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UK House prices: News & Views

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London's dirty little secret - rents have fallen for the last 21 months!


Knight Frank: Rental yields dropped below ˜risk-free" government bond yield at end of 2013


Rents for London's best residential properties rose 0.2% in January, which was the highest monthly increase since September 2011. Rents fell 2% versus January 2013, which was the lowest annual decline since August 2012. Prime central London rental GROSS yields fell in January to 2.86%, the result of falling rents and strong investor demand. The full extent of this demand was demonstrated in December, when yields fell to 2.88%, dropping below the benchmark 10-year UK government bond yield of 3.02% recorded at the end of the month. Good job BOE can't see any bubbles.


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(why is it that people running for office will not speak sense - like THIS?):

 

Mr Posen said: "I find this whole initiative largely mistaken by the Treasury."

The first stage of Help to Buy was recently extended until 2020.

 

"The idea of pumping up credit for middle to upper-middle class people to spend more on housing, when people have already spent too much on housing, is dysfunctional," Mr Posen told BBC Radio 5 live's Wake Up to Money programme.

 

"We need a distinction between housing policy and mortgage policy, and we need affordable housing in the great cities of the North.

"London is now semi-detached from the rest of the country. There's a perception that it's just pockets in Kensington or Chelsea, but increasingly the homes in zone two or zone three [of the London Underground map] are going out of the price range of normal people."

 

'Badly mistaken'

He also said the Bank of England needed to change its "culture of trust", and get tougher with the UK's biggest banks.

 

=== ===

 

Tougher?

Yeah! hit them with a Brick!

Or at least some sensible legislation

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"We need a distinction between housing policy and mortgage policy"

 

I don't think there has been a housing policy in the UK since 1979

 

I think you'll find housing policy has been "increase home ownership to >100%".

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unfortunately

 

unless they really do lose control of interest rates i think he is probably pretty close

 

http://www.marketoracle.co.uk/Article45053.html

 

UK House Prices Forecast 2014-2018

My in-depth analysis of UK house prices during December 2013 concluded in a detailed trend forecast for the next FIVE years from 2014 to 2018 that house prices target an average gain of 10% per year totaling 55% by the end of 2018 as illustrated below:

UK House Prices Forecast 2014 to 2018 - Conclusion

This forecast is based on the non seasonally adjusted Halifax House prices index that I have been tracking for over 25 years. The current house prices index for November 2013 is 174,671, with the starting point for the house prices forecast being my interim forecast as of July 2013 and its existing trend forecast into Mid 2014 of 187,000. Therefore this house prices forecast seeks to extend the existing forecast from Mid 2014 into the end of 2018 i.e. for 5 full years forward.

My concluding UK house prices forecast is for the Halifax NSA house prices index to target a trend to an average price of £270,600 by the end of 2018 which represents a 55% price rise on the most recent Halifax house prices data £174,671, that will make the the great bear market of 2008-2009 appear as a mere blip on the charts as the following forecast trend trajectory chart illustrates:

 

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I think you'll find housing policy has been "increase home ownership to >100%".

 

How do you do that when prices are so high, only a minority can afford to buy?

 

If you add govt-gteed-debt, it just enslaves people, with debts they can barely afford

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http://moneyweek.com/the-london-property-bubbles-days-are-numbered/

 

EXCERPT (posted by DrB):

 

The London property bubble’s days are numbered

 

By: Matthew Partridge - 03/04/2014 - 18 Comments
button-print-gry20.png

140403-london-property.jpg

We take high London prices for granted

 

It’s wrong to think of the UK property market as a single entity, as MoneyWeek editor-in-chief Merryn Somerset Webb has pointed out.

There are really two different markets. In most of the UK, house prices have yet to recover from the crash in nominal terms, and are still sharply down when you take inflation into account (in ‘real’ terms).

London by contrast, is in the grip of a property bubble, with the ratio of prices to average earnings at a record high.

The obvious trade – if you live in the capital – is to move. As Merryn points out, depending on where you start out and where you want to go, you can now swap a small London flat for a castle in the Scottish Highlands.

But the ‘London premium’ has grown so extreme that you don’t even have to move that far out of the capital to get a lot more space for your money.

 

===

 

There's a thread about LONDON versus Rest of UK elsewhere on GEI

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"There's a thread about LONDON versus Rest of UK elsewhere on GEI"

 

1 / http://www.greenenergyinvestors.com/index.php?showtopic=17737&page=1

A FINAL Rally in London property? How to play it.

