Thursday, June 12, 2008

“Big Scary Numbers”

How far will house prices fall?

If we extrapolate from the Halifax's 6.8% drop so far this year, then 2008 will end with house prices down by 15.8%. If we think the rest of the year will be just like the past three months, then prices will be even lower - down by 21.3% by the end of December. However, the Department of Communities and Local Government (DCLG) says prices are still 5% higher than a year ago

Posted by little professor @ 06:20 AM (1256 views)
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6 thoughts on ““Big Scary Numbers”

  • based on the BBCs previous articles that involve predicting things in the future based on statistics (Future population of the UK etc), I’m surprised they don’t foresee a time in a few years when house prices turn negative..

    I kind of expect to see the headline:

    House prices ‘to average minus £1m by 2050’

    Based on current price decline, the BBC expects the average UK property to be in negative value within 10 years compounding further price falls etc etc”

    Maybe the express will run it too but use a more hysterical shrieking font

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  • “House prices ‘to average minus £1m by 2050’

    Quite. People were quite happy to give us that kind of [email protected] when prices were rising, on the back of a credit boom, which is now destroying the banks.

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  • Come on guys, we roll out the figures ourselves.

    I think this is a relatively balanced article even if I disagree with the vested interest commontators views.

    The general public have a right to see where the figures could go.

    As for the surveys still showing positive I can only assume they are including houses without mortgages ie £1-2m + bought with huge city bonuses and by foreign investors and that sales at these levels are throwing out figures of regular mortgaged property sub £1m.

    Whilst the Haliwide surveys can be volatile, to be showing -2.5% in peak purchase months points strongly toward larger monthly falls as the year goes on.

    No-one in their right mind now would put in any more than a cheaky offer on a property (-10/-15%) and if they did I’d be very surprised if the surveyor didn’t down value the property on behalf of the mortgage company.

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  • mark wadsworth says:

    I’m going for ‘double digit falls’, i.e. somewhere between 10% and 99%.

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  • Fingerbob69 says:

    It’s the repeated positive spin put in by the vested intrests that gets me. In 1990-92 despite houses still selling (2/3 per week at estate agent in Ipswich were I worked at the time) and 100% morgages still being readily available, the market still dropped 20% during those two years. Just to support prices down by 6% this year so far, sales would have to increase by about a third… morgage lending would therefore have to increase by about a third. The banks simply do not have that sort of cash to lend or more importantly, the will to lend it.

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  • need-a-crash says:

    I thought DCLG and Land Registry figures were lagging indicators based on completions, so at least 2/3 months behind Haliwide surveys??

    So why is the BBC using these as evidence that the surveys aren’t congruous?

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