UK House prices: News & Views

[harold bishop]

What the hell is going on?

 

Yes, I've seen the same and in fact I bought last year.

 

Lending hasn't really dried up for those types of houses. They are not first time buyers and there is a goodly bit of equity built in these purchases. Volumes are down but as you say, houses are still selling, purely, because people/families just shrug their shoulders are getting on with it because short of emigrating, they have no choice.

 

Many are paying very, very low rates of interest and many of those are interest-only with no meaningful capital repayment scheme. As we know, these lending policies have continued to support house prices when as every HPCer knows, they should have nose dived.

 

I think the situation will continue, maybe for 10 years or more because its the only exit route for the very indebted It also allows the banks to maintain their "asset" values and threaten the government with the nightmare of mass repossessions, for which they are then periodically re-capitalised.

 

In the meantime, in the real economy - because selling houses to each other is not a real economy - it is dire with very little investment or growth.

[John Doe]

Seems the end of the stamp duty holiday might not have had such an effect after all.

 

Approvals for home loans in Britain rose unexpectedly in March, suggesting the housing market continued to recover despite the end of a tax exemption for first-time buyers, Bank of England data showed on Wednesday.

 

 

http://uk.finance.yahoo.com/news/uk-march-mortgage-approvals-rise-083034627.html

 

Wonder how long it will keep going, or rather, how long rates will stay stupidly low?

[drbubb]

SEEING THROUGH the Hype

 

This was posted on a Hong Kong website:

 

 

Hey, people of Hong Kong:

If you think the property salesmen from the UK "saw you coming," then you are probably right.

 

The Estate Agents from the London seem to think that HK people will buy anything, and pay some silly prices, way beyond whay local people will pay.

 

This thread is to collect examples to show how little some agents respect the intelligence of the HK-based property investor.

 

I will start with these:

 

+ What is a "prime location"? The EA's seem to think it is anywhere that the developers are willing to ask a cheeky price for a property?

 

+ What's the rental return going to be? It has nothing to do with what properties in the area actually achieve, it is calculated by taking the price and multiplying it by about 5% - and then stating flatly: "this is what we expect landlords to achieve."

 

+ What are that likely tax and other costs associated with owning a Uk property? If you want to see what an EA looks like when the are "playing dumb", then just ask this question.

 

Have they told you, as the SCMP did today that:

 

+ "The UK government announced that as of April next year non-resident "non-natural persons" will pay capital gains tax (CGT) on the disposal of a UK property."

 

+ "With immediate effect a non-UK company that purchases residential property in Britain valued at over GBP 2 million will have to pay Stamp Duty Land Tax at 15 percent."

[John Doe]

Nationwide -0.2% (NSA up again)

 

Boring

 

http://www.bbc.co.uk/news/business-17923907

[drbubb]

Nationwide -0.2% (NSA up again)

Boring

http://www.bbc.co.uk/news/business-17923907

"Now more people are making a lifestyle choice not to commit to the financial burden of a mortgage, and to benefit from the flexibility of renting in the long term rather than the short term.

 

"Inevitably, this means that less old stock is coming back onto the market, and the supply-demand balance is being disrupted."

 

Simon Ward, director of the Dorset-based estate agents Mr Green, says: "With many young people still reluctant to take on the responsibility of a mortgage, there is a temptation to talk of a Generation Rent - suffering ever increasing rent, but unwilling or unable to take out a mortgage."

 

A recent report for the Royal Institution of Chartered Surveyors suggested that home ownership in England has been falling since 2003 and has also fallen in the US, Australia, Austria, Finland and the Irish Republic, among others.

 

If current trends were projected forward, then by 2025 the percentage of home ownership could be below 60% - lower than most other European countries.

 

/source: http://www.bbc.co.uk/news/business-15287743

 

Can they not see that prices are set up for a slide now/ ie Post Olympics?

What use are these sort of market comments

[John Doe]

"Now more people are making a lifestyle choice not to commit to the financial burden of a mortgage, and to benefit from the flexibility of renting in the long term rather than the short term.

 

"Inevitably, this means that less old stock is coming back onto the market, and the supply-demand balance is being disrupted."

 

Simon Ward, director of the Dorset-based estate agents Mr Green, says: "With many young people still reluctant to take on the responsibility of a mortgage, there is a temptation to talk of a Generation Rent - suffering ever increasing rent, but unwilling or unable to take out a mortgage."

