May 2006 Archive
Tuesday, May 30, 2006 
Owning a house is not a substitute for having a pension
Money Extra: Your home is not your pension
Many homeowners believe their property will generate enough money to provide for their retirement. This is far from the case.
FTSE crashes again
Reuters: European stocks end sharply lower on rate worries
European shares took a beating on Tuesday as concerns about the outlook for interest rates weighed on markets, with financial issues taking a hit, and U.S. stocks also falling.
Job cuts and property sale at Land Registry
Firstrung: Land Registry announce job cuts and property disposal
Civil servants potentially losing their jobs generally figures more prominently on the news radar. This weak press release, issued by the Land Registrar, does nothing to hide the fact that L.R. expect a dramatic fall in the number of property transactions over the next four years..
House Prices
BBC News: 'Worrisome' rise in house prices
Houses in Wales have become some of the least affordable in Britain, new research for BBC Wales' current affairs programme Week In Week Out has found.
Which way for Interest Rates?
MoneyWeek: Why UK interest rates will rise
Five months into 2006, and three compelling investment trends stand out. These trends are accelerating at a rate we never imagined. On the one hand, we see the spectacular emergence of an über-rich class in London and the South East. Compare that with the soaring number of people declaring themselves bankrupt and the rise in company liquidations outside the financial sector. Then set them both against the backdrop of runaway commodity prices.
Monday, May 29, 2006
Boom then Bust in Northern Ireland
Belfast Telegraph: Ulster's house prices boom - but there could be bust ahead
Northern Ireland's property price boom could be followed by bust, resulting in negative equity for many householders, it was claimed today.
Syndey homebuyers who have bought at the peak in 2003 have lost 10%
Sydney Morning Herald: 10% fall in house prices as demand heads west
SYDNEY homebuyers who bought at the top of the market have lost 10 per cent of their capital, new Bureau of Statistics figures show. Those buyers would, on average, have earned a 51 per cent gain if they had bought in Perth instead.
Central Banks
Telegraph: Ignore the world's biggest central banks at your peril
Round one to the Bank of Japan, ultimate cause of the violent sell-off in stocks, commodities, and riskier bonds across the world over the past three weeks writes Ambrose Evans-Pritchard
250,000 default on Mortgages
DailyRecord: 250,000 HOMES AT RISK
A QUARTER of a million homeowners are behind with mortgage payments and 1.5million more owe on credit cards and loans.
First time buyers, the week in focus
Firstrung: The week in focus
Not the busiest of weeks for the housing industry in all its facets, however, here's a selection of the weeks highlights in relation to the plight of the first time buyer.
Sell to renters sleeping soundly in the US
Firstrung: Its a renters marekt
In Riviera Beach, for instance, three-bedroom townhomes are renting for as low as $1,150 a month. Owning one would cost about $1,800 to $3,000 a month, after a 20 percent down payment. In West Palm Beach, $400,000 townhomes are renting in the $1,500 range. Owning one would cost nearly twice that per month. In Lantana, a $450,000 three-bedroom condo with an Intracoastal view is available for $1,850 per month. In Port St. Lucie, three-bedroom, $450,000 houses are renting for about $2,200, a third less than they would cost to own
House price growth is slowing
In2Perspective: Hometrack: House price growth 'limited'
"The prospects for the second half of the year are not so good." - Richard Donnell, director of research at Hometrack.
Sunday, May 28, 2006
Inflation
Telegraph: So is inflation still dead?
In response to last week’s column about the short-term outlook for inflation, various people have asked me whether I, once dubbed the High Priest of Low Inflation, am getting worried about inflation after all. Moreover, it is now almost exactly 10 years since my book, The Death of Inflation, was published. Accordingly, it is appropriate to take last week’s analysis to a deeper level. In short, is inflation still dead?
Unemployment in Scotland
Scotland on Sunday: Revealed: grim truth of Scots unemployment
THE true figure for unemployment in Scotland is 250,000 - almost three times the official number - according to a groundbreaking report. esearch conducted by one of Britain's leading authorities on the welfare state claims there are 160,000 "hidden unemployed" in Scotland, many of them forced on to sickness benefits through lack of work.
MPC Nominations
Telegraph: Probe into Brown's MPC nominations
The Treasury Select Committee is to launch an inquiry into the way Gordon Brown, the chancellor, selects members of the Bank of England's Monetary Policy Committee.
Interest Rates
The Sunday Times: Too early for a calming rate cut
THERE have been three occasions during its nine years of independence that the Bank of England has reduced interest rates in response to a global financial crisis. How long does the current period of extreme financial-market turbulence have to last before the Bank decides that a calming cut is needed? If a week is a long time in politics, a day can be an eternity when it comes to reading financial markets. We ended the week stronger but the fragility remains. The stock market’s performance this month gives a fair impression of the old caricature of red-bracered City traders, shouting “buy, buy, buy” in the phone jammed to one ear, and “sell, sell, sell” in the other. One day it’s party time, the next Armageddon.
How to add value to your home
BBC News: Loft overhaul boosts house price
A loft conversion or having an extension built are two of the most effective ways to boost the value of a property, a survey has suggested. On average, an extension adds 12% and a loft conversion 10.9% to a property's value, the Nationwide Building Society survey found.
Fancy a Gamble?
