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hlyeo98 - 15 Sep 2007 19:56
With the US subprime crisis spreading to Europe, shockwaves in Northern Rock which would spread to other banks, UK economy growth not looking healthy, increasing trade deficits, sharply rising mortgage costs, falling corporate profits and job cuts especially in the City, and as market turmoils escalates, housing price which shows a first drop of 2.6% (from Rightmove last month), this are the signs of the beginning of a housing crash. PROPERTY SHARES ARE A SELL!
hlyeo98 - 15 Sep 2007 19:57 - 2 of 352
hlyeo98 - 15 Sep 2007 19:58 - 3 of 352
hlyeo98 - 15 Sep 2007 19:58 - 4 of 352
hlyeo98 - 15 Sep 2007 19:59 - 5 of 352
hlyeo98 - 15 Sep 2007 19:59 - 6 of 352
hlyeo98 - 15 Sep 2007 19:59 - 7 of 352
hlyeo98 - 15 Sep 2007 20:01 - 8 of 352
Wolseley downgraded - MoneyAM
Credit Suisse has today downgraded shares in Wolseley to 'underperform' from 'neutral'.
The brokerage also dropped its target price to 850p from 1,150p, citing a continued deterioration in the US housing market.
In a note published this morning, the broker said it has also lowered its full-year 2008 and 2009 estimates for the specialist trade distributor of plumbing and heating products and supplier of building materials by 11% and 7% respectively, noting that it feels that while the share price may still present longer-term value, the operational hurdles faced by US Building Materials in the coming months skew risk to the downside.
The broker noted that its full-year 2008 profit before tax amortisation estimate of 751m for Wolseley puts it 14% below company-guided consensus, but added that the share price has underperformed the FTSE100 by around 8% since early August, suggesting the market has already priced in a downgrade.
Credit Suisse added that, while it remains broadly in-line in terms of the upcoming full-year 2007 numbers, its updated full-year 2008 forecasts also place it 14% below consensus estimates.
hlyeo98 - 15 Sep 2007 20:06 - 9 of 352
hlyeo98 - 16 Sep 2007 09:54 - 10 of 352
hlyeo98 - 16 Sep 2007 10:01 - 11 of 352
hlyeo98 - 16 Sep 2007 10:11 - 12 of 352
Hammerson, the FTSE 100 property developer, has warned that the City office market is in danger of being damaged by the fall-out from the continuing turbulence in the financial markets.
The warning from the developer of the old London Stock Exchange building will send shudders through Britain's 700 billion commercial property market as it marks the first time a large UK commercial developer with a direct vested interest in the capital has raised the red flag over its health.
The warning from Hammerson comes just days after The Times revealed that property industry experts have pencilled in a significant risk of the City vacancy rates doubling next year if banks suddenly pull their requirements for new space in the face of falling profits.
It would, in turn, cause the last two years of soaring City rent rises to come to a halt or even trigger rent falls by 2009. Since then Macquarie, the Australian bank, has put its search for new City premises on hold.
A fall in rents could also trigger falls in capital values of buildings where cheap borrowing had until this spring unleashed unprecedented demand for buying commercial property.
Stan
- 16 Sep 2007 10:23
- 13 of 352
As illustrated in most of the charts above people have been selling for months.
maddoctor - 16 Sep 2007 13:49 - 14 of 352
are you always six months late with your threads - what a waste of space
hlyeo98 - 16 Sep 2007 16:47 - 15 of 352
Well, I have been shorting some of these for the past 4 months.
hlyeo98 - 17 Sep 2007 13:47 - 16 of 352
More shorting on these...it has been worthwhile.
ptholden
- 17 Sep 2007 21:12
- 17 of 352
Course you have Hlyeo, of course you have, so unlike you to keep quiet for so long. Ever thought of becoming a stock ambulance chaser?
hlyeo98 - 17 Sep 2007 22:57 - 18 of 352
hehe I can see someone is caught in the web.
cynic
- 18 Sep 2007 08:28
- 19 of 352
HYLEO ..... not clear if you mean "sell prop SHARES" or "sell physical houses" ..... if you mean the latter, then for sure you are talking bollocks ....... it would comne as no surprise if house prices in general stagnated or even fell back a little, for it is (imo) self-apparent that the rises over the last few years are unsustainable .... however, quality property in the right location will always be in high demand, even if selling them takes a little longer than of late
maddoctor - 18 Sep 2007 08:33 - 20 of 352
this child needs sending back to the dark side!
Big Al
- 18 Sep 2007 08:37
- 21 of 352
I've believed for a couple of years that house prices will crash. It's only a matter of time IMO.
cynic
- 18 Sep 2007 08:41
- 22 of 352
AL .... too sweeping a statement .... crash by how much and for how long?
hewittalan6
- 18 Sep 2007 08:47
- 23 of 352
They will fall, certainly, but Cynics is a fair question.
The other question is what the catalyst will be.
Tougher lending? Possibly. Higher rates? Seems unlikely for some time.
Higher unemployment? Perhaps, but the current unstable and low paid jobs culture hasn't done it.
Lower demand. Definitley. But this also seems unlikely unless the government does what people are demanding and creates massive investment in social housing and cheaper private housing. Those same people who demand that will the demand the PM's balls on a platter because there has been a housing "crash" and they are in negative equity.
Who'd be a politician?
Alan
The other question is what the catalyst will be.
Tougher lending? Possibly. Higher rates? Seems unlikely for some time.
Higher unemployment? Perhaps, but the current unstable and low paid jobs culture hasn't done it.
Lower demand. Definitley. But this also seems unlikely unless the government does what people are demanding and creates massive investment in social housing and cheaper private housing. Those same people who demand that will the demand the PM's balls on a platter because there has been a housing "crash" and they are in negative equity.
Who'd be a politician?
Alan
Andy
- 18 Sep 2007 08:54
- 24 of 352
Big Al,
Sooner or later you're bound to be right if yiu keep on saying it long enough!
Actually the last 'crash' was far from that, more of a slow downward spiral which lasted a few years.
Sooner or later you're bound to be right if yiu keep on saying it long enough!
Actually the last 'crash' was far from that, more of a slow downward spiral which lasted a few years.
hewittalan6
- 18 Sep 2007 08:55
- 25 of 352
Another random thought on house prices.
Your view on the direction is often driven by your own hopes for them, and that differs very much by life stage.
As a FTB, I would be hoping for a crash and looking for the signs, so I could afford to get on the ladder.
As a growing family in a small semi, I would be looking for stability so I could save up and move on, but a crash is no good as my equity would be swept away and I would be stuck.
As I reached retirement and the family moved on, I would desire a boom before I downsized, so that I had more equity than ever before to ease my life in retirement.
Whatever happens with house prices, some will be delighted, others horrified. Classic no win.
Your view on the direction is often driven by your own hopes for them, and that differs very much by life stage.
As a FTB, I would be hoping for a crash and looking for the signs, so I could afford to get on the ladder.
As a growing family in a small semi, I would be looking for stability so I could save up and move on, but a crash is no good as my equity would be swept away and I would be stuck.
As I reached retirement and the family moved on, I would desire a boom before I downsized, so that I had more equity than ever before to ease my life in retirement.
Whatever happens with house prices, some will be delighted, others horrified. Classic no win.
Big Al
- 18 Sep 2007 09:02
- 26 of 352
I think 30% is not unlikely with little or no recovery until 2015 or thereabouts.
Andy - the last crash was a crash and make no mistake. I know someone who bought in Norfolk in '88 having knocked around 20% off the asking price and he was still in negative equity for alomst all the 90's.
This time around you hear of 9x multiples being lent with interest rates being their lowest in 40years in 2005. Anyone who thinks a crash is not on the cards is a helluva dumb-ass IMO.
BTW, I've no properties in my investment, having sold up some time ago. They were bought 94/95. ;-))
Andy - the last crash was a crash and make no mistake. I know someone who bought in Norfolk in '88 having knocked around 20% off the asking price and he was still in negative equity for alomst all the 90's.
This time around you hear of 9x multiples being lent with interest rates being their lowest in 40years in 2005. Anyone who thinks a crash is not on the cards is a helluva dumb-ass IMO.
BTW, I've no properties in my investment, having sold up some time ago. They were bought 94/95. ;-))
cynic
- 18 Sep 2007 09:46
- 27 of 352
i happen to own my house, which we bought in 1986 at what we thought to be absolute top dollar, but that has increased 6-fold and perhaps more ..... it happens to be in an ace positon and, for various reasons, almost unique (for lack of a better word) ...... even if prices fall, and our house is included, i'll not care much, for if we move then it will be to downsize.
i also bought a small freehold off Portobello Market in 1978 for what is now a risible sum ...... that has risen exponentially and for various reasons has further still to go . ..... by miles the best investment i ever made, though did not realise at the time.
point i am trying to make is that with property, quality and location (location, location) will always be a sound investment ....
though beware of companies who try to drag you in on that, for we also got totally screwed on a couple of EIS deals where the commercial properties, allegedly bought on the cheap, seemingly did no better than stand still over a number of years.
i also bought a small freehold off Portobello Market in 1978 for what is now a risible sum ...... that has risen exponentially and for various reasons has further still to go . ..... by miles the best investment i ever made, though did not realise at the time.
point i am trying to make is that with property, quality and location (location, location) will always be a sound investment ....
though beware of companies who try to drag you in on that, for we also got totally screwed on a couple of EIS deals where the commercial properties, allegedly bought on the cheap, seemingly did no better than stand still over a number of years.
cynic
- 18 Sep 2007 09:49
- 28 of 352
even if X rents, then Y has clearly bought, and Z has obviously sold!
Stan
- 18 Sep 2007 09:55
- 29 of 352
Never bought and sold property as an investment but might be worth looking at should prices retract in the future.
ED: Sorry getting off topic here.
ED: Sorry getting off topic here.
chocolat
- 18 Sep 2007 09:58
- 30 of 352
I agree with you, cynic (ha, make a note!) "quality property in the right location will always be in high demand", but that doesn't constitute the market as a whole by any stretch.
cynic
- 18 Sep 2007 10:02
- 31 of 352
hi choccy .... long time no flirt!
one could draw the same parallel with shares!
one could draw the same parallel with shares!
hlyeo98 - 18 Sep 2007 11:24 - 32 of 352
Cynic, it is shares I'm talking about now...but in the near future, house prices will also drop.
chocolat
- 18 Sep 2007 11:45
- 33 of 352
Indeedy you old grouch ;)
But in my simplistic view it's all swings and roundabouts.
Ok, so in the case of mortgage default, house prices will be affected as lenders will dispose of properties at less than market value for a quick return. But aside of the impending dilemma facing property owners with negative equity, if prices slump considerably at the bottom end of the market, this would surely enable 1st time buyers to either move out of rented accommodation, or (please, please) give their parents some longed for space :)
Result: reduced BTL = more demand to buy property.
House builders might not be building as many new houses, but there is an increasing demand, having by nature been prevalent at the lower and median range of the market, but more recently closer to the higher range, for property extensions - and some of them are quite considerable. In the last couple months I have counted 14 skips just within walking distance. There are also as many houses on the market - one for almost a year!
Another subtle change which I assume is not localised to south Manchester, is that councils are finally listening to residents and slapping on conservation orders in many areas. This has two effects of course. The market for BTL is slumping, and therefore in the short term diminishes the value of previously suitable property for development - but conversely these areas as a whole have shot up in value, as ordinary 'professionals' are willing to pay the price to move into a markedly improved neighbourhood - and closer to work. Imo, these properties will always remain 'desirable'.
But in my simplistic view it's all swings and roundabouts.
Ok, so in the case of mortgage default, house prices will be affected as lenders will dispose of properties at less than market value for a quick return. But aside of the impending dilemma facing property owners with negative equity, if prices slump considerably at the bottom end of the market, this would surely enable 1st time buyers to either move out of rented accommodation, or (please, please) give their parents some longed for space :)
Result: reduced BTL = more demand to buy property.
House builders might not be building as many new houses, but there is an increasing demand, having by nature been prevalent at the lower and median range of the market, but more recently closer to the higher range, for property extensions - and some of them are quite considerable. In the last couple months I have counted 14 skips just within walking distance. There are also as many houses on the market - one for almost a year!
Another subtle change which I assume is not localised to south Manchester, is that councils are finally listening to residents and slapping on conservation orders in many areas. This has two effects of course. The market for BTL is slumping, and therefore in the short term diminishes the value of previously suitable property for development - but conversely these areas as a whole have shot up in value, as ordinary 'professionals' are willing to pay the price to move into a markedly improved neighbourhood - and closer to work. Imo, these properties will always remain 'desirable'.
BigTed
- 18 Sep 2007 13:19
- 34 of 352
5 interest rate rises this last year, people forget they take a few months to take effect, on top of that add the extra supply of houses prior to 1st August to dodge the sips package (this includes all houses, as it was only a last minute decision to limit to 4 beds, most sellers had already marketed their property), 5.75% is low, and demand is still high... The growth in prices has surely got ahead of itself, but retracements in prices will only be to the serious sellers who have marketed their property at an over-inflated price in the first place.
Even if the government plan to build 250,00 starts a year it will take 10 years to solve the demand problems...
I see turmoil and panic in the stock markets and in general, but i still see people filling restaurants and buying expensive cars, plenty of money to be spent.
A slow down was predictable, but demand is still high and borrowing relatively affordable, i dont see a crash unless rates go much higher, or demand tails off.
Even if the government plan to build 250,00 starts a year it will take 10 years to solve the demand problems...
I see turmoil and panic in the stock markets and in general, but i still see people filling restaurants and buying expensive cars, plenty of money to be spent.
A slow down was predictable, but demand is still high and borrowing relatively affordable, i dont see a crash unless rates go much higher, or demand tails off.
oblomov
- 18 Sep 2007 14:14
- 35 of 352
What utter twaddle from most posters! House prices have been increasing at a steady rate since 1979 - see link below.
During that time mortgage rates have been at 15% and more (I know because I had one) and still prices rose!
The only dfference now is that, aided by easier borrowing, borrowers stretch themselves and, not realising the mortgage rate is historically low, run the risk of negative equity situations. It people weren't so greedy and didn't borrow the most they could afford, there would be no problem.
When push comes to shove, people realise bricks and mortar is a good investment and will sacrifice other spending to get on the ladder.
The property market occasionally slows down and these slow downs sometimes turn into a drop for short periods - but look at the facts - the prices always have regained their past levels after a drop and soared past them.
http://www.wheresmyproperty.com/prices/historicprices.htm
Historic mortgage rates since 1989 here:-
http://www.moneyextra.com/dictionary/Interest-rate-history-003455.html
During that time mortgage rates have been at 15% and more (I know because I had one) and still prices rose!
The only dfference now is that, aided by easier borrowing, borrowers stretch themselves and, not realising the mortgage rate is historically low, run the risk of negative equity situations. It people weren't so greedy and didn't borrow the most they could afford, there would be no problem.
When push comes to shove, people realise bricks and mortar is a good investment and will sacrifice other spending to get on the ladder.
The property market occasionally slows down and these slow downs sometimes turn into a drop for short periods - but look at the facts - the prices always have regained their past levels after a drop and soared past them.
http://www.wheresmyproperty.com/prices/historicprices.htm
Historic mortgage rates since 1989 here:-
http://www.moneyextra.com/dictionary/Interest-rate-history-003455.html
cynic
- 18 Sep 2007 14:52
- 36 of 352
oblomov ..... you contradict yourself ..... unless Alan tells me off yet again yet again, negative equity arises because your house price has fallen below the price at which you bought, not because mortgage rates rise ...... the latter might well hurt badly, and you may be forced to sell, but that is not the same thing.
you then continue correctly, by agreeing that over time, especially in UK, "prices always have regained their past levels after a drop and soared past them".
you then continue correctly, by agreeing that over time, especially in UK, "prices always have regained their past levels after a drop and soared past them".
oblomov
- 18 Sep 2007 17:20
- 37 of 352
Agree cynic, though I dont think I contradicted myself. I didn't make myself clear. What I should have said was that negative equity is only a problem if you have to sell and that usually happens because of the mortgage rate rise because borrowers didn't account for the fact that the mortgage rate can rise! They borrow what they can afford at the current interest rate, not what they could afford if it goes up a couple of per cent.
Partly the lenders fault - they used to build in a margin so thet borrowers could afford a rise. Now the onus is on the borrower to do it themselves, and greed often prevents them from doing so.
Falcothou - 18 Sep 2007 19:58 - 38 of 352
Had an estate agent round today out of interest, they valued it 40,000 less than the last agency to my surprise and said that a lot of people had put their homes on the market before the hips came in, then again never trust an estate agent!
cynic
- 18 Sep 2007 20:29
- 39 of 352
certain companies - e.g. S*****'s - are known to over-value so they can get the house on their books ..... when it does not sell at their initial vakuation, they will suggest reducing .... verges on sharp-practice
Falcothou - 18 Sep 2007 20:53 - 40 of 352
Amazing how we copy the Dow verbatim whilst theycould not care less if we descend into a sub prime we truly are the 51st state without the benefits
halifax - 18 Sep 2007 20:57 - 41 of 352
OO's
hlyeo98 - 20 Sep 2007 16:44 - 42 of 352
This will not be good news for house prices and property shares....
BoE looks reluctant to reduce interest rates just yet - AFX
LONDON (Thomson Financial) - The Bank of England looks no closer to cutting interest rates than it did at the start of the month, if governor Mervyn King's words today are anything to go by.
Since the start of the credit crisis this summer and the recent deterioration in overall liquidity conditions, marked by the Northern Rock debacle, economists have been slowly moving towards pricing in a rate reduction. Some have even called for a cut as early as November.
But in an appearance before a parliamentary committee today, King was adamant, saying the option of cutting rates at the first sign of trouble is not the way to go.
'King is finding it very hard to conceal his true colours as an extremely conservative monetary hawk,' said David Brown at Bear Stearns. 'Short sterling futures are reining in some of the optimism for easing after King dampened expectations for any near-term cut in rates.'
Matthew Sharratt at Bank of America echoed this view. For him, King's statement the central bank will not be taking short-term options was crucial.
Comments from other ratesetters at today's hearing also appeared to indicate support for King's view. Kate Barker, the resident housing expert, said UK mortgage repossessions are 'not alarming'' despite recent rises in defaults, adding the housing market remains 'relatively robust.'
Meanwhile, Andrew Sentance said it is too soon to see adverse effects of the crisis on the wider economy.
Today's data also proved supportive. Retail sales in August did not fall as some had feared but rose somewhat strongly for a second month. Money supply was also back at levels not seen since May.
The underlying trend in retail sales remains robust, said Sharrat at Bank of America.
Even housing market data came in strong, with the British Bankers Association's key mortgage lending figure topping 6 bln stg in August, up on 5.8 bln in July and just a shade under the 6.2 bln stg record set in November last year.
'With King arguing that the BoE should not be taking easy, short-term options and retail sales and M4 money supply data for August coming in on the strong side, the chance of a near-term rate ease from the BoE next month still looks small,' said Sharratt.
But these figures are partly backward-looking and it is very hard to see the UK economy escaping unscathed by the confidence-denting events of the past few weeks. In particular, the drying up of liquidity in the interbank market, the highly public nature of the run on Northern Rock and the emergency measures taken by the government and the BoE may exact a toll on consumer confidence.
The financial sector, for one, may see business slow slightly, leading in turn to a smaller contribution to services sector growth.
Already some observers are downgrading UK growth prospects next year.
Lehman Brothers has revised downward its forecasts for UK GDP growth in 2008 as a result of the financial market turmoil. The US investment bank said it is now forecasting GDP growth of 1.7 pct in 2008, down from its earlier forecast of 2.3 pct.
Michael Saunders at Citigroup pointed out the longer the strain in the money market runs, the greater the likelihood of a rate cut in the UK. But the BaoE also has another option: lowering the standing facility lending rate, which now stands at 6.75 pct, he added.
For Daragh Maher at Calyon, the general observation among the ratesetters that it is still too early to gauge the economic effects of the recent credit crisis suggests a wait-and-see period where the BoE will hold off cutting the base rate, even if it offers additional liquidity to money markets.
By Sivakumar Sithraputhran; sivakumar.sithraputhran@thomson.com
BoE looks reluctant to reduce interest rates just yet - AFX
LONDON (Thomson Financial) - The Bank of England looks no closer to cutting interest rates than it did at the start of the month, if governor Mervyn King's words today are anything to go by.
Since the start of the credit crisis this summer and the recent deterioration in overall liquidity conditions, marked by the Northern Rock debacle, economists have been slowly moving towards pricing in a rate reduction. Some have even called for a cut as early as November.
But in an appearance before a parliamentary committee today, King was adamant, saying the option of cutting rates at the first sign of trouble is not the way to go.
'King is finding it very hard to conceal his true colours as an extremely conservative monetary hawk,' said David Brown at Bear Stearns. 'Short sterling futures are reining in some of the optimism for easing after King dampened expectations for any near-term cut in rates.'
Matthew Sharratt at Bank of America echoed this view. For him, King's statement the central bank will not be taking short-term options was crucial.
Comments from other ratesetters at today's hearing also appeared to indicate support for King's view. Kate Barker, the resident housing expert, said UK mortgage repossessions are 'not alarming'' despite recent rises in defaults, adding the housing market remains 'relatively robust.'
Meanwhile, Andrew Sentance said it is too soon to see adverse effects of the crisis on the wider economy.
Today's data also proved supportive. Retail sales in August did not fall as some had feared but rose somewhat strongly for a second month. Money supply was also back at levels not seen since May.
The underlying trend in retail sales remains robust, said Sharrat at Bank of America.
Even housing market data came in strong, with the British Bankers Association's key mortgage lending figure topping 6 bln stg in August, up on 5.8 bln in July and just a shade under the 6.2 bln stg record set in November last year.
'With King arguing that the BoE should not be taking easy, short-term options and retail sales and M4 money supply data for August coming in on the strong side, the chance of a near-term rate ease from the BoE next month still looks small,' said Sharratt.
But these figures are partly backward-looking and it is very hard to see the UK economy escaping unscathed by the confidence-denting events of the past few weeks. In particular, the drying up of liquidity in the interbank market, the highly public nature of the run on Northern Rock and the emergency measures taken by the government and the BoE may exact a toll on consumer confidence.
The financial sector, for one, may see business slow slightly, leading in turn to a smaller contribution to services sector growth.
Already some observers are downgrading UK growth prospects next year.
Lehman Brothers has revised downward its forecasts for UK GDP growth in 2008 as a result of the financial market turmoil. The US investment bank said it is now forecasting GDP growth of 1.7 pct in 2008, down from its earlier forecast of 2.3 pct.
Michael Saunders at Citigroup pointed out the longer the strain in the money market runs, the greater the likelihood of a rate cut in the UK. But the BaoE also has another option: lowering the standing facility lending rate, which now stands at 6.75 pct, he added.
For Daragh Maher at Calyon, the general observation among the ratesetters that it is still too early to gauge the economic effects of the recent credit crisis suggests a wait-and-see period where the BoE will hold off cutting the base rate, even if it offers additional liquidity to money markets.
By Sivakumar Sithraputhran; sivakumar.sithraputhran@thomson.com
maestro - 20 Sep 2007 18:42 - 43 of 352
i'd sell ya houses and buy back 50% cheaper next year...almighty crash coming
Big Al
- 21 Sep 2007 07:17
- 44 of 352
Well, that confirms it then. Maestro said so.
hlyeo98 - 25 Sep 2007 00:14 - 45 of 352
Wolseley is a very good one to short now...short today at 820p.
Wolseley profits slide - MoneyAM
Wolseley said FY pretax profit fell from last year, hit by its exposure to the gloomy US housing market.
The group said there are no signs yet of any upturn in the US housing market.
In Europe, Wolseley said underlying fundamentals of the construction markets remain sound, and its operations are expected to show further good progress.
'Europe continues to progress, achieving strong profit improvement and benefiting from acquisitions during the period, whilst in the US we have been fast and decisive in reducing our cost base in reaction to deteriorating market conditions,' CEO, Chip Hornsby, said.
The building materials and plumbing supplies group said pretax profit before exceptional items was 758m, compared with 817m last year, and pretax profit also fell 17.6% to 634m.
In North America, the results were also adversely affected by price deflation in lumber and panels, weakness of the dollar, and one-off restructuring costs, the company said.
The company added that Wolseley UK grew strongly in a market which showed a gradually improving trend over the year, despite rising interest rates.
The commercial and industrial market should remain positive, albeit at lower rates of growth, the company said.
Sales for the year ended July 31st rose 14.6% to 16.22bn from 14.16bn, the company said.
Irrespective of market conditions, the group said it will look out for acquisitions.
The company also lifted its full-year dividend by 10.2% to 32.4p.
Wolseley profits slide - MoneyAM
Wolseley said FY pretax profit fell from last year, hit by its exposure to the gloomy US housing market.
The group said there are no signs yet of any upturn in the US housing market.
In Europe, Wolseley said underlying fundamentals of the construction markets remain sound, and its operations are expected to show further good progress.
'Europe continues to progress, achieving strong profit improvement and benefiting from acquisitions during the period, whilst in the US we have been fast and decisive in reducing our cost base in reaction to deteriorating market conditions,' CEO, Chip Hornsby, said.
The building materials and plumbing supplies group said pretax profit before exceptional items was 758m, compared with 817m last year, and pretax profit also fell 17.6% to 634m.
In North America, the results were also adversely affected by price deflation in lumber and panels, weakness of the dollar, and one-off restructuring costs, the company said.
The company added that Wolseley UK grew strongly in a market which showed a gradually improving trend over the year, despite rising interest rates.
The commercial and industrial market should remain positive, albeit at lower rates of growth, the company said.
Sales for the year ended July 31st rose 14.6% to 16.22bn from 14.16bn, the company said.
Irrespective of market conditions, the group said it will look out for acquisitions.
The company also lifted its full-year dividend by 10.2% to 32.4p.
Strawbs
- 25 Sep 2007 08:39
- 46 of 352
Don't suppose anyone will be surprised by this:
BBC News: Borrowers told to lie about wages
Strawbs.
BBC News: Borrowers told to lie about wages
Strawbs.
hlyeo98 - 11 Oct 2007 16:44 - 47 of 352
Fall In House Prices Speeds Up
[ October 11, 2007 ]
By Serena Cowdy
House prices are falling at their fastest rate for two years, according to the latest figures from the Royal Institution of Chartered Surveyors (Rics).
The survey shows that in September, 14.6 per cent more surveyors reported a drop in house prices than reported a rise. This is a big jump from August's figures, when just 3.3 per cent more reported such a drop.
Surveyor confidence in both sales and prices took a knock in September, reaching their lowest levels since March 2003 and May 2005 respectively.
The number of new buyer enquiries dropped - for the tenth month in a row - and at the fastest pace since March 2003. Rics also states that in every area except London, the number of properties coming onto the market fell, for the fourth month in a row.
The group said the fall in buyer confidence was largely the result of the five interest rate hikes since August 2006, along with stricter mortgage lending criteria on the back of the recent global credit crunch.
Jeremy Leaf, a spokesman for Rics, emphasised that despite the drop in prices, "the underlying economy remains strong" and said that a major correction in the market "seems unlikely" while economic growth and employment conditions remain in good health.
There were also significant regional variations in the September figures; while the largest price falls were seen in East Anglia, Wales and the Midlands, smaller falls were reported in the south-east, south-west, Yorkshire and Humberside and the North West - and Scotland and London still saw prices rise.
However, buyers have good reasons to be wary. Earlier this week, the Council of Mortgage (DMBK.TA - news) lenders (CML) said that interest-repayment burden on first-time buyers was the worst it's been for 16 years.
It seems that the nation's house-buying fever is cooling.
[ October 11, 2007 ]
By Serena Cowdy
House prices are falling at their fastest rate for two years, according to the latest figures from the Royal Institution of Chartered Surveyors (Rics).
The survey shows that in September, 14.6 per cent more surveyors reported a drop in house prices than reported a rise. This is a big jump from August's figures, when just 3.3 per cent more reported such a drop.
Surveyor confidence in both sales and prices took a knock in September, reaching their lowest levels since March 2003 and May 2005 respectively.
The number of new buyer enquiries dropped - for the tenth month in a row - and at the fastest pace since March 2003. Rics also states that in every area except London, the number of properties coming onto the market fell, for the fourth month in a row.
The group said the fall in buyer confidence was largely the result of the five interest rate hikes since August 2006, along with stricter mortgage lending criteria on the back of the recent global credit crunch.
Jeremy Leaf, a spokesman for Rics, emphasised that despite the drop in prices, "the underlying economy remains strong" and said that a major correction in the market "seems unlikely" while economic growth and employment conditions remain in good health.
There were also significant regional variations in the September figures; while the largest price falls were seen in East Anglia, Wales and the Midlands, smaller falls were reported in the south-east, south-west, Yorkshire and Humberside and the North West - and Scotland and London still saw prices rise.
However, buyers have good reasons to be wary. Earlier this week, the Council of Mortgage (DMBK.TA - news) lenders (CML) said that interest-repayment burden on first-time buyers was the worst it's been for 16 years.
It seems that the nation's house-buying fever is cooling.
cynic
- 11 Oct 2007 16:50
- 48 of 352
house prices could not keep rising exponentially, but a breather or retrenchment, even for a year or two, is a long way from a property slump.
i know for sure that in Yorkshire, at the upper end of the market, sales have become sluggish - i.e. good properties in the right location and at the right price still sell easily enough, while those with more fanciful ideas continue to sit and wait ..... and wait and wait
i know for sure that in Yorkshire, at the upper end of the market, sales have become sluggish - i.e. good properties in the right location and at the right price still sell easily enough, while those with more fanciful ideas continue to sit and wait ..... and wait and wait
hlyeo98 - 11 Oct 2007 18:36 - 49 of 352
Cynic, I thought u said that house prices would not drop...guess u have now changed your mind.
cynic
- 11 Oct 2007 19:40
- 50 of 352
they may drop a bit, especially sectors like buy-to-let and similar, but i do not believe that there will be any significant overall drop especially in the quality market ..... do not confuse an inability to get a fancy price with a fall
BigTed
- 11 Oct 2007 19:55
- 51 of 352
well said Richard, the thing is there are stacks of over-priced houses on the market and it is these people who realise now they have to be sensible and reduce their prices if they are serious about selling, that are causing prices to look as though they are dropping, as you rightly said a quality location will always sell as will a well presented or re-furbed house at the right price.
People forget interest rate increases take several months after to take effect, the BOE were wrong two years ago to drop from 4.75 down to 4.5% it only accelerated price growth and caused more of a headache for now, i think they were right to increase to current levels, and have probably found they might have caused a bit too much of talk of a slow down, i'm certain we will see a rate decrease by early next year, which should keep the market bouyant...
People forget interest rate increases take several months after to take effect, the BOE were wrong two years ago to drop from 4.75 down to 4.5% it only accelerated price growth and caused more of a headache for now, i think they were right to increase to current levels, and have probably found they might have caused a bit too much of talk of a slow down, i'm certain we will see a rate decrease by early next year, which should keep the market bouyant...
BigTed
- 11 Oct 2007 20:00
- 52 of 352
I am completing next week on a purchase i made at auction two weeks ago, just a quick refurb, i noted the projected increase quoted on the mortgage if a full percent increase of 80, so that is just 20 for a quarter rate rise.... wow 5 a week, if it happens i guess i better not have that extra pint and a quarter when i go out then...:)
maddoctor - 11 Oct 2007 21:28 - 53 of 352
Moody's Investors Service on Thursday cut its ratings on home builders Centex, Lennar and Pulte Homes to junk status, saying it expects bleak housing industry conditions to linger at least until 2009.
The downgrades affect about $9.4 billion of debt and $3.25 billion of commercial paper authorizations, Moody's said.
Key problems facing homebuilders include rapidly declining orders, high housing inventories, disruptions in the mortgage market and heavy cancellations, Moody's said in a statement.
Affordability issues are also weighing on key markets while confidence is ebbing among potential homebuyers, Moody's said.
It will be challenging for the three companies, as well as for much of the entire industry, to stay in compliance in the coming year with debt leverage covenants, the rating agency said. Covenants are restrictions in borrowing agreements.
The downgrades affect about $9.4 billion of debt and $3.25 billion of commercial paper authorizations, Moody's said.
Key problems facing homebuilders include rapidly declining orders, high housing inventories, disruptions in the mortgage market and heavy cancellations, Moody's said in a statement.
Affordability issues are also weighing on key markets while confidence is ebbing among potential homebuyers, Moody's said.
It will be challenging for the three companies, as well as for much of the entire industry, to stay in compliance in the coming year with debt leverage covenants, the rating agency said. Covenants are restrictions in borrowing agreements.
hlyeo98 - 18 Oct 2007 11:50 - 54 of 352
From The Times - October 18, 2007
UK house market is heading for crash - Gary Duncan, Economics Editor
The property boom of the past ten years has left the British housing market in danger of following the slump in American house prices, the International Monetary Fund said yesterday.
In a bleak warning, the IMF found that homes in Britain were overpriced by up to 40 per cent far more than the overpricing in the US before the current property slump began there. The finding will fuel fears over housing market prospects after growing evidence recently that prices have already begun to fall in some parts of Britain.
The warning came as it emerged yesterday that the Bank of England discussed whether to lower interest rates this month to shore up Britains growth. But there was substantial reluctance among the Banks Monetary Policy Committee to rush into lowering borrowing costs, with only one of the nine-strong panel voting for a rate reduction.
The IMF report said: The extent of house price overvaluation may be considerably larger in some national markets in Europe than in the US. The estimates suggest that a number of advanced economies housing markets outside the US could be vulnerable to a correction.
House prices in Britain now stand at about nine times average annual earnings up from about five times in 2001. Average national house prices have risen threefold since the early 1990s, from about 60,000 to about 200,000 now.
In its twice-yearly report on world economic prospects, the IMF warned Europes governments that the tighter lending conditions for homebuyers caused by the worldwide squeeze on credit could lead to a serious correction in excessive house prices.
The steady increase in interest rates has already contributed to some cooling of these housing booms, and recent developments are likely to have a further dampening impact, it said.
The IMF, however, did qualify its pessimism, saying that there were considerable uncertainties in its model, which did not take in key factors in Britain such as shortages of supply, boosts to prices from immigration and greater affordability due to the availability of mortgages.
UK house market is heading for crash - Gary Duncan, Economics Editor
The property boom of the past ten years has left the British housing market in danger of following the slump in American house prices, the International Monetary Fund said yesterday.
In a bleak warning, the IMF found that homes in Britain were overpriced by up to 40 per cent far more than the overpricing in the US before the current property slump began there. The finding will fuel fears over housing market prospects after growing evidence recently that prices have already begun to fall in some parts of Britain.
The warning came as it emerged yesterday that the Bank of England discussed whether to lower interest rates this month to shore up Britains growth. But there was substantial reluctance among the Banks Monetary Policy Committee to rush into lowering borrowing costs, with only one of the nine-strong panel voting for a rate reduction.
The IMF report said: The extent of house price overvaluation may be considerably larger in some national markets in Europe than in the US. The estimates suggest that a number of advanced economies housing markets outside the US could be vulnerable to a correction.
House prices in Britain now stand at about nine times average annual earnings up from about five times in 2001. Average national house prices have risen threefold since the early 1990s, from about 60,000 to about 200,000 now.
In its twice-yearly report on world economic prospects, the IMF warned Europes governments that the tighter lending conditions for homebuyers caused by the worldwide squeeze on credit could lead to a serious correction in excessive house prices.
The steady increase in interest rates has already contributed to some cooling of these housing booms, and recent developments are likely to have a further dampening impact, it said.
The IMF, however, did qualify its pessimism, saying that there were considerable uncertainties in its model, which did not take in key factors in Britain such as shortages of supply, boosts to prices from immigration and greater affordability due to the availability of mortgages.
hlyeo98 - 18 Oct 2007 11:59 - 55 of 352
Segro has been a good shorting for me...I think this will go to 400p.
fliper
- 18 Oct 2007 12:52
- 56 of 352
There are buyers waiting to pick up bargins in the housing market .
hlyeo98 - 18 Oct 2007 12:58 - 57 of 352
It is not a bargain yet at the moment...the slide is due to happen soon.
fliper
- 18 Oct 2007 13:08
- 58 of 352
Who wants to sell their house 20% cheaper ?
hlyeo98 - 18 Oct 2007 13:21 - 59 of 352
When someone is drowning in debts facing higher mortgage rates, job loses or salary cuts, rising inflation and petrol prices. It is a buyers' market now...you can see that sign boards are staying longer nowadays. And buyers are quoting 15-30% off the asking price as advised by websites.
cynic
- 18 Oct 2007 18:28
- 60 of 352
more interesting would be to pick some property/building shares to short ..... this is not a sector i have ever followed, so would appreciate any thoughts
hewittalan6
- 18 Oct 2007 18:34
- 61 of 352
No idea which companies may be most affected, but many lenders have lowered their maximum loan to value deals on all new build properties and flats.
It therefore follows that builders aiming at affordable housing for first timers will be hardest hit (unusually) as these are exactly the type who usually have little deposit, and there is less room to mess around with prices and part exchanges, due to lower margins.
Strange, but the impact looks to me to be at the lower end, rather than the luxury end that often gets walloped.
Barratts, Wimpey etc?????
It therefore follows that builders aiming at affordable housing for first timers will be hardest hit (unusually) as these are exactly the type who usually have little deposit, and there is less room to mess around with prices and part exchanges, due to lower margins.
Strange, but the impact looks to me to be at the lower end, rather than the luxury end that often gets walloped.
Barratts, Wimpey etc?????
cynic
- 18 Oct 2007 18:57
- 62 of 352
i can tell you that even the high(er) end has stagnated somewhat or at least faciful prices are no longer being achieved nearly so readily
hewittalan6
- 18 Oct 2007 19:40
- 63 of 352
Agreed. But we are talking of the builders, not the general market.
With high end propertied with fanciful prices there is enough margin to package up a deal involving a part ex or assisted sale, which can then take a gifted deposit at a high LTV, as it is not a new property.
Industry estimates are for 70% of people being sub prime, yet this market is now restricted in many instances to only 75% LTV on new build property. Essentially this means a large part of the first time buyer market is out of the new build market.
On pre owned property they can still achieve 90% LTV, so the builders can sell them part ex properties in order to get the part exers into their new and badly overpriced home. For me, it follows from this that the hardest hit will not be the builders doing 5 bed country piles, but the ones building tiny 2 bed townhouses on brownfield sites.
