UK House prices: News & Views

[drbubb]

LIES, Damned lies, and Estate Agent reports...

Or is this a true account, and maybe a little dated (12 months - year-on-year?)

 

 

MidEast buyers spur luxury London property boom

 

Real estate prices in central London increased the most in nine months in August as wealthy investors sought a safe haven for their assets amid fears of a global recession, Knight Frank said.

 

Values of houses and apartments costing an average of £3.7m ($6m) rose 10.5 percent in the 12 months through August, the London-based consultancy said, bolstered in part by Arab buyers.

 

“Middle Eastern investors definitely have a sector of the market. Overseas buyers in general are boosting London property prices there is just no question about that,” Grainne Gilmore, head of UK residential research at Knight Frank, told Arabian Business.

 

“Prime London property is an investments class of its own now, it’s decoupled from the rest of the UK market and it more closely resembles other safe haven investments.”

 

The weakness of the pound coupled with fears of a global recession and low base rate have helped push up the value of London’s prime residential properties, the broker said in its August index report. Real estate prices in the capital have increased 36.3 percent since their recent post-credit crunch low in March 2009, said Knight Frank.

 

New buyers increased 11 percent in August compared to the same period the previous year while viewings and offers increased 23 percent and 13 percent, respectively, said the report.

 

“While purchasers buying with sterling are now paying prices in excess of 2008 peak prices, eurozone buyers are still able to achieve a 10 percent discount on 2008 prices and US dollar buyers an 18 percent discount,” said the report.

 

/more lies?:

http://www.arabianbusiness.com/mideast-buyers-spur-luxury-london-property-boom-418212.html

[stunlee]

I always like the line about London being a safe haven. I mean it is not as if there have been any problems in London recently and the British Government is in an excellent fiscal position and in no way will be lookking to raise taxes in the future.

[drbubb]

I always like the line about London being a safe haven. I mean it is not as if there have been any problems in London recently and the British Government is in an excellent fiscal position and in no way will be lookking to raise taxes in the future.

LOL

 

 

...meantime, C-C-Crash Cruise speed in B-aaack !

 

U.K. House Prices Fall Most in 10 Months on Slow Economy, Nationwide Says

 

By Scott Hamilton - Aug 31, 2011 11:00 PM PT

 

U.K. house prices fell the most in 10 months in August as a slowing economic recovery threatens to undermine demand, Nationwide Building Society said.

 

The average cost of a home dropped 0.6 percent to 165,914 pounds ($269,800) from July, the Swindon, England-based customer-owned lender said in an e-mailed report today. From a year earlier, values were down 0.4 percent.

 

While a shortage in the supply of homes for sale and record-low Bank of England interest rates have supported prices, the housing market is struggling to gain momentum as banks restrict lending and Britons’ spending power is eroded by inflation. The British Chambers of Commerce cut its economic growth forecast today as the U.S. recovery slows, Europe’s debt crisis escalates and Britain’s government implements the biggest fiscal squeeze since World War II.

 

“We continue to expect house prices to move sideways or drift modestly lower over the remainder of 2011, although we recognize that the downside risks have increased,” Nationwide Chief Economist Robert Gardner said in the report. “The major risk for the housing market is that weak economic growth could lead to a further deterioration in the labor market.”

 

U.K. consumer sentiment fell for a third month in August as Britons grew more pessimistic about the economy, a report from GfK NOP Ltd. yesterday showed. An index of sentiment slipped 1 point from July to minus 31, while a gauge of households’ expectations for the economy over the coming 12 months fell 4 points to minus 31, the lowest in six months, GfK said. Jobless claims increased the most in more than two years in July.

 

/more: http://www.bloomberg.com/news/2011-09-01/u-k-house-prices-decline-the-most-in-10-months-nationwide-says.html

 

 

enjoy !

 

" the housing market is struggling to gain momentum... Britons’ spending power is eroded by inflation."

 

LOL.

What happened to the BOOST from inflation that some were talking about ???

[John Doe]

I always like the line about London being a safe haven. I mean it is not as if there have been any problems in London recently and the British Government is in an excellent fiscal position and in no way will be lookking to raise taxes in the future.

