November 2006
House Prices Beat the Stock Market!
LONDON Reuters - Property prices have soared at more than three times the rate of stock market returns in the past decade, figures showed on Saturday.

House prices have surged 187% since the market recovered in February 1996, while stock prices rose 61% over the same period, data from Halifax revealed.

The increase in earnings and rate of inflation were even more modest. Nominal earnings rose by 54% and retail prices increased 31%. Property values have tripled in three regions: London house prices have soared by 240%, Northern Ireland by 231% and south-west England by 213%.

November 2006
How to Reduce the Risk of Your House Sale Collapsing
A trial of home information packs (Hips) aimed at reducing the number of collapsed house sales began today, despite resistance from parts of the property industry.

The packs, which will become mandatory from June 2oo7, will provide potential homebuyers with up-front information and an energy efficient report on a house. They are aimed at speeding up the homebuying process and cutting the number of transactions that fall late in the day.

The argument for Hips. >>>
The arguement against Hips. >>>

October 2006
Property Boom Builds on a Swamp of Debt
Credit is out of control - which is why the base rate will be raised soon.

Here are some snippets of news from last week. Abbey says it will offer mortgages of up to five times single or dual income. A survey shows that repayments on home loans now consume more than half the weekly budget of the average family. One of Britain's leading economists says there is a 36% chance that house prices will fall by 2010. The governor of the Bank of England says he finds the current level of house prices hard to explain. A record number of people are going bust.

September 2006
What the Experts Say
Halifax's chief economist, Martin Ellis, says: "Higher mortgage rates following the Bank of England's decision to raise official interest rates last month and the increase in fixed rates that has already occurred since spring are likely to dampen housing demand."

"These developments, combined with the historically high level of house prices relative to average earnings, are expected to constrain housing demand and moderate house price inflation over the remainder of the year."

Howard Archer, chief UK economist at financial consultancy Global Insight, expects prices to continue to pick up in the near term, over the longer term they would settle into a pattern of modest rises.

Mr Archer said: "Even the small increase in interest rates so far could have a significant dampening impact on housing market activity, given stretched affordability. Furthermore, many potential house buyers will be alarmed by the very real possibility that interest rates could rise again before the end of the year."

August 2006
Halifax Reports Strong Rise in House Prices
UK house prices rose at a blistering rate in August, suggesting the Bank of England’s interest rate rise at the start of the month has so far done little to cool the property market.

Halifax on Thursday said prices rose 1.0% on the month, taking the average price of a home to £179,043. However, the lender said that despite the stronger than expected data, there were signs that house price inflation was beginning to moderate. Annual house price growth eased to 8.2% from 9.4% in June, and this trend is expected to continue.

Martin Ellis, Halifax’s chief economist, said “A number of developments are expected to constrain housing demand and moderate house price inflation over the remainder of 2006”. He pointed to growing pressure on household finances from increased utility bills and higher mortgage payments in the wake of the Bank of England’s August rate rise, as factors that would contribute to damping the market.

The Halifax data tally with figures published by rival lender Nationwide last week, which also reported a sharp rise in house price growth last month.

July 2006
House Prices to Soar 50% Within Six Years
The average house price in England will rise by more than 50% to top £300,000 within six years, according to econometric forecasts by the National Housing Federation.

It said the further boost to property prices might be reassuring for owners who borrowed heavily to get on to the housing ladder. But the federation, representing 1,400 housing associations, warned that it "spells disaster for tomorrow's first time buyers who will find it increasingly difficult to afford a place of their own".

July 2006
House prices fell by -1.2% in June, says the Halifax. Is this the beginning of the end for the mini-boom?...
June's poor showing follows a two per cent rise in April and a 0.1% rise in May - but perhaps we shouldn't read too much into one month's figures, not least when that month was dominated by the World Cup.

Taking a longer view, house prices have increased by 9.4% since June 2005, rose by 4.5% in the first half of 2006 and by 2.6% in the second quarter of the year.

In the second quarter, the largest rises were in Scotland (5.7%), the South West (3.8%) and East Anglia (3.5%).

The smallest increases were in the North West (0.2%) and the North (0.9%). Only Wales showed a slight fall (-0.8%), reflecting the increasing affordability difficulties for buyers in the Principality.

In 2006, the market has revealed a pronounced regional divide: southern England - Greater London, the South East, the South West and East Anglia - accounted for two-fifths of the overall rise in UK house prices in the first two quarters of the year.

This is significantly different to 2005 when rising house prices in the South contributed less than one quarter to the increase in UK house prices.
From an article in the Daily Mail

June 2006
UK Property Prices Continue to Rise
New figures have corroborated recent statistics suggesting that the UK's property market is continuing to show signs of strong growth.

While a number of experts had been predicting a potential downturn in the market due to the spectre of a rise in interest rates, a number of recent surveys have been of the opinion that the market is in fact in buoyant mood. Hometrack's latest survey has backed up this view with its latest report, which shows that house prices have again risen in June, regardless of fears over a potential increase in interest rates.

Rumours had been abound in early June that the Bank of England's monetary policy committee (MPC) might be considering upping interest rates to keep a lid on inflation – something which property investors would be loathe to see given the strong start to the year made by the housing sector. However, with the release of the minutes of the MPC's last meeting released last week, fears over a potential rise appear to have receded somewhat, as all but one of the members voted in favour of holding the base rate at 4.5 per cent.

Hometrack's figures, however, appear to indicate that the property market has in fact been paying little attention to the speculation on an interest rate rise, with properties continuing to increase in value.

from Assetz Property News Service

May 2006
Prices move up yet uncertainty remains
Property prices have surged by as much as 2 per cent last month in certain parts of the UK. Even the capital London has recently enjoyed property price rises for selected areas.

