August 2006 Archive
Wednesday, August 30, 2006 
Latest from Mr Conway
Telegraph: Not out of the woods yet
Last Saturdays comment from the Telegraph's economics correspondent writing in the Property section is the usual mix of points of concern to note coupled with a verbal crossing of the fingers.
London housing market now the worlds biggest rip off
Yahoo News: London is world's priciest housing market
LONDON (Reuters) - London has officially overtaken New York as the world's most expensive residential market, a top global property agency said in a report on Thursday.
why buy when can rent
citv news: why buy
House prices are so expensive that their's a house on my road that is so messy and needs everything scrapped in and out the house when the price is £265.000.and to repair the property it will be another 50k so why bother buying the house when you can rent.it's easier and simpler to rent then buy your own house
...It's all looking rosy for more IR hikes!
BBC: Summer sales spree for UK stores
UK retailers enjoyed their strongest sales growth in one and a half years during August, despite the recent rise in interest rates, the CBI has said. Its latest distributive trades survey confounded expectations of a post World Cup dip, with 45% of retailers saying sales were up and 33% reporting a fall. The positive balance of 12% is the best since December 2004 and the CBI now expects similar growth in September. It said stores were doing less heavy discounting and were raising prices.
Conflicting information to the BoE figures this morning..
Firstrung: Moneyextra suffers a drop in mortgage market activity during July
The average value of mortgages completed by AWD Moneyextra customers dropped by 6.68 per cent between June and July to £137,591.65. That's also a fall of 5.76 per cent on the average agreed mortgage value in July 2005 of £145,944.69. The average value of loans completed during the first seven months (Jan-July 06) was £141,797.56
CCJs, do we look bovvered???
Firstrung: Purfleet Essex has the highest recorded level of CCJs
In Purfleet, the town with the worst record - three times the national average - the predominant socio-economic group is single home-owners and renters with pre-school age children. Tilbury, the town in second place, is a port town in the South East. The town has a large proportion of people who are employed in unskilled or semi-skilled jobs at the port.
Investors turn to property
news: Investors turn to property
BLUE collar workers have helped boost the number of Australians planning to buy investment property in the next year, according to Wizard Home Loans.
... onwards and upwards!
BBC - who else!: UK mortgage lending rises sharply
The buy-to-let market has boosted demand for mortgages. The strength of the property market has been highlighted by the latest mortgage figures from the Bank of England. The number of new mortgages approved for house buying, but not yet lent, rose again in July to 120,000 - the highest level since the start of 2006. Approvals have been rising steadily this year and are up 24% on a year ago. Meanwhile the amount of money actually lent on new mortgages in July was £9.8bn, the second highest monthly figure on record.
Will August figures see the impact of the interest rate rise?
Firstrung: Mortgage lending up - BoE
Mortgage lending rose in July, while approvals for new house loans hit their highest since the start of the year, official data showed on Wednesday.
Business leaders seek 'unlimited immigration' from new EU states
The Independent: Business leaders seek 'unlimited immigration' from new EU states
The leaders of Britain's biggest businesses employing millions of people have called on the Government to allow unlimited immigration from Bulgaria and Romania when the two former Eastern Bloc states join the European Union next year. Seems like big business loves the cheap labour and low interest rates
Great article on the increasing desperation of housing VIs
Motley Fool: No Housing Bust Here!
If it's disconcerting that the most prominent housing bulls are, when we're not looking, begging for economic policies aimed at shoring up their crumbling story, then this might be much worse. How about if the last shred of the housing bull story turned out to be untrue? It turns out that the anecdotal evidence for falling prices may be exactly right, because a large number of housing sale prices may be based on fudged numbers. That's right, the last leg of Greenspan's bubble may be collapsing under the weight of farcical accounting, trickery that would get you tossed in jail if you tried it at an American corporation.
House-price fall poses dilemma on interest rate
The Times Online: House-price fall poses dilemma on interest rate
"The housing market has moved from cooling, through slide, into collapse. At least, that’s what many property analysts and economists are saying." "Otherwise, the recession will be deep and nasty." No if and when here, it's happening.
Tuesday, August 29, 2006
US rate decision not unanimous
BBC News: Fed was split over US rate freeze
The Federal Reserve\'s decision to halt interest rate rises earlier this month was not unanimous it has emerged, with hints that hikes could resume. In a decision on 8 August, rates were held at 5.25%, breaking a two-year cycle of rate rises introduced to slow a rampant economy.
More high earning job losses - this time in S East
BBC News: Thames Water to cut 25% of jobs
Thames Water is planning to axe up to 25% of its workforce as part of a major efficiency drive that would see 300 jobs go each year until 2010. One just knows that many of the 1500 will already be drowning in debt!
Statistics estimates that 63,500 hectares of land available for development
Firstrung: One million first time buyer starter homes could be built on existing brownfield sites
Statistics published today from the Department for Communities and Local Government suggest that existing stocks of available "brownfield" land could accommodate up to one million new homes.
Fuel, a problem?
Firstrung: Will we have enough gas to last the winter?
Ofcom, the energy regulator thinks so. Chairman Sir John Mogg said last week he was "much more confident" of the UK gas supply situation this year because the Langeled and BBL pipelines from Norway and the Netherlands will come on stream before the end 2006.
Bank's Bean says cheap goods 'banquet' may be over
The Independent: Bank's Bean says cheap goods 'banquet' may be over
The Bank of England's chief economist Charlie Bean has warned that record oil prices could kill off the era of cheap goods, making it harder for policymakers to keep a lid on inflation. Cheap imports from the Far East and eastern Europe have kept the prices of goods down. In spurring greater competition, globalisation has provided a "favourable tailwind to central banks' attempts to hold inflation down," Mr Bean said at the annual gathering of central bankers in Jackson Hole, Wyoming, sponsored by the Kansas City Federal Reserve Bank. Yet he cautioned: "Winds can be changeable and the process may go into reverse at some point. To an extent this may already be happening .... There is no never-ending banquet under the sun."