 

There was a piece on TV last night saying about 60% of the "mansions" being bought in the UK were by foreign buyers (many of whom don't even visit them, let alone live in them).

 

The argument is that London is a safe haven compared to say Egypt, Lybia etc etc, so all relative.

 

No tax (except £23 a week council tax) and no capital gains IF the prices rise.

 

Then there was some LibDem talk of a mansion tax again to specifically hit these types of property buyers. Even Redwood (Tory) agreed (But then again, it was only a LibDem and Redwood saying it, so not very likely I'm afraid).

[frizzers]

House next door to me has just sold for 50% more than summer 2006 price.

[Jake]

House next door to me has just sold for 50% more than summer 2006 price.

But are you happy in it?

 

(sorry)

[John Doe]

LOL

 

 

...meantime, C-C-Crash Cruise speed in B-aaack !

 

U.K. House Prices Fall Most in 10 Months on Slow Economy, Nationwide Says

 

By Scott Hamilton - Aug 31, 2011 11:00 PM PT

 

U.K. house prices fell the most in 10 months in August as a slowing economic recovery threatens to undermine demand, Nationwide Building Society said.

 

The average cost of a home dropped 0.6 percent to 165,914 pounds ($269,800) from July, the Swindon, England-based customer-owned lender said in an e-mailed report today. From a year earlier, values were down 0.4 percent.

 

While a shortage in the supply of homes for sale and record-low Bank of England interest rates have supported prices, the housing market is struggling to gain momentum as banks restrict lending and Britons’ spending power is eroded by inflation. The British Chambers of Commerce cut its economic growth forecast today as the U.S. recovery slows, Europe’s debt crisis escalates and Britain’s government implements the biggest fiscal squeeze since World War II.

 

“We continue to expect house prices to move sideways or drift modestly lower over the remainder of 2011, although we recognize that the downside risks have increased,” Nationwide Chief Economist Robert Gardner said in the report. “The major risk for the housing market is that weak economic growth could lead to a further deterioration in the labor market.”

 

U.K. consumer sentiment fell for a third month in August as Britons grew more pessimistic about the economy, a report from GfK NOP Ltd. yesterday showed. An index of sentiment slipped 1 point from July to minus 31, while a gauge of households’ expectations for the economy over the coming 12 months fell 4 points to minus 31, the lowest in six months, GfK said. Jobless claims increased the most in more than two years in July.

 

/more: http://www.bloomberg.com/news/2011-09-01/u-k-house-prices-decline-the-most-in-10-months-nationwide-says.html

 

 

enjoy !

 

" the housing market is struggling to gain momentum... Britons’ spending power is eroded by inflation."

 

LOL.

What happened to the BOOST from inflation that some were talking about ???

 

Now now Dr B, as you know we are all expecting falls over the next 5 or 6 months, but last month was 0.3% up, so over 2 months 0.15% per month, so hardly crash cruise speed (yet), even by your own definitions

 

Just for balance, mortgage approvals rising again, even a whole whopping 3% more than July last year!

 

http://www.bbc.co.uk/news/business-14715129

 

Especially when it is suddenly cheaper to own than rent, and BTL landlords are coining it after ZIRP.

 

Yep, isn't that what some of us have been saying for some time now?

[G0ldfinger]

House next door to me has just sold for 50% more than summer 2006 price.

Do your new neighbours work for RBS? Because these bankrupt entities still pay bonus (from taxpayers money, I suppose).

 

Brave new world!

[John Doe]

House next door to me has just sold for 50% more than summer 2006 price.

 

And some here like to imply that I am an EA

[John Doe]

Now now Dr B, as you know we are all expecting falls over the next 5 or 6 months, but last month was 0.3% up, so over 2 months 0.15% per month, so hardly crash cruise speed (yet), even by your own definitions

 

Although it is looking at the NSA figures!

