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UK House prices: News & Views


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Ive no doubt if the banks starting lending like they did before there would be a stampede to buy. The trouble is though they are not and anyone who wants to chuck their hard earned away, who is in a position to, kudos to them.

 

The price being paid now is more likely to be scrutinised more closely, hence the low volume.

 

If the EA's are happy with this volume, well good luck to them.

 

Trouble is - in 'rough number' terms - house prices doubled, transaction numbers halved - agents now are making the same money as they did 5 to 10 years ago (depending which part of the country one is considering) for half the work. No wonder, now there has been a shake out, they are not bleating much.

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I think the plan is to make their unsold properties look cheaper.

 

If say they have one on at £300k that isn't shifting putting a similar property on at £350k makes it look cheap. Then once the original one sells they reduce the £350k to £325k then put the next one on at £350k or £375k to make that look cheap. Then a floor of at least £300k is established instead of dropping the original £300k further. If they had put the second house at £300k both that and the original £300k might have been reduced.

 

An agent near me has a 4 bed that's been on for ages. They have just put a 3 bed on at the same price. The 4 bed will now sell because it looks "cheap" to someone.

I believe most buyers wise up fast, and stop viewing the overvalued properties.

 

A lack of viewers is a clear sign to a vendor that their property is over-priced, but it may take a few weeks for that to sink in.

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Trouble is - in 'rough number' terms - house prices doubled, transaction numbers halved - agents now are making the same money as they did 5 to 10 years ago (depending which part of the country one is considering) for half the work. No wonder, now there has been a shake out, they are not bleating much.

 

Birmingham agents still use a fee based system below a certain amount, at a guess £200k. Which depending on the postcode is the bulk of their work.

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Something I have noticed is how much the banks manipulate the prices. When they were aggressively lending they allowed very loose valuations and high LTV loans, which pushed prices higher constantly. Now they are funds restricted they have instructed valuers in some areas (particularly the North and Wales) to down value. This means many sales fall through or buyer have to put in bigger deposits. This looks good for the banks, who can then show they are lending freely (when in reality they are holding the market back) and also gives them a cushion against further falls.

 

The above actions are actually leading the market, so very useful for short/medium term forecasting. I can see how some areas are being deliberately pushed downwards and other areas (London is a prime example) are being protected and eased upwards. I realise supply/demand are prime drivers but with their lending policies the banks do control a lot of this supply/demand.

 

I think DrBubb's method of watching builders shares possibly gives similar results to a degree as builders profit forecasts are very reliant on lending policies.

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Quote of the week: "There has been a lot of interest in the house, and the only explanation for that can be that it is really under-priced."

 

Also note the bank's duty to purchasers statement!!! - The same beasties that have been placing loon reserves on auction property & stuffing the rest of their repo mass into EAs.

 

http://www.thisisstaffordshire.co.uk/news/Couple-s-anger-unfair-house-price/article-3414605-detail/article.html

A DEBT-STRICKEN couple say a bank's repossession of their home is driving them into even deeper financial straits.

 

Young parents Jennifer and Jamie Barlow are accusing scotland&where=Staffordshire&searchType=Business?pid=tistaff_dir_Article_BankValuationRow">Royal Bank of Scotland of undervaluing their house, which they were forced to leave last year, by tens of thousands of pounds.

 

They paid £130,000, with the help of a £118,000 mortgage, for the semi-detached Tunstall property in December 2008. The house is currently on the market for just £79,950.

 

The couple, who have two young children, also believe the bank failed to provide them with the correct advice.

 

RBS insists it has followed the correct procedure and says the valuation is fair.

 

But the Barlows are now planning to complain to the Financial Ombudsman Service.

 

Admin worker Mrs Barlow, aged 35, said: "RBS valued our property at £130,000 two years ago, but now they're saying it's worth £79,000.

 

"One of them must be wrong. Property prices have fallen, but not by 50 per cent.

 

"Our neighbour has just had his house valued at £118,000, which is a fair price. We're not looking to make money from this, we just don't want our situation to get even worse.

 

"We owe loans totalling £45,000 and the difference between the two house valuations is £50,000."

 

Two years ago the couple were both in work and had just bought their home in Tunstall where they were raising their son Josh, now aged four.

 

But last February Mr Barlow, also aged 35, had to quit his job as a freelance car salesman because the terms of an individual voluntary arrangement they had taken on after getting into debt stops people from working in the finance sector.