The Observer: Place your bets on the boom and bust UK housing market
Anxious British homeowners could soon have the opportunity to hedge their bets by laying money on a house price crash as a firm set up by Yale economics professor Robert Shiller opens a new market in housing futures. Shiller, author of Irrational Exuberance, which predicted the dotcom crash, is co-founder of MacroMarkets, which began offering investors the opportunity to bet on US housing markets last week.
Pensions
BBC News: Property 'no alternative pension'
Homeowners believing their property will generate enough money to provide for their retirement could be in for a shock, economic experts have warned. One out of every five retired people living in poverty owns a property worth more than £100,000, the Institute for Public Policy Research says.
First time buyer news, the week in focus
Firstrung: Firstrung - first time buyers, the week in focus
A popular feature Firstrung highlights the weekly news in relation to the first time buyer.
Saturday, May 27, 2006
Buy to let, fly to let, what is it that they don`t get?
Firstrung: Fly2let, you couldn`t make it up
Perhaps it`s just the Firstrung team having a bad day, here`s another piece of journalism we`ve struggled to get our heads round...why on earth would investors chase properties and areas globally that had already experienced recent and intense house price inflation? You pay more, your mortgage payment is consequently more, and your rental figure?...well that stays the same, or infact gets lower due to increased competition....doh!
Cheap fixed rate mortgages disappear
Times Online: Switch hitch as the cheap fix disappears
Fixed rate mortgages, as used by 70% of mortgage borrowers, are becoming more expensive, even though the Bank of England has not changed rates for 9 months. You would be lucky to get less than 4.8% now, up from 4.2% in July of last year.
RICS spokesman blowing smoke up his own?
Firstrung: RICS spokesman blowing in the wind
What awaits the first time buyer, cardboard city? Presumably, if we are to take Mr. Leaf`s logic to its finality, rents will rise there also, as buy to let investors target the new "self assembly build" emering market.
Global Rates Can't Stay Low Permanently
Bloomberg: RBA's Stevens Says Global Rates Can't Stay Low Permanently
Interest rates around the world can't stay low and steady "permanently" and central banks will continue to control inflation, Reserve Bank of Australia Deputy Governor Glenn Stevens said.
Friday, May 26, 2006
US: Fastest increase in inflation in 12 months exceeds Fed comfort zone
BusinessWeek Online: Inflation rises above Fed comfort zone
Consumer spending increased at April at the fastest pace for three months but much of the increased was absorbed by higher fuel prices. Inflation increased at the fastest pace in twelve months adding to speculation that the Fed will continue to keep rising rates to control mounting inflationary pressures.
“I am sad. I'm angry. I'm confused.”
NBC: As rates rise, home foreclosures surge
More worrying news from the US...
Hips debate rages on....
Firstrung: HIPS, just what is the objection to their introduction?
Does Michael Gove's early day motion on Home Information Packs highlight just how ill-founded his party's stance is? See the link to the EDM, then read the comments below from two advocates of HIPS:
More on Mortgage level dip
Timesonline: House prices calmer as mortgage levels dip
Mortgage slowdown as part of general trend to lower borrowing. Comment on housing market from Global Insight.
HPI goes crazy in Ireland
Belfast Telegraph: Word of warning for all first-time buyers
Soaring property price rises in Northern Ireland in recent weeks have sparked concern that the market could be overheating. First-time buyers are taking out loans of up to four-and-a-half times their income in a frantic bid to get onto the property ladder.
Mortgage Approvals
Sky: Mortgage Borrowings Fall
The number of mortgage approvals for home purchases fell in April. That is the first annual fall in nine months, the British Bankers' Association data revealed.
Bursting Bubbles?
50 Connect: Is the new house price bubble set to burst?
The housing market in the UK has taken everyone by surprise with its renewed growth, but are we set for a gentle landing? Growth in the UK housing market and the rise in house prices were forecast by all of those involved in the sector to slow this year. The question very simply was by how much?
Risky Property Lending rises
TimesOnline: Bank lending to riskier property projects soars
During last year when residential property sales hit a 30 year low bank lending to high risk commercial projects grew by 40% according to research by De Montfort University.
Japan's Recovery
BBC News: Japanese prices continue to rise
Japanese consumer prices were higher in April than a year ago, the sixth month in a row they have risen, lifting hopes that deflation has been shaken off. Government figures showed core consumer prices, which do not include fresh food costs, rising 0.5% from a year earlier.
A £10,000 pay cut to avoid David Brent
In2Perspective: Britain wants to work from home
A look at how changing attitudes to working from home, improved house values from having an office and mass wi-fi coverage are affecting demand in the housing market.
Thursday, May 25, 2006
A small rise in interest rates could cause havoc
Firstrung: Weak UK economic recovery could be derailed by small rise in interest rates - Experian
"The key uncertainty for the outlook is interest rates. At the start of 2006, indicators were still so weak that few expected anything except a further loosening in policy. But there has been a rapid turnaround in sentiment.
Sydney shows official falls in house prices
Australian Bureau of Statistics: House Price Indexes: Eight Capital Cities, Mar 2006
House prices fell in Sydney by 1.2% in the first quarter of this year and they fell by 3.1% year on year.
Belts are beginning to tighten
SKY News: Household Spending Down
Economic growth was on a level for the first quarter of the year. But household spending grew at its slowest rate in nearly a year. Gross Domestic Product rose by 0.6% in the first quarter, as expected, and the same rate as for the fourth quarter.
