UK House prices: News & Views

[aliveandkicking]

You're such a pesimist . Why would fiat failiure lead to world wide distruction

 

Because it will fail either thru deflationary collapse leading to protectionism and the breakdown of globalisation as worker groups demand changes or it will fail via hyperinflationary attempts to escape what cannot be escaped by cheating or getting some kind of currency advantage as a way to repudiate debt that is the advantage now of a trading partner.

 

Perhaps you can out line the Zignic flower power revolution as the alternate view?

 

 

Meanwhile i dont see how it is written that it must fail so i dont see myself as a pessimist. I see you as the pessimist.

 

I see you as the pessimist because you have such a low opinion of the way the world works today. Personally I dont think it is any different to the way it always was.

[ziknik]

...

Perhaps you can out line the Zignic flower power revolution as the alternate view?

...

The nuclear deterrent may do its job and deter anyone from starting a war that could lead to the destruction of the world.

 

...

Personally I dont think it is any different to the way it always was.

 

 

Are you sure you cannot see any UNPRECEDENTED activity?

 

LONDON (Reuters) - The Bank of England surprised markets on Thursday by keeping its quantitative easing programme unchanged at 125 billion pounds, boosting speculation that it may soon finish its unprecedented asset-buying scheme.

http://uk.reuters.com/article/idUKTRE5682J...me=businessNews

 

Gordon Brown and President Sarkozy made an unprecedented intervention in the global oil market yesterday, using a meeting of the Group of Eight leading economic nations to press for a crackdown on speculators stoking volatility in global crude prices.

http://business.timesonline.co.uk/tol/busi...icle6670238.ece

 

The German government is mulling the "unprecedented" step of lending directly to companies as credit dries up for both Mittlestand family firms and the industrial export giants.

http://www.telegraph.co.uk/finance/finance...ct-lending.html

[romans holiday]

Yeah, the world will muddle through. Just another depression.

[aliveandkicking]

The nuclear deterrent may do its job and deter anyone from starting a war that could lead to the destruction of the world.

 

 

 

 

Are you sure you cannot see any UNPRECEDENTED activity?

 

LONDON (Reuters) - The Bank of England surprised markets on Thursday by keeping its quantitative easing programme unchanged at 125 billion pounds, boosting speculation that it may soon finish its unprecedented asset-buying scheme.

http://uk.reuters.com/article/idUKTRE5682J...me=businessNews

 

Gordon Brown and President Sarkozy made an unprecedented intervention in the global oil market yesterday, using a meeting of the Group of Eight leading economic nations to press for a crackdown on speculators stoking volatility in global crude prices.

http://business.timesonline.co.uk/tol/busi...icle6670238.ece

 

The German government is mulling the "unprecedented" step of lending directly to companies as credit dries up for both Mittlestand family firms and the industrial export giants.

http://www.telegraph.co.uk/finance/finance...ct-lending.html

 

Do you really think these actions are without precedent?

 

[lowrentyieldmakessense(honest!)]

Meanwhile i dont see how it is written that it must fail so i dont see myself as a pessimist. I see you as the pessimist.

 

I see you as the pessimist because you have such a low opinion of the way the world works today. Personally I dont think it is any different to the way it always was.

 

 

history shows it

 

 

 

[ziknik]

Do you really think these actions are without precedent?

I don’t know TBH. I’m taking the articles at face value.

 

You didn’t answer my question

 

Are you sure you cannot see any UNPRECEDENTED activity?

 

Here’s a couple more

 

http://www.guardian.co.uk/society/2009/jul...ng-boom-england

"Housebuilding is unprecedentedly low," said Kerslake. "Over the last 20 years completions fluctuated, averaging around 120,000. But even at the peak of the buoyant market we didn't hit the target."

