UK House prices: News & Views

[drbubb]

London -3.7% MoM

Metro: Biggest Fall in House Prices in 5 Years

Tis the season to be jolly.

[drbubb]

House prices tumble again as buyers face a squeeze

Russell Lynch, Evening Standard Wed, 7 Feb

More signs of a deflating property market emerged on Wednesday as prices fell for the second month in a row for the first time since the Brexit vote, according to lender Halifax.

Average prices fell 0.6% in January on the back of a 0.8% decline in December, the first time house prices have marked successive monthly declines since July and August 2016.

In annual terms house prices are 2.2% ahead of a year earlier, which is the weakest growth since last July.

The latest signs of weakness, which follow recent stronger signals from the Nationwide benchmark, come after the Bank of England’s first rate rise in a decade in November.

Market speculation is mounting that policymakers could move again in May.

Although Halifax says that prices are being supported by a lack of homes for sale, potential buyers are facing a squeeze on real incomes, with inflation still higher than wage growth.

Chancellor Philip Hammond abolished stamp duty for first-time buyers on property up to £300,000 in November’s budget but Halifax’s Russell Galley, said “it’s still too early to see any impact” on house prices.

Mortgage approvals for new house purchases have also dropped sharply since the rate rise, putting more pressure on the market.

> https://uk.yahoo.com/news/house-prices-tumble-again-buyers-102800618.html
 

[drbubb]

London house prices slump most since financial crisis...

Price drop underscores hit from Brexit uncertainty, high inflation

House prices in London have dropped the most since the height of the financial crisis, underscoring the impact from rising inflation and uncertainty over the U.K.’s exit from the European Union.

The average price of a home in the capital dropped to £593,396 ($822,447) in the three months to January, down 2.6% from the same period last year, according to a report by data provider Acadata out on Monday. In comparison, house prices across all of England and Wales rose 0.7% during the period, with the biggest jump seen in the North West.

London — once the center of a U.K. property boom — has now seen house prices fall for three straight months, according to the data. The weakness comes as the country grapples with uncertainty over the Brexit negotiations with Brussels, with particular focus on how the divorce will impact the capital’s financial center and investments.

The EU referendum in 2016 also sparked a plunge in the pound GBPUSD, +0.4116%  , which pushed up inflation and is now eating into household’s budgets. Rising inflation also prompted the Bank of England to raise interest rates for the first time in a decade in November, driving up the cost of mortgages.

[drbubb]

HPC headlines

/ 1 /

England & Wales -0.4%, London -4.3% YoY

Evening standard: London leads house price plunge into �the red zone� as market records worst performance since financial crisis

In answer to Frizzers' post below ... the capital heads a year on year slide, now reflected in E&W figures too.

Posted by nickb @ 10:23 AM 2 Comments

/ 2 /

The Independent: Savills becomes latest estate agent to warn over challenging housing market

I just love how 'price declines' are given the politically correct term 'volatility' or 'uncertainty'. It's like how what's unfolded since 2008 has never been labelled a 'depression'. Call it like it is. House prices are going down, led by a much-needed crunch in London. I wouldn't want to be an offshore owner of all those newbuild "LUXURY DEVELOPMENTS" now!!! You don't vote, you don't pay tax, you don't live here, you can't sell because nobody onshore will pay them -- and we don't care!

Posted by sneaker @ 05:12 PM 0 Comments

(No one cares if foreign investors ever make a profit, this makes it seem)

[drbubb]

Rate rise doubts as property demand falls, says RICS

By Kevin Peachey Personal finance reporter

• 12 April 2018
•  
• A lack of activity in the UK housing market could make it more difficult for Bank of England policymakers to raise interest rates, surveyors have said.

There has been widespread speculation of a potential increase in the Bank rate in May from its level of 0.5%.

The Royal Institution of Chartered Surveyors (RICS) said property buyer demand had fallen for its 12th consecutive month in March.

This could mean slower household spending as fewer people move home.

Simon Rubinsohn, chief economist at RICS, said that there was little sign of any potential pick-up in buyer demand.

"Apart from the implications this has for the market itself, it also has the potential to impact the wider economy, contributing to a softer trend in household spending," he said.

"This could make Bank of England deliberations around a May hike in interest rates, which is pretty much odds-on at the moment, a little more finely balanced than would otherwise be the case."