Just a thought. Lets see what happens.
With high end propertied with fanciful prices there is enough margin to package up a deal involving a part ex or assisted sale, which can then take a gifted deposit at a high LTV, as it is not a new property.
Industry estimates are for 70% of people being sub prime, yet this market is now restricted in many instances to only 75% LTV on new build property. Essentially this means a large part of the first time buyer market is out of the new build market.
On pre owned property they can still achieve 90% LTV, so the builders can sell them part ex properties in order to get the part exers into their new and badly overpriced home. For me, it follows from this that the hardest hit will not be the builders doing 5 bed country piles, but the ones building tiny 2 bed townhouses on brownfield sites.
Just a thought. Lets see what happens.
cynic
- 18 Oct 2007 20:01
- 64 of 352
i think you are right
fliper
- 19 Oct 2007 08:50
- 65 of 352
I think the next move on intrest rates will be a cut . There is an idea that , to sell and rent for a period will be a good plan . This will push up rents and make BTL a good thing again , and there are investors waiting .
hewittalan6
- 19 Oct 2007 08:59
- 66 of 352
Word of warning.
Sell and rent has always been a lousy high risk plan.
When one takes into account estate agent fees, HIPS fees, stamp duty, legal costs, moving costs, mortgage fees, valuation fees and rental costs, one would have to see a crash of 20%+ to make it profitable at all, and there is no guarantee of either that, or being able to pick both top and bottom and getting a property where you want to live.
Sell and rent has always been a lousy high risk plan.
When one takes into account estate agent fees, HIPS fees, stamp duty, legal costs, moving costs, mortgage fees, valuation fees and rental costs, one would have to see a crash of 20%+ to make it profitable at all, and there is no guarantee of either that, or being able to pick both top and bottom and getting a property where you want to live.
cynic
- 19 Oct 2007 09:35
- 67 of 352
i am far from convinced that UK will cut rates in the near future .... there seems no pressing reason and indications are that europe is more likely to put them up.
concur with Alan ...... playing your house like a share trade makes no sense at all
concur with Alan ...... playing your house like a share trade makes no sense at all
hewittalan6
- 19 Oct 2007 09:46
- 68 of 352
Interesting research out today.
The good old north / south divide is back in business.
There is a long history of the north being a far more stable housing market than the overcrowded south, so perhaps the northern housebuilders may suffer less than their southern counterparts.
This is in % terms of course, but a (say) 10% downturn on a 250k house is still more off the bottom line than the same downturn on a 150k house. On top of this the south usually suffers a greater % fall (or rise) than the north.
If you must stay in the housebuilding sector, then perhaps the least risky play is for an upmarket northern builder and the most risky is for a low cost southern builder. However they seem contradictions in terms!!
The good old north / south divide is back in business.
There is a long history of the north being a far more stable housing market than the overcrowded south, so perhaps the northern housebuilders may suffer less than their southern counterparts.
This is in % terms of course, but a (say) 10% downturn on a 250k house is still more off the bottom line than the same downturn on a 150k house. On top of this the south usually suffers a greater % fall (or rise) than the north.
If you must stay in the housebuilding sector, then perhaps the least risky play is for an upmarket northern builder and the most risky is for a low cost southern builder. However they seem contradictions in terms!!
fliper
- 31 Oct 2007 15:54
- 69 of 352
The USA have cut intrest rates , are we going to do the same ?
cynic
- 01 Nov 2007 07:54
- 70 of 352
i would doubt it, for there looks to be no necessity .... in fact the move by Fed could prove to be a poison chalice in the long(er) run with it's inevitable inflationary effect
hlyeo98 - 03 Nov 2007 08:26 - 71 of 352
From The TimesNovember 3, 2007
Cracks appearing as bankruptcies riseGrainne Gilmore and Gabriel Rozenberg
The number of consumers becoming insolvent is expected to soar next year after figures published yesterday showed rising bankruptcies and a fall in the use of arrangements to avoid going bust.
Personal insolvencies overall fell in the third quarter by 3 per cent, and were 5 per cent lower than a year ago at 26,072, data from the Governments Insolvency Service showed.
However, accountants said that the figures disguised the problems that are set to emerge in the consumer credit market, which will give people fewer means of combatting debt.
Individual voluntary arangements (IVAs), a form of insolvency that has gained popularity over the past decade, dropped by 14 per cent year-on-year. But the decline comes in the aftermath of an industry-wide squeeze by banks on IVA providers.
Steve Treharne, of KPMG, the accountant, said: This is really a lull in the storm. The traditional ways that people can delay the impact of money worries such as a new credit card or a second charge on their home are gradually being closed off as a result of the credit crunch. This is now a plateau, but all the indicators are that consumers are in for a rough ride.
IVAs, which allow debtors to freeze and sometimes reduce their debt while paying off a manageable sum each month, have been affected by a dispute between creditors and IVA companies. Some creditors believe the fees charged by IVA companies are too high, and have rejected large numbers of IVA applications. Nearly one in five IVA applications are rejected.
Several insolvency operators, including Debt Free Direct, the market leader, have been forced to issue profit warnings this year as banks withdraw their support.
John Hall, chief executive of personal debt solutions provider new-tomorrow.com, said: These figures arent surprising and the underlying position is much worse than the figures suggest.
There is a dam waiting to burst and the cracks are starting to appear. The reason the figures are not higher still is that lenders are making it more difficult for their customers to put a voluntary debt solution in place by insisting on unachievable repayment levels, resulting in significantly more house repossessions.
Mr Treharne said: According to the Council of Mortgage Lenders, the number of property repossessions is likely to rise by 50 per cent in 2008. If people struggling with debt lose their home they often give up and either go bankrupt or enter into an IVA.
Although personal bankruptcies were down by 3 per cent in the third quarter compared with the previous three months, they rose by 2.2 per cent from a year earlier. Some 111,359 people went into bankruptcy or entered into an IVA in the year to the end of September, up 13 per cent year-on-year. Other data showed that about 3,100 companies went into liquidation in the third quarter of this year, nearly 3 per cent down on the number of company liquidations in the same period last year. The number of compulsory liquidations fell by 4 per cent, while voluntary liquidations fell by 2 per cent.
Mike Jervis, partner in the Business Recovery Services practice at PricewaterhouseCoopers, said: Credit has been readily available to corporates until this summer and the downward trend in corporate insolvencies reflects this. However, while companies have so far avoided formal insolvency, less creditworthy corporates are finding that it is increasingly difficult to borrow at affordable rates in the current climate. There is still uncertainty as to how many businesses will fail as a result of the more restrictive credit environment.
Ministry of Justice figures showed housing possession orders rose in the third quarter, to 23,800 from 23,000.
Cracks appearing as bankruptcies riseGrainne Gilmore and Gabriel Rozenberg
The number of consumers becoming insolvent is expected to soar next year after figures published yesterday showed rising bankruptcies and a fall in the use of arrangements to avoid going bust.
Personal insolvencies overall fell in the third quarter by 3 per cent, and were 5 per cent lower than a year ago at 26,072, data from the Governments Insolvency Service showed.
However, accountants said that the figures disguised the problems that are set to emerge in the consumer credit market, which will give people fewer means of combatting debt.
Individual voluntary arangements (IVAs), a form of insolvency that has gained popularity over the past decade, dropped by 14 per cent year-on-year. But the decline comes in the aftermath of an industry-wide squeeze by banks on IVA providers.
Steve Treharne, of KPMG, the accountant, said: This is really a lull in the storm. The traditional ways that people can delay the impact of money worries such as a new credit card or a second charge on their home are gradually being closed off as a result of the credit crunch. This is now a plateau, but all the indicators are that consumers are in for a rough ride.
IVAs, which allow debtors to freeze and sometimes reduce their debt while paying off a manageable sum each month, have been affected by a dispute between creditors and IVA companies. Some creditors believe the fees charged by IVA companies are too high, and have rejected large numbers of IVA applications. Nearly one in five IVA applications are rejected.
Several insolvency operators, including Debt Free Direct, the market leader, have been forced to issue profit warnings this year as banks withdraw their support.
John Hall, chief executive of personal debt solutions provider new-tomorrow.com, said: These figures arent surprising and the underlying position is much worse than the figures suggest.
There is a dam waiting to burst and the cracks are starting to appear. The reason the figures are not higher still is that lenders are making it more difficult for their customers to put a voluntary debt solution in place by insisting on unachievable repayment levels, resulting in significantly more house repossessions.
Mr Treharne said: According to the Council of Mortgage Lenders, the number of property repossessions is likely to rise by 50 per cent in 2008. If people struggling with debt lose their home they often give up and either go bankrupt or enter into an IVA.
Although personal bankruptcies were down by 3 per cent in the third quarter compared with the previous three months, they rose by 2.2 per cent from a year earlier. Some 111,359 people went into bankruptcy or entered into an IVA in the year to the end of September, up 13 per cent year-on-year. Other data showed that about 3,100 companies went into liquidation in the third quarter of this year, nearly 3 per cent down on the number of company liquidations in the same period last year. The number of compulsory liquidations fell by 4 per cent, while voluntary liquidations fell by 2 per cent.
Mike Jervis, partner in the Business Recovery Services practice at PricewaterhouseCoopers, said: Credit has been readily available to corporates until this summer and the downward trend in corporate insolvencies reflects this. However, while companies have so far avoided formal insolvency, less creditworthy corporates are finding that it is increasingly difficult to borrow at affordable rates in the current climate. There is still uncertainty as to how many businesses will fail as a result of the more restrictive credit environment.
Ministry of Justice figures showed housing possession orders rose in the third quarter, to 23,800 from 23,000.
hlyeo98 - 10 Nov 2007 21:03 - 72 of 352
From The Times - November 8, 2007
Two years of downturn predicted for housing - Gabriel Rozenberg and James Rossiter
The housing market will face two years of blight stemming from the impact of the global credit squeeze, with prices falling continuously over much of southern England, a report forecasts today.
Prices are set to fall by as much as 4 per cent in the West Midlands by the end of 2009 and there will also be sharp drops in the East Midlands, the South West and Northern Ireland, according to Experian, the economic forecaster.
However, London is tipped to buck the trend with a 6 per cent rise, slightly above inflation, the report says.
Andrew Burrell, of Experian’s business strategies division, said that GDP growth would slow to just 2.1 per cent next year, from 3.1 per cent in 2007, with an even more abrupt downturn in consumer demand.
The situation could worsen if market interest rates fail to fall in line with official rates, the report said, because lenders would be forced to cut back on issuing new mortgages, resulting in price falls in all regions.
Redrow, one of Britain’s largest builders of affordable homes, added to the gloom surrounding the housing market yesterday as it gave warning that its sale volumes for the second half of this year would be 10 per cent below those achieved last year.
The housebuilder blamed general uncertainties in the banking sector for the sudden drop in buyer confidence since September.
Redrow’s warning has wider resonances beyond the new homes market because it targets the type of buyer who promotes activity in the broader residential homes market.
The housebuilder’s Debut range of starter homes sell for about £79,000, while its core Signature brand of houses and flats go on the market at approximately £168,000. Buyers of these homes are typically first-time buyers or young homeowners who are looking to move up the property ladder.
Redrow’s warning comes just a day after Bovis Homes, one of the country’s leading specialists for selling mid-market homes in the regions priced at less than £250,000, said that its sales volumes this year would be down on last year.
Last week Taylor Wimpey, Britain’s largest builder of new homes, blamed buyer fears about the health of the wider economy as it gave warning that its 2007 UK sales would be 5 per cent lower than last year.
Two years of downturn predicted for housing - Gabriel Rozenberg and James Rossiter
The housing market will face two years of blight stemming from the impact of the global credit squeeze, with prices falling continuously over much of southern England, a report forecasts today.
Prices are set to fall by as much as 4 per cent in the West Midlands by the end of 2009 and there will also be sharp drops in the East Midlands, the South West and Northern Ireland, according to Experian, the economic forecaster.
However, London is tipped to buck the trend with a 6 per cent rise, slightly above inflation, the report says.
Andrew Burrell, of Experian’s business strategies division, said that GDP growth would slow to just 2.1 per cent next year, from 3.1 per cent in 2007, with an even more abrupt downturn in consumer demand.
The situation could worsen if market interest rates fail to fall in line with official rates, the report said, because lenders would be forced to cut back on issuing new mortgages, resulting in price falls in all regions.
Redrow, one of Britain’s largest builders of affordable homes, added to the gloom surrounding the housing market yesterday as it gave warning that its sale volumes for the second half of this year would be 10 per cent below those achieved last year.
The housebuilder blamed general uncertainties in the banking sector for the sudden drop in buyer confidence since September.
Redrow’s warning has wider resonances beyond the new homes market because it targets the type of buyer who promotes activity in the broader residential homes market.
The housebuilder’s Debut range of starter homes sell for about £79,000, while its core Signature brand of houses and flats go on the market at approximately £168,000. Buyers of these homes are typically first-time buyers or young homeowners who are looking to move up the property ladder.
Redrow’s warning comes just a day after Bovis Homes, one of the country’s leading specialists for selling mid-market homes in the regions priced at less than £250,000, said that its sales volumes this year would be down on last year.
Last week Taylor Wimpey, Britain’s largest builder of new homes, blamed buyer fears about the health of the wider economy as it gave warning that its 2007 UK sales would be 5 per cent lower than last year.
hlyeo98 - 10 Nov 2007 21:08 - 73 of 352
BDEV and WOS are excellent to short now. Both are on a slippery slope. SELL!
mojo47
- 12 Nov 2007 19:07
- 74 of 352
i know what you are all saying but if the arse falls out of the market belive me their are people out there waiting for it to happen, with the cash to buy thats how they first started with the big boys and the buy to let lot started, they had the cash buying up all the houses, and give them credit where its due the nerves to go for it
hlyeo98 - 13 Nov 2007 12:43 - 75 of 352
Subprime losses could reach $400 billion Tue Nov 13, 2007 - Reuters
NEW YORK (Reuters) - Banks worldwide may lose as much as $400 billion (193 billion pounds) from subprime mortgages, as at least one in four of the risky home loans go into default, analysts said on Monday.
Mike Mayo, an analyst at Deutsche Bank Securities Inc, estimated $150 billion to $250 billion of losses based on $1.2 trillion of U.S. subprime loans, and an additional $150 billion of losses on derivatives linked to subprime debt.
David Hilder, a Bear Stearns & Co analyst, also estimated a $150 billion to $250 billion loss on subprime home loans, in what he called a $2 trillion market.
"Given our fundamental outlook, which is for rising inflows of non-performing loans in both mortgage and commercial loan portfolios, we believe the odds are in favor of the write-downs getting worse, rather than better," this year, Hilder wrote.
Banks including Citigroup Inc (C.N: Quote, Profile, Research), Merrill Lynch & Co (MER.N: Quote, Profile, Research) and Wachovia Corp (WB.N: Quote, Profile, Research) have announced more than $40 billion of write-offs this year as U.S. foreclosures set records and after investors stopped buying many kinds of risky debt.
Mayo said large banks and brokerages may suffer $100 billion to $130 billion of the subprime losses. He said this could include $60 billion to $70 billion by year end, including $43 billion already reported.
In the fourth quarter alone, he said Barclays (BARC.L: Quote, Profile, Research), HSBC Holdings (HSBA.L: Quote, Profile, Research), Royal Bank of Scotland Group (RBS.L: Quote, Profile, Research) and UBS (UBSN.VX: Quote, Profile, Research) might each need to write off $5 billion, while Merrill Lynch might write off $4 billion and Bank of America Corp (BAC.N: Quote, Profile, Research) $1 billion.
Mayo's forecast assumes a 30 percent to 40 percent default rate and 40 percent to 50 percent loss rate. Hilder assumes a 25 percent to 30 percent default rate and 30 percent to 40 percent loss rate.
NEW YORK (Reuters) - Banks worldwide may lose as much as $400 billion (193 billion pounds) from subprime mortgages, as at least one in four of the risky home loans go into default, analysts said on Monday.
Mike Mayo, an analyst at Deutsche Bank Securities Inc, estimated $150 billion to $250 billion of losses based on $1.2 trillion of U.S. subprime loans, and an additional $150 billion of losses on derivatives linked to subprime debt.
David Hilder, a Bear Stearns & Co analyst, also estimated a $150 billion to $250 billion loss on subprime home loans, in what he called a $2 trillion market.
"Given our fundamental outlook, which is for rising inflows of non-performing loans in both mortgage and commercial loan portfolios, we believe the odds are in favor of the write-downs getting worse, rather than better," this year, Hilder wrote.
Banks including Citigroup Inc (C.N: Quote, Profile, Research), Merrill Lynch & Co (MER.N: Quote, Profile, Research) and Wachovia Corp (WB.N: Quote, Profile, Research) have announced more than $40 billion of write-offs this year as U.S. foreclosures set records and after investors stopped buying many kinds of risky debt.
Mayo said large banks and brokerages may suffer $100 billion to $130 billion of the subprime losses. He said this could include $60 billion to $70 billion by year end, including $43 billion already reported.
In the fourth quarter alone, he said Barclays (BARC.L: Quote, Profile, Research), HSBC Holdings (HSBA.L: Quote, Profile, Research), Royal Bank of Scotland Group (RBS.L: Quote, Profile, Research) and UBS (UBSN.VX: Quote, Profile, Research) might each need to write off $5 billion, while Merrill Lynch might write off $4 billion and Bank of America Corp (BAC.N: Quote, Profile, Research) $1 billion.
Mayo's forecast assumes a 30 percent to 40 percent default rate and 40 percent to 50 percent loss rate. Hilder assumes a 25 percent to 30 percent default rate and 30 percent to 40 percent loss rate.
hlyeo98 - 13 Nov 2007 20:10 - 76 of 352
Yes, BDEV and WOS have gone down further today.
fliper
- 14 Nov 2007 13:18
- 77 of 352
More people are renting , because they cannot get a mortgage . Others are trying to be wise and sell now , rent , and buy back at a lower price . There are many buyers waitng to get property at a good price .
hlyeo98 - 14 Nov 2007 18:30 - 78 of 352
All the estate agents are twiddling their thumbs now, I notice.
hlyeo98 - 19 Nov 2007 18:33 - 79 of 352
BDEV is 480p and WOS is 654p...excellent shorting...continue SELL signal getting ever stronger now. Great.
hlyeo98 - 19 Nov 2007 19:25 - 80 of 352
Barratt sees slowdown - MoneyAM
Barratt Developments today confirmed that the UK housing market has continued to tighten.
Since the end of September private home sales are lower than last year and cancellation rates higher.
In a trading update for the 19 weeks since July 1st, the housebuilder said the reduction of private sales per week and site reflected the more challenging market conditions, due to the cumulative impact of rate rises and the effects of the more recent liquidity squeeze.
However, Barratt said net average selling prices in the period to the end of October increased by 2%, despite average sales discounts running marginally higher than the same period last year, and it expects its operating margin for the half year to be 'broadly' in line with the guidance given at the preliminary results.
The housebuilder, which saw sales fall by 5%-10% in the week following the Northern Rock crisis, expects first half home completions of around 8,750 units. It said it has a 'strong' forward order book, which currently stands at approximately 1.8bn, and has now secured around 61% of its full year requirement.
Barratt added that it continues to prioritise operating margins rather than volume, by focusing on cost reduction and deploying its sales capabilities to deliver completion volumes and sale prices at satisfactory levels.
'Looking forward, the fundamentals of the market remain strong with demand exceeding supply and with a Government committed to increasing the supply of new housing,' it said in a statement.
Barratt Developments today confirmed that the UK housing market has continued to tighten.
Since the end of September private home sales are lower than last year and cancellation rates higher.
In a trading update for the 19 weeks since July 1st, the housebuilder said the reduction of private sales per week and site reflected the more challenging market conditions, due to the cumulative impact of rate rises and the effects of the more recent liquidity squeeze.
However, Barratt said net average selling prices in the period to the end of October increased by 2%, despite average sales discounts running marginally higher than the same period last year, and it expects its operating margin for the half year to be 'broadly' in line with the guidance given at the preliminary results.
The housebuilder, which saw sales fall by 5%-10% in the week following the Northern Rock crisis, expects first half home completions of around 8,750 units. It said it has a 'strong' forward order book, which currently stands at approximately 1.8bn, and has now secured around 61% of its full year requirement.
Barratt added that it continues to prioritise operating margins rather than volume, by focusing on cost reduction and deploying its sales capabilities to deliver completion volumes and sale prices at satisfactory levels.
'Looking forward, the fundamentals of the market remain strong with demand exceeding supply and with a Government committed to increasing the supply of new housing,' it said in a statement.
hlyeo98 - 21 Nov 2007 08:31 - 81 of 352
New lows again for WOS and BDEV today.
BigTed
- 21 Nov 2007 08:56
- 82 of 352
Haven't checked Persimmons (above) but whats happened there???
*edit* ok sorry false alarm, chart showed a 55% gain, but has mysteriously changed its mind now and i cant delete the post!!!
*edit* ok sorry false alarm, chart showed a 55% gain, but has mysteriously changed its mind now and i cant delete the post!!!
fliper
- 22 Nov 2007 17:42
- 83 of 352
I am going to buy a property , knocked a fair bit off the asking price so here goes !
hlyeo98 - 23 Nov 2007 18:22 - 84 of 352
From Times Online - November 23, 2007
Housing slump looms as new mortgages fall; Home Information Packs discourage sellers - Marcus Leroux
The rate of UK mortgages approvals fell by 16 per cent in October as the Government's controversial Home Information Packs discouraged sellers from putting their homes up for sale and higher interest rates put off buyers taking out home loans.
The British Bankers' Association (BBA) said today the number of mortgages approved for home-buyers fell from 54,000 in September to 44,100 last month a 37 per cent slump on October last year.
The BBA said that the sharp fall was the delayed result of five interest rate increases since August 2006, which are now impacting the housing market.
Also, the BBA said that the introduction of Home Information Packs, faltering confidence following the Northern Rock crisis and the global credit squeeze had also taking the steam out of UK housing.
David Dooks, the head of statistics at the BBA, said: Octobers data provide evidence of a rapidly slowing mortgage market and of consumers limiting their personal borrowing.
Pressure on household finances, the cumulative impact of interest rate rises over the last year, the expanded application of Home Information Packs and the consequential impact of the credit crunch may well all have a part to play in suppressing current demand and supply.
Last week, Nationwide Building Society forecast that house price inflation would tumble from near-double figures to zero by the end of next year.
Howard Archer, the chief UK and European economist at Global Insight, said: "Slowing housing demand is expected to steadily feed through to dampen house prices over the coming months. Indeed, there is undeniably a very real risk that the housing market could see a sharp correction."
Housing slump looms as new mortgages fall; Home Information Packs discourage sellers - Marcus Leroux
The rate of UK mortgages approvals fell by 16 per cent in October as the Government's controversial Home Information Packs discouraged sellers from putting their homes up for sale and higher interest rates put off buyers taking out home loans.
The British Bankers' Association (BBA) said today the number of mortgages approved for home-buyers fell from 54,000 in September to 44,100 last month a 37 per cent slump on October last year.
The BBA said that the sharp fall was the delayed result of five interest rate increases since August 2006, which are now impacting the housing market.
Also, the BBA said that the introduction of Home Information Packs, faltering confidence following the Northern Rock crisis and the global credit squeeze had also taking the steam out of UK housing.
David Dooks, the head of statistics at the BBA, said: Octobers data provide evidence of a rapidly slowing mortgage market and of consumers limiting their personal borrowing.
Pressure on household finances, the cumulative impact of interest rate rises over the last year, the expanded application of Home Information Packs and the consequential impact of the credit crunch may well all have a part to play in suppressing current demand and supply.
Last week, Nationwide Building Society forecast that house price inflation would tumble from near-double figures to zero by the end of next year.
Howard Archer, the chief UK and European economist at Global Insight, said: "Slowing housing demand is expected to steadily feed through to dampen house prices over the coming months. Indeed, there is undeniably a very real risk that the housing market could see a sharp correction."
partridge
- 24 Nov 2007 10:08
- 85 of 352
The reality at present is of a falling residential market, likely to deteriorate further in 2008. Underlying demand is good looking further out, so what will happen? If history is anything to go by, depressed selling prices will feed through into lower land prices and the stronger building companies will ultimately prosper, with weaker ones failing or being taken over.Bit of "falling knife" syndrome across the sector at present, but FWIW I have just tucked away a few ABBY - ungeared, trading at substantially below net asset value and very solid track record.Always DYOR
fliper
- 24 Nov 2007 16:48
- 86 of 352
Will the new HIPS for all properties discourage many people putting their houses on the market ? An estate agent i spoke to today thinks it will .
mojo47
- 24 Nov 2007 17:23
- 87 of 352
No it wont all the seller will do is add it onto the asking price, The house will be overpriced buy 5k knowing that they will have to come down a bit so the buyer thinks he has a good buy all of its just a big mind game and the only people who make any big money is the estate agents
hlyeo98 - 24 Nov 2007 18:47 - 88 of 352
Buyers will not be so daft as to think they will get a good bargain unless they mark it down by 20%.
hlyeo98 - 24 Nov 2007 20:20 - 89 of 352
From The Times - November 24, 2007
Sub-prime time bomb is set to explode in Britain - Grainne Gilmore and Gabriel Rozenberg
Lenders are cracking down on sub-prime borrowers across Britain and could force tens of thousands of homeowners into forced sales of their homes, property experts warned yesterday.
The global credit crunch provoked by the crisis in American sub-prime mortgages is creating a time bomb in Britains own market for loans to borrowers with imperfect credit records.
The warning came as figures from the British Bankers Association (BBA) suggested that the slowdown in house prices was on course to be the most severe in at least a decade, as would-be buyers take fright at a declining market.The number of mortgages approved in October for home purchases by the BBA dropped by 17 per cent over the month to only 44,105, the lowest figure since the body began to compile figures in September 1997. Approvals were 37 per cent lower than a year ago.
Experts fear that the emerging British sub-prime crisis could further destabilise the domestic property market. As existing homeowners with particularly bad credit records known as heavy sub-prime customers come to the end of the cheap two-year fixed deals that were readily available until the summer, lenders are refusing to offer similar terms.
Bob Sturges, of Money Partners, a sub-prime lender, said: These are people who before the credit crunch would have been able get a maximum of 95 per cent LTV. Now the maximum they can get is 75 or 80 per cent. When they come off their fixed-term deal they are going to be disenfranchised from the beneficial rates they have enjoyed. If they cant afford the higher rates, they face the prospect of selling up and joining the rental sector. This will affect tens of thousands, if not hundreds of thousands of people.
Those who have insufficient equity in their homes and who do not have the cash to make up the shortfall will be forced to pay their lenders expensive Standard Variable Rate (SVR).
Two years ago, borrowers could snap up a two-year fixed-rate deal for heavy adverse borrowers of 6.58 per cent. Hundreds of thousands of homeowners face being moved on to their lenders higher rate, which typically will be at 9.5 per cent. On a 150,000 mortgage, this will leave homeowners facing an extra 280 a month in loan repayments. Thomas Reeh, of Black & White Mortgages, the sub-prime broker, said: There are very difficult times ahead for customers who are habitual defaulters, or heavy sub-prime. They are unlikely to get a new competitive deal, and face significant pressure from their existing lender.
The higher cost of all mortgages, prime and sub-prime, in the wake of rises in interest rates and the credit squeeze has also put people off from dipping into their housing equity to fund big purchases, in a worrying sign for the retail sector as the Christmas season approaches. Mortgages not for house purchase or remortgage fell to 38,471 in October, the lowest figure since May 2000.
The sharply weaker picture of the property market led some analysts to predict that the Bank of England would move to cut interest rates next month, despite a noncommittal speech this week by Rachel Lomax, a Bank deputy governor.
The argument for keeping rates on hold was strengthened yesterday by data showing that the economy had enjoyed continued robust growth in the third quarter.
Sub-prime time bomb is set to explode in Britain - Grainne Gilmore and Gabriel Rozenberg
Lenders are cracking down on sub-prime borrowers across Britain and could force tens of thousands of homeowners into forced sales of their homes, property experts warned yesterday.
The global credit crunch provoked by the crisis in American sub-prime mortgages is creating a time bomb in Britains own market for loans to borrowers with imperfect credit records.
The warning came as figures from the British Bankers Association (BBA) suggested that the slowdown in house prices was on course to be the most severe in at least a decade, as would-be buyers take fright at a declining market.The number of mortgages approved in October for home purchases by the BBA dropped by 17 per cent over the month to only 44,105, the lowest figure since the body began to compile figures in September 1997. Approvals were 37 per cent lower than a year ago.
Experts fear that the emerging British sub-prime crisis could further destabilise the domestic property market. As existing homeowners with particularly bad credit records known as heavy sub-prime customers come to the end of the cheap two-year fixed deals that were readily available until the summer, lenders are refusing to offer similar terms.
Bob Sturges, of Money Partners, a sub-prime lender, said: These are people who before the credit crunch would have been able get a maximum of 95 per cent LTV. Now the maximum they can get is 75 or 80 per cent. When they come off their fixed-term deal they are going to be disenfranchised from the beneficial rates they have enjoyed. If they cant afford the higher rates, they face the prospect of selling up and joining the rental sector. This will affect tens of thousands, if not hundreds of thousands of people.
Those who have insufficient equity in their homes and who do not have the cash to make up the shortfall will be forced to pay their lenders expensive Standard Variable Rate (SVR).
Two years ago, borrowers could snap up a two-year fixed-rate deal for heavy adverse borrowers of 6.58 per cent. Hundreds of thousands of homeowners face being moved on to their lenders higher rate, which typically will be at 9.5 per cent. On a 150,000 mortgage, this will leave homeowners facing an extra 280 a month in loan repayments. Thomas Reeh, of Black & White Mortgages, the sub-prime broker, said: There are very difficult times ahead for customers who are habitual defaulters, or heavy sub-prime. They are unlikely to get a new competitive deal, and face significant pressure from their existing lender.
The higher cost of all mortgages, prime and sub-prime, in the wake of rises in interest rates and the credit squeeze has also put people off from dipping into their housing equity to fund big purchases, in a worrying sign for the retail sector as the Christmas season approaches. Mortgages not for house purchase or remortgage fell to 38,471 in October, the lowest figure since May 2000.
The sharply weaker picture of the property market led some analysts to predict that the Bank of England would move to cut interest rates next month, despite a noncommittal speech this week by Rachel Lomax, a Bank deputy governor.
The argument for keeping rates on hold was strengthened yesterday by data showing that the economy had enjoyed continued robust growth in the third quarter.
hewittalan6
- 25 Nov 2007 09:56
- 90 of 352
I don't doubt for a moment that the housing market is stalling, but headlines of doom and gloom always sell better.
Let me play devils advocate for a moment and tell you what the quieter types in the industry are saying.
Firstly the credit squeeze. How much is real and how much is a feeling of cynicism?
Remember that all UK mortgages are based on an Independant and professional valuation of property. We must believe this to be accurate, or else we believe the RCIS members to be wrong. So if a property was valued at 200k 2 years ago it would be reasonable to assume that was accurate and it will have accrued some value since then. Therefore the loan is pretty much secure now.
Secondly the media are painting a picture (see above) of heavy defaulters and non payers mortgaging to 95% LTV. This is not true. The heavy and unlimited sub prime clientelle could only raise 80% or 85% in exceptional circumstances.
Finally the rates, and therefore jump to SVR is not as bad as painted. The 6.58% quoted above was for near prime or minor adverse products, or higher adverse at very low LTV.
The upshot is, that in reality, a customer on heavy sub prime may now owe about 65-70% on his property and be facing a rise of around 2% on his monthly bill. This is not the meltdown portrayed above. The crisis in the USA came around because the value of the property was questionable in an economy that had seen very high growth and falling demand for houses. While we had seen the growth to some extent, it was not as rampant and other factors point to a softer landing here.
Both the housing and mortgage markets face problems - true. But they will only be that bad if the media keep on fuelling it. The old self fulfilling prophecy again. All to sell papers.
Alan
Let me play devils advocate for a moment and tell you what the quieter types in the industry are saying.
Firstly the credit squeeze. How much is real and how much is a feeling of cynicism?
Remember that all UK mortgages are based on an Independant and professional valuation of property. We must believe this to be accurate, or else we believe the RCIS members to be wrong. So if a property was valued at 200k 2 years ago it would be reasonable to assume that was accurate and it will have accrued some value since then. Therefore the loan is pretty much secure now.
Secondly the media are painting a picture (see above) of heavy defaulters and non payers mortgaging to 95% LTV. This is not true. The heavy and unlimited sub prime clientelle could only raise 80% or 85% in exceptional circumstances.
Finally the rates, and therefore jump to SVR is not as bad as painted. The 6.58% quoted above was for near prime or minor adverse products, or higher adverse at very low LTV.
The upshot is, that in reality, a customer on heavy sub prime may now owe about 65-70% on his property and be facing a rise of around 2% on his monthly bill. This is not the meltdown portrayed above. The crisis in the USA came around because the value of the property was questionable in an economy that had seen very high growth and falling demand for houses. While we had seen the growth to some extent, it was not as rampant and other factors point to a softer landing here.
Both the housing and mortgage markets face problems - true. But they will only be that bad if the media keep on fuelling it. The old self fulfilling prophecy again. All to sell papers.
Alan
hlyeo98 - 25 Nov 2007 12:42 - 91 of 352
The housing market is not as good as you think, Alan, if you think they are out only to sell papers. Only 40% of graduates are able to get on the property ladder after 10 years of working life...and number will increase when inflation and interest rates and fuel prices are going through the roof.
We are living in a 'boom and bust' economy that Gordon Brown has created.
We are living in a 'boom and bust' economy that Gordon Brown has created.
hewittalan6
- 25 Nov 2007 13:09
- 92 of 352
I don't think it's good!!
I just don't think its as bad as the media paint it.
The basics are very different from the US, and the mortgage holders are not facing quite what the papers say.
I just think that the "crash" will not be the multi car pile up they predict, more of a 3 car shunt and that the biggest driver (pun intended) will be peoples lack of confidence rather than the fundamentals, and the principle cause of a lack of confidence is the reporting of a potrential meltdown.
The basics are still that rates are historically low, employment high, growth steady, demand high (if a little down), supply short and likely to decrease due to HIPS and builders pulling their horns in and affordability is not at its worst ever, with the possible exception of the capital.
There does however need to be a change in peoples expectations.
In the 1980's Lord Tebbit was very quick to tell people in my area to get on their bikes and find a job, and stop whining that there were none in the area. the same rule applies. Being a nurse does not grant you automatic rights to buy a property in the most expensive area of the country. Find another job or move away. When the NHS cannot function in London, and there are few police, ambulance or fire crews and no-one to staff the schools, property prices will fall and equilibrium will out.
Harsh, but no more harsh than the north went through in the 80's. In most of the UK first time buyers can still buy, but they have to be realistic.
Slowdown? Yes. Crash? Not for most, though I sympathise with those in the over priced areas. Time to move???
Alan
I just don't think its as bad as the media paint it.
The basics are very different from the US, and the mortgage holders are not facing quite what the papers say.
I just think that the "crash" will not be the multi car pile up they predict, more of a 3 car shunt and that the biggest driver (pun intended) will be peoples lack of confidence rather than the fundamentals, and the principle cause of a lack of confidence is the reporting of a potrential meltdown.
The basics are still that rates are historically low, employment high, growth steady, demand high (if a little down), supply short and likely to decrease due to HIPS and builders pulling their horns in and affordability is not at its worst ever, with the possible exception of the capital.
There does however need to be a change in peoples expectations.
In the 1980's Lord Tebbit was very quick to tell people in my area to get on their bikes and find a job, and stop whining that there were none in the area. the same rule applies. Being a nurse does not grant you automatic rights to buy a property in the most expensive area of the country. Find another job or move away. When the NHS cannot function in London, and there are few police, ambulance or fire crews and no-one to staff the schools, property prices will fall and equilibrium will out.
Harsh, but no more harsh than the north went through in the 80's. In most of the UK first time buyers can still buy, but they have to be realistic.
Slowdown? Yes. Crash? Not for most, though I sympathise with those in the over priced areas. Time to move???
Alan
pinechris - 26 Nov 2007 12:09 - 93 of 352
You're right about moving, I live in the southwest and there is no way I can get anything more than a flat, tiny terraced houses around here (2 bed), no garage/parking and very small gardens are going for 125 k, I would be deep in debt until the day I retire, I can, however, move to South Wales, do the same job as I'm doing now and 3 bed houses are on the market for as little as 38 k, hope to be off asap.
Toya
- 26 Nov 2007 12:21
- 94 of 352
I haven't been following this in detail but would like to know, PineChris, where in South Wales you can buy a 3-bed house for 38k! Is it a wreck that needs complete rebuilding?
pinechris - 26 Nov 2007 15:50 - 95 of 352
AHH, can't find the one I was looking at for 38 k, several under 52 k though, go to darlows.co.uk and look in Rhondda and follow links to auctions, next auction this Wed, not sure if I can find out exactly what they sold for, will 'phone the agent on Friday, some require modernisation but I understand most are fit to live in, will go and have a look around in a week or so when I get time off.
Toya
- 26 Nov 2007 15:53
- 96 of 352
That's amazing - really didn't think it was possible to buy anything fit for habitation, even if only vaguely, at that price. Good luck if you're going to the auction!
fliper
- 26 Nov 2007 16:08
- 97 of 352
http://www.rightmove.co.uk/viewdetails-15539903.rsp?pa_n=1&tr_t=buy , In the east midlands a 2 bedroom property in a good area is around 125k .
Toya
- 26 Nov 2007 17:12
- 98 of 352
That's more realistic, Fliper.
BigTed
- 26 Nov 2007 17:16
- 99 of 352
I purchase properties in the southwest at auction, and would like to point out, that although you are correct about the prices being lower in parts of Wales, the guide prices are always set very low at auction to entice strong interest, i have just paid 107k for a 3 bed that had a guide of 70k...
Falcothou - 26 Nov 2007 18:08 - 100 of 352
I live in South Wales and really enjoy the proximity of cities,beaches, mountains, waterfalls and space. I would think twice about living in some of the more depressed areas where prices are very low though or you may find yourself in 'bandit' country! By the way if you think the markets are stormy check out the forecast for the latter end of this week. 40ft swell forecast for West coast of Ireland and 20ft. for here, may be time to get out of insurance shares!
fliper
- 28 Nov 2007 15:59
- 101 of 352
The 340 million Westfield Derby development opened on 9 October 2007, presenting a dynamic mix of fashion, food and leisure in the heart of the city.
