• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

House prices 'could fall by further 55 per cent'

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    House prices 'could fall by further 55 per cent'

    http://www.telegraph.co.uk/finance/e...-per-cent.html

    House prices 'could fall by further 55 per cent'
    House prices may fall by a further 55 percent and there is a "very real probability" that Britain will be bankrupted, a leading investment bank has warned in a private note to clients.

    People who bought buy-to-let flats are expected to “begin panic selling” and the average home value could drop below £100,000.

    The predictions in a 298-page report from Numis Securities, a City investment bank, are the bleakest yet on the deteriorating state of the British property market.

    House prices have already fallen by about 20 per cent over the past year.

    However, in the note written last month, Numis said: “Despite UK house prices already having fallen 21% from the peak, we do not believe that the correction is anywhere near over.

    “Our core headline forecast is that UK property prices remain between 17% and 39% overvalued based on fair valuation. Moreover, history has shown us that when property…which has experienced a price bubble corrects, the price tends to fall below fair value for a period of time, as confidence in that market remains low. Prices could fall a further 40-55% if the over-correction was as bad as the early 1990s in our view.”

    The report warns that “city centre flats” and “new executive homes” are likely to record the biggest reductions and describes investing in buy-to-let property as a “poor man’s hedge fund”.

    “It is the action of these amateur investors over the next few months which we are most concerned about,” the report says. “We expect some to begin panic selling their portfolios, with the peak volume as is almost always the case with private investors, being at the market trough.”

    Yesterday, Alistair Darling, the Chancellor, warned that the world is facing the most difficult economic conditions for “generations”.

    However, the Numis report is scathing of Government attempts to help the economy.

    “The Prime Minister and Chancellor have publicly stated that they want banks this year to lend at 2007 levels,” it said. “We think this is a crazy policy, given that too much debt was one of the prime reasons why the economy has its current problems.”

    It also criticises the huge debts being run up by the Government to pump money into the economy. Yesterday, John Lewis, the retailer, said that the £12.5 billion cut in Vat has not made “any long term difference at all”.

    The Numis report says: “The bankruptcy of the UK is a very real probability as the UK Government is trying to stimulate a greater debt burden in a grossly indebted economy. We believe the scale of the macro imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.”

    Last night, the Conservatives said that the Numis analysis increased the pressure on the Prime Minister to apologise. Grant Shapps, the shadow Housing minister, said: “This is a devastating critique of the Government’s record and how Gordon Brown’s credit bubble will lead to a mountain of debt, a wave of repossessions and negative equity misery. Labour Ministers must take direct responsibility for fuelling buy-to-let speculation.

    “Gordon Brown’s fingerprints are all over this economic wreckage and he should now have the decency to at least apologies for his mistakes.”

    Yesterday, it emerged that the number of borrowers falling behind with their mortgage repayments has already doubled in the past year. According to Moody’s Investors Services, borrowers more than 90 days in arrears have increased to 1.5 percent of all home loans compared to 0.6 percent a year ago.
    Last edited by BrilloPad; 12 March 2009, 11:47.

    #2
    Oh dear.... I can hear Corporal Jones...

    DON'T PANIC
    I'm alright Jack

    Comment


      #3
      I predicted last year that there was no reason ti stop property prices dropping by 80 per cent as per the Tokyo fall in the property market - and that was from the early 90's and they still have not recovered - in fact now there is a new recession in Japan.

      Since last year theres been a 30 per cent fall - so another 50 per cent or more fall over the next year is certainly on the cards.

      You cannot buck the markets.

      Fortunately the Pruffock Mansions in Scotland have held their value - you see - its the exception that proves the rule.

      PS The Tory housing minister is talking non-sense - property owenership for everyman was at the heart of the Thatcher vision for the UK
      Last edited by AlfredJPruffock; 12 March 2009, 09:47.

      Comment


        #4
        I wish these blinking experts would keep their traps shut for a few weeks, they might put my buyer off.

        Comment


          #5
          Never mind, Cybercretin's house has risen by 50% in the past week alone.
          Boomed!
          Hard Brexit now!
          #prayfornodeal

          Comment


            #6
            The price of my house is still rising

            - Cybertory
            "Experience hath shewn, that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted it into tyranny. "


            Thomas Jefferson

            Comment


              #7
              I saw Kirsty and Phil on TV last night, urging some thick gullible buyers to "jump in quick, this property won't be on the market for long!"

              Had to laugh!

              Comment


                #8
                Originally posted by TimberWolf View Post
                I wish these blinking experts would keep their traps shut for a few weeks, they might put my buyer off.
                Whoops sorry TW - how about this then ...

                The recent decline in UK property proces has clearly now reached its bottom - the stats from Jan demonstrate that propertry prices can now expect steady growth over the year and beyond - this amounts to an excellent opportunity for those seeking to invest in property whilst prices remain affordable - those whom hesitate now will later regret .

                Perfect.
                Last edited by AlfredJPruffock; 12 March 2009, 09:53.

                Comment


                  #9
                  Originally posted by DimPrawn View Post
                  I saw Kirsty and Phil on TV last night, urging some thick gullible buyers to "jump in quick, this property won't be on the market for long!"

                  Had to laugh!

                  Was there an "(R)" beside the TV listing?

                  Comment


                    #10
                    The BTL panic selling they are talking about is being prevented by the interest rate cuts at the moment. If/when interest rates start to climb I think that's when you'll see real carnage.

                    Comment

                    Working...
                    X