UK House prices: News & Views

[halight]

Except 25 years ago, when they took out the mortgage, £25k was a bloody good LTV deposit. (Av house price when they took out the deals back then was less than £40k)

 

Guess they'll just have to remortgage for the remaining £15k while rates are at their lowest ever (before they rise). Hardly a reason to sell.

 

 

A good few years back people were warned about this. If they have not been trying to put some extra aside every month. Then they have been a bit silly. Still as long as they have taken any other loans out on their house then they should only need a small LTV mortgage.

 

but what the betting that not only did some not put any extra aside they also took out 2nd and even 3rd loans out on their House.

[John Doe]

but what the betting that not only did some not put any extra aside they also took out 2nd and even 3rd loans out on their House.

 

Good point.

 

For them I don't have much sympathy.

[John Doe]

Nationwide down 1% MoM.

 

Wow, perhaps people really did try and beat the stamp duty cut off. Should have just waited and got a couple of % off later

[Van]

Nationwide down 1% MoM.

 

Wow, perhaps people really did try and beat the stamp duty cut off. Should have just waited and got a couple of % off later

 

Or maybe not, if you care to just look at the figures:

 

 

 

Jan-12 £162,228

 

Feb-12: £162,712

March-12: £163,327

 

Fall = ALL seasonal adjustment.

[John Doe]

Or maybe not, if you care to just look at the figures:

 

 

 

Jan-12 £162,228

 

Feb-12: £162,712

March-12: £163,327

 

Fall = ALL seasonal adjustment.

 

Yep, quite right Van.

 

Wondered if anyone would notice that (even HPC'ers picked up on it within 4 posts)

 

Seems that many are only interested in the NSA when it works the other way

 

Then again, the spring bounce is a real phenomena (weird as it is) so it’s not totally unfair to revise down in such circumstances.

[drbubb]

Yep, quite right Van.

Wondered if anyone would notice that (even HPC'ers picked up on it within 4 posts)

Seems that many are only interested in the NSA when it works the other way

 

Then again, the spring bounce is a real phenomena (weird as it is) so it’s not totally unfair to revise down in such circumstances.

A valid point.

But when I look at all the Data, two things Jump Out at me:

 

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% :

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 : 128,105 -1.28% / 165,914 = n/a = 161,743 162,076 : £163,995 : - 1.64% :141.2% :

S : : 233.139 : 427,889 : 128,821 +0.55% / 166,256 = n/a = 161,132 162,375 : £164,316 : + 0.20% :141.9% :

O : : 239,672 : 450,210 : 127,252 -1.22% / 165,650 = n/a = 163,311 164,311 : £164,981 : + 0.40% :145.3% :H

N : : 232,144 : 444,724 : 124,083 -2.49% / 165,798 = n/a = 161,731 160,801 : £163,300 : - 1.02% :142.2% :

D : : 225,766 : 434,871 : 12X,xxx - X.xx% / 163,822 = n/a = 160,063 157,803 : £160,813 : - 1.52% :140.4% :

2012

J. : : 224,060 : 438,324 : 12X,xxx - X.xx% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% :

F. : : 233,252 : 449,252 : 12X,xxx - X.xx% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% :

M : : 236,939 : 455,159 : 12X,xxx - X.xx% / 163,327 = n/a

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

mom:+1.58% : +1.31 % : -Est.DI : 147.3% / + 0.38% = n/a = : - 0.49% : +0.01% : +0.16%

 

 

(1) Nationwide is down Year-on-Year from 164,751 to 163,327 in March 2012 - that's -0.86%

 

(2) The Delusion Index, estimated for March, is 147.3%, a record "nose bleed" level.

 

I reckon that the Sellers are going to find that theirre confidence gets very thoroughly crushed in the weeks and months to come, and when reality strikes home after the Olympics, the market will wake up and find it is in Crash-cruise-speed freefall, rather than the gentle sides-to-down drift that we have been seeing in recent months.

[drbubb]

THE HK-BASED AGENTS may be getting some resistance to higher priced UK properties

 

(I received this email today)

EXCERPT:

I have just secured a development of 9 apartments - a mixture of one-bed and two-beds.

 

I can sell a 1-bed for GBP230,950 including a furniture pack and all closing costs.

