UK House prices: News & Views

[alexreeve]

Sorry, but I think you might still be missing the point. (Although yes, the main point is we all have s**t loads of debt).

 

We, like the US, bailed out our banks, but that money is assumed to be coming back (for both us and them).

It is because the UK banks are a much larger percentage of UK GDP than the US bank are to their GDP that makes the headline figure which includes this, look so bad.

 

Hence the distortion (which is far far worse for Eire for example).

 

When these figures are taken out, I think we are much more similar.

Assumptions like that caused the whole sorry mess in the first place.

[John Doe]

Assumptions like that caused the whole sorry mess in the first place.

Yes, that's very true.

[John Doe]

Here it comes. THE GREAT DEBT JUBILEE spreads to residential

 

Don't say we didn't warn you.

 

First the BTL'ers were bailed out, now it's going to be the homeowners!

 

Allied Irish Banks Plc (ALBK), the nation’s biggest mortgage lender, may use money from its taxpayer bailout to rescue homeowners unable to pay their mortgages, opening the door to debt forgiveness in Europe’s worst real-estate market.

 

“We would be using the capital that has been provided by the government in this process,” Chairman David Hodgkinson told reporters in Dublin yesterday. “Clearly, it needs to be an industry-wide, government-supported approach.”

 

http://www.bloomberg.com/news/2011-07-25/ireland-weighs-debt-forgiveness-in-europe-s-worst-housing-market.html

 

But heh, it's going to be called a "restructure" so it's not really a debt forgiveness!

[LauraB]

“We would be using the capital that has been provided by the government in this process,” Chairman David Hodgkinson told reporters

 

"Provided"?

 

[Van]

July Nationwide +0.2%,

YoY -0.4%

 

 

Stagnation for 5 years? Don't rule it out.

[John Doe]

July Nationwide +0.2%,

YoY -0.4%

 

 

Stagnation for 5 years? Don't rule it out.

 

Could be, the YTD NSA is 4% up!

[TrueNorth]

US house prices in gold -- story from Forbes magazine

 

An American friend sent me this

 

written by Adrian Ash

 

Is It Time To Trade Pricey Gold Bars For Cheap Houses?

Posted by Adrian Ash

 

After this week’s poor U.S. housing data, might the average home be nearing its low? Priced against gold it might be.

 

Dropping hard as the gold price doubled and more since 2006, the average U.S. home is now priced at 103 ounces of gold, little more than one market-approved gold bar for settling a 100-ounce Comex gold futures contract.

 

Housing has only been cheaper against gold, according to the rough-and-ready averages spat out by the U.S. Census and other major estimates, in 26 of the last 121 years. It’s currently priced around half the long-run average of 201 ounces.

 

Might there be further to go on the downside?

 

. . . .

[drbubb]

July Nationwide +0.2%,

YoY -0.4%

Stagnation for 5 years? Don't rule it out.

Outside London is morphing towards Crash Cruise speed and London may get there soon too, I reckon

 

House prices decline accelerates, as Land Registry shows even London struggling

 

By SIMON LAMBERT .. 28th July 2011

 

House prices are falling at the fastest annual rate since October 2009, according to Land Registry figures, with even the London property market falling flat.

 

Stand-off: Buyers and sellers are seeing big gaps in their expectations on price

Property prices in England and Wales stagnated in June, according to the organisation’s latest report, but the average home is down 2.5% year-on-year.

 

The decline marks the latest stage in a downward trend seen since the post slump mini-boom tailed off in the middle of last year.

And even the previously buoyant London market is feeling the squeeze, with average prices dipping by 0.1% in June, the second month in a row in that they have fallen.

 

 

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2019803/Land-Registry-house-prices-decline-accelerates-London-struggles.html#ixzz1TU1cEMiT

[TrueNorth]

This is quite interesting, from Zoopla, a "heatmap" of UK property prices.

 

Zoopla prices "heat-map"

[drbubb]

This is quite interesting, from Zoopla, a "heatmap" of UK property prices.

 

Zoopla prices "heat-map"

No icicles... yet.

Most of the heat is around transport stations - that's no surprise

[drbubb]

I am anticpating good news for the patient Bears

 

Here you go ... Score one big bellwether drop for the Housing Bears

 

UK:BDEV / Barratt Developments PLC / 7/29/2011 01:32 PM

 

Last: 95.90 / Change: -3.40 / Percent Change: -3.42%

Open: 98.70 / High : 100.20 / Low: 95.25

Volume: 2,405,353

[Van]

Could be, the YTD NSA is 4% up!

