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Gross mortgage lending declines in August

 

Gross mortgage lending declined to an estimated £11.4 billion in August, down 14% from £13.3 billion in July and 6% from £12.1 billion in August 2009, according to new data from the Council of Mortgage Lenders.

 

This is the lowest August total since 2000 (£11.1 billion). Lending volumes are likely to remain below last year’s level in the coming months as activity was buoyed by the upcoming end of the stamp duty holiday in the last few months of 2009.

 

In today’s market commentary, CML chief economist Bob Pannell commented:

 

“We face the prospect of a difficult second half of the year. However, the Bank of England is likely to keep interest rates at record lows for longer to support the economy. This will continue to alleviate payment pressures for many borrowers.”

 

That's quite a stunning statistic given the UK base rate was 6% back in August 2000.

 

Given the recent sharp MOM fall in prices this could really mark the start of the next journey downwards.

 

Next report 20th October.

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Gross mortgage lending declines in August

 

That's quite a stunning statistic given the UK base rate was 6% back in August 2000.

Given the recent sharp MOM fall in prices this could really mark the start of the next journey downwards.

 

Next report 20th October.

"This is the lowest August total since 2000 (£11.1 billion)."

 

August 2000 was going the low before great 7 year cycle up began.

My very worst case forecast, is that UK house prices may go back there:

 

H&N Index:

=========

Aug. 2000 : £ 83,073

Aug. 2007 : £192,490 : Peak

Feb. 2009 : £153,477 : - 20.3% off peak

Aug. 2010 : £167,698 : - 12.9% off peak

Sep 2010 : £165,198 : - 14.2% off peak

 

A 56.8% drop may seem impossible, but Hong Kong had a 69% drop from 1997-2003.

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Remortgaging drops to decade low record

 

 

Remortgaging accounted for only a quarter of home loans in August, the lowest proportion in more than a decade, according to the figures published by the Council of Mortgage Lenders.

 

Just 25,000 loans were approved for house purchase in August, down 13 per cent on the previous month and 19 per cent lower than a year earlier.

 

Banks have tightened their lending criteria in recent months amid fears that higher unemployment will result in home owners defaulting on their loans.

 

The curtains are being drawn on the mortgage equity release episode, it would seem, people are starting to wake up.

 

 

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A 5% Shocker, or just a normal seasonal "cheeky trying it out"?

 

This year's 4.95% jump in Great London asking prices seems a shocker, until you see that last year's rise was 6.5%

 

For some odd reason, Rightmove doesn't refer to prior year JUMPS in October asking prices, which have always been huge:

Comparison:

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

2009

S : : 223,996 : 390,768 : 156,118 +0.2% / 161,816 163,533 163,487 164,854 : £163,335 :+1.40% :137.1%

O : : 230,184 : 416,157 : 156,430 +0.2% / 162,038 165,528 165,349 165,430 : £163,734 :+2.44% :140.6% : RM '09 Hi

==================

chg: + 6,188 : + 25,389 (+6.50%)

2010

S. : : 229,767 : 399,019 : 157,600* -0.4% / 166,757 = n/a = 162,096 163,639 : £165,198 :- 1.49% :139.1%

O : : 236,849 : 418,778 : est.DI: 143.4%

==================

chg: + 7,089 : + 19,759 (+4.95%)

mom:+3.08% :+4.95%

 

Of that Pds. 25k gain last year, over Pds. 17k was given back in two months.

 

I reckon the give back will be even greater this year.

 

 

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From a SP thread:

"I am very confused at the moment as to where the property market is heading, obviously no one can predict the future but was just looking for other peoples views here. About 2 weeks ago i read in the news that house prices were set to rise maybe 20% over the next 4 years or so, which sounded promising after all the doom and gloom of late."

- pound behind / 24 Aug. 2010

 

Yes, it is difficult to predict accurately. Most cannot do it, especially Estate Agents, who will always tell you what you want to hear.

But if you use cycles, and some other technical indicators, you can sometimes have a good idea of what the future path of property moves might be.

 

As evidence of a "surprisingly accurate forecast" made just as the early 2009 "Dead Cat Bounce" was beginning, look at this:

 

001er.gif

 

If you follow the tinyurl link given in the chart, you can get an idea of how the forecast was made, and what may lie ahead.

 

Warning: the Property Bulls may not like it!

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Crash Cruise speed : -1.4% is above the speed limit

Nationwide was -0.7% today (or -1.4% for NSA).

 

Now tantalisingly close to going YoY negative. Once that happens I think sentiment and prices will take another big lurch down as people buying on the bounce in the last 18 months will realise they've lost money in the last year and that the bull market really is utterly dead and buried.

 

http://www.bbc.co.uk/news/business-11638433

_49686293_house_prices_464_oct.gif

 

Actual m-o-m figure is -0.7%, right in the middle of the -0.5-1.0% Crash Cruise speed.