I can sell a 2-bed for GBP249,950 including a furniture pack and all closing costs.

 

The properties will be delivered upon settlement yielding 6% with a tenant in place and fully managed.

 

The development is under construction, currently up to roof level, and is set to complete in August of this year.

[drbubb]

When with London property prices get really cheap?

 

When they are Cutting off Electricity and Water during a period of Hyperinflation

 

I liked this EXCERPT

 

Becoming a Millionaire ... left us tending our garden (to survive)

 

By this time, everyone was working the land. Nowadays in the US, there’s a 100-year ravine between your average Joe and his closest farmer ancestor. In Ukraine, no one lived too far from the land. There’s always a grandma in a village somewhere, working that hoe with her butt in the air, eager to share her potatoes and pickles with the grandkids “from the city”.

 

 

No matter occupation, you tended to your 0.03 acres after work, and mostly throughout the weekend. Everyone left the city on Saturday mornings, and on Sunday nights hordes of tired and dirty city-dwellers packed into city-bound commuter trains to return home. They dropped off gardening tools in sheds and garages, walked the dark streets to their flats almost forgetting that electricity and running water have been shut off by the state-owned utility companies in an effort to conserve.

 

At this time, a friend of my father’s used his one most prized possession — an early model JVC VHS camcorder — to film weddings, and get paid with food for his services. I heard stories of real estate — apartments and even houses — being traded for Soviet-made cars and imported electronics like Panasonic VCRs. Things were so out of whack fiscally that only pensioners and those on fixed income complained. Everyone else had to hustle, so there was little time to stop and catch breath.

 

In 1993, things got interesting. The official rate of inflation hit a staggering 10,156%. Later I learned that it’s ranked 27th worst period of hyperinflation in world history. Prices went absolutely nuts, and my Dad became a millionaire. He came home one night, shoved a stack of bills into my hand and said, “There you go, you’re now a millionaire”.

 

Note especially this part:

"dark streets to their flats almost forgetting that electricity and running water have been shut off by the state-owned utility companies in an effort to conserve.

. . .

I heard stories of real estate — apartments and even houses — being traded for Soviet-made cars and imported electronics like Panasonic VCRs."

 

FLATS in the city with no electricity or running water were being 'given away' for cars - a means of escape.

I doubt that anyone was giving away their dachas with farmland around them, and therefore a means of survival.

From a thread that deserves more attention:

http://www.greenenergyinvestors.com/index.php?showtopic=16185

[John Doe]

Seems the UK housing stock as a whole is worth (on paper) £5.5Trillion and has a LTV of only 20%

 

Even if all the properties have been 100% over valued, that still gives a national LTV of only 40%, capable of getting all the best deals

 

Not quite as bad as some try to make out, is it?

 

On a more serious level, the figures put the much-quoted £1.2tn personal debt mountain – most of it tied to mortgages – into a fresh perspective. It suggests that we have a total of £4tn worth of equity (on paper) and that on a loan-to-value basis (around 20%) the country may not quite be in the mess it sometimes appears.

 

http://www.guardian.co.uk/money/2012/mar/30/house-prices-guide-property-hotspots#

 

Seems the UK could cope with a significant fall in prices after all. As a whole .

[Van]

Seems the UK housing stock as a whole is worth (on paper) £5.5Trillion and has a LTV of only 20%

 

Even if all the properties have been 100% over valued, that still gives a national LTV of only 40%, capable of getting all the best deals

 

Not quite as bad as some try to make out, is it?

 

 

 

http://www.guardian....perty-hotspots#

 

Seems the UK could cope with a significant fall in prices after all. As a whole .

 

You *have* noticed the date, haven't you?

[John Doe]

You *have* noticed the date, haven't you?

 

Haha yes April fools :lol:

 

Did you see the one(s) on HPC?

 

Not nearly as funny

 

Wonder if any stories coming out this morning are real

[John Doe]

In case anyone was wondering........

 

It seems total mortgage debt is about £1.3Trillion give or take a £100Billion or so, whilst value of all residential private housing seems to be somewhere between £3.5Trillion and £4.5Trillion.

 

So add in the other housing, as the report did, and I'd guess you're not too far off the 20%LTV they suggested, April 1st or not

[malvern hills]

In case anyone was wondering........