 

Aug-10 £166,507 -1.7%

Sep-10 £166,757 0.1%

Oct-10 £164,279 -1.5%

Nov-10 £163,133 -0.7%

Dec-10 £162,249 -0.5%

Jan-11 £161,211 -0.6%

Feb-11 £161,183 0.0%

Mar-11 £164,751 2.2%

Apr-11 £165,609 0.5%

May-11 £167,208 1.0%

Jun-11 £168,205 0.6%

Jul-11 £168,731 0.3%

Aug-11 £165,914 -1.7%

 

Ouch!

 

That must be why all the for sale are turning to sold up here, what with the big discount etc

[Jake]

House next door to me has just sold for 50% more than summer 2006 price.

How low will the house price / gold ratio go?

 

The cost in gold of the average house over the past 40 years is 275 ounces. We're already below that. But that doesn't mean we can't go any lower. At the peak of the market in 2005, the average UK house cost an unprecedented 700 ounces. In London it was almost 1,100 ounces. At the bottom of the market in 1980, when gold spiked to $850 an ounce, the average UK home cost just 50 ounces. It also spent several years around the 50 ounce mark during the 1930s.

 

Fischer is convinced we're going back to 50 ounces for the average UK home. I have a slightly more sober, long-term target of 100 ounces, although I wouldn't rule out 50. Once the ratio hits 100, I'll look at rolling my portfolio out of gold and back into housing.

 

I'm confident we'll get there within the next three years. Gold need only rise by a third from here (from £825 to £1,100 an ounce), and house prices fall by a third (£168,000 to £110,000), to give you a 100:1 ratio. Both look very possible given the underlying fundamentals.

 

Or, as is more likely in my view, gold could double from here to £1,650 per ounce, while nominal house prices stay the same. I'm sure those up top would rather see this latter scenario, with nominal house prices remaining unchanged. People will believe that the so-called value of their houses is unaffected, so they won't be too upset. All the while the value of their money is destroyed. But we have so few savers, who cares about that? As one of my correspondents puts it, "nominal house prices remain unchanged, so the muppets are happy".

 

 

Now at midway point between your target when you penned this and todays 150oz tag, Dominic. What do you think now?

London seems to be in a world of its own, for the time being perhaps.

[drbubb]

House next door to me has just sold for 50% more than summer 2006 price.

Obviously, People will pay more to live next to a celebrity.

Why else would they do that? Or was that the property sold in 2006 with a "sitting tenant"?

 

[drbubb]

Now now Dr B, as you know we are all expecting falls over the next 5 or 6 months, but last month was 0.3% up, so over 2 months 0.15% per month, so hardly crash cruise speed (yet), even by your own definitions

A little bird told... er no, it was Barratt !

 

Nationwide reported -0.6%, but they must have faulty calculators...

 

Mo.: Rt'mov : London : Rest of UK %chg/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

J. : : 240,394 : 438,622 : 128,965 +0.61% / 168,205 = n/a = 163,430 163,642 : £165,924 :+ 0.70% :144.9% :

Jl : : 236,597 : 432,641 : 129,766 +0.62% / 168,731 = n/a = 163,981 164,714 : £166,723 :+ 0.48% :141.9% :

A : : 231,543 : 418,008 : 12X,??? +0.??% / 165,914 = n/a =

=====================================

mom: - 2.14% : - 3.38% : Est.DI : 138.9% / -1.67% = n/a = :+0.34% :+0.65% : + 0.48%

 

The actual figures was -1.0% more than that, and not far off the fall announced by Rightmove.

 

-1.67% / That's a lot for a major UK index

 

We are speeding into a Crash Cruise Speed period, it would seem.

[BoldAsBrass]

LOL

 

 

...meantime, C-C-Crash Cruise speed in B-aaack !

 

The average cost of a home dropped 0.6 percent to 165,914 pounds ($269,800) from July, the Swindon, England-based customer-owned lender said in an e-mailed report today. From a year earlier, values were down 0.4 percent.

 

 

Boy, I'd love to see 'crash cruise speed' but 0.4% in a year hardly fits the bill does it?

 

Meanwhile London property is still going up - unbelievably - but there it is - and, in my area, suddenly a rash of Sold signs have appeared. We seem to be back to a similar market to a couple of years ago where there is now very little on the market. Anything half decent is now selling quite quickly and, at prices I would say are at least at 2007 levels.

