November 2006 Archive
Thursday, November 30, 2006 
£11.6 Billion NL Affordable Housing Cost???
thisismoney.co.uk: Housing crisis 'needs £11.6bn'
Now that's what I call a fair chunk of investment - Iraq only cost UK £4 Billion!!!
Bernanke warns about inflation but ambiguous about interest rates
BBC News: Bernanke raises inflation concern
Ben Bernanke, the head of the Federal Reserve, has warned of the impact of continuing inflation on the US economy. "A failure of inflation to moderate as expected would be especially troublesome", said Mr Bernanke during a speech in New York.
OECD doesn't think IR rise necessary in UK
The Scotsman: Think-tank rejects case for raising interest rates
In its biannual assessment of the UK, the Organisation for Economic Cooperation & Development (OECD) said a raft of migrant workers from the likes of Eastern Europe was helping keep wage inflation under control.
Some fairly basic advice for FTBs from What Mortgage
What Mortgage: Top tips for first-time buyers
Life is pretty tough for would-be homeowners. Affordability is stretched to the limit and many of the cheaper flats and houses are snapped up by investors, before the poor first-time buyer even gets a look in. But help is it hand. We’ve put together top tips to help you on your way to home ownership.
More people mortgaging despite IR rises
The Independent: New mortgages hit highest level for three years
The number of new mortgages approved last month unexpectedly rose to its highest level for three years, according to figures from the Bank of England that confirmed the strength of the housing market.
BOE thinks wages are too high
Hemscott (AFX): UK's real wages have not fallen enough - BoE rate-setters
Real wages in the UK have not fallen by enough to stop unemployment rising, two members of the Bank of England's rate-setting Monetary Policy Committee said today. However, the perceived arch-dove on the Committee, David Blanchflower reckons that wage growth in the economy has been over-estimated because pay indicators in the UK do not cover a quarter of the labour market.
IR rates hit retail but not house prices
Scotsman: Mood and shop sales flag as house prices march on
House prices marched on this month in the face of higher interest rates, but retail sales fell more than expected and people's mood soured. The pound hit a 14-year high against the dollar as traders continued to dump the U.S. currency on concern the giant American economy was slowing down.
Eurozone inflation is up too.
Reuters: UPDATE 1-Euro zone Nov inflation, confidence spell ECB hikes
More pressure to raise ECB rates
US core inflation up 0.2%
FT: US inflation remains stubbornly high
How can they lower US interest rates ?
Anyone fancy a bit of inflation?
BBC: Pound hits 14-year dollar high
The pound has hit a 14-year high against the dollar amid speculation that the Bank of England will raise interest rates in the New Year.
House price inflation gathers pace according to the Nationwide
TimesOnline: House price gains hit 21-month high
House price inflation hit a 21 month high according to the Nationwide
Interest Rate Slap for BTL
Home.co.uk: Interest rate hike slowed buy-to-let market
Instructions to let property rose at the slowest pace since Q2 2005, says RICS Lettings Survey published today. The slowdown was skewed primarily towards flats as buy-to-let investors expressed caution in the market, reflecting a fall in landlords’ profit margins as a result of rising interest rates. The BTL house of cards begins to wobble.
Onwards and upwards?
FT.com: UK house prices ‘refuse to cool’
UK house prices rose in November at their fastest pace so far this year as the market “refused to cool”, the Nationwide building society said on Thursday. The average price of a home was £172,185, a month-on-month increase of 1.4 per cent. This was higher than the 0.8 increase recorded in October, is the sharpest rise since February 2005, and leaves annual house price inflation at 9.6 per cent.
Reaching the Apex.
BBC News: House price growth gathers pace
Average UK house £172,185 - rising by £41 per day. Up 9.6% from 8% in October.
Wednesday, November 29, 2006
Thoughts from the sheeple
Daily Mail: Women who face debt forever
Insight into attitudes towards debt.
Pounds up, interest rates up, job down, house price...
bloomberg.com: Pound Set for Longest Winning Run in Four Years on Rate Outlook
The pound is headed for its longest winning run against the dollar in more than four years on expectations the Bank of England will keep lifting interest rates into next year. . Investors and analysts are now expecting the pound to touch the milestone of $2, which was last reached in 1992. Deja vue?
Affordable Housing; On Starkey's last word
Starkey's last word, More4: Affordable Housing
Originally broadcast on 24th Oct, but missed by the HPC bloggers.
Debt starts to bite the lenders
The Times: Barclays to write off 1.5bn in credit card debt as bankruptcies hit record level
Barclaycard, Britain’s most popular credit card, signalled yesterday that it expected its army of customers to default on an unprecedented £1.5 billion of debt this year. Its parent company, Barclays, blamed rising numbers of personal insolvencies, particularly individual voluntary arrangements (IVAs), for the blow-out in bad debts. In the second half of this year, the bank has been writing off debts owed by credit card and personal loan customers at the rate of £31 million a week. The problem has been worsening, the write-off rate rising from £19.5 million a week to £22.7 million and then £26.8 million in the previous three six-month periods.
HOW TO SURVIVE A HOUSE MARKET CRASH
THE INDEPENDENT: How to survive a market crash
A return to the negative equity of the early 1990s would leave home owners unable to move, unless they could cover the mortgage shortfall from savings or other reserves, or through moving to a cheaper property. They might also be unable to remortgage, if negative equity means that they would have to borrow more than even the most generous lender will offer. At best, home owners with negative equity would face a narrower choice of mortgages.
Sorting out sub-prime mortgage brokers
The Scotsman: FSA targets 'sub-prime' mortgage brokers
MORTGAGE brokers targeting vulnerable "sub-prime" borrowers have come in for criticism from the Financial Services Authority (FSA) which has told 200 firms to withdraw or amend misleading advertising.