Consumer spending hits 12 month low
BBC: Consumer lull undermines growth
Hopes of a rate cut to help the consumer vanish as GDP Grows 0.6% over the first three months of the year.
No competition in home energy sector
Guardian: Now energy firms don't care if they lose customers
Consumers struggling to pay gas and electricity bills that have almost doubled since 2001 are likely to despair at yet another huge increase in profits at a power company - and yet another warning that prices will rise this year.
Barclays bad debt
Timesonline: Barclaycard hit by bad debts jump
Lax lending lands many more in trouble.
Problems ahead for Brown or not?
Times: With one bound, Brown could be free from Blair's unpopularity. Here's how
Are crime, education and health really the main reasons for the unpopularity of Tony Blair? That seems to be the message of recent opinion polls, such as the one in yesterday’s Guardian, which showed Labour trailing the Tories on these issues for the first time.
Too little housebuilding, too late, too expensive
Firstrung: The affordable housing crisis is worsening by 165 homes per day
Although the number of homes being built is increasing, with a 17% rise in new homes completions in the first quarter of this year compared to the same period in 2005, 70% of all homes built are now priced at more than £150,000. The increase in housebuilding also masks a sharp fall in the number of affordable homes being built by housing associations.
All change for state pensions
BBC News: Pensions shake-up to be unveiled
People will have to wait longer, possibly until they are 68, to collect a state pension, the government's Pensions White Paper is to propose.
Wednesday, May 24, 2006
Fannie Mae fined
Firstrung: Fannie Mae - the US government sponsored mortgage company - receives $400mil civil penalty
The U.S. Office of Federal Housing Enterprise Oversight (OFHEO) and the Securities and Exchange Commission (SEC) announced on Tuesday a 400-million- dollar civil penalty against Fannie Mae -- the government- sponsored mortgage company -- in a settlement over alleged accounting manipulation.
New man on the MPC - Hawk or Dove?
BBC News: Bank appointee quizzed on rates
Prof David Blanchflower, due to take up his post on 1 June, told the Parliamentary Treasury Select Committee he had no preconceived ideas on the future of interest rates.
Bank of Canada carries on with rate increases
Canada.com: Bank of Canada raises key interest rate
The Bank of Canada raised its trend-setting interest rate by a quarter-point to 4.25 per cent on Wednesday.
CAB see the tip of the debt 'iceberg'
BBC News: Britons face 'lifetime of debts'
It could take 77 years on average for people asking Citizens Advice for help with debt to get back into the black, a report from the charity has said.
UK Consumers Stretched
Sky: Weekly spending Drops
A brief article which indicates how little cash UK consumers have to spend. Sadly the quality of journalism is poor and there is no mention of how the figures were calculated. If the UK consumer has little cash, it increases the risks faced by a consumer-driven economy.
(C)rumblings in the Interior
Money Week: Is the US housing market crumbling?
This article indicates that the US economy has peaked and is tipping into an unstoppable bust. The property market is crumbling - “the real US hard landing starts now”.
DIY crash before the House Price Crash?
SKY News: B&Q Earnings Crash
The owner of the B&Q home improvement chain has seen its earnings plummet in Britain. Kingfisher made less than £22m in UK retail profits over the last three months, down more than 70% on the same time last year.
Hometrack research specifies a need for £100bn spend
Firstrung: £100bn investment needed to meet future demand for private rented housing
New research by Hometrack, the housing information business, projects that demand for private rented housing is set to rise by 600,000 households by 2021. In order to meet this demand, new investment of over £100bn will be required. "Demographic changes are the primary driver of future demand for rented housing," comments the report author Richard Donnell, Director of Research at Hometrack.
Tuesday, May 23, 2006
Where's the justice in second home ownership?
Guardian: Second home owners are the most selfish people in britain
Second homeowners are just plain selfish and need to be taxed to hell and back. Plus comments from readers.
Buy to Let
Times: Buy-to-let market 'slowly recovering'
Conditions for landlords have picked up in the first half of the year according to a report out today from UCB Home Loans, the buy-to-let mortgage arm of Nationwide building society.
Venezuala considers ditching dollar for euro on oil sales
Venezuelanalysis: Venezuala considers selling oil in Euros
Another one for those of us following petro-dollar developments - Hugo Chavez may be considering following Iran, and selling Venezuelan oil in Euros. What implications might this have for the $US?
Hurricane predictions push up oil price again
Terra Daily (US): Hurricane forecast drives oil prices back up
Oil prices staged a sharp rebound Monday after US experts predicted a packed summer season of Atlantic hurricanes, traders said.
More retailers going to the wall
Retail Bulletin: Retailing business failures up 19% in quarter one 2006
Despite Gordon Brown’s insistence that the UK economy is thriving, the latest analysis from Equifax, reveals that business failure rates are up in Quarter One 2006 by 13%.
Housing boom coming to an end in US
FT.com: Door closes on boom times for DIY stores
Lowe's, the do-it-yourself retailer, added to signs of a slowdown in the US housing market yesterday by lowering its sales and earnings guidance for the rest of the year, amid a softening of consumer spending on home improvement products.
High earners struggle to meet debt
BBC: High earners in debt firing line
Consumer Credit Counselling Service (CCCS) said that the number of people earning £30,000+ who are seeking help with them has risen 257% in last three years.
