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UK House prices: News & Views

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THE REAL TEST is after the Spring, when rates rise and HB are capped

 

But prices are up on a 12 month horizon, (and have risen 3 out of the last 4 months).

 

So the data can be reported however you like, but sometimes you just have to admit that the UK is weird.

(Also note the NSA figure, quite a revision downwards )

 

Pause or perhaps something more? Your builders index is showing a soft landing is it not?

 

Of course, in real terms we will still get the ~10% down expected.

Actually, I think you need to look at the BIGGER PICTURE - not just the Nationwide Data.

That is why I track several indices, and look at them together.

 

(For some reason, I seem to be one of the very few people to do this - most interpret a few months statistics without any real sense of the wider context.)

 

Mo.: Rt'mov : London : Hometrack %/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

2010

J. : : 222,261 : 407,731 : 156,116 - 0.5% / 163,481 169,777 169,484 165,514 : £164,497 :- 0.11% :135.1% : HFsa HIGH

F : : 229,398 : 427,987 : 156,584 +0.3% / 161,320 166,857 166,703 165,997 : £163,659 :- 0.51% :140.2%

M : : 229,614 : 417,461 : 157,054 +0.3% / 164,519 168,521 168,433 167,808 : £166,164 :+1.53% :138.2%

A : : 235,512 : 421,822 : 157,368 +0.2% / 167,802 168,202 168,212 170,772 : £169,287 :+1.88% :139.1% : H&N HIGH

M : : 237,134 : 420,203 : 157,682 +0.2% / 169,162 167,570 167,287 169,204 : £169,183 :- 0.06% :140.2%

J. : : 237,767 : 429,597 : 158,700*+0.1% / 170,111 166,203 166,351 166,395 : £168,253 :- 0.55% :140.5%

Jl : : 236,332 : 422,248 : 158,500 - 0.1% / 169,347 167,425 167,536 168,331 : £168,839 :+0.35% :140.0%

A. : : 232,241 : 405,058 : 158,200 - 0.3% / 166,507 = n/a = 168,124 168,889 : £167,698 :- 0.68% :138.5%

S. : : 229,767 : 399,019 : 157,600*-0.4% / 166,757 = n/a = 161,974 163,639 : £165,198 :- 1.49% :139.1%

O : : 236,849 : 418,778 : 156,200* 0.9% / 164,279 = n/a = 164,949 165,275 : £164,777 :- 0.25% :143.7% : Hi Delus.

N : : 229,379 : 417,279 : 155,575 - 0.4% / 163,133 = n/a = 164,708 163,268 : £163,201 :- 0.96% :140.5% :

D : : 222,410 : 408,248 : 155,100 - 0.3% / 162,249 = n/a = 162,435 161,498 : £161,874 :- 0.81% :137.4% :

2011

J. : : 223,122 : 413,259 : 154,300 - 0.5% / 161,211 = n/a = 164,173 161,470 : £161,341 : - 0.33% :138.3% :

F. : : 230,030 : 430,680 : 154,000 - 0.2% / 161,183 = n/a = 162,657 161,680 : £161,432 :+ 0.06% :142.5% :

M : : 231,790 : 424,307 : 153,850 - 0.1% / 164,751 =

=====================================

mom : + 0.8% : - 1.5% : Est.DI: 143.6% / + 2.21% : = n/a = : -0.92% : +0.13%

 

What I see here, is a seasonally driven bounce back towards resistance at GBP 165,000 or so (as the Builder stocks have also been signalling IMHO.) You can track the big picture most easily, by looking at the "H&N Index" column.

 

The economy has shown some signs of recover and wages are up a bit, but the BofE is recklessly keeping interest rates at ultra-low levels.

 

Nationwide's report seems to be warning that current rate levels are unsustainable (and I am too - see the Zombie thread ). What's next? I real test of the resilience of the market, as Housing Benefits (finally!) get capped in April, and rates begin to drift higher.

 

Watch wages and incomes - I think growth is need there to get any sort of soft landing. Meantime, I see Europe's debt troubles eventually spreading to the UK within 2011.

