TrueNorth

This is quite interesting, from Zoopla, a "heatmap" of UK property prices.

Zoopla prices "heat-map"

US house prices in gold -- story from Forbes magazine

An American friend sent me this

written by Adrian Ash

Is It Time To Trade Pricey Gold Bars For Cheap Houses?

Posted by Adrian Ash

 

After this week’s poor U.S. housing data, might the average home be nearing its low? Priced against gold it might be.

 

Dropping hard as the gold price doubled and more since 2006, the average U.S. home is now priced at 103 ounces of gold, little more than one market-approved gold bar for settling a 100-ounce Comex gold futures contract.

 

Housing has only been cheaper against gold, according to the rough-and-ready averages spat out by the U.S. Census and other major estimates, in 26 of the last 121 years. It’s currently priced around half the long-run average of 201 ounces.

 

Might there be further to go on the downside?

 

. . . .

From Business Insider

Has Housing Bottomed?

A Simple Explanation For Why Housing Hasn't Bottomed Yet

Charles Hugh Smith, Of Two Minds | Jul. 21, 2011, 6:04 AM |

 

Charles Hugh Smith is a novelist and economic commentator

 

Has Housing Bottomed? Here's How to Tell

 

Housing has been propped up by Central State intervention. As that ends, Phase II of the retrace to pre-bubble valuations is at hand.

Has housing bottomed? Here is the sure-fire way to tell:

 

Stories titled "Has housing bottomed? Here's how to tell" have vanished for lack of interest.

 

The absence of stories about the bottom in housing will mark the final nadir, because the real bottom can only be reached when everyone has abandoned housing as a pathway to easy money. Only when the public and investor class alike have completely lost interest in real estate as a "sure-fire" investment can the real trough be reached.

 

This destruction of long-held habits and beliefs takes a long time. The closest analogy might be the stock market in the last secular Bear market. Stocks topped out in 1966, though the economy lumbered on until 1969 before faltering. Stocks then meandered for 13 years of stagflation, losing 66% of their inflation adjusted value in 1966 by 1982.

 

People gave up on stocks. I call this loss of faith "when belief in the system fades:" note how household participation in stocks topped out in 1969, three years after the peak in the market. Participants clung to their belief in stocks for about four years after 1969, at which point participation cratered as they finally abandoned their faith in a "permanent Bull market."

 

continues

Where's that rocket pic when you need it?!

Thank you for the updated chart.

Is anyone swapping gold for silver?

apologies for double post -- the forum has been playing up for me recently, not loading pages, etc.

PWC announces house prices will return to their 2007 peak by -- wait for it -- 2020.

Story here from the Independent, but a mass of coverage of this this morning

House prices in the red until 2020, warns PwC

By Simon Read, Personal Finance Editor

 

Tuesday, 12 July 2011

 

Housing prices are unlikely to recover to their peak levels until 2020, according to PricewaterhouseCoopers' latest UK Economic Outlook.

 

 

Even then, the analysis suggests there is just a 50 per cent chance of a real house price rise relative to 2007, when prices reached their peak.

 

Over the next four years there is only a 12 per cent chance that real house prices will have risen back above their 2007 peak, according to PwC's analysis. In fact the median projection over the period until 2015 is for a 12 per cent real decline.

 

There is further depressing property news in the Rics June 2011 UK Housing Market Survey published today. It reports that the housing market faced a stalemate during June, as demand failed to pick up and supply of new property fell back.

 

Rics' housing spokesman Alan Collett said: "The housing market was pretty flat during June. Buyer interest in purchasing property remains relatively low across much of the UK while the volume of new stock which is coming to the market has slackened. With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue."

 

The picture is going to get worse before it shows any sign of recovery, warned John Hawksworth, the chief economist at PwC. "We expect average UK house prices to drift down further over the next year and then enjoy only a modest recovery over the next few years," he said.

 

"This reflects the dampening impact of declining real income levels and continued tight credit conditions for first-time buyers in particular." Mr Hawksworth added that there would be a "long, slow road to recovery".

 

"Later in the decade, we expect stronger house price growth as supply shortages reassert themselves and credit availability gradually returns to more normal levels," he said.

 

The Rics figures for June show that the property market in London continues to buck the downward trend.