FTSE 100: Gains made in 2006 wiped out
FT: Stock slump wipes out FTSE 100’s gain for year
The FTSE 100 suffered another bleak day yesterday with yet another 2.2% wiped off its value but was not as bad as the FTSE 250 which was down 4.0% on the day.
Monday, May 22, 2006
Everything not OK in Pleasantville
Firstrung: Smartnewhomes see prices of new homes fall by 3.1% in April
Smartnewhomes see prices fall by 3.1% in a month. Whisper it quietly, and despite all the froth that accompanies the press release, could it be that new homes are struggling to sell?
Bad news from the US
BusinessWeek Online: The Growl of a Housing Bear
John Talbott warned that home prices were ready to fall back in 2003, when he wrote the best-seller The Coming Crash in the Housing Market. BusinessWeek Online reporter Sonja Ryst recently spoke with Talbott about his bearish outlook for housing.
Bad news from Down Under
Moneyweek: Bad news from Down Under for the UK housing market
Down under comparison of housing markets
VAT likely to raise 3% for Germany
BBC News: Germany braces for sharp VAT hike
The rate of value-added tax (VAT) in Germany looks set to rise to 19% from the beginning of 2007.
Another high street bank set for foreign ownership?
BBC News: Agricole confirms interest in A&L
Shares in Alliance & Leicester have risen 6% after French bank Credit Agricole confirmed it is considering making a takeover bid. Abbey National owner Santander is also seen as a potential bidder for A&L.
Shelter comment on government failure to tackle housing shortage
Firstrung: Shelter - 20,000 more social rented homes needed each year
"That's why Ruth Kelly's personal commitment to tackle the housing shortage is welcome - the upcoming Comprehensive Spending review is the clear opportunity not only to put that commitment into practice but also to lance a painful boil in the process."
European stock exchanges down 1%
FT.com: Europe and UK stocks follow Asia sharply lower
UK and European bourses slid sharply on Monday, confounding expectations of a higher open as commodities sold off, while Asian equities gave up early gains.
1 million Britons struggling to pay debts
Guardian: Debt problem soars as 1m face threat of bankruptcy
A million people in Britain could be on the verge of bankruptcy, while one in five adults - or eight million - have unsecured debt of more than £10,000, according to a report out today.
You want to move? You can't afford to move!
this is money: Second time-buyers stay put
A study into second-time buyers, released today, has shown that it is not just first-timers who are struggling but also those who have already bought their first home and now want to move.
Property activist in China
Telegraph: China gags property boycott protester
China has silenced a businessman who called for a boycott of property purchases in protest at rising house prices.
Sunday, May 21, 2006
Inflation fears may be overdone
Telegraph Online: Is the only way up for inflation?
Telegraph piece taking a balanced view of US & UK inflationary pressures
Hips, open and shut case?
Firstrung: 'HIPs could elevate property industry' Case closed
Having run a pilot Home Information Pack scheme since August, Kevin Hollinrake of the Hunters Property Group North writes that HIPs will not be as bad for the property market as many in the industry are expecting them to be. Below, we reproduce an article published this week in Estate Agency News on his views of how HIPs will affect the buying process:
Savills report, puff and air?
Firstrung: House prices and the property market, something for the weekend
We`ve broken this Savills report into several bite size sections, not that it makes it any more palatable for first time buyers. However, it does make for interesting reading, although we question just how far North of Watford the compilers wander given they can describe Northern towns "undergoing a renaissance".
Saturday, May 20, 2006
Share prices crash in Wall Street and London, but may have further to fall
Guardian Online: Did the Bubble burst this week?
A summary of what happened this week and where it might lead
In defence of HIPS
Firstrung: First time buyers cannot fail to benefit from the introduction of HIPS
With the introduction of compulsory Home information Packs only about 12 months away, all sectors of the residential property industry are working hard to make the necessary changes required. For example, even now there are over 4,000 prospective home inspectors in training to re-qualify as government licenced inspectors.
Cornish HPI
Telegraph: Small cities lead the property price boom
How locals have been priced out by outsiders.
Swansea: Cost of home per square metre
icWales.co.uk: Price of a 1946 house would buy 1sq m today
House price increases calculated by square metres
Tessa Jowell selling up
Firstrung: Jowell To Cash In Before Crash? Tessa house on sale for 950K
Culture secretary Tessa Jowell is selling her London home for £950,000. Described by the agent as being; "Located in an elevated positon in Kentish Town, just off the crest of Lady Margaret Road enjoying high quality natural light and some wonderful views this late Victorian house is offered in marvellous condition."
Friday, May 19, 2006
Community land trusts to create more affordable housing?
BBC Action Network: Building dreams in property
Could CLTs be a way of providing more sustainable affordable housing. The basic concept is that the community owns the land in trust for the benefit of the community and that private individuals who buy property on this land do not profit from appreciation in the land value, only from the value of their buildings.
Summary of the latest property news
In2Perspective: Essential Summary May (part 2)
House prices, unemployment, possessions, predictions...once a fortnight we give a summary of the latest UK property news. Hope you find it interesting.
Spectrum offering 90% mortgages to bankrupt clients
Firstrung: Spectrum launches mortgage range for those subject to bankruptcy orders
Cue jokes of Captain Scarlet and the Mysterons as surely lending practice has now reached fantasy land? The products, which cover from light to heavy adverse, include a choice of two- and three-year fixed rates starting from 5.89 per cent. All pricing is based on Bank Base Rate and mortgages are available up to 90 per cent loan-to-value (LTV) on both a full status and self-cert basis.