 

It seems total mortgage debt is about £1.3Trillion give or take a £100Billion or so, whilst value of all residential private housing seems to be somewhere between £3.5Trillion and £4.5Trillion.

 

So add in the other housing, as the report did, and I'd guess you're not too far off the 20%LTV they suggested, April 1st or not

 

I think I read that 60-70% of all privately held property is in fact mortgage free. \its the rest which you would work the ltv out on .

[John Doe]

I think I read that 60-70% of all privately held property is in fact mortgage free. \its the rest which you would work the ltv out on .

 

 

Yeah I know , I was responding to the article (they also included social housing and other types too) with a bit of tongue in cheek.

 

Then again (as has also been pointed out before) together with the fact that only about 10% of houses change hands etc, it shows how such a relatively small percentage of the "market" actually dictates "price" etc.

 

You'd think in such times price fluctuations would be much wider.

[John Doe]

What? No mention of the Halifax data today? YoY ~ flat

 

Crash cruise speed delayed once more.

 

Maybe next month.

[Van]

What? No mention of the Halifax data today? YoY ~ flat

 

Crash cruise speed delayed once more.

 

Maybe next month.

 

Looks like the spring bounce was rolled up into 1 month this time around.

[John Doe]

Looks like the spring bounce was rolled up into 1 month this time around.

 

Yep.

 

Pay growth up too, 2.3% now.

[Van]

As I said last month, other lenders will follow Halifax and RBS and raise their SVRs too:

 

 

 

http://www.telegraph...rest-rates.html

 

The Co-op Bank said it will lift its standard variable mortgage rate by 0.5% to 4.74% from May 1, meaning payments will typically go up by around £15 a month, or £180 a year.

...

And the Bank of Ireland also announced that it is increasing its SVR, affecting 100,000 UK customers. It will raise the SVR on its mortgages to 4.49% from 2.99% in two stages.

[Erewhon888]

Set in 2.32 acres, and with five-bedrooms, it was bought for €3.3million (£2.7m) during a fierce bidding battle at the height of the property boom.

But now, following a disastrous period for the country's economy, the property is on the market for just €395,000 (£325,500).

 

 

an 87 per cent drop in price

[halight]

A bit of Fun!

 

Who says bigger's better? The cosy eco-friendly micro houses made from household junk for less than $200 (just don't expect a king-size bed)

 

Read more: http://www.dailymail.co.uk/news/article-2125389/The-charming-200-micro-houses-junk.html#ixzz1rBX4Y3O0

 

 

A great story with some great photos!

 

I dont think my wife would like one.

[John Doe]

As I said last month, other lenders will follow Halifax and RBS and raise their SVRs too:

 

 

 

http://www.telegraph...rest-rates.html

 

That link takes you to this comment

 

In 2006-2007 all it took was a move from 4.25% to 5.75% base rates - a rise of 35% - to precipitate the fastest and largest period of falling house prices on record. The market becomes geared to what present rates are and then suffers when they from this base. And this was during a period of increasing real income and rising employment. The factors that are causing RBS and Halifax to raise their rates will put pressure on other lenders to do the same, and one by one they will follow. Rates will definitely not be going down for a while. They can't really go any lower.

 

Sonner or later the markets will look at UK growth figures and work out that the coalition deficit elimination plans are not credible, and at that point they will stop lending and rates will rise. It will not be the BoE that precipitates this; they will have it forced upon them. And if the BoE buys their own bonds, they will print money to do so and create inflation that will further reduce household income.

 

and, as was pointed out shortly after....

 

It was actually more to do with the mortgage lenders (indeed, all lenders) suddenly stopping lending to anyone that could put a cross on a bit of paper.

 

They haven't really restarted yet. There are still very strict criteria in place and only very recently has the 90% mortgage started to reappear, let along the 95.

 

I agree there is only one way rates can go, but they wont rise properly for some time yet, and most will fix when that time comes.

 

There was a bigger relative rise in rates earlier in the decade (3.5 to 4.75 from Oct 03 to Aug 04), didn't cause a crash though (although it did slow HPI).

 

Indeed, it is abundantley clear that it was the collapse in the supply of credit that caused the 2007 - 2009 crash.

 

As that supply of credit is still restricted (yet nominal prices seem to have stabilised), it stands to reason that it will take more than a % or two on SVR's to cause a real crash now.