 

Given that most of the wealth of the country seems to be in London and the South East - and some of the South West - I'd be curious to know how many people live (roughly) in London, Essex, Herts, Kent, Bucks, Sussex, Surrey, Hampshire, Dorset, Somerset, Wiltshire, Gloucestershire, parts of Suffolk and Norfolk ... is it the case, I wonder, that half the population live in areas where there have been no significant drops overall.

[tallim]

Especially when it is suddenly cheaper to own than rent, and BTL landlords are coining it after ZIRP.

...

Yep, isn't that what some of us have been saying for some time now?

I'm still wading through that report you linked to, but I know you'll have a go at my challenge I originally made to Van a few pages ago. Rightmove links if possible so we've got the PropertyBee history.

 

*********************************

 

I can't find a family home in an area you'd want to live in long term that's cheaper to buy than rent. They must be appearing soon, but I can't find them.

 

My assumptions, please feel free to alter them if you disagree:

 

Funding mix cost 4%

90% of asking on purchase

95% of asking on rental

1% of purchase price per year in ownership responsibilities

 

The best I ever find on the open market is that the costs are roughly equal and the places at auction are never family homes in reasonable areas. So for zero cash benefit you're becoming illiquid and taking on risk with few signs of an imminent upside.

 

If you wish to make it mean more to me then somewhere in one of the following places: Lymm, Altrincham, Weybridge, Reading, Bath, Wetherby, Yarm or S10/S11 in Sheffield. Otherwise I'll trust your judgement on areas you know well.

[Meralti]

Why spoil a half decent post with this last line?

 

Nowhere have I ever said property only ever goes up, indeed, quite the reverse. All my posts say falls are ahead.

 

I really don't know why you persist in these attempts at baiting, when we are actually agreeing on quite a few things.

 

The simple fact is what really sets us apart is that the US, Eire and Spain all had huge oversupply. If you keep ignore this (amongst other things), then you are not looking at the whole picture.

 

Did Canada and Australia have a big oversupply? If not, then my arguments are actually given more weight. Also they have s**t loads of commodities, or do you think that has no effect as well?

 

 

 

That's right, but the current situation could go on for many, many years, slowly reducing the amount of outstanding debt, or do you not accept that is a possibility?

 

Remember the old saying "Markets can stay irrational longer than you can stay solvent"?

 

Here something to remove from your list of bull-list.

 

Mortgage fraud no longer officially sanctioned

 

Mortgage lenders have set up a formal arrangement with the tax authorities to cross-check borrowers' income information on their mortgage applications.

 

The move is part of the continuing attempts to combat mortgage fraud, which amounted to an estimated £1bn last year.

 

Lenders will be able to send suspicious application forms to a special unit at HMRC which will check an applicant's purported income against their tax details and those supplied by their employer.

 

In turn, the tax authorities will use the lenders' information to check if an applicant's tax returns were accurate.

 

Paul Smee, director general of the Council of Mortgage Lenders (CML), said: "Lenders have found during the pilot that the scheme has been very useful in helping them to lend responsibly.

 

"It has helped them to avoid lending in some cases where there is a risk of fraud, at the same time as giving them confidence about the borrower's credentials in some cases that they might otherwise have felt compelled to refuse."

 

 

Btw. Yes I think that the commodity boom has helped Australia and Canada enormously. Not so sure how long it will continue though, it looks like we heading for a global recession next year.

The Canadian ecomomy shrank in the 2nd quarter.

 

 

Gross domestic product fell at an annualized rate of 0.4pc from the first quarter.

 

This was worse than a 0.1pc increase expected by economists and a 3.6pc gain in the first three months of the year

[drbubb]

Boy, I'd love to see 'crash cruise speed' but 0.4% in a year hardly fits the bill does it?

 

Meanwhile London property is still going up - unbelievably - but there it is - and, in my area, suddenly a rash of Sold signs have appeared. We seem to be back to a similar market to a couple of years ago where there is now very little on the market. Anything half decent is now selling quite quickly and, at prices I would say are at least at 2007 levels.

