To tell you the truth, I was getting nervous. With all this recent talk of the UK housing market reaching a bottom, I thought the crash might be coming to an end. However, today's Halifax house Price index posted a reassuring decline. Prices are still falling, and the bottom is nowhere in sight.
Wednesday, 6 May 2009
UK housing crash is back on
To tell you the truth, I was getting nervous. With all this recent talk of the UK housing market reaching a bottom, I thought the crash might be coming to an end. However, today's Halifax house Price index posted a reassuring decline. Prices are still falling, and the bottom is nowhere in sight.
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18 comments:
Yes, it doesn't look like my theory of new money creation propping up prices holds any water!
Glad I don't own a house.
Dear Alice,
Could you also post a UK housing chart in Euros?
Thank you in advance.
Rambo
Rambo
Tomorrow, I will try.
Thanks,
Alice
A friend has just remortgaged his house and spent the cash on buying a flat in London for his son. Awfy brave.
@rambo, @alice
EUR for me too please! Also I would like to see prices converted to USD.
Dearieme,
Not brave... stupid.
If there is any upward swing in prices, it will be a short one before the REAL crash comes.
Sellers are largely still in denial that prices can drop significantly, but just wait till taxes go up, there is no money left for bailouts and interest rates start to rise - then they will drop... like a stone !
I've had a go at making a graph of UK house prices in EUR & USD:
http://www.pyrosoft.co.uk/blog/2009/05/06/uk-house-prices-1999-2009-in-gbp-usd-eur/
Darling has deferred all the nasty bits for the Tories.
Swingeing public sector cuts are yet to come adding further to UE figures. Previously safe sinecures (my own included) will be at risk.
Any early return to rising house prices has to be nonsense, surely ?
Anon at 15.55 - I own a house. I'm still glad to see this happening. There was nothing wrong with those chintz sofas and curtains that got chucked out in the '90s - they'd still be going strong today.
There's been nothing worse environmentally, culturally or economically (barring war) than the DFS sofa bought on tick.
Anon 15:55 - surely you mean you're glad you don't own a mortgage on a house?
I own a house, and I'm profoundly happy about it. Whatever happens, however bad things get, nobody can turn me out on street.
Oh - except the council tax-eaters of course, who are going to need everything I own, and more, to keep their pension payments up. Bastards.
Two words: suckers rally. It is plain as the nose on my face. The Labour Party is juicing the stats and the economy to get enough of a feel-good rally going to hold on to power. But if you think this false rally is healthy, sustainable and based on reality, look at Gordon Brown's face: does he look like a healthy man? Does he exude health?
That little upward blip is the expected Spring bull trap - for the unwary who don't realise real prices will be going down for another six to eight years.
Alice - could you post an updated long real prices chart, to see how much of the drop suggested by the one on your Bloghead has happened?
B. in C.
Perhaps the best way to think of the housing market is by way of an analogy. Think of a huge, inflated bouncy-castle. Over the last decade the Government turned on the inflation fan and let rip, and the castle of air grew and grew and grew, until at some point it ripped a seam.
The rip happened early this year, and now the castle is deflating. The rip is big enough that even the inflation fan set on maximum output cannot out-pace it, however Gordon and his manky mates have tried to keep things inflated with all manner of tricks, from releasing scuba tanks of compressed air into the castle, to standing in front of the rip loudly proclaiming it doesn't exist.
None of the Labour tricks will work. At best all they'll do is re-inflate things a little bit, before the deflation continues.
Basically the huge inflated structure will collapse back down to almost nothing; there'll be remaining pockets of air in places but mostly it'll go flat again, and there is absolutely nothing you, nor I, nor any political force can do about it. Grin and bear it, folks, its going to happen regardless.
What I found strange about UK house prices, was that if you asked somebody if they actually had the purchase money, would they then buy? The answer was always no.
If I had 200K in the bank I wouldn't want a grotty sub-standard flat in London.
I'm amazed by the level of agreement from everyone above, given that the media seem to be well on the governments side.
Take for example the news that by June £75 billion of 'quantitative easing' will have been completed. 4 tv channels and 2 papers I checked so far have announced that this measure is working, and that a turnaround is in progress.
Given the FTSE's increases which show that they see a recovery coming (and they're never wrong), you'd have thought that you'd all be talking about what a good job Brown and Darling are doing. It's almost as if you all see through the smoke and mirrors and know what will happen as a result of printing money and setting an interest rate of 0.5% at the same time.
Joking aside, I'm with Markbaldy in that interest rates are unsustainable at these levels and when reality asserts itself the next level of this crash and the negative equity repossessions will really start.
I can't wait to see how that turd will be polished into an example of the recovery in progress.
It won't be a case of polishing the turd - more like a case of us all having to eat a bit of it.
My money's going on spoons.
4 tv channels and 2 papers I checked so far have announced that this measure is working, and that a turnaround is in progress.Same shite everywhere, even here in the DK:
IMO the media is corrupt too; It is possible that there is a recent EU directive in force banning "negative reporting" ...
I hate to say it but Ajay Ahuja said exactly this,
"By Spring the media will be fed up with negative stories and will start talking up markets ..."
I guess that's why he has £20m and I don't.
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