Mortgage lending falls 12% in April
BBC: Mortgage lending falls in April
Mortgage lending fell 12% in April and is now lower than the average over the last 6 months
Higher rates dissident sets out his stall
TimesOnline: MPC's rates dissident explains his reasoning
David Walton, the lone voice on the MPC who voted for a rate explains his reasoning
The UK share sell off is overdone
Telegraph Online: The UK share sell off is overdone
The Telegraph predicts a rapid rebound in UK share prices
Thursday, May 18, 2006
Indian shares suffer biggest drop in history
BBC News: Indian shares suffer record drop
Bombay Stock Exchange suffers its biggest one day drop ever, down 6.8%.
Nationwide, lending down 42%
Firstrung: Nationwide sees profits rise but lending fall sharply
Surprised this hasn`t caused more of a reaction in the media, or on the HPC forum. This decision, to scale back lending, was taken some time ago, what do they know that the rest of us are guessing at?? Nationwide, the country's biggest customer-owned lender and the fourth biggest mortgage provider, said its net mortgage lending in its last financial year fell to 6.3 billion pounds, down 42 percent from 10.9 billion a year earlier.
Last year's spate of buyer inaction is spurring demand
BusinessWeek Online: London's Real Estate Boomlet
Big bonuses in the CIty coupled by a rate cut in August have helped to allay the fears of those expecting a house price crash and led to double digit growth in some areas of London during the first quarter. Reading between the lines of this is quite interesting. If you take away the ephemeral factors that business week mention there seems little to prop up the market.
Mortgages get heavier / Brace yourselves, credit-card junkies
Finance Yahoo.com: Battered Stocks, and Hot Burgers
Delinquency rates are rising on mortgages issued last year, according to Wall Street firms. People who bought homes in 2005 faced a double whammy -- rising mortgage rates and sky-high prices. OK, "binge" borrowers, says Janet Whitman in the New York Post. Pay up. You've been "racking up credit-card debt and taking out" risky mortgages while interest rates were low. Now the "whiff of inflation" is in the air, and the Federal Reserve will have to keep jacking up interest rates "to keep inflationary pressures at bay."
Nationwide BS doing well
Times: Nationwide boosted by strong housing market
A recovering housing market helped Nationwide Building Society to post record pre-tax profits of £559.2 million for the year to April, despite its share of mortgage lending sliding against last year. Britain's fourth-largest mortgage lender said it had an "outstandingly successful" 12-month period, as fears of a housing market crash tailed off in the latter part of 2005 and momentum in the property market began to return in the new year.
Retail sales recovered in April alleviating pressure for a near-term hike in interest rates
BBC: Retail sales data shows recovery
Howard Archer, chief European economist at research firm Global Insight stated that after consumers has taken a breather earlier in the year had returned to a limited extent. Sales in the three months to the end of April were up by 0.1%.
Death to the estate agent!
In2Perspective.com: Will internet kill off estate agents?
Enjoyed reading this! Surely the estate agents days are numbered now... after BBC's Whistleblower there are calls for regulation and in surveys everyone seems to want to see the back of them. They charge too much for just lying and doing nothing. Surely we will all sell our houses on the internet soon anyway?
B&B pull in their horns
Firstrung: Bradford & Bingley announce the end of the line for brokers
Bradford and Bingley are to cut ties with their intermediaries/brokers/introducers. For such a pioneering and pro-active industry player this is quite a U turn and has taken the market by surprise.
Wednesday, May 17, 2006
Surprise acceleration in US core inflation sends FTSE tumbling
FT: New bout of inflation jitters hits markets
FTSE down 2.9 on the day. Sharpest falls in European equities in three years.
An omen of things to come?
CNN: Housing slowdown to be widely felt
A view from the other side of the pond on the bleak prospects for the housing market. CNN - not usually know for its bearish outlook.
Jobs in manufacturing hits 28 year low
BBC: Unemployment at four-year record
Manufacturing jobs at lowest level since records began in 1978. Number of people out of work hits 4 year high.
"An economy held aloft by credit will surely come crashing back to earth"
Guardian: Comment is Free Blog: Caveat debtor
On the eighth anniversary of the 70,000 strong human chain in Birmingham, Anne Pettifor of Jubillee 2000 draws a parallel between today's consumers in the UK and US and the heavily indebted developing countries in the 1990s. She blames financial deregulation and liberalisation and predicts it will all end in a mess. Also features some interesting comments from readers.
Protests over the price of housing in Spain
euroresidentes: Protests over the price of housing in Spain
Thousands of young people took to the streets yesterday in 60 towns and cities to protest at the price of housing in Spain and to ask the Spanish government to do something to protect the right of young people to buy a decent house.
Official figures contrast property boom surveys
In2Perspective.com: Official house price figures less rosy
The latest government figures contrast the claim of most leading house price surveys that Britain's property market is booming.
Longer term mortgages, is there a market for them?
Firstrung: First time buyers should beware of long term solutions - moneysupermarket.com
Anyone else of the opinion that these longer term mortgages will simply not fly? Moneysupermarket.com crunch the numbers and come to that conclusion.
