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UK House prices: News & Views

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UK Property - in GBP, USD, Gold oz. (x500)

I put them all on one chart

003dc.png

 

At first glance, UK property looks reasonably priced, in Gold Oz.

 

At 204.35 oz., we are back to below Jan.1996 levels (212.44 oz.) and in the region of 1973.

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In 1973 real estate in the UK was in a blow-off mode. 1974 heralded a banking crisis - Natwest Bank was technically bust but was bailed out by the other clearing banks on the insistance of the Governor of the B of E. In those days of course the crash in house prices in real terms was masked by the general inflation rate. It was after this crash that I was able to purchase two flats on 9,75% mortgages and exploit the swing back up in property prices by 25%.

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Pinched from HPC. I thought this quite interesting that some notionally central players allowed the veil to be dropped here. Some real acknowledgement and discussion on the subject. Even though you have to laugh at the notion they could ever hope to pick a figure at which prices should stop falling <_<

 

 

http://www.moneymark...1015197.article

 

Coalition ready to let property values fall

 

Industry experts believe the Government is more focused on helping businesses than it is on supporting the housing and mortgage markets.

 

Speaking at a Money Marketing round table last week, Barclays director of intermediaries David Finlay said the Government sees the housing market as something that will start to recover naturally after the rest of the economy is on a better footing.

 

He says: “I think the coalition Government has taken a slightly different view, in that they are very much looking at the business economy and the banking sector as a whole. I think they are potentially looking at housing as the lag element to their wider proposition. All they are really concentrating on is the economy.”

 

Association of Mortgage Intermediaries director Robert Sinclair said the Government does not want to stimulate the housing market and it may even want to see property values fall from a “disproportionate” level.

 

He said: “They do not want to be in that position again where people treat their properties like an ATM. We have got this big pressure coming from the Treasury where we saw this big rise in the capital value of property which they believe was disproportionate.

 

“They do expect this fall in the capital values of residential properties from about £4trn. They think £3trn might be a better number, nobody is going to come out and say that though.”

 

Building Societies Association head of mortgage policy Paul Broadhead said: “All of a sudden, it seems the support is unravelling, which will make consumers far more cautious about whether they should upsize now and whether they should even get on to the ladder.”

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Pinched from HPC. I thought this quite interesting that some notionally central players allowed the veil to be dropped here. Some real acknowledgement and discussion on the subject. Even though you have to laugh at the notion they could ever hope to pick a figure at which prices should stop falling <_<

 

 

http://www.moneymark...1015197.article

 

Coalition ready to let property values fall

 

Industry experts believe the Government is more focused on helping businesses than it is on supporting the housing and mortgage markets.

 

Speaking at a Money Marketing round table last week, Barclays director of intermediaries David Finlay said the Government sees the housing market as something that will start to recover naturally after the rest of the economy is on a better footing.

 

He says: “I think the coalition Government has taken a slightly different view, in that they are very much looking at the business economy and the banking sector as a whole. I think they are potentially looking at housing as the lag element to their wider proposition. All they are really concentrating on is the economy.”

 

Association of Mortgage Intermediaries director Robert Sinclair said the Government does not want to stimulate the housing market and it may even want to see property values fall from a “disproportionate” level.

 

THIS IS GREAT NEWS !

...and exactly what the UK needs: healthy and growing small businesses, rather than massive capital tied up in an unproductive investment like over-priced BTL properties.

 

Hammering down the BTL brigade through higher taxes, and less subsidies is unwinding the foolish and reckless policies of the corrupt Brown regime. The other side of it, is helping small business through tax incentives, and less red tape.

 

It is wonderful seeing some good leadership in the country.

 

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THIS IS GREAT NEWS !

...and exactly what the UK needs: healthy and growing small businesses, rather than massive capital tied up in an unproductive investment like over-priced BTL properties.

 

Hammering down the BTL brigade through higher taxes, and less subsidies is unwinding the foolish and reckless policies of the corrupt Brown regime. The other side of it, is helping small business through tax incentives, and less red tape.

 

It is wonderful seeing some good leadership in the country.

Agree. And maybe Osborne can blame it on Brown if he sinks property quickly. I am pleasantly surprised by Osborne and co so far. Have heard very little from Cam and Clegg though. Maybe because I am a long way away.

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...maybe Osborne can blame it on Brown if he sinks property quickly.

Believe me, they will !

And with full justification too.

They need to refocus the economy in a way that is starts CREATING WEALTH again -

Not just consuming it. It will be a painful process, and many toes need to be trod upon.

Like I say, if they can get Brown and/or some of his cronies in prison, it would help to draw the line

on the old "bad" ways, and show that there is truly a new way forward.

 

Perhaps they are less vengeful than I am. But I do think they need to show accountability.