Halifax and its simplistic view of first time buyers
Firstrung: Handy hints for first time buyers from The Halifax, a place somewhere in Eutopia
It's a while since we published such an intelligence sapping and patronising press release as this from The Halifax. If you can bear to read it well done. It falls short of finishing with that time honoured phrase, "make sure you have the cups and kettle handy for that nice cup of tea..." although it does mention "tea break for the troops" It's so simple, this 'first time buyer lark'...
The sheeple are still buying...
BBC: Mortgage market continues to boom
Mortgage lending and mortgage approvals in the UK are running at their highest level since 2003, the Bank of England has said. Both the number of new mortgages approved for house buying and the amount of money lent on new mortgages roseto 3 year peaks in October. The figures will add weight to the view that the housing market is growing.
Why the UK's bad debt boom is just beginning
MoneyWeek: Why the UK's bad debt boom is just beginnning
The OECD is reassuring people that although the US housing downturn has marked “the end of a decade-long [property] boom that also occurred across much of the rest of the world,” the impact will be less pronounced in other countries. "It is comforting to note that in many countries households seem well prepared to cope with the consequences of a downturn in housing markets ... household balance sheets are generally sound and debt-servicing burdens still moderate, although some low-income households may be overstretched." We’re not sure which countries the OECD is talking about, but if consumers in the UK have ‘sound balance sheets’, it’s news to Barclaycard who have announced that bad debts are on the rise. And it's likely to get worse.
Dollar in trouble!
BBC: Dollar plunges on world markets
The dollar has continued its recent decline, falling to fresh 20-month lows against the euro as concerns grow about a US economic slowdown. In early Wednesday trading in the Far East, the dollar was hovering at about $1.32 against the euro, and also down against both sterling and the yen. The dollar's continuing weakness came after US data showed a fall in both the price of goods and consumer confidence. Analysts now predict US interest rates will have to be cut early next year.
Tuesday, November 28, 2006
Social problems brewing over lack of housing
BBC "News": Housing 'key to far right rise'
MPs say the lack of housing is fuelling propaganda from far right loons. The government replies - "No it isn't", ignores problem and hopes problem will go away.
secular trends continue
www.bullnotbull.com: Is This It?
Dollar breaks down Dow finally corrects Gold ready for lift off The secular trends are continuing after a cyclical reversal The 33-36 year cycle is lookig good again The goose is nearly cooked for the housing market
House prices still not reached tipping point?
Firstrung: House prices up 7 percent annually 1.2 percent monthly - Land Registry
Robust house price appreciation continues (average price increases 1.2 per cent in October to £171, 709). House prices in England and Wales have continued to exhibit strong growth. This month's data shows a monthly increase of 1.2 per cent and an annual increase of 7.0 per cent. This increase means that the average property price is now £171,709.
Monday, November 27, 2006
LOL! last ditch attempt to sucker the fool hardy
BBC News: Mortgage 'U-turn' at Nationwide
Just when you think that every trick in the book has been tried, they slip in an old chesnut. At least it shows they've run out of ideas to keep this bubble going
Council Taxes Could Be 1% of Property Values Soon
Telegraph.co.uk: Show your local authority the front door over higher charges
Typically speculation by the media, however nearly all local authorities are going broke so Tony and Gordon will allow a report to be released ( leaked ) showing that council taxes need to be based on current values, there will be widespread horror at 1% and it will be accepted when its .5 to .75%. Not the time to have a £1.5 Million home, well maybe if you can afford it - Tony.
More Predictions
TheTimesOnline: Place your bets now
Experts predict a slower market in 2007, report Anne Ashworth and Susan Emmett THE house price prediction industry is building up steam. This week we report on the first three substantial pieces of research on the prospects for 2007. No one is talking of a slump, but even the most optimistic of these gurus does not envisage that prices will outperform this year’s bravura performance of a rise of 8 per cent. Forecasts from Halifax and Nationwide will follow in the next few weeks......
ummmm... I wonder what will happen if HPC occurs
Times both online and in paper: What happens when house prices collapse?
"Old-fashioned bank managers, before the age of call centres, used to regard it as their professional duty to give prudent advice to their clients. One of their rules of thumb was that young buyers should not pay more than four times their income for their first purchase of a house. For most of the past 50 years that advice has worked tolerably well. House prices did average about four times disposable income in the late 1950s, 1960s and mid-1990s"
Nationwide BS reverses policy on best deals
BBC: Mortgage 'U-turn' at Nationwide
Nationwide will now only offer best deals to new customers or those actually moving home. Remortgagers won't get good deals. What does one make of this? This move seems to want to drive remortgagers away so might be the first signs of a reluctance to take on business.
No crash?
Property News: House price crash 'very unlikely'
Property News: "Independent" economist rubbishes idea of a crash....
Dangerous buy to let lending growth?
Firstrung: Buy to let specialist Paragon increases lending by 82 percent in twelve months
These stunning figures from Paragon quite simply defy belief - lending up 83% in a single year? In the volatile environment that is 'buy to let' some market commentators may describe this performance as out of control. Surely this 'stellar growth' can only have been achieved by taking on even riskier debt and ignoring even the most basic of under-writing criteria?
Serious economists say something's got to give
IMF: The Liquidity Glut
A little heavier going than your average tabloid house price story, but rather better informed. The investment bank Julius Baer put out a very interesting report today in the wake of this to which there's no link but which in essence agrees that central banks have pussy footed around while post 9/11 risk averse investors have created a self inflating prophesy by rampaging into assets. However that's been at the expense of serious long term investment into R&D and developing markets. The big boys aren't talking house price correction they're talking rebalancing between inflated asset prices and liquidity, between savings and investment and between Asia and the West. And when we wake up after the coming correction China and India will look much much much bigger than they do now.
Advertised prices up 5% on year
Reuters: House prices rise at fastest since 2004
Property consultant Hometrack said prices rose 5.3 percent in November compared with a year ago, up from 4.9 percent in October. On the month, prices were 0.6 percent higher, although the monthly figures are not seasonally adjusted.
November sees further house price increases according to Hometrack data
Reuters UK: UK Nov house price rise fastest since 2004 -survey
British house prices rose in November at their fastest annual pace since August 2004, a survey showed on Monday, in a further sign rising interest rates have not yet dented demand.