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*Mortgage Approvals are also tracked here: http://www.housepricecrash.co.uk/graphs-mo...e-approvals.php

Mortgage Approvals

= : - 2006 - / - 2007 - / - 2008- / - 2009- / - 2010- /

J. : 121,000 : 121,000 : 73,000 : 31,000 : 48,198 :

F : 115,000 : 120,000 : 72,000 : 37,937 : 47,094 :

M : 117,000 : 114,000 : 64,000 : 39,230 : 48,901 :

A : 108,000 : 109,000 : 58,000 : 43,201 : 49,871 :

M : 115,000 : 113,000 : 42,000 : 43,414 : 49,815 :

J. : 119,000 : 113,000 : 36,000 : 47,584 : 47,643 :

Jl : 117,000 : 112,000 : 33,000 : 50,123 : 48,722 :

A : 118,000 : 106,000 : 32,000 : 52,317 : 47,372 :

S : 124,000 : 100,000 : 33,000 : 56,215 : 47,474 :

O : 129,000 : 089,000 : 32,000 : 57,345 :

N : 131,000 : 083,000 : 27,000 : 60,518 :

D : 115,000 : 072,000 : 31,000 : 59,023 :

 

mortgage_approvals_1449224c.jpg

 

Housing dip feared as mortgage approvals stall ..

Bank of England figures for September show approvals for new home loans were static compared with August

 

Fears of a double-dip in the housing market were exacerbated today with news that the number of mortgage approvals remained static in September, while net lending (not including redemptions and repayments) was just £112m during the month – down from £1.62bn in August.

 

The Bank of England statistics showed approvals for new home loans in September totalled 47,474 – near-identical to the August figure of 47,498 but lower than the previous six-month average of 48,764. This follows yesterday's announcement from Nationwide Building Society that house prices fell by 0.7% in October, taking the quarter-on-quarter drop to 1.5%, the biggest decline since April 2009.

. . .

Analysts said the overall trend for mortgage lending was downward, reflecting high (and likely to rise) unemployment, muted wage growth, and low and deteriorating consumer confidence. Howard Archer of IHS Global Insight said low mortgage interest rates and the current stamp duty holiday for first-time buyers on all properties costing up to £250,000 only partially offsets these adverse factors – especially as it is difficult for many people to get a mortgage.

 

"Much will obviously depend on mortgage availability, the amount of houses coming on to the market and how well the economy holds up as the fiscal squeeze increasingly kicks in," Archer added.

 

/more: http://www.guardian.co.uk/money/2010/oct/2...tgage-approvals

== ==

 

I don't fully buy those comments.

 

The problem is not just "mortgage availability", it is also sentiment. People can see that the tide is turning lower, and they are not eager to take mortgages now, when they think they they can save money by buying later. (Of course, the BBA does not want to risk harming their business by telling you that.) All British people are not just stupid sheep, who will just buy because they can. Many will wait to buy when prices are right (ie more sensibly priced.) They have been reading about falling prices, and can see that austerity lies ahead, so it makes perfect sense to wait. The desire to wait will intensify if/when the rate of prices falls accelerates, and/or interest rates begin to rise.

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The council of mortgage lenders has just released data showing a continuing mortgage slump

That means that the net lending for this year is 1/12 of that seen in 2007 (the UK property peak).

WOW:

The group now expects net lending, which strips out redemptions and repayments, to be just £9 billion during 2010, well down on its original forecast of £15 billion and its revised forecast of £12 billion, and only a fraction of the £108 billion that net lending totalled in 2007.

Total advances are expected to be around £137 billion, less than half the £363 billion advanced in 2007, and significantly lower than the group's original prediction for the year of £150 billion.

The forecasts illustrate just how much the mortgage market has shrunk since the credit crunch first struck in the third quarter of 2007. They also suggest the market has failed to recover at all during 2010, as both forecasts are lower than the totals recorded for 2009.

Meanwhile, separate figures from the Bank of England showed that mortgage lending for house purchase fell to a nine-month low of £5.3 billion during October.

 

Year=: NET LENDING === - - - - - - - - - - - - : GROSS LENDING === - - - - - - - - - -

2007 : .. £108 bn / 189k : 571,400 houses : ... £363 bn / 189k : 1,920k houses :

2010 : Est £ 9 bn / 166k :. 54,200 houses : Est £137 bn / 166k :.. 825k houses :

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BINGO !

The days of illusion are ending. Reality is back (& Brown is a fading memory.)

What was non seasonally adjusted about -1.2

Even more than that !

Here's the actual NSA data :

 

Mo. Year Index %.chg Std Price

Nov 2009 536.0 +1.7% 165,617

Dec 2009 541.3 +5.6% 167,260

2010

Jan 2010 535.7 +3.6% 165,514

Feb 2010 537.2 +4.3% 165,997

Mar 2010 543.1 +6.8% 167,808

Apr 2010 552.7 +8.7% 170,772

May 2010 547.6 +5.2% 169,204

Jun 2010 538.5 +4.8% 166,395

Jul 2010 544.8 +4.8% 168,331

Aug 2010 546.6 +4.3% 168,889

Sep 2010 529.6 - 0.7% 163,639

Oct 2010 534.9 - 0.1% 165,275

Nov 2010 528.4 - 1.4% 163,268

==========

 

This is the lowest figure of the year, 2010.

In fact, you would need to go back to Aug. 2009 to find a lower figure.

The 2009 low was Feb : 157,066, and Nov.2010 is only 3.95% above that.

