Tuesday, March 20, 2007

Are we at the end of the road for the housing market mini-boom?

Are we at the end of the road for the housing market mini-boom?

The panel of "experts", as usual seems to be derived from estate agency and mortgage lender cheerleaders. Property prices are at a crossroads, so we asked a panel of experts for their views on where they go now. The consensus is a gentle but prolonged slowdown, but no-one denies there are still risks. Money editor Kathryn Cooper asks the questions ...

Posted by doomwatch @ 12:36 PM (517 views)
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6 thoughts on “Are we at the end of the road for the housing market mini-boom?

  • Why is it always a gentle but prolonged slowdown that then in relaity turns into yet another boom.

    They have saying there will be a gentle slowdown for years and that 10% year on year rises can’t happen, yet they always seem to.

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  • tyrellcorporation says:

    ‘I think you can almost see the market becoming a closed system — owner-occupiers with equity vs would-be first-time buyers. ‘

    I think this is exactly what’s happened. The owner-occupiers have detached from the normal food chain (market) and are currently floating in a slightly surreal jet-stream. For them, the only view they have now, is down.

    Conversely our necks are cricked upwards and have been for years!

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  • Having read this again, I now can’t help thinking this seems a little contrived. Ms Cooper takes on the Lynn role in the Alan Partridge episode [To Kill A Mocking Alan]; sat there feeding lines for the “experts”:

    “Yes, Alan. I wondered if you had any more Alan Partridge tie and blazer badge combination packs available.”

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  • Question: in the long-term, will there be enough people in such a “closed system” buying the properties at the bottom end (because if not, how do those at the bottom end sell their properties to move up the ladder, and if they can’t move up, the ones above them can’t move up, and so on…)?

    You need sufficent quantities of people either “downsizing” or doing the buy-to-let thing I guess. But will there be enough downsizing going on to sustain things if BTL dies out (as rents are increasing at the same rate as wages but house prices, and so mortgages, aren’t)? And even a downsizer, whilst they may want a few less bedrooms, won’t want to move to a “less attractive” area than the one they’re already in, whereas at least the odd first time buyer might have done so in the past, attracted by the lower house prices. AND if nobody new can get into the loop, “demand” from new households (which is supposedly going to keep prices up) doesn’t actually exist – because the new households aren’t able to get into this closed system anyway, and therefore can’t influence it. Sounds like a lot of stagnation to me, which means prices become more affordable over time thanks to inflation in the greater economy, so then people can get into the closed system after all, so it isn’t closed…

    These things never achieve a state of permanent equilibrium, tis always ups and downs for sure.

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  • What it requires is a “National Non-payment of Rent for 6 Months” demonstration. Bloody the nose of all the BTL brigade. If done by FTBs it will be a clear signal of unhappiness. A statement that FTBs like George are not going to sit back and watch all possibility of homeownership disappear.

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  • disgustedofyork says:

    There’s a couple of interesting points in there: Notice how the extinction of the first time buyer is acknowledged. Then dismissed as being irrelevant, as the market will be sustained by selling activity amongst the ‘haves’.
    Finally a straw of hope is thrown to the have nots, when Yolande Barnes points to trouble in 20-25 years time when the BTL and babyboomers sell up. Too bad if that’s too long to wait.

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