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They need to refocus the economy in a way that is starts CREATING WEALTH again -

 

Agreed but this is easier said than done.

Exactly what jobs are people going to do to create wealth?

Can the UK compete with Asia on labour costs?

Have the UK got resources they can exploit?

What do 20m working people actually do?

As it stands a sizable number of workforce just provide meaningless services for each other.

 

 

 

 

 

 

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The UK population has been brainwashed by the government media machine. Special interest groups have been pandered to and made to feel that they are entitled to a free living, and many choose not to work. I hope this nonsense is about to stop otherwise I am getting out in a couple of years time. I had to struggle in my earlier years because I started with nothing; I didnt expect handouts. I dont see why I should subsidize the lazy. If they choose to remain idle and not figure out for themselves how to pull themselves up by their bootstraps - tough luck! There should be no easy way out for the lazy. The only exceptions to this in my books are the disabled, sick and mentally ill - in a civilised society they must be helped.

 

40 years ago Singapore was a backwater. There industrious population have tranformed their tiny island into an a massive success under the leaderhip of Lee Quan Yue. He was tough, uncorruptible and fair. The people responded as they have. Meanwhile over here in the UK our obsession with "mob rule dressed up in a coat and tie" (hat tip Mr Casey) - so called democracy- has allowed the majority (dumb asses in the main) to set the sails for the good ship HMS UK and head towards the rocks.

 

Falling real standards of living will hopefully remove the idea that a country can live beyond it 's means, and at some one elses expense.

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The UK population has been brainwashed by the government media machine. Special interest groups have been pandered to and made to feel that they are entitled to a free living, and many choose not to work. I hope this nonsense is about to stop otherwise I am getting out in a couple of years time. I had to struggle in my earlier years because I started with nothing; I didnt expect handouts. I dont see why I should subsidize the lazy. If they choose to remain idle and not figure out for themselves how to pull themselves up by their bootstraps - tough luck! There should be no easy way out for the lazy. The only exceptions to this in my books are the disabled, sick and mentally ill - in a civilised society they must be helped.

. . .

Falling real standards of living will hopefully remove the idea that a country can live beyond it 's means, and at some one elses expense.

Good post.

We are singing in the same choir

 

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100718-1.jpg

100718-2.jpg

http://retirementinvestingtoday.blogspot.c...k-property.html

 

I've just run some more research and analysis of the UK property market (link above for full details) which includes:

- The Economist has just run an analysis showing Britain is the 6th most over valued market on their list with an overvaluation of 33.8%. The most over valued country was Australia at 61.1%.

-Using my analysis from the charts above:

--The average inflation adjusted price since 1952 has been £84,716. So with today's price of £170,111 prices could be 50% over valued. Probably too bearish.

-- Ratio of prices to average earnings since 1990 on average has been 930.7. Today it's sitting at 1,189 so maybe 22% over valued. This is my preferred measure as salaries have increased in real terms over the years which would allow house prices to increase in real terms while mainatining affordability. Probably too bullish as since 1990 we've only seen one bear market and two bull markets (one very big one which we remain in IMO).

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Agreed but this is easier said than done.

Exactly what jobs are people going to do to create wealth?

Can the UK compete with Asia on labour costs?

Have the UK got resources they can exploit?

What do 20m working people actually do?

As it stands a sizable number of workforce just provide meaningless services for each other.

 

 

That is the nub of it - there is little actual wealth creation going on any more and no quick way of getting any started. For a small island with a huge population, manufacturing is vital - but that has mainly gone and will not come back unless the workers are prepared to accept £100/month pay. The inertia of a huge population living on international credit is slowing - there is great poverty and upheaval ahead.

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Does LMNQ exclude bonuses?

 

Hi ziknik

 

LNMQ is the seasonally adjusted Average Earnings Index (AEI) measure. The non seasonally adjusted index is LNMM. I used to always use this index however it has some wild rides. Looking at the months since January '10 it went -0.44%, 4.95%, 7.80% and then 0.51%.

 

I am pretty sure it includes bonuses and I personally am assuming this when conducting my analysis. It is based on information obtained form the ONS Monthly Wages and Salary Survey (MWSS). If you look up details of this survey it collects total gross pay from individual firms, as well as total bonus payments and any pay award arrears. The reason I'm not 100% sure is this statement on the ONS website "The AEI is based on information obtained from ONS’ Monthly Wages and Salary Survey.". It's the word based that is a little ambiguous IMO but maybe I'm just paranoid. :)

 

Here's the 2 links that are relavent so you can get it straight from the horses mouth.

http://www.statistics.gov.uk/about/data/gu...siness/mwss.asp

http://www.statistics.gov.uk/statbase/Prod...2484&More=Y

 

 

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Hi ziknik

 

LNMQ is the seasonally adjusted Average Earnings Index (AEI) measure. The non seasonally adjusted index is LNMM. I used to always use this index however it has some wild rides. Looking at the months since January '10 it went -0.44%, 4.95%, 7.80% and then 0.51%.