US housing in trouble
The Daily Reckoning: US housing in trouble
As somebody who normaly likes to bash Bill Bonner when ever possible, I'm becoming alarmed at the frequency with which I seem to be in agreement with him of late! Anyway, this is Bills latest muse over the US housing market.
Hometrack forecast slowdown
Home.co.uk News: House prices rise in August - but set to slow
The north-south divide in house price growth continued over August. Average residential values in the capital grew by 0.9% over August with above average growth in the South West (0.5%) and the South East (0.4%). In contrast, house prices were static in two regions and up by just 0.1% in three others. Richard Donnell commented: "The divergence in house price growth is largely a result of affordability..." Compounding these trends, the Hometrack survey also highlights longer sales periods in the lower growth regions as well as buyers having to accept slightly larger than average discounts on asking prices. [A VI suggesting price cutting inevitable ?]
Gordon Brown: Economic Stability
FT.com: Tough choices that safeguard stability
These have been a turbulent few months, both in the battle against terrorism and for the world economy. In Britain, we have been at the sharp end of terror alerts and we must remain vigilant against all security threats. Around the world, stubbornly high oil and commodity prices and continued tension in the Middle East have contributed to fears of further inflationary pressure and have threatened growth. In Britain we have faced the second-round effects of those high oil prices on gas, electricity and utility bills. But even during these turbulent months the British economy has been showing a capacity to withstand its share of these global shocks. In every other decade, an oil shock by itself would have threatened a return of the traditional British “stop-go”. But once again our economy is demonstrating the resilience that has given us the longest period of unbroken growth and stability in our history.
Monday, August 28, 2006
Australia market crash: property prices fall 40% in Sydney
Real Estate Newsblog: Australia market crash property prices fall 40% in Sydney
A three bedroom house in Sydney's St Clair sold for just $260,000 at the weekend - down about 42 per cent from its last sale at $450,000 in 2003 in a further sign of the depressed state of the Sydney property market.The Herald checked 16 properties in south-western and western suburbs listed at the weekend and found 60 per cent had prices or had attracted offers at a discount to their last sale price.
Mini-boom to end in the Autumn
Guardian: Property mini-boom 'soon over'
Richard Donnell, Director of Research at Hometrack, expects market sentiment to be dented by the latest rate rise and expectations of future rises over the coming months.
ECB set to raise rates in October
Bloomberg: ECB May Signal Rate Increase in October on Inflation Concerns
The ECB is likely to signal this week that it will raise interest rates by a quarter point in October. Economists also expect another increase by the end of the year, bringing rates up to 3.5 percent in the Eurozone.
Oh we do love to be beside the seaside ...
Sky News: Seaside House Price Boom
Nine out of the 10 most expensive towns are located on the west coast - four of them in Cornwall, three in Dorset and two in Devon. The annual review of seaside towns published by mortgage lenders Halifax puts Sandbanks in Dorset top, with the average house costing £508,337.
Hometrack see a 0.4% rise since July
MSN: Home price rise near 2-year high
Property consultant Hometrack said house prices rose 3.9 percent in August compared with a year earlier, the highest rise since September 2004 when they rose 4.6 percent. Prices rose 0.4 percent month-on-month to average 167,200 pounds, a slight slowing in growth compared to the previous four months when prices rose 0.6 percent each month.
Bank Holiday 'no news' item....
Firstrung: Nude Britannia, 84% of Brits would buy a home next door to naturists
A startling 19.7% of respondents say they have got their kit off outside while at home on at least one occasion, equivalent to around 11 million people. The figures also suggest people are not going to great lengths to ensure nobody sees them, with 21% saying that they have caught their neighbours in the altogether at some point.
House price growth slowing in most UK regions
Firstrung: House prices grow by 0.4% in August as affordability constraints begin to impact - Hometrack
The survey, which tracks residential values across the whole market rather than just areas where transactions are taking place, found that price rises were limited to 30% of the country over August, compared to price rises across 42% of the market in June 2006. This explains the slowdown in the rate of growth over the month compared to June and July.
US Housing crash looms spelling dramatic knock on economic effects for US' trading partners
The Observer: US Housing slump fuels crash fears
Foundering American property market could spark global slowdown worse than dotcom collapse. The downturn in the US housing market will force businesses to slash 73,000 jobs a month in the new year and could be more damaging to the world economy than the dotcom crash, economists have warned.
House price rises to a 2 year high.
Yahoo News: Home price rise near 2-year high
LONDON (Reuters) - House prices rose at their fastest rate annual pace in nearly two years in August, a survey showed on Monday in a sign the Bank of England's surprise interest rate hike this month has not hit sentiment yet.
Sunday, August 27, 2006
BoE official criticises US inflation measure.
FT: BoE hits at US inflation measure
The US Federal Reserve is wrong to focus on core measures of inflation that exclude energy prices, Charles Bean, chief economist at the Bank of England, has suggested. It should focus instead on headline inflation, which is much higher, he argued. Including energy and food costs, US consumer price inflation is running at an annual rate of 4.1 per cent, against 2.7 per cent for core inflation.
UK interest rates to rise further
Sunday Telegraph: The real economy is pushing rates up
Now that inflation is above target, and likely to remain there according to the MPC, it did the right thing and raised rates. And I do not think that is the end of it........... There are ...... vested interests in the City and elsewhere who do all they can to understate the chances that rates will rise.