 

NATIONWIDE - Excerpts

==========

 

Interest rate increases – how much of a hit?

The Bank of England is likely to start the process of returning interest rates to more normal levels at some point in 2011. However, rate increases may exert more of a drag on the household sector than would have been the case before the recession.

 

Households more sensitive to rate increases

Mortgages account for around 85% of household debt and since 2008 the proportion of mortgages on variable interest rates has risen sharply, from 48% to 62%.

 

How much of a squeeze on borrowers?

For those with a capital repayment mortgage, a typical mortgage payment is currently around £4551, equivalent to 23% of individual take home pay. A one percentage point rise in interest rates would see this rise to £494 - 25% of current take home pay.

 

In the five years before the crisis, the Bank Rate averaged 4.5%. A rise to this level would see typical payments rise to £621 if rate increases were fully passed on to borrowers.

 

If the Bank of England were to increase interest rates to 4.5% by the end of 2013 and wages keep rising at the current pace of 2.3% a year, this would take typical payments on repayment mortgages to 29% of take home pay.

 

(4.5% by the end of 2013? We could get there much more quickly IMHO)

 

It is interesting to see a statistic, saying that wages are rising at 2.3% per year (!?)

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Actually, I think you need to look at the BIGGER PICTURE - not just the Nationwide Data.

That is why I track several indices, and look at them together.

 

(For some reason, I seem to be one of the very few people to do this - must interpret a few months statistics without any sense to the greater context.)

 

Oh but I do, all the time (and I think you are well aware of this).

 

LR Home.co.uk and Acadametrics are the best by far. (Except for the lag) I also follow closely several local markets of interest and believe I always put a balanced argument based on the data.

 

Sometimes the data doesn't match what we want. Many people choose the bits they want to. HPC and SP are classic examples of this.

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Actually, I think you need to look at the BIGGER PICTURE - not just the Nationwide Data.

That is why I track several indices, and look at them together.

 

(For some reason, I seem to be one of the very few people to do this - must interpret a few months statistics without any sense to the greater context.)

 

xx

 

How much have UK house prices fallen in real money?

 

Once they started down the road of securitization, let alone QE, measuring house prices in Sterling means nothing. They should be on the floor by now but a big fiddle was done.

 

So, we had an initial fall of some 30%??? Further subtract the fall in the Pound, another 30%. In reality they're already 60% down.

 

Does any of that make sense?

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Don't bother with a Thailand thread. You can never own land here as a foreigner. ...

So, does Faber rent too? And, BTW, I agree that he is embarrassing himself quite a bit, as you have mentioned.

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So, does Faber rent too? And, BTW, I agree that he is embarrassing himself quite a bit, as you have mentioned.

 

I've no idea. We talked about it once, his new offices. Very fancy and traditional. He perhaps has a 30+30 year lease on the land and owns the structures upon the land, this is permissible. But even then . . . just rent.

 

Yes, I cringe when he mentions the joys of Chiang Mai's 'nightlife'. Thank God he doesn't live in Pattaya.

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BTW, I would see a problem with a country being mostly muslim (Malaysia) to be a safe haven for an obvious Gringo (in the wider sense). Similar South America, but for other reasons.

 

I think as a Gringo, your political/economic safe havens are pretty much (in no particular order): Canada, Norway, Switzerland, NZ, Aussieland, but none of them might be practical for different reasons. Hence, keeping a low profile somewhere in Europe (+UK) or the US might not be so bad in the end. A good network of friends/family is helpful too.

 

The Colonel wouldn't live in Thailand if he could not fall back on the labour market and the social security of the UK, is my guess. So, spending some time in some cheap paradise is not the worst thing to do, but where's your real base if things go bad (economically, or say, health-wise)?

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Oh but I do, all the time (and I think you are well aware of this).

 

LR Home.co.uk and Acadametrics are the best by far. (Except for the lag) I also follow closely several local markets of interest and believe I always put a balanced argument based on the data.

 

Sometimes the data doesn't match what we want. Many people choose the bits they want to. HPC and SP are classic examples of this.

Yeah, I believe you do.

