Latest Housing Stats.....

Emy1501

baileysbattlebus wrote: »

Apart from the last recession - when the housing market crashed - you have times like now when unemployment is rising, but after an initial fall, so are house prices. That happened in the early 1980's too, unemployment and house prices rising at the same time. Although initially house prices fell a bit. And we had massive unemployment then - much worse than now.

In the late 1980's and early 1990's there were very high interest rates along side high unemployment - so was the crash caused by high unemployment or high interest rates? Was it unemployment or high interest rates that caused people to default?

I think the logical thing would be to say rising unemployment = falling house prices - fewer people able to afford a home and demand would fall - but that would depend on who lost their job wouldn't it?

This time we have tight credit and rising unemployment - how can the rise in house prices this year be explained? Theoretically there should be less demand as we have rising unemployment and tight credit restrictions.

And of course in the last recession we also had falling unemployment and falling house prices -

Sorry the chart only goes out to mid 2008 - but you know what comes next - prices fall until early 2009 and then start to rise - and unemployment keeps rising.


So IMHO, it's actually difficult to say unemployment directly affects house prices.

Someone will be able to straighten me out though!




House prices are Nationwide and the unemployment figurs ONS

The government has suggested they saved potentially up 200,000 homeowners from losing/having to sell their home. The house next door to me has been empty for 8-9 months as the oweners moved out as thought it was about to be repossessed on a second charge on the property. The main lender has only just turned up to find out where the owners are. The mortgage probably has not been paid for close to a year but its only now they have turned up. I wonder how many others are in this situation. The banks need to make money and sooner or later they are going to have to start repossessing whether the government like it or not.

We are possibly seeing up to 15K potential forced sellers a month being saved from the need to sell possibly due to the above. There is also no doubt that the really low interest rates are helping.

I do not know whether rising unemployment will have any bearing on prices over the next couple of years but someone cannot say as fact it won't unless they can see into the future.

Emy1501

HAMISH_MCTAVISH wrote: »

And there are different economists with the opposite opinion.

I have read both sides of the debate and picked the one I think more probable. This is, I would agree, an opinion only, but it is a tad more credible than a "guess" which by definition would imply random chance.




Actually that is not my "guess", it is the outcome calculated as most probable by the BOE and stated so by King.

One would suspect the Bank of England economists have rather more knowledge on the issue than you or I, and certainly more than "no idea".[/QUOTE]

Maybe its me but the below does not suggest merv has much idea either. I can't see where the bit about low rates for years to come. Suggest they will return to more normal levels at sometime?

http://www.thisismoney.co.uk/news/article.html?in_article_id=492210&in_page_id=2

HAMISH_MCTAVISH

Emy1501 wrote: »

[Maybe its me but the below does not suggest merv has much idea either. I can't see where the bit about low rates for years to come. Suggest they will return to more normal levels at sometime?2

They will certainly return to "normal" levels at some time.

But that time is most likely to be years away.

In fact, based on BoE projections, Kings statements and the likeliest outcome, the swap markets think rates will not cross 3.5% for the next 5 years, and many economists now think rates will stay at 0.5% for the whole of 2010.

However, economists took comments from the Bank of England quarterly inflation report on 11 November to suggest rate rises would come even later, with some predicting rates may stay at 0.5% for much of 2010.

A week before that, the quantitative easing programme was boosted by £25bn to £200bn at the November meeting - a three-way split decision - in response to disappointing economic growth data. Many analysts expect this to mark the end of the Bank's asset-purchasing scheme. If no more QE is needed, attention will then turn to rate rises.

The markets pared back expectations of rate rises throughout the year until economic signs began pointing to recovery in late October and November. The improved outlook was despite grim GDP figures showing Britain remained in recession during the third quarter (July to September).

Swap markets aim to predict future rates. They reflect that rates will only have risen to around 2% in two years. To demonstrate the change in predictions, I've listed some swap rate prices:

Mid-August 2009
• 1.10% in one year
• 2.08% in two years
• 3.52% in five years
Source: Bloomberg

Early October 2009
• 0.86% in one year
• 1.75% in two years
• 3.11% in five years

Early November 2009
• 1.02% in one year
• 2.04% in two years
• 3.42% in five years

Late November 2009
• 0.90% in one year
• 1.75% in two years
• 3.03% in five years
Early December 2009
• 0.95% in one year
• 1.83% in two years
• 3.12% in five years

http://www.thisismoney.co.uk/interest-rates

It really does look like the years from 2007 until 2015 will be a once in a lifetime opportunity to have a tracker mortgage and/or a capped SVR and pay it off early.

And one of the worst times in history to have savings in the bank instead...

chucky

Emy1501 wrote: »

The government has suggested they saved potentially up 200,000 homeowners from losing/having to sell their home

when did they suggest this?

nearlynew

And we still haven't established why it is right for homeowners to be saved from repossession in the first place.

Given that it has ALWAYS been the case that SOME people will never be able to afford to buy a house.



The HPI cheerleaders cannot answer this question.

julieq

Because there are more homeowners than not, and homeowners have votes.

Democracy, sadly.

Emy1501

HAMISH_MCTAVISH wrote: »

They will certainly return to "normal" levels at some time.

But that time is most likely to be years away.

In fact, based on BoE projections, Kings statements and the likeliest outcome, the swap markets think rates will not cross 3.5% for the next 5 years, and many economists now think rates will stay at 0.5% for the whole of 2010.



http://www.thisismoney.co.uk/interest-rates

It really does look like the years from 2007 until 2015 will be a once in a lifetime opportunity to have a tracker mortgage and/or a capped SVR and pay it off early.

And one of the worst times in history to have savings in the bank instead...

So once again not fact then and not said by Mr King then? We all know these predictions are normally wrong. Plus a 2% rise which equal £3K a year for anyone borrowing 150K is going to be pretty significant especially when more than 50% are or on the Trackers/SVR's and some have become used to their new rate.

chucky

nearlynew wrote: »

And we still haven't established why it is right for homeowners to be saved from repossession in the first place.

and did you ever establish that it was wrong?

it seems that you would be very happy for people and families to be thrown out of their homes. good on you!!

at least these two agree with you
The Following 2 Users Say Thank You to nearlynew For This Useful Post: Show me >>
Graham_Devon (Today), rewired (Yesterday)

nearlynew wrote: »

The HPI cheerleaders cannot answer this question.

seeing that you already own 4 homes - you're one of these HPI cheerleaders you keep on banging about

Graham_Devon

chucky wrote: »

it seems that you would be very happy for people and families to be thrown out of their homes. good on you!!

at least these two agree with you
The Following 2 Users Say Thank You to nearlynew For This Useful Post: Show me >>
Graham_Devon (Today), rewired (Yesterday)

You should apply for a job in government as a spin doctor with that masterful act above.

Gordon would love you. Say one thing and you could spin it into something completely and utterly different to suit your purposes at the time.

chucky

Graham_Devon wrote: »

You should apply for a job in government as a spin doctor with that masterful act above.

Gordon would love you. Say one thing and you could spin it into something completely and utterly different to suit your purposes at the time.

i've got a well paid job at the moment so no need to apply for anything.

you should really get yourself the economics 101 book - it may teach you a bit, actually quite a lot.

why should people who are being repossessed be thrown out of their homes then?