Thursday, April 16, 2009

More Property ramping publication

House prices to start rising steadily as soon as October

Four million homeowners in the UK are playing a waiting game with the property market, watching for the best moment to trade up and cash in on cheaper home-ownership before prices start to rise. According to research from First Direct, these homeowners are now sitting on a savings pot of £20.2bn which is ready to be ploughed into the housing market when the time is right.The survey found that with the property market already showing small signs of recovery, the average Brit expects house prices to start rising steadily as soon as October 2010. One in six (15 per cent) of respondents said that house prices would return to steady growth by the end of 2009. However, a further 16 per cent expect to wait until after 2012 to see steadily rising prices again.

Posted by jack c @ 11:35 AM (3993 views)
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38 thoughts on “More Property ramping publication

  • It’s more mental excrement than news. If you look back at articles from the 1990’s (think there are some on this site somewhere) there was 5 years of this kind of talk before things began to change. 5 years and that was just a bubble bursting minus the ecomomic armageddeon we’ve seen and continue to face.

    I think there is a danager of looking at house prices too closely and forgetting the bigger picture. We are going down anywhere from 40 – 80% from here. There really is no debate beyond how bad it will be.

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  • need-a-crash says:

    Unbelievable amount of property ramping going on at the moment and yet when you look at the figures be it increase in mortgage lending, buyer interest or in the case of this article public opinion stats (as if the general public ever get this sort of thing right!) you see that the rampers really are clutching at straws…

    An increase from 23,400 to 24,300 or whatever it was for mortgage lending is tiny, tiny, tiny and the average Brit from this article doesn’t expect house price growth until late 2010, which is actually a long way off and is NOT this October as the headline seems to imply.

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  • why does the title say HOUSE PRICES RISING AS SOON AS OCTOBER when the article ACTUALLY says OCTOBER 2010?

    Moodys downgraded lenders the other day on the basis that the ASSUMPTION NOW WAS 40% FALLS. So why can’t the press spell out that by that time a £300000 property will be valued at £180000. LET’S GET THE PRICES DOWN BEFORE THEY START RISING SHALL WE?

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  • To put it crudely – this FT article is bilge. We are in unchartered waters. No one knows what and when with any degree of accuracy.

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  • It makes no difference what’s printed, the conditions which drove the boom have gone into reverse. Large deposits are required, unemployment is rising, mortgage lending is at record lows, negative equity is affecting large swathes of homebuyers. This won’t go away because of upbeat articles.

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  • waitingfor hpc says:

    this looks more like Gordons prayer to God for a saviour!

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  • As I said on an earlier post, I think that house prices will stabilise and perhaps rise slightly in the very short term. There are a lot of folk who are waiting for the right time to buy and prices have fallen, interest rates are low etc.

    Alas, October may not be the right time as I expect Interest Rates to rise from their current level by Christmas, which will catch out many of these new buyers. Mortgage rates +2.5% by Christmas and further job erosion could weigh heavily, continuing the downward slide of house prices.

    Unless we have to go to the IMF, that is……

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  • I feel strongly that the net effect of all this press ramping of property will be an increase in expectation of the sellers for this prime selling period, but the buyers will not, in the main, be fooled.

    Most sellers are going to miss out on their last opprtunity to realise a good sale price (-25% off peak).

    Asking prices are still about the same as peak in most regions.

    So we will have a Spring/Summer of high prices and low volume.

    As I, and many others, have predicted, it will be Autumn onwards before the forced selling starts.

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  • I did some work in the home of a local EA yesterday, he seemed to think we are about to turn the corner, the worst of the job losses are over, more people are starting to view houses (not buy), and a classic, “people are bored waiting around they just want things to get back to normal”.

    I trotted out all the arguments I’ve seen on here over the years but was told rather sniffily I did’nt understand the “fundamentals” of the housing market.

    That made two of us I replied, to stoney silence. I hope his cheque does’nt bounce.

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  • £20bn savings pot held by 4 million people? That’s an enormous… £5000 each. Hardly going to set fire to the market, is it?

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  • But Karlos you are forgetting the 0.20billion which adds that critical £50 to the equation

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  • Somehow the unsurpising news that, “One in six (15 per cent) of respondents said that house prices would return to steady growth by the end of 2009.” transforms into a headline of, “House prices to start rising steadily as soon as October.”

    5 in 6 do NOT expect house prices to start growing by the end of 2009. The FT is happy to overlook this.

    This has about the accuracy of expecting the BNP to win the next general election based on current polling.

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  • Genuine affordability is the key – I see no recovery in prices on the horizon if we get (a) rise in inflation but without wage inflation (b) Rising interest rates (c) Rise in unemployment – all of which in the coming months/years seem very likely IMO.

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  • Did no-one else clock the October mentioned in the headline was actually October NEXT year?

    And as Karlos points out, £20bn doesn’t go very far.

    Still I’m quite happy with this Irrational Exuberance – six weeks ago when I first got a whiff of a false dawn in the wind, I took a little punt and bought a rather large stack of Barratt shares – I’ve just sold half of them for double what I paid..

    ..keep ramping guys!

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  • mark wadsworth says:

    Karlos, genius bit of maths there, that kicks the stuffing out the whole stupid article.

    They aren’t even clutching at straws, they are clutching at imaginery straws.

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  • mark wadsworth says:

    Or should that be ‘imaginary’?

