UK House prices: News & Views

[Van]

Yes. 25%-30% would be pretty much all my savings in, hence why I'm hesitating.

 

Yeah, it's a tough one, but savings are depreciating at the moment, and I don't think there's much upside left in stocks. You could hold some gold, but that is not without short term risks as it's so volatile.

 

I think it's sensible to hold some gold as a hedge. I do expect the gold:house ratio to fall further, so I'm long (paper) gold by about 10% the value of my house. Neither the house nor the gold position are over-leveraged, so I sleep well at night. If gold goes to the sort of ratios that many here predict then this will go towards paying off a large chunk of the house.

[drbubb]

DISCOUNTS Offered to HK-based investors

 

 

20% off the Normal price, if we can close the property purchases before March fiscal year-end

 

Example:

Units 15.03 (15th floor, 3 bed, 1647 NET sq foot) Asking price - 975,000 will accept 20% off asking price (WILL ACCEPT 780,000) and will furnish the apartment fully.

 

Agent's comment:

"That takes these 2 units to below 500 a foot in a project that is worth 700 + a foot. Very rare an opportunity comes around like this."

 

The builders may be a bit "desperate" now. And they want to keep the transaction away from London, it seems (?)

[John Doe]

Some nice charts from FT on HPC

 

http://www.housepricecrash.co.uk/forum/index.php?showtopic=152362&view=findpost&p=3235410

 

Well worth a look.

[drbubb]

Some nice charts from FT on HPC

http://www.housepricecrash.co.uk/forum/index.php?showtopic=152362&view=findpost&p=3235410

Well worth a look.

Prices are moving back in time, wiping out gains

 

[ecoface]

I went heavily short on BDEV yesterday.

(as well as Ftse)

[fexx]

Could this mean Doncaster being highlighted once more as the London fast commute hotspot?

Those were the days; she said, pausing only to wipe away an unexpected tear of nostalgia.

 

The thought of Doncaster becoming the next UK property hotspot also brought a tear to my eye.

 

What started off as shaking, quickly became an uncontrollable belly laugh, and finally, tears.

[John Doe]

Prices are moving back in time, wiping out gains

 

 

I would say it was generally agreed that prices were very cheap in 1996 (they certainly were where I was at the time). That graph would suggest we are within 10-20% of fair value. Flat nominal prices and inflation of a few % for a few years could make that a reality.

[grunff]

I would say it was generally agreed that prices were very cheap in 1996 (they certainly were where I was at the time). That graph would suggest we are within 10-20% of fair value. Flat nominal prices and inflation of a few % for a few years could make that a reality.

 

But the market always overshoots (that's how you end up with 'very cheap' in 1996).

[Van]

But the market always overshoots (that's how you end up with 'very cheap' in 1996).

 

I think we'll ultimately get a bottom when some exogenous Sterling crisis forces interest rates to rise, but it's anyone's guess when that might come about. It could easily be 5 years away. Until then we are in a mini-Japan and prices will just meander along.

[John Doe]

But the market always overshoots (that's how you end up with 'very cheap' in 1996).

 

True, but I'm not sure if the market always overshoots as expected. For example, the low in 96 wasn't as low as the previous low (looks ~ 20% just going back to 1983).

 

If you go back in time (on the graphs) you usually see lower lows and lower highs, even in inflation adjusted terms. You also have to take into account changes in demographics and the social make up (double income households, lack of new houses, massive population growth etc) and a host of other issues that, even the most bearish agree, have had an effect over the decades.

 

For all we know, it could turn out that it's near overshot now (unlikely yes, yet it is possible).

 

Baring a serious crisis, like Van mentions, I would be wary of hoping for an overshoot to the previous low.

[grunff]

All good points. I am not really hoping for an overshoot, as I don't intend to ever buy property in the UK again. I'm just an interested spectator.

 

But my gut feeling says that interest rates will have to rise eventually, which will trigger the last step drop (maybe 20%).

[Jake]

 

Baring a serious crisis, like Van mentions, I would be wary of hoping for an overshoot to the previous low.

 

http://theautomaticearth.blogspot.com/2012/01/january-16-2012-quo-vadis-britannia.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FlRTBR+%28The+Automatic+Earth%29

 

''Still, what makes it striking is the sheer number of people affected. One million people need emergency loans to keep their families in their homes, while six million households have nothing whatsoever saved for a rainy day.

 

If we put the average household size at 2.5 people, that means that, out of 60 million living in Britain, 2.5 million are on the verge of losing their homes, and 15 million, or 25% of the population, risk having to cut on their basic needs, food and heating, if they hit even the slightest speedbump.

