January 2007 Archive
Tuesday, January 30, 2007 
Repossessions to rise :¬(
Firstrung: Repossessions to rise by up to fifteen percent in 2007
Research by Moore & Blatch, solicitors who specialise in repossession management for a selection of leading mortgage lenders, has revealed that up to 75% of the mortgage lenders its represents anticipate repossessions rising by at least 5% in 2007.
Another cautious article for the pile
MSN News UK (Reuters): Evidence of cooling house market builds
Another straw on the HPI camel's back, or another plea for Swervin Merv to leave interest rates alone? You decide.
Lib Dems comment on "irresponsible lending"
Firstrung: Lib Dems slam irresponsible mortgage lending
Commenting on a Yorkshire Bank survey showing that six out of ten first time buyers would take a mortgage of over five times their salary, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "These findings are extremely alarming. But we should not blame the borrowers - they have little choice because of the highly inflated price of property. A great deal of irresponsible lending is fuelling this problem on debt.
Inside Track
Firstrung: Inside Track reveal buy to let hotspots
An annual valuation of Inside Track's portfolio has revealed buy-to-let (BTL) continues to provide investors good returns, but with marked regional variations. Inside Track has Britian's biggest residential investment portfolio, entirely of new build property.
Don'tMove.co.uk
ThisIsMoney: Welcome gloom amid the boom
"Don'tmove.co.uk is an embryonic rival for which a forward-thinking few of us at Financial Mail are currently seeking financial backing. Rather than list potential properties, it will provide good reasons to stay put. In extremis it will disable your computer, thus barring access to the likes of Rightmove."
Banks refusing IVA settlements rocks IVA sector
TimesOnline: Pressure on third IVA firm as sector is hit by near-panic
The booming business of individual voluntary arrangements (IVAs) has taken a hit over the last few days with share values of companies operating in the sector being badly hit. An IVA is a less painful alternative to personal bankruptcy. The reason the IVA sector is being badly hit is due to banks demanding better terms on the IVA and are refusing agreements which allow customers to walk away from a high proportion of their debt.
UK house prices 'start to cool'
BBC News: UK house prices 'start to cool'
Hard to tell this time of year if this a blip, and we are still in positive HPI territory. Ms Earley is finding it increasingly difficult to keep up her positive spin however. I can hear it now "Prices are reducing but only by 10% month on month which is insignificant when compared to the massive gains over recent years, It still remains a good time to buy.....blah blah blah"
UK house prices 'start to cool'
BBC News: UK house prices 'start to cool'
House prices rose by 0.3% in January, the slowest pace for eight months, according to the Nationwide.
Things slowing down
Reuters: House prices up at slower pace
House prices rose at their slowest pace for eight months in January, a survey showed on Tuesday, indicating higher borrowing costs may be starting to dampen the housing market.
The Centre for Economics and Business Research said that
Daily Express: House prices to soar again
HOUSE prices are rising at their fastest for nearly four years with the property market showing no signs of running out of steam.
Monday, January 29, 2007
Debts and Bust Not Confined To Consumers
FT.com: Winding-up petitions increase 23%
If this article is correct, then businesses are indebt and struggling too. Take the quote "The research identified the services sector across the UK as experiencing the most difficulties and having the highest number of companies with significant and critical problems." If the consumer is struggling, and the services sector is finding it hard, and we have no manufacturing left, can someone just tell me WHY BRITAIN IS BOOMING? (PS They can also tell me why house prices are remaining ridiculously high too.)
House prices end 2006 on the rise
BBC: House prices end 2006 on the rise
House price inflation picked up towards the end of 2006 in England and Wales, the latest report from the Land Registry says.
Oh no, what a disaster!
BBC News: Share slump hits debt companies
Shares in several debt management companies have slumped after two of them issued profit warnings on Friday.
The Future of Self Cert Mortgages
The Self Cert Mortgage Centre: The Future of Self Cert Mortgages
As the market for self certified mortgages grows, so does the pressure for tighter regulations for self certified mortgages. Those who have a keen interest in the future of self certified mortgages may have noticed that they are beginning to appear more and more frequently in the media. Self certified mortgages - which enable the borrower to certify their income without needing to supply standard income documentation – may be extremely popular with the self employed but they are also a cause for concern for the regulatory bodies.
FSA Slams Exit Fees
Finance Daily: Expert Opinion: Exit Fees & Your Rights
Glossery letter: I write to you to put forward a claim for compensation due to your unfair charge of £? exit fee for the above mortgage. I would also like to claim compensation for the mortgage risk payment (MIG) which I was made to pay £? for insurance to cover yourselves, and the £? administration charge for using an outside company for buildings and contents cover.
Blanchflower hits back at "Dove" suggestion.."If I am wrong then I will vote for a rate rise."
Guardian: MPC economist denies 'dove' decision on rates
David Blanchflower, the US-based economist on the Bank of England's monetary policy committee, has hit back at suggestions that he is a "dove" determined to keep interest rates down. In his first interview since joining the MPC in June last year, he told the Guardian: "I am as hawkish as anyone about keeping inflation on target."
More IR pressure - Poor Merv!
Reuters: January retail sales rise fastest in 2 yrs: CBI
Retail sales volumes soared more than expected this month and at their sharpest rate in more than two years, a survey showed on Monday, and retailers are optimistic sales will remain strong in February. The Confederation of British Industry said its distributive trades survey's reported sales balance rose to +30 in January, marking a fresh 2-year high after December's reading of +25. Analysts had forecast a reading of +14 and retailers' own expectations were for a reading of +4.
Commercial property on the slide
FT.com: Commercial property boom ‘at an end’
The commercial property boom in the UK has finally ended, judging by new data suggesting that prices started to fall in the closing months of last year. Average net initial yields fell from 7.3 per cent in December 2001 to 4.89 per cent in September 2006, but by December 2006 had risen to 5 per cent, according to agents Lambert Smith Hampton.
Strength of London property market drives prices up
TimesOnline: London drives house price rise
Houses prices were unchanged across the country for January but a strong London market pushed prices up by 0.8%. according to the property website Hometrack. No doubt as the data is from Hometrack this is "asking" prices and not "selling" prices.
Commercial property boom ‘at an end’
FT.com: Commercial property boom ‘at an end’
The commercial property boom in the UK has finally ended, judging by new data suggesting that prices started to fall in the closing months of last year.
Morons buy hotel rooms
Guardian: A room with a view to profit
BTL hotel rooms. What a good idea. Presumably now even the BTL landlords can't afford a whole house
House Prices to Rise at £1,000 a month
Daily Express: House Prices to Soar Again
House prices to rise at £30 a day over the coming year. Will this ever end? It may be spin, but I begin to wonder? Is it?
Sunday, January 28, 2007
Broke Brown turns to 'Grave Robbery'
Scotsman: Claim or lose your rainy day savings
Having raided every pot imaginable from Pensions, Stamp Duty, Inheritance Tax and the usual stealth taxes for cash windfalls to prop up his 'economic miracle' Brown makes move on 'forgotten' shares and savings in a Burke and Hare (Grave Robbers) style cash grab.
