jerpy Posted January 29, 2009 Report Share Posted January 29, 2009 Probably today but not tomorrow You talk about denial, a couple across the road moved out and put their flat on the market in August 2007 at £194,950 and has just recently reduced it to £174,950. Another person in the street who they are friendly with needed to sell reasonably quickly and got £147,000 in November last year. They've put a tenant in their now on the expectation of the market picking up in the summer as a result of the interest rate cuts. Mind you they did n't say which summer, just as well. Give it a few more months for the sheeple to see that the interest rate cuts are not working then the panic phase will be in IMO. You might be wrong there, i'm constantly amazed. One of my staff has just paid £200k for a 4bed det, landed via a £100k mortgage and he's grumpy because the bank he's been with have insisted on a 5year fix at near 7%(forget the exact figure). This represents a fair hike in his mortgage, but he's happy to pay as the security of both himself and his wife working allow him the comfort not to fear the worst Jaw drops and left speechless! Link to comment Share on other sites More sharing options...
Concrete Jungle Posted January 29, 2009 Report Share Posted January 29, 2009 Question is - is it worth the £70K? Not in my opinion. Two and three bed terraces in my area typically went for £20k - £45k depending on location and condition in 1999 - 2001. £120k is a pie in the sky valuation. It looks like we still have a long, long way to fall, considering the average wage in these parts is in the £15k - £18k bracket. Link to comment Share on other sites More sharing options...
sonixtorm Posted January 29, 2009 Report Share Posted January 29, 2009 Probably today but not tomorrow You talk about denial, a couple across the road moved out and put their flat on the market in August 2007 at £194,950 and has just recently reduced it to £174,950. Another person in the street who they are friendly with needed to sell reasonably quickly and got £147,000 in November last year. They've put a tenant in their now on the expectation of the market picking up in the summer as a result of the interest rate cuts. Mind you they did n't say which summer, just as well. Madness. Funnily enough I was talking to someone last week who was planning to up-size (having seen property at prices attractive in comparison to the last few years), but was also planning to rent out their existing property (denial that their particular property is worth a penny less than it was in 2007). I pointed out the risk of owning two (potentially) depreciating assets. Give it a few more months for the sheeple to see that the interest rate cuts are not working then the panic phase will be in IMO. Talking to my 'ears' in the local front-line housing office, denial still runs strong in those with bailiffs knocking on the door, so we may have a little while to go yet. Link to comment Share on other sites More sharing options...
sonixtorm Posted January 29, 2009 Report Share Posted January 29, 2009 Not in my opinion. Two and three bed terraces in my area typically went for £20k - £45k depending on location and condition in 1999 - 2001. £120k is a pie in the sky valuation. It looks like we still have a long, long way to fall, considering the average wage in these parts is in the £15k - £18k bracket. Wouldn't surprise me at all to see entry-level, tidyish houses going for £50K. Guess it depends what happens to inflation later this year. Link to comment Share on other sites More sharing options...
GTG Posted January 29, 2009 Report Share Posted January 29, 2009 You might be wrong there, i'm constantly amazed. One of my staff has just paid £200k for a 4bed det, landed via a £100k mortgage and he's grumpy because the bank he's been with have insisted on a 5year fix at near 7%(forget the exact figure). This represents a fair hike in his mortgage, but he's happy to pay as the security of both himself and his wife working allow him the comfort not to fear the worst Jaw drops and left speechless! I hope he's not in charge of money at your place Link to comment Share on other sites More sharing options...
drbubb Posted March 13, 2009 Author Report Share Posted March 13, 2009 I'd like to announce that the (next Friday or Saturday's) GEI Conference Call will focus on UK Property Join us, if you are interested. Last Call can be heard here. Link to comment Share on other sites More sharing options...
tinecu Posted March 13, 2009 Report Share Posted March 13, 2009 Asking prices not falling as fast as one might expect.... Denial? http://www.home.co.uk/asking_price_index/HAPIndex_MAR09.pdf See the time on market graph at the end of the report. That dam's gotta break sometime soon. Link to comment Share on other sites More sharing options...