"DrBubb is Bullish on UK Property, but calls it a 'Final Rally' "

 

ukhaliwrest13pred.png

How to play it? Think :
WHERE would you buy outside London?

 

 

2 / http://www.greenenergyinvestors.com/index.php?showtopic=17441

Britain's most Up-and-Coming cities : Where? If not London.

history.jpg
There was a time when London was affordable. But those days are long-gone

As London property prices have soared into the stratosphere, prices in the rest of the UK have moved little, or even drifted lower. Result: the Gap between London and Rest-of-UK prices have reached an unprecedented level.

ukhaliwratiob.png

Here-in is the opportunity: Sell and London, and Buy cheaper elsewhere. But the UK has not second London. There is nowhere with all the same walkability, cultural attractions, and other advantages (high paying jobs?) that attract people to London.

mapofengland.gif

Some cities are trying hard to create the right environment (to move to). Within the UK are many Up-and-Coming cities. Let's identify them, and talk about the improvements in the living environment that people are seeing.

Over time, I will create a Top-5 or Top-10 List here. What should be on it ?

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Anyone for a London crack den? (many may be for sale soon)

 

The Week: London House price bubble. Is it time to leave the capital?

 

I just loved this quote. 'The upshot, according to developer David Galman of Galliard Homes, is that :

even "a grotty studio of crack-den quality" costs over £1m in Mayfair.'.

THE rumbles of anxiety over London's booming property market are getting louder, says Katie Allen in The Guardian. Against a backdrop of soaring demand and reports of mobbed viewings, housebuyers are now paying more than 99 per cent of asking prices, according to Hometrack. That's "the highest proportion seen for a decade".

With the cost of the average property in the capital approaching £500,000, the gap between London and non-London property prices is now at its widest ever. Last week, the Bank of England warned that almost one buyer in five is taking out a "high income-multiple" loan in a desperate scrabble to get on the ladder before it is lifted completely out of their reach. There are fears of an unsustainable bubble.

Sound of the suburbs
In central London, where prices (up 13.1 per cent year-on-year) are now beyond "all but the very wealthy", demand is still being stoked by foreign buyers, says The Sunday Times. The upshot, according to developer David Galman of Galliard Homes, is that even "a grotty studio of crack-den quality" costs over £1m in Mayfair. Some suggest prices may double to £10,000 per square foot within five years.

As the billionaires continue to maintain a stranglehold over prime central London, the merely wealthy "are being pushed out to the leafy streets of Zone 2" – and further. The latest Land Registry figures show that the hotspots with the highest house-price growth over the past year are Hackney (up 21 per cent) and Waltham Forest (up 20.1 per cent). Agents in popular migratory cities such as Oxford and Cambridge also report "a rampant market".

Moving out
Hometrack's historic data suggests that when the gap between asking and agreed prices is this narrow, it's a reliable sign that prices are about to peak.

So if you live in London, do yourself a favour, says Merryn Somerset Webb on MoneyWeek.com. Bank your "vast gains" and move out...

Read more: http://www.theweek.co.uk/prosper/58009/london-house-price-bubble-it-time-quit-capital#ixzz2y5cy4kQg

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Through discussions with agents as well as my own observations there are early signs emerging that a market top may be forming in London. It would appear that buyers are starting to question the excessive increases and madness in asking prices that have occured over the last year and are now taking stock of the situation

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Through discussions with agents as well as my own observations :

there are early signs emerging that a market top may be forming in London.

It would appear that buyers are starting to question the excessive increases and madness in asking prices that have occured over the last year and are now taking stock of the situation

 

This could prove to be an excellent call, C.S. !

 

BDEV / Barratt is also showing signs of weakness ... update

 

BDEV_zpscad90e39.png

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This is like deja-vu... we'll be asking in a couple of years how come we were so stupid as to allow HelptoBuy or whatever it's called.

 

Please hurry up and top dear market! And then start correcting!

 

I should change my name to Mr Angry - even with a half-decent job plus good deposit, in the far reaches of Zone 5 (Harrow/Hillingdon), I am looking at £400k+ for a 3-bed semi. It used to be £50k less till everyone went nuts and wanted some of the action! Seriously you have to see some of the crap on offer for £300-350k to understand how screwed up things are.

 

I keep thinking I should give up on buying something for my family (of four) but in the back of my mind I pray things unravel so I can buy something.

