UK House prices: News & Views

[G0ldfinger]

While there has been a bounce in house prices, there has also been a bounce in inflation. Inflation-adjusted, the bounce is not that impressive. Here are the newest updated Approximity charts:

 

http://gold.approximity.com/since2008/UK_House_Prices.html

 

http://gold.approximity.com/since2008/UK%20RPI.html

 

http://gold.approximity.com/since1968/UK_H...es_RPI-adj.html

[id5]

It's the end of the quarter so a couple of house price graphs from me as well to compliment the ones from GF

 

 

 

 

[No6]

No return to the free for all of the self cert fraud years. Prices are going to go down, bank on it.

 

Banks to tighten lending criteria on loans and reduce credit card limits

 

Banks are expected to tighten their lending criteria on loans and credit cards amid signs of economic recovery, a report by the Bank of England suggests.

 

It comes as more lenders said they had reduced the availability of mortgages rather than increased it during the past three months following a “deterioration” in the cost and access to wholesale funds.

 

It comes despite billions of pounds of taxpayers’ money being pumped into some of Britain's biggest banks.

 

The Bank’s Credit Conditions Survey suggested lenders will place stricter limits on those they give money to and reduce credit card holders’ limits in the run up to Christmas.

 

It also warned that more people would default on their loans as the profit margins made by lenders on credit cards and unsecured loans had risen.

 

It comes despite signs of recovery in the economy with house prices and number of mortgages approved rising from the low levels seen during the height of the credit crunch.

 

Oliver Gilmartin, a senior economist at the Royal Institution of Chartered Surveyors, said: “The survey is yet to signal any significant improvements in the availability of credit to households.”

 

http://www.telegraph.co.uk/finance/persona...ard-limits.html

[G0ldfinger]

...

Could I have this one logarithmic please?

[drbubb]

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.

 

Nov 3rd is a long way away.

A drop to 100p may seem impossible. But it is not.

What then?

Barratt still gets its money, since the underwriters stump up.

At some point, they may consider running shorts, to cover the risk.

So far, the "put" they have sold is out of the money, and not worth hedging.

 

[drbubb]

Typically the average shoople would not even read past the headline!!!!!!!!!!

 

House prices 'back to 2008 level'

. . .

David Smith, of property consultancy Carter Jonas, said anyone hoping to sell now had a "window of opportunity" that might soon shut.

 

"We have to expect more turbulence ahead, specifically as a result of rising unemployment and interest rates," he said.

 

"This toxic combination will bring more property on to the market as people struggle to meet their repayments, which will apply downward pressure on prices and potentially reverse the recent trend, at least for a time," he added.

 

Smith's comment makes sense.

 

The charts are showing the formation of a possible right shoulder

 

[id5]

Could I have this one logarithmic please?

Your wish is my command, only happy to help.

 

[jerpy]

No return to the free for all of the self cert fraud years. Prices are going to go down, bank on it.

 

Banks to tighten lending criteria on loans and reduce credit card limits

 

Banks are expected to tighten their lending criteria on loans and credit cards amid signs of economic recovery, a report by the Bank of England suggests.

 

This in part is being masked at the minute as many people are coming off fixed rate deals and reverting to S.V.R's because they are obviously cheaper.

 

Hang out in the locals, hear the sheeple talk and you will hear many saying they are "better off" to the tune of several hundred pounds depending on their mortgage.

 

All adds to a false sense of security and even encourages some to move. Reality will only hit home with higher unemployment and inflation etc for some.

 

[G0ldfinger]

Your wish is my command, only happy to help.

Cheers.

 

...

All adds to a false sense of security and even encourages some to move. Reality will only hit home with higher unemployment and inflation etc for some.

Yes. Let's wait for 10%, 15% etc.

[dst]

 

BBC article on new build flats, BTLers pursued for broken contracts, mis-investment etc

 

BBC link

 

Financial shadow cast by city apartments

 

Contracts were signed for all but one of the apartments, but today only 14 have been bought and are occupied. The withdrawals caused the collapse of the developer, Brampton Asset Management (Leicester) Ltd.

 

Now the administrator could pursue these buyers through the courts for broken contracts - and the law says that they could be forced into completing the sale.

 

...