GTG Posted March 13, 2009 Report Share Posted March 13, 2009 I'd like to announce that the (next Friday or Saturday's) GEI Conference Call will focus on UK Property Join us, if you are interested. Last Call can be heard here. Went well, interesting call.... might be an idea to put a link to the GEI thread with the charts on the radio page not only for the convenience of GEI members wishing to catch up on the call but for anyone who strays there too. Link to comment Share on other sites More sharing options...
id5 Posted March 15, 2009 Report Share Posted March 15, 2009 I haven't had much time to post lately, spend so much time at work trying to make myself more indispensible than the next bloke and getting ready to move to our new fabulous rental, I could never afford the mortgage on it! Not until the prices drop that is I was discussing house prices with my wife again having finally found time to download the latest house data. We both feel that the pain has only just started to bite and there is a long way to go. The graph below shows house sales in our target area. It shows that they petering out rather that really dropping although the £250K band line is interesting. So the next step will be that QE does repair the economy or houses will be sold at asking price and the prioces drop further. Then the graph above will show a definite downswing in the same way that the graph below on asking prices in the same area shows BUT they both show that there is a long way to go yet. The pain has just begun The vertical banding in the chart above is just me collecting data on a bi-weekly'ish period rather than something else interesting Link to comment Share on other sites More sharing options...
drbubb Posted March 16, 2009 Author Report Share Posted March 16, 2009 I will probably move the Call BACK by one week. (next Friday or Saturday's) GEI Conference Call will focus on UK Property Join us, if you are interested. Last Call can be heard here. TIMELY? Housebuilding guru says bottom of the property market has been reached By Mark Leftly / Sunday, 15 March 2009 Tony Pidgley, the great sage of the housebuilding industry, has called the bottom of the market. Mr Pidgley, who made a fortune and his reputation for calling the 1990s housing crash correctly, told The Independent on Sunday: "We all accept that, give or take 5 per cent, the market is somewhere along the bottom [of its economic cycle]." The chief executive at Berkeley Group, one of the few cash-rich housebuilders, added that there would be between 35,000 and 50,000 construction starts on new homes in 2009. He said 40,000 was most likely, meaning government ambitions to complete up to 240,000 new homes a year would not be fulfilled. In its last interim results, Berkeley had a pre-tax profit of £79.6m, 12.1 per cent down on the same six months in 2007 – a good result, given the sharp downturn in housing /see: http://www.independent.co.uk/news/business...ed-1645222.html Link to comment Share on other sites More sharing options...
jerpy Posted March 16, 2009 Report Share Posted March 16, 2009 I will probably move the Call BACK by one week. TIMELY? Housebuilding guru says bottom of the property market has been reached By Mark Leftly / Sunday, 15 March 2009 Tony Pidgley, the great sage of the housebuilding industry, has called the bottom of the market. Mr Pidgley, who made a fortune and his reputation for calling the 1990s housing crash correctly, told The Independent on Sunday: "We all accept that, give or take 5 per cent, the market is somewhere along the bottom [of its economic cycle]." The chief executive at Berkeley Group, one of the few cash-rich housebuilders, added that there would be between 35,000 and 50,000 construction starts on new homes in 2009. He said 40,000 was most likely, meaning government ambitions to complete up to 240,000 new homes a year would not be fulfilled. In its last interim results, Berkeley had a pre-tax profit of £79.6m, 12.1 per cent down on the same six months in 2007 – a good result, given the sharp downturn in housing /see: http://www.independent.co.uk/news/business...ed-1645222.html 60,000 new starts would be an extremely optimistic figure at present. However, as it's my passion to recite real life soundbites, talking to someone today who had put a property on the market last week, he's a had 3 viewings with 2 wanting to come back already, so he's now in a rush to do a deal with a developer and move things along. His original expectation was a 6 month struggle. There's a slight mood swing in the air, kid you not Link to comment Share on other sites More sharing options...
drbubb Posted March 17, 2009 Author Report Share Posted March 17, 2009 60,000 new starts would be an extremely optimistic figure at present. However, as it's my passion to recite real life soundbites, talking to someone today who had put a property on the market last week, he's a had 3 viewings with 2 wanting to come back already, so he's now in a rush to do a deal with a developer and move things along. His original expectation was a 6 month struggle. There's a slight mood swing in the air, kid you not THe sheeple are getting warmed up for a final fleecing, as we will discuss on the GEI conference call Link to comment Share on other sites More sharing options...
Arn Posted March 18, 2009 Report Share Posted March 18, 2009 US Association of Economics as per their paper and Economist article in Jan 09 studied previous boom/busts. Peak to Trough RE average is 5 years. 5equities 3.5 years) On this basis given 2007 as Peak then trough will equal 2012. But I think I can safely say this is not an average Boom/Bust. Link to comment Share on other sites More sharing options...