• Interest rates: What would a rise mean for you?
• Moving home is 'becoming a rarity'

>

http://www.bbc.com/news/business-43724002

 

[drbubb]

Deflation from housing

Zerohedge: Beware mother of all deflations

USA opinion piece with UK as case study. Until 1982 mortgages were supplied by building societies. Building societies were -not- granted the same privilege to create credit/money so finance availability was limited. After 1982 the banks, capable of creating loans ex nihilo got into the market, valuations became circular on lending, and the only limit to price increases was(is) how much debt can be sustained leading to 2008, debts can't grow, process goes into reverse ->massive government intervention.

/ 2 /

Sign of Desperation?

Desperate banks slash rates on high risk mortgages

• 1 2

By Mancunian284, Friday at 04:13 AM

[drbubb]

Gold looks a better bet than UK property – here’s why

Today we return to a subject that has been a favourite of mine over the years: UK house prices – but with a twist.

We don’t consider them in the debased, devalued currency that is the pound. Rather, we measure them in the eternal currency that is gold.

Comparing those two charts – house prices in sterling and house prices in gold – the story is quite different. When you look at the journey UK house prices have been on measured in gold, you also get a clearer idea of just how much sterling has been debased, particularly since 2008.

Measured in gold, from 2005, house prices fell for six years, so that by 2012, at 150oz for the average UK home, they were briefly back to where they were in 1987. It’s astonishing. Even today, at 220oz for the average UK home, we are only at mid-1990s prices.

here’s Greater London in gold.

Where London has differed from the rest of the UK (perhaps with the exception of the likes of Oxford, Cambridge, Bristol and Brighton) is in the breathtaking rally it has enjoyed since 2012, whether in sterling or gold. The average London house went from 150oz to almost 450oz. From low to high it nearly tripled.

The market got massively overheated by about 2015-16 and has since pulled back. We now have atrophy at the top of the market, thanks to George Osborne’s higher stamp duty, and central London, agents report, appears to have pulled back by 10% or 15%. In gold terms, we are back at 350oz.

Unlike the rest of the UK, we are nowhere near the ("cheap") early 1990s levels of around 200oz.

Where London goes next depends, to my mind at least, on the current chancellor. Stamp duty is punitively high: it’s 10% above £925,000 and 13% above £1.5m – even more for second homes. It’s killed the top of the market.

But despite lower transactions levels, revenue to the Treasury is also high, so that will be a deterrent to any chancellor wishing to reduce it. If stamp duty stays high, London property heads lower. If it doesn’t, then the outlook is brighter.

> Dominic Frisby: https://moneyweek.com/uk-house-prices-gold-a-better-bet-than-uk-property/

[drbubb]

While the UK suffers, The Philippines booms !

(so far)

New Data in from Colliers

CONVERSATIONS with Property Agents (in the Philippines)

[BoldAsBrass]

A little anecdotal. Apologies if already posted the first bit. Thinking in terms of house price indices - one I just saw shows a decline of 0.5% in the South East. Sold our house in Berkshire earlier this year.

Bought it in 2010 for £422k. 4 bed detached estate house in a nice area. Spent a fair bit on it - new kitchen, bathroom, en-suite. New fireplace - redecorated from top to bottom, new flooring to ground floor, new carpets upstairs, bit of work on the gardens etc. It was an ex-rental when we bought it, and we turned it into a nice family home.

It went on the market for £720k in summer 2017. First offer was £695k. Timewasters who pulled out. Second offer was £665k which we accepted - as we were keen to move on and we had also had an offer of £650k. Second buyer's buyer couldn't get the mortgage they needed so they pulled out too. Buyer number 3 offered us £670k which we took. And this went through, 9 months after first going on the market - in April this year. We seemed to have not too much trouble getting offers, but finding someone who could go through with it seemed tricky. The third sale dragged on for about 4 months even though there were only 3 in the chain.

Anyway, round my son's house this morning - he had an agent round for a valuation. First time since 1990 I've heard an agent utter the words 'the market is falling'.

Quite how the house prices indices factor in my house baffles me. All they know is we bought it in 2010 for £422k and sold it in 2018 for £670k. On the face of it the house went up 58% in 8 years - but the index has no idea how much we spent on the house.

