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UK House prices: News & Views

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Halifx following too....

 

House prices fell for the third month in a row in September according to the Halifax, one of the UK's biggest mortgage lenders.

Its latest monthly survey suggests that average prices dipped by 0.4% last month compared with August.

This latest fall means that the average UK house now costs £159,486, which is 1.2% lower than at the same point a year ago.

 

http://www.bbc.co.uk/news/business-19821613

 

Interestingly, they blame "the recession"! :o

 

What, not the olympics? not the jubilee? not the weather? not the full moon? :lol: :lol:

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Halifax -0.4% last month, now below the 160k barrier:

 

http://www.bbc.co.uk...siness-19821613

 

This latest fall means that the average UK house now costs £159,486, which is 1.2% lower than at the same point a year ago.

 

 

I see from the press release that Halifax/ASHE ratio is now down at 4.25, not too far from the long term average of 4, which is.. interesting.

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Halifax -0.4% last month, now below the 160k barrier:

 

http://www.bbc.co.uk...siness-19821613

 

This latest fall means that the average UK house now costs £159,486, which is 1.2% lower than at the same point a year ago.

 

 

Or 143oz in gold, or 7,352oz of silver. I wonder how this will change going forward?

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Debt forgiveness by another name?

 

The lessons from Japan are acute, too. To stimulate growth, Japan tried quantitative easing, infrastructure spending and credit easing. UK policy has been a virtual carbon copy. What Japan never addressed was debt restructuring. Instead it let “zombie companies [be] supported by zombie banks”, as Bank of Japan’s deputy governor put it in a recent speech.

 

Where the politicians fear to tread, though, the FPC might. If banks are made to write off swathes of forborne mortgages, the improved terms for those borrowers with £100bn of forborne debt could be made permanent. Although the homeowner would still in theory have the same principal loan to repay, the cost of servicing it would be lower – thereby reducing the effective debt. It would be forgiveness in another guise.

 

There is only big caveat, though. Taking the hit would wipe out so much capital the banks would need to go back to shareholders, or the taxpayer, cap-in-hand. Which explains why regulators are blocking bonuses and dividends, and telling the banks to raise capital now.

 

 

http://www.telegraph...for-growth.html

 

It's not policy.........yet.

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Now can we please all agree that Rightmove is the worst of all the indices?

 

That's not news, mate.

Another jump in the delusion index, still what did you expect when the Olympics have given everyone a sense of invicibility?

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That's not news, mate.

Another jump in the delusion index, still what did you expect when the Olympics have given everyone a sense of invicibility?

 

Oh Van, you didn't get it? What a shame :(

 

Nobel Prize: Alvin Roth and Lloyd Shapley win economics award

 

http://www.bbc.co.uk/news/business-19946503

 

I was sure it'd be you this year ;)

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Rightmove out

http://uk.finance.ya...-085421862.html

Now can we please all agree that Rightmove is the worst of all the indices?

"House sellers have raised their asking prices by more than £8,000 this month as a shortage of homes for sale restricts choice in the market."

 

That's a seasonal thing - that happens every October, and usually gets given back

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The Oct. Rightmove rise was GBP 7000 or so in several previous years

 

The Greater London jump this month was even bigger, and took it to a fresh high

 

 

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 : 152,815 : +0.63% / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% :149.8% :

M : : 243,759 : 469,314 : 152,803 : - 0.01% / 166,022 = n/a = 160,941 161,785 : £163,904 : +0.77% :148.7% :

J. : : 246,235 : 477,440 : 153,332 : +0.35% / 165,738 = n/a = 162,417 163,240 : £164,489 : +0.36% :149.7% :

Jl : : 242,097 : 460,304 : 151,633 : - 1.11% / 164,389 = n/a = 161,094 162,619 : £163,504 : - 0.60% :148.1% :

A : : 236,260 : 454,875 : 150,173 : - 0.96% / 164,729 = n/a = 160,256 160,200 : £162,465 : - 0.64% : 145.4% :

S : : 234,858 : 456,237 : == n/a = : -- n/a -- / 163,964 = n/a = 159,486 160,437 : £162,201 : - 0.16% : 144.8% :

O : : 243,168 : 478,071 : == n/a = : -- n/a -- /

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

mom:+3.54% : +4.79 % : Est. DI : : 149.9% / +0.??% = n/a = :- 0.48% : +0.15% : - 0.16% :

 

Up there with Barratt / BDEV .. update

 

 

bigl.gif

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Remember this?

 

 

It is a headache for the Government and ministers are only too aware that the NewBuy programme to help first-time buyers get on the housing ladder and the Funding for Lending Scheme aimed at boosting mortgage lending are not enough to kickstart a housing boom.

It's ridiculously expensive for people to buy houses in this country,' said Housing Minister Grant Shapps.

