Wednesday, March 14, 2007

HPC’s Financial Planner on BBC

Head to head: Will property prices crash?

House prices are accelerating again and first time buyers are stretching themselves even more. But interest rates have gone up and may go higher. Two commentators ponder if the property market is a bubble about to burst.

Posted by david20040_0 @ 12:13 AM (488 views)
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7 thoughts on “HPC’s Financial Planner on BBC

  • Well done to whoever helped arrange this with the BBC and Mr Davis, who provided an excellent summary in clear language. Its the sort of balance we require from the media. The shortage of housing is always trotted out – hopefully someone in influence will start asking why we have so many properties sat empty as investments for capital gain over the country.

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  • dohousescrashinthewoods says:

    Good stuff – and on the BBC too!
    Are they starting to cover butt for all their weak ramping?
    Have the bosses sold their BTLs?
    Am I too cynical this morning?

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  • The no crash bloke argues the usual stuff, lack of supply, rich investors, immigration and so forth. However, if you look at the highest house price growth last year, at county and unitary authority level, Neath Port Talbot in Wales had the highest house price growth over 2006, rising 14 per cent.

    No-one can tell me that this was lack of supply, that there was a huge number of people all wanting to move to industrialised South Wales, or that there are scores of international investors snapping up desirable properties. No, the truth is, it was one of the last places that housing was cheap relative to rest of the country, so people saw it as an opportunity to speculate. Same goes for Hull and a whole host of other towns, where no of the above arguments apply.

    Sorry mate, Britains housing boom is based far more on speculation than any underlying economic fundamentals.

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  • Interesting – suddenly all the news in the papaers is about a possible pending crash – today the stock market has opened and is already nearly 100 points down on the FTSE 100 Index – I went for a walk last night and the three houses by me that last week had sold signs now say for sale again, and I notice that one of these has dropped it’s asking price by a staggering £50K – Ok it started at £950K. We have the budget next week which I am sure is making the markets nervous – The US market is most definately now in Free Fall, which is being led by the Sub-Prime market collapsing, and 10’s of businesses on the verge of going under… Are we catching the cold from the US. All we need now is for interest rates to go up again next month which I believe they will – If the media talk about a crash enough people will start to believe it and a crash will certainly be triggered – I believe that we have now reached the peak – the turning point will be over the next three months and then it will be a slow down hill run for the next 3 to 4 years. I am not expecting a huge drop though this year, and certainly there will be the wave that will head out from London and the South East, which will mean that some parts of the country still have several months of Boom left.

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  • Who is Jonathan Davis?

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  • “Right now, there is a stampede in the US: according to some experts, the market is falling faster than since the Great Depression of the 1930s.

    The buy-to-letters drove it up and they are bringing it back down again. ”

    No they didn’t. I fear brother Jonathan is confusing us with US like so many others before. There is a stampede in the US, brought about by much speculation (flipping). Yes, there is flipping here too (and buy-to-keep-empty) but my impression is that is has been rife in the US, whereas here it is a small portion of the BTL market. There are similarities, both UK and US developers have ended up catering for the demand from the investment market rather than owner-occupiers but I believe that the difference lies in how long those investors intended to hold.

    Anecdotal evidence, I know, but just how many articles on the US buy-to-let market have you read? Not subprime, not residential, not holiday homes – there are gazillions of those but buy-to-let, yields etc. Answers on a postcard please.

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  • Maybe Jonathan Said should read “The Great crash 1929” by Galbraith and educate himself on the never ending ability of “free markets”
    to deliver misery from greed driven stupidity.

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