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UK House prices: News & Views

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thank you,

I will study


Several friends of mine have, and 3-4 of them have bought, about 12 houses between us - and 80 in total by the local HK intermediary.

Biggest problem is: Prices are not so cheap as 12-18 months ago. But there are still some reasonal opportunities


I will send you a link for what is in Inventory right now

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Can any foreigner buy a property in the USA and become a landlord? I.e. Legally own a property and enter into a legal tenancy agreement of some sort? Can you remit the money out of the USA? Where must tax be paid on it?

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Not sure why that might happen.

Try THIS maybe:


"When you reply to posts, how do you get their post to show in yours - so it is clear what you are replying to"


Can you see the difference?

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Canalside developments in the UK





Walking along the Grand canal


I do not like the UK Property market, but there is a project that I am looking at now.

I thought it might be a good time to launch this thread, even though I believe strongly, it is not the right time to buy


Maybe there are readers here who know something about these developments



New thread - have a look: http://www.greenenergyinvestors.com/index.php?showtopic=21237

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London prices are heading south. No need to catch a falling knife.


Yeah, I agree with that.

In a sideways or up market, these developments look pretty interesting

And at GBP 500 per sf (or so), I am tempted, since I think Crossrail will be a long term positive


Does anyone know how much a Crossrail ride across London will cost

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FRED HARRISON (of 18-year cycle fame) calls into the show - at 25 minutes in:

NEW - The Nigel Farage Show From Washington DC - Trump Inauguration Special - LBC 19-01-2017

"Donald Trump will be a very rich man in 8 years time, thanks to the Trillion in infrastructure investments...

Then, there will be a very serious financial crisis...many people will lose their homes"

INFRASTRUCTURE - a thesis by Fred Harrison

> The Art of Political Rip-offs

Thesis Number: #6 (Page 1 of 8)

The world is on the cusp of the greatest redistribution of income in history. Infrastructure, which originated as a life-force, sent its value flowing through the ages to endow people with richer lives. When that social value was diverted into private pockets, people were cheated and their civilisations imploded. That catastrophe is once again unfolding in our midst.

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WHERE in the Property Cycles are we?

so Fred Harrison predicting boom in USA and bust in UK over next two years,

wouldn't that be unusual, I thought the two economies were very closely correlated?


Yeah. That's what he says - I haven't had an update from him in awhile, so it was interesting to hear this.

Obviously, he thinks they are at different points in the long cycle.


For me, the 18 year cycles bottomed in:


+ for the US : 2011, and so + 14 yrs = 2025 - Next peak? ... and 2016+ 8yrs = 2024 - so his comment makes sense

+ for the UK : ... I need to do more research...


There's normally a dip, lasting a year or so in the middle of the 14 year upswing, and that is due now for the US.

Here's PHM - my US homebuilder benchmark stock:


PHM / Pulte Homes chart : All data


A dip to $15, perhaps in 2017 looks possible, unless it came "early"


For the UK, I look at


BDEV / Barratt Developments chart : All data


I also see a major Low in 2011 - so Harrison must be looking at something else, in predicting a serious recession in two year.

Hence the need for more research into Harrison's present cyclical assessment

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I found links to these two articles (which I cannot read at the moment)


/ 1 /

Economists Explain Why Our Economy Crashes Every 18 Years


Mar 25, 2016 - ... economist and director of the Land Research Trust, Fred Harrison. ... Harrison predicts the midcycle recession will hit in 2019, and the current ...


/ 2 /

Are we heading for a crash? | Albert Edwards, Aditya Chakrabortty ...
https://www.theguardian.com › Opinion › Global economy

Jan 29, 2016 - Fred Harrison: A British recession will happen in 2019. Fred Harrison ... Fred Harrison is an economics commentator and author of Boom Bust ...



Fred Harrison: A British recession will happen in 2019

Britain is on course for a recession in 2019, a year before the general election. The crash will not happen before then because politicians and central bankers will appear not to lose their nerves.

The QE (quantitative easing) solution to the 2008 crash has rendered monetary policy useless as a fine-tuning instrument. Policymakers failed to adopt fiscal reforms that could have rescued the UK, so politicians have no tools to guide Britain out of the current turbulence.

