Туй му го пратил на Рашко братчет му-коча Рашид, от Англия.Те там повечето били мисилмани, да ги поебе нереза ми Прокопи , и затова кръстили братчета на Рашко Рашид.Та те тоа Рашид казал, че това било интересно. Я и една дума не вденах от това, ама много му вервам на Рашко и на родата му.
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House prices not set to reach 2007 peaks for another five years
Only a sustained pick-up in mortgage lending will drive lasting recovery in house prices
London 14 September 2009: UK house prices will not reach their autumn 2007 peaks for at least another five years, according to the Ernst & Young ITEM Club. In a special report released today the forecasters say that while data is showing that the housing market is now beginning to stabilise, the recent rise in house prices cannot be sustained beyond the spring of 2010.
With the UK having one of the highest rates of home ownership in the world the housing market has always been central to the prospects for the domestic economy. The decade from 1996 saw a sustained boom in the values of properties across the UK, but the onset of the global financial crisis have seen prices fall in excess of 20% from their peak in the autumn of 2007.
A false dawn leading to a 2010 dip?
Hetal Mehta, Senior Economic Advisor to the Ernst & Young ITEM Club explains, “ITEM believes the current stabilisation in the housing market is a false-dawn. Price rises largely reflect the acute shortage of available properties, with many homeowners either trapped in negative equity or reluctant to sell for fear of locking in the losses of the past two years. A small number of cash-rich buyers have supported prices, but the supply of these funds is limited, which means prices are likely to dip again in the first half of next year.”
She adds “Mortgage lending remains depressed and with 56% of owner occupiers having a mortgage, it would be difficult to make a case for a sustained pickup in prices without a recovery in mortgage lending. However, this would still appear to be some way off. Banks are continuing to restrict the amount of money that they are willing to lend, with them looking to strengthen, rather than expand, their balance sheets.”
ITEM suggests that prices are likely to stagnate for the next two years, before picking up again gradually from 2011 as the wider economy strengthens and credit conditions ease. But it will take more than five years for prices to return to their late-2007 peaks.
Particularly tough for first time buyers
The scarcity of mortgage supply and tough lending criteria is making it particularly difficult for first time buyers to enter the market. Given that they typically purchase cheaper properties, this will have significant implications for those looking to trade up, clogging up the market and limiting the number of transactions taking place. With prices and transactions closely correlated, this will inhibit the usual chain of events where rising prices provide homeowners with the equity to trade up, which itself pushes up prices.
Andrew Goodwin, Senior Economic Advisor to the Ernst & Young ITEM Club explains: “In order for the housing market to function properly it is essential that first-time buyers are bought back into the market, else the current status quo of a low number of transactions, dominated by speculative cash buyers, is likely to be maintained.”
Passing on larger portions of the current low interest rate into mortgage rates would help. But despite sharp falls in Libor, the cost of a mortgage remains high, with very few attractive deals available for new mortgages and remortgaging both in terms of tracker and fixed rate mortgages.
The other factor likely to prevent a strong rebound in house prices is the labour market. We have already seen a steady rise in unemployment since the credit crisis hit and ITEM forecasts that levels will peak at 8.8% or 2.76 million next spring.
He comments: “The combination of rising joblessness and weak earnings growth is bad news for the housing market. The threat of unemployment encourages consumers to save more and to pay down debt, rather than add to their existing burden. The uncertainty also discourages consumers from committing to big decisions such as buying a house. The weakness of earnings growth has also meant that, despite the sharp drop in house prices, affordability has not improved to any great extent.”
Country wide variations
Looking across the UK housing market the report says that although no regions have been exempt from falling prices, the crash was not distributed evenly and the early signs suggest that the recovery will be similarly unbalanced. Aside from Northern Ireland – which experienced an extraordinary boom and slump, seemingly divorced from trends elsewhere in the UK – the largest declines over the two years to Q2 2009 were in the south of England, in particular Greater London and the South West. Scotland has been the least affected by some distance, reflecting its position as the most affordable region of the UK.
Goodwin says, “The fall in property values seen in London and the South West in part reflects the unwinding of the previous surge, with these areas having enjoyed the strongest gains in the mini-boom of 2006/7. But they are also characterised by very high price-to-income ratios, particularly in London where there has been an over reliance on City bonuses to underpin demand.
ITEM predicts that in the short-term the regional pattern is likely to continue along similar lines. However, over the medium term southern regions are likely to prosper ahead of the rest of the UK, where inward migration is at its highest.
Mehta concludes, “Mortgage credit is likely to remains scarce and expensive until banks succeed in rebuilding balance sheets or raising shareholder capital such that they feel sufficiently confident to lend once more. Even then we will not see a return to the high income multiples, high loan-to-value ratios and cheap mortgage finance that householders became accustomed to in the first half of this decade.”