The new centre provides four new themed malls, over two retail levels anchored by Marks & Spencer and Debenhams. The introduction of more than 100 new shops has brought a vibrant mix of national and local fashion and lifestyle brands. Westfield Derby incorporates leading retailers Zara, Bershka, Topshop, Next, Monsoon, New Look, Dorothy Perkins, River Island and H&M.
They are spending another 330 mil around the city centre as well .
A 30 million 12-screen Cinema De Lux (opening Spring 2008) will provide a first-class customer entertainment experience adjacent to the 800-seat Eat Central, which will houses an innovative mix of international, national and local cuisine, creating an exciting lifestyle destination.
The new centre provides four new themed malls, over two retail levels anchored by Marks & Spencer and Debenhams. The introduction of more than 100 new shops has brought a vibrant mix of national and local fashion and lifestyle brands. Westfield Derby incorporates leading retailers Zara, Bershka, Topshop, Next, Monsoon, New Look, Dorothy Perkins, River Island and H&M.
They are spending another 330 mil around the city centre as well .
A 30 million 12-screen Cinema De Lux (opening Spring 2008) will provide a first-class customer entertainment experience adjacent to the 800-seat Eat Central, which will houses an innovative mix of international, national and local cuisine, creating an exciting lifestyle destination.
Big Al
- 29 Nov 2007 08:00
- 102 of 352
Excellent news for housing bears today and hopefully bad news for all the BTL dimwits in the country. ;-)))
hewittalan6
- 29 Nov 2007 08:06
- 103 of 352
But confusingly the opposite view on commercial property!!
What chance do the rest of us have when experts have such dramatically opposed views?
What chance do the rest of us have when experts have such dramatically opposed views?
Big Al
- 29 Nov 2007 08:19
- 104 of 352
Commercial sector already falling, Alan, hence funds are demanding 3 month notice of withdrawals. It's been gonig on for a while. A wee bounce might be on.
Residential now on slippery slope IMO.
Residential now on slippery slope IMO.
hewittalan6
- 29 Nov 2007 08:46
- 105 of 352
Some fund or other is predicting the bottom of the commercial market this morning.
Residential is undoubtedly facing problems, I just don't think they are of the magnitude some parties are talking about, Big Al.
Certainly we will see less activity and lower asking prices, but the actual sale prices will not fall as far as the bigger predictions suggest.
We are basing our view of a crash on following the USA lead, since we followed them on the credit crunch, but the USA had a very different housing background to us. We have seen steadily rising prices, not runaway rises like the USA.
3 Years ago, a friend of mine was making very good money on Florida property by day trading!!! No wonder there is a fair distance to fall. And the dollar is very weak.
IMHO there are 3 things causing this prediction of a crash. The credit squeeze (which will not last for ever, it must turn around soon), High oil prices which will fuel inflation (though OPEC are pumping money into raising the supply side, at last) and perceived high rates (though historically they are fairly low).
The credit squeeze is showing signs of recovery (Citibank and Abu Dhabi), Oil is starting to fall and has further to go when capacity increases as Opec want, and as credit becomes more liquid, margins over LIBOR will reduce cheapening rates regardless of what the MPC decide.
If employment remains high the housing market will suffer a short term fall and recover just as quickly. Just as perceived problems cause a fall, a perceived bottom causes a rise.
All IMO.
Alan
Residential is undoubtedly facing problems, I just don't think they are of the magnitude some parties are talking about, Big Al.
Certainly we will see less activity and lower asking prices, but the actual sale prices will not fall as far as the bigger predictions suggest.
We are basing our view of a crash on following the USA lead, since we followed them on the credit crunch, but the USA had a very different housing background to us. We have seen steadily rising prices, not runaway rises like the USA.
3 Years ago, a friend of mine was making very good money on Florida property by day trading!!! No wonder there is a fair distance to fall. And the dollar is very weak.
IMHO there are 3 things causing this prediction of a crash. The credit squeeze (which will not last for ever, it must turn around soon), High oil prices which will fuel inflation (though OPEC are pumping money into raising the supply side, at last) and perceived high rates (though historically they are fairly low).
The credit squeeze is showing signs of recovery (Citibank and Abu Dhabi), Oil is starting to fall and has further to go when capacity increases as Opec want, and as credit becomes more liquid, margins over LIBOR will reduce cheapening rates regardless of what the MPC decide.
If employment remains high the housing market will suffer a short term fall and recover just as quickly. Just as perceived problems cause a fall, a perceived bottom causes a rise.
All IMO.
Alan
hlyeo98 - 29 Nov 2007 12:39 - 106 of 352
I have just shorted Bovis Homes BVS at 622p. Looks likely to go down further
Big Al
- 29 Nov 2007 13:38
- 107 of 352
This quote sums up my take on housing here, there and everywhere. I have bolded the critical word. ;-0
"the price of houses is more to do with supply and demand of credit"
"the price of houses is more to do with supply and demand of credit"
survived87
- 29 Nov 2007 18:55
- 108 of 352
".... its all reason enough to fear that we may be about to experience the most prolonged downturn in the housing market for 15 years or so."
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
http://www.bbc.co.uk/blogs/thereporters/robertpeston/
hlyeo98 - 29 Nov 2007 19:06 - 109 of 352
The housing market in London is starting to show its seams. No doubt it will start to fall from now.
survived87
- 29 Nov 2007 21:23
- 110 of 352
Meanwhile, across the pond today:
White House lowers '08 economic forecast:
"The housing market decline has been more significant than we expected," Edward Lazear, chairman of the White House's Council of Economic Advisers, told reporters in a conference call.
US foreclosure filings up in October:
U.S. foreclosure filings nearly doubled in October from the same month last year, the latest sign many homeowners are falling behind on mortgage payments and increasingly losing their homes, according to a mortgage research company.
Federal National Mortgage Assoc Home prices fall 0.4 percent in Q3:
U.S. home prices marked a quarterly decline for the first time in 13 years in the third quarter, according to government data released Thursday that provide fresh evidence of the housing market slump.
White House lowers '08 economic forecast:
"The housing market decline has been more significant than we expected," Edward Lazear, chairman of the White House's Council of Economic Advisers, told reporters in a conference call.
US foreclosure filings up in October:
U.S. foreclosure filings nearly doubled in October from the same month last year, the latest sign many homeowners are falling behind on mortgage payments and increasingly losing their homes, according to a mortgage research company.
Federal National Mortgage Assoc Home prices fall 0.4 percent in Q3:
U.S. home prices marked a quarterly decline for the first time in 13 years in the third quarter, according to government data released Thursday that provide fresh evidence of the housing market slump.
Big Al
- 29 Nov 2007 21:40
- 111 of 352
It's coming here, it has to!!!!!
fliper
- 30 Nov 2007 16:15
- 112 of 352
I think an intrest rate cut is on the cards .
chocolat
- 30 Nov 2007 16:48
- 113 of 352
'Cards' being the operative word here.
The only thing it'll boost maybe is credit card spending over the festive wotsit.
It won't make a blind bit of difference to mortgage holders or applicants - rates have already gone up because of LIBOR.
The only thing it'll boost maybe is credit card spending over the festive wotsit.
It won't make a blind bit of difference to mortgage holders or applicants - rates have already gone up because of LIBOR.
Big Al
- 30 Nov 2007 16:54
- 114 of 352
Indeed.
Additionally, they'll no longer lend to just any Tom, Dick, Harry or Choccy. ;-)))
Additionally, they'll no longer lend to just any Tom, Dick, Harry or Choccy. ;-)))
hewittalan6
- 30 Nov 2007 17:28
- 115 of 352
Oh they will, Big Al.
Capitalism can almost be defined by saying that where there is a demand, someone will evolve to supply it!! The rates may not be as good and the underwriting a tad more cautious, but it will exist. And inevitably, as the boldest players make good money from a less competative, but equally profitable market, competition will be back to drive margins down and risks up.
It may be some considerable time yet, but it will come about, because demand for this type of loan will rise, and those facing repossession or unmanagable debts will pay whatever rate they need to in order to save their home or consolidate their monthlys so they can have a beer at the weekend.
Just IMO of course.
Alan
Capitalism can almost be defined by saying that where there is a demand, someone will evolve to supply it!! The rates may not be as good and the underwriting a tad more cautious, but it will exist. And inevitably, as the boldest players make good money from a less competative, but equally profitable market, competition will be back to drive margins down and risks up.
It may be some considerable time yet, but it will come about, because demand for this type of loan will rise, and those facing repossession or unmanagable debts will pay whatever rate they need to in order to save their home or consolidate their monthlys so they can have a beer at the weekend.
Just IMO of course.
Alan
fliper
- 30 Nov 2007 17:30
- 116 of 352
Times are hard choccy , are you still holding your bank shares ?
Big Al
- 30 Nov 2007 20:12
- 117 of 352
Alan - I think we always agree to disagree.
People have been going bankrupt, making IVAs and losing their homes at the highest rate in years for quite some time. Of course, you don't read about it in the papers yet. The only reason there is demand is because money is cheap. It's been as cheap as it was in the 60s. Unfotruantely the 70s happened next. ;-)))))
People have been going bankrupt, making IVAs and losing their homes at the highest rate in years for quite some time. Of course, you don't read about it in the papers yet. The only reason there is demand is because money is cheap. It's been as cheap as it was in the 60s. Unfotruantely the 70s happened next. ;-)))))
BigTed
- 30 Nov 2007 21:09
- 118 of 352
Yes but for every repossession that goes to auction, there is ten buyers bidding strong money for the property, strong demand will not go away unless we build 100,000 more starts a year for the next ten years...
Big Al
- 30 Nov 2007 21:26
- 119 of 352
Rubbish IMO. It's all a house of cards built on very cheap money that is becoming ever more expensive.
Do you really think in your wildest dreams that people will be able to take 6x salary at 8% when they've had it at 4.5% for 2-3 years. Get real.
Do you really think in your wildest dreams that people will be able to take 6x salary at 8% when they've had it at 4.5% for 2-3 years. Get real.
BigTed
- 30 Nov 2007 21:37
- 120 of 352
Not sure about 8%, the only reason there is a slowdown is because of the delayed effect of 5 rate rises still biting, 5.75% is still low. The mistake by the BOE was by lowering the rate back down to 4.5% 2 years ago, when it was at 4.75, they fuelled the surge in prices which has led to the problems we face now...
hewittalan6
- 01 Dec 2007 08:01
- 121 of 352
We'll disagree then Al. :-)
Just remember that 6x salary at 8% is 50% of income. Just the same as 4x salary at 12.5%, and rates were running at higher than that when I got on the ladder. Since then we have seen almost continuous boom.
Anyway, if lots get repossesed, they end up renting and there is a limited stock of social and council housing so rents will rise as demand outstrips supply. The effect will be to make buying appear more affordable than renting and so the whole shebang kicks off again.
The simple fact, long term, is that we have a population that outstrips housing supply, a changing demographic of fewer people per household and an increasing population, and not enough houses being built. There is no way that the businesses involved in home financing will not want a slice of this, so as the supply of credit comes back, prices will rise.
As a foot note, we are all pretty much locked in to it. Even though 2008 may see a dip in prices, it would have to fall almost 20% for it to be worthwhile selling my property and buying in again at the bottom, and thats if I could call top and bottom accurately and find a willing buyer and then seller, so ther is little I or anyone else can do.
Alan
Just remember that 6x salary at 8% is 50% of income. Just the same as 4x salary at 12.5%, and rates were running at higher than that when I got on the ladder. Since then we have seen almost continuous boom.
Anyway, if lots get repossesed, they end up renting and there is a limited stock of social and council housing so rents will rise as demand outstrips supply. The effect will be to make buying appear more affordable than renting and so the whole shebang kicks off again.
The simple fact, long term, is that we have a population that outstrips housing supply, a changing demographic of fewer people per household and an increasing population, and not enough houses being built. There is no way that the businesses involved in home financing will not want a slice of this, so as the supply of credit comes back, prices will rise.
As a foot note, we are all pretty much locked in to it. Even though 2008 may see a dip in prices, it would have to fall almost 20% for it to be worthwhile selling my property and buying in again at the bottom, and thats if I could call top and bottom accurately and find a willing buyer and then seller, so ther is little I or anyone else can do.
Alan
fliper
- 05 Dec 2007 17:27
- 122 of 352
Talk of an intrest rate cut on thursday ? we shall see .
hlyeo98 - 05 Dec 2007 19:46 - 123 of 352
House prices fell for the third month in a row during November, dropping by 1.1%, Britain's biggest mortgage lender said today.
Halifax said it was the first time prices had fallen for three consecutive months since early 1995, while it was the biggest monthly drop recorded since December last year.
The slide pushed annual house price inflation down to 6.3%, its lowest level since March last year.
The figures confirm the slowdown is now well under way, as the market responds to higher interest rates and stretched affordability.
Halifax is currently the only one of the major indexes to report three consecutive months of falling prices, but Nationwide Building Society last week said house prices fell by 0.8% during November - their biggest monthly drop for more than 12 years.
Property information group Hometrack said house prices in England and Wales fell for a second month during November, easing by 0.2%, while website Rightmove said they dropped by 0.7% in the four weeks to November 10.
Wednesday's figures will further stoke speculation among some commentators that the market is now heading for a period of sustained price falls.
But Halifax said a mixed pattern of monthly price rises and price falls was a "typical feature" of a more subdued housing market.
It said between July 2004 and June 2005 there were six monthly falls and six monthly increases as the market slowed in response to higher interest rates.
It added that higher mortgage repayments and falling earnings in real terms had put pressure on households' income, leading to a slow down in both house price growth and activity.
Halifax said it was the first time prices had fallen for three consecutive months since early 1995, while it was the biggest monthly drop recorded since December last year.
The slide pushed annual house price inflation down to 6.3%, its lowest level since March last year.
The figures confirm the slowdown is now well under way, as the market responds to higher interest rates and stretched affordability.
Halifax is currently the only one of the major indexes to report three consecutive months of falling prices, but Nationwide Building Society last week said house prices fell by 0.8% during November - their biggest monthly drop for more than 12 years.
Property information group Hometrack said house prices in England and Wales fell for a second month during November, easing by 0.2%, while website Rightmove said they dropped by 0.7% in the four weeks to November 10.
Wednesday's figures will further stoke speculation among some commentators that the market is now heading for a period of sustained price falls.
But Halifax said a mixed pattern of monthly price rises and price falls was a "typical feature" of a more subdued housing market.
It said between July 2004 and June 2005 there were six monthly falls and six monthly increases as the market slowed in response to higher interest rates.
It added that higher mortgage repayments and falling earnings in real terms had put pressure on households' income, leading to a slow down in both house price growth and activity.
fliper
- 07 Dec 2007 15:13
- 124 of 352
Well just 0.25 off , but more to come .
hlyeo98 - 17 Dec 2007 12:13 - 125 of 352
From The Times - December 17, 2007
London house price fall of 6.8% in past month stokes economy fears - Gabriel Rozenberg, Economics Reporter
House prices in London have fallen by an average of £28,000 in the past month, as the capital sets the pace of an accelerating property downturn, a leading survey reports today.
Rightmove, the property website that tracks asking prices for homes across the market, says that prices tumbled by £20,000 a week in affluent Kensington and Chelsea – and by more than £10,000 a week in inner-city Hackney.
The company’s data shows that house prices fell by 3.2 per cent across the country, and by 6.8 per cent in London, over the month to the middle of December.
The figures are the gloomiest that homeowners have had to face since the market began to turn this autumn.
In Kensington and Chelsea, the average asking price in December was £1,572,814, compared with £1,653,696 a month ago. In Hackney, prices fell from £473,377 to £425,007.
However, house prices in the West London borough had risen by 41 per cent in the past year.
The news comes as business leaders warn that a property-led downturn in investment is set to hamper the economy next year.
The CBI says today that consumer spending will slow sharply and overall growth will be weak for the next two years.
This may worsen if the credit crisis deepens.
Rightmove says that the substantial falls in asking prices confirmed that sellers were adjusting to a new reality of buyers’ unwillingness to take any chances in a deteriorating market.
However, the impact of the downturn has been magnified by sellers putting their homes on the market before compulsory and costly Home Information Packs (HIPs) were introduced for smaller properties last week.
Prices fell in most regions of England and Wales, but the effect was harshest in London and the South East.
The falls took the national house price inflation rate down to 4.8 per cent, from 7.9 per cent the previous month, with a house typically losing £7,590 in value.
Miles Shipside, commercial director of Rightmove, said that the introduction of HIPs had distorted the latest figures.
He said: “Many sellers who have listed this month have priced below the market to try to sell. It is wrong, however, to speculate that prices will continue to fall based on one month’s statistics from a quiet December.”
However, the report said that the property market was now in “uncharted territory” because of the difficulty that mortgage lenders are having in raising funds.
Fears over a shortage of liquidity have caused money markets to seize up in recent weeks, in a renewal of problems first seen over the summer that have darkened the outlook for the economy.
Concern over the credit squeeze has led the CBI, the business group, to cut its forecast for growth next year for the third time.
It now predicts that the economy will expand by 2 per cent in 2008 and by 2.1 per cent in 2009. The decline from bullish growth of 3.1 per cent this year will be driven by a fall in investment in residential and commercial buildings, the CBI said, and by the effect of the squeeze on the financial sector.
Consumer spending growth was tipped to weaken to only 1.9 per cent next year, from a figure of 3.1 per cent this year.
London house price fall of 6.8% in past month stokes economy fears - Gabriel Rozenberg, Economics Reporter
House prices in London have fallen by an average of £28,000 in the past month, as the capital sets the pace of an accelerating property downturn, a leading survey reports today.
Rightmove, the property website that tracks asking prices for homes across the market, says that prices tumbled by £20,000 a week in affluent Kensington and Chelsea – and by more than £10,000 a week in inner-city Hackney.
The company’s data shows that house prices fell by 3.2 per cent across the country, and by 6.8 per cent in London, over the month to the middle of December.
The figures are the gloomiest that homeowners have had to face since the market began to turn this autumn.
In Kensington and Chelsea, the average asking price in December was £1,572,814, compared with £1,653,696 a month ago. In Hackney, prices fell from £473,377 to £425,007.
However, house prices in the West London borough had risen by 41 per cent in the past year.
The news comes as business leaders warn that a property-led downturn in investment is set to hamper the economy next year.
The CBI says today that consumer spending will slow sharply and overall growth will be weak for the next two years.
This may worsen if the credit crisis deepens.
Rightmove says that the substantial falls in asking prices confirmed that sellers were adjusting to a new reality of buyers’ unwillingness to take any chances in a deteriorating market.
However, the impact of the downturn has been magnified by sellers putting their homes on the market before compulsory and costly Home Information Packs (HIPs) were introduced for smaller properties last week.
Prices fell in most regions of England and Wales, but the effect was harshest in London and the South East.
The falls took the national house price inflation rate down to 4.8 per cent, from 7.9 per cent the previous month, with a house typically losing £7,590 in value.
Miles Shipside, commercial director of Rightmove, said that the introduction of HIPs had distorted the latest figures.
He said: “Many sellers who have listed this month have priced below the market to try to sell. It is wrong, however, to speculate that prices will continue to fall based on one month’s statistics from a quiet December.”
However, the report said that the property market was now in “uncharted territory” because of the difficulty that mortgage lenders are having in raising funds.
Fears over a shortage of liquidity have caused money markets to seize up in recent weeks, in a renewal of problems first seen over the summer that have darkened the outlook for the economy.
Concern over the credit squeeze has led the CBI, the business group, to cut its forecast for growth next year for the third time.
It now predicts that the economy will expand by 2 per cent in 2008 and by 2.1 per cent in 2009. The decline from bullish growth of 3.1 per cent this year will be driven by a fall in investment in residential and commercial buildings, the CBI said, and by the effect of the squeeze on the financial sector.
Consumer spending growth was tipped to weaken to only 1.9 per cent next year, from a figure of 3.1 per cent this year.
pinechris - 19 Dec 2007 17:38 - 126 of 352
Toya, from post 94, found a 3 bed end tce for £25k, needed work and now sold, also 3 bed mid tce central heating dbl glazed for £35k, also sold, going to look at 6 early Jan from 2 bed mid tce for £40k, 3 bed mid tce dbl glazed, rewired, replastered, needs finishing, £45k and another 4 3 bed houses from £45k to £52k, all around Mountain Ash/Tonypandy area, as I'm well into cycling/mountain biking this would be ideal, should be able to transfer with my job to Merthyr as well.
Falcothou - 19 Dec 2007 21:20 - 127 of 352
Noted from paper that many Buy to letters are expected to ditch in April when CGT reduced
fliper
- 02 Jan 2008 17:50
- 128 of 352
Fal , I am one of them , but i have good LTT so i will wait . 1 month into my current project and its back to the shell . New gas ch and a rewire in the next few weeks before i fit the kitchen and bathroom .
hlyeo98 - 03 Jan 2008 17:24 - 129 of 352
From The Times - January 3, 2008
London prime property market falters - Judith Heywood, Deputy Property Editor
Prices at the higher end of London’s property market, thought to have been largely immune to recent ructions in the wider industry, have suffered their first quarterly decline since 2003.
Savills, the estate agent, has revealed that the price of prime property – that valued at more than £1 million – had fallen by 2 per cent in the last three months of 2007.
The absence of a spending spree by those earning large City bonuses has been blamed for the poor quarterly performance across the prime London market.
Last year, £5.5 billion of the £8.8 billion City bonus pot was poured into homes. This year Savills thinks that only £2 billion, from a total fund of £7 billion, will find its way into the property market.
London prime property market falters - Judith Heywood, Deputy Property Editor
Prices at the higher end of London’s property market, thought to have been largely immune to recent ructions in the wider industry, have suffered their first quarterly decline since 2003.
Savills, the estate agent, has revealed that the price of prime property – that valued at more than £1 million – had fallen by 2 per cent in the last three months of 2007.
The absence of a spending spree by those earning large City bonuses has been blamed for the poor quarterly performance across the prime London market.
Last year, £5.5 billion of the £8.8 billion City bonus pot was poured into homes. This year Savills thinks that only £2 billion, from a total fund of £7 billion, will find its way into the property market.
cynic
- 03 Jan 2008 17:27
- 130 of 352
interestingly, "pukka property" around Harrogate is seemingly still holding up well and selling steadily
BAYLIS
- 03 Jan 2008 21:58
- 131 of 352
tip\for 2011
brianboru
- 05 Jan 2008 21:46
- 132 of 352
I have a number of friends either on the tools or running constuction business - all seem to be very busy still (and using Marshalls)...
Falcothou - 06 Jan 2008 18:19 - 133 of 352
I seem to remember the last time there was a housing crash the food chain of builders, developers and contractors went to the wall because of delayed or non payment causing a domino effect. I can't pay you because I haven't been paid and so on...
hlyeo98 - 16 Jan 2008 15:55 - 134 of 352
Inflation rate is worst in 17 years - AFX
WASHINGTON (AP) - Higher costs for energy and food last year pushed inflation up by the largest amount in 17 years, even though prices generally remained tame outside of those two areas. Meanwhile, industrial output was flat in December, more evidence of a significant slowdown in the economy.
Consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006, the Labor Department said Wednesday. Consumers felt the pain when they filled up their gas tanks or shopped for groceries. Prices for both energy and food shot up by the largest amount since 1990.
In a second report, the Federal Reserve said that output at the nation's factories, mines and utilities showed no growth in December, adding to a string of weak economic reports showing that the economy was slowing at the end of last year.
The unchanged output in December was the poorest showing since industrial output actually fell by 0.5 percent in October. Output had been up by 0.3 percent in November.
The December weakness reflected flat output at U.S. factories, a tiny 0.1 percent rise in the mining industry and a 0.2 percent drop at the nation's utilities.
The Consumer Price Index rose by 0.3 percent in December, slower than the 0.8 percent in November, as food costs were flat for the month and energy prices rose by 0.9 percent after an even bigger 5.7 percent jump in November.
Outside of food and energy, inflation rose a more moderate 0.2 percent in December. This measure of core inflation rose by 2.4 percent for all of 2007, down slightly from a 2.6 percent increase in 2006.
The Federal Reserve is closely watching to see whether the jump in food and energy becomes more widespread and starts pushing core inflation higher.
WASHINGTON (AP) - Higher costs for energy and food last year pushed inflation up by the largest amount in 17 years, even though prices generally remained tame outside of those two areas. Meanwhile, industrial output was flat in December, more evidence of a significant slowdown in the economy.
Consumer prices rose by 4.1 percent for all of 2007, up sharply from a 2.5 percent increase in 2006, the Labor Department said Wednesday. Consumers felt the pain when they filled up their gas tanks or shopped for groceries. Prices for both energy and food shot up by the largest amount since 1990.
In a second report, the Federal Reserve said that output at the nation's factories, mines and utilities showed no growth in December, adding to a string of weak economic reports showing that the economy was slowing at the end of last year.
The unchanged output in December was the poorest showing since industrial output actually fell by 0.5 percent in October. Output had been up by 0.3 percent in November.
The December weakness reflected flat output at U.S. factories, a tiny 0.1 percent rise in the mining industry and a 0.2 percent drop at the nation's utilities.
The Consumer Price Index rose by 0.3 percent in December, slower than the 0.8 percent in November, as food costs were flat for the month and energy prices rose by 0.9 percent after an even bigger 5.7 percent jump in November.
Outside of food and energy, inflation rose a more moderate 0.2 percent in December. This measure of core inflation rose by 2.4 percent for all of 2007, down slightly from a 2.6 percent increase in 2006.
The Federal Reserve is closely watching to see whether the jump in food and energy becomes more widespread and starts pushing core inflation higher.
hlyeo98 - 16 Jan 2008 16:19 - 135 of 352
From The Times - January 16, 2008
UK house price decline worst since 1990s slump
New figures suggest the housing downturn is gathering pace as unsold properties build up and surveyors' confidence falls - Grᩮne Gilmore and Gary Duncan
Falls in house prices across the country may now be at their most severe since the property slump of the early Nineties, according to bleak figures today suggesting that Britain's housing downturn is gathering pace.
A highly influential barometer of housing market conditions reports this morning that 49.1 per cent more surveyors found that house prices fell last month than saw them rise.
The gloomy result is the worst since November 1992 in the closely watched poll carried out by the Royal Institution of Chartered Surveyors (RICS), when this negative balance fell as far as minus 60.1 per cent. December's figure compares with a negative balance of 40.6 per cent of surveyors who reported that prices were on the slide in November.
With virtually every other reliable indicator of the housing market also pointing to grim conditions and falling prices, today's RICS report will deepen already intense gloom over prospects for homeowners this year.
UK house price decline worst since 1990s slump
New figures suggest the housing downturn is gathering pace as unsold properties build up and surveyors' confidence falls - Grᩮne Gilmore and Gary Duncan
Falls in house prices across the country may now be at their most severe since the property slump of the early Nineties, according to bleak figures today suggesting that Britain's housing downturn is gathering pace.
A highly influential barometer of housing market conditions reports this morning that 49.1 per cent more surveyors found that house prices fell last month than saw them rise.
The gloomy result is the worst since November 1992 in the closely watched poll carried out by the Royal Institution of Chartered Surveyors (RICS), when this negative balance fell as far as minus 60.1 per cent. December's figure compares with a negative balance of 40.6 per cent of surveyors who reported that prices were on the slide in November.
With virtually every other reliable indicator of the housing market also pointing to grim conditions and falling prices, today's RICS report will deepen already intense gloom over prospects for homeowners this year.
hlyeo98 - 20 Feb 2008 17:44 - 136 of 352
Housebuilders were in full retreat after broker Dresdner Kleinwort downgraded Persimmon and Taylor Wimpey, saying both stocks should be sold. Among the second-liners Barratt Developments was also weaker after Dresdner Kelinwort reiterated its "sell" recommendation, while Bovis headed lower after Dresdner changed its stance to "sell" from "reduce".
hlyeo98 - 08 Apr 2008 18:16 - 137 of 352
UK house prices slump - MoneyAM
Halifax has reported UK house prices registered their biggest monthly fall in over 15 years in March.
Halifax, which is part of the HBOS banking group, the country's leading mortgage lender, said today house prices dropped 2.5% month-on-month, the biggest fall since September 1992 and much worse than the 0.4% fall analysts had expected, following February's fall of 0.3%.
The average house price in the UK in March was ?91,556, down from February's ?96,649, Halifax said.
In annual terms, March's prices slowed to a quarterly rise of 1.1% from February's 4.2%. The March increase was the smallest since March 1996 and below analysts' forecasts for a 2.3% rise.
House prices fell 1% in the first quarter from the previous quarter, the biggest fall since the second quarter of 1995.
'Overall, we expect there to be a modest fall in UK house prices this year,' said Martin Ellis, chief economist.
However Ellis added that any declines should be viewed in the context of significant price rises over recent years, adding that housing valuations are being underpinned by a strong labour market, low interest rates and a shortage of new houses.
Halifax has reported UK house prices registered their biggest monthly fall in over 15 years in March.
Halifax, which is part of the HBOS banking group, the country's leading mortgage lender, said today house prices dropped 2.5% month-on-month, the biggest fall since September 1992 and much worse than the 0.4% fall analysts had expected, following February's fall of 0.3%.
The average house price in the UK in March was ?91,556, down from February's ?96,649, Halifax said.
In annual terms, March's prices slowed to a quarterly rise of 1.1% from February's 4.2%. The March increase was the smallest since March 1996 and below analysts' forecasts for a 2.3% rise.
House prices fell 1% in the first quarter from the previous quarter, the biggest fall since the second quarter of 1995.
'Overall, we expect there to be a modest fall in UK house prices this year,' said Martin Ellis, chief economist.
However Ellis added that any declines should be viewed in the context of significant price rises over recent years, adding that housing valuations are being underpinned by a strong labour market, low interest rates and a shortage of new houses.
Big Al
- 08 Apr 2008 18:49
- 138 of 352
"housing valuations are being underpinned by a strong labour market, low interest rates and a shortage of new houses."
No shortage of new housing around our way. In fact the enticements are becoming ridiculous. Unfortunately there's no money to be loaned at anywhere near the rates they were.
Low interest rates maybe, but then multiples are way over the average.
... and the strong labour market is probably the only thing holding it all up. Problem is it's a lagging economic indicator and by the time it shows up, we'll be well down.
Interestingly I'm about to start some building work and a couple months ago, 1 guy coming round with his quote actually told me there were builders laying off around here. I live near Edinburgh and that's hardly a place you normally associate with a bad housing market.
Food for thought.
No shortage of new housing around our way. In fact the enticements are becoming ridiculous. Unfortunately there's no money to be loaned at anywhere near the rates they were.
Low interest rates maybe, but then multiples are way over the average.
... and the strong labour market is probably the only thing holding it all up. Problem is it's a lagging economic indicator and by the time it shows up, we'll be well down.
Interestingly I'm about to start some building work and a couple months ago, 1 guy coming round with his quote actually told me there were builders laying off around here. I live near Edinburgh and that's hardly a place you normally associate with a bad housing market.
Food for thought.
scotinvestor - 08 Apr 2008 19:01 - 139 of 352
i came back to aberdeen last year and housing was up about 35% in the year.....that was on top of another 30 odd per cent rise prev year.
property has doubled within 3 years in aberdeen.
i saw a 2 bedroom flat......price was 245,000.....haha, u must be joking.
anyway prices quoted, u need to add about 50% here to get property......an estate agent early last year told me on average there were 28 people after a given property.......i wonder what it is now
property has doubled within 3 years in aberdeen.
i saw a 2 bedroom flat......price was 245,000.....haha, u must be joking.
anyway prices quoted, u need to add about 50% here to get property......an estate agent early last year told me on average there were 28 people after a given property.......i wonder what it is now
Big Al
- 08 Apr 2008 19:04
- 140 of 352
Oil booming. Lived there 90-96. You wouldn't believe the bargains when I moved there and it was just when the rest of the country was looking peaky. '86 had ruined it. It'll happen again. ;-0
hewittalan6
- 09 Apr 2008 08:17
- 141 of 352
Short term, who knows what is happening.
But who remembers the decade of woe that was the 1970's?
One thing many of us should remember clearly was the queues outside building societys on the first of every month, as young couples wanting to buy their own home queued for very limited funds that the society were able to lend out as mortgages.
You had to be a member and you had an interview as well as an application and by the end of the day, the society had often committed all it could for that month.
We are not going to see that again, but signs are apparant that something similar is happening.
High street lenders are pricing high to deter borrowing. Off street lenders are pulling deals each month as their tranche of lending becomes used up.
Only this morning, one of the biggest off street lenders has e-mailed to say its April money for 90% lending has gone.
The remaining question is whether this is due to demand or low supply. The housing figures suggest supply must be very low, I know demand to be very high, mainly for remortgaging debts.
Where next? It is unlikely we will go back to the days of queueing, but lenders will cherry pick their borrowers more and more until more money is available. The problem with this is tha an estimated 70% of all the population is classed as sub prime from a credit perspective, and without those people being able to join consumerism, consumerism will suffer a long slow starvation.
Doom and gloom? Perhaps. But the silver lining is that capitalism abhors a vacuum and someone will evolve the product to plug a gaping gap. When they do, the surge will be huge.
But who remembers the decade of woe that was the 1970's?
One thing many of us should remember clearly was the queues outside building societys on the first of every month, as young couples wanting to buy their own home queued for very limited funds that the society were able to lend out as mortgages.
You had to be a member and you had an interview as well as an application and by the end of the day, the society had often committed all it could for that month.
We are not going to see that again, but signs are apparant that something similar is happening.
High street lenders are pricing high to deter borrowing. Off street lenders are pulling deals each month as their tranche of lending becomes used up.
Only this morning, one of the biggest off street lenders has e-mailed to say its April money for 90% lending has gone.
The remaining question is whether this is due to demand or low supply. The housing figures suggest supply must be very low, I know demand to be very high, mainly for remortgaging debts.
Where next? It is unlikely we will go back to the days of queueing, but lenders will cherry pick their borrowers more and more until more money is available. The problem with this is tha an estimated 70% of all the population is classed as sub prime from a credit perspective, and without those people being able to join consumerism, consumerism will suffer a long slow starvation.
Doom and gloom? Perhaps. But the silver lining is that capitalism abhors a vacuum and someone will evolve the product to plug a gaping gap. When they do, the surge will be huge.
Guscavalier
- 09 Apr 2008 09:31
- 142 of 352
I agree with you about the gap filling in principle but I don't think this will happen while house valuations remain too high. There is only a credit crisis for riskier borrowers or high geared companies notwithstanding conditions have generally tightened. Its a pity financial institutions did not keep more older experienced staff to hand on a stricter discipline. Well they must all learn the hard way now. Sounds to me hewittalan6 that the government would like to see a giant Northern Rock situation where governments buy up these sub prime assets at tax payers expense. They must be worried about social unrest particularly with so many people threatened with repossession. So much for Brown's stability and the end to boom and bust.
hewittalan6
- 09 Apr 2008 10:32
- 143 of 352
The gap filling principle has been tried once in this round of problems, Gus.
A lender started sourcing cheap money on the Swiss LIBOR, but this has failed. The sign is though that they are already trying. I know of one source where 100% funding is available on a quite risky basis for purchases under value, using newcastle B. Soc and a bridging facility. Scary.
Mervyn King did actually say consideration was being given as to haw to prevent large amounts of repossession and I think this will form from a shift in policy towards lenders having a more difficult ride in repossession proceedings, rather than a government bail out.
I envisage a court approach where the lender has to prove that repossession is the only option on a longer term basis, rather than on the short term basis it currently has to prove.
In other words the current test of there being no likelihood of arrears being caught up in the foreseeable future may drop the word foreseeable and allow defendants to argue that potential changes in circumstances in the more distant future and reduced payments in the present would show a net result of the mortgage not exceeding its original term.
Another possibility is that mortgages come under similar rules to HP, in that when equity achieves a particular % level, the property cannot be repossessed, but remains as security, with interest rolled up or payments made for as long as it takes, at a level set by the courts.
My opinion is that capitalism demands nature takes its course and we swallow the bitter medicine for the good of the economy.
A lender started sourcing cheap money on the Swiss LIBOR, but this has failed. The sign is though that they are already trying. I know of one source where 100% funding is available on a quite risky basis for purchases under value, using newcastle B. Soc and a bridging facility. Scary.
Mervyn King did actually say consideration was being given as to haw to prevent large amounts of repossession and I think this will form from a shift in policy towards lenders having a more difficult ride in repossession proceedings, rather than a government bail out.
I envisage a court approach where the lender has to prove that repossession is the only option on a longer term basis, rather than on the short term basis it currently has to prove.
In other words the current test of there being no likelihood of arrears being caught up in the foreseeable future may drop the word foreseeable and allow defendants to argue that potential changes in circumstances in the more distant future and reduced payments in the present would show a net result of the mortgage not exceeding its original term.
Another possibility is that mortgages come under similar rules to HP, in that when equity achieves a particular % level, the property cannot be repossessed, but remains as security, with interest rolled up or payments made for as long as it takes, at a level set by the courts.
My opinion is that capitalism demands nature takes its course and we swallow the bitter medicine for the good of the economy.
justyi - 09 Apr 2008 11:38 - 144 of 352
The 2.5% fall is just the beginning
Mr Browns reassuring statement is simply disingenuous. Sure, house prices have jumped by 180% in the past ten years. But this 2.5% fall happened over the course of just one month. If you annualised that (multiply by 12), then that would be a 30% fall in house prices over the course of a year.
Of course, you cant do that the monthly figures are volatile, and I fully expect the Halifax index to see some sort of bounce (or at the very least, a much smaller drop) for this month, simply because the March fall has been so big.
The point is that yes, a 2.5% fall would be containable if that was the end of it. But it wont be. This is just the beginning of the crash. Certainly, we cant expect the government to acknowledge that immediately. After all, it took at least a year and probably longer for the US authorities to begin to admit that there was no end in sight to the house price crash over there. But as that experience also shows, politicians cant prevent bad news from happening simply by going into denial mode.
The bigger lie, however, is a much more fundamental one. Mr Browns statement suggests that the 180% rise in house prices over the past decade is a good thing. Its not. Its a bad thing. And its a bad thing regardless of what you believe has driven prices higher.
