John Doe Posted September 29, 2011 Report Share Posted September 29, 2011 House prices surge! http://uk.finance.yahoo.com/news/Biz-Bulletin-House-Prices-skynews-3510936810.html?x=0 House Prices 'Back In Growth' Yes, a whole 0.1% up Meanwhile Mortgage approvals up. August mortgage approvals highest since December '09 http://uk.finance.yahoo.com/news/August-mortgage-approvals-reuters_molt-3027747287.html?x=0 More QE on the way as last BoE hawk turns dove http://uk.finance.yahoo.com/news/Global-weakness-persistent-QE-reuters_molt-2168753890.html?x=0 Can't see crash cruise speed yet? Link to comment Share on other sites More sharing options...
John Doe Posted October 1, 2011 Report Share Posted October 1, 2011 Yet more now realising/admitting that the oversupply in Eire was indeed a big part of their big crash. Looking at other countries helps in assessing where Irish prices are likely to end up. Consider our nearest neighbour, where prices have fallen by a relatively small 11 per cent since 2007, a fact that has provided one of the few positives for Nama, which offloaded some of its London trophy properties this week at no cost to beleaguered Irish taxpayers. Among the most important reasons for Britain’s house-price stability are its tight planning laws, which mean that few new houses are built across the water. It was different here during the property frenzy, when building permits were extraordinarily easy to obtain. The result was that, in 2007, 90,000 homes were built here while 180,000 were built in Britain, wildly disproportionate figures given that the population of our neighbouring island is more than 13 times greater than that of the Republic. And the early emergence of subprime played a big part in the US IF BUILDING TOO MANY houses can end in tears, so can bad lending by banks. Although the US did not look out of the ordinary in the property-price rises it experienced from 1997 to 2006 (130 per cent compared with Ireland’s 400 per cent), it has suffered the second-worst rich-world crash (after Ireland), and the residential property-price drops from coast to coast are now greater than those during the Great Depression in the 1930s. One of the main reasons for the US economy’s woes was the quality of bank lending. American financiers gave the world subprime mortgages. The idea behind these was simple and seemingly good: lend to people who, traditionally, would not be entertained by a bank manager, but charge a higher rate of interest to cover higher default rates. http://www.irishtimes.com/newspaper/weekend/2011/1001/1224305066691.html Eire and UK were relative latecomers to the subprime party. Link to comment Share on other sites More sharing options...
Van Posted October 2, 2011 Report Share Posted October 2, 2011 The governments needs to massively ramp up its housebuilding programme. The cost of housing is too high (both renting and buying) compared to other countries. Planning restrictions need to be lifted - if that means changing laws and building on greenbelt land then so be it. I used to be of the opinion that there was no real shortage of housing as rents were not rising, but now that rents are ever increasing I've changed this view - the UK desperately needs more houses to be built. There is a very real shortage of housing, as our housing stock is not keeping pace with our population growth. The UK economy is in the doldrums, yet the free market is not allowed to operate to build houses where there is an obvious demand for them. Why not lift the restrictions, let the market do its work - reallocation of resources to will provide an economic boost and lower the cost price of housing, which will be good for everyone in the long run. Despite our supposed affluence, most young people cannot afford to live comfortably by themselves - instead, house sharing has become the norm. Yet in other countries this is not the case, and people can afford to live comfortably by themselves on much more modest incomes. As long as we allow the current situation to persist then the social unrest will continue to grow. Looks like I am not the only one who thinks this: http://www.independe...lt-2364448.html "the PM is to announce the release of thousands of hectares of disused public sector, mainly brownfield, land to build 100,000 new homes, creating 200,000 new jobs by 2015" Francis Maude puts it succintly: "I think this idea that creating a presumption in favour of sustainable development is somehow a massive erosion of the ability to conserve, is bollocks, frankly." F*** the Nimbys! Link to comment Share on other sites More sharing options...
drbubb Posted October 2, 2011 Report Share Posted October 2, 2011 Looks like I am not the only one who thinks this: "...the PM is to announce the release of thousands of hectares of disused public sector, mainly brownfield, land to build 100,000 new homes, creating 200,000 new jobs by 2015" What if many of those London jobs melt away, at the same time new supply hits the market? This could create disaster, a self-inflicted one. Link to comment Share on other sites More sharing options...
John Doe Posted October 2, 2011 Report Share Posted October 2, 2011 What if many of those London jobs melt away, at the same time new supply hits the market? This could create disaster, a self-inflicted one. The new supply will be social housing. Probelm solved Link to comment Share on other sites More sharing options...