 

http://www.guardian.co.uk/money/2009/jul/0...ent-competition

Wes Streeting, the president of the National Union of Students, said: "As the first generation of students to pay top-up fees leaves university with unprecedented debt levels, we now have confirmation that a quarter of graduate vacancies have disappeared, in direct contrast to the overly optimistic and glib predictions that had previously been issued."

 

EDIT: Sorry. I have to add this one. You can’t say there’s a precedent for this

 

http://www.guardian.co.uk/business/2009/ju...osthumous-sales

Michael Jackson has proved to be bigger than Elvis, according to high street chain HMV, which has reported unprecedented demand for the singer's back catalogue.

 

[aliveandkicking]

I don’t know TBH. I’m taking the articles at face value.

 

You didn’t answer my question

 

 

 

Here’s a couple more

 

http://www.guardian.co.uk/society/2009/jul...ng-boom-england

"Housebuilding is unprecedentedly low," said Kerslake. "Over the last 20 years completions fluctuated, averaging around 120,000. But even at the peak of the buoyant market we didn't hit the target."

 

http://www.guardian.co.uk/money/2009/jul/0...ent-competition

Wes Streeting, the president of the National Union of Students, said: "As the first generation of students to pay top-up fees leaves university with unprecedented debt levels, we now have confirmation that a quarter of graduate vacancies have disappeared, in direct contrast to the overly optimistic and glib predictions that had previously been issued."

 

EDIT: Sorry. I have to add this one. You can’t say there’s a precedent for this

 

http://www.guardian.co.uk/business/2009/ju...osthumous-sales

Michael Jackson has proved to be bigger than Elvis, according to high street chain HMV, which has reported unprecedented demand for the singer's back catalogue.

 

What i think is unprecedented is the degree of global cooperation..........so far.

 

On the other hand you can argue we have unsustainable fascist style corporate style world government that cannot last but on the other hand you can argue there never was any democracy anyway so what difference does it make?

[G0ldfinger]

The Scottish property market, especially in Edinburgh, must be imploding - despite reports claiming the opposite.

 

In the good old bubble days, there would only be one thing on ESPC: "Offers Over". Then everything went into gridlock: "Fixed Price". Now, on their webpage, they have introduced $h1te like "Offers Around" and "In The Region Of".

 

Are you kidding me?

 

The roof, the roof, the roof is on fire. Burn, MOFO, burn (is what I tell the Scottish property market)!

 

From:

[G0ldfinger]

50%? Bring it on! Why not 70% sometime soon?

 

http://www.telegraph.co.uk/finance/persona...pc-not-9pc.html

Price of new build properties have fallen 50pc not 9pc

We were told that house prices started to fall officially in late 2007, but the reality for people who bought new builds is altogether different

...

because that is the case with flat number 7 Henry Laver Court, Colchester, which was bought for a princely sum of £246,995 in the Spring of 2006 only to be sold for £120,000 less than that three years later. It is not the only flat in the three-year old development that has fallen in value by as good as 50pc.

...

One of the issues with new-build properties is valuation, and there have been concerns in the past that they were overcooked.

No kidding!

 

..."major obstacle to the recovery of the housing market".

Why would anyone want this? Houses, just like electronic gadgets, should be as cheap as possible such that everyone can afford them and live happily thereafter.

[DoctorSolar]

The Scottish property market, especially in Edinburgh, must be imploding - despite reports claiming the opposite.

I sold to rent in Edinburgh at the beginning of 2008 and have to say im still surprised at how long it is taking for prices to come down. They are still no where close to being affordable on the cities average income. In fact most prices are no where close to being at 2005 levels.

 

I am going to follow how the sale of this particular property goes:

 

Atholl Terrace, Edinburgh

 

I almost bought this flat for £125,000 in January 2005.

The eventual buyer paid around £122,000:

 

Nethouse prices: search result for Atholl Terrace

 

And now they want over £172,000 for it!

