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!

It's bloodbath in the housing sector today

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

;-(

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.

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.

They're wrong. This ain't even started yet.

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.

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.

"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'....

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!

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 no resources or main industry left......its just aberdeen thats keeping uk afloat! lol.....population of 200,000 keeping 61 million brits up.

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.

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.

This is a fairly astonishing chart.

The housing market is still far too over-valued...expect more downtrend.

Precisely. I see no bend at the end yet! ;-))

See page 1...when I started this thread, they all said I'm talking thrash. Well, those people have shut their mouths now

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.

uck me Scotty ... thank fcuk for Aberdeen