 

"London remains a market apart with both sales and prices showing a greater degree of resilience," Mr Collett said.

 

The capital and the South-east will lead the economic recovery, according to PwC. "The UK as a whole faces a slow climb to recovery given the continued squeeze on consumer and government spending," Mr Hawksworth said. "But we see a distinct regional pattern to growth with the public spending cuts acting as a drag on recovery in Northern Ireland, Scotland, Wales and the North-east in particular."

 

He said London and the South-east is not be immune to the cuts, but growth there is less dependent on the public sector and more on the international financial and business services sector, in which growth is likely to remain relatively strong.

 

However, there was some relatively positive news for the property sector yesterday as new data from the Council of Mortgage Lenders showed a rise in loans for house purchase and remortgaging. Figures for May showed more signs of stabilisation in the mortgage market, according to the CML.

 

Michael Coogan, the CML's director general, said: "There is no evidence of any drastic changes or significant shifts in direction for the mortgage market. These stable conditions are expected to continue for the rest of the year.

 

"Recent securitisation deals suggest confidence has returned as investors regain their appetite to invest in bonds backed by mortgage assets. This is a positive influence on mortgage market conditions," Mr Coogan said.

PWC announces house prices will return to their 2007 peak by -- wait for it -- 2020.

Story here from the Independent, but a mass of coverage of this this morning

House prices in the red until 2020, warns PwC

By Simon Read, Personal Finance Editor

 

Tuesday, 12 July 2011

 

Housing prices are unlikely to recover to their peak levels until 2020, according to PricewaterhouseCoopers' latest UK Economic Outlook.

 

 

Even then, the analysis suggests there is just a 50 per cent chance of a real house price rise relative to 2007, when prices reached their peak.

 

Over the next four years there is only a 12 per cent chance that real house prices will have risen back above their 2007 peak, according to PwC's analysis. In fact the median projection over the period until 2015 is for a 12 per cent real decline.

 

There is further depressing property news in the Rics June 2011 UK Housing Market Survey published today. It reports that the housing market faced a stalemate during June, as demand failed to pick up and supply of new property fell back.

 

Rics' housing spokesman Alan Collett said: "The housing market was pretty flat during June. Buyer interest in purchasing property remains relatively low across much of the UK while the volume of new stock which is coming to the market has slackened. With continued uncertainty over the jobs market and the economy, this subdued picture is set to continue."

 

The picture is going to get worse before it shows any sign of recovery, warned John Hawksworth, the chief economist at PwC. "We expect average UK house prices to drift down further over the next year and then enjoy only a modest recovery over the next few years," he said.

 

"This reflects the dampening impact of declining real income levels and continued tight credit conditions for first-time buyers in particular." Mr Hawksworth added that there would be a "long, slow road to recovery".

 

"Later in the decade, we expect stronger house price growth as supply shortages reassert themselves and credit availability gradually returns to more normal levels," he said.

 

The Rics figures for June show that the property market in London continues to buck the downward trend.

 

"London remains a market apart with both sales and prices showing a greater degree of resilience," Mr Collett said.

 

The capital and the South-east will lead the economic recovery, according to PwC. "The UK as a whole faces a slow climb to recovery given the continued squeeze on consumer and government spending," Mr Hawksworth said. "But we see a distinct regional pattern to growth with the public spending cuts acting as a drag on recovery in Northern Ireland, Scotland, Wales and the North-east in particular."

 

He said London and the South-east is not be immune to the cuts, but growth there is less dependent on the public sector and more on the international financial and business services sector, in which growth is likely to remain relatively strong.

 

However, there was some relatively positive news for the property sector yesterday as new data from the Council of Mortgage Lenders showed a rise in loans for house purchase and remortgaging. Figures for May showed more signs of stabilisation in the mortgage market, according to the CML.

 

Michael Coogan, the CML's director general, said: "There is no evidence of any drastic changes or significant shifts in direction for the mortgage market. These stable conditions are expected to continue for the rest of the year.

 

"Recent securitisation deals suggest confidence has returned as investors regain their appetite to invest in bonds backed by mortgage assets. This is a positive influence on mortgage market conditions," Mr Coogan said.

