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!

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.

Hope you managed to short all those companies when you started the thread. Would have made some serious money if so.

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.

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.

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

Investors Chronicle has also recommended a SELL on Taylor Wimpey this week.

Taylor Wimpey is 86p now

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

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!

http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=A1YourView&xml=/money/2008/05/26/ccom126.xml

Taylor Wimpey is the biggest casualty - 75p now.

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

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.

house prices still rising in scotland!!!

My niece lives in Scotland.

She says the 'experts' there are saying you are about to join us in the plunge

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

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.

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.

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.

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.