Thursday, July 19, 2007

Halifax raises 2007 forecast

Halifax revises up 2007 house price forecast

LONDON (Reuters) - Britain's largest mortgage lender HBOS, which produces the closely watched Halifax monthly house price survey, revised up its 2007 house price inflation forecast to 6 percent from 4 percent on Thursday. House prices have recorded robust growth this year despite rising interest rates and affordability constraints as hot spots in areas such as London and Northern Ireland drive headline inflation higher. "This revision largely reflects the greater upward movement in prices than expected during the first four months of the year," HBOS said in a statement. Nonetheless, evidence is starting to emerge that five interest rate rises in less than a year are starting to dampen demand in the market.

Posted by benedict @ 11:33 AM (513 views)
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10 thoughts on “Halifax raises 2007 forecast

  • hmmm they cant exactly say the market is crashing can they, no-one would borrow from them..lol

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  • george monsoon says:

    An unrefutable projection from a completely impartial source with no vested interest in house prices rising.
    excellent..!

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  • Fortune Teller says:

    The market will crash.

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  • ontheotherhand says:

    At least Reuters writes that Halifax “revises” the forecast whereas BBC wants to use the positive word “ups house price forecast”. Prices have already risen 5% in 2007 and so their old forecast of 4% was clearly wrong. By adjusting it to 6%, Halifax is therefore predicting only 1% more till the end of the year which is less than inflation, so if they are right homeowners will make a loss in real terms.

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  • Well, let us give em credit, they keep their subdued forecast of no growth in 2H 2007, but they have reflected the higher than expected growth in 1H

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  • So they’re saying (in a nutshell):

    “things are getting bad but we’re upbeat and optimistic”

    Ah well that’s okay then.

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  • I’ve noticed the BBC has pounced like hungry sewer rats on this and trumpeted it on their front page.

    It’s unashamedly biased. There’s not been a peep from the BBC concerning the recent structural inflation issues and dropping of house prices according to the Land Registry figures. The BBC really have become self-interested government puppets.

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  • Nearly time for the MPC meeting….

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  • Yes Paul,

    The activities of the BBC are coming under increasing spotlight. House price hypes, comic relief fraud, insulting the Queen, what’s next?

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  • Paul

    Good point. The main issue is the problem of rising inflation and this problem is only going from bad to worse. The inflationary pressures are starting to come from all angles. Still thinking about inflation, the government changed its prefered measure of inflation to CPI some time ago, (changing from RPI). The government has urged employers to base annual wage settlements on CPI rather than RPI. This enabled employers to offer smaller annual percentage wage increases as CPI less than RPI. But the actual rate of inflation experienced by most people is at least RPI (if not higher than RPI). This has caused wages to fall behind real price increases, with the result that peoples purchasing power has fell sharply. This Governement inflation measure con trick is having a big effect and I believe that it is behind
    the reduction in the amount people save and why so many people seem to be struggling. A friend of mine who has a good job, recently said to me that him and his family are ‘sinking financially’. I personally know so many people who feel like this. People can only be financially squeezed so far and then something goes bang, and i think that something will be the economy.

    All the economic variables seem to be going south.

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