Buy signal for bullion and PM stocks today from Bob Hoye/Ross Clark at Institutional Investors

Silver: COT Levels into Accumulation Territory

Technical observations of RossClark@shaw.ca

 

Bob Hoye

Institutional Advisors

Posted Jul 7, 2011

 

The Commitment of Traders data for futures contracts is released by the CFTC each Friday. The data is compiled as of the preceding Tuesday. For each long futures contract there is a short position. Unlike equities that have a fixed number of shares issued by a corporation, there can be an unlimited number of contracts. For each new buyer and new seller a contract is created (called open interest). In a strong uptrend the open interest will expand, identifying that new buyers are stronger than new sellers. In a rising trend with declining open interest it identifies that the market is being pushed higher by more short sellers exiting positions than new buyers establishing positions. When the last of the undercapitalized short sellers have exited their positions the market becomes vulnerable.

 

The COT report breaks down the positions based upon the type of market participants. In our analysis we monitor the net positions of non-commercials (speculators) and commercials. The total level of positions can be significant, however, what interests us more is the rate of change in positions. When there is a dramatic decline in positions of both commercial and non commercial participants due to a shift in market direction it serves as a buy alert. As of last week commercials have reduced their shorts by 48% and non-commercials by 61%. This produces the ninth cluster of alerts in the data (available from the CFTC back to 1986).

 

(charts)

 

For those investors with deep pockets is it time to begin accumulating bullion and related stocks.

frpm 321gold

And this from BBC

6 July 2011 Last updated at 09:11

UK housing market 'facing headwinds', says Halifax

 

The housing market is facing "significant headwinds" despite prices rising slightly in June, according to the Halifax.

 

The lender, which is now part of Lloyds Banking Group, said that low pay rises, higher taxes and inflation were all constraining demand from buyers.

 

But it said low interest rates had maintained housing market stability.

 

The average home rose in price by 1.2% in June compared with May, but was 3.5% cheaper than a year earlier.

 

The annual change is based on average prices during the three months to the end of June, compared with the same three-month period of the previous year.

 

When comparing prices in the three months to the end of June with the previous three months, there was a fall of 0.5% - the smallest quarterly drop since the second quarter of last year.

 

"Low interest rates, an increase in the number of people in employment and some tightening in market conditions earlier in the year are likely to have been the main factors behind the recent improvement in price trends," said Halifax's housing economist Martin Ellis.

 

Typical mortgage payments for a new borrower had fallen from a peak of 48% of average disposable earnings in mid-2007 to 28% in the second quarter of 2011, Halifax figures showed.

 

"A slowly improving economy and sustained low interest rates should help to support broad stability in the market over the coming months," Mr Ellis said.

 

"The market is, however, likely to continue to face significant headwinds which are expected to constrain housing demand."

 

It said the average home cost £163,049.

 

Comparison

 

The data and analysis, based on Halifax's own lending, is broadly similar to that of the Nationwide Building Society.

 

A week ago, the Nationwide said that the property market had "moved sideways" in the last six months.

 

Its figures showed that the value of the typical home was the same in June as in the previous month, but 1.1% lower than in June 2010.

 

The Land Registry, which produces relatively comprehensive figures that lag behind other surveys, said that prices in England and Wales dropped by 0.4% in May, to push them 2.2% lower than a year earlier.

 

However, it said that prices in London were bucking the trend.

http://www.bbc.co.uk/news/business-14042621

Together, these seem to pour cold water on the property bulls' talk. Is the tide turning?

The Scotsman weighs in -- op=ed piece from today's paper

http://business.scotsman.com/business/Only-when-property-prices-become.6796506.jp?articlepage=1

Only when property prices become genuinely affordable will the market get moving again

 

Published Date: 06 July 2011

By Ken Taylor

MILLIONS of us have exposure to property so we're bound to have a vested interest in believing that house prices will rise.

The British are unquestionably a property owning democracy, which sets us apart from many of our continental neighbours. Much of our previous government's economic policy was based on the simple premise that property prices will continue to rise, hence the consumer-fed debt crisis that we are now coming to terms with. Those who felt comfortable in the knowledge that their home was worth more than it was a year ago were also happy to take on additional debt in the form of credit card expenditure, additional borrowing against their property or simply a more affluent lifestyle.

 

The most widely held justification for house prices continuing to rise from current levels is the shortage of housing supply. However, I believe that there is plenty of evidence supporting an opposite view on property prices that is well worth considering.

