UK House prices: News & Views

[drbubb]

I am watching this chart ... update : 2-day

 

(whoops - posted in the wrong place)

[drbubb]

This cannot be good for UK Property prices...

 

Companies to cut investment and hiring

 

Financial Times - ‎6 hours ago‎ / By Brian Groom, Business and Employment Editor

Finance directors of Britain's largest companies plan to cut investment and hiring after reporting the biggest decline in optimism about their business's financial prospects since 2007.

. . .

Companies were more focused than 12 months ago on defensive balance sheet strategies, such as reducing leverage and disposing of assets, he said.

 

“They are less likely to be making acquisitions or undertaking capital expenditure. On balance, CFOs see hiring, capital spending and discretionary spending declining over the next year.”

 

Companies have stepped up preparations for a euro break-up, with 28 per cent saying their plans had been made or were at an advanced stage, compared with 18 per cent in the first quarter.

 

The Deloitte survey shows the sharpest decline in corporate confidence since it started in 2007.

== ==

 

Optimists will HOPE that sentiment has "hit bottom"

[drbubb]

BARRATT IS ON THE TOP of a channel - Downturn Coming ?

 

Barratt Dev'l / BDEV : Weekly chart : Monthly chart : Daily chart : http://tinyurl.com/BDEV-610d

 

BDEV has given us excellent early warnings of TURNS in UK house prices.

 

Early in 2011, I asked on GEI: "Will the UK house price rally last? I think not."

 

BDEV has surged again after a Spring dip, rising to over 140p but remains below its 153p high. A drop in BDEV back below key support at/near 110p on high volume (If we see that), would be a sign that Crash Cruise Speed (with falls averaging more than 0.5% per month), is likely to resume in the housing markets. I expect we will see that after the London Olympics, when I expect realism to return to UK property markets.

 

I still expect a serious slide in UK House prices into 2013 or later.

 

Watching BDEV on Daily charts ... update

 

[John Doe]

Best 20 property related 'Matt' cartoons.

 

http://www.telegraph.co.uk/property/propertypicturegalleries/9054056/Top-20-Matt-cartoons-on-property.html?image=1

 

Love the caveman!

 

Edited link

[notanewmember]

Watching BDEV on Daily charts ... update

 

Hmm the price chart of the builders is at odds to the, what we believe are the fundamentals. I have come to my own conclusion, one should be long the home builders. I was shocked to hear Mr Weinstein (last Sat on FSN), and also Cockney Rebel from ADVFN (recognised profitable trader) come to the same separate conclusions.

 

^The Home construction sector index, NMX3720. NMX3720 constituents -> http://www.londonstockexchange.com/exchange/prices-and-markets/stocks/indices/constituents-indices.html?index=NMX&industrySector=3720&page=1 Ignore Reckitt Benckiser which makes household products.

 

GFRD, BDEV, PSN, less so TW., BVS, BWY, are heading up.

[drbubb]

GFRD, BDEV, PSN, less so TW., BVS, BWY, are heading up.

BDEV needs to break above the down channel to be a Buy

 

 

I cannot ruole that out - But I favor the Bear case

[notanewmember]

I want to add that the strongest is GFRD in the last two years;

 

They say one should follow the strongest from a group, rather than play the weakest.

[Meralti]

Add to this a bearish figure from Rics.

 

British house prices fell last month at their fastest pace since October as demand failed to pick up and the number of properties being put up for sale dropped off, a survey showed on Tuesday.

 

The Royal Institute of Chartered Surveyors' (RICS) seasonally adjusted house price balance fell to -22 from a downwardly revised -17. That was far below economists' forecasts for it to hold steady at May's original reading of -16.

 

Rics has traditionally been a leading indicator for other indices predictiong the trend on inflection points of others quite well, but often overstating the levels.

[John Doe]

Meanwhile, BDEV cleaning up

 

Barratt Developments, Britain’s biggest housebuilder, expects to report a near 160pc rise in full-year profits in a relatively stable housing market, despite continued difficulties for buyers in finding mortgage finance.

 

The company said in a trading update that it expects to deliver full-year profit before tax and exceptional items of around £110m, compared with £42.7m the previous year.

 

http://uk.finance.yahoo.com/news/barratt-expects-near-160pc-rise-073805380.html

 

Well, with flat prices (nominal) and loads of help to buy a new home, it's the one part of the housing market where money is still being made.

