Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Stocks Are At The End Of The Line – Prepare Yourself Now! - 23rd Nov 17
Some Traders Hit. Some Traders Miss. Here's How to be Part of the 1st Group - 22nd Nov 17
Geopolitical Risk Highest “In Four Decades” – Global Gold Demand to Remain Robust - 22nd Nov 17
Relationship between Crude Oil Price and Oil Stocks - 22nd Nov 17
Harry Dent’s Gold Prediction Invalidated - 22nd Nov 17
Gold Sector is On a Long-term Buy Signal - 21st Nov 17
Saudi Arabia and Israeli Alliance Targets Iran - 21st Nov 17
What History Says for Gold Stocks in 2018-2019 - 21st Nov 17
US Bond Market Operation Twist by Another Name and Method? - 21st Nov 17
Learning from Money Supply of the 1980s: The Power and Irony of “MDuh” - 20th Nov 17
Trump’s Asia Strategy, Goals and Realities - 20th Nov 17
Crude Oil – General Market Link - 20th Nov 17
Bitcoin Price Blasts Through $8,000… In Zimbabwe Tops $13,500 As Mugabe Regime Crumbles - 20th Nov 17
Stock Market More Correction Ahead? - 19th Nov 17
Universal Credits Christmas Scrooge Nightmare for Weekly Pay Recipients - 18th Nov 17
Perspective on the Gold/Oil Ratio, Macro Fundamentals and a Gold Sector Bottom - 18th Nov 17
Facebook Traders: Tech Giant + Technical Analysis = Thumbs Up - 18th Nov 17
Games Betting System For NCAA Basketball Sports Betting - Know Your Betting Limits - 18th Nov 17
Universal Credit Doomsday for Tax Credits Cash ISA Savers, Here's What to Do - 18th Nov 17
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17

Market Oracle FREE Newsletter

Traders Workshop

Help to Buy Scheme Prompts Panic Buying UK House Prices Boom

Housing-Market / UK Housing Jan 03, 2014 - 01:45 AM GMT

By: Nadeem_Walayat

Housing-Market

The Coalition government's March 2013 help to buy scheme, the extension of which to all properties rather than just new builds that itself was brought forward to the 1st of October 2013 from 1st of January 2014 has sparked panic buying amongst many thousands of prospective home buyers who had been finding it near impossible to build deposits of 20%-25% that mortgage lenders typically sought in terms of managing risk, however now the same mortgages can be secured with just 5% deposits which on the £600k valuation limit amounts to a huge difference between a previous deposit requirement of £120-£150k against £30k today under the help to buy guarantee scheme.


Three months on and over £1 billion has been committed under the help to buy scheme resulting in EXTRA demand of 6,000 housing market transactions. Whilst academics may argue that the number of extra transactions is relatively small i.e. at about 2000 per month amidst a total of around 70,000 (3%). However what the academics fail to comprehend is that bull and bear markets are made at the margins, and then driven by sentiment. Therefore a marginal increase in demand of 3% per month is enough to generate positive sentiment that gains momentum each month into a full blown house prices boom during 2014.

In an article ahead of the extension I laid out what to expect in terms of the ramping up the housing market into an election boom that at least targets a trend trajectory of 10% per annum during 2014. Especially as the news of the day is also accompanied by another wave of out of control immigration currently under way.

29 Sep 2013 - David Cameron Brings Forward Help to Buy Mortgages, Stoking House Prices Bubble, Election Boom

It's not rocket science, it's actually quite simple: Limited Supply + Quadruple Demand = House Prices Boom!

The strategy in bringing forward of the Help to Buy Scheme for all properties is clearly aimed at building on housing market sentiment towards a trend trajectory of average UK house prices rising at a rate of at least 10% per annum, which is precisely inline with my forecast momentum for UK house prices to be rising by 10% per annum as of October 2014 data, and all the way into Mid 2014.

Yours analyst waiting for the PANIC Buying headlines in the mainstream press. Forget under offers, it's offers OVER for an increasing number of areas of the country as I warned several weeks ago - Final Warning UK House Prices Boom Imminent!

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

David Cameron prompted to respond to help to buy demand news and house price bubble fears replied - "Where we are today, house prices are still way below the peak they reached in 2007. Forecasters do not think they will get back to the level before the crash even in 2019. So there is no evidence of a problem."

Well, if the UK house prices trend pans out as I expect then average house prices will have reached their 2007 highs BEFORE the May 2015 general election and have soared far into the stratosphere by 2019 as I elaborate upon next.

UK House Prices Forecast 2014-2018

My recent in-depth analysis for UK house prices concluded in a detailed trend forecast for the next FIVE years from 2014 to 2018 that house prices target an average gain of 10% per year totaling 55% by the end of 2018 as illustrated below:

UK House Prices Forecast 2014 to 2018 - Conclusion

This forecast is based on the non seasonally adjusted Halifax House prices index that I have been tracking for over 25 years. The current house prices index for November 2013 is 174,671, with the starting point for the house prices forecast being my interim forecast as of July 2013 and its existing trend forecast into Mid 2014 of 187,000. Therefore this house prices forecast seeks to extend the existing forecast from Mid 2014 into the end of 2018 i.e. for 5 full years forward.

My concluding UK house prices forecast is for the Halifax NSA house prices index to target a trend to an average price of £270,600 by the end of 2018 which represents a 55% price rise on the most recent Halifax house prices data £174,671, that will make the the great bear market of 2008-2009 appear as a mere blip on the charts as the following forecast trend trajectory chart illustrates:

Additionally, a video version of excerpts of the forecast analysis is available -

UK House Prices Forecast video

Also ensure to subscribe to my always free newsletter for regular housing market updates as well as FREE download of my New UK Housing Market ebook (available from mid January 2014) which includes the full analysis and many topics beyond forecast analysis such as -

  • A step by step guide of how to buy a house.
  • Analysis of buying vs renting
  • How to increase the value of your home
  • Managing your mortgage debt
  • Maintenance that can save you a lot of money long-term
  • Money saving low cost home improvements
  • Regional house prices analysis
  • Surveying properties - what to look for

Source and Comments: http://www.marketoracle.co.uk/Article43818.html

Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 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

© 2005-2017 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

Catching a Falling Financial Knife