'The housing bubble locked a generation out. I'm in complete agreement there's a housing crisis.'

. . .

We are very pleased to get ourselves in such a strong position.' But despite the bullish updates – which have been echoed in recent months by rival builders including Barratt Developments and Taylor Wimpy – experts reckon just 100,000 homes will be built this year.

 

'We haven't been building this few houses outside wartime for 100 years,' said Bovis boss Ritchie.

 

The big problem is mortgages – or the lack of them – and the men in hard hats say they will only build more homes if they can sell them and that means freeing up the mortgage market. It is a view shared by Shapps.

 

'You can't solve this by building homes that no one can afford to buy,' he said. The Government introduced NewBuy last March to protect banks against losses if they offer mortgages to buyers with only a 5 per cent deposit as long as they are buying new-build houses.

 

 

Dim politicians !

Look at the chart:

article-2191734-14A418E4000005DC-204_634x648.jpg

 

The problem isn't MORTGAGES - it is that at current levels of LAND PRICES, there is only one easy way to make money...

 

Why take the risk of buildings loads of New homes all across the UK, when you can make better money selling homes branded as London "Prime" in 2nd-tier locations to gullible foreign buyers - who then just rent them out to house-hungry locals. They will keep on buying until they discover their fingers are getting burned.

 

It is time for some SHOCK therapy.

Take The Hit that should have been taken long ago, as the USA and Ireland have down.

 

ALLOW home prices to Go Down!

That will push land prices lower, and allow surviving Builders to replenish their land banks more cheaply, then they can get back to doing the business they should be doing.

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Keep an eye on the forecast on credit market conditions.

 

Whilst remaining very bearish on most measures, for the first time in many years, it seems the EYIC UK forecast is now looking at an improvement in conditions coming in the next 6 months or so.

 

“The latest credit conditions survey shows that one of the biggest headwinds facing the UK has now begun to ease – lending has started to loosen up and we’re hopeful that the housing market is primed for a recovery early next year.”

 

http://www.myfinances.co.uk/investments/2012/10/15/item-club-uk-economy-set-to-grow-as-consumers-spend-more

 

If the credit forecast turns out to be true, it might not mean a full blown recovery or boom, but you can forget your big crash for the foreseeable future.

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Rightmove out

 

 

 

http://uk.finance.ya...-085421862.html

 

:lol: :lol:

 

Now can we please all agree that Rightmove is the worst of all the indices?

 

The headline on the RIghtmove site is "Asking prices jump by 3.5%". That is nothing but sloppy sensationalism and possibly down right wrong. I've been trying to understand the differences between all of the indices and wrote my last thoughts here. While I'm still yet to figure out the intracacies of all the interactions between the indices and which one I should be using as my key reference I do know it won't be the Rightmove Index. The main reason is that it doesn't track house prices (even asking ones as opposed to sold ones) at all. It just averages asking prices as properties come on to the market. This means it is actually tracking a combination of initial asking prices, possible housing type mix changes and possible location mix changes making it just about useless.

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Maybe they should seasonally adjust it :rolleyes:

 

That would then take more effort than listing all of the initial asking prices in one Excel column and then typing =Average(A1:AX) in the cell below. It might even require the use of a

Statistician. I'm now even starting to wonder if they actually filter out all the duplicate entries which arise by people listing with multiple agents.

 

If not we're going to get even more rubbish data with distortions like this. Property 1 http://www.rightmove.co.uk/new-homes-for-sale/property-36028837.html and Property 2 (oh hang on it's Property 1 again) http://www.rightmove.co.uk/property-for-sale/property-33694633.html each listed for £39,950,000.

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Meantime, thanks to these sensational prices from Rightmove, the Delusion Index has made a new Notional high - at 149.9%

 

In this case, it is Oct.Rightmove to Sep.Haliwide

==

 

Miles Shipside, director of Rightmove, said: "Sellers need to be mindful that the window of opportunity to sell before the traditional winter slowdown is a narrow one, and they risk being left out in the cold for months until the spring market thaw."

Rightmove said that its own research found that fewer than two in five would-be buyers say they will arrange to visit a property they believe is over-priced, even if it matches their criteria.

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QUESTION: If the UK is "in Austerity", then why are London property prices booming ?

 

This disharmony struck me on my recent trip to the UK.

And the puzzle was also mentioned at the beginning of a recent podcast on FBB

http://commoditywatc...ullish-on-gold/

 

Any thoughts on why this might be happening? How long can it last?

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From the Central London Property thread...

 

I have been thinking re whether it makes more sense for a private investor to buy property ie buy to let directly or buy a REIT via an isa. Admittedly different assets ie residential vs commercial, different leverage etc but am thinking the tax advantage, instant liquidity and the opportunity to buy REITS at a discount to NAV make them attractive? Add in the ability to chose your mix of commercial, retail, development and location mix? And without the headaches of having to manage property directly. The negative arguably is that the best performing sector has been residential for a long time ( tho' some property co.s have resi exposure).