[drbubb]

Meanwhile, BDEV cleaning up

http://uk.finance.yahoo.com/news/barratt-expects-near-160pc-rise-073805380.html

Well, with flat prices (nominal) and loads of help to buy a new home, it's the one part of the housing market where money is still being made.

Yeah?

The market says: "So what ?!" - Rallies to over 142P, and then promptly SELLS OFF!

 

BDEV: 135.40 -1.70 /

Open: 137.10 / High: 142.287 / Low: 135.20

Volume: 3,482,411

Percent Change: -1.24% ... BDEV-chart

 

 

Effectively saying:

"Bubb's probably right; the best days may be behind BDEV."

"Grab your profit while you still can. Take the money and run !"

Let's see if that Bear mode continues beyond today.

[John Doe]

Yeah?

The market says: "So what ?!" - Rallies to over 142P, and then promptly SELLS OFF!

 

Effectively saying:

"Bubb's probably right; the best days may be behind BDEV."

"Grab your profit while you still can. Take the money and run !"

 

 

Nice turn of phrase.

 

Here's how they are doing it...

 

That the industry is on the up, amid constant reminders that the UK housing market remains in the doldrums, may surprise some. “I fully understand why, looking at it outside the sector, people may say, 'How could that be?’,” says Pete Redfern, chief executive of Taylor Wimpey.

 

But the view from the inside is that it is not the end of the world if the market is slow, so long as it is steady. “You can be bullish on the sector without needing to be bullish on house prices,” note analysts at Liberum Capital.

 

Mortgage availability is indeed tight, but housebuilders say it is not getting materially worse. Meanwhile that curb on demand is balanced by the constrained supply of homes to the market, as would-be sellers wait for prices to recover, coupled with a wider housing shortage.

 

http://uk.finance.yahoo.com/news/housebuilders-bucking-housing-market-downturn-171114676.html

[tinecu]

Hmm no downturn in sight yet...

 

http://www.home.co.uk/asking_price_index/

 

"Supply of homes to market has fallen and was 7% lower last month than in June 2011.

 

Asking prices for homes on the market in England and Wales continue their steady rise, up a further 0.2% since last month.

 

Average UK asking price rises to highest value since Nov 2008, but some regions continue a downward trend.

 

Supply to market of properties for sale down 7% year-on-year.

 

Annual change in asking prices: +2.1%

 

6-month change: +2.7%"

 

Surprising stuff....

[John Doe]

Hmm no downturn in sight yet...

 

Surprising stuff....

 

And mortgage approvals up too!

 

The Council of Mortgage Lenders (CML) said the number of new loans granted to home buyers jumped by 33% from April to 48,300.

 

The CML said the rise was a rebound from a brief slump that followed the reintroduction of 1% stamp duty for first time buyers on 24 March.

 

Lending in May was up 24% compared with a year earlier, despite the continued rationing of mortgage lending.

 

http://www.bbc.co.uk/news/business-18811234

 

Go figure

 

I think things have definitely took a turn for the worst over the last few months (esp Eurozone activity, or lack of, etc), so would expect this to show up in the next few months figures.

 

Then again, the article is a bit more balanced than usual for the BBC with a quote from Howard....

 

But Howard Archer, of IHS Global Insight, doubted that the pick up in May would be sustained.

 

"While the CML data show a welcome pick up in housing activity compared to April, it is still very low compared to long-term norms," he said.

 

"We seriously doubt that there will be any significant pick up in housing market activity in the near term at least given the weak economic fundamentals, uncertain outlook and low consumer confidence."

[LauraB]

Check thread title.....no mention of a 'UK only' bias....begin post:

 

Is this a Spanish bottom test?

http://www.eigroup.co.uk/property-auctions/search/alicante.aspx

[John Doe]

Check thread title.....no mention of a 'UK only' bias....begin post:

 

Is this a Spanish bottom test?

http://www.eigroup.co.uk/property-auctions/search/alicante.aspx

 

Not sure, but this is

 

[drbubb]

I am not so optimistic as this

 

Twelve more years for house prices to recover

 

House prices will not recover their pre-crisis peak until 2024, according to analysis by PricewaterhouseCoopers.