[drbubb]

UK Property:

First time since 1990 I've heard an agent utter the words 'the market is falling'.

That's an important marker.

They probably would not say that unless there was a lot of evidence

The main property bellwether, BDEV, peaked over 9 months ago

That's nicely within the window of "Developer stocks peak 6-12 months before the actual market"

BDEV / Barratt Dev'l ... update :

=

[drbubb]

A Bad sign

Rents down 0.3% over the year in London, outlook is further falls

Office of National Statistics: Index of Private Housing Rental Prices, Great Britain: July 2018

Not sure what the Enfield statistic is though :-) Interestingly, the most highly leveraged landlords - those in London - are clearly not doing a good job at passing on their tax costs to tenants. The business model of a lot of London landlords is making no money or a loss on rent, but hitting the jackpot with a big capital gain. Let's see how this pans out if prices keep falling

/ 2 /

Prices now slightly less over inflated

Zero Hedge: London House Prices Fall At Fastest Rate Since Height Of Financial Crisis

- London house prices fall at the fastest annual rate since height of the financial crisis - London house prices fall in 5th month in row, worst falls since 2009 - London rents dropped at the fastest rate in eight years - ONS - Brexit, London property slump put brake on UK house price growth - Consumer spending declined in July as inflation increased

BDEV / Barratt Dev'l ... update :

PSN / Persimmon ... update : PSN w/ BDEV :

[BoldAsBrass]

I am now in the market to buy … it's funny how no matter how quiet the market is - or how much doom and gloom there is about - it is very hard to find a vendor who is prepared to accept (much) less than the agent valued it at, or they think it is worth.

My experience of falling housing markets before is that it takes at least a year for people to get their heads around the fact the market is not on an eternal upward curve and for agents to have so few sales that they, finally, start telling vendors the facts of life.

That said, we are now awash with on-line agents and people can put their house on the market at any daft price and only risk losing a few hundred quid. 

[tinecu]

Spot on BoldAsBrass, it will take quite some time for the new market reality to sink in. Londoners will 'get it' first...

 

Meanwhile... update on London rents...from here: https://www.home.co.uk/asking_price_index/HAPIndex_NOV18.pdf

"...rents are rising by 2.3% nationally and by a massive 5.8% in Greater London."

Shortage of available rental stock driving up London rents.

[drbubb]

On 10/12/2018 at 10:15 PM, BoldAsBrass said:

I am now in the market to buy … it's funny how no matter how quiet the market is - or how much doom and gloom there is about - it is very hard to find a vendor who is prepared to accept (much) less than the agent valued it at, or they think it is worth.

Sounds like you might have to wait a bit to find a distressed seller willing to take a realistic price

[drbubb]

UK facing longest fall in living standards for over 60 years, finds think tank

The UK is on course for the longest period of falling living standards since records began, according to a leading think tank.

The Resolution Foundation said data released in the Budget showed British are families suffering the biggest squeeze in their finances since the 1950s.

It explained in a report published this morning that the UK economy will be £42bn smaller in 2022 than we thought it would be in March after official data indicated dismal growth forecasts in coming years.

Read more: WHAT REALLY HAPPENED | The History The US Government HOPES You Never Learn! http://www.whatreallyhappened.com/#ixzz5Y0eGjHUV

[drbubb]

WINDOW on UK Life - thru Christmas commercials

is it as Bad as Mark Collette suggests here?

MP3 : http://content.blubrry.com/rbn/stream_2018-11-26_115941.mp3

Images (fake?) of Live in the UK from major UK co's

[drbubb]

BOE Predicts House Prices could fall by a third in the case of hard Brexit

BBC: Bank warns no-deal could see UK sink into recession

I am getting fed up with the expression "No one voted for a worse economy" etc. If house prices dropped by 1/3 but wages only came down 15% then many people would benefit. Although I own my bungalow a price drop would make a bigger one that much cheaper. Obviously the over-indebted wouldn't benefit at all.

/ 2 /

London down 1.7% in November alone

The Guardian: UK house prices fall by £5,000 on average, with south sliding fastest

More and more price reductions. I guess sold prices to follow shortly. I loved the estate agent's reduction strategy though Good time for cheeky offers.