 

This should undermine psychology, since no one can say UK home prices are rising any more,

and just a 4% drop, would wipe out the entire "Dead Cat bounce rally", and that could happen by

Q1 or Q2 next year.

 

The -1.4% drop in Halifax's November NSA index is a big score in the Bear's column.

 

By my reckoning, the H&N Index was down -0.9%, and we have moved into Crash Cruise speed !

 

Mon.: Rt'move : London : Hometrack chg./ Na'wide H.old.SA Hali.SA Hali.nsa: H&Nindex : mom :DelusIdx

2010

S. : : 229,767 : 399,019 : 157,600*-0.4% / 166,757 = n/a = 161,974 163,639 : £165,198 :- 1.49% :139.1%

O : : 236,849 : 418,778 : 156,200* 0.9% / 164,381 = n/a = 164,949 165,275 : £164,828 :- 0.02% :143.7% : Hi Delus.

N : : 229,379 : 417,279 : 155,575 - 0.4% / 163,398 = n/a = 164,708 163,268 : £163,333 :- 0.91% :140.4% :

=====================================

mom: -3.15%: - 0.36% : Est.DI: 139.2 % / : -0.60%: = n/a = : +1.82%: -1.4% : - 0.91%

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From the At What point will the UK market bottom? thread :

 

Here's where we've been:

I have some charts you might find useful. Give me a second while I go to my computer and work out why they're not on my website.

 

Here's the one of the data above

Houses_15592_image001.png

What's coming?

If it fits the cyclical pattern, it should be something like this:

propcycle.jpg

 

In fact, the fall may be quicker now that the Second Leg down is underway than suggested by my chart.

For example, in the US the drop has been rather symmetrical with the rally:

 

http://www.blogcdn.com/www.dailyfinance.co...home-price2.jpg

 

Now that the mirror of that 2005 plateau has been traced out for the UK market, a symmetrical drop would suggest a rather ugly move down. I talk about "crash cruise speed" with prices averaging at least "0.5-1.0% down per month", but I think it could easily be faster than that, for at portion on the next 2-3 years.

 

My H&Nindex is the average of Halifax and Nationwide.

 

Peak was-- : 192,490 -08/07 (100.0% )

Leg1 Low-- : 153,477 -02/09 ( 79.73% : -20.3%)

DC bounce : 169,287 -04/10 ( 87.95% : -20.3%)

Today------- : 163,333 -11/10 ( 84.85% : -15.1%)

Mos to12/12: 25 mos.

== at 1%--- : 115,500 -11/10 ( 60% : -40%)

Mos to12/13: 37 mos.

== at 1%---- : 92,500 -11/10 ( 48% : -52%)

 

Of course, a drop averaging 1% a month would not be a s deep as I have shown,

because the base upon which the 1% applies gets smaller over time.

But the above order of magnitude- to Pds. 100,000 - 115,000 should give some

idea of what I think is possible over the next 3-5 years, if the government allows

prices to return to historical multiples of income, without tampering.

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Manipulating Ziknik's charts:

I have a couple of new charts for my site today. They track the previous crash against the current one

 

Houses_31892_image001.png

interesting.

I think you might want to say when GC1 and GC2 started.

 

Also the big dead cat bounce in GC2, engineered by the "forces of browness", might simply serve to delay the bottom of the market, as I show here:

 

zzzzkq.png

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ON USING THE HPI DATA

 

My take on the endless supply of stats is that they are essentially meaningless.

 

There is way too much noise in monthly stats. National stats over a longer period are meaningless too - what is happening in Newcastle may well be the exact opposite of what is happening in Guildford.

 

So, who/what to take notice of? Regional stats over a long period? But the volume of transactions is so low that regional stats are so full of variations as to make discerning a trend impossible.

 

Microscopic example. I bought a house a few months ago. An identical house in the next street (same estate) went on the market last week for £65k more than I paid. I was in a good position and the vendor was keen to sell - maybe I got a good deal (relatively speaking) - who knows? That's my point. The only value stats seem to have is to aid the general population's view of the housing market. So, hopefully, they'll stay negative for years and start re-conditioning the way people think about property.

The data are valuable, provided you know how to use them.

 

My advice is: IGNORE the seasonal adjustment. Focus on the actual raw data, and just be aware of the seasonality.

 

Also: the NOISE and inefficiency is in actual prices.

 

If you turn things around, and think this way, you can make consistently accurate forecast. Check my Property Diary and my track record, and I think you will find I have been doing rather well using the data (with some help from the Homebuilder stocks), since at least 2007.

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A breakout in the 10 year Gilt rate might be good for Sterling...

 

78745444.png

 

... But it is hardly good for UK property

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Well, this accurately reflects my experience of London.

No HPC here:

http://www.thisislondon.co.uk/standard/art...ow-in-hendon.do

The average detached family home hits the £1m mark -

Agents say the family home market has been far stronger than that for flats and apartments because of demand from "equity rich" professionals and, in central London, from wealthy foreigners. Smaller properties favoured by first-time buyers have been more badly hit by the mortgage funding drought with prices rising just eight per cent between the last quarter of 2009 and the end of last year.

 

Peter Rollings of agents Marsh & Parsons said that family homes in Battersea were the single fastest rising property category in London last year.

