Thursday, August 12, 2010

Music to my ears!!!

House prices in the South East fall significantly

"More surveyors reported a fall rather than a rise in South East house prices as supply continues to outstrip demand and more properties come on to the market. This is according to the latest RICS UK Housing Market Survey. In July 15% more surveyors reported a fall rather than a rise in house prices, a steep fall of 30% from June, when 15% more surveyors were optimistic that prices would rise. Demand for property in the South East, measured by the net balance of new buyer enquiries, fell slightly for the second month in a row, from negative 22 to negative 24. Difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential homebuyers though the excess of supply over demand is central to the market."

Posted by mark wadsworth @ 02:33 PM (3426 views)
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31 thoughts on “Music to my ears!!!

  • general congreve says:

    Definitely getting cheaper round here.

    BoE better crank up the printing presses fast. Who cares if they manage to keep house prices inflated near 2007 levels and destroy the pound in the process? Not me, cos houses should hopefully end up being worth only a few ounces a piece. Get in.

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  • sibley's love child says:

    Hmm, not sure if i’m suffering from confirmation bias but there does seem to be a wealth of bear food recently. I was only suggesting to the wife at the weekend that once the possibility of a double-dip began to feature on the front-pages would I be vindicated. Lo and behold today’s Independent. I don’t normally buy hard-copy but I was moved to do so; if only to keep her sweet re: renting vs buying…

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  • Significantly more houses have come onto the market in the last 2-3 months in my area, the Surrey Hills – an area of outstanding natural beauty (read: area of outstandingly high houses prices).

    Prices will still have to fall a long way to convince me to take the plunge.

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  • Yes – even positive sentiment is running out of steam. Where’s smugdog?

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  • sibley's love child says:

    Tending to a swiftly depreciating portfolio?

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  • mark wadsworth says:

    SLC, we are all suffering from selective quotations, wishful thinking, blinkers and confirmation bias etc, but hey …. so are The Other Side, and it’ll be us lot that are right in the end 🙂

    I’m happy to report that Her Indoors seems to have fallen into line and is quite happy staying renting. We go and look at a house for sale every few months but only for sport.

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  • Excellent news, but don’t house prices always rise in the South East?

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  • sibley's love child says:

    Good man Mark; I must admit it has been a precarious tightrope act balancing our financial well-being with an, ahem, tempestuous better half. Through a combination of the sport which you allude to and thinly disguised procrastination it looks like i’ve survived the year-long bull-trap.

    I owe my sanity to HPC…

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  • the number cruncher says:

    MW & SLC

    Mrs TNC has being giving me less grief lately regarding our rental situation well – so keep the bear food coming. I caught her ready one of the HPC posts last night on my laptop.

    Happy days

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  • Mrs t has a brother in nequity and desperately trying to sell so needs little convincing that our rented pad is just fine and dandy. Our time is coming boys – be patient…

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  • MW and SLC – it must be something to do with the waxing of the moon, as my missus has also warmed to holding off buying. Particularly as according to the local paper sales volume is up but prices are down – which to me indicates sellers facing up to reality – some of the houses we’ve been looking at have been on the market for years. Seller fatigue is setting in even before interest rates rise.

    I have said before that I think all this bear food in the MSM is all engineered. I am (in my more paranoid moments) convinced that the coalition wants to crash everything so they can stage a recovery before the next election, but they dont want to be seen as responsible for rates increasing, so they are encourage HPC sentiment while shouting about wanting to keep rates low, while organising behind the scenes a reason for them to have to shoot up.

    I can but wish

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  • In my area – North London – apart from the odd insanely priced house, that will never sell, most prices are looking slightly cheaper.

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  • sibley's love child says:

    How ironic that the biggest threat to our financial wellbeing was not the continuous subliminal media messages but the ‘enemy within’. I bet my old man never had to put up with this guff.

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  • What is it women and desperately needing to buy. And to be honest you guys with live-in partners need to grow spines – just tell her shes welcom to buy at any time so long as *she* can afford the mortgage payments.

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  • mark wadsworth says:

    Ta for anecdotal re the enemy within 🙂

    Inbreda, we have discussed this before (without coming to a conclusion). Do the Tories want to crash the market ASAP, blame it all on Labour (in which case they are running out of time) and then try and get prices to start rising before the next election? I personally doubt it, but hey…

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  • do you doubt it because you doubt the tories are looking that far ahead, or because you think they are incapable of developing a strategy, or because you think they would never dare and their strategy is something different?

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  • In Dover houses are just not welling. I think this is because people are mortgaged upto the hilt and can’t afford to sell.

    Again, we will see substantial price drops when people are forced to sell (Interest rates >4%)

    Long term outlook:

    Higher Interest rates
    Less goverment supported jobs
    Higher CGT on BTL
    Lower goverment supported mortgege payout
    Lower rental support (=Less BTL)

    Anyone add to the list.

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  • Another couple of things that I have been thinking about.

    When Interest rates rise ‘investors’ will look to get better returns than the very small returns that they are currently getting with property.

    The boomers will be looking to retire over the next 5 years selling there ‘investments’ and downsizing this alone will increas the numbers properties available, though most will not be forced sellers (unless they have gone silly on MEW).

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  • I’m playing devil’s advocate for a moment.

    Assuming that those HPC’ers who have sold to rent did so of their own volition and not because of financial difficulties, could it be that they were looking to make a fast buck by buying back into the housing market at a lower price?