 

It was the soundbite generators on HPC that I was thinking of.

 

Many folks on GEI seem to prefer these more in depth discussion that are more common here.

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BTW, I would see a problem with a country being mostly muslim (Malaysia) to be a safe haven for an obvious Gringo. Similar South America, but for other reasons.

 

I think as a Gringo, your political/economic safe havens are pretty much (in no particular order): Canada, Norway, Switzerland, NZ, Aussieland, but none of them might be practical for different reasons. Hence, keeping a low profile somewhere in Europe (+UK) or the US might not be so bad in the end. A good network of friends/family is helpful too.

 

The Colonel wouldn't live in Thailand if he could not fall back on the labour market and the social security of the UK, is my guess. So, spending some time in some cheap paradise is not the worst thing to do, but where's your real base if things go bad (economically, or say, health-wise)?

 

No, no access to the welfare state (SE) or the NHS (out of country too long). On my own.

 

I was a contractor in the UK and would never have used a house there, always lived on site (12 years of that hell), all over the place. UK immigration fought like hell over family moving to the UK, so I gave up with that and built here.

 

I've known plenty of expats in Malaysia, never a bad word for the place.

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Go on Thai Visa and read countless horror stories, many ending in murder/suicide.

I met the guys who run that site at a Google function in Hong Kong last year.

 

They have created a real business around it, far more revenues than GEI, or even HPC, I think.

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No, no access to the welfare state (SE) or the NHS (out of country too long). On my own.

 

I was a contractor in the UK and would never have used a house there, always lived on site (12 years of that hell), all over the place. UK immigration fought like hell over family moving to the UK, so I gave up with that and built here.

Oh, okay, that is interesting to know. So, you and your family really wouldn't (easily?) be able to go back. Hmm, that much for "nanny state".

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I met the guys who run that site at a Google function in Hong Kong last year.

 

They have created a real business around it, far more revenues than GEI, or even HPC, I think.

 

Guess you met George then.

 

Huge site. Widespread business interests. Huge membership, 2500 online at any one time.

 

Only thing is, it's about the most miserable site on the planet.

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Oh, okay, that is interesting to know. So, you and your family really wouldn't (easily?) be able to go back. Hmm, that much for "nanny state".

 

The UK doesn't look after its own, GF. It feeds off them.

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How much have UK house prices fallen in real money?

 

Once they started down the road of securitization, let alone QE, measuring house prices in Sterling means nothing. They should be on the floor by now but a big fiddle was done.

 

So, we had an initial fall of some 30%??? Further subtract the fall in the Pound, another 30%. In reality they're already 60% down.

 

Does any of that make sense?

 

Yup. See page 8 in this report.

http://www.home.co.uk/asking_price_index/HAPIndex_NOV10.pdf

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In October 2007 the average home asking price was the equivalent of 660 ounces of

gold. Three years later the average home can be bought for just 272 ounces of ‘old

money’. For those wise and perhaps lucky gold owners, house prices have fallen by

59%. Maybe they would like to now pick up a bargain and reinvigorate the UK

property market?

 

:blink:

 

No wonder HPC hated goldbugs!

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:blink:

 

No wonder HPC hated goldbugs!

Not just HPC :lol:

http://www.moneyweek.com/investments/property/gold-price-and-uk-house-prices-04909

 

What's the most controversial topic we've ever tackled? You'd think it might be something about exploiting rising food prices. Or bankers' bonuses. Or even vice stocks.

 

I doubt any of you would have guessed: "the ratio of gold and silver to house prices". Yet that is the subject that holds the record for reader comments by a long chalk.

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I think many are kicking themselves for not listening to Goldfinger and CGNAO.

...and DrBubb...

 

Who sold his property in 2001 (when gold bottomed) to buy Gold shared,

and then used the profits to buy 10 propeties in Hong Kong.

 

But that was so long ago (and seemed so crazy at the time) that no one can recall it.

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Guess you met George then.

Huge site. Widespread business interests. Huge membership, 2500 online at any one time.

Only thing is, it's about the most miserable site on the planet.