 

I don't buy it. You are too close to the center of the madness to see it properly.

 

Incomes in London are not rising so fast, and indeed - may be set to fall off a cliff - as multiple cataclysms hit the UK economy in 2011 and beyond.

 

The UK's bubble economy, built on finance, borrowing and bullcr@p, may be set to fall apart, as rates go on rising, seeking a breakpoint:

 

UK- 10 year govt. rates ... update * : 12mos

001hn.png

 

Having said that, I may start a thread soon on the Bull argument for UK property, to put the bull arguments to the test.

== ==

 

*We are back at/near a possible "red box" moment:

 

Mo. : H&N-index

7.01 178,646

7.02 181,951 1.85%

7.03 185,131 1.75%

7.04 189,260 2.23%

7.05 190,424 0.62%

7.06 191,764 0.70%

7.07 192,424 0.34%

7.08 192,490 0.03%

7.09 192,446 -0.02%

7.10 191,930 -0.27%

7.11 189,178 -1.43%

7.12 188,706 -0.25%

8.01 185,874 -1.50%

8.02 186,403 0.28%

8.03 184,865 -0.83%

8.04 184,753 -0.06%

8.05 180,033 -2.56% "red box"

8.06 177,090 -1.63%

8.07 173,878 -1.81%

8.08 170,031 -2.21%

8.09 167,574 -1.45%

8.10 163,515 -2.42%

8.11 160,645 -1.76%

8.12 155,742 -3.05%

9.01 155,159 -0.37%

9.02 153,477 -1.08%

9.03 154,006 0.34%

9.04 154,508 0.33%

9.05 157,442 1.90%

9.06 157,624 0.12%

9.07 159,778 1.37%

9.08 161,077 0.81%

9.09 163,335 1.40%

9.10 163,734 0.24%

9.11 164,191 0.28%

9.12 164,681 0.30%

10.01 164,497 -0.11%

10.02 163,659 -0.51%

10.03 166,164 1.53%

10.04 169,287 1.88%

10.05 169,183 -0.06%

10.06 168,253 -0.55%

10.07 168,839 0.35%

10.08 167,698 -0.68%

10.09 165,198 -1.49%

10.10 164,828 -0.22%

10.11 163,333 -0.91%

10.12 162,131 -0.74%

11.01 161,536 -0.37% "red box" coming ??

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Why 2011 May Be the End of the Housing Crash

 

Nationally, the cost of a house is the equivalent of about 19 months of total pay for an average family, the lowest level in 35 years. Prices usually average close to two years' pay, although that varies nationally.

/more: http://online.wsj.com/article/SB1000142405...=googlenews_wsj

Let's compare that with the UK:

 

H&N index House Price : Pds.161,536 (Jan.2011) : Tinyurl.com/GPC-data

Average HH income--- : Pds . 3,129 (Jan.2011) : Tinyurl.com/GPC-incomes*

=========================

Ratio : Months to Pay- : 51.6 Months

 

*Note: that's Pds. 37,544 pa / 12 = Pds. 37,544 pa

 

== ==

 

As I have said before : The UK has not really "faced its house crash demon" yet.

The Brown regime wimped out in late 2008, when it was the first to move the QE and ZIRP.

 

The coalition (and the country) will bear a heavy cross for a long time for that decision.

But - to be fair - the crash is underway outside London. When will London face the demon ?

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Taken from the front page of HPC comments section on the Nationwide figures today. Posted by phdinbubbles.

 

Seasonal adjustments for Feb:

 

2001: -0.3370%

2002: -0.2599%

2003: -0.2225%

2004: -0.3108%

2005: -0.2393%

2006: -0.0599%

2007: -0.1550%

2008: +0.1178%

2009: +0.0306%

2010: +0.3219%

2011: +0.56% (based on the non-re-adjusted NSA figures, as with previous years)

2012: +5%?

 

hmmm. Any thoughts on these stats?

No you see why I do not use SA figures in my H&Nindex.

NSA figures are relatively spin-free.

 

Crash cruise speed is still intact (so far), I believe

A single month of no move (when the SA was negative in prior years) does not invalidate the trend in place.

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Good charts - which need posting here too...

Some charts reposted from FreeTrader's HPC thread.

 

It is likely now, imo, that we closer to the end of the UK property bear market than the start.

 

HPC0211.gif

 

HalifaxReal0211.gif

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...I think the continuining excesses now, and the temporary nature of distortions from "ultra low rates", may mean this correction will ultimately be far greater than the prior one.

The "target" that I am showing below could occur if we get a deeper slide on the same time frame

HpcUK.gif

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THE REAL TEST is after the Spring, when rates rise and the HB cap slides into place.

 

But prices are up on a 12 month horizon, (and have risen 3 out of the last 4 months).

 

So the data can be reported however you like, but sometimes you just have to admit that the UK is weird.

(Also note the NSA figure, quite a revision downwards )

 

Pause or perhaps something more? Your builders index is showing a soft landing is it not?

 

Of course, in real terms we will still get the ~10% down expected.

Actually, I think you need to look at the BIGGER PICTURE - not just the Nationwide Data.

That is why I track several indices, and look at them together.

 

(For some reason, I seem to be one of the very few people to do this - most interpret a few months statistics without any real sense of the wider context.)

