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UK Builder charts / Is House Shortage "Bollox" ?


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#1 DrBubb

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Posted 25 February 2012 - 01:43 AM

UK Builder charts / Is House Shortage "Bollox" ?
Or is there a tidal wave of FTBers waiting ?
=========================================

Telegraph: Redrow dismisses ‘lost decade’ housing claim

RDW.L / Redrow ... 5-yr-chart
Posted Image

Steve Morgan, the chairman of housebuilder Redrow, says there is a “tidal wave” of first-time buyers trying to get into the housing market and dismissed City research questioning whether the UK has a housing shortgage as a “load of b*****ks”.

In a note published on Wednesday, Collins Stewart analyst Alastair Stewart said the housing market could face a “lost decade” and that warnings the UK needs 240,000 new homes a year are based on “bunkum” projections. However, Mr Morgan said: “What is he smoking? It is a bit like saying it is not going to get dark tonight.” He said Redrow has had over 6,000 people inquire about the government's "NewBuy" mortgage indemnity scheme, which will encourage lenders to offer 95pc loan-to-value mortgages by underwriting potential losses.

/see: http://www.telegraph...sing-claim.html

Collins Stewart is known for being willing to see thru mainstream myths
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#2 DrBubb

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Posted 25 February 2012 - 01:50 AM

In a note published on Wednesday, Collins Stewart analyst Alastair Stewart said the housing market could face a “lost decade” and that warnings the UK needs 240,000 new homes a year are based on “bunkum” projections.


Mr Stewart said in his original note that proposals to boost mortgage lending from the Coalition could backfire and leave first-time buyers in negative equity as house prices fall.

“UK housing could be stuck in a lost decade, with tight lending putting pressure on prices and record low volumes," he said.
. . .
The Collins Stewart research claims the UK has been building double the rate of population growth for 20 years and is in line with the main European countries. It says 11,000 “hidden” homes are built every year that are not officially recorded in construction figures but are picked up by tax authorities.

“We believe that periods of rampant house price inflation have more often been caused by over-supply of capital rather than under-supply of housing – the northern buy-to-let boom of the last decade being a prime example,” Mr Stewart added.


/Original story: http://www.telegraph...ns-Stewart.html
=== ===

Offering again 95% Mortgages, would be a classic case of "over-supply capital" to an over-hyped market

Meantime, the UK Builders are enjoying the rise in home-buying, be it from "pent-up demand" or from the renewed "over-supply of capital", as buyer enthusiasm meets a pre-Olympic surge in hype.

Other Builders - BDEV has recently broken a downtrend line
=============

BDEV / Barratt ... update
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BKG / Berkely ... update
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PSN / Persimmon ... update
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compare to USA Bellwether:

PHM / Pulte Homes ... update
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Are we now seeing a UK "spike", similar to the USA - PHM "spike" of 2008, just prior the crash ?
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#3 DrBubb

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Posted 25 February 2012 - 02:39 AM

compare to USA Bellwether:

PHM / Pulte Homes ... update
Posted Image

Pulte still looks strong, based on the volume

PHM-weekly ... update
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PHM-daily ... update : 6mos
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6mos
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The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#4 DrBubb

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Posted 25 February 2012 - 03:06 AM

BDEV / Barratt ... update
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Are we now seeing a UK "spike", similar to the USA - PHM "spike" of 2008, just prior the crash ?

From the UK Stock Traders thread:

...looks like a major breakout for Barratt
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It is impossible to know where it will stop, because it has moved into a fresh range, and BDEV will need to form its own top ... in its own time.
X : 069.20p : 01.Dec.2010
A : 120.60p : 13 May.2011
B : 064.91p : 19.Aug.2011
? : 146.90p : 23 Feb.2012 (so far)
X-to-A : 51.40p
B-to-? : 82.--p (159.5%)
Target : 83.--p (161.8%) : 148p ??

High for year so far: 146.90 : BDEV-6mos
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#5 DrBubb

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Posted 25 February 2012 - 03:22 AM

The Collins Stewart research claims the UK has been building double the rate of population growth for 20 years and is in line with the main European countries. It says 11,000 “hidden” homes are built every year that are not officially recorded in construction figures but are picked up by tax authorities.