 

And what are the chances this situation will improve any time soon? It doesn't look good; in fact it looks set to worsen. While there's no lack of denial, an increasing number of voices admit that the British economy has already slipped back into recession.''

[G0ldfinger]

Here's an interesting U.K. property investment:

Couple buy toll bridge that will earn them a tax-free £100,000 per year... and it only cost them £400,000

 

Law passed in 1774 means all earnings from the bridge are tax free

Crossing comes with two-bedroom cottage and 1.1 acres of land

 

 

Read more: http://www.dailymail.co.uk/news/article-2088693/Couple-sell-home-buy-tax-free-toll-bridge-400-000-earn-100-000-year-fares.html#ixzz1juYJMZiL

[drbubb]

Here's an interesting U.K. property investment:

Wonderful !

Anymore like that ?

Apparently, there are - see below.

(Add a booth where you can surf the web, and you've a great Head Office for GEI.)

 

Comment:

How can you buy a bridge when people pay road tax so who own the road before the bridge and after who looks after the maintenance this country never stop to surprise me - nico siano, cheshire, 19/1/2012 11:40 Nico, the road leading up to the bridge on either side is maintained by the Highways agency using taxpayers money. The bridge is in private ownership, privately maintained and therefore the owners have a right to charge people for using the bridge. No public money is used to maintain the bridge, it is maintained from money received in the tolls. The bridge was constructed back in the 18th century using private money. There are dozens of similar bridges dotted around the country. This is not a unique situation

- Sarah, London, 19/1/2012 13:05

===

 

Not a HUGE amount of time for surfing tough:

Some simple maths: 200 cars a day produces income of £160 which equates to £58560 in 2012 To reach £100,000 needs nearly 350 cars a day, which could be 240 in daylight (12 hours) and 110 at night (12 hours From which you can see that 20 cars an hour would be required during the day - one every three minutes. And this is the average rate. Will they get cars at that rate - well I'll leave it to you. - John Wood, Hull UK, 19/1/2012 11:38 get a life you loser.

 

Read more: http://www.dailymail.co.uk/news/article-2088693/Couple-sell-home-buy-tax-free-toll-bridge-400-000-earn-100-000-year-fares.html#ixzz1jucjpY3f

[drbubb]

If we put the average household size at 2.5 people, that means that, out of 60 million living in Britain, 2.5 million are on the verge of losing their homes, and 15 million, or 25% of the population, risk having to cut on their basic needs, food and heating, if they hit even the slightest speedbump.

One thing that seems pretty likely would be "speedbumps" in the near future

[G0ldfinger]

Wonderful !

Sounds like a nice retirement job is what I thought. I am not sure how well you can insure the bridge against floods and similar. I assume the owner is obliged to maintain the bridge open, so it could be quite a financial risk if something goes wrong.

[John Doe]

http://theautomaticearth.blogspot.com/2012/01/january-16-2012-quo-vadis-britannia.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FlRTBR+%28The+Automatic+Earth%29

 

''Still, what makes it striking is the sheer number of people affected. One million people need emergency loans to keep their families in their homes, while six million households have nothing whatsoever saved for a rainy day.

 

All true, but it has never been much lower than that, there have always been 100's of thousands taking short loans like that, and several million with no savings, even in the, so-called, good times.

 

Also note a lot of them take the loans for rent, and before payday loans arrived, it used to be the man from the pru or other "legal" sharks calling door to door (I remember them well myself) or even worse, the illegal sharks.

[dgul]

When it was sold eight years ago it was said to bring in around 30-40,000. Given the price increase from 50p to 80p, for the same amount of traffic this would now be 48-64,000. When it was put up for sale last year (or so) it was estimated to bring in 70,000. I would say that they are being a bit optimistic in their income predictions.

 

[actually, I would bet that someone at some point has said it brings in an income equivalent to an annual salary of 100,000 - around 70k after tax - and this has erroneously taken hold as the income due to tolls (tax free)]

 

This said, ~60K pa (after maintenance) on a 400k investment isn't bad... But I'd have to see maintenance and associated costs (not least public liability insurance) as well as potential big expenditures (it was rebuilt 20 years ago, so presumably won't need any major attention for a while).

 

 

 

 

 

 

 

Wonderful !

Anymore like that ?

Apparently, there are - see below.

(Add a booth where you can surf the web, and you've a great Head Office for GEI.)

