drbubb Posted July 28, 2012 Report Share Posted July 28, 2012 Wealthy buyers are helping to prop up house prices in Wales where a two-tier housing market has emerged, according to analysts. Prices are up 2.4% on last year, according to LSL Acad Wales' House Price Index. Nigel Favas, managing director of Reeds Rains estate agents, part of LSL, said the rise was predominantly down to wealthier buyers and equity rich retirees. He said: “Given how difficult it is to get a mortgage at the moment, an annual rise in prices of 2.4% is a real victory for the housing market. Lower house prices in Wales have made it comparatively easier for first time buyers to get on the housing ladder than in England. "Predominantly, though, it is wealthier buyers and equity-rich retirees who are sustaining sales-levels, which has helped nudge up prices. It’s created a two tier market where prices tend to vary regionally depending on the number of wealthier buyers. Prices have held up well, and even seen significant increases, in areas with plenty of wealthier buyers, but have fallen in areas with more first time buyers. The main stumbling block to a fluid housing market is a chronic lack of mortgage finance. It is marooning first time buyers in the rental market, which keeps sales levels suppressed and stops house prices growing." /more: http://www.24dash.com/news/housing/2012-07-25-Wealthy-buyers-prop-up-Welsh-house-prices-as-two-tier-market-emerges Link to comment Share on other sites More sharing options...
drbubb Posted July 28, 2012 Report Share Posted July 28, 2012 In case you had forgotten the long list of Blair/Brown's "achievements": Are things really worse than 2009? Or is Britain merely facing reality? Link to comment Share on other sites More sharing options...
drbubb Posted July 31, 2012 Report Share Posted July 31, 2012 Does this surprise anyone here? It shouldn't... Homebuyers in Greater Manchester willing to pay a significant premium to be close to rail links £12,000 premium for a property 500m from the nearest station, compared with a similar property 1,500m away 65% of properties in Greater Manchester are within 1.5km of a Metrolink or railway station /see: http://www.nationwide.co.uk/NR/rdonlyres/B464EDCB-7155-4579-9DD8-B2F19E38D8D6/0/GreaterManchesterTransportSpecial2012.pdf (( Nationwide's July Index price comes out tomorrow )) Link to comment Share on other sites More sharing options...
borassic Posted July 31, 2012 Report Share Posted July 31, 2012 Advice sought guys and gals: I am in the process of selling a house as my role as executor. I will be a beneficiary and receive about £100k. I am married and live in a rented flat with my wife who is a local authority worker - safe job earns about £40k pa. I am self-employed and earn about £30 pa. Our rent is about £500 pcm. We are both mid 40s. We some savings not a lot in ISAs. Have found house for sale in Cherry Tree Walk, Chesham on for £250,000 needs totally modernising ie redeck thruout, new kitchen, new bathroom and possibly a new boiler. But is habitable. http://www.rightmove.co.uk/property-for-sale/property-38585210.html Am I mad to take out a circa 125-140 motgage for 15 years? Should I wait? We are in very secure cheap accommo although cramped. This house has loads of space compared to the comedy Victorian cottages with no parking that sell for same money? Link to comment Share on other sites More sharing options...
Walktothewater Posted July 31, 2012 Report Share Posted July 31, 2012 Advice sought guys and gals: I am in the process of selling a house as my role as executor. I will be a beneficiary and receive about £100k. I am married and live in a rented flat with my wife who is a local authority worker - safe job earns about £40k pa. I am self-employed and earn about £30 pa. Our rent is about £500 pcm. We are both mid 40s. We some savings not a lot in ISAs. Have found house for sale in Cherry Tree Walk, Chesham on for £250,000 needs totally modernising ie redeck thruout, new kitchen, new bathroom and possibly a new boiler. But is habitable. http://www.rightmove.co.uk/property-for-sale/property-38585210.html Am I mad to take out a circa 125-140 motgage for 15 years? Should I wait? We are in very secure cheap accommo although cramped. This house has loads of space compared to the comedy Victorian cottages with no parking that sell for same money? Sorry, completely unrelated to your question. I just have to say how shocking UK house prices look in general. And the quality.... [i live part-time in UK, main base east Germany, for £250k you could buy a block of 6,8 or 10 flats, german size/quality, in a good area of Leipzig that puts a reliable £20-25k after expenses in your pocket from day one] Link to comment Share on other sites More sharing options...