Poor business doesn't want to pay so much tax - bless!
MSN: One in 5 firms moving some business abroad
One in five companies have relocated some of their activities overseas and a third are considering it because of gripes over tax, according to a poll by the CBI published on Monday. The survey also showed nearly 20 percent of companies had even considered moving their headquarters abroad.
End of BTL?
bullbearings: Five time-bomb investments to sell now!
BTL is one of five places you DO NOT want to be!
Inflation UP UP UP, Bus Fares to rise 25%
IC Birmingham: Anger over plans to raise bus fares
Mirracle economy my arse, bus fares in the Midlands are set to rise by upto 25% as Travel West Midlands which has a near monopoly on bus travel in the midlands raises its charges from January 2007. Remember trickle down economics well this is trickle up inflation. You can fool some of the people........
Sunday, November 26, 2006
Is the Irish mortgage debt out of control?
Firstrung: Irish mortgage debt is double European level
Mortgage debt in Ireland is increasing at almost three times the EU average and Irish people owe twice as much on their mortgages as their European counterparts, according to new research.
New Yorkers struggling with mortgage payments
Firstrung: New Yorkers missing mortgage payments in increasing numbers in last quarter
In the third quarter of this year, the number of city residents who had missed more than three months of mortgage payments jumped by 20 percent compared with the same quarter a year ago. Still, New Yorkers often have more time to try to hold onto their homes than homeowners in the rest of the country.
Council Tax Re-Banding Looms
Telegraph: Show your local authority the front door over higher charges
Perhaps the main reason why NL loves house-prices going up and up - new council tax will be 1% of house value.
No-one wants to buy UK's most expensive residential property
Telegraph: Not for love nor money
Not much to say about this - just a perfect example of modern-day conspicuous consumption. First sign of a HPC? (joke)
Optimism still fuels house price engine
Financial Times: Optimism still fuels house price engine
Buyers are continuing to bank on price rises of 10% per year. This emotional element is seen as a big driver behind continued house price rises.
UK's fifth largest housebuilder for sale
Telegraph online: Wilson Bowden puts itself on the market for £2bn
Wilson Bowden is to be sold. Could they be selling at the top of the market, fearing an imminent slowdown?
Pack them in and stack them high
TimesOnline: The living room keeps on getting smaller
Britain is now building the smallest homes in Europe according to think tank. While the rest of Europe builds houses on an average sized plot of 100 sq metres the British squeeze them into a paltry 76 sq m.
Saturday, November 25, 2006
BBC homelessness season
Firstrung: Tune in to BBCs 'No Home' season of films and documentaries
The BBC is poised to broadcast a week of radio and TV programmes - including a special episode of Casualty - tackling homelessness and bad housing. The season, starting on Sat 25 Nov, coincides with the 40th anniversary of Cathy Come Home's first screening - the programme that alerted the nation to the crisis and led to the founding of Shelter
million pound houses increase by 32% in a year?
Firstrung: Portman believe property millionaires increased by 32% in a year
Has the amount of property worth in excess of £1 million increased by 32% in the last 12 months? According to the Portman yes, according to the definitive data from Land Registry no...The Portman must improve their level of research if they are not to be immediately dismissed as simple 'spin merchants'
The Guardian assesses David Miles' claim that house prices are set to fall
The Guardian: Will the property bubble ever burst?
The collapse of the housing market has long been predicted, but Ashley Seager doubts anyone can put an exact timescale on it
No growth in Irish housing market for 3rd quarter of 2006 according to daft.ie
Firstrung: Growth in Irish house prices grinds to a halt
Daft.ie Ireland's busiest property website, has released the Daft.ie report for Quarter 3 2006. The report shows that growth in house prices has come to a halt. Average asking prices for residential property did not increase between the 2nd and 3rd quarter of this year. Prices fell slightly over the summer months but recovered somewhat in September. Preliminary figures for October indicate slight growth but all signs point to a levelling off in prices.
Longer term fixed rate mortgages- the solution for FTB's?
Reuters UK: Long-term fixed rate mortgages: the pros and cons
Mortgage lenders are introducing competitive longer-term fixed rates -- which could spell a surge in demand among homeowners. Unlike those in the US and continental Europe, British borrowers tend to avoid longer-term home loans, preferring cheap short-term fixed or discounted products, or variable rates which move up and down according to the Bank of England base rate.
More home owners with feel good paper profits
BBC News: Millionaire house owners increase
The number of property millionaires in England and Wales has increased by a third to nearly 80,000. Research from the Portman Building Society shows 78,219 homeowners in England and Wales have property that is worth in excess of £1m.
Friday, November 24, 2006
It's all going pair shaped!
