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G0ldfinger

UK House prices: News & Views

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Average UK house price c. 166,000

1 oz gold = £1,178

Average UK house now 140 ounces.

LOL.

 

 

Trouble is which index do you use? Haliwide is £166,000, land reg is £200,000, rightmove asking average is £230,000.

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Trouble is which index do you use? Haliwide is £166,000, land reg is £200,000, rightmove asking average is £230,000.

You've got the most history on Hali-wide.

So why not use that ?

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You've got the most history on Hali-wide.

So why not use that ?

 

Because they only account for a small part of the market and do not include cash purchases etc (which there have been a larger percentage of over the last few years)?

 

Land reg would be the most accurate, albeit with a 3 month(ish) lag (though even they are not perfect as they don't include <20k or >1m properties).

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re: House price : Gold

d'oh. It doesn't matter which index you use, so long as you use the same one for historical analysis. Surely that just be obvious.

 

Clearly, the market has lost it's 1st-half momentum and is now in for a few soft months - behaviour entirely consistent with the strong-H1, weak-H2 pattern that I've predicted.

Price will begin to pick up again at the start of next year.

 

As we see the current turmoil in the stock market the only thing that will be guaranteed is that interest rates will stay low and many small-time investors will continue to put their money into property instead of shares.

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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.

 

I agree. I just found a gorgeous 5 bed end-terraced victorian to rent for £1000/month. I couldn't buy it for a mortgage payment of nearly twice that. . . not yet, anyway. But hopefully, it will drop in price in the coming denouement. . .

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There's nothing bullish in these figures.

 

All three major indices were DOWN HARD, over -1.6% drops in August - that's not bullish.

The extent of the fall was disguised to some degree by seasonal adjustments.

 

I reckon we have started another period of "Crash Cruise Speed"

 

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

2011

J. : : 223,122 : 413,259 : 127,148 - 0.25% / 161,211 = n/a = 164,145 161,470 : £161,341 :- 0.33% :138.3% :

F. : : 230,030 : 430,680 : 125,624 - 1.20% / 161,183 = n/a = 162,697 161,680 : £161,432 :+ 0.06% :142.5% :

M : : 231,790 : 424,307 : 127,160 +1.22% / 164,751 = n/a = 162,712 162,151 : £163,451 :+ 1.25% :141.8% :

A : : 235,822 : 431,013 : 127,721 +0.44% / 165,609 = n/a = 160,393 162,303 : £163,956 :+ 0.31% :143.8% :

M : : 238,874 : 430,936 : 128,189 +0.37% / 167,208 = n/a = 161,039 162,344 : £164,776 :+ 0.50% :145.0% : Hi Delus.

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 = 161,743 162,076 : £163,995 : - 1.64% :141.2% :=====================================

mom: - 2.14% : - 3.38% : Est.DI : 141.2% / -1.67% = n/a = :- 1.36% :- 1.60% : - 1.64%

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But hopefully, it will drop in price in the coming denouement. . .

 

but 'van' says "Price will begin to pick up again at the start of next year".

 

I love that phrase 'pick up', it's so VI :D

 

mm070911-2.gif

 

Despite the falls the UK still offers one of the lousiest quality of life/price ratios there is. I look from afar & shake my head in disbelief, but that is a subjective view & thus irrelevant here.

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Despite the falls the UK still offers one of the lousiest quality of life/price ratios there is. I look from afar & shake my head in disbelief, but that is a subjective view & thus irrelevant here.

 

Not at all, still looking for a job in my sector, but in sunnier climes B)

 

but 'van' says "Price will begin to pick up again at the start of next year".

 

Not sure about pick up, but I think they will level out after about 5 or 6 months of falls (nominal).

 

Between 5 and 10% down before the nominal low is in was my guess from this time last year, and I'm still sticking to it (currently about 2% down on the most bearish reading).

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Not sure about pick up, but I think they will level out after about 5 or 6 months of falls (nominal).