An Alternative View to Doomster Predictions
Times Online: Greenback will fall, Armageddon will not follow
This article provides an alternative scenario to the financial melt-down that some doomsters are predicting for the US economy. It uses historical examples to forecast long-term gains will outweigh a short-term dip. It touches upon the power of diplomacy within global markets. For doomsters who believe nothing is different this time around, you must also believe history examples are of use to forecast the future. Perhaps not all is gloom within the US economy afterall.
Tax on 2nd Homes - Debate Continues
Decide which house you call your home: FT.com
This article supports second-home ownership and explores how paying a tax on your second (and subsequent) homes can be avoided. Originally I was not going to post this article but it does act as a balance to one of yesterday's posts, "2nd Homes to be Taxed". Just goes to show if a new tax is introduced, clever people will find new ways of avoiding it.
Scotland Booms While English Prices Fall
home.co.uk: Scottish And English Housing Markets Poles Apart
Home.co.uk gives some interesting information which seems at odds with all the other recent reports of a booming market! Prices are falling in England!
British car industry kicked in the teeth again
BBC: Vauxhall confirms 900 job losses
Vauxhall has confirmed 900 jobs to go at its Ellesmere Port factory in Cheshire.
House Prices Falling In Scotland
Inside Property: Scottish House Prices Slip For Second Consecutive Quarter
Scotland's property market is talked up more than any other region of the UK, but beneath the spin comes the news that for two quarters in a row average prices have actually fallen.
BoE minutes show divided MPC
Reuters: Bank split three ways in May
The Bank of England's Monetary Policy Committee was split three ways on this month's decision to keep interest rates at 4.5 percent with one member wanting a hike while another voted for a cut.
Beware of 35 year mortgages
Firstrung: First time buyers should beware of long term solutions - moneysupermarket.com
Moneysupermarket crunch the numbers and suggest that 35 year + mortgages do not add up...
Tuesday, May 16, 2006
Doom'n'gloom talk hits the tabloids
Thisismoney.co.uk (Daily Mail): So how worried should we be?
This article is a little like the Jeff Randall piece in the Torygraph last week, with it's '10 reasons' why we're heading for a fall: 'When one also considers that UK households have built up a £1trillion debt mountain, which is highly sensitive to an interest rate hike of the kind likely to be seen later this year, and the outlook becomes even more worrying.'
Why is the dollar under pressure
BBC: Why the dollar is falling so fast
What are the implications if the dollar continues to fall?
House prices rise again with larger properties causing the swell
Firstrung: House prices rise again with larger properties causing the swell
Have RICS finally shed light on the fact that price rises are only due to the vast amount of unsold expensive properties on agents books? "House prices have risen for the sixth consecutive month and larger properties are out performing flats, according to the RICS UK housing market survey published today, (15 May). House prices rose as demand has further stabilised on the back of the strengthening economy. For the three months to April, 15% more Chartered Surveyors reported a rise in house prices than a fall, up from 12% in March. Confidence in the industry remains high and is still above the historical average for the survey. Larger and mid range property types are showing disproportionate price gains compared to under performing flats, the largest variation of performance since 2001."
Second Homes Tax Recommended
Western Morning News: Tax on second homes looming
Second home owners in the west country should pay a new "impact tax" to reflect the damage they cause to rural communities, a Government-sponsored report will say this week. In a finding that will stoke the controversy about the growing number of second homes in parts of Devon and Cornwall, the Affordable Rural Housing Commission will warn that excessive numbers of holiday homes can "undermine the viability" of some rural communities.
April Inflation Data
National Statistics: April: CPI rises to 2.0%, RPI up to 2.6%
Inflation up marginally in UK, driven by higher transport and energy costs.
Immigration policies key to house prices
In2perspective: Immigration key to low inflation and interest rates
The deflationary pressure on the economy generated by the willingness of migrant workers to work for minimum wage or less translates into low interest rates. This allows us to borrow money, whether in the form of credit cards, mortgages, loans or otherwise, at new low rates....
RICS: Inquiries from new buyers slows
TimesOnline: Property prices rise faster, but calls from buyers slow
Calls from new buyers slows but property prices grew slightly faster in April according to RICS.
Swansea to be one of the top 3 buy to let hotspots
Firstrung: You lied Edward, there is a Swansea" - presumably the new road takes you there
Ho Hum...Another day, another survey, this came the way of UCB who specialise in buy to let mortgages. Their intelligence (no sniggering at the back of the class) suggests that Swansea is to be the next big thing in the world of the buy to let investor. Well it has a beach and a university..what more do you need? "Swansea will soon be one of Britain's "top three" buy-to-let hot spots outside London. That is the view of UCB home loans, the specialist buy-to-let arm of Nationwide. UCB said yesterday it anticipated a large number of the 2,000 new homes with sea or riverside views being built in Swansea's fast developing SA1 development would be used as buy-to-let properties."
Predictions for the dollar today
Telegraph Online: US grabs its cash...
An article explaining what happened to the Dollar & world stock markets yesterday, and predicting that the Dollar slide will continue today at a pace
RICS: Inquiries From New Buyers Rise
Guardian: House prices continue to rise
House prices rose for the sixth month in a row in April and are expected to carry on climbing over the coming months, according to a study by the Royal Institution of Chartered Surveyors. The Rics findings coincided with government figures showing the value of the average home rose almost £3,600 during March. Rics said the number of inquiries from new buyers rose in April for the 11th consecutive month. Its assessment also agreed with other recent surveys from organisations such as website Rightmove.
Monday, May 15, 2006
80 billion for a house!
