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Good points.

When the big 5% jump in Rightmove's October asking prices was announced, I characterised it a "seasonal, trying on" of higher prices, which would be quickly rejected - and so it was.

I wasn't aware of the time lag in the other figures.

With the big move down in Rightmove, I think we can safely ignore the dated Academetrics index.

 

I have to wonder how long those Builder share prices can go on levitating, when most everything else looks bearish.

And they haven't yet broken above key resistance. Blips like these have been "faded" several times in the last few years

 

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 : 420,248 : 155,575 - 0.4% / 163,398 = n/a = 164,708 163,268 : £163,333 :- 0.91% :140.4% :

D : : 222,410 : 408,248

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

mom: -3.04%: - 2.86% : Est.DI: 136.2 % / : -0.60%: = n/a = : +1.82%: -1.4% : - 0.91%

 

The Delusion Index is dropping fast as those "aspirational" asking prices are cut / read: "unrealistically high"

 

I'm sorry to throw water on the fire but you will be unable to prove this is not a seasonal trend until the Spring.

 

For example, even during the winner's curse years of the greatest housing boom in history the winter figures were negative.

 

For example, the Halifax Index not seasonly adjusted for the South East in similar quarters.

 

Q4 2004 to Q1 2005 = - 0.48%

Q4-2005 to Q1 2006 = - 1.04%

 

Let's not count our chickens yet. Traditionally the Spring market has been the catalyst for YoY growth and allayed fears of winter doldrums. We will have to wait until March/ April to be sure that these falls are not seasonal IMO.

 

 

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I'm sorry to throw water on the fire but you will be unable to prove this is not a seasonal trend until the Spring.

For example, even during the winner's curse years of the greatest housing boom in history the winter figures were negative.

There is seasonality in the markets, but in a weak market, we may get no Spring rally at all, and when those numbers come out and get seasonally adjusted, they could get adjust downwards.

 

To me, I would rather watch the prices people actually pay, since no one can buy or sell at a "seasonally adjusted price."

 

Smart buyers are aware of seasonality too, and they may await the arrival of seasonally slack time to but, and grab a bargain.

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More bearish data has been released, this time from Rics; as reported by the Press association

 

 

Property prices fell again last month as interest from buyers plunged for the sixth month in a row, research indicates.

 

New buyer inquiries slumped again in November and dropped at a faster rate than in October, according to the latest report from the Royal Institution of Chartered Surveyors (RICS).

 

It showed 44% more chartered surveyors reported prices falling rather than rising in November, while the reading for transactions per surveyor slumped to its lowest level since June 2009 at 14.8 last month.

 

...

 

A lack of buyers in the market is continuing to weigh on property prices, with mortgage finance remaining a stumbling block for many, particularly first time buyers.

 

RICS also said the surge in properties coming on to the market was now fading as would-be sellers decide to hold off until the new year.

 

Perhaps we should expect fall to increase if would be sellers decide to put the their properties on the market next year.

 

 

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... from the 16-18 year Cycle thread ...

 

LOOKING BACK - at indicators that correctly anticipated the present downturn in house prices

 

Here's an EXCERPT from an article "The Housing market about to turn back down" (with some good charts!) by Dominic Frisby on Moneyweek from November 2009, which gives us credit for having suggested a key cyclical indicator:

 

QUOTE ===

 

House-builder stocks anticipate the housing market

Below is a long-term chart of the Nationwide house price index (blue line) versus the share price of Barratt Developments (red line). As probably the UK's best-recognised builder, we will use it as a proxy for the house-builders. As you can see, it made a low in early 1992, re-tested that low in mid-1992 and by 1993 it was in a firm uptrend.

 

However, as the Nationwide data shows, after the crash of 1989-90, the UK housing market didn't make its final low until 1994-6, by which time Barratt had long since broken out.

 

001ht.png

 

As you can see, Barratt saw some volatility in the late 1990s, coinciding with the Asian crisis. It weathered the dotcom bust in 2000, then alongside the other UK builders, it really began to take off, before finally peaking in February 2007. This was some six to nine months before our housing market peaked in summer-autumn of the same year.

