UK House prices: News & Views

[Jake]

So it now looks like we have a green light for ZIRP to be held into 2013:

 

http://www.bbc.co.uk...siness-14472741

 

ZIRP + Improving job market = no further meaningful nominal falls imo.

This isn't how it played out/is still playing out in Japan.

 

What's this about 'improving job market'-are you talking the UK?

 

I see more unemployment, less and less growth, inflation in food and energy, deflation or flatlining of nominal house prices, continued falls if measured in gold, etc etc.

 

The US in particular gave Japan a lot of stick over the years in managing the 'recession' here. Actually the Japs have managed it remarkably well, so far, so much so that the Yanks and the Brits and all and sundry want to follow the ZIRP and walk the problem down over the next decade or so.

That may or may not be possible. I don't know. But I think unlikely with the DEBTS on the table and being beholden to the bond vigilantes. At least the Japs owe their countrymen-and they are getting less and less thanks to Fukushima and years of deflation taking its toll on the population (lack of new members-no marriages-no real jobs). They also had loads of lolly in the kitty which has been a soft cushion. US/UK/ EU has sweet FA.

I imagine the UK property scene going into a long slide anytime now.

 

Stagflation then.

[John Doe]

Well it started to fall off in 96, which was the signal for buying property, I guess.

 

2000-01 was the low.

Wasn't 1980 the previous high? A 20 year fall?

 

meanwhile

 

 

Mortgage lending jump 22% in June.

 

http://www.bbc.co.uk/news/business-14474238

 

(Albeit from a very low base)

[Jake]

I guess we're not going to agree on this.

 

My eldest son is nearly 23. He has about 15k to his name. I'm trying to imagine the conversation ...

 

"Dad, I've decided to invest my 15k (all the money I have in the world - acquired from savings accounts my parents put money into all my life, topped up with birthday and Christmas money from parents, grandparents, aunts etc - topped up with a recent present from an Aunt who was terminally ill) into gold."

 

 

"Hmmm, so you're not worried that the gold price could halve tomorrow? Or that it can be an extremely volatile market and, when you want the money for something useful (as opposed to owning a bit of shiny metal) that you might not get back all the money you put in? I'd say son, with the benefit of a bit more knowledge of how the world works than you, that you would be nuts to risk your money in that way. Better off hanging on to it until the day you want to settle down and use it as a deposit on a house ... or use it to start a business."

Sometimes BAB...I do wonder if you are a troll. I've never really accused anyone of that before. But you and JD alight my suspicions. If you are, you are very good. Sorry if I offend.

[John Doe]

Sometimes BAB...I do wonder if you are a troll. I've never really accused anyone of that before. But you and JD alight my suspicions. If you are, you are very good. Sorry if I offend.

Excuse me, a troll?

 

I've been posting here for several years and have never been accused of being a troll. (Some other things yes, but never a troll).

 

Just because some people try and give a more balanced account, rather than fall into the group think mentality that some sites tend to, that does not make them trolls.

 

It seems you and BaB are disagreeing, that’s OK.

 

You both have your own opinions and, in reality, you are probably both right in some respects and both wrong in others.

 

This is not HPC, I have always found that other opinions are, usually, welcome here.

 

I have always found your posts very polite.

 

Please do not try and shut down discussion by accusing genuine posters of being trolls just because they don’t agree with you in one area, (especially when they probably agree with you in many other areas).

[Jake]

Excuse me, a troll?

 

I've been posting here for several years and have never been accused of being a troll. (Some other things yes, but never a troll).

 

Just because some people try and give a more balanced account, rather than fall into the group think mentality that some sites tend to, that does not make them trolls.

 

It seems you and BaB are disagreeing, that’s OK.

 

You both have your own opinions and, in reality, you are probably both right in some respects and both wrong in others.

 

This is not HPC, I have always found that other opinions are, usually, welcome here.

 

I have always found your posts very polite.

 

Please do not try and shut down discussion by accusing genuine posters of being trolls just because they don’t agree with you in one area, (especially when they probably agree with you in many other areas).

I think you box your corner very well but 'doth protest too much' your 'open mind' and BaB, honest hodman or not, 'is wise enough to play the fool'. But I am well versed in literature rather than finance and my intuition gets me in hot water from time to time. So I may be wrong on both counts. With a sig like yours though... I am more inclined to think the the system is beat rather than you can't beat it.