drbubb Posted March 19, 2009 Author Report Share Posted March 19, 2009 US Association of Economics as per their paper and Economist article in Jan 09 studied previous boom/busts. Peak to Trough RE average is 5 years. 5equities 3.5 years) On this basis given 2007 as Peak then trough will equal 2012. But I think I can safely say this is not an average Boom/Bust. Harrison says: 3-5 years. But this one could be longer. Here's the History that I found: (From the Conf.Call#3 thread): ... That delayed Low from the big 1948 peak is interesting ... C# 2 : Housing is a Cyclical market /see: http://conservativehome.blogs.com/platform...-wadsworth.html C# 3 : 18 year Cycles go back a long way Peaks in Property UK: 2007 1989 -18 1973 -16 (1948 +18= 1966, stretched by WW2) 1948 -25 USA: 1946 (2 years before the UK) 1926 -20 1905 -21 1887 -18 1871 -16 C# 4 : The Pattern show the 18 year Cycle peak is in place C# 5 : The peak was preceeded by a top in Builder stocks 9 months earlier ... Spline's website Link to comment Share on other sites More sharing options...
sonixtorm Posted March 19, 2009 Report Share Posted March 19, 2009 Harrison says: 3-5 years. But this one could be longer. Any thoughts on the rumblings from the FSA on limiting salary multiples, imposing minimum deposits? The feeling on GHPC/HPC is that this will create downward pressure. I'd agree if it was implemented straight away, but I do wonder if announcing vague limitations in the future may have the effect of creating increased demand for what little credit is available - prompting a few to take the leap whereas they would have otherwise waited. Link to comment Share on other sites More sharing options...
drbubb Posted March 22, 2009 Author Report Share Posted March 22, 2009 Any thoughts on the rumblings from the FSA on limiting salary multiples, imposing minimum deposits? The feeling on GHPC/HPC is that this will create downward pressure. I'd agree if it was implemented straight away, but I do wonder if announcing vague limitations in the future may have the effect of creating increased demand for what little credit is available - prompting a few to take the leap whereas they would have otherwise waited. The impact of sharply lower debnt rates may be bigger. I am getting a sense that the Central banks of the US and the UK are going to work together or engineer a reflation of Property prices. This is the logic behind the QE moves. Gordon thinks this might save his stinking hide. Link to comment Share on other sites More sharing options...
GTG Posted March 22, 2009 Report Share Posted March 22, 2009 Nadeem Walayats take: The FSA has proposed changes to limit the amount of money people can borrow for house purchases which includes minimum deposits of as much as 15% of the value of the property as part of the Chairman of the FSA, Lord Turners review into the banking crisis. The aim of the review is to put an end to the high risk mortgages that at the height of the housing boom had the likes of the now nationalised Northern Rock bank allowing mortgages of upto 125% of the value of property, far in excess of the X3.5 safe salary multiple which witnessed self certification mortgages of as much as X10 salaries with the accepted norm of more than X5 salaries. I can imagine that the proposed changes will be met by much resistance from the financial industry as it will in one fail swoop bring a halt to the boom and bust cycle i.e. if loans are fixed at X3.5 salary then it would have been impossible for UK house prices to have risen to an average of £200,000 which equates to more than X6.6 salaries, which allowed those in the industry to bank huge commissions and bonuses amidst a speculative fever, only for the bust to have dumped all of the bankrupt banks bad debt liabilities that run to the hundreds of billions of pounds onto the UK tax payer. Whilst it is too little too late now, it will however prevent the next boom and bust from occurring as long as the proposals are actually implemented, which would point to a different type of UK housing market that may perhaps result in a sea change in public perception from that of becoming home owners to favouring renting as house price growth will effectively be regulated by the regulator inline with average earnings. The average house price has now fallen from £200,000 to just under £160,000 for February Halifax data, which implies the maximum loan at X3.5 salary on the average £30,000 salary would be cut to £105,000, on top of this there is a requirement for a deposit of 15% which on £160k amounts to £24k. This therefore implies the maximum house price in a functioning market should be £129k or still nearly 20% lower than where house prices stand today. However the Labour government has embarked on an programme of Quantative Inflation the consequences of which will be much higher inflation than any one can estimate at this point based on the existing deflationary trend as a consequence of debt delveraging as the government seeks to fill the gap with public debt monetized by printing money to force the long yield curve lower, which effectively means devaluing the value of the british pound and thus inflating prices such as wages and house prices to give the illusion of a market that has stopped falling in nominal terms, i.e. an attempt to fill the gap between £129k and £160k by inflating wages in nominal terms. http://www.marketoracle.co.uk/Article9554.html Link to comment Share on other sites More sharing options...
sonixtorm Posted March 22, 2009 Report Share Posted March 22, 2009 The impact of sharply lower debnt rates may be bigger. I am getting a sense that the Central banks of the US and the UK are going to work together or engineer a reflation of Property prices. This is the logic behind the QE moves. Gordon thinks this might save his stinking hide. The latest plan in the US appears to be; buy a house, get a green card (http://www.frontlinethoughts.com/pdf/mwo032109.pdf). I wonder if we will see direct government lending to potential homebuyers in the UK? Are we about to get our very own Fannie Mae? Link to comment Share on other sites More sharing options...
ecoface Posted April 1, 2009 Report Share Posted April 1, 2009 The impact of sharply lower debnt rates may be bigger. I am getting a sense that the Central banks of the US and the UK are going to work together or engineer a reflation of Property prices. This is the logic behind the QE moves. Gordon thinks this might save his stinking hide. Go to: http://www.ft.com/cms/bfba2c48-5588-11dc-b...00779fd2ac.html watch Authers on if US market has seen a bottoming... Link to comment Share on other sites More sharing options...
drbubb Posted April 3, 2009 Author Report Share Posted April 3, 2009 PUMPING IT UP The BMV BTL Pitch : MRA Link to comment Share on other sites More sharing options...
