Surprise at ‘falling house prices’ claims (From York Press)

Bloody estate agents. Rising prices is not a brilliant thing.

Statistics like this are always very open to debate and are notoriously inaccurate.

The figures are not surprising.

I used to own one of York's largest estate agencies but I now act purely for buyers so I can see both sides of the argument!

Firstly, house price falls are not always a bad thing. If you are moving within the same broad area then it is all relative. If you are moving up the ladder then it is a good thing - theoretically if you are selling at 100k and buying at 200k then a 6% price drop narrows the gap for you.

Secondly, the label "York" covers a large area. I am finding that period houses within the ring road are selling for the same if not slightly more than last year. Property in the areas just outside such as Haxby, Copmanthorpe etc is not doing as well - particularly over 500k where prices are definitely down on last year due to reduced demand and a steady supply. Average all this out and you get the sort of stats shown in this report.

My job is to make sure people buy the right property in the right area at the right price - If you do this then provided you don't take too short term a view you will always do ok on the property ladder.

Finally, don't read too much into this report - York is a steady market overall and I will bet my mortgage on the fact that next week there will be a report from the Halifax or similar saying that we are bucking the trend and prices are up!!

"Borne out" please. If people are going to make a living out of using English, can they at least try to spell it properly.

Trying to talk up and get the property market moving which would appear to be the aim of developers, estate agents and politicians is akin to flogging the bones of a very dead dinosaur.

Property prices have reached their maximum values give or take the odd aggrandised rise or drop. I'll tell you why in simple economics. Deregulation of the banks (both labour and Tory happily went along with this) allowed the vultures to lend outrageous amounts in mortgages creating an artificially inflated property bubble. It really only mirrored what was going on in the rest of Europe anyway. Now, look at the property market in Ireland, Italy, Portugal, Spain and Greece where developers have lost fortunes, housing prices have crashed. The only difference between 'them and us' is that the UK isn't tied into the doomed Euro and at the moment, a good deal of the world's financial trade is ploughed through the City of London. As anyone reading this has probably noticed, ALL politicians are afraid of the banking institutions. Libs, Tories, Labs are all united with their fear of the big fiscal corporates. Oh sure, there’s been a carefully crafted and stepped roll-out of banker persecution stories but on the whole the banks they’ve been left untouched. Even the Barclays Libor scandal has now ‘blown over’ and put off the front pages of the news. I’m not suggesting this has been undertaken deliberately but the sheer lack of UK banking stories at present may be a sign of political panic control. They (politicians) can after all D-list stories if they think it is potentially damaging for whatever reason.

Where am I going with this?

1. The UK property market is grossly overvalued. Period.
2. The global economy is to all intents and purposes, in flux. Yes, it’s functioning at a perfunctory level.
3. UK banks are potentially exposed to horrendous levels of euro-debt individual countries cannot repay their outstanding debts. This is a real possibility.
4. Talk about headless chickens, European politicians and UK politicians haven’t a clue what to do to resolve the euro-crisis. There are splits and endless meetings where nothing is really achieved. Realistically, a two-tier Euro state with decentralised currency (eg. A return to the lira and peseta in financially knackered countries) is very much on the cards.
5. Austerity in the UK hasn’t really ‘got going’ yet. There have been token cuts here and there but the government is still borrowing record amounts to keep the ‘wheels turning’.
6. ‘We should expect austerity and cuts till 2020’ - Not only are politicians saying this, every other financial blog or influential think-tank is also making this their mantra.
7. Records levels of debt (not to be confused with deficit). Over a trillion owed in the UK in personal debt alone. Public debt is huge as well.
8. The USA. There are several ‘Superpower’ states in the world now. The US is just one. Its global influence and power has receded. Additionally, many countries (not just the Chinese) got burnt with bad US dollar bonds. As such, there isn’t really a ‘safe’ global currency. This very much affects where the biggest players will invest their Wonga.
9. Global resources. There are various resource issues affecting the world which are sat nicely on the very near horizon. Potentially there could also be a nasty bust-up in the far-east between China and Japan over ironically, a group of Islands with resources for drilling. A conflict would affect the world.
10. Worryingly, the value of earnings and savings continues to fall.

The point I am making is that there is much financial uncertainty tied into world events at the moment. Housing/House prices are directly affected by global finance problems (Actually, quite why anybody thought of property and increased values as a stable long-term continual money making sector of any economy is questionable). Property values will fall significantly in the future. Anyone who thinks anything other is welcome to put their mortgage and savings on it. I wouldn’t though.