drbubb Posted July 31, 2012 Report Share Posted July 31, 2012 Advice sought guys and gals: ... Am I mad to take out a circa 125-140 motgage for 15 years? Should I wait? We are in very secure cheap accommo although cramped. This house has loads of space compared to the comedy Victorian cottages with no parking that sell for same money? It sounds like you can afford it (so is does not sound reckless) But I reckon you will see cheaper prices, if you can wait 1-2 years, maybe 10-20% lower. But mortgage money may become LESS AVAILABLE in the future. If the UK is headed the way of Greece and Spain, prices could drop more than 20% I think buying Gold here, may be a far smarter move. Or maybe 75% Gold, and 25% Gold shares. You could double your money on Gold shares over the next 12-18 months Link to comment Share on other sites More sharing options...
frizzers Posted July 31, 2012 Report Share Posted July 31, 2012 Agree with Bubb's analysis on gold. 2.99% HSBC 5-year mortgage is very tempting however. However, you only have one life. If you would be happy in this larger home, then buy and enjoy it. Debt brings forward pleasure , gold postpones it, if you see what I mean. Buying a house is bloody expensive though ... I expect some incentives in the form o lower tax to kickstart the housing market before long ... Link to comment Share on other sites More sharing options...
borassic Posted July 31, 2012 Report Share Posted July 31, 2012 Thanks for the feedback everyone. The trouble with me is if I buy gold and gold shares I will worry all the time. With a house it's there, it's real, and I will be busy making it a comfortable home - very satisfying that. I can't stick it in a savings account as inflation will destroy it. So I play into the banker's hands: speculate in shares or go into debt. You have to hand it to 'em! They (bankers - they are in charge) will do everything it takes to keep the game going - a central banker used those very words - and the friend of the debtor is inflation. Link to comment Share on other sites More sharing options...
JIMBOWEN27 Posted July 31, 2012 Report Share Posted July 31, 2012 Agree with Bubb's analysis on gold. 2.99% HSBC 5-year mortgage is very tempting however. However, you only have one life. If you would be happy in this larger home, then buy and enjoy it. Debt brings forward pleasure , gold postpones it, if you see what I mean. Buying a house is bloody expensive though ... I expect some incentives in the form o lower tax to kickstart the housing market before long ... Frizzers/Dr Bubb I too think gold shares are cracking value and should double over the next 18-24 months. My question is, do you prefer majors, midcap producers, advanced development projects or explorers? Frizzers - do you still like Aureus? It looks a great company to be. I have a fair chunk of cash (sterling) and don't want to hold such a large amount. I do have a reasonable amount of physical and gold stocks already Link to comment Share on other sites More sharing options...
John Doe Posted July 31, 2012 Report Share Posted July 31, 2012 Thanks for the feedback everyone. The trouble with me is if I buy gold and gold shares I will worry all the time. With a house it's there, it's real, and I will be busy making it a comfortable home - very satisfying that. I can't stick it in a savings account as inflation will destroy it. So I play into the banker's hands: speculate in shares or go into debt. You have to hand it to 'em! They (bankers - they are in charge) will do everything it takes to keep the game going - a central banker used those very words - and the friend of the debtor is inflation. TBF, you could probably get a better deal if you wait a few months or so, for the market to hit the dark winter doldrums, and the new financing (cheap mortgage) deals from the BoE's latest plan to kick in properly. However, considering this property seems to be limited by the stamp duty 250k mark (i.e any property worth up to 275K ish is being held back to this) you might well be getting a ~10% reduction for free on top of any current valuations (discounts). So, if it's the right place for you, and the right time for you, and you think it will make you happy, then why not just go for it borassic. There's a lot more to life than a few thousand (or even tens of thousand) ponds in the grand scheme of things over a lifetime. Link to comment Share on other sites More sharing options...
borassic Posted July 31, 2012 Report Share Posted July 31, 2012 Thanks JD - wise words. Link to comment Share on other sites More sharing options...
