Tuesday, January 15, 2013

Nice :)

Capital Economics forecasts 5% drop in house prices in 2013

The analysis delivers an increasingly bleak outlook for the year ahead as predictions of rising unemployment are connected to mortgage arrears and possessions figures and a deteriorating labour market is expected to drive house prices down.

Posted by happy mondays @ 08:04 AM (1923 views)
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5 thoughts on “Nice :)

  • happy mondays says:

    Not too keen on the bleak outlook bit, however if this what it takes to drum some sense into the housing market & house prices only ever go up brigade, then so be it.. Bring it on!

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  • mark wadsworth says:

    that looks like a very reliable prediction to me.

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  • @Mark.
    Regretably ‘reliable’ seems to have little to do with it these days. The open UK policy is to protect ‘Homeys’ at all costs and flick to fingers to all (younger people) who will have to pick up the tab.
    The socially divisive generational gap abides. They won’t be laughing when they are made to sell there expensive homes to pay for someone to come and wipe their bottoms in expensive old age care.

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  • Well, according to the table on the HPC website Home page, in July 2010, Capital Economics predicted that house prices would fall by 23% in the period 2010-2012, There is also the quote “UK house prices will fall through 2012 as the deepest public-spending cuts since World War II and tighter credit conditions deter potential buyers.” I think the consensus of opinion would be that house prices stayed pretty much the same (maybe fell a few percent) during this period so, clearly CE were very wide of the mark.

    But, perhaps, this new prediction is based on new criteria. For instance, in July 2010 few commentators would have thought that we’d still have a base IR 0.5% today. If people/organisations such as CE are (finally) factoring in the behaviour of the BoE MPC (i.e. that the ultra low base IR must be maintained at all costs) then CE’s forecast of a 5% fall might be reliable.

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  • @Grumpybob- Good point, it irks me that the natural end point for this debarcle (ie house prices coming down and conforming to the lending now available) has been avoided through a myriad of schemes, artificial and unbsustainable IR’s and theft from savers. But what really gets my goat is rampers on forums (normally BTL ‘entreapeanuers’, accidental landlords, the self interested) touting that anyone declaring a wish to a sustainable and fair housing market have been wrong in there assesment.
    I stayed out of getting involved around 2007 (when means allowed me to buy) because the market was unsustainable, whats happened is wrong and in the long run will cost the UK far moare socially and financially.

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