Merryn Somerset Webb in the FT, with some housing market reality.

ad9898_3

Great article from the FT.

The truth is that all real bear markets tend to offer the unwary investor one last opportunity to lose money.

http://www.ft.com/cms/s/2/fcb77330-205c-11de-a1df-00144feabdc0.html

BlondeHeadOn

Really good article, I agree. I liked the following quote:

"...even if you aren’t fussed about long-term affordability ratios, consider this: for a real recovery to get going now, a very large number of people need to have five things: a job; a firm belief that they will still have a job in five years even as unemployment rises over 3m; a conviction that you can’t lose in the long term with bricks and mortar; a good £20,000 as a deposit; and – most importantly of all – the ability to get a mortgage. Know many people like that? Nor do I. "

amcluesent

I'm awaiting the FTSE dropping below 3500 before thinking it's a true bottom.

Pobby

Sensible reading.

StevieJ

Another STR article :rolleyes: yaaaawwwwn

Pretending to be the FT

I thought so !!!!!!'s rag again
Merryn Somerset Webb is editor-in-chief of Money Week and previously worked as a stockbroker. The views expressed are personal. :rotfl:

ad9898_3

StevieJ wrote: »

Another STR article :rolleyes: yaaaawwwwn

Pretending to be the FT

I thought so !!!!!!'s rag again
Merryn Somerset Webb is editor-in-chief of Money Week and previously worked as a stockbroker. The views expressed are personal. :rotfl:

I feel the views represented though, are honest and well thought through, can't find much in that article that isn't true as we look out of our window today.

penguine

Good article, thanks. I hear a lot of people saying that they think it's a good time to buy, so obviously the reality of this crash hasn't hit the general public yet. Unfortunately they aren't likely to read this.

Only days before the Nationwide numbers, we had the Land Registry numbers.

These are the most authoritative we can get, and they showed the decline in house prices actually accelerating. They were down 2 per cent in February – making the annual rate of decline now standing at 16.5 per cent.

Radsteral

the 4 she listed are the one that stoped me buy... i got more than 20 k though so i fulfill 1 of the requirements
she may have beeen a stockbrooker but i ve read her before and she seems to make sense

Davesnave

I think us impatient bears need an article like this now and again.

I have a small collection of EA brochures & property papers from 2002, which I also use when I feel a bit of 'purchase friskiness' coming on.

Its like thinking of kippers when......well, you get the idea!

kennyboy66_2

ad9898 wrote: »

I feel the views represented though, are honest and well thought through, can't find much in that article that isn't true as we look out of our window today.

Except a more honest article might have gone along the lines of.

1) Houses have a bit further to fall, could be 10%, could be 15%.
2) In % or nominal terms falls won't be as much as has already happened.
3) There is likely to a fair period of stagnation.
4) Real house prices will fall during this stagnation period as they will lag inflation.
5) House prices have no relationship with the price of Silver (a curious Moneyweek obsession).
6) People who are waiting for the bottom, probably will never buy a house.

All a bit boring though.

JP45

I noticed a discrepancy between what appeared in Merryn's article and what appeared in a recent article in The Sunday Times.

According to Merryn:

UK house prices are still totally out of whack: they’ve still got a long way to fall to get anywhere near the usual 3.5 times average earnings. Look at the Land Registry prices and ONS numbers on average earnings, and you will see that the ratio is still well over five times.

According to The Sunday Times:

The ratio of house prices to average earnings has now fallen to 4.34, says the Halifax, which is close to the long-run average of 4, and well down from its peak of 5.84 in summer 2007.


Presumably the difference lies in whose set of figures you choose to use, the Halifax or the Land Registry's. The Sunday Times article was all about 'chinks of light emerging in the economic gloom', whereas Merryn's article is based on her belief that the property crash won't be over until prices are down 'a good 40 per cent'.

Either way, it just shows how both camps tend to be selective in their use of data. As ever, the truth probably lies somewhere between the two. Like the previous poster, I reckon a further fall of 10-15% is the most likely outcome.