Monday, September 14, 2009

Property Prices Not Sustainable

House prices 'will fall again next year'

Propety prices not sustainable, it just amazes me that we need experts to tell us the obvious but PLEASE GOD let us have a lot more articles that point to HOUSE PRICE FALLS rather than this pointless ramping of a market that HAS to fall in order to be sustainable. Currently we are hearing that PRICES ARE RISING on the basis of a few cash rich buyers whilst the majority of sellers cannot sell because the majority of buyers cannot afford to buy or cannot get a lender to lend more than 25% from peak leaving agents selling 1 property a month . What we currently have is not a "recovery" but a hopeless case of denial that I for one cannot wait to be over.....

Posted by sybil13 @ 08:53 AM (1803 views)
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24 thoughts on “Property Prices Not Sustainable

  • To be honest I would like to know what Ernst & Young think will drive the market up to 2007 values by 2014 unless of course they are thinking that inflation will make a property look like it is back to 2007 values by 2014 by will actually have dropped 50%!! Historically , (that is before the RMBS market that was the cause of this current bubble), property has risen about 1 – 2% above inflation per year, so 40% falls would take a little longer than 5 years would it not?

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  • Needless to say, although the BBC often feature the ITEM club’s prnouncements, this will categorically NOT be featuring in todays Business News.

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  • http://news.bbc.co.uk/2/hi/business/8253017.stm

    BBC – The Ernst & Young Item Club also says that property values will not return to their 2007 peak for at least another five years.

    It says “a small number of cash-rich buyers have supported prices”.

    And its in MOST papers Times / Telegraph /Daily Mail / Ch 4 / Independant so its a good headline FALSE DAWN PROPERTY PRICES ARE GOING DOWN no point in waiting unless you are prepared to wait for the market to drop 40% and then start to rise!

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  • Paul they are covering this “item” and I just posted it on the main board.

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  • Yes, the BBC have posted it. With more miused quotes. They do love abusing quotation marks.

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  • In fact, the BBC have completely turned round what the article says:

    “The Ernst & Young Item Club says property values will not return to their 2007 peak for at least another five years.

    However the latest figures from mortgage lenders show a continued revival in lending to house buyers.”

    So they’ve taken other data from mortgage lenders with vested interests to counter what a non-vested interest is saying about the housing market.

    In addition, they’ve asked the CML to comment too, to counter what the influential ITEM club says:

    “It’s tempting to call the turn in the mortgage market at this point, and there is certainly concrete evidence that lending for house purchase is increasing,” said the CML’s economist Paul Samter.”

    Shill journalism at its worst.

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  • Paul,

    I think you’ve meant to say “Yes, the BBC have posted it with more misused quotes.”

    The full stop between “it” and “with” was not necessary. I’ve also corrected your spelling error.

    Please don’t think I’m being “pedantic” or “petty”.

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  • Paul, they also rather conveniently included the Nationwide/Halifax graph which sort of implies a U shaped recovery – they certainly (IMO) want to counter the Item club report.

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  • Trying to fight a market with less than a relatively huge capital resource by “newsletter” alone will prove extremely difficult given the “subscribers” cannot afford the asset in question without credit.

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  • The “fear” was once in the market. It is now with the lenders who fear that they may now be missing out on good credit worthy buyers.
    Life is moulded by opportunities, including those missed.

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  • smugdog: I know quite as few senior people who work for banks. They are shit*ing themselves about getting too exposed to mortgage lending. In fact, they all have the publicly stated aim of reducing the size of their loan books. Of course, they will fight over grade AAA customers but that is a niche market

    Anyone can make almost any comment but it helps if it’s true

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  • Flash: you state that you are currently looking to buy, why would you do that if, as you and the jolly folk on this site proclaim, we are teetering on the edge of the abyss?
    If you eventually buy, will that mean you will “jump ship” with your views on this site?