 

Indeed, and the YoY will go +ve too as H2-2010 was all -ve, so unless that is matched this year then we'll go +ve for sure. However, I still think that this market is essentially flat (in case anyone accuses me of being a bull), within the confines of seasonality, with punters basically optimistic for the first half of the year, and then falling back in the 2nd half.

 

 

 

 

Builder shareprices essentially foretells this, with minor peaks and troughs ahead of the HPI indices by several months.

[Van]

US house prices in gold -- story from Forbes magazine

 

An American friend sent me this

 

written by Adrian Ash

 

 

 

I've started saying this too now. US houses are positively cheap as chips. The gold/house ratio suggests that offloading their Gold and buying real estate is getting a bargain.

 

I know there are good reasons why the Gold bull market should run further, but I see Gold is regularly making the front pages of the BBC now - surely signs than the market is overheating.

 

Even cheaper when you consider...

 

"US housing’s previous low came during the deflation of the Great Depression. Never mind that the average US home doubled in size in between, or swelled another 40% since"

[Jake]

If I was in the US I think I would be looking at one of those nice walkable community houses, maybe.

[drbubb]

If I was in the US I think I would be looking at one of those nice walkable community houses, maybe.

Yep !

Since the housing bust began, the average U.S. home has lost better than 70% of its value in gold. It’s dropped nearly 80% since the gold-market found its own floor back in the early spring of 2001.

/more http://blogs.forbes.com/greatspeculations/2011/07/27/is-it-time-to-trade-pricey-gold-bars-for-cheap-houses/

 

Might be a good idea.

Especially, if you can buy a home with profits, and hold onto core capital

[BoldAsBrass]

Apart from investors who already have somewhere to live and need to decide whether, for example, property or gold is a better investment at any point in time ... what is the point of thinking of house prices in terms of gold?

 

One might think that if, historically, houses are cheap in gold (which they are) then, either house prices are going to go up or gold is going to go down - to head towards the average.

 

A dispassionate investor, looking at a chart of house prices priced in gold, would buy houses now as they are so cheap - particularly in the states.

[BoldAsBrass]

Just as an aside ... how long does someone have to wait before a prediction becomes out of date? In the sense that ... I'm sure you've all heard of Bill Bonner and his various missives ... he has been saying for many, many years that gold would go up and property would go down and the world was heading to hell on a debt handcart. Maybe I have been receiving emails from his various outlets for what - 10 years? So, was he right all along or was it just inevitable he would be right one day.

 

When I STRed in 2003 - if I had followed his general thinking and put my fund in gold - I guess it would have doubled. As it was I waited 7 years and bought back in to property. Oh me of little faith eh?

[Jake]

Just as an aside ... how long does someone have to wait before a prediction becomes out of date? In the sense that ... I'm sure you've all heard of Bill Bonner and his various missives ... he has been saying for many, many years that gold would go up and property would go down and the world was heading to hell on a debt handcart. Maybe I have been receiving emails from his various outlets for what - 10 years? So, was he right all along or was it just inevitable he would be right one day.

 

When I STRed in 2003 - if I had followed his general thinking and put my fund in gold - I guess it would have doubled. As it was I waited 7 years and bought back in to property. Oh me of little faith eh?

Looks like BB has been right all along. Gold, trade of the decade and all that. Surely if you had lisened to him you would have quadrupled your funds, at least. 2003 gold was about 200/oz. Ok so house prices continued for a while.

I still wonder if BB is right on the next trade of the decade-Japan? I suppose he is betting that Japan comes out of her K winter. Still a ways to go yet. But the lows were Nikkei 7-8000 odd. So far...I wonder if Bonner moved out of gold or is just having a punt with his profits? Somehow I doubt he has gone cold on gold.

[Bosworth]

Looks like BB has been right all along. Gold, trade of the decade and all that. Surely if you had lisened to him you would have quadrupled your funds, at least. 2003 gold was about 200/oz. Ok so house prices continued for a while.

I still wonder if BB is right on the next trade of the decade-Japan? I suppose he is betting that Japan comes out of her K winter. Still a ways to go yet. But the lows were Nikkei 7-8000 odd. So far...I wonder if Bonner moved out of gold or is just having a punt with his profits? Somehow I doubt he has gone cold on gold.

 

Not sure I agree on Japan. As an export led economy, which markets will see strong growth?

[LauraB]

Apart from investors who already have somewhere to live and need to decide whether, for example, property or gold is a better investment at any point in time ... what is the point of thinking of house prices in terms of gold?