Van Posted October 3, 2011 Report Share Posted October 3, 2011 What if many of those London jobs melt away, at the same time new supply hits the market? This could create disaster, a self-inflicted one. I don't think you can think in those terms - i.e. a problem that doesn't exist at the moment (oversupply) that might come about because we are trying to fix the opposite problem (undersupply). The country needs to deal with the problems it has at hand, which at the moment is the prohibitive cost of housing. This is not the US; we are not bulldozing houses to prop up the market. I would say cheap housing and lower living costs are a necessity for a country that is at peace with itself. Link to comment Share on other sites More sharing options...
John Doe Posted October 3, 2011 Report Share Posted October 3, 2011 I would say cheap housing and lower living costs are a necessity for a country that is at peace with itself. It's a nice thought. Link to comment Share on other sites More sharing options...
tallim Posted October 4, 2011 Report Share Posted October 4, 2011 Well, our tenancy is up in a few months, so we thought we'd have a quick check of what's for sale in our area of the North West. Before we looked we decided that we'd go check what kind of mortgages were being offered, so booked in to see the Nationwide this lunchtime. We look like a decent credit risk on paper; double income, no kids, no debt, decent deposit, etc... I wasn't prepared to be offered 5 times joint salary though, I thought those days were gone. My advice is don't bank with Nationwide, though they're probably not alone on this, so maybe the advice should be don't bank in the UK Link to comment Share on other sites More sharing options...
John Doe Posted October 4, 2011 Report Share Posted October 4, 2011 Well, our tenancy is up in a few months, so we thought we'd have a quick check of what's for sale in our area of the North West. Before we looked we decided that we'd go check what kind of mortgages were being offered, so booked in to see the Nationwide this lunchtime. We look like a decent credit risk on paper; double income, no kids, no debt, decent deposit, etc... I wasn't prepared to be offered 5 times joint salary though, I thought those days were gone. My advice is don't bank with Nationwide, though they're probably not alone on this, so maybe the advice should be don't bank in the UK Yep, I mentioned a few weeks back that they offered me a huge multiple too. I was quite surprised too. Also, how can they (small mutual) manage to offer decent mortgage rates even though they do not have an investment arm? Isn't that the big argument from the Big Wan... I mean Bankers, that they couldn't offer us cheap loans without their casino operations? Link to comment Share on other sites More sharing options...
John Doe Posted October 4, 2011 Report Share Posted October 4, 2011 Never mind Tallim, might as well take the Nationwide’s money while they are still solvent. After all, latest figures show there's been a better time to buy News that it is now cheaper to buy rather than rent across 90 per cent of Britain may rub salt into the wounds of many frustrated first-time buyers (FTBs). But are things really as tough as they seem for those wanting to get that first foot on the property ladder? New figures from property website Zoopla show that falling house prices and a jump in rental demand have meant that the average renter in Britain is currently paying 13 per cent more than the average owner. http://www.independent.co.uk/money/mortgages/ignore-the-doomsayers-first-timers-its-easier-than-you-think-2364222.html Link to comment Share on other sites More sharing options...
THEBIGMAN Posted October 4, 2011 Report Share Posted October 4, 2011 Never mind Tallim, might as well take the Nationwide’s money while they are still solvent. After all, latest figures show there's been a better time to buy http://www.independe...nk-2364222.html Indeedy... http://www.moneyweek.com/blog/is-buying-property-cheaper-than-renting-dont-be-so-sure-55628 Link to comment Share on other sites More sharing options...
John Doe Posted October 4, 2011 Report Share Posted October 4, 2011 Indeedy... http://www.moneyweek.com/blog/is-buying-property-cheaper-than-renting-dont-be-so-sure-55628 A rather questionable example (from the traditionally bearish moneyweek) looking at a first time buyer (20% deposit) with mortgage rising to 5% in 2 years etc (when they can fix for 5 better than that now, and possibly lower in the coming months as twist UK QE2 (unoficial3) arrives) and also assuming prices being down on todays in 5 years time. Lots of ifs and buts for a "fair" comparison is it not? Besides, according to his post Tallim has a much bigger than 20% deposit (so he can fix for 10 years at less than 5% and 5 years for less than 3.7%). Blows money weeks figures out of the water. Of course, that said, only a mutton head would buy now PS as much as I like moneyweek and the author of that piece (Merryn SW), what was it she did just a little while back? Oh yes, that's right, she bought a house! Put your money(week) where you mouth is Link to comment Share on other sites More sharing options...
