House Price to surge + Unemployment to surge - how does that work??

[wednesday1]

the daily sport......no, not that one

 

The daily express

 

 

Ah, the paper that made the following predictions just 8 short months ago, I should take their predictions with a pinch of salt!

 

UK NEWSHOUSE PRICES ARE SET TO SOAR

 

PROPERTY BOOM: House prices are set to soar

Monday May 3,2010

By Sarah O'Grady Have your say(38)

HOUSE prices are to soar by at least 20 per cent to crown a hat-trick of good news for homeowners, property experts predicted last night.

 

 

Rock-bottom interest rates, cheap mortgages and a shortage of supply are set to fuel a “significant” new property boom.

 

Lenders are predicted to cut average interest rates from four to three per cent.

 

 

GENERAL ELECTION 2010: GET THE LATEST NEWS AND ANALYSIS HERE...

 

 

Even Bank of England governor Mervyn King has suggested that the base rate, currently 0.5 per cent, will stay at record low levels for up to four years – longer than expected.

 

The Centre for Economic and Business Re*search predicted a typical three-bedroom semi would rocket from the predicted 2010 year-end price of £172,500 to £203,200 by the end of 2013 if the surge – from the beginning of this year – materialises.

 

 

Chief executive Douglas McWilliams said: “House prices will be notably higher in three years than they are today.” The report, the most optimistic this year, shows that the rate of house price growth will moderate in 2010.

 

Yet prices will still be 5.3 per cent higher at the end of the year, at an average of £172,500. During 2011, house price growth could slow to 3.4 per cent in the wake of public-sector cutbacks, and the resulting job losses.

 

But after that dip analysts say the shortage of new-build *housing will drive growth of nine per cent in 2012 and a further four per cent in 2013.

 

The forecast come on the back of last week’s Land Registry figures showing a £12,000 rise in house prices in the past year, and Nationwide data showing the first double-digit rise in three years, with prices up 10.5 per cent in the year ending in April.

 

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Stuart Law, chief executive of Assetz, said: “These latest figures confirm that the UK housing market is well advanced on its path to recovery. Post-election we would expect to see house prices continue to firm up as a result of renewed consumer *confidence in the market, with a Conservative majority encouraging the highest levels of growth.”

 

The CEBR, meanwhile, believes mortgage rates will fall from an average of four per cent to three per cent by early 2011. The drop would be driven by renewed confidence in the money markets as Labour’s huge *post-recession deficit is cut.

 

Mr McWilliams added: “We think the next rate increase, other than a temporary one to protect the pound if there is a hung *parliament, could be as much as two years away, possibly longer. When the market realises this, new mortgage rates will fall.”

 

While some economists believe the Bank of England base rate will rise to 2.25 per cent by the end of 2011, Mr King himself seemed to reinforce the view that it will stay at 0.5 per cent. It was claimed that he told a senior US economists that UK interest rates would stay low. One of those present said: “The impression was they would stay low for the next four years.”

 

The base rate could soar to 3.5 per cent if there is a hung parliament after the General Election. But the CEBR says this would be temporary, and back to low rates within 18 months, just as they will remain if a single party wins on Thursday.

 

Property investment expert Sarah Barrett said: “It’s imperative that interest rates don’t rise any time soon. That would have a catastrophic effect on the housing market recovery and could see us plunge into a double dip. This would have an impact on the wider economy. Low rates help owners who are struggling.”

 

 

 

Read more: http://www.express.co.uk/posts/view/172842/House-prices-are-set-to-soarHouse-prices-are-set-to-soar#ixzz1BQPmOt6Q

[vinyl]

Of course the massive inflation in house prices which led to the bursting bubble was caused by the last governments total and utter failure to build new houses be they the low cost eco houses that they spouted about, or any other houses for that matter.

 

House prices spiraled out of control simply becuse that failure caused desperation and house price inflation on a massive scale. The negative equity and defaults when the unsustainable bubble burst led to the toxic debts on unpaid mortgages and the bank bail outs.

 

Nice Job.

[wednesday1]

This is of course true. It is the artifical rise in house prices that led to that phenomena called toxic debt. Where people had borrowed more on their mortgages than the houses turned out to be worth. It is people defaulting on repayment of loans that caused the banking crisis. It is very good that you pointed this out.

 

Brown claimed he had eliminated boom and bust. Well he certainly didn't in the housing market. Hundreds of thousands of folks bought houses at peak market. According to the Halifax they fell by 18% in 2008 and saddled those folks with negative equity and many facing repossession.

 

 

 

So your original point was totally wrong then.

[carosio]

I've never understood the glee in certain sections of society at spiraling housing costs. So what if you can sell your house at a tidy profit, the next one you buy will surely be more expensive than it would have been, so where is the benefit?

 

Although any rise in value is only on paper, there are advantages. You can re-mortgage or take out a second loan (or could!) against the higher value, convert it to cash or income via the various schemes, sell up and rent, or have more to leave to any beneficiaries.

[LordChaverly]

It is yet more proof, if proof were needed, that the Philips Curve is seriously flawed.

[vinyl]

So your original point was totally wrong then.

 

No. But as usual your lefty spin was.

[wednesday1]

No. But as usual your lefty spin was.

 

 

 

And true to form .......................wrong again!

[Cyclone]

Yes it is and if you looked at the data you would understand.

 

The UK recession started in the second quarter of 2008. In April 2008 the national (annual %) average house price falls for the first time since before January 2001. Price falls are recorded every month until the UK emerges from recession on 4th quarter of 2009. In September 2009 the national (annual %) annual average house price records a 0% change. It then rises by 2% (annually) in October 2009.

 

The entire time we were in recession the price of the average house in the UK fell. As soon as we were out of the recession, prices started to rise.

 

Ref: http://www.housepricecrash.co.uk/indices-nationwide-national.php

Ref: http://news.bbc.co.uk/1/hi/8479639.stm

 

How do you account for 2010 then, prices have been falling again, but the economy isn't in recession.

[Vague_Boy]

Because even if you are unemployed you have to live somewhere. The supply pressure doesnt go away.

 

Hogwash. There's plenty of supply, not enough buyers.

 

there are currently too few buyers chasing too many properties.

 

I wouldn't place too much store in a Daily Mail headline. "Experts predict" do they? Probably the same experts that failed to predict the downturn.

 

Interests rates are likely to be going up in the summer. That's hardly going to help house prices is it?

[truman]

I've never understood the glee in certain sections of society at spiraling housing costs. So what if you can sell your house at a tidy profit, the next one you buy will surely be more expensive than it would have been, so where is the benefit?

 

If you're downsizing?