Good Summary of Global Economic Outlook
Sunday Telegraph: It could be downhill all the way after Davos
Good Summary of Global Economic Outlook
Daily Mail wants to setp up a housing gloom website
ThisIsMoney: Welcome gloom amidst the boom
Some of us at the Financial Mail want to set up don'tmove.co.uk, to rival Rightmove. Rather than list potential properties, it will list reasons to stay put. The aim? To slow the housing market of course. High house prices spook the BoE and drive interest rates up. An about-turn on borrowing costs would provide breathing space for the over-indebted millions.
Which report on overdraft charges
Firstrung: Is your bank taking you for a mug? Which uncover bank overdraft tactics
A Which? exposé has uncovered the tricks that some banks are using to deter customers who challenge their overdraft charges. And it's not only those who confront their bank that suffer.... Which? discovered that some banks are: Closing - and threatening to close - accounts Passing accounts to debt collectors Delaying requests for statements and charging too much for them Delaying their responses to, or ignoring, customer letters. Which? has also heard of some customers being offered personal loans or increased overdrafts in place of refunds.
More Housing Bull from the BBC
BBC News: UK home price 'up £1,000 a month'
Britain's housing boom will continue in 2007, with average prices rising by £1,000 a month, according to a report the Centre for Economics and Business Research (CEBR). Looks like the UK average 187K house will be 199K by year end, only a 6.5% increase, though saying £1000 per month does make a better more bullish headline.
Week in focus for first time buyers
Firstrung: Property news in focus from the first time buyers viewpoint - Firstrung
What we finally need to finally turn the tide of opinion v FTBs to one of blame is photo opportunities of BTL investors (with their young families) stood outside two-three bed terraces in, for example Oxford, be-moaning the fact that they've been out manouvered by underhand FTBs who dont want the place as an investment, they want to "own it and live in it, how bizarre!". "But it was supposed to be our pension" will read the caption, "What will our kids inherit?"...
Sit back and conspire...
Bull! Not Bull: Fiat Empire - A Closer Look at the Federal Reserve
Hour-long programme about the Fed, fiat currency, and the US constitution. Of no relevance to us? Think again. Some interesting contributions, particularly from congressman Ron Paul. The film is spoilt, however, by the appearance of vain bogeyman, Edward Griffin.
Saturday, January 27, 2007
US Essential Service Staff Suffering Too!
Orlando Sentinel: Housing too pricey?
Global HPI News: Teachers, firefighters, police and other essential-services personnel are priced out of Florida's housing market.
Has "time" been called on HPI?
TimesOnline: Fears grow for housing slowdown
Figures showing the biggest annual fall in mortgage approvals since the last housing slowdown prompted concern yesterday that the year-long resurgence was over. Bit short and sweet this report but it is another in recent glut of bearish news.
First time buyers disappeared not desperate
Firstrung: Desperate first-time buyers faced with rising prices "it's all your own fault" screams Yorkshire Bank
That the FTB is somehow portrayed as the villain of the piece as opposed to the victim is quite frankly disgraceful. We can now confidently expect Yorkshire to finally go the 'full nine yards' and begin to blame recent house price inflation on 'desperate priced out FTBs' in favour of for example: 750,000 newbie BTL investors since 2003, Money supply being out of control, Loose and lax lending policies, Inflation rising, Lack of decent family starter homes. Of course the Yorkshire are immune to criticism, despite the fact that their BTL lending book has boomed since 2003, they accept heavy sub prime business, require low deposits and will lend to 'extreme multiple' levels - typically five times income...
Debt management shares battered in late Friday trading
Firstrung: Slow growth in IVAs causes debt management company shares to meltdown
Debt Free Direct: "Over the last quarter, we have been challenged by two external factors; creditor posturing and increased advertising from our competitors," it said. "The combined impact of these two factors will make it challenging to fully achieve market expectations for the FY 2007," added the group.
First Time Buyers risking ever more in the last chance property saloon
BBC News: First-time buyers 'risking more'
First-time buyers are willing to take greater financial risks than ever, a survey by Yorkshire Bank reveals tat 6 out of 10 would consider taking out a substantial mortgage in excess of five times salary just to get on the property ladder.
First-time buyers 'risking more'
BBC: First-time buyers 'risking more'
First-time buyers are willing to take greater financial risks than ever, a survey by Yorkshire Bank suggests.
How to manage a budget well
The Express: Nurses told: Work for no pay
What a shambles and very sad. In the broader sense an economy with no where left to run.
How did it come to this!
Daily Mail: 36 reasons to say goodbye to Britain
As you sit in stationary traffic and pouring rain, worrying about the mortgage and whether you'll ever get a date for treatment on that ingrowing toenail, you may not be totally surprised by the news. In the league table of the best countries to live, Britain is 37th.
More dodgy tactics by the banks
Daily Mail: Homeowners can claim £200m over mortgages rip-off
Homeowners are expected to claim compenation totalling around £200million after paying rip-off mortgage charges. The FSA yesterday criticised mortgage lenders for their ‘exit fees’, which have surged over the last two years.
Demand for homeloans heading south
Daily Mail: Mortgage Demand Plunges
Homeloan approvals are sharply down to a six-year low - and that's before January's rate rise is factored in. BIG indicator that sentiment is doing a u-turn.
Friday, January 26, 2007
The rising cost of living in the UK
The Times Online: How to keep your head above water
An useful article which summarises increases in the cost of living. The article's description is "Magnus Grimond fights back against the rising tide of inflation" but inflation is only at 3% isn't it?
Some BIG stats in here!
BBC: US new home sales hit during 2006
Sales of new US homes fell in 2006 by the largest amount in 16 years as the industry was hit after five years of growth, the Commerce Department said. It all looks pretty bad but they try and gloss the figures by adding aircraft sales into the stats! I can't remember the last time I bought a jet airliner!!!
Time trip fixes Japan's Woes
Reuters News: Time trip fixes Japan's Woes
"Bubble e Go!!" ("Go to the Bubble!!") is only a film, but in Japan its central theme of boom and bust is all too real. In the comedy, due to open in Japan next month, the country is left with 713 days and 13 hours before a public debt crisis triggers an economic meltdown.
Borrowers hit as lenders leapfrog latest base rate
FT: Borrowers hit as lenders leapfrog latest base rate
Millions of homeowners with variable rate mortgages are being hit with excessive increases to their monthly repayments, as many of the UK’s largest lenders have raised interest rates more than the recent base rate rises.
Time trip fixes Japan's Woes
Reuters News: Time trip fixes Japan's Woes
"Bubble e Go!!" ("Go to the Bubble!!") is only a film, but in Japan its central theme of boom and bust is all too real. In the comedy, due to open in Japan next month, the country is left with 713 days and 13 hours before a public debt crisis triggers an economic meltdown.