The UK's economic future looks grim
Sunday Telegraph: Economic Agenda: Why Brown has been imprudent
During years when the economy should have been building up national savings to prepare for the forthcoming demographic drag, the Government has actually presided over a sharp drop in saving and huge rises in borrowing. Economic policy has focused on sustaining growth in the short term, by spending and borrowing, and has squandered the demographic boost that should have enabled more saving to prepare for the ageing population. Far from prudent management, this suggests a short-sighted agenda of going for growth now and leaving the next administration to cope with the consequences of demographic inevitability..........
Economists 'fess up, prices could be going down...
Scotland on Sunday: Cold comfort after heated house prices
HOME owners will today be bracing themselves as higher mortgage bills will begin dropping onto doormats later this week. But there is more gloomy news ahead. House price inflation in Scotland has peaked and the market is heading for a slowdown, according to a Scotland on Sunday survey of property experts.
Nationwide group economist Fionnuala Earley adds that affordability is now stretched to a point where runaway values are no longer sustainable.
Thinking of buy-to-let? Do the sums
The Guardian: Thinking of buy-to-let? Do the sums
If something looks like a bubble and smells like a bubble, there's a good chance it may be a bubble. Figures out last week showed a renewed frenzy of buying in the buy-to-let market, an area of the economy that is flashing warning signs as never before.
Lock stock, is HPI over?
Firstrung: Lock, Stock and two smoking barrels, the Firstrung newsletter 26/08/06
No prizes for guessing the biggest property news story of the week, yep, that's right, Rightmove's confirmation that asking prices had fallen in spectacular fashion inside a month. The 'swing' was a jaw dropping 4.5%, from +1.6 to -2.9%. Unprecedented in terms of Rightmove's reports...
co-buying RIP
Firstrung: Stranger danger, why co-buying is a non starter
The Firstrung view remains steadfast, if this is genuinely the only method by which you believe you can buy, then begin to question your own motives as to why you wish, or need to buy. Perhaps you need to examine the warning signals, if you cannot afford it, then don't buy it, or more importantly do not buy into the hype surrounding the message of home ownership at any cost.
Another factor propping up UK house prices?
FT.com: London top homes draw world billionaires
More than 51 per cent of homes worth more than £2m sold in the last year have gone to overseas buyers from Russia, the Middle East and elsewhere, according to figures from Knight Frank, the agents. (Bet they don't pay tax here either!). The data help explain how London prices have soared in the last year while the rest of the UK market has stagnated as a result of affordability issues and interest rate fears.
Anyone here want to desert Blighty?
Times: 10m want to quit 'over-taxed' UK
According to the Times, one in five Britons — nearly 10m adults — is considering leaving the country amid growing disillusionment over the failure of political parties to deliver tax cuts, according to a new poll. This somewhat biased article seems part of a campaign to reduce tax. I'm sure there are many other reasons for wanting to leave such as house prices, loss of traditional communities through immigration and the weather.
Incoming chickens!
Guradian: US housing slump fuels crash fears
The realisation that the crash will dispose of certain ... elements .. of the economy of the USA is starting to bite. But were those jobs really legitimate? Would these jobs have ever existed if the wild excesses of the housing market had not been allowed in the first place?
House-price fall poses dilemma on interest rate
saturn956: Sunday Times
THE R word is back. The housing market has moved from cooling, through slide, into collapse. At least, that’s what many property analysts and economists are saying.
Saturday, August 26, 2006
Thirty grand deposit now needed to buy for the first time
Firstrung: First time buyers against a 'property brick wall' due to lack of affordability
Over the past ten years, the rise in house prices has been so pronounced that accessibility is almost 300 percent worse than in 1996 and currently as low as the weak levels experienced in 1980.
Poll of 'experts' revealing?
Firstrung: Reuters 'straw' pollsters view house prices as ten percent over valued
The Reuters news agency recently surveyed 29 economists for their views on British house price inflation, questions were tabled such as; whether current house prices are overvalued and the likelihood of a correction in the coming year. Naturally amongst those surveyed there would be a degree of caution, particularly amongst those directly employed in the industry.
Mortgage Debt becoming more expensive
Guardian: What can turn those 'best buy' mortgages bad
Mortgage companies are manipulating "best buy" tables by offering seductive low-rate deals - and then hitting homebuyers with huge arrangement fees. Just last week, Halifax launched a highly competitive 4.49% two-year fixed rate - but with a massive £1,499 arrangement fee.
Banks bolting the stable door - but where's the horse?
FT.com: Surge in bad debts forces lenders to tighten criteria
Banks and loan companies have been tightening up their lending criteria for unsecured loans as they become concerned about rising bad debts and the growing numbers of Individual Voluntary Arrangements (IVAs) that allow consumers to walk away from debt.
Friday, August 25, 2006
Nice broad round-up of the current situation on IRs
Firstrung: It's been a bad week for the US property market
"Central bankers today look suspiciously like Santa Claus. They provide more booze and nibbles when the party starts to run low. They nurse bubbles like doting grandparents."
...A bit more detail on the Consumer Spending story
Reuters: Consumers power economy
Consumer spending powered economic growth to its fastest rate in two years in the second quarter, keeping alive expectations interest rates will rise again in the coming months. The figures provide further evidence some the economy is growing strongly and mean Chancellor Gordon Brown is almost certain to beat his budget forecast for growth of between 2.0 and 2.5 percent for the full year.
Why UK should be worrying about falling US house prices
Scotsman: Why UK should be worrying about falling US house prices
HOUSE prices are always a hot topic of conversation. For the past few years, they have just gone up and up, which has made everyone with a property very happy. But now and again, someone throws in a hand grenade: is the housing market headed for a crash?
