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Nationwide +1.3 (-6.2 YoY)
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Dan:_4
Posts: 3,795 Forumite
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Sig Updated.
It appears that we are now the above the figure we enjoyed in Dec 2008.0 -
From the release:One of the factors helping prices to stabilise in 2009 is the shortage of properties available for sale. In the short
run, the supply of homes on the market is mainly determined by factors such as potential sellers’ confidence in
market conditions, labour market turnover or financial pressures to sell among existing homeowners. Over the
long run, however, the supply-demand balance depends critically on the rate of housing construction in relation to
the rate of household formation.
“The future level of household formation is a matter of tremendous uncertainty, as it depends on factors that are
difficult to estimate such as birth rates, life expectancy, net migration and lifestyle preferences. Of these, net
migration is one of the most important and uncertain factors. After the expansion of the European Union in 2004,
net migration increased substantially, as workers in the new member states were attracted to the UK by strong
labour demand and a high level of Sterling. Given the downturn in the UK economy and the fall in the Sterling
exchange rate, net migration seems likely to slow somewhat from recent levels, although it will probably remain
positive given the openness of the UK economy and labour market relative to other countries.
“The central assumption from the Department of Communities and Local Government is that long term net
migration will be 171,500 per year, resulting in an annual increase in the number of households in England of
252,000 once other factors are taken into account. Even if one were to assume zero net migration, however, the
number of households is still projected to expand by an average of 153,000 units per year through to 2031.
Whatever the true number is, it is almost certain that current levels of housing construction have fallen far below
future levels of household formation (chart 3). Based on recent levels of housing starts, it looks likely that only
around 100,000 homes will be built during 2009, which would represent by far the lowest level on record
(chart 4). As it is likely to take time for the economy and housing construction to recover to pre-crisis levels, the
potential exists for a considerable housing shortfall to develop over the next few years. This would be on top of
the shortfall that already started to develop in 2004, when even boom-time levels of construction failed to keep
pace with household growth.
So where will all these households live if new houses aren't being constructed? Of course, they don't say (correctly) that this will correspond with a rise in demand as demand is linked to ability to pay as well as desire.
UK families to be crammed into ever smaller spaces or will the coming pensions crisis force baby boomers to sell at lower prices and move into smaller properties? My bets are on the latter but time, as ever, will tell...0 -
They just said on BBC Breakfast the time to buy is now.0
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07:00 30Jul09 UK House Prices May Rise In 2009 Nationwide
LONDON--There is a "reasonable chance" that U.K. house prices could end the year slightly higher than where they started it, the Nationwide Building Society said Thursday in one of the most upbeat comments on the market since it was throttled by the credit crisis.
"Only a few months ago, such an outcome would have appeared unthinkable," Martin Gahbauer, Nationwide's chief economist, said in the company's latest house price report.
Nationwide said the average price of a home rose for the third consecutive month in July, increasing 1.3% to GBP158,871 following a revised 1.0% gain in June. Prices have risen a cumulative 1.3% over the first seven months of the year and are at their highest level since October 2008, it said.
Although house prices were still 6.2% lower than they were in July last year, that was up sharply from June's 9.3% year-on-year drop.
The figures are likely to surprise economists. The market consensus from a Dow Jones Newswires survey was for prices to rise just 0.3% on the month, leaving them 7.5% lower on the year.
"Even if prices were to remain unchanged for the rest of 2009, the year-on-year rate would continue to improve since prices were falling very sharply in the second half of last year," Gahbauer said.
The three-month rate of change, which compares home prices over the latest three months with the previous three months and is seen as a smoother indicator of the near-term trend, also rose to 2.6% in July from 1.0% in June, Nationwide said.
The figures suggest the severe slump in the U.K. housing market caused by the global credit crisis and ensuing recession is not only bottoming out, but may be starting to recover with support from a combination of pent-up demand and low supply of property on the market. Other recent indicators have also suggested that the combination of lower house prices, the U.K. government's efforts to stabilize the banking system, and record low Bank of England interest rates have helped fuel a modest increase in housing sales.
"Although the resulting rise in transactions has not been that dramatic, it has been enough to produce an upward bounce in prices because it coincided with very low levels of supply on the market," Gahbauer said.
Banks are still very hesitant to lend to businesses and households, but BOE data released Wednesday showed mortgage approvals increased to a 14-month high of 47,584 in June.
Nationwide cautioned that if house prices continued to rise at the rate seen over the last three months they would be out of line with earnings, rents, and other indicators. Rising unemployment was also likely to have an impact on the market, it said.
"It is unlikely, therefore, that price increases can be sustained for long at the very strong rate observed over the last few months," Gahbauer said.
But the building society said the current low level of housing starts indicated there was a potential for a housing shortfall to develop over the next few years. That could help support prices as the U.K. didn't have the excess housing that has weighed so heavily on the property market in countries such as the U.S., Ireland, and Spain.
"Over time, however, these shortages are detrimental to housing affordability and can contribute to future instability in prices," Gahbauer said.
Web site: www.nationwide.co.ukPlease take the time to have a look around my Daughter's website www.daisypalmertrust.co.uk
(MSE Andrea says ok!)0 -
TIMBER
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Ooops, forgot to read the figures.:D0 -
Well it seems the government have succeeded in changing sentiment, the borrowed money and low IR's have convinced people to buy. I'll be honest I have no idea how prices can trend upwards in a recession of this magnitude, but they are and it can't be denied at this time, luckily my own area is still negative by over 13% YoY, and hold steady at -2% on a rolling 3 month basis so it's not all bad news.
At this rate on a national level we will be back to 2007 prices by Spring 2010, with mortgage approvals following suit, looks like most of us were wrong house prices do in fact only go up. The bears can wait for the winter to hope for some more falls, but once people have it their heads that prices are on the up, they will start to buy. Looks to me like leaving for Oz is coming to the fore now when my investments come in, as there is no way on earth I will pay current prices, but it seems the majority in the country disagree, good luck to 'em................. onwards
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Oh come on ad, it's not so bad as that. It's a blip upwards, nothing more than that, and when people are tempted to sell by the apparent increase the increased supply will cause price drops. Chin up.0
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It has amazed me how resilient the housing market is, 6% is nothing in the scheme of things, and it looks like the doomsters will miss the boat again.0
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Oh come on ad, it's not so bad as that. It's a blip upwards, nothing more than that, and when people are tempted to sell by the apparent increase the increased supply will cause price drops. Chin up.
Kind of you Julie, but my chin is up thanks, to be honest I always call a spade a spade even if it's not what I want to see, denial is a terrible place to be. Of course the real fireworks will start after the election, we will get a much clearer picture of where things are going, but for the time being I'm standing at the edge of the boxing ring with my towel in the air, not quite ready to throw it in yet.
I have no idea why people want to get into so much debt at this time, unless it's pure fear that if they don't they will be lumbered with even more debt later.0 -
Looks to me like leaving for Oz is coming to the fore now when my investments come in, as there is no way on earth I will pay current prices, but it seems the majority in the country disagree, good luck to 'em................. onwards
Looking at the stats and the charts, It does look similar to the last crash.
Mainy that the big falls have happened and the falls going forward will mainly be in "real terms" not nominal. (no Graham, I am not going over that again. If you don't understand it after the last conversation you never will:))
I think their are still some falls to come but if people continue not to sell who knows. Perhaps we could see a very long period of stagnation.
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