UK House Prices - Real and Nominal

This graph shows the changes in nominal and real house prices in the past two decades.
Real house prices means adjusted for inflation.
In the last housing crash from 1989-1993, inflation was significantly higher than the present period. Therefore, the fall in real house prices was quite dramatic. e.g if House prices fall 15% in a year [...]

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[Source: Finance Blog]

When Will Interest Rates Rise?

With UK interest rates at record lows, many are wondering how long they will remain close to zero?
If the experience of Japan is anything to go by, very low interest rates could last 10 years. However, I think it is unlikely that the UK will repeat the Japanese experience of a decade of deflation and [...]

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[Source: Finance Blog]

Why US House Prices are Falling

After the well documented housing bubble from 2000 - 2006, US house prices have shown a remorseless and long lasting decline.
Since the market turned in 2006, house prices are expected to fall by 41% by 2010. Some fear US house prices could fall by 48%. The interesting thing is that US house price to rentable [...]

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[Source: Finance Blog]

Pound Sterling Set to Rise Against the Euro?

The Pound has had a rough time against the Euro, in recent months. But, whilst the UK economic climate is far from strong, the Eurozone economy looks to be experiencing increasing problems.
Led by the German economy, the Eurozone experienced a sharp contraction in the first quarter of this year. Eurozone GDP fell by 2.5% and [...]

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[Source: Finance Blog]

A Good Time To Buy? - As House prices stabilise.

A study by hometrack showed that last month, house prices were stable in most regions, giving more evidence that the dramatic declines in house prices may be over. However, hometrack cautioned against calling the bottom to be reached. Last week a report by Nationwide predicted house prices would not maintain a lasting recovery until next [...]

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[Source: Finance Blog]

Changes in UK Banking System

The past two years have seen an acceleration in the shifting market structure of the UK Banking system.
For the consumer it represents bad news. The market has become more concentrated leaving less choice. In particular the UK Bank market is becoming dominated by the Big Two Banks - Lloyds Group and Santander.
These are the Top [...]

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[Source: Finance Blog]

Valuing the Property Market

Looking back at the past two years it seems that the housing market is subject to irrational expectations helping to exaggerate booms in house prices that later prove unsustainable.
Why do Booms in Housing Markets occur and why don’t People see Them Coming?
The nature of the UK Property Market encourages volatility. With inelastic supply (unresponsive to [...]

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[Source: Finance Blog]