.

So understandable why they talk of a housing crisis. but hard to understand why this journalist is dumb enough not to see beyond the hype. The problem is speculative demand, and if that problem goes away then we will have a fall in prices, and all this talk of supply shortage will evaporate.

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Housing supply is only one part of the HPI equation. Very few homes are bought for cash. Most are purchased on credit. Therefore the availability and affordability of the loans used to buy property are key to the equation. If that gets squeezed then credit is not so easy to obtain and the cost of borrowing rises for all new and existing borrowers. Then home owners may struggle to pay their mortgages and become forced sellers while new buyers simply can not get loans. The net result is an increase in supply and a drop in demand resulting in lower prices.

At the moment we are being kept afloat by a flood of funds from the Far East some of which enters the UK via the carry trade and the rest being invested in sterling denominated cash deposits and securities. This does not sit idle but is used by UK banks to provide the basis for some of the UK's mortgage lending. It is by no means certain that this happy situation where foreigners give us money so we can speculate on a property bubble is going to continue forever. At the moment Asian savers are simply being robbed as a result of the turn down in the US property market and there are signs that over the next few years they may start to get more risk averse.

http://www.atimes.com/atimes/Global_Economy/IG14Dj01.html

One day they are going to tire of seeing their money frittered away by lard a****d western consumers on pointless asset bubbles.

When that happens it is going to be show time for the UK property market

Edited by up2nogood

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it doesn't matter WHAT gordie does, he doesn't control the money supply, the central banks do

THEY control if we crash or not and recent bis reports suggest it's coming soon...

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yawn.........Halligan's at it again I see! I would post a reply to his article on the Times page but he wouldn't read it. Halligan's obviously sh#tting himself recently with the rate rises and he is trying to convince himself (and his readers) that there will be no correction.

Yes, Liam - the UK is different from the rest of the world. Every other country in the world will have a HPC but it won't reach our shores. We have completely different fundamentals to the rest of the world. Besides it's all about supply and demand, innit? We also don't have any sub prime here either nor the largest personal debt per capita in the world.

IF I KEEP SAYING IT OFTEN ENOUGH IN MY COLUMN EVERY WEEK IT WON'T HAPPEN!!! :P

Halligan you are an odious BTL pr#ck!

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it doesn't matter WHAT gordie does, he doesn't control the money supply, the central banks do

THEY control if we crash or not and recent bis reports suggest it's coming soon...

I think that's part of Brown's problem. Talking about supply shortages and affordable housing is basically admitting that the whole thing is out of their control for the time being. All they can hope for is that any crash happens just after an election rather than just before, so they will try to speak soothing words up until the election and then see what happens.

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yawn.........Halligan's at it again I see! I would post a reply to his article on the Times page but he wouldn't read it. Halligan's obviously sh#tting himself recently with the rate rises and he is trying to convince himself (and his readers) that there will be no correction.

Yes, Liam - the UK is different from the rest of the world. Every other country in the world will have a HPC but it won't reach our shores. We have completely different fundamentals to the rest of the world. Besides it's all about supply and demand, innit? We also don't have any sub prime here either nor the largest personal debt per capita in the world.

IF I KEEP SAYING IT OFTEN ENOUGH IN MY COLUMN EVERY WEEK IT WON'T HAPPEN!!! :P

Halligan you are an odious BTL pr#ck!

Nicely put.

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Prices to stay firm

Now is a good time - not least because the signals are mixed. And with interest rates up five times in 11 months - and more rises forecast - our house-price fixation is fast approaching neurosis.

Is this guy a poster?

But the big question for us property-obsessives is whether this impending slowdown is a temporary blip, or the start of a bigger slide in prices? And, last week, this crucial question was framed by the latest missive from Gordon Brown.

The Prime Minister announced that the UK will build 3m new homes by 2020 - so "affordable homes are within the reach of not just the few, but the many". That amounts to around 250,000 house completions every year, for the next 12 years.

On the basis of supply and demand, Brown is on the right track. If you increase the supply of housing, prices are likely to fall - or, at least, the rate of growth of prices.

That would not only soothe an overheated market, but would make housing more affordable too - which is good news for everyone.

But there is about as much chance of Brown's housing vision coming to pass as there is of him eloping with Cherie Blair.