 

Comment:

How can you buy a bridge when people pay road tax so who own the road before the bridge and after who looks after the maintenance this country never stop to surprise me - nico siano, cheshire, 19/1/2012 11:40 Nico, the road leading up to the bridge on either side is maintained by the Highways agency using taxpayers money. The bridge is in private ownership, privately maintained and therefore the owners have a right to charge people for using the bridge. No public money is used to maintain the bridge, it is maintained from money received in the tolls. The bridge was constructed back in the 18th century using private money. There are dozens of similar bridges dotted around the country. This is not a unique situation

- Sarah, London, 19/1/2012 13:05

===

 

Not a HUGE amount of time for surfing tough:

Some simple maths: 200 cars a day produces income of £160 which equates to £58560 in 2012 To reach £100,000 needs nearly 350 cars a day, which could be 240 in daylight (12 hours) and 110 at night (12 hours From which you can see that 20 cars an hour would be required during the day - one every three minutes. And this is the average rate. Will they get cars at that rate - well I'll leave it to you. - John Wood, Hull UK, 19/1/2012 11:38 get a life you loser.

 

Read more: http://www.dailymail.co.uk/news/article-2088693/Couple-sell-home-buy-tax-free-toll-bridge-400-000-earn-100-000-year-fares.html#ixzz1jucjpY3f

[drbubb]

When it was sold eight years ago it was said to bring in around 30-40,000. Given the price increase from 50p to 80p, for the same amount of traffic this would now be 48-64,000. When it was put up for sale last year (or so) it was estimated to bring in 70,000. I would say that they are being a bit optimistic in their income predictions.

Someone must be looking to escape from a headache, I reckon.

Would a buyer really know the risk?

[BoldAsBrass]

True, but I'm not sure if the market always overshoots as expected. For example, the low in 96 wasn't as low as the previous low (looks ~ 20% just going back to 1983).

 

If you go back in time (on the graphs) you usually see lower lows and lower highs, even in inflation adjusted terms. You also have to take into account changes in demographics and the social make up (double income households, lack of new houses, massive population growth etc) and a host of other issues that, even the most bearish agree, have had an effect over the decades.

 

For all we know, it could turn out that it's near overshot now (unlikely yes, yet it is possible).

 

Baring a serious crisis, like Van mentions, I would be wary of hoping for an overshoot to the previous low.

 

I know things are regional - but those charts on HPC just don't relate to my experience of the world.

 

Prices in Guilford over last 11 years

 

Their graphs tie in pretty much with my experience of the market both in Surrey, Berkshire and the West Country

[BoldAsBrass]

Prices in Shropshire over 11 years

 

Prices in Nottinghamshire over 11 years

 

House prices in Cumbria over 11 years

 

They're all pretty much the same - either up a bit over the last 6 or 7 years or pretty flat. Why do the HPC nutters keep going on about this crash being like the 89 crash? In the crash that started in August 1988 prices (where they fell significantly (largely restricted to London and the Home Counties - which is where prices had gone up a lot) fell about 40% in 18 months. There was no wage inflation at the time - there was a marked increase in unemployment and people were happy to have a job and no-one asked for a rise.

 

This time transactions have fallen - but not by as much as people seem to think (still 780,000 last year) and it's a very slow market with no pressure on prices either way.

[John Doe]

And Glasgow?

 

http://www.home.co.uk/guides/asking_prices_report.htm?location=glasgow&startmonth=10&startyear=2007&endmonth=01&endyear=2012

 

I guess the answer to BaB's question is because the nice areas (and looking at the data, nice properties) are doing OK. The not so nice, which rose the most 1996 to 2007, are not.

[Mabon]

And Glasgow?

 

http://www.home.co.uk/guides/asking_prices_report.htm?location=glasgow&startmonth=10&startyear=2007&endmonth=01&endyear=2012

 

I guess the answer to BaB's question is because the nice areas (and looking at the data, nice properties) are doing OK. The not so nice, which rose the most 1996 to 2007, are not.

 

Terraced houses in Middlesborough (decent enough street) 2 bedders for 12k now (Zoopla)

 

We'll start seeing 2 bedder terraced in some of the less fortunate places for under 10k by the autumn.

 

Property as ever is local, regional, national

[Kapouillax]

I know things are regional - but those charts on HPC just don't relate to my experience of the world.

 

Prices in Guilford over last 11 years

 

Their graphs tie in pretty much with my experience of the market both in Surrey, Berkshire and the West Country

 

I wish my area was going down like GU1 does : Prices in Fleet.

 

(allegedly, they started much higher and the soufflé is deflating to normalise)

[alexreeve]

And Glasgow?

 

http://www.home.co.uk/guides/asking_prices_report.htm?location=glasgow&startmonth=10&startyear=2007&endmonth=01&endyear=2012

 

I guess the answer to BaB's question is because the nice areas (and looking at the data, nice properties) are doing OK. The not so nice, which rose the most 1996 to 2007, are not.

According to the graph in the link the detached properties have gone from over £800,000 to under £500,000. Far, far more of a drop than I have observed living pretty close to Guidford.