Sunday, January 28, 2007

More Housing Bull from the BBC

UK home price 'up £1,000 a month'

Britain's housing boom will continue in 2007, with average prices rising by £1,000 a month, according to a report the Centre for Economics and Business Research (CEBR). Looks like the UK average 187K house will be 199K by year end, only a 6.5% increase, though saying £1000 per month does make a better more bullish headline.

Posted by enuii @ 01:21 PM (582 views)
Please complete the required fields.



11 thoughts on “More Housing Bull from the BBC

  • Just got me calculator out to check the figures, which state that 2007 will see a 7.6% increase and the average house will be £225K by 2010. Correct me if I am wrong but to me this means that house prices during 2008, 2009 & 2010 will increase merely (or less than) the real rate of inflation depending on your circumstances i.e. around 5% p.a to start of 2010. If we go to the end of 2010 then this equates to 4%. The days of property investment/speculation seem to be coming to an end. ‘Britains housing boom will continue’, but not for very much longer. Looks like MEWing will be a thing of the past for many as well.

    Reply
    Please complete the required fields.



  • “The CEBR does not share the fears from some experts that there will be a correction in house prices of between 15% and 20%”
    But we don’t like to dwell on those here at the BBC. Why don’t they just stop with the predictions – they all got it wrong last year so why should we take them seriously this year.

    Reply
    Please complete the required fields.



  • The CEBR has been long-time advocates of MEWing as a means of living, ie equity release as an alternative to a proper pension. See this from 2003 -http://news.bbc.co.uk/1/hi/business/2961549.stm. They seem to have too much invested HPI and the notion of spending the equity in your home – presumably through lucrative consultancy contracts with various investment companies who offer equity release schemes – to give an independent view on the subject. Try ‘CEBR equity release’ in Google and see how many links you get to sites selling equity release products…

    Reply
    Please complete the required fields.



  • They’re trying very hard to ignore that rather nasty 11% drop in mortgages in December.

    Reply
    Please complete the required fields.



  • Higher interest rates please(at least to kill off all the nonsense of the last 5 years). The sooner people realise that houses are bricks and mortar and not giant cash machines the better. At present there is a terrifying growth of money in the world – in other words inflation is going to let rip – solution 4% on world wide base rates please. Should make life rather interesting for amateur BTL portfolios :-).

    Reply
    Please complete the required fields.



  • It’s easy to write predictions and somehow market them as fact, however you can’t change the fact that there’s been a wholesale change in both the public and the press’s take on the housing market over the last few weeks. The balance is firmly in the house price drop camp and we all know how important public opinion is on markets.

    Reply
    Please complete the required fields.



  • Positive spin about a possible future by a VI hardly constitutes ‘news’ – then why report it?

    Reply
    Please complete the required fields.



  • any growth in HPI will please property owners even if it is slightly below inflation. Say you have 100 thousand to invest and you need to live somewhere.

    Option 1) Rent somewhere and invest 100000 at 5.5 tax (which you will have to pay CGT on)
    2) Buy somewhere worth 300000 and get 2% per annum appreciation on the property.

    Option 2 is still better as you can pay off the capitol, own a property and make all that money tax free.

    Reply
    Please complete the required fields.



  • Nohpc, – I agree to a certain extent. But you forgot to add the fees, stamp duty, etc.. to the property that you buy.

    Which would mean if you were only getting 2% a year. You’d probably need to wait about 2 years to cover the cost of buying the place before you started to make a profit on it.

    Oh and if you were going to rent it out to cover the mortgage then you need to include the running costs too, and don’t forget to pay the CGT on it when you sell…

    Buying still could be right for a lot of people, but in terms of running cost and agility, renting for most people is better than stretching yourself to buy a property which you probably don’t really like but it was the only thing you can afford. The only problem is that wags look at you like a freak at the dinner table, and the man of the house likes to talk about MEWing to buy that Porsche 911 GT he’s need to ‘recapture’ his freedom after feeling trapped in his own mediocre two bed end of terrace (it’s more like a semi!).

    Reply
    Please complete the required fields.



  • george monsoon says:

    NoHPC, better still, wait for the houses to drop in value, after all they are only made of bricks, wood and quite a lot of MDF. When the prices drop, buy one at a reasonable price. A price that allows for enough disposable cash to feed and clothe your family, a price that will not cripple you if interest rates go up,a price that means you and your family can have a HOME of your own. (as opposed to an ATM – there is a difference! honestly! houses were actually built to live in!!). When settled, sit down with said family on a Saturday evening and watch the cretins and speculators (same thing) throw themselves out of their Chelsea flat windows.

    Is this scenario impossible, improbable or impractical in any way? I will answer that question with the correct answer that is NO!

    Reply
    Please complete the required fields.



  • NoHPC

    Assuming that rent paid = repayment on mortgage – and that it continues to be the case for as long as ‘you own the house’.

    I agree with you. Many property owners will still like this scenario, because they are idiots!!!!

    No… Any sensible investor will be looking for a return greather than inflation.

    Besides; ISA and dividends are all tax free. And owning a property is not so great. You are responsible for all repairs, insurance etc etc. And you are a lot less flexible.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>