Will the UK house price slowdown turn into a crash ?
The Scotsman: Why UK should be worrying about falling US house prices
"HOUSE prices are always a hot topic of conversation. For the past few years, they have just gone up and up, which has made everyone with a property very happy. But now and again, someone throws in a hand grenade: is the housing market headed for a crash? ........"
You can always rely on the Great British consumer!
BBC: Consumer spending lifts UK growth
Don't bother clicking the link, this is the whole article. Consumer spending lifts UK growth A rise in consumer spending helped the UK economy grow at its fastest rate in two years, Office for National Statistics figures have confirmed. Gross domestic product (GDP) grew 0.8% between April and June, leaving growth 2.6% higher than the same time in 2005, unrevised from first ONS estimates. A 1% jump in household expenditure, as well as an acceleration in service sector growth, drove the increase. In contrast, output from production industries weakened to fall 0.2%. That compared with growth of 0.8% during the previous month.
Rebates disguise falling US home prices
New York Times: Home for Sale, by Anxious Owner
Deal sweeteners are playing an increasingly important role in supporting home prices. From large national home builders to individual homeowners, many sellers are offering thousands of dollars in perks, including straight cash, so they do not have to slice deeply into asking prices. But these discounts are almost entirely missing from the statistics on new-home prices reported by the government and on existing-home prices reported by the National Association of Realtors. As a result, home prices may now be falling, despite what the official numbers show, many economists say.
US house sales down, sparking recession fear
Daily Telegraph: Falling house sales add to recession fears
Those who fear the US is on the verge of recession were given fresh ammunition after fresh data on the housing market showed new home sales tumbled more than 4pc last month.
First time buyers out of the ball park
Home.co.uk News: First-time buyer needs over £29,000 savings
The average first-time buyer must now save three quarters of their income to get a foot on the property ladder, new research has claimed. In its first accessibility index the Royal Institution of Chartered Surveyors found a first-time-buyer couple must save 74% of their take-home pay to find the £29,200 needed to meet the upfront costs on a typical home, including the deposit and stamp duty. Anyone surprised?
UK Economic Growth on the Increase
Bloomberg: U.K. Economy Grows the Most in 2 Years on Spending
The U.K. economy grew at the fastest pace in two years in the second quarter as consumer spending rose at more than three times the rate of the previous three months.
Thursday, August 24, 2006
Is (US) economy headed to a soft landing?
USA Today: Is economy headed to a soft landing?
Er, no, according to a growing number of voices Stateside: '...there is a small but growing minority of economists who warn that the downturn could be severe. New York University professor Nouriel Roubini gives 70% odds of a recession by year's end. Merrill Lynch analyst David Rosenberg puts the chances of a recession at 40% to 80% in the coming year, based on models and market conditions. A recent Blue Chip survey of economists pegged the risk at 27%, up from earlier estimates.'
America's house-price bubble spells trouble
The Economist: What's the Hissing Sound?
A slowing, perhaps even falling, housing market spells trouble for the American economy
Speed Dating Madness
Reuters: Speed dating event to come to aid of first-time buyers
This is some crazy madness... meet your perfect co-owner in just four minutes......!!!!! I quote "And -- unlike those looking for love -- HouseDates does not aim to bring together people for long-lasting partnerships....'It's really just about getting a foot on the ladder -- not a long-term commitment'." What is a 25 year mortgage then, if it is not a long-term commitment.....?
Prices of electrical goods to rise
Neowin: LCD TV and monitor prices on verge of rising
Cheap electrical goods seem to be a key element of keeping the 'official' inflation figure low. However even that 'get-out' now looks as though it is about to end. '...prices will likely continue upward despite added capacity.' Although a US based news article the supply chain is the same.
We're all being conned!
Telegraph Business: CPI controversy fuelled by rising inflation
The controversy surrounding the Consumer Price Index (CPI) has taken a new turn as the Office for National Statistics said its measure of inflation fell last month, despite electricity and gas prices rising at the fastest rate in over 26 years. Figures from the ONS have also shown that it is understating the effect of higher utility bills on the overall inflation number. The amount of weighting given to gas bills in its inflation calculations has risen by only 17pc since 2003 while the actual cost of gas bills has rocketed by 64pc. Paul spotted this article first... TC
The mortgage that just keeps on taking
MoneyWeek: Why Tesco is the Bank of England's next big worry
Kent Reliance Building Society has now released the ultimate mortgage for today’s debt-laden generation - the mortgage that you never have to pay back...Purchasers can pay interest-only until the day they die, and then pass the debt onto their children - or perhaps a lucky friend.
Soft Landing or Crash
Times Online: Slowing house prices will help crush inflation
Has the Fed engineered a soft landing or is this the start of something more severe for the housing market?
It's all the governments fault again, those generous builders aren't in it for massive profits
Firstrung: Smartnewhomes.com calls for 'government re-think' on housing policies
"Our campaign is calling on Government to take into consideration demands for particular types of housing. Young families are continually struggling to find suitable and affordable homes to meet the needs of their growing household and current Government planning policy does not address this demand.
FTBs in Ireland, 20% are 'non Irish'...
Firstrung: One in five first time buyers in Ireland are non Irish
According to recent reserch from the Irish Mortgage Corporation, Asians now top the ranks of non-Irish nationals buying their first home in Ireland. The findings are based on mortgages completed by the independent mortgage broker in the first 6 months of 2006.
Forget about your pension Dad, I need a house
Firstrung: First time buyers expect 'as of right' parental contributions when buying for the first time
First-time buyers take it for granted that they will get parental assistance in order to get onto the property ladder, according to research from Abbey. Not only do many first-time buyers live at home for a considerable time in order to save money, but parents are expected to give generously from their savings to help out financially, and even lend a hand when moving in.
