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Is the property market crash over?

In our opinion, no. You’ve no doubt read stories about prices rising over the past few months, so you might be forgiven for assuming this means the worst of the housing market downturn is over and we’re getting back to business as usual. We don’t think that’s true. The most important thing to understand about this situation is that the behaviour of the property market over the past decade was anything but ‘business as usual’ – so it’s foolish to expect a return to the days of sustained 10% or even 5% annual house price rises. It’s insane that anybody even thinks that’s a desirable situation. If the average cost of a home increases at a rate that...

posted on: Aug 16, 2009 | author: Lance

Basic guide to Quantitative Easing

This is an article that I could have written a few months ago, when the Bank of England stated its intention to begin ‘queasing’. But it has become rather more relevant now that one of the pronouncements of the G20 summit is that the International Monetary Fund (IMF) will itself begin to ‘print’ additional SDRs (Special Drawing Rights, effectively the IMF’s own currency) which its contributor countries can draw down in the shape of dollars, euros, etc. Note my use of the word ‘print’ in the above paragraph. The days when first world countries used the printing press to increase the volume of money in circulation have long gone, assigned to eras such as Weimar Germany. Paper and...

posted on: Apr 4, 2009 | author: Alex

Mortgage approvals rise for third month, we’re saved!...

According to the British Bankers Association, the number of mortgages approved by major banks rose in February for the third consecutive month. Happy days are here again! Not quite, despite the rise, mortgages approvals are still close to historic lows and down over 30% on the same period for last year, so we’re not out of the woods yet. Low interest rates and falling property prices may have tempted some cash-rich bargain hunters back into the market to buy houses at what they believe to be once-in-a-lifetime knock-down prices, but the bulk of the market is still frozen solid. Most importantly of all, first time buyer mortgages are still extremely hard to get hold of, and as everybody...

posted on: Mar 24, 2009 | author: Lance

Housing market going to hell in a handcart...

The UK property market remains in freefall, with figures from Righmove.com showing the average price of a home in England and Wales has fallen by a shade under 5% over the past twelve months (although Halifax and Nationwide put that figure at 12%). According to the Council of Mortgage Lenders, UK mortgage lending has dropped a massive 42% over the previous year, which explians why prices are dropping – people simply can’t borrow enough money to keep prices at their current over-inflated level. The fact that the market is clearly screwed for the forseeable hasn’t quite penetrated the skulls of many homeowners, as this story from the Times reports, asking prices in some areas are actually rising, even...

posted on: Oct 20, 2008 | author: Lance

Home reposessions are rising, and we’re all going to suffer...

We’ve all read the stories about rising house repossessions, as the people who over-stretched themselves to claw their way onto the property ladder ‘at any cost’ during the boom years suddenly realise that borrowing all that money to buy a property at a wildly inflated price probably wasn’t such a good idea after all. And it should come as no surprise to learn that around one in thirteen of repossessions over the past three months have involved Northern Rock customers, because the company’s ’strategy’ over the past decade has largely been based on lending huge sums of money to people without asking too many questions about whether they were able to pay it back. The Americans call this...

posted on: Aug 27, 2008 | author: Lance