House market stalls, fuels double-dip recession fears

amcluesent

Fears are growing that the housing market could be facing a double-dip recession, as data released today shows house prices in March have risen by the smallest margin on record.

Prices rose just 0.1 per cent, the weakest growth in the month of March for at least eight years. The news has raised fears that the market could be following a "double dip" pattern after last year's recovery.

"We expect house prices to fall further," economists at Capital Economics said.

The housing website Rightmove said the £216 rise in average asking prices in England and Wales was the lowest it had ever recorded for the month and compared with an average jump of 1.3 per cent in March.

The group attributed the low figure to a surge in the number of people putting their property up for sale. The number of properties on the market jumped by 17.5 per cent compared with the previous month and 34 per cent compared with the same period of 2009. It is the highest level for 18 months.

FACT - seller's panicking to get out, prices drop by minimum of 20%, gazzundering returns!

litt

I'm always a bit wary of Capital Economics, they seem to say whatever gets them a bit of press

The Rat and Mouse Blog had a great 'results table' from 2009 predictions, it turned out eveyone had it wrong, but CE the worst. The Government figures showed a 0.8% rise but CE had predicted a 20% fall !

mystic_trev

I'm hardly bullish on Houseprices for the coming year. However if Capital Economics are saying there's going to be a fall, prices will probably end up on the year :rotfl:Their record on predicting Houseprices has been a disaster!

sarkin1

Halifax down

Nationwide down

Rightmove stagnent

Shurley shome mistake Miss Money Penny

skap7309

Its going to be an interesting summer if this area is anything to go by. Property is literally flooding onto the market but the asking prices are well above the average here. For instance - a 3 bed detached would go for £190k - £210k recently but there are some 3 bed terraces coming on for that price. 4 bed semis £230k, even a council estate box house wants £170k. It just is not sustainable with the amount of property coming onto the market. It has regularly been over 10 a day within a 3 mile radius compared to 1 a day only a month or so ago.

HAMISH_MCTAVISH

litt wrote: »

I'm always a bit wary of Capital Economics, they seem to say whatever gets them a bit of press

The Rat and Mouse Blog had a great 'results table' from 2009 predictions, it turned out eveyone had it wrong, but CE the worst. The Government figures showed a 0.8% rise but CE had predicted a 20% fall !

:rotfl:

Glad to see others are picking up on how bad CE are........

One more time with the Capital Economics house price forecast history.....

The evidence says they have consistently been as wrong as it's possible to get.

BBC December 2002 - Capital Economics warned that the UK property market was severely overvalued, and that prices could fall by up to 30% over the next few years.

BBC October 2003 - House prices are set to fall by 20% in the next 18 months, a leading economics firm predicts. - Capital Economics argues that central banks in both the US and UK have fuelled the housing bubble by keeping interest rates deliberately low, and house prices are now at "dangerously high levels." It predicts that average house prices will fall from £135,000 in 2004 to below £110,000 in 2007, before beginning a more gradual recovery.

BBC September 2004 - Capital Economics is not predicting a sudden drop in prices, but a slow 20% grind lower over the next 2-3 years.

BBC May 2005 - Economic forecast group Capital Economics, which has predicted that house prices could fall, reiterated that the market had reached an "impasse", with buyers and sellers unable to agree on prices. "We expect the pace of the slowdown to pick up as the year progresses, in line with more gloomy reports from surveyors and housebuilders," Capital Economics said.

Independant Nov 2006 - Capital Economics Giving up on House Price Crash - Ed Stansfield, property economist at Capital Economics, said: "I cannot see 2006/2007 being the time we look back on and say 'yes, that was the start of the housing market crash'."

BBC April 2007 - Capital Economics Turns Bullish - Capital Economics, which in 2003 famously predicted that the UK was headed for house price falls of up to 20%, broadly agrees with Mr Boulger's upbeat analysis. "It gets to a stage when you can't keep saying a crash will happen while prices keep on rising," Ed Stansfield, analyst at Capital Economics, admits.

Gaurdian November 2007 - So, what are the experts saying about 2008? The bleakest assessment (if you are a homeowner, that is) comes from Capital Economics, which says it expects house prices across the country to fall by 3% during both 2008 and 2009.

(3% ? Is that all ? After years of forecasting 20 to 30% drops now Capital Economics is down to a absymally poor forecast of 3% per year for 2008 and 2009, AFTER house prices had already peaked and fallen ! )

Telegraph- November 2008 - "This housing market correction has already overtaken the 1990s crash and, with the economic slump deepening, it is set to get worse. Interest rate cuts will not be enough to stop the correction, nor slow the pace of house price declines. We expect house prices to fall a further 20pc in 2009," said Seema Shah, property economist at Capital Economics.

