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Speed of UK House price decline - what is it NOW?

Speed of UK House price declines  

33 members have voted

  1. 1. How are you experiencing house price declines in your area of the UK

    • Property price falls are speeding up
      5
    • Crash cruise speed - prices are falling at a fairly steady rate
      14
    • The rate of decline has slowed noticeably
      2
    • Prices seem to be stable - have stopped falling
      1
    • Prices are now showing a slight uptrend
      2
    • Prices are rising in a healthy way
      0
    • The picture is very mixed. No conclusion is possible
      6
    • No comment
      3
  2. 2. My belief about a bounce, or sign of stability

    • There will be no bounce this year
      15
    • What I am seeing, will be nothing but a Spring bounce
      12
    • The stability could eventually lead to a recovery
      2
    • This is THE LOW in the cycle
      0
    • No comment
      4
  3. 3. Availability of finance

    • It is virtually impossible to borrow to buy a home where I am
      0
    • Loans can be obtained by those who have a 40-50% deposit, and sufficient income
      3
    • Mortgage loans of 70-75% LTV are available
      13
    • 80-85% loans are available (tell us more)
      7
    • Loans of 90-100% can be obtained
      0
    • No comments
      10


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Dead Cat rebound? or the end of the low prices?

http://www.bloomberg.com/apps/news?pid=206...&refer=home

 

 

Let me tell you something, that you ALL MUST KNOW already:

THIS IS TEMPORARY. The bounce is brought on by a combination of factors:

 

+ Prices dropped more than 20%- enough for some impatient people to think they are a bargain

 

+ Interest rates have been brought down to the LOWEST levels in UK history, as a desperate measure

to stop the price falls. These lower rates cannot be sustained, else the Pound will fall thru the floor.

Gordon Brown is trying desperately to get other countries to "take the red pill", and join the UK in

its QE adventure. Some may follow, and buy him a litle more time of articially low rates. What

would that do? It would simply prolong the period of the "bull trap", causing more to fall into it.

 

+ A Dead Cat bounce is a normal phenomenon after a steep initial price fall, as some money gets

thrown back into the market, by those who havent "got it" yet, that a big trand change is underway.

Once that sort of buying is exhausted, then rates will resume their falls. The temporary rate cut

wil serve to prolong the period of the Dead Cat. Meantime, unemployment is rising, and salaries are

underpressure. These factors will undermine the buying on their own eventuallly

 

+ People doing the "Rent versus Buy" calculations will be using mortgage rates that are temporary,

unprecedented, and unsustainable. They will make an error, because they will use too low and

interest rates, and they may not factor in the fact that the UK's weak economy is likely to bring

lower housing demand, and LOWER RENTALS. Within a few months rentals could be significantly

lower causing an adjustment in the attractions of renting

 

+ Once rates start rising again, people will wake up to the fact they they have been "conned"

and fallen into a trap of paying too much for houses, as the begin their second leg down. All those

smug landlords, that think they have dodged a bullet, will find themselves hit from both sides.

They will experience falling rents, while mortgage payments start creeping back up.

 

THEN, THE SECOND LEG DOWN will begin.

 

Only it will be different, Mr. Bear will be say: "This time, I mean it!"

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I find it interesting that certain parts of the media - the BBC - need I say more, presented the Nationwide figures as a sign of "recovery" in the housing market. I suppose thousands of estate agents up and down the country will be jumping up and down in their empty offices and cheering this morning as they think the good times are coming back. There is a madness in the UK which some just don't understand, it's called spending too much money on things you can't afford and corrupt, fraudulent banks helping and encouraging everyone to do this. You would like to think that those days are over. Are the banks really going to be allowed to go back to their loose lending, fraudulent ways? Well, if house prices are to go up again in this wonderful "recovery", that's what it will take as the average worker in the UK simply does not have the income to house price ratio to support another surge in house prices. House prices are going to fall a lot further, especially once the pressure to put up IR's again starts to hit home in the next 9 - 12 months. It is amazing that the mainstream in the UK just don't seem get this?

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I suppose thousands of estate agents up and down the country will be jumping up and down in their empty offices and cheering this morning as they think the good times are coming back. There is a madness in the UK which some just don't understand, it's called spending too much money on things you can't afford and corrupt, fraudulent banks helping and encouraging everyone to do this. You would like to think that those days are over.

 

They are so used to lying - that they cannot do anything else

--

"Interest rates at almost zero and the Bank of England’s move to start the process of quantitative easing “will take time to work through into the housing market before we can expect a sustained recovery in house prices,” Nationwide’s chief economist Fionnuala Earley said.

 

The number of mortgage approvals also started to increase again, to the highest level since May 2008, and is likely to be linked to the fall in interest rates, according to Nationwide. "

UNQUOTE/ see: http://www.telegraph.co.uk/finance/economi...omists-say.html

 

Let me translate this spin into plain English:

 

THe bounce we are seeing now, she HOPES will become something more significant.

In fact, it is likely to be very temporary, but she wants buyers to believe that low rates "will take time to work through into the housing market".