IHT: Zimbabweans ask, who can afford houses?
You think we have it bad - The asking price on one advertisement is 80 billion Zimbabwe dollars, or about $800,000 on the official market and $372,000 at black market rates. Analysts say housing prices are another sign of Zimbabwe's upside-down economy and a currency that is losing its value faster than any other on earth.
Stateside: Help for FTB through counselling and psychoanalysis
BuilderOnline: First-Time Buyers Getting Help
"Angela a data processing supervisor from South San Francisco attended the seminar to finally break the cycle of renting." This is freakish! Poor Angela thinks she is suffering from an incurable desease just because she rents.
McDonaldisation of US jobs market
Counterpunch.org: Life in the Bush Economy: Fat, Drunk and Broke
Paul Craig Roberts, ex-Reagan administration, has been writing regularly on the declining job quality in the USA. Much of what is happening stateside is happening in the UK. Job growth during the current debt binge has been highly concentrated in the low-paying sectors like retail, leisure and call centres.
BBC mistake cabbie for IT Expert
Mail on Sunday: The BBC's latest star - a baffled cabbie
A little off topic, but I think you will all appreciate it none-the-less. The BBC have interviewed a cabbie live on air for his comments on the outcome of the Apple Corps versus Apple Computer case, after mistaking him for a Technology Expert.
Why the UK housing market did not crash
in2perspective: Why the UK housing market did not crash
Roger Bootle of Capital Economics had predicted a correction in the UK housing market by as much as 20%. In an article published yesterday in The Telegraph, and reproduced below, he explains why he turned out to be wrong and discusses what lies ahead for house prices.
The importance of sentiment and the problems of managing an economy by examination of expectations
Times Online: Prepare for a sudden swing to pessimism
This article explores the relationship between financial institutions, business and sentiment/expectations. Reality will eventually prevail over expectations but there will be an overshoot into pessimism before equilibrium is achieved. Naturally house prices are immune to the economic laws of sentiment and expectations.
Who is fearing a crash?
Independent Online: Housing bubble fears grow as prices hit record high
Despite the title, the article doesn't say who is fearing a crash. It reports house prices are rising fast, currently at 5.9% with the potential to reach 8% this year. This is either a sign of the UK house price bubble's last gasp or that the general population has hit House-Price-Crash fatigue - too many warnings yet still no crash. Sales are up 40% since last March (Land Registry) and demand is up 25% (YourMove). Could the "House-Price-Crash fatigue" group be right?
Number claiming unemployment benefit up 10% yoy
The Observer - UK: Markets booming, but jobs disappear
100,000 more people are out of work and claiming benefits than this time last year. Some commentators are suggesting that native low skilled workers may have been displaced by migrant workers from the new EU member states.
Black Monday revisited as FTSE drops 2.6%
TimesOnline: Stock crash gathers pace on dollar, inflation fears
Inflation fears and a weaker dollar sent world equity markets tumbling for a second day. The FTSE 100 index crashed as much as 156.7 to 5755.4 in the opening hour of business.
Asking Prices rise again...according to Rightmove!
TimesOnline: Mini-boom sees house prices surge
According to rightmove asking prices for properties rose 2% over the last month. Rightmove stated that the figures "exceeded all expectations" Is this the start of a new boom or speculative sellers "chancing their luck". Will this add weight to next months MPC meeting and force a pre-emptive rate rise.
Markets braced for the worst
Telegraph Business: News Item
Global markets are bracing for turmoil today after an ominous slide in the US dollar and a slump in equity and bond prices late last week sent tremors through the global financial system, evoking memories of the 1987 crash. Emerging economies have led the sell-off as investors recoil from risky assets, pummelling stocks and bonds in Turkey, Hungary, Iceland and much of Latin America.
The end is nigh for the US....
Guardian online: Original News Atricle
Larry Elliott, Economics Editor for Guardian online puts the boot in to the US economy
Rightmove increases 2006 forecast
Guardian: Rate of house price inflation doubles in one month
House prices have risen by 2% in the past month as the property revival gains momentum, according to a survey published today. It helped push annual house price growth up to 5.9% for the year to May 6, up from 4.1% the previous month. The average house price is now £209,829. Rightmove said that as a result of the strong growth seen during the past few months, it was increasing its house price forecast for 2006 from 5% to 8%.
Blackburn tops league for early mortgage repayment
Firstrung: Want to pay off your mortgage early? Then move to Blackburn and relax
RBS Offset Mortgage research identifies Blackburn, in Lancashire, as the UK town where the average homeowner is closest to paying off their mortgage completely. The RBS Fastest Mortgage League highlights the UK's mortgage payment hotspots, where average-earning homeowners can pay off the remainder of their mortgages the soonest. Areas of Scotland and the north of England are revealed as the best in the UK for obtaining outright home ownership most quickly.
Sunday, May 14, 2006
Customers not happy in Which? Estate agents report
Firstrung: Which? Estate agents report
Interesting press release from the consumer magazine Which? It covers mainly the service aspect the general public receive from estate agents and forms part of the Which campaign "moving on"...."Consumers entering the home-buying or selling process are substantially disadvantaged by the way estate agents currently operate. Less than half were always happy with the service they received from estate agents:"
What's happening with the Economy?
