The last 3 Recessions
I have particular memories of 1990 because I bought a house at the beginning, and sold one at the end of the collapse in property prices – fortunately for me someone else was picking up the difference in prices, the house that sold went for £125,000 – down from an asking price of £175,000 in 9 months. That collapse was brought about by the end of tax relief on mortgage interest, and was preceded by a bubble of frantic activity all summer as prices went through the roof. Then one day in autumn someone turned the tap off, and the market died literally overnight. As a house hunter I was in and out of Estate Agents several times a week, one day it was “please wait over there I will be with you in a second”, the next it was an office like a morgue.
What sets this market apart is the unprecedented support that it has had both from within the industry, and from government. Property Press has been calling a recovery since January, and finally the market has followed what it has been repeatedly told it ought to do. London has benefited in particular as the collapse in the pound has made anything British very cheap for foreigners, and so in the face of a worldwide collapse in property prices, Real Estate money has come to the literal pound shop of the global High Street – London.
Many in Property in their economic ignorance openly yearn for a Conservative Government – they fail to appreciate that “Quantitative Easing” of £175,000,000,000 and interest rates of 0.5% are unprecedented intervention, which has prevented a 70% collapse in property prices – who would believe that the best friend Bankers and Estate Agents ever had would be a Socialist Government?
One of my first blogs written almost a year ago makes very interesting reading a year on!
Margaret Thatcher famously observed “There is no way in which one can buck the market”, and 20 years later this still applies. The Government has declared it’s intent to wind back Quantitative Easing as soon as it can, everyone else’s Real Estate market is recovering ahead of ours ………….
Here is the graph – YOU fill in the dots for Q4 2009, & 2010 ………
UK Property Prices
So what do YOU think that the graph is going to do?
Tags: house prices, Interest Rates, Property
Posted in General on October 24th, 2009 |
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All year Letting Agents, and Estate Agents have tried to kick start their market with announcements of a recovery in the market. Frankly it just isn’t happening, but also – it doesn’t have to. What is wrong with selling or letting at the current market price? ……… Absolutely nothing! Just price your flat at a sensible price and it will go.
The latest piece of mis-information comes courtesy of the Telegraph.
Pimlico Flats
The statistical fact behind the article is that the RICS reported in March (that’s 2 months ago) Surveyors reported the change in House Prices as follows:
A Rise 2%
No Change 36%
A Fall 61%
You can download the data yourself here
This is reported by the Telegraph as:
House prices in Britain rise for first time in 18 months
Housing prices in Britain are on the rise again for the first time in 18 months, figures from the Royal Institution of Chartered Surveyors show.
Yeah – right.
Tags: Flats, house prices
Posted in General on May 12th, 2009 |
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Maybe the dinner tables of the middle-classes have been quieter during the last 6 months as house prices plummeted through the floor. I’ve shown the drama by plotting house prices for the last 57 years (click the charts to see them at full size) ………
Flat House Prices
But actually it’s all about how you look at things, & in particular just plotting prices isn’t the way to look at things, because a £1000 drop in price now isn’t as important as it was back in 1952. This can work for you if you are an investor (it’s called the power of compounding), so when I read The Money Gym I decided to do a picture to illustrate why there is no great event happening to the housing market really. To compensate for the point about the value of £1000 being less after time, one plots prices as a log thus ………
Flat House Prices
Thus we can see the consistency of the trend without any distortion. This gives the good news that the present price decline for flats & houses is nothing special, but also the bad news that it wouldn’t be terribly surprising to see the decline continue as far again.
It all depends upon how you look at things!
Tags: Apartment, Flats, house prices, Pimlico, Property, Studios
Posted in London on January 23rd, 2009 |
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