John Doe Posted July 31, 2012 Report Share Posted July 31, 2012 Sorry, completely unrelated to your question. I just have to say how shocking UK house prices look in general. And the quality.... [i live part-time in UK, main base east Germany, for £250k you could buy a block of 6,8 or 10 flats, german size/quality, in a good area of Leipzig that puts a reliable £20-25k after expenses in your pocket from day one] Yep, many parts of the UK you could get way more for your money too (even get an old castle up in the N.E. of Scotland). Yet I hear from friends in Hamburg that they'd get a decent 2 bed apartment for that. Then again, in real good parts of London you wouldn't even get a one bed studio. Indeed, there was a bit on R4 this morning stating something along the lines of.... as you drive from London to Manchester, the price of equivalent housing drops at ~ £3K per mile! http://www.bbc.co.uk/iplayer/episode/b01l7r0j/Today_31_07_2012/ Guess it really is all about location location location Thanks JD - wise words. Thanks borassic, but more likely just a lucky coincidence of clarity in an otherwise jumbled narrative. Good luck in whatever decision you end up making Link to comment Share on other sites More sharing options...
drbubb Posted July 31, 2012 Report Share Posted July 31, 2012 Indeed, there was a bit on R4 this morning stating something along the lines of.... as you drive from London to Manchester, the price of equivalent housing drops at ~ £3K per mile! http://www.bbc.co.uk/iplayer/episode/b01l7r0j/Today_31_07_2012/ Guess it really is all about location location location Unless you are near convenient public transport TO JOBS, which then creates all sorts of arbitrage opportunities Homebuyers in Greater Manchester willing to pay a significant premium to be close to rail links £12,000 premium for a property 500m from the nearest station, compared with a similar property 1,500m away 65% of properties in Greater Manchester are within 1.5km of a Metrolink or railway station /see: http://www.nationwide.co.uk/NR/rdonlyres/B464EDCB-7155-4579-9DD8-B2F19E38D8D6/0/GreaterManchesterTransportSpecial2012.pdf Link to comment Share on other sites More sharing options...
drbubb Posted August 1, 2012 Report Share Posted August 1, 2012 WANTED: Journalists that understand statistics July 30th, 2012 Author: Dominic Dean aka The Misplaced Economist Read more: http://www.economicvoice.com/wanted-journalists-that-understand-statistics/50031460#ixzz22KbVPVUs EXCERPT ... The lead story in the paper I picked up was ‘House prices on the slide’. This surprised me, as I think house prices have broadly been going sideways for a few years now, so I read the article with interest. Once again I was left despairing at the state of British journalism. The article referred to the Hometrack house price index, which to start with is not an especially great series. Hometrack, like Nationwide and Halifax, measure house prices at the ‘mortgage approval’ stage, rather than when contracts or exchanged or transactions completed. Their data cover England and Wales, and are based on a survey of just 1,500 estate agents, who are of course one of the most honest and reliable sources of information around. (In contrast, Nationwide and Halifax actually track the loans they approve.) The Hometrack measure has also only been going since 2001 – among the pantheon of house price indices, it is not so much the little brother as the distant cousin. In terms of data sourcing, backrun and sample size, there are reasons to be cautious about taking it literally. What is more, the article actually referred to prices falling by just 0.1% in July 2012. Yes, that’s right – prices fell by a whopping one-thousandth of their value on the month. This was the first fall for seven months. Read more: http://www.economicvoice.com/wanted-journalists-that-understand-statistics/50031460#ixzz22Ka5sWxV LOL. Right. And if they'd been up by 0.1%, the headline might have been about HOME PRICES RISING. It shows the British obsession with house prices, though few who right about them, actually have anything sensible to say. When I examine THIS CHART A post-Olympics rollover looks very likely to me Link to comment Share on other sites More sharing options...