 

A recent report for the Royal Institution of Chartered Surveyors suggested that home ownership in England has been falling since 2003 and has also fallen in the US, Australia, Austria, Finland and the Irish Republic, among others.

 

If current trends were projected forward, then by 2025 the percentage of home ownership could be below 60% - lower than most other European countries.

 

/source: http://www.bbc.co.uk/news/business-15287743

 

Can they not see that prices are set up for a slide now/ ie Post Olympics?

What use are these sort of market comments

 

I agree the comments are useless, but they are also very wrong.

 

The vast majority of young people are not choosing to rent (just a few savy ones). The rest would buy at the drop of a hat if they could.

 

They just have no choice because mortgages are not available to them (as they haven't saved enough deposit).

[drbubb]

I agree the comments are useless, but they are also very wrong.

 

The vast majority of young people are not choosing to rent (just a few savy ones). The rest would buy at the drop of a hat if they could.

 

They just have no choice because mortgages are not available to them (as they haven't saved enough deposit).

Okay

So they are being PROTECTED by reluctant banks.

For once: "Good on the banks."

[TrueNorth]

The squeeze tightens on the UK housing market

By MoneyWeek Editor John Stepek May 03, 2012

 

Moneyweek link

 

in the comments section, CoolDude says

 

I hope Dominic Frisby reads this article. House prices always fall in a recession and this time will be no different.

 

[John Doe]

2.4% DROP on the MoM Halifax figures! (Although, not so impressive when you consider the 2.2% rise they reported last month).

 

Bit choppy to say the least

 

Flawed data collection/interpretation model, or a sign of low transactions and reducing market share?

 

http://uk.finance.ya...-090611241.html

[Van]

2.4% DROP on the MoM Halifax figures! (Although, not so impressive when you consider the 2.2% rise they reported last month).

 

Bit choppy to say the least

 

Flawed data collection/interpretation model, or a sign of low transactions and reducing market share?

 

http://uk.finance.ya...-090611241.html

 

It's is very obvious that the end of the stamp duty holiday had a big positive effect on the previous month that has been unwound this month.

[Van]

In terms of CPI-deflated real prices, houses are at a new low of 68.26% of their peak:

 

Month	SA Price	Annual avg inflation	SA Inflation Adjusted
Aug-07	199,612		100.00%
Sep-07	198,533	4.7	99.08%
Oct-07	197,698	4.7	98.29%
Nov-07	195,092	4.7	96.62%
Dec-07	197,074	4.7	97.23%
Jan-08	196,244	4.7	96.45%
Feb-08	194,953	4.7	95.45%
Mar-08	190,900	4.7	93.11%
Apr-08	187,980	4.7	91.33%
May-08	183,694	4.7	88.91%
Jun-08	180,320	4.7	86.94%
Jul-08	177,164	4.7	85.10%
Aug-08	174,241	4.7	83.37%
Sep-08	171,857	1.6	82.12%
Oct-08	168,112	1.6	80.23%
Nov-08	164,646	1.6	78.47%
Dec-08	160,070	1.6	76.19%
Jan-09	163,945	1.6	77.93%
Feb-09	160,104	1.6	76.00%
Mar-09	157,622	1.6	74.72%
Apr-09	154,663	1.6	73.22%
May-09	159,111	1.6	75.23%
Jun-09	158,445	1.6	74.82%
Jul-09	159,749	1.6	75.33%
Aug-09	160,947	1.6	75.80%
Sep-09	163,294	3.1	76.71%
Oct-09	164,990	3.1	77.31%
Nov-09	167,032	3.1	78.07%
Dec-09	168,176	3.1	78.40%
Jan-10	168,390	3.1	78.30%
Feb-10	166,928	3.1	77.42%
Mar-10	168,435	3.1	77.92%
Apr-10	168,593	3.1	77.80%
May-10	167,207	3.1	76.96%
Jun-10	165,686	3.1	76.07%
Jul-10	167,497	3.1	76.71%
Aug-10	168,388	3.1	76.92%
Sep-10	162,307	4.5	73.87%
Oct-10	164,320	4.5	74.51%
Nov-10	164,269	4.5	74.21%
Dec-10	163,665	4.5	73.67%
Jan-11	163,609	4.5	73.38%
Feb-11	162,715	4.5	72.71%
Mar-11	162,712	4.5	72.44%
Apr-11	160,393	4.5	71.15%
May-11	161,039	4.5	71.17%
Jun-11	163,430	4.5	71.96%
Jul-11	163,765	4.5	71.85%
Aug-11	161,926	4.5	70.78%
Sep-11	161,368	3.6	70.33%
Oct-11	163,227	3.6	70.93%
Nov-11	161,556	3.6	70.00%
Dec-11	159,888	3.6	69.07%
Jan-12	160,925	3.6	69.31%
Feb-12	160,118	3.6	68.76%
Mar-12	163,796	3.6	70.14%
Apr-12	159,883	3.6	68.26%

[John Doe]

It's is very obvious that the end of the stamp duty holiday had a big positive effect on the previous month that has been unwound this month.