 

I am pretty sure it includes bonuses and I personally am assuming this when conducting my analysis. It is based on information obtained form the ONS Monthly Wages and Salary Survey (MWSS). If you look up details of this survey it collects total gross pay from individual firms, as well as total bonus payments and any pay award arrears. The reason I'm not 100% sure is this statement on the ONS website "The AEI is based on information obtained from ONS’ Monthly Wages and Salary Survey.". It's the word based that is a little ambiguous IMO but maybe I'm just paranoid. :)

 

Here's the 2 links that are relavent so you can get it straight from the horses mouth.

http://www.statistics.gov.uk/about/data/gu...siness/mwss.asp

http://www.statistics.gov.uk/statbase/Prod...2484&More=Y

 

I've double checked. It does include bonuses.

 

AEI: Whole economy SA inc bonus: Index 2000=100: GB

Seasonally adjusted

2000 = 100

Industry: 01-93

Updated on 18/ 6/2010

 

I am surprised to see the rate of growth reducing,

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I've double checked. It does include bonuses.

 

AEI: Whole economy SA inc bonus: Index 2000=100: GB

Seasonally adjusted

2000 = 100

Industry: 01-93

Updated on 18/ 6/2010

 

I am surprised to see the rate of growth reducing,

 

That's great to know. Thanks.

 

Yes I'm watching the rate of growth slowing with interest. LNMM for April '10 up only 0.5% with RPI at that time sitting at 5.3%. Everyone please take a pay cut in real inflation adjusted terms...

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That's great to know. Thanks.

 

Yes I'm watching the rate of growth slowing with interest. LNMM for April '10 up only 0.5% with RPI at that time sitting at 5.3%. Everyone please take a pay cut in real inflation adjusted terms...

While checking I noticed AEI is going to be scrapped. You might want to pick out a new measure and start updating your charts.

 

The Average Earnings Index (AEI) is an indicator of how fast earnings are growing in Great Britain. It is no longer the lead measure of short term changes in earnings, having been replaced by the Average Weekly Earnings Statistic in January 2010.

 

The Average Earnings Index will be discontinued after September 2010.

 

EDIT Link

 

http://www.statistics.gov.uk/CCI/nugget.asp?ID=304

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While checking I noticed AEI is going to be scrapped. You might want to pick out a new measure and start updating your charts.

 

The Average Earnings Index (AEI) is an indicator of how fast earnings are growing in Great Britain. It is no longer the lead measure of short term changes in earnings, having been replaced by the Average Weekly Earnings Statistic in January 2010.

 

The Average Earnings Index will be discontinued after September 2010.

 

EDIT Link

 

http://www.statistics.gov.uk/CCI/nugget.asp?ID=304

 

Thanks for that Ziknik. All I can say is arghh! What is the saying lies, damn lies and statistics. Or something like that. Why do they always have to change the measures that they use. A cynic would think they are trying to hide things. Lucky I'm not cynical however it really does make it difficult to make sensible informed decisions.

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U.K. Home Asking Prices Drop for the First Time This Year on Supply Glut

By Fergal O’Brien - Jul 18, 2010

 

U.K. home sellers cut prices for the first time this year in July and will probably keep doing so for the remainder of 2010, Rightmove Plc said.

 

Asking prices fell 0.6 percent to 236,332 pounds ($364,708) and will drop 7 percent in the second half, wiping out gains so far this year, the operator of the nation’s biggest property website said in a statement in London today. In the U.K. capital, the cost of a home dropped 1.7 percent, led by Kensington and Chelsea, its most expensive district.

 

Government budget cuts to curb the record deficit have spooked consumers and sent Nationwide Building Society’s gauge of confidence to its lowest in a year. Tighter lending rules and a supply glut may also restrain home-price inflation as about 30,000 new homes come onto the market every week, almost three times the number of mortgages granted, Rightmove said.

 

“Estate agents are suffering from podgy portfolios, and buyers’ fitness to purchase is in correspondingly poor shape,” Rightmove Commercial Director Miles Shipside said in the statement. “With agents beginning to choke on a surfeit of new stock, sellers are going to have to price at bargain levels.”

 

The monthly drop in asking prices in July was the first since December. From a year earlier, prices rose 3.7 percent, down from a 5 percent annual pace in June, Rightmove said.

 

London Falling

 

In London, prices fell 1.7 percent on the month to 422,248 pounds, with drops recorded in 29 of the capital’s 32 districts. Kensington and Chelsea, where prices fell 5.2 percent, remains the most expensive location, and the average home price of 1.82 million pounds there is almost nine times more than in the city’s cheapest area, Barking and Dagenham. The capital’s only gains were in Hounslow, Richmond-upon-Thames, and Islington.

