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5 "Tells" that the Stock Markets Are About to Reverse

Final Warning UK House Prices Boom Imminent!

Housing-Market / UK Housing Sep 10, 2013 - 10:30 AM GMT

By: Nadeem_Walayat

Housing-Market

At this very moment in time, long before the EFFECTS will become manifest in the underlying prices data, the UK housing market is fast accelerating towards a boom BEFORE the end of this year as the latest news out of the UK housing market continues to gives strong indications towards.


The Royal Institution of Chartered Surveyors today reports that UK house prices are now rising at their fastest pace in 7 years as their seasonally adjusted houses prices balance climbed to a reading of +40 from an upward revision to +37 for July, the highest since November 2006, with RICS now forecasting a 2.2% rise in house prices over the coming year. Additionally the average number of proprieties sold per surveyor per quarter rose to 17.9, the highest in near 4 years.

The UK housing market momentum is continuing to accelerate towards a boom of over 10% per annum as per the conclusion of my last in depth analysis of mid August - UK House Prices Bull Market Soaring Momentum, 10% Inflation by October?

Where my expectations were for house prices momentum to rise from 4.6% (July data) to at least 10% for October data, and reach 12%+ by January 2014 data as excerpted below:

UK house prices bull market

In terms of the bull markets current momentum, the UK housing market is accelerating towards an annual inflation rate of at least 10% per annum. Given the markets current trend trajectory, UK house prices could be rising by 10% per annum as early as on release of the Halifax data (NSA) for October 2013 (in November), and continue accelerating to a rate of more than 12% per annum for January 2014 data (released Feb 2014).

Therefore all those waiting to decide where to buy or not, then you should take this as your final warning that house prices are literally about to enter a boom phase when within just a couple of months time the mainstream press will become saturated with stories of a UK house prices boom.

For in-depth analysis for the reasons why UK house prices are set to boom see my previous article - 19 Aug 2013 - UK House Prices Bull Market Soaring Momentum, 10% Inflation by October?

Also remain subscribed to my ALWAYS FREE newsletter for ongoing in depth analysis of the UK housing bull market.

Re-cap of the UK House Prices Trend Trajectories

Uk house prices forecast

The actual signal for change from an embryonic bull market into a bull market proper came in September 2012 following the governments announcements proposing to double permitted developments for home owners, which had the near immediate effect of changing housing market sentiment long before the first building works could be commenced, as it would trigger demand for property with a view to extending as well as owners seeking to contract builders as I pointed out at the time right at the bottom of the UK housing market for 2012.

06 Sep 2012 - Super Mario Draghi Triggers Stocks Stealth Bull Market Rallies to New Bull Market Highs

This years convergence towards housing market bottoms such as the UK and US presenting one of those once in a couple of decades opportunities to climb aboard what still are embryonic bull markets, just as I strongly suggested the birth of a new multi-year stocks stealth bull market in March 2009

08 Sep 2012 - UK Home Extension Planning Rules Relaxed to Boost Economy, Trigger Housing Bull Market

I am continuing to see positive signs towards a multi-year bull market, so I am giving you another head start on an emerging probable multi-year bull market in UK housing.

The announcement was followed by further government measures that would boost sentiment long before the policies would be implemented in any significant number such as George Osbourne's March budget announcement to effectively create a UK subprime mortgage market by paying 20% of the deposit on first new builds and from 1st of January 2014 all properties upto a value of £600k.

20 Mar 2013 - George Osborne Boosts UK Subprime Housing Market Ahead of Election Boom

Creating a UK Subprime Housing Bubble

The chancellors announcement of £130 billion mortgage guarantees effectively amounts to seeking to ultimately create a UK version of U.S. Fannie Mae and Freddie Mac that will eventually blow up in spectacular style as more and more house buying voters expect to be bribed at each election and therefore the £130 billion will mushroom to one day stand at well over £1 trillion of liabilities, off course the bust will come AFTER the next housing boom, so this and the next government need not worry themselves for the consequences of creating a UK subprime housing bubble as the consequences of which tax payers will be liable for in a decade or so's time which means another financial crisis as this repeats the SAME mistakes of mortgage backed securities i.e. the lenders are not liable for the risks so can take on more risky loans for commission as the liabilities will be with tax payers.

As mentioned above, this scheme will be extended from the 1st of Jan 2014 to allow prospective home buyers to buy ANY property (not just new builds) with the government financing 20% of a deposit upto £600k, or £120k of tax payer money going towards EACH prospective buyers home purchase, which EFFECTS market sentiment in the PRESENT.

The bottom line is to take this as your final warning for a UK house prices boom as those waiting on the sidelines have only a matter of weeks to act before housing market sentiment responds to a market that is rising at a rate of more than 10% per annum. The days of under offering for good houses in good locations is about to end.

In terms of the long-term picture, my view remains that I expect this housing bull market to last the REMAINDER of this DECADE.

Over the past 18 months, virtually everyone I know personally has gotten the unequivocal once in a decade buying opportunity message and acted, hopefully many of my readers will have also gotten the message and acted, rather than to be found kicking themselves by year end due to delaying action.

For possible bull market investing opportunities see - 03 Jun 2013 - UK Housing Bull Market Opportunities In Britain's Multiculturalism Immigration Crisis.

Again, those who are skeptical for an imminent strong UK housing bull market need to understand that the Bank of England is extremely reluctant to raise interest rates, in fact the new governor literally stated NO RISE for THREE YEARS! That and an election 2 years away means there is NOTHING to counteract SOARING Prices, Instead as my last article on sentiment explained at length the sentiment will feed on itself where we could easily see house prices soaring well beyond anything we can imagine today. My existing analysis concludes in a forecast momentum of 12% for Jan 2014, my unconfirmed expectations are that such a momentum should be able to be sustained for most of 2014, more on the outlook for the whole of 2014 over the next few months.

Source and Comments: http://www.marketoracle.co.uk/Article42199.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2013 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of four ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series.that can be downloaded for Free.

The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 600 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

© 2005-2018 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Yuriy
13 Sep 13, 19:08
bubble in london market

Hello guys,

what I think is very important to note is the mature bull housing market in London and south east.

Gazumping is a common thing now in London. London's bull market is almost 3 years old and most likely will pause this year.

I believe that UK residential market is turning very alike to commercial property market where prices, at least in most popular locations such as London and south east, will be determined by ROI or simply rental yields.


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