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  • You would think that they would at least state the exact date and time within the month of Oct.

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  • Survey by vested interest First Direct (HSBC) – a bit disappointing to see more and more of this type of article in the FT

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  • I don’t think that Brits realize the impact of the approaching new era with banks having much greater regulation and indeed bankers actually asking questions like: “Can you actually repay the loan?” House prices much fall much further and will not start to steadily rise – why would they?

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  • Note also the average punter thinks October *2010* – that’s October next year!

    I can say with confidence that things will actually be vastly better as soon as May…

    …2016

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  • Anybody seen the land price figures lately.They can be accessed via Google with the inspiring words

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  • Have n’t finished yet,to continue: They can be accessed on Google with the inspiring words :Land values fall by 50%

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  • It’s all a little perverse.
    If the so called house price crash (which as someone pointed out is still not very evident in many areas) was the result of easy money inflating a bubble and since that bubble is supposedly deflating then surely this price deflation is in itself the recovery?
    i.e. if bubbles are abnormal and unsustainable then a correction is needed to return to normality and sustainability.

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  • Why the hell are FT Adviser running an advert disguised as journalism for HSBC’s offset mortgage providing arm?!

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  • mark wadsworth says:

    DBC, good find. Now I shall do a clever link to the article I think you mean.

    Land prices down 50% already, another half of that still to go. Hey … wouldn’t that be a good time to replace Council Tax etc with LVT?

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  • £20.2bn is nothing so I am betting on a 50% crush and that is not a bad thing. At least the world will be a better place.

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  • dohousescrashinthewoods says:

    ~15% for, ~15% against, what about the other ~60%?

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  • george monsoon says:

    How much will that £20 billion have devalued by the time house prices begin to rise..

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  • My next-door neighbour said that she thought prices had stopped dropping, presumably on the strength of one month’s figures from the Halifax. The house the other side has just sold for the same price the people bought it for in 2004. Still twice as much as I could get a mortgage for, though affording my rent is quite easy.

    All this comical clutching at straws is in fact evidence that the fall has a long way to go yet. The market will continue to fall for as long as there are plenty of people around who think it is just about to turn. It’s when everyone has given up hope, and everyone has sold who is going to, that it finally will turn. And that will be at least 3.5 years from August 2007, as it was in 1989-1993, not 20 months from the peak as we are now.

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  • So where are we now… about 18% fall from peak? Once unemployment gets going and the repos start, that will continue at about 3% a month. According to this article that will go on for another 18 months. Tot it up, comes to about 70% fall from peak. I know my maths is back-of-the-fag-packet but you know what I mean…Great news!

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  • Anecdotally

    Just been speaking to a BTLer who’s brother has a place in Ireland. Apparently in Ireland things are fetching about a third of their asking price.
    I think they’re ahead of us and in a worse state, but certainly points towards the general direction.

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  • Apologies if this has already been covered by the time it gets posted – as my password requests never receive a response my posts are manual and don’t appear for a couple of hours… but, the statistical significance of 15% of these ‘wait-to-buyers’ living in London is exactly the opposite of that suggested by the article, which although a bit ambiguous, could be interpreted as canny Londoners getting ready to catch the upswing. The reality is nearly 14% of the UK’s population live in London (approx 8m out of approx 60m people) and the last 10 years of crazy houseprice rises have thwarted a higher proportion of London’s aspirant home owners’ than they have other regions wannabe FTBs. The upshot is that if value was finally returning to the market or was at least in prospect, the much trailed ‘pent-up’ demand should mean that Londoners are significantly over represented (i.e. more than by a puny 1%).

    No doubt this has been pointed out elsewhere on the site, but London based financial journalists must be Uber-VIs: 6 years reporting on the PE/Hedgefund/Asset Bubble phenomenas must have exposed them to people living lifestyles that they couldn’t possibly have managed on journalists’ salaries, so the temptation to over-borrow and MER must have been huge…

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  • Err, what odds are Ladbrookes offering on house prices falling in the final quarter of the year?

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  • another alan says:

    @symo… I’d have some of that.

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  • it_is_going_with_a_bang says:

    What a nonsense article.

    All it says is that homeowners are holding on to their money because they obviously don’t feel the property market is worth putting their money into.

    How on earth they can set any date or month is simply guesswork and nothing more.
    Ask someone if they want to invest in property and they will say – yeh yeh maybe in a year or so when prices come down.

    That means nothing whatsoever. As someone has already stated it indicates 2010 in the article but not in the heading.
    It’s almost laughable. Dominic Welling obviously has sweet FA to do. Excuse the language.

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  • voiceofreason says:

    Nice to see some old names back on the forum.
    A rash of ramping always brings out the big-er-old guns !!

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  • Greenshootsandleaves says:

    I decided to take part in the sweepstake someone at the office is running on when the housing market will recover. I was pretty despondent when the ticket I drew out of the hat turned out to be October 2009 (11.35 am on the 17th, to be precise). I thought I stood no chance, but now I’ve read the article there’s a spring in my step, I can tell you.
    That said, I’m not sure I’d want to buy a ticket in the sort of lottery Mr Welling appears to be advocating, what with prices averaging around £180k.

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  • new user 2007 says:

    If people waiting to move finally do, they may be willing and able to pay the same as 2007 for their house as they are merely trading. Not sure how that equates to new money (for whom the thinking is loss of deposit, not an exchange of one house for another)

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