 

The warning that the UK housing market is only at the start of a 17-year, inflation-adjusted slump came as the accounting firm predicted that the economy will flat-line this year before growing just 1.7pc in 2013.

 

Average house prices will have bounced back to their 2007 high in cash terms by 2017, PwC said, but will need another seven years to catch up with inflation. By 2020, headline prices will be up 30pc but still 7pc below their real terms peak.

 

Prices hit a record high of just over £197,000 at the end of 2007, according to the Halifax. Last month, the average house price was £162,417.

 

Despite the prolonged slump, first time buyers will find it harder than ever to get on the property ladder due to the housing shortage and squeeze on consumer credit.

 

PwC chief economist John Hawksworth said: “A single person leaving university today is unlikely to be able to afford their first house until their late 30s without financial assistance from their parents or others.”

 

/more: http://www.telegraph.co.uk/finance/economics/houseprices/9393170/Twelve-more-years-for-house-prices-to-recover.html

 

I think you need to see the bottom in place, before predicting the length of the rally.

We should prices EVER catch up with the inflation adjusted peak?

To see that, yo need a long period of incomes exceeding inflation.

Maybe AFTER the coming long emmergency we could see that

[John Doe]

Like it or not, this could limit the winter falls somewhat.

 

The new bank lending scheme has just been laid out, and already the cheap mortgages are starting to appear.

 

The lowest five-year fixed rate mortgage ever seen in Britain is being launched today by HSBC, one of the biggest banks in the world.

Borrowers with a 40pc deposit or that much equity in their home will be able to lock into a rate of 2.99pc fixed for five years.

 

Although there is a hefty £1,499 booking fee and the loan is only available directly from the bank, mortgage brokers gave a cautious welcome to the initiative, which aims to stimulate Britain’s depressed housing market where turnover has collapsed and house prices in most areas outside London are falling.

 

There is also a 7 year fix at 5.29% if you only have a 10% deposit! (assuming you have a good safe steady job and a high credit rating )

 

http://blogs.telegraph.co.uk/finance/ianmcowie/100018632/hsbc-launches-lowest-ever-five-year-fixed-rate-mortgage/

 

Let’s see if the others follow suit?

[drbubb]

Like it or not, this could limit the winter falls somewhat.

 

The new bank lending scheme has just been laid out, and already the cheap mortgages are starting to appear.

 

Borrowers with a 40pc deposit or that much equity in their home will be able to lock into a rate of 2.99pc fixed for five years.

 

Although there is a hefty £1,499 booking fee and the loan is only available directly from the bank, mortgage brokers gave a cautious welcome to the initiative, which aims to stimulate Britain’s depressed housing market where turnover has collapsed and house prices in most areas outside London are falling

 

If that is the aim, why make the loan available in Greater London?

[John Doe]

If that is the aim, why make the loan available in Greater London?

 

Perhaps because they're the only ones that have a good enough job and credit score to qualify for one

 

Rightmove out today.

 

'Would-Be Sellers 'Must Drop Asking Prices'

 

http://uk.finance.yahoo.com/news/sellers-must-drop-asking-prices-073611078.html

 

Conversley, they say the Olympics has distracted people from house hunting, along with the bad weather of course

[drbubb]

"LARGEST DROP FOR FOUR YEARS" - Rightmove

London down -3.6% in a Month - I call that a "crushing" fall

 

Crushing an Apple

 

Key points

=========

+ This month’s sellers cut asking prices by -1.7% (-£4,138) the largest price drop in July for four years

+ UK Wide: Only +2.3% up in the past 12 months

+ Greater London was down a "crushing" -3.6% (-£17,136) in one month !

+ New sellers outnumber successful buyers by nearly 2:1, with miserable ‘viewing’ weather plus Olympic distractions adding to the ‘summer selling challenge’

+ "The fact that we have not (yet) seen major price falls in the UK and that many areas are not awash with agents’‘For Sale’ boards may lead some sellers to be over-optimistic with their pricing, but it is vital that they are dispassionate and face up to what they have to do to get their property fit to sell. New seller numbers may be down some 30% on the period prior to credit-crunch,"

==== ====

 

Mo.: Rt'mov : London : Rest of UK %chg/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