 

Their situation became even more desperate when Mrs Barlow discovered she was pregnant with their daughter Maddison.

 

The couple decided that repossession was the only way forward.

 

They appeared in court in July and say they were told they had to leave the property by August.

 

But the Barlows, who now rent a house in Intake Road, Norton, say RBS did not fully explain the assisted voluntary sale scheme (AVS), which would have allowed them to stay in the house while it was being sold.

 

The AVS was launched by RBS last year as an attempt to stop more repossessions.

 

Mrs Barlow added: "We're not estate agents so there's no reason why we should have known what an AVS is.

 

"It would have meant I could have stayed in the house while I was pregnant, and we would have been able to get a better price for it as well. But we only got a letter about the AVS scheme after we'd moved out, which was far too late."

 

RBS has written the Barlows a letter dealing with their complaints.

 

The bank insists that the AVS scheme would have been explained to them prior to the repossession.

 

RBS also says the house was valued correctly by two independent surveyors.

 

The letter states: "You mention in your letter that your neighbour's property was estimated at a value of £118,000.

 

"The bank cannot take this into consideration as the property was not sold at that price, and the bank can only take into consideration amounts where a property has been sold.

 

"Whilst I offer my sympathy in your disappointment in the amount the bank is marketing your property at, the bank has a duty of care to the purchasers as well."

 

Mr Barlow is currently retraining as an electrician, and he hopes the family will be able to get out of debt once he returns to work.

 

He said: "There has been a lot of interest in the house, and the only explanation for that can be that it is really under-priced.

 

"We want a good price for the house not just for our own sake, but it will mean that the bank get their money back as well."

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"We want a good price for the house not just for our own sake, but it will mean that the bank get their money back as well."

The british are too nice about things, I think we should do as Max Keiser is suggesting and "Hang the bankers".

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They paid £130,000, with the help of a £118,000 mortgage, for the semi-detached Tunstall property in December 2008. The house is currently on the market for just £79,950.

...

Admin worker Mrs Barlow, aged 35, said: "RBS valued our property at £130,000 two years ago, but now they're saying it's worth £79,000.

 

"One of them must be wrong. Property prices have fallen, but not by 50 per cent.

Overpaid for your House?

 

Then, blame the bank that financed it - surely the buyer was not to blame.

 

BTW, a drop from 130,000 to 79,950 is a drop of 38.5%, not 50%.

But if this couple is so naive about buying property, why should they be able to do maths?

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Quote of the week: "There has been a lot of interest in the house, and the only explanation for that can be that it is really under-priced."

 

Also note the bank's duty to purchasers statement!!! - The same beasties that have been placing loon reserves on auction property & stuffing the rest of their repo mass into EAs.

 

http://www.thisissta...il/article.html

A DEBT-STRICKEN couple say a bank's repossession of their home is driving them into even deeper financial straits.

 

Young parents Jennifer and Jamie Barlow are accusing scotland&where=Staffordshire&searchType=Business?pid=tistaff_dir_Article_BankValuationRow">Royal Bank of Scotland of undervaluing their house, which they were forced to leave last year, by tens of thousands of pounds.

 

They paid £130,000, with the help of a £118,000 mortgage, for the semi-detached Tunstall property in December 2008. The house is currently on the market for just £79,950.

 

The couple, who have two young children, also believe the bank failed to provide them with the correct advice.

 

RBS insists it has followed the correct procedure and says the valuation is fair.

 

But the Barlows are now planning to complain to the Financial Ombudsman Service.

 

Admin worker Mrs Barlow, aged 35, said: "RBS valued our property at £130,000 two years ago, but now they're saying it's worth £79,000.

 

"One of them must be wrong. Property prices have fallen, but not by 50 per cent.

 

"Our neighbour has just had his house valued at £118,000, which is a fair price. We're not looking to make money from this, we just don't want our situation to get even worse.

 

"We owe loans totalling £45,000 and the difference between the two house valuations is £50,000."

 

Two years ago the couple were both in work and had just bought their home in Tunstall where they were raising their son Josh, now aged four.

 

But last February Mr Barlow, also aged 35, had to quit his job as a freelance car salesman because the terms of an individual voluntary arrangement they had taken on after getting into debt stops people from working in the finance sector.

 

Their situation became even more desperate when Mrs Barlow discovered she was pregnant with their daughter Maddison.

 

The couple decided that repossession was the only way forward.