I have shared my anger with the looters on another thread. But they are merely picking up crumbs of what they are locked out of compared to the real looters. And when the middle classes join in the chorus of disenchantment, we will see some real anger perhaps and the 'system' will be laid bare for what it is.

 

Your opinions btw are welcome here, I am sure, and well founded in one version of reality. But you could be right, so..an awkward bow. Dont let me stop you posting, John Doe.

[John Doe]

With a sig like yours though... I am more inclined to think the the system is beat rather than you can't beat it.

I have shared my anger with the looters on another thread. But they are merely picking up crumbs of what they are locked out of compared to the real looters. And when the middle classes join in the chorus of disenchantment, we will see some real anger perhaps and the 'system' will be laid bare for what it is.

 

 

I think my sig has been taken the wrong way by several people since I started using.

 

It was a saying from my youth, whilst living on a s**thole estate in the midlands, when, whatever you tried to do, you always seemed to get shafted, while the better off always seemed to succeed. (Of course in reality, we didn't really help ourselves much at that time). I think BaB has a similar background, maybe that’s why we sometimes see things a certain way.

 

The sig was really meant to convey my anger and frustration that things are not as they should be now.

 

If you read my posts pre 2009, you will see I was a true deflationist (I even STR'd in 2007 (for the second time)).

 

It was only when I saw the lengths TPTB went to, to maintain themselves and their friends, I realised just how much the odds are stacked against us, and how much they are stacked in their favour.

 

Others seem to think that it means we shouldn't complain or something along those lines. It doesn't and was never meant to convey that.

 

It was meant to be taken as, you can’t beat the system, but if you know what they are doing, perhaps you can use that to your advantage in your trading etc.

 

Anyway, I think I will remove it.

 

Your opinions btw are welcome here, I am sure, and well founded in one version of reality. But you could be right, so..an awkward bow. Don’t let me stop you posting, John Doe.

 

No offence Jake, but my “version of reality” stated this time last year that we would probably only see 5% falls for house prices in 2011, when practically everyone else here was predicting a big crash.

 

I think that particular prediction is closer to the money than any of the others.

 

Again with the sig, it doesn't matter what "should" be, it just is what it is.

[Van]

This isn't how it played out/is still playing out in Japan.

 

What's this about 'improving job market'-are you talking the UK?

 

I see more unemployment, less and less growth, inflation in food and energy, deflation or flatlining of nominal house prices, continued falls if measured in gold, etc etc.

 

The US in particular gave Japan a lot of stick over the years in managing the 'recession' here. Actually the Japs have managed it remarkably well, so far, so much so that the Yanks and the Brits and all and sundry want to follow the ZIRP and walk the problem down over the next decade or so.

That may or may not be possible. I don't know. But I think unlikely with the DEBTS on the table and being beholden to the bond vigilantes. At least the Japs owe their countrymen-and they are getting less and less thanks to Fukushima and years of deflation taking its toll on the population (lack of new members-no marriages-no real jobs). They also had loads of lolly in the kitty which has been a soft cushion. US/UK/ EU has sweet FA.

I imagine the UK property scene going into a long slide anytime now.

 

Stagflation then.

 

 

This isn't Japan, and I don't think the either the UK economy or housing market will play out in the same way. The job market *is* improving, both in the UK and in the US. The steady stream of employment figures show us that.

 

 

Inflation will peak soon with falling commodity prices (see my other thread http://www.greenenergyinvestors.com/index.php?showtopic=15097), and this will allow real wages to start growing again.

 

I agree that it's going to be a relatively long period of slow and anemic growth, but at least it will be "real" growth rather than NuLab's debt fuel comsumption binge.

 

 

 

[romans holiday]

I think my sig has been taken the wrong way by several people since I started using.

 

It was a saying from my youth, whilst living on a s**thole estate in the midlands, when, whatever you tried to do, you always seemed to get shafted, while the better off always seemed to succeed. (Of course in reality, we didn't really help ourselves much at that time). I think BaB has a similar background, maybe that’s why we sometimes see things a certain way.

 

The sig was really meant to convey my anger and frustration that things are not as they should be now.

 

If you read my posts pre 2009, you will see I was a true deflationist (I even STR'd in 2007 (for the second time)).

 

It was only when I saw the lengths TPTB went to, to maintain themselves and their friends, I realised just how much the odds are stacked against us, and how much they are stacked in their favour.

 

Others seem to think that it means we shouldn't complain or something along those lines. It doesn't and was never meant to convey that.

 

It was meant to be taken as, you can’t beat the system, but if you know what they are doing, perhaps you can use that to your advantage in your trading etc.

