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!

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.

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.

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

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

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.

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?

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 really can't believe there are actually any housing bulls on here. Nuts!

Are there any?

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.

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.

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.

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.