    If this is correct, then surely they are no different to those who have speculated that the market will rise and are practising double standards.

    Just a thought.

    Stands back and waits for an outburst of outraged invective.

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  • But but but, the ‘Daily Express’ said 2 weeks ago that they would rise 20% in the next 3 years.

    I bet the ramping department is working overtime tonight.

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  • tenyearstogetmymoneyback says:

    Mark asked “Do the Tories want to crash the market ASAP, blame it all on Labour (in which case they are running out of time) and then try and get prices to start rising before the next election?”

    Have you seen this ?

    http://www.conservatives.com/Video/Conservatives_TV.aspx

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  • @tenyearstogetmymoneyback – for once Labour did tell the truth ie The former chief secretary to the Treasury, Liam Byrne, has reignited criticism of Labour’s stewardship of the economy with a note for his successor which said “there’s no money left”.

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  • greenshootsandleaves says:

    Forget the Russian oligarchs, the tax-dodging Greeks/Italians and the various other cash-rich buyers dreamt/bigged up by the Fleet St Property Correspondents. Cheap and easy mortgages helped push prices up to their 2007 levels and cheap and easy mortgages are needed to keep them there! The increasing number of Sold STCs metamorphosing into Availables suggests that financing is harder to come by than people expect and that, as a result, one or two wheels may have come off the demand side of the equation. With supply continuing to grow, it is most unlikely that we will witness any of the flatlining now being predicted by the bulls. Come to think of it, when did house prices ever flatline? That said, I still see a continuing downward drift as opposed to a crash, but would love to be proved wrong. All it would take is a little nudge here and there (a rise in interest rates, anyone?)

    PS Just as I’d ironed out the bugs in my Recaptcha-deciphering software!!!

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  • sibley's love child says:

    Not I Mr G (if only I were so affluent). I would consider myself an average-Joe would-be FTB; priced-out and with little hope of saving a decent deposit due to most of my outgoings contributing to a roof over our head and various non-discretionary spending. I take home around £1500 and before i’ve even touched it around £1300 goes on rent, utilities, childcare and food.

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  • “If this is correct, then surely they are no different to those who have speculated that the market will rise and are practising double standards.”

    But Mr.g, The difference is that those who sold in the hope of buying back in at a lower price don’t get bailed out by taxpayers if they guessed wrong.

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  • “Assuming that those HPC’ers who have sold to rent did so of their own volition and not because of financial difficulties, could it be that they were looking to make a fast buck by buying back into the housing market at a lower price?”

    No, no Mr G. HPWatcher corrected me earlier when I suggested something similar, telling me most are here to prevent debt induced tragedies such as murder and suicide.

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  • Mr G, I agree, if those posting on here are morally critical of people for wanting to cash in on a bull property market. If I thought property was cheap and below the long-term trend, I’d be buying up with a view to making a killing too. I’m not critical of them for wanting to make smart decisions with their money and increase their wealth, I’m critical of them for being so dumb in believing that property, especially now, is still a one way bet. Anyone trying to take some moral high ground against the pro-market brigade is on shaky ground, unless they can convince me they contribute to this site out of a sense of social justice. Most people are probably like me – hoping to buy the best home they can for themselves / their families without getting ripped off and plunging themselves into a debt time bomb.

    The VIs, market myth makers and pro-market fools make a great target right now, as ultimately they will be shown to be wrong when the market does what it always, always does… returns to the long-term trend. But let’s not get all moral about it. I respect anyone who has locked in financial growth through buying/selling property – wish I’d had their foresight. But right now, they’re on the losing side and not before time.

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  • yes rumble and “I think you will find” HPW is ALWAYS right ;).

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  • “If this is correct, then surely they are no different to those who have speculated that the market will rise and are practising double standards.”
    That’s one way to look at it.. Personally I want them to come down and stay down! Expensive housing does us no favours in the long run.

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  • Prices around here (Gerrards X) are also softening up. Spoke to a chap from Coventry. One viewing in 3 months, but loads of very low offers.

    Mr G: I too challenge people to be that objective about money they own. I’ve never said how terrible it is to make money from housing – it’s just another good that people trade in. I sold in July 07 and rented on a very stong hunch it was all going to go wrong. We fixed interest on savings as well.

    The problem is when buyers are suckered into borrowing by predatory lenders appealing to rose-tinted buyers. They tell you want you want to hear and have been sponsored by the Government to do it! Worse is they don’t even have to suffer their mistakes because the Government (taxpayer) has bailed them out.

    I am all for giving the lenders a kicking to get them to be realistic with their own customers. For a start, we should change the law to make negative equity the problem of the lenders. I know there are people that think it’s the buyers problem, but I’ll wager that a lender is going to really make sure they’re not overlending if they stand to lose out.

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  • My attitude towards making money from anything is that it is fine provided that the value represented by the money earned is commensurate with value created. Thus the individuals/companies that made a mint from buying and selling property in recent years fail this test – plainly there was no value created, quite the opposite. I also include highly paid bankers in this parasitic group, along with other very well paid company types.

    As for trying to make money through renting, from my point of view it is not so much a question of speculating (personally I would not want to try such a thing with my home) but of not shelling out my hard-earned cash, plus taking out whopping loan, on a grossly overpriced asset that is more likely to leave me in an impecunious position than financially secure.

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