HIPS again...yawn...
Firstrung: HIPS reaches another stumbling block
According to anti HIPS campaigner, Trevor Kent, the timetable for the introduction of Home Information Packs (HIPs) took another faltering step backwards today following the announcement of yet another 'consultation' by the DCLG after nine years of investigations, consultations and trials...
Holding Back?
This is money: Mortgage demand plunges
The overall figure is the lowest monthly total since January 2001, statistics show but net mortgage lending still atrong.
Holding Back?
This is money: Mortgage demand plunges
The overall figure is the lowest monthly total since January 2001, statistics show but net mortgage lending still atrong.
Exit charges capped
BBC News: FSA moves on mortgage exit fees
This will put pressure on lending rates as the lenders will know they can't screw the borrower when they switch. All to the good!
More barriers to 'testing the market'
Telegraph: Home green packs will cost £200
Home owners will be forced to pay more than £200 for a green energy certificate when they put their house on the market. The Government strengthened its commitment to the energy performance certificate yesterday, saying the certificates must be included in the property particulars buyers will see before they even view a home. The certificates, which could cost as much as £350, will give properties an energy rating of between A (best) and G (worst).
mortgage approvals fall 11.1 percent yr-on-yr -BBA
Reuters: UK Dec mortgage approvals fall 11.1 percent yr-on-yr -BBA
British mortgage approvals fell 11.1 percent in December from a year ago to 45,533, the first annual fall since April
Thursday, January 25, 2007
BTL Boom Fuelled By Pensions Crisis
IFA Online: 80% 'seriously worried' about pensions - ITV show
Many BTL investors are trying to secure their retirement through the property market and after watching tonights ITV documentary I can fully understand why. The much ignored pensions crisis in this country will in the long term be a big nail in the coffin of property prices as it is the current FTB's who are paying the price of their parents failing pension funds and jeopardising their own retirement.
Mervyn King cast deciding vote on last month's IR rise
Times Online: Bank schism on interest rates leaves forecasters in confusion
The FTSE is above 6300 for the first time in six years, and the city doesn't quite know what to make of the Monetary Policy Committee's decision. The MPC was split, with 4 members of the panel voting for no rise. Philip Shaw of Invetsec said “We were in the dark before the minutes and we’re even less clear now.”
Home-grab danger highest in London
This is Money: Home-grab danger highest in London
Repossessions in London are at the highest for more than a decade as house prices soar and interest rates go up.
Home-grab danger highest in London
This is Money: Home-grab danger highest in London
Repossessions in London are at the highest for more than a decade as house prices soar and interest rates go up.
Victory for pensioners in ECJ
Firstrung: Britain failed to protect pensioners - unions win landmark pensions case
Thousands of workers are celebrating today after the European Court of Justice (ECJ) ruled that the UK government has failed to properly implement European law and so could be entitled to full compensation for their lost pension savings.
Victory for unions in pensions battle
Firstrung: Britain failed to protect pensioners - unions win landmark pensions case
Thousands of workers are celebrating today after the European Court of Justice (ECJ) ruled that the UK government has failed to properly implement European law and so could be entitled to full compensation for their lost pension savings.
Financial crisis next year
The Telegraph: Imbalances 'setting stage for crisis'
"The global imbalances are becoming more concentrated, not less," he said. While China is adding to its colossal reserves at a rate of $200bn (£102bn) a year, five countries, led by the US and Britain, now account for 84pc of the $1,000bn of trade deficits in the global system.
Global financial imbalance is set
Telegraph website: Global financial imbalance is set
Why we are set for a massive correction in all asset classes
And the nominations are.....
The Corporation: Gordon Brown 'among 100 sexiest'
Gordon Brown, sometimes criticised as dour and sombre, has made it into a list of the world's 100 sexiest men
Wednesday, January 24, 2007
Aussie houses overpriced, rents skyrocketing -but that's A-OK cause the inflation battle has been won...?
The Age: Inflation genie back in the bottle
THE lowest inflation reading in almost eight years sent the Australian dollar into a tailspin and prompted financial markets to revise their bets, with investors now ruling out the chance of another rate rise next month.
Rents are starting to rise again in Australia...
The Age: Rent rises fastest for 16 years
RENTS last year rose at their fastest annual rate for 16 years as landlords took advantage of falling vacancy rates and made tenants pay more for a place to live. Although the overall consumer price index fell in the December quarter, average rents across Australia jumped 1 per cent for the quarter and by 3.7 per cent for the year.
RICS - very wrong and mischievous
Firstrung: RICS first time buyer comments out of order - Firstrung
In response to the recent press release from RICS, citing that first time buyers are somehow 'at risk' due to the recent rises in interest rates, Paul Holmes, Operations Director of the leading first time buyer website Firstrung, refutes the statement and suggests that recent first time buyers are at less risk than any other buyers, particularly buy to let investors:
2007 House Repossessions set to be 3X 2004 level
Guardian: Interest hike set to increase home repossessions
About 19,000 homes are likely to be repossessed this year - more than three times the number seized in 2004 - and first-time buyers appear most vulnerable, according to RIC's a leading property trade body.
Interesting survey without the usual vested interests?
Firstrung: UK Financial Activity Survey finds weakest savings, investment and borrowing demand in 5 years
Consumers are showing little appetite for spending and borrowing and more households are finding difficulty saving as higher taxes, utility bills and housing/motoring costs grow according to JGFR who provide; financial, marketing research, consultancy and infomation services
Pound falls on MPC split
FT.com: Sterling off 14-year highs against dollar
Sterling retreated further from a 14-year high against the dollar and the yen on Wednesday, as the minutes from the Bank of England’s monetary policy committee meeting revealed that four of the nine members voted against January’s UK rate rise. The market had been expecting a seven to two vote in favour of raising rates. The minutes should dampen expectations of another rise in interest rates as soon as February.
Pound rises as traders bet on rate rise
TimesOnline: Pound pushed to 14-year high as traders bank on a rate rise
The pound surged to 14 year high as currency traders smell further rate rises
Halifax predict 4% house price increases in 2007
Firstrung: House price growth will slow in all regions in 2007 - Halifax
House prices increased in all regions during 2006 Quarter 4. The biggest price rises were in Northern Ireland (15.9%), Greater London (6.6%) and Wales (5.1%). The smallest increase was in the North (0.9%). Northern Ireland recorded a 53% increase in its average house prices in 2006; the biggest regional annual gain since 1988 (West Midlands: 60%).
FTBs in Oxford have no chance
Firstrung: Average house prices in Oxford are now 70% higher than the UK average at £304,467
The average house price in Oxford is now £304,467. That represents an increase of 388% compared with the average figure of £62,444 in 1986, the year before Inspector Morse first reached our screens. Over the same period, house prices across England rose 440% to £209,223, while the UK figure increased by 348% to £179,601.