BBC News: Why the dollar is falling so fast
The US domination of the world economy may be at stake. The US dollar is plunging in world currency markets - and bringing down share prices in its wake. But why is the dollar under pressure - and what would be the consequences for the US economy if it continues to fall? Behind the problems of the dollar lies the huge and growing US trade deficit, and the large Federal budget deficit. A fall in the greenback could hit Asian countries whose governments hold huge foreign currency reserves in dollars A disorderly unwinding of global imbalances would be very damaging Rodrigo Rato, IMF Managing Director For many years financial markets have worried about the growing size of the US trade deficit - the difference between the amount the US imports from the rest of the world, and the amount it can sell to the rest of the world. That deficit is now heading above $800bn for 2006, or 7% of the US economy, and shows no signs of diminishing. At the same time, tax cuts and the war in Iraq have led to a US budget deficit of several hundred billion dollars despite the booming economy. Asian giants Much of the trade gap relates to US commerce with East Asian countries such as China, Japan, and Korea, who sell much more to America than they buy. Cheap exports have fuelled China's enormous trade surplus Together, the East Asian countries have accumulated foreign currency surpluses of nearly $1 trillion, much of it held in US Treasury bonds denominated in dollars. Thus they are funding both the budget gap and the trade gap. These huge global imbalances are threatening to derail the world economy, the IMF and other international organisations have warned. The classic economic view of how to correct such changes is to adjust the exchange rate in order to make US goods cheaper and Asian goods more expensive. But many Asian currencies - especially the Chinese yuan - do not float freely on international currency markets, and the US has long been pressuring China to revalue its currency. Now the markets are beginning to take matters into their own hands, by forcing the US dollar down. Traders are worried about the effects of the dollar fall In the long run, the fall in the dollar could lead to a cut in the trade deficit and a boost to US exports. But this process often takes a long time, and in the meantime, it is fraught with dangers. The fall in the dollar is worrying the IMF, the international organisation charged with surveillance of the world economy. "A disorderly unwinding of global imbalances would be very damaging," IMF managing director Rodrigo Rato warned at its spring meeting in April. Run on the dollar In the first place, a rapid fall in the dollar, if it accelerates, could cause short-term problems for the US economy. The higher price of imported goods could lead to a hike in domestic inflation, and it could take several years before consumers switch back to buying more US goods. High inflation, combined with the stronger-than-expected growth of the US economy, could force the US central bank, the Federal Reserve, to keep raising interest rates. They have already been raised 15 times, and now stand at 5%, partly on fears of a growing housing boom. But the fears of inflation are also likely to affect the interest rates on long-term bonds, which determine mortgage rates. The rising mortgage rates, while they may eventually dampen the housing boom, will also give a further boost to inflationary pressures. International exporters hit Meanwhile, foreign companies who have derived an increasing proportion of their sales and profits from the US market could also be hit by falling demand for their exports. The sharp falls in non-US stock markets, especially in Asia, are a response to this fear, with electronics and car companies like Toyota and Sony especially vulnerable. And that in turn could affect the growth rate of countries like China, who derive much of the growth in their economies from exports. But the Asian exporters also have another reason to feel vulnerable. As the value of the dollar falls, their reserves of the currency also reduce in value, as do the yields on the US Treasury bonds held by many of their central banks. In buying such bonds these governments are, in effect, underwriting the large US Federal budget deficit as well. This deficit is set to increase as the baby boomer generation faces retirement. The Asian governments and investors may be tempted to sell many of their dollar holdings in order to protect themselves - but this would have the effect of weakening the dollar further. And it would force the Fed to raise interest rates even more to protect the dollar. Countries like China are reluctant to massively revalue their currency - because it would make investing in China much more expensive and could deter valuable foreign investment. Managed float This problem with the dollar has happened before, in the 1980s, when it was Japan rather than China that was seen as the main threat. At that time, the main industrialised countries worked together for a managed currency float in an agreement called the Plaza Accord. The coordinated approach led to a managed decline in the value of the dollar, which then stabilised at a more sustainable level, supported by central banks. However, the current US administration does not favour such an approach, believing that the markets should be left to their own devices. And given the vast size of foreign currency markets today, it is doubtful that central banks could make such an effective intervention again. The downside for the US in the 1980s was that it was forced to enter into an international agreement with other governments that reduced its freedom to set its own domestic policy. But in the absence of such an agreement, it looks like the markets themselves are finally deciding that the US 'twin deficits' are no longer sustainable. And when the world's largest economy begins to look shaky, it is not surprising that confidence among financial markets is weakened around the world.
CML urges government mortgage protection..
Firstrung: The CML's pre-Budget report urges the government to increase support for mortgage borrowers
The Council of Mortgage Lenders today urges the government to increase support for mortgage borrowers who fall into payment difficulties and renew its commitment to sustainable home-ownership..
Good schools price premium falling...
Firstrung: House price premium for good school catchment areas falling dramatically - RICS
The RICS survey results show that despite high demand for property in good school catchment areas, the value-added-premium that potential buyers are willing to pay for the privilege is falling.
Tenant protection starts April 2007
Firstrung: Tenants finally get protection for rent deposits from 2007
The 2004 Housing Act requires those holding tenants' deposits to join a scheme that protects the deposits held as well as offer a remedy should a dispute arise concerning the deposit. The legislation will come into force in April 2007 and will affect members who are managing agents involved in the collection and retention of deposits made by tenants.
More trouble for the dollar
BBC: Dollar loses ground against euro
The dollar has plunged to its lowest level against the euro since April 2005 amid concerns for the US economy
An insight into our obsession with house (prices)
BBC: Why is it so expensive to buy a house?
It covers the usual stuff about population, single households etc, but also covers speculation.
Thursday, November 23, 2006
Some people in the Beeb are bearish!
bbc.co.uk: House prices 'set to fall 20%'
Over the past decade, the UK has enjoyed the longest sustained rise in house prices than at any time since the Second World War. Between April and June this year, the average price of a house stood at £154,503, compared to £65,025 in the same period in 1993, an increase of 138% - and more than the increase in house prices in the booms of the 1970s or 1980s. But forecasters at Capital Economics say the housing boom is unsustainable, and predict that there will be a house price crash with profound effects on the economy.
Why UK house price falls are inevitable
moeyweek.com: Why UK house price falls are inevitable
Because of our bearish long-term view for UK property, which we believe to be significantly over-priced at current levels, we have spent the past year wondering about the impact that the new pension rules would have on the property market because of the expected wall of money.
Millions indeed
ThisIsMoney.co.uk: Millions at risk over cheap loans
Mortgages & homes: Millions are said to be risking losing their homes after taking out unprotected interest-only mortgages as they stretch themselves to meet high prices...