If you think that house prices have risen because of a supply and demand imbalance, then it shows that the property market is failing in some way. A rising price in this context warns producers (in this case, builders) that we need more of something (in this case, houses). The fact that prices have risen so far and for so long suggests therefore that our mechanism for satisfying housing demand is sorely lacking. Thats a failure of government ultimately, because it comes down to bad planning and confused building regulations.
If, as we do, you think the rise in house prices has much more to do with the availability of cheap credit, then thats also a bad thing. Because its discouraged saving, and encouraged breath-taking levels of risk-taking behaviour amongst financially nae consumers. I suspect that the carnage set to ensue due to the number of 100%-plus, interest-only and six-times-salary mortgages taken out in recent years will dwarf any mis-selling scandal weve seen in the past few decades. Certainly, I find it hard to believe that the property industry will escape this crash without having stricter regulation imposed on it.
House prices are now falling year-on-year
By the way, not many people pointed this out, but if you look at the raw data, house prices are now falling year-on-year. Halifax takes the three-monthly average and comes up with annual growth of 1.1%. But taking the March average house price of 191,556 alone, reveals a 1.3% fall on March 2007, when the average price was 194,094, and a whopping 4% fall on August last year.
So when the Halifax argues that well see low-single digit price falls this year well, were already there. Are things going to stabilise in the next few months? I doubt it. Expect to see that forecast downgraded to high-single digit before the end of the year
Mr Browns reassuring statement is simply disingenuous. Sure, house prices have jumped by 180% in the past ten years. But this 2.5% fall happened over the course of just one month. If you annualised that (multiply by 12), then that would be a 30% fall in house prices over the course of a year.
Of course, you cant do that the monthly figures are volatile, and I fully expect the Halifax index to see some sort of bounce (or at the very least, a much smaller drop) for this month, simply because the March fall has been so big.
The point is that yes, a 2.5% fall would be containable if that was the end of it. But it wont be. This is just the beginning of the crash. Certainly, we cant expect the government to acknowledge that immediately. After all, it took at least a year and probably longer for the US authorities to begin to admit that there was no end in sight to the house price crash over there. But as that experience also shows, politicians cant prevent bad news from happening simply by going into denial mode.
The bigger lie, however, is a much more fundamental one. Mr Browns statement suggests that the 180% rise in house prices over the past decade is a good thing. Its not. Its a bad thing. And its a bad thing regardless of what you believe has driven prices higher.
If you think that house prices have risen because of a supply and demand imbalance, then it shows that the property market is failing in some way. A rising price in this context warns producers (in this case, builders) that we need more of something (in this case, houses). The fact that prices have risen so far and for so long suggests therefore that our mechanism for satisfying housing demand is sorely lacking. Thats a failure of government ultimately, because it comes down to bad planning and confused building regulations.
If, as we do, you think the rise in house prices has much more to do with the availability of cheap credit, then thats also a bad thing. Because its discouraged saving, and encouraged breath-taking levels of risk-taking behaviour amongst financially nae consumers. I suspect that the carnage set to ensue due to the number of 100%-plus, interest-only and six-times-salary mortgages taken out in recent years will dwarf any mis-selling scandal weve seen in the past few decades. Certainly, I find it hard to believe that the property industry will escape this crash without having stricter regulation imposed on it.
House prices are now falling year-on-year
By the way, not many people pointed this out, but if you look at the raw data, house prices are now falling year-on-year. Halifax takes the three-monthly average and comes up with annual growth of 1.1%. But taking the March average house price of 191,556 alone, reveals a 1.3% fall on March 2007, when the average price was 194,094, and a whopping 4% fall on August last year.
So when the Halifax argues that well see low-single digit price falls this year well, were already there. Are things going to stabilise in the next few months? I doubt it. Expect to see that forecast downgraded to high-single digit before the end of the year
hewittalan6
- 09 Apr 2008 12:04
- 145 of 352
I have a wee problem with the idea of mis-selling and tighter regulation.
It has been argued by many (including a tory investigation into the role of the FSA) that regulation is far too tight already, and is hindering the industry with mountains of unneccessary red tape.
John Redwood argued for more caveat emptor and less big brother.
As far as mis-selling goes, the rigmarole for a broker is painstaking and exhaustive. They are held responsible for investigating the truth behind applications and for assessing a clients affordability. Morally and ethically, how can anyone argue that offering a client a product they have asked for, on the basis of facts they themselves supplied, provided by a lender willing to take the risk, giving the client full written details of the contract prior to their commitment to it and employing a solicitor to check it over can ever possibly be mis-selling!!!!!
It is the typical bullshit of "blame someone else" for my mistakes culture that is going a long way to ruining life.
What next? Car companies sued for mis-selling a 1.6 litre car to someone who only needs a 1.2 litre and have suffered an extra few quid in fuel costs?
What utter crap. I am waiting for the queues of people claiming mis-selling, but that is an astonishing abrogation of their duty to themselves. Anyone taking on a long term commitment of any sort is a fool who deserves all they get if they do it without considering the what ifs of the future.
We happily apply that to the lenders. The borrowers should expect the same response.
It has been argued by many (including a tory investigation into the role of the FSA) that regulation is far too tight already, and is hindering the industry with mountains of unneccessary red tape.
John Redwood argued for more caveat emptor and less big brother.
As far as mis-selling goes, the rigmarole for a broker is painstaking and exhaustive. They are held responsible for investigating the truth behind applications and for assessing a clients affordability. Morally and ethically, how can anyone argue that offering a client a product they have asked for, on the basis of facts they themselves supplied, provided by a lender willing to take the risk, giving the client full written details of the contract prior to their commitment to it and employing a solicitor to check it over can ever possibly be mis-selling!!!!!
It is the typical bullshit of "blame someone else" for my mistakes culture that is going a long way to ruining life.
What next? Car companies sued for mis-selling a 1.6 litre car to someone who only needs a 1.2 litre and have suffered an extra few quid in fuel costs?
What utter crap. I am waiting for the queues of people claiming mis-selling, but that is an astonishing abrogation of their duty to themselves. Anyone taking on a long term commitment of any sort is a fool who deserves all they get if they do it without considering the what ifs of the future.
We happily apply that to the lenders. The borrowers should expect the same response.
Guscavalier
- 09 Apr 2008 12:14
- 146 of 352
hewittalan6 - interesting comment about bridging facility and New.B/Society. Somebody cannot be living in this world. I wonder how wide spread this type of transaction goes on at present against the current background. Scary indeed. I can see where Courts should be used where there is a good deal of equity in the property or a reasonable amount but, presumably where negative equity is concerned,it won't make much difference unless the authorities are prepared to underwrite the bad loans and take on some of all of the risk. I agree with you that capitalism should take its course but, with so many people involved in sub prime the social problem could be immense. Unfortunately, we have not got the right people in government to think the situation through and hopefully something will give and Brown &co are forced to go. A backbench revolt may be the catalyst if things get worse and they start getting worried about losing their seats.
hewittalan6
- 09 Apr 2008 12:31
- 147 of 352
It will be a good test of the independance of the BoE, Gus.
Politics demand a rate cut or two. It can be argued that good fiscal management requires at least to hold rates and there is a good argument for raising them!!
In the long term, I think raising rates would be a fairly good move, as it would strengthen the considerably and interest foreign depositors, and hasten a fall in property prices to more sustainable levels.
Fear of a fall in value is what has restricted lending at least as much as the lack of money, and once that fall is realised lenders will loosen their criteria a little, spurring the market on to a steadier playing field.
I agree though that the socio-sconomic fallout would be too much for a government to weather, so a cut is on the cards, with all this means for simply putting off the inevitable end game.
Politics demand a rate cut or two. It can be argued that good fiscal management requires at least to hold rates and there is a good argument for raising them!!
In the long term, I think raising rates would be a fairly good move, as it would strengthen the considerably and interest foreign depositors, and hasten a fall in property prices to more sustainable levels.
Fear of a fall in value is what has restricted lending at least as much as the lack of money, and once that fall is realised lenders will loosen their criteria a little, spurring the market on to a steadier playing field.
I agree though that the socio-sconomic fallout would be too much for a government to weather, so a cut is on the cards, with all this means for simply putting off the inevitable end game.
Guscavalier
- 09 Apr 2008 13:27
- 148 of 352
Tend to agree with you hewittalan6 about interest rates. However, for now at least, the rate set by the BOE seems to have de-coupled from market rates. Presumably this will continue while there is such mistrust between institutional lenders. If BOE lowers rate this week, be interesting to see what market rates do.
Big Al
- 09 Apr 2008 14:30
- 149 of 352
If anyone cannot afford to pay the interest on their house let alone the capital repayment then they should be thrown out. It's that simple.
We live in a society where we seem to think loans should never be repaid. Stick 'em in the streets I say.
We live in a society where we seem to think loans should never be repaid. Stick 'em in the streets I say.
hlyeo98 - 09 Apr 2008 17:33 - 150 of 352
Britain is heading for a decline in the housing market similar to that witnessed in America, while the number of people having their homes repossessed could double as mortgage costs rise, the International Monetary Fund claimed.
Against a backdrop of a 180 per cent rise in house prices over the past decade, George Osborne, the shadow chancellor, accused the Government of allowing a "debt bubble to grow in Britain" which is now beginning to burst. Mortgage lenders are responding to the global credit crunch by tightening up conditions for loans and raising the cost of borrowing.
Against a backdrop of a 180 per cent rise in house prices over the past decade, George Osborne, the shadow chancellor, accused the Government of allowing a "debt bubble to grow in Britain" which is now beginning to burst. Mortgage lenders are responding to the global credit crunch by tightening up conditions for loans and raising the cost of borrowing.
Big Al
- 09 Apr 2008 17:42
- 151 of 352
At the end of the day, why shouldn't the UK see house price falls like all the other countries in the world? We're about the only ones not to have had it yet!
hlyeo98 - 09 Apr 2008 17:53 - 152 of 352
Totally agree with you, Big Al...
The young generation of today seems to think money grows on trees, living on credit cards and paying only the interest, buying things they don't need and cannot afford impulsively, driving inflation upwards, bingeing on alcohol and drugs, and also think that things will get only BETTER without helping themselves!
The young generation of today seems to think money grows on trees, living on credit cards and paying only the interest, buying things they don't need and cannot afford impulsively, driving inflation upwards, bingeing on alcohol and drugs, and also think that things will get only BETTER without helping themselves!
Big Al
- 09 Apr 2008 21:48
- 153 of 352
It's not just the young, hyleo.
I know folk in their 50's who've been cashing in pension plans in the last year or so to buy properties and are only paying interest on the mortgage. Nuts! This is especially so since they made about 6000 income on 4 flats last year. They're currently having trouble remortgaging their earlier fixed deals at anything near the rates. I don't expect them to make much at all this year!
I know folk in their 50's who've been cashing in pension plans in the last year or so to buy properties and are only paying interest on the mortgage. Nuts! This is especially so since they made about 6000 income on 4 flats last year. They're currently having trouble remortgaging their earlier fixed deals at anything near the rates. I don't expect them to make much at all this year!
Big Al
- 09 Apr 2008 21:48
- 154 of 352
PS - they freely admit they cannot afford for prices to drop!
scotinvestor - 10 Apr 2008 01:16 - 155 of 352
an economist last year said int. rates had to go at least 8% to tackle housing prices rocketing.....and probably 10%.....but even then it was getting late as should have been done about 2 years earlier.
has anyone ever thought why houses are up about 180% in 10 years.....as in previous 30 or 40 years say, housing is up about 3 per cent on average.
my guess is that Mrs. T revolutionised way people treat shares in that many buy shares since her day.....but also their pensions rely on stock market.....in other words, most people r reliant on shares.......this was not the case in 1970s under crappy labour.
now, the labour cabinet aint allowed to buy shares and its been about 20 years since they in power......so they think.....hmmm, how can i make money but no shares......i know, lets ramp up houses
has anyone noticed john reid has lots of property.....but its under his non-dom wife from south america.....he has cheek to call himself a socialist. he looks like a mafia wee gangster. it was just when the newspapers were getting hold off this story, that reid stepped down from government......strange that. eh!
now, he's away to ireland to help celtic.....oops, i meant glasgow!
has anyone ever thought why houses are up about 180% in 10 years.....as in previous 30 or 40 years say, housing is up about 3 per cent on average.
my guess is that Mrs. T revolutionised way people treat shares in that many buy shares since her day.....but also their pensions rely on stock market.....in other words, most people r reliant on shares.......this was not the case in 1970s under crappy labour.
now, the labour cabinet aint allowed to buy shares and its been about 20 years since they in power......so they think.....hmmm, how can i make money but no shares......i know, lets ramp up houses
has anyone noticed john reid has lots of property.....but its under his non-dom wife from south america.....he has cheek to call himself a socialist. he looks like a mafia wee gangster. it was just when the newspapers were getting hold off this story, that reid stepped down from government......strange that. eh!
now, he's away to ireland to help celtic.....oops, i meant glasgow!
hewittalan6
- 10 Apr 2008 12:25
- 156 of 352
As predicted widely, rates were cut today.
Manufacturing looks strong and inflationary pressures are very real.
The only solid reason why rates have been cut is to try to stem the credit crisis.
Is this done because the credit crisis will bring a sting in its tail by way of a slump, or is it for political reasons and the fallout a severe property downturn may bring?
Decide for yourselves, but I know which I think to be true.
Manufacturing looks strong and inflationary pressures are very real.
The only solid reason why rates have been cut is to try to stem the credit crisis.
Is this done because the credit crisis will bring a sting in its tail by way of a slump, or is it for political reasons and the fallout a severe property downturn may bring?
Decide for yourselves, but I know which I think to be true.
Guscavalier
- 10 Apr 2008 12:31
- 157 of 352
Heard on the news that Nationwide has put some mortgage rates up.
Big Al
- 10 Apr 2008 12:45
- 158 of 352
Interest rates affect SVRs, LIBOR affects the rest is the basic story.
scotinvestor - 10 Apr 2008 12:47 - 159 of 352
aye hewitt...its for political reasons. the interest cut will not be passed on to people in UK Mainly.
whenever, brown goes to country for election now, whether its next year or 2010.....the country is going to be screwed and most people no better than stagnating and probably much worse off
whenever, brown goes to country for election now, whether its next year or 2010.....the country is going to be screwed and most people no better than stagnating and probably much worse off
BigTed
- 10 Apr 2008 13:40
- 160 of 352
Interestingly, while awaiting remortgage offer from the Woolwich, on a sale property i have, i enquired as to what the Barclays Bank Base Rate actually was? and was quite surprised to find it is still identical to the BoE base rate, the broker expects the rate to drop on Monday to 5% in line with todays decision, so even though the product i am awaiting the offer for is no longer available, there are still some good deals out there albeit max 95% LTV...
As has been highlighted by many here, anyone who took a large mortgage fixed 2 years ago at around 3.75% and couldn't foresee a large jump in repayments when the deal ended deserves to be in a pickle...
As has been highlighted by many here, anyone who took a large mortgage fixed 2 years ago at around 3.75% and couldn't foresee a large jump in repayments when the deal ended deserves to be in a pickle...
hewittalan6
- 10 Apr 2008 15:35
- 161 of 352
Big Ted,
Its not people not foresseing that I get the hump about.
You will know as you are remortgageing that you will have had at least one Key Features Illustration, and you will get at least 2 more, that shows not only the current payment, but the payment at SVR and the effective rise in /S/D for every 1% increase in rates. This is followed by a paragraph challenging you to ask yourself if you could afford these higher payments and a further one warning your home may be repossessed etc.
You have to ask how on earth anyone could possibly, ever, in any circumstances, bleat that they were unaware of what could happen, and that it was all someone elses fault???? But they surely will.
You would have to be a totally illiterate moron to not understand all that lot!!!
Its not people not foresseing that I get the hump about.
You will know as you are remortgageing that you will have had at least one Key Features Illustration, and you will get at least 2 more, that shows not only the current payment, but the payment at SVR and the effective rise in /S/D for every 1% increase in rates. This is followed by a paragraph challenging you to ask yourself if you could afford these higher payments and a further one warning your home may be repossessed etc.
You have to ask how on earth anyone could possibly, ever, in any circumstances, bleat that they were unaware of what could happen, and that it was all someone elses fault???? But they surely will.
You would have to be a totally illiterate moron to not understand all that lot!!!
BigTed
- 10 Apr 2008 16:07
- 162 of 352
Funnily enough, just had an offer on the property half hour ago, trouble is i dont trust anyone at the moment and this is a buy-to-let purchaser supposedly with cash, got my PI checking them out as i type...!
hlyeo98 - 10 Apr 2008 18:49 - 163 of 352
Did he/she give you the asking price?
BigTed
- 10 Apr 2008 20:50
- 164 of 352
Nope, but i'm ahead of the game somewhat, as it is already probably the cheapest property of its type in the area, so have demanded completion within 28 days and will continue marketing, although they are buying it at a fantastic price, i would rather it goes now whereas this price may seem expensive in 6 months time...
Big Al
- 15 Apr 2008 16:00
- 165 of 352
Housing gloom 'worst in 30 years'
Confidence in the UK housing market fell in March to its lowest point in 30 years, according to a closely watched survey of property surveyors.
The Royal Institution of Chartered Surveyors' (Rics) said that 78.5% more surveyors reported a fall than a rise in house prices in March.
Confidence in the UK housing market fell in March to its lowest point in 30 years, according to a closely watched survey of property surveyors.
The Royal Institution of Chartered Surveyors' (Rics) said that 78.5% more surveyors reported a fall than a rise in house prices in March.
spitfire43 - 15 Apr 2008 18:34 - 166 of 352
Housing market certainly looks a bleak prospect in the UK, house builders were hoping as recently as March that Lenders would keep lending. We now know the answer to that one, it gives me no pleasure to say that this bubble is in the process of bursting now.
I haven't any shorts running in this sector, but I will keep an eye on BDEV, and conversly will try and judge an entry point in the future. Too early to pick out which company yet, but PSN seems financially stronger that some.
I haven't any shorts running in this sector, but I will keep an eye on BDEV, and conversly will try and judge an entry point in the future. Too early to pick out which company yet, but PSN seems financially stronger that some.
BigTed
- 15 Apr 2008 19:34
- 167 of 352
Just driven from Paignton back to Torquay and must have seen around 40 for sale boards, out of these, just two Sold signs... says it all really, i can remember 12 months ago it would be the complete opposite.
To be fair, i looked through the local Homeseeker at the weekend and i had to laugh at the prices everyone is marketing their properties at - 600k up, ok i dont expect to see any declines, but from 350k down and in particular the 150-180k bracket, they are dreaming. I fear people are being too slow to catch on and dont stand a chance in hell of finding a naive buyer...
To be fair, i looked through the local Homeseeker at the weekend and i had to laugh at the prices everyone is marketing their properties at - 600k up, ok i dont expect to see any declines, but from 350k down and in particular the 150-180k bracket, they are dreaming. I fear people are being too slow to catch on and dont stand a chance in hell of finding a naive buyer...
Guscavalier
- 15 Apr 2008 21:15
- 168 of 352
I agree with you, I have noticed similar with vendors prices still in cloud cuckoo land. I live in mid Kent and my daughter is looking to buy for the first time. Fortunately, she has a good deposit and can bide her time over the next year or so, to let prices deflate. Like many others I thought this was on the cards 2 or 3 years back but, prices just kept rising. Therefore, the fall may well be steeper.
neil777
- 16 Apr 2008 11:37
- 169 of 352
Completely agree , the amount of people that see the world in noddyvision is unbelievable, and there are still a few that think (even though the credit crunch, banks tightening their lending criteria ,and the overall price of living on the up, to name but a few ) that house prices are still going to go up.
These folk are astonishing , and really do have magic in their head.
I am sick of hearing this supply and demand crap . Demand is disappearing , fast!.
This downturn has the potential to be really bad.
These folk are astonishing , and really do have magic in their head.
I am sick of hearing this supply and demand crap . Demand is disappearing , fast!.
This downturn has the potential to be really bad.
scotinvestor - 16 Apr 2008 13:10 - 170 of 352
as i said before about uk banks thread...........most people haven't a clue what goes on in uk......they dont know about taxes going up....more cctv watching us....they dont read quality newspapers or main headlines even on news.
these are probably the morons that are selling houses at 3 trillion pounds or wotever it is in england.....maybe some of tony blair russian mafia friends like abromavich etc that own london now can buy all the available houses.
i said last year that oil would go to 120$....people in my office were shocked, one guy said it would go to $55.....lol, oil is getting harder to find new stuff....and if in uk hugely more expensive with 20% tax on profits and highly regulated.
oil in future is going to at least 150$ so expect petrol to go much higher in years to come
these are probably the morons that are selling houses at 3 trillion pounds or wotever it is in england.....maybe some of tony blair russian mafia friends like abromavich etc that own london now can buy all the available houses.
i said last year that oil would go to 120$....people in my office were shocked, one guy said it would go to $55.....lol, oil is getting harder to find new stuff....and if in uk hugely more expensive with 20% tax on profits and highly regulated.
oil in future is going to at least 150$ so expect petrol to go much higher in years to come
scotinvestor - 16 Apr 2008 13:11 - 171 of 352
as i said before about uk banks thread...........most people haven't a clue what goes on in uk......they dont know about taxes going up....more cctv watching us....they dont read quality newspapers or main headlines even on news.
these are probably the morons that are selling houses at 3 trillion pounds or wotever it is in england.....maybe some of tony blair russian mafia friends like abromavich etc that own london now can buy all the available houses.
i said last year that oil would go to 120$....people in my office were shocked, one guy said it would go to $55.....lol, oil is getting harder to find new stuff....and if in uk hugely more expensive with 20% tax on profits and highly regulated.
oil in future is going to at least 150$ so expect petrol to go much higher in years to come
these are probably the morons that are selling houses at 3 trillion pounds or wotever it is in england.....maybe some of tony blair russian mafia friends like abromavich etc that own london now can buy all the available houses.
i said last year that oil would go to 120$....people in my office were shocked, one guy said it would go to $55.....lol, oil is getting harder to find new stuff....and if in uk hugely more expensive with 20% tax on profits and highly regulated.
oil in future is going to at least 150$ so expect petrol to go much higher in years to come
spitfire43 - 16 Apr 2008 13:57 - 172 of 352
I did a bit of research last night, and compared the top four US house builders shares compared to ours. I expected to find the share prices loss much higher than our house builders, but hat wasn't really the case. I was hoping that with the American housing market fall starting 16 month's before ours it may give me some clues to future price moves.
The top four US builders had an average price decline of 77.5% over a 28 month time period starting in September 2005.
The top four UK builders had an average price decline of 63% over a 14 month time period starting in January 2007.
As you can see the UK prices have fallen much steeper over a shorter period, unfortunately it doesn't give me much guidance to future price movement, as we have nearly caught up with the US. It may indicate that our housing market could be in much more fragile state than in America.
It should be noted that BDEV fall = 74%, RDW = 65%, PSN = 58%, BVS = 56%
With the American companies the falls were all very close to the 77.5% average, and all companies are now upto 10% above the lows in January 2008. So we may have seen the low point in the US already.
The top four US builders had an average price decline of 77.5% over a 28 month time period starting in September 2005.
The top four UK builders had an average price decline of 63% over a 14 month time period starting in January 2007.
As you can see the UK prices have fallen much steeper over a shorter period, unfortunately it doesn't give me much guidance to future price movement, as we have nearly caught up with the US. It may indicate that our housing market could be in much more fragile state than in America.
It should be noted that BDEV fall = 74%, RDW = 65%, PSN = 58%, BVS = 56%
With the American companies the falls were all very close to the 77.5% average, and all companies are now upto 10% above the lows in January 2008. So we may have seen the low point in the US already.
BigTed
- 16 Apr 2008 14:04
- 173 of 352
There could be another outcome, (not my opinion, however) - what if the credit crisis unravels in the next two quarters and from then lending rates start improving... problem solved, house prices resume upwards and it was all just a correction... with 20% downside from peak last spring...???
hewittalan6
- 16 Apr 2008 16:29
- 174 of 352
Reports in the industry suggest pent up demand. If the credit crisis is unwound quickly (extremely unlikely IMO), and banks go back to old ways of lending (even more unlikely) then there is a suggestion that prices would rise dramatically.
Personally, I expect stagnation, with a small downside for most areas, with the south dropping a bit further than elsewhere.
Personally, I expect stagnation, with a small downside for most areas, with the south dropping a bit further than elsewhere.
scotinvestor - 16 Apr 2008 16:38 - 175 of 352
scotland still going up though and 1 or 2 areas are still going up 30%
neil777
- 16 Apr 2008 17:11
- 176 of 352
Looking at Nationwides house price chart , every correction from 1975 to now has always gone bellow the long run trend line.
If it happens again, which why wouldnt it, we are in for the biggest fall yet , or as I am told again and again by people who dont want it to go down, that its different this time but what they want and what they are going to get maybe two different things.
If it happens again, which why wouldnt it, we are in for the biggest fall yet , or as I am told again and again by people who dont want it to go down, that its different this time but what they want and what they are going to get maybe two different things.
spitfire43 - 16 Apr 2008 17:48 - 177 of 352
Another problem that I hadn't thought of until a news item last night, is that as household bills have been rising along with mortgages. People have loaded up the credit card even more to pay the mortgage, it doesn't sound like the banks are in any mood to be flexable when these people get into trouble.
I think that America may just get away with a mild recession, having pumped money into the system and reduced interest rates.( Storing up a bigger problem a few years down the line. Can the UK ride on there coat tails ? I'm not to sure..........
I think that America may just get away with a mild recession, having pumped money into the system and reduced interest rates.( Storing up a bigger problem a few years down the line. Can the UK ride on there coat tails ? I'm not to sure..........
scotinvestor - 17 Apr 2008 01:07 - 178 of 352
i can assure you that banks aint backing down over credit card debt as i know people in banking sector. in fact, they wont even reduce the high interest rates on the cards.........could be 100,000ssss of them bankrupt soon
and yet the banks want bailed out as they need money......boo hoo
The whole of HBoS board should be sacked with immediate effect.....they have destroyed the great work from more than 100 years of great bank of scotland.
hornby aint a banker and has destroyed the share price.....and doing little to improve things.
and yet the banks want bailed out as they need money......boo hoo
The whole of HBoS board should be sacked with immediate effect.....they have destroyed the great work from more than 100 years of great bank of scotland.
hornby aint a banker and has destroyed the share price.....and doing little to improve things.
hlyeo98 - 09 May 2008 11:57 - 179 of 352
Home repossesions hitting near 1990's peak...
Home repossession orders are nearing the level last seen in the recession of the early 1990s after rising by 16 per cent in the first quarter of this year.
According to the Ministry of Justice, 38,688 mortgage possession claims were issued from January to March this year, compared with 33,715 for the first quarter of 2007.
The last time mortgage repossession claims reached this level was in the third quarter of 1990, when actions hit 37,498, and the housing market was slipping into one of the worse downturns in its history.
At the peak of the downturn in 1991, home repossession orders hit 186,649 for the year, reaching a quarterly high of 51,037 from July to September. The actual number of houses taken back into possession by lenders climbed to a record 75,500 in 1991, according to the Council of Mortgage Lenders (CML).
Home repossession orders are nearing the level last seen in the recession of the early 1990s after rising by 16 per cent in the first quarter of this year.
According to the Ministry of Justice, 38,688 mortgage possession claims were issued from January to March this year, compared with 33,715 for the first quarter of 2007.
The last time mortgage repossession claims reached this level was in the third quarter of 1990, when actions hit 37,498, and the housing market was slipping into one of the worse downturns in its history.
At the peak of the downturn in 1991, home repossession orders hit 186,649 for the year, reaching a quarterly high of 51,037 from July to September. The actual number of houses taken back into possession by lenders climbed to a record 75,500 in 1991, according to the Council of Mortgage Lenders (CML).
hlyeo98 - 10 May 2008 12:36 - 180 of 352
The number of people who are losing their homes because they cannot meet rising mortgage bills is set to double this year, experts said yesterday.
Dearer mortgage costs in the log-jammed home loans market were blamed for a rise of almost 20 per cent over the past year in court orders allowing lenders to seize properties.
The number of repossession orders granted in England and Wales in the first three months of the year climbed to levels not seen since the early 1990s, reaching 27,530. That was up by 17 per cent on a year earlier, and by 9 per cent since the final quarter of last year alone.
In a further sign of the growing financial distress, the number of new court actions started by lenders seeking repossession also leapt sharply. It rose to 38,688 in the first three months of the year, up by 16 per cent on a year ago, and by 7 per cent on the previous quarter.
The news will spark fears that a new wave of repossessions this year will aggravate rapidly worsening conditions in the housing market at a time when prices have already begun to tumble.
The latest survey from Halifax, the biggest mortgage lender, showed that average house prices dropped by 1.3 per cent in April, and are down by 0.9 per cent on levels a year ago.
Dearer mortgage costs in the log-jammed home loans market were blamed for a rise of almost 20 per cent over the past year in court orders allowing lenders to seize properties.
The number of repossession orders granted in England and Wales in the first three months of the year climbed to levels not seen since the early 1990s, reaching 27,530. That was up by 17 per cent on a year earlier, and by 9 per cent since the final quarter of last year alone.
In a further sign of the growing financial distress, the number of new court actions started by lenders seeking repossession also leapt sharply. It rose to 38,688 in the first three months of the year, up by 16 per cent on a year ago, and by 7 per cent on the previous quarter.
The news will spark fears that a new wave of repossessions this year will aggravate rapidly worsening conditions in the housing market at a time when prices have already begun to tumble.
The latest survey from Halifax, the biggest mortgage lender, showed that average house prices dropped by 1.3 per cent in April, and are down by 0.9 per cent on levels a year ago.
halifax - 10 May 2008 12:40 - 181 of 352
It would be interesting to know what percentage of all repossesions are buy to let properties?
hlyeo98 - 10 May 2008 12:54 - 182 of 352
In 1996 Leeds had a mere handful of city centre apartments. In the six years to 2002, a further 1,035 flats were built and the five years from 2002 to 2007 brought an additional 5,900. The city centre now has 7,070 flats, with a further 2,096 under construction, 8,514 with planning consent and 1,362 awaiting planning permission. If all the proposed developments go ahead, Leeds will have more than 19,000, mainly one or two-bedroom flats in which to house the young workforce of its burgeoning concrete metropolis.
And yet it is estimated that more than 1,000 of the city centres existing flats are lying vacant. Property prices in some apartment blocks have plunged, rental fees are static and mortgage costs have leapt.
High-quality developments in the best locations continue to flourish, but cautionary tales from elsewhere suggest, in the words of one estate agent, that some so-called luxury apartments are in danger of becoming inner-city slums of the future.
The consensus among the citys property professionals is that Leeds is learning a harsh lesson. Flats should be built for the people who are going to live in them, not for investors seeking to make a quick buck.
An estimated 80 per cent of the city centre flats in Leeds were bought as buy-to-let investments, many by members of investment clubs. More than 1,000 were purchased by members of one such club, Instant Access Properties, whose sister company, Inside Track Seminars, went into administration recently. Many buy-to-let investors bought flats off plan without even visiting Leeds.
Members of one property club bought a significant chunk of the 235 flats built by Bryant Homes in a huge complex that opened in 2003 under the name of Aspect 14. Of the 11 flats in the block that have been sold most recently, the average price fetched was 129,000. A few years earlier their average purchase price was 166,000. Aspect 14 is on the northeast fringe of the city centre, next to a busy dual carriageway and on the edge of Little London, one of the most deprived housing estates in Leeds.
At another isolated but even newer development of 400 flats, City Island, completed in 2005, properties are selling for 50,000 less than their purchase price. It has already gained the unhappy nickname of S****y Island.
George Wimpey set further alarm bells ringing when it announced in November that it was mothballing its plans to build 800 city-centre apartments as part of a 100 million, mixed-use development called Green Bank. It blamed its decision on the current uncertain market conditions for high-rise apartments in central Leeds.
A recent riverside development of 50 flats each with an agreed buyer who had paid a 10 per cent deposit of 20,000 is empty because every purchaser has pulled out. The 20,000 they have all lost is far less than the fall in the value of each flat since they signed their off-plan deals.
And yet it is estimated that more than 1,000 of the city centres existing flats are lying vacant. Property prices in some apartment blocks have plunged, rental fees are static and mortgage costs have leapt.
High-quality developments in the best locations continue to flourish, but cautionary tales from elsewhere suggest, in the words of one estate agent, that some so-called luxury apartments are in danger of becoming inner-city slums of the future.
The consensus among the citys property professionals is that Leeds is learning a harsh lesson. Flats should be built for the people who are going to live in them, not for investors seeking to make a quick buck.
An estimated 80 per cent of the city centre flats in Leeds were bought as buy-to-let investments, many by members of investment clubs. More than 1,000 were purchased by members of one such club, Instant Access Properties, whose sister company, Inside Track Seminars, went into administration recently. Many buy-to-let investors bought flats off plan without even visiting Leeds.
Members of one property club bought a significant chunk of the 235 flats built by Bryant Homes in a huge complex that opened in 2003 under the name of Aspect 14. Of the 11 flats in the block that have been sold most recently, the average price fetched was 129,000. A few years earlier their average purchase price was 166,000. Aspect 14 is on the northeast fringe of the city centre, next to a busy dual carriageway and on the edge of Little London, one of the most deprived housing estates in Leeds.
At another isolated but even newer development of 400 flats, City Island, completed in 2005, properties are selling for 50,000 less than their purchase price. It has already gained the unhappy nickname of S****y Island.
George Wimpey set further alarm bells ringing when it announced in November that it was mothballing its plans to build 800 city-centre apartments as part of a 100 million, mixed-use development called Green Bank. It blamed its decision on the current uncertain market conditions for high-rise apartments in central Leeds.
A recent riverside development of 50 flats each with an agreed buyer who had paid a 10 per cent deposit of 20,000 is empty because every purchaser has pulled out. The 20,000 they have all lost is far less than the fall in the value of each flat since they signed their off-plan deals.
hlyeo98 - 13 May 2008 12:57 - 183 of 352
LONDON (Reuters) - House prices suffered their most widespread decline across Britain for 30 years and retail sales fell for a second consecutive month in April, surveys showed on Tuesday, in a sign the economic slowdown is worsening.
The weak figures are likely to worry both Bank of England policymakers and out-of-favour Prime Minister Gordon Brown as the economy loses momentum but inflation intensifies as the impact of the global credit crunch deepens.
Manufacturers ramped up prices at the sharpest pace in at least 22 years last month, battling the fastest rise in costs on record, and economists expect headline consumer price inflation to remain well above the Bank's 2 percent target for some time.
"If you thought housing was weak in March ... it pales in comparison to the latest survey," said George Buckley, an economist at Deutsche Bank who expects house prices to fall about 10 percent this year.
The Royal Institution of Chartered Surveyors said its house price balance fell to -95.1 in the three months to April from -79.4 in March -- the weakest since the series began in January 1978 and well below forecasts for a reading of -80.0.
The balance fell in every region compared with March.
Bank arch-dove policymaker David Blanchflower warned last month that house prices could slump by almost a third unless aggressive remedial action was taken.
Two housebuilders warned on Tuesday their performance had been hit by a sharp downturn in the housing market and retail sales values fell for a second straight month in April, according to the British Retail Consortium.
That was the first time sales have fallen in consecutive months since 2005 and suggests tighter credit and rising household bills are forcing consumers to tighten their belts.
The weak figures are likely to worry both Bank of England policymakers and out-of-favour Prime Minister Gordon Brown as the economy loses momentum but inflation intensifies as the impact of the global credit crunch deepens.
Manufacturers ramped up prices at the sharpest pace in at least 22 years last month, battling the fastest rise in costs on record, and economists expect headline consumer price inflation to remain well above the Bank's 2 percent target for some time.
"If you thought housing was weak in March ... it pales in comparison to the latest survey," said George Buckley, an economist at Deutsche Bank who expects house prices to fall about 10 percent this year.
The Royal Institution of Chartered Surveyors said its house price balance fell to -95.1 in the three months to April from -79.4 in March -- the weakest since the series began in January 1978 and well below forecasts for a reading of -80.0.
The balance fell in every region compared with March.
Bank arch-dove policymaker David Blanchflower warned last month that house prices could slump by almost a third unless aggressive remedial action was taken.
Two housebuilders warned on Tuesday their performance had been hit by a sharp downturn in the housing market and retail sales values fell for a second straight month in April, according to the British Retail Consortium.
That was the first time sales have fallen in consecutive months since 2005 and suggests tighter credit and rising household bills are forcing consumers to tighten their belts.
G D Potts
- 13 May 2008 14:59
- 184 of 352
Hope you managed to short all those companies when you started the thread. Would have made some serious money if so.
hlyeo98 - 14 May 2008 19:14 - 185 of 352
Barratt sales hit by market deterioration - MoneyAM
Barratt Developments said total housebuilding revenues in the 19-week period to May 11th fell 7.6%.
The company said market conditions have deterioriated significantly since the end of March.
The group added it has short-term financing in place, ruling out a rumoured rights issue, after agreeing to convert 400m of a facility into a new two-year facility 'which, combined with the expected fall in land spend over the next financial year, effectively deals with the group's short term re-financing requirements'.
Total housebuilding revenues for the 19-week period was 825m compared to 893m in the prior year, while completions were down 5.5%.
The forward order book currently stands at 1.56bn compared to 2.1bn a year ago, reflecting the lower sales rates currently being delivered.
Barratt Developments said total housebuilding revenues in the 19-week period to May 11th fell 7.6%.
The company said market conditions have deterioriated significantly since the end of March.
The group added it has short-term financing in place, ruling out a rumoured rights issue, after agreeing to convert 400m of a facility into a new two-year facility 'which, combined with the expected fall in land spend over the next financial year, effectively deals with the group's short term re-financing requirements'.
Total housebuilding revenues for the 19-week period was 825m compared to 893m in the prior year, while completions were down 5.5%.
The forward order book currently stands at 1.56bn compared to 2.1bn a year ago, reflecting the lower sales rates currently being delivered.
hlyeo98 - 23 May 2008 12:19 - 186 of 352
Wolseley slips as market toughens - MoneyAM
Plumbing and building materials distributor Wolseley announced trading profits down 23% in the nine months to April 30th and said it expected challenging trading conditions to continue in many of its markets, as it had anticipated.
While not giving any figures, Wolseley said group trading profit in the period fell 23% against the same period last year and pretax profit before amortisation and impairment of intangibles was 30% lower, against a 2% rise in revenue.
