Britain see through house price puzzle
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Bentham is an experienced fund manager, he not only founded the American GMO fund management company, he was a master of identification and confirmation of the bubble, which allowed him to invest in the game at ease. He said that over the past few years, he identified a total of 34 species of the bubble, but only two that he can not control, one of which is the UK's real estate market.
Released last week, according to a British real estate market report, September housing price drop of £ 6,000 to £ 162,000, a decline of 3.6%, the biggest drop on record.
The face of this dramatic change in house prices, many economists expressed optimism that they believe that falling house prices benefit the consumer market. But in the long perspective, falling house prices is not a good thing. Because, as the vane of the economy, falling house prices seems to indicate weak economic outlook.
For the real estate market, Grantham mentioned the purchase of housing can be used as a benchmark for price-earnings ratio. In fact, every month the British Government to provide a "surplus of housing prices," the chart, people can also be used as a reference. Chart shows the latest price earnings, price earnings ratio is now 5.4. This figure means that only 25% of housing price decline, the real estate market can go back to the healthy development of the period.
In theory, this gap can be adjusted from the other side, that is income. However, this is possible? Under the shadow of the financial crisis, the United Kingdom has not really come out from the recession. According to official data, over the past year, the British wage growth is weak. Although the government hoped the private sector to recover quickly and help improve the UK employment rate and wage level, but by supporting the Government's massive increase in future wages will further slow down the UK.
It would appear that the only way to reduce the burden on the people is to reduce lending rates, but this does not seem realistic. In the seasonally adjusted number of mortgage loans approved for 4 months has been declining, the loan threshold, has again been raised. For those people who buy the first time, life is not easy.
Finally, after many years as we Imagine the price, it will still be far too high and stable development of the time, some factors still is not negligible. But for those who have put their property into the pension plan of the people, their prospects will become unpredictable. |
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Author Resource:-
Chris Holigan a professianl writer from , it provides the high quality products, such as Diaphragm Wall Equipment manufacturer, ST-100 Mobile Drilling Rig, and many more.
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By :
Jessie Stone
Submitted
2010-10-22 09:34:02 |
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