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G0ldfinger

UK House prices: News & Views

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Plenty of deja vu in the last few posts - the same arguments have been dissected to the nth degree a million times on HPC - 10 years ago.

 

A little anecdotal - a friend in Winchester (outskirts - not the very pricey city centre) - retired some years ago, been thinking about downsizing a bit and giving their adult children some money.

 

4 bed estate box - pre credit crunch - 2007 - were fetching £350k. Post credit crunch - 2009 - down to £315k - 18 months on market. (Not theirs, a few doors up).

 

2012 - agent in to value - £400k apparently (okay, it's not sold yet - I know!)

 

Where I live - 4 bed detached a few doors away from us has just gone on for £540k. Until recently - they were all in the £475k area.

 

Leaflet from estate agent through letter box in the last hour - 4 bed detached houses desperately wanted in the area - why not get them round? These leaflets are usually a sign of an agent that thinks he can sell your house - not take it on for a laugh for a year.

 

What, the feck, is going on?

 

Eldest lad inherited a bit of money from an aunt recently - and he has a savings nest egg built up over the years from pocket money and grandparents etc and, with a bit of a stretch, he could buy something in poor condition to do up. He works in the building industry. I've been preaching the house price crash message to him for years - while he is watching (and helping) his mates and his boss buy up houses, do them up, and make a profit.

 

I haven't got the nerve to say anything any more. Worse case he'll end up with somewhere to live and not be paying some bastard's mortgage for them.

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...

What, the feck, is going on?

...

 

My latest thoughts http://www.retiremen...ordability.html make me think that we will see no meaningful nominal house price reductions until (if ever, looking over at Japan today) interest rates make significant rises. By my calculations the average UK house affordability has become 26% to 40% cheaper than peak. That combined with government back stops makes me struggle to find a reason, other than interest rates, for a drop.

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My latest thoughts http://www.retiremen...ordability.html make me think that we will see no meaningful nominal house price reductions until (if ever, looking over at Japan today) interest rates make significant rises. By my calculations the average UK house affordability has become 26% to 40% cheaper than peak. That combined with government back stops makes me struggle to find a reason, other than interest rates, for a drop.

 

Hi GK, I think you might just be right.

 

Even with a full blown Euro crisis, rates ain't gonna rise here in ole blightly, indeed, quite the opposite if anything.

 

The one thing that makes me think we might still get another 5-10% nominal fall is the restriction in lending, which, with the ever increasing capital ratios etc required by the regulators, looks to be the general course for the next few years.

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The one thing that makes me think we might still get another 5-10% nominal fall is the restriction in lending, which, with the ever increasing capital ratios etc required by the regulators, looks to be the general course for the next few years.

Right now the UK, and London in particular, is benefitting from its relative "Safe Haven" status,

buyers are flooding in from Greece, Spain, etc.

 

If that should be lost for some reason, London property prices may show a surprisingly rapid slide

 

"Leaflet from estate agent through letter box in the last hour - 4 bed detached houses desperately wanted in the area - why not get them round? These leaflets are usually a sign of an agent that thinks he can sell your house - not take it on for a laugh for a year.

 

What, the feck, is going on?"

 

Safe Haven demand is less price-sensitive that normal buyers. You often get a price blip up

just before a major decline.

 

Do you see in price clues here:

 

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% :

M : : 243,759 : 469,314 : = n/a = : = n/a = / 166,022 = n/a = 160,941 161,785 : £163,904 : +0.77% :148.7% :

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

mom:+0.00% : +0.94 % : -Est.DI : 148.7% / +1.15% = n/a = : +0.66% : +0.38% : +0.77%

 

Barratt / BDEV ... update

bdev.gif

 

Let's see if BDEV can hold that support into, and after the Olympics

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What, the feck, is going on?

 

 

Perhaps it is just your area that has these problems after all BaB.

 

Have a look at the Land Reg figures FaFa posted on HPC

 

http://www.housepricecrash.co.uk/forum/index.php?showtopic=179453&view=findpost&p=909058791

 

Nice graph.

 

Of course, small pockets in some of these areas will be doing well, but overall, it seems it really is just London that has not been hit with prices significantly lower since the peak.

 

Don't loose all hope just yet BaB :)

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Perhaps it is just your area that has these problems after all BaB.

 

Have a look at the Land Reg figures FaFa posted on HPC

 

http://www.housepricecrash.co.uk/forum/index.php?showtopic=179453&view=findpost&p=909058791

 

Nice graph.

 

Of course, small pockets in some of these areas will be doing well, but overall, it seems it really is just London that has not been hit with prices significantly lower since the peak.