Worldwide, central bankers will talk up any good news, hoping to persuade consumers to spend, even as wages continue to be battered. In the US the Fed will not take any chances in the run-up to November’s presidential election. Oil producers will finally do a deal to drive up petrol prices, which will be sold as a step towards normality. Debts will continue to grow, until a peak in house prices in 2019. Then the game will be up.


There is also this:

When's the Next Property Crash? - Share The Rents
By Fred Harrison on 13 July 2010 in Global Downturn, UK Economy. Finally ... It is ultimately, as Mr Harrison argues, a ruinous way of running our affairs.”.


relevant analysis of what caused the Depression of 2010. ...


... the new realism began when Martin Wolf analysed my book 2010: The Inquest in the Financial Times (July 8). He summarised the mechanism that drives the economy to distraction in these terms:


“Buyers rent property from bankers, in return for a gamble on the upside. A host of agents gain fees from arranging, packaging and distributing the fruits of such highly speculative transactions. In the long upswing (the most recent one lasted 11 years in the UK), they all become rich together, as credit and debt explode upwards. Then, when the collapse comes, recent borrowers, the financial institutions and taxpayers suffer huge losses. This is no more than a giant pyramid selling scheme and one whose dire consequences we have seen again and again. It is ultimately, as Mr Harrison argues, a ruinous way of running our affairs.”


That message has to sink into the heads of economists if they want to guide the western economy out of the depression...

. . .

Unless the Wolf realism infects mainstream analysts, expect the disarray to continue and for the next property cycle to terminate in 2025. Wolf has just been appointed as one of 5 experts to the new Financial Policy Committee within the Bank of England, which will operate “in parallel with its existing Monetary Policy Committee”.

Will Wolf be able to influence the Bank of England? Not likely. So a lot of traps await the unwary between now and the Crash of ’25.


So perhaps he means: a mid-cycle recession in 2019, followed by a bigger peak, and larger Crash in 2025.

That means the UK would be 1-2 years behind the US cycle.

I do note however that London never had much of a correction in 2008-9, so this 2019 drop could be something more serious for London.

I also think the Demographics that Harry Dent talks about will hurt London as boomers retire, and shift wealth away from the capital city

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it seems he's predicting a mid cycle recession in 2019 but house prices to continue to rise until 2026?


Economists Explain Why Our Economy Crashes Every 18 Years


so if i wanted to profit from the 2019 midcycle recession what would be the positions to take,

given the government and financial institutions seem determined to prevent true price discovery whatever the cost to the peons go long on the ftse?

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UK Timing - I added some timing detail to my prior post


(I wrote this in an email to a friend who saw this thread):


The US is well positioned in the 18 year cycle

Low as 2011 + 14 = 2023 Peak.


We may see a dip in 2017-18

But i do think there may be a big risk on the USD, so borrowing 10+ years at a Low fixed rate (3-4%) may make good sense


Use the money to buy a gold convertible bond or something

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I occasionally look in here to add a little anecdote and, of course, to read what others are saying. I think I have probably posted elsewhere that my sons bought a new build house using Help to Buy last year - in June. They had a card through the letterbox the other day from a local estate agent trumpeting the news that a house near them had just been sold for (I think, can't remember the exact figure) 60k more than was paid - just a few months ago! This is a large new estate too - huge. Must be a couple of miles square. Looking at the houses currently for release my sons' 4 bed terrace house has gone up by almost 100k in 8 months.


All I can say is - the mind boggles and how right my sons were not to listen to me when I warned them against buying what I thought was already an overvalued house.


It seems this market just goes on and on and on. I have been waiting for a crash since 2002.

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"All I can say is - the mind boggles and how right my sons were not to listen to me when I warned them against buying what I thought was already an overvalued house."


So long as the bought before the 2-3 year "Buyers Remorse period", they may be alright

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The British property boom is OVER




This chart, from Morgan Stanley, is the final nail in the coffin of Britain's post-2008 crisis property boom. It shows three separate indices that measure major movements in UK house prices. Prime central prices have collapsed, and general market UK house prices are following them down.

