Monday, March 12, 2007

Prices up 1% since December 2006 – DCLG

House prices rise from 9.9% in December to 10.9% in January 2007 - DCLG

The UK house price inflation rate rose from 9.9 per cent in December 2006 to 10.9 per cent in January 2007. Between December 2006 and January 2007 there was a rise of 2.1 per cent in the prices index of properties bought compared with a lower increase of 1.1 per cent over the same period last year resulting in an increase in the inflation rate

Posted by converted lurker @ 11:29 AM (484 views)
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16 thoughts on “Prices up 1% since December 2006 – DCLG

  • I guess we already new this.

    You have to ask however, how long this can continue?

    Another year of 10% and we’ve got houseprices at 7 times earnings. Another year after that and we’ve got mortgage payements on your average home equal to the average take home pay.

    For sure Steve will be on here telling us that prices will still go up, but to me it doesn’t seem possible.

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  • They can and will go up, there are enough people who are coming into the country who can afford to pay these prices so they will keep going up.

    Everyone keeps predicting a slow down in a few months but it never happens or materialises.

    Property will be out of reach for my generation.

    I wish you guys could just understand that houses won’t drop and at best they will stabilise at rises of 10k a year.

    House prices are currently rising at £121 a day and may even increase this month.

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  • You guys say that they can’t rise any further, yet every year house prices rise by at least 10k.

    It is only March yet prices have rocketed by over 5k.

    When will you understand, there are absolutely no signs that the market will crash.

    All you guys yourselves have a vested interest and as soon as prices start to drop you too will try to buy your own home.

    There is massive demand for housing and massive immigration.

    Everyone here knows I am right with this yet cannot admit it to themselves.

    People like Japanese Uncle with his trends is wrong.

    THE UK MARKET WILL NOT CRASH THIS YEAR!

    I will say that now and be proved right at the end of the year and anyone who doesn’t believe that is kidding themselves.

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  • converted lurker says:

    Ha! this is brilliant, if wages increase at 3% and house prices go up by 10% at what point would average prices = all of the average take home pay…hahahaha. I reckon 2010

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  • There’s massive immigration in order to suppress wage demands, how in the name of Crash Gordon can prices keep on going up with wages heading in the opposite direction can somebody answer me that.

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  • > They can and will go up, there are enough people who are coming into the country who can afford to pay these prices so they will keep going up.

    OK Steve, the average home is £200K, so at 3.5 x salaries, the immigrants coming here to earn money doing low paid jobs will need to be earning £57K a year.

    That’s nearly twice the UK average wage.

    Yep, makes sense.

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  • “There’s massive immigration in order to suppress wage demands, how in the name of Crash Gordon can prices keep on going up with wages heading in the opposite direction can somebody answer me that.”

    yeah – pack loads of them into the same building – and charge each room out for the same amount of money you used to rent out the whole place

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  • Steve, sorry, but I the vast majority of these in-migrants are poor people from poor countries (particularly the EU accession countires), seeking to earn some extra dosh here and then return home in a few years to be back with their families. If they earn so little in their own country that they seek to move here instead, I don’t think you can argue that they can afford to buy houses that even we can’t afford.

    I think you’ve confused two different issues here. The first is that migrants in general are pushing up the population figures, and so supposedly increasing DEMAND for housing (usually rented housing, but you could argue this provides more tenants for BTL landlords and so more of them are buying). The second issue is a far smaller number of super-rich Roman Abramovich types pushing up PRICES in the swankier parts of London.

    Do bear in mind that this second factor has a dispoportionate effect on the “average house price” figures you keep getting so upset about (you only need to sell a handful of multi-million pound Chelsea residences at an inflated rate to make the overall average go through the roof, even if most normal houses aren’t increasing that fast). The effect of the first factor on house prices is arguable, because the increase in population due to births vs. deaths has been dropping, so the migrants aren’t having as much effect as they might have done, and house building has been picking up recently too (from 1991 to 2005, our population increased 2.5 million and the “stock” of dwellings in the country increased 2.1 million for the same period, and of course many households contain more than one person), so I don’t really believe demand is exceeding supply much more than it was in the early 1990’s, and of course the market managed to crash then.

    Whether the market will crash this year or not is not something anyone can predict – you could well be right. In fact, it is theoretically possible that it will never crash, although the evidence of every other similar asset price inflation – in houses, dot.com shares, business premises in Japan, tulip bulbs, etc, etc, – for hundreds of years of human history, would make the event of no crash happening this time a truly unique event (and so seemingly very unlikely). The best that can happen is that price increases level out to the same rate as wage inflation, as I can’t see even the mortgage industry offering 7 or 8 (or more) times mortgages, which is what you would start to need if things just continued as is. There is an element of speculation in the current market and that means, when gains ahead of inflation (and interest rates) stop being made, speculators will likely pull out added to those who couldn’t afford their 5 times mortgage in the first place hitting the rocks – this is sound reasoning, not just us lot kidding ourselves.

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  • Tipping Point says:

    Anyone know the sort of numbers are selling at the moment? Maybe these figures are being pushed up by a large number of good to high spec renovated houses being sold. So many people have been persuaded to go into the house renovation game that I wouldn’t be suprised.

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  • And when it all goes tits up the government will be the first to say ‘you shouldn’t borrow what you cannot afford!’ it’s not our fault……..

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  • Steve said:
    >>They can and will go up, there are enough people who are coming into the country who can afford to pay these prices so they will keep going up.

    Such as whom?
    A few houses selling in London to obscenely wealthy Russians will not keep the market afloat and the housing market is like a food chain with those lower down the ladder feeding those above etc. Who are the “enough people coming into the country”?

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  • Steve said:
    >>They can and will go up, there are enough people who are coming into the country who can afford to pay these prices so they will keep going up.

    Such as whom?
    A few houses selling in London to obscenely wealthy Russians will not keep the market afloat and the housing market is like a food chain with those lower down the ladder feeding those above etc. Who are the “enough people coming into the country”?

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  • Patience my children, patience.

    The tipping point will be when growth slows to mid to low single digit growth. At current rental yields of 4% or less before expenses, these are hardly attractive returns. Yet investors continue to buy or at least hold stock because of capital growth expectations. Once that growth slows down a bit which in time it will, then we will see investors turn to other asset classes and start to offload property stock.

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  • Denzil is spot on, London is not the rest of the UK and must be treated in isolation, I wonder what the figures would look like if Greater London is erased from them!

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  • The people from new EU accession states may be poor but when you have 10 people living in one house they can afford it.

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  • > The people from new EU accession states may be poor but when you have 10 people living in one house they can afford it.

    Give me strength!

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