 

/more: http://www.bloomberg.com/news/2010-07-18/u...upply-glut.html

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THE BULL TRAP is closing as...

 

House price inflation eases again, says Nationwide

 

Buyers are still restricted by mortgage rationing

House price inflation in the UK continued to ease off in July, the Nationwide building society has said.

 

BBC gives it the usual bullish spin:

 

The Nationwide said price rises were easing off as more homes were being put up for sale.

 

"At the moment, the market is clearly easing relative to the very tight supply conditions that characterised it since early 2009," said the society's chief economist Martin Gahbauer.

 

"A combination of restrictive credit conditions and uncertainty about the future economic outlook continues to limit the pool of buyers to those with relatively large financial resources," he added.

 

Falling prices?

Buyers typically still have to put down a deposit of at least 25% to secure a mortgage as banks and building societies continue to ration their mortgage lending in the wake of the credit crunch and banking crisis of 2007 and 2008.

 

The Nationwide pointed out that the number of completed home sales was still running at about half the level recorded before the credit crunch started.

 

Since the spring of 2009 prices had been pushed higher again, mainly by a shortage of homes coming onto the market for sale.

 

Earlier this month, the Royal Institution of Chartered Surveyors (Rics) said it expected prices to start falling in the second half of this year, as sellers started to outnumber buyers.

 

However, the Nationwide said it was less certain about the prospect for prices.

 

"It will take several more months to establish whether house prices are now simply oscillating around a flat price trend or whether a period of downward trending prices may be in store," Mr Gahbauer said.

 

/see: http://www.bbc.co.uk/news/business-10794461

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Want to do a price check (historical data)?

 

It is here and Up-to-date: http://tinyurl.com/UKTrap

 

... here's what it looks like / I plan to keep it up-to-date ...

 

Mon.: Rt'move: Na'wide Hali.SA Hali.nsa: H&Nindex : mom :DelusIdx

When?: 18th? - 28th ? : Next mo.on 8th?

2009

J. : : 213,570 : 150,501 159,818 163,966 : £155,159 : = n / a : 137.6%

F : : 216,163 : 147,746 160,327 159,208 : £153,477 :- 1.08% :140.8% : LOW

M : : 218,081 : 150,946 157,326 157,066 : £154,066 :+0.38% :141.6%

A : : 222,077 : 151,861 154,716 157,156 : £154,508 :+0.29% :143.7%

M : : 227,441 : 154,016 158,565 160,869 : £157,442 :+1.90% :144.5%

J. : : 226,436 : 156,442 157,713 158,807 : £157,624 :+0.12% :143.7%

Jl : : 227,864 : 158,871 159,623 160,686 : £159,778 :+1.37% :142.6%

A : : 222,762 : 160,224 160,973 161,930 : £161,077 :+0.81% :138.3%

S : : 223,996 : 161,816 163,533 164,854 : £163,335 :+1.40% :137.1%

O : : 230,184 : 162,038 165,528 165,430 : £163,734 :+2.44% :140.6% : RM HIGH

N : : 226,440 : 162,764 167,664 165,617 : £164,191 :+0.28% :137.9%

D : : 221,463 : 162,103 169,042 167,260 : £164,681 :+0.30% :134.5%

2010

J. : : 222,261 : 163,481 169,777 165,514 : £164,497 :- 0.11% :135.1% : HFsa HIGH

F : : 229,398 : 161,320 166,857 165,997 : £163,659 :- 0.51% :140.2%

M : : 229,614 : 164,519 168,521 167,808 : £166,164 :+1.53% :138.2%

A : : 235,512 : 167,802 168,202 170,772 : £169,287 :+1.88% :139.1% : H&N HIGH

M : : 237,134 : 169,162 167,570 169,204 : £169,183 :- 0.06% :140.2%

J. : : 237,767 : 170,111 166,203 166,395 : £168,253 :- 0.55% :140.5%

Jl : : 236,332 : 169,347 16X,- - - 16X, - - - : £16X,- - - :

mom: - 0.60%: - 0.45% :

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I'll believe it when I really see it.

 

This is nothing more than a couple of ticks down, which has happened many times before. 2005 and, to a greater extent, 2008. The UK housing market has a habit of surprising people and , in my lifetime, the surprises have always been to the upside.

 

My observations of my locale is that there is a bit more property for sale than usual. But stuff is still selling - particularly family homes, which, in the event of a crash, are likely to hold up better for and for longer. Rents are still extravagant. There are no repossessions or anything approaching the wash-out of 89-94. I know they come further down the road.

 

But for now this is just a tick down.

 

So no premature congratulation

 

 

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House price inflation eases again, says Nationwide

 

We still have house price inflation then? It's just eased a little.

 

I'm predicting a boom of negative 50%.

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