 

Then why doesn't it show up on BofE mortgage approvals numbers (much much larger sample), or even Nationwiide's data?

 

In terms of CPI-deflated real prices, houses are at a new low of 68.26% of their peak:

 

Another 10% off should put it back near fair value then

[drbubb]

2.4% DROP on the MoM Halifax figures! (Although, not so impressive when you consider the 2.2% rise they reported last month).

Impact of the expiring Stamp Tax holiday.

 

Just wait until the Olympics are out of the way, and they can get things moving (to the downside) in London !

 

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 : 146,967 - 0.28% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% :

F. : : 233,252 : 449,252 : 149,658 +1.83% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% :

M : : 236,939 : 455,159 : 151,853 +1.47% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% :

A : : 243,737 : 464,944 : = n/a = :: = n/a = / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% :149.8% :

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

mom:+2.87% : +2.15 % : -Est.DI : 149.5% / +0.49% = n/a = : -2.39% : -1.37% : -0.44%

[Erewhon888]

\

 

Impact of the expiring Stamp Tax holiday.

 

Just wait until the Olympics are out of the way, and they can get things moving (to the downside) in London !

 

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

 

2012

 

J : : 224,060 : 438,324 : 146,967 -0.28% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% : 139.6% :

F : : 233,252 : 449,252 : 149,658 +1.83% / 162,712 = n/a = 160,118 158,897 : £160,805 : + 0.16% : 145.1% :

M : : 236,939 : 455,159 : 151,853 +1.47% / 163,327 = n/a = 163,803 163,419 : £163,373 : + 1.60% : 145.0% :

A : : 243,737 : 464,944 : = n/a= : =n/a= / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% : 149.8% :

 

 

 

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

 

 

mom:+2.87% : +2.15 % : -Est.DI : 149.5% / +0.49% = n/a = : -2.39% : -1.37% : -0.44%

 

[\/font]

[drbubb]

In London,

Both BDEV and PSN jumping - I wonder why?

Might THIS be the reason?

 

London stays out of UK property price drops

 

House prices fell by 0.6 per cent in March, taking the average property value in England and Wales year-on-year to 160,372, Land Registry figures have revealed.

 

London experienced the highest increase in property values, increasing 0.7 per cent since March 2011, while Wales experienced the greatest annual fall, decreasing 5.5 per cent.

 

(But this part doesn't sound promising):

 

He said: “Lending to new buyers will drop sharply this quarter as mortgage lenders struggle to cope with their increased funding costs. Up until now, the banks have absorbed increasing costs rather than passing them onto the consumer. That policy has veiled serious underlying weaknesses in the mortgage market and the way it’s funded.

 

“Now lenders’ balance sheets are stretched to breaking point, those weaknesses are coming to bear. Lenders have told the Bank of England they will be forced to ship extra costs onto customers in the form of higher rates and fewer high loan-to-value loans. This will put the brakes on first time buyer activity, and reverberate through the rest of the market.”

 

/more: http://www.ftadviser.com/2012/05/09/mortgages/mortgage-products/london-stays-out-of-uk-property-price-drops-CoMluWBFNJCy1D0fzOWBsN/article.html

[Chartered Surveyor]

Secretly I suspect the banks want a market correction especially London. Market rises 4 steps then drops 2, moves up 3 drops 1 and so forth. I am not ruling out a correction shortly to reignite the market to enable it to move forward again.

 

The present market is abnormal and is very unhealthy. Rising London prises may be grabing all the headlines but in fact its stagnating. If left on its present course it will turn in on itself. The major lenders have over the last 4 years each built up very healthy mortgage books. The present trend will eat into this.The banks want to lend but they also want to manage that risk, and at present it is my view that they see risk is back on the table. They can see the new highs being obtained in London as being artificial due to a distorted market through ultra low interest rates. The Bank of England has lost control of interest rates yet it is the high street lenders one should now look to, to see the direction they are going. Higher mortgage rates as well as higher saving rates. This may seem odd but higher saving rates shows a glimmer of hope that some banks are repairing their books. They would rather have 5 sales at lower prices than one one sale reaching a new market high. Market prediction: short correction to start 4-6 months time.

