From: "Crowley" 
Newsgroups: uk.politics.misc uk.finance
Subject: Re: "Worst housing market for 30 years" as estate agents admit to "overpricing". House price crash on the way ?
Date: 12 Jan 2006 11:47:57 -0800
   posting-account=yGNAvw0AAABsgRsckUU2yFAQy4yH8Lsf

First time buyers have shrunk to an all-time low of 7%, down from a
peak of nearly 50% in 1999. Thats a near 85% reduction and means the
removal of the bottom rung of the housing ladder. So what's left  to
prop it up ?.......................


Lucky number seven?

http://firstrung.co.uk/articles.asp?pageid=NEWS&articlekey=1137&cat=47-0-0

The property news in the U.K. is always awash with predictable
statistics. Even when bad news is published first time buyers stare
helplessly, frozen at the sidelines as inevitably the data once washed,
spun, hung out to dry and neatly folded, remains consistently
optimistic for home owners, lenders and for those set to continually
profit from the industry....

Rightmove pointing to a 1% increase in house price inflation....
Nationwide predicting, (using the disturbing language of "a managed and
controlled slowdown in the housing market"), prices to grow perhaps by
3%in 2006....
The Halifax publishing similar assumptions....strange how one glaring
statistic has evaded them all in recent months.
Could it be that there is a reason various data sources ignore the most
alarming statistic that month by month steadily reduces? At what point
will the acknowledgement surface that the most glaring statistic for
proof as to which way the property market is headed is the amount of
new entrants into that market place? Let`s suspend belief for a time,
what if the figures actually begin to approach near zero, what then? A
reliance on the continual game of spoof and hot potato played out
amongst those further up the rungs to continually provide the illusion
that property only ever increases in value?

Let`s put aside the search for triggers to propel falls in property
values for one moment, when looking for a pointer for the property
market to correct massively in coming years it is quite simply to be
found in the absent number of first time buyers.

According to data recently published by the N.A.E.A., the percentage of
first time buyers reached an all time recorded low towards the final
quarter of 2005 to stand at close on 7%. That is down from a peak of
nearly 50% in 1999.

In short the first time buyer figures have imploded, shrinking by
nearly 85% in 6 years. In recent times has there ever been such a
volatile indice when related to the housing market?

Can first time buyers confidently expect this alarming statistic to
grace the front pages of the most popular newspapers some time soon?
Not a chance.

The main titles occasionally like to dabble with the odd headline
grabbing title of "Property Crash". However, these are soon replaced by
reverse headlines as various paymasters, in the form of advertisers,
exercise their considerable lobbying muscle in order that the
publishers stay on message, with articles that reflect what is best for
their clients interests.

This 7% statistic has not passed by anonymously. It may prove to be
ultimately unlucky for some if historically it indicates a market that
has run its course. Firstrung has stated before that for a housing
market to continue in any form, in all its various component parts, new
entrants are necessary. These cannot be existing customers only, fresh
customers are needed for new opportunities to be exploited within that
or indeed any other market.

The fact that new entrants have disappeared to such an extent could
herald a collapse in values far greater than any market commentator
could have dared to predict.