 

I know they did some refurbishment to convert it from a 1 bed to a 2 bed but let me tell you having lived in an identical property there is NO WAY this is a REAL 2 bed flat. They have merely moved the kitchen into the living room to get that 2nd bed in there. Meaning there is now ZERO storage. Where in the hell do these folk keep their hoover etc....

 

Anyway im going to start keeping an eye on a few properties and see how they fair. Im with you GF in thinking that surely prices must implode in edinburgh with all these banking job losses at RBS and HBOS. We just still somehow seem to be in the deep denial phase.

 

[G0ldfinger]

http://www.guardian.co.uk/money/2009/jul/1...e-loans-dropped

Ban on 100% home loans dropped

Great! 125% for everyone!!

 

Tough new curbs on mortgage lending to limit loans and force homebuyers to come up with far bigger deposits are being eased amid fears that they could wreck the emerging recovery in the housing market.

 

Earlier this year, Gordon Brown asked the Financial Services Authority, the government watchdog, to consider a ban on mortgages with a high loan-to-value (LTV) rate - such as those requiring deposits of less than 10% - and on so-called high-multiple mortgages, which allow buyers to borrow more than three or four times their income.

 

FSA executives told a parliamentary committee last week that such restraint could lock first-time buyers out of the market just as they were starting to regain confidence. Their warnings reflect a growing consensus in Whitehall that banning higher-risk mortgages may be counterproductive.

100% guaranteed. I suggest 200% IR only mortgages to anyone who wants it in order to get this market moving.

 

Seriously, how idiotic are these people?

[InternationalRockSuperstar]

What i think is unprecedented is the degree of global cooperation

 

yeah - it's never fallen so much before:

 

[FWIW]

http://www.guardian.co.uk/money/2009/jul/1...e-loans-dropped

 

Great! 125% for everyone!!

 

 

100% guaranteed. I suggest 200% IR only mortgages to anyone who wants it in order to get this market moving.

 

Seriously, how idiotic are these people?

 

I think they are playing the 'can't beat the idiots, then join them' card...

 

If the masses go for these 'jumbo' loans then once agian the bubble will reinflate - only to deflate worse next time...

 

Everyone needs a home, so I can understand why some people 'need' to buy.

[GenghisKhan]

... people should understand that if they save in an ISA their money will be safe and will not be lost"!! WTF.

 

Put it in a cash ISA for safety. Then sit tight and watch it be stolen through the miracle of inflation!

 

I really believe financial literacy should be taught at school as a genuine subject. It still amazes me the number of people in this world who can't calculate a simple %. What hope do they have... They are then left with no option but to do whatever the Daily Mail or the Sun tells them to do. Herd mentality not by choice but becuase they have no other choice.

[ziknik]

The BofE confirming the[ir] view that stabilisation of house prices [at unsustainable levels] is a good thing

 

http://www.bankofengland.co.uk/publication...009/mpc0906.pdf

18 Housing market activity had picked up. The number of loan approvals for house purchase had

increased by 8% in April and the preview of the May survey of the Royal Institution of Chartered

Surveyors showed further improvement across most housing market activity indicators, with new

buyer enquiries and sales both picking up. Both the Nationwide and Halifax measures of house prices

had increased in May, the first time that that had happened since August 2007, and had increased by an

average of 1.9%. But activity remained subdued, with the level of loan approvals for house purchase

less than half of its average of the past decade. In such a thin market there was likely to be greater

volatility than usual in housing market indicators. A stabilisation of house prices at current levels

would benefit homeowners, limiting the reduction in their net wealth and capping the scale of negative

equity, and would provide support to the balance sheet position of banks.

[DoctorSolar]

The BofE confirming the[ir] view that stabilisation of house prices [at unsustainable levels] is a good thing

 

http://www.bankofengland.co.uk/publication...009/mpc0906.pdf

 

A stabilisation of house prices at current levels

would benefit homeowners, limiting the reduction in their net wealth and capping the scale of negative

equity, and would provide support to the balance sheet position of banks.