 

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

2010

J. : : 222,261 : 407,731 : 156,116 - 0.5% / 163,481 169,777 169,484 165,514 : £164,497 :- 0.11% :135.1% : HFsa HIGH

F : : 229,398 : 427,987 : 156,584 +0.3% / 161,320 166,857 166,703 165,997 : £163,659 :- 0.51% :140.2%

M : : 229,614 : 417,461 : 157,054 +0.3% / 164,519 168,521 168,433 167,808 : £166,164 :+1.53% :138.2%

A : : 235,512 : 421,822 : 157,368 +0.2% / 167,802 168,202 168,212 170,772 : £169,287 :+1.88% :139.1% : H&N HIGH

M : : 237,134 : 420,203 : 157,682 +0.2% / 169,162 167,570 167,287 169,204 : £169,183 :- 0.06% :140.2%

J. : : 237,767 : 429,597 : 158,700*+0.1% / 170,111 166,203 166,351 166,395 : £168,253 :- 0.55% :140.5%

Jl : : 236,332 : 422,248 : 158,500 - 0.1% / 169,347 167,425 167,536 168,331 : £168,839 :+0.35% :140.0%

A. : : 232,241 : 405,058 : 158,200 - 0.3% / 166,507 = n/a = 168,124 168,889 : £167,698 :- 0.68% :138.5%

S. : : 229,767 : 399,019 : 157,600*-0.4% / 166,757 = n/a = 161,974 163,639 : £165,198 :- 1.49% :139.1%

O : : 236,849 : 418,778 : 156,200* 0.9% / 164,279 = n/a = 164,949 165,275 : £164,777 :- 0.25% :143.7% : Hi Delus.

N : : 229,379 : 417,279 : 155,575 - 0.4% / 163,133 = n/a = 164,708 163,268 : £163,201 :- 0.96% :140.5% :

D : : 222,410 : 408,248 : 155,100 - 0.3% / 162,249 = n/a = 162,435 161,498 : £161,874 :- 0.81% :137.4% :

2011

J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,211 = n/a = 164,173 161,470 : £161,341 :- 0.33% :138.3% :

F. : : 230,030 : 430,680 : 154,000 - 0.2% / 161,183 = n/a = 162,657 161,680 : £161,432 :+ 0.06% :142.5% :

M : : 231,790 : 424,307 : 153,850 - 0.1% / 164,751 =

=====================================

mom : + 0.8% : - 1.5% : Est.DI: 143.6% / + 2.21% : = n/a = : -0.92% : +0.13%

 

What I see here, is a seasonally driven bounce back towards resistance at GBP 165,000 or so (as the Builder stocks have also been signalling IMHO.) You can track the big picture most easily, by looking at the "H&N Index" column.

 

The economy has shown some signs of recover and wages are up a bit, but the BofE is recklessly keeping interest rates at ultra-low levels.

 

Nationwide's report seems to be warning that current rate levels are unsustainable (and I am too - see the Zombie thread ). What's next? I real test of the resilience of the market, as Housing Benefits (finally!) get capped in April, and rates begin to drift higher.

 

Watch wages and incomes - I think growth is need there to get any sort of soft landing. Meantime, I see Europe's debt troubles eventually spreading to the UK within 2011.

 

NATIONWIDE - Excerpts

==========

 

Interest rate increases – how much of a hit?

The Bank of England is likely to start the process of returning interest rates to more normal levels at some point in 2011. However, rate increases may exert more of a drag on the household sector than would have been the case before the recession.

 

Households more sensitive to rate increases

Mortgages account for around 85% of household debt and since 2008 the proportion of mortgages on variable interest rates has risen sharply, from 48% to 62%.

 

How much of a squeeze on borrowers?

For those with a capital repayment mortgage, a typical mortgage payment is currently around £4551, equivalent to 23% of individual take home pay. A one percentage point rise in interest rates would see this rise to £494 - 25% of current take home pay.

 

In the five years before the crisis, the Bank Rate averaged 4.5%. A rise to this level would see typical payments rise to £621 if rate increases were fully passed on to borrowers.

 

If the Bank of England were to increase interest rates to 4.5% by the end of 2013 and wages keep rising at the current pace of 2.3% a year, this would take typical payments on repayment mortgages to 29% of take home pay.

 

(4.5% by the end of 2013? We could get there much more quickly IMHO)

 

It is interesting to see a statistic, saying that wages are rising at 2.3% per year (!?)

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It is true. http://www.bbc.co.uk/news/uk-politics-11880383

 

What about builder's shares as being your indicator to house prices? Up 50% since last Autumn when Grant Shapps decided to block any moves to restrict mortgage lending by the FSA.

I have to say that the Builders Shares have already anticipated what I have called, "A SPRING PAUSE" in the Crash Cruise Speed.

 

But I think they would need to go higher, above the 987d/200wkMA perhaps, to signal that something more Bullish was afoot.

 

BDEV/ Barratt : chart / Data etc.: http://tinyurl.com/UKtrap'>http://tinyurl.com/UKtrap *

 

The UK is storing up some big problems IMHO.