Beyond the verbiage, let's have a look at Brown's record - given that even back in in 1997, he was calling for an expansion in the housing supply. By 2001, only 162,000 homes were completed - the lowest figure since 1924. The figure has grown since, but reached only 175,000 last year.

Over the same period, the demand for new houses, as measured by the number of new households, grew by an average of at least 250,000 a year. The real figure could be much higher - given the patchiness of our immigration data. That is why prices have surged so much, and beyond the reach of countless youngsters.

So what of the future? Brown's triumphant headline numbers imply house building will grow at 3.7 per cent per annum over the coming years. That's actually below than the current rate of growth. And I predict house-building will indeed slow over the foreseeable future. The reason is basic politics. The rate at which houses are built is closely connected to the granting of planning permission. Brown claims such permission will now be granted faster.

Really? Labour and the Tories are now locked in a battle for the centre ground of British politics. So is the Prime Minister really going to risk annoying all those "swing voters" in the semi-rural, edge-of-town seats which, while ripe for property development, will in fact decide the next general election?

I think not. And that's the main reason why the growth of house prices, while slowing down, will stay quite firm. There'll be no crash - just more spin from Brown, and more misery for first-time buyers.

He makes some good points.

I agree - makes sense.

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So is the Prime Minister really going to risk annoying all those "swing voters" in the semi-rural, edge-of-town seats which, while ripe for property development, will in fact decide the next general election?

He only needs to worry about it until the next election. Then, with an increased majority, he can do as he likes for 4 or 5 years. By that time the "swing voters" will be thinking about something else.

p

Edited by patprimer74

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He only needs to worry about it until the next election. Then, with an increased majority, he can do as he likes for 4 or 5 years. By that time the "swing voters" will be thinking about something else.

p

If the British public is stupid enough to vote Labour in again I'd be surprised. :blink:

Hopefully some Labour MPs will be doing a 4 or 5 year stretch after the cash-for-honours trial. Wouldn't it be just great to see Blair locked up where he belongs? You could go and visit him and take along a copy of the Guardian. :lol:

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Hopefully some Labour MPs will be doing a 4 or 5 year stretch after the cash-for-honours trial.

You may be in for a little surprise, Xurbia! Who'd have thought that this affair would backfire in such an interesting way? Happy days!

p

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You may be in for a little surprise, Xurbia! Who'd have thought that this affair would backfire in such an interesting way? Happy days!

p

Nothing would surprise me Pat. When the Labour government accepts money from a RAPIST who knows what they will do next. It wouldn't surprise me if Labour steal charity boxes from the Salvation Army next.

In my world a rapist is lower than a guttersnipe. I come from the old school though, a place where honour still exists and rapists get a good hiding.

Labour are obviously proud to mix with rapist scum. Just think about that.

So just to recap:

1. Labour take money from pensioners.

2. Labour support illegal wars.

3. Labour take bribes for honours.

4. Labour pretend they're going to build houses and won't.

5. Labour bolster public pensions by extorting council tax.

6. Labour makes a mockery of the BBC's independence.

7. Labour makes a mockery of immigration.

8. Labour presides over the biggest property bubble in history.

9. Labour accepts money from rapists.

10. bored of typing now as the list is endless.

Um, no nothing will shock me.

Edited by Xurbia

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So just to recap:

1. Labour take money from pensioners.

2. Labour support illegal wars.

3. Labour take bribes for honours.

4. Labour pretend they're going to build houses and won't.

5. Labour bolster public pensions by extorting council tax.

6. Labour makes a mockery of the BBC's independence.

7. Labour makes a mockery of immigration.

8. Labour presides over the biggest property bubble in history.

9. Labour accepts money from rapists.

10. bored of typing now as the list is endless.

You obviously haven't taken the news of the huge Labour lead in the polls very well, have you, poor demented loser.

p

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Prices to stay firm

Now is a good time - not least because the signals are mixed. And with interest rates up five times in 11 months - and more rises forecast - our house-price fixation is fast approaching neurosis.

Is this guy a poster?

But the big question for us property-obsessives is whether this impending slowdown is a temporary blip, or the start of a bigger slide in prices? And, last week, this crucial question was framed by the latest missive from Gordon Brown.