 

The first point is that we are enduring a long period of abnormally low interest rates. Historically, the base rate has hovered marginally above inflation, but clearly the present picture is far removed from that.

 

This situation has contributed to a lack of forced sellers in the market, and hence prices have remained relatively stable. But at some future point what might be termed a return to "normalisation" is likely to occur. It's not possible to predict with any certainty when or indeed in what form such a change of circumstances might come, but it seems likely that such a shift will occur. If this is true, then we are likely to witness a glut of sellers in the market, which can only result in falling valuations.

 

In the mid to late 1990s, yields on rented property were about 9 per cent, while inflation was roughly 1.5 per cent. This represented a handsome real return for those renting out property, and simply explains why this form of investment became so popular. The gross yield now is a more modest 7 per cent which, after inflation at about 5 per cent, is a significantly less attractive proposition. Add in low rental income and maintenance costs and it becomes difficult to achieve a real return on your capital in this form.

 

So I would conclude that the issue with property is not to do with a shortage of supply, but rather a shortage of credit. Despite artificially low interest rates, it is still mighty challenging to borrow at a rate of, say, 5 per cent on an interest-only basis. We now exist in an era characterised by a return to sensible, prudent lending, in stark contrast to the previous decade of almost unlimited borrowing multiples at very low rates of interest. In other words, we are witnessing a return to good old fashioned affordability.

 

The average age of a first-time buyer in the UK has now risen to the late thirties and the average purchase price represents a multiple of 4.3 times annual average income. This remains simply unsustainable and needs to correct before the whole property system can once again begin to function. The only way this can occur is for average prices to fall significantly from current levels.

 

I am sure I will not win any friends with this argument, but it might be a valid counter to the widely pronounced insistence that house prices are set to soar. Let's be realistic for a change.

 

• Ken Taylor is managing director of Mackenzie Taylor Wealth Management www.mtwm.co.uk

Delighted to hear you are getting a positive response across so many markets! Well done!

Surprised nobody has suggested this: sell the flat, invest the proceeds in precious metals, and rent either your old place or another, larger place.

I expect your PMs will provide a lot more security than any other investment.

A february 2011 news release from Association of Residential Letting Agents (ARLA) suggests something that would not only green britain, but create some much needed economic activity:

ARLA: TOP TIPS FOR "GREENING" RENTED PROPERTIES

 

Landlords overseeing residential properties should consider measures to improve the energy efficiency of their properties, according to the Association of Residential Letting Agents (ARLA).

 

The Government's Green Deal will encourage landlords to take advantage of up-front financing to make their properties more energy efficient, where tenants request improvements be made.

 

For those landlords who don't comply however, the Government has stated that it may introduce regulations to force landlords to improve their properties by 2015.

 

The Government's aim is for all properties with an Energy Performance Certificate (EPC) rating of F or G to be improved beyond that grading, which may be a significant challenge for older properties.

 

So ARLA has come up with these simple tips to make your properties more efficient, thus saving money and further financial outlays in the future:

Cavity wall and floor insulation: This can often be a disruptive process, but effective insulation will represent a significant step towards improving the energy efficiency of your property.

Ensure you have effective loft insulation: Although many properties now have loft insulation installed, check the depth and quality. The recommended thickness is between 250-300mm for optimum energy efficiency.

Insulate your water fittings: ARLA recommends that lagging should be installed around water pipes and boilers to minimise heat loss. As many will have experienced this winter, water pipes are also prone to freezing, so insulation should help to prevent this.

Prevent draughts: Landlords should seek to block draughts in various parts of their properties, through draught proofing doors and windows, as well as reducing heat loss through floorboards.

Install a thermostat on your boiler: Thermostats ensure that when a room reaches its optimum temperature of around 19?C, the heating is automatically switched off, thus reducing heating bills.

Communicating with tenants: Effective communication between landlords and tenants can ensure that tenants are aware of the importance of energy efficiency, and take their own simple steps to reducing heating costs.

 

Ian Potter, Operations Manager of ARLA, commented: "Landlords can already take advantage of a tax allowance of up to £1,500 for these energy efficiency improvements through the Landlord's Energy Saving Allowance (LESA).