House prices fell by more than £5,000 on average in November, sliding fastest in Britain’s wealthiest towns as Brexit uncertainty gripped the property market, according to the website Rightmove.

In the largest November drop in prices since 2012, Rightmove said the average price of property coming to the market was down by 1.7%, or £5,222, on the month alone. It said the biggest falls were in London, where the typical asking price fell by £10,793 (a fall of 1.7%) and in the south-east of England, where prices were down £8,647 (2.1%).

The “ripple effect”, where rising prices in London spread around the rest of the country during the boom years, has now reversed, said Rightmove, with falling prices in the capital now spreading across the south.

“Higher-end, former hotspot towns are now among the biggest annual fallers with Rickmansworth (-7.1%), Esher (-6.4%) and Gerrards Cross (-6.0%) now cold spots following price rises of nearly 40% over the seven preceding years,” said Miles Shipside of Rightmove.

. . .

The figures echo data from surveyors earlier this month, which said the property market is at its weakest since 2016. The Royal Institution of Chartered Surveyors found that prices were flat or falling across half of the country, with sales “in limbo” until a Brexit deal emerges.

The debate among some estate agents is how to cut asking prices without precipitating a market crash. Richard Freshwater, of Cheffins in Cambridge, tells buyers that it is better to make a single, large cut in price rather than lots of small cuts.

“The key is to drop the price by enough to bring in a new set of buyers within a new bracket. The mistake often made by sellers is to reduce the price on consecutive occasions which can have a damaging effect and put buyers off.”

[drbubb]

UK Housing Bubble Swoons as Brexit-Day Nears. London Hit Hardest

In the fourth quarter of 2018, prices in prime regional housing markets in England and Wales fell by 0.9%, according to global real estate agency Knight Frank. For the whole year, priced dropped by 0.6%, compared to 2017. The rate of annual price growth in the prime country market has averaged less than 1% since mid-2016, compared to almost 3.5% between 2014 and 2016, with peaks as high as 5% in 2014. Something isn’t working anymore:

By a different measure, across the UK as a whole, house price inflation slipped to just 0.9% in the year to November, according to a survey by LSL Property Services/Acadata

Read more: WHAT REALLY HAPPENED | The History The US Government HOPES You Never Learn! http://www.whatreallyhappened.com/#ixzz5bDNYNpeX

[drbubb]

Scary: 100% Mortgage Loans in the UK !

The banks continue to be trouble,trouble,trouble

Under the new Lloyds Bank “Lend A Hand” deal, a first-time buyer will be able to borrow up to £500,000 for a new home, without putting down a penny of deposit.

Why is this necessary? It is because the establishment have played the same old song of higher house prices and telling people they are better off via wealth effects. Meanwhile the claims of no inflation are contradicted by the increasing inability of first-time buyers to afford housing even with ultra-low mortgage rates to help.

In this instance the mortgage is 100% of the loan for the people taking it out but payments are backed for 3 years by a family member or members.

The Lloyds deal requires that a member of the family – such as parent, grandparent or close relative – helps out. The bank will only grant the 100% mortgage if the family member puts a sum equal to 10% of the value of the property into a Lloyds savings account.

I have looked it up and their liability is limited to the first 3 years.

At the end of the 3 years, you will be able to take out your savings plus interest. That’s as long as the buyer hasn’t missed any payments or their home hasn’t been repossessed.

Frankly if payments are in danger of being missed it may suit the family member to fund them. But unless things go dreadfully wrong after 3 years we have what it a mortgage with only a little equity as not much is repaid in the first 3 years.

But as ever we see something of a round-tripping cycle between the central bank which pushes cheap liquidity to the banks who then pump up the housing market.

Vim Maru, group director of Lloyds Banking Group, which also controls Halifax, said: “We are committed to lending £30bn to first-time buyers by 2020 as part of our pledge to help people and communities across Britain prosper – and ‘Lend a Hand’ is one of the ways we will do this.

> source: https://www.investmentwatchblog.com/the-banks-continue-to-be-troubletroubletrouble/

[Spoony]

I sold my shared ownership in Milton Keynes in the autumn 2018. There was great demand for it as the rent was low and for someone who needs a 3 bed house but can't get a mortgage and deposit for a normal freehold at £275k - its their only option. Looks like I did well to get out while the going was good.