 

Anyway, I think I will remove it.

 

 

 

No offence Jake, but my “version of reality” stated this time last year that we would probably only see 5% falls for house prices in 2011, when practically everyone else here was predicting a big crash.

 

I think that particular prediction is closer to the money than any of the others.

 

Again with the sig, it doesn't matter what "should" be, it just is what it is.

Nice post, which i think gets to the crux of it. What is primarily an investment forum "should" discuss what actually is in the economic world, and what might then realistically come from that..... not what should be. I think some of the storms in teacups often arise from various posters arguing at cross-purposes.... where one will be taking a descriptive approach, of what is, and another more of a normative, "purist", or moral approach, of what ought to be. Of course they are all valid discussions but need to be separated out if posters are interested in constructive dialogue. Having separate threads for distinct topics should facilitate this.

[drbubb]

This video was attached to a Daily Mail story about the London rioting, chaos in Ealing. It seems to have been dubbed with a dark score and manipulated somewhat but I sense it may capture these dark times.

That's a great video - they should use it on their road shows in Hong Kong

 

 

Luxury flats 'will start a renaissance'

Feb 4 2011 By Poppy Bradbury, Ealing Gazette

 

FLATS which are part of a new development promising to breathe life back into Ealing are going on sale to the public.

 

Dickens Yard, located behind the town hall in The Broadway, will offer 698 luxury apartments set around a square of shops, cafes and restaurants.

With the closure of HMV on Sunday and many other shops having disappeared in recent years, it is hoped Dickens Yard will revitalise the area.

 

The Mayor of Ealing, Rajinder Mann, joined council leader Julian Bell and Berkeley Homes chairman Tony Pidgley at the unveiling of the marketing suite at The Old Fire Station last Thursday; it opens to the public tomorrow.

Mr Bell said: "We have long held an aspiration to see Dickens Yard get off the ground and start a renaissance which will deliver a legacy for the people of Ealing."

[Jake]

I think my sig has been taken the wrong way by several people since I started using.

 

It was a saying from my youth, whilst living on a s**thole estate in the midlands, when, whatever you tried to do, you always seemed to get shafted, while the better off always seemed to succeed. (Of course in reality, we didn't really help ourselves much at that time). I think BaB has a similar background, maybe that’s why we sometimes see things a certain way.

 

The sig was really meant to convey my anger and frustration that things are not as they should be now.

 

If you read my posts pre 2009, you will see I was a true deflationist (I even STR'd in 2007 (for the second time)).

 

It was only when I saw the lengths TPTB went to, to maintain themselves and their friends, I realised just how much the odds are stacked against us, and how much they are stacked in their favour.

 

Others seem to think that it means we shouldn't complain or something along those lines. It doesn't and was never meant to convey that.

 

It was meant to be taken as, you can’t beat the system, but if you know what they are doing, perhaps you can use that to your advantage in your trading etc.

 

Anyway, I think I will remove it.

 

 

 

No offence Jake, but my “version of reality” stated this time last year that we would probably only see 5% falls for house prices in 2011, when practically everyone else here was predicting a big crash.

 

I think that particular prediction is closer to the money than any of the others.

 

Again with the sig, it doesn't matter what "should" be, it just is what it is.

Fair points and I'll take it on the chin. So, apologies. I agree that TPTB will stop at nothing to protect what is 'sacred' and we will see how it pans out for them-esp on housing and the pound. Indeed it has been proved wise to play ball with the system, especially over the last few years. I see it as being suckered into buying/speculating stocks and overpriced property with low rate teasers, affordability. Gold tells the story (reads the market) better than I though.

But I will give you I feel a level of frustration of late hearing the serpent sirens wax lyrical on property.

Best wishes and apologies,

jake

[Jake]

Nice post, which i think gets to the crux of it. What is primarily an investment forum "should" discuss what actually is in the economic world, and what might then realistically come from that..... not what should be.

What? Like 'out at 17.90' or banning Fitkid for mocking you wanting the argument in log?

[John Doe]

Fair points and I'll take it on the chin. So, apologies. I agree that TPTB will stop at nothing to protect what is 'sacred' and we will see how it pans out for them-esp on housing and the pound. Indeed it has been proved wise to play ball with the system, especially over the last few years. I see it as being suckered into buying/speculating stocks and overpriced property with low rate teasers, affordability. Gold tells the story (reads the market) better than I though.