 

"It makes sense therefore for landlords to carry out these improvements straight away, as considerable cost savings can be made."

There is no incentive, however, as the tenant is the one who foots the bill for a poorly-insulated building. Until the property becomes unrentable by virtue of a "failing" EPC, I doubt landlords will make any efforts to "green" their housing stock.

I calculated the current energy costs of that pile I considered renting, plugging the EPC number the estate agent generated, oh, three years ago when it first went on the market. I input the EPC number into "EPCadviser" on t'internet and voila! Current costs? £7,500 pa. To heat it! Who can afford that?!

Pleased to hear you found it insightful.

A snip at 10k!

Thought this was worth reading:

CRASH 2: Banking crisis? Wait until the UK property bust really gets going…. from a blog called "The Slog":

Wait til property crash. . .

. . . .The two reasons the UK housing crash hasn’t been enormous to date are (1) the banks have a gun to their heads from government forcing them to be tolerant of those behind on their mortgage payments; and (2) zero-rate interest policy (Zirp) has meant that only a fraction of buyers have actually handed over their keys to the provider.

BBC Radio 4 "Today" segment on the demand for rental accommodation as people postpone buying.

Chief executive of the British Property Federation, Liz Peace, and Stuart Fraser, chairman of the Policy and Resources Committee in the City of London, debate how to tackle the shortage of affordable housing in Britain.

No segment mp3 of this piece, but can be heard at front end of complete show podcast:

Radio 4 Today

The banks must realise now, many of those mortgages were excessive, or should not have been granted at all

I agree. It seems very tough going for people looking to get mortgages now.

/http://www.thisismoney.co.uk/mortgages-and-homes/house-prices/article.html?in_article_id=536533&in_page_id=57#ixzz1OwnnpOqF

also on that website, news of how much mortgage availability has changed:

. . . City watchdog the Financial Services Authority (FSA) is making sweeping reforms to the way banks and building societies approve mortgages. Borrowers will face far more detailed checks on whether they can afford to repay their loan.

 

Although the rules are not official yet, most of the High Street's biggest lenders have already adopted a tougher approach, fearing the wrath of the FSA.

 

Trade body the Council of Mortgage Lenders estimates 3.2m of the six million people who took out a mortgage since 2005 would not be able to get a new deal because of these changes.

 

But Money Mail estimates, based on the latest figures, suggest this could be several hundred thousand more, equating to 30% of the UK's 11.4 million mortgage holders.

 

Many are being barred from taking some of the lowest interest rates in history.

shocking to think that more than half of the people who got mortgages since 2005 are not able to get a new deal.

If I could find a decent, big enough house to rent, I would be all over it like white on rice. I am renting at the mo, having STR, and am dying to get a place to call my own. I think it is the area we have just moved to (north of england), there is very little on offer. People are not interested in renting out their nice homes, as they need to sell them to get another place to live.

In the biggest flat I could find (a large 2 br) I am feeling very squeezed and seriously thinking of buying for the first time since I sold. Places we are looking at are big vacant houses, whose owners have moved "down south" and who haven't yet shifted their homes here.

It's no doubt too soon to buy, as I am anticipating further falls in the market, but I am just fed up renting.

I am very torn, STR pre-crash, been renting for ages now. Just moved to the north of England, very little on offer that is, let's say, as luxurious as I would like. The only option seems to be buying. Frankly, I am sick of renting. I'd like to be able to bang nails in the wall and hang some of my art collection.

However, I still think places up here are overpriced. The selection is good, however, as far as for sale properties go, versus rental properties. Saw two places today, both were vacant family homes at the high end of the market. Both families have moved "down south", leaving their five bedroom town houses vacant and on the market. They don't seem to be in any rush to lower the price to get a sale. Perhaps they are not in a rush, and are taking a wait-and-see approach.

While I am tempted to buy my dreamhome here, as it is discounted at the mo, I am equally tempted to buy something very affordable so that any further falls in the market have a proportionately smaller impact on my home.

We expect to be here for five years. I suppose I may come out even if I buy. Really, quality of life is rearing it's ugly head and saying "Buy you suckah! Buy!"

Thanks GF and CC.

Goldfinger, please tell me, when did the chart hit the max (725)? Was it the spring/summer of 08? thanks.

Thanks.