== == ==

 

*Excerpt from the DATA Thread / http://tinyurl.com/UKtrap

 

Barratt closer / BDEV.L ... update : Longer Term : Last 12 months : 6 mos

pb1.gif

 

It looks to me like BDEV had a "fake out" bounce on light volume in Sept. 2009, and the NEXT LEG DOWN is underway.

I will expect a continuing slide in Uk House prices into 2012/13 or later.

Next Buy signal would be: after the Builder shares break up on high volume.

 

In early 2011, Homebuilder prices rose, but on light volume, suggesting a

Spring 2011 "PAUSE" in the decline. Will it last? I think not. The failure

of the Homebuilder rally and a drop in BDEV back below 100p on high volume

(If we see it), would be a sign that Crash Cruise Speed (falls averaging more

than 0.5% per month, is resuming.

========================

(I need to change the comment in the first post now, and so will use this):

 

From a low in July 2008 (at 22p), Barratt/BDEV had a long rally into a Sept. 2009 high near 280p (184p- split adjusted), and then another downturn began. This drop in the share preeceded a fall in actual house prices. A few months later in Spring 2010 a second downleg in UK property prices began, despite continued ultra-low interest rates.

 

BDEV continued to fall for most of 2010, but the rate of decline slowed and the stock bottomed in late Nov.2010 at near 71p, which was well above the Nov 2009 low of 31p. Then, a year-end rally in BDEV stock began, taking BDEV back near 90p by the end of 2010.

 

In early 2011, Homebuilder prices rose further, with BDEV over 110p, suggesting a Spring 2011 "PAUSE" in the decline in UK-wide home prices. Will the house price rally last? I think not. The failure of the Homebuilder rally and a drop in BDEV back below 100p 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.

 

I still expect a long slide in UK House prices into 2012/13 or later.

Next Buy signal would be: after the Builder shares break up above key resistance levels on high volume.

 

The present rally has broken above some important MA's, like 377d and 610d, but with light voliume. So we cannot take a 2011 decline for granted. But from a fundamental standpoint, I cannot see how UK houseprices will be able to overcome: a rising supply of homes on the market, the probability of rising rates, and the imposition of caps on housing benefits - all in an economic environment where post-tax disposable incomes are rising in tiny steps, if at all.

=========================================

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It's an interesting phenomenon. Transactions are low, prices are high and enough people want to buy the property that is available and have enough money to keep prices high.

 

For those people hoping for a house price correction (and that includes me - for the benefit of my kids and everyone else's too) - it isn't looking too hopeful.

I dunno.

Look at the Halifax reports, and it sounds like plenty of folks are standing aside. How much longer will sellers be able to hold up prices before caving in, and cutting them to find buyers ? The buying enthusiasm which usually comes in the Spring will fade soon, and the buyers that are still there will be more practical, and the sellers may soon panic, cutting prices more drastically.

 

HNindex2.jpg

 

/see: http://tinyurl.com/UKtrap

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This is from the first page of: http://tinyurl.com/UKtrap , where

HNindex2.jpg

 

I RE-WROTE THE DESCRIPTION IN THE HEADER...

 

Barratt closer / BDEV.L ... update : Longer Term : Last 12 months : 6 mos

BDEVwk.gif

 

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

 

From a low in July 2008 (at 22p), Barratt/BDEV had a long rally into a Sept. 2009 high at 280p. We noticed a key point in the rally, and in early April 2009, predicted a 12 months "Dead Cat bounce" in UK property prices, and that duly arrived.

 

We watched BDEV for a sign that the house price rally was petering out. And from Sept. 2009 and the 280p peak (184p, on a split-adjusted basis), BDEV began to fall. This drop in the share preceded a fall in actual house prices, as measured by various property indices. A key point in the decline, was when BDEV slid back below its 250 day/1 year moving average. That occurred in Feb 2010. Within a few weeks, in Spring 2010 a second downleg in UK property prices began. And it was clearly reflected in the H&Nindex (the average of the non-seassonally adjusted Halifax & Nationwide indicies), which peaked in April 2010 at £169,287. The new slide in UK prices came despite continued ultra-low interest rates.

 

BDEV continued to fall for most of 2010, but the rate of decline slowed and the stock bottomed in late Nov.2010 at near 71p, which was well above the Nov 2009 low of 31p. Then, a year-end rally in BDEV stock began, taking BDEV back near 90p by the end of 2010. We watched to see if the bounce in stocks was going to be strong enough to push back above the 250d/1 year MA, and if that occurred, if there would be a reverse the downturn in UK property prices.

 

In early 2011, Homebuilder prices rose further. BDEV rose above 110p, and pushed beyond the 250d MA, suggesting a Spring 2011 "PAUSE" in the decline in UK-wide home prices. Will the house price rally last? I think not. The failure of the Homebuilder rally and a drop in BDEV back below 100p 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.

 

 

I still expect a long slide in UK House prices into 2012/13 or later.

Next Buy signal would be: after the Builder shares break up above key resistance levels on high volume.

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THE SEASONAL RALLY is now running out of steam

 

BACK-up DATA

 

GPC - DATA bank: / WHAT HAS HAPPENED since 2009:

 

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

When?: 18th? - 18-20th : - 25 - 30th chg / -28th ? : Next mo.on 8th?

