Sunday, September 6, 2009

Pining for the good old days

Property shows potential, but work required

Start: After a dire 2008, which saw price falls of 16pc, the UK housing market has been one of the more surprising sources of good news on the economic front in the past few months ... Finish: Clearly the price rises over the past month are not the beginning of a return to the booming housing market, which began to unravel with the global downturn. Not until unemployment stabilises are larger increases likely to occur. The high levels of household debt relative to income, prevalent in the UK, are unlikely to foster a booming housing market. Nationwide expects to see larger increases in three to five years. Instead we are in for a period of stabilisation, with some volatility along the way. Following 16pc falls in prices in 2008 alone, that is reason enough for some cheer.

Posted by quiet guy @ 12:18 AM (1439 views)
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7 thoughts on “Pining for the good old days

  • The current housing market is a zombie being kept alive on low interest rates, deferred mortgage payments, sellers turning landlord, banks holding back repo’s and idiots buying the hype that now is the time to buy.

    It reminds me of that episode of The Simpsons where Marge decides to teach children the piano to get some extra cash rolling in. Lisa points out to Marge that she doesn’t actually know how to play the piano, but as Marge says, “I only need to stay one lesson ahead of the child.”

    I measure the housing market against FTB affordability and on this scale we have a long long way to go…

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  • This article deserves preservation as a mature-phase example of Homeintern propaganda to keep people under the Iron Heel of the Property market : house price increases good;wage increases bad! I am old enough to remember when anything the least bit lively was denounced as a Communist plot .(They found rock’n’roll a real facer but a lot of performers did end up in jail or the US army).
    However this woman does concede that a lot of the property market is currently being held up by people who have got a lot of equity in their houses which has been the HPC consensus for some time.

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  • we are in for a period of stabilisation, with some volatility along the way

    Just about covered all bases there then.

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  • paul – I think she does the weather forecast as well.

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  • Two clowns down the road from myself have just clubbed together and bought a property in need of updating with the idea of flipping it after installing a new bathroom and a combi boiler etc. Clearly influenced by all the good news being creatively peddled on the property front I suspect they will be onto a looser quicker than they think.

    How many more wide boys and girls are there out there who think they are onto a quick earner under the impression that the market has bottomed and how many of them are going to get their fingers burned financially. Time will shortly tell!

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  • Don’t panic HPCers I’m not looking to buy a house in this market but:
    I love these calls of how house prices will go up, fact I’m a better than average paid male in my late 20s, I didn’t take a student loan, have no outstanding debts and no dependents and a good amount of savings towards a deposit. Technically I should be a safe bet but for humour value I looked at what an averaged price house would set me back and what my monthly repayements would be… those banks that would offer me the £140,000+ mortgage (at 85% LTV) I’d need to get the supposed average West Mids property (£165k read somewhere recently) would be taking around £1000 pcm off me if I took out a 2 year fix or £810 pcm on a 2 year tracker (the ones that would offer it – most places require 60 – 75% LTV for trackers now) Now that kind of money each month would mean I would be living for the bank, let alone if something should happen workwise!
    Now if I’m in a better position than most of my friends who graduated around the same time (no student loan – I worked instead) and the average West Mids wage is actually less than UK average where are these buyers going to come from?

    Thank god I don’t buy the government line and buy a house or I’d be broke within 18 months!

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  • well put @1, we have unemployment closing in on 3million, a period of property speculation never before seen in the UK; loans on impossible multiples, loans with no equity, self certified loans based on fantasy earnings, but what do you know as yet no repossessions.

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