Denial is rife about falling UK house prices

House prices can go down aswell as up but some people just dont want to believe it...........
House Rat on the state of denial surrounding the decline in property prices
Daily Telegraph 6th Sept
Nick Clark, the managing director of this month's Property Investor Show in Docklands, is getting a little hot under the collar.
"Many so-called experts have been overtly pessimistic in their predictions for the market's future in their quest for media notoriety at the expense of sensible analysis," he said last week. "Double-digit house-price inflation was indeed unsustainable, but wide economic conditions and the continuing high demand for housing lend themselves to a relatively strong market and, at the very worst, a stabilisation of prices."
I am sure property investors everywhere will be reassured to hear this voice of reason among the nihilistic ramblings of the country's economists, who of course are so vain that they will say anything to get their name in the papers. Or maybe not.
Either way, the property market is not behaving as it was supposed to when the Bank of England cut interest rates a month ago. According to the Nationwide, prices fell by 0.2 per cent in August, reducing annual house-price inflation to 2.3 per cent, the same as the Government's preferred measure of inflation, the Consumer Prices Index (CPI).
Don't expect that situation to last for long. The CPI is rising sharply, while annual house-price inflation is falling steadily. You can forget about a revival caused by a quarter-point cut in interest rates: fixed rates, which are influenced by how the market expects to move in the future, rose last month.
The question is what happens when annual house-price inflation falls below zero. Will starry-eyed buy-to-letters, drunk on the easy profits of the past, still want to flock along to Mr Clark's property investment show then?
For many homeowners, falling prices already are a reality. Not that all seem able to believe it. On one online property forum last week a woman from Cambridge wrote in to say that her property, which she bought for £350,000 last year, had now been valued at £300,000. She wanted to know if she could sue the surveyor who had valued it at £350,000 in her homebuyer's report.
That certainly is a novel way of losing money in the property market: running up large legal bills trying to sue a surveyor who did not spell it out in idiot's language that house prices can go down as well as up.
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Reply to
Crowley
More signs of a collapsing UK house market..........
Housebuilders suffer UK slowdown
BBC news 6th Sept
The slowdown in the UK housing market has hit the fortunes of two of the country's leading housebuilders, George Wimpey and Taylor Woodrow. Pre-tax profits at both firms fell in the first half of the year after the number of new UK houses sold declined..............cont
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for more news of falling house prices check this out....
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Reply to
Crowley
Yep too true seeing house price reduction every day where I live. A barn I was interested in is now back on the market. With the use of Tumbleweeds web site the place went for 485,000 Jan 2004 I did not wish to pay that much, I noted 3 months ago the purchaser tried the market for 525,000. On review of the estate agents web site this week it is now on the market for 470,00 or offers.
Local developers are offering part exchange, carpets, appliances, stamp duty etc. Several months ago no such offers. Evidence of correction occuring.
Alan
House prices can go down aswell as up but some people just dont want to believe it...........
House Rat on the state of denial surrounding the decline in property prices
Daily Telegraph 6th Sept
Nick Clark, the managing director of this month's Property Investor Show in Docklands, is getting a little hot under the collar.
"Many so-called experts have been overtly pessimistic in their predictions for the market's future in their quest for media notoriety at the expense of sensible analysis," he said last week. "Double-digit house-price inflation was indeed unsustainable, but wide economic conditions and the continuing high demand for housing lend themselves to a relatively strong market and, at the very worst, a stabilisation of prices."
I am sure property investors everywhere will be reassured to hear this voice of reason among the nihilistic ramblings of the country's economists, who of course are so vain that they will say anything to get their name in the papers. Or maybe not.
Either way, the property market is not behaving as it was supposed to when the Bank of England cut interest rates a month ago. According to the Nationwide, prices fell by 0.2 per cent in August, reducing annual house-price inflation to 2.3 per cent, the same as the Government's preferred measure of inflation, the Consumer Prices Index (CPI).
Don't expect that situation to last for long. The CPI is rising sharply, while annual house-price inflation is falling steadily. You can forget about a revival caused by a quarter-point cut in interest rates: fixed rates, which are influenced by how the market expects to move in the future, rose last month.
The question is what happens when annual house-price inflation falls below zero. Will starry-eyed buy-to-letters, drunk on the easy profits of the past, still want to flock along to Mr Clark's property investment show then?
For many homeowners, falling prices already are a reality. Not that all seem able to believe it. On one online property forum last week a woman from Cambridge wrote in to say that her property, which she bought for 350,000 last year, had now been valued at 300,000. She wanted to know if she could sue the surveyor who had valued it at 350,000 in her homebuyer's report.
That certainly is a novel way of losing money in the property market: running up large legal bills trying to sue a surveyor who did not spell it out in idiot's language that house prices can go down as well as up.
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Reply to
physman
Its certainly a buyers market but I think would-be-buyers are well-advised to hang on for the time-being because it looks like prices have a lot further to fall.
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Reply to
Crowley
The big coming problem is the way oil is going to boost inflation - the B of England is playing nonsense economics if the increase ( or keep same ) intrest rates to 'cool off' this commodity price generated inflation. They should have cut it by at least 0.5 % last month.
Simon T.
Reply to
Simon T.
Guess it all depends whether the hack is an owner, BTLer or has sold up and is renting.
"The Halifax building society said seasonally adjusted monthly property values increased by 1.6% in August - the sharpest rise since September 2004." - The Guardian
One thing is sure, there are a lot of people who sold up and moved into rented accomodation a while back who will get severely singed if there isn't a severe drop in house prices soon.
Reply to
davidof