2009

J. : : 213,570 : 386,653 : 158,200 - 1.0% / 150,501 159,818 163,945 163,966 : £155,159 : = n / a : 137.6%

F : : 216,163 : 387,988 : 157,000 - 0.8% / 147,746 160,327 160,104 159,208 : £153,477 :- 1.08% :140.8% : LOW

M : : 218,081 : 398,867 : 156,100* -0.6% / 150,946 157,326 157,622 157,066 : £154,066 :+0.38% :141.6%

A : : 222,077 : 387,161 : 155,600* -0.3% / 151,861 154,716 154,663 157,156 : £154,508 :+0.29% :143.7%

M : : 227,441 : 397,646 : 155,600*+0.0% / 154,016 158,565 159,111 160,869 : £157,442 :+1.90% :144.5%

J. : : 226,436 : 397,140 : 155,650 +X.X% / 156,442 157,713 158,445 158,807 : £157,624 :+0.12% :143.7%

Jl : : 227,864 : 402,761 : 155,650 +X.X% / 158,871 159,623 159,749 160,686 : £159,778 :+1.37% :142.6%

A : : 222,762 : 387,265 : 155,806 +0.1% / 160,224 160,973 160,947 161,930 : £161,077 :+0.81% :138.3%

S : : 223,996 : 390,768 : 156,118 +0.2% / 161,816 163,533 163,487 164,854 : £163,335 :+1.40% :137.1%

O : : 230,184 : 416,157 : 156,430 +0.2% / 162,038 165,528 165,349 165,430 : £163,734 :+2.44% :140.6% : RM HIGH

N : : 226,440 : 403,069 : 156,743 +0.2% / 162,764 167,664 167,451 165,617 : £164,191 :+0.28% :137.9%

D : : 221,463 : 398,426 : 156,900*+0.1% / 162,103 169,042 168,763 167,260 : £164,681 :+0.30% :134.5%

 

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

2010

J. : : 222,261 : 407,731 : 156,116 - 0.5% / 163,481 169,777 169,484 165,514 : £164,497 :- 0.11% :135.1% : HFsa HIGH

F : : 229,398 : 427,987 : 156,584 +0.3% / 161,320 166,857 166,703 165,997 : £163,659 :- 0.51% :140.2%

M : : 229,614 : 417,461 : 157,054 +0.3% / 164,519 168,521 168,433 167,808 : £166,164 :+1.53% :138.2%

A : : 235,512 : 421,822 : 157,368 +0.2% / 167,802 168,202 168,212 170,772 : £169,287 :+1.88% :139.1% : H&N HIGH

M : : 237,134 : 420,203 : 157,682 +0.2% / 169,162 167,570 167,287 169,204 : £169,183 :- 0.06% :140.2%

J. : : 237,767 : 429,597 : 158,700*+0.1% / 170,111 166,203 166,351 166,395 : £168,253 :- 0.55% :140.5%

Jl : : 236,332 : 422,248 : 158,500 - 0.1% / 169,347 167,425 167,536 168,331 : £168,839 :+0.35% :140.0%

A. : : 232,241 : 405,058 : 158,200 - 0.3% / 166,507 = n/a = 168,124 168,889 : £167,698 :- 0.68% :138.5%

S. : : 229,767 : 399,019 : 157,600*-0.4% / 166,757 = n/a = 161,974 163,639 : £165,198 :- 1.49% :139.1%

O : : 236,849 : 418,778 : 156,200* 0.9% / 164,279 = n/a = 164,949 165,275 : £164,777 :- 0.25% :143.7% : Hi Delus.

N : : 229,379 : 417,279 : 155,575 - 0.4% / 163,133 = n/a = 164,708 163,268 : £163,201 :- 0.96% :140.5% :

D : : 222,410 : 408,248 : 155,100 - 0.3% / 162,249 = n/a = 162,435 161,498 : £161,874 :- 0.81% :137.4% :

2011

J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,211 = n/a = 164,173 161,470 : £161,341 :- 0.33% :138.3% :

F. : : 230,030 : 430,680 : 154,000 - 0.2% / 161,183 = n/a = 162,657 161,680 : £161,432 :+ 0.06% :142.5% :

M : : 231,790 : 424,307 : 153,850 - 0.1% / 164,751 = n/a = 162,912 162,151 : £163,451 :+ 1.25% :141.8% :

A : : 235,822 : 431,013 : 153,850 +0.0% / 165,609 = n/a =

=====================================

mom : + 1.7% : + 1.6% : Est.DI: 144.3% / + 0.52% : = n/a = : +0.16% : +0.29% : + 1.25%

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So the NSA was up 0.31%, doesn't the figure come in about 4% in a normal market this time of year that's why we get SA. How does it compare to 08/09 for the same month.

The offers need to start coming down, if the market is going to slide.

I reckon it will happen, but there's no real evidence in the data... yet.

 

Here are the Month-on-month changes in NSA - H&N Index

 

Mo / 2009 : =2010 : =2011 :

J. : =n / a : -0.11% : -0.33% :

F. :- 1.08%: -0.51% : +0.06% :

M.:+ 0.38%: +1.53% : +1.25% :

A.:+ 0.29%: +1.88% : +0.31% :

M.:+ 1.09%: -0.06% :

J. :+ 0.12%: -0.55% :

==========

SB +1.76%: +3.41% : 1.56% :

*Seasonal bounce: March-May.