But I will give you I feel a level of frustration of late hearing the serpent sirens wax lyrical on property.

Best wishes and apologies,

jake

 

No need for any apologies Jake.

 

It's only now I have seen how some others had been interpreting my sig. I had thought some were just having a dig before, but re-reading, I can sort of see where they were coming from.

 

So, back to houses.......

 

I would think that flats above sports shops in cities in the Uk could be falling in price a little quicker than those above bookshops in the near future .

[John Doe]

You guys are going to love this..

 

http://uk.finance.yahoo.com/news/100pc-mortgages-return-market-tele-2687694686.html

 

Yep, the 100% mortgage is back!

 

In N.Ireland of all places

[BoldAsBrass]

Sometimes BAB...I do wonder if you are a troll. I've never really accused anyone of that before. But you and JD alight my suspicions. If you are, you are very good. Sorry if I offend.

 

Yes, mildly offended by that.

[BoldAsBrass]

Change is not easy for some. For most it is almost impossible & so they support the system that is 'killing' them, as maintaining the status quo is their life goal; whatever the cost.

 

The thing is - what, actually, is going to happen? Despite the evidence presented here and in other places I still think global inflation is what is going to happen.

 

I don't think we're going to see the end of fiat money - or gold going to the moon - or the banking system shutting down - or any of the more apocalyptic scenarios on offer.

 

I do, of course, accept I may well be wrong.

[Jake]

You guys are going to love this..

 

http://uk.finance.yahoo.com/news/100pc-mortgages-return-market-tele-2687694686.html

 

Yep, the 100% mortgage is back!

 

In N.Ireland of all places

 

http://www.marketwatch.com/story/us-moves-to-sell-rent-92000-foreclosed-homes-2011-08-10?Link=obinsite

[John Doe]

http://www.bloomberg.com/news/2011-08-11/u-k-house-prices-slip-0-1-to-19-month-low-acadametrics-says.html

 

Acadametrics report out. One of the most reliable as based on Land Reg.

 

-2.4 YOY

 

“The costs of mortgages have recently fallen and loans have become more readily available, with a strong suggestion that the core problem at present in the housing market is a lack of demand,” Williams said. “Were the economic news to improve and were the rate of price falls to continue to slow over the next few months, activity could pick up.”

 

I think the price falls will probably increase during the next 4-5 months, but once this winter is over, keep a close eye on volumes, the nominal low might well be in by spring 2012.

 

With the rates this low (3.39% now for a 5 year fix now), the LTV's dropping like stones (and even the return of the 100% mortgage), if the sun does come out next spring (ie gdp pick up and no major increase in unemployment) there might just be a quite significant pick up (in volume not price).

 

Can't see any price rises for a good while after the nominal low is in mind you, more likely a few years of ~flat prices.

 

However, as always, the best deal is achieved by getting the big discount just before the lows are in. Once that nominal low is in, bang goes the big reduction from the cheeky offer (just like 1996-97).

 

Close examination of volumes etc will be important.

[drbubb]

http://www.bloomberg.com/news/2011-08-11/u-k-house-prices-slip-0-1-to-19-month-low-acadametrics-says.html

Acadametrics report out. One of the most reliable as based on Land Reg.

-2.4 YOY

DOWN Month-on-month too

 

House Prices Decline to a 19-Month Low as Loan Restrictions Deter Buyers

 

By Scott Hamilton - Aug 11, 2011

 

U.K. house prices fell to the lowest level in more than 1 1/2 years last month as banks’ requests for larger deposits deterred first-time buyers, Acadametrics Ltd. and LSL Property Services Plc said.

The average price of a home in England and Wales fell 0.1 percent from June to 217,300 pounds ($351,700), the lowest since December 2009, the groups estimated in an e-mailed report in London today. Prices dropped 2.6 percent from a year earlier.

 

Despite lower rates, I think prices will be LOWER at year end,

and maybe even speeding lower at Crash Cruise Speed (CCS)

[Van]

http://www.bloomberg...trics-says.html

 

Acadametrics report out. One of the most reliable as based on Land Reg.

 

 

 

 

Accurate maybe, but at the expense of being hopelessly behind the real state of the market (as with Land Reg). Especially in these times, I think there is a 6-9 month lag in these figures to where the real state of the market is at.

 

 

As I have seen it, we have a bounce (2009 to mid 2010), a further decline, (mid 2010 - end 2010), and a smaller bounce since the start of 2011 - ie if you were to chart it it would be a flag formation. Even if we decline slightly from here into the end of the year there's a good chance 2011 will finish higher than it started.