. . .

The green line measures prices in "prime central London," the area mostly inside Zone 1 were only the very rich can afford to buy. Normally, you can ignore this measure as it only affects the 1%. Ordinary people cannot afford to live in Mayfair or Chelsea, and the amount of housing inventory in those areas is a tiny fraction of the British market.

That line does broadly follow growth in the market as a whole, however, and right now it looks like the canary in the coal mine. Prime central prices have collapsed, and general market UK house prices are following them down. (We'll explain why later.)


> more: https://uk.yahoo.com/finance/news/british-property-boom-over-124900378.html



At the same time...

Barratt has rallied back to where it was before Brexit


BDEV / Barratt Developments ... 5-years : Last: 558.50 P




If the boom is truly over, then BDEV may be a great short here

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Catch-Up Time? the New PROPERTY PRICE BOOM:


Forget the London property bubble – house prices are rising MORE in Liverpool and Birmingham


FIRST-TIME buyers in London have faced excessively high house prices for years, but now Liverpool and Birmingham could be the new price property hotspots.

According to a property price index, house prices in Liverpool, Birmingham and Manchester are now rising more quickly than in the capital, with house price growth in London weakening.


According to property analysts Hometrack, year-on-year house price growth in London was 6.4 per cent in January – the lowest level recorded since June 2013.

By comparison, house prices in Birmingham and Liverpool have grown 7.4 per cent and 7.1 per cent, respectively.

The index, which monitors house prices across the UK’s 20 biggest cities, found Bristol remains the city with the strongest house price growth, with an annual increase of 9.5 per cent in January.


> https://www.thesun.co.uk/money/2939808/forget-the-london-property-bubble-house-prices-are-rising-more-in-liverpool-and-birmingham/



> New thread om LIVERPOOL : http://www.greenenergyinvestors.com/index.php?showtopic=21444

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Barratt may be very near an ideal sell-point


BDEV... all


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US Millennials are now trying to force older homeowners to Sell to them

- presumably "at a price we can afford"


Baby Boomers Who Won't Sell Dominating Housing Market...

  • Older Americans own half of houses, squeezing out youngsters
  • Why a 23-year-old is cruising city streets, knocking on doors

Jake Yanoviak is hunting for houses. On a weekday afternoon in North Philadelphia, the 23-year-old painter cruises along on his bike, its black paint obscured under stickers from breweries and rock bands. He turns onto a side street, where he spots a few elderly neighbors, standing on adjoining porches. He parks, leans on one handlebar and makes his pitch.

“Anybody on the block considering selling?” Yanoviak asks gently. “I’m not a developer, I’m not interested in renting to students. I’m just a kid trying to buy a house, fix it up and live in it.”

Jake Yanoviak / Photographer: Prashant Gopal/Bloomberg

“We’re not going no place,” replies a 70-something woman, relaxing in fuzzy white pig slippers in the row house where she’s lived twice as long as Yanoviak has been alive. “All these houses are taken.”

Like much of his generation, Yanoviak is desperate to get a piece of an increasingly scarce commodity: prime American real estate. Millennials are finding themselves out in the cold because building has slowed, and longer-living baby boomers are staying put, setting up a simmering conflict between the two biggest generations in U.S. history.


The article doesn't mention that the home may be the main asset of the older person, or if an investment,

like their pension - at a time when bank deposit rates are still near zero

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St James project at White City


+ Looks good, but

+ Ugh, what a price! GBP 655,000 ! and up


> http://www.stjameswhitecity.com/wp-content/uploads/2014/09/St-James-White-City-Sept-Exhibition_part-1-of-2.pdf

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Welcome to Britain's biggest ghost town - where 1 in 3 shops are boarded up

Yahoo Finance UK 21 September 2017
Empty shops in Burslem – the UK’s ‘ghost town’ capital (SWNS.com)

Welcome to Britain’s most stark ghost town – where one in three shops is empty.

Burslem, in Stoke-on-Trent has a shop vacancy rate of 31.5%, nearly three times the national average of 12.2%.

Where once stood a bustling array of local traders, many buildings are now boarded up, left to decay and a magnet for graffiti artists and vandals.