GTG Posted April 3, 2009 Report Share Posted April 3, 2009 PUMPING IT UP The BMV BTL Pitch : MRA I read somewhere (can't remember now) that average earnings in the north east as a percentage of the national average was approximately 87%. Thats a price to income ratio of 3.22 and a gross yield of 7.45% (approx. 4.2% above 10 year gilts) in this example. Being mindful that LHA is usually not far away from the market rent (and in some cases more generous), do you think these prices will drop much further? Link to comment Share on other sites More sharing options...
ecoface Posted April 15, 2009 Report Share Posted April 15, 2009 Pidgeley saying one week that the market has bottomed, and now this? But to be fair, he did say that he felt the housing, not land, market had bottomed. However, IMO land prices bottom about 12-18 months before sales prices. So inconsistency is in the air... "Berkeley boss disagrees with Knight Frank prediction that values will stabilise in the summer The market for residential land housing is unlikely to recover this year, according to Berkeley Group chief executive Tony Pidgley. But the housebuilder, who famously predicted the nineties recession, said actual house sales were beginning to pick up, as average house prices had reached a more affordable level of four times income. He added that they would improve further once mortgage markets eased. This followed his comments last month that the housing market was “very close to the bottom”. He said: “We are being very selective, but we have bought probably 10 sites in total.” He added: “I cannot see the residential land market recovering this year. Is the bottom of the market in the summer? The answer is no.” Pidgley’s assessment followed a report by property consultant Knight Frank, which predicted the market for residential land would drop a further 10% before stabilising in the summer. The report, published last week, said land values had halved over the year and fallen 15% in the last quarter, with the biggest drops seen on very high-value sites in London. Jon Neale, head of development research at Knight Frank, said few sites were selling because developers could not raise bank finance and sellers were waiting for better market conditions before disposing of sites. He predicted the number of transactions would grow once the market stabilised. David Pretty, former chief executive of Barratt and now chair of the New Homes Marketing Board, agreed with Knight Frank’s predictions. He added that he would buy sites for first-time buyers and social housing if he were still a housebuilder. “For those with cash, it is a good time to buy selectively and drive the hardest of bargains with landowners.” However, the chief executive of Crest Nicholson thought land values had already reached their lowest point, with house prices not far behind. Stephen Stone said: “I believe we are near the trough and land is probably factored in at the bottom now.” Link to comment Share on other sites More sharing options...
drbubb Posted April 17, 2009 Author Report Share Posted April 17, 2009 ...a report by property consultant Knight Frank, which predicted the market for residential land would drop a further 10% before stabilising in the summer. The report, published last week, said land values had halved over the year and fallen 15% in the last quarter, with the biggest drops seen on very high-value sites in London. I think they are dead wrong. I see a rally into summer- a Dead Car bounce, before it grinds lower Link to comment Share on other sites More sharing options...
drbubb Posted April 26, 2009 Author Report Share Posted April 26, 2009 Two (temporary) steps forwards - thanks to low rates, and Two (permanent) steps back ======================================= Higher taxes set to hit house prices By Sharlene Goff Published: April 24 2009 19:26 | Last updated: April 24 2009 19:26 Estate agents are warning that the higher taxes introduced in this week’s Budget could increase the pressure on house prices, as buyers at the top end of the market decide to live elsewhere. Many buyers of multi- million pound properties earn enough to be hit by the higher rate of income tax from next year. Agents said this extra levy could lead to fewer people living and working in London and could reduce demand for properties in the prime market. /see: http://www.ft.com/cms/s/2/1f2d52c6-30fd-11...144feabdc0.html Link to comment Share on other sites More sharing options...
Assurbanipal Posted May 1, 2009 Report Share Posted May 1, 2009 I've read UK bond prices dropped. Is this spelling higher interest rates and further stress of overleveraged borrowers? Or central bank will use printing press in more extensive way and house prices recover - at least for some time - prematurely? Anyway, for foreigner like me it has just theoretical meaning, all pound denominated assets seems to be very dangerous for me. Link to comment Share on other sites More sharing options...
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