Advice for investors: housing prices will collapse
MoneyWeek: The twelve key investment trends of 2007
What's ahead for stocks and the economy in 2007? Setting aside unknown elements like major terrorist attacks or natural disasters, I believe six phenomena are shaping the investment climate this year. The world is awash in financial liquidity mainly due to rising house values, the negative US corporate financing gap and the American balance of payments deficit. Inflation remains low despite higher energy prices. As a result, investment returns are low. Speculation remains rampant despite the 2000-2002 bear market. So, investors are accepting more risks to achieve expected returns. And then there's the insatiable US consumer, who, thanks to the booming housing market, continues to spend freely.
No more interest rate rises?
Financial Times: King hints that rate rise cycle is near end
Mervyn trying to make out that he's still in control. Maybe he thinks the worst of the inflation rise is over. Read the small print though and another story emerges: "the Bank governor left open the possibility of its monetary policy committee raising rates again this spring."
Will interest rates rise again next month?
MoneyWeek: Will interest rates rise again next month?
We're moving ever closer to the $2 pound...and closer still to a 5.5% UK base rate. Sterling hit its highest level against the dollar in 14 years, heading above $1.99 due to a quarterly report from the Confederation of British Industry (CBI). The survey showed that the number of businesses reporting that they had hiked prices in the past three months had hit its highest level since 1995. The stronger-than-expected data may have been good news for anyone getting their holiday money for a trip to the States - but it's not so great for anyone who'd hoped that interest rates had peaked this month...
We're making a killing, Lewis
The Sun: We're making a killing, Lewis
Home owners in Oxford are cashing in on the Inspector Morse effect, with house prices in the city rising above the UK average for every year the drama has been on the small screen.
Too tight for comfort
BBC: Bank voted 5-4 for rate increase
The MPC decision was only just carried
KIng's Speech in Full
Firstrung.com: Governor of the Bank of England, "inflation in the UK could fall quite sharply in 2007"
Mervyn King says, "The opportunity to write to the Chancellor did not arise last week. But since we are so close to the level that would trigger a letter, let me instead write a letter to you." But nary a mention of raising interest rates to control house prices. In fact, nary a mention of house prices at all...
King keeps quiet on prospect of further rate rises
BBC News: King defends interest rate rise
The governor of the Bank of England has defended January's shock interest rate rise - saying it was a pre-emptive strike against higher increases. Policymakers had been expected to wait at least a month before taking action.
Tuesday, January 23, 2007
Ratings for Major Urban Markets
Demographia.com: 3rd Annual Demographia International Housing Affordability Survey
This survey expands coverage to 159 major markets in Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States. The Demographia International Housing Affordability Survey employs the “Median House Price to Median Household Income Multiple,” (“Median Multiple”) to rate housing affordability.
SVRs at 7.44 percent! Not a pretty sight ;¬(
Firstrung: Natwest and RBS increase their standard variable rates up to 7.44 percent
NatWest today announced that its Standard Variable Mortgage Rate would increase by 0.30 per cent to 7.44 per cent. The Royal Bank of Scotland today announced that its Standard Variable Mortgage Rate would increase by 0.30 per cent to 7.44 per cent
Shelter founder dies
Firstrung: Shelter founder Reverend Bruce Kenrick has died aged 86
In 1963 Kenrick, then a parish priest, established the Notting Hill Housing Trust in response to the squalor he'd observed in the area's overcrowded tenements - what he later described as 'damnable housing conditions' with 'families living in one room with a stove and sink squeezed into one corner'.
The Rightmove BULLS??? ?
Telegraph: House Prices To Rise Despite Rate Move
Here's confidence at its best!! House prices are purportedly to continue rising according to Rightmove, with it's prediction of a further increase in January. Whether an agency who derive there profits from estate agents who derive there profits from the sellers who derive there profits from inflated house prices can be nearly reliable is another question - but I think the constant whipping up of the housing market is now proving to be hard work even for the most optimistic heads of rightmove as there investors and shareholders react contrary to the article. Take a look at the shareprice tumble of RMV today!! Looks to me (an optimist WITH EXPERIENCE) that the bubbles ready to pop!!.
Recent FTBs at risk
Firstrung: Recent first time buyers at risk due to recent interest rate rises
Research from mform.co.uk reveals that approx. 228,000 property owners under 25 spend more than £9,000 a year in mortgage repayments. Research also shows that 61 per cent of homeowners aged 25 and under have only been on the property ladder for less than two years. One third (33 per cent) have only been on the property ladder under a year and only 29 per cent have owned a property for three years or more.
When Irish eyes are smiling...
Irish Examiner: Significant cooling’ likely in housing market as interest rates set for rise
HIGHER than expected interest rates and stamp duty uncertainty may have resulted in a fall in house prices at the start of the year, according to a new report
US data suggest difficulties mounting
FT.com: US productivity growth lowest for decade
The US economy last year recorded its lowest rate of labour productivity growth in more than a decade, with growth in output per hour worked falling behind the EU and Japan. The fall casts further doubt on the ability of the Federal Reserve to cut interest rates as the US economy slows.
An alternative to the new-build box
Make: technology in your time: A low impact woodland home
This article differs from most on here and yes the link to HPC is bit weak but I stumbled across this new-build in Wales and thought I would share it.
Monday, January 22, 2007
Parents and students hammered
BBC: Tuition fees 'may rise to £6,000'
1997: Education, Education, Education 2007: Inflation, Inflation, Inflation. Triple fees for science courses as well.
Chelsea's last affordable flat?
BBC News: 'Table-sized flat' for £170,000
A flat roughly the size of a snooker table has gone on sale for £170,000 in London's upmarket Chelsea. The former janitor's storeroom measures 11ft by 7ft and has a cupboard place for a shower and kitchenette area. Potential buyers can expect to fork out an extra £30,000 to make the room habitable as there is no lighting and it is full of rubble.
The liquidity bubble,
Marketoracle: The liquidity bubble, from real estate to bonds to stocks...
"I have never seen anything quite like what is currently going on. Market participants have lost all memory of what risk is."
Turning Point on Horizon
REUTERS: House Price Growth At Risk Of Tumble
LONDON (Reuters) - House price growth is at risk of taking a tumble after optimism in the housing market declined, according to a new report.
A few 'positives' to take from the latest Rightmove reoprt
Firstrung: Supply shortages push national average asking prices to a new record high of £222,859 - Rightmove
There's very few positives to take from the latest report from Rightmove for those waiting for that elusive first rung to come closer in reach. However, closer analysis of the Rightmove data reveals the following: The last six months have witnessed asking prices increase by only 2.3% This is a remarkable swing from the previous six months growth of 10.5% The average time on market has increased from 74 to 87 days in the past two months (roughly a 16% increase) The average properties for sale per agent has fallen from 61 to 54 (roughly a 13% decrease) The North West, Yorkshire and Humberside (-2.2%) and East Midlands all saw falls. The largest increase was Wales (2.9%) Greater London has finally slowed (0.3%)
Icesave 5.7% !!!!!!!!