Property fat cat cuts and runs
Yahoo: London ends lower in as property shares slip
The FTSE 100 has ended the day down 20.3 points to 6,140, as negative broker comment affected property stocks. British Land fell 2 per cent to £15.52 as investors reacted to news that the property company’s outgoing chairman, Sir John Ritblat, had pocketed £56.6m through the sale of stock. British Land was also pressured by an HSBC downgrade to “neutral” from “overweight”. Land Securities, which has risen 7.4 cent in the past month, was also hit by profit taking. Its shares closed 2 per cent cheaper at £21.74. Shares in Kensington Group plunged yesterday as the specialist mortgage lender admitted its profits were being squeezed by "intense" competition. Kensington was also hurt by fresh concerns over house prices sparked by influential Morgan Stanley economist David Miles, who voiced fears of falls in the next two years. The company's shares tumbled 100p to 805p, making it the biggest faller in the FTSE 350 index of Britain's biggest companies. Kensington specialises in the sub-prime market - such as the self-employed or those with poor credit histories. Paragon, the lender to landlords, got caught in the backwash, falling as much as 8 per cent at one point before recovering.
Attn: first time buyers, stop being so fussy
Firstrung: haart estate agents - "first time buyers are too fussy"..
Look what you could have won!... a one bedroom converted flat in Broadstairs, a studio flat in Hindhead Surrey, 2 bed properties in Swindon or Ipswich... There is a serious point in this communication from haart - be realistic, be flexible, do your homework, be ruthless with your offer/s... However, first time buyers are (for the most part) simply 'priced-out', not "fussy". A run down, converted, one bed flat, in an unattractive part of Kent for 95K may not represent value..it is as 'they say ' all relative...
City analysts think further IR rises unlikely
London Stock Exchange: nterest rates predicted to remain at 5%
Following the Bank of England's (BoE) decision to raise interest rates by 0.25 per cent earlier this month, economy experts are predicting that interest rates will remain at the current level into 2007. In response to the publication of the minutes from the BoE's monetary policy committee meeting, Global Insight states that conditions within the current labour market will limit wage increases, meaning the BoE is unlikely to raise interest rates further.
The Motley Fool looks at the hidden costs of mortgages
Motley Fool: Mortgages With Fat Fees
When most of us search for a new mortgage, or shop around for a remortgage, we tend to concentrate on headline rates of interest. However, although the interest rate (and how interest is charged, such as fixed, discounted, capped or tracker rates) is the primary concern of mortgage borrowers, you need to look beyond mouth-watering rates of interest.
New company launches non-advisory mortgage brokerage
FT Advisor: Advice-free mortgages launched
Mform, a new online mortgage business that bypasses intermediaries by linking consumers directly to lenders, is targeting a 1% share of the UK mortgage market in its first year of operation.
Fastest growing house prices in the world are in Latvia
Latvia heads league of rising house prices: The Guardian
Many UK homeowners will be delighted with the near-9% house price growth notched up over the past year, but their counterparts in the Latvian capital of Riga really have something to smile about: prices are up 39% from 12 months ago.
Scottish growth outpaces UK according to Lloyds analyst
Real Estate TV: Lloyds: Scottish house prices on the up
Scotland might have seen the last of this year's housing boom, but the property prices are defiantly still climbing all over the region. The Lloyds house price index showed that house prices in the country rose by 2.6 per cent in the three months to the end of October, bringing the average house price close to £145,593.
Parents, paying for their house price... twice!
Priced Out: Parents, paying for their house price... twice!
The current housing boom has thrown up many examples of strange, misinformed and irrational behaviour. One of the most stark examples of this is the increasing phenomenon of parents "releasing equity" to help their children onto the housing ladder.
John Ritblat dumps his shares
This is Money: Market report: Thursday latest
John Ritblat, chairman of British Land, disposes of most of his shares. I wonder why?
Survey says half of mew is ploughed back into home improvements
BBC News: House prices 'fund renovations'
More than half of English homeowners who raise money by borrowing against the value of their houses spend some of it on home improvements, a survey says. The government's Survey of English Housing found that 656,000 people borrowed an average of £33,000 each in each of the past three years.
Pension ages to rise to 68
BBC News: Hutton says pension age must rise
The state pension age has to be raised to 68 to avoid shifting the tax burden onto younger people, Work and Pensions Secretary John Hutton has warned.
Adopt the position?
Firstrung: Why have house prices soared so high and are they set to crash?
Apparently house prices could well fall at some point over the next couple of years. Now regular MoneyWeek readers will know that we've been expecting some sort of collapse for quite a while - but it's not just us who are saying it this time. No lesser authority than David Miles, Morgan Stanley's chief UK economist and former adviser to the Treasury, has reported that "a sharp fall in real house prices is likely at some point in the relatively near future." So why does he believe this? Miles believes that as much as half of the growth in house prices since 1996 (up about 187%, according to figures from Halifax) has been driven by speculation, with only half down to fundamentals, such as the supply and demand issues that property bulls keep citing. He's not sure of exactly when the slump will come, but seems to think it'll be pretty soon - "it could yet be one or two years away".
House market 'risks bursting'
Telegraph.co.uk: House market 'risks bursting'
The housing market is likely to burst within the next few years, a prominent economist and former adviser to Gordon Brown will warn today. David Miles, chief UK economist at investment bank Morgan Stanley, has written a report arguing that house price growth has been grounded in unrealistic expectations of double digit annual rises.
A falling Dollar AND a slowing economy!!!
Telegraph: Santa's little helper: a plunging dollar
The FEDs worst case scenario. How are they gonna protect the value of the Dollar if people are trying to get rid of it? Upping IRs in the face of a slowing economy will get Hank and Velma trading in their Ute just to keep breathing! Last night the pound hit its strongest rate against the dollar for 18 months. It jumped 1½ cents to $1.91 and could test the two-dollar mark in the coming months, economists said.
Spin beginning to unwind...
Firstrung: What's that coming over the hill is it a 'house price crash'?
It's always a dilemma creating a title for our latest newsletter, trying to get it to 'stick out' in your inbox amongst the 'spam offers' to; buy Viagra/Cialis (now available in patches apparently), buy junk American shares/stock, to meet Katrina from Latvia who has just found you on the net from an internet cafe and is 'dying' to meet you, to accept the re-finance loan you've been accepted for...in fact, here's a thought, why not do the lot? Meet Katrina, 'drop' (or stick on) Viagra, buy the junk stock with the secured loan you've been accepted for..live a little! Katrina may be impressed, for a night at least. Question; is it any more dangerous than buying a property this side of Xmas?