[John Doe]

Accurate maybe, but at the expense of being hopelessly behind the real state of the market (as with Land Reg). Especially in these times, I think there is a 6-9 month lag in these figures to where the real state of the market is at.

 

 

As I have seen it, we have a bounce (2009 to mid 2010), a further decline, (mid 2010 - end 2010), and a smaller bounce since the start of 2011 - ie if you were to chart it it would be a flag formation. Even if we decline slightly from here into the end of the year there's a good chance 2011 will finish higher than it started.

 

Agree with the lag effect, but that is a known known (to coin a phrase) and due to the way the data is collected.

 

However, the same lag will prob now see a rise over the next few months, but I can't see anything but falls for the next 5 or 6 months, (so with the lag, it will prob show as falls from maybe Oct to March).

[BoldAsBrass]

Yesterday my wife and I, on the way to visit relatives, drove past a big, new, housing estate in Hampshire. We decided to go in and have a look at the show homes - we are about to refurbish our bathrooms and thought we'd have a look at what is now current. Of course you have to pretend you are interested and I like to take any opportunity to find out how the market is really doing. We said 'we're looking up to 500k' and the sales person said 'the 5 beds are £525k and the 4 beds are £450k'. We said 'would they take an offer on the 5 bed' and she sort of half-smiled disdainfully and said 'not twenty five thousand'.

 

So we had a look around and went through the usual banter before we could get away. She said they are selling them as fast as they build them and are not having to negotiate on price. The site is big and it seems they have been on site for some years. She added, 'a couple of years ago when the market went down we dropped our prices a bit, but they've gone back up again now'.

 

It seems that, so far, it's not just London that is disconnected. Most of the South East seems to be too.

[drbubb]

... She added, 'a couple of years ago when the market went down we dropped our prices a bit, but they've gone back up again now'.

 

It seems that, so far, it's not just London that is disconnected. Most of the South East seems to be too.

Perhaps she thinks she is doing her job by lying thru her teeth

 

Rightmove today (Monday) announced a 3.4% drop in London asking prices.

And that's 3% down / -GBP 14,400 in a single month.

 

It looks like Crash Cruise speed is coming back... and in a hurry

 

Rightmove:

 

Shipside adds: “We’re in a ‘limbo-land’, where a restricted number of motivated sellers are trying to match themselves up with the similarly restricted number of financially capable buyers. In many parts of the country transaction levels are limited to the number of sellers who are willing to price aggressively below the competition and can afford to do deals. It seems that this stalemate can continue indefinitely, until it is broken either by an improvement in upside factors, such as a relaxation of mortgage finance, or by a further marked deterioration in employment and a corresponding increase in forced sales at bargain-basement prices.”

 

. . .

Shipside comments: “We are four years into this journey, and it still looks like a long road ahead.

The UK does not have the chronic over-supply of property seen in many other countries, due to restrictive planning laws and tight central control of local government finances, leading to low levels of new build in both social housing and the private sector. Demand for housing is high due to demographic changes, including net immigration, boosting household numbers. These factors give our housing market more balance and stability, but perversely prevent a possibly quicker but more painful route to recovery via lower prices with higher transaction volumes.”

 

(In other words, prices are too high - but the structure of tight supply does not allow a fast correction. Let's get the panic rolling now, so this fat greasy pig can slide down the shoot to its inevitable fate.)

 

"... a restricted number of motivated sellers"

"Demand for housing is high due to demographic changes, including net immigration, boosting household numbers."

 

He knows but doesnt say:

Overly-generous housing benefits boosted household formations, and that trend may be set to change now.

And supply will rise if banking scares and austerity-constrained incomes can increase the number of "motivated sellers."

[Van]

Sizeable -2.1% slide in Rightmove index. The delusion gap is clearly coming down as H1 optimism gives way to H2 realism.

[tinecu]

Perhaps she thinks she is doing her job by lying thru her teeth

 

Rightmove today (Monday) announced a 3.4% drop in London asking prices.

And that's 3% down / -GBP 14,400 in a single month.

 

It looks like Crash Cruise speed is coming back... and in a hurry

 

 

 

That's odd as Home.co.uk reported prices ticked up in London this month

 

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

 

the rightmove index is rather noisy month on month

[drbubb]

That's odd as Home.co.uk reported prices ticked up in London this month

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

the rightmove index is rather noisy month on month

True.

But it tends to lead the other indices also