UK House prices: News & Views

[Wanderer]

The Government has been quietly trying to change the terms by which they can make Civil Servants compulsorily redundant. This is widely seen as the precursor to widespread retrenchments and is already causing mayhem with the Unions. This will become a big issue nearer Christmas. Its going to be a choppy ride for any Govt. that wins the next elections. The figures for my own Dept make you pause and scratch your head.

[G0ldfinger]

The Government has been quietly trying to change the terms by which they can make Civil Servants compulsorily redundant. This is widely seen as the precursor to widespread retrenchments and is already causing mayhem with the Unions. This will become a big issue nearer Christmas. Its going to be a choppy ride for any Govt. that wins the next elections. The figures for my own Dept make you pause and scratch your head.

Interesting. What do you think about the semi-public sector, like universities? I would expect cuts there too. Funding must drop some time soon.

 

[Oddjob]

Heard on cnbc this evening.. 23% of homeowners in the state of Florida are either in foreclosure or default.. Incredible !

[G0ldfinger]

Heard on cnbc this evening.. 23% of homeowners in the state of Florida are either in foreclosure or default.. Incredible !

Grate Depression levels. And we are not even close to the trough yet.

[G0ldfinger]

Ooooooooops.

 

http://southflorida.bizjournals.com/southf...28/daily40.html

Report: Nearly 1M bank foreclosures in process

South Florida Business Journal - by Brian Bandell

...

While the rock-bottom sales of foreclosed properties are dragging real estate prices down, what’s on the market now is the just tip of the iceberg. The report said that 106,007 foreclosures were completed as of June 30. For every bank-owned property, there were nine more homes in the process of foreclosure.

[Jake]

Ooooooooops.

 

http://southflorida.bizjournals.com/southf...28/daily40.html

Report: Nearly 1M bank foreclosures in process

South Florida Business Journal - by Brian Bandell

...

'While the rock-bottom sales of foreclosed properties are dragging real estate prices down, what’s on the market now is the just tip of the iceberg. The report said that 106,007 foreclosures were completed as of June 30. For every bank-owned property, there were nine more homes in the process of foreclosure.'

 

 

 

 

When, oh when, will this be the UK? I wish it was now...but will just have to wait some, I guess. What the hell is keeping the UK market up? I can't BELIEVE the resilience of the market but know that when it cracks the veneer will shatter. One hell of a tough nut though! Perhaps because it is all we have for an economy really. The UK really is addicted to property. What is the real reason, I wonder?　

[drbubb]

What the hell is keeping the UK market up?

I can't BELIEVE the resilience of the market but know that when it cracks the veneer will shatter. One hell of a tough nut though! Perhaps because it is all we have for an economy really. The UK really is addicted to property. What is the real reason, I wonder?　

 

Low rates, denial (that things are as bad as they are),

and hope that the "old normal" can be restored

 

[Jake]

Low rates, denial (that things are as bad as they are),

and hope that the "old normal" can be restored

 

 

And the States? What's the big difference in psychology across the pond, Dr Bubb? Stocks have bounced back too but US housing has by and large continued its fall from grace.

 

Sentiment in the UK is stonger. Does that simply mean the UK is more gullible (thicker)?

[G0ldfinger]

And the States? What's the big difference in psychology across the pond, Dr Bubb? Stocks have bounced back too but US housing has by and large continued its fall from grace.

 

Sentiment in the UK is stonger. Does that simply mean the UK is more gullible (thicker)?

The difference also is that you can default more easily in the US.

[Oddjob]

Ooooooooops.

 

http://southflorida.bizjournals.com/southf...28/daily40.html

 

Is anyone else surprised with how quickly foreclosures are mounting in Florida?

 

Never been there before (although I'll be honeymooning there in January) but I think that the system in the US makes it too easy for people to throw in the towel and get away without consequences.

 

I often hear companies advertising on US radio that they can help you get away without paying the full amount you owe on credit cards, loans etc.

 

I believe its this type of irresponsibility which is going to make the matter worse in the US.

