Jump to content
House Price Crash Forum
Sign in to follow this  
It is different this time

The Hurricane That Is About To Hit The Uk Housing Market

Recommended Posts

http://www.marketoracle.co.uk/Article3966.html

A matter of days after soothing words on the prospects for UK house prices for 2008 were issued by the chief economist of Britain's largest Mortgage Bank (The Halifax), the Royal Institute of Chartered Surveyors released data today which shows the worst margin between rising and falling house prices since the height of the 1990's property crash.

As this analyst warned in an article barely 3 days ago, the UK housing market is primed for a crash that is scheduled to occur in April 2008 following the changes capital gains taxes, though this is not the reason for falling house prices but merely a triggering point. Today's RICS data merely illustrates the tail end of the hurricane that is about to hit the UK housing market, which will be far more lasting and damaging than the recent stormy weather that has battered much of Britain's coastline.

The prospects for the UK housing market continue trend towards at least a 15% fall in average house prices over 2 years from August 2007 to August 2009

uk-house-price-forecast-march-2008.gif

UK_housing_market_forecast_Jan08.gif

Even property shows such as the BBC's popular and entertaining 'Homes Under the Hammer' is finding it difficult to present a positive picture on the outcome of auction buyers ability to realise a gain on their speculative refurbished buys. Instead of the slickly dressed walk on estate agents announcing potential profits of several tens of thousands of pounds, as used to be the case, now are being replaced with wide ranging rental value estimations. Defensive smiles from the property speculators cannot hide the fact that yields of under 4.5% are nothing much to smile about given the risks of capital loss, and this taken from programming shot during the second half of 2007. It will therefore be interesting to see what current programming reveals in say 4 to 6 months time

The reasons why the UK housing market is heading towards a crash are many, and have been iterated numerous times since May 2007 which can be revisited in the extensive articles archive. Home owners hoping that interest rate cuts will able to halt the decline will find disappointment in that expectation, as sentiment switches from greed to fear. From the prospects of capital gains to the realisation of capital losses as expressed in the loss of equity far beyond that of the £30 or so saved in interest payments per month following each 0.25% base rate rate cut. That is IF the banks in their decimated state are willing or even able to pass on the rate cuts to their increasingly high risk mortgage borrowers. No, not even wishful thinking that the government will step in to save the day will come to pass as we have seen with the Northern Rock debacle. A bank which is driving mortgage interest rates higher so that mortgage borrowers remortgage to another bank and hence Northern Rock moves that step closer to repayment of the £50 billion loaned from the British tax payer.

The UK has already witnessed the once booming flats and commercial property market crash. The plug pulled from under many commercial property funds starting in late last year, as the investment funds ran dry of cash and become forced sellers of properties to meet panic redemption requests from investors in the face of sharp falls in fund unit values. Those that remain in the funds, are now increasingly locked into depreciating assets

The buying instead of renting dead money mantra never really stood up to proper scrutiny as highlighted back in October 2007, the relative costs between the two are never usually properly evaluated when seen through the rose tinted glasses of perpetual money for nothing capital appreciation during a mania driven market environment.

By Nadeem Walayat

Well done Nadeem nicely put. The second graph of price forecast is very interesting, 25% drop of London house prices Aug 2007 to Aug 2009? Those, who think London is untouchable, will have a rude awakening! Come on Mr 'No boom no bust' stop it if you can :lol:

If London prices can fall 25% - 30% or maybe even more then God help the rest of the country. The rest will be on the market probably as 'buy one get one free'!

Share this post


Link to post
Share on other sites
http://www.marketoracle.co.uk/Article3966.html

Well done Nadeem nicely put. The second graph of price forecast is very interesting, 25% drop of London house prices Aug 2007 to Aug 2009? Those, who think London is untouchable, will have a rude awakening! Come on Mr 'No boom no bust' stop it if you can :lol:

If London prices can fall 25% - 30% or maybe even more then God help the rest of the country. The rest will be on the market probably as 'buy one get one free'!

Superb graphs

Share this post


Link to post
Share on other sites
http://www.marketoracle.co.uk/Article3966.html

Well done Nadeem nicely put. The second graph of price forecast is very interesting, 25% drop of London house prices Aug 2007 to Aug 2009? Those, who think London is untouchable, will have a rude awakening! Come on Mr 'No boom no bust' stop it if you can :lol:

If London prices can fall 25% - 30% or maybe even more then God help the rest of the country. The rest will be on the market probably as 'buy one get one free'!

Those that thought anywhere is untouchable aren't old enough to understand the housing market.

Share this post


Link to post
Share on other sites

There's going to be many many young folk tied down to new build rabbit hutches in negative equity in London in the next 2 years..........and all because they wanted to give the walls a lick of paint and hang a few pictures up. This will prove to be a very expensive lesson for them.

No...wait... :lol::lol::lol:

Share this post


Link to post
Share on other sites

And then the over mortgaged buy-to-letters start having to dump property as well as those already in negative equity who decide to cut there losses it's jsut going to get worse.

Wonder where teh cash will go.

Course some of us who had a a mixed portfolio for a pension scheme instead of a house are still making money.

:-)

Share this post


Link to post
Share on other sites
There's going to be many many young folk tied down to new build rabbit hutches in negative equity in London in the next 2 years..........and all because they wanted to give the walls a lick of paint and hang a few pictures up. This will prove to be a very expensive lesson for them.

No...wait... :lol::lol::lol:

Totally agree. An@l Numpties.

Edited by eric pebble

Share this post


Link to post
Share on other sites
If London prices can fall 25% - 30% or maybe even more then God help the rest of the country. The rest will be on the market probably as 'buy one get one free'!

There is no reason to assume (as you appear to) that London is charmed. It wasn't last time, it won't be this. There is every reason to think that London prices will fall more than the rest of the UK (with the exception of Northern Ireland).

Share this post


Link to post
Share on other sites
There is no reason to assume (as you appear to) that London is charmed. It wasn't last time, it won't be this. There is every reason to think that London prices will fall more than the rest of the UK (with the exception of Northern Ireland).

Mate I know who deals in London property all the time assures me that already it is entirely the norm to offer 10-20% under offer price atm..... and climbing..... Has been like this for ages too....

Edited by eric pebble

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 297 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.