However trying to sell a  probate 2 bed semi now at 240k, not a bite. Agent told us to cut price, we did, no bites. Agent also told me that the market is falling and he sold to rent a year ago! Could be the brexit effect. Northern towns and Northern Ireland  (basketcase) are still going up though so its probably more about affordability.

Latest inflation figures are out and its down to 1.8% (CPI) Pay settlements are over 3% so I don't see how we have a reduction in living standards as that above article said. I don't see rates going up more now we have inflation below target.

 

I was just looking back at the earlier pages of this thread from 2009, how wrong we all were!

[colonelmustard]

On 2/13/2019 at 2:03 PM, Spoony said:

I sold my shared ownership in Milton Keynes in the autumn 2018. There was great demand for it as the rent was low and for someone who needs a 3 bed house but can't get a mortgage and deposit for a normal freehold at £275k - its their only option. Looks like I did well to get out while the going was good.

However trying to sell a  probate 2 bed semi now at 240k, not a bite. Agent told us to cut price, we did, no bites. Agent also told me that the market is falling and he sold to rent a year ago! Could be the brexit effect. Northern towns and Northern Ireland  (basketcase) are still going up though so its probably more about affordability.

Latest inflation figures are out and its down to 1.8% (CPI) Pay settlements are over 3% so I don't see how we have a reduction in living standards as that above article said. I don't see rates going up more now we have inflation below target.

 

I was just looking back at the earlier pages of this thread from 2009, how wrong we all were!

According to my calculations the last bull run in UK house prices started in 2002. So if you believe as I do in Fred Harrison's 18 year property cycle theory the good times start to roll in the Spring of 2020...The roaring twenties perhaps ?

If the Brexit debacle is cleared up by then confidence may return quickly to the market. It's anyone's guess but that would be my gamble.

[tinecu]

" The 28% drop in supply and the 17% drop in stock levels for London are highly significant and point towards price recovery in the near future, despite lower demand. Brexit or no Brexit, London remains a highly desirable world city. Post-boom, prices have been correcting in the capital for 36 months and, should the mists of uncertainty clear, the stage looks set for this leading property market to return to the growth phase of the property cycle. "

https://www.home.co.uk/asking_price_index/HAPIndex_MAY19.pdf

[BoldAsBrass]

Another little anecdotal update - one might think looking at the London market that prices are falling in the UK. One thing I have learned is that there is no such thing as 'the property market' - there is just the market where you live.

I bought a place in West Dorset earlier this year. The market here is driven by second home owners - some of whom buy cottages for holiday lets - and by people moving here to retire having sold up - generally - in the Home Counties. The result is a 'ticking over' sort of market where properties might be a bit slow to sell but vendors are very reluctant to drop prices. Even empty places we looked at - being sold by executors - the vendors would not budge. So, yes, a quieter market - less transactions that when things are booming - but it's a steady market. You see the For Sale sign and, sometimes within a week, generally within a couple of months - you see the Under Offer sign.

Meanwhile, back in Berkshire, notwithstanding our plans at one time to extend our house so our sons could have their own spaces - one of our sons bought a new build near Wokingham for £515k - which included about £10k of extras a previous buyer had paid for.This would have been two and a half years ago. He was showing me the releases for the next phase the other day - they had stopped building the house type he bought - but they have started to offer it again. It's almost identical but the new one is about 1.2m narrower. The new one is going on at £620k. Despite my concerns when he bought it - my warnings about taking on such a big mortgage and (surely!) house prices must have peaked - it seems to have gone up about 20% - against the backdrop of Brexit, uncertainty etc.

One feels the housing market is, generally, an unstoppable juggernaut. I am a bit relieved to be back in the market as a property owner.

[colonelmustard]

Given the current circumstances it looks as if we'll have to put the good times on hold for a while... possibly indefinitely

[colonelmustard]

Or maybe not. This is from Fred Harrison's blog :

Quote

I maintain that the cycle that began in 2010 will continue through to 2028. However, consider the possibility that the pandemic did inflict sufficient violence to disrupt the cycle that shaped capitalist economies of the past three centuries. What does history tell us about the consequences?

https://sharetherents.org/articles/the-virus-exit-nightmare-what-we-can-do-about-it/