(and as we now know, prices rose in 2009 by a whopping 10% in the last 12 months)

Capital Economics are without a doubt the WORST forecasters in UK housing history.

So if they are predicting a 10% fall, it's safe to say prices will be rising.

HAMISH_MCTAVISH

amcluesent wrote: »

FACT - seller's panicking to get out, prices drop by minimum of 20%, gazzundering returns!

FACT - vendors putting houses on market for spring. Happens every year. Most people in 18 months, because recession is over, confidence is returning, mortgage funding is more available, and activity is forecast to be double last years levels.

MatteH

HAMISH_MCTAVISH wrote: »

FACT - vendors putting houses on market for spring. Happens every year. Most people in 18 months, because recession is over, confidence is returning, mortgage funding is more available, and activity is forecast to be double last years levels.

More sellers than buyers
0.1% increase in asking prices doesn't look exactly like much confidence is returning
Mortgages on average cost more than last year
Activity (mortgage approvals) has slumped 50% yoy.

Looking very rosey indeed Hamish!

Graham_Devon

Did I miss feb's figures?

sarkin1

HAMISH_MCTAVISH wrote: »

:rotfl:

Glad to see others are picking up on how bad CE are........

One more time with the Capital Economics house price forecast history.....

The evidence says they have consistently been as wrong as it's possible to get.

BBC December 2002 - Capital Economics warned that the UK property market was severely overvalued, and that prices could fall by up to 30% over the next few years.

BBC October 2003 - House prices are set to fall by 20% in the next 18 months, a leading economics firm predicts. - Capital Economics argues that central banks in both the US and UK have fuelled the housing bubble by keeping interest rates deliberately low, and house prices are now at "dangerously high levels." It predicts that average house prices will fall from £135,000 in 2004 to below £110,000 in 2007, before beginning a more gradual recovery.

BBC September 2004 - Capital Economics is not predicting a sudden drop in prices, but a slow 20% grind lower over the next 2-3 years.

BBC May 2005 - Economic forecast group Capital Economics, which has predicted that house prices could fall, reiterated that the market had reached an "impasse", with buyers and sellers unable to agree on prices. "We expect the pace of the slowdown to pick up as the year progresses, in line with more gloomy reports from surveyors and housebuilders," Capital Economics said.

Independant Nov 2006 - Capital Economics Giving up on House Price Crash - Ed Stansfield, property economist at Capital Economics, said: "I cannot see 2006/2007 being the time we look back on and say 'yes, that was the start of the housing market crash'."

BBC April 2007 - Capital Economics Turns Bullish - Capital Economics, which in 2003 famously predicted that the UK was headed for house price falls of up to 20%, broadly agrees with Mr Boulger's upbeat analysis. "It gets to a stage when you can't keep saying a crash will happen while prices keep on rising," Ed Stansfield, analyst at Capital Economics, admits.

Gaurdian November 2007 - So, what are the experts saying about 2008? The bleakest assessment (if you are a homeowner, that is) comes from Capital Economics, which says it expects house prices across the country to fall by 3% during both 2008 and 2009.

(3% ? Is that all ? After years of forecasting 20 to 30% drops now Capital Economics is down to a absymally poor forecast of 3% per year for 2008 and 2009, AFTER house prices had already peaked and fallen ! )

Telegraph- November 2008 - "This housing market correction has already overtaken the 1990s crash and, with the economic slump deepening, it is set to get worse. Interest rate cuts will not be enough to stop the correction, nor slow the pace of house price declines. We expect house prices to fall a further 20pc in 2009," said Seema Shah, property economist at Capital Economics.

(and as we now know, prices rose in 2009 by a whopping 10% in the last 12 months)

Capital Economics are without a doubt the WORST forecasters in UK housing history.

So if they are predicting a 10% fall, it's safe to say prices will be rising.

The lady doth protest too much, methinks

HammerSmashedFace

Again, althought the hard of thinking may see this has 'unexpected', it is absolutely expected, the market has backed itself so tightly into a corner, there is nowhere else for it to go. Eventually it had to hit the wall. So what is the governement going to do now ?, they've tried...

1) A myriad of schemes to stop repo's
2) Reduced bank rate to zero, therefore reducing SVR's for hundreds of thousands
3) Forced government controlled banks to stop repo'ing
4) Printing £200 billion of funny money
5) Used £300 billion of taxpayer's money to gaurantee 'mortgage lending'
6) etc.............

And yet they still can't stop prices falling back and sentiment disappearing, based on half the 'mortgage approval' average of the last 13 years. Interesting times are ahead for the country's biggest pyramid scheme.