House Price Forecasts and Predictions in the UK
House Price Update 3/12/2012
Is UK Housing Market Set to Collapse?
According to the Nationwide´s monthly survey UK house prices continue to dip slowly. Despite being 1.2 per cent than last year the overall forecast is that the housing market is stable – unless you take the views of Galvan Research and trading that expect the UK housing market to collapse sooner rather than later.
Statistics are misleading. Both Nationwide and Halifax submit monthly reports, often with differing figures. Although there is never a lot of difference between the two figures it is not uncommon for on survey to report a rise and the other a fall. Either way, the results are based on the previous year. UK house prices in November 2012 have not changed one way or the other since October, but reports suggest they are 1.2% down – based on figures for November 2011.
Another mismanagement of financial systems also saw house prices in the UK rise at three times the rate of salaries in the last decade. Whereas the average house price increased by 94%, the average wage increase was only 29 per cent. Galvan´s researcher and report writer said:
“You don’t have to be a mathematical genius to see things are not right. Importantly, long-term studies have proven that ultimately property prices ‘revert to the mean’. In other words, they can’t defy gravity forever.”
UK house price surveys give false information
According to the Galvan report, the aforementioned surveys are by-the-by information. They cannot be relied upon because they only catalogue movers and shakers on the property market – and then give an average for the UK. London and the south-east has been propping the housing market figures up for over a year, giving it a bit of a glow when in actual fact it has been sliding slowly into the abyss.
Galvan Research and Trading is recognized as one of the leading contract for difference brokers in the UK and look at the bigger picture. Their report suggests the housing market has been propped up low interest rates set by the Bank of England. UK interest rates have now been at an all-time low for more than three and half years.
The Galvan report indicates that low interest rates have prevented repossessions and allowed time for interested parties to talk about a “gradual recovery” and “signs of stabilisation.” They conclude that the UK housing market is a ticking time bomb.
Date created: Timestamp 2012-12-03 (YYYY-MM-DD)