 

So the house-builder stocks – and it wasn't just Barratt, but Persimmon, Bovis and the other majors too – anticipated the housing market. (I would like to thank the trader Michael Hampton of www.globaledgeinvestors.com for first alerting me to this invaluable leading indicator).

 

Now, if we look at the more recent stock action of the builders, we can see that they made their low in late 2008, and began creeping up after that. In March, things began to accelerate, and Barratt broke up. But it wasn't until several months later that the reports of revitalised activity in the housing market filtered through, and house prices began to tick back upwards.

 

Why the housing market is about to turn down

So why do I think the housing market may be about to turn down once again? Quite simply, because the builders have turned down. The stock market made a high on 23 September and then a higher high on 15 October. The builders, however, appear to have put in a top on 9 and 10 September (see chart below – I've added Persimmon (green line) and Bovis (blue dotted line)), and have been gently establishing a downtrend ever since. It is still early days, but that does not portend well for the housing market.

 

002dbh.jpg

 

A cycle of changes in sentiment:

003dx.png

 

UNQUOTE ===

 

/more: http://www.whichwayhome.com/index.php/real...-turn-down.html

 

Note: To minimise the risk of getting "taken in" by a false break, I used the 1 year Moving average of Builder share prices as a confirming indicator - I want to see a new market confirm by Builder shares breaking above the 1 year (252d) MA, or breaking below it to confirm a new Bear market. And ideally, I want to see the 76d.MA also break the 252d.MA.

 

BDEV / Barratt Development ... update

001xg.gif

 

The cross confirming a new Bear trend followed happened in February- March 2010, as the major House Price indicators were peaking. Of course, I do not use this indicator in isolation, I also look at more fundamental indicators like Mortgage Loan approvals.

 

The following data shows a TURN in the H&Nindex (average of Halifax and Nationwide prices) in April, just after the crossover indicator happened.

 

Mon.: Na'wide H.old.SA Hali.SA Hali.nsa: H&Nindex : mom : Note

2010

J. : : 163,481 169,777 169,484 165,514 : £164,497 :- 0.11% :

F : : 161,320 166,857 166,703 165,997 : £163,659 :- 0.51% :

M : : 164,519 168,521 168,433 167,808 : £166,164 :+1.53% :

A : : 167,802 168,202 168,212 170,772 : £169,287 :+1.88% : PEAK

M : : 169,162 167,570 167,287 169,204 : £169,183 :- 0.06% :

J. : : 170,111 166,203 166,351 166,395 : £168,253 :- 0.55% :

Jl : : 169,347 167,425 167,536 168,331 : £168,839 :+0.35% :

A. : : 166,507 = n/a = 168,124 168,889 : £167,698 :- 0.68% :

S. : : 166,757 = n/a = 161,974 163,639 : £165,198 :- 1.49% :

O : : 164,381 = n/a = 164,949 165,275 : £164,828 :- 0.02% :

N : : 163,398 = n/a = 164,708 163,268 : £163,333 :- 0.91% :

D : :

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Goldfinger's chart, with some of my own comments

 

After Labour came to power, the BofE and the government ignored House Price Inflation, thinking it provided cost free stimulus to the economy. They kept rates at moderate levels, focusing instead on other types of inflation, and thinking that a housing bubble would not create economic problems later.

 

zzzzil.png

 

...Until the BofE introduced QE and ultralow rates. That trigger a 12 months bounce (of about 10% in the H&Nindex). but that is also beginning to give way under its own weight (and some cahnges in Housing benefits.)

 

Rates cannot be moved below zero, and banks are unlikely to go back to reckless lending, so what will stop the slide this time?

 

The only think I can see is prices falling back to affordable levels, which could be at Pds.125,000-130,000 or even: 100,000 - 115,000 assuming the Uk avoids a bout of hyperinflation.

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"Hedging" a forecast...

Dr Bubb has been on the money so far. Called the turning points just about perfect. He'll probably call the bottom pretty well too.

Hope so.

 

But I'm hedging my bets a little.

I want to come out and say we will see a low at 100-115,000, but I also think that 125,000-135,000 (or so) might be enough if they can manage to hold rates down while pushing up incomes. But I cannot see right now how the government will manage that trick.