Observer: Markets booming, but jobs disappear
Recent rises in the number of people out of work have got economists worried - and some blame the UK's woes on the influx of east European workers, writes Heather Stewart. In the sunny Square Mile last week, as Mervyn King delivered his latest thoughts on the state of the economy, there seemed to be plenty of reasons for optimism. Retailers had a happy Easter; the house price crash hasn't (yet) come to pass; and even manufacturers are feeling more cheerful than usual.
BoE debt warning
Observer: Would you credit it? King has just woken up to debt
So Mervyn King, governor of the Bank of England, believes spiralling levels of personal debt are becoming a 'potentially large social problem'. Suddenly the number of people going bankrupt and approaching debt charities for help seems to be sinking in. He has also warned homeowners that house prices seem 'remarkably high'.
Serene Economy will sail Brown into his very own Labour election victory
TimesOnline: Is it springtime for Gordon?
Last years property worries are rapidly fading as the housing market has been gaining strength as house prices, mortgage loans and approvals move higher.
Weekly summary of news for FTB's
Firstrung: First time buyer weekly news in focus
A brief summary of the major news concerning first time buyers. A familiar theme for first time buyers with this week news reaching the Firstrung team that first time buyers had finally reached an historic all time low in Scotland. With the average age now 37, buyers paying 30-40% over asking price and deposits at 20% - 23K with purchases at 5.5 times salary, these figures now represent the worst in the UK and Ireland.
Roger Bootle - an apology
Telegraph Online: Housing market on a knife-edge
Roger Bootle's explanation as to why his predicitons for the housing market were wrong, and how he sees the current state of the market
Fixed rate mortgages becoming more expensive
TimesOnline: Cost of fixing your mortgage set to jump
Fixed rate mortgages are set to jump as money markets scent rate rises. Abbey, Bank of Scotland and GMAC banks, and Yorkshire, Cheshire and Stroud & Swindon building societies all withdrew their fixed rates last week whilst Abbey National have already raised their fix rate and Nationwide and Halifax are withdrawing theirs early this coming week.
Avoid greedy banks’ useless or inappropriate products
Sunday Times: Avoid greedy banks’ money-making ploys
The “big five” — Barclays, NatWest/Royal Bank of Scotland, HSBC, HBOS/Bank of Scotland and Lloyds TSB — made a total of £33.4 billion this year. Fat Prophets, a consultant, predicts this will soar by 50% over the next nine years. The banks make a large chunk of their profits from costly insurance policies and “premium” accounts. The best way to avoid adding to their coffers is to shun these products.
SIPP Loophole uncovered for holiday properties
Sunday Times: Wealthy cash in on holiday flat loophole
Lawyers for some of Britain’s wealthiest residents have uncovered a loophole in the pension rules that allows people to buy holiday properties with their retirement funds.\r\nScores of investors, including senior directors at some of the City’s top firms, have been quietly taking advantage of the perk to purchase holiday apartments in French ski resorts, coastal towns and even Paris with their self-invested personal pensions (SIPPS).
Saturday, May 13, 2006
Only two thirds or mortgage payers have life insurance!
Firstrung: Home owners ignore life cover for their mortgage - Friends Provident
Interest only mortgages without the life of the mortgagee being insured? This could be due to the affordability issue being stretched to breaking point. Buy to let mortgages providers rarely ask for proof of life cover.... A recent survey from Friends Provident has revealed that just most home owners insure the contents of their property and ignore the mortgage they borrowed to buy it, putting their families' future at risk in the event of their death Only two-thirds (69 per cent) of home owners have life cover to meet mortgage repayments, compared to the nine out of ten (92 per cent) who have contents insurance, the survey found.
Couples say "I do" to buying a house
SKY News: Houses Top Priority List
A survey by the Yorkshire Building society suggests that young people consider purchasing a house more important than getting married.
Impending hurricane season may push oil prices higher
Interactive Investor: Hurricane season to expose oil prices
Whilst damage from hurricane Katrina is still being repaired, there are 9 hurricanes forecast for the US this year, which could increase the price of a barrel even further. 'Crude oil prices are within $10 to $15 of the $80 to $90 price range executives think would likely trigger a recession.'
Public Confidence in US economy drops
Bloomberg: U.S. Economy: Confidence Drops as Gasoline Surges
Fueled by gasoline prices and rising costs of living.
Another 430 NHS jobs to be cut
Sky News: Hospital Jobs Axe Falls
Leeds Hospital Trust Spokesperson hopes the jobs can be cut without resorting to redundancies. NHS job cuts total nearly 5,000 so far this year.
Does buy-to-let still make sense?
Guardian: Does buy-to-let still make sense?
Good to see this on the Guardian site, are the "Buy to Fret" investors beginning to struggle? "In the TV world inhabited by Britain's favourite property duo, Kirstie Allsopp and Phil Spencer, making money from buy-to-let property is a doddle. Follow a few basic rules, buy a place in a carefully selected city, and just sit back and wait for the money to roll in."
Mortgage Lenders should fix their exit fees
Firstrung: Mortgage Lenders should fix their exit fees
Lenders charge exit fees when customers redeem their mortgage in full, for example, by switching their mortgage to a rival lender. Exit fees can also be termed administration charges, sealing fees or deeds-release fees and are raised to cover the cost of taking property deeds out of storage, sending them to a solicitor and producing a final account statement. Borrowers are warned when they sign up that if they switch lenders, they'll have to pay a fee - but the size of that fee is not guaranteed to stay the same.