Wednesday, October 7, 2009

Wake up, this is reality

Fitch forecasts steep house price falls

The recent gains in UK house prices are likely to prove only a temporary respite before a further steep fall next year, according to Fitch, the global ratings agency.Fitch warned on Wednesday that it expected prices to fall by about 30 per cent in total from the October 2007 peak, despite three consecutive months of house price growth that has led to hopes of a more sustained recovery.

Posted by bufferbear @ 11:28 PM (1720 views)
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10 thoughts on “Wake up, this is reality

  • Good, that’s Capital economics & now Fitch on our side. Lets hope they’re right and we see the falls starting soon.

    I am waiting patiently to respond to a friend that was trying to explain to me that I didn’t appreciate and understand the local housing market that commanded high prices.

    This comment coming after the recent rises.

    He’d been quiet for a while as I’d told him to sell his BTL 6 months before the falls started.

    Don’t you just love a smiug home owner.

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  • Yes, and I am surrounded by them!

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  • Yes, and I am surrounded by them!

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  • Those BTL’s (slumdog,greenbay etc) who didn’t sell up in the last 6 months, when they had the chance are now well and truly f#(ked.
    he he he.
    I just managed to sell off my late mothers bungalow last tuesday, so i am feeling a little smug (and a bit sad) this week.
    We still had to drop our asking price by 8%, but i reckon we sold it just in time.

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  • House prices aren’t going to drop, the stock market isn’t going to crash, gold will keep going up, there won’t be any increase in interest rates or taxes and there will be absolutely no hyper-inflation. Governments around the world have finally achieved the ultimate goal of permanent prosperity. That is what they have wanted “whatever it takes” and “whatever the cost”. There was a minor blip along the way when the entire Global financial system was barely seconds away from catastrophic failure but that has been sorted now, please move on with your lives, there is nothing more to see.

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  • I thought Osborne’s cuts announced at the Tory conference put it all into focus quite well. £7b of cuts that will hurt and cause strikes and angry marches.

    £7b of painful cuts whereas this governments figures promise £175b of borrowings next year.

    Run for the hills!

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  • I am amused by estrader’s comments. It’s been my experience for the last 40 years that whenever people start to explain (convincingly) that the laws of gravity have been suspended it’s time to bale out of the market.

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  • mark wadsworth says:

    STR2007, I love a smug sell-to-renter far more than a smug home-owner!

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  • Fitch’s reasoning is the same as it has been here.
    It’s rational so long as the ratio of available capital to gross income remains constant.
    However, rational is not always realised and the state can control the ratio to some degree.
    So
    “expected prices to fall by about 30 per cent in total from the October 2007 peak”
    actually means
    “expected the ratio of available capital to gross income to remain constant”
    – but this is almost certainly wrong! If anything this ratio should decrease ( higher taxation; higher basic living expenses ), leading to further falls; but we should not underestimate what the aforementioned degree of control actually is.

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  • Why thank you Mark.

    I’m not smug yet, but live in hope.

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