Plumbing and building materials distributor Wolseley announced trading profits down 23% in the nine months to April 30th and said it expected challenging trading conditions to continue in many of its markets, as it had anticipated.
While not giving any figures, Wolseley said group trading profit in the period fell 23% against the same period last year and pretax profit before amortisation and impairment of intangibles was 30% lower, against a 2% rise in revenue.
hlyeo98 - 23 May 2008 16:31 - 187 of 352
Taylor Wimpey's ratings has been placed on negative watch on UK housing weakness - Fitch
Fitch, therefore, expects TW's full-year sales and EBITDAR to be sharply down year-on-year in 2008, and, as such, EBITDAR-based credit metrics will likely materially decline.
SELL Taylor Wimpey at 100p imo
Fitch, therefore, expects TW's full-year sales and EBITDAR to be sharply down year-on-year in 2008, and, as such, EBITDAR-based credit metrics will likely materially decline.
SELL Taylor Wimpey at 100p imo
hlyeo98 - 26 May 2008 12:48 - 188 of 352
Investors Chronicle has also recommended a SELL on Taylor Wimpey this week.
hlyeo98 - 29 May 2008 21:42 - 189 of 352
Taylor Wimpey is 86p now
scotinvestor - 30 May 2008 00:56 - 190 of 352
oh dear.....2.5% drop in house prices this month.....thats average 5k of everyone house.
oil price booming.....food prices rocketing.......real inflation has been calcalated to be 14.5%, not gordon brown made up fantasy figure.
unemployment rising.....even the poles r starting to leave.
also, rampant violence under the the anger ridden people of uk with the soft approach taken by blair in past who couldnt even deal with his own children.
public finances r screwed too........gov must increase taxation and keep hoping oil goes up so that petrol is at least 1.50 quid or even 2 to raise revenue. also northern rock to pay and extra 50 billion to banks plus iraq to fund......oh and to double its amount given to europe for next SIX YEARS! LOL
THE COUNTRY IS SCREWED
oil price booming.....food prices rocketing.......real inflation has been calcalated to be 14.5%, not gordon brown made up fantasy figure.
unemployment rising.....even the poles r starting to leave.
also, rampant violence under the the anger ridden people of uk with the soft approach taken by blair in past who couldnt even deal with his own children.
public finances r screwed too........gov must increase taxation and keep hoping oil goes up so that petrol is at least 1.50 quid or even 2 to raise revenue. also northern rock to pay and extra 50 billion to banks plus iraq to fund......oh and to double its amount given to europe for next SIX YEARS! LOL
THE COUNTRY IS SCREWED
Falcothou - 30 May 2008 09:22 - 191 of 352
Things are not looking that rosy Scot but stagflation is a global phenomenon and there are plenty of far worse places to live than the UK. The UK presss seem to make out it's only happening here. May be we should be looking for a new planet!
Falcothou - 30 May 2008 10:09 - 192 of 352
http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=A1YourView&xml=/money/2008/05/26/ccom126.xml
hlyeo98 - 04 Jun 2008 08:44 - 193 of 352
Taylor Wimpey is the biggest casualty - 75p now.
scotinvestor - 04 Jun 2008 09:39 - 194 of 352
yes, things maybe worse in places like korea, iraq, zimbaBwe etc but this is uk! we used to rule quarter of the world....we used to be caring, well educated, well mannered people, well dressed too........i cant say any of these things anymore. people in this country r apathetic and dont want to work but expect to be wealthy and have 2 holidays a year, modern gadgetry, designer clothes etc, lol.
just read that 350 aussie bankers left uk as they r fed up looking at impoverished people in uk......lol, hilarious.....aye, you dont see poverty in oz like you do in britain. thats from a country thats REDUCED taxation by 15% in last decade, not increasing it with stealth taxes like capitalist labour
just read that 350 aussie bankers left uk as they r fed up looking at impoverished people in uk......lol, hilarious.....aye, you dont see poverty in oz like you do in britain. thats from a country thats REDUCED taxation by 15% in last decade, not increasing it with stealth taxes like capitalist labour
hlyeo98 - 04 Jun 2008 16:05 - 195 of 352
Barratt Developments (BDEV.L: Quote, Profile, Research), Britain's second largest house builder by volume, said on Wednesday reservations in 2008 were down a third year-on-year as buyers struggle to get mortgages in the global credit crunch.
"Since the end of March, market conditions have deteriorated significantly as a result of an unprecedented reduction in mortgage availability and tightening lending criteria, combined with a decline in consumer confidence," Barratt said.
The comment chimes with recent statements from rivals and the timing ties in with a report early in April from Halifax, the country's biggest mortgage lender, that house prices fell 2.5 percent in March, as competition in the mortgage market all but disappeared and availability dried up.
"Since the end of March, market conditions have deteriorated significantly as a result of an unprecedented reduction in mortgage availability and tightening lending criteria, combined with a decline in consumer confidence," Barratt said.
The comment chimes with recent statements from rivals and the timing ties in with a report early in April from Halifax, the country's biggest mortgage lender, that house prices fell 2.5 percent in March, as competition in the mortgage market all but disappeared and availability dried up.
scotinvestor - 04 Jun 2008 16:22 - 196 of 352
house prices still rising in scotland!!!
dealerdear - 04 Jun 2008 16:33 - 197 of 352
My niece lives in Scotland.
She says the 'experts' there are saying you are about to join us in the plunge
She says the 'experts' there are saying you are about to join us in the plunge
scotinvestor - 04 Jun 2008 16:43 - 198 of 352
it depends where u live really......aberdeen is awash with money and imagine double digit increases again.....on top of 35% increases in last 2 years each....houses have doubled in price there in 2.5 years almost.
growth of 4% right now this year overall in scotland from what was on in news.
its just credit crunch.....and hornby the devious git says it will last at least 18 months more......so dont expect much houses being bought in england, if any are bought these days......capitalism between goverments and banks etc are falling apart and we r to endure it for well over 2 if not up to 4 years by some analysts.......maybe marx, stalin etc was right
growth of 4% right now this year overall in scotland from what was on in news.
its just credit crunch.....and hornby the devious git says it will last at least 18 months more......so dont expect much houses being bought in england, if any are bought these days......capitalism between goverments and banks etc are falling apart and we r to endure it for well over 2 if not up to 4 years by some analysts.......maybe marx, stalin etc was right
hewittalan6
- 05 Jun 2008 15:55
- 199 of 352
Being the contrarion as always...............;-)
I am hearing high level banking figures talking about a recovery in the money markets as soon as Q4 this year.
These guys are also talking of house prices falling by as little as 2%. The most vocal of these has put his money where his mouth is and relaxed criteria on his BTL range of mortgages. This is the first relaxation of criteria in a year and goes against the tide.
Other companies are also now swimming against the tide in other ways.
Abbey and Skipton, to name 2, have re-introduced exclusive products for intermediary sales, and very good ones they are too, better in some ways than the direct offerings. This flies against the Nationwides and HBOS who have kept the very best exclusives for branch use only.
Perhaps not the green shoots of recovery, but the odd seedling starting to sprout.
I am hearing high level banking figures talking about a recovery in the money markets as soon as Q4 this year.
These guys are also talking of house prices falling by as little as 2%. The most vocal of these has put his money where his mouth is and relaxed criteria on his BTL range of mortgages. This is the first relaxation of criteria in a year and goes against the tide.
Other companies are also now swimming against the tide in other ways.
Abbey and Skipton, to name 2, have re-introduced exclusive products for intermediary sales, and very good ones they are too, better in some ways than the direct offerings. This flies against the Nationwides and HBOS who have kept the very best exclusives for branch use only.
Perhaps not the green shoots of recovery, but the odd seedling starting to sprout.
Guscavalier
- 05 Jun 2008 16:35
- 200 of 352
The announcement I have just posted on Lloy BB does seem to indicate that there is plenty of money available if the deal is right. Lloy would seem to be going cherry picking which seems to indicate that there are good opportunities around for the shrewd.
Guscavalier
- 05 Jun 2008 16:57
- 201 of 352
I have been looking at the Builders from a contrarian viewpoint, a sector in which I have no share holdings at present. Although the background is not encouraging it may be a worthwhile exercise to consider the Companies that are better placed once a bottom has been found. Although I have more homework to do, my initial view is that the prospects for Taylor Wimpey and Barratts look awful so I have cast them aside. The better ones may be Bovis and Bellway and perhaps the more diversified Galliford Try, the directors of which have been buying shares around the 50p level although the sp has weakened since. I agree that we probably have more bad news to come but I can not help thinking that the market is beginning to discount alot of the prospective bad news in repect of some of the stocks. However, still watching at present.
hewittalan6
- 05 Jun 2008 17:16
- 202 of 352
Probably very wise, Gus.
Inevitably, the new build sector will be one of the last to benefit from an end of the crisis. There will be many indicators before then.
You are right about Lloyds cherry picking. They all are. There are odd exceptions to be found, but they are mainly mutuals. Most mutuals seem to have almost identical criteria, and LTV levels as before the crunch, though some have redrawn their geographic criteria.
The point I was making was that the onset of the credit crunch saw lenders scrambling to ensure their offerings were not market leading. They did not want to be exposed. Now we are just starting to see a reverse as some lenders are trying to top the comparison charts (though with large fees). This is a sign that they have money to lend out and are willing to buy business, and therefore a sign that we may have seen the worst.
Inevitably, the new build sector will be one of the last to benefit from an end of the crisis. There will be many indicators before then.
You are right about Lloyds cherry picking. They all are. There are odd exceptions to be found, but they are mainly mutuals. Most mutuals seem to have almost identical criteria, and LTV levels as before the crunch, though some have redrawn their geographic criteria.
The point I was making was that the onset of the credit crunch saw lenders scrambling to ensure their offerings were not market leading. They did not want to be exposed. Now we are just starting to see a reverse as some lenders are trying to top the comparison charts (though with large fees). This is a sign that they have money to lend out and are willing to buy business, and therefore a sign that we may have seen the worst.
hewittalan6
- 06 Jun 2008 11:36
- 203 of 352
Following on from yesterday, today sees one small lender increasing its available LTV's from 75% to 90%, and Leeds increasing their BTL LTV's to 80%.
This is a good sign of returning confidence within the lending institutions, but there is a long way to go yet.
This is a good sign of returning confidence within the lending institutions, but there is a long way to go yet.
neil777
- 06 Jun 2008 12:18
- 204 of 352
I would't get too carried away, just wait for christmas, and then a long hard winter.
I believe were only at the very start of a downturn, that could potentailly be rather nasty!
imo
I believe were only at the very start of a downturn, that could potentailly be rather nasty!
imo
hewittalan6
- 06 Jun 2008 12:39
- 205 of 352
The jury is out, Neil, but I think it has bottomed in the financial markets. It may bump along for a while and it will be some time before the real economy feels the full effect, but I think the balance of "news" from banks etc. will now be neutral and will turn more positive through late 2008.
Just like you, imo.
Alan
Just like you, imo.
Alan
hewittalan6
- 06 Jun 2008 12:52
- 206 of 352
And within the last 30 minutes a very odd announcement.
Cannot disclose the lender, but they have announced they are only making their high LTV product available as a fixed, not at their SVR.
The public reason for this, when announced, will be to mitigate the borrowers risk from potentially increased payments. No lender is that altruistic. I beleive the real reason is more likely to be profitablity. I think they are expecting their LTV to drop in the coming months and anyone on a fixed rate will be paying much more than otherwise and face large penalties to get out of the fix.
A kind of fleece 'em while you can scenario. Normally they would pull their fixes and replace them with lower fixes, but with them being one of the few available over 90%, they do not need to work hard to attract borrowers.
Cannot disclose the lender, but they have announced they are only making their high LTV product available as a fixed, not at their SVR.
The public reason for this, when announced, will be to mitigate the borrowers risk from potentially increased payments. No lender is that altruistic. I beleive the real reason is more likely to be profitablity. I think they are expecting their LTV to drop in the coming months and anyone on a fixed rate will be paying much more than otherwise and face large penalties to get out of the fix.
A kind of fleece 'em while you can scenario. Normally they would pull their fixes and replace them with lower fixes, but with them being one of the few available over 90%, they do not need to work hard to attract borrowers.
partridge
- 06 Jun 2008 13:00
- 207 of 352
Alan - what sort of term is it fixed for? Seems to me that major cause of banks' troubles is lending long and borrowing short, so from their perspective the deal makes sense if they have sourced the funds. If only for a few years, however, surely the borrower is back to the mercy of rates when the deal expires?
hewittalan6
- 06 Jun 2008 14:31
- 208 of 352
Just 3 years, Partridge.
I still read it as profiteering from a restricted supply by ensuring as supply eases and rates come down they are enjoying large margins.
I still read it as profiteering from a restricted supply by ensuring as supply eases and rates come down they are enjoying large margins.
Big Al
- 06 Jun 2008 15:00
- 209 of 352
I really can't believe there are actually any housing bulls on here. Nuts!
Guscavalier
- 06 Jun 2008 15:41
- 210 of 352
Are there any?
hewittalan6
- 06 Jun 2008 15:43
- 211 of 352
Not me.
I have no idea what might happen to the housing market. I just comment on the financing of it. The market itself is 12 months behind the lenders.
I have no idea what might happen to the housing market. I just comment on the financing of it. The market itself is 12 months behind the lenders.
Guscavalier
- 06 Jun 2008 15:53
- 212 of 352
and not me but, I won't deny that I am choosing some of the more quality stocks for future investment when the time is more appropriate.
hlyeo98 - 06 Jun 2008 18:14 - 213 of 352
Mortgage lenders putting up rates despite BOE keeping rate fixed.
Bradford & Bingley is raising rates on its standard residential, buy-to-let and self-certification mortgages by between 0.05% and 0.55%. It claimed the move was part of its "normal business activity", which has seen it repricing its mortgages on a monthly basis for the past 18 months.
It added that it had nothing to do with Monday's announcement that it had racked up an 8 million pre-tax loss in the four months to the end of April after suffering a further 89 million hit from the credit squeeze and a 36 million charge from increasing arrears.
As a result of the changes, a two-year fixed rate loan for someone with a 75% deposit who pays a 999 fee will rise by 0.2% to 6.49%.
But the biggest rises were seen across the group's buy-to-let range, with fixed rate deals jumping by 0.55% and variable ones increasing by 0.45%, leaving a three-year fix with a 1.5% fee at 7.44%.
Abbey is raising its rates by between 0.07% and 0.26% on a range of its products, including those for people with only a 15% deposit and its five-year fixed rate loans. The move will leave a five-year fixed rate deal for someone with a 25% deposit 0.26% higher at 6.45%.
It is the second time that the UK's third largest lender has increased its mortgage rates in two weeks and it warned that there were likely to be further changes to come.
Bradford & Bingley is raising rates on its standard residential, buy-to-let and self-certification mortgages by between 0.05% and 0.55%. It claimed the move was part of its "normal business activity", which has seen it repricing its mortgages on a monthly basis for the past 18 months.
It added that it had nothing to do with Monday's announcement that it had racked up an 8 million pre-tax loss in the four months to the end of April after suffering a further 89 million hit from the credit squeeze and a 36 million charge from increasing arrears.
As a result of the changes, a two-year fixed rate loan for someone with a 75% deposit who pays a 999 fee will rise by 0.2% to 6.49%.
But the biggest rises were seen across the group's buy-to-let range, with fixed rate deals jumping by 0.55% and variable ones increasing by 0.45%, leaving a three-year fix with a 1.5% fee at 7.44%.
Abbey is raising its rates by between 0.07% and 0.26% on a range of its products, including those for people with only a 15% deposit and its five-year fixed rate loans. The move will leave a five-year fixed rate deal for someone with a 25% deposit 0.26% higher at 6.45%.
It is the second time that the UK's third largest lender has increased its mortgage rates in two weeks and it warned that there were likely to be further changes to come.
hewittalan6
- 06 Jun 2008 21:44
- 214 of 352
What the above journalist failed to mention was that Abbey had made its rates much cheaper through the introduced channels and higher through the direct channels in response to the AMI & FSA concerns about dual pricing. In effect they have levelled the playing field and their fixed rates are as low as 5.69%!!
Disengenuous reporting if ever I read it.
Also, anyone who believes the B&B have not raised their rates due to Mondays announcement is in cloud cuckoo land. They have nothing to lend out really and so the best way to deal with that is to be unattractive.
Finally, further changes to come could mean anything!!!!! Hardly a warning except in the septic minds of journalists who love to put the fear of God in everyone.
The trouble is, the lie becomes the truth and the prophecy self fulfills.
I could rewrite that story with identical facts and you would believe that free beer was here!! Neither are true but a bit of honesty would not go amiss.
Disengenuous reporting if ever I read it.
Also, anyone who believes the B&B have not raised their rates due to Mondays announcement is in cloud cuckoo land. They have nothing to lend out really and so the best way to deal with that is to be unattractive.
Finally, further changes to come could mean anything!!!!! Hardly a warning except in the septic minds of journalists who love to put the fear of God in everyone.
The trouble is, the lie becomes the truth and the prophecy self fulfills.
I could rewrite that story with identical facts and you would believe that free beer was here!! Neither are true but a bit of honesty would not go amiss.
hlyeo98 - 07 Jun 2008 16:59 - 215 of 352
justyi - 08 Jun 2008 15:24 - 216 of 352
Further evidence that Britain's housing slump is gathering pace has been provided by figures from Halifax, which show that house prices are plunging at twice the rate of the property market's drastic downturn in the early Nineties.
House prices fell by a further 2.4 per cent last month, extending losses that have left them down by 6.6 per cent since January, wiping £13,000 off the value of the average home.
Prices have fallen twice as fast in the past five months as in the same period in 1992, during the most recent property crash, when they fell by only 3.3 per cent, based on Halifax figures. The decline in prices this year is the biggest five-month fall since records began in 1991. If the deterioration in house prices continues at its present pace, the value of a home will slump by more in six months this year than in the whole of 1992, when prices fell by a total of 7.2 per cent. Some economists forecast that prices could fall by up to 12 per cent this year, followed by further declines next year.
After the Bank of England took a hardline decision to keep rates on hold yesterday there were fears that it could raise interest rates later this year after the European Central Bank issued a surprise warning that surging inflation may force it to lift eurozone rates as early as next month. The emerging threat of higher base rates in the UK will add to the growing pressure on families struggling with the rising cost of living.
Bradford & Bingley is expected to aggravate the pain today, when the troubled lender increases rates on all of its home-loan products, although it has not said by how much.
House prices fell by a further 2.4 per cent last month, extending losses that have left them down by 6.6 per cent since January, wiping £13,000 off the value of the average home.
Prices have fallen twice as fast in the past five months as in the same period in 1992, during the most recent property crash, when they fell by only 3.3 per cent, based on Halifax figures. The decline in prices this year is the biggest five-month fall since records began in 1991. If the deterioration in house prices continues at its present pace, the value of a home will slump by more in six months this year than in the whole of 1992, when prices fell by a total of 7.2 per cent. Some economists forecast that prices could fall by up to 12 per cent this year, followed by further declines next year.
After the Bank of England took a hardline decision to keep rates on hold yesterday there were fears that it could raise interest rates later this year after the European Central Bank issued a surprise warning that surging inflation may force it to lift eurozone rates as early as next month. The emerging threat of higher base rates in the UK will add to the growing pressure on families struggling with the rising cost of living.
Bradford & Bingley is expected to aggravate the pain today, when the troubled lender increases rates on all of its home-loan products, although it has not said by how much.
hlyeo98 - 09 Jun 2008 13:01 - 217 of 352
All the property stocks are crashing today because the banks are asking them to revalue their properties which has slumped in value.
Big Al
- 10 Jun 2008 07:57
- 218 of 352
Thousands facing negative equity
By Richard Scott
Personal finance correspondent, BBC News
More than 23,200 people who took out 100% mortgages in the year to 31 March could face negative equity, according to figures obtained by the BBC.
Falling house prices mean the amount borrowed could be greater than the value of their properties.
The data from the Council of Mortgage Lenders comes as figures show the housing market is slowing down further.
Separate housing figures suggest the number of transactions per estate agent has hit a 30-year low.
These figures from the Royal Institution of Chartered Surveyors come as banks are imposing stricter requirements on borrowers, in the wake of the credit crisis.
By Richard Scott
Personal finance correspondent, BBC News
More than 23,200 people who took out 100% mortgages in the year to 31 March could face negative equity, according to figures obtained by the BBC.
Falling house prices mean the amount borrowed could be greater than the value of their properties.
The data from the Council of Mortgage Lenders comes as figures show the housing market is slowing down further.
Separate housing figures suggest the number of transactions per estate agent has hit a 30-year low.
These figures from the Royal Institution of Chartered Surveyors come as banks are imposing stricter requirements on borrowers, in the wake of the credit crisis.
partridge
- 10 Jun 2008 09:42
- 219 of 352
Yes Al - but lots of those in negative equity early 90s now have substantial asset in their homes. Key is serviceability - if that no problem, then blips in short term valuation of no great significance. Time getting near imo to remember that shares can go up as well as down - my only holding at present in housebuilding sector is ABBY (no debt) but may soon be tempted to catch the falling knife. Same imo applies to some of the banks but always DYOR.
skinny
- 10 Jun 2008 15:31
- 220 of 352
hlyeo98 - 10 Jun 2008 15:43 - 221 of 352
Persimmon (LSE: PSN.L - news) , down nearly 9% to 387p, is the FTSE 100's worst performer today after Goldman Sachs lowered its stance on the index's sole housebuilder to 'sell' from 'neutral'.
The broker said the Persimmon will be unable to escape the effects of a housing downturn and land writedowns despite its disciplined management and high quality land holdings.
Persimmon was also hit by a Royal Institution of Chartered Surveyors (RICS) survey that showed chartered surveyors completed just 17.4 transactions each over the last three months versus 18.5 in the period to April.
The broker said the Persimmon will be unable to escape the effects of a housing downturn and land writedowns despite its disciplined management and high quality land holdings.
Persimmon was also hit by a Royal Institution of Chartered Surveyors (RICS) survey that showed chartered surveyors completed just 17.4 transactions each over the last three months versus 18.5 in the period to April.
spitfire43 - 10 Jun 2008 19:41 - 222 of 352
Guscavalier
was interested to read your earlier thread, because I had also looked at Housebuilders with a contrarian view, and like you had discounted BDEV and TW. due to weak balance sheets. The two I'm following are PSN and BWY which seem sronger and should emerge on the other side. I was looking at a 12 month view before buying, but this was just guess work, so I have decided to use charts to decide on my timing.
The plan is to use the 50 and 200 ma, when looking back at PSN i noticed that the 50ma crossed the 200ma = dead cross in August 2007 a very good sell signal. When the 50ma moves above 200ma in the future this could indicate a buy signal = golden cross. I had a look back at some graphs in 2002/03 and it seemed to work then, I would miss the first rise in price this way but it should still be near the bottom.
I would also wait for some companies to fail or to be taken over first before I would expect any buy signals. But like you I still have some homework to do on the timing of the buy signals, and also which company would be the best one to follow.
was interested to read your earlier thread, because I had also looked at Housebuilders with a contrarian view, and like you had discounted BDEV and TW. due to weak balance sheets. The two I'm following are PSN and BWY which seem sronger and should emerge on the other side. I was looking at a 12 month view before buying, but this was just guess work, so I have decided to use charts to decide on my timing.
The plan is to use the 50 and 200 ma, when looking back at PSN i noticed that the 50ma crossed the 200ma = dead cross in August 2007 a very good sell signal. When the 50ma moves above 200ma in the future this could indicate a buy signal = golden cross. I had a look back at some graphs in 2002/03 and it seemed to work then, I would miss the first rise in price this way but it should still be near the bottom.
I would also wait for some companies to fail or to be taken over first before I would expect any buy signals. But like you I still have some homework to do on the timing of the buy signals, and also which company would be the best one to follow.
Guscavalier
- 11 Jun 2008 10:21
- 223 of 352
Merrill Lynch reviewed the UK Housebuilding sector this morning, downgrading all the major players.
Barratt Developments, Bellway, Berkeley, Galliford Try and Redrow were moved from 'neutral' to 'underperform', while Persimmon was dropped to 'neutral' from 'buy'.
The broker has new price targets for Barratt at 90p, Bellway at 525p, Berkeley at 700p, Bovis at 300p, Galliford Try at 35p, Kier at 1,000p, Persimmon at 400p, Redrow at 170p and Taylor Wimpey at 70p.
In a note to clients, Merrill Lynch said it believes given the deteriorating market backdrop that UK housebuilders have experienced over the past three months, the early 1990s housing market recession has increasing relevance as a comparator.
The broker said it thinks unemployment levels will be of critical importance as the single most important determinant of consumer confidence and housing transactions as this was the case in the early 1990s recession.
If, as Merrill suspects, unemployment trends higher, then it thinks this will put additional pressure on housing transaction volumes and the broker advises, more than anything else, to watch this variable closely.
The broker has cut its volume and house price assumptions for 2009, with volume projections from flat to down 10% and house prices from 5% lower to a drop of 10%.
Merrill believes we have gone beyond the tipping point and are now clearly seeing a UK housing market being squeezed on opposing fronts, by a lack both of willing lenders, as well as willing purchasers.
spitfire43- be interesting to hear when your 'golden cross' is triggered. Certainly an interesting guide and from the Merrill Lynch outlook the more help we can get the better. Not easy to get the timing right with contrarian investing since negative sentiment can continue to rule even if most of the outlook for a sector has been discounted. I tend to buy a few shares with a view to average down if lower levels are reached. I have done this with Royal Bank Scot and Barc recently. However, have not made an initial move with the builders. Will continue with the homework!
Barratt Developments, Bellway, Berkeley, Galliford Try and Redrow were moved from 'neutral' to 'underperform', while Persimmon was dropped to 'neutral' from 'buy'.
The broker has new price targets for Barratt at 90p, Bellway at 525p, Berkeley at 700p, Bovis at 300p, Galliford Try at 35p, Kier at 1,000p, Persimmon at 400p, Redrow at 170p and Taylor Wimpey at 70p.
In a note to clients, Merrill Lynch said it believes given the deteriorating market backdrop that UK housebuilders have experienced over the past three months, the early 1990s housing market recession has increasing relevance as a comparator.
The broker said it thinks unemployment levels will be of critical importance as the single most important determinant of consumer confidence and housing transactions as this was the case in the early 1990s recession.
If, as Merrill suspects, unemployment trends higher, then it thinks this will put additional pressure on housing transaction volumes and the broker advises, more than anything else, to watch this variable closely.
The broker has cut its volume and house price assumptions for 2009, with volume projections from flat to down 10% and house prices from 5% lower to a drop of 10%.
Merrill believes we have gone beyond the tipping point and are now clearly seeing a UK housing market being squeezed on opposing fronts, by a lack both of willing lenders, as well as willing purchasers.
spitfire43- be interesting to hear when your 'golden cross' is triggered. Certainly an interesting guide and from the Merrill Lynch outlook the more help we can get the better. Not easy to get the timing right with contrarian investing since negative sentiment can continue to rule even if most of the outlook for a sector has been discounted. I tend to buy a few shares with a view to average down if lower levels are reached. I have done this with Royal Bank Scot and Barc recently. However, have not made an initial move with the builders. Will continue with the homework!
hlyeo98 - 11 Jun 2008 10:23 - 224 of 352
Now there is a new crisis in addition to the sub-prime mortgages, prime mortgages are the next disaster to hit the building and banking sector.
That is why the property sector is continuing its steep downtrend today.
That is why the property sector is continuing its steep downtrend today.
dealerdear - 11 Jun 2008 10:32 - 225 of 352
telegraph saying this morning BDEV on the brink. Needs a debt for equity swap and quickly! Currently down another staggering 26%, TW. 20% etc etc.
Will we have any housebuilders in 1 mnths time?
Will we have any housebuilders in 1 mnths time?
dealerdear - 11 Jun 2008 10:35 - 226 of 352
This is obviously the second leg of the credit crisis. Looks as though a few builders are following NRK. Unfortunately I hold PSN. At least they are one of the strongest. If they go the lot will go!
spitfire43 - 11 Jun 2008 11:46 - 227 of 352
looking very grim for BDEV, they are in horrible position with huge debts and falling sales, I would think it would be over a year before I could consider a contrarian purchase in this sector. I will look for the Golden Cross and continue to monitor and research the sector.
I have been making small purchases in the bank sector with LLOY and looking at RBS, but hesitating for now because it feels like they could go lower, dragged further down by the housing sector.
I have been making small purchases in the bank sector with LLOY and looking at RBS, but hesitating for now because it feels like they could go lower, dragged further down by the housing sector.
hlyeo98 - 11 Jun 2008 11:49 - 228 of 352
Thanks for the reference, dealerdear.
Plight of Barratt and Taylor Wimpey deepens as shares fall more than 20pc
By David Litterick
Last Updated: 10:49am BST 11/06/2008
The plight of Barratt Developments worsened this morning after shares fell a further 25pc to just 68.25p as fears mounted that the housebuilder's woes are so severe that it will have to resort to a debt-for-equity swap to stand a chance of survival.
Taylor Wimpey also fell by 20pc to 52p, after a flurry of negative coverage saying that the company would also have to raise capital to try and repair its struggling balance sheet. Both companies now have net debt which far exceeds their market value.
Barratt shares have tumbled 85pc since the beginning of 2008, while Taylor Wimpey has fallen 74pc.
Shares in the rest of the sector were hit this morning, but to a lesser extent.
There are fears many housebuilders will now be forced into drastic writedowns in the value of their land banks
The share price falls follow a bad day for housebuilder's yesterday, when Barratt saw its shares slump 29 to 91p after brokers said there was no end in sight to the collapse in the housing market.
In a savage note, Dresdner Kleinwort withdrew its target price on Barratt in a note titled: "Don't buy [at any price]."
Barratt was not alone in feeling the pain. Persimmon shares tumbled 41 to 387p and Taylor Wimpey slumped 12 to 65p.
Plight of Barratt and Taylor Wimpey deepens as shares fall more than 20pc
By David Litterick
Last Updated: 10:49am BST 11/06/2008
The plight of Barratt Developments worsened this morning after shares fell a further 25pc to just 68.25p as fears mounted that the housebuilder's woes are so severe that it will have to resort to a debt-for-equity swap to stand a chance of survival.
Taylor Wimpey also fell by 20pc to 52p, after a flurry of negative coverage saying that the company would also have to raise capital to try and repair its struggling balance sheet. Both companies now have net debt which far exceeds their market value.
Barratt shares have tumbled 85pc since the beginning of 2008, while Taylor Wimpey has fallen 74pc.
Shares in the rest of the sector were hit this morning, but to a lesser extent.
There are fears many housebuilders will now be forced into drastic writedowns in the value of their land banks
The share price falls follow a bad day for housebuilder's yesterday, when Barratt saw its shares slump 29 to 91p after brokers said there was no end in sight to the collapse in the housing market.
In a savage note, Dresdner Kleinwort withdrew its target price on Barratt in a note titled: "Don't buy [at any price]."
Barratt was not alone in feeling the pain. Persimmon shares tumbled 41 to 387p and Taylor Wimpey slumped 12 to 65p.
dealerdear - 11 Jun 2008 11:52 - 229 of 352
If a builder goes under what effect that will have on a bank sp I don't know.
Apart from that analysts are becoming very +ve about RBS. Another one on CNBC a few moments ago saying good things.
Apart from that analysts are becoming very +ve about RBS. Another one on CNBC a few moments ago saying good things.
robertalexander
- 11 Jun 2008 13:31
- 230 of 352
is there any likelyhood of BDEV being suspended followwing a near 50% drop in SP in two day? do they have to issue an RNS?[possibly not because their woes are inn public domain already]
Providing they don't go bust anyone care to speculate a buy-in point with a view for long-term recovery. people are always going to need new houses
please feel free to comment.
Alex
Providing they don't go bust anyone care to speculate a buy-in point with a view for long-term recovery. people are always going to need new houses
please feel free to comment.
Alex
dealerdear - 11 Jun 2008 13:44 - 231 of 352
Alex.
My take is this as I'm watching very carefully. B&B were apparently told by the FSA they didn't have to update the market immediately about their profit warning until they had the secured the input of cash. Otherwise the FSA knew there would be a run on the bank similar to NRK. I can only think the builders have been told the same. There is probably a hell of a lot of activity going on behind the scenes between builders, M King and the government. The trouble today is everything is interlinked. If a builder goes bankrupt then the market may fall rapidly which could have a knock on effect on banks. As RBS and HBOS are only trading just above their rights prices, any severe fall would IMO mean resignations from both sets of boards. Probably at this very moment some of the builders are refinancing. I tried trading BDEV and gave up. I wouldn't stay in them. Their shares may be worthless. IMHO big news will break in the next day or so.
My take is this as I'm watching very carefully. B&B were apparently told by the FSA they didn't have to update the market immediately about their profit warning until they had the secured the input of cash. Otherwise the FSA knew there would be a run on the bank similar to NRK. I can only think the builders have been told the same. There is probably a hell of a lot of activity going on behind the scenes between builders, M King and the government. The trouble today is everything is interlinked. If a builder goes bankrupt then the market may fall rapidly which could have a knock on effect on banks. As RBS and HBOS are only trading just above their rights prices, any severe fall would IMO mean resignations from both sets of boards. Probably at this very moment some of the builders are refinancing. I tried trading BDEV and gave up. I wouldn't stay in them. Their shares may be worthless. IMHO big news will break in the next day or so.
dealerdear - 11 Jun 2008 13:50 - 232 of 352
You can almost sense the fear in the market. It is as though we are all waiting for something to happen whch is why nearly all other companies are being ignored and most traders, based on the posts here, have given up!
Guscavalier
- 11 Jun 2008 13:52
- 233 of 352
robert - I remember in the 80's the Company got into trading difficulties and they had to call back Laurie Barrett out of retirement to sort the mess out. From memory, I think it was the Kuwait Investment Office that took a large stake at the time for longer term recovery and the shares duly obliged. I personally would steer clear of this situation since any recovery plan may well dilute existing shareholders' interests, with banks in a position to squeeze a hard deal for themselves if there is a debt for equity swop. Once any dilution has taken place and assuming the shares remain listed, a share purchase could then be considered. All imho of course.
Guscavalier
- 11 Jun 2008 13:58
- 234 of 352
dealer, I am not sure they have given up, it is more a case of keeping a low profile! I think thats what they call it anyway.
dealerdear - 11 Jun 2008 14:02 - 235 of 352
There was nobody on here that i saw at 7am apart from cynic and myself! There didn't even appear to be any 'staff' to sort out the lack of RNS news.
Starting to feel like 'nobby no mates'. I've taken to talking to the cat ..
Starting to feel like 'nobby no mates'. I've taken to talking to the cat ..
dealerdear - 11 Jun 2008 14:05 - 236 of 352
... even he crapped on me as well ..
robertalexander
- 11 Jun 2008 14:49
- 237 of 352
Thanks for your input guys
I have no intention of buying.
too many risks/unknowns to factor in and definitely too high risk for me.
I was just seeing if anyone was feeling brave and risk buying in for a long term recovery play, but looks like we were all in agreement atm.
Alex
I have no intention of buying.
too many risks/unknowns to factor in and definitely too high risk for me.
I was just seeing if anyone was feeling brave and risk buying in for a long term recovery play, but looks like we were all in agreement atm.
Alex
fliper
- 11 Jun 2008 15:31
- 238 of 352
Poor old BDEV .
skinny
- 11 Jun 2008 15:44
- 239 of 352
Statement re: Market Speculation (Barratt Developments)
RNS Number : 5014W
Barratt Developments PLC
11 June 2008
Wednesday 11th June 2008
Statement re: Market Speculation
Responding to continuing market speculation Barratt Developments is today confirming the
guidance for its full year ending 30 June 2008
given to the market at its Interim Management Statement made on 14 May 2008.
The company remains comfortable with market consensus forecasts for completions numbers
(18,300) and profit before tax and exceptional
charges (395m).
The Group continues to operate within its 2.6bn of committed facilities and its banking
covenants. Given anticipated completion
numbers, net debt at the end of June is expected to be approximately 1.7bn in line with
previous guidance.
Based on the review of site margins at the time of the IMS, we continue to expect the
requirement for development provisions (often
referred to as land write downs) in the current year will be limited. Once year-end numbers
are confirmed and a detailed review of the
company's 600 developments is completed with our Auditors, the company will provide a full
update.
The Group's Trading Update is scheduled for 10 July.
RNS Number : 5014W
Barratt Developments PLC
11 June 2008
Wednesday 11th June 2008
Statement re: Market Speculation
Responding to continuing market speculation Barratt Developments is today confirming the
guidance for its full year ending 30 June 2008
given to the market at its Interim Management Statement made on 14 May 2008.
The company remains comfortable with market consensus forecasts for completions numbers
(18,300) and profit before tax and exceptional
charges (395m).
The Group continues to operate within its 2.6bn of committed facilities and its banking
covenants. Given anticipated completion
numbers, net debt at the end of June is expected to be approximately 1.7bn in line with
previous guidance.
Based on the review of site margins at the time of the IMS, we continue to expect the
requirement for development provisions (often
referred to as land write downs) in the current year will be limited. Once year-end numbers
are confirmed and a detailed review of the
company's 600 developments is completed with our Auditors, the company will provide a full
update.
The Group's Trading Update is scheduled for 10 July.
robertalexander
- 11 Jun 2008 15:51
- 240 of 352
that seemed to stop the rot
hlyeo98 - 11 Jun 2008 16:05 - 241 of 352
Not for long I guess. It's a good time to reduce loss or get a quick profit.
A statement does not change the net debt or financial situation.
A statement does not change the net debt or financial situation.
driver
- 11 Jun 2008 16:24
- 242 of 352
hlyeo98
You still on rift.
You still on rift.
hlyeo98 - 11 Jun 2008 16:26 - 243 of 352
no, not on rift but ive and mrp as penny shares
driver
- 11 Jun 2008 16:30
- 244 of 352
hlyeo98
Can you put the rift web link in the header on the rift thread its on the last post. Cheers.
Can you put the rift web link in the header on the rift thread its on the last post. Cheers.
hlyeo98 - 15 Jun 2008 09:09 - 245 of 352
HOW THE GIANTS HAVE FARED SO FAR...