 

Mr Brown says that the market will decide whether it will also be considered as a financial mistake as well. He says that prices will show if the "pile them high and sell them cheap" approach has led to an oversupply.

[G0ldfinger]

BBC link

 

"In a generation, we might ask what an earth were we doing."

 

Good insight!

[ecoface]

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.

 

Nice head and shoulders pattern is forming on BDEV.

[moonriver]

http://www.bloomberg.com/apps/news?pid=new...id=a72zaFNruWKM

No-Money-Down Property Loans That Sank U.K. Housing Return

 

Easy credit is back in the U.K., and this time the government and homebuilders are making the loans. Seeking to recover from the worst recession in a generation, Britain is helping as many as 10,000 buyers obtain 100 percent financing through a 300-million-pound plan called HomeBuy Direct at a time when mortgages are scarce and, according to Ernst & Young LLC, home prices will “stagnate” for at least two more years...

 

Britain’s homebuilders have also embraced HomeBuy Direct to revive sales. Barratt Developments Plc, Persimmon Plc, Miller Group Ltd. and Redrow Plc are offering a combined 7,000 homes through the plan, according to the companies....

 

“Generally, it has been very good for the industry,” Chris Millington, a house building analyst at Numis Securities in London, said in an interview. “It removes one of the main problems in the market and helps the new buyer. It has been quite a decent success....”

 

U.K. homebuilders are calling the plan a success and some have initiated their own lending plans such as Barratt’s Head Start, Bovis Homes Group Plc’s Jumpstart and Taylor Wimpey Plc’s Easystart...."

 

 

I know this scheme was only limited to £300 million, but I do wonder how much this scheme has helped those builders out by, for example enabling them to initiate those own own lending plans of theirs, as mentioned in the article?

 

I see the scheme is due to finish in March. Do you think this will add to the builders, and housing market problems?

Or perhaps this £300million has already been spent ?

[nicejim]

"In a generation, we might ask what an earth were we doing."

 

Good insight!

You think it will take that long?

 

 

 

The spin is in the headline, the news is in the article.

 

Number of mortgages up 29% in August

http://business.timesonline.co.uk/tol/busi...icle6870711.ece

The number of loans taken out to buy houses dipped 5 per cent in August

 

 

Note that it "dipped". It didn't fall or drop, it "dipped".

[nicejim]

It's hard to keep the faith

 

http://boards.fool.co.uk/Message.asp?mid=1...&sort=whole

It's all very well you lot promising me "it will be any day now". You were trying to suggest that Nottingham's market holding up was a figment of my imagination. And now I find that right across the country the market is more buoyant than Sarah Beaney doing backstroke.

[FWIW]

It's hard to keep the faith

 

http://boards.fool.co.uk/Message.asp?mid=1...&sort=whole

 

We've got another 10 years of this....

[ecoface]

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

 

Blackrock adds to it short position

 

[ecoface]

I am making a call for the end of the Dead Cat Bounce in UK resi property.

I have been watching BDEV for a month and it topped in Sept. IMO.

I work in property development and activity is definitely tailing off.

Darker sentiment is returning.

I have been on several seminars recently where talk is definitely of a W shape and we are embarking on a return to harder times.

I could provide more evidence but have lack of time.

I will be intrigued to see Spline's updated Oct bellweather Index (last updated in Sept). Bubb do you have this?

I have been waiting for 2-3 months to post this and have finally made a call based on my own experiences and what is happening in the resi land market too.

 

(I don't think confidence will return until after the election, if at all. The only possible argument the property bulls can have is that supply will dry up in the usual fashion as owners delay marketing their property until after the results.)

 

 

[chazza]

I am making a call for the end of the Dead Cat Bounce in UK resi property.

I have been watching BDEV for a month and it topped in Sept. IMO.

I work in property development and activity is definitely tailing off.

Darker sentiment is returning.

I have been on several seminars recently where talk is definitely of a W shape and we are embarking on a return to harder times.

I could provide more evidence but have lack of time.

I will be intrigued to see Spline's updated Oct bellweather Index (last updated in Sept). Bubb do you have this?

I have been waiting for 2-3 months to post this and have finally made a call based on my own experiences and what is happening in the resi land market too.