More Good News for Bears
Reuters: Cost of a mortgage surges by a third
The cost of paying a mortgage has soared by a third in the past three years, a study says. The average annual cost of meeting mortgage repayments has hit 6,284 pounds -- up from 4,711 pounds in 2003, according to mform, a new online mortgage company that launched on Tuesday.
The beginning of the end or just a seasonal tail off?
Reuters: Property sales fell sharply in October
LONDON (Reuters) - The number of property transactions in England and Wales fell sharply in October to their lowest level in more than a year, tax authority data showed on Tuesday. Revenue and Customs department said the number of property sales fell to 118,000 in October in seasonally adjusted terms from 147,000 in September. That was the lowest level since May 2005 when 117,000 sales were recorded.
The end of the rate rises?
City A.M.: Dissent at MPC over rate rises
"HOPES that interest rates may have peaked were boosted yesterday when it emerged that two members of the Bank of England's Monetary Policy Committee voted against this month's rate rise, with deputy governor Rachel Lomax a surprise dissenter."
Commerical market booming
London Stock Exchange: UK property 'to continue prospering'
While the UK housing market may be set to burst, the commercial scene is looking healthy.
Internet key to house buying
What mortgage: Is homebuying stepping up a gear?
The days of plodding from estate agent to esate agent and mortgage lender to mortgage lender are over. Sit back, switch on, and get surfing.
Beginning of the burst?
BBC News: Scots house offers over the odds?
Following a top economist's warning that the house price bubble is set to burst, property prices in Scotland are branded "over the odds".
In defence of Abbey mortgages
City Wire: Why five times one still adds up
Abbey's mortgage offer of five times salary is defended. When lending is done responsibly, it is a way onto the property market for young professionals who have healthy salaries.
Buy-to-let boosts mortgage lenders
Reuters: Paragon eyes UK buy-to-let top spot as profits jump
Thanks to the buy-to-let market, business is booming for mortgage lender Paragon. Annual figures are healthy thanks to demand from "immigrants, students and young professionals".
House price halt
Scotsman: House prices set for serious slow down, says report
Top Morgan Stanley economist warns of imminent slow down in house prices - brace yourselves for a "sharp fall".
Have patience renters
Daily Mail: Housing market at risk of bursting
Britain's booming housing market is on the brink of a major collapse, a former Government adviser has said.
Wednesday, November 22, 2006
Yvette Cooper shames Ruth Kelly on housing
In2Perspective: Yvette Cooper shames Ruth Kelly on housing
Nice quote in here: "In time the Government's Homebuy scheme will be seen as the housing market equivalent of offering cut-price tickets aboard the Titanic."
World property price growth slows
Home.co.uk News: House price growth slowing around the globe
Global house price inflation has continued to slow from the peak levels reached in 2004, reports Knight Frank...Estate agents Knight Frank released their Global House Price Index for the third quarter of 2006. The report's main finding is that price growth has slowed in 21 of the 32 residential markets reviewed. Average global house prices were growing by 8.4% year-on-year at the end of September 2006 down from 10.9% a year earlier.
On the front page of the BBC site!!!!!
BBC: House prices 'set for slowdown'
A well posted story but significant this has reached the BBC. The UK's rampant house price inflation is likely to slow down dramatically in the next year or two, according to a former government economic adviser. The prediction comes from David Miles, the Morgan Stanley chief UK economist.
7% house price growth in 2007?
Firstrung: House price growth to be 7 percent in 2007 - Savills research
Savills Residential Research has forecasted 7% growth in average UK house prices for next year and substantially more in the London and South East markets. The forecast assumes that interest rates will peak at 5.25% but Savills say that, even with further rises, there would still be room for further value growth - albeit at a reduced rate. This reflects a departure from conventional thinking on property values as they say that the extremely supply-constrained market in most parts of the UK puts additional upward pressure on prices - even when traditional measures of affordability look strained
The rain in Spain..or the reign in Spain of the equity tourists...
Firstrung: Halifax advice on buying property in Spain
Good advice here from the Spanish arm of the Halifax in relation to buying property abroad...Our suggestion (for what it's worth, as we do not proclaim to be experts on the subject) is anyone considering buying in Spain, in the usual suspect places, needs to take a deep breath and count to ten - perhaps ten years for the absurd prices and drastic over development to have its full impact..As for the 'equity wealthy' borrowing v their main residence to then buy abroad....
UK house price inflation set to slow down dramatically
BBC: House prices 'set for slowdown'
The UK's rampant house price inflation is likely to slow down dramatically in the next year or two, according to a former government economic adviser.
MPC minutes released
BBC: Bank voted 7-2 for rate increase
7 to 2 - It ain't just Blanchflower
The case for affordable rural housing development
BBC News: Rural housing: Only for the wealthy?
More and more people are following their dream and moving out of the urban areas, either in pursuit of a much-vaunted lifestyle idyll or to invest in a second home. It is no coincidence that at the same time, local people are deserting the villages where the houses once occupied by their parents and grandparents have become too expensive for them.
FTBs share their experiences with the BBC
BBC News: FTBs; Reader's Panel
4 first time buyers from Kidderminster, Southampton, Liverpool and Surrey discuss their experiences and talk about the type of mortgage they have.
Price increases mean only 1 in 33 FTB's escape stamp duty
Telegraph: Fewer than one in five homes escapes stamp tax threshold
Relentless house price inflation means that fewer than one in five properties now escapes the £125,000 stamp duty threshold, new figures disclosed last night.The threshold was doubled from £60,000 only 18 months ago by the Chancellor and then increased again earlier this year to help first-time buyers to get a foot on the property ladder.
Former advisor to Gordon Brown predicts crash
FT.com: Housing bust ‘likely in next few years’
A housing market bust is likely within the next few years because house price growth has been grounded in unrealistic expectations of double-digit annual rises, a report by a prominent economist and former adviser to Gordon Brown will warn on Wednesday.