I very much doubt there are a lot...there are a lot talking about it and telling others to sell upt, but very few who actually take their own advice. I dont think Crowley has for example.
Reply to
Tumbleweed
On working lunch on Friday they claimed there were a lot too, but they didn't give any evidence.
I was surprised that asking prices in my area (Bournemouth) have continued to rise over the last 12 months - big shame as I'm hoping to move but was hoping for a HPC to make my jump more affordable.
Reply to
davidof

ISTR I asked you and you said you hadn't. If you have, just say so here, it would have been less typing than the URL you posted, and I certainly cant be arsed to look through a forum to see if you claim to have, and no doubt neither can most others...dare I say 'lots'.
Reply to
Tumbleweed
Huh?
The price of oil is increasing, the pound is lower due to reduced interest rates thereby making the price of oil worse, and you think they should massively _reduce_ interest rates when the rest of the world is raising their? So the pound crashes, oil becomes even more expensive and inflation even higher?
Now _that_ is what I call 'nonsense economics'.
Back in the real world, there is nothing the Bank of England can do to save us from an economic catastrophe after creating a huge artificial boom by running insanely low interest rates for years. If they reduce rates then the pound won't be worth wiping your arse with and inflation will explode, if they raise interest rates the whole debt-based economy will crash. If they continue to hold interest rates, they just put off the decision until the market makes it for them.
Still, at least once the US economy -- which is even worse off than ours -- crashes, the price of oil will drop :).
Mark
Reply to
mmaker
In message , snipped-for-privacy@my-deja.com writes
Well and truly on the fence!
Somebody has to make a decision to do one of the above, and believe that it is the best decision - I'm glad it's not you.
Our insanely low interest rates have been higher than Europe, the US and Japan, so the whole world must have been wrong.
Raising interest rates to support the pound has failed miserably in the past - it started the last recession. I think we are fairly strong against the dollar, and arent fluctuating much against the euro, so no apparent need to worry about the currency at the moment.
The rising oil price is something which needs to be dealt with, and it may be that a massive reduction in demand will have an effect.
There is no question that consumer spending has fallen over the past 12 months, and increased prices due to oil will tend to maintain this, so I would favour lowering interest rates a little further, but may wait a month or two to see how things go.
Reply to
Richard Faulkner
In message , davidof writes
Ditto here in Manchester, and properties are still selling, albeit with much less frenzy. Flats which were £190 per sq.ft. a year ago now seem to be around £220 per sq.ft., although I am looking at a fairly small area of Manchester.
Reply to
Richard Faulkner
wrote:
bit still a soupçon of frenzy eh?
Ok, now keep looking at it.....keep looking!!!....poooffft!!!...it's gone.
Reply to
curiosity
"curiosity" wrote
Are you trying to describe something, or create it? Seems much more like the latter!
Reply to
Tim
In message , curiosity writes
I'm only commenting! I appreciate that it cant go on indefinitely, and am as surprised as anyone else at what is happening.
As I've said before, i really am not bothered whether prices rise or fall. I stopped buying about a year ago, and have sold the last property that I want to for the time being.
Reply to
Richard Faulkner
wrote:
It could go on longer, but the longer the more devastating the consequences would have to be. This is worth a read..
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Ponzi was a favourite bête noire of Kurt Vonnegut.
Reply to
curiosity

Whenever I try to explain the "illegality" of the UK State pension scheme, it takes awhile to sink in - but it's a classic Ponzi scam.
I had to smile at the point made by FirsTnews (especially the sentence in capitals):
"The massive gains made by existing homeowners must thus be made at the expense of those who buy at the top, a classic rob-Peter-to-pay-Paul system.
It is absurd to think we can all get rich by buying and selling each other's homes."
Doug Ramage
Reply to
Doug Ramage
"Doug Ramage" wrote
But isn't it really just a welfare benefit system, paid out of taxation? So if that's illegal, aren't *all* welfare benefits illegal? :-(
Reply to
Tim

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