drbubb Posted August 1, 2012 Report Share Posted August 1, 2012 (here we go!) UK Nationwide:House Prices Fall For Fourth Time In Five Months -- House Prices Down 0.7% m/m; Down 2.6% y/y LONDON (MNI) - House prices fell for the fourth time in five months in July, with the annual deflation rate the largest since August 2009, according to the latest House Price Index report from Nationwide. House prices declined by 0.7% in July, taking the annual pace of house price growth down to -2.6%. The data continue the recent pattern in house price surveys of sometimes volatile monthly movements and mild deflation on a yearly basis. The Nationwide survey follows the strikingly weak June mortgage approvals numbers from the Bank of England, which showed approvals - a good leading indicator of the future health of the house market - slumping to their lowest level since December 2010. In the Nationwide series the average house price in July stood at stg164,389, down from the stg165,738 level hit in June. In its report Nationwide said that the weaker price trend observed in recent quarters is unsurprising, given the disappointing performance of the wider economy. Commenting on the data, Robert Gardner, Nationwide's Chief Economist, said that it could even be argued that house prices have shown resilience in the face of a flagging economy. "While prices are currently 13% below their 2007 peak, this is less than the declines seen in a number of other economies that have experienced similar or more robust economic recoveries," he said /more: https://mninews.deutsche-boerse.com/index.php/uk-nationwidehouse-prices-fall-fourth-time-five-months?q=content/uk-nationwidehouse-prices-fall-fourth-time-five-months THE REPORT: http://www.nationwide.co.uk/hpi/historical/July_2012.pdf "July stood at stg164,389, down from the stg165,738 level hit in June" Using my calculator, that's : - 0.81%, not -0.7%, as was reported REACTION: "Forexpros - The U.K.’s Nationwide house price index fell more-than-expected last month, data showed on Wednesday. In a report, , Nationwide Building Society said that said its index of U.K. house prices fell to -0.7%, from -0.6% in the preceding month. Analysts had expected the Nationwide HPI to fall -0.1% last month Link to comment Share on other sites More sharing options...
drbubb Posted August 1, 2012 Report Share Posted August 1, 2012 THE REPORT: http://www.nationwide.co.uk/hpi/historical/July_2012.pdf EXCERPT “The weaker price trend observed in recent quarters is unsurprising, given the disappointing performance of the wider economy. Data released last week revealed that the UK recession intensified in the three months to July, with the economy contracting by 0.7% quarter on quarter. This disappointing outturn can be only partly explained by unusually wet weather and the impact of an extra bank holiday during the quarter. Indeed, the UK economy has contracted by 1.4% over the past nine months, and is now 4.5 percentage points smaller than it was in Q1 2008. “Against this difficult economic backdrop, it could be argued that UK house prices have shown resilience. While prices are currently 13% below their 2007 peak, this is less than the declines seen in a number of other economies that have experienced similar or more robust economic recoveries (see chart).” Link to comment Share on other sites More sharing options...
John Doe Posted August 1, 2012 Report Share Posted August 1, 2012 Or as the Telegraph put it... Nationwide: House prices fall at fastest pace in three years http://uk.finance.yahoo.com/news/nationwide-house-prices-fall-fastest-071540877.html EXCERPT “Against this difficult economic backdrop, it could be argued that UK house prices have shown resilience. While prices are currently 13% below their 2007 peak, this is less than the declines seen in a number of other economies that have experienced similar or more robust economic recoveries (see chart).”[/i] 13% below peak NOMINAL. REAL is a different story. Link to comment Share on other sites More sharing options...
drbubb Posted August 1, 2012 Report Share Posted August 1, 2012 13% below peak NOMINAL. REAL is a different story. "Real" ?? What's that? Deflated by what, the CPI? Makes no sense whatsoever. If you deflate by Net Incomes, that makes some sense Link to comment Share on other sites More sharing options...