Gordon Brown gets a warning about house price crash
Telegraph: House market 'risks bursting'
The housing market is likely to burst within the next few years, a prominent economist and former adviser to Gordon Brown will warn today.
House price crash warning
This is Money: House price crash warning
The housing market may be heading for a sharp fall, a leading expert will warn today. Economist David Miles says property prices will probably drop dramatically in the next few years.
Lloyds TSB Study predicts Scottish housing market to 'gently subside'
BBC News: 'Brakes on boom' in house prices
Scotland's housing boom may have ended but prices are continuing to rise, a report has shown. The Lloyds TSB Scotland House Price Monitor found annual increases ranged from 8% in Glasgow to 15% in Aberdeen.
Hometrack predicts 4% house price rise next year
Mortgage Solutions: House prices ‘to rise 4%’ over 2007
Average UK house prices are forecast to rise by 4% over 2007, Hometrack has reported. According to Hometrack, the rise would be supported by low levels of housing turnover and prices being set by the ‘haves’ already on the housing ladder. It said London and the South East were expected to remain the primary engines for growth with prices being driven by a continuing supply/demand imbalance.
Housing market on the brink
Breaking News: UK housing market bubble at 'risk of bursting'
Gordon Brown will be advised today that the UK housing market will face "significant falls" in the next year or two. The massive increase in house prices hasn't been matched by salaries, and the time has come for the "bubble to burst".
UK millionaires can't afford Monaco
Firstrung: Monaco closes the real estate door on some UK millionaires
Monaco - famous for its fast cars and beautiful people - is becoming increasingly out of reach for even the richest UK property investors. A studio apartment can reach up to $1m in the tax haven.
UK market preferable to eastern Europe
Citywire: Barings avoids eastern Europe for its property fund
Barings asset management fund invests in UK property instead of joining the rush to bag eastern European bargains, hoping to cash in on the "strong demand from overseas investors".
Estate agent crack down
BBC News: Bill to curb bad estate agents
Dodgy estate agents be warned - the government announces new plans to regulate the profession.
Ere We Go - Housing Bust 'LIKELY IN NEXT FEW YEARS' - FORMER BROWN ADVISER
Financial Times: Housing Bust 'Likely in Next Few Years'
A Housing market bust is likely within the next few years because house price growth has been grounded in unrealistic expectations of double-digit annual rises, a report by a prominent economist and former adviser to Gordon Brown will warn on Wednesday. Throwing cold water on the current housing market euphoria, David Miles, chief UK economist of Morgan Stanley, says it is only possible to explain the more than doubling of house prices in the past decade if people’s demand for housing has been heavily influenced by expectations that the rapid price rises would continue. Chris Giles - Financial Times
Tuesday, November 21, 2006
Mortgage cost climbing
Reuters: Cost of mortgage surges by a third
The cost of a mortgage over the last 3 years has soared by a third, says a new study. Yet our salaries haven't... Something doesn't add up,
Sterling stable
Reuters: Sterling steady ahead of UK mortgage lending data
Sterling is steady against the Euro and Dollar, as investors wait for October mortgage data.
Campaigners tackle housing issues
BBC News: Campaigners tackle housing issues
Part of the new BBC special report into housing. Looks at a number of campaigns tackling various housing issues, including PricedOut.org.uk who get top spot.
UK spa towns give fast returns
Letting News website: Buying Property in UK Spa Towns is a Good Move
New research reveals that property in the UK's 18 spa towns is giving fast returns. Snap up a bargain and reap the rewards.
Jokes invited
BBC: US aims to relaunch dollar coin
Like: surely a dollar coin would be worth more on the scrap metal market - and, I don't fancy pushing a wheelbarrow full of those to the supermarket for a loaf of bread!
Keep the faith - looks like BBC changes tack!
BBC News: Special Report: Housing UK
Just as everyone on the forum was getting HPC fatigue - the BBC start showing signs of producing HPC articles themselves. Result!?
ECB warns of inflation complacency
ECB calls for inflation vigilance: BBC News
The president of the European Central Bank (ECB) has warned that rising inflation fuelled by oil prices remained a concern in global markets. Jean-Claude Trichet said that while the global economy was set for "dynamic growth" in 2007, there was "no room for complacency" over price rises.
Credit card borrowing declining in favour of mortgages
The Herald: Big demand for mortgages as credit card borrowing falls
UK mortgage lending remained robust last month, but consumers' borrowing on credit cards fell for the sixth straight month, industry figures showed yesterday. Seasonally-adjusted figures from the British Bankers' Association showed mortgage lending by the big UK banks rose by a net underlying £5.5bn last month.
New study assesses costs of keeping a mortgage
IFA online: True cost of a mortgage rises 33%
The true cost of servicing a mortgage has increased by a third is just over three years according to research from new online mortgage company mform. The company which launches into the mortgage market today say the average annual cost of a mortgage is around £6,284, compared to £4,711 three years ago.
Co-Op follows Abbey in offering 5x income multiples
BBC News: Co-op offers five times mortgages
The Co-operative Bank has become the latest mortgage lender to offer loans that are calculated at up to five times a customer's income. At the beginning of November the Abbey, the country's second largest lender, attracted widespread attention for a similar deal. The Co-op said it was stretching its lending criteria so borrowers could keep up with rising house prices. It said the offer was aimed at people with stable jobs and incomes.
Nice to see an MP that has some sense. Baby Boomers take note.
David Willetts MP: THE CLASH OF GENERATIONS, A Speech to Policy Exchange by David Willetts MP, Monday, 28th November 2005
First, personal financial assets are skewed most heavily towards the older and the rich. The top quarter of 50-69-year-olds own 84% of all the financial wealth held by that age group. Having built it up rapidly in their 50’s and early 60’s it is then run down quite fast to boost incomes in retirement. Amongst young people home ownership is an aspiration as strong as ever but one that seems harder and harder to fill. There is a fortunate generation of baby boomers who got into the housing market in time to enjoy the enormous appreciation of the past 15 years but it is going to be a longer, slower, and more painful process for the younger generation to achieve home ownership.