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Deja Vu all over again

 

"... we'll be asking in a couple of years how come we were so stupid as to allow HelptoBuy"

 

I agree !

A very poor policy.

Short term gain, long term pain.

The whole idea was to get some politicians reelected.

 

May they wear their blunder proudly, like a Gordon Brown mask, stitched on their faces

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The Barratt Warning Bell is ringing LOUDER !

 

LAST: 366.9P - 19.4 : - 5.02%

 

BDEV / Barratt Dev'l ... 2-year : 6-mos ::

BDEV_zpsac61becd.png

 

If the support near 360-365p does not hold, then WATCH OUT BELOW !

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EXCERPT from the article by Dominic Frisby

 

Housebuilders are warning of a potential peak in house prices

...I like to watch the house builders. By that I mean the likes of Barratt (LSE: BDEV), Persimmon (LSE: PSN) and Taylor Wimpey (LSE: TW). They have, over the years proven to be reliable indicators as to the future direction of house prices.

. . .

Here’s a chart of UK house prices since the mid-1980s from Nationwide.

14-4-16-MM-1.png

 

(compare):

 

14-4-16-MM-2.png

 

In each move, Barratt has been ahead of the housing market. Intraday, Barratt actually peaked in 2006 and retested that peak in February 2007, while house prices themselves peaked in late 2007.

So, to 2014. Having been as high as 450p in early March, Barratt touched 360p on Monday. That’s a fall of more than 20%. In other words, it’s bear market territory.

==

 

> more: http://moneyweek.com/money-morning-dont-speak-too-soon-but-the-housing-bubble-may-be-peaking/

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I agree !

A very poor policy.

Short term gain, long term pain.

The whole idea was to get some politicians reelected.

 

May they wear their blunder proudly, like a Gordon Brown mask, stitched on their faces

 

You could be right - it might be a ploy to develop a 'goodtimes' sentiment prior to election - FWIW, I think it will work too.

 

I think they looked at the 'recovery' unfolding at snail's pace and thought that they should add HTB to the other strategies in place. I dont htink they expected the other 'positives' to develop so fast though - unemployment going below 7%, wages rising a bit, inflation dropping off, consumption up etc. If they could have seen that coming, would they have thrown further fuel on the fire in the shape of HTB?

 

Maybe they didnt expect HTB to be so successful - they have started to use 'reigning-in' language now they can another bubble forming. The horse has well and truly bolted though, based on personal experience as I am literally priced out, despite a £75k income. If houses in the suburbs are now over £400k and I can't afford them, who is buying? It can only be the desperate, well-off, BTL landlords, or HTB-supported buyers. And I guess that they will be pleased that they've been able to achieve their own place, understandably. I am kicking myself for hesitating and not buying at £375k a year ago.

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EXCERPT from the article by Dominic Frisby

 

Housebuilders are warning of a potential peak in house prices

...I like to watch the house builders. By that I mean the likes of Barratt (LSE: BDEV), Persimmon (LSE: PSN) and Taylor Wimpey (LSE: TW). They have, over the years proven to be reliable indicators as to the future direction of house prices.

. . .

In each move, Barratt has been ahead of the housing market. Intraday, Barratt actually peaked in 2006 and retested that peak in February 2007, while house prices themselves peaked in late 2007.

So, to 2014. Having been as high as 450p in early March, Barratt touched 360p on Monday. That’s a fall of more than 20%. In other words, it’s bear market territory.

==

 

> more: http://moneyweek.com/money-morning-dont-speak-too-soon-but-the-housing-bubble-may-be-peaking/

 

Thanks for that... will keep an interested eye on it... do you keep that data on here somewhere or do you just post charts now and again?

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Charts on BDEV?

Yeah, I post them often - see above for an example

 

There's also a thread on BDEV in another section:

http://www.greenenergyinvestors.com/index.php?showtopic=17414

 

The Current RALLY in UK House prices was predicted here back in April 2013, one year ago

 

ukhaliwrest13pred.png

 

Another place to find Interesting Charts, is my Diary, which I update every day:

http://www.greenenergyinvestors.com/index.php?showtopic=18950&page=1

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Remember this?

 

The C_Wave low came in 2012 for most of the UK

 


The A-B-C down in UK Property prices, still needs a C down, before it bottoms
Back in 2008, this chart was posted on GEI:

001th4.png

So what happened ?:

Since 2002:

hw2002.png

Since 2009: (up to June 2012: £164,489)
Latest: Oct. 2012 : £161,986

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