[Oddjob]

I live in FL 6 months of the year and can confirm the situation is dire - good for me as I'm renting, and will buy when real estate bottoms - that will be some time off yet, big big drops still to come, and the same imho goes for the UK

 

 

sounds like a dark future for the sunshine state

[G0ldfinger]

http://www.bloomberg.com/apps/news?pid=206...id=a5WHew1SU3G0

RBS, Lloyds Send ‘Shocking’ $4.4 Billion to Ireland

...

Irish impaired assets deteriorated following the “collapse in liquidity in the Irish property markets,” Lloyds said in its half yearly earnings statement. About 14 percent of its Irish loan book was impaired at the half-year stage, the bank said.

...

House prices in Ireland have fallen 24 percent from their early 2007 peak levels, mortgage lender Irish Life & Permanent Plc said in a Sept. 28 report. Commercial property prices may drop 75 percent while development land values may slump 80 percent from their peak, Goodbody Stockbrokers said on Sept. 1. ...

[nicejim]

I often hear companies advertising on US radio that they can help you get away without paying the full amount you owe on credit cards, loans etc.

That happens here too. I was told that there's nothing in these solicitors' claims, except for a nice big fee from the gullible. But at least one case has paid off. I just hope the solicitors got paid in advance - this woman might try to find another loophole!

http://news.bbc.co.uk/1/hi/business/8282264.stm

 

 

A related story - Bankruptcy Tourism. Foreigners can earn £150,000 per year on minimum wage!

http://uk.news.yahoo.com/5/20090925/tuk-br...po-45dbed5.html

[TrueNorth]

Latest Nationwide survey says houses are back to Sept 2008 prices

 

House prices rise in September

 

House prices rose for the fifth month in a row in September and are now back to the same level as this time last year, figures released by the UK's largest building society showed today.

 

Nationwide's latest snapshot of the housing market revealed that prices were up 0.9% over the month, bringing the annual rate of inflation to 0%.

 

Nationwide said the average price of a property in the UK was now £161,816, up from £160,224 in August.

 

The figures represent a remarkable turnaround from earlier in the year, when prices appeared to be in freefall.

 

The average price is now just under £14,000 higher than in February, when it dipped to a low of £147,746, while the annual rate of change has moved out of negative territory for the first time since March 2008.

 

The three-month trend – which generally offers a better indicator of underlying trends than monthly figures – rose from 3.3% in August to 3.8% in September, its highest level since August 2004.

 

However, prices are down 13.5% on the peak they reached in October 2007, before the credit crunch took hold, and Nationwide warned that the market remained fragile. . . .

[sophia]

With the highest uk quarterly rise in Northern Ireland (over 9%), and first house price rise here for 2 years.

 

I'm kind of fed up with this waiting to buy a house nonsense now, I'm trying to hold out till 2011 - but if interest rates don't go up etc, will this thing just be dragged out for years?!

[No6]

With the highest uk quarterly rise in Northern Ireland (over 9%), and first house price rise here for 2 years.

 

I'm kind of fed up with this waiting to buy a house nonsense now, I'm trying to hold out till 2011 - but if interest rates don't go up etc, will this thing just be dragged out for years?!

 

Prices have been going up recently, but on much lower sales levels. The removal of self cert, no income check mortgages from the market means that only those that can prove their income and put up a big deposit can afford to buy at current levels. House prices went up on the back of a self cert fuelled boom between 2000 and 2007 and house prices still reflect the fiction of prices achieved in a liars market because of the attempts and policies of Government and the BoE to keep prices as high as possible. The reality is that real income levels do not support current house prices, but they can be kept artificially higher through sales to high earners. Fact is that current mortgage approval levels are 50-60,000 a month compared to 100-130,000 a month at the self cert peak. The headlines only report the increases, not the reality of the market which is still a long way from being healthy if you believe that actual sales levels are important.