Icesave: rate increase from 5.45 to 5.7%
Great yield, no decorating between tenants, safe investment, no overheads, no missed payments, zero repairs, zero maintenance, yields almost certain to increase in the very near future! Common BTL's you know it makes sence.
Housing Affordability Comparison
Demographia: 3rd Annual Demographia International Housing Affordability Survey:
Annual Demographia International Housing Affordability Survey - London rated 'severely unaffordable', but its not alone.....
Rightmove says house prices will continue to rise
This Is Money: Rate rise can't halt house prices
A study by the estate agent website Rightmove claims the average property asking price rose 0.5 per cent in the past month to £222,859. The figure is up 13.5% in the past year. Some estate agents claim to have effectively 'sold out' - leaving buyers resorting to unorthodox measures like gazumping.
House prices rise 13.5 percent (asking prices, that is)
Reuters: House prices rise 13.5 percent
Asking prices for homes rose an annual 13.5 percent this month, a Rightmove survey showed on Monday, picking up from a 13 percent increase in December and suggesting higher interest rates have not dampened demand.
Exclude energy, and inflation in December would have been 2.1%
The Independent: Why the rate rise? We haven't got a runaway economy
Mr Brown didn't cure boom and bust. Our crazy mortgage system gave him a boom that obscured the structural problems being created by the rapid expansion of the non-competitive economy. Unfortunately, by following the same monetary rules that gave us a boom, the Bank is now in danger of giving us a bust. But I'm sure it will say it's for our own good.
Bill Robinson predicts a short recession
The Independent: With wages and inflation tamed, the days of savage downturns should be over
Most economic downturns are accompanied by a fall in asset prices. Last time, it was the stock market. This time, the bellwether will be the housing market.
Sunday, January 21, 2007
Alarmingly, eight per cent of pensioners have taken to gambling
Firstrung: Forty percent of pensioners live on less than £10,000 per year
With 2007 barely weeks old, British pensioners have little to celebrate. New research from the Prudential UK highlights that the average pensioner income is currently just £12,151 a year, around £12,000 less than the average national income
Commercial property dead - well we knew that!
Sunday Times: Warning over rush into property
The Sunday Times is playing a blinder today. NB Its by far the widest read quality on a Sunday: More than half the money invested in unit trusts recently has gone into commercial property. But even the funds’ managers say their glory days are over. Investors have been warned they could be piling into commercial property just as the smart money pulls out.
Shock Horror: 'The housing market is cooling down'
Sunday Times: The housing market is cooling down
Further evidence that the housing market is beginning to cool was revealed today by the Royal Institute of Chartered Surveyors (Rics). Its surveyors reported that prices rose at their slowest pace for more four months in December and this slowdown is expected to continue as the recent interest rate increases begin to bite.
More bad sentiment for those BTLers (aw, diddums)
BTL fears mount after rate rise: Sunday Times
Buy-to-let investors are in for a rough ride. Higher interest rates mean tough times ahead for all mortgage borrowers, but buy-to-let investors are in for a rougher ride than most. (tee hee!!!) The warning signs are already there. Mortgage brokers are reporting that demand for buy-to-let property is faltering after last year’s two quarter-point rate rises and overstretched landlords are rushing for fixed-rate deals to protect themselves from further increases.
Paul's smart move
Skynews: Heather's in the money
What a nice touch! When your getting screwed by someone why not pay them off with £10m of depreciating assets at the top of the market that with soon be worth £5m ........ you screw me .... I screw you :)
It's the economy, stupid
Telegraph: It's the economy, stupid
Just when the Chancellor thought he'd finally secured the keys to Number 10, a storm of bad news arrives. Last week's inflation hike and rising interest rates are the early signs that Britain is heading for trouble – and it's all Mr Brown's fault
Saturday, January 20, 2007
Markets price in interest rates of 5.75% by June 2007
Murdoch's Times: Traders bet on rate rises after strong Christmas sales period
Another Gabriel Rozenberg article which highlights gathering economic clouds. A bunch of so called experts are pricing in 5.75% interest rates by June 2007 because of the strength of Christmas 2006 sales. I'm taking a dim view of so called experts but I feel the mood of the media is swinging towards higher interests rates. How long before reports of repossessions?
Average council tax bill £1300 in the spring?
Firstrung: Conservatives have warned that council tax bills will pass the £1,300 mark in the spring
With inflationary pressures taking their toll on living costs, both Shadow Chancellor George Osborne, and Shadow Local Government Secretary Caroline Spelman, blamed Gordon Brown for putting the big squeeze on Britain's working people. The Conservatives have warned that council tax bills will pass the £1,300 mark in the spring, just as new figures confirm that family incomes are falling in real terms.
The Hamster STRs!! Richard Hammond's a secret HPCer?
The Daily Mirror: No Home Is An Improvement
"But the thing I'm most looking forward to? Not being a homeowner for a while. Thanks to the vagaries of the housing market, we have sold but not bought, so we're living in a rented house until we do. And I can't wait. I shall be freed from having to justify my decor, the wallpaper, the carpets and the colour of the ruddy bath."
BTL's in it for capital appreciation? Average price of a new flat down 0.9%
FT: Average price of a new flat down 0.9%
The price of the average new flat in the UK has fallen 0.9 per cent in the past three years, even as the rest of the housing market has risen 31 per cent. The news will make alarming reading for the tens of thousands of investors who have bought new apartments in recent years in the hope of rapid capital growth. Whoops!
More bad news for borrowers?
This is money: Triple Whammy
More indications of possible IR rises sooner rather than later.
BTL Nightmare - Flat prices Flat over Three Years
Financial Times: Average price of a new flat down 0.9%
The price of the average new flat in the UK has fallen 0.9 per cent in the past three years, even as the rest of the housing market has risen 31 per cent. The news will make alarming reading for the tens of thousands of investors who have bought new apartments in recent years in the hope of rapid capital growth. ADVERTISEMENT The Financial Times has analysed data from the Land Registry and found a vast discrepancy in capital growth between different types of housing.
Friday, January 19, 2007
£100k house price 'normal'
The Sun: £100k house price 'normal'
THERE's no escape from the creep of house prices. Halifax are claiming today that the average house price in every county across the UK is above £100,000 for the first time.
Part 2 of Mr. Bonners Reckonong upon inflationary illusions
Daily Reckoning: New Woman, new economy,new inflation
I'm becoming quite a fan of this site!
How high will IRs have to go?
Sharecast: Bumper Christmas as retail sales jump
LONDON (SHARECAST) - Britain’s high street enjoyed a bumper Christmas according to the latest official survey putting in its best performance for more than 18 months. The Office for National Statistics said retail sales rose 1.1% in December, the biggest monthly rise since June 2005 and more than double the 0.5% rise expected.
Does the "average household" bring in £443 (net) per week?