 

Given that most of the wealth of the country seems to be in London and the South East - and some of the South West - I'd be curious to know how many people live (roughly) in London, Essex, Herts, Kent, Bucks, Sussex, Surrey, Hampshire, Dorset, Somerset, Wiltshire, Gloucestershire, parts of Suffolk and Norfolk ... is it the case, I wonder, that half the population live in areas where there have been no significant drops overall.

A 0.5% per Month prices drop (in the H&N Index) qualifies for Crash Cruise Speed, and I would like to see that over at least 3-6 months.

 

-1.67% on Nationwide gives a nice running Jump into it.

 

(You can accuse me of "making up the rules as I go along", if you like. But that's one of the nice perks of being the inventor of the concept.)

 

London was down -3% in Rightmove's data. so it depends on who you want to believe. Did Nationwide give actual figures?

[John Doe]

I'm still wading through that report you linked to, but I know you'll have a go at my challenge I originally made to Van a few pages ago. Rightmove links if possible so we've got the PropertyBee history.

 

No I won't because I agree with you

 

As I have said before, nice family homes in nice areas are far cheaper to rent than buy (and I listed several reasons why this tends to be the case).

 

However, nice houses in nice areas adds up to only a small percentage of all homes in the UK and it's all the rest that are cheaper to buy than rent.

[John Doe]

So, it seems QE3 will be all about bringing long term interest rates down. That has got to end up being inflationary, has it not?

 

So, the question is, when do I go for the 10 year fix rate.

 

Now, or wait a few months for the once in a lifetime rate (which I thought we were already close to)?

 

Decisions, decisions.

[drbubb]

So, it seems QE3 will be all about bringing long term interest rates down.

That has got to end up being inflationary, has it not?

If you are right, it might hurt UK property prices, as have recent increases in inflation

[marceau]

So, it seems QE3 will be all about bringing long term interest rates down. That has got to end up being inflationary, has it not?

 

So, the question is, when do I go for the 10 year fix rate.

 

Now, or wait a few months for the once in a lifetime rate (which I thought we were already close to)?

 

Decisions, decisions.

 

 

'It's the deal of a lifetime!'

 

The knife catchers mantra.....

[signofthetimes]

'It's the deal of a lifetime!'

 

The knife catchers mantra.....

 

Give people enough rope and they'll usually hang themselves

[John Doe]

'It's the deal of a lifetime!'

 

The knife catchers mantra.....

 

Hehe yes, they could reduce them even further I guess, especially with all the slowdowns being reported around the world and the EU with their heads up their butts still, but, at some point, they will be going up again.

 

If you are right, it might hurt UK property prices, as have recent increases in inflation

 

While you are correct, the (real/nominal) price doesn't really concern those in my (admittedly fortunate) position, as we are very happy in our home, and could essentially be mortgage free within a year or two if we wanted. If we sold, we would still have to rent somewhere, the price of which would undoubtedly rise during those 10 years, whilst our savings would be eroded by inflation.

 

However, the chance of nearly free money for 10 years (i.e. a fix at say <4%) has it's attractions, especially if one expects inflation to rear up sometime during those years, does it not?

 

I should point out that, before I get accused of being an EA again, this is just a possibility for us, in our position, and I am by no means suggesting it would be a good idea for anyone else.

 

I was just trying to find a good reason why it wouldn’t make sense for us?

[John Doe]

Talking of thigs to do with free money for the next ten years....

 

I'm sure everyone here thinks Germany is in a better position than the UK, yes?

 

So, how about shorting the FTSE and going long the Dax?

 

(Over the last decade or two, the Dax isn't often at a similar price to the FTSE, as it is now)

 

http://uk.finance.yahoo.com/q/bc?s=%5EGDAXI&t=5y&l=off&z=l&q=l&c=%5EFTSE

 

Oh, and the 100% motgage is back , with a twist.

 

http://www.thisismoney.co.uk/money/mortgageshome/article-2033878/Aldermore-launches-100-deposit-guarantor-mortgage.html

[frizzers]

Average UK house price c. 166,000

1 oz gold = £1,178

Average UK house now 140 ounces.

LOL.