Wednesday, July 2, 2008

Just one of many bearish articles this morning – see comment 1

When bubbles go pop

Sometimes bubbles deflate gently; other times they just go pop. No prizes for guessing which is the case in Britain's housing market. As price slides go, this is the fastest since 1992. Nor is it likely to stop. Instead of gentle deflation, we are getting a big bang. Prices on basics such as food and fuel are soaring, while credit has dried up. Consumers are seeing a squeeze on their standard of living while also fretting about rising joblessness.

Posted by little professor @ 01:14 AM (1202 views)
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7 thoughts on “Just one of many bearish articles this morning – see comment 1

  • little professor says:

    See also

    The Times: Falling house prices raise spectre of a crash

    Fears that the already severe slump in the housing market will mutate into a full-blown crash intensified yesterday as a key survey showed house prices plunging at their fastest annual rate since the end of the last recession. The pace of price falls almost doubled in the second quarter. Alan Clarke, of BNP Paribas, said: “There is virtually no light at the end of the tunnel for the housing market. Plenty more downside is likely.”

    The Telegraph: House price declines fastest since 1992

    Since the peak in October last year, the average house price has fallen from £186,044 to £172,415, with house prices now falling for eight consecutive months – a length of time not matched even in the house price crash of the early 1990s. Economists called the mortgage figures “dire”, “disturbing” and “horrible”.

    Daily Mail: House prices down 17% as experts warn outlook is dire

    The biggest loser is Sheffield, where prices have fallen by 17 per cent since last June – the biggest drop ever recorded in a city by Nationwide. The building society said average prices there peaked at around £200,000, but are currently around £168,000.

    Independent: House prices: The market collapses

    The general picture is of a housing market that is falling as fast as in the slump of the early 1990s – with worse to come.
    Conscious of the crisis facing the property market and the building industry, the Housing Minister, Caroline Flint, is today expected to announce a scheme to hasten the speed at which the Government responds to offers to buy property from housebuilders.
    A new “national clearing house” will be established, whereby builders can approach the government to sell their unsold stock for affordable housing.

    The Express is curiously silent on the matter…

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  • little professor says:

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  • Nice one LP,all of todays newspaper articles in one place and easy to read over breakfast.Thanks.
    The quote in the independant “A new “national clearing house” will be established, whereby builders can approach the government to sell their unsold stock for affordable housing.” made me smile.
    I can just see nu labours Affordable Housing Tsar in 2010 taking the credit for this policy as thousands of low income families move into their “luxury apartmentzs”.

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  • george monsoon says:

    I’m signing up for the affordable housing now..!!

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  • Still-waiting says:

    If the govt was investing that amount in each county rather than across the whole country, it might make a difference

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  • voiceofreason says:

    Thanks for the posting LP: Very nice.
    Who is this plonker Prof Stephen Nickell in the Independent article?

    “In the medium term, he added, the eventual easing of financial conditions may coincide with a renewed shortage of new housing, as construction has virtually ground to a halt. That could push prices up again as supply dries up.”

    Which means, don’t worry everyone, soon the banks will recommence throwing money at us so we can have nice high prices again….

    When what he should be saying is that prices have been unsustainable and are returning (thank Crunchy) to normality again, when people will be able to borrow less to spend less to buy a place to live. And inflationary growth of house prices will deter speculators and BTLers and return 3 million homes to the market for buy-to-live-in-ers.

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  • Brilliant post LP. What the news blog should be all about. Thanks.

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