 

Between 5 and 10% down before the nominal low is in was my guess from this time last year, and I'm still sticking to it (currently about 2% down on the most bearish reading).

That's possible - the "muddle through" scenario may work...

 

UNLESS:

+ There is a big shrinkage of jobs in the City

+ Interest rates rise, as debt problems spread to the UK

 

Meantime, Outside London Prices have joined the other major indices in Falling

 

UknonLondonR.jpg

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That's possible - the "muddle through" scenario may work...

 

UNLESS:

+ There is a big shrinkage of jobs in the City

+ Interest rates rise, as debt problems spread to the UK

 

Maybe. The UK government's continuing support for housing needs to be factored in. I don't have the figures but the support is very broad. Housing benefit, SMI relief, Council Tax benefit, Tax Credits and benefit etc. Much of this is routed back, via BTL or mortgage holders to the banks which continues to support the house prices.

 

Interest rate rises and loss of employment will be picked up by the state in one form or another.

 

I've come to the conclusion, there really isn't a housing market anymore for the average Joe. Not in the sense we once knew it.

 

BTLs are still adding to the empire with rents being pretty stable.

House/mortgage holders not selling but extending or renting their houses and becoming tenants themselves if they need to move.

House/mortgage holders becoming unemployed use SMI to sit tight. Forcing them out would cost the Gov more than paying a bit of interest.

Divorcing couples remaining in the matrimonial home for financial reasons.

 

It seems a few cash buyers and deaths now drive sales. I don't look at the technicals but I suspect a lot of the stats generated about the housing market are on pretty thin or unreliable data.

 

Edit: Forgot to add. Stamp Duty at say 3% or 5% is a big chunk of cash to find just to move. Gone are they days of slapping it on the mortgage. Another reason not to sell/move but build and extension.

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House/mortgage holders becoming unemployed use SMI to sit tight. Forcing them out would cost the Gov more than paying a bit of interest.

Divorcing couples remaining in the matrimonial home for financial reasons.

 

It seems a few cash buyers and deaths now drive sales. I don't look at the technicals but I suspect a lot of the stats generated about the housing market are on pretty thin or unreliable data.

Does anyone have a good notion of the best levels of mortgage rates achievable now?

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Divorcing couples remaining in the matrimonial home for financial reasons.

 

Did they never watch "The War of The Roses"? :o

 

Does anyone have a good notion of the best levels of mortgage rates achievable now?

 

Last time I checked (few weeks back), you could get a 5 year fix at ~3.8%, 10 year fix at just under 5%.

 

Trackers are about BoE base +2% (HSBC).

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http://www.ftadviser.com/FTAdviser/Mortgages/Lenders/News/article/20110907/4ad306aa-d943-11e0-b3b8-00144f2af8e8/Negative-equity-could-hit-17m.jsp

 

Another 10% fall = a doubling of NE 'sufferers'.

 

Detail apart this is on the wrong side of blindingly obvious, but it's the potential exponentiality of it that fascinates me.

 

Increase those percentages of NE & watch this one fly.

Rabbits out of hats & Britain's team of benevolent BTLs not withstanding.

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http://www.ftadviser.com/FTAdviser/Mortgages/Lenders/News/article/20110907/4ad306aa-d943-11e0-b3b8-00144f2af8e8/Negative-equity-could-hit-17m.jsp

 

Another 10% fall = a doubling of NE 'sufferers'.

 

Detail apart this is on the wrong side of blindingly obvious, but it's the potential exponentiality of it that fascinates me.

 

Increase those percentages of NE & watch this one fly.

Rabbits out of hats & Britain's team of benevolent BTLs not withstanding.

 

NE is not a problem unless you have to move.

 

With IR's so low, not many have to move.

 

When IR's rise (and it could be a long time yet), then NE will be a problem. Until then, it's too early to get excited.