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  • hello smugdog: I am a cash buyer and I am looking for my ‘final’ house. Within reason, I do not therefore care if it loses or gains in value, thereafter. Apart from that, I have an overwhelming reason to buy (my wife). I sold my last house because I had a very young child and one on the way and wanted a slightly different type of house. I ‘tricked’ my wife into renting for a short while while the market fell. I have stretched the definition of a short while and my wife quite rightly wants to get on with it.

    My views on house prices are my views, regardless of my personal situation. They will only change when the economy changes. On a personal note, the whole concept of a house as an investment makes me cringe. It should be the family hub and nothing else.

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  • Flash: hardly crapping themselves?

    “Lending was up by 19% on the year and by 24% from June, according to figures published today by the Council of Mortgage Lenders (CML)”

    Fear breeds greed breeds fear. An endless cycle.

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  • The CML forgot to minus the redemptions and repayments. NET lending actually fell. Even the gross lending was a rise from a very small base and it has to be considered in that light.

    smugdog, I sense that you are a clever chap. You don’t need the fortune cracker wisdom (“fear breeds greed breeds fear. An endless cycle”)

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  • Flash: A refreshing view, and perhaps you state some of the basic family values that have been lost of late during this madness. I hope you find the ideal shelter for your family.

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  • cheers smugdog. keep on posting

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  • “final home” – Flash what a chilling thought. My young wife seems pretty relaxed about us renting, apart from the occasional desire to get the place exactly as she wants, and then deciding it’s not worth it, as we will not be there permanently.

    We got a pretty sweet deal on the rent though, £800 per month on something that would sell (or at least would have sold) for about £350k.

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  • Hi bellwether: yes put like that, it does sound a bit macabre.

    It’s a bit more woolly cardy than that. I’m in my mid 40’s and I want a place where I can be for another 40 years or so and never think about houses again. There is definitely emotional value in living in a house with decades of family memories. My folks still live in the house I grew up in and I get a good feeling when I go there. The wife (somewhat younger) is not exactly unhappy about renting but she has big plans for a garden and perhaps a horse for the kids and a few chickens somewhere or other. She also thinks the kids should be settled etc etc so I am no longer prepared to be the miserable sod who unnecessarily denies her want she wants? We used to have 3 houses between us so renting is a bloody hard sell.

    800 per month??? I should live in your neck of the woods

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  • @luckyjim

    The difference being I’m posting to a forum whereas the BBC is posting to a news website.

    I really shouldn’t have to explain that difference. Are you sure you don’t work for the BBC yourself?

    Eh?

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  • Understand your perspective,I guess you’re holding off is just trying to get as much as possible for your money, but there’s got to be a balance I suppose especially if you’re not borrowing to buy.

    Yeah the rent is ridiculously cheap, usually would be about twice that, but we got lucky as the Landlord, a thoroughly honorable chap, bought for £100k in 1998 and doesn’t see why he should charge much more in rent.

    Guess it at least shows there are bargins out there. Best of luck in finding one – you never know another squeeze might see some distressed.

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  • mark wadsworth says:

    @ Flashman:

    It’s a bit more woolly cardy than that. I’m in my mid 40’s and I want a place where I can be for another 40 years or so and never think about houses again. There is definitely emotional value in living in a house with decades of family memories… The wife (somewhat younger) is not exactly unhappy about renting but she has big plans for a garden and perhaps a horse for the kids and a few chickens somewhere or other. She also thinks the kids should be settled etc etc so I am no longer prepared to be the miserable sod who unnecessarily denies her want she wants? We used to have 3 houses between us so renting is a bloody hard sell.

    Oo-er. Are you sure you aren’t me?

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  • Paul,

    Actually the BBC sent me here to keep an ‘eye’ on you. It’s all part of the ‘conspiracy’. Ha ha ha ha ha.

    Seriously, I can see why the misuse of quotes is an important issue. Why don’t you write to ‘Points of View’ to complain. Be sure to write your letter in crayon and all in capitals. They will read it. I promise.

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  • @luckyjim

    As long as everyone keeps an eye on the BBC News Online team’s leanings, I don’t care who keeps an eye on us here.

    Everyone else here agrees with my point. Consider yourself rumbled, luckyjim from the BBC.

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