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Capital Economics Suggest 20% Hpc By Christmas

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http://www.thisislondon.co.uk/standard/art...+low/article.do

Homes warning as new mortgages fall to record low

Martin Bentham, Home Affairs Editor

29.07.08

Britain's housing crisis deepened today as the number of new home loans slumped to a record low and a government adviser warned of three more years of rising mortgage costs.

The Bank of England revealed only 36,000 mortgages were approved for people moving home last month - 69 per cent down on the total 12 months ago. The number has now fallen for 14 months in a row and is at the lowest level since records began in 1993.

Today a report by former HBOS boss Sir James Crosby, commissioned by Prime Minister Gordon Brown, also issued a stark assessment of the prospects for the country's housing market and wider economy.

Sir Jameswarned that lenders would continue to raise the cost of their mortgages for at least two to three more years and predicted more repossessions and continuing falls in both house prices and consumer spending.

Sir James's report, ordered in the hope of unearthing potential solutions to the slump, also cautions that the government intervention, while a possible option, might "create more problems-than it would solve". It adds that the shortage of mortgage finance "will persist throughout 2008, 2009 and 2010".

The bleak conclusions were reflected in today's Bank of England figures, which also showed a steep fall in the overall value of mortgage lending, with net advances last month hitting a near eight-year low of £3.1 billion.

There was also a fall in all types of mortgage approval - including remortgages, equity release and buytolets - with just 165,000 new loans agreed during June, down from 214,000 three months earlier.

City experts said the figures showed the continued stranglehold of the credit crunch. Howard Archer, chief UK and European economist at Global Insight, called it "yet more very disturbing mortgage data".

Vicky Redwood, UK economist at Capital Economics, said the latest fall in mortgage approvals pointed to house price falls of at least 20 per cent this year. Simon Rubinsohn, chief economist at Royal Institution of Chartered-Surveyors, said: "Unless the authorities take steps to restart the mortgage market, the likelihood is that there will be more bad news in store."

In further signs of the troubled housing market, Abbey today said that the number of its customers more than three months in arrears with their mortgages had risen significantly.

But calls for government intervention to prop up the housing market were met with only a limited endorsement in Sir James's report.

One option is for the Treasury to guarantee new mortgage-backed securities to increase the flow of money available to banks and building societies, but warned that this might ultimately be rejected.

The report added: "Lenders are seeking to re-price existing mortgages but this is a slow process which will take two or three years to run its course. This will cause an increase in defaults, which are in any case on the increase."

Nick Leeming, of Propertyfinder, said: "The Crosby report offers a chink of light at the end of the tunnel but this is not a time to delay or be timid."

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Depends if they are talking peak to trough, and also on how much Haliwide fudge their seasonal adjustments, but it is achievable. Although by that point we might well be seeing 0 mortgage approvals and no one will have any idea how much a house costs anymore.

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Nick Leeming, of Propertyfinder, said: "The Crosby report offers a chink of light at the end of the tunnel but this is not a time to delay or be timid."

Desperate property ramper of the day goes to Mr Leeming.

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Depends if they are talking peak to trough, and also on how much Haliwide fudge their seasonal adjustments, but it is achievable. Although by that point we might well be seeing 0 mortgage approvals and no one will have any idea how much a house costs anymore.

Prices are set at the margin. All it needs is for 1 mortgage approval only in a particular month between a particularly tough buyer and a particularly desparate seller and we could see 30% reductions by Christmas...

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20% by Xmas has been my prediction for a while now, so good to see some 'experts' agreeing - although having spoken with an EA in Central London recently, 20% off last year's peak is where we're at now... ;)

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20% by Xmas has been my prediction for a while now, so good to see some 'experts' agreeing - although having spoken with an EA in Central London recently, 20% off last year's peak is where we're at now... ;)

Agreed!

It's nice to see some 'mainstream' economists moving in the direction of the predictions by 'financial planner' / Jonathan Davis etc...

However, I was going to make a viewing on a particular property with a view to, if it all looked sound, putting in a 25 - 30% below asking price offer on it but all this bear food is kind of making me think twice! All I can hear in my head is 'look at what happened in Japan!'. Surely it's not going to get that bad? (that's a rhetorical question!)

I guess nobody ever said calling the bottom of any market was easy!

R

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Oh Hard and Fast... Wait till Thursdays news, that will have a even the optimistic vi's and Daily Express readers thinking "WTF!, this correction seems to be hanging on a bit"

But one thing is for sure, house prices will go up eventually... BUT at a rate WELL below inflation.

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Would love to se a graph on avg price prediction change by all main stream media outlets (or just those on the front page) make the hpc monthly change graph/cliff look like a weee lil bump.

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http://www.thisislondon.co.uk/standard/art...+low/article.do

Homes warning as new mortgages fall to record low

Martin Bentham, Home Affairs Editor

29.07.08

Britain's housing crisis deepened today as the number of new home loans slumped to a record low and a government adviser warned of three more years of rising mortgage costs.