Business leaders say the town has been left deserted due to the demise of the once thriving pottery industry, which gave the area its nickname, as well as the impact of Brexit.


> https://uk.finance.yahoo.com/news/welcome-britains-biggest-ghost-town-1-3-shops-boarded-102956773.html

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UK House price article

Over the past 30 years real interest rates in the UK and other developed economies have been on a long-term downwards trend. This has supported the valuations of many assets, including house prices. With real interest rates predicted to rise gradually over the next decade or two, precisely the opposite (a ‘decapitalisation’, or a fall in real house prices) could happen and we believe real house prices could be 20% lower by 2030.

The recapitalisation effect
In the second half of the 1980s mortgage interest rates in real terms averaged over 7.5%. In contrast, in the five-year run-up to the global financial crisis they averaged less than half that, at 3.5%, and over the last five years they have halved again, averaging just 1.7%.


The persistent decline in mortgage interest rates over the past 30 years has been one of the most powerful influences that helped contribute to the more than fivefold rise in nominal (and 2.5-fold rise in real) house prices over that period.

What is more interesting is that following the sizable fall in interest rates and rise in house prices, the repayment-to-income ratio is now exactly in line with its long-run average. This indicates that, when it comes to affordability, the fall in mortgage rates has been completely offset by an equivalent rise in house prices known as the ‘recapitalisation’ effect.

From recapitalisation to decapitalisation
Now imagine this process in reverse. How far do house prices have to fall by 2030 to keep the repayment-to-income ratio in line with its long-run average when interest rates rise?

To develop our framework, we made some assumptions:

  • Bank of England official nominal interest rates will rise linearly to 4% by 2030 (i.e., just over 25bp of hikes per year). This resting point for interest rates reflects a combination of long-term real GDP growth of 2% plus 2% inflation.
  • The spread of mortgage rates over Bank Rate will remain close to its current 230bp.
  • Average nominal household income will grow at 2.5% per year, rising to 0.75% y-o-y thereafter.

Based on these assumptions, if our aim was to keep the repayment-to-income ratio static at its current long-run average level of 23.5%, then nominal house prices would need to remain broadly unchanged each year between 2017 and 2030. That equates to an average 1.75% annual decline for each of those years. In level terms, nominal house prices would be unchanged relative to this year by 2030; in real terms that equates to a 20% decline over the period.


In other words, just as lower interest rates were ‘recapitalised’ into higher house prices over the past few decades, a normalisation in interest rates could result in a ‘real term decapitalisation’ of the UK housing market over the coming years.

For more in depth information on our analysis including some of the potential pitfalls, read The ‘decapitalisation’ of UK housing


> http://www.nomuraconnects.com/focused-thinking-posts/will-uk-housing-continue-to-stand-tall-or-fall/?utm_campaign=BrandQ4~HK&SG&utm_source=Dianomi&utm_content=UKhousing:theriseandfall~UKhousing~&utm_medium=Agreedtitles

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Coming Down!

UK homeowners slash house prices by over £25,000 on average as property market slows

Stephen Little
Figures from Nationwide show that house price growth went up 0.1 per cent in November: Getty

UK homeowners desperate to sell their property in a slowing market have slashed their offer price by an average of £25,562, according to new figures from property website Zoopla.

An analysis of house price data across its website for November reveals that 35 per cent of properties on the market had been marked down, with average prices in London being cut by more than £50,000.

As a proportion of property price, Stockton-on-Tees saw the largest reductions, with homes in the town marked down by £13,350 – or 8 per cent on average – since being listed.

This was closely followed by Darlington and Bishop Auckland, where property was reduced by £12,285, or 7.88 per cent, and £10,573, or 7.86 per cent, respectively.

In London, 39 per cent of property listings were reduced in price, up from 37 per cent that were cut during the month of July. The average price reduction in London was £53,251 – or 7.4 per cent.

Kensington and Chelsea was the most discounted borough in value terms, with prices knocked down by £129,559 on average – representing 7.9 per cent of the total property price.


> more: https://uk.finance.yahoo.com/news/uk-homeowners-slash-house-prices-120200518.html?hl=1&noRedirect=1

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