Thursday, March 8, 2007

February house prices ‘rose 1.8%’

February house prices 'rose 1.8%'

£121 rise a day.A crash on the horizon? I don't think so.

Posted by steve @ 11:34 AM (532 views)
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16 thoughts on “February house prices ‘rose 1.8%’

  • Yep, you can tell a lot from 1 months figures.

    A month ago the FTSE rose over 30 points.

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  • Steve says, “A crash on the horizon? I don’t think so.”

    However, the actual article he has provided the link for says, “Nevertheless, Mr Ellis repeated his long-held assertion that house price inflation will slow significantly during the second half of 2007. Higher interest rates and rising house prices, which make it extremely difficult for many would-be first-time buyers to enter the market, could dampen things down. The number of new mortgage approvals – a key indicator of housing market activity – has been slowing of late, Mr Ellis noted. In addition, the Royal Institution of Chartered (RICs) surveyors said last week that enquiries from potential homebuyers had fallen for the first time in two years.”

    And these comments from a VI too! Please don’t only read the headlines – it’s people being ill-informed that has been, at least in part, responsible for this mess in the first place.

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  • Banks and other commentators have been saying that a slow down will occur months in advance for years since at least 2004. It is complete rubbish house prices will rise by 15% this year. Low interest rates are going to keep fuelling this.

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  • From The Times:

    Britain’s biggest mortgage lender today cautioned that the housing market was beginning to slow despite seeing prices rise by an average of £121 a day last month.

    £121 is a massive increase, who on earth can afford that.

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  • This ‘mess’ has been caused by low house building, living in a very crowded island and extremely low interest rates.

    The US may be crashing but look at the size of the US, they can build themselves out of a problem.

    We in the UK can’t.

    If you want to buy a house now the only choice is to leave the UK, plain and simple. How can anyone afford price rises of £121 a day?

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  • Excellent, more tinder from Halifax but no fire from the BoE and the US is still burning.

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  • dohousescrashinthewoods says:

    Agreed, Dugmug. Steve, Probably better to look at the global credit situation – it is tightening because interest rates are rising (especially Japan). This is compounded because it triggers sub-prime bad debts, creating headaches across the market (currently heading for full swing in the US). Add to that negative equity in the US market that could stop people remortgaging to cheaper rates when their ARM teaser rate jumps.

    The “artificial demand” (easy credit meaning more people trying to buy) will disappear as credit becomes harder to get, which is why even bulls are admitting to a slowdown coming over the hill.

    Finally, I don’t see if this is this seasonally adjusted. Wouldn’t we expect prices to rise at this time of year? The Halifax curve seems to steer an average across the nationwide figures, showing flat growth at a time when we would expect it to tick up. That would mean the underlying trend is actually down?

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  • Flat growth, they are rising at £121 a day, that is not flat growth.

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  • C'mon Correction says:

    So I take it from reports like this we can expect RPI inflation to increase this month?

    Either these property reports or the inflation reports are false(or both!)? We can’t have RPI inflation falling while house prices are rising like this; it doesn’t calculate. If RPI has increased this month, then this will feed into wage inflation at a critical time in the year.

    ??????

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  • bidin'matime says:

    I don’t think even the so-called ‘experts’ appreciate just how quickly this thing can turn around. The BTL and BTS (‘buy-to-sit’) brigade may not be forced to sell imminently, but when they stop buying, whether due to credit restriction or signs of a small downturn, there will be no one left buying. It only takes a small percentage more sellers than buyers to send prices down and as soon as it starts, it will snowball.

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  • That’s right.

    There’s the supply issue as well. There’s an unmistakable surge of properties up for sale on my street, which usually sees one or two sales a year. There are currently 8 on the market, which all came on in January. I can only assume people think that this is as good as it’s going to get and a cashing in.

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  • Randomkevlar says:

    How come everybody shouts about all house price stats every month but no one takes that much notice of home.co.uk figures?
    Feb 07 figure state a -0.1% drop with an annual increase of 1.6% which of course due to inflation is actually a 2% or more drop in real terms.

    Is they something I should know about Home.co.uk that means we can all ignore it???

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  • Message No.5 from Steve .

    “This ‘mess’ has been caused by low house building, living in a very crowded island and extremely low interest rates.”

    Didn’t the Japanese housing market crash rather badly (though slowly) with the above conditions .

    “The US may be crashing but look at the size of the US, they can build themselves out of a problem.

    We in the UK can’t.”

    Have a look at the UK satellite maps from Google maps . Loads of that green stuff to build on . But the government won’t allow it .

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  • There may be some green land left in the UK but do we really want to concrete everywhere.

    I am sorry lads but with interest rates this low it is likely the avg house price could be 250-300k in 5 years.

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  • Deadspider is right.

    Demand is not just about numbers of people, it is what they are willing/able to pay too.

    Re the US – the Americans actually built themselves into a problem. Their boom has manifested itself as over building leading to a fall in prices. We are only seeing this on BTL flats.

    And on Deadspider’s last point, I actually support a rethink of the use of agricultural land. It is largely a subsidised, poisoned monoculture and provides very little amenity to ordinary people. Why not spread out a bit eh? Perhaps if land prices went down we’d be able to build much better homes – not just low cost (aka low quality) housing.

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  • Random – Agree,I’ll try and fid out the last Home.co.uk survey according to it, only the south of England are showing rises, oh and Scotland. Everywhere else showed losses. That is why I dont buy papers anymore, I prefer to surf the web for many sources and build my own picture.

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