UK House prices: News & Views

[John Doe]

 

These charts, may back up my still-Bearish view on UK Property...

 

What, I see is rates dropping with QE. So QE means lower rates, which means cheaper mortgages.

 

The yield curve looks quite healthy.

 

How is that bearish?

[Concrete Jungle]

Have any meaningful numbers been published on this latest government wheeze to persuade proles to take on massive debts from banksters to 'get the housing market moving'? At a first glance it smells suspiciously like the various New Labour grand plans for housing and mortgages in 2008 - 2010 that fell to pieces upon closer inspection. Initial back of a fag packet calculation 400,000,000 / 160,000 = 2500. A bit high you might cry well divide it by 80,000, or 40,000. Bearing in mind for September 2011 total mortgage lending for purchases was seven billion one hundred million pounds on 48,200 sales for just one month. The initial four hundred million to "unblock" stalled housing schemes at say forty grand per property = 10,000 houses. Or less than one weeks worth of mortgage lending for September 2011.

 

Unless the total amount committed is in the tens of billions per year, it initially strikes me as more political smoke and mirrors designed to win some favourable headlines in the mainstream media. Ditto the £150 million to help bring empty housing back into use. At fifteen grand per property it brings ten thousand properties back to a habitable standard. At ten grand per property it brings back fifteen thousand. At five grand per property it brings back thirty thousand, a tiny percentage of the total housing stock. Fingers crossed I didn't inadvertently borrow a calculator off Mr G Brown when doing the sums.

[drbubb]

What, I see is rates dropping with QE. So QE means lower rates, which means cheaper mortgages.

The yield curve looks quite healthy.

How is that bearish?

Nothing falls forever,

and if you believe some folks who predicted the spike in Italian rates,

the jump for UK rates may be at hand:

http://www.greenenergyinvestors.com/index.php?showtopic=15609

 

[Chartered Surveyor]

You beat me to it Bubb.

 

With reference to another thread if the markets are looking to attack UK gilts over the next 3 months to obtain a higher rate then this would have an effect on UK house prices as the cost of credit would become more expensive.

 

In London the market has slowed down over the last two months with a number of falls in prices being achieved.

 

The City is the key driver to London Housing. With talk of bonuses now being cut and layoffs starting to happen this may help explain the fall in values from a summer peak to low sale volumes experienced at the moment.

 

In Prime London, there is a wall of money looking for a home. Today I was informed by an agent that he has buyers with cash ranging from £500,000 - £20,000,000 looking to park their money in housing. Is this a sign of desperate people looking to get out of fiat at all costs and into a tangible commodity, this being bricks and mortar. The same conversation revealed the same fiscal group buying gold and farm land with one chap buying 50,000 hectares of farm land in Zimbabwe.

 

Lower down the scale there is alot of buy to let buying going on especially the affluent 50 -65yr age group that are removing their savings from banks and putting it into bricks and mortar as they view a 4% yield better than money held on deposit with the bank. In fact many of these buyers inform me they dont trust banks with their money which I have never heard from the buyers before.

[drbubb]

You beat me to it Bubb.

 

With reference to another thread if the markets are looking to attack UK gilts over the next 3 months to obtain a higher rate then this would have an effect on UK house prices as the cost of credit would become more expensive.

Indeed - And maybe a fast crash too.

 

Here's the chart I just added above

 

Rates may be bottoming now

 

In Prime London, there is a wall of money looking for a home. Today I was informed by an agent that he has buyers with cash ranging from £500,000 - £20,000,000 looking to park their money in housing. Is this a sign of desperate people looking to get out of fiat at all costs and into a tangible commodity, this being bricks and mortar. The same conversation revealed the same fiscal group buying gold and farm land with one chap buying 50,000 hectares of farm land in Zimbabwe.

 

Once they understand that "parking money in Prime London property" is not truly safe, that type of buying will dry up. Rising rates, and falling rents, will change that perception quickly... as London prices break their uptrend.