PERSIMMON
Pretax profit, 2007: £ 582.7m
Landbank: 89,987 plots
Houses sold, 2007: 15,905
Net debt: £ 1 billion
Market value today: £ 1.2 billion
Market value at peak: £ 4.6 billion
BARRATT DEVELOPMENTS
Pretax profit, 2007: £ 427.8m
Landbank: 109,700 plots
Houses sold, 2007: 17,168
Net debt: £ 1.7 billion
Market value today: £ 299.9m
Market value at peak: £ 4.4 billion
TAYLOR WIMPEY
Pretax loss, 2007: £ 19.5m
Landbank: 86,155 plots
Houses sold, 2007: 14,862 (UK)
Net debt: £ 1.9 billion
Market value today: £ 744.2m
Market value at peak: £ 5.5 billion
PERSIMMON
Pretax profit, 2007: £ 582.7m
Landbank: 89,987 plots
Houses sold, 2007: 15,905
Net debt: £ 1 billion
Market value today: £ 1.2 billion
Market value at peak: £ 4.6 billion
BARRATT DEVELOPMENTS
Pretax profit, 2007: £ 427.8m
Landbank: 109,700 plots
Houses sold, 2007: 17,168
Net debt: £ 1.7 billion
Market value today: £ 299.9m
Market value at peak: £ 4.4 billion
TAYLOR WIMPEY
Pretax loss, 2007: £ 19.5m
Landbank: 86,155 plots
Houses sold, 2007: 14,862 (UK)
Net debt: £ 1.9 billion
Market value today: £ 744.2m
Market value at peak: £ 5.5 billion
hlyeo98 - 15 Jun 2008 09:23 - 246 of 352
Its Bleak House for builders as property prices tumble and their share values collapse
- John Waples and Matthew Goodman
Two years ago Mark Clare was riding high. He was a director at Centrica and cited as a future chief executive of the 11 billion energy group.
Then he received a phone call from a headhunter to ask if he was interested in becoming chief executive of Barratt, one of the countrys biggest housebuilders. It didnt take much persuasion and in October 2006 he was in the new job.
Housebuilding was not a sector he knew about, but after dealing with the thousands of complaints he received when he ran Centricas residential energy business he did know how to manage a business and deal with difficult customers.
Clare, 51, was also a man in a hurry. Just a few months after he joined Barratt, he was negotiating one of the industrys biggest takeovers when he bought the rival builder Wilson Bowden for 2.2 billion in a deal principally financed by debt.
His acquisition propelled the company into the FTSE 100 and Clare was running his own show, ranked among the elite of Britains top businessmen.
It was to prove a short reign. Six months after the deal was completed, the mortgage bank Northern Rock owned up to its financial difficulties. It gave the first hints of cracks in the housing market and signalled that the good times were over.
As a precaution, Clare dusted off a file at Barratts headquarters. The company had almost gone bust in the last housing crash in the early 1990s and had kept the DIY manual of how to survive a recession.
Clare opened it up, but little did he know how bad it was going to get. Since that time the groups share price has fallen 91% and the market value of the combined group has collapsed from 4.4 billion to 300m. At the same time its debts have remained stubbornly high at 1.7 billion and there are now serious questions about the companys future.
Clares career as a chief executive is probably over. Those shareholders who have stayed the course are incensed at the way he has gambled away Barratts legacy. For 20 years the company had studiously avoided mergers and acquisitions, but now, in just one deal, Clare has nearly destroyed the company.
How long Clare and his finance director Mark Pain remain at the company lies in the hands of their new chairman, Bob Lawson, who joined this month and has a reputation for rolling up his sleeves at operational level. As one investor put it: The answer is not very long.
Barratt is not alone. Taylor Wimpey, which was formed out of the merger of Taylor Woodrow and Wimpey, is in a similar mess. Its share price has collapsed by 82% and its value has fallen from 5.5 billion to 744m. That fall, usually seen only in high-risk technology and biotech stocks, has also cast doubt over the future of its chief executive, Peter Redfern.
A raft of other quoted builders, including Persimmon, which has pulled off a series of deals, are also facing challenging times. They are downgrading their profit forecasts as margins come under pressure and they build fewer homes. Many have stopped buying land.
Even the sectors most experienced operators, such as Tony Pidgley, chief executive of Berkeley Group, say it is the worst market they have experienced. He said: This market reminds me of the early 1970s. Its much worse than the 1990s. The downturn has been much quicker and sharper. In 1973, no sooner had you blinked, you were in a collapse.
Big redundancies are inevitable. In the last recession, in the early 1990s, it is estimated that about 500,000 people directly employed by the housebuilders lost their jobs. For the past decade the housebuilding sector has tried hard to repackage itself as a disciplined industry that is no longer characterised by boom and bust cycles. That claim has proved to be invalid. This cycle has proved yet again that the best leaders of housebuilders are entrepreneurial founders who can predict trends. That is why the best ones, like Steve Morgan of Redrow and Alan Cherry of Countryside Properties, sold out in the past few years.
- John Waples and Matthew Goodman
Two years ago Mark Clare was riding high. He was a director at Centrica and cited as a future chief executive of the 11 billion energy group.
Then he received a phone call from a headhunter to ask if he was interested in becoming chief executive of Barratt, one of the countrys biggest housebuilders. It didnt take much persuasion and in October 2006 he was in the new job.
Housebuilding was not a sector he knew about, but after dealing with the thousands of complaints he received when he ran Centricas residential energy business he did know how to manage a business and deal with difficult customers.
Clare, 51, was also a man in a hurry. Just a few months after he joined Barratt, he was negotiating one of the industrys biggest takeovers when he bought the rival builder Wilson Bowden for 2.2 billion in a deal principally financed by debt.
His acquisition propelled the company into the FTSE 100 and Clare was running his own show, ranked among the elite of Britains top businessmen.
It was to prove a short reign. Six months after the deal was completed, the mortgage bank Northern Rock owned up to its financial difficulties. It gave the first hints of cracks in the housing market and signalled that the good times were over.
As a precaution, Clare dusted off a file at Barratts headquarters. The company had almost gone bust in the last housing crash in the early 1990s and had kept the DIY manual of how to survive a recession.
Clare opened it up, but little did he know how bad it was going to get. Since that time the groups share price has fallen 91% and the market value of the combined group has collapsed from 4.4 billion to 300m. At the same time its debts have remained stubbornly high at 1.7 billion and there are now serious questions about the companys future.
Clares career as a chief executive is probably over. Those shareholders who have stayed the course are incensed at the way he has gambled away Barratts legacy. For 20 years the company had studiously avoided mergers and acquisitions, but now, in just one deal, Clare has nearly destroyed the company.
How long Clare and his finance director Mark Pain remain at the company lies in the hands of their new chairman, Bob Lawson, who joined this month and has a reputation for rolling up his sleeves at operational level. As one investor put it: The answer is not very long.
Barratt is not alone. Taylor Wimpey, which was formed out of the merger of Taylor Woodrow and Wimpey, is in a similar mess. Its share price has collapsed by 82% and its value has fallen from 5.5 billion to 744m. That fall, usually seen only in high-risk technology and biotech stocks, has also cast doubt over the future of its chief executive, Peter Redfern.
A raft of other quoted builders, including Persimmon, which has pulled off a series of deals, are also facing challenging times. They are downgrading their profit forecasts as margins come under pressure and they build fewer homes. Many have stopped buying land.
Even the sectors most experienced operators, such as Tony Pidgley, chief executive of Berkeley Group, say it is the worst market they have experienced. He said: This market reminds me of the early 1970s. Its much worse than the 1990s. The downturn has been much quicker and sharper. In 1973, no sooner had you blinked, you were in a collapse.
Big redundancies are inevitable. In the last recession, in the early 1990s, it is estimated that about 500,000 people directly employed by the housebuilders lost their jobs. For the past decade the housebuilding sector has tried hard to repackage itself as a disciplined industry that is no longer characterised by boom and bust cycles. That claim has proved to be invalid. This cycle has proved yet again that the best leaders of housebuilders are entrepreneurial founders who can predict trends. That is why the best ones, like Steve Morgan of Redrow and Alan Cherry of Countryside Properties, sold out in the past few years.
hlyeo98 - 28 Jun 2008 08:50 - 247 of 352
Lending, at 25.5 billion pounds in May, was some 20 percent lower on the year. Remortgaging accounted for most of that as homeowners sit tight and new buyers avoid taking their first steps on the ladder amid the downbeat outlook and jump in the cost of borrowing.
The cost of fixed-rate mortgages has hit a 10-year high -- and is set to climb further, analysts say -- as lenders pull cheap deals and repeatedly replace them with higher rates.
Nationwide, Halifax, the Woolwich and Abbey have all hiked the cost of some of their deals since the start of this month, blaming the rise in money market rates.
It is this ongoing fallout from the credit crunch and rise in swap rates that have led to the unusual situation of fixed and tracker rates being much in line with standard variable rates (SVRs) -- those that banks and building societies normally charge only when borrowers come to the end of a special deal.
As a result, some lenders -- Royal Bank of Scotland, Woolwich, Halifax, Lloyds TSB and Cheltenham and Gloucester included -- have stopped offering SVRs to new customers.
The cost of fixed-rate mortgages has hit a 10-year high -- and is set to climb further, analysts say -- as lenders pull cheap deals and repeatedly replace them with higher rates.
Nationwide, Halifax, the Woolwich and Abbey have all hiked the cost of some of their deals since the start of this month, blaming the rise in money market rates.
It is this ongoing fallout from the credit crunch and rise in swap rates that have led to the unusual situation of fixed and tracker rates being much in line with standard variable rates (SVRs) -- those that banks and building societies normally charge only when borrowers come to the end of a special deal.
As a result, some lenders -- Royal Bank of Scotland, Woolwich, Halifax, Lloyds TSB and Cheltenham and Gloucester included -- have stopped offering SVRs to new customers.
hlyeo98 - 29 Jun 2008 14:38 - 248 of 352
Looking expensive at 62p with 1.9 billion debt and profit warning very likely with poor liquidity. Housing market likely to deteriorate with rising mortgage rates will not help.
SELL...
Emergency rescue for housebuilder Taylor Wimpey
Taylor Wimpey is in an emergency 400m fund-raising to save it from collapse.
Chairman Norman Askew and Peter Redfern, chief executive, are also close to securing a deal with its banks to relax lending covenants on bank debt of 1.9 billion.
Taylor Wimpey, which was formed out of the merger of Taylor Woodrow and Wimpey a year ago, is one of Britains biggest housebuilders. It also has sizeable operations in America, where it is building houses in Florida, San Francisco and Texas. In Europe the group has divisions in Spain and Gibraltar.
It has been badly hit by the credit crisis, though, which has made it difficult to sell new homes and has put pressure on prices. In addition the company, which last year built 14,862 homes in the UK, is committed to spending 453m this year on completing land purchases that have already been agreed.
One analyst said: No-one wants to give away these land banks on the cheap. The problem is one of liquidity and this is what the group is trying to address.
Other builders are also in trouble. Among them are Crest Nicholson and McCarthy & Stone, two companies that were both taken private in consortiums led by HBOS. In most cases, banks are being supportive, and within the next three weeks Barratt, which is now chaired by Bob Lawson, should confirm that its banks have agreed to relax covenants on debt totalling 1.7 billion.
The City is keen to hear the details of Taylor Wimpeys trading statement and whether it will give an insight into additional writedowns on the land banks value. It is likely the statement will include a profit warning.
Last year Taylor Wimpey wrote off 283m against its North American business. According to its last set of report and accounts, the company has net assets of 3.7 billion, equivalent to a share price of 352p per share. This compares with Fridays share price of 62p, which values the builder at 654m.
Redfern is also expected to say that the dividend will be cut back dramatically. Taylor Wimpeys pension trustees are understood to be taking advice from lawyers. The builders scheme has a deficit of 216m at present.
The group has already moved to address its cost base and recently announced it will close 13 of its 39 UK offices, which could cost up to 600 jobs. It has also asked suppliers to reduce their bills.
SELL...
Emergency rescue for housebuilder Taylor Wimpey
Taylor Wimpey is in an emergency 400m fund-raising to save it from collapse.
Chairman Norman Askew and Peter Redfern, chief executive, are also close to securing a deal with its banks to relax lending covenants on bank debt of 1.9 billion.
Taylor Wimpey, which was formed out of the merger of Taylor Woodrow and Wimpey a year ago, is one of Britains biggest housebuilders. It also has sizeable operations in America, where it is building houses in Florida, San Francisco and Texas. In Europe the group has divisions in Spain and Gibraltar.
It has been badly hit by the credit crisis, though, which has made it difficult to sell new homes and has put pressure on prices. In addition the company, which last year built 14,862 homes in the UK, is committed to spending 453m this year on completing land purchases that have already been agreed.
One analyst said: No-one wants to give away these land banks on the cheap. The problem is one of liquidity and this is what the group is trying to address.
Other builders are also in trouble. Among them are Crest Nicholson and McCarthy & Stone, two companies that were both taken private in consortiums led by HBOS. In most cases, banks are being supportive, and within the next three weeks Barratt, which is now chaired by Bob Lawson, should confirm that its banks have agreed to relax covenants on debt totalling 1.7 billion.
The City is keen to hear the details of Taylor Wimpeys trading statement and whether it will give an insight into additional writedowns on the land banks value. It is likely the statement will include a profit warning.
Last year Taylor Wimpey wrote off 283m against its North American business. According to its last set of report and accounts, the company has net assets of 3.7 billion, equivalent to a share price of 352p per share. This compares with Fridays share price of 62p, which values the builder at 654m.
Redfern is also expected to say that the dividend will be cut back dramatically. Taylor Wimpeys pension trustees are understood to be taking advice from lawyers. The builders scheme has a deficit of 216m at present.
The group has already moved to address its cost base and recently announced it will close 13 of its 39 UK offices, which could cost up to 600 jobs. It has also asked suppliers to reduce their bills.
Guscavalier
- 01 Jul 2008 08:53
- 249 of 352
John Charcoal cuts workforce by 25% and closed 3 offices, Manchester, Guildford and Birmingham. 5 outlets remain. Loan approvals last month sank to unpresidented low. CEO and Finance director to leave. Founders John Garfield and Charles Wishart and long time investor Jon Moulton have pumped in an undisclosed sum to keep business afloat. Garfield will take over as Executive Chairman
hewittalan6
- 01 Jul 2008 09:31
- 250 of 352
Don't say I didn't forecast this a couple of months ago on this very thread (or was it the BANK thread???) ;-)
hewittalan6
- 01 Jul 2008 09:51
- 251 of 352
For my next Nostradamus moment, I would not be suprised to see the OFT getting involved in the mortgage market.
Reason? The banks are operating what could almost be called a cartel. They are ensuring that none of them are offering anything dramatically different to the others, by way of rates, criteria or underwriting.
It could also be argued they are maintaining an artificailly high LIBOR & swap rates for their own benefit.
It will not last of course, capitalism will out, but in the meantime it is very damaging to the economy, while maintaining high margins for the banks.
Reason? The banks are operating what could almost be called a cartel. They are ensuring that none of them are offering anything dramatically different to the others, by way of rates, criteria or underwriting.
It could also be argued they are maintaining an artificailly high LIBOR & swap rates for their own benefit.
It will not last of course, capitalism will out, but in the meantime it is very damaging to the economy, while maintaining high margins for the banks.
hlyeo98 - 01 Jul 2008 10:02 - 252 of 352
Good to see that you followed my idea, Alan
Guscavalier
- 01 Jul 2008 10:25
- 253 of 352
hewittalan6, quite right, you said watch this space, can't remember what thread it was myself. I suppose one of the fortunate deals was for Hunt, the owner of Foxtons who sold out at around 283million I think it was just before the crunch. John Riblatt sold most of his British Land holding around 16 a share not long before the trouble started. Both turned out to be shrewd guides. Keep watching.
hlyeo98 - 01 Jul 2008 19:02 - 254 of 352
Housing price fall fastest in 16 years
House prices are falling at their fastest annual rate for nearly 16 years, figures show.
The average home has seen 6.3% wiped off its value during the 12 months to the end of June, the biggest annual fall since December 1992, according to Nationwide Building Society.
The cost of property fell for the eighth month in a row during June, sliding by 0.9%, to leave the typical home worth 172,415.
The housing market downturn has now wiped 7.3%, or 13,500, off the value of homes compared with their peak in October last year, with prices falling by 6.4% since the beginning of 2008.
Falls are even steeper in some areas of the country, with the average cost of a home in Northern Ireland sliding by 9% during the past 12 months, while Scotland is the only region to have seen price rises, with the value of property there creeping up by just 0.6% during the year.
Nationwide said the pace of price falls had slowed "significantly" during June, following May's 2.5% dive, adding that prices were still 4% higher than they were two-years ago.
But economists warned that the housing market correction could be more prolonged than previously predicted as the problems in the mortgage market caused potential buyers to sit on their hands.
Seema Shah, property economist at Capital Economics, said: "Evidence is growing that this housing market correction will be sharper and steeper than previous downturns."
She added that recent data showing that activity has slowed sharply, suggested house price falls would "step up a gear" in the coming months.
House prices are falling at their fastest annual rate for nearly 16 years, figures show.
The average home has seen 6.3% wiped off its value during the 12 months to the end of June, the biggest annual fall since December 1992, according to Nationwide Building Society.
The cost of property fell for the eighth month in a row during June, sliding by 0.9%, to leave the typical home worth 172,415.
The housing market downturn has now wiped 7.3%, or 13,500, off the value of homes compared with their peak in October last year, with prices falling by 6.4% since the beginning of 2008.
Falls are even steeper in some areas of the country, with the average cost of a home in Northern Ireland sliding by 9% during the past 12 months, while Scotland is the only region to have seen price rises, with the value of property there creeping up by just 0.6% during the year.
Nationwide said the pace of price falls had slowed "significantly" during June, following May's 2.5% dive, adding that prices were still 4% higher than they were two-years ago.
But economists warned that the housing market correction could be more prolonged than previously predicted as the problems in the mortgage market caused potential buyers to sit on their hands.
Seema Shah, property economist at Capital Economics, said: "Evidence is growing that this housing market correction will be sharper and steeper than previous downturns."
She added that recent data showing that activity has slowed sharply, suggested house price falls would "step up a gear" in the coming months.
Big Al
- 01 Jul 2008 20:57
- 255 of 352
;-)))))
scotinvestor - 01 Jul 2008 21:10 - 256 of 352
scotland has gone down very slightly in last 3 months but theres big differences depending on where u r in country just like areas in england.
expect at least 20% decline in next 18 months in uk
expect at least 20% decline in next 18 months in uk
hlyeo98 - 02 Jul 2008 08:10 - 257 of 352
It's bloodbath in the housing sector today
hlyeo98 - 02 Jul 2008 08:20 - 258 of 352
Taylor Wimpey fails to get funding and closing one-thirds of its premises and this spells deep trouble ...now 30p...but could go below 20p soon as it says no real recovery foreseen
Big Al
- 02 Jul 2008 20:40
- 259 of 352
;-(
hlyeo98 - 02 Jul 2008 22:31 - 260 of 352
With Taylor Wimpey's debts standing at 1.7m at the end of June, Taylor Wimpey also announced plans to close a third of its 39 offices, axe about 900 jobs and cut costs by 45m.
Taylor Wimpey, which has expanded aggressively in both America and Spain in recent years, added that disposing of smaller businesses would not be central to its bid to raise cash.
Alongside the cost-cutting plans, Taylor Wimpey revealed that finance director Peter Johnson will leave by the end of the year, becoming the biggest casualty so far of the crisis afflicting the entire sector.
Mr Redfern said that although Taylor Wimpey stopped buying new land in the UK last September, the company had underestimated the scale of the downturn now facing the industry.
The group now expects to write down the value of its landbank and work-in-progress across the UK by around 550m, representing 11pc of its total.
Echoing comments from most businesses whose fortunes are tied to the housing market, Mr Redfern said that transaction are down by a third this year and he does not expect "any recovery in the short-term".
Housebuilders shares have been falling since sales during the traditionally strong Spring market was hit by the evaporation of credit in the mortgage markets and a weakening of consumer confidence. Taylor Wimpey said that reservations are down sharply and cancellation rates jumped from 19pc to 29pc in the first six months of the year.
Taylor Wimpey, which has expanded aggressively in both America and Spain in recent years, added that disposing of smaller businesses would not be central to its bid to raise cash.
Alongside the cost-cutting plans, Taylor Wimpey revealed that finance director Peter Johnson will leave by the end of the year, becoming the biggest casualty so far of the crisis afflicting the entire sector.
Mr Redfern said that although Taylor Wimpey stopped buying new land in the UK last September, the company had underestimated the scale of the downturn now facing the industry.
The group now expects to write down the value of its landbank and work-in-progress across the UK by around 550m, representing 11pc of its total.
Echoing comments from most businesses whose fortunes are tied to the housing market, Mr Redfern said that transaction are down by a third this year and he does not expect "any recovery in the short-term".
Housebuilders shares have been falling since sales during the traditionally strong Spring market was hit by the evaporation of credit in the mortgage markets and a weakening of consumer confidence. Taylor Wimpey said that reservations are down sharply and cancellation rates jumped from 19pc to 29pc in the first six months of the year.
hewittalan6
- 04 Jul 2008 08:11
- 261 of 352
Its a funny thing, but when rates rise it is headline news. Has anyone seen blazing headlines today announcing that Nationwide have cut fixed and tracker rates???
No???
Well they have, from 9th July, on the most popular 2 year deals.
Trouble is it is not in line with media policy of selling doom and gloom, so there is no report, but some banks feel we have ridden out the worst.
No???
Well they have, from 9th July, on the most popular 2 year deals.
Trouble is it is not in line with media policy of selling doom and gloom, so there is no report, but some banks feel we have ridden out the worst.
Big Al
- 04 Jul 2008 10:49
- 262 of 352
They're wrong. This ain't even started yet.
hewittalan6
- 04 Jul 2008 11:04
- 263 of 352
I am refering to the financial sector, but I would agree about the economy as a whole.
The financial sector was first in and will be first out.
The real economy is at least 6 months behind. Lenders are now 12 months into the crisis, whereas everyone else is just starting to feel it.
This morning, 2 lenders have reduced fixed and tracker rates for their 2 & 3 year deals. This is tantamount to a forecast that LIBOR and swap rates are due to ease. 2 year fixes (without stupidly high fees) are now <6% again.
It is a start, but criteria needs to relax for there to be a real impact and move the housing market, which is the real driver of our economy.
This will take a while after relaxing criteria as housing relies so heavily on confidence and this has been knocked badly. But the first signs are in place. It remains to be seen if other lenders follow. If they do, this is a firmer indicator. If they do not then the lenders concerned will be over exposed and up their rates again.
The financial sector was first in and will be first out.
The real economy is at least 6 months behind. Lenders are now 12 months into the crisis, whereas everyone else is just starting to feel it.
This morning, 2 lenders have reduced fixed and tracker rates for their 2 & 3 year deals. This is tantamount to a forecast that LIBOR and swap rates are due to ease. 2 year fixes (without stupidly high fees) are now <6% again.
It is a start, but criteria needs to relax for there to be a real impact and move the housing market, which is the real driver of our economy.
This will take a while after relaxing criteria as housing relies so heavily on confidence and this has been knocked badly. But the first signs are in place. It remains to be seen if other lenders follow. If they do, this is a firmer indicator. If they do not then the lenders concerned will be over exposed and up their rates again.
romanway - 04 Jul 2008 14:13 - 264 of 352
Nationwide are in a better state than most so can risk increasing their market share. The rest don't want to and if there is a stampede to Nationwide they will up their rates again.
brianboru
- 04 Jul 2008 14:43
- 265 of 352
"and move the housing market, which is the real driver of our economy"
I actually find that a really, really sad comment on our 'economy'....
I actually find that a really, really sad comment on our 'economy'....
brianboru
- 04 Jul 2008 14:47
- 266 of 352
Attended this auction last night - 36 properties of varying quality were offered :
http://www.boultonsauctions.co.uk/properties/
10 sold on the night
4 sold prior
3 withdrawn
3 postponed
16 failed to sell
Unusually, of those that sold, only one property beat the published guide price - and that by only 500.
Those that did sell were mainly the lower priced 'tat' and a couple were knocked down at well below guide.
Normally at Boultons the guide is published, fairly conservatively to attract interest, around 4 to 6 weeks prior. A couple of days before the auction the reserve price will be set, dependant on viewer footfall and general interest shown. Usually the reserve will be set somewhat higher than the top guide price. Not yesterday though!
hewittalan6
- 04 Jul 2008 14:48
- 267 of 352
It may be sad, but it is now very true.
We have an economy based on stealing the washing from each others lines. We produce very little except reports and beaurocracy.
We have an economy based on stealing the washing from each others lines. We produce very little except reports and beaurocracy.
scotinvestor - 04 Jul 2008 14:52 - 268 of 352
we have no resources or main industry left......its just aberdeen thats keeping uk afloat! lol.....population of 200,000 keeping 61 million brits up.
hlyeo98 - 14 Jul 2008 23:22 - 269 of 352
Short Bellway (BWY):
If one was going to short a housebuilder at the moment it would probably be Bellway purely on the basis that a 460p share should have further to fall than one below a 100p like Barratts. A similar near term descending price channel in place from early last month, one that has its resistance line at 465p. Below this on an end of day close basis one would be tempted to go short for a new leg down towards the lowest intraday levels of the year sub 350p.
If one was going to short a housebuilder at the moment it would probably be Bellway purely on the basis that a 460p share should have further to fall than one below a 100p like Barratts. A similar near term descending price channel in place from early last month, one that has its resistance line at 465p. Below this on an end of day close basis one would be tempted to go short for a new leg down towards the lowest intraday levels of the year sub 350p.
hlyeo98 - 31 Jul 2008 16:58 - 270 of 352
LONDON (Reuters) - House prices crumbled at record rates and consumer confidence hit historic lows, data showed on Thursday, fuelling fears that a consumer-led slowdown could tip the economy into recession.
The Nationwide building society said house prices fell by 1.7 percent this month, leaving them 8.1 percent lower than a year ago -- the biggest annual fall since the series began in January 1991.
House prices have now fallen by nine percent in nine months from the peak hit last year, an even sharper fall than during the property crash of the early 1990s.
The combination of falling house prices and rising household bills is weighing increasingly heavily on consumer morale. The GFK NOP consumer confidence index fell five points in July to -39, the lowest reading since the survey began in 1974.
The figures flag the threat of a sharpening consumer retrenchment and the uphill struggle facing Prime Minister Gordon Brown if he is to regain public support before the next election, expected in 2010.
"The combination of weaker consumer confidence and sharply slowing house prices will take its toll on consumer spending and the broader economy throughout the remainder of this year," said George Buckley, chief economist at Deutsche Bank.
The Nationwide building society said house prices fell by 1.7 percent this month, leaving them 8.1 percent lower than a year ago -- the biggest annual fall since the series began in January 1991.
House prices have now fallen by nine percent in nine months from the peak hit last year, an even sharper fall than during the property crash of the early 1990s.
The combination of falling house prices and rising household bills is weighing increasingly heavily on consumer morale. The GFK NOP consumer confidence index fell five points in July to -39, the lowest reading since the survey began in 1974.
The figures flag the threat of a sharpening consumer retrenchment and the uphill struggle facing Prime Minister Gordon Brown if he is to regain public support before the next election, expected in 2010.
"The combination of weaker consumer confidence and sharply slowing house prices will take its toll on consumer spending and the broader economy throughout the remainder of this year," said George Buckley, chief economist at Deutsche Bank.
Big Al
- 01 Aug 2008 09:49
- 271 of 352
This is a fairly astonishing chart.
hlyeo98 - 01 Aug 2008 15:53 - 272 of 352
The housing market is still far too over-valued...expect more downtrend.
Big Al
- 01 Aug 2008 16:02
- 273 of 352
Precisely. I see no bend at the end yet! ;-))
hlyeo98 - 01 Aug 2008 16:11 - 274 of 352
See page 1...when I started this thread, they all said I'm talking thrash. Well, those people have shut their mouths now
Big Al
- 01 Aug 2008 16:24
- 275 of 352
hlyeo - I was right with you all the way. I think at some point I stuck my neck out and said 40% drop from the peak. I'm sticking with it. This thing ain't een started yet.
I know a couple who have 4 flats, even remortgaging their own house to buy more last year. They are really nervous.
I know a couple who have 4 flats, even remortgaging their own house to buy more last year. They are really nervous.
Dil
- 02 Aug 2008 00:54
- 276 of 352
uck me Scotty ... thank fcuk for Aberdeen
mojo47
- 03 Aug 2008 22:14
- 277 of 352
If anyone out their has the time. will you explain to me how a person buys a house then re mortg it to buy another and the same again, they only started with the deposit for the first house and now has 4 small houses all let
hewittalan6
- 04 Aug 2008 06:54
- 278 of 352
Very easy mojo.
You buy the first as a BTL. Assuming you buy it at slightly under market value, with a decent deposit, you then buy the second as the start of a portfolio of property where the LTV is on an aggregate basis.
For instance, the first property is worth 100k. You buy it as distressed sale for 90k with a 15k deposit. You owe 75k on 100k value.
You then see a property very similar, worth 100k and buy it for 90k. Aggregate lending is 165k on 200k. ie less than 85% so the portfolio lender requires no deposit.
In a rising market this is very easy because the value of the earlier properties keeps on rising and therefore the available equity keeps rising. In a falling market there are many more properties available under value, so each one adds to the available pot of equity, though you have to move faster.
The alternative is gifted deposit lending.
I know of properties for sale where the sale price is about 75% of the true value. The selling agent arranges the deal so that you borrow 85% of the true value. The deposit is gifted so that you pay no actual money and the 10% balance comes back to you as a cashback.
There are other ways, but these are the simple and most oft used ones.
Alan
You buy the first as a BTL. Assuming you buy it at slightly under market value, with a decent deposit, you then buy the second as the start of a portfolio of property where the LTV is on an aggregate basis.
For instance, the first property is worth 100k. You buy it as distressed sale for 90k with a 15k deposit. You owe 75k on 100k value.
You then see a property very similar, worth 100k and buy it for 90k. Aggregate lending is 165k on 200k. ie less than 85% so the portfolio lender requires no deposit.
In a rising market this is very easy because the value of the earlier properties keeps on rising and therefore the available equity keeps rising. In a falling market there are many more properties available under value, so each one adds to the available pot of equity, though you have to move faster.
The alternative is gifted deposit lending.
I know of properties for sale where the sale price is about 75% of the true value. The selling agent arranges the deal so that you borrow 85% of the true value. The deposit is gifted so that you pay no actual money and the 10% balance comes back to you as a cashback.
There are other ways, but these are the simple and most oft used ones.
Alan
partridge
- 04 Aug 2008 09:04
- 279 of 352
And with gullible/greedy lenders therein lies the problem.
mojo47
- 04 Aug 2008 12:50
- 280 of 352
yes i can see that but how and when do they pay the mort. the mort on say 100k is about 700 a month with insuraces etc and the rent is only just that so in fact she doesnt own anything i think she might be just paying the interest off, so infact the building society still owns them. i think this is a big risk. am i right or just scared
hewittalan6
- 04 Aug 2008 18:40
- 281 of 352
Depends on your timescale.
Medium term there has never yet brrn a bad time to buy property, but it is illiquid and short term it is high risk stuff.
For taxation purposes, most landlords claim the most efficient strategy is to pay interest only and ensure that you are maxed out on the LTV. Rents will continue to rise, but mortgage payments are fairly stable so in the medium term you start to make money, and then as prices rise, you make a capital gain too.
Take the point, Partridge, but as we have discussed before, surley it is the investors who are the greedy ones, and just because it is property not shares, are they really different to us. Particularly those on here who leverage through spread betting and CFD's.
Medium term there has never yet brrn a bad time to buy property, but it is illiquid and short term it is high risk stuff.
For taxation purposes, most landlords claim the most efficient strategy is to pay interest only and ensure that you are maxed out on the LTV. Rents will continue to rise, but mortgage payments are fairly stable so in the medium term you start to make money, and then as prices rise, you make a capital gain too.
Take the point, Partridge, but as we have discussed before, surley it is the investors who are the greedy ones, and just because it is property not shares, are they really different to us. Particularly those on here who leverage through spread betting and CFD's.
partridge
- 04 Aug 2008 19:14
- 282 of 352
Agree Alan. Gearing up in whatever asset class enhances both potential reward and potential loss. Key point in your summary is "pay interest only" - if the borrower can keep the interest paid, then the lender (whether greedy or not) will usually be happy and history suggests all will be ok in the medium term. Problem comes when voids or falling rents in the short term mean interest cannot be covered and the lender sees little option but to foreclose.
partridge
- 04 Aug 2008 19:37
- 283 of 352
Should have added of course that rising interest rates can also kill off highly geared businesses of any kind fairly quickly.
hlyeo98 - 14 Aug 2008 08:03 - 284 of 352
Home sales fall 14% at Bellway
LONDON (ShareCast) - Bellway (LSE: BWY.L - news) sold 6,556 home in the twelve months ended 31 July, 14% less than the year before, while reservations slumped around 45% in the second half.
The average selling price fell by 4,300 to about 169,000 as 20% of the completions were to housing associations. The group's order book of future sales at the end of July was 370m versus 594m last year.
"Restricted mortgage supply and a lack of customer confidence had led to lower levels of activity," it said.
LONDON (ShareCast) - Bellway (LSE: BWY.L - news) sold 6,556 home in the twelve months ended 31 July, 14% less than the year before, while reservations slumped around 45% in the second half.
The average selling price fell by 4,300 to about 169,000 as 20% of the completions were to housing associations. The group's order book of future sales at the end of July was 370m versus 594m last year.
"Restricted mortgage supply and a lack of customer confidence had led to lower levels of activity," it said.
hlyeo98 - 14 Aug 2008 08:50 - 285 of 352
British Land property valuations slide
MoneyAM
British Land, Britain's second-largest real estate investment trust, said the value of its multibillion pound property portfolio slipped 5% in the three months to end-June as gloomy economic portents continued to depress the UK property market.
British Land said the value of its net assets had fallen to 6.3bn and its net asset value per share had dropped 10% in the quarter to 1,212p as Britain's year-old property correction continued.
In a statement, British Land said subdued leasing activity had started to hit office rents, but retail rents were still growing, albeit at a slower rate.
As a result, it said it would continue to review the timing of a major City of London skyscraper office development project at 122 Leadenhall, known locally as the Cheesegrater, pending an uptick in occupier demand.
British Land described investment markets 'as thin, nervous and negative in tone' and said it saw long-term value for UK prime property in the yield range of 5%-6%, contrasting with sub-4% property yields regularly seen at the peak of the last boom cycle.
'Our prime property assets will see out many economic cycles with a dependability few businesses can match,' CEO, Stephen Hester, said in a statement. 'As spring follows winter, so too will property markets, in due course, see better times again,' Hester said.
The company posted a 23% rise in underlying pretax profit to 74m in the quarter and chalked up like-for-like rental growth of 6.3% versus the industry benchmark of 3.3%.
MoneyAM
British Land, Britain's second-largest real estate investment trust, said the value of its multibillion pound property portfolio slipped 5% in the three months to end-June as gloomy economic portents continued to depress the UK property market.
British Land said the value of its net assets had fallen to 6.3bn and its net asset value per share had dropped 10% in the quarter to 1,212p as Britain's year-old property correction continued.
In a statement, British Land said subdued leasing activity had started to hit office rents, but retail rents were still growing, albeit at a slower rate.
As a result, it said it would continue to review the timing of a major City of London skyscraper office development project at 122 Leadenhall, known locally as the Cheesegrater, pending an uptick in occupier demand.
British Land described investment markets 'as thin, nervous and negative in tone' and said it saw long-term value for UK prime property in the yield range of 5%-6%, contrasting with sub-4% property yields regularly seen at the peak of the last boom cycle.
'Our prime property assets will see out many economic cycles with a dependability few businesses can match,' CEO, Stephen Hester, said in a statement. 'As spring follows winter, so too will property markets, in due course, see better times again,' Hester said.
The company posted a 23% rise in underlying pretax profit to 74m in the quarter and chalked up like-for-like rental growth of 6.3% versus the industry benchmark of 3.3%.
hlyeo98 - 16 Aug 2008 11:14 - 286 of 352
August 16, 2008
Lehman Brothers in talks over sale of $40bn real estate assets - Suzy Jagger in New York
Lehman Brothers, the Wall Street investment bank, is understood to be in talks to sell its entire $40 billion (21.5 billion) real estate portfolio in a move to stem losses incurred during one of the worst property slumps since the Great Depression.
The bank whose stock has fallen 69 per cent since the credit crisis erupted just over a year ago is believed to be prepared to take a $5 billion hit on the sale of the assets and securities.
Lehman is believed to have begun sale negotiations with firms such as Blackstone, the private equity group, and BlackRock, the fund manager.
However, it is thought that Lehman is optimistic about the price it might secure for the portfolio even though both residential and commercial real estate assets have collapsed in value. Some mortgage-backed securities which are collateralised by residential real estate are so untradeable, they are effectively worthless.
Worryingly, Lehman said that many of the British mortgage-related assets on its books had become virtually impossible to value. This is in marked contrast with its first quarter, when the assets had been fairly easy to value, according to Erin Callan, Lehmans then chief financial officer.
Lehman Brothers in talks over sale of $40bn real estate assets - Suzy Jagger in New York
Lehman Brothers, the Wall Street investment bank, is understood to be in talks to sell its entire $40 billion (21.5 billion) real estate portfolio in a move to stem losses incurred during one of the worst property slumps since the Great Depression.
The bank whose stock has fallen 69 per cent since the credit crisis erupted just over a year ago is believed to be prepared to take a $5 billion hit on the sale of the assets and securities.
Lehman is believed to have begun sale negotiations with firms such as Blackstone, the private equity group, and BlackRock, the fund manager.
However, it is thought that Lehman is optimistic about the price it might secure for the portfolio even though both residential and commercial real estate assets have collapsed in value. Some mortgage-backed securities which are collateralised by residential real estate are so untradeable, they are effectively worthless.