More large scale job losses - Manchester this time
BBC News: Northern Foods to shed 690 jobs
This on top of HP sauce factory moving to The Netherlands with 120 jobs gone from West Midlands.
House Prices on the rise in Oz
Sydney Morning Herald: House prices still nudging up
House prices are still on the rise in Oz, according the Australian Bureau of Statistics, just published today!
More Inflation pressures building!
Telegraph: Price of food and drink will soar, experts predict
On top of soaring fuel bills, petrol prices and council tax, retail experts issued a warning yesterday that the cost of food and drink was about to go up sharply. Supermarkets are expected to pass on higher prices to customers after a combination of poor harvests and the rising cost of global commodities such as orange juice and coffee. Drink up: The cost of orange juice is expected to rise by up to 25 per cent over the next few months. The cost of food has been rising substantially this year. The British Retail Consortium said food prices went up in July for the third month in a row. In the 12 months to July, food inflation was 3.2 per cent compared with the overall inflation rate of 2.4 per cent.
Wednesday, August 23, 2006
America's housing party is over
The Economist: Gimme Shelter
Now that America’s housing party is over, how bad will the hangover be? AMERICA’s housing market has banged its head on the ceiling; now investors and homeowners are wondering how soon—and how hard—it will hit the floor.
US housing slowdown
BBC News: New sign of US housing slowdown
Sales of previously-owned homes were down 4% in July from a month before, a bigger fall than analysts had expected. Successive interest rate rises have taken the heat out of the market, with sales of new homes also falling. Federal Reserve chairman Ben Bernanke said recently he believed the market was headed for a "soft landing".
First time buyers over-stretched
Home.co.uk News: Are stretched first-time buyers misskimping?
Nearly half of first time buyers would only be able to meet their mortgage repayments for six months if they lost their regular income tomorrow....One in 20 admit they would have to sell their house in this event.
Negative equity in Oz
Sydney Morning Herald: Home owners find equity a spent force
The stagnant property market has taken a toll on a favourite Australian pastime: converting bricks and mortar into cash. The boom in equity withdrawn from housing and used to boost superannuation, bolster share portfolios and buy cars, overseas holidays and plasma televisions has petered out, a report by the Reserve Bank says.
Is Britain Too Expensive
MSN MONEY: Is Britain Too Expensive
Article that talks about real cost of Britain and Inflation. Perhaps general people are seeing that inflation is here.
Even Neo-Labour is in debt up to its eyeballs
Telegraph: Labour loaned £28m in three months
The Labour Party was lent more than £28 million between April and June this year, figures released by the Electoral Commission have shown.
Has the Australian house price crash started?
MoneyWeek: Has the Australian house price crash started?
Rising interest rates across the world are starting to have a more painful impact on global housing markets. In the US yesterday, the country’s largest luxury house builder, Toll Brothers, reported that its third quarter profits fall 19% - the first decline in four years. The group also slashed forecasts for fourth-quarter earnings - unsurprising, as the number of unsold new family homes in the US is currently at an all-time hig
Top housebuilder turns mildly bearish ('cos they can't lie to The Stock Exchange
The Times: House price surge tailing off, says Persimmon
CONCERNS that Britain’s house price “mini-boom” is running out of steam were fuelled yesterday as Persimmon, the country’s biggest housebuilder, sounded a warning that prices will not rise much further this year. The caution over the state of the housing market from the homebuilder came just days after an influential survey from Rightmove, the property website, suggested that asking prices fell in August for the first time in months.
Utter Utter Madness
Daily Mail: The Mortgage that Never Ends
Here is a scheme that passes the debt to the kids, and the property to the lending institution. When things get this desparate then surely the end is nigh.
Blow some more air into the bubble....
Telegraph.co.uk: First steps on the property ladder
Winston Churchill once wryly observed, "Saving is a fine thing. Especially when your parents have done it for you." Antonia and Alexander Faust, sister and brother from East Sheen, Surrey, are unlikely to disagree with that, as their parents, Jane and Andreas, are giving them the not insubstantial sum of £47,000 for the deposit and building works on their first home, a £250,000 two-bedroom flat in White City, west London. Lucky Antonia and Alexander........
Tuesday, August 22, 2006
Doom Doom Doom
The Daily Reckoning: Inflation upheavals
Gloomy view from the U.S by the right wing 'crack pot' Bill Bonner. 'Bullion Bill' compares the hypainflation of 20's Germany, with what he sees as being the likely future for the U.S. Everyone knows what emerged politicaly from the economic ruin of Germany, but could the US be heading the same way? Some might ask, if anybody in the U.S would notice a rise in fascism, after all, what is the difference between Fascists and Neo-Cons besides a possible differing of opinion upon the jewish question?
Debate over 120,000 new homes in Kent
BBC News: Housing plans build Kent passions
Any discussion about the future of Kent and the preservation of its character tends to boil down to one central issue: housing. The subject inevitably polarizes opinion and often pits business interests against community ideals. One man caught in the middle of the debate is Nick Sharp, site director of Kent Science Park.
Downbeat on House Prices
Firstrung: "I still don't think house prices will crash, but there's something in the air that makes me nervous."
There were a number of uncharacteristically downbeat pieces on the property market spread across the weekend press. And this is another!
BBC in complete denial of housing market downturn
BBC "News": Persimmon upbeat on house market
True to form, the BBC has rurned a blind eye to the coming housing market chaos, and instead reports on Persimmon's rising profits for the "first half of this year". The number of completions has risen sharply too - but only because of their acquisition of Westbury. Desperate means call for desperate measures, I guess.