[geisaver]

Have any meaningful numbers been published on this latest government wheeze to persuade proles to take on massive debts from banksters to 'get the housing market moving'? At a first glance it smells suspiciously like the various New Labour grand plans for housing and mortgages in 2008 - 2010 that fell to pieces upon closer inspection. Initial back of a fag packet calculation 400,000,000 / 160,000 = 2500. A bit high you might cry well divide it by 80,000, or 40,000. Bearing in mind for September 2011 total mortgage lending for purchases was seven billion one hundred million pounds on 48,200 sales for just one month. The initial four hundred million to "unblock" stalled housing schemes at say forty grand per property = 10,000 houses. Or less than one weeks worth of mortgage lending for September 2011.

 

Unless the total amount committed is in the tens of billions per year, it initially strikes me as more political smoke and mirrors designed to win some favourable headlines in the mainstream media. Ditto the £150 million to help bring empty housing back into use. At fifteen grand per property it brings ten thousand properties back to a habitable standard. At ten grand per property it brings back fifteen thousand. At five grand per property it brings back thirty thousand, a tiny percentage of the total housing stock. Fingers crossed I didn't inadvertently borrow a calculator off Mr G Brown when doing the sums.

 

Isn't the government only putting up 5.5% of the mortgage? So on a £160k house their share is £8,800 meaning 45,000 houses using £400m

 

The scheme is just something to pretend to be helping FTBs and grab the headlines, to cover what they are doing with REITs.

[John Doe]

Nothing falls forever,

 

 

I see your point and yes, one day, far from now, rates will increase.

 

But, as I have pointed out many times before, we are not Italy, (or Greece, or Spain.....)

 

We have very, very long dated debt (14 years average maturity!), and a central bank that can print money and buy bonds to it's hearts content.

 

We don't need to rollover 100's of billions of pounds next year (as these others do). So no pressure there either.

 

We even have bailed out banks which can be told to buy debt when required. We are totally different.

 

Besides, looking at that yield curve, I would be very tempted to move the rest of the short term debt to 15-20 and even 30 years.

[drbubb]

I see your point and yes, one day, far from now, rates will increase.

But, as I have pointed out many times before, we are not Italy, (or Greece, or Spain.....)

 

We have very, very long dated debt (14 years average maturity!), and a central bank that can print money and buy bonds to it's hearts content.

We don't need to rollover 100's of billions of pounds next year (as these others do). So no pressure there either.

 

We even have bailed out banks which can be told to buy debt when required. We are totally different.

Besides, looking at that yield curve, I would be very tempted to move the rest of the short term debt to 15-20 and even 30 years.

The attack may start on the currency.

But when the FX rate falls enough, the UK will be forced to raise rates.

[Concrete Jungle]

Isn't the government only putting up 5.5% of the mortgage? So on a £160k house their share is £8,800 meaning 45,000 houses using £400m

 

The scheme is just something to pretend to be helping FTBs and grab the headlines, to cover what they are doing with REITs.

 

I have not seen a figure quoted for the amount committed towards mortgages yet. The four hundred million pounds announced was basically a bribe to builders and a bail out for the land values on their balance sheets and ditto banks. It is supposed to bring mothballed housing developments back to life. So assuming each mothballed property on average requires a forty or even twenty thousand pound bribe for the builders to finish it, you are only looking at say ten to twenty thousand finished houses. Or roughly one to two weeks mortgage lending for house purchases at September 2011 levels.

[drbubb]

I have not seen a figure quoted for the amount committed towards mortgages yet. The four hundred million pounds announced was basically a bribe to builders and a bail out for the land values on their balance sheets and ditto banks. It is supposed to bring mothballed housing developments back to life. So assuming each mothballed property on average requires a forty or even twenty thousand pound bribe for the builders to finish it, you are only looking at say ten to twenty thousand finished houses. Or roughly one to two weeks mortgage lending for house purchases at September 2011 levels.

Are you so certain that British citizens will be foolish enough to take that money,

and risk finding themselves vastly underwater when prices fall?

 

Maybe so long as rates are low, they will be willing to take the risk, but as soon

as rates move back up, the risks of this reckless scheme will become apparent

 

I certainly home that the UK can learn something from the housing mess in the USA

[G0ldfinger]

For me this has always been about inflation-adjusted prices, for instance about the house price measured in gold. Nominally, Merv can make the yield curve look fantastic and hyper-inflate the U.K. In this situation, with a destroyed economy, a U.K. house would most likely still be a dog of an investment in comparison to other hard but much more liquid assets.

