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Small fall in South West house prices prompts positive predictions

By Western Morning News  |  Posted: November 02, 2012

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House prices in the region have fallen steadily in the last eight months but only by a small amount, as families continue to keep tight control on their finances.

A new study by the Nationwide has highlighted a year-on-year decrease of 0.9 per cent in the value of properties.

But the building society believes the picture is unlikely to change much until people see their personal finances beginning to pick up and wages improving to keep up with the cost of living.

Richard Copus, Westcountry executive for the National Association of Estate Agents (NAEA), who runs Richard Copus Estates, said the national picture was very much reflected locally.

He also pointed to a feeling of more confidence in the housing market and predicted a better new year.

“The Nationwide figures tally with what is happening here,” he said.

“Overall I think there is more confidence in the market.

“People are putting offers in and following through and chains are also holding together better.”

Mr Copus added: “People are still moving.

“People who are having families are up-sizing and people who are retiring are downsizing. The market is still working.

“There seems to be a feel-good factor coming in and as long as nothing nasty happens before Christmas I think in January and February we could see an improvement.”

The Nationwide said that despite figures last week showing an end to the longest double-dip recession since 1950, the economic recovery was likely to remain “fairly sluggish” as households try to repair the state of their finances rather than spend.

Robert Gardner, the company’s chief economist, said: “The situation is likely to remain challenging in the housing market.

“Although the UK has been adding jobs in recent quarters, even in the midst of recession, conditions remain very difficult for households.

“Wage growth is still not keeping up with the cost of living and unemployment is still well above normal levels.

“This helps to explain why housing market activity has remained subdued, with the number of mortgage approvals still running at little more than half their long-run average.”

Figures from the British Bankers’ Association (BBA) showed that mortgage approvals for home buyers reached a five-month high in September, but they still remained below the levels seen last year.

The BBA said households had “no appetite” to take on more debt and that demand for loans remained weak amid the uncertain economy.

The report said monthly prices had failed to show any strong trend over the past half-year, with three months of price increases and three months of falls since May, but the market continued to be relatively stable overall.

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  • Bleach  |  November 07 2012, 9:29AM

    No, seriously; start acting like it.

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  • SmartyC  |  November 06 2012, 8:22PM

    @ Bleach - Presumably you mean by flailing about insulting people on the Internet that point out the obvious flaws in my argument? Sorry, doesn't strike me as very "manly".

  • Bleach  |  November 06 2012, 6:17PM

    @SmartyC "By the way I'm male, not female." Then start acting like it.

  • robocop1982  |  November 06 2012, 3:20AM

    We're screwed anyway. in 100 years we won't even know what happened. MY personal view is though this is just a preparation for the next life and perhaps on a different planet. i think we will be doing this again in another lifetime. Just think at some point in a different lifetime in another manifestation you are going have to go back to primary school. THere could be eternal lifetimes ahead. We will be doing this all over again in another lifetime so it doesn't matter.

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  • SmartyC  |  November 05 2012, 9:57PM

    @ Bleach - Well argued sir, brilliant! You've completely convinced me! :D By the way I'm male, not female. @ Sallyhope. You might not be able to "second guess" the property market, but you can certainly apply a little common sense. I say again, where is the irresponsible lending that funded the massive massive property boom to current levels going to come from? Because it isn't the banks. By the way, I own my own home, bought (more by luck than judgement) just after the previous (much smaller) late eighties property price bubble burst and wiped a third off values. Given that time boom was so very much bigger, do you really honestly think we're going to "get away with" the 10-15% drop we've had so far?

  • sallyhope  |  November 05 2012, 2:56PM

    @SmartyC You sound like someone who is desperately trying to justify to yourself that you are right to not enter the housing market (perhaps you can't afford to at the moment?). You really can't second guess the housing market no matter how much you think you can. People have been saying a big drop in prices is just around the corner but it still hasn't happened despite a deep, double dip recession. People will probably still be saying the same thing in 10 years time. If people can afford to buy then they should. Why put your life on hold? Hope ownership has so many benefits over renting. If you can afford the monthly payments and you are relatively secure in your job, then go for it. And, hey you never know prices might just rise…again.

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  • Bleach  |  November 04 2012, 1:37PM

    @SmartyC "Good effort at talking up the market, but apply a little common sense and logic and it doesn't stack up" Don't patronise me you stupid little woman. I've forgotten more about the housing market than you're ever likely to learn in your sad, pathetic lifetime.

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  • SmartyC  |  November 04 2012, 10:53AM

    @Bleach Agree wholeheartedly that long term a mortgage is better than renting, and not just financially. But I wasn't talking about renting forever, I was talking about waiting for house prices to drop to a sensible level before buying. As to - "Either way, there's every sign that this recession is turning and the property market is turning with it." Where's the money going to come from? People can't just choose what property is worth (at least not any more), it has to be able to be funded. And since banks can't and aren't lending basically unlimited amounts anymore, how can the property market "turn"? And if property isn't selling now, at reduced amounts and with interest rates as low as they've ever been, what do you suppose will happen when interest rates rise? Good effort at talking up the market, but apply a little common sense and logic and it doesn't stack up.

  • Stork  |  November 03 2012, 12:34PM

    I was in the property game for years, and have seen it go from sensible ( 3x annual salary) to crazy ( 'ave as much as you want ! ). The "trade" accepts that most, not all, properties up for sale are "about" 20% over priced. My daughter has just bought a very nice house. I told her to offer 20% less than the asking price. She finally agreed a deal on 18% below asking price. If you have a good deposit, and preferably a mortgage offer available, start at "about" 20% below asking price, and see the response. If the vendor is not interested, simply look elsewhere. The market is quiet now, it always seasonally is. More property will become available come February 2013, and some might be much cheaper, as there is no end in sight, yet, for the downturn.

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  • Bleach  |  November 03 2012, 11:17AM

    @SmartC "But either way, surely you'd have to be a fool to buy something this year that could well be £25,000 less (or more) next year." You'd be a fool to buy something now that could be worth *more* next year? Assuming that's what you mean by 'or more' in parentheses. Either way, there's every sign that this recession is turning and the property market is turning with it. Even if it isn't just yet, it will in only a few years. That makes your investment a good one. "either way, you're still funding (and paying interest on) £25,000 for the next 25 years that you didn't have to" Except that you would have to. You'd be paying rent at roughly the same amount and the rent would be index linked; the 400-500 a month you'd be paying in mortgage wouldn't. In other words, in real terms you'd be paying a great deal less per month in even 10 years, let alone 25. My mortgage payments, which come to an end next year, are £80 a month. If I were renting I'd be paying around £1000. If you have the funds and stay within your budget, a mortgage is a fine investment.

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