 

They appeared in court in July and say they were told they had to leave the property by August.

 

But the Barlows, who now rent a house in Intake Road, Norton, say RBS did not fully explain the assisted voluntary sale scheme (AVS), which would have allowed them to stay in the house while it was being sold.

 

The AVS was launched by RBS last year as an attempt to stop more repossessions.

 

Mrs Barlow added: "We're not estate agents so there's no reason why we should have known what an AVS is.

 

"It would have meant I could have stayed in the house while I was pregnant, and we would have been able to get a better price for it as well. But we only got a letter about the AVS scheme after we'd moved out, which was far too late."

 

RBS has written the Barlows a letter dealing with their complaints.

 

The bank insists that the AVS scheme would have been explained to them prior to the repossession.

 

RBS also says the house was valued correctly by two independent surveyors.

 

The letter states: "You mention in your letter that your neighbour's property was estimated at a value of £118,000.

 

"The bank cannot take this into consideration as the property was not sold at that price, and the bank can only take into consideration amounts where a property has been sold.

 

"Whilst I offer my sympathy in your disappointment in the amount the bank is marketing your property at, the bank has a duty of care to the purchasers as well."

 

Mr Barlow is currently retraining as an electrician, and he hopes the family will be able to get out of debt once he returns to work.

 

He said: "There has been a lot of interest in the house, and the only explanation for that can be that it is really under-priced.

 

"We want a good price for the house not just for our own sake, but it will mean that the bank get their money back as well."

 

The hallway, got real loud and crowded

They walked right past us, I don't know how they allowed it

The funny thing about it, through all the excitement

They Range got towed, they double parked by a hydrant

Stupid mother****rs

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Overpaid for your House?

 

Then, blame the bank that financed it - surely the buyer was not to blame.

 

BTW, a drop from 130,000 to 79,950 is a drop of 38.5%, not 50%.

But if this couple is so naive about buying property, why should they be able to do maths?

 

True, but an increase from 80k to 130k is an increase of 62.5%.

 

So, looked at another way, if it is sold now for 80k the new vendors will be rubbing their hands saying 'You'll never believe this but it sold a couple of years ago for 62.5% more than we paid for it.'

 

Too right blame the bank that financed it. Feck them! They are quite happy to lend you 118k one day and then tell you the next that it is only worth 80k and that is what they are going to sell it for. I have to say it again - feck them! The banks should not be able to sell for less than they lent or, if they do, they should take the loss. They'd be a bit damn more careful about how much debt they hang around people's necks then.

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...The banks should not be able to sell for less than they lent or, if they do, they should take the loss. They'd be a bit damn more careful about how much debt they hang around people's necks then.

Well, obviously they are lending too much at 75%, 80%, or whatever to take on THAT risk.

 

If they lent less (60%? 65% LTV?) and charged more, the perhaps they could. They do lend that way in the USA.

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Well, obviously they are lending too much at 75%, 80%, or whatever to take on THAT risk.

 

If they lent less (60%? 65% LTV?) and charged more, the perhaps they could. They do lend that way in the USA.

 

Maybe they could do it on a sliding scale. The higher percentage they lend, the more risk the bank takes. With a lid of say 80% to prevent irrational exuberance.

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Maybe they could do it on a sliding scale. The higher percentage they lend, the more risk the bank takes. With a lid of say 80% to prevent irrational exuberance.

 

Anything over 80% imho and the bank should be FORCED BY LAW to keep the loan on their books. Anything under 80% can be packaged and sold on.

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Anything over 80% imho and the bank should be FORCED BY LAW to keep the loan on their books. Anything under 80% can be packaged and sold on.

I agree, but think the cutoff should be 70% - like in Hong Kong.

 

Why the banking regulators in the UK have failed to learn from the lesson of HK is beyond me.

 

HK went through at heartbreaking 69% drop in prices from 1997 to 2003.

 

How many banks went bust and needed to be taken over by the government?

Answer: None. Naughta. Zero.

 

The banks all survived. And they are happy to be constrained by the 70% limit on normal lending, since it applies to all/

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UK banks’ rush into property needs watching

 

By John Plender

 

Published: April 19 2011 16:27 | Last updated: April 19 2011 16:27

 

While the financial crisis that began in 2007 had a plethora of causes, property was at the heart of the problem. The fact that the big UK-based banks, with the exception of Lloyds Banking Group which is battling with the dismal property legacy it acquired with HBOS, have been significantly increasing their exposure to the sector should thus prompt eyebrows to twitch.