[G0ldfinger]

BTW, if you compare one turd to another, they start to both look fairly stable -- but only over the past 8 years or so.

 

http://gold.approximity.com/since1985/UK_House_Prices_to_FTSE_100.html

[G0ldfinger]

... a sign of desperate people looking to get out of fiat at all costs and into a tangible commodity, this being bricks and mortar.

Apparently there is some sort of crack-up boom in housing in Germany, reports Der Spiegel today.

 

http://www.spiegel.de/wirtschaft/service/0,1518,799698,00.html

 

Not sure this charts' data is reliable enought to show this:

 

http://gold.approximity.com/since2006/German_House_Price_Index.html

[John Doe]

Are you so certain that British citizens will be foolish enough to take that money,

 

If you need to ask that question, you don't know the British very well

 

The attack may start on the currency.

But when the FX rate falls enough, the UK will be forced to raise rates.

 

That would be music to the BoE's ears.

 

Besides, why attack the currency now?

 

There is no disparity they can play on like before when we were tied to the ERM and there are far more obvious (and easy) targets all around?

[geisaver]

I have not seen a figure quoted for the amount committed towards mortgages yet. The four hundred million pounds announced was basically a bribe to builders and a bail out for the land values on their balance sheets and ditto banks. It is supposed to bring mothballed housing developments back to life. So assuming each mothballed property on average requires a forty or even twenty thousand pound bribe for the builders to finish it, you are only looking at say ten to twenty thousand finished houses. Or roughly one to two weeks mortgage lending for house purchases at September 2011 levels.

 

I see what you mean. The £400m is just going to be distributed in brown envelopes to builders as bribes. No doubt lots of builders that Coalition MPs and their sponsors have interests in will be at the front of the queue. There is no figure mentioned on the amount of money to be used for the governments 5.5% mortgage liability.

 

http://www.guardian.co.uk/politics/2011/nov/21/cameron-clegg-homes-plan?newsfeed=true

[Concrete Jungle]

Are you so certain that British citizens will be foolish enough to take that money,

and risk finding themselves vastly underwater when prices fall?

 

Maybe so long as rates are low, they will be willing to take the risk, but as soon

as rates move back up, the risks of this reckless scheme will become apparent

 

I certainly home that the UK can learn something from the housing mess in the USA

 

I am a British citizen and I am confident plenty of people will take the money. Some will end up under water, in arrears and / or reposessed. Others will sit tight, keep their jobs and sweat out negative equity. Don't forget the government here will also pay your mortgage interest for two years (I think) should someone be made unemployed. Property is the UK economy and we have no shortage of idiots.

 

I see what you mean. The £400m is just going to be distributed in brown envelopes to builders as bribes. No doubt lots of builders that Coalition MPs and their sponsors have interests in will be at the front of the queue. There is no figure mentioned on the amount of money to be used for the governments 5.5% mortgage liability.

 

http://www.guardian....n?newsfeed=true

 

I guess we will have to wait for the finer details to be made public on the mortgage 'backing' scheme.

[John Doe]

UK 'safer' than Germany

 

For the UK Chancellor, who has stuck resolutely to fiscal austerity in an attempt to rectify the horrible state of the public finances despite trenchant criticism that it was endangering the economy, the news that gilts are trading through Bunds represents a huge vote of confidence in his strategy by the market.

[stunlee]

Are you so certain that British citizens will be foolish enough to take that money,

 

I would bet my life on it.

 

Apparently there is some sort of crack-up boom in housing in Germany, reports Der Spiegel today.

 

Interesting article. Looking at immobilienscout and the local papers, my flat seems to have increased in price by about 25 percent since I bought it a couple of years ago, and there are constant reports on the news about the rent tables rising. I have to say it is strange living here, the German government seems to be trying to keep the rents down. Have they learnt nothing from Anglo-Saxon capitalism?

 

 

stuck resolutely to fiscal austerity in an attempt to rectify the horrible state of the public finances

 

Is this the kind of fiscal austerity where you are borrowing 120000000 pounds a year?

[John Doe]

Is this the kind of fiscal austerity where you are borrowing 120000000 pounds a year?

 

£120,000,000? That's nothing, that's what they have to add to the borrowing every 8 hours or so.

 

£120,000,000,000 a year is more like it!