What is more likely: A temporary dip in rates will lead to a very temporary bounce.

 

There will be NO STAYING POWER onces rates go back up

 

 

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They are so used to lying - that they cannot do anything else

--

"Interest rates at almost zero and the Bank of England’s move to start the process of quantitative easing “will take time to work through into the housing market before we can expect a sustained recovery in house prices,” Nationwide’s chief economist Fionnuala Earley said.

You would expect a VI to say such things, nevertheless, given how the UK and US got into this mess, it is incredible that they think there can be "a sustained recovery in house prices,” after 10 years of the biggest housing bubble in the history of the planet. They have a chance to put things right, but they seem intent on destroying the system for generations to come.

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Does anyone think perhaps the house price crash will be different this time due to quantitative easing and nationalised banks which are being forced to lend, not to mention the various HomeBuy schemes offering in effect, 100% mortgages?

 

Will house prices continue to fall in nominal terms or do you think they will fall by 30% from peak to trough nominally with the majority of the fall being in real terms?

 

Its just that we have a crazy Prime Minister who is HELL BENT on PROPPING up house prices and is throwing everything at them, including the kitchen sink to keep them up. The effects can be seen in the recent mortgage approval rates which have risen although still down YoY and Nationwides +0.9% rise for March '09.

 

Another factor is interest rates. Now I know they can't keep them this low for a long time but any ideas on when rates will rise? Q4 2009 perhaps? What sort of rates can we expect them to rise to? Double digits or 5-9%?

 

Then we have the majority of the UK who are blind sheeple believing the mass media like the BBC, The Sun, VI's and EA's spin etc and are property obsessed!

 

Now, since its my first post here, I'll explain my situation. Currently own my own house with no mortgage but am looking to upgrade. Prices are currently still too high and the area I want to buy in is only down 12.8% from peak so far and prices are still ridiculous. I've felt uneasy about this crash since the whole Quantitative Easing issue and eroding debts away with inflation. I thought the crash would be as simple as just waiting it out but instead we have dangers of high (or hyper) inflation and since I have lots of cash saved up, I'm worried about its value and don't want to risk it in bonds, gold and stocks since I've never traded in them before so wouldn't want to play with fire.

 

:(

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British banks expect to increase lending

 

April 2, 2009

 

The credit crunch showed fresh signs of easing today as the Bank of England reported that lenders expect to make more loans available to people and businesses over the next three months.

 

Contrary to expectations at the start of the year, credit available to larger companies has increased over the past three months and banks expect that trend to continue, the Bank said.

 

Unsecured credit to households and small firms fell in the past three months, but by less than had been expected and banks expect the position to stabilise in the next three months.

 

Overall, more banks expect to boost credit availability than to reduce it in the next three months, the Bank found in its closely watched survey of banker intentions.

 

A lack of available credit from banks desperate to hoard cash has been seen as a major cause of the recession and the reason the Government has allotted more than £1 trillion in capital injections, loans and guarantees to Britain's embattled banks.

 

Howard Archer, chief UK and European economist at IHS Global Insight, said today's survey suggests "various policy measures undertaken by both the central bank and the government to boost bank lending are starting to have a beneficial impact".

 

He added: "It raises hopes that credit conditions will increasingly become less of a constraint on economic activity over the coming months. This is critical to recovery prospects.

 

"Hopefully, the Bank of England's quantitative easing programme will further improve matters."

 

The new Credit Conditions Survey also found that margins on loans to people and businesses had widened considerably and banks expect them to continue widening, holding out the promise of high profits on future business.

 

However, default rates rose in the past three months and are expected to continue rising.

 

Source: http://business.timesonline.co.uk/tol/busi...icle6020798.ece

 

Looks like the banks are stocking up on Brown QE sauce.

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Its just that we have a crazy Prime Minister who is HELL BENT on PROPPING up house prices and is throwing everything at them, including the kitchen sink to keep them up. The effects can be seen in the recent mortgage approval rates which have risen although still down YoY and Nationwides +0.9% rise for March '09.

 

Another factor is interest rates. Now I know they can't keep them this low for a long time but any ideas on when rates will rise? Q4 2009 perhaps? What sort of rates can we expect them to rise to? Double digits or 5-9%?

 

You have nailed it !

This is a very temporary fix, that is a Bull Trap, and will lead to a catastrophic fall in one or two years.

I am "all over this", and will do my best to save people for the inevitable disaster.

 

When I scheduled today/Friday's GE Conference Call, it was a glimmer of a possibility, now it has become more likely event as every day goes by !

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I am a little confused as to how these two reports can be so wildly different.

 

House prices 'drop 1.9% in March'

 

UK house prices fell by 1.9% in March compared with the previous month, according to the Halifax. The lender - now part of Lloyds Banking Group - said that conditions in the housing market would remain tough for the rest of the year. The average UK home now costs £157,226, at least £30,000 less than a year ago.

 

The figures come the day after Nationwide reported a rise in prices

 

link

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Oh flippin' 'eck. I got home last night and Mrs. Paddles pointed at the news and said "the economy is saved; they're printing $250bn, Gordon Brown has been made Chancellor of the World and the Nationwide says the house price crash is cancelled".