(May not included yet in 2011.)

 

Could be the weakest bounce in the 3 year period.

 

EVoH9.gif

 

Useful comparison

MORE Seasons...

 

Mo / Aver. :: =2004= : =2005= : =2006= : =2007 : =2008= : =2009 : =2010= : =2011= :

J. : - 0.38%:: +0.29%: - 0.47%: - 0.45%: - 0.03%: - 1.50%: - 0.37%: -0.11% : -0.33% :

F. : +0.68%:: +2.76%: +0.29%: +1.17%: +1.85%: +0.28%: -1.08%: -0.51% : +0.06% :

M.: +1.23%:: +2.76%: +0.98%: +2.08%: +1.75%: -0.83%: +0.38%: +1.53% : +1.25% :

A.: +1.50%:: +2.72%: +1.23%: +2.18%: +2.23%: -0.06%: +0.29%: +1.88% : +0.31% :

M.: +0.53%:: +2.59%: +0.61%: +0.68%: +0.62%: -2.56%: +1.09%: -0.06% : ? ? ? ? :

J. : +0.11%:: +1.74%: +0.55%: - 0.14%: +0.70%: -1.63%: +0.12%: -0.55% : ? ? ? ? :

==========

SB +3.26%:: +8.07%: +2.82%: +4.94%: +4.60%: -3.45%: +1.76%: +3.41% : 1.56% :

*Seasonal bounce: March-May.

(May not included yet in 2011.)

 

2011 seems to be running well below the seasonal average.

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The following figures might put the unhealthy balance into perspective.

 

UK ASKING PRICES - at ABSURD levels : 145%+ is the highest on record

 

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

2011

J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,211 = n/a = 164,173 161,470 : £161,341 :- 0.33% :138.3% :

F. : : 230,030 : 430,680 : 154,000 - 0.2% / 161,183 = n/a = 162,657 161,680 : £161,432 :+ 0.06% :142.5% :

M : : 231,790 : 424,307 : 153,850 - 0.1% / 164,751 = n/a = 162,912 162,151 : £163,451 :+ 1.25% :141.8% :

A : : 235,822 : 431,013 : 153,850 + 0.0% / 165,609 = n/a = 160,395 162,303 : £163,956 :+ 0.31% :143.8% :

M : : 238,874 : 430,936 :

=====================================

mom : + 1.3% : -0.02% : Est.DI: 145.7% / + 0.52% : = n/a = : - 1.55% : +0.09% : + 0.31%

 

What are the vendors smoking?

A thread from HPC has a chart of the Delusion Index:

 

delusionindexcomp.jpg

 

/source: http://www.housepricecrash.co.uk/forum/index.php?showtopic=120428&st=75

 

But they use Nationwide alone, instead of The average of H&N

 

Using H&N (non-seasonally adjusted), the latest figure is ABOVE any month in 2009. But it compares May Rightmove with the latest H&N index (which is April.) If the May H&N index falls, then the May Delusion index will be even more extreme !

 

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

When?: 18th? - 18-20th : - 25 - 30th chg / -28th ? : Next mo.on 8th?

2009

J. : : 213,570 : 386,653 : 158,200 - 1.0% / 150,501 159,818 163,945 163,966 : £155,159 : = n / a : 137.6%

F : : 216,163 : 387,988 : 157,000 - 0.8% / 147,746 160,327 160,104 159,208 : £153,477 :- 1.08% :140.8% : LOW

M : : 218,081 : 398,867 : 156,100* -0.6% / 150,946 157,326 157,622 157,066 : £154,066 :+0.38% :141.6%

A : : 222,077 : 387,161 : 155,600* -0.3% / 151,861 154,716 154,663 157,156 : £154,508 :+0.29% :143.7%

M : : 227,441 : 397,646 : 155,600*+0.0% / 154,016 158,565 159,111 160,869 : £157,442 :+1.90% :144.5%

J. : : 226,436 : 397,140 : 155,650 +X.X% / 156,442 157,713 158,445 158,807 : £157,624 :+0.12% :143.7%

Jl : : 227,864 : 402,761 : 155,650 +X.X% / 158,871 159,623 159,749 160,686 : £159,778 :+1.37% :142.6%

A : : 222,762 : 387,265 : 155,806 +0.1% / 160,224 160,973 160,947 161,930 : £161,077 :+0.81% :138.3%

S : : 223,996 : 390,768 : 156,118 +0.2% / 161,816 163,533 163,487 164,854 : £163,335 :+1.40% :137.1%

O : : 230,184 : 416,157 : 156,430 +0.2% / 162,038 165,528 165,349 165,430 : £163,734 :+2.44% :140.6% : RM HIGH

N : : 226,440 : 403,069 : 156,743 +0.2% / 162,764 167,664 167,451 165,617 : £164,191 :+0.28% :137.9%

D : : 221,463 : 398,426 : 156,900*+0.1% / 162,103 169,042 168,763 167,260 : £164,681 :+0.30% :134.5%

 

Maybe someone should post this on HPC.

 

I do think the H&N averages are more accurate.

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