 

Most of the growth, revealed in the banks’ recent annual reports, is coming from a big expansion in UK residential lending. Since 2008 HSBC’s UK home loans have risen 31.5 per cent, leaving commercial and residential property accounting for 31.6 per cent of total loans; the rise at RBS is 14.8 per cent, giving a percentage of total loans of 36.3 per cent; and Barclays’ UK home loans have increased by more than a fifth, taking property to 41.4 per cent of total loans.

 

http://www.ft.com/cms/s/cd902a96-6a8f-11e0-a464-00144feab49a,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fcd902a96-6a8f-11e0-a464-00144feab49a.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fuk

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QUOTE

Most of the growth, revealed in the banks’ recent annual reports, is coming from a big expansion in UK residential lending. Since 2008 HSBC’s UK home loans have risen 31.5 per cent, leaving commercial and residential property accounting for 31.6 per cent of total loans; the rise at RBS is 14.8 per cent, giving a percentage of total loans of 36.3 per cent; and Barclays’ UK home loans have increased by more than a fifth, taking property to 41.4 per cent of total loans

UNQUOTE

 

Dial up the Risk ! (you frigging Bozos!)

 

This just shows the moral hazard in the UK bailing out their banks.

Management reckons they will get bailed out again, if they get into trouble once again. This notion needs to have some penalties attached.

 

My Idea:

No government owned bank should be allowed to pay out more than 20% of a bonus in cash. 80% should be in preferred stock, with a maturity of up to five years. If the banks get into trouble, and balied out again, the preferred stock should get crunched (reduced to zero), before the taxpayer suffers a penny of loss. And anything paid by the taxpayer, should be matched in some fashion with a reduction in pensions of the top management.

 

depression_apples.gif

 

If the top management winds up on the streets selling apples, then the taxpayers would be able to spit in their faces, and call them names. Or maybe people like Fred Goodwyn should be forced to work in Loos, so people could relieve their frustration in other ways for the excessive risks these guys are taking on.

 

Why not Try: Humiliation, Financial penalties... as disincentives to excessive risk taking. (More humane than the violence of old.)

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I agree, but think the cutoff should be 70% - like in Hong Kong.

 

Why the banking regulators in the UK have failed to learn from the lesson of HK is beyond me.

 

HK went through at heartbreaking 69% drop in prices from 1997 to 2003.

 

I take your point on higher LTV's, but to be fair, that heartbreaking 69% dropin HK was a direct result of the territory being handed over to a totalitarian regime that had recently run tanks over its own people.

 

I dont think the UK has to be prepared for such an event as these circumstances were, essentially, unique.

 

I really like the idea of the banks being responsible for the percentage of loans greater than 80%. That could really work.

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This just shows the moral hazard in the UK bailing out their banks.

Management reckons they will get bailed out again, if they get into trouble once again. This notion needs to have some penalties attached.

 

 

More like a determination to get the UK to Ireland's level of citizen wealth shredding.

The UK may be a bigger nut but it will still be cracked.

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I take your point on higher LTV's, but to be fair, that “heartbreaking 69% drop”in HK was a direct result of the territory being handed over to a totalitarian regime that had recently run tanks over its own people.

 

I don’t think the UK has to be prepared for such an event as these circumstances were, essentially, unique.

 

I really like the idea of the banks being responsible for the percentage of loans greater than 80%. That could really work.

NO, it wasn't

 

The takeover helped to spur the big boom in 1996-97, when people saw that China was offering Hong Kong:

"One country, two systems", and freedom for capitalism for at least 50 years.

 

But prices got bid up too high in the HK boom in the 1997 peak, as they have been bid up too high in the UK's boom.

 

The bust was a necessary correction in prices, but it went as far as it did for two reasons:

 

+ The HK government released much new property to HK developers to try to drive prices down, and excess supply overwhelmed demand,

 

+ Thanks to the peg, HK monetary policy was linked to US monetary policy, so when rates were pushed up in the US, they were forced "too high" for HK. But HK had to keep its rates high, if it wanted to maintain the peg.

 

The UK could be forced to push its rates "too high" if there is a run on its currency

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I take your point on higher LTV's, but to be fair, that “heartbreaking 69% drop”in HK was a direct result of the territory being handed over to a totalitarian regime that had recently run tanks over its own people.