Now this kind of statement from the boe i find truly scary. I extrapolate from this that they will now try and put in place some scheme that achieves this stabilisation. Regardless of any consequences for sterling and savers.

 

Can this be achieved? And if so what would be the mechanism?

 

I don't see how just keeping interest rates low will be enough. Unemployment is rising and wages are falling. BT and BA are asking staff to work for free for goodness sakes!

 

 

 

 

 

[aliveandkicking]

Now this kind of statement from the boe i find truly scary. I extrapolate from this that they will now try and put in place some scheme that achieves this stabilisation. Regardless of any consequences for sterling and savers.

 

Can this be achieved? And if so what would be the mechanism?

 

I don't see how just keeping interest rates low will be enough. Unemployment is rising and wages are falling. BT and BA are asking staff to work for free for goodness sakes!

 

from their point of view nominal stabilisation with real falls over maybe 10 years or even more is the best outcome.

 

That will be the reality they work with, so that is the reality you have to factor into whatever plans you have.

 

Roubini and Kasriel see USA recovery in 2010. Which probably means a bottom of sorts and a grind forwards to a different place with that reality in place.

 

None of this is particularly inflationary. The juice for inflation is not there. Destroying all savers is not going to achieve much it only creates less demand from the savers who cannot spend now and live later - the old and vulnerable.

 

The BOE has the power and freedom to do whatever is necessary to support current prices of what they think are important prices and equally in conjunction with central banks and governments the power to frustrate those who only want to speculate and take advantage of the mess these governments have created for themselves

 

These seem like realities we all now have to deal with

[ziknik]

Now this kind of statement from the boe i find truly scary. I extrapolate from this that they will now try and put in place some scheme that achieves this stabilisation. Regardless of any consequences for sterling and savers.

 

Can this be achieved? And if so what would be the mechanism?

 

I don't see how just keeping interest rates low will be enough. Unemployment is rising and wages are falling. BT and BA are asking staff to work for free for goodness sakes!

 

The BofE can increase house prices any time they want by using brokers (like Paragon) to hand out BofE mortgages or another scheme like homebuy, ownhome, etc. Sterling is toast in the long run anyway so it’s not going to make too much difference to the long term outcome.

 

The BofE has the ability to print USD and EUR so they can manage Sterling exchange rates in the short term. I think these swap agreements will stay in place for years.

 

I don’t think they can suppress the gold price forever. I see gold as the only way to protect myself.

 

Stabilising the housing market is much harder than increasing prices so the BofE will probably over egg the support to be on the safe side.

 

[ziknik]

...

Roubini and Kasriel see USA recovery in 2010. Which probably means a bottom of sorts and a grind forwards to a different place with that reality in place.

...

 

Do we have a thread on the Roubini video/interview?

 

[DoctorSolar]

from their point of view nominal stabilisation with real falls over maybe 10 years or even more is the best outcome.

 

That will be the reality they work with, so that is the reality you have to factor into whatever plans you have.

So basically its too late to sell to rent in the hope of further falls?

Unless you can rent somewhere for less than your current mortgage?

[drbubb]

EVENT Tonight - any interest? (too far for me)

 

Housing Markets and the Global Financial Crisis

Date Mon, Jul 13, 2009, 18:30 - 20:00

Venue Hong Kong Theatre, Clement House, LSE, London, England

Admission Free

Inquiries 44.20.7955.6043

[romans holiday]

So basically its too late to sell to rent in the hope of further falls?

Unless you can rent somewhere for less than your current mortgage?

If only nominal prices of houses are being supported - with the intention to deflate the real value of houses by depreciating the currency - it makes perfect sense to sell and rent. With the proviso of course that you put the realized equity from the sale into an asset which would preserve the current value of the cash.... namely, gold.

