Sunday, April 25, 2010
Rejoice! Rejoice! Rejoice!
HOUSE PRICES SOAR BY 10%
"HOUSE prices have leapt nearly 10 per cent in a year, figures will show this week. They are being buoyed by a perfect storm of pent-up demand, the seasonal spring rush, low interest rates, MORE AFFORDABLE PROPERTY PRICES and evidence that the banks are at last lending again. The Nationwide Building Society is expected to report on Thursday that house prices rose 0.5 per cent month-on-month in April, pushing the year-on-year increase to 9.8 per cent, according to think-tank Global Insight."
Posted by mark wadsworth @ 12:12 PM (3161 views)
19 thoughts on “Rejoice! Rejoice! Rejoice!”
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Daveats says:
Well that’s a surprise 2 weeks to the election and house prices are soaring… let’s see wot they do after depending who wins.
righttoleech says:
With the dirt cheap property prices in this country and fantastic economy Gordon Brown has provided this is hardly a surprise. I urge the faithfull ‘fill yer boots with interest only variable rate mortgages’. You know it makes sense.
mrflibble says:
I cannot disagree with the figure. After looking back through my figures to last May I can confirm that the average of Halifax, Nationwide and Land Registry do indeed point to +10% for my old house – Starter home in Milton Keynes.
What’s next then gents, wage inflation? Since prices are not coming down then surely wages now need to rise to keep this hpi fantasy alive.
hpwatcher says:
Yes, I really think these idots are mad enough to put maintaining high house prices before everything else.
taffee says:
there lies the problem though….wages have been falling and uk needs an austerity package and unemployment is rising…hardly the right circumstances for wage inflation.
btw…I also found out that lots of companies pay immigrant companies abroad for staff getting round the minimum wage issue
amjidk says:
Hang on credit has dried up, unemployment is increasing, HTF are house prices still rising, i just don’t get it..
Crunchy says:
Welcome to the new “Rising Damp” FTBer.
Clever Rigsby gets the mortgage on a 3 bed and friends pay it off.
How cosy!
drewster says:
amjidk,
1. Credit is less dry now than it was a year ago.
2. Unemployment is rising but mainly in certain areas. Some parts of the country are fairly unaffected; others are worse. Public sector cuts won’t hit until after the election. So people with jobs are still spending.
3. Inflation is higher than interest rates on savings accounts, so people with cash to spare are piling into property to protect their wealth.
4. Psychology. Other countries (USA, Spain, Ireland) have had big falls but Britain hasn’t. This reinforces the old belief that nothing is safer than bricks & mortar, and that the government would never let house prices fall. Hence people are still buying.
alan_540 says:
Returning to Normal…
alan says:
Drewster.
“the government would never let house prices fall”. I have been told this so many times over the past year!
The only problem with this attitude is…..the government may not be in control any longer.
tenyearstogetmymoneyback says:
mrfibble wrote “What’s next then gents, wage inflation ?”
These people aren’t concerned about wages when they can keep MEWing against the
ever increasing value of their properties.
I know someone who would claim to be a BTL landlord but in reality has been doing that for the last six years
drewster says:
Alan,
I agree entirely. However that doesn’t mean they won’t keep trying, and they may wreak a lot of damage to the economy in the process.
matt_the_hat says:
Let the IMF do what a democratic government dare not
hpwatcher says:
amjidk,
1. Credit is less dry now than it was a year ago.
2. Unemployment is rising but mainly in certain areas. Some parts of the country are fairly unaffected; others are worse. Public sector cuts won’t hit until after the election. So people with jobs are still spending.
3. Inflation is higher than interest rates on savings accounts, so people with cash to spare are piling into property to protect their wealth.
4. Psychology. Other countries (USA, Spain, Ireland) have had big falls but Britain hasn’t. This reinforces the old belief that nothing is safer than bricks & mortar, and that the government would never let house prices fall. Hence people are still buying.
Drewster, you forgot to mention the low volume of sales 😉
greenshootsandleaves says:
More good news on house prices! The Sunday Express again doing its bit to ensure Labour stays in power.
amjidk says:
Alan, i hope your right with ref to the bubble graph, i’m getting more depressed by the day..
Archiejc says:
amjidk – don’t let yourself be sucked in by the psychology of what’s happening in the housing market at the moment. Did people see the clip of Jeremy Grantham talking about bubble markets on FT.com? What the mainstream press won’t tell people is that to bet on property not crashing back to the longterm trend of affordability is to bet on something extremely unlikely. In fact, as Grantham, says, it would be the first time in history if this happened. i.e. if UK house prices do not sink back to the longterm trend that existed PRIOR to the bubble developing in the first place (and not some ‘new’ longterm trend), then it will be a unique event in the history of markets.
I think we all know what’s coming. It’s just a matter of waiting a bit longer. Grantham says rising interest rates will be the trigger. When it comes it will be a blood bath.
I’ve been following this blog now for some years. The fact that we’re all still here in 2010, watching and waiting, doesn’t mean that we were wrong, it just means the correction will be worse than any of us probably expected, or hoped. Worse to the extent that I’m not sure I’m looking forward to it any more (aspiring home purchaser that I am), as the collateral damage to our economy will be huge, given current fundamentals. There are aspiring FTBs out there waiting to see property become more affordable in the final downward leg of this market, not realising that it won’t benefit them as they won’t have a job. It seems a bit grim to say it, but I really think it will be that serious.
Andyadam says:
Transactions recorded by Land Reg in April relate to sales agreed in Jan-Feb. Thus no reason to be depressed yet 🙂
Brightonrentfodder says:
I don’t know you guys think, but I wouldn’t be suprised if the rug is completely pulled after the election, as I’m sure Labour had this election in their targets ever since the bank crises. It wouldn’t suprise me if QE was only ever really put into place for this one primary objective. You’ll see their true colours after the election IF they get back in. Its all about the “Feel good factor” and house prices have always been the primary target for this.