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UK House prices: News & Views


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When I get time I will do a little report for GEI readers as to what is happening in the market. Are valuations meeting puchase prices, and are houses actually selling. For now the market is very thin and not in good shape.

Yes, Please !

 

 

Have people looked at BDEV stock recently?

 

BDEV.L / Barratt Dev'l ... update

 

92604103.png

 

A break of 120P might be a good confirmation that BDEV's high is in

 

The Slow grind down is still underway...

To make sense of the Barratt's price move, I have redrawn the trend lines

 

BDEV.L / Barratt Development ... update

 

20138930.gif

 

The "ugly" and destructive wave 3 down may be underway.

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Sentiment still improving, (albeit from a low base) just as expected.

http://uk.finance.yahoo.com/news/homeowners-confident-house-prices-rise-064606503.html

Sorry, JD.

But it is already in the price

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Sorry, JD.

But it is already in the price

 

No need to apologise, I am actually looking for flat or a very slight dip (for a good few years too), in order to address the rebalancing required in the least harmful way for the average family. Price rises is the last thing I want.

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No need to apologise, I am actually looking for flat or a very slight dip (for a good few years too), in order to address the rebalancing required in the least harmful way for the average family. Price rises is the last thing I want.

My comment is partly based on what is happening to the BDEV share price

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THE DOWNSIDE OF DELUSION

"Presumed future wealth" often gets spent - with potentially dire consequences)

 

Sentiment still improving, (albeit from a low base) just as expected.

 

http://uk.finance.yahoo.com/news/homeowners-confident-house-prices-rise-064606503.html

 

BE CAREFUL what you wish for

 

What would happen if, as so many people are hoping, home prices were to go up dramatically again as they did in the early 2000s? Would such a change really benefit society?

 

People who most ardently desire this are homeowners who are underwater on their mortgages, who took out mortgages at the peak of the boom and now find that their homes are worth less than they owe on them. They would just feel relieved to get out of the red as soon as possible.

 

But should they really be wishing for this, if they were to take into account all the effects and their humane concerns for all people?

 

The property predicament .. By Robert Shiller

 

The idea that rapidly rising home prices are positive is often based on unrealistic expectations

 

http://www.ft.com/cms/s/2/1cc90a5c-87a8-11e1-8a47-00144feab49a.html#ixzz1t6RnAgOF

 

(click to see charts)

 

The price increases the last time were brought on by some massively unrealistic expectations. This means that people made costly mistakes, and not just the mistake of a bad investment in homes. People under such delusions and feeling rich may not have taken necessary steps to maintain their human capital, their skills and job readiness, for instance. Their complacency about their presumed future wealth may also have meant that they did not save for the future in other forms. It means that people may have missed other investments that might have provided better for them. It even means that people may not have been supportive of taxes paid for government infrastructure investments that might have better supported the economy.

. . .

Even people who are living with underwater mortgages may not really benefit much from a home price increase. If it is like the last one, the increase may not last for long, and the bubble will burst again before they sell the property.

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Two Stories from Moneyweek

 

Could the UK housing rental market be about to crack?

By Phil Oakley, 24 April, 2012

 

Despite high demand for housing and recent rises in rents, Britain's property rental market is showing signs of strain, says Phil Oakley. And that could be very bad news for house prices.

 

 

How to cash in on the land bubble

By Merryn Somerset Webb, 20 April, 2012

 

Agricultural land prices are soaring. And while they may no longer be cheap, they could still have a way to run yet. Merryn Somerset Webb explains the best ways for you to cash in - and warns of some investments to avoid.

 

/see: http://www.moneyweek.com/investments/property/uk/uk-housing-rental-market-21700

 

EXCERPT:

There may be lots of people wanting to rent properties, having the money to pay the rent is another matter.

 

A recent survey by the Association of Residential Letting Agents (ARLA) showed that 41.2% of its members saw a rising number of tenants struggling to meet their rental payments during the six months to March 2012. More tenants are haggling over their rents, too, with landlords finding it harder to push through rental increases.

 

And, according to Templeton LPA, the number of tenants in severe financial trouble rose by 10.2% in the first quarter of this year. Just over 9% of all rents were in arrears.

 

And if people aren’t paying their rent, it becomes a lot harder for their landlords to pay the mortgage. Throw in the fact that many mortgage rates are going up, then we wouldn’t be surprised if buy-to-let mortgage default rates started to increase.

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I find it quite baffling given the low transaction numbers that the EAs can still turn a profit.