 

.

[Chartered Surveyor]

New Build Flats

 

BDEV up today you say Bubb.

 

This does not surprise me. All of the new build flats across West London I have being monitoring over the last 4 years. All of them have all come to completion right on time for Spring 2012. I have always wondered why some were taking so long to build. Was the answer staring me in the face? Did the major builders know something we dont. ie get their sales in and completed before the Spring of 2012 to obtain the new market highs before a correction?

 

Sceptical maybe, but sometimes you do have to ask the obvious question staring right at you.

[drbubb]

New Build Flats

Sceptical maybe, but sometimes you do have to ask the obvious question staring right at you.

Maybe they anticipated a pre-Olympic bubble

 

RENTS get hyped, and that drives some towards buying.

What a great set-up for a Top !

[Chartered Surveyor]

When you have a centralised and controlled economy to a great extent as now, then inside information such as how much QE will be injected into an economy and when, then one can plan ahead with a degree of certainty. The rest of us have to second guess which makes one a speculator not an investor. Stacked deck.

[drbubb]

There's something Good about this?

 

Propping up the builders

 

Daily Mail: Buy a £500,000 home with just FIVE PER CENT deposit!

PM hopes new scheme will get first-time buyers back on the property ladder

(just in time for the next crash! -

Will someone shoot him BEFORE the damage is done please!)

 

£1bn of taxpayers' cash to be used to guarantee loans for new-build homes Barclays, Nationwide and NatWest to offer 95% mortgages under scheme But MPs fear NewBuy deal, which is open to ALL buyers, could spark another credit crisis And deal is derided as gimmick that will only help construction industry

[BlackPepper]

There's something Good about this?

 

Propping up the builders

 

Daily Mail: Buy a £500,000 home with just FIVE PER CENT deposit!

PM hopes new scheme will get first-time buyers back on the property ladder

(just in time for the next crash! -

Will someone shoot him BEFORE the damage is done please!)

 

£1bn of taxpayers' cash to be used to guarantee loans for new-build homes Barclays, Nationwide and NatWest to offer 95% mortgages under scheme But MPs fear NewBuy deal, which is open to ALL buyers, could spark another credit crisis And deal is derided as gimmick that will only help construction industry

I think there is nothing that will prop up the property/asset market in the UK much longer, beyond the Olympic games. A delayed delusion perhaps, but we are pricing falls of above 20 percent after August 2012 and who knows. Something else to consider IT is sourced cheaper within Asia with performance results that exceeds. Above that holding costs that effects nett returns make the UK look very unattractive, and currency without merit and tax systems that reward slackers. To add which is more important, service industry is to costly, and performance poor. Technology no longer limits location.

[geisaver]

I think there is nothing that will prop up the property/asset market in the UK much longer, beyond the Olympic games. A delayed delusion perhaps, but we are pricing falls of above 20 percent after August 2012 and who knows.

 

Who is "we"?

[drbubb]

...we are pricing falls of above 20 percent after August 2012 and who knows...

 

Those gullible FTB-ers who buy with 5% deposits would then get fried,

and the banks that lend to them may soon be in trouble.

 

I think NO ONE in those banks should get a cash bonus. All bonuses should be payable in 3-5 year preferred stock, and if the bank melts down, that that stock would lose most of its value

 

Paying bonuses to idiots who hatch reckless schemes like that is the worst sort of moral hazard.

 

Or maybe they should tell the bankers after a meltdown: "You can keep your homes, or your bonuses, but not both."

 

Then they would experience some of the pain they cause for others.

[drbubb]

BIG FIRMS WORRY TOO

 

Here are the topics that a Major firm will cover in their...

 

Full Update on the London residential market

 

• the Stamp Duty Land Tax changes

• the proposed annual charges and capital gains tax on sale of UK

residential property owned by non-UK

resident, non-natural persons - the consultation process

• the implications for existing structures

• how purchases of UK residential and commercial property should now

be structured in order to minimise

UK tax

• update on the statutory residence test

[TrueNorth]

Residential Property Focus Q2 2012

 

14 May 2012

 

With the new property world dominated by cash and not mortgage borrowing, the time for residential investment has finally arrived.

 

from Savills

 

http://pdf.euro.savills.co.uk/uk/residential-property-focus-uk/residential-property-focus-q2-2012.pdf

 

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