Yes. I think it was George. And one of his colleagues.

They reminded me of the people you might meet hanging out in bars on Patpong road, if they still do that.

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...and DrBubb...

 

Who sold his property in 2001 (when gold bottomed) to buy Gold shared,

and then used the profits to buy 10 propeties in Hong Kong.

 

But that was so long ago (and seemed so crazy at the time) that no one can recall it.

 

It was ten years ago. I knew you bought some flats in Honkers, but beyond that . . . :huh: Did you sell them?

 

Goldfinger is the best at the gold bug thing, probably because he's called . . . Goldfinger . . . and says things like 'Buy Gold'.

 

CGNAO had a real way with apocalyptic sensationalism along with a nuclear mushroom cloud. Eye catching.

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Yes. I think it was George. And one of his colleagues.

They reminded me of the people you might meet hanging out in bars on Patpong road, if they still do that.

 

No doubt.

 

It's a bunch of sexpats pretending not to be sexpats.

 

Ugly.

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It was ten years ago. I knew you bought some flats in Honkers, but beyond that . . . :huh: Did you sell them?

 

Goldfinger is the best at the gold bug thing, probably because he's called . . . Goldfinger . . . and says things like 'Buy Gold'.

 

CGNAO had a real way with apocalyptic sensationalism along with a nuclear mushroom cloud. Eye catching.

True.

He is well-named and more consistent.

I am too often early. Buy early, Sell early.

But as long as I make money, I do not care much

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Zoopla.co.uk: Home Values Hit 8 Month Low

 

Recent figures show that British property values are down 11% from last July with prices 18% below their peak. According to Zoopla.co.uk this dip has created some interesting buying opportunities.

 

"Whilst it has been a challenging period for the property market over the past few months, the recent dip in prices and the notable variance between regions may have created some interesting buying opportunities.

(Vocus/PRWEB) 30 March 2011

 

Having hit a 5-year low in February 2009, UK property values rose steadily during the rest of that year and throughout the first half of 2010, but have since fallen for the past eight successive months, accordingly to the latest data from property website Zoopla.co.uk, by an average of 11.09% since last summer, creating a potential buying opportunity.

 

Property prices in England have fallen by an average of £26,240 (11.06%) since last July, whilst in Scotland they are down on average by £21,489 (12.37%) and in Wales by £17,205 (10.73%). The average home values now stand at £211,003 in England, £152,106 in Scotland and £143,182 in Wales according to Zoopla.co.uk, which provides free value estimates of every UK home.

 

Across Britain, average house prices are now 18.01% (£45,594) below their peak, with the average house price at £201,911 compared to £247,505 in October 2007. The recent dip over the past 8 months could well have created a buying opportunity if prices start to pick up in the second half of the year as predicted by many.

 

Regionally, the North East has been hardest hit over the past few months, down 14.12% since last July with average local house prices now at £146,242. Not surprisingly, London has proved most resilient down only 7.59% over the same period to an average of £378,295 today. Property values in the North East now stand at 24.39% below their October 2007 peak, a massive drop of £47,173, compared to London where prices now are only 8.36% below the peak levels having fallen £34,527.

 

Nick Leeming, Business Development Director at Zoopla.co.uk, commented, "Whilst it has been a challenging period for the property market over the past few months, the recent dip in prices and the notable variance between regions may have created some interesting buying opportunities. The first half of 2010 provided strong gains in market values but, since last summer, economic uncertainty and lending constraints have eroded these gains and put downward pressure on house prices.”

 

/more: http://www.prweb.com/releases/2011/3/prweb8248393.htm

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I met the guys who run that site at a Google function in Hong Kong last year.

 

They have created a real business around it, far more revenues than GEI, or even HPC, I think.

 

Do sites like this and HPC actually make money? I get the impression from other people with forums that revenue in the range of $30 to £60 a month is the norm. Is there big money in this lark?

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Do sites like this and HPC actually make money? I get the impression from other people with forums that revenue in the range of $30 to £60 a month is the norm. Is there big money in this lark?

 

I believe HPC makes around 300k GBP a year.

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