 

Because the majority of one's savings are in it?

Thus every major purchase is like timing the purchase of your foreign holiday money for the best rate.

 

 

One might think that if, historically, houses are cheap in gold (which they are) then, either house prices are going to go up or gold is going to go down - to head towards the average.

Why would that happen given the present situation?

 

A dispassionate investor, looking at a chart of house prices priced in gold, would buy houses now as they are so cheap - particularly in the states.

 

How many dispassionate property investors do you know who hold gold & are buying?

I know quite a few UK-based property investors (who doesn't these days?), none of whom AFAIK have gold, & I wouldn't describe any of them as dispassionate. On the contrary, they seem keener than ever to get me to join in with their 'fail-safe' strategy as my other-world approach just has to be wrong.

I had lunch with a group on Saturday & three of the species were there so their attitude (& body language) is still fresh in my mind.

.................................

The only way I could force myself to take the alien step to buy PMs was by switching the big question from: "What if I do?" to "What if I don't?"

[Van]

I know quite a few UK-based property investors (who doesn't these days?), none of whom AFAIK have gold, & I wouldn't describe any of them as dispassionate.

 

Fair enough but I can wholeheartedly say the same about Gold investors.

[LauraB]

Fair enough but I can wholeheartedly say the same about Gold investors.

 

The only ones I know of are on internet forums & they seem to be of a very different mentality

Are they 'investors'? I thought they just didn't rate having their savings in fiat.

[BoldAsBrass]

Because the majority of one's savings are in it?

Thus every major purchase is like timing the purchase of your foreign holiday money for the best rate.

 

Don't understand. Who thinks like that? The majority of my money is 'saved' in my house but, all other things being equal, I'm going to need somewhere to live until I depart this mortal coil ... so why would I ever think of my house in terms of gold? Sure, I might think what it will be worth when I retire and if I can downsize to fund some of my retirement (I can't stop myself thinking like that - sometimes - but I won't really care if prices do go down because so will everything else and I may be a bit worse off but, so what, I was going to have to give a wedge to my children and maybe they won't need it) but one thing I won't be doing is selling my house and buying gold with the money.

 

 

Why would that happen given the present situation?

I agree it probably won't. I was just trying to make the point that if you stuck that chart under the nose of a 'dispassionate' (uninvested in the gold or property markets) investor, they would look at the chart and say 'Gold's had a good run, housing has had a bad run ... the chart shows these things go up and down like a yo-yo, we're at an extreme now so, all other things being equal, I would expect things to start to head back towards the average at some point'.

 

 

How many dispassionate property investors do you know who hold gold & are buying?

I know quite a few UK-based property investors (who doesn't these days?), none of whom AFAIK have gold, & I wouldn't describe any of them as dispassionate. On the contrary, they seem keener than ever to get me to join in with their 'fail-safe' strategy as my other-world approach just has to be wrong.

I had lunch with a group on Saturday & three of the species were there so their attitude (& body language) is still fresh in my mind.

 

What did they say when you said 'My investment in gold has doubled, your investment in property has, at best, stagnated and has probably gone down. I can now buy twice as many properties as I could have 5 years ago'? Do they still trot out the old property mantras?

[drbubb]

CHEAP PROPERTY?

 

UK property may look cheap relative to gold, but it looks expensive relative to income.

 

So unless your income is in Gold, property owners still have a problem

[Jake]

I've started saying this too now. US houses are positively cheap as chips. The gold/house ratio suggests that offloading their Gold and buying real estate is getting a bargain.

 

I know there are good reasons why the Gold bull market should run further, but I see Gold is regularly making the front pages of the BBC now - surely signs than the market is overheating.

 

Even cheaper when you consider...

 

"US housing’s previous low came during the deflation of the Great Depression. Never mind that the average US home doubled in size in between, or swelled another 40% since"

'cheap as chips' This sticks in my head, Van. Do you think so? I see the graph and if I was in the US I may start viewing properties. But equally likely is 2000 USD gold. Thus houses for around 80-85 ounces. I suppose once there at 2000 you'd be persuaded to move the goalposts again and listen to 5000USD (Schiffy) or 8500USD (Robin Griffiths). So av houses around 20 ounces. Cheap as chips? Now or then? Of course gold at 8000 USD doesnt mean your dollars will still be the same value as today...but maybe they would still buy you the same house. (ie no nominal change from today).

 

Any rate I am not in the US and wont be buying US property...but this is a useful exercise nevertheless.