U.K. House Prices Unexpectedly Rose in March, Nationwide Says

Discussion in 'Economics' started by ASusilovic, Apr 2, 2009.

  1. April 2 (Bloomberg) -- U.K. house prices unexpectedly rose for the first time since October 2007 after the Bank of England’s interest-rate cuts attracted buyers to the property market, Nationwide Building Society said.

    The average cost of a home jumped 0.9 percent in March from the previous month to 150,946 pounds ($218,000), the mortgage lender said in a statement today. All 13 economists in a Bloomberg News survey predicted a drop.

    ...

    Banks granted 38,000 home loans in February, up from a trough of just 27,000 in November, Bank of England data showed this week. Lenders have hoarded cash after racking up more than $1.2 trillion in losses worldwide.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=arqfmCwmUIA8&refer=home

    Is this piece of news "GBP" supportive ? Or is it G20 summit related ?:confused:
     
  2. [​IMG]

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    But is this just a dead cat bounce or something more significant?

    Nationwide is hedging its bets.

    The moderation in the annual rate of fall is somewhat distorted by conditions last year and so it would be unwise to draw strong conclusions from the significant slowdown in the annual rate of fall. Equally, while the rise in prices in March is welcome, it is far too soon to see this as evidence that the trough of the market has been reached. The Bank of England has already taken strong measures to ease the tensions in economic and financial markets by cutting rates and commencing quantitative easing. However it will take time for these to work through into the housing market before we can expect a sustained recovery in house prices.

    And Howard Archer at IHS Global Insight reckons it is important not to read too much into March’s gain.

    As Nationwide point out themselves. House prices can be very volatile on a month-to-month basis, and the Nationwide data still show that house prices fell by 4.2% quarter-on-quarter in the first quarter of 2009, which was only modestly down from the 4.7% quarter-on-quarter drop seen in the fourth quarter of 2008.

    http://ftalphaville.ft.com/blog/2009/04/02/54362/rejoice-uk-house-prices-rise/
     
  3. AK100

    AK100

    It's in Nationwide's interest to be bullish. Just remember that.
     
  4. IMO this is a sucker rally. Trends in real estate prices tend to be very persistent and last for years. Good blip to sell if you still own any UK property.
     
  5. LOL. The UK economy is in a death spiral.

    Combine this fake news with the ECB"s move to "only" cut rates to 1.25% and you've got yourself a fine entry to re-short Sterling or the Euro (Euro in my case).