An old one, never posted before and from the golden days of VI housing market ramping. Things have only got worse since.
BBC News: UK 'empty nesters' top cash table
Analysts say this post-war baby boom generation has reaped the rewards of better job prospects, having their families early, and high house prices. "Generally, the boomers are better paid than previous generations and have had their families early," Andrew Russell, the report's author, told BBC News Online. "Their children have now left home early, relieving them of a huge expense," Mr Russell added. And the strength of the UK housing market means British early empty nesters are enjoying more spending power than their European counterparts, the report said. "Many Britons have owned their homes for 30 years and have benefited enormously from house price increases."
So not all Baby Boomers have the same negative attitude to the younger generation as Casual Observer then!
Reform: Two-thirds of voters think that today’s young people find it more difficult to get a start in life than their parents’ generation
A new report today paints a bleak picture of the economic position of young people in the UK and warns that their position will worsen significantly unless radical action is taken. The report – Class of 2006: a lifebelt for the IPOD generation, published by the independent think tank Reform – shows that a combination of rising taxes, student debt repayments and pensions contributions will give the average graduate aged 21-35 an effective tax burden of nearly 50 per cent early in the next decade. · A very large majority of all voters (65 per cent), and clear majorities in all age groups, think that it is now more difficult for younger people to get started in life than it was for their parents. Only 11 per cent think that today’s young people find it easier. · 70 per cent of voters agree that a key factor determining the success of the economy is the initiative and talent of young people. Again, clear majorities of all age groups agree. · Taken as a whole, a majority of voters agree that the tax burden on young people is unfair (50 per cent agree, 45 per cent disagree). · There is clear concern over political parties’ current efforts to address the economic position of young people. A clear majority – 52 per cent to 39 per cent – thinks that none of the political parties are setting out new ideas to improve the economic position of young people. Only people over 65 disagree. Young people are by far the most likely not to identify, to any extent, with any political party.
Telegraph discussion - September but not posted before
Telegraph: Should young people give up on owning a home?
The Bank of England has acknowledged that house prices have risen faster than expected so far this year, with the average cost of a home now exceeding £200,000. Is it financial prudence or collective madness for young people to plunge themselves into exorbitant levels of debt to buy a house? Any youngster with any sense should be looking at getting out of this crime infested hell hole of a country while the goings good. In years to come no one will want to live here anyway the way things are going and house prices will tumble. The creation of a new underclass, who have no hope of ever getting on the property ladder, is a direct result of Labour policies, with some assistance from Brown's "independent" Bank of England. The Baby Boomers were born at the most opportune time, have accumulated the overwhelming majority of the wealth, and are now busy pulling the ladder up behind them. This applies not just to housing but also to pensions. Shame on you boomers! To First Time Buyers: DO NOT get involved in this market...it is a ponzi-scheme built on funny money and a lies, and it will implode.
Boomers have it far easier than the Ipod generation
Propertyinvesting.net: UK wealth and cultural differences within the age groups – investors take note
The post war generation of baby-boomers (more 1946 to 1962) were bought up in an austere post-war environment of rising unemployment, closing of heavy industry and increasing competitiveness. Many, taught by their parents, did not take anything for granted and worked hard to get themselves up the social ladder – out of the slums, into the middle-classes. This all sounds rather historical and old fashioned, yet this psyche led to rapidly increasing wealth, living conditions, deposable incomes and retail spending. The Thatcher years created a bunch of hard working, keenly competitive workers – aspiring to climb a social/wealth ladder. Increasing borrowing led to the current sustained housing boom over the last ten years – where prices have tripled. Most of this wealth of some £1 Trillion now resides with the baby-boomers. Some of these even went into buy-to-let, helping to drive asset prices further up – and out of reach of the younger first time buyers. Many of these younger generation have now been forced to rent because of the high costs of stamp duty, deposit, fees and mortgage payments on high capital borrowing.
For all the baby boomers that say the younger generation have it easier
Reform: Class of 2006 - A lifebelt for the Ipod generation
Last year the independent think tank Reform published the first analysis of the impact of tax, public expenditure and higher education policies on young people under 35. The research outlined the difficult economic position of the young and explained how this constituency has been unfairly burdened both by the actions of successive governments and by a general unwillingness to assess how policy decisions affect the financial prospects of the younger generation. It termed young people the IPOD generation: Insecure, Pressured, Over-taxed and Debt-ridden.
One for the boomers
Will the baby boomers be better-off than their parents in retirement?: London School of Economics
The paper concludes that although many of the 1960s baby boomers will be better off in retirement than their parent’s generation, there is evidence that the poorest baby boomers have benefited relatively less from recent economic growth than the cohort on average, reflecting widening inequality within the cohort. The increasing emphasis on the individualisation of risk means that incomes in later life are likely to be more rather than less unequal in the future, with the result that some baby boomers may well fare a less secure retirement than their parent’s generation.
Old but wasn't posted before, still relevant today
The Times: Anxious life of the 'Ipod' generation
THEY should be Britain’s gilded youth, enjoying opportunities to study, travel and embark on exciting careers in a way previous generations could only dream about. But instead they are the “Ipod” generation — “Insecure, Pressured, Over-taxed and Debt-ridden” — according to a study by Reform, the think tank, to be published this week.
Risk grows for FTBs
BBC website: Risk grows for FTBs
FINALLY!!! BBC allows someone to stop people getting caught in the madness. I already emailed him Julian.Knight@bbc.co.uk and told him well done. Perhaps others might like to. It can be lonely for a contrarian journalist. He responded with thanks and appreciation.
Inside Track eNewsletter BTL Propaganda
Inside Track: Don't be fooled by IR rises
A very big VI in the BTL sector. Talk about snake oil salesman - his view is don't worry about cashflow it's all about er capital gains...which is fine if you can remain solvent long enough!