The worrying factor here is that consumer confidence and sentiment dictates house prices. After-all, if we decide to lower our values, house prices will fall...
Posted: 10:04 am, 16th December 2007
UK house prices have risen according to Government figures. And, as the DCLG index uses data from the land registry, it would seem the opinionated 'gloomers' writing articles for media these days have got it all wrong. Again!
I was looking back at some house price forecasts from the so called 'experts' over the past 5 years. Our hastiness to fall for the spin that is spun by freelance editors listening to these predictions is worrying to say the least.
Most experts are actually still predicting a positive outlook for house prices in 2008. Knight Frank believe house prices will rise 10% in prime London while the Council of Mortgage Lenders (CML) predict a 2-3% rise. Lombard, Nationwide, HSBC, Hometrack and Savills all predict 0-5% growth during 2008. In fact, the only notable gloomers are HousePriceCrash.co.uk and FirstRung.co.uk - hardly suprising considering their alliance.
We will brush past the rediculous 35% fall for 2008 predicted by HousePriceCrash.co.uk and focus on the much publicised fall predicted by the well respected Capital Economics, one of the leading economic research consultancies in the UK and founded by Roger Bootle who is one of the City of London’s best known economists, having worked in or around the financial markets since 1978.
As many people are placing a good deal of their faith on such organisations, I thought it pertinent to highlight some cracks.
Capital Economics predicted that house prices were going to fall by some staggering 20% from January 2005 through to January 2007. Clearly, Mr Bootle has a bad opinion of our own property market. And, it would seem, a knack for getting things glaringly wrong. House prices actually rose by some 22% over this period making the Capital Economic prediction a massive 42% wide of the mark.
FirstRung.co.uk and HousePriceCrash.co.uk are new additions to the prediction pile - mainly because they are trying to make up the numbers in the notable absence of past public prophets.
It would seem predicting house prices is an impossible task. Those that do stick their necks out usually get it wrong and those that don't just sit back and laugh at the endless spin.
I read an article on FirstRung.co.uk that had the headline "UK house prices crash 1.1%". A little desperate I am sure you will agree. Aside from the fact that house prices haven't crashed, such a minute 'fall' certainly doesn't justify such a ludicrous spin. Strangely, this actually filled me with some confidence. If such websites are declaring a crash at a time when a crash is not even close it surely shows that they have decided to clutch at as many straws as they can!
The worrying factor here is that consumer confidence and sentiment dictates house prices. After-all, if we decide to lower our values out of fear of a falling market, house prices will innevitably fall. This is actually the main problem, not the housing market or house prices themsleves.
With RightMove reporting a drop in prices, it would seem that this theory is correct. Asking prices have fallen because the press are spinning yarns fuelled by wild predictions from historically innacurate forecasters influenced by largely unreliable data.
If we ignore the spin and focus on the actual prices of property sold we will surely not go far wrong. For the most accuarate index look to the DCLG data. They showed house prices rising 0.5% in November following a rise of 0.7% in October.
Strange then how so many other less reliable indices are showing house prices falling!? It would seem innacurate information is available in abundance.
A friend once said to me - "54.9% of statistics are made up on the spot".
The worrying factor here is that consumer confidence and sentiment dictates house prices. After-all, if we decide to lower our values, house prices will fall...
Posted: 10:04 am, 16th December 2007
UK house prices have risen according to Government figures. And, as the DCLG index uses data from the land registry, it would seem the opinionated 'gloomers' writing articles for media these days have got it all wrong. Again!
I was looking back at some house price forecasts from the so called 'experts' over the past 5 years. Our hastiness to fall for the spin that is spun by freelance editors listening to these predictions is worrying to say the least.
Most experts are actually still predicting a positive outlook for house prices in 2008. Knight Frank believe house prices will rise 10% in prime London while the Council of Mortgage Lenders (CML) predict a 2-3% rise. Lombard, Nationwide, HSBC, Hometrack and Savills all predict 0-5% growth during 2008. In fact, the only notable gloomers are HousePriceCrash.co.uk and FirstRung.co.uk - hardly suprising considering their alliance.
We will brush past the rediculous 35% fall for 2008 predicted by HousePriceCrash.co.uk and focus on the much publicised fall predicted by the well respected Capital Economics, one of the leading economic research consultancies in the UK and founded by Roger Bootle who is one of the City of London’s best known economists, having worked in or around the financial markets since 1978.
As many people are placing a good deal of their faith on such organisations, I thought it pertinent to highlight some cracks.
Capital Economics predicted that house prices were going to fall by some staggering 20% from January 2005 through to January 2007. Clearly, Mr Bootle has a bad opinion of our own property market. And, it would seem, a knack for getting things glaringly wrong. House prices actually rose by some 22% over this period making the Capital Economic prediction a massive 42% wide of the mark.
FirstRung.co.uk and HousePriceCrash.co.uk are new additions to the prediction pile - mainly because they are trying to make up the numbers in the notable absence of past public prophets.
It would seem predicting house prices is an impossible task. Those that do stick their necks out usually get it wrong and those that don't just sit back and laugh at the endless spin.
I read an article on FirstRung.co.uk that had the headline "UK house prices crash 1.1%". A little desperate I am sure you will agree. Aside from the fact that house prices haven't crashed, such a minute 'fall' certainly doesn't justify such a ludicrous spin. Strangely, this actually filled me with some confidence. If such websites are declaring a crash at a time when a crash is not even close it surely shows that they have decided to clutch at as many straws as they can!
The worrying factor here is that consumer confidence and sentiment dictates house prices. After-all, if we decide to lower our values out of fear of a falling market, house prices will innevitably fall. This is actually the main problem, not the housing market or house prices themsleves.
With RightMove reporting a drop in prices, it would seem that this theory is correct. Asking prices have fallen because the press are spinning yarns fuelled by wild predictions from historically innacurate forecasters influenced by largely unreliable data.
If we ignore the spin and focus on the actual prices of property sold we will surely not go far wrong. For the most accuarate index look to the DCLG data. They showed house prices rising 0.5% in November following a rise of 0.7% in October.
Strange then how so many other less reliable indices are showing house prices falling!? It would seem innacurate information is available in abundance.
A friend once said to me - "54.9% of statistics are made up on the spot".
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