Worryingly, Lehman said that many of the British mortgage-related assets on its books had become virtually impossible to value. This is in marked contrast with its first quarter, when the assets had been fairly easy to value, according to Erin Callan, Lehmans then chief financial officer.
scotinvestor - 16 Aug 2008 19:16 - 287 of 352
house prices still going up in scotland.....was on news here 2 nights ago.....just big reduction in sales thats all.
hangon - 17 Aug 2008 01:37 - 288 of 352
FWIW I heard on the Radio4 that high-value houses ( 2m+) were still in demand ( probably in City centres, esp London with Olympics soonish)....so the housing pain is being felt towards the bottom ( esp thiose weow bought in the last 2-years, say since 2006 because of Mortgage deals ending...- so anyone thinking of moving won't. Thiose thinking of buying will wait, believing prices will get lower - this continues until prices are so low ( compared with cost of Money//or//wages) that some folk can't resist a Bargain.
Only sellers will find it difficult, since the only Buyers are those looking for a Bargin....hence Sellers will have to drop their price to attract a sale.
For these reasons, Housbuilders ( like Persimon and the rest), will find things very difficult - as Unsold new-builds don't look very attractive with empty properties next-door and the potential of an unfinished building-site for a few years to come. At least in the past, the dust and builders moved-on as the Estate was completed in 2-3 years. This "might-be" five years before it restarts - meaning existing Estate might not be finished for the next 8-years....Oh deary.
If you are thinking of buying, try to get a bargain....two for the price of one, maybe (one just a shell....it will be easy to have it finished as Brickies/plasterers find large contracts dry-up). And that relieves the Builder having to do-up a property only to break-even on an uncertain Sale.
Note - It must be secure! - and weatherproof - so windows/doors and roof-tiles!
Then, when the down-cycle is over...you have TWO properties, -but only ONE mortgage.
OR ask for the plot to be larger, such that you can build it, later, or if large enough....even a second home whilst you maintain the land and give the area a "Deluxe" feel. BUT make sure the services are laid and sealed. Very expensive to install later when the machines have gone away.
Only wish I had some Dosh to do this, but I'm ALWAYS at the wrong end of these cycles.
The same trick can be achieved ( with two easy-mortgages) , at the start of a Housing-Boom when sellers are eager to start the project, for nothing looks better than lots of "Sold" notices.
INVESTMENTS:-
Do we buy CFD's for Builders to go "down" - is that the smart thing to do - anyone?
Only sellers will find it difficult, since the only Buyers are those looking for a Bargin....hence Sellers will have to drop their price to attract a sale.
For these reasons, Housbuilders ( like Persimon and the rest), will find things very difficult - as Unsold new-builds don't look very attractive with empty properties next-door and the potential of an unfinished building-site for a few years to come. At least in the past, the dust and builders moved-on as the Estate was completed in 2-3 years. This "might-be" five years before it restarts - meaning existing Estate might not be finished for the next 8-years....Oh deary.
If you are thinking of buying, try to get a bargain....two for the price of one, maybe (one just a shell....it will be easy to have it finished as Brickies/plasterers find large contracts dry-up). And that relieves the Builder having to do-up a property only to break-even on an uncertain Sale.
Note - It must be secure! - and weatherproof - so windows/doors and roof-tiles!
Then, when the down-cycle is over...you have TWO properties, -but only ONE mortgage.
OR ask for the plot to be larger, such that you can build it, later, or if large enough....even a second home whilst you maintain the land and give the area a "Deluxe" feel. BUT make sure the services are laid and sealed. Very expensive to install later when the machines have gone away.
Only wish I had some Dosh to do this, but I'm ALWAYS at the wrong end of these cycles.
The same trick can be achieved ( with two easy-mortgages) , at the start of a Housing-Boom when sellers are eager to start the project, for nothing looks better than lots of "Sold" notices.
INVESTMENTS:-
Do we buy CFD's for Builders to go "down" - is that the smart thing to do - anyone?
hlyeo98 - 17 Aug 2008 07:59 - 289 of 352
House prices to tumble as boom turns to bust
Thu Aug 7, 2008
LONDON (Reuters) - House prices are likely to fall 7 percent this year and will probably tumble 20 percent from their highs before they start to recover, a Reuters poll found, in more evidence that a decade-long boom has turned to bust.
The poll of 27 analysts at banks, investment firms and research institutions found forecasts for 2008 as a whole ranged from a 20 percent fall to a 2.2 percent rise, with a fall of 8 percent predicted for next year.
The poll found economists predicting the market would fall 20 percent from peak to trough, with a few saying the correction would be as much as 35 percent.
A Reuters survey in May predicted just a 5 percent fall in house prices this year, while a poll in October forecast a 2.2 percent rise, highlighting the rapidly deteriorating outlook for the once-booming property market.
But the figures may already be understating reality. Data released by the Halifax mortgage lender earlier on Thursday showed house prices fell for the sixth month in a row in July and by a sharp 1.7 percent.
Some are now concerned that Britain is heading for a bust similar to the one that is in full gear in the United States, where prices are already falling more than 15 percent on one measure, the worst on record.
The Reuters poll found a 50 percent chance of that happening here, up sharply from 30 percent in the May survey.
"We think that in most respects the UK is undergoing a U.S.-style housing correction," said David Page, economist at Investec, who expects house prices will continue falling until the end of next year before finding a bottom.
First-time buyers have been struggling to raise a sufficient deposit while lenders have tightened their criteria for loans.
Last week HBOS Plc, Britain's biggest mortgage lender said first-half profits had halved and predicted that house prices would fall by 15-20 percent over 2008 and 2009.
Housebuilders have been shedding jobs over recent months with Bovis Homes, Barratt Developments and Redrow among those cutting thousands of positions to cope with the deepening depression in the housing market.
Thu Aug 7, 2008
LONDON (Reuters) - House prices are likely to fall 7 percent this year and will probably tumble 20 percent from their highs before they start to recover, a Reuters poll found, in more evidence that a decade-long boom has turned to bust.
The poll of 27 analysts at banks, investment firms and research institutions found forecasts for 2008 as a whole ranged from a 20 percent fall to a 2.2 percent rise, with a fall of 8 percent predicted for next year.
The poll found economists predicting the market would fall 20 percent from peak to trough, with a few saying the correction would be as much as 35 percent.
A Reuters survey in May predicted just a 5 percent fall in house prices this year, while a poll in October forecast a 2.2 percent rise, highlighting the rapidly deteriorating outlook for the once-booming property market.
But the figures may already be understating reality. Data released by the Halifax mortgage lender earlier on Thursday showed house prices fell for the sixth month in a row in July and by a sharp 1.7 percent.
Some are now concerned that Britain is heading for a bust similar to the one that is in full gear in the United States, where prices are already falling more than 15 percent on one measure, the worst on record.
The Reuters poll found a 50 percent chance of that happening here, up sharply from 30 percent in the May survey.
"We think that in most respects the UK is undergoing a U.S.-style housing correction," said David Page, economist at Investec, who expects house prices will continue falling until the end of next year before finding a bottom.
First-time buyers have been struggling to raise a sufficient deposit while lenders have tightened their criteria for loans.
Last week HBOS Plc, Britain's biggest mortgage lender said first-half profits had halved and predicted that house prices would fall by 15-20 percent over 2008 and 2009.
Housebuilders have been shedding jobs over recent months with Bovis Homes, Barratt Developments and Redrow among those cutting thousands of positions to cope with the deepening depression in the housing market.
hlyeo98 - 17 Aug 2008 08:06 - 290 of 352
House prices fall at record rate
LONDON (Reuters) - British house prices fell at a record annual rate in July to their lowest level in two years, data from Britain's biggest mortgage lender HBOS showed on Thursday, as the outlook for the economy darkens.
Prices fell by 1.7 percent on the month, the sixth straight fall in a row, according to the lender's Halifax house price index. That took them nearly 10.9 percent lower on the year, a sharper decline than at any time in the last housing crash in the early 1990s.
"This continues the run of bad news on the housing market. Declines have been pretty unrelenting for the last six months," said Dominic White at ABN AMRO. "This could go on for the next year," he said.
More than 20,000 pounds has been wiped off the value of the average British home since the peak in prices in August last year and economists say prices could fall by another 10-15 percent as lenders have tightened up borrowing terms.
The grim news came as Bank of England policymakers were holding their monthly rate-setting meeting but no change is expected as inflation is nearly double the central bank's target.
Still, most analysts expect the BoE to cut rates at some point, even if not for a few months, as the housing market slide takes its toll on the wider economy.
Housebuilders have announced thousands of job cuts and furniture retailers have been hard hit as the number of property transactions has halved from a year ago.
Earlier this week a study by ratings agency S&P said house prices could fall by another 17 percent, which would increase the number of people in negative equity from 70,000 households to 1.7 million next year.
LONDON (Reuters) - British house prices fell at a record annual rate in July to their lowest level in two years, data from Britain's biggest mortgage lender HBOS showed on Thursday, as the outlook for the economy darkens.
Prices fell by 1.7 percent on the month, the sixth straight fall in a row, according to the lender's Halifax house price index. That took them nearly 10.9 percent lower on the year, a sharper decline than at any time in the last housing crash in the early 1990s.
"This continues the run of bad news on the housing market. Declines have been pretty unrelenting for the last six months," said Dominic White at ABN AMRO. "This could go on for the next year," he said.
More than 20,000 pounds has been wiped off the value of the average British home since the peak in prices in August last year and economists say prices could fall by another 10-15 percent as lenders have tightened up borrowing terms.
The grim news came as Bank of England policymakers were holding their monthly rate-setting meeting but no change is expected as inflation is nearly double the central bank's target.
Still, most analysts expect the BoE to cut rates at some point, even if not for a few months, as the housing market slide takes its toll on the wider economy.
Housebuilders have announced thousands of job cuts and furniture retailers have been hard hit as the number of property transactions has halved from a year ago.
Earlier this week a study by ratings agency S&P said house prices could fall by another 17 percent, which would increase the number of people in negative equity from 70,000 households to 1.7 million next year.
scotinvestor - 17 Aug 2008 14:16 - 291 of 352
it aint british house prices falling.....its english house prices that r falling......and all regions are different as well too.......i wish media would stop making sweeping general comments.
even when house prices went up.....some areas only went up a few % but others went up 35% in a year
even when house prices went up.....some areas only went up a few % but others went up 35% in a year
hlyeo98 - 30 Aug 2008 23:16 - 292 of 352
August 29, 2008
House prices fall 2% as UK gloom spreads
House prices in England and Wales have fallen 2 per cent over the past year after a further 0.6 per cent drop in July, according to Land Registry figures released today.
The average house price stood at 178,364 at the end of July, with London the only region across the country where property has risen in value over the past 12 months.
In the year to July, prices in the capital rose 1.7 per cent, contrasting with the East Midlands which experienced the largest decline in England and Wales, with values falling by 5.1 per cent.
The Land Registry's July data follows research released by Nationwide yesterday showing prices fell by more than 10 per cent since last August - the fastest rate in 18 years.
Land Registry figures are based on the value of homes in completed sales logged with the agency, while the rival surveys gauge prices based on a range of alternative measures, such as mortgage offers, that reflect earlier stages in the home-buying process.
Despite recording price rises for the year, transactions fell in London, mirroring the decline around the rest of the country.
East Midlands have been hardest hit followed by Wales where prices dropped 4.4 per cent. In the West Midlands prices fell 3.8 per cent and the South West recorded declines of 3.4 per cent.
At 0.1 per cent down the North East held up the best after London while the South East dropped 1.3 per cent over the year.
Broken down into house types, the greatest price falls in July were for detached houses, which dipped 2.3 per cent for the year. Semi-detached, terraces and flats have all fallen 2.0 per cent.
House prices fall 2% as UK gloom spreads
House prices in England and Wales have fallen 2 per cent over the past year after a further 0.6 per cent drop in July, according to Land Registry figures released today.
The average house price stood at 178,364 at the end of July, with London the only region across the country where property has risen in value over the past 12 months.
In the year to July, prices in the capital rose 1.7 per cent, contrasting with the East Midlands which experienced the largest decline in England and Wales, with values falling by 5.1 per cent.
The Land Registry's July data follows research released by Nationwide yesterday showing prices fell by more than 10 per cent since last August - the fastest rate in 18 years.
Land Registry figures are based on the value of homes in completed sales logged with the agency, while the rival surveys gauge prices based on a range of alternative measures, such as mortgage offers, that reflect earlier stages in the home-buying process.
Despite recording price rises for the year, transactions fell in London, mirroring the decline around the rest of the country.
East Midlands have been hardest hit followed by Wales where prices dropped 4.4 per cent. In the West Midlands prices fell 3.8 per cent and the South West recorded declines of 3.4 per cent.
At 0.1 per cent down the North East held up the best after London while the South East dropped 1.3 per cent over the year.
Broken down into house types, the greatest price falls in July were for detached houses, which dipped 2.3 per cent for the year. Semi-detached, terraces and flats have all fallen 2.0 per cent.
hlyeo98 - 30 Aug 2008 23:16 - 293 of 352
August 29, 2008
House prices fall 2% as UK gloom spreads
House prices in England and Wales have fallen 2 per cent over the past year after a further 0.6 per cent drop in July, according to Land Registry figures released today.
The average house price stood at 178,364 at the end of July, with London the only region across the country where property has risen in value over the past 12 months.
In the year to July, prices in the capital rose 1.7 per cent, contrasting with the East Midlands which experienced the largest decline in England and Wales, with values falling by 5.1 per cent.
The Land Registry's July data follows research released by Nationwide yesterday showing prices fell by more than 10 per cent since last August - the fastest rate in 18 years.
Land Registry figures are based on the value of homes in completed sales logged with the agency, while the rival surveys gauge prices based on a range of alternative measures, such as mortgage offers, that reflect earlier stages in the home-buying process.
Despite recording price rises for the year, transactions fell in London, mirroring the decline around the rest of the country.
East Midlands have been hardest hit followed by Wales where prices dropped 4.4 per cent. In the West Midlands prices fell 3.8 per cent and the South West recorded declines of 3.4 per cent.
At 0.1 per cent down the North East held up the best after London while the South East dropped 1.3 per cent over the year.
Broken down into house types, the greatest price falls in July were for detached houses, which dipped 2.3 per cent for the year. Semi-detached, terraces and flats have all fallen 2.0 per cent.
House prices fall 2% as UK gloom spreads
House prices in England and Wales have fallen 2 per cent over the past year after a further 0.6 per cent drop in July, according to Land Registry figures released today.
The average house price stood at 178,364 at the end of July, with London the only region across the country where property has risen in value over the past 12 months.
In the year to July, prices in the capital rose 1.7 per cent, contrasting with the East Midlands which experienced the largest decline in England and Wales, with values falling by 5.1 per cent.
The Land Registry's July data follows research released by Nationwide yesterday showing prices fell by more than 10 per cent since last August - the fastest rate in 18 years.
Land Registry figures are based on the value of homes in completed sales logged with the agency, while the rival surveys gauge prices based on a range of alternative measures, such as mortgage offers, that reflect earlier stages in the home-buying process.
Despite recording price rises for the year, transactions fell in London, mirroring the decline around the rest of the country.
East Midlands have been hardest hit followed by Wales where prices dropped 4.4 per cent. In the West Midlands prices fell 3.8 per cent and the South West recorded declines of 3.4 per cent.
At 0.1 per cent down the North East held up the best after London while the South East dropped 1.3 per cent over the year.
Broken down into house types, the greatest price falls in July were for detached houses, which dipped 2.3 per cent for the year. Semi-detached, terraces and flats have all fallen 2.0 per cent.
BigTed
- 31 Aug 2008 12:39
- 294 of 352
makes me laugh to read 2% this and 1.6% that etc, prices are down 30% already if your serious about selling, values have gone to the opposite ends - instead of being overvalued, now they have to be seen as undervalued to achieve a sale...
BigTed
- 31 Aug 2008 14:31
- 295 of 352
Just got sale agreed on a place i put on market on Monday... its all down to price at the end of the day, buyers are still out there
scotinvestor - 01 Sep 2008 00:42 - 296 of 352
prices aint going down in scotland.....so i wish media and thus most people would stop referring to all this doom and gloom......its just certain areas in uk that r falling.
brianboru
- 01 Sep 2008 06:22
- 297 of 352
Government package designed to support housing out today apparently...
hangon - 01 Sep 2008 13:35 - 298 of 352
Isn't the issue that it was the "cheap money" that created the high house-prices . . . . they never were worth ten times the average salary, hence the need to manipulate the earnings and with that the risks of reposession.
All the while the Government did nothinig the cheap money flowed and more (young) folk got into deals that were not sustainable. We should look back at houseprices and be grateful prices are being corrected. Sure, that's no comfort for buyers in the last 5 years (particularly), but that is the sad fact as I see it.
When prices are "silly" you should rent . . . . . for it would not endure . . . . . then when things get "better" - that's the time to buy....maybe in another year....(Late 09)
Any other views here?
Scotinvestor - do you not think there is a storm gathering with RBS - won't this be devastating for property?
All the while the Government did nothinig the cheap money flowed and more (young) folk got into deals that were not sustainable. We should look back at houseprices and be grateful prices are being corrected. Sure, that's no comfort for buyers in the last 5 years (particularly), but that is the sad fact as I see it.
When prices are "silly" you should rent . . . . . for it would not endure . . . . . then when things get "better" - that's the time to buy....maybe in another year....(Late 09)
Any other views here?
Scotinvestor - do you not think there is a storm gathering with RBS - won't this be devastating for property?
hewittalan6
- 01 Sep 2008 17:47
- 299 of 352
Broadly true, hangon, but very simplistic.
All of us on here should know that timing the exact top and bottom is almost impossible.
If one bought at the bottom and sold at the top, to then buy in again at the bottom, then theoretically it works. The truth is that if the timing is less than exact then stamp duty, agents fees, valuation & application fees, legal fees, moving fees etc. would mean that you lost out.
The truth is more prosaic. Houses are not investments and the quicker we learn that, then the better we will all be for a sustainable market.
Sure, people have made money in property, but due to its illiquid nature and vulnerability to swings, it is an asset class that should only be utilised by the more wealthy. The problem is that every cabbie in yorkshire owns several houses as he sees it as a way to a quick buck.
All of us on here should know that timing the exact top and bottom is almost impossible.
If one bought at the bottom and sold at the top, to then buy in again at the bottom, then theoretically it works. The truth is that if the timing is less than exact then stamp duty, agents fees, valuation & application fees, legal fees, moving fees etc. would mean that you lost out.
The truth is more prosaic. Houses are not investments and the quicker we learn that, then the better we will all be for a sustainable market.
Sure, people have made money in property, but due to its illiquid nature and vulnerability to swings, it is an asset class that should only be utilised by the more wealthy. The problem is that every cabbie in yorkshire owns several houses as he sees it as a way to a quick buck.
brianboru
- 02 Sep 2008 07:14
- 300 of 352
Looks like new buyers will be able to get a 30% interest free loan to buy a property - knowing full well that if they fail to make the repayments on the mortgage the local council will pick up the payments...crazy!!
Falcothou - 02 Sep 2008 08:43 - 301 of 352
Sounds like council tax might be getting a whole lot more expensive, probably end up more than the mortgage!
Snip
- 02 Sep 2008 09:17
- 302 of 352
that will be to pay for the gold-plated council workers pensions
hlyeo98 - 04 Sep 2008 12:28 - 303 of 352
UK house prices recorded an annual fall of 10.9% in August - the first double digit drop since 1983 says the Halifax.
The lender said that property prices dropped 1.8% in August compared with July, leaving the cost of an average home in the UK at 174,178.
It said market conditions would remain "challenging" in the months ahead, despite government help for buyers
News that house prices are still falling close to 2% month-on-month and the expectation of further declines is likely to be an important factor limiting the scope for a quick recovery.
The benefits of the stamp duty saving would be wiped out in less than a month
Over the past six months, house prices on the Halifax index have fallen by an average 2,900 a month, greater than the maximum potential saving of 1,750 to a buyer from the recently introduced stamp duty holiday.
A slowdown in transactions suggests many buyers are delaying as prices continue to fall.
The lender said that property prices dropped 1.8% in August compared with July, leaving the cost of an average home in the UK at 174,178.
It said market conditions would remain "challenging" in the months ahead, despite government help for buyers
News that house prices are still falling close to 2% month-on-month and the expectation of further declines is likely to be an important factor limiting the scope for a quick recovery.
The benefits of the stamp duty saving would be wiped out in less than a month
Over the past six months, house prices on the Halifax index have fallen by an average 2,900 a month, greater than the maximum potential saving of 1,750 to a buyer from the recently introduced stamp duty holiday.
A slowdown in transactions suggests many buyers are delaying as prices continue to fall.
XSTEFFX
- 04 Sep 2008 12:37
- 304 of 352
2009 SPRING IT A MUST I HOPE.
scotinvestor - 04 Sep 2008 20:53 - 305 of 352
england prices r down more like!!
prices will keep going down till 2010 at least......prices wont increase a lot till 2015 according to top housing advisor to pm
prices will keep going down till 2010 at least......prices wont increase a lot till 2015 according to top housing advisor to pm
dealerdear - 04 Sep 2008 21:18 - 306 of 352
I don't think so!
Prices may fall more but everybody is waiting to dive in when the market bottoms because they will feel they are getting a bargain and won't want to be beaten to the property by anybody else. Greed will get the better of people. The recovery may initially be slow but bricks and mortar have always been a good investment.
If I was given 1 every time an analyst came out with crap, I'd be a millionaire!
Prices may fall more but everybody is waiting to dive in when the market bottoms because they will feel they are getting a bargain and won't want to be beaten to the property by anybody else. Greed will get the better of people. The recovery may initially be slow but bricks and mortar have always been a good investment.
If I was given 1 every time an analyst came out with crap, I'd be a millionaire!
Guscavalier
- 05 Sep 2008 10:31
- 307 of 352
There may be people waiting to dive in but, the number that will be able to dive in will be affected by affordability. This whole episode is going to educate people the hard way including the banks and, mortgages will get harder to get even if prices fall by another 25% or so. I live in Kent and I do not think the penny has totally dropped yet with people. As for Gordon's help with stamp duty etc. imho if possible, I would advise people to stear clear of buying a house for the time being and live with Mum and Dad for a year or so and see if there is a new dawn then. Its all the fault of unreasonable cheep lending, greed, awful tv property programs stirring up encouragement, and a generation of too many people with the lack of respect for monetary value for one reason of another. Last but certainly not least its the fault of scotinvestor's mate Gordon with his high taxation and wasteful ways.
BigTed
- 08 Sep 2008 11:27
- 308 of 352
Sentiment is the key word, at some point lenders have to become more competitive to gain business, they cant just keep writing off millions and refuse to lend, lending is where they make money. I believe it is already happening, with interbank rates becoming slightly more competitive. The point is, if investors started reading headlines like the worst is over, there would be a bigger panic to purchase property in fear that prices are already as low as they are likely to go... this may not be as far away as some people think. imo. We are still an overpopulated island, and everyone wants to own their own home. When sentiment does change, i believe prices are capable of rising, initially, just as sharply as they have fallen.
Fred1new
- 08 Sep 2008 11:31
- 309 of 352
BT. I think a little over optimistic.
justyi - 11 Sep 2008 12:34 - 310 of 352
Some analysts are talking of more losses in 2009 for housebuilder Redrow and, with so many adjustments, that is likely. More worrying is that Redrow is expecting to be cash negative for the next six months, in spite of discounting its homes and not committing to more land purchases. With one-sixth of the market value in the hands of short-sellers, and a hedge fund holding a 27% stake. A rally since the start of July provides a possible exit window.
Now 200p
Now 200p
hlyeo98 - 24 Sep 2008 15:55 - 311 of 352
NEW YORK WASHINGTON, Sept 24 (Reuters) - Prices of existing homes in the United States suffered a record drop in August while the sales pace slowed and the overstock of homes shrank, the National Association of Realtors said on Wednesday.
The pace of existing home sales decreased 2.2 percent to a 4.91 million unit annual pace while the median national home price declined 9.5 percent to $203,100.
Economists polled by Reuters were expecting home resales to fall to a 4.93 million-unit pace from the July rate of 5.02 million units. The dollar extended losses against the euro after the data.
The realty trade group said in a report that as many as 2 in 5 home sales are by borrowers who have seen their property lose value or are facing foreclosure.
'The big question now is whether lending is so tight that sales are being hurt,' said Gary Thayer, senior economist at Wachovia Securities in St. Louis, Missouri. 'If we can work through the current lending difficulty, sales are likely to improve later this year.'
The inventory of existing homes for sale fell 7.0 percent to 4.26 million from the record-high overstock reported in July.
The pace of existing home sales decreased 2.2 percent to a 4.91 million unit annual pace while the median national home price declined 9.5 percent to $203,100.
Economists polled by Reuters were expecting home resales to fall to a 4.93 million-unit pace from the July rate of 5.02 million units. The dollar extended losses against the euro after the data.
The realty trade group said in a report that as many as 2 in 5 home sales are by borrowers who have seen their property lose value or are facing foreclosure.
'The big question now is whether lending is so tight that sales are being hurt,' said Gary Thayer, senior economist at Wachovia Securities in St. Louis, Missouri. 'If we can work through the current lending difficulty, sales are likely to improve later this year.'
The inventory of existing homes for sale fell 7.0 percent to 4.26 million from the record-high overstock reported in July.
XSTEFFX
- 24 Sep 2008 21:53
- 312 of 352
hlyeo98 - 02 Oct 2008 08:18 - 313 of 352
LONDON, Oct 2 British house prices fell 1.7 percent in the month of September to post their biggest annual drop since comparable records began in 1991, the Nationwide building society said on Thursday.
Interest rate futures rallied as investors speculated the figures increased the chance of an interest rate cut by the Bank of England next week, although analysts cautioned that a cut in itself would do little to halt sliding property values.
'Even if the Bank of England cuts interest rates as early as next week, as we now expect, this is likely to provide only very limited support to the housing market given that elevated money market rates are exerting upward pressure on fixed rate mortgages,' said Howard Archer, economist at Global Insight.
Nationwide said house prices in August were 12.4 percent lower than a year earlier. Before 1991, Nationwide conducted quarterly house price surveys. The largest annual fall on that measure was a 10.7 percent drop recorded in the early 1990s.
The 11th consecutive monthly decline highlights the sharp reversal of fortune for the property market since the credit crunch took hold last summer, bringing an end to a decade in which property values almost trebled.
'Casting back one year there have been some astonishing and unpredictable developments in the housing and financial markets,' said Fionnuala Earley, Nationwide's chief economist.
'We would need to see a significant shift in consumers' sentiment before we begin to see any real recovery in activity and subsequently house prices.'
September's decline pushed the average price of a property to 161,797 pounds ($286,060), the lowest since February 2006.
The precipitous drop in house prices both in Britain and overseas has been a key element of the crisis that is rocking the global banking sector and threatening to send many industrialised economies into recession.
A reluctance by banks to lend to each other had led to a sharp increase in wholesale funding costs in recent weeks. Several mortgage providers have responded by raising their own mortgage rates.
Policymakers are concerned a weakening property market could feed a vicious downward spiral of falling consumer demand and rising unemployment.
Futures markets suggest the Bank of England will cut interest rates to 4.75 percent next week and to 4 percent by this time next year.
A Reuters poll this week showed 45 of 66 economists polled Sept. 29-Oct. 1 said the BoE would hold rates at 5.0 percent next week. A cut by the end of the year is now almost a certainty with forecasters in the poll.
Interest rate futures rallied as investors speculated the figures increased the chance of an interest rate cut by the Bank of England next week, although analysts cautioned that a cut in itself would do little to halt sliding property values.
'Even if the Bank of England cuts interest rates as early as next week, as we now expect, this is likely to provide only very limited support to the housing market given that elevated money market rates are exerting upward pressure on fixed rate mortgages,' said Howard Archer, economist at Global Insight.
Nationwide said house prices in August were 12.4 percent lower than a year earlier. Before 1991, Nationwide conducted quarterly house price surveys. The largest annual fall on that measure was a 10.7 percent drop recorded in the early 1990s.
The 11th consecutive monthly decline highlights the sharp reversal of fortune for the property market since the credit crunch took hold last summer, bringing an end to a decade in which property values almost trebled.
'Casting back one year there have been some astonishing and unpredictable developments in the housing and financial markets,' said Fionnuala Earley, Nationwide's chief economist.
'We would need to see a significant shift in consumers' sentiment before we begin to see any real recovery in activity and subsequently house prices.'
September's decline pushed the average price of a property to 161,797 pounds ($286,060), the lowest since February 2006.
The precipitous drop in house prices both in Britain and overseas has been a key element of the crisis that is rocking the global banking sector and threatening to send many industrialised economies into recession.
A reluctance by banks to lend to each other had led to a sharp increase in wholesale funding costs in recent weeks. Several mortgage providers have responded by raising their own mortgage rates.
Policymakers are concerned a weakening property market could feed a vicious downward spiral of falling consumer demand and rising unemployment.
Futures markets suggest the Bank of England will cut interest rates to 4.75 percent next week and to 4 percent by this time next year.
A Reuters poll this week showed 45 of 66 economists polled Sept. 29-Oct. 1 said the BoE would hold rates at 5.0 percent next week. A cut by the end of the year is now almost a certainty with forecasters in the poll.
hlyeo98 - 05 Oct 2008 10:31 - 314 of 352
Average house price drops £25,000 over 12 months making property bust of 2008 much worse that the 90s crash
House prices have fallen by an average of £25,000 in less than a year, making the property bust of 2008 even worse than the early 1990s. The average fall is put at 12.4%, which is greater than anything seen during the disastrous crash and wider recession of 18 years ago. Industry analysts last night warned of a deep and long-running property crisis that will see prices fall by more than 30per cent by early 2010. House prices have fallen for the 11th consecutive month in September, with the average house in the UK now worth £161,797. The latest figures from the Nationwide building society put the average price at £161,797 in September - some £25,000 below the peak of October last year. The market has hit a brick wall following a ten year boom where prices surged ahead of wage rises, fuelled by reckless lending that included loans of 125per cent of a property's value.
The global credit crunch means banks and building societies have drastically reduced the number of mortgages available and tightened the rules on who they will lend to.
The resulting mortgage drought, falling prices and a squeeze on consumer finances, have sent potential property buyers running for cover. Economist Seema Shah of Capital Economics, said: 'Even during the early 1990s slump, the furthest house prices fell in one year was 10.7per cent - reached in the final three months of 1990. 'This correction has already surpassed that, and we are only in the initial stages of what is likely to be a severe economic downturn.' She added: 'The toxic combination of the mortgage credit squeeze, sharply slowing economic activity, and plummeting buyer confidence have caused house prices to fall at a record pace over the past year. 'With none of these factors likely to disappear, or even ease, over the coming months, the house price declines could easily intensify.
'Buyer confidence, already reeling from the fall-out of the mortgage credit squeeze and sharply slowing economy, is likely to be further depressed by the negative developments in the financial markets. 'What’s more, recent rises in mortgage funding costs have already led lenders to raise mortgage rates, which had only just come down. 'Overall, the outlook for the housing market remains extremely bleak.'
House prices falls have been widespread across the country, however the declines in some regions are remarkable.
The figure in Northern Ireland is down 29.8per cent when comparing the last three months with the same period last year. The fall in East Anglia and the South West is put at 11.4per cent. The fall in Scotland was a lower 7.1 per cent and 8.6 per cent in the North. ]
Economist Howard Archer, of Global Economics, warned that house prices could now fall by 34per cent from their peak last autumn. 'House prices seem poised to fall substantially further for an extended period as the fundamentals are pretty ugly,' he said. 'Fewer mortgages are available, while lenders have raised their fixed rate mortgages in recent days. 'Meanwhile, faster rising unemployment, heightened concerns over the economic outlook and widespread expectations that house prices will continue to fall markedly for some considerable time to come will depress housing market activity and prices.'
Mr Archer said the Government's recent decision to suspend stamp duty on property costing less than £175,000 will do nothing to help the market. His company is now predicting that house prices will fall 16per cent in 2008 and 15per cent in 2009.
Mr Archer said: 'Reduced falls in house prices are expected in the first half of 2010, taking them down to a low of £123,505, which would be 34per cent below their peak.' The Nationwide's chief economist, Fionnuala Earley, said: 'Casting back one year there have been some astonishing and unpredictable developments in the housing and financial markets.' Miss Earley said consumers' confidence in the market changed almost immediately following the problems at Northern Rock.
'As expectations have collapsed, house purchase approvals have fallen to less than a third of their long run trend,' she said. 'It seems that we would need to see a significant shift in consumers' sentiment before we begin to see any real recovery in activity and subsequently house prices.' She said that while sentiment is important, a resolution to the current financial turmoil is also key. Despite the recent house price falls, the average cost of a home is still 60per cent higher than it was in 2000. Nationwide said even if prices continue to fall at their current rate for two years, they would still be around a fifth higher in real terms than at the millennium.
House prices have fallen by an average of £25,000 in less than a year, making the property bust of 2008 even worse than the early 1990s. The average fall is put at 12.4%, which is greater than anything seen during the disastrous crash and wider recession of 18 years ago. Industry analysts last night warned of a deep and long-running property crisis that will see prices fall by more than 30per cent by early 2010. House prices have fallen for the 11th consecutive month in September, with the average house in the UK now worth £161,797. The latest figures from the Nationwide building society put the average price at £161,797 in September - some £25,000 below the peak of October last year. The market has hit a brick wall following a ten year boom where prices surged ahead of wage rises, fuelled by reckless lending that included loans of 125per cent of a property's value.
The global credit crunch means banks and building societies have drastically reduced the number of mortgages available and tightened the rules on who they will lend to.
The resulting mortgage drought, falling prices and a squeeze on consumer finances, have sent potential property buyers running for cover. Economist Seema Shah of Capital Economics, said: 'Even during the early 1990s slump, the furthest house prices fell in one year was 10.7per cent - reached in the final three months of 1990. 'This correction has already surpassed that, and we are only in the initial stages of what is likely to be a severe economic downturn.' She added: 'The toxic combination of the mortgage credit squeeze, sharply slowing economic activity, and plummeting buyer confidence have caused house prices to fall at a record pace over the past year. 'With none of these factors likely to disappear, or even ease, over the coming months, the house price declines could easily intensify.
'Buyer confidence, already reeling from the fall-out of the mortgage credit squeeze and sharply slowing economy, is likely to be further depressed by the negative developments in the financial markets. 'What’s more, recent rises in mortgage funding costs have already led lenders to raise mortgage rates, which had only just come down. 'Overall, the outlook for the housing market remains extremely bleak.'
House prices falls have been widespread across the country, however the declines in some regions are remarkable.
The figure in Northern Ireland is down 29.8per cent when comparing the last three months with the same period last year. The fall in East Anglia and the South West is put at 11.4per cent. The fall in Scotland was a lower 7.1 per cent and 8.6 per cent in the North. ]
Economist Howard Archer, of Global Economics, warned that house prices could now fall by 34per cent from their peak last autumn. 'House prices seem poised to fall substantially further for an extended period as the fundamentals are pretty ugly,' he said. 'Fewer mortgages are available, while lenders have raised their fixed rate mortgages in recent days. 'Meanwhile, faster rising unemployment, heightened concerns over the economic outlook and widespread expectations that house prices will continue to fall markedly for some considerable time to come will depress housing market activity and prices.'
Mr Archer said the Government's recent decision to suspend stamp duty on property costing less than £175,000 will do nothing to help the market. His company is now predicting that house prices will fall 16per cent in 2008 and 15per cent in 2009.
Mr Archer said: 'Reduced falls in house prices are expected in the first half of 2010, taking them down to a low of £123,505, which would be 34per cent below their peak.' The Nationwide's chief economist, Fionnuala Earley, said: 'Casting back one year there have been some astonishing and unpredictable developments in the housing and financial markets.' Miss Earley said consumers' confidence in the market changed almost immediately following the problems at Northern Rock.
'As expectations have collapsed, house purchase approvals have fallen to less than a third of their long run trend,' she said. 'It seems that we would need to see a significant shift in consumers' sentiment before we begin to see any real recovery in activity and subsequently house prices.' She said that while sentiment is important, a resolution to the current financial turmoil is also key. Despite the recent house price falls, the average cost of a home is still 60per cent higher than it was in 2000. Nationwide said even if prices continue to fall at their current rate for two years, they would still be around a fifth higher in real terms than at the millennium.
justyi - 15 Oct 2008 13:32 - 315 of 352
British House Prices Down By 40%
One flat in Folkestone, Kent, went on the market on January 28 this year at 125,000, and has now been reduced to 75,000.
The one-bedroom, lower ground floor property lies in an upmarket area of the coastal town, and is in need of refurbishment.
When Sky News Online posed as cash buyers, the estate agent Fell Reynolds confirmed the flat had been slashed from 125,000 to 99,950 and then to 75,000 because of the housing slump.
"We felt that because of the lack of interest and the market conditions, 75,000 would be a realistic price," the agent added.
"It's a nice little flat in a good area."
Other properties in the UK have fallen even more sharply, according to Propertysnake, a website which measures price reductions.
One two bedroom house near Worthing, West Sussex, was first advertised last October at 319,950 - but is now down a staggering 53% to 149,995.
A similar home in Cardiff, Wales, has been slashed by 45% from 184,950 to 100,000 in less than a year.
The news comes as new figures show estate agents are selling only one house a week.
The Royal Institution of Chartered Surveyors (RICS) said its members sold an average of just 11.5 homes during the three months to the end of September - the lowest level since its survey first began in 1978.
The situation is even worse in London, where estate agents have made an average of just eight sales during the period.
Some London homes on the market are down 20% from original asking prices, taking them back to levels seen in 2005 and 2006.
And completion prices are even lower because of 'gazundering' - where buyers cut their offer at the last minute - in the capital.
A five-bedroom house in Herne Hill has been cut by 37% from 1,275,000 to 795,000 as the number of homes sold in London falls to its lowest level since records began 30 years ago.
One London agent said: "We're 20% down. There are some very, very keen sellers out there."
In other new figures, the number of first-time buyers getting on to the property ladder slumped to a record low during August.
An RICS spokesman said he hoped this week's bail-out of three high street banks would help the housing market and restore buyer confidence.
One flat in Folkestone, Kent, went on the market on January 28 this year at 125,000, and has now been reduced to 75,000.
The one-bedroom, lower ground floor property lies in an upmarket area of the coastal town, and is in need of refurbishment.
When Sky News Online posed as cash buyers, the estate agent Fell Reynolds confirmed the flat had been slashed from 125,000 to 99,950 and then to 75,000 because of the housing slump.
"We felt that because of the lack of interest and the market conditions, 75,000 would be a realistic price," the agent added.
"It's a nice little flat in a good area."
Other properties in the UK have fallen even more sharply, according to Propertysnake, a website which measures price reductions.