Firstrung: Households spend on average £443 a week with transport being the highest expense - ONS
UK households spent an average of £443 a week in 2005-06. Transport was the highest category of spending, with an average spend of £62 a week. This included £23.90 on purchase of vehicles, £27.90 on the operation of personal transport (such as petrol, diesel, repairs and servicing) and £9.90 on transport services such as rail, tube and bus fares.
Net mortgage lending down sharply
Firstrung: Lower growth in net mortgage lending and continued weak consumer credit - BBA
Latest figures from the Major British Banking Groups, for December 2006, show that: Total sterling lending to the UK private sector showed a net underlying increase of £4.0bn (+0.3%) to £1,266bn. This was the weakest monthly rise in lending for over a year and compares with an underlying rise of £15.2bn in November and an average of £12.4bn over the previous six months
It's Going To Get Worse
The Mirror: IT'S GOING TO GET WORSE
TWO shock reports released yesterday are pointing to another rise in interest rates. Some economists were already predicting another rise in February and yesterday's data makes that more likely.
No county has an average price of below 100K - Halifax
Firstrung: New Halifax research shows that no county now has an average price below £100,000
This is the first year that this has been the case. In 2001, nearly two in three counties - 63 out of 101 - had an average price below £100,000. The ten counties that have delivered the highest house price growth over the past five years are all in Wales and Scotland
Inflation may take some containing
TimesOnline: Inflation fears mount as companies plan steepest price rises for a decade
Businesses are planning to cincrease prices at their fastest rate in a decade, a survey has found, in the latest sign of the heady inflationary pressures sweeping through the economy.
Thursday, January 18, 2007
Bull or Bear? Not Waving But Drowning?
BBC News: Mortgage lending 'at record high'
Mortgage lending fell 10% in Dec but was 20% up on the figures for 2005.
BBC are squeeling like piggies!
BBC: Firms 'looking to raise prices'
The number of British companies planning to push up their prices has grown at the fastest rate for almost a decade, a study has suggested. The British Chamber of Commerce said domestic sales of goods and services surged between October and December.
House price crash, where was it then? - CML
Firstrung: "The commentators who predicted a house price crash for 2006 were wrong" - CML
"The commentators who thought the housing market would crash in 2006 were wrong. Last year the market proved itself to be in robust shape and we expect it to remain so during 2007.
Housing Bubble Bloodbath (US..)
Information Clearing House: Housing Bubble Bloodbath
“The crash of the housing bubble will not be pretty. Millions of people stand to lose their homes and life savings....." A must read for those wondering if a US collapse will occur. Qu. is how will this affect the UK?!
Merv. to Crash.
The Daily Reckoning: A letter from Mervyn King
Mock 'open letter' from Merv. to crash... ."Look, I know you hate being compared with Lawson or Clarke. But last time inflation was this bad, base rates in Britain were 10.38%. Now they're barely half that price! Yes, back in Dec. 1991 we were defending the Pound, just before that Hungarian character got us thrown out of the Eurozone system. Today sterling's at near-record highs. But this won't stop the proverbial hitting the fan this year. And Mr Ash seems to be a fellow Holte Ender too!
Property investment outlook for 07
Telegraph: Where to put your property money in 2007
This article still sees property and real estate as a solid invetsment for 07, and little chance of a house price crash. With the establishment of REIT's, will property investors who otherwise would have gone into BTL be attracted to the safer investment vehicle of a REIT?
The Massive Transfer of wealth
The Daily Reckoning: The massive Transfer of Wealth
Good Daily Reckon from Bill Bonner on the folly of inflationary growth illusions, and the quickoning rate of cash flow away from Joe average and into the pockets of that top 1% of good, honest, and hardworking capitalists.
Chambers of Commerce survey justifies IR rise
Guardian: Rising prices justify interest rate hike
A survey carried out by the British Chambers of Commerce reinforces the recent CPI figures. Demand in the manufacturing sector is at a 12 year high, and a 2.5 year high in the services sector. However, the BCC chief economist urged the BOE not to raise rates again before more price information was available.
NAEA optimistic for 2007
Firstrung: First time buyers decreased from 16.4 percent - 10.4 percent in the final quarter of 2006 - NAEA
Members of the National Association of Estate Agents (NAEA) reported an encouraging end to what has been, in many areas of the country, a good year for the residential housing market as the number of those registering an interest in buying property increased, despite December being traditionally the slowest month of the year in estate agency.
Time to quit BTL?
every investor: Buy to let: should you get out while you can?
Many new investors entered the Buy-To Let market in 2003 and 2004 when they were able to borrow at little over 4%. If they have to replace a mortgage today, they will get a nasty shock: they will pay over 5% for the best deals on the market and if they want to borrow more than 80% of valuation the rate will probably be 5.5% or 6%.
Inflation leads to fall in real wages for the first time since Labour came to power
TimesOnline: Inflation leads to fall in real wages for first time since 1997
Official figures are now showing that real wages have declined for the first time since Labour came to power. The shadow chancellor George Osborne said, "Gordon Brown tries to pretend that everything is rosy in the economy, but rising prices mean that families’ real living standards are falling." Average wage rises grew by 3.6% during the period measured while RPI was at 3.9. Recent RPI sprinted ahead to 4.4% which will no doubt sqeeze the the consumer further.
US CPI up while housing starts down (again)
Bloomberg: U.S. Consumer Prices Probably Rose in December, Starts Fell
A heads up from Bloomberg to today's stats: So let's get this straight - the economy is declining and inflation is rising. OK. That must be good for stocks... NOT!
Wednesday, January 17, 2007
US housing bust goes on
New York Times: Buyers Scarce, Many Condos Are for Rent
Unsold properties pile up, prices continue to fall
Ho Ho Ho Ha Ha Ha: Interest rate cut in Aug 2005 was a MISTAKE
Inflation leap turns screw on MPC: Torygraph Online:::
The bears are gathering: First Edmund Conway and now Ambrose Evans-Pritchard. This short piece by Evans-Pritchard reports the mistakes of the past and suggests the MPC now has its work cut out. "The MPC is a highly competent body that has delivered low inflation for almost a decade, but it now has work to do to maintain that record." The piece also shows have different sectors of the population are facing vastly different inflation rates (but strangely, none of them are near the CPI - why is that then?). The article also states inflation will rise for the next 24 months if wages increases occur. Bring it on ...
Who benefits from high inflation?
Telegraph: Winners in the inflation stakes
The Telegraph looks at how inflation can improve some people's financial situations. Debtors see the real value of their debt shrink, homeowners see the value of their property soar, and people in index-linked savings accounts earn good interest.
What's your personal inflation rate?
ONS: Personal Inflation Calculator
Work out your personal rate of inflation based on your own expenditures, as opposed to the averages used in the official indexes.
Will there be another IR rise on the back of the high CPI?
Times Online: Homeowners face another rate rise after inflation reaches 15-year high
If the MPC raised IR's because they had seen the inflation figures released to the rest of the country yesterday, is it inevitable that another rate rise will take place in Feb or March? Wage settlements are not predicted to increase, and homeowners are going to come under increasing financial pressure.