 

Surely something has to give soon in this Mexican standoff between buyers and sellers. At some point the EAs must ask themselves how to increase transactions? The answer is either to not overvalue a property in the first place or to convinve the sellers to meet a buyers offer.

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I find it quite baffling given the low transaction numbers that the EAs can still turn a profit.

 

Surely something has to give soon in this Mexican standoff between buyers and sellers. At some point the EAs must ask themselves how to increase transactions? The answer is either to not overvalue a property in the first place or to convinve the sellers to meet a buyers offer.

 

Haven't about half of all EA branches around in 2007 in the UK now closed?

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I find it quite baffling given the low transaction numbers that the EAs can still turn a profit.

Obviously, they charge too much.

It's 1% in Hong Kong. What is it now in the UK, I forget ?

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It looks like a Bottom may be in formation - But not necessarily:

 

76312170.png

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I find it quite baffling given the low transaction numbers that the EAs can still turn a profit.

 

Surely something has to give soon in this Mexican standoff between buyers and sellers. At some point the EAs must ask themselves how to increase transactions? The answer is either to not overvalue a property in the first place or to convinve the sellers to meet a buyers offer.

 

20 transactions a month getting 1.5% of 200k

10 transactiosn a month getting 1.5% of 400k

 

... gives the same income.

 

Staff have been slashed.

Some offices have closed.

Most of them now do rentals.

 

No mystery as to how they are turning a profit.

 

One agent I know personally - resigned as a director of one of the leading agencies where I used to live until a couple of years ago - and started up on his own, about 4 years ago.

 

He is really good and is now the leading agent in the town and making a fortune. He sells about half the houses that get sold.

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All EAs have stepped up their letting business.

It is no coincidence that they are trying to encourage a faster turnover in the letting market. Many renting friends I know have had to move out in recent years. The new letting process is all part of the gravy chain for them. I'm very glad I don't have to put up with that sh1t any longer.

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Out for my usual evening bike ride around the local area - I noticed another one had got Sale Agreed on it. A 4 bed, detached 1960s estate house - quite nice, not huge by any means and not much of a garden - it was on for £675k.

 

And it got me thinking along the lines of 'could I have been more wrong about the housing market?'

 

I was in there early - sold to rent in late 2003. Member of HPC from soon after it started.

 

We had a real slow down in the market in 2004/5 - houses were sitting on the market forever it seemed. Prices fell a good bit - maybe 15%. Then interest rates were dropped 0.25% in August 2005 and in January 2006 the market went mad again. Everything sold and prices went back up to 2003 levels almost overnight.

 

Then we had the credit crunch in 2008. Again the market slowed, prices hardened and fell about 10% to 15%. Then in 2010 they went back up again.

 

And all this time the HPC crowd talked incessantly about not defying gravity for ever, it was just a matter of time, you can't buck the market etc. etc. And I agreed and preached the message.

 

But NOW? Nearly 9 years on since I sold to rent. And still they are selling. Not that many it is true but this spring everything on the market has sold within a few weeks of going on the market. I am not aware of one single property in my area that has been on the market for months.

 

Where is the money coming from? For years and years now people have said that cash is moving into property. Is this pot of cash endless? It seems to be.

 

A block of fancy flats - up to £395k for a 2 bed flat (nice, but not THAT nice) - stood on the market for ages when new in 2008. They gave up trying to sell them and rented a load of them out. Now all long since sold.

 

A block of flats I used to use as a benchmark back in 2004/5. It seemed they couldn't give them away. Same thing, rented out and long since sold.

 

2 new builds near the golf course - best part of 900k. Both have cars on the drive now.

 

And now, as I say, they are bloody selling. Everything around here is selling and getting prices that are as high as they have ever been. What the hell is going on?

 

I must be really daft - I have been wrong about the market now for 9 years. And so has everyone else repeating the HPC mantra.

 

Look at Homes Under the Hammer (yes, I know the presenters make you want to puke). But the stuff on the box now was filmed in 2011 and it's still going on all over the country. They are all being bought by 'investors' who all seem to make money and are happy with the yield and are off to buy another one. Where are they all still getting the money from? I thought lending had dried up. It appears not!

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OLYMPIC LETDOWN ?

 

No big race for London flats before Olympics

 

"Demand for rental homes slack as people unwilling to pay three times the going rate." - says Bloomberg

 

It seems like way too many landlonds are trying to cash in on the expected boom.

Will people "stay away in droves"?

 

The statisticians told them:

 

"About 320,000 visitors will converge on London during the Olympic games in Augusr, and they will compete for about 140,000 hotel rooms"

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