John Doe Posted August 1, 2012 Report Share Posted August 1, 2012 "Real" ?? What's that? Deflated by what, the CPI? Makes no sense whatsoever. If you deflate by Net Incomes, that makes some sense No the "REAL" REAL price, based on the REAL inflation rate, much more like 7-8%P.A. than the fiddled CPI. In those REAL terms they're probably down nearer 40-50% from peak. Link to comment Share on other sites More sharing options...
drbubb Posted August 1, 2012 Report Share Posted August 1, 2012 No the "REAL" REAL price, based on the REAL inflation rate, much more like 7-8%P.A. than the fiddled CPI. In those REAL terms they're probably down nearer 40-50% from peak. A completely useless measure. Why use that? (You are thinking like Bozo-the-clown, over on HPC - in other words, not really thinking.) The BEST thing to use is: an index of Net Income per capita, since that is from whence people pay their mortgages, that's what matters. And growth in that measure has been poor, less than CPI. If the prices of beans ( or gasoline, or food ) goes up fast, that doesn't help people pay a higher mortgage. In fact, slow growth in incomes, plus rapid growth in the price of other essentials, can leave LESS money in people's hands to pay mortgages. THAT is exactly what we have seen. Link to comment Share on other sites More sharing options...
John Doe Posted August 1, 2012 Report Share Posted August 1, 2012 A completely useless measure. Why use that? (You are thinking like Bozo-the-clown, over on HPC - in other words, not really thinking.) The BEST thing to use is: an index of Net Income per capita, since that is from whence people pay their mortgages, that's what matters. And growth in that measure has been poor, less than CPI. If the prices of beans ( or gasoline, or food ) goes up fast, that doesn't help people pay a higher mortgage. In fact, slow growth in incomes, plus rapid growth in the price of other essentials, can leave LESS money in people's hands to pay mortgages. THAT is exactly what we have seen. Er now who's being like bozo. ** So if someone sold at peak in 2007, then put that money in an RPI +0.5% bond, then they wouldn’t be looking at a great discount today? Of course they would. So hardly a "useless" measure. Now where's that house price vs gold graph gone Edit** so Dr B can understand Link to comment Share on other sites More sharing options...
drbubb Posted August 1, 2012 Report Share Posted August 1, 2012 Er now who's being like bozo. It's practically the same thing. Now where's that house price vs gold graph gone It is NOT the same thing at all ! For instance: Taxes are rising, and that crimps Net Income You may recall this old chart: The RED LINE might make some sense if Net Income was rising at a steady rate. It isn't, and that matters. Link to comment Share on other sites More sharing options...
John Doe Posted August 1, 2012 Report Share Posted August 1, 2012 It is NOT the same thing at all ! For instance: Taxes are rising, and that crimps Net Income You recall this old chart: xx It might make some sense if Net Income was rising in a straight line. It isn't, and that matters. Just edited the previous post as you were posting. Please see previous. The red line's been done to death with the general conclusion that it's a very poor measure and actually leads to an infinite rise if followed to it's logical conclusion. I think we can discard it As for disposable income going on housing, you’re forgetting rates are super low and falling. For those actually buying houses (40% of whom are actually cash purchasers nowadays), those that can get a mortgage are getting the lowest rates ever (and staill falling as we speak), meaning as a proportion of their take home pay, the percentage going on the mortgage is actually less (and getting lower) now than the vast majority of the time shown on the graph. Link to comment Share on other sites More sharing options...
geisaver Posted August 1, 2012 Report Share Posted August 1, 2012 I can't stick it in a savings account as inflation will destroy it. That depends what you are going to spend the money on. If it's a house only house price inflation can harm it. Any other inflation is your friend because it means other people have less money to save your house fund. Link to comment Share on other sites More sharing options...
drbubb Posted August 1, 2012 Report Share Posted August 1, 2012 Here's US Income - note the recent slowdown Here are two European countries - also slowing Anyone have the figures for the UK? I used to have them, but lost them when my computer crashed a few months ago Maybe someone can extract the figures from here: http://img.docstoccdn.com/thumb/orig/41706980.png == == "You’re forgetting rates are super low and falling..." Yeah, rates are falling. But Trees don't grow to the sky, and neither will bond yields go negative Despite this downwards trend, UK property prices are now easing. What if rates start to rise - which is inevitable. When that trend starts, it will be time to: Look out Below ! Link to comment Share on other sites More sharing options...
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