 

If you are uncertain whether reflation/inflation is possible - and that deflation may rule the day - then it is obviously still a good idea to sell and reduce your debt burden. In this scenario, though you would be less certain of currency depreciation [due to a conventional 70s style inflation], the risk of a currency devaluation remains [on the fx market] so it would probably be a good idea to hedge your cash by say having half of it in gold.

 

Either way, selling an over-valued asset in a collapsing market looks like a good idea to me.

[drbubb]

Now this kind of statement from the boe i find truly scary. I extrapolate from this that they will now try and put in place some scheme that achieves this stabilisation. Regardless of any consequences for sterling and savers.

 

Can this be achieved? And if so what would be the mechanism?

 

I don't see how just keeping interest rates low will be enough. Unemployment is rising and wages are falling. BT and BA are asking staff to work for free for goodness sakes!

 

I agree.

About the only effective mechanism is this:

They start buying a share in Houses, or they finance someone who does that (buys houses.)

Very dangerous, since it helps some (those who sell), while costing the taxpayer.

 

However, it does serve to prop up prices, while getting money into people's hands - a dangerous combination,

that really can lead to inflation, and maybe much higher inflation.

 

Other QE/Money printing techniques may help property somewhat, while leaving it near the bottom of the list

of those items that benefit from inflation. Look at the big lag in house prices in Weimar times !

[aliveandkicking]

So basically its too late to sell to rent in the hope of further falls?

Unless you can rent somewhere for less than your current mortgage?

 

I am thinking of buying in Finland myself or at least in two minds about it because i can hopefully get a property cheap and do something with it that should work out for me.

 

Zignics inflation case looks better when the deflationary case is weakened by the fact that even when people are repaying debt of 8.1b in one month? that mortgage lending is still getting bigger. Until it actually falls more and more money must be coming into the market to support prices?

 

The other thing that bothers me that i dont have sufficient information about is the nature of the house price indexes. In my mums reasonably popular south of england area where we sold her house back in early 2006 i dont see a weakening in advertised prices so far on anything in that kind of 'affordable' 200,000 area. The impression i have formed rightly or wrongly is that quality houses have not softened so much? Whereas appartments and rubbish stuff does not have the buyers. If there is one index it is hard to know what is happening.

 

Here in Finland dispite many people laid off and plenty of 'permanent' reductions in staff, as far as i can see inventory is falling for units across the country. Why? I am not sure. Are people holding off for the buyers like me? Meanwhile i am still holding off so far in the hope better deals surface. In Europe anyway it appears there is no shortage of very cheap mortgage finance and even the unemployed appeared to be staying put for now.

 

From my point of view lending finance has to get worse to drive these doom and gloom scenarios. Back in the 1990's UK crash BOE rates were around 10% and peaked at 14% for example. Only if inflation comes back are we going to see a change in the historicly low rates and the ordinary person who thinks he can stay put and tougth it out has protected themself by buying property with debt.

 

Germany reckons their recession ended already. Hard to believe but if so then we are in a different reality to the one i thought we were living in.

[ziknik]

The BofE can increase house prices any time they want by using brokers (like Paragon) to hand out BofE mortgages or another scheme like homebuy, ownhome, etc. Sterling is toast in the long run anyway so it’s not going to make too much difference to the long term outcome.

...

 

HMG scraps My Choice Homebuy and Ownhome. The money has already been spent anyway.

 

New Build Homebuy and Homebuy Direct are not scrapped.

 

 

http://www.ft.com/cms/s/0/eb9dea30-6f34-11...144feabdc0.html

 

Schemes to help first-time buyers scrapped

…

Ministers have quietly scrapped two of the most popular schemes aimed at helping first-time buyers on to the housing ladder.

 

The government invested £200m ($324m) through MyChoiceHomeBuy and Ownhome, known collectively as Open Market HomeBuy, over the past year alone.

…

“Government funding is still available for first-time buyers and we intend to focus all our efforts on helping people into homes through new-build schemes, which create jobs and homes such as HomeBuy direct and New Build HomeBuy,” he said.