Reactions on HPC:
(1)
"...the article isnt exactly packed with info, simply writing...
. It says 11,000 “hidden” homes are built every year that are not officially recorded in construction figures but are picked up by tax authorities.
Doesnt really sound convincing. Could just be an article to appeal to the NIMBY readership of the Telegraph."

(2)
Needed:240,000
built----: 120,000
=====
shortfall:120,000
but wait! those 11,000 secret builds make all the difference.
they must be HUGE!.

/source: http://www.housepric...howtopic=175549

Here's the Truth:
The size of the "shortfall" if any depends on household formations, and the number of people per household.
If the UK stopped its generous housing subsidies, Household sizes would stop falling, and start rising.

I wish that HP-Crashers, and other assorted mainstream-soundbiters would stop throwing around figures they do not take time to understand.

I posted that, and then later in the same thread, found this useful information posted by W--o

"From 2001-2010 the population of England grew 5.6%, while the housing stock grew 7.0%"

http://www.communiti...pdf/2039750.pdf
http://www.ons.gov.u...ates/index.html

"Looking at the Detailed RPI CPI tables"

My link: http://www.ons.gov.u...il Prices Index

Table 30b Jan01 - Jan11 RPI-X has risen 35.9%
Table 38 Jan01 - Jan11 Rent has risen 28.7%

"As a footnote, non shop services have risen 67% and shop services by 50%!"
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#6 John Doe

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Posted 25 February 2012 - 09:31 AM

UK Builder charts / House Shortage : "Bollox" ?


Steve Morgan, the chairman of housebuilder Redrow, says there is a “tidal wave” of first-time buyers trying to get into the housing market and dismissed City research questioning whether the UK has a housing shortgage as a “load of b*****ks”.

In a note published on Wednesday, Collins Stewart analyst Alastair Stewart said the housing market could face a “lost decade” and that warnings the UK needs 240,000 new homes a year are based on “bunkum” projections. However, Mr Morgan said: “What is he smoking? It is a bit like saying it is not going to get dark tonight.” He said Redrow has had over 6,000 people inquire about the government's "NewBuy" mortgage indemnity scheme, which will encourage lenders to offer 95pc loan-to-value mortgages by underwriting potential losses.

Collins Stewart is known for being willing to see thru mainstream myths


:lol:

Figures can be spun as we all know and there are many factors that dictate how markets move.

However, when comparing the UK to other countries, we see the same low rates, the same help to home owners etc etc, yet the nominal falls in the UK were far less (so far).

The whole premise that we had under supply and that this has had some effect, should, perhaps, be taken in comparison to other countries where they had over supply.

Huge over supply occurred in the countries that have witnessed the biggest (nominal) price falls, including USA, Eire and Spain.

So perhaps the "so-called experts" like Stewart should consider these facts before spouting their, now how did Morgan put it? Oh yes, "b****cks" :lol:
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#7 tallim

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Posted 26 February 2012 - 02:25 AM

Please forgive the waffling post, my thoughts aren't very clear yet. The UK 'housing shortage' has been something I've pondered a lot and I think I'm coming round to the idea that the very high level numbers can indiciate one thing, but the reality on the ground is different.

I've proposed before that the fact that we have decreasing household sizes during a period of population growth must mean that we're adding, as a proportion, more housing than people because a smaller household cannot form until there is a physical house to do it in. If house building, as a proportion, really lagged population growth we would by definition see rising household sizes.

I still stand by this hypothesis for the high level numbers, but I think the crux of the issue may be that the housing added recently is not equal to the average housing stock of old in size, location or quality.

I'm finding it difficult to articulate exactly what I mean, so maybe an example is best:

3000 sqft Geogian townhouse that used to house a single family of 5 is sold and a developer splits it into 4 flats. 3 houses are added in this process, the 4 flats can now easily house 7 or 8 people, we have a falling average household size, but no-one is happy, because who wants to bring up a family in a 750 sqft flat.

Now this is an extreme example, there has been plenty of completely new building going on as well, but I wouldn't want to live in many year 2000 onward housing developments if I had a choice, the kind of things that put me off are; lack of off-road parking, 'executive townhouses' that are all corridors and stairs, mixed tenancy social housing provision, being a long way from established town centres, etc... Not to mention that an awful lot of the houses added have been 'executive flats' where your kitchen is in your lounge so you can't cook fish or put the washing machine on in the evening.