 

The best strategy now is to expect a sizable drop, and watch the Builders and other warning signs for a premature upturn, or maybe an unusual bounce on the way towards a bottom.

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PSYCHOLOGY IN A BUYERS MARKET (from "Market Bottom" thread on the Main board)

 

However, psychology is important when thinking of the housing market with an eye on other markets. Many people also will not sell when they see falling prices, the way one would sell a falling stock because home is home, or some such. So the acceleration to the downside may be muted - maybe.

 

Of course, there are many low equity people who may very well walk away.

True.

But there also be many who do not sell early, since they will be expecting prices to "return to highs."

When prices sink lower and lower, they will wish they had sold, and then begin chasing the price down.

As the price sinks, their hopes will sink with it, and they may realise they are trapped (in negative equity.)

 

Then they will fall in the pattern of seeing the market drop, and then dropping their sales ideas afterwards, not realising that buyers are scarce, and they will be looking for a discount to market, not paying last year's price. One of the factors that will keep prices in a downtrend, will be that mass of unfulfilled sellers, wishing the market would come back up.

 

Buyers will get in the habit of "underbidding" the market on several places at once, and waiting to see who will come down and negotiate with them.

 

The frustrated sellers will be saying, "It is impossible to sell;" not realising they are simply playing the wrong game. In a buyers market you have to do what an old Greek shipowner with ships to charter told me that he instructed his brokers to do in a weak market: "Firm up the bid, and fix it." (That is, don't mess about trtying to get a better price, because the buyer may change his mind.)

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I am recording FORECASTS FOR 2011:

 

+ Roger Bootle "megabear": -10 to 15% in a year "is not impossible"

+ Capital Economics team- : -10.0%

+ DrBubb/ Global Edge Inv. : - 9.0% (London - 6.5%)

+ Tim Waring / Gritty Econ. - : - 7.5%

+ Howard Archer/IHS Global : - 7.0? ("will lose 10% from 2010 peak")

+ IG Index Sep2011 (156.4) : - 6.5% - yoy to Sept.2011

+ Liam Bailey, Knight Frank : - 6.0%

+ Yolanda Barnes, Savills-- : - 3.0% (London - 1.0%)

+ Hometrack, in Dec. 2010- : - 2.0%

+ RICS / Royal Inst. Surv.-- : - 2.0%

 

My "official" forecast is: -9% for 2011,

But I think there is a fair chance that price may fall faster than that.

 

Reasons for the expected fall, of near 10%:

+ Sluggish demand due to austerity measures beginning to bite.

+ Rising rates, thanks to cost-push inflation in energy and food prices,

+ Downwards pressure on rents, as Housing Benefit caps come into effect

+ Deterioration of the presently-bullish sentiment

 

During the course of 2011 or 2012, I expect we will see the year-on-year change of to hit -10% and higher.

2012 falls could speed up, if 2011 is -9% and rates are forced higher by rising inflation.

 

Greater London could surprise on the downside, if public sector job cuts bite, and the UK tax regime turns less favorable for the mega-wealthy.

 

/more: http://tinyurl.com/GEI-hpi2011

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How much has the UK to rollover during the first half, including the bank turds?

i am sorry - i cannot answer that.

 

Sean David Morton is predicting big defaults in Europe (Greece, Ireland, and Spain) and also in US states like

California and Ohio in the first 6 months of 2011.

 

I think the troubles will spread to the UK, and take the form of restricted credit, and probably rising rates

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I think the troubles will spread to the UK, and take the form of restricted credit, and probably rising rates

 

Further credit tightening look inevitable as the requirement imposed on banks during the bailout to lend at 'affordable' rates fall away.

 

See telegraph article

 

These targets were imposed to ensure that ordinary people could still borrow money during the recession, and have helped stimulate the property market over the past two years.

 

But these lending targets are due to be withdrawn at the end of February 2011, when the state-owned banks Lloyds Banking Group and Royal Bank of Scotland will be free to set their own lending levels.

 

Lloyds Banking Group includes the Halifax and C&G brands, two of the country's biggest lenders.

 

Although it is now known how individual lenders will reacts to the changes, the total amount banks lend for mortgages is expected to fall significantly due to the lack of competition in the market.