 

Thoughts / comments?

 

Residential property is very heavily exposed to the risk of rising rates - that worries me

 

10 Year UK Gilt Rates - just off the long term lows

 

ukgiltyield.png

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QUESTION: If the UK is "in Austerity", then why are London property prices booming ?

 

Well, it's all relative.

 

Greece has austerity.

 

Portugal has austerity.

 

Eire has austerity.

 

Spain is getting it, whilst we are just cutting down on the odd latte etc and letting inflation do the rest. Hey ho :rolleyes:

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Well, it's all relative.

 

Greece has austerity.

 

Portugal has austerity.

 

Eire has austerity.

 

Spain is getting it, whilst we are just cutting down on the odd latte etc and letting inflation do the rest. Hey ho :rolleyes:

 

I don't consider anyone who is still running a budget deficit to be truely running an austerity programme. They may be a little more austere than before, but they are still living above their means.

 

And if anyone says that the austerity is resulting in the fall in GDP so it's a downward spiral, well that just should how much of these economies were made up of unnecessary governmental departments. They'll continue on this downward spiral until what's left is actually of productive value.

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QUESTION: If the UK is "in Austerity", then why are London property prices booming ?

 

This disharmony struck me on my recent trip to the UK.

And the puzzle was also mentioned at the beginning of a recent podcast on FBB

http://commoditywatc...ullish-on-gold/

 

Any thoughts on why this might be happening? How long can it last?

 

it's the global economy stupid! Ha ha.. couldn't resist that. :P

 

In other words; with globalism, capital is free to range the planet. Money will go to 'hotspots' irrespective of the national monetary policy. the same is happening in Auckland, NZ. The government here is apeing austerity, and there is a boom in the property market! With the instability and uncertainty, money is going into certain cities. Hong Kong still going well?

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Hong Kong still going well?

 

Sure - rising now at something like 0.5% PER WEEK !

 

Thanks to those low rates - but HK has none of those debt problems that the UK and the US have

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UK unemployment down again.

 

http://www.bbc.co.uk...siness-19975719

 

A more sober look at the statistics reveals something rather less sanguine. Comparing June-August 2007 and June-August 2012:

  1. the number of people in full-time employment fell by 355,000
  2. the number of people in part-time employment increased by 724,000
  3. the number of unemployed people increased by 883,000
  4. the number of economically inactive people, aged from 16 to 64, fell by 112,000

  • Household population aged 16+ increased by 1.853 million seasonally adjusted over the period
  • The number of people in employment has not been higher since comparable records began in 1971, the employment rate of 71.3 per cent, for those aged from 16 to 64, is lower than the pre-recession peak of 73.0 per cent recorded for March to May 2008.

Source: ONS: Labour Market Statistics October 2012 (pdf)

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Oh, and btw mortgage lending has fallen off a cliff http://www.independe...gh-8216447.html>

 

 

Mortgage lending was “disappointingly lacklustre” in September, sliding by 10% compared with the previous month when borrowing for home buyers reached a two-year high, lenders said today.

The Council of Mortgage Lenders (CML) said lending totalled £11.6 billion last month, which is also 15% lower than a year ago, despite a recent boost to the availability of mortgage deals.

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A more sober look at the statistics reveals something rather less sanguine. Comparing June-August 2007 and June-August 2012:

  1. the number of people in full-time employment fell by 355,000
  2. the number of people in part-time employment increased by 724,000
  3. the number of unemployed people increased by 883,000
  4. the number of economically inactive people, aged from 16 to 64, fell by 112,000

  • Household population aged 16+ increased by 1.853 million seasonally adjusted over the period
  • The number of people in employment has not been higher since comparable records began in 1971, the employment rate of 71.3 per cent, for those aged from 16 to 64, is lower than the pre-recession peak of 73.0 per cent recorded for March to May 2008.

Source: ONS: Labour Market Statistics October 2012 (pdf)

 

Yep, right smack bang in the middle of one of the biggest recessions ever, the number of people in employment is just a percent or so off the most ever in history, which was recorded at the top of maybe the biggest boom in history. All in all, not so bad then.

 

Now I'm not defending current policies (actually I have moved a little towards the left on this now), or the data, (indeed, I was rather surprised, again, considering), but I still think it could be a whole lot worse.

 

Also, until those that lose their jobs are forced to sell (forbearance in full effect at present), it aint gonna effect the prices of houses much (as has been the case, so far).

 

As for the CML figures, that'll be the Olympics/autumn/bad-weather/global-wierding-effect etc. :D

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