[sophia]

Prices have been going up recently, but on much lower sales levels. The removal of self cert, no income check mortgages from the market means that only those that can prove their income and put up a big deposit can afford to buy at current levels. House prices went up on the back of a self cert fuelled boom between 2000 and 2007 and house prices still reflect the fiction of prices achieved in a liars market because of the attempts and policies of Government and the BoE to keep prices as high as possible. The reality is that real income levels do not support current house prices, but they can be kept artificially higher through sales to high earners. Fact is that current mortgage approval levels are 50-60,000 a month compared to 100-130,000 a month at the self cert peak. The headlines only report the increases, not the reality of the market which is still a long way from being healthy if you believe that actual sales levels are important.

 

Thanks for that No6.

 

House prices here are still falling everyday, I monitor them on propertybee and another website that shows house price drops here.

 

I suppose I knew we would be getting a 'dead cat bounce', house prices are a bit more affordable now but still not affordable for the average First Time Buyer.

 

The only people I know who are moving are those that bought 5+ years ago, on to their 2nd or 3rd homes, maybe more of these types of homes are being sold, and not the traditional FTB homes - perhaps that is why we got such a large increase here?

 

Transaction are still heavily down and I do believe the market here is a long way from being healthy as you say, I just can't be bothered with all the ramping we are going to get from our local newspaper and their vested interest rubbish!

[Oddjob]

Leaving Affordable Mortgage May Become Winning Gambit

 

So-called strategic defaults, in which homeowners stop paying their mortgages while remaining current on other debts, rose 128 percent to 588,000 last year..

 

..Ten states are so-called non-recourse, prohibiting deficiency judgments after most home foreclosures: Alaska, Arizona, California, Hawaii, Minnesota, Montana, North Dakota, Oklahoma, Oregon and Washington, according to the National Consumer Law Center, based in Boston. The bank can repossess your home in those states, not other assets, to settle the debt...

 

..Banks may be more willing to accept foreclosure alternatives, such as a short sale or deed-in-lieu of foreclosure, in states where a lender can’t sue for per.sonal assets..

 

..A foreclosure remains on a credit report for seven years. Credit scores can begin to rebound in as little as 2 years if bills are paid on time, according to FICO...

 

As I said before, its all too easy for people to throw in the towel..

[littledavesab]

And the States? What's the big difference in psychology across the pond, Dr Bubb? Stocks have bounced back too but US housing has by and large continued its fall from grace.

 

Sentiment in the UK is stonger. Does that simply mean the UK is more gullible (thicker)?

 

IMO - 2 things

 

1 = US has accepted it has had a bubble - UK has not - I mean UK in terms of most politicians and the general public

 

2. UK banks have not (I think) written down asset values sufficiently relating to housing stocks. Commercial property might be a little different. However as an example. if you look at Taylor Wimpey's close shave with bankruptcy earlier this year, the banks could have killed it and taken full ownership and chose not too - Investors Chronicle (not exactly a redical publication) thinks this is because the banks did not want to take the hit on the writedown that such action would have caused

[No6]

I think that there is a very good chance that the next downward leg in UK property prices will happen once the next election is out of the way. Regardless of who wins, the cutbacks in public spending, continued high unemployment levels, close to zero level pay increases or pay cuts will see house prices falling further. As it is the Tories who are likely to be elected, they will be hoping to get this bad news out of the way in the first two to three years of the next Parliament so that they can have a run at being re-elected in year 4/5 on the back of prices having stabalised and going back up again.

[ecoface]

If the markets do turn over the next week or so then Barratts et al could well be in a lot of trouble.

The rights issues that occurred earlier in the year were considerably better timed. Research from several estate agents indicate that activity has fallen off in the last week.

I reckon that come October we could be seeing the turn in property too, and winter may come early.

But then again the duration of the dead cat bounce has surprised me. Cash rich buyers are the supporters of this market right now, and as EMs fall and fear sets in again, then property will be punished. I don't often link property sentiment to equity market's performance, but this time I can quite easily see how closely related they are.

 

Watch the rights issues for these two builders. With the markets turning they could be in alot of trouble. Speculation was that the money was more for seeing out existing commitments rather than to create new money (through new site acquisitions), hence dead money. What on earth would anyone want to invest in housebuilders for?

 

Since mid Sept when they offered the rights issues BDEV and RDW (Redrow) have fallen very sharply.