 

Don't loose all hope just yet BaB :)

 

But that graph looks nothing like this graph for Berkshire - where I lived until a couple of years ago. That shows prices pretty flat between 2007 and now.

 

As does this one for Nottinghamshire

 

I looked at a load of different counties a while ago. They all show the same thing. Prices went up a lot but, depending on area, it was either ages ago or before 2007 and that, one way or another, the market has been pretty flat (apart from Londo) for 4 to 5 years now.

 

Which makes it feel less like a boom every day.

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But that graph looks nothing like this graph for Berkshire - where I lived until a couple of years ago. That shows prices pretty flat between 2007 and now.

 

As does this one for Nottinghamshire

 

I looked at a load of different counties a while ago. They all show the same thing. Prices went up a lot but, depending on area, it was either ages ago or before 2007 and that, one way or another, the market has been pretty flat (apart from Londo) for 4 to 5 years now.

 

Which makes it feel less like a boom every day.

 

Yet, they are taken from what is generally considered to be the most concise (actual sold price) data set there is (whereas, AFAIR Home use asking price data). You also have to take inflation into account; there's been a fair drop (real) due to that too.

 

You just seem to have a knack for being in the rare places where nominal prices don't fall.

 

You know, a bit like the "rain god" in the hitchhikers guide to the galaxy, you could be the "high house price god" :D

 

(sorry, couldn't resist, was reading it last night :unsure: )

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A Convoluted argument

 

Now second-time buyers face huge mortgage leap as cost of trading up rises three foldBy Daily Mail Reporter

 

8 June 2012

 

Hefty: Those wishing to upgrade from their first-buy flat to a second buy bigger property are being priced out of moves

The cost of trading up from a first-time buyer property to a second home has almost tripled in the past decade, says a survey.

 

And one in six of those trying to move up the property ladder has to turn to their parents for help, asking for nearly £13,000 on average.

 

The price difference between a typical first-time buyer flat and the semi-detached home desired by many ‘second steppers’ has risen from £14,000 ten years ago to almost £41,000

 

Read more: http://www.dailymail.co.uk/news/article-2156570/Now-second-time-buyers-face-huge-mortgage-leap-cost-trading-rises-fold.html#ixzz1xLXACDeH

 

How do they know what a first buy and second buy home might be?

Are Brits frigging robots?

For instance, they might move from London to a cheaper city, and buy bigger for less

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Yet, they are taken from what is generally considered to be the most concise (actual sold price) data set there is (whereas, AFAIR Home use asking price data). You also have to take inflation into account; there's been a fair drop (real) due to that too.

 

You just seem to have a knack for being in the rare places where nominal prices don't fall.

 

You know, a bit like the "rain god" in the hitchhikers guide to the galaxy, you could be the "high house price god" :D

 

(sorry, couldn't resist, was reading it last night :unsure: )

 

No, they are sold prices. They do have asking price data as well (I think) but I am clicking on the 'Sold prices since 2000' links and, to be honest, I have only looked at 4 or 5 counties - dotted about the country - Berkshire, Devon, Nottinghamshire, Northumberland - I think they were - and they all show the same thing ... which is not much like the graph that was posted based on Land Registry prices. The Home Sold prices are based on that data too ...

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A Convoluted argument

 

Now second-time buyers face huge mortgage leap as cost of trading up rises three foldBy Daily Mail Reporter

 

8 June 2012

 

Hefty: Those wishing to upgrade from their first-buy flat to a second buy bigger property are being priced out of moves

The cost of trading up from a first-time buyer property to a second home has almost tripled in the past decade, says a survey.

 

And one in six of those trying to move up the property ladder has to turn to their parents for help, asking for nearly £13,000 on average.

 

The price difference between a typical first-time buyer flat and the semi-detached home desired by many ‘second steppers’ has risen from £14,000 ten years ago to almost £41,000

 

Read more: http://www.dailymail.co.uk/news/article-2156570/Now-second-time-buyers-face-huge-mortgage-leap-cost-trading-rises-fold.html#ixzz1xLXACDeH

 

How do they know what a first buy and second buy home might be?

Are Brits frigging robots?

For instance, they might move from London to a cheaper city, and buy bigger for less

 

Just this very day an old friend told me they are selling their house and splitting the proceeds between the children - and they are moving into one of those awful mobile home parks for the retired - because their children are getting on for 40 and cannot afford to move up the property ladder. The son has at least as good a job as his father had at his age - yet he has no chance of owning a house like the one he grew up in - unless his parents sell up and give him a load of money.

 

Strange days indeed.