One two bedroom house near Worthing, West Sussex, was first advertised last October at 319,950 - but is now down a staggering 53% to 149,995.
A similar home in Cardiff, Wales, has been slashed by 45% from 184,950 to 100,000 in less than a year.
The news comes as new figures show estate agents are selling only one house a week.
The Royal Institution of Chartered Surveyors (RICS) said its members sold an average of just 11.5 homes during the three months to the end of September - the lowest level since its survey first began in 1978.
The situation is even worse in London, where estate agents have made an average of just eight sales during the period.
Some London homes on the market are down 20% from original asking prices, taking them back to levels seen in 2005 and 2006.
And completion prices are even lower because of 'gazundering' - where buyers cut their offer at the last minute - in the capital.
A five-bedroom house in Herne Hill has been cut by 37% from 1,275,000 to 795,000 as the number of homes sold in London falls to its lowest level since records began 30 years ago.
One London agent said: "We're 20% down. There are some very, very keen sellers out there."
In other new figures, the number of first-time buyers getting on to the property ladder slumped to a record low during August.
An RICS spokesman said he hoped this week's bail-out of three high street banks would help the housing market and restore buyer confidence.
neil777
- 16 Oct 2008 01:01
- 316 of 352
Its time to change the header!
fliper
- 16 Oct 2008 16:32
- 317 of 352
Lots of cheap property out there . Good time to make deals .
hlyeo98 - 17 Oct 2008 10:06 - 318 of 352
I think it's only fair they get reposssessed - why did they take a 125% mortgage in the first place??? Northern Bank is a business, not a charitable organisation...
Repossesssions rising sharply.
Around 19,000 homes were repossessed in the first half of this year by mortgage lenders and banks as a whole.
The charity said that the bank was not being flexible enough with customers who defaulted on their mortgage repayments.
Chris Tapp, Director of Credit Action said: "There's not a lot of flexibility being shown by Northern Rock. They are also not giving people a lot of time, they seem to be moving for repossession quite quickly as a resort."
He added: "They are being quite aggressive in terms of their use of the courts in going for repossession, but for a lot of people they don't need to get to that point, if only Northern Rock would be more flexible with them in the first place."
Earlier this week the nationalised lender said it was "well ahead" of its Government loan repayment target, having paid back more than half the 26 billion owed, to leave 11.4 billion outstanding as of September 30.
Before running into funding problems last summer, Northern Rock was one of the UK's biggest and most aggressive mortgage providers, advancing loans worth as much as 125 per cent of home values.
But it was forced to turn to the Bank of England for emergency support after the money markets froze, leaving the group facing a funding crisis.
Northern Rock's nationalisation in February led to 1,500 job losses as it scaled back activity to pay back the Government.
The lender has been reducing the size of its mortgage book in order to pay back its Government borrowing.
Most of the repossessions were for properties secured with a "Together" mortgage, which allowed buyers to borrow up to 125 per cent of the property's value.
Repossesssions rising sharply.
Around 19,000 homes were repossessed in the first half of this year by mortgage lenders and banks as a whole.
The charity said that the bank was not being flexible enough with customers who defaulted on their mortgage repayments.
Chris Tapp, Director of Credit Action said: "There's not a lot of flexibility being shown by Northern Rock. They are also not giving people a lot of time, they seem to be moving for repossession quite quickly as a resort."
He added: "They are being quite aggressive in terms of their use of the courts in going for repossession, but for a lot of people they don't need to get to that point, if only Northern Rock would be more flexible with them in the first place."
Earlier this week the nationalised lender said it was "well ahead" of its Government loan repayment target, having paid back more than half the 26 billion owed, to leave 11.4 billion outstanding as of September 30.
Before running into funding problems last summer, Northern Rock was one of the UK's biggest and most aggressive mortgage providers, advancing loans worth as much as 125 per cent of home values.
But it was forced to turn to the Bank of England for emergency support after the money markets froze, leaving the group facing a funding crisis.
Northern Rock's nationalisation in February led to 1,500 job losses as it scaled back activity to pay back the Government.
The lender has been reducing the size of its mortgage book in order to pay back its Government borrowing.
Most of the repossessions were for properties secured with a "Together" mortgage, which allowed buyers to borrow up to 125 per cent of the property's value.
partridge
- 17 Oct 2008 10:13
- 319 of 352
hlyeo98 - they took 125% mortgages because they were encouraged to do so and in their ignorance trusted the lender. It would never have happened in the "old fashioned" banking days, when the lenders felt a duty of care towards their customers. Unlike you and me, they were ignorant of basic financial acumen, which imo should be the first thing on the National Curriculum at Secondary schools.
hlyeo98 - 17 Oct 2008 10:17 - 320 of 352
Sorry, I can't agree with that, partridge. It's just like the younger generation are draining their credit cards and not paying up. Despite that, they still think things are 'hunky dory'. This is sheer stupidity.
partridge
- 17 Oct 2008 12:11
- 321 of 352
We will have to agree to differ. I believe most people are still basically honest, but have not a clue when it comes to their finances, until it is too late. Having given some time voluntarily a few years ago to talk for an hour a week to 16 year olds at a good independent school about basic finance issues, I was appalled at the lack of knowledge - and they were generally very bright students. We are now beginning to see the results of ignorant borrowers and irresponsible lenders. A government which has encouraged high levels of debt as a normal thing, both by its own direct actions and by insisting that there is nothing wrong with coming out of university with a debt of 30K, also imo takes some responsibility.
justyi - 19 Oct 2008 19:04 - 322 of 352
Collapsing house prices are plunging 60,000 homeowners a month into negative equity, which means the country is on course for a worse crisis than the 1990s crash.
At current trends, 2m households will enter negative equity by 2010, outstripping the 1.8m affected at the bottom of the last housing slump.
New research from Standard & Poors, the ratings agency, coincides with evidence that banks are aggressively seizing homes whose owners have slipped just a few hundred pounds behind on their mortgage payments.
It is a further signal that the financial crisis is now infecting the real economy as hundreds of thousands of families face the prospect of being unable to move house because their home is worth less than the value of their mortgage.
Many more homeowners will now be afraid that the bank may suddenly repossess their property. Repossessions have soared to 19,000 in the first half of the year, up 40% on the previous six months. That figure is expected to rise to 26,000 in the second half of 2008.
Economists believe house prices will fall by up to 35% from their peak by 2010. This compares with a drop of only 20% in the early 1990s.
Last night opposition politicians blamed Labour for encouraging a culture of indebtedness that now threatens to cause an implosion in the housing market. Philip Hammond, the shadow Treasury chief secretary, said: We are now paying the price for a decade of debt-fuelled boom, with hundreds of thousands of people unable to sell their property, after being encouraged by the government to overstretch themselves to get on the property ladder.
Vince Cable, the Liberal Democrat finance spokesman, urged Gordon Brown to do more to prevent unnecessary repossessions. It genuinely must be a lenders last resort, which right now it certainly is not, he said.
With official figures out this week expected to show Britain has fallen into recession, Brown is planning a 1930s-style programme of public works, spending billions on new schools, homes and transport projects. He has urged senior colleagues to increase expenditure on big capital projects despite forecasts that tax revenues are about to collapse.
Browns ambitious plan is modelled on Franklin Roosevelts New Deal, which helped drag America out of the Great Depression. A Whitehall source said: We cannot afford to risk the complete collapse of our construction industry. We have to make sure that the skills have not been lost when we finally pull out of the downturn.
Standard & Poors has calculated that by the end of the month 335,000 homes will be worth less than their mortgages. The figure represents a rise of 260,000 in four months.
Capital Economics, the City consultancy, expects up to 2m properties will be in negative equity by 2010 more than in the recession of the early 1990s.
Northern Rock, the bank nationalised this year, is said to be behind a wave of aggressive repossessions. In the nine months to the end of September, the state-owned lender made more than 2,000 seizures.
Esther Spick, from Surrey, is three months in arrears on her Northern Rock mortgage. The lender has launched repossession proceedings, even though she owes just 1,200. In one case reported to The Sunday Times by a housing charity, the bank is trying to seize a home where the owner is just 800 in arrears, even though he has about 40,000 of equity in the 180,000 property.
Chris Tapp, director of Credit Action, a debt charity, said: What makes these negative equity statistics so worrying is that they come at a time when banks are behaving so unreasonably over repossessions.
We are particularly dismayed with the inflexibility of Northern Rock.
Adam Sampson, chief executive of Shelter, the housing charity, said: Northern Rock is behaving very aggressively on repossessions, but it is not the only lender acting like that.
The Council of Mortgage Lenders said there were no industry guidelines for how deeply in arrears a lender had to be for a home loan provider to be entitled to launch repossession proceedings.
The government said last night it would bring forward laws forcing lenders to offer alternative payment schemes before they were allowed to take back possession of the property.
Northern Rock denied that it was overly aggressive. Repossession proceedings are only launched as a last resort, it said.
The details of the prime ministers extra spending on public works is expected to be unveiled in the pre-budget report next month. Brown has already tasked his new enforcer, the Cabinet Office minister, Liam Byrne, with compiling a list of major construction projects at risk from the credit crunch that would benefit from extra government support.
Browns handling of the financial crisis has failed to improve Labours electoral prospects. Despite most voters saying he had performed well over the past few weeks, only 13% said they were now more likely to vote Labour, an ICM survey for the News of the World found.
At current trends, 2m households will enter negative equity by 2010, outstripping the 1.8m affected at the bottom of the last housing slump.
New research from Standard & Poors, the ratings agency, coincides with evidence that banks are aggressively seizing homes whose owners have slipped just a few hundred pounds behind on their mortgage payments.
It is a further signal that the financial crisis is now infecting the real economy as hundreds of thousands of families face the prospect of being unable to move house because their home is worth less than the value of their mortgage.
Many more homeowners will now be afraid that the bank may suddenly repossess their property. Repossessions have soared to 19,000 in the first half of the year, up 40% on the previous six months. That figure is expected to rise to 26,000 in the second half of 2008.
Economists believe house prices will fall by up to 35% from their peak by 2010. This compares with a drop of only 20% in the early 1990s.
Last night opposition politicians blamed Labour for encouraging a culture of indebtedness that now threatens to cause an implosion in the housing market. Philip Hammond, the shadow Treasury chief secretary, said: We are now paying the price for a decade of debt-fuelled boom, with hundreds of thousands of people unable to sell their property, after being encouraged by the government to overstretch themselves to get on the property ladder.
Vince Cable, the Liberal Democrat finance spokesman, urged Gordon Brown to do more to prevent unnecessary repossessions. It genuinely must be a lenders last resort, which right now it certainly is not, he said.
With official figures out this week expected to show Britain has fallen into recession, Brown is planning a 1930s-style programme of public works, spending billions on new schools, homes and transport projects. He has urged senior colleagues to increase expenditure on big capital projects despite forecasts that tax revenues are about to collapse.
Browns ambitious plan is modelled on Franklin Roosevelts New Deal, which helped drag America out of the Great Depression. A Whitehall source said: We cannot afford to risk the complete collapse of our construction industry. We have to make sure that the skills have not been lost when we finally pull out of the downturn.
Standard & Poors has calculated that by the end of the month 335,000 homes will be worth less than their mortgages. The figure represents a rise of 260,000 in four months.
Capital Economics, the City consultancy, expects up to 2m properties will be in negative equity by 2010 more than in the recession of the early 1990s.
Northern Rock, the bank nationalised this year, is said to be behind a wave of aggressive repossessions. In the nine months to the end of September, the state-owned lender made more than 2,000 seizures.
Esther Spick, from Surrey, is three months in arrears on her Northern Rock mortgage. The lender has launched repossession proceedings, even though she owes just 1,200. In one case reported to The Sunday Times by a housing charity, the bank is trying to seize a home where the owner is just 800 in arrears, even though he has about 40,000 of equity in the 180,000 property.
Chris Tapp, director of Credit Action, a debt charity, said: What makes these negative equity statistics so worrying is that they come at a time when banks are behaving so unreasonably over repossessions.
We are particularly dismayed with the inflexibility of Northern Rock.
Adam Sampson, chief executive of Shelter, the housing charity, said: Northern Rock is behaving very aggressively on repossessions, but it is not the only lender acting like that.
The Council of Mortgage Lenders said there were no industry guidelines for how deeply in arrears a lender had to be for a home loan provider to be entitled to launch repossession proceedings.
The government said last night it would bring forward laws forcing lenders to offer alternative payment schemes before they were allowed to take back possession of the property.
Northern Rock denied that it was overly aggressive. Repossession proceedings are only launched as a last resort, it said.
The details of the prime ministers extra spending on public works is expected to be unveiled in the pre-budget report next month. Brown has already tasked his new enforcer, the Cabinet Office minister, Liam Byrne, with compiling a list of major construction projects at risk from the credit crunch that would benefit from extra government support.
Browns handling of the financial crisis has failed to improve Labours electoral prospects. Despite most voters saying he had performed well over the past few weeks, only 13% said they were now more likely to vote Labour, an ICM survey for the News of the World found.
justyi - 19 Oct 2008 19:14 - 323 of 352
Barratt raises incentives as profits plunge
Barratt Developments, Britains biggest housebuilder, today unveiled measures to kick start the property market as it axed its final shareholder dividend and reported a 67 per cent slide in pre-tax profits.
The group pledged to pay customers stamp duty on purchases up to 500,000 and said it would be launching a part-exchange service normally reserved for the car industry. Anyone looking to buy a new Barratt home can sell their old one to the business at a fair market value.
Mark Clare, chief executive of Barratt, said housebuilders had to offer higher incentives given the considerable uncertainty about the near-term prospects for the sector.
He said: We know from research that our customers want low moving costs, help in selling their existing property, and more certainty over the price of their purchase."
The poor health of the market was reflected in full-year profits from the group today. The heavily-indebted housebuilder, which has spent the summer struggling to put its finances on a better footing, scrapped its final dividend and made writedowns worth 208.4 million on its land and commercial developments.
As a result, pre-tax profit for the 12 months to June 30 fell from 424.8 million last year to 137.3 million. Like its rival, Redrow, Barratt is paying only an interim dividend. Investors received a 12.23p per share payout in May.
The housebuilder, Britain's biggest by volume, said that margins, which have halved during 2008, would continue to slide in 2009, while forward sales in the past four weeks were down 30 per cent on the previous year.
Full-year revenues rose 16.7 per cent to 3.5 billion but like-for-like completions fell by 13.8 per cent.
Barratt Developments, Britains biggest housebuilder, today unveiled measures to kick start the property market as it axed its final shareholder dividend and reported a 67 per cent slide in pre-tax profits.
The group pledged to pay customers stamp duty on purchases up to 500,000 and said it would be launching a part-exchange service normally reserved for the car industry. Anyone looking to buy a new Barratt home can sell their old one to the business at a fair market value.
Mark Clare, chief executive of Barratt, said housebuilders had to offer higher incentives given the considerable uncertainty about the near-term prospects for the sector.
He said: We know from research that our customers want low moving costs, help in selling their existing property, and more certainty over the price of their purchase."
The poor health of the market was reflected in full-year profits from the group today. The heavily-indebted housebuilder, which has spent the summer struggling to put its finances on a better footing, scrapped its final dividend and made writedowns worth 208.4 million on its land and commercial developments.
As a result, pre-tax profit for the 12 months to June 30 fell from 424.8 million last year to 137.3 million. Like its rival, Redrow, Barratt is paying only an interim dividend. Investors received a 12.23p per share payout in May.
The housebuilder, Britain's biggest by volume, said that margins, which have halved during 2008, would continue to slide in 2009, while forward sales in the past four weeks were down 30 per cent on the previous year.
Full-year revenues rose 16.7 per cent to 3.5 billion but like-for-like completions fell by 13.8 per cent.
justyi - 01 Nov 2008 13:33 - 324 of 352
From Times Online October 31, 2008
US confidence falls at biggest rate in 30 years Tom Bawden, New York
US consumer spending fell for the first time in two years in September as the weakening economy prompted the biggest decline in Americans confidence in at least three decades and reduced their ability to finance the purchase of goods and services.
The 0.3 per cent decrease in consumer spending in September was the biggest decline in three and a half years and came after two consecutive months of flat expenditure, according to new figures from the Commerce Department.
Weak spending looks set to continue as separate data indicated that consumer confidence recorded its biggest decline in October since monthly data began in 1978.
The Reuters/University of Michigan index of consumers sentiment dropped from 70.3 in September to 57.6 in October. The measure, in which the larger the number. the greater the confidence, averaged 85.6 last year.
In a further dose of gloomy economic news, the Institute for Supply Management-Chicago reported that its index a gauge of employment and demand fell from 56.7 in September to 37.8 in October.
US confidence falls at biggest rate in 30 years Tom Bawden, New York
US consumer spending fell for the first time in two years in September as the weakening economy prompted the biggest decline in Americans confidence in at least three decades and reduced their ability to finance the purchase of goods and services.
The 0.3 per cent decrease in consumer spending in September was the biggest decline in three and a half years and came after two consecutive months of flat expenditure, according to new figures from the Commerce Department.
Weak spending looks set to continue as separate data indicated that consumer confidence recorded its biggest decline in October since monthly data began in 1978.
The Reuters/University of Michigan index of consumers sentiment dropped from 70.3 in September to 57.6 in October. The measure, in which the larger the number. the greater the confidence, averaged 85.6 last year.
In a further dose of gloomy economic news, the Institute for Supply Management-Chicago reported that its index a gauge of employment and demand fell from 56.7 in September to 37.8 in October.
justyi - 03 Nov 2008 11:19 - 325 of 352
From The Times November 3, 2008
Three million homeowners face negative equity trapGary Duncan, Economics Editor
Three million homeowners, or more than a fifth of households, could end up in the trap of negative equity, with mortgage debts larger than the value of their property, as house prices continue to plunge, new City estimates show.
Bank of England calculations that the numbers caught in negative equity could soar from about half a million at present to 1.2 million by 2011, are seen as too optimistic in the bleakest assessment yet of the threat.
Michael Saunders, of Citigroup, says that the Bank's estimates are too optimistic since they are based on a survey of households where homeowners are asked for details of their own debts, financial assets and property value. Mr Saunders points to previous Bank research which showed that individuals tend to overstate the value of their homes by up to 20 per cent, and understate debts by 10 to 15 per cent.
Adjusting for this bias, he calculates that a likely further drop of 15 per cent in house prices on top of the 15 per cent slide over the past year will leave between 2.5 and 3 million homeowners in negative equity. This would exceed the peak of 1.8 million, the number of people who were in this predicament in the early Nineties.
Mr Saunders gave warning that negative equity will leave millions of people reluctant to spend and deepen the painful, consumer-driven recession that most of the City now expects. Widespread negative equity is likely to exert a lasting drag on spending as households save more, while also hitting the credit quality of lenders' assets and adding to the caution over high debt levels among both lenders and borrowers, he said.
Worries over the scale of the housing slump were reinforced on Friday as the latest snapshot of conditions in London from Knight Frank, the estate agent, showed that prices in the prime residential areas of the capital fell by a record 3.9 per cent last month.
The City is on alert for Thursday's interest rates verdict from the Bank's monetary policy committee (MPC). A cut is seen as a certainty, with a majority of economists expecting a further half-point reduction to match last month's emergency move, and take rates to 4 per cent.
Some believe the MPC will be bolder, and order an unprecedented reduction of 0.75 percentage points, or even a full point as it steps up its efforts to prevent a deep recession. On the same day, the European Central Bank is also expected to cut eurozone interest rates by a half-point.
Pressure on the MPC to deliver an aggressive rate cut will be increased this week as a spate of dire results from corporate Britain is expected to emphasise the impact of the economic downturn. First-half sales at Marks & Spencer are tipped to be the worst for three years, while British Airways' half-year results on Friday are expected to show the impact of sliding demand and the past surge in oil prices.
Three million homeowners face negative equity trapGary Duncan, Economics Editor
Three million homeowners, or more than a fifth of households, could end up in the trap of negative equity, with mortgage debts larger than the value of their property, as house prices continue to plunge, new City estimates show.
Bank of England calculations that the numbers caught in negative equity could soar from about half a million at present to 1.2 million by 2011, are seen as too optimistic in the bleakest assessment yet of the threat.
Michael Saunders, of Citigroup, says that the Bank's estimates are too optimistic since they are based on a survey of households where homeowners are asked for details of their own debts, financial assets and property value. Mr Saunders points to previous Bank research which showed that individuals tend to overstate the value of their homes by up to 20 per cent, and understate debts by 10 to 15 per cent.
Adjusting for this bias, he calculates that a likely further drop of 15 per cent in house prices on top of the 15 per cent slide over the past year will leave between 2.5 and 3 million homeowners in negative equity. This would exceed the peak of 1.8 million, the number of people who were in this predicament in the early Nineties.
Mr Saunders gave warning that negative equity will leave millions of people reluctant to spend and deepen the painful, consumer-driven recession that most of the City now expects. Widespread negative equity is likely to exert a lasting drag on spending as households save more, while also hitting the credit quality of lenders' assets and adding to the caution over high debt levels among both lenders and borrowers, he said.
Worries over the scale of the housing slump were reinforced on Friday as the latest snapshot of conditions in London from Knight Frank, the estate agent, showed that prices in the prime residential areas of the capital fell by a record 3.9 per cent last month.
The City is on alert for Thursday's interest rates verdict from the Bank's monetary policy committee (MPC). A cut is seen as a certainty, with a majority of economists expecting a further half-point reduction to match last month's emergency move, and take rates to 4 per cent.
Some believe the MPC will be bolder, and order an unprecedented reduction of 0.75 percentage points, or even a full point as it steps up its efforts to prevent a deep recession. On the same day, the European Central Bank is also expected to cut eurozone interest rates by a half-point.
Pressure on the MPC to deliver an aggressive rate cut will be increased this week as a spate of dire results from corporate Britain is expected to emphasise the impact of the economic downturn. First-half sales at Marks & Spencer are tipped to be the worst for three years, while British Airways' half-year results on Friday are expected to show the impact of sliding demand and the past surge in oil prices.
Big Al
- 03 Nov 2008 18:33
- 326 of 352
Is it any wonder all these folk go into negative equity? You borrow 6x your salary to take out a 125% loan in an already over-inflated market.
It was bound to end in tears and I've no sympathy with th ose borrowers who got themselves into that position nor with the banks who ran around with their heads up their rear ends for far too long.
Long may this downturn continue IMO. A lifelong lesson is being learnt by those who need it.
It was bound to end in tears and I've no sympathy with th ose borrowers who got themselves into that position nor with the banks who ran around with their heads up their rear ends for far too long.
Long may this downturn continue IMO. A lifelong lesson is being learnt by those who need it.
ptholden
- 03 Nov 2008 19:25
- 327 of 352
Which is fine Al as long as you are not one of those people who are facing eviction and all that goes with it (I am not). Although one and all have a responsibility to ensure mortgages can be paid, whatever happened to the fiscal responsibilites of banks who should have ensured that borrowers could make their repayments? I think you must have a brick on a string for a heart mate ;-)
Big Al
- 03 Nov 2008 21:04
- 328 of 352
pth
I agree, as noted above, that the banks have a huge role to play in this, but it seems everybody is trying to lay the balme solely at their door. As individuals we all have a responsibility to monitor where we are financially and far too many have neglected that for the sake of having all the material things they really could not afford. I mean some folk must have been struggling to pay 6x for a start even at the lowest interest rates. They were purely greedy and blinded by that.
They were living a dream and eventually we all wake up.
I'm sorry, but you make your own bed in life and to blame others for stealing the covers is an abdictation of responsiblity IMO. That's all I'm saying.
In the early 80's, Maggie said we should take a dose of medicine. In the late 00's, another dose is here to be swallowed and it'll take a few more spoonfuls yet!
I agree, as noted above, that the banks have a huge role to play in this, but it seems everybody is trying to lay the balme solely at their door. As individuals we all have a responsibility to monitor where we are financially and far too many have neglected that for the sake of having all the material things they really could not afford. I mean some folk must have been struggling to pay 6x for a start even at the lowest interest rates. They were purely greedy and blinded by that.
They were living a dream and eventually we all wake up.
I'm sorry, but you make your own bed in life and to blame others for stealing the covers is an abdictation of responsiblity IMO. That's all I'm saying.
In the early 80's, Maggie said we should take a dose of medicine. In the late 00's, another dose is here to be swallowed and it'll take a few more spoonfuls yet!
Falcothou - 18 Nov 2008 08:24 - 329 of 352
It's not all doom and gloom . Not sure how the Dinar has fared but can't be much worse than the pound.http://www.rte.ie/news/2008/0916/baghdad.html
hlyeo98 - 05 Dec 2008 20:57 - 330 of 352
There is really no hurry to buy a house now...especially the first-time buyers, just wait for another 6-12 months and you will get a better bargain.
House prices still falling fast
House prices fell another 2.6% in November, the Halifax says.
According to its latest survey, that increased the annual rate of house price falls to 14.9%, as against the 13.7% rate in the 12 months to October.
The Halifax said the average property in the UK was now valued at 163,605,
a level last seen in July 2005.
Last week, the Nationwide building society said the pace of house price decline had eased off, with prices down 13.9 % in the year to November.
But the Halifax figures suggest that house price falls are accelerating.
"The combination of high house prices in relation to earnings, constraints on householders' incomes and spending power, and the decline in the availability of mortgage finance since the summer of 2007 has curbed housing demand," said the Halifax's chief economist, Martin Ellis.
The mortgage lender calculates the annual rate of decline by comparing the average house price over the past three months with the average for the same three-month period the year before.
A straightforward monthly year-on-year comparison suggests that prices may have fallen even faster, by 16.1%, although the lender argues that this approach can be distorted by short-term price fluctuations.
The Halifax's survey suggests that the average house price has now dropped by 31,485 in the past 12 months.
Mr Ellis said there were indications that sales, if not prices, had bottomed out.
"The number of mortgages approved to finance house purchase was broadly unchanged for the fourth successive month in October at a seasonally adjusted 32,000," he said.
"The recent flattening off in approvals suggests that housing market activity may be stabilising."
However, there are widespread fears that the current rationing of mortgages will become even worse in the coming year, unless the government's efforts to overcome the crisis in the banking industry and to revive mortgage lending come to fruition.
The Council of Mortgage Lenders (CML), among others, has warned that new lending may be negative in 2009, for the first time on record.
That means that there could be so little new lending by banks and building societies that it would be outstripped by borrowers paying off their mortgages.
That in turn would means sales falling even further, putting further downward pressure on prices.
The Halifax will be publishing its formal house price prediction for 2009 later this month.
"We have said we were comfortable with the consensus that prices would fall by about 20% over the course of 2008 and 2009," said Mr Ellis.
"But we do need to look at that again," he added.
Other commentators have already suggested that prices will continue to fall fast, with some suggesting they could drop by another 15-20%.
"The speed at which this housing market correction is unfolding, already the fastest on record by a country mile, is likely to step up a gear over the coming months," said Seema Shah at the consultancy Capital Economics.
"We think that we are only half way through this correction."
House prices still falling fast
House prices fell another 2.6% in November, the Halifax says.
According to its latest survey, that increased the annual rate of house price falls to 14.9%, as against the 13.7% rate in the 12 months to October.
The Halifax said the average property in the UK was now valued at 163,605,
a level last seen in July 2005.
Last week, the Nationwide building society said the pace of house price decline had eased off, with prices down 13.9 % in the year to November.
But the Halifax figures suggest that house price falls are accelerating.
"The combination of high house prices in relation to earnings, constraints on householders' incomes and spending power, and the decline in the availability of mortgage finance since the summer of 2007 has curbed housing demand," said the Halifax's chief economist, Martin Ellis.
The mortgage lender calculates the annual rate of decline by comparing the average house price over the past three months with the average for the same three-month period the year before.
A straightforward monthly year-on-year comparison suggests that prices may have fallen even faster, by 16.1%, although the lender argues that this approach can be distorted by short-term price fluctuations.
The Halifax's survey suggests that the average house price has now dropped by 31,485 in the past 12 months.
Mr Ellis said there were indications that sales, if not prices, had bottomed out.
"The number of mortgages approved to finance house purchase was broadly unchanged for the fourth successive month in October at a seasonally adjusted 32,000," he said.
"The recent flattening off in approvals suggests that housing market activity may be stabilising."
However, there are widespread fears that the current rationing of mortgages will become even worse in the coming year, unless the government's efforts to overcome the crisis in the banking industry and to revive mortgage lending come to fruition.
The Council of Mortgage Lenders (CML), among others, has warned that new lending may be negative in 2009, for the first time on record.
That means that there could be so little new lending by banks and building societies that it would be outstripped by borrowers paying off their mortgages.
That in turn would means sales falling even further, putting further downward pressure on prices.
The Halifax will be publishing its formal house price prediction for 2009 later this month.
"We have said we were comfortable with the consensus that prices would fall by about 20% over the course of 2008 and 2009," said Mr Ellis.
"But we do need to look at that again," he added.
Other commentators have already suggested that prices will continue to fall fast, with some suggesting they could drop by another 15-20%.
"The speed at which this housing market correction is unfolding, already the fastest on record by a country mile, is likely to step up a gear over the coming months," said Seema Shah at the consultancy Capital Economics.
"We think that we are only half way through this correction."
hlyeo98 - 02 Jan 2009 14:27 - 331 of 352
House Prices decline 2.2% in December - MoneyAM
Average UK House prices fell by 2.2% during December, according to the Halifax Building Society. House prices nationally are now 16.25% lower than 12 months ago.
Halifax says that the house price to earnings ratio is at its lowest for five and a half years. At 4.44, this is the lowest since April 2003 but is still above the long term average of 4.0
Average UK House prices fell by 2.2% during December, according to the Halifax Building Society. House prices nationally are now 16.25% lower than 12 months ago.
Halifax says that the house price to earnings ratio is at its lowest for five and a half years. At 4.44, this is the lowest since April 2003 but is still above the long term average of 4.0
Big Al
- 02 Jan 2009 14:39
- 332 of 352
hlyeo98 - 23 Jan 2009 09:20 - 333 of 352
Repossessions almost doubled in the three months to September last year, according to the City watchdog.
Figures published today by the Financial Services Authority (FSA) show 13,161 homes were repossessed by mortgage lenders in the third quarter of last year. It represents a 92 per cent jump on the same period in 2007, when fewer than 7,000 householders lost their homes.
The FSA also warned of a sharp rise in the number of homeowners who have missed at least one mortgage repayment. It said 340,000 borrowers were in arrears at the end of September, a 24 per cent rise on the same period in 2007 and a ten per cent rise on the previous quarter of last year.
The proportion of total mortgages in arrears rose to 2.92 per cent, up 0.79 percentage points on the third quarter in 2007. The figures, which were compiled by the FSA using data from 300 mortgage lenders, paint a worsening picture of the UK housing market.
Figures published today by the Financial Services Authority (FSA) show 13,161 homes were repossessed by mortgage lenders in the third quarter of last year. It represents a 92 per cent jump on the same period in 2007, when fewer than 7,000 householders lost their homes.
The FSA also warned of a sharp rise in the number of homeowners who have missed at least one mortgage repayment. It said 340,000 borrowers were in arrears at the end of September, a 24 per cent rise on the same period in 2007 and a ten per cent rise on the previous quarter of last year.
The proportion of total mortgages in arrears rose to 2.92 per cent, up 0.79 percentage points on the third quarter in 2007. The figures, which were compiled by the FSA using data from 300 mortgage lenders, paint a worsening picture of the UK housing market.
Big Al
- 14 Jul 2009 16:17
- 334 of 352
ttt
Mixed signals abound. We're still in the bull trap for me.
"Roger Bootle, managing director of macroeconomic research consultancy Capital Economics: 'Houses would still look expensive if rates hit average levels of around 6-7%. The average house price to earnings ratio is now still at the previous all-time peak seen in the 1980s, even after recent falls, so house prices have some way further to fall.'
I agree totally with Mr Bootle. ;-))
Mixed signals abound. We're still in the bull trap for me.
"Roger Bootle, managing director of macroeconomic research consultancy Capital Economics: 'Houses would still look expensive if rates hit average levels of around 6-7%. The average house price to earnings ratio is now still at the previous all-time peak seen in the 1980s, even after recent falls, so house prices have some way further to fall.'
I agree totally with Mr Bootle. ;-))
Strawbs
- 14 Jul 2009 17:55
- 335 of 352
You could possibly argue a number of other markets are in the same bull trap too.... That's normally the nature of the beast though... one last chance to loose your money before the jobs done..... :-)
Strawbs.
Strawbs.
skinny
- 14 Jul 2009 18:05
- 336 of 352
Big Al
- 14 Jul 2009 20:47
- 337 of 352
Strawbs - I'd heartily agree. We've probably got some way to go in this recession IMO.
Big Al
- 14 Jul 2009 20:50
- 338 of 352
Interesting article, skinny. Wonder what happens when the housing market drops another 25% or so ........................... and there's a strong possibility it might very well!
Strawbs
- 14 Jul 2009 21:12
- 339 of 352
I think many markets were (still are) over levered. The first wave took out those on the edge. Governments slashed rates and printed money to stop things spiralling out of control. They've bought some time, but that's probably all. I get the feeling it just needs something to set the ball rolling again.
Strawbs.
Strawbs.
Big Al
- 14 Jul 2009 22:37
- 340 of 352
Very true IMO, Strawbs.
I had a look on the Nationwide website today at mortgage rates. Their 5 year fixed if you have 25% deposit is 5.98% and for 15% deposit 6.88% for new borrowers. That's more than it was when BoE interest rates were 5%. What's more the arrangement fee is 995!!
Problems are two-fold: Few people have the size of deposit required and they cannot get the multiples they once could. These two dampeners must lead to price drops from here of fairly substantial proportions.
Finally, I truly believe the buy-to-let market will never return to its heady heights in my lifetime (and I've just turned 50 this year!).
I had a look on the Nationwide website today at mortgage rates. Their 5 year fixed if you have 25% deposit is 5.98% and for 15% deposit 6.88% for new borrowers. That's more than it was when BoE interest rates were 5%. What's more the arrangement fee is 995!!
Problems are two-fold: Few people have the size of deposit required and they cannot get the multiples they once could. These two dampeners must lead to price drops from here of fairly substantial proportions.
Finally, I truly believe the buy-to-let market will never return to its heady heights in my lifetime (and I've just turned 50 this year!).
skinny
- 14 Jul 2009 23:26
- 341 of 352
Old fart - me too in three weeks :-(
jkd - 15 Jul 2009 00:13 - 342 of 352
s
dont know if you have children or not, anyway it matters not, you do realise that the thought of you ' doing it' is revolting to them, surely you is too old? its only for us youngsters dont you know? LoL never too old . maybe they will learn one day? us youngsters always think the same until suddenly we realise we aint so young anymore.
btw im older than the pair of you.(not jointly i hasten to add) but if i were then lucky me on more than one count.LoL
regards
jkd
dont know if you have children or not, anyway it matters not, you do realise that the thought of you ' doing it' is revolting to them, surely you is too old? its only for us youngsters dont you know? LoL never too old . maybe they will learn one day? us youngsters always think the same until suddenly we realise we aint so young anymore.
btw im older than the pair of you.(not jointly i hasten to add) but if i were then lucky me on more than one count.LoL
regards
jkd
Big Al
- 15 Jul 2009 07:38
- 343 of 352
;-))
Strawbs
- 15 Jul 2009 08:19
- 344 of 352
I think interest rates could well create a tipping point. I know a few buy to let landlords who are perfecly happy with low rates at the moment, as they're making a mint on the rental yield. If rates start moving significantly it could make all the difference. Unemployment could be a big factor too.
In my opinion....
Strawbs.
In my opinion....
Strawbs.
cynic
- 15 Jul 2009 08:26
- 345 of 352
unemployment will almost certainly continue to increase into at least Q4, for that always lags behind economic activity.
however, there is no doubt at all that properties are starting to sell again, both retail (high street) and housing .... that is from personal observation, and not just newspaper reports!
however, there is no doubt at all that properties are starting to sell again, both retail (high street) and housing .... that is from personal observation, and not just newspaper reports!
dealerdear - 15 Jul 2009 08:42 - 346 of 352
You're a cheerie lot on here (Big Al & Strawbs). Seems to me it is the classic case of missing the upside. There's a golden rule as a trader/investor and that is trade what you see and not what you think is going to happen. Since Jan I've made quite a bit and will always have at least one lot of dough in ready to catch an up day. The thing is not to be overstretched in case the market does reverse.
ps. In Notts most of the decent property has now sold. After having nobody viewing for ages, suddenly about 3 mnths ago my partner had 2/3 potential purchasers coming round per week. The house sold, fell through and has now sold again.
ps. In Notts most of the decent property has now sold. After having nobody viewing for ages, suddenly about 3 mnths ago my partner had 2/3 potential purchasers coming round per week. The house sold, fell through and has now sold again.
Strawbs
- 15 Jul 2009 08:50
- 347 of 352
Actually DD, if you read my posts on the FTSE thread I did make plenty of money between March and May (although can't take the credit for the analysis). I always invest on what I see, I just haven't seen it yet..... or maybe I have, and it's a different picture from yours. ;-)
Strawbs.
Strawbs.
dealerdear - 15 Jul 2009 08:54 - 348 of 352
You've actually taken a risk strawbs?
Things must be getting better!
;-)
Things must be getting better!
;-)
Strawbs
- 15 Jul 2009 08:57
- 349 of 352
Took a risk DD. Between March and May... Now waiting for confirmation before taking the next one (on the bearish side)... ;-)
Strawbs.
Strawbs.
Big Al
- 15 Jul 2009 14:02
- 350 of 352
DD - never considered property a "trade". It'll be "investable" in a year or two when it's dropped another 25%. ;-))))
dealerdear - 15 Jul 2009 14:39 - 351 of 352
The shares are a trade albeit they appear to be mainly stuck atm.
TW. has barely moved for 4 weeks. It used to be a good trading share but I guess things have to improve in the US before we see upside.
TW. has barely moved for 4 weeks. It used to be a good trading share but I guess things have to improve in the US before we see upside.
Big Al
- 15 Jul 2009 14:59
- 352 of 352
Ah, I see where you're at. I was talking buying/selling property.
TW. is the one housebuilder I watch / trade, but I agree it's flat-lining recently after a very exceiting Spring!
TW. is the one housebuilder I watch / trade, but I agree it's flat-lining recently after a very exceiting Spring!
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