 

Maybe a sudden increase in unemployment or a major EU (or other) shock causing all rates to rise by 3% or more will do the trick.

 

Until then, the slow slow grind down will probably continue, until a major shock, or until the credit taps are turned on again.

[John Doe]

See the 2, 5, 10 and 30 year yields have been coming back down again too over the last couple of weeks.

 

http://www.yieldcurve.com/marketyieldcurves.asp

 

Strange, what with the pound getting a little stronger vs the Euro etc.

[Van]

There was a bigger relative rise in rates earlier in the decade (3.5 to 4.75 from Oct 03 to Aug 04), didn't cause a crash though (although it did slow HPI).

 

Indeed, it is abundantley clear that it was the collapse in the supply of credit that caused the 2007 - 2009 crash.

 

 

Do you ever stop?

 

 

The bubble was not as inflated back in 03-04, so the market and indeed the economy was not as geared and dependent on low rates as it become only a few years later.

 

Pinning the cause or the collapse on credit supply or any other single factor is to misunderstand or oversimplify the nature of a financial asset bubble where many things happen simultaneously which causes the rise to be unsustainable and therefore must ultimately be corrected.

[John Doe]

Do you ever stop?

 

 

The bubble was not as inflated back in 03-04, so the market and indeed the economy was not as geared and dependent on low rates as it become only a few years later.

 

Pinning the cause or the collapse on credit supply or any other single factor is to misunderstand or oversimplify the nature of a financial asset bubble where many things happen simultaneously which causes the rise to be unsustainable and therefore must ultimately be corrected.

 

Do I ever stop

 

yeah right. Prices had way more than doubled in the 7 years till 2003.

 

Where were you back in 2003 when The Economist and others (including a few names here and on HPC) were all warning about overpriced houses and bubbles??

 

http://www.economist.com/node/1812326

 

Then the EU and USA then dropped their rates through the floor, and even UK rates were are at essentially historic lows.

 

As for single issues, FFS, you are the one stating that the rise in rates (a single factor) precipitated the drop in prices. And I quote...

 

In 2006-2007 all it took was a move from 4.25% to 5.75% base rates - a rise of 35% - to precipitate the fastest and largest period of falling house prices on record.

 

Wrong, wrong wrong!

 

By your reckoning, the drop in rates that occurred 2007-2008 should have produced a boom .

 

Guess what, it didn't because, as everyone else in the world knows, it was A full blown (and very rare) Credit Crunch!

 

Occam's razor.

 

In simple terms, it was the end of easy loans (including the 125% LTV etc) given to anyone with a pulse.

 

THAT is what that caused the crash, not a paltry 1 or 2% rate change.

 

Talk about "misunderstand or oversimplify"

 

If ever in history there was a single reason for a crash, the sudden massive restriction in the supply of credit, coming straight after the most easy credit in history was it!

 

Jees, FFS, this is basic, basic economics 101.

 

Check your facts before slinging mud Van, and then, perhaps, sling it where it belongs

[drbubb]

MEMORIES ARE SHORT !

 

I read this in today's SCMP :

 

Rush for tax break boosts UK home index

 

A house-price index in Britain rose to a 21-month high last month as first-time buyers took advantage of an expiring two-year stamp-duty examption, the Royal Institution of Chartered Surveyors said. The guage rose three points from February to minus 10, the highest reading since June 2010... The tac break was available on first homes costing less than GBP 250,000.

 

(Indeed. That neatly explains last month's jump in the Halifax Index):

 

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

2012

J. : : 224,060 : 438,324 : 12X,xxx - X.xx% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% :

F. : : 233,252 : 449,252 : 12X,xxx - X.xx% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% :

M : : 236,939 : 455,159 : 12X,xxx - X.xx% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% :

A : : 2XX,xxx

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

mom:+1.58% : +1.31 % : -Est.DI : 145.0% / +0.38% = n/a = :+2.30% :+2.85% :+1.60%

 

 

I wonder how many here can recall what happened back in 1989, when there was an important change in the tax law. I think it was June 1989 when it was the last month that two unrelated persons could buy a property together, and still get a tax break on the interest paid on a mortgage.

 

Prices rose straight up, into a little surge, and then topped right with the tax change.

 

The more things change...