 

So we did the only sensible thing and rushed out to the all night estate agents (London is a city that never sleeps) and bought a "dream" flat in a druggy area of zone 5. We move in today.

 

Now today's halifax figures make me wonder whether we've done the right thing. Oh dear. I think I'm going to have to lie down, except the bedroom in the new place is too small for anything but a rope between the walls to lean on.

 

 

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http://news.bbc.co.uk/1/hi/business/7980813.stm

 

UK house prices fell by 1.9% in March compared with the previous month, according to the Halifax. :blink:

Interesting. Yesterday the BBC was all over the Nationwide good news rise, today I haven't heard this reported at all. It is on the BBC website, but hasn't been mentioned on any radio news (at least not the ones I've listened to).

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http://news.bbc.co.uk/1/hi/business/7980813.stm

UK house prices fell by 1.9% in March compared with the previous month, according to the Halifax. :blink:

 

The Halifax figures have been released this morning -1.9% The Brown Bulltrap Bounce didn't last long! :lol:

 

LOL. I saw that.

 

Of course, the Bull Trap upturn is only being signalled now, by the following indicators:

 

+ The anomolous jump in the recent Nationwide figure

 

+ The rally in the shares of "leader" Berkeley Group to above the 252d.MA : see BKG.L update

bigf.gif

 

+ Tony Pidgely (Chmn. of BKG) recently said, "the bottom is at hand"

 

+ Main UK bellwether BDEV.L looks set to breakout, above the 252d.MA : see BDEV.L update

bigx.gif

 

+ Another bellwether, Persimmon, has broken above the 252d.MA : see PSN.L update

biga.gif

 

As you may have seen in the poll, the vast majority of GEI and HPC respondents think that "Crash Cruise speed" will remain underway. I disagree. I know from past experience that markets do not fall straight down, and that often a correction takes place with aa A-B-C move - where the upwards "B wave" a mere "dead cat bounce", between a downwards A-wave and downwards C-wave.

 

The upwards B-wave appears to be underway in the stocks, and may start soon in the UK property market.

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i would have thought land prices would be a leading indicator

 

but dont think this data is easy to get hold of

 

 

link

 

Land values fall by up to 64% across the UK

 

Land earmarked for housing development has halved in value since the height of the boom, according to the latest research from estate agents Knight Frank.

 

The study said the value of residential development land had slumped by 15% in the last quarter of 2008 alone, as housebuilders attempt to off-load sites to shore up their balance sheets.

 

Head of development research Jon Neale said he expected land values to fall a further 10% before stabilising in the summer. In general he said that while very few transactions were currently taking place, the conditions were being created for a “very large scale transfer of development land,” from housebuilders to private investors, landowners and the public sector.

 

The research found land had slumped in value most significantly in Yorkshire and the Humber, recording a 64% fall, with the smallest falls being found in outer London, seeing only a 40% drop. However, he said no area was immune from the effects of shut-down in mortgage lending and the consequent decline in house-prices.

 

During the last quarter of 2008 the biggest loser was central London, recording falls of 33%, after having previously remained resilient to the downturn.

 

Development land values tend to fall faster than house prices, because it is not possible to cut the construction costs of homes by a large amount, so the majority of the fall in house prices ends up coming off the land value.

 

Neale said that most landowners were not selling, increasing the danger that the fall in prices will stop the government from hitting housing targets.

 

He said: “Very few developers have cash or can access bank finance, and those that are in a position to buy are adopting an extremely cautious strategy. Only extremely well-located sites, or those suited for larger family homes, are attracting interest – or, indeed, qualify for bank backing.”

 

“There are very few sales occurring at this moment in time. However, many players believe fair value is approaching and we believe prices have a further 10% to fall before stabilising over the summer. After this point, transactions should become more commonplace.”

 

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Interesting. Yesterday the BBC was all over the Nationwide good news rise, today I haven't heard this reported at all. It is on the BBC website, but hasn't been mentioned on any radio news (at least not the ones I've listened to).

 

Laughable, isn't it? I have often wondered what is actually behind this selective reporting. Is it just a case of telling people what they want to hear?

 

 

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Laughable, isn't it? I have often wondered what is actually behind this selective reporting. Is it just a case of telling people what they want to hear?

 

Or telling people what they are told to tell people?

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i would have thought land prices would be a leading indicator

but dont think this data is easy to get hold of

link

 

QUOTE

Land values fall by up to 64% across the UK

Land earmarked for housing development has halved in value since the height of the boom, according to the latest research from estate agents Knight Frank.

UNQUOTE

 

Yes, that's a good idea- to monitor land prices, but as you say, the data is hard to get, and often late.

Do you know when that "fall of 64%" was recorded, and where?

 

The Builder prices are generally AHEAD of the price move, so let's watch how this unfolds.

 

 

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bumping, and moving this thread.

 

(Unfortunately, the HPC version has been deleting, which removes an interesting historical record.)

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