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!

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.

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%.

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.

house prices still going up in scotland.....was on news here 2 nights ago.....just big reduction in sales thats all.

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?

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.

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.

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

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.

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.

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...

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

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.

Government package designed to support housing out today apparently...

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?

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.

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!!

Sounds like council tax might be getting a whole lot more expensive, probably end up more than the mortgage!

that will be to pay for the gold-plated council workers pensions

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.