The Bank of England revealed only 36,000 mortgages were approved for people moving home last month - 69 per cent down on the total 12 months ago. The number has now fallen for 14 months in a row and is at the lowest level since records began in 1993.

Today a report by former HBOS boss Sir James Crosby, commissioned by Prime Minister Gordon Brown, also issued a stark assessment of the prospects for the country's housing market and wider economy.

Sir Jameswarned that lenders would continue to raise the cost of their mortgages for at least two to three more years and predicted more repossessions and continuing falls in both house prices and consumer spending.

SirThere was also a fall in all types of mortgage approval - including remortgages, equity release and buytolets - with just 165,000 new loans agreed during June, down from 214,000 three months earlier.

City experts said the figures showed the continued stranglehold of the credit crunch. Howard Archer, chief UK and European economist at Global Insight, called it "yet more very disturbing mortgage data".

Vicky Redwood, UK economist at Capital Economics, said the latest fall in mortgage approvals pointed to house price falls of at least 20 per cent this year. Simon Rubinsohn, chief economist at Royal Institution of Chartered-Surveyors, said: "Unless the authorities take steps to restart the mortgage market, the likelihood is that there will be more bad news in store."

In further signs of the troubled housing market, Abbey today said that the number of its customers more than three months in arrears with their mortgages had risen significantly.

But calls for government intervention to prop up the housing market were met with only a limited endorsement in Sir James's report.

http://news.bbc.co.uk/1/hi/business/7530432.stm

Willem Buiter, a former member of the Monetary Policy Committee at the Bank of England, forecast further big falls in house prices.

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http://www.thisislondon.co.uk/standard/art...+low/article.do

Homes warning as new mortgages fall to record low it is becoming obvious now that propping up the housing "market" with LIAR LOANS is totally unsustainable.

Martin Bentham, Home Affairs Editor

29.07.08

Britain's housing crisis deepened today as the number of new home loans Liar Loans being issued slumped to a record low and a government adviser warned of three more years of rising mortgage costs.

................/

Today a report by former HBOS boss Sir James Crosby, commissioned by Prime Minister Gordon Brown, also issued a stark assessment of the prospects for inevitable consequences of LIAR LOANS to the country's housing market and wider economy.

Sir James warned that lenders would continue to raise the cost of their mortgages Liar Loans for at least two to three more years and predicted more repossessions and continuing falls in both house prices and consumer spending.

Sir James's report, ordered in the hope of unearthing potential solutions to the slump, also cautions that the government intervention, while a possible option, might "create more problems-than it would solve". It adds that the shortage of mortgage finance shortage of LIAR LOANS "will persist throughout 2008, 2009 and 2010".

The bleak conclusions were reflected in today's Bank of England figures, which also showed a steep fall in the overall value of mortgage Liar Loan lending, with net advances last month hitting a near eight-year low of £3.1 billion.

There was also a fall in all types of mortgage approval - including scams like remortgages, equity release and buytolets - with just 165,000 new loans [probably mostly Liar Loans] agreed during June, down from 214,000 three months earlier.

City experts said the figures showed the continued stranglehold of the credit crunch the lack of LIAR LOANS. Howard Archer, chief UK and European economist at Global Insight, called it "yet more very disturbing mortgage data proof of the fact that the Liar Loan bubble has burst - as was always inevitable".

Vicky Redwood, UK economist at Capital Economics, said the latest fall in mortgage LIAR LOAN approvals pointed to house price falls of at least 20 per cent this year. Simon Rubinsohn, chief economist at Royal Institution of Chartered-Surveyors, said: "Unless the authorities take steps to restart the mortgage LIAR LOAN market, the likelihood is that there will be more bad news in store."

In further signs of the troubled housing market, Abbey today said that the number of its customers more than three months in arrears [due to that being the inevitable outcome of Liar Loans] with their mortgages had risen significantly.

But calls for government intervention to prop up the housing market with government sponsored LIAR LOANS were met with only a limited endorsement in Sir James's report, becasue even they balked at the idea of a government backing Liar Loans, which are the only option open to raise the ridiculous sums needed to buy UK slaveboxes which have become so ludicrously expensive, thanks to the massively inflationary consequences of LIAR LOANS.

One option is for the Treasury to guarantee new mortgage-backed securities to increase the flow of money LIAR LOANS available to banks and building societies, but warned that this might ultimately be rejected.

The report added: "Lenders are seeking to re-price existing mortgages desperately continue issuing LIAR LOANS but this is a slow process which will take two or three years to run its course. This will cause an increase in defaults, which are in any case on the increase, as is inevitable with LIAR LOANS"

Nick Leeming, of Propertyfinder, said: "The Crosby report offers a chink of light at the end of the tunnel but this is not a time to delay finding a way of pretending everything is rosy and just continuing the status quo of the last 6-8 years and continuing to issue LIAR LOANS or be timid."

:D

Edited by eric pebble

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Does the Evening Standard have a property section - just wodnring how reliant on property advertising it is to get away with all these 'truths' about house prices.

From what I can see most 'local' papers are avoiding it but, I suppose, the ES is a bit different to your average local paper.

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  • 399 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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