tallim Posted October 5, 2011 Report Share Posted October 5, 2011 Yep, I mentioned a few weeks back that they offered me a huge multiple too. I was quite surprised too. Also, how can they (small mutual) manage to offer decent mortgage rates even though they do not have an investment arm? Isn't that the big argument from the Big Wan... I mean Bankers, that they couldn't offer us cheap loans without their casino operations? I don't really know how they can offer such low mortgage rates, I suppose I'd be stealing from pensioners and savers in a roundabout way There's absolutely no way I'd lend myself money at the multiples they offer at the rates they offer. It turns out that all the investment bankers added to the mix was volume in the shape of a long line of of willing mortgage funders who thought they were buying special super sexy structured securities, not a bunch of unsexy mortgages from Scunthorpe, Eccles and Wolverhampton. It did explain to me why we've seen a much bigger impact on volume than prices though, if you've got a bit of cash and proven employment it's still 2007. I really hope they don't keep at these multiples, we'll have a whole generation with squeaky bums each time the rate setting committee meets. Link to comment Share on other sites More sharing options...
drbubb Posted October 5, 2011 Report Share Posted October 5, 2011 Blows money weeks figures out of the water. Of course, that said, only a mutton head would buy now PS as much as I like moneyweek and the author of that piece (Merryn SW), what was it she did just a little while back? Oh yes, that's right, she bought a house! Put your money(week) where you mouth is She bought expecting a low return, I believe. If you have a big deposit, you may be able to justify buying - since you get some tax benefits from owning. Link to comment Share on other sites More sharing options...
John Doe Posted October 5, 2011 Report Share Posted October 5, 2011 She bought expecting a low return, I believe. If you have a big deposit, you may be able to justify buying - since you get some tax benefits from owning. Could you elaborate? There are also a fair few other benefits too (esp in the UK with it's crap tennant rights). However, it's true that if you have money, it makes a lot more sense than if your are struggling. Money is currently very cheap, if you have money. Not so if you dont. This is another reason for the good houses in good areas staying highly priced, while the rest are struggling. Link to comment Share on other sites More sharing options...
Van Posted October 5, 2011 Report Share Posted October 5, 2011 Money is currently very cheap, if you have money. Not so if you dont. This is another reason for the good houses in good areas staying highly priced, while the rest are struggling. Very true. With 5yr fixed mortgage rate mortgages from 3.5% and 10yr deals from 4.2% this is considerably below rental yields, so if you can get access to these rates then owning is cheaper than buying. Of course the catch is that you need 20-25% equity/deposit to access these rates and the opportunity cost of what else could you do with that money if you could release it. People have to do their own sums and figure out if renting or buying is cheaper, and then weigh up the pros and cons of owning vs renting. If you can honestly conclude that buying is both cheaper and has a tangible net benefit over renting then I would not criticize anyone for choosing to buy right now even if they expect further price falls. As we know the market has a habit of not fulfilling general expectations. Link to comment Share on other sites More sharing options...
John Doe Posted October 6, 2011 Report Share Posted October 6, 2011 Wow, they've done it already! QE2 (or 3 including the stealth bond buying by our "nationalised" banks, that's been going on for the last year) is here. £75B to start with. http://uk.finance.yahoo.com/news/Bank-launches-QE2-75-billion-reuters_molt-1529205810.html?x=0 Grab your assets quick Link to comment Share on other sites More sharing options...
drbubb Posted October 6, 2011 Report Share Posted October 6, 2011 Very true. With 5yr fixed mortgage rate mortgages from 3.5% and 10yr deals from 4.2% this is considerably below rental yields, so if you can get access to these rates then owning is cheaper than buying. Of course the catch is that you need 20-25% equity/deposit to access these rates and the opportunity cost of what else could you do with that money if you could release it. Is it? I have been looking at various new properties that come through HK, and generally we see Gross Yields that look something like 5.0%, which translates into a Net Yield of less than 4%. Only one or two projects were substantially better than this. One of my favs: NFQ I have even put down a small deposit* on one of the best flats in the development, but after much thought, I shall probably let it go. One of the problems: I expected to be in London before the deadline, to see the place for myself. But now, my trip has been delayed until early November. (I hope I can see some GEI members when I am next in London.) *If someone here might be interested in "stepping into my shoes" on this purpose, you had better let me know very soon. Link to comment Share on other sites More sharing options...