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Perhaps they should move to Shoreditch?

 

I didn't know what to make of this, tbh. Always used to be a little dump, but now revved up with cocktails and awful accents and piff poor poetry. Still worth a look. Might be fab for all I know. Am I missing the UK at all? Or anything on offer?

 

http://www.bbc.co.uk/news/world-18373621

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Perhaps they should move to Shoreditch?

 

I didn't know what to make of this, tbh. Always used to be a little dump, but now revved up with cocktails and awful accents and piff poor poetry. Still worth a look. Might be fab for all I know. Am I missing the UK at all? Or anything on offer?

 

http://www.bbc.co.uk/news/world-18373621

 

I've never lived in London so am going on what I've heard and read but apparently Shoreditch is a funky, vibrant place to live that is surrounded by rough areas. Each to their own, but I'd sooner live in a quieter area surrounded by other quieter areas.

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I've never lived in London so am going on what I've heard and read but apparently Shoreditch is a funky, vibrant place to live that is surrounded by rough areas. Each to their own, but I'd sooner live in a quieter area surrounded by other quieter areas.

If we are really headed into a severe Recession,

then London's gentrification process will go into reverse.

 

Risk you money (maybe), but don't riks your life ?

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Prices going up up

 

What a bizarre (financial) world we live in.

 

 

Indeed we do.

 

But wow, I've always liked Home.co.uk for their realistic assesment of the market in the UK (usually quite bearish) but I've never seen them talk like this before! :blink:

 

In fact, over the last 5 years gold has tripled in value compared to the average UK home asking price. A traditional investment in times of financial uncertainty, for many investors Gold has acted as a useful hedge against the corrosive effects of both inflation and asset price deflation.

However, the recent trend since September 2011 suggests that the pendulum could be swinging back in the opposite direction. Since September 2011, home prices have gained 15% vs. Gold. Should this trend continue, we could be witnessing the start of a considerable turnaround in the property investment sector. Investors are still enthusiastic about UK property and the principle reason must be that, unlike Gold, property offers a return on capital in the form of rent.

 

 

http://www.home.co.uk/asking_price_index/HAPIndex_JUN12.pdf

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Prices going up up

Property the new gold? Ha ha.

Goldfinger would have a nice chart to disassemble that idea

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Indeed we do.

 

But wow, I've always liked Home.co.uk for their realistic assesment of the market in the UK (usually quite bearish) but I've never seen them talk like this before! :blink:

 

 

 

 

http://www.home.co.uk/asking_price_index/HAPIndex_JUN12.pdf

 

JD, you ever so conveniently forgot to copy the last line of that article. Allow me to add it:

 

On the other hand, perhaps Gold is set to surge even higher as the financial catastrophe in the Euro-zone unfolds. Only time will tell...

:)

 

 

''In fact, over the last 5 years gold has tripled in value compared to the average UK home asking price. A traditional investment in times of financial uncertainty, for many investors Gold has acted as a useful hedge against the corrosive effects of both inflation and asset price deflation.

However, the recent trend since September 2011 suggests that the pendulum could be swinging back in the opposite direction. Since September 2011, home prices have gained 15% vs. Gold. Should this trend continue,( :lol: ) we could be witnessing the start of a considerable turnaround in the property investment sector.( :lol: :lol: ) Investors are still enthusiastic about UK property and the principle reason must be that, unlike Gold, property offers a return on capital in the form of rent. ( And Gold offers a return OF capital in the form of purchasing power).

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JD, you ever so conveniently forgot to copy the last line of that article. Allow me to add it:

 

On the other hand, perhaps Gold is set to surge even higher as the financial catastrophe in the Euro-zone unfolds. Only time will tell...

:)

 

Not at all.

 

I just found their interpretation of a brief (probably) drop in the price of gold being equated to an increase in house prices as quite strange and unexpected, especially coming from what are usually considered mainstream commentators.

 

I don't know much about the gold market (except it seems actually quite small and very easily manipulated) so I don't comment on it, but I do have a small amount (just in case :D ).

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Not at all.

 

 

 

I don't know much about the gold market (except it seems actually quite small and very easily manipulated) so I don't comment on it, but I do have a small amount (just in case :D ).

Typical answer I have grown accustomed from you... A profession of seeming innocence, followed by an acid drop of insinuation. And then a bit of track covering/wriggle room. As I thought, you do protest too often.

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Typical answer I have grown accustomed from you... A profession of seeming innocence, followed by an acid drop of insinuation. And then a bit of track covering/wriggle room. As I thought, you do protest too often.