 

...

 

Analysts warned that with no new Government targets in place, lenders will withdraw their deals for the riskiest borrowers amid fears that they will default on their loans.

 

These requirements were really set up to support prices. Letting them lapse is an example of a passive policy shift: where nothing is actively done, but non-the-less will result in a significant change in the mortgage market. This an example of what I was talking about here.

 

This means that the rates charged for domestic mortgages are likely to rise regardless of the BoE base rate.

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Further credit tightening look inevitable as the requirement imposed on banks during the bailout to lend at 'affordable' rates fall away.

. . .

This means that the rates charged for domestic mortgages are likely to rise regardless of the BoE base rate.

Thanks for that, M.

Pile this on top of:

+ The imposition of Housing benefit Rental caps

+ The deflationary impact of: austerity job cuts, lower salaries, rising VAT sales tax

+ Increased sovereign debt concerns

 

And we have some powerful downside forces about to hit the UK property market

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Further credit tightening look inevitable as the requirement imposed on banks during the bailout to lend at 'affordable' rates fall away.

. . .

This means that the rates charged for domestic mortgages are likely to rise regardless of the BoE base rate.

Thanks for that, M.

Pile this on top of:

+ The imposition of Housing benefit Rental caps

+ The deflationary impact of: austerity job cuts, lower salaries, rising VAT sales tax

+ Increased sovereign debt concerns

 

And we have some powerful downside forces about to hit the UK property market

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Back on Dec.29th, I Said about the forecast for a no change in 2010:

I think 2010 will come in at about -1.6 to -2.0%.

So their call of "flat" missed the direction

Two days later, I got this reaction:

 

Possibly a bit of a premature call Dr B.

And the final figures for 2010 are......... drum roll........... +0.4% YOY!

http://www.bbc.co.uk/news/business-12096125

 

Pretty bl**dy close to the vast majority of VI forecasts, I'm sure you'd agree?

Now if the HF come in at -0.4% YOY, we would have to conclude that they were bang on!

(Of course, that would also be the first year in history that they got it right :lol: )

We now have the year-on-year figures for both Nationwide and Halifax....

 

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

2009

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

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% / 164,381 = n/a = 164,949 165,275 : £164,828 :- 0.02% :143.7% : Hi Delus.

N : : 229,379 : 420,248 : 155,575 - 0.4% / 163,398 = n/a = 164,708 163,268 : £163,333 :- 0.91% :140.4% :

D : : 222,410 : 408,248 : 155,100 - 0.3% / 162,763 = n/a = 162,435 161,498 : £162,131 :- 0.74% :137.2% :

Year on Year:

yoy: +0.42% : +2.47% : Est.DI: 137.2 % / : +0.41%: = n/a = :-3.75%: -3.44% : - 1.55%

 

To summarise, my H&N Index (average of Halifax & Nationwide) was:

 

£162,131, down from £164,681, that's -1.55% yr-on-yr !

 

And the last 5 months are:

- 0.68%, - 1.49%, - 0.02%, - 0.91%, - 0.74% : for an average of -0.77% monthly.

 

That's in the middle of "Crash Cruise Speed" (ie: -0.5 to -1.0%)

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... as likely as it is, there is absolutely no guarantee that rates will be high in two years.

As you have stated, the UK is unique in trying to avoid a crash because we are totally screwed if there is a big one. As such, everything will be done to avoid a big crash. The most likely course being moderate inflation for a long period (assuming the markets allow it).

 

In fact, if rates do rise soon and cause the s**t to hit the fan, as it inevitably would, then the more likely rates will be lower again by the time the fixed rate ends.

I think you need to reverse that:

"there is absolutely no guarantee that rates will STILL BE ULTRA-LOW in two years."

 

Here's why:

The homebuyer gets "business as usual" if rates stay low, and probably a negative equity disaster if rates jump.

He/she takes a huge risk of financial disaster, against the opportunity to buy an overpriced home today.

 

In effect, he is betting on continued financial recklessnes by banks and the country, at a time when other

over-geared countries are 'getting found out" and suffering a sudden jump in their borrowing costs.

 

The risk/reward is all wrong for prudent investing.