The Prime Minister announced that the UK will build 3m new homes by 2020 - so "affordable homes are within the reach of not just the few, but the many". That amounts to around 250,000 house completions every year, for the next 12 years.

On the basis of supply and demand, Brown is on the right track. If you increase the supply of housing, prices are likely to fall - or, at least, the rate of growth of prices.

That would not only soothe an overheated market, but would make housing more affordable too - which is good news for everyone.

But there is about as much chance of Brown's housing vision coming to pass as there is of him eloping with Cherie Blair.

Beyond the verbiage, let's have a look at Brown's record - given that even back in in 1997, he was calling for an expansion in the housing supply. By 2001, only 162,000 homes were completed - the lowest figure since 1924. The figure has grown since, but reached only 175,000 last year.

Over the same period, the demand for new houses, as measured by the number of new households, grew by an average of at least 250,000 a year. The real figure could be much higher - given the patchiness of our immigration data. That is why prices have surged so much, and beyond the reach of countless youngsters.

So what of the future? Brown's triumphant headline numbers imply house building will grow at 3.7 per cent per annum over the coming years. That's actually below than the current rate of growth. And I predict house-building will indeed slow over the foreseeable future. The reason is basic politics. The rate at which houses are built is closely connected to the granting of planning permission. Brown claims such permission will now be granted faster.

Really? Labour and the Tories are now locked in a battle for the centre ground of British politics. So is the Prime Minister really going to risk annoying all those "swing voters" in the semi-rural, edge-of-town seats which, while ripe for property development, will in fact decide the next general election?

I think not. And that's the main reason why the growth of house prices, while slowing down, will stay quite firm. There'll be no crash - just more spin from Brown, and more misery for first-time buyers.

He makes some good points.

Another trusted Bellweather says Great Crash 2 is not coming.

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You obviously haven't taken the news of the huge Labour lead in the polls very well, have you, poor demented loser.

p

I really don't care too much for polls and I think the majority of us are sick of all politicians. This is just a question of Labour being supported by a RAPIST. The demented ones are those who, by association, allow this to happen. Apart from declaring a nuclear war there isn't much else Labour can do.

So I think you are demented and the country is a loser. What's the point of name calling. I could call you Tony and Gordon's bitch but it's hardly constructive.

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I really don't care too much for polls and I think the majority of us are sick of all politicians. This is just a question of Labour being supported by a RAPIST. The demented ones are those who, by association, allow this to happen. Apart from declaring a nuclear war there isn't much else Labour can do.

So I think you are demented and the country is a loser. What's the point of name calling. I could call you Tony and Gordon's bitch but it's hardly constructive.

Sorry, Xurbia, I had no idea that this was meant to be a sensible conversation! So, as far as I can make out your views, the theme is "Labour being supported by a RAPIST".

This is just a question of Labour being supported by a RAPIST.

How does a political party stop someone being its supporter? Do the apparaticks arrange for every person in the land that they consider 'unsuitable' to have their brains examined to make sure there's no fondness for their party? Do your Thought Police guard every public meeting to watch out for them? Stand at the door of every polling station with a mind-reading gadget to weed them out? Perhaps have magic rays emanating from TV sets to read all 'unsuitable' people's minds during party political broadcasts?

"Labour being supported by a RAPIST" may well be a wonderful headline in your Express or Mail and give you comfort in these very dark days of oblivion but to anyone who has a modicum of grey matter it's absolute twaddle.

For all that you or I know, RAPISTS (putting the word in capitals seems to give you a special pleasure; have you asked yourself 'Why'?) are supporters of the Monarchy, any other political party, the Church of England, England soccer team, Oxfam, Amnesty International etc etc. So what? Does that somehow devalue the work of those organisations?

By the way, I'm not surprised that you say "the majority of us are sick of all politicians" because it shows that in your little fantasy world you know what "the majority" believe! By "the majority", are you speaking for more than half the 60,000,000 people in the UK? Or is it, perhaps, more than half the people in your train-spotting club? In reality, it's more likely to be the majority you speak of is of yourself, your cat, budgie and teddy bear - your only companions in your cold garret!

People are reduced to name calling when they find the arguments (if that's not too strong a word) put by some cretins so stupid and illogical that attempting to discuss the subject rationally would be a waste of time and effort. Bear it in mind. It explains to you why you are so often at the receiving end.

p

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