Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Seasonal Buying Opportunities - 4th Dec 23
Transition From Debt Default And Dollar Demise To A Digital Bridge Currency Recovery - 4th Dec 23
The Future of Trading Has Arrived: Say Hello to Tradu - 4th Dec 23
Adapting to the Fast-Paced World of Online Poker - 4th Dec 23
Israeli Prime Minister Confesses to Being a Palestinian - 4th Dec 23
The Bond Trade - 1st Dec 23
Gold Shines as the Economic Outlook Darkens - 1st Dec 23
Stock Market Santa Rally to S&P 4600+ - 28th Nov 23
Stocks and Silver Have Something to Say about Gold - 28th Nov 23
Can A Stock Market Crash Be Averted... For Now? - 28th Nov 23
Taiwan 2024 Election: Militarization or Development - 28th Nov 23
The Stock Market Trend and the Policy Behind it - 28th Nov 23
Cameco Uranium Stock Hits All-Time High - 28th Nov 23
TSLA, LRCX, TSMC Stock Earnings and Trend Analysis - 26th Nov 23
A Golden Setup: Gold Price Trend Forecast Report - 26th Nov 23
Gold Stocks Winter Seasonal Rally - 26th Nov 23
Elections in South America and Europe Reveal Backlash against Socialism - 26th Nov 23
LMT, JNJ and ASML Stock Earnings and Trend Analysis - 23rd Nov 23
When AI Hallucinates - Top AI Tech Stocks - 23rd Nov 23
Stock Market Ignoring Hawkish Fed - 23rd Nov 23
Stock Market Trend Trajectory into Year End 2023 - 22nd Nov 23
Copper/Gold Ratio: Still Counter-Cyclical - 22nd Nov 23
Learn to Use the FORCE! - How to Really Get Rich - 21st Nov 23
Quad Witching Cracks Stock Market Nuts - 18th Nov 23
Biden Bizarrely Brags About Lower Budget Deficits as US Federal Debt Skyrockets - 18th Nov 23
Silver Price Between a Rock and a Hard Place - 18th Nov 23
The Most Important Chat GPT Tech Reveal of 2023 - 18th Nov 23
AI Tech Stocks Portfolio - 9th Nov 23
Micron MU Stock Trend Analysis - 9th Nov 23
TSMC Stock Trend Analysis - 9th Nov 23
NVIDIA Stock Trend Analysis - 9th Nov 23
The “new ChatGPT” just launched - 9th Nov 23

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

UK House Prices Plunge 0.8% In November on Target for Forecast 15% Drop

Housing-Market / UK Housing Nov 30, 2007 - 07:25 AM GMT

By: Nadeem_Walayat

Housing-Market Best Financial Markets Analysis ArticleThe Nationwide, one of Britain's biggest mortgage Lenders announced a sharp 0.8% Drop in House Prices for November, the biggest fall for 12 years, bringing the annualised rate down sharply to 6.9%. Whilst at the same time the Bank of England reported a slump in new home buyer mortgage approvals to a 3 year low. The fall house prices is inline with the Market Oracle forecast for a 15% drop in UK House prices as of 22nd August 07.


The Market Oracle is on target for its forecast for a UK house price gain of 3.5% for 2007 as of 31st December 06. House prices are expected to continue the downward trend during November and December to bring annualised house price inflation down sharply with the year on year gains to go negative by the April 2008 data release which is to coincide with the capital gains tax change that is expected to lead to an avalanche of buy to let selling.

Though off course the Government could change its mind and withdraw the proposed tax changes and therefore the expectation of a sharp drop in the 2nd quarter triggered by the tax rule change would need to be revised.

Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said: “House prices fell by 0.8% in November, reversing October’s surprisingly strong performance. This brings annual house price growth down to 6.9%. This is back in line with the softening trend we have seen in the second half of the year and is consistent with our forecast of house price growth of 5-8% in 2007. The 0.8% monthly fall is the first since February 2006 and the largest monthly fall since June 1995. However, monthly data can be volatile and the sharp fall this month is partly a reflection of the strength recorded last month and in November last year. A better picture of the underlying trend is captured in the three-monthly growth rate. This too fell back into line with its softening trend in November, returning to 1.5% from the 1.8% recorded in October. The price of a typical house in the UK is now £184,099, almost £12,000 more than this time last year."

It is only 2 weeks since Nationwide's last report suggesting a stagnating housing market with housing market expected to be supported by supply limitations and therefore not expected to fall during 2008. As my Septembers article Media Lessons from 1989! suggested, that the mortgage banks and estate agents and media reliant on advertising revenue from the industry won't actually acknowledge the true implications of further price declines until AFTER house prices have fallen.

The following graph illustrates the expected overall contraction of 15% in UK house prices, with London expected to fall as much as 25% (last updated 22nd August 07).

UK House Price Forecast 2008

UK House Price Affordability Index

UK House Price Affordability Index

The Market Oracle's affordability index clearly illustrates that UK house prices are now at extreme levels of unaffordability not seen since 1989. The index also clearly shows why house prices were extremely under valued for nearly 8 years right into 2002, when many housing pundits were prematurely calling for a UK house price crash.

UK Housing Market Forecast for 2008-09 - As of 22nd August 2007
UK House Prices to fall by 15% over two years, falling prices to be accompanied by cuts in UK interest rates. (22nd Aug 07),

 

By Nadeem Walayat
Copyright (c) 2005-07
Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 20 years experience of analysing and trading the financial markets and is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 100 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in