Wednesday, October 17, 2007

Another Warning for Housing Market

Bleak warning of US-style British housing slump

IMF's findings will fuel fears over the housing market’s prospects after recent evidence in a series of key surveys that house prices have begun to fall in some parts of the UK.

Posted by peter @ 04:17 PM (1272 views)
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4 thoughts on “Another Warning for Housing Market

  • “In the UK, the IMF’s number-crunching indicated that only 60 per cent of the rise in house prices since 1997 is explained by its model of fundamental factors, leaving 40 per cent unexplained.”

    40% seems a plausible drop to me, although they have to try and spoil it by also saying:

    “Its model of prices does not, for example, factor in key factors in the British market such as shortages of housing supply, boost to prices from immigration, and greater affordability owing to the availability of mortgage financing. [and] Unlike the US, European housing markets have largely avoided lending to financially exposed homebuyers through “sub-prime” loans, so lending standards have been higher, it notes.”

    The IMF haven’t been watching Panorama, et al, if they believe the “lack of sub-prime” argument, have they! And supposedly proffessional economists talking about “greater affordability” is criminal – they know credit never stays loose forever, they know interest rates don’t stay in the same place for anything like the 25 years that most mortgages last for, so this “affordability” is only ever a short-term argument at best and is never going to prop up a housing market in perpituity! Mortgage brokers using “affordability” to justify lending higher multiples to people is one thing – we know they’re in it for the money and we expect them to be greedy, so it’s dispicable but at least understandable – but the same crap coming from the IMF??? Why?

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  • Always go to the source…I’ve possibly done the IMF a dis-service in my comments above, as having actually read the relevant sections of their report, they actually say, “For example, migration patterns, supply constraints, and changes in the availability of mortgage financing — including to the subprime sector — could all be relevant” which the Times journo has then interpretted to his way of thinking!

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  • tyrellcorporation says:

    The Times is dogmatically pro Labour. Much like the Beeb and Reuters, the left-leaning slant and ‘everything is going great’ stance is all pervading. This article appearing in The Times is remarkable in itself.

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  • I honestly can’t see the leftward lean is in the neoliberal mainstream media, Tyrellcorp.

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