Here is Stuart Law, chief executive, Assetz on the future path of UK house prices:
"How can the UK housing market be over-valued and houses unaffordable when people are still paying and prices are still going up?
I expect property prices to rise by around 5% next year, due to the strong fundamentals of undersupply and falling interest rates. The Government forecasts that 4.4 million more people will be living in the UK by 2016, and house builders will not be able to supply enough property to meet that demand, defending robust house prices and even driving them up further.
House prices drop when interest rates go through the roof, but that scenario doesn't look very likely at all. Inflation is always a risk, but oil prices don't have the same impact they used to and over the long term inflation is very much under control.
The other factor said to cause prices to fall is the prospect of a recession, but all the economic fundamental indicators are positive. There is nothing visible that is going to cause a serious recession in the UK or globally. Even if the US went into something of a recession, the global nature of the market means the UK isn't as tied to the US as it used to be.
Finally, the buy-to-let market is helping to hold up the housing market and rents are rising more than they have in years. Yes, repossessions are increasing, but those properties are being bought by investors. While these sales are at lower prices, people who don't need to sell are not discounting."
Well that has me convinced. Obviously, it is time to stop renting and starting buying. Where is the nearest estate agent?
"How can the UK housing market be over-valued and houses unaffordable when people are still paying and prices are still going up?
I expect property prices to rise by around 5% next year, due to the strong fundamentals of undersupply and falling interest rates. The Government forecasts that 4.4 million more people will be living in the UK by 2016, and house builders will not be able to supply enough property to meet that demand, defending robust house prices and even driving them up further.
House prices drop when interest rates go through the roof, but that scenario doesn't look very likely at all. Inflation is always a risk, but oil prices don't have the same impact they used to and over the long term inflation is very much under control.
The other factor said to cause prices to fall is the prospect of a recession, but all the economic fundamental indicators are positive. There is nothing visible that is going to cause a serious recession in the UK or globally. Even if the US went into something of a recession, the global nature of the market means the UK isn't as tied to the US as it used to be.
Finally, the buy-to-let market is helping to hold up the housing market and rents are rising more than they have in years. Yes, repossessions are increasing, but those properties are being bought by investors. While these sales are at lower prices, people who don't need to sell are not discounting."
Well that has me convinced. Obviously, it is time to stop renting and starting buying. Where is the nearest estate agent?
4 comments:
More than a whiff of desperation!
Stuart Law: "..but all the economic fundamental indicators are positive."
Thats OK then.
"Between April and June (2006) there were 26,021 bankruptcies in England and Wales, the highest number ever and well above the 15,645 for the same quarter last year."
"Claimant count for the unemployed has risen 11.3% in the 12 months to May 2006 and job vacancies fell by 8.5% across the same period."
Except those..
If people are going bankrupt at a greater rate than ever before, and unemployment is rising, job vacanckes falling, those seems like pretty unhealthy fundamentals to me.
Lets not forget the Retail Price Index which growing at 4.2% p.a.
"I expect property prices to rise by around 5% next year"
Yes and next year, I expect to be next inline to the throne of England, posh & sporty spice drag me off the streets to perform a 3some whilst demanding that I be the father of their babies and Bill Gates will name me as his sole heir to his microshite fortune.
Well its as likely to happen as housing prices rising 5%!!
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