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G0ldfinger

UK House prices: News & Views

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The Scottish property market, especially in Edinburgh, must be imploding - despite reports claiming the opposite

 

I am going to follow how the sale of this particular property goes:

 

Atholl Terrace, Edinburgh

 

I almost bought this flat for £125,000 in January 2005.

The eventual buyer paid around £122,000:

 

Nethouse prices: search result for Atholl Terrace

 

And now they want over £172,000 for it!

 

Well one month on and the flat I mentioned above is under offer for over 172,000 GBP!!

Thats 50,000GBP more than they seller paid for it in January 2005.

It would appear that at least for now the property market in Edinburgh is far from imploding.

 

All of which is highly frustrating as I sold to rent in Edinburgh over a year ago.

 

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Well one month on and the flat I mentioned above is under offer for over 172,000 GBP!!

Thats 50,000GBP more than they seller paid for it in January 2005.

It would appear that at least for now the property market in Edinburgh is far from imploding.

 

All of which is highly frustrating as I sold to rent in Edinburgh over a year ago.

I also noticed that an identical property one street down sold for 168,000GBP in August 2008.

So if anything house prices are actually going up, at least in this part of the city.

In fact the more I look at the data (via nethouseprices.com) for this very specific part of town I see that prices have not fallen at all.

 

Again all very frustrating.

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Frustrating, but, would you want a mortgage in this market?

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I also noticed that an identical property one street down sold for 168,000GBP in August 2008.

So if anything house prices are actually going up, at least in this part of the city.

In fact the more I look at the data (via nethouseprices.com) for this very specific part of town I see that prices have not fallen at all.

 

Again all very frustrating.

Repeat to yourself 100 times that these houses are just over-valued piles of bricks. This should remove the desire to buy. :rolleyes:

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Yep, it is frustrating but one just needs to be patient. Flats like that may nudge up another couple of thousand or so but the risk is overwhelmingly to the downside. I mean where are the jobs and lending going to come from to support today's versus the '05 price?

 

Like many on here I'm expecting another big leg down in stocks, commodities etc later this year and expect UK property to be part of that too.

 

I think the market (especially in places like Edinburgh) needs another kick in the balls before people start to wake up and realise that property (no matter where) is not a one way bet.

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Housing Starts in U.S. Unexpectedly Decline; Single-Family Starts Increase

http://www.bloomberg.com/apps/news?pid=206...id=a5oDxafZlx2I

 

This is so unexpected, it boggles the mind.

 

I've read that lumber is a good lead indicator of the US building industry, if that's the case things look a bit bearish to me.

 

 

 

The last time there was a MACD crossover was last September and it's plain to see what happened then. Add in the crossing of the 50dma at about the same time and what looks imminent now, I'd say there is a good chance we're near to another leg down. Perhaps another (albeit thin) argument is that the rally is a head and shoulders pattern.

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possibly not much higher. there's only so many repossessions they can enforce with 80,000 police.

The financial problem will still worsen.

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Barratt Developments up 9.45% today? New 52-wk high? Que?

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Low interest rates are here to stay, City predicts

 

Gerard Lyons, chief economist at Standard Chartered Bank, said it was now possible that King would not raise interest rates from their current all-time low of 0.5% during his current term as governor, which lasts until mid-2013.

 

A large number of people are managing to avoid repossession courtesy of low interest rates. If rates remain this low right out till 2013 a significant number of these people will be able to ride this out easing downward pressure on house prices.

 

On the other hand we have increasing unemployment and high interest rates for first time buyers. This should lower demand and increase downward pressure. Most folks I speak to don't realise that a first time buyer cannot go straight on to a standard variable rate or borrow at 0.5%!

 

Finely balanced? Or a pointless fight against an inevitable further fall in house prices?

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Since home loans are "non-recourse" in the USA this surely causes greater downward pressure on prices than in countries that will pursue you for the full purchase price even when you are in negative equity.?

 

 

 

 

My Friend Can't Wait to Default on His Mortgage

By Tom Dyson

Monday, August 03, 2009

 

"We're considering stopping our mortgage payments..."

 

A friend of mine lives in Las Vegas. He and his wife both have safe jobs. They have no kids and no debt. They live in a modest house in the outskirts of the city. Their house has a spare room. They rent it to a friend...

 

In short, my friend and his wife can comfortably afford their monthly mortgage payment. But they may stop paying anyway.

...

A "strategic default" is where the homeowner can afford to make the monthly payment but decides he's better off defaulting anyway.

 

...And in the meantime, his wife can buy a house (the mortgage is only in his name).