 

I will be watching Persimmon (PSN). That sp has been whacked too since Barratt and Redrow went begging to the market for more capital.

 

The rights issue for BDEV ends in 4 weeks (Nov 3rd) with a strike price for the supporting syndicate of 100p. Given how much the sp has fallen already and we are potentially in for a large correction in EMs over the next month, then...

If the underwriting syndicate panics then there will be greater downward pressure on the share price.

In other words they may well then short Barratts to drive the price lower to 100p (about 63% off 270p) It would be one magnificent fall if they did but, remember that only 6 months ago Barratt was trading at below 100p.

 

It is intresting to note that the following have shorted Barratt recently:

 

Marshall Wace LLP - 02 October 2009

GLG Partners LP - 01.10.09

JGD Management Corp. 25 September 2009

Cazenove Cap Mgnt.Ld - 28 September 2009

BlackRock Group - 24th Sept

 

 

[id5]

Thanks for that No6.

 

House prices here are still falling everyday, I monitor them on propertybee and another website that shows house price drops here.

 

I suppose I knew we would be getting a 'dead cat bounce', house prices are a bit more affordable now but still not affordable for the average First Time Buyer.

 

The only people I know who are moving are those that bought 5+ years ago, on to their 2nd or 3rd homes, maybe more of these types of homes are being sold, and not the traditional FTB homes - perhaps that is why we got such a large increase here?

 

Transaction are still heavily down and I do believe the market here is a long way from being healthy as you say, I just can't be bothered with all the ramping we are going to get from our local newspaper and their vested interest rubbish!

Look at the size of the houses for sale as well sophia, you get a lot better and often bigger size house even though the average has gone up. If they were force to quote a £perSquareMetre then we would all see it still falling.

[Schaublin]

Thanks for that No6.

 

House prices here are still falling everyday, I monitor them on propertybee and another website that shows house price drops here.

 

I suppose I knew we would be getting a 'dead cat bounce', house prices are a bit more affordable now but still not affordable for the average First Time Buyer.

 

The only people I know who are moving are those that bought 5+ years ago, on to their 2nd or 3rd homes, maybe more of these types of homes are being sold, and not the traditional FTB homes - perhaps that is why we got such a large increase here?

 

Transaction are still heavily down and I do believe the market here is a long way from being healthy as you say, I just can't be bothered with all the ramping we are going to get from our local newspaper and their vested interest rubbish!

 

A friend of mine expressed surprise that the house price bubble was taking a long time to deflate - I agreed with him but bear in mind that all levers that can be pulled to slow down the crash have already been pulled - there is no more ammo left.

 

A further devaluation in GBP would bring higher oil prices and higher prices of almost everything else - the weaker the GBP is, the less will be the nominal falls in house prices. Goldfinger has covered this in his Oz gold/average house prices graph - this IMO is the best tool for understanding property prices. The muppets at HPC dont get it and will lose the opportunity to take advantage of their STR strategy because their GBP will be falling almost as fast as the house prices.

[drbubb]

I think that there is a very good chance that the next downward leg in UK property prices will happen once the next election is out of the way.

 

I really dont think it will take that long

 

The forces undermining property in the UK are now gaining in force every day:

 

WATCH:

+ Falling stocks (especially the Builders)

+ Job losses

+ Weak rents

 

[sophia]

Look at the size of the houses for sale as well sophia, you get a lot better and often bigger size house even though the average has gone up. If they were force to quote a £perSquareMetre then we would all see it still falling.

 

mmm interesting concept, never thought of that thanks.

 

A friend of mine expressed surprise that the house price bubble was taking a long time to deflate - I agreed with him but bear in mind that all levers that can be pulled to slow down the crash have already been pulled - there is no more ammo left.

 

no ammo left I like it

 

Have decided when I buy again (perhaps 2011) will do so without a mortgage. My hubby is in public sector employment and it is going to be cut big time here and I also think Dr Bubb has a point about future property taxes.

 

Thanks for all your input guys, I love this forum as I learn so much , have a good weekend all.