 

(I don't think confidence will return until after the election, if at all. The only possible argument the property bulls can have is that supply will dry up in the usual fashion as owners delay marketing their property until after the results.)

 

BDEV looks interesting against the FTSE, failing miserably to make new highs as the FTSE has. Instead stuck against ST resistance in maybe a bearish wedge.

 

Went to someones house recently whose partner has been/is involved in property development. What you can do with leverage and a bull market is amazing. Had to be a £10mio pad.*

 

very interesting to hear your thoughts as, to me the rental market seems to be 'recovering' with the sales market.

 

*I have actually no idea how much it costs, but in a very nice area and very impressive

[drbubb]

Nice head and shoulders pattern is forming on BDEV.

 

yes, it could be. but there's no break with volume yet.

other builders, like PSN, are weaker

 

I am making a call for the end of the Dead Cat Bounce in UK resi property.

I have been watching BDEV for a month and it topped in Sept. IMO.

I work in property development and activity is definitely tailing off.

Darker sentiment is returning.

I have been on several seminars recently where talk is definitely of a W shape and we are embarking on a return to harder times.

I could provide more evidence but have lack of time.

I will be intrigued to see Spline's updated Oct bellweather Index (last updated in Sept). Bubb do you have this?

I have been waiting for 2-3 months to post this and have finally made a call based on my own experiences and what is happening in the resi land market too.

 

(I don't think confidence will return until after the election, if at all. The only possible argument the property bulls can have is that supply will dry up in the usual fashion as owners delay marketing their property until after the results.)

 

it sounds as if you may be closer to the physical market than I am, so you may have the right call.

I will make one when I see the "break with volume" that I am awaiting - maybe next week?

[drbubb]

... from hpc...

Didnt the prop stocks fall months before house price falls last time? I seem to recall they topped in Dec 06 and HPC started Summer 07.

Does this mean (if this is the top?) that we have to wait another 6 months?

 

You are right!

But i reckon the lag will be less this time

[Mike Mustard]

Come back Leslie Phillips!

[drbubb]

Oh Bubb I do worry about the market, despite screaming macro elements shouting that this is nothing but a bull trap, the govt has managed to pervert the natural cycle of this particular Bubble and combining with the short sighted greed of the UK public this sucker might have legs, certainly going by the suckers throwing themselves at SSTC’s in Harrogate.

 

What is your call for the next 2 years, HPC or HPI? What kind of % change could we see? I am still clinging to the 20% off camp over this period.

 

In early April, I thought the Dead Cat bounce would last 6-9 months

 

In May, saw so many parallels with 1930, I thought that UK Property would be sliding again by the end of 6 months,

and that BDEV would peak out before the end of August, and Property might start down 1-2 months after that.

 

Barratt (BDEV) made a peak close to 300p in the first half of September, and hasn't surpassed that high yet.

Yesterday's close was 249.6P, and BDEV remains above important support near 225P..

 

To generate a post: " BARRATT's Slide looks confirmed !", I want to see BDEV slide below 225p with high volume.

If we see that in October, then we could see negative growth in UK property prices in Dec. or January.

Presently, that is my expectation. And then I think the slide would gather pace in 2010.

 

If I am wrong, and BDEV makes new highs after October, then the renewed slide may be delayed.

But I still see NO WAY that the slide can be avoided.

 

My intuition tells me that the longer it is delayed, the steeper the slide may be.

[nicejim]

Fergus Wilson on the Renegade Economist channel. I don't think they got on. He should have brought a puppy.

 

From:

[drbubb]

Fergus Wilson on the Renegade Economist channel. I don't think they got on.

He should have brought a puppy.

 

900 Houses?

Whichever, That's a serious number. I found 10 Flats was more than I wanted.

 

"People want to live in houses... not flats," he says.

"Only poor people live in flats."

"Flats don't have the ability to increase in value, as houses do."

"At similar rents, people will take a house over a flat."

"There seem to be cycles every 17 years."

"In the mid-1990's there was a shortage of flats, and now there is a surplus."

"A professional landlord makes his money out of the surplus of rents over mortgage payments."

 

"We didnt really put in much money at all."

"We bought at auction, and by the time we had to pay, (the valuation was high enough to allow

us to borrow all the money from the bank)"