 

It's a buyer's market in Las Vegas, and his wife can buy at a 50% discount to what they paid the first time around. Interest rates have fallen... so they'll have lower monthly payments. And to top it all off, the government is offering an $8,000 tax credit to first-time homebuyers who buy a home before December 1, 2009.

 

By defaulting on his loan, he'll save himself over a hundred thousand dollars... and still own a home.

 

"Everyone's doing it," says my friend. "I know three other people who are doing [strategic defaults] too," he says. "They're buying bigger houses with lower monthly payments. And that's just from my work..."

 

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Surprise, surprise! That would be one for angry Eric.

 

http://news.bbc.co.uk/1/hi/business/8213504.stm

Massive fraud at building society

 

The Chelsea building society has revealed it has lost £41m as a result of mortgage frauds by some of its buy-to-let borrowers.

...

It said the frauds were mainly due to "the artificial inflation of property values by third party professionals involved in the transactions".

...

The society said it was now trying to recover the money "vigorously."

Guess what? This will further tank prices, because it sounds like forced liquidation of negative equity mortgages.

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Since home loans are "non-recourse" in the USA this surely causes greater downward pressure on prices than in countries that will pursue you for the full purchase price even when you are in negative equity.?

You would think so.

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The reslience of the almost genetic desire to own property in the UK never ceases to amaze me.

 

I spent last weekend sailing; crossed the channel and back. One of the crew was a self-employed builder who is currently really struggling to find jobs and when he does, his margins are being eroded by cheaper Eastern European outfits.

 

We noticed that the shipping lanes didn't seem very busy at all this trip, comparitively very few of the -really- big container ships crossing our path, which tallies up with what we've been seeing on the Baltic Dry Index. I mentioned that I felt that this indicated that the "green shoots" were probably not going to thrive too well.

 

The bloke then proceeded to tell me that the best thing to do would be to invest in property because the "yields" are good now because of low interest rates. "but what about the capital?", I asked, "last year saw the market drop 20%, it could easily drop another 10%, especially as interest rates have only got one way to go now".

 

His reply; "but you'll still make your 5% yield".

 

AAAARRRRGGGGHHHHHH!

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The reslience of the almost genetic desire to own property in the UK never ceases to amaze me.

Just heard back from my solicitor about another flat here in Edinburgh which went for significantly over the valuation price. In fact they bid so much over they broke in to the next stamp duty threshold thus tripling their fees. Money no object apparently. From what I have been seeing first hand going out and about viewing and researching, residential property prices in central Edinburgh have hardly fallen at all if anything from their peek values.

 

Here's hoping Bubb and G0ldfinger are right about the next down leg approaching.

 

When you position yourself for a depression and that depression you envisaged doesn't come, its well, rather depressing :lol:

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...

When you position yourself for a depression and that depression you envisaged doesn't come, its well, rather depressing :lol:

The depression is going to be an inflationary depression IMO. It is possible that house prices rise in nominal terms but fall when measured against anything else.

 

That said, South Manchester has been falling steadily with zero signs of a bounce.

 

I’m going to see a flat on Friday evening. The asking price is 45% lower than the 2007 selling price.

 

I’m hoping to see many more discounted flats in the coming months.

 

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House prices 'continue to rise'

 

UK house prices rose again in August, increasing by 1.6% from July, the Nationwide has said.

 

The average price of a home is now £160,224, up from £158,871 in July, and following four monthly rises in a row.

 

While prices are still lower than last year, the annual rate of decline in property values slowed sharply to 2.7%, compared with July's 6.2% fall.

 

Sigh! :rolleyes:

 

 

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However, he cautioned that when interest rates ultimately start to rise again as the wider economy recovers, the strong house price increases of recent months "would become difficult to sustain".

 

"The eventual exit from exceptionally loose monetary policy could make the recovery in the housing market bumpier than some might expect after the last few months of price increases," said Mr Gahbauer.

 

I wonder how many readers have missed these words of wisdom.

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... "The eventual exit from exceptionally loose monetary policy could make the recovery in the housing market bumpier than some might expect after the last few months of price increases," said Mr Gahbauer.[/i] ...

:lol: Such a gross understatement!!

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My observation of this 2009 housing market remains that first time buyers are not participating or not able to participate. In fact, the politicians have stopped talking about FTBers any more. So who is propping up the pyramid scheme for now?

 

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My observation of this 2009 housing market remains that first time buyers are not participating or not able to participate. In fact, the politicians have stopped talking about FTBers any more. So who is propping up the pyramid scheme for now?

 

FT had a story a month or more ago citing "cash buyers" driving the market. I was surprised to hear that.

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