City Expect another rate rise before year end
TimesOnline: Expectation of rate rise grows in City
More than two thirds of city economists believe the Bank of England (BoE) will raise rates before the end of 2006.
More signs of trouble from down under
Sydney Morning Herald: Life in the red
Another reality check article from Australia. "You think life's pretty good. Your job is steady, interest rates are relatively low - at least for the time being - and you own your own home."
At the top of a slippery slope...?
The Times: House prices fall as higher rates bite
The Bank of England’s decision to raise interest rates earlier this month is already having an impact on the housing market, according to the latest survey of asking prices. Rightmove, the property website, reported that prices are down 1.6 per cent in August indicating that the mini boom in house prices could already be over.
Monday, August 21, 2006
Banks target Polish workers
Daily Mail: Banks target Polish workers
Major banks in the UK are starting to recruit Polish-speaking staff and specifically tailor products for Poles after identifying them as a "major growth area". Barclays, HSBC and Lloyds TSB are "attempting to improve life for Britain's Poles", who have traditionally faced a tricky task opening bank accounts to start them off in British financial life. - It's so nice to see the banks taking an interest in our new guests wellbeing and not as a new source of borrowers to increase their profits (and perhaps prop up the market ?). I'm sure lots of UK borrowers feel "indebted" to the banks for the way they have improved their lives also.
Oil price climbs again
BBC News: Oil rebounds on Iran uncertainty
Oil prices rebounded on Monday from two-month lows as concerns reignited over Iran's nuclear programme. Iran has said it will not suspend uranium enrichment, a key demand of an international proposal aimed at resolving the nuclear program row.
Are we following the Aussies?
Sydney Morning Herald: Housing crash puts sellers in debt crisis
A THREE-BEDROOM brick-veneer house in St Clair sold for just $260,000 at the weekend - down about 42 per cent from its last sale at $450,000 in 2003 in a further sign of the depressed state of the Sydney property market.
Crocodile tears for the FTB - and no mention of the dip in prices
BBC "News": First rung
This is the property news today for the BBC, not the dismal Home.co.uk or Rightmove figures. Emma Koubayssi joins presenter Lesley Curwen to explore the best way to get her toe on the bottom rung of the property ladder. In other words, this silly girl is thinking of jumping on the property ladder in the Gorbals, Glasgow. She persuades herself that an interest only mortgage is the one for her, no mistake!
True rate of UK inflation is 10%
Daily Mail: Inflation for middle classes 'runs at 10pc'
Living costs for the middle classes are rising at more than four times the official rate of inflation, an economist warned yesterday.......
House prices falling
Daily Mail: House prices slip back £3,400
THE property mini-boom in the South of England, which has driven up prices across the country, is running out of steam, according to one of the most optimistic house price surveys. The interest rate rise, higher bills and the August lull have contributed to a drop in asking prices The latest figures released by property website Rightmove ............
House Prices head south
Home.co.uk News: Housing market runs out of steam
The housing market has ‘run out of steam’ with prices falling by 1.6% in August, according to property website Rightmove’s August index out today. Yep that's Rightmove!
Have house prices peaked for 2006?
MoneyWeek: Have house prices peaked for 2006?
There were a number of uncharacteristically downbeat pieces on the property market spread across the weekend press. Since the beginning of the year, the pundits have been itching to proclaim the return of the boom, with prices in London apparently leading the way. So why the sudden change in tone? Well, after this month’s “shock” rise in interest rates, the estate agents are getting edgy. “If we keep saying that house prices are rising, the Bank of England might hike rates even further,” they imagine to themselves. “And that could - gasp - damage the market.” To our minds, it is nothing less than rank self-delusion for property pundits to imagine that the rash of half-baked little surveys they churn out will make any difference to the mindset of the Bank’s interest-rate setting committee - which is after all, meant to be targeting inflation, rather than house prices. But still, you can rarely accuse an estate agent of thinking far beyond their next sale. And surprise, surprise, just as we said would happen last week, the data on the property market has taken a sudden downturn…
Spectre of negative equity haunts Sydney property market
Sydney Morning Herald: Housing crash puts sellers in debt crisis
Negative newsflow is clearly rising in the Australian market. Auction clearance rates in Sydney are hovering around 48 per cent since the recent interest rate rise, but plummeting property prices have meant many vendors are confronting negative equity, where they owe more on the property than it is worth.
Music to my ears
Guardian: After the mini-boom, property prices are dropping at their fastest rate in two years
House prices "now falling at their fastest rate for almost two years" Mr Shipside added: "Activity in the property market virtually stopped dead after two successive rate rises in 2004 and took a year to recover. Prices are now cooling off and require no further intervention from the Bank." But then he would, wouldn't he.
At last!
guardian: thinking of BTL? do the sums first
An enlighteningly honest and sensible article. About time we came across a journo with some sense. This could represent the start of a change in attitude of the media, which could be a significant thing.
Is this the leaf turning?
Yahoo Finance: House price rally peters out
Or is it just another blip?
Is this the *real* start of the downturn? Or another false dawn?
Bloomberg: U.K. House Prices Drop Most in Nearly 2 Years, Rightmove Says
*U.K. House Prices Drop Most in Nearly 2 Years, Rightmove Says* Coming from the usually bullish RightMove this may at last signal VI acceptance that the market has peaked. ``Prices have passed their peak for 2006,'' Miles Shipside, commercial director of Rightmove, said in a statement. ``With the market cooling, and signals from the Bank of England that interest rates may move up again, sellers may have to reduce their price expectations.''
Sunday, August 20, 2006
Think before you bet on buying to let
Scotsman: Think before you bet on buying to let
BUY-to-let investing is booming, according to the latest figures from the Council of Mortgage Lenders, as more people than ever gamble on the housing market in the hope of securing their financial future.