 

I know, some will say, " But if rates jump, many people will be in a mess, and the government will not allow that

to happen." Can he not see that the decision is no longer with the BofE? The UK's fate is in th hands of the market.

And there are many examples around the world of how disaster visits countries in such circumstances.

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THE PROJECTED END of Complacency ??

 

In response to a question on PT:

"Agree with you that in order to sell people have to be realistic but in general it seems people still expect the market to recover and start rising again and therefore are "sitting it out"."

 

For me, with my interest in cycles and market psychology, the most interesting thing to watch is this question: What will break the present market COMPLACENCY?

 

Only time will tell for sure, but my firm expectation is this: People will remain complacent until until the time they see the market fall below the 2009 low. By my H&N Index, that was: £153,477 in February 2009, and as of Dec. 2010, we are now at £162,131 - that level needs a further fall of -5.3%, at a rate of 0.60% per month, it would take nine months to get there - so we may see that in about Sept.- Oct. 2011 - say after this coming summer.

 

Ni guarantees about this, but that is my present "best guess" as to when the complacency may give way to fear and bigger prices cuts.

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Copied from thread on main (I thought I had put a link in?)

 

(DrBubb @ Jan 11 2011, 11:48 PM)

I think you need to reverse that:

"there is absolutely no guarantee that rates will STILL BE ULTRA-LOW in two years."

 

Well that's just saying the same thing.

 

 

I know, some will say, " But if rates jump, many people will be in a mess, and the government will not allow that

to happen." Can he not see that the decision is no longer with the BofE? The UK's fate is in th hands of the market.

And there are many examples around the world of how disaster visits countries in such circumstances.

I'm under no illusion that if IR's rise then we are sunk. I have always said if that happens all bets are off.

 

If the markets turn on the UK (which is not that likely compared to several countries, due to the long dated structure of UK debt and, like it or not, the deficit reduction currently under way), then of course there is not much the BofE / Gov can do (assuming they don't use the nuclear option of haircuts and debt forgiveness).

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If the markets turn on the UK (which is not that likely compared to several countries, due to the long dated structure of UK debt and, like it or not, the deficit reduction currently under way), then of course there is not much the BofE / Gov can do (assuming they don't use the nuclear option of haircuts and debt forgiveness).

In my view, some sort of stress from higher rates, or sovereign defaults is IN MY BASE forecast,

and is not an "all bets are off" scenario.

 

I described it recently on PT, in response to this posting:

 

thomas gallagher said:

... if we were to imagine a scenario where all uk home owners owned their property unencumbered then i would be first to agree with your doomsday scenario of possible 50% falls as people would panic sell due to the present bad press. i may be wrong but i just dont think that the massive collapse that you predict is possible unless they all just hand the keys back to the lender and walk away

 

(My response):

Thanks for the comment, Tom.

 

For the record here: I still regard a 50% fall from the Pds, 192,000 top of 2007 (lets say to under Pds.100,000) as possible. But that is not my base forecast. At the moment, I would expect a low to come perhaps 25-30% under the recent high (£169,287 x 30% = £118,500) by 2013 or later as the most likely possibility. But I reserve the right to change my forecast without notice. And I will change it, if the "crash cruise speed" that we are seeing now morphs into something else.

 

I think "the real fun" for cash rich buyers will beginning when the complacency gives way to panic when prices fall below the 2009 lows, possibly later in 2011.

 

And, yes, I will expect many forced sellers, with banks foreclosing on many properties, and even some desperate borrowers walking away from their properties.

 

May I ask why you think the scenario I describe WILL NOT arrive? What can stop it? A steady rate of prices falls will eventually break complacency IMHO.

 

 

 

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May I ask why you think the scenario I describe WILL NOT arrive? What can stop it? A steady rate of prices falls will eventually break complacency IMHO.

Who me?

 

I think a steady, slow reduction in prices over a few years (10 to 15% maybe) coupled with continued ultra low rates (which is currently a high probability) and inflation bubbling away in the background, would put things on a much more sustainable path.

 

This would still hurt a few, but would not result in the death-cycle of falling prices = bank losses = bank bailouts = more pain for tax payer = more cuts = higher unemployment = more falls = more repos = more bank losses........ etc etc.