 

WTF? :blink:

 

Think your slightly over analysing there. Some of us actually just think not everything is black and white :lol:

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BDEV / Barratt has had a nice bounceback ... update

 

62205112.png

 

It came on good volume, and we should know very soon (Monday?, Tuesday?)

whether it is more than just a knee-jerk rally

 

Surely, the announcement of more UK money-printing must have helped.

(And how very reckless that is !)

 

BKG , PSN look weaker

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A government can use its resources to modify or even set the outcome in any market it chooses, provided it has sufficient resources. This seems to have been the case with UK property and will continue to be the case until such time as its resources are depleted. Given the eagerness with which people appear to be begging the government to borrow their money from them at patently negative interest, that day does not look to be any time soon.

 

Rising interest rates will be a symptom of resource depletion, not a cause of it. Very important to make that point because there are people looking to interest setting policy to bring about the change. These people are simply partaking of the illusion.

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What do people think of Hillingdon?

 

It sounds like a big improvement in transport (in that area) is coming...

 

(WARNING - for folks in Hong Kong):

 

COMPARISON:

High Point Village, in Hayes, Middlesex - vs- "Prime London"

 

I do believe that there is less downside and greater potential percentage returns in the first versus the second.

 

Here, I am comparing the development described below with 375 High Street Kensington (at GBP 1500 psf), which the property agents have called "Prime Central London", but it isn't. The really funny thing is the so-called Central London location on the edge of Hammersmith, will be less convenient in some respects than the Hayes property, assuming we can believe the advertised transport times, which are:

Heathrow : 6 mins

Paddington : 17 mins

West End : 37 mins

The City : 47 mins

(Note: It could easily take 1 hour to get from 375 Ken.High St to bank)

 

I don't necessarily believe the advertised times (they are often inaccurate), but this comparison does show the importance of actual transport links, rather than "brand name addresses" like Kensington High Street.

 

High Point Village... : MasterPlan

"is situated within the fast-emerging business hub of Hayes. And seamless transport links mean it is equally well-connected to Heathrow Airport, some of the most prosperous business areas, the M4 corridor and Central London. Heathrow Airport is only six minutes away. Hi-tech business parks surround High Point Village. The West End is just over 30 minutes. And with Crossrail being just seconds away, the West End and the city will become even closer."

 

/link: http://www.highpointvillage.co.uk/location

 

It will be interesting to see what price per sf they are asking for the Highpoint property. The advert does mention: a "projected return of 6.8% pa Gross Yield"

 

/source: http://hongkong.asiaxpat.com/forums/hong-kong-property/threads/146664/avoiding-the-london-sucker-punch/

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Confidence seen in Q1 2012

 

Despite uncertainty surrounding the implications of the Budget changes, there has been a growing confidence in the market in the first months of 2012. In the first quarter of the year we have seen increased levels of activity, particularly for the most desirable properties in the most prime locations which are selling well.

 

While stock levels still remain low by historic standards, we saw an increase in instructions in March and this provided a much needed boost in new choice for previously frustrated buyers. The new Crossrail service has also helped to create interest and there is a general 'buzz' over the Olympics later in the year.

 

A quarter of properties sold in 2011 in the West End would have incurred the additional Stamp Duty Land Tax of 7%, resulting in an average additional stamp duty bill of £87,000. While some purchasers may balk at this extra cost, we expect any effect on the market to be felt most closely by those with properties already for sale just above the threshold. Achieved sales prices could be negotiated down for a short time but we believe this will soon be factored into the asking price.

 

The average sales price across the West End in 2011 was £1.4m for flats and £4.4m for houses. However, there are parts of our market which offer more value for money than others, particularly further to the east. That said, sales in prime parts of Bloomsbury are now in excess of £1,000 per square foot, with properties achieving record prices of £1,150 per square foot. This is in part a knock-on effect of increased demand in other parts of central London, such as Belgravia, rippling out to Mayfair, Marylebone and then the West End.

 

“In the West End, the mood is buoyant. Demand for property remains unabated despite the Budget announcements, which we expect to mainly affect the £2m to £2.2m market for a short time only”.

 

- WW

=====

 

I would "fade" this forecast.

I think there will be a marlked deterioration in the London property market after the Olympics,

whatever property sector you may want to focus upon.

 

Time will tell who is right.

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Why do you see a marked downcast in London property after the Olympics Bubb. What will be the driving force behind such a fall in values?

 

I must say I am hearing from people that London properties never crash, or its a safe haven or the powers that be will never let it fall. Same mantra I heard up till September 2008 to March 2009 before they wacked in ultra low interest rates and money printing.

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