Sunday, Oct 29, 2006

House prices aren't overvalued after all

Sunday Times: House prices just keep on flying

A round-up of the past year's housing market and some predictions for the year ahead. Lombard Street Research predicts rises of 12-14%, despite bank rates rising to 5.25%. Low interest rates and high population growth (partly immigration) to blame. Read it and weep. No mention of any counter-arguments, such as the fact that in most areas it's actually cheaper to rent than to buy....

Posted by drewster @ 07:48 PM (496 views)
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1. sold 2 rent 1 said...

I have been onto his own blog and posted a couple of times

He has conceded that if HPI rises by 15% over the next 12 months then the 8% IR "bubble" limit will be reduced to " 7%, 6%, 5.5%".
I'm still in for crash starting in 2008

Monday, October 30, 2006 09:36AM Report Comment

2. geed said...

His views are based on reason, I dont usually agree with this man. I have lived for the last 6 years in rented property and there is no reason why the next should be any different. Houses, Homes are luxury items in the current economic climate in the UK, that is a fact and that is shamefull.

I think it will go on for longer that 08 much to my disapointment. The banks are just stopping short of mailing bundles of cash through the post at moment, the BoE is standing by watching the train crash and the young and foolish just can't say no.

One thing I'm sure of, I'm not that young anymore and I'm certainly not foolish

Must speak to the landlord about putting a few pictures up on the wall.

Monday, October 30, 2006 10:27AM Report Comment

3. sold 2 rent 1 said...

His argument is based on facts, but all from the optimistic camp.

There is no real mention of the risks posed from:-
- continued rising house prices
- rising inflation
- US recession
- Stock market downturn
- wage inflation rising

Monday, October 30, 2006 10:46AM Report Comment

4. inbreda said...

The US recession is a biggie. The fact that growth was more subdued than expected is keeping the ftse subdued as well. It is the city bonuses that have kept the top end of london prices high. A US recession will be bad for the FTSE, bad for city bonuses and immediately bad for the top end properties in london. HPI would disappear overnight.

Monday, October 30, 2006 03:45PM Report Comment

5. tyrellcorporation said...

...Then they'll just start slashing IRs though... hopefully this will have the effect of simply urinating from a helicopter onto a burning oil refinery...

Monday, October 30, 2006 04:38PM Report Comment

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