 

Who benefits from this? No-one, no-one at all, and the banks and the bondholders and the government and most of the country realise this.

 

Again, we are not Ireland or the US, we never had the massive oversupply (I know it's not just about supply demand etc, but it does have some effect) and new building(which wasn’t keeping up even in the boom years) has practically stopped in the UK now. There is a housing shortage in the UK, hence the high rents.

 

As for complacency< I just don’t buy it. As I have said many times, the vast majority of people who buy houses are not investors. They have a simple understanding that you get a mortgage then buy a house, live in the house and then, after ~25 years your house is yours, no landlord, no rent to pay, ever. Simple and very effective. Unless you are one of the poor soles to lose their jobs, and not be re-employed before your benefits/savings expire, you will not lose your house.

 

If you are an investor, then yes, your arguments make perfect sense. Sell properties and buy them back cheaper later. But the vast majority still won't, and after all the discussions you have had with them, you know that now. That’s their problem, but again, if they have tenants paying the mortgage, after 25 years, the landlord owns the property.

 

I don't see a major problem arising from the sov debt either. Europe will mess about, but then will bailout Portugal and Spain if they have to. They are not going to let them go down.

 

It took a once in a lifetime global meltdown to cause the last crash. Even with all the global imbalances and problems still existing from the, the most likely course is a gentle muddling along again for several years.

 

Or were you asking Tom? :rolleyes:

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I think a steady, slow reduction in prices over a few years (10 to 15% maybe) coupled with continued ultra low rates (which is currently a high probability) and inflation bubbling away in the background, would put things on a much more sustainable path.

This is a common misconception.

"inflation bubbling away in the background" is not going to help home prices - in fact, inflation on its own without any rise in incomes and employment would HURT home prices, since people will pay more for their essentials, like food and energy, and will seek ways to economise on their household expenses, like moving in with mon & dad, or sharing with a friend.

 

I address this in a new thread on Main: Is there a Housing Shortage in the UK ?

FALLING EMPLOYMENT - suggest falling incomes may lead to pressure to cut Rents

Some relevant charts

(2)

12.gif.

The employment rate for those aged from 16 to 64 for the three months to October 2010 was 70.6 per cent, down 0.1 on the quarter. This is the first quarterly fall in the employment rate since the three months to April 2010. The number of people in employment aged 16 and over fell by 33,000 on the quarter to reach 29.13 million. The number of people employed in the public sector fell by 33,000 on the quarter to reach 6.01 million while the number of people employed in the private sector was unchanged on the quarter at 23.11 million. The number of people working full-time fell by 58,000 on the quarter to reach 21.17 million.

/source: http://www.statistics.gov.uk/cci/nugget.asp?id=12

 

(3)

UK has big risk of double-dip in employment and wage rates

UK-jobs-oct062010.jpg

/source: http://www.finfacts.ie/irishfinancenews/ar...e_1019481.shtml

 

Also, you say:

I don't see a major problem arising from the sov debt either. Europe will mess about, but then will bailout Portugal and Spain if they have to. They are not going to let them go down.

They may not want to "let them go down", but things are getting worse. The can is being "kicked down the road", but at each kick it is getting heavier and harder to move. At some point, the kicking becomes impossible, and debt defaults muct be faced. And I think that day will come in 2011 or 2012, and the result may be that the market FORCES higher rates on over-indebted countries like the UK.

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Some interesting facts coming to light. This also matches well with other reports on another thread.

 

Firstly, mortgage lending is reported as reaching a 9 low and interest rate expected to raise. As reported here by the BBC. Interesting that the BBC has reported bearishly on property recently. As the mouth piece of the UK government this is a total reversal from a few months ago.

 

Total UK mortgage lending fell to its lowest level for nine years in 2010, new figures show.

 

The value of mortgages advanced stood at £136.3bn, which was down 5% from £143.3bn in 2009 and the third year in a row that the figure has fallen.

 

Lending was just over a third of level seen in 2007, revealing the extent to which the UK property bubble has burst.

 

The Council of Mortgages Lenders (CML) also said it expected interest rates to rise sooner rather than later.

