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!

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.

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. ;-))

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.

Arrears rocket but lenders hang fire on repossessing properties

Strawbs - I'd heartily agree. We've probably got some way to go in this recession IMO.

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!

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.

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!).

Old fart - me too in three weeks :-(

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

;-))

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.

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!

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.

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.

You've actually taken a risk strawbs?

Things must be getting better!
;-)

Took a risk DD. Between March and May... Now waiting for confirmation before taking the next one (on the bearish side)... ;-)

Strawbs.

DD - never considered property a "trade". It'll be "investable" in a year or two when it's dropped another 25%. ;-))))

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.