Brown's reaction to inflation figures
Guardian: Chancellor plays down inflation rise
The high level of the CPI is due to the trebling of oil prices between 2003 and 2006, according to the Chancellor. 125% countries around the world have raised interest rates and experienced high inflation, with Britain's experience being less problematic than many others.
Future is bright for FTBs
Firstrung: Firstrung - the recent interest rate rises will not hinder first time buyers
"The common misconception is that a rate rise will prevent first time buyers getting onto the much fabled 'first-rung', the irony is that low interest rates and the volume of ready available cheap credit has caused prices to rise out of the reach of first time buyers. This recent rise in rates will surely help to achieve the stage where house prices can finally stop accelerating out of the reach of the many".
Further fall in UK unemployment
BBC News: Further fall in UK unemployment
Unemployment in the UK fell by 29,000 between September and November to 1.67 million, official figures have shown.
Do you plan to accept a pay cut this year?
MoneyWeek: Do you plan to accept a pay cut this year?
MoneyMorning's John Stepek examines the latest inflation figures and how they are likely to affect wage demands and next month's interest rate decision.
UK inflation set to fuel pay claims
FT.com: UK inflation set to fuel pay claims
Interesting FT article about how RPI (now at 4.4%) is expected to rise to 5% by the spring. Unions are encouraging their members to ask for 'significantly above' 4.4% in their pay negotiations. 'Widespread price rises showed inflation more entrenched in the economy than the Bank had thought possible.'
Bad news stories coming thick and fast
Daily Mail: Homeowners' triple whammy
Homebuyers were rocked by a triple dose of depressing financial news. First they were warned to brace themselves for yet another interest rate rise, the fourth in seven months. That threat came in the wake of figures showing inflation is running at its highest for 15 years. Finally, the plight of first-time buyers was painted as bleaker than ever, with a report showing they are taking on unprecedented levels of debt to secure a toehold in the market.
Tuesday, January 16, 2007
Evan Davis - sorts the mess out
BBC News: Why the sharp rise in inflation
Evan analyses. All to the good. No earth shatterings.
Credit crunch begins
Home.co.uk News: Goodbye to fixed rates
Many lenders are rushing to take fixed rate mortgage deals off the market after last week’s surprise bank rate hike. As many as 12 lenders have suspended popular fixed-rate mortgages already. Some are withdrawing their entire range.
More Bear News
MoneyWeek:::: Will the UK housing market stumble in 2007?
A Similar article to the one in the Indie. Interesting to look for parallels and differences though. I wonder what the culative effect of Bear-ish articles will be, now that they are starting to appear fashionable in the main stream press. (If one can call MoneyWeek or the Indie fashionable).
Is 2007 the year in which house prices will finally crash?
The Independant: Is 2007 the year in which house prices will finally crash?
Nobody wants to be the bearer of bad news. That may be why it is almost impossible to find a housing market expert who predicts a crash - or even a slowdown - this year.
No slowdown for NI house prices
BBC NEWS: No slowdown for NI house prices
Northern Ireland house prices continued to rise in December despite a slowdown in the United Kingdom market, according to a new housing study.
Official govt inflation release
Firstrung: Inflation figures - the highest on record
CPI annual inflation - the Government's target measure - was 3.0 per cent in December, the highest on record, and up from 2.7 per cent in November. The largest upward effect on the CPI annual rate came from transport costs. Prices of fuels and lubricants rose this year, in large part reflecting the increase in fuel duty which came into effect on 6 December
Lib Dems savage govt. financial advice initiative
Firstrung: Financial advice must be available now to halt spiralling debt - Cable
"With personal debt levels spiralling out of control, free generic financial advice is needed now. However, reports that this scheme will not be up and running until 2012 are shocking" - Vince Cable
Irish eyes smiling or wiped?
Firstrung: House prices have dropped in Ireland for first time since 2001
Ulster Bank's economist Pat McArdle said December was the second month in a row in which housing activity fell. He said it was likely that there was an outright fall in house prices in the month - the first time this has happened since late 2001.
Will the UK housing market stumble in 2007?
MoneyWeek: Will the Uk housing market stumble in 2007?
'As regular readers will know, MoneyWeek has been worried about the UK housing market for some time. So far, our fears have been unfounded. House prices - after a brief hiatus in 2005 - have continued to soar beyond even the most optimistic commentator's predictions. But despite all that, we can't just relax and join the party. And this year - for a change - it seems we're not the only ones who are starting to believe that this can't go on forever...' John Stepek looks at how the Bank of England's latest rate rise is already starting to affect homeowners - and why there's trouble ahead for buy-to-let investors.
First time buyers 'squeezed more'
BBC News: First time buyers 'squeezed more'
First-time home buyers in the UK are borrowing an average of 3.29 times their incomes, figures show.
Oooops! (he-he!)
BBC: UK inflation rate increases to 3%
The UK's rate of inflation jumped to 3% in December, according to the latest set of official figures. The rise in the Consumer Prices Index, up from a rate of 2.7% in November, was at the top end of expectations.
Inflation at an 11-year high
BBC: Inflation rate 'at 11-year high'
The MPC could quite easily be accused of dithering for way too long as inflation is now expected to hit an 11-year high.
Excess in the City: Bonus Bonanza
ITV1: Excess in the City: Bonus Bonanza
ITV1 tonight 9pm. As the City of London prepares to pay an incredible 19 billion pounds in annual bonuses to City staff, this programme reveals the lavish lifestyles of some of the traders and bankers who are part of the pay bonanza, showing how they've earned the money and how they're spending it. The programmes also explores how the payment of such bonuses affects the rest of us, through spiralling house prices and inflation, and details the new industries set up to cater for the new breed of super rich.
Excess in the City: Bonus Bonanza
ITV1: Excess in the City: Bonus Bonanza
ITV1 tonight 9pm. As the City of London prepares to pay an incredible 19 billion pounds in annual bonuses to City staff, this programme reveals the lavish lifestyles of some of the traders and bankers who are part of the pay bonanza, showing how they've earned the money and how they're spending it. The programmes also explores how the payment of such bonuses affects the rest of us, through spiralling house prices and inflation, and details the new industries set up to cater for the new breed of super rich.
The heat is on!
Telegraph: Banks withdraw fixed-rate mortgage offers
Banks and building societies pulled many fixed-rate mortgage deals off the market yesterday, denying borrowers the chance to avoid the Bank of England's next increase in interest rates.
Monday, January 15, 2007
Times reports RICS
Times Online: Housing market starts to cool as higher rates bite
Britain’s red-hot housing market slowed at its fastest pace in more than two years last month, in the first clear-cut signal that higher interest rates are at last cooling the market.
New Zealand Bubble
New Zealand Herald: NZ homes at their least affordable in 18 years
Don't know if we have covered New Zealand before but here is another article reflecting such global property trends. Will the much forcast impending downturn turn into a global phenomenon of Wall Street crash proportions.