 

I don’t think the UK has to be prepared for such an event as these circumstances were, essentially, unique.

 

I really like the idea of the banks being responsible for the percentage of loans greater than 80%. That could really work.

NO, it wasn't

 

The takeover helped to spur the big boom in 1996-97, when people saw that China was offering Hong Kong:

"One country, two systems", and freedom for capitalism in the SAR for at least 50 years.

 

But prices got bid up too high in the HK boom in the 1997 peak, as they have been bid up too high in the UK's boom.

 

The bust was a necessary correction in prices, but it went as far as it did for two reasons:

 

+ From 1997-2000/1, the HK government released much new property to HK developers to try to drive prices down, and excess supply overwhelmed demand,

 

+ Thanks to the peg, HK monetary policy was linked to US monetary policy, so when rates were pushed up in the US, they were forced "too high" for HK. But HK had to keep its rates high, if it wanted to maintain the peg.

 

The UK could be forced to push its rates "too high" if there is a run on its currency

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NO, it wasn't

 

The takeover helped to spur the big boom in 1996-97, when people saw that China was offering Hong Kong:

"One country, two systems", and freedom for capitalism in the SAR for at least 50 years.

 

But prices got bid up too high in the HK boom in the 1997 peak, as they have been bid up too high in the UK's boom.

 

The bust was a necessary correction in prices, but it went as far as it did for two reasons:

 

+ From 1997-2000/1, the HK government released much new property to HK developers to try to drive prices down, and excess supply overwhelmed demand,

 

+ Thanks to the peg, HK monetary policy was linked to US monetary policy, so when rates were pushed up in the US, they were forced "too high" for HK. But HK had to keep its rates high, if it wanted to maintain the peg.

 

The UK could be forced to push its rates "too high" if there is a run on its currency

 

Actually Bubb, upon refreshing my memory (with a bit of help from google) you are quite right, I stand corrected.

 

It appears it was more to do with the Asian financial crises of 97 and a controlled small ownership.

 

However, wouldn't this be more akin to the massive rise in Northern Ireland (for example) where prices are now a good 50% down from peak?

 

Yes there were big rises in the UK, but nowhere near as big as this (in such a short time scale)?

Also, there is no chance of our government releasing s**t loads of new property.

 

I see prices are back at their 1997 level in HK now.

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The UK could be forced to push its rates "too high" if there is a run on its currency

 

I would say that is quite unlikely (at the moment and for near term).

 

UK has no peg

 

UK Gov want a devalued currency

 

UK has long dated debt

 

UK deficit reduction is liked by the markets.

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But nothing much seems to change here.

 

I see the Daily Express has the usual 'House prices to go up 10% this year' headline reported by, yes, you guessed, Assetz 'let's destroy the prospects of the next generation' Property Management (or whatever they are called).

 

It's enough to make you weep - and every time my eldest son sees such a headline, it makes him more determined to emigrate.

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But nothing much seems to change here.

 

I see the Daily Express has the usual 'House prices to go up 10% this year' headline reported by, yes, you guessed, Assetz 'let's destroy the prospects of the next generation' Property Management (or whatever they are called).

 

It's enough to make you weep - and every time my eldest son sees such a headline, it makes him more determined to emigrate.

 

Do you encourage him to emigrate?

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UK has no peg

UK Gov want a devalued currency

A mildly depreciating currency, not one in freefall.

Look what is happening to long rates in certain European countries. Britain's turn will come.

 

Right now, they are pushing London properties like mad in Hong Kong. I think the potential buyers will soon wise up.

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Do you encourage him to emigrate?

 

On the whole, yes. If I can't offer him a reasonable chance at life in this country (i.e. I don't really have the money to say to him 'here's a load of cash to get you started - well I do, but that leaves me potless in retirement - if I ever get to retire) ... and this country can't offer him a reasonable opportunity to get a job, buy a house, have a family, live a normal life etc. then, yes, I encourage him to go.

 

Much as I like the idea of one day playing 'Grandad' - with my sons and (in due course) their families near me - I know that this seems to be too much to ask. My wife hates the idea that our sons may have to move abroad and is finding out what the entry requirements are for old farts to Aus, NZ and Canada. I'd quite happily follow them but, in a way, it's a bit daft. They might move to Canada - settle down - and then get a job offer in Singapore or, even, the UK!

 

Who knows what will happen. All I know is that the bloody bankers have a lot to answer for. And I'd quite happily be the one asking the questions.

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