What we always suspected!
Telegraph: Inflation is 10pc for middle class
The "real" rate of inflation hitting middle-class households is as high as 10 per cent - more than four times the Government's official rate, it is claimed. Economists are warning that the Consumer Price Index (CPI), the benchmark measure of inflation, is "meaningless" to millions of consumers, who have been victims of staggering rises in the cost of energy, council tax and school fees over the past 12 months.
Brown fiddling the unemployment figures ?
The Business Online: The real unemployment figure in Britain today
The Chancellor has never been honest about the true nature of British joblessness. Now he has been rumbled' THE number of people claiming out-of-work benefits in Britain has hit 5.29m, more than three times as many as are officially unemployed,
Brown fiddling the inflation figures ?
Sunday Telegraph: Inflation is 10pc for middle class
The "real" rate of inflation hitting middle-class households is as high as 10 per cent - more than four times the Government's official rate, it is claimed. Economists are warning that the Consumer Price Index (CPI), the benchmark measure of inflation, is "meaningless" to millions of consumers, who have been victims of staggering rises in the cost of energy, council tax and school fees over the past 12 months.
The Great Australian (British?) iIlusion
The Age: The Great Australian illusion
Why house prices are bad news for most people.
Behold what awaits us!
The Sydney Morning Herald: slump hits home
This article is 6 months old, but for those of us who believe that the Australian economy/property market, may provide clues as to where we are heading, then this is a valuable and scary insight. Not only are there clues as to the direction of our own economy/property market here, but for those who take an intrest in the political agenda behind the 'global economic mirricle', there are quite clear (and familiar) social policy concequences evident too. The 'unfortunate circumstances', and 'tough decisions' that Nation States seem to be left with as a result, are worthy of note.
Telegraph getting Nervous
Telegraph: Word on the Street
The bubble only bursts when the last bear turns bull...and this article fells that has happened with Capital Economics falling into bull camp.It then outlines some possible triggers for the crash.
Record profits for banks and yet savers lose out
Times: Savers lose as home loans rise
More than 30 banks and building societies have put up their mortgage rates in the last fortnight, some by more than the Bank of England interest rate rise, while all but a few have so far failed to pass on the benefits to their savers.
What the Lord giveth, the government taketh away
Telegraph: Byers calls on Labour to scrap inheritance tax
Stephen Byers, the former transport secretary and a leading Blairite "outrider", claims that the tax, which brought in a total of £3.3 billion last year, is "a penalty on hard work, thrift and enterprise".
How negative gearing can become a problem for all...
The Age: Landlords bring their losses to the masses
NEGATIVE gearing of rental properties is rapidly eroding tax revenues, with the Australian Tax Office reporting that net losses claimed by rental investors jumped 50 per cent in 2004-05 to $3.9 billion.
Ex-transport secretary doesn't want to pay inheritance tax
BBC News: Byers wants inheritance tax ended
He told the Sunday Telegraph removing the tax would allow Tony Blair's successor to show New Labour's middle class electors had not been forgotten. They've forgotten FTBs so why should they not forget older home owners? Because Stephen Byers is one of them!
Final warning given...........
SCMP: Why the housing boom is coming to an end
The Souch China Post gwarns wealthy expats that this may be their last chance to off-load their investments in the west with a sound summary of why we are in this mess..............
Saturday, August 19, 2006
Falling Uni numbers ... la la la, I'm not listening
Indepedent: Read property at university: your tutorial starts today
Buy a house for your child to live in at university and you could make a first-class profit, says David Prosser
Borrow, borrow, borrow
Daily Mail: Mortgage borrowing tops £30bn in a month
Soaring house prices forced homeowners to borrow more money last month than any July since records began. The booming home loan market is fuelling fears that interest rates could go up for the second time this year...... ...He said the rise was being fuelled by 'a strong appetite' among borrowers for remortgaging in an attempt to cut their monthly repayments...
Why Interest Rates Are Rising
BBC News: Q + A: Why are interest rates rising
Interesting article that explains why global interest rates are rising and why it wont be a flash in the pan event, it also mentions directly how central banks have woken up to the fact that property value to earnings ratios are wrong.
Credit crunch in small business community
Firstrung: Business failures continue to increase - Equifax
The rise in the number of businesses with a zero credit limit and therefore unable to obtain new finance to support their business has gone up by nearly 3 per cent compared to the same period in 2005.
FTB summit welcomed by A&L
Firstrung: First time buyers 'summit' welcomed by Alliance and Leicester
Perhaps it's just the Firstrung team that see the irony of using the word summit to describe the 'Tory initiative' in relation to the plight of first time buyers; summit = peak, perhaps a suggestion that prices must come down from an unsustainable height?...
Friday, August 18, 2006
Distorted record July budget surplus
BBC News: Record July budget surplus for UK
The UK Treasury had its highest July budget surplus on record - but the figures were skewed by a string of one-off factors.The surplus stood at £8.4bn, £4.3bn higher than at the same time last year.
Borrow, borrow ... forget you have to pay it back tomorrow !
The Times: Mortgage lending continues buoyant
Mortgage lending remained robust last month as the housing market's summer resurgence showed little sign of cooling, figures showed today.
Facists of the World Unite
Torygraph: Unchecked immigration is putting Britons out of work
Unchecked immigration is putting Britons out of work, and apparently it's all those low paid immigrants that have fuelled the housing bubble...
Boring, boring Mervyn!
Independent: MPC is ensuring that Mr King won't achieve his 'boring' ambition
In his best-known aphorism, Mr Mervyn King said it was his ambition to make monetary policy "boring". By this he meant that a central bank's actions were likely to be most effective if they conformed to a widely understood policy framework.