Maybe what we have is not a housing shortage as defined by the number of front doors, but by sqft or front doors in desirable locations.

I've also been thinking a lot about what makes a desirable location and I think for me it's fundamentally about the other people that live in your neighbourhood, whether they care for their own property, respect yours and behave appropriately.

You can do all the architectural regeneration you like and build hundreds of community facilities, but if your neighbours still like to argue in the street at 2am or let their dogs crap on your lawn it's not desirable.

In the UK, I think it might only be London where regeneration of an existing residential neighbourhood can really happen, I know of nowhere else that every year has an influx of people who are there for no other reason than to work hard and make something of themselves. Without that, all you're left to do is hope that somehow people will clean up their act, but does anyone in the UK really think that the chav class is receding, not growing?

Are the majority of empty houses in the UK in crap areas like this that have no hope of regneration because there are always going to be a proportion of idiot families that ruin it for everyone else?

http://maps.google.c...2,301.9,,0,-0.2
Posted Image
BTW - I didn't specifically look for this image when writing this post, I came across it yesterday while browsing local auction listings and checking out the areas using google streetview. There are places like this right across the UK in the ex-industrial towns and cities.

#8 DrBubb

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Posted 26 February 2012 - 03:16 AM

Are the majority of empty houses in the UK in crap areas like this that have no hope of regneration because there are always going to be a proportion of idiot families that ruin it for everyone else?

Posted Image
BTW - I didn't specifically look for this image when writing this post, I came across it yesterday while browsing local auction listings and checking out the areas using google streetview. There are places like this right across the UK in the ex-industrial towns and cities.

It reminds me of parts of Detroit - I was born in that city, and my parents still live in a (nice) suburb.

The property in your photo is worth less than the land - you will have to pay something to tear that structure down.
It will only have value if there are enough jobs, so people want to live there. And I don't mean government jobs, because they do not create wealth, they just transfer money from those who work in the private sector to those who work in the government sector.
The market is "bipolar", swinging back and forth from a focus on Inflation to Deflation. Bet on swings; and stay flexible. What are bipolar markets? See: http://tinyurl.com/GEI-Manix

#9 Roddy

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Posted 28 February 2012 - 10:48 PM

It reminds me of parts of Detroit - I was born in that city, and my parents still live in a (nice) suburb.

The property in your photo is worth less than the land - you will have to pay something to tear that structure down.
It will only have value if there are enough jobs, so people want to live there. And I don't mean government jobs, because they do not create wealth, they just transfer money from those who work in the private sector to those who work in the government sector.

Reminds me of the stories in the last housing crash in the UK that you could buy a house in Manchester for the cost of a round of drinks. I did look at a couple of houses on paper at the time in Manchester - the ones I found were a few thousand pounds each rather than a few hundred pounds. However it was not safe to go visit them and I figured life was too short to try to take them on. I was advised some of the neighbourhoods were particularly rough etc.

Re size of house - have been thinking about that - think you need to separate 'overhead' from 'compulsory' and 'discretionary' floorspace - ie 'overhead' is eg corridors / staircases; compulsory might be space for a fridge, a washing machine, a tumble drier etc and 'discretionary' is actual floor space you can move about in etc. I think that there are various trade offs eg a single person flat might have very limited 'discretionary' space as opposed to overhead and compulsory space. In comparison a family of four living in a little larger house might actually have more 'discretionary' space per head (as only need one washing machine etc) even if the gross space per head is less.

Not sure where this all leads to except perhaps to say that 30 yr olds living with their parents may actually have more 'discretionary' space than if they lived alone.

Also an interesting aside - in many cultured an extended family living in one household is considered the norm. and indeed an advantage in many ways (eg child care; sharing expenses etc) - is it a bad thing to have this? (Or is it a conspiracy by housebuilders etc? ;-) )

#10 pilchardthecat

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Posted 29 February 2012 - 09:54 AM

I predict massive immigration from elsewhere in the EU, increasing the demand side of the equation.

The unemployed Spanish 20-somethings will need somewhere to live.




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