 

Also, considering recent posts regarding the media priming the UK public for rate rises we now see that mortgage lenders are unilaterally rising rates in response to rising swap rates. link

 

More lenders are set to withdraw competitive fixed price deals over the coming days and weeks, and replace them with higher rates.

 

Hard-pressed householders are having to pay more for their mortgages, in advance of expected base rate rises, and at a time when inflation is being stoked by higher fuel and food prices.

 

Lenders are raising rates against the backdrop of increased costs of wholesale borrowing, with five-year swap rates having shot up from 2.66% at the start of the year to nearly 3%. Two, three and ten-year swap rates have also soared, with ten-year swap rates now standing at 3.78%.

 

Also rents are now being reported as falling.

 

rents fall for first time in 11 months

 

In December, the average UK rent dropped by 1.2% to £684 per month - the lowest average since July 2010 according to the figures.

 

Boom in rental inflation 'coming to an end'

 

The boom in rental growth is likely to be at an end, think-tank Capital Economics has warned.

 

Property economist Paul Diggle says the boom is on its last legs and warned that if its unemployment forecasts are correct, more tenants will be struggling to pay rents.

 

 

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I sometimes browse the MoneySavingExpert forums to get a taste of what people in the UK are doing regarding debt and mortgages.

 

The mortgage brokers who post on there are a great indicator of lending standards being applied. At the moment, there's basically no nonsense going on, it's all; minimum 10% deposit (but you'll pay for it on rates), proper checks of documentation, repayment mortgages only, sensible income multiples, etc...

 

I found this thread interesting in particular

 

http://forums.moneysavingexpert.com/showthread.php?t=2992974

 

It's about a young couple who bought somewhere for £88k in 2006 on a 100% mortgage and now want to leave the UK (possibly back home, it doesn't really say). The poster says

 

its on offer at 77995 now, im willing to drop it as low as 70000. painful, but if it stops the sleepless nights then i guess its worth it

 

Is this an example of someone at the Capitulation stage in the cycle?

 

2icboki.gif

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I sometimes browse the MoneySavingExpert forums to get a taste of what people in the UK are doing regarding debt and mortgages.

 

The mortgage brokers who post on there are a great indicator of lending standards being applied. At the moment, there's basically no nonsense going on, it's all; minimum 10% deposit (but you'll pay for it on rates), proper checks of documentation, repayment mortgages only, sensible income multiples, etc...

 

I found this thread interesting in particular

 

http://forums.moneysavingexpert.com/showthread.php?t=2992974

 

It's about a young couple who bought somewhere for £88k in 2006 on a 100% mortgage and now want to leave the UK (possibly back home, it doesn't really say). The poster says

 

 

 

Is this an example of someone at the Capitulation stage in the cycle?

 

2icboki.gif

 

Fear stage

 

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Some interesting facts coming to light. This also matches well with other reports on another thread.

 

(1)

Firstly, mortgage lending is reported as reaching a 9 low and interest rate expected to raise. As reported here by the BBC. Interesting that the BBC has reported bearishly on property recently. As the mouth piece of the UK government this is a total reversal from a few months ago.

 

(2)

Also, considering recent posts regarding the media priming the UK public for rate rises we now see that mortgage lenders are unilaterally rising rates in response to rising swap rates. link

 

(3a)

Also rents are now being reported as falling.

rents fall for first time in 11 months

(3b)

Boom in rental inflation 'coming to an end'

Thanks for that posting, M.

Truly, we have a TRI-FECTA for those looking for lower prices in the UK

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This doesn't bode well.

 

WASHINGTON (MarketWatch) — Home prices fell 1% in November from October in 20 major U.S. cities, according to the Case-Shiller home-price index released Tuesday by Standard & Poor’s.

 

It marked the fourth straight monthly decline for prices.

 

Prices have fallen 1.6% in the past year, marking the second consecutive decline. This is a faster decline than the 0.9% decline in October.

 

Now, given that the US housing cycle is about 9-12 months ahead of the UK's, then this could mean that the price falls in the UK that we have recently seen are going to gather pace.

 

 

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One of the largest contributors to the -05 GDP figures released yesterday was construction at -3.3% in Q4 2010.

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