The Bank of England news of nine months of unchanged interest rates (4.5%) was further encouragement to buyers. Furthermore the popularity for remortgages continued as homeowners sought to both keep their mortgage rates competitive and in many cases release equity or consolidate debt.

However high Oil prices loom as a threat to future interest rates and this has brought mixed reaction from economists and propery experts whose views vary in regard to the second half of 2006.

Those homeowners living in the North of England, Wales and Yorkshire and Humberside have seen house prices surge the most over the past three months. In some cases by as much as 7 per cent.

January 2006
Rallying House Prices - At Last!
Predictions of a property slowdown have faded away, with analysts almost united today in declaring house prices to be on the rise again.

Gloomy forecasts at the beginning of 2005 have gradually been reversed during the year with the last major price monitor coming into line by reporting an above inflation rise.

A report today from Hometrack claims that house prices are rising for the first time in 18 months, with prices 0.1 per cent higher in December.
The significance of the announcement is that Hometrack has been the most gloomy of all the house price monitors over the past year. With today’s report, all the indicators are pointing in the same direction: up.

January 2006
'Modest recovery' in house prices
UK house prices rose by 2.1% in the final three months of 2005, confirming a "modest recovery" in the latter part of the year, the Halifax has said.

During December house prices rose by 1%, the bank said. This meant prices increased by 5.1% over the whole year - the smallest annual rise for 10 years.

The Halifax added that the average UK house price now stood at £171,632.
However, the housing market is expected to be "flat" this year, the Halifax said, with prices set to rise by 3%.

Predictions for 2006 from Halifax, Nationwide, Hometrack, Capital Economics and the Royal Institure of Chartered Surveyors

Halifax
Will prices rise or fall during the next twelve months? Rise.

By how much? 3%

2006 overview: The bank says housing market fundamentals are "sound" but price growth is likely to remain below the long-term trend in 2006. Overall, house prices will not rise as fast as average wages, which should make property more affordable. Robust growth in average earnings - predicted to be close to 5% - as well as cuts in interest rates will combine to prop-up the housing market and prevent any slide in values.

Did it get it right in 2005? No, it predicted a small fall in prices. The market proved a little more robust than predicted due to high levels of employment and continued economic growth.

Regional winners and losers? The north/south divide will narrow further during 2006, the bank predicts. Modest price rises in Scotland and Northern Ireland are predicted while prices should stagnate in the south east and east Anglia.

Nationwide
Will prices rise or fall during the next twelve months? Rise.

By how much? By up to 3%, the society predicts.

2006 overview: The Nationwide reckons the UK economy will recover next year and as a result there will not be a collapse in house prices. Overall, the society says it is "cautiously optimistic" about prices. But the society warned that year-on-year house prices may fall in early 2006, compared to strong growth in early 2005. The group added that it thought buyers and sellers were now accustomed to lower levels of house price inflation and as a result it was becoming easier for both parties to agree sales.

What is its forecasting track record? Pretty good, of late. The Nationwide predicted annual UK house price inflation would be about 2% in 2005. In November, the society said annual house price inflation was 2.4%. However, looking further back to the boom years between 1999 and 2004, house price inflation often exceeded the Nationwide's growth predictions.

Hometrack
Will prices rise or fall during the next twelve months? Rise.

Housing market surveys explained in full 2006 overview: Prices should rise by 1% during the course of 2006. The group said the market was being starved of first-time buyers as people in their twenties and even thirties simply do not earn enough to be able to afford their own home. Hometrack looked further into the future than the other forecasters. The group predicted that prices would increase by an average of 2.1% a year over the next three years.

"These low levels of house price growth will result in a steady re-alignment of household incomes and house prices to more sustainable levels," Richard Donnell, Hometrack's director of research, said.

What is its forecasting track record? Hometrack has not been around very long to have much of a forecasting track record. Last year, though, the group said prices would remain unchanged, a prediction which seems only slightly wide of the mark as prices have fallen 1.57%, by its own estimates, during the year.

Capital Economics
Will prices rise or fall over the next twelve months? Fall.

By how much? By 5%.

Capital Economics are predicting price falls2006 overview:Capital Economics believes that the UK housing market is still "fundamentally overvalued", despite price growth moderating in 2005. The group argues that house prices have raced so far ahead of wages as to make purchasing property unaffordable for many would-be first time buyers. Dangers lie all around for the housing market, the group argues. For example, a deterioration in the UK economy could lead to sharp house price falls as people lose their jobs and struggle to keep up with their mortgage repayments.

What is its forecasting track record? Capital Economics is a long-standing housing market sceptic. The group has been predicting a sharp fall in house prices, starting in late 2004. Last year, they said prices would fall 7% as a prelude to a 20% decrease over three years. So far their predictions have not been proved right but Capital Economics is far from alone in saying that house prices are at an unsustainably high level.

RICS
Will prices rise or fall over the next twelve months? Rise.

By how much? By 4%. It expects steady growth during both 2006 and 2007.

2006 overview: RICS said it expected prices to rise on the back of an increasing number of sales. The number of properties being sold fell dramatically between late 2004 and the first half of 2005. RICS said this trend had now halted and that it thought mortgage approvals - a key indicator of housing market activity to rise from a five year low of 1.127m in 2005 to reach 1.336m in 2006.

What is its forecasting track record?Last year the surveyors' industry body called the market right, saying prices would rise by about 3%. RICS surveys its members to find what they think about the future direction of house prices. This can mean that it is early in flagging up moves in house prices.