From The Metro:
This pent-up demand, which will have been exacerbated by the fall in the number of new homes being built since the end of 2007, suggests house prices could recover quickly once activity in the market starts to rise again.
Ms Earley said: "The short-term outlook for the housing market is fairly weak. This should not be surprising given the economic and labour market conditions we expect to face. Sharp cuts in interest rates will provide support to existing and potential homeowners and pave the way for the improvement in affordability which will eventually encourage buyers back into the market."
The joke here is that Ms Earley is Chief Economist at The Nationwide Building Society - yup, the very same building society that announced last week that it "... will not pass on any further cuts in UK interest rates to most of its tracker mortgage customers."
For clarity, The Nationwide appears to be a well run, old-fashioned institution, with sensible lending ratios and which didn't go for this whole "wholesale funding" and "securitisation" malarkey, and which has not, as yet, had to go cap in hand to the government for a bail out, so they are probably doing the right thing by charging (and paying) higher interest rates than other lenders. It's just strange that their 'Chief Economist' doesn't seem to know this.
Wednesday, 7 January 2009
Pent-up demand
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5 comments:
Must admit Mark, I am tempted to start looking to buy again now. For a while sellers were holding on to unreasonable prices (and not selling), but it looks like they are getting more sensible now in my area(Caterham/Whyteleafe/Warlingham).
I think come February/March time we'll start doing some viewings. Got a review with our FA at the end of this month to crunch some numbers.
He's suffering the same crysrtalballism that so afflicetd all these well educated idiots since 1997.
I am sure that Mr Early is a very nice man and very clever and well educated and all that but he's not out on the street trying to make a living. He therefore has lost touch with the state of mind of the Man on the Clapham Omnibus. On top of that he works for an outfit who's chief wishfulfillment would be ever rising house prices, preferably above inflaton, so that they will be thought of as 'investments' rather than the millstones they actually are.
And he is poisoned by the whole English 'owning a house is a good thing' problem.
It is somewhat worrying both Nationwide and Halifax are opting out of any forecasts for prices in 2009.
The Nationwide data suggests prices would have to fall by some 20% to bring earnings : price ratios into line.
For first time buyers, the fall would have to be some 25%.
JKA
My mortgage is with Nationwide, the tight bastards!!! ;-)
Actually, I can see the sense in their policy, and I'm more than happy with the monthly saving of £450 I've already made - well, not saving exactly, as I'm paying the same to wipe thousands off while the going is good.
A bit unprofessional of Ms Earley not to be following her employer's line more closely though.
Pah! Not brave enough to have a go at spelling her christian name, then?
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