Oh lordy, it’s all beginning to sound a bit medieval. Numis Securities, a City investment bank, have been making like Nostradamus as far as the housing market goes.

Lo, they say unto us, a veritable plague cometh and there will be much wailing, gnashing of teeth, and a really big fire sale in the buy-to-let sector.

The country could go bankrupt too. And the moon will fall into the sun and create a world of perpetual darkness.

The Daily Mail and The Telegraph, to cite just two, are loving this, and report breathlessly that “house prices could slump by another 55 per cent. The Numis report predicts that price falls will accelerate in coming months as amateur buy-to-let investors begin to ‘panic sell’ their portfolios.”

Now leaving aside the fact that City investment banks haven’t exactly covered themselves in glory recently, the source of this prediction begs a few questions.

Numis produce market reports for various sectors of the economy, and this melodramatic forecast comes from their Financials Team – who have, shall we say, a vested interest in promoting equities and the stock market.

Numis, interestingly, also have a Building & Property Team. So what do they think? I called Chris Millington, from this division, and he said:

“Our central projection is 30 per cent peak-to-trough. The market has actually improved recently, housebuilders have had a good start to the year and activity is on the rise. The downturn is past its middle point. Things are looking a lot more interesting.”

I know who I think is right on this one. I leave you to draw your own conclusions.

In the meantime, let’s all hope that the Finance and Property teams over at Numis don’t get stuck in a lift together or it could all kick off.

Related Tags: House Price Predicitons, General, Numis Securities

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