2012

J. : : 224,060 : 438,324 : 146,967 - 0.28% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% :

F. : : 233,252 : 449,252 : 149,658 +1.83% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% :

M : : 236,939 : 455,159 : 151,853 +1.47% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% :

A : : 243,737 : 464,944 : 152,815 : +0.63% / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% :149.8% :

M : : 243,759 : 469,314 : 152,803 : - 0.01% / 166,022 = n/a = 160,941 161,785 : £163,904 : +0.77% :148.7% :

J. : : 246,235 : 477,440 : 153,332 : +0.35% / 165,738 = n/a = 162,417 163,240 : £164,489 : +0.36% :149.7% :

Jl : : 242,097 : 460,304 : = n/a = :

 

Even so, London is 6.4% higher than July 2011.

But that hardly covers closing costs.

[Van]

"LARGEST DROP FOR FOUR YEARS" - Rightmove

London down -3.6% in a Month - I call that a "crushing" fall

 

I reckon that'll be the seasonality that I keep going on about kicking in...

[Chartered Surveyor]

I do not see any seasonality in London. This is the buying season that can only be described as very depressed at this moment in time, Excussess such as the Olympics, Jubilee the weather are just that. Overseas money is still the leading factor, with agreed sales significantly above market trend. It is almost like a crack up boom with somebuyers desperate to get out of cash at all costs.

 

Quick tale: Within the last month I have done 3 remortgages for Investment Bankers. All 3 selling off a small potion of their Buy to let investments to consolidate their debt. Is this a marker that they see getting out at the new market high to reap maximum profit.. All three looking to buy back in at a date.

 

Market watch:

 

Fulham & Nottinghill as these two areas are very sensitive to the success of the City. Weakness in volumes of sales and prices achieved will give the punter a great insight into the direction of the London market. At the moment new highs are still being achieved although my view is they are to be short lived for now.

[drbubb]

I reckon that'll be the seasonality that I keep going on about kicking in...

Okay.

But if you look at the actual data - this is amongst the larger moves down,

and the Seasonally Big drops generally happen in August, rather than July.

 

 

Greater London- Rightmove

Seven Biggest Moves Down

====

#1 : -28,099 : -6.81% : Dec.07

#2 : -21,096 : -5.27% : Aug.08

#3 : -17,190 : -4.07% : Aug.10

#4 : -17,136 : -3.59% : July 12

#5 : -15,496 : -3.85% : Aug.09

#6 : -14,633 : -3.38% : Aug.11

#7 : -13,088 : -3.14% : Nov.09

 

The drop in July'12 was the 4th largest drop since 1999,

in terms of GDP, 5th largest in percentage terms,

and the only Big Drop to occur in July.

 

Here are average Mo-by-Month changes

===

J 3,403

F 5,749

M 2,622

A 2,302

M 2,861

J 2,545

J 1,880

A -7,119

S 1,372

O 9,108

N 1,187

D -4,498

 

Next month may be interesting.

Nov. and Dec., too.

[Van]

 

Greater London- Rightmove

Seven Biggest Moves Down

====

#1 : -28,099 : -6.81% : Dec.07

#2 : -21,096 : -5.27% : Aug.08

#3 : -17,190 : -4.07% : Aug.10

#4 : -17,136 : -3.59% : July 12

#5 : -15,496 : -3.85% : Aug.09

#6 : -14,633 : -3.38% : Aug.11

#7 : -13,088 : -3.14% : Nov.09

 

The drop in July'12 was the 4th largest drop since 1999,

in terms of GDP, 5th largest in percentage terms,

and the only Big Drop to occur in July.

 

Here are average Mo-by-Month changes

===

J 3,403

F 5,749

M 2,622

A 2,302

M 2,861

J 2,545

J 1,880

A -7,119

S 1,372

O 9,108

N 1,187

D -4,498

 

Next month may be interesting.

Nov. and Dec., too.

 

Thanks, that's interesting.

 

But I'm far more general - I believe seasonality in the UK housing market can be broadly divided into a strong H1 and a weak H2. It may be as simple as waxing/waning with the days getting longer/warmer & shorter/colder. The 7 biggest drops all occur in H2 - it's probably just a statistical fluke that Sept/Oct have not appeared in the list.

[drbubb]

Here's a more traditional look: Year-on-Year changes

 

+ For Greater London

 

+ For UK-wide