Mortgage millstone for millions of OAPs
Daily Mirror: OWE APs
MIILLIONS of homeowners are reaching retirement age with the millstone of a large mortgage still hanging around their necks
Mervyn talking sense again, why does noone listen?
Bloomberg: U.K. First-Time House Buyers Dwindle, Threatening Blair's Boom
"Clearly, in the long run, the market requires first time buyers to come in and provide base demand,'' Mervyn King said at an Aug. 9 press conference in London." There is a great deal of uncertainty about the sustainability of the present level of house prices relative to earnings or incomes.
US homeowners still using homes as cash machines
Reuters: US consumers still extracting wealth from homes
Many U.S. homeowners continue to take cash out of their homes even as mortgage rates climb and home sales slip, helping to brace the economy, economists said. This year, Americans who refinance their mortgages are expected to draw $257 billion of wealth out of their homes, according to mortgage finance giant Freddie Mac. That's $13 billion more than the refinancing cash-out seen in 2005 - the hottest year of the recent housing boom.
China raises base rate
Reuters: China raises interest rates by 0.27 pct point
China raised interest rates on Friday in the latest of a series of tightening steps aimed at slowing a boom in credit and investment that risks destabilising the world's fourth-largest economy. The People's Bank of China, the central bank, said on its Web site (www.pboc.gov.cn) that it had ordered an increase of 0.27 percentage point in commercial banks' benchmark one-year deposit and lending rates.
Roundup of the various banks reactions to the rate rise
Money Extra: Mortgage/savings rates - Who has done what
Two weeks on from the Base Rate increase financial data provider Moneyfacts notes that only half of UK mortgage providers have announced changes to their SVR (Standard Variable Rate), with some of the big players on the high street, namely Woolwich (Barclays), HSBC and NatWest, still to decide on mortgage rates.
Eurozone inflation 2.5% for June
BBC News: Eurozone inflation falls in July
Inflation in the eurozone eased to 2.4% last month but economists said the move would not stop policymakers from raising interest rates again soon.
BTL lemmings go bonkers
Home.co.uk News: Landlord lending leaps to record levels
Buy-to-let borrowing set new records in the first half of the year, with lenders advancing 152,500 loans, worth £17.5 billion. Incredible!!
Global House Price Crash??
Home.co.uk News: Risk of global house price crash falls away
Knight Frank have recently released the second quarter 2006 results of their Global House Price Index which they claim to be the first serious attempt to analyse pricing trends in residential property across the world on a standardised basis every quarter. The main finding is that global house price growth has continued to slow from the recent peak reached in 2004 and overall 18 out of the 30 countries covered have seen price growth slow over the last 12 months. Average global house prices stood 8.5% higher at the end of June 2006 compared to the same period 12 months earlier, the index shows.
Thursday, August 17, 2006
Good ol' politicians
Guardian: Cameron proposes expansion of right-to-buy
A little bit of extra supply to help tip the balance?
Privileged remain privileged
Guardian: City bonuses reach record £19bn
City back handers are on the up.
Another shock - not!
Guardian: Powergen reveals energy price hike
So that's one sixth of the entire adult population that face higher bills. Bring it on.
I'm not surprised
Guardian: Surprise fall in spending
Why is it that when consumer spending was flying, no-one considered it a reason for a rate hike, but now it's fallen off a bit lazy journalist retards are spouting that it means the bank won't be able to raise rates again?
Norway raises base rate to 3%
Norges Bank: Norges Bank increases the interest rate by 0.25 percentage point to 3.00 per cent
Norges Bank’s Executive Board decided today to raise the sight deposit rate by 0.25 percentage point to 3.00 per cent with effect from 17 August 2006. The interest rate on banks’ overnight loans is also being raised by 0.25 percentage point.
City bonuses up again but will this affect property?
SKY News: City Bonuses Soar 16%
Bonus payments in the City are reported to have climbed 16% to a record £19bn - equivalent to the UK's entire annual transport budget. The figure is claimed in The Guardian newspaper which has analysed data from The Office for National Statistics.
Retail sales fall in July and June figure is revised downwards
SKY News: High Street Sales Falter
Retail sales in British shops unexpectedly fell in July for the first time in six months and it could defuse calls for further increases in interest rates. The Office for National Statistics said sales volumes fell by 0.3% last month compared with expectations of a rise of 0.2%. June's rise was also revised lower to 0.7% from an initially reported 0.9%.
When will the buy-to-let bubble burst?
MoneyWeek: When will the buy-to-let bubble burst?
Minutes from the Bank of England’s August interest-rate setting meeting revealed nothing that we didn’t already know. Gordon Brown’s new man on the Monetary Policy Committee, David Blanchflower, is - surprise, surprise - a dove. He was the only one of the seven-strong committee (it’s two members down at the moment) to vote against a rate hike. Mind you, you can’t expect a great deal of sense from a man whose crowning academic glory is a piece of research that proved that having more sex tends to make people happier. Doubtless the two new MPC members who join in October - both Treasury appointees - will also be doves. But with six members actually worrying about inflation, that still leaves the odds stacked in favour of a rate hike. And that’s bad news for all those new buy-to-let landlords who have jumped on the bandwagon since the start of this year…
Why bankruptcies are set to rise even further
MoneyWeek: Why bankruptcies are set to rise even further
It's a week or so old, but here's MoneyWeek commenting on the BBC's debt diary woman...
Re-arranging the deck chairs on the Titanic
Telegraph: Govt. to tackle debt mountain
No-one takes government 'initiatives' very seriously any more, but, anyway, here we go again... - Why does it take two years to introduce a simple tweak to the national curriculum?