Housing slump hits hard across the pond
Telegraph: US housing bust getting worse, warns Goldman
The US Federal Reserve will need to slash interest rates three times this year as the housing slump goes from bad to worse and the American consumer begins to buckle, Goldman Sachs has warned. "Americans have shown a complete lack of self-control. The personal savings rate is at its lowest point ever, and has actually been negative since April 2005. We believe that housing will soon become the proverbial straw that breaks the camel's back". Goldman Sachs said homeowners had treated windfall gains from rising house prices as if they were "recurring income", using home equity withdrawls to subsidize over-stretched lifestyles. This artificial boost to spending has already dropped from 7pc to 4pc of GDP over the last year, and is likely to halve again in 2007. Mortgage equity withdrawal will fall from 13pc of "discretionary household cash flow" in 2006 to 7pc this year, causing spending power to contract for the first time since the dotcom bust.
US housing bust getting worse, warns Goldman
Daily Telegraph: US housing bust getting worse, warns Goldman
American consumer begins to buckle with a complete lack of self-control, homeowners have treated windfall gains from rising house prices as if they were "recurring income", using home equity withdrawls to subsidize over-stretched lifestyles.
UK 2007?
Telegraph: US housing bust getting worse
Americans have shown a complete lack of self-control. The personal savings rate is at its lowest point ever, and has actually been negative since April 2005. "We believe that housing will soon become the proverbial 'straw that breaks the camel's back'," said David Kostin, the investment bank's US strategist.
Education, education, education.
FT.com: Promise of free financial advice for all adults
Every adult is to be offered free basic advice about financial products in a nationwide scheme to be set up within five years, the government will promise today. The Treasury reckons inability of millions of adults to get to grips with basic financial information hampers economic efficiency and entrenches poverty.
Income tax rise of 4%?
TimesOnline: Public spending 'will need income tax rise of over 4p'
A report has found that from the middle of next year income tax will have to rise by 4p on the basic rate of income tax to fund the difference between government income and its expenditure.
Why a crash has got to happen
MSN: Why house prices have got to come crashing down
Article from Chris Gilchrist - Everyinvestor.co.uk: Basically stating that housing cannot continue to oustrip earnings, FTBuyers not being able to afford to buy houses in 90% of towns, that the housing market cannot survive without a lower rung, and that BTL has replaced FTB as the lower rung in recent years but at poor returns. How raising interest rates for the 2nd time in 3months will have an effect, and how homes are much cheaper in France and Germany etc...
Balanced HPC article
Every Investor: The house price boom has got to crash
A random link that a colleague sent me, it covers with clarity a few of the angles that will be well-worn to regular visitors on this blog, including earnings vs prices, the bank of mum and dad, BTL figures not adding up, through to inflation. Looks like a balanced article in a sea of fluff.
Halifax rebut negative news
Firstrung: House prices rose by £400bn in 2006 - Halifax
For some this will make for pleasant reading, just as the market jitters begin to emerge after last weeks rate rise so HBOS publish another 'feel good release' that the Daily Mail/Express readers will lap up. In fact the comparison with the Express deserves closer investigation, similar to re-hashed 'Dianagate' articles, this release is a re-modelled version of the data HBOS published in 2006, you know the script by now...
DCLG shows average price nearing 200K
Firstrung: First time buyers see house prices rise by 8.8% year on year - DCLG
The mix-adjusted average house price in the UK in November 2006 stood at £199,467, up from £197,987 in October 2006 (not seasonally adjusted). UK annual house price inflation in November 2006 was 8.9 per cent, up from 8.6 per cent in October 2006. Annual house price inflation in London was 10.1 per cent in November 2006, down from 10.6 per cent in October 2006.
Office of National statistics personal inflation calculator
Office for National Statistics (ONS): Personal Inflation Calculator
It's aim is to try and help the punter understand his or her inflation measure. I have just completed my own measure which was marginally over 6.5%.
Dr Doom says it's time to cash up now
New Zealand Herald: Dr Doom says it's time to cash up now
Marc Faber, who predicted the US stock market crash in 1987, said global assets are poised for a "severe correction" and it's time to sell. "In the next few months, we could get a severe correction in all asset markets," Faber said in an interview with Bloomberg Television in New York.
Debt
Sky News: Worries Over Loans Begin
Households need to take action to reduce their credit card bills if they want to avoid panic setting in on so-called "Debt Day", a consumer campaigner has warned. Martin Lewis, founder of www.moneysavingexpert.com, said the time has now come when the cost of Christmas spending begins to hit home. Bills are dropping through the letterbox for the first time since the party season ended. And Mr Lewis insists that unless people review the way they intend to pay off debt, they could be looking at a lengthy period deep in the red. He pointed out that the country had now reached "Debt Day".
New website to work out personal inflation
BBC News: ONS highlights personal inflation
Members of the public can now work out their own personal inflation rate using an official government website. An online calculator will enable people to work out how their spending compares with national averages.
Sunday, January 14, 2007
Weeks news in one slice
Firstrung: First time buyers the week in focus - 14/01/07
RICS expects UK house prices to grow by 7% and affordability and accessibility for first time buyers to continue to worsen in 2007. Predicting a small slowdown from this year's 8% growth rate, RICS expects activity to remain high with demand outstripping supply...READ MORE.
An HPCer tells it like it is
Indie on Sunday: House Prices: Will your home reach for the sky or crash?
As Rolf might say, 'Can you tell who it is yet?'
McRae's analysis of IR hike
The Independent: Hamish McRae: You might grumble, but a rate rise now could soften the downturn when it comes
The MPC's rate rise may have been caused by a prospect of a consumer price index for December creeping over 3%. McRae believes this economic cycle may see interest rates of 6%, within the next year or two. He also argues that the continuing housing boom is a failure of monetary policy, and must end soon
Housing market pain not relieved by spin
CNN: Housing market pain not revealed by stats
We hear lots of stories about the pain in the US: An Indiana man writes to say he can't sell his house even asking less for it than he paid - four years ago. A Duluth, Minnesota, writes, "The housing market is brutal, has been for months. Prices dropping at least $20,000, some as high as $60,000 just to get them sold. Most aren't selling even with the drop."
Buy To Let Nab Majority of Homes
Guardian: Buy-to-lets nab London's homes
More than two thirds of new homes in London are sold to buy-to-let investors, increasing fears that the property market's rise - which is squeezing out first-time buyers - is being fuelled by speculators.
Global house price inflation slowing
Firstrung: The global property boom is slowing but will a bust follow?
Global house prices continued to rise rapidly in 2006, but at a slower pace than in 2005. Northern Europe leads the house price boom. Northern European countries saw the highest house price rises in 2006, among the 40 countries monitored by the Global Property Guide (which maintains the world's single biggest collection of house price indices). Leading the charge was Estonia with an impressive 54% house price increase in 2006. This followed average dwