Best of the Week
Most Popular
1. Will Gold Price Breakout? 3 Things to Watch… - Jordan_Roy_Byrne
2.China Invades Saudi Oil Realm: PetroDollar Kill - Jim_Willie_CB
3.Bitcoin Price Trend Forecast, Paypal FUD Fake Cryptocurrency Warning - Nadeem_Walayat
4.The Stock Market Trend is Your Friend ’til the Very End - Rambus_Chartology
5.This Isn’t Your Grandfather’s (1960s) Inflation Scare - F_F_Wiley
6.GDX Gold Mining Stocks Fundamentals - Zeal_LLC
7.US Housing Real Estate Market and Banking Pressures Are Building - Chris_Vermeulen
8.Return of Stock Market Volatility Amidst Political Chaos and Uncertain Economy - Buildadv
9.Can Bitcoin Price Rally Continue After Paypal Fake FUD Attack? - Nadeem_Walayat
10.Warning Economic Implosion on the Horizon - Chris_Vermeulen
Last 7 days
What to Expect at a Critical Stock Market Point: End of a Wave 2 Rally - 26th Apr 18
A New Lithium War Is About To Begin, Modern Gold Rush! - 26th Apr 18
Silver, silver, and silver! There’s More Than Silver, People! - 26th Apr 18
How to be Financially Prepared When Purchasing Your First Home - 26th Apr 18
Is a Stock Market Crash Imminent or Does this Stock Market Bull Still Have Legs - 25th Apr 18
Gold Price Focusing on May Cycle Bottom - 25th Apr 18
Cash “Vanishes” From Bank Accounts In Ireland - 25th Apr 18
Is the Malaysian Economy a Potemkin Village - 25th Apr 18
Land Rover Discovery Sport Rattling / Knocking Sounds From Car Pillars - 25th Apr 18
China Takes the Long View on Gold-Silver... and So Should You - 25th Apr 18
Russia Buys 300,000 Ounces Of Gold In March – Nears 2,000 Tons In Gold Reserves - 24th Apr 18
Stock Market Study Shows Why You Shouldn’t “Sell in May and Go Away” - 24th Apr 18
CRYPTOCURRENCY MASTERCLASS #CRY90 - 24th Apr 18
UK Gambling Statistics - What the Numbers Say - 24th Apr 18
Chaos Capitalists Short Countries - How Chanos Got China Wrong - 24th Apr
Artificial Intelligence Defines the Political News Narrative - 24th Apr 18
Stock Market "Oops, They Did It Again" - 24th Apr 18
Fox in the Henhouse: Why Interest Rates Are Rising - 23rd Apr 18
Stocks and Bonds, This is Not a Market - 23rd Apr 18
Happy Anniversary Silver Investors! - 23rd Apr 18
The Hottest Commodity Play In 2018 - 23rd Apr 18
Stock Market Correction Turns Consolidation - 23rd Apr 18
Silver Squeeze, Gold Fails & GDX Breadth - 23rd Apr 18
US Economy Is Cooked, the Growth Cycle has Peaked - 23rd Apr 18
Inflation, With a Shelf Life - 23rd Apr 18 - Gary_Tanashian
Stock Market Predictive Modeling Is Calling For A Continued Rally - 22nd Apr 18
SWEATCOIN - Get PAID to WALK! Incentive to Burn Fat and Lose Weight - Review - 22nd Apr 18
Sheffield Local Elections 2018 Forecast Results - 22nd Apr 18
How Long Does it take for a 10%+ Stock Market Correction to Make New Highs - 21st Apr 18
Sheffield Ruling Labour Party Could Lose 10 Council Seats at May Local Elections - 21st Apr 18
Crude Oil Price Trend Forecast - Saudi Arabia $80 ARAMCO Stock IPO Target - 21st Apr 18
Gold Price Nearing Bull Market Breakout, Stocks to Follow - 20th Apr 18
What’s Bitcoin Really Worth? - 20th Apr 18
Stock Market May "Let Go" - 20th Apr 18
Overwhelming Evidence Against Near Stock Market Grand Supercycle Top - 20th Apr 18
Crude Oil Price Trend Forecast - Saudi's Want $100 for ARAMCO Stock IPO - 20th Apr 18
The Incredible Silver Trade – What You Need to Know - 20th Apr 18
Is War "Hell" for the Stock Market? - 19th Apr 18
Palladium Bullion Surges 17% In 9 Days On Russian Supply Concerns - 19th Apr 18
Breadth Study Suggests that Stock Market Bottom is Already In - 19th Apr 18
Allegory Regarding Investment Decisions Made On Basis Of Government’s Income Statement, Balance Sheet - 19th Apr 18
Gold – A Unique Repeat of the 2007 and How to Profit - 19th Apr 18
Abbeydale Park Rise Cherry Tree's in Blossom - Sheffield Street Tree Protests - 19th Apr 18
The Stock Market “Turn of the Month Effect” Exists in 11 of 11 Countries - 18th Apr 18
Winter is Coming - Coming Storms Will Bring Out the Best and Worst in Humanity - 18th Apr 18
What Does it Take to Create Living Wage Jobs? - 18th Apr 18
Gold and Silver Buy Signals - 18th Apr 18
WINTER IS COMING - The Ongoing Fourth Turning Crisis Part2 - 18th Apr 18
A Stock Market Rally on Low Volume is NOT Bearish - 17th Apr 18
Three Gold Charts, One Big Gold Stocks Opportunity - 17th Apr 18
Crude Oil Price As Bullish as it Seems? - 17th Apr 18
A Good Time to Buy Facebook? - 17th Apr 18
THE Financial Crisis Acronym of 2008 is Sounding Another Alarm - 16th Apr 18
Bombs, Missiles and War – What to Expect Next from the Stock Market - 16th Apr 18
Global Debt Bubble Hits New All Time High – One Quadrillion Reasons To Buy Gold - 16th Apr 18
Will Bitcoin Ever Recover? - 16th Apr 18
Stock Market Futures Bounce, But Stopped at Trendline - 16th Apr 18
How To Profit As Oil Prices Explode - 16th Apr 18
Junior Mining Stocks are Close to Breaking Downtrend - 16th Apr 18
Look Inside a Caravan at UK Holiday Park for Summer 2018 - Hoseasons Cayton Bay Sea Side - 16th Apr 18
Stock Market More Weakness? How Much? - 15th Apr 18
Time for the Gold Bulls to Show their Mettle - 15th Apr 18
Trading Markets Amid Sound of Wars - 15th Apr 18
Sugar Commodity Buying Levels Analysis - 14th Apr 18
The Oil Trade May Be Coming Alive - 14th Apr 18

Market Oracle FREE Newsletter

Trading Lessons

George Osborne Warns of 18% Cheaper House Prices - BrExit for First Time Buyers

ElectionOracle / EU_Referendum May 22, 2016 - 04:24 PM GMT

By: Nadeem_Walayat

ElectionOracle

Britain's first time buyers fully understand the nature of the crisis that is Britain's housing market one of soaring average prices that far out strip average wages as unaffordability continues to trend ever higher to new extremes each year as I have illustrated over several years. A crisis that first the Coalition and now the Conservative government has bent over backwards to try and get first time buyers a leg up onto the housing ladder by adopting extreme tax payer funded measures such as the help to buy scheme, and most recently the Lifetime ISA, which will see the government hand out £1,000 cash to first time buyers for every £4k saved.


We'll the latest and greatest boost for the prospects for first time buyers could be a BrExit, that according to George Osborne would result in average house prices apparently becoming 18% cheaper! And thus resulting a huge boost for prospective home buyers as well as freeing up a lot of demand, as the prospects for falling house prices will incentivise those contemplating selling to actual move, as in a falling market you want to sell sooner rather than later. Thus BrExit could achieve far more than all of the costly tax payer funded schemes put together.

George Osborne stated: “If we leave the European Union there will be an immediate economic shock that will hit financial markets... That affects the value of people’s homes and the Treasury analysis shows that there would be a hit to the value of people’s homes by at least 10 per cent and up to 18 per cent."

Rising Interest Rates?

Apparently in a world where zero interest rates are moving into negative rates, the UK will be the odd one out to actually lift interest rates.

And at the same time first time buyers are hit because mortgage rates go up, and mortgages become more difficult to get.

Whereas the reality is that rising interest rates would be a sign of economic strength, as has nearly always been the case that interest tend to rise so as to COOL an overheating economy.

David Cameron and George Osborne then continue with their contradictory statements of a plunging sterling and rising inflation.

"If we leave the EU the fall in the value of sterling would be an average 12%."

"Let's be clear what that means: a weaker currency means more expensive imports; that means more expensive food and it drives higher business costs; and we all know where that ends up: higher prices in the shops." - David Cameron

Firstly, a fall in exchange rate is what virtually every central bank is trying to engineer by means of zero and negative interest rates! It's called the CURRENCY WARS, central banks trying to IMPORT inflation and EXPORT deflation as I covered in this video in response to earlier government propaganda -

In fact since the referendum was announced the British Pound has been in a RISING trend on apparent BrExit hopes rather than REMAIN fears, as a rising currency is indicative of the inflow of foreign funds into the UK.

In a world starved of yield with many bond holders in Japan and Germany actually PAYING interest to lend money to the government (bonds), rising UK interest rates would act as a huge financial hoover, sucking in foreign investment into UK bonds which ironically would result in a FALL in UK interest rates i.e. demand exceeding supply.

So the blatant flaw in Osborne's reasoning that sterling would fall is that higher interest rates would be resulting in a flood of foreign investment BUYING the British Pound and sterling assets such as HOUSING which would send the British Pound soaring!

Of course all of which George Osborne and David Cameroon are saying is a load of rubbish because it is has no basis in reality, instead it is pure propaganda that is relatively easy to rip apart.

The bottom line is that a BrExit would result greater sterling assets demand for the fundamental reason that currency flows are relative, and following a BrExit it would be the euro-zone that would bear the brunt of uncertainty of whether the European Union and eurozone survive or not, hence triggering a flight to the relative stability of sterling and thus actually push asset prices such as housing HIGHER and inflation LOWER. The exact opposite of that which they have been spouting.

UK House Prices 5 Year Forecast

In terms of the prospects for UK house prices, it is now near 2 1/2 years since excerpted analysis and the concluding 5 year trend forecast from the then forthcoming UK Housing Market ebook was published:

30 Dec 2013 - UK House Prices Forecast 2014 to 2018, The Debt Fuelled Election Boom

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:

Recent UK average house prices data (£212,859) is showing a 3.6% deviation against the forecast trend trajectory, which if it continued to persist then in terms of the long-term trend forecast for a 55% rise in average UK house prices by the end of 2018 then would translate into a 9% reduction in the forecast outcome to approx for a 46% rise by the end of 2018.

The bottom line is that house prices are going to continue to get ever more expensive where those who are waiting for a crash to more affordable levels will continue to regret not buying as the only way housing can even start to become more affordable is if the UK literally triples the number of new builds each year from approx 140,000 per year to 400,000, something that is just not going to happen as it would literally mean the government undertaking to build a new major city EVERY YEAR! Instead it has been over 40 years since the last new town let alone city was built.

Therefore the UK housing crisis is not just one of the inability of the housing market to cope with current demand, but as the earlier housing affordability trend graph illustrates that the crisis is going to get much WORSE with each passing year, which ultimately means an social EXPLOSION of some kind, maybe not a revolution but it's not going to look pretty! Whilst a BrExit bringing a halt to out of control immigration would provide a mechanism that gives Britain time to at least stabilise the current crisis, whilst a REMAIN vote guarantees that UK housing will continue to become ever more unaffordable, which will especially hit young people and families HARD! All because the vested interests in the establishment want cheap labour that the tax payer picks up the bill for in terms of in work benefits and the people of Britain pay the price for in terms of the slow motion collapse of society as literally each service after service FREEZES!

EU Referendum - Counting Down to BrExit!

Counting Down to Freedom - Support Our BrExit Campaign

The latest EU referendum opinion polls put the LEAVE and REMAIN camps virtually neck and neck on 44% with 12% of those polled undecided. Which compares against a month ago of 42% LEAVE and 48% REMAIN, 10% undecided. So it is no wonder that the REMAIN camp has gone into full blown panic mode with a relentless torrent of fear mongering emanating from the establishment REMAIN camp. Instead I offer my latest video in this series as a message of HOPE, a message of a New Dawn, New Life for Britain!

With just 5 weeks to go the Market Oracle's own 9 month long BrExit campaign has been ramped up a few notches as we enter this last stretch, producing Brexit resources from in-depth analysis, rebuttal articles such as this, many videos, and also active on the social networks so as to do our best to do our part in Britain not wasting it's very last chance for freedom which you too can support allowing us to continue to intensify our efforts to counter the daily barrage of REMAIN propaganda as well as to keep producing video's that help spread the case for BrExit being good for Britain.

Counting Down to Freedom - Support Our BrExit Campaign

And also ensure you are subscribed to my always free newsletter (only requirement is an email address) for forthcoming in-depth analysis and detailed trend forecasts that include the following :

  • BrExit to Save Europe from the Apocalypse
  • US Dollar Trend Forecast
  • UK Housing Market Trend Forecasts
  • US Stock Market Forecasts
  • US House Prices Detailed Multi-Year Trend Forecast
  • Gold and Silver Price Forecast

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2016 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 five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The 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 1000 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
22 May 16, 22:02
Who believes polls

As per your previous posts- who believes polls propaganda :-)

Remain side is firmly in majority by min 10% despite blogosphere shouting about a narrow race.

But at least you are open about what side you are on


Nadeem_Walayat
23 May 16, 06:10
Polls

I don't believe the polls. But that's all I have to play with.

And I am not one for fence sitting, never have been. My analysis tends to resolve in firm forecast conclusions.


Post Comment

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

6 Critical Money Making Rules