# UK house prices - down for 10th month



## Mike (26 Apr 2005)

Less than a year ago my cousin in London was saying you just can't go wrong with property in London, the govt won't let property fall, the economy is strong, the market is different this time etc etc  all the usual justifications people make when buying into an overpriced market. 

Now the poor guy is faced with a very unpleasant choice: sell now at a small loss or sell later with perhaps a greater loss. Ugh!

[broken link removed]

http://www.reuters.co.uk/newsArticl...14580&section=finance&src=rss/uk/businessNews


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## Unregistered (26 Apr 2005)

Notice the above post was moved from the home buying forum, why I wonder?


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## ClubMan (26 Apr 2005)

Unregistered said:
			
		

> Notice the above post was moved from the home buying forum, why I wonder?



Because in dealing with the possible directions that the _UK_ property market might be taking or have taken it has more to do with general financial discussion than buying/mortgaging a house. As such it seems to fit better in this _Great Financial Debates _forum than the _Mortgages and Home Buying _forum (in which a redirect link to this topic still exists). The latter forum is more geared towards the nitty-gritty/mechanics of mortgages and house buying as opposed to more generalise financial/macroeconomic debates. Does that answer your question?


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## Unregistered (27 Apr 2005)

Repossessions in UK climb

http://www.thisislondon.co.uk/news/articles/18202057?source=Evening


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## Unregistered (28 Apr 2005)

Yawn !!

Does any one else find this constant debate about when the sky is going to fall in to be tedious and repetitive in the extreme ?


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## Unregistered (28 Apr 2005)

Tedious price cuts in Glasgow, yawn [broken link removed]


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## Unregistered (28 Apr 2005)

I hear that house prices have also fallen in Zimbabwe, and in a district of Queensland. Do you think this could be the beginning of the end for house price rises in Ireland ? 


Go back over the past 5 years here on AAM, and there are always a number of doomsayers predicting the sky is about to fall in. The interesting thing is that they go quiet after a while. 


The cynic in me says that they’ve decided to give up waiting for the ever elusive price crash and have decided to bite the bullet and buy a home.


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## Unregistered (28 Apr 2005)

The predicated fall of the stock market started 6 years before it actually fell. I have property, bought at market value so I am not talking the market down (it would not be in my interests).  But I would not advise anyone to buy property in the current bubble. Remember dot com shares or further back tulips


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## Gabriel (28 Apr 2005)

Unregistered said:
			
		

> The predicated fall of the stock market started 6 years before it actually fell. I have property, bought at market value so I am not talking the market down (it would not be in my interests).  But I would not advise anyone to buy property in the current bubble. Remember dot com shares or further back tulips



Define "market value" in the context of when you bought?


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## tonka (28 Apr 2005)

Unregistered said:
			
		

> Tedious price cuts in Glasgow, yawn [broken link removed]


#

Interesting that !

Normally a developer has about 5% margin with 'allowances' . 

Say a property is 200k with 5k allowances, the builder can still charge 200k but bump the allowances up to 20k  . Thats a cut of 7.5% disguised as a steady price policy. 

The Glasgow guy could not hold prices EVEN by adding granite and marble finishes and kitchens and applicanes  and shag pile carpets and built ins and basically had to cut the price, by 12% I noticed.


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## Unregistered (28 Apr 2005)

You are right Tonka, a developer would have to think long and hard and exhaust every other possibility before knocking the headline price of the remaining units in a development.  You can imagine how other owners in the development greeted news like that.


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## tonka (28 Apr 2005)

Unregistered said:
			
		

> You are right Tonka, a developer would have to think long and hard and exhaust every other possibility before knocking the headline price of the remaining units in a development.  You can imagine how other owners in the development greeted news like that.



Exactly, they take a bath on 'allowances' while keeping their headline price stable at a minimum . The price was still too high in Glasgow so they cut the price by 12% according to that article but may also have upped the allowances , therefore the price cut may have been an effective 15% or even 18% .

That will really p1sss off the other investors who no doubt include some of Irelands finest ....

The lesson to be learnt is to see if the alloances in a development are creeping up (as they did in 2001 in Dublin) in order to hide what is actually a fall in realisable value.


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## Unregistered (28 Apr 2005)

Fascinating stuff!!

How long did that "slide" you refer to in 2001 last ?


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## tonka (28 Apr 2005)

longer than your attention span anyway!


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## Unregistered (29 Apr 2005)

Yup, good response Tonka. Anything intelligent to say?


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## tonka (29 Apr 2005)

I love the smell of freaked out  investors in the morning


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## Unregistered (29 Apr 2005)

Do you do any thing other than Troll you muppet ?


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## tonka (29 Apr 2005)

You are neither great , nor financially unimpaired nor a debater ...judging from your resolutely uninformed and uninformative one liners .

Please register in a forum where you can bond with your peers....such as here maybe. 

[broken link removed]

Now go away


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## HoorayHenry (29 Apr 2005)

Great !!

Another debated drawn into the mire by tonka.

Just what AAM needs


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## Billy (29 Apr 2005)

i was at a conference in london earlier this week on the subject of UK housebuilding - the three largest housebuilders were speaking (Persimmon, Wimpey, Wilson Bowden) as well as a few economists and a representative of the UK Housebuilding Federation.


The feeling is that in the short term the market is a bit slippy because (I) houseprices nationally rose so much in 2003 and early 2004 and (II) Bank of England interest rates have risen to 4.75%.  The builders are saying that prices are holding, incentives have risen, and volumes are slightly lower than last year.

In the medium term prices should be fine because there is still an imbalance between supply and demand.  This is due mainly to restrictive planning laws which mean less houses are getting built.  For example the UK will build 180000 houses this year, compared to 70000 in Dublin.  There are efforts to free up the planning process but this is a few years off.

As for London prices specifically I'm not so sure.....I believe the North of England is the strongest market presently.  Likelihood is that if house prices slip further that interest rates will start to fall again, this would provide support.


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## Billy (29 Apr 2005)

sorry, that should read 70000 new house in ireland, not in Dublin.....


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## Unregistered (29 Apr 2005)

Don't think its likely that UK interest rates will go much higher, so the market should regain its momentum soon


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## tonka (29 Apr 2005)

Unregistered said:
			
		

> Don't think its likely that UK interest rates will go much higher,


Correct. 


> so the market should regain its momentum soon



Overall I doubt it. The UK had 10 years of property appreciation in the past 3 or 4 years alone. Some patches will rock on but the starter home in Hackney or Deptford has probably peaked already and will remain flat for a long time ahead. 

London , the M25 corridor and the M4 corridor to Cardiff will continue to grow for a variety of reasons...but not at breakneck speed however  the hollowing out of the British economy in places like Birmingham (where rover and their suppliers were) will have an effect on many of the Regional markets over there.

In order for the outer suburbs in the UK to do well there has to be an equity cushion for the seller to punt into trading up. If capital appreciation is stagnant in the starter areas and if interest only mortgages are more like the norm then there is no hard equity to punt into the cost of the move ....is there?


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