Thursday, October 26, 2006

U.K. Home Shortage Keeps Property Market Ablaze as Rates Rise

fast all diese im nachfolgenden aufgeführten zitate und rechtfertigungen warum die preise so astronomisch sind und auch zukünftig steigen werden habe ich in genau der selben form im jahr 2004 und 2005 aus den usa gehört. all diese argumente haben sich 12 monate später in luft aufgelöst.

when you read the article and see the arguments you really feel like the pieces that came out from the nar in the year 2004 and 2005. we all now what happened shortly after this......

more on the bubble in the uk
....Average home prices have climbed by 2.3 percent since the Bank of England raised its benchmark lending rate to 4.75 percent on Aug. 3. With too many buyers chasing too few houses, economists say, the further quarter-point rate increase they expect next month isn't likely to cool things off either. (i´m not so sure, da bin ich mir nicht so sicher)

``Rates at 5.5 percent might be enough to slow the rest of the economy, but not property,.... ``The housing market is going to keep on chugging.''

.... The average price of a U.K. home has risen to 181,186 pounds ($339,000), according to figures from HBOS Plc, the nation's largest mortgage lender. The stock of unsold property on the market has fallen by 11.2 percent since August 2004, a period when prices rose 13 percent

Britain's population of 60 million is struggling to squeeze onto an island about the size of Oregon, while government restrictions on defoliating the countryside leave building permits in short supply.

The result is that homebuilding has stagnated, producing an average of 148,000 new homes a year between 1989 and 2005, according to the Department for Communities and Local Government. The most the industry ever produced was 203,000 homes in 1998, below the 209,000 the government estimates are needed each year until 2026.

Demand Without Supply
``We've got an increase in housing demand without an increase in supply,'' said Gavin Redknap, an economist at Standard Chartered Bank in London. ``That's what's underpinning the housing market in the U.K., as opposed to the U.S., where you can always easily build more houses.''

In the London borough of Kensington and Chelsea, so few homes are on sale that neither surging prices nor higher interest rates have curtailed buyers. Rightmove Plc, a property Web site, said asking prices for homes there surged 10 percent last month, to an average of 999,087 pounds. Asking prices rose 2 percent nationally, it said. (asking is not market or sellingprice, just ask in the us..../angebotspreise sind keine markt oder verkaufspreise, fragt mal in den usa nach....)

....It's the same story in the industrial West Midlands, where the average asking price of a home rose 1.2 percent in October to 186,026 pounds, eight times the average wage.

Higher Taxes
In addition to the paucity of new homes, an increased tax burden is discouraging people from moving up the housing chain, further limiting the number of homes on sale.

Since Blair took office in 1997, Chancellor of the Exchequer Brown has doubled the tax on house purchases, known as stamp duty, to 3 percent on properties costing between 250,000 pounds and 500,000 pounds. He also introduced a 4 percent rate on properties above half a million pounds.

....``Supply of homes coming onto the market is dropping as prices increase (does this make any sence?macht diese aussage sinn?)because fewer home owners can afford to trade up,'' said Miles Shipside, commercial director at Rightmove. ``This adds to the shortage of suitable properties for sale, resulting in further upward pressure on prices.''

Rates and Prices
A home in the London region worth 100,000 pounds a decade ago, when the interest rate was 5.75 percent, has more than tripled in value, HBOS figures show. In that time, the U.K.'s benchmark interest rate peaked at 7.5 percent and fell as low as 3.5 percent.

While Britain's house-price boom has helped fuel 57 consecutive quarters of economic growth, it also creates headaches for the central bankers as consumers borrow against the rising value of their homes to spend more.

Mortgage-equity withdrawals have averaged 11 billion pounds a quarter for the past three years; as recently as 1998, that level was zero, Bank of England figures show. (amazing!/unfassbar)!

With consumers shouldering a record 1.25 trillion pounds of debt, the housing market's importance to the economy may deter the bank from clamping down too quickly. A speedy increase in rates might drive the investors and speculators who are helping fuel the boom out of the market, triggering a collapse in prices, according to Dominic White, an economist at ABN Amro Holding NV and former economist at the U.K.


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