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An impressive response time JD, a mere 4 minutes! :D

 

MkIV's? - 4 minutes? .... Could that be by design? ;)

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Hey Cuthy, I can't believe your most recent one provoked 60 comments! http://www.moneyweek.com/investments/property/uk/britains-secret-house-price-crash-13701

 

I hope MoneyWeek pays you 10 bucks a comment, even if there are class acts like:

Comparing house prices to ounces of gold is fundamentally flawed, simply because the price of gold rises and falls; and of late the price has risen to unsustainable levels.

...

And what good does gold do? Other than jewellery, it has no purpose whatsoever.

:)

 

So, watch out you gold bugs, apparently the price of gold in Sterling rises and falls.

 

Now, to me, it seems that house prices are flawed because they move up and down, sometimes they cost 720 ounces, sometimes less than 100 ounces. I think we should fix house prices at 50 ounces to get that nasty flaw out of the system once and for all.

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Hey Cuthy, I can't believe your most recent one provoked 60 comments!

 

I just assumed Dom had too many subscribers again & was using his proven method for thinning the numbers :lol:

 

 

I think we should fix house prices at 50 ounces to get that nasty flaw out of the system once and for all.

 

35307A15C5FE526F88E1B52C69767E.jpg

 

I agree GF :D

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I just assumed Dom had too many subscribers again & was using his proven method for thinning the numbers :lol:

 

 

 

 

35307A15C5FE526F88E1B52C69767E.jpg

 

I agree GF :D

I'd push the boat out to 120oz and a few pieces of eight for that one. :D

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NE is not a problem unless you have to move.

 

With IR's so low, not many have to move.

 

When IR's rise (and it could be a long time yet), then NE will be a problem. Until then, it's too early to get excited.

 

People still move if they need to. They just rent out their houses and the rent covers the mortgage. I've got three UK examples here of friends:

 

1. A family, both parents get job offers and visas for Australia. Can't sell their newish estate house as zero interest. But many tenants lining up prepared to do annual leases at good rent level.

 

2. Another family, in or close to negative equity. Tried to move but the numbers don't work. Sitting tight and now paying down capital on a very low mortgage rate.

 

3. Another couple. Cash bought a lovely apartment in 2006. Now cash bought a house ( the apartment was always a stop gap until the right house turned up). Put the apartment up for sale, offers less than they paid, so, it is now rented at 6% gross.

 

In all three cases, the houses are now off the market and will be for years and years.

 

This is why I made my comment about there being no proper housing market as these examples are being replicated up and down the country. Add in the BTLers, many of who get the rent paid via Housing Benefit, the unemployed mortgagees who get SMI payments, continuing low interest rates etc, etc and the residual, real, "housing market" can stay pretty buoyant.

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An impressive response time JD, a mere 4 minutes! :D

 

MkIV's? - 4 minutes? .... Could that be by design? ;)

 

I had an upgrade and sensed something strange on my astral plane :blink:

 

Back to earth, the latest scores on the board are

 

Savers 0 : Borrowers 1

 

Yes, thanks to the BoE and the ultra low rate policy, savers loose £43B while mortgage holders benefit to the tune of £51B!

 

As a saver and borrower, I guess I'm even (unlike a few odd people here :lol: ).

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In all three cases, the houses are now off the market and will be for years and years.

 

This is why I made my comment about there being no proper housing market as these examples are being replicated up and down the country. Add in the BTLers, many of who get the rent paid via Housing Benefit, the unemployed mortgagees who get SMI payments, continuing low interest rates etc, etc and the residual, real, "housing market" can stay pretty buoyant.

Push rates up ... and it is ALL CHANGE !

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Push rates up ... and it is ALL CHANGE !

 

Yes, I agree but it will take more. If rates rise, they will, to some extent, be covered by SMI, Housing Benefit etc. Cutting Housing Benefit, Council Tax benefit, SMI etc will have a profound effect. Any government forcing these cuts through as policy would crash house prices and not be in the political wilderness. Just look at the "fiddling at the edges" regarding the 50 p tax rate !

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