drbubb Posted October 6, 2011 Report Share Posted October 6, 2011 Wow, they've done it already! QE2 (or 3 including the stealth bond buying by our "nationalised" banks, that's been going on for the last year) is here. £75B to start with. A former member of the Bank of England's Monetary Policy Committee has told Sky News that expanding quantitative easing (QE) would be a mistake. Andrew Sentance, the one-time hawk on the MPC who repeatedly voted for a rise in the bank's core interest rate to tackle inflation, spoke ahead of the decision about his fears that additional QE - or asset purchases as the Bank calls the scheme - would not boost growth. He believed such a move would only serve to push up prices and undermine the Bank's credibility. Mr Sentance said: "The MPC needs to hold its nerve here and show the value of having an independent central bank that balances both these worries about (economic) growth but also takes into account the genuine concerns about inflation, which is creeping up. http://uk.finance.yahoo.com/news/Andrew-Sentance-More-QE-A-skynews-894896572.html;_ylt=An1C8Ri00A5BXMt5Zp1.2ew3sLFG;_ylu=X3oDMTE2YnBhbXRrBHBvcwMzBHNlYwN0b3Atc3RvcmllcwRzbGsDYW5kcmV3c2VudGFu?x=0 Link to comment Share on other sites More sharing options...
John Doe Posted October 6, 2011 Report Share Posted October 6, 2011 A former member of the Bank of England's Monetary Policy Committee has told Sky News that expanding quantitative easing (QE) would be a mistake. Andrew Sentance, the one-time hawk on the MPC who repeatedly voted for a rise in the bank's core interest rate to tackle inflation, spoke ahead of the decision about his fears that additional QE - or asset purchases as the Bank calls the scheme - would not boost growth. He believed such a move would only serve to push up prices and undermine the Bank's credibility. Mr Sentance said: "The MPC needs to hold its nerve here and show the value of having an independent central bank that balances both these worries about (economic) growth but also takes into account the genuine concerns about inflation, which is creeping up. http://uk.finance.yahoo.com/news/Andrew-Sentance-More-QE-A-skynews-894896572.html;_ylt=An1C8Ri00A5BXMt5Zp1.2ew3sLFG;_ylu=X3oDMTE2YnBhbXRrBHBvcwMzBHNlYwN0b3Atc3RvcmllcwRzbGsDYW5kcmV3c2VudGFu?x=0 And everyone else disagreed, because they know things are worse than he thought. He’s always been out there on his own. Link to comment Share on other sites More sharing options...
G0ldfinger Posted October 6, 2011 Author Report Share Posted October 6, 2011 All this BoE QE just to keep house prices from falling off the cliff. Meanwhile, house prices in gold are in a free fall. Houses will stay a sucker investment for years to come when compared with gold. Link to comment Share on other sites More sharing options...
Van Posted October 6, 2011 Report Share Posted October 6, 2011 blah blah blah blah blah.... Link to comment Share on other sites More sharing options...
TrueNorth Posted October 6, 2011 Report Share Posted October 6, 2011 I don't think that sort of critique is particularly helpful, Van. Link to comment Share on other sites More sharing options...
John Doe Posted October 6, 2011 Report Share Posted October 6, 2011 All this BoE QE just to keep house prices from falling off the cliff. Meanwhile, house prices in gold are in a free fall. Houses will stay a sucker investment for years to come when compared with gold. Think King and the gang are worried about more than just house prices. Britain could be in the grip of the "most serious financial crisis ever", the governor of the Bank of England has exclusively told Sky News. Sir Mervyn King said the global and UK economies had been turned on their heads in the past three months alone and said: "The world has changed." The situation could be even worse than the Great Depression of the 1930s, he said, making it crucial do "the right thing" - which in the UK now means pumping more cash into the economy. http://uk.finance.yahoo.com/news/Fears-UK-Is-In-Worst-Ever-skynews-4005630554.html?x=0 Nice of them to finally catch up and realise what many (esp here) have been saying for years. Owning a house outright might just be a great hedge. So could having a long term fixed rate mortgage. Especially if (when) we get to the great debt jubilee! Along with the confiscation of gold Link to comment Share on other sites More sharing options...
G0ldfinger Posted October 6, 2011 Author Report Share Posted October 6, 2011 I don't think that sort of critique is particularly helpful, Van. He's clearly ran out of argument here. Link to comment Share on other sites More sharing options...
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