[drbubb]

Apparently there is some sort of crack-up boom in housing in Germany, reports Der Spiegel today.

 

http://www.spiegel.de/wirtschaft/service/0,1518,799698,00.html

 

Not sure this charts' data is reliable enought to show this:

 

http://gold.approximity.com/since2006/German_House_Price_Index.html

What?

German property prices rising faster than Gold prices?

Have we got that right?

[Perishabull]

 

 

 

HOUSE PRICES TO SOAR BY 15%

25th November 2011

 

"HOUSE prices are set to increase by 15 per cent over the next five years, say leading economists.

The price of the average three-bedroom semi will go up by more than £25,000 from £176,184 to £202,068 by 2016.

The rise is because of a persistent shortage of property on the market and cash injections into the economy by the Bank of England which will make it easier to get a mortgage.

Douglas McWilliams, chief executive of the Centre for Economic and Business Research, said: "It's important to realise that the UK has a housing shortage, which is shown by the recent rises in rents. In addition the very ­weakness of the economy, which will almost certainly mean more quantitative easing by the Bank of England, means that gradually mortgages will be easier to come by.

"By 2016 we are forecasting 740,000 new mortgages a year – up from an estimated 560,000 this year but only just over half the peak 2006 level.

"Both the shortage of supply and the growth in mortgage availability will push up house prices, though only slowly at first."

 

 

And here's a comment by Sibley;

 

 

"You only have to look at how fast property is flying off the shelves to know this story is 100% spot on.

Anything decent is snapped up and anyone making silly offers humiliated. Now the EA's won't even bother ringing time wasters like the ones who will be posting on this story later.

If you are renting and cannot afford a house do something about it like we all did. Second jobs, save up and sacrifice. Sitting on internet forums patting each other on the back saying prices will drop is only getting your landlords mortgage paid off.

Anyone who sold to rent has to admit they got it badly wrong and try to get back into the housing market now. I know it hurts to admit you got things wrong but do not cut your nose off to spite your face.

Rent money is dead money. A house is the best investment you will ever make. Unless you plan living in a slum prices will be rising a lot faster than your wages."

 

 

The truly sad thing is that people actually believe this bolshoi.

[drbubb]

Max gets it - Cameron gains a new position on "the list" and a new name

 

Here Max Keiser lets "Dopey Dave" Cameron have it between both eyes:

 

Cameron makes his view on housing prices clear

 

V.214

Link: http://rt.com/programs/keiser-report/episode-214-max-keiser/

 

"Let the free market work!" says Max.

Don't take from tax payers to prop up an overvalued housing market to win votes.

 

With this ridiculous scheme, Cameron earns himself a place in the Top10 Financial Villains list.

 

There must be a sensible leader somewhere out there in the UK?

Let's find him. (It isn't Cameron, who has now shown his true colors.)

[d2thdr]

Wow, so much for the slowdown in net migration some thought would occur due to the UKs economic prospects.

 

Official figures (not including all the unofficial entrants) show another 250,000 net increase in 2010!

 

 

 

More people, less housing, hmmmmm, wonder if that will have any effect on rents/prices?

 

http://www.bbc.co.uk/news/uk-15868793

 

1970's recession lead to the population of London declining by 70%. Source of this info is BBC file on 4. It will happen again.

 

 

 

[stunlee]

£120,000,000? That's nothing, that's what they have to add to the borrowing every 8 hours or so.

 

£120,000,000,000 a year is more like it!

 

Whoops! I had it right the first time, then edited my post because it looked wrong. 120000000000 it is.

 

What?

German property prices rising faster than Gold prices?

Have we got that right?

 

A very quick and unscientific look at the immobilienscout website suggested that prices at the top end in the big German cities are rising at about 15 to 20 percent a year. Of course it is a website for the selling of real estate so those figures could be exaggerated, asking prices in my area are about 20 to 25 percent higher than 2 years ago. One tennanted flat for sale is proudly announcing a 4.24 percent yield. Rents are rising quickly.

[stunlee]

1970's recession lead to the population of London declining by 70%. Source of this info is BBC file on 4. It will happen again.

 

70%?

 

http://www.londononline.co.uk/factfile/historical/

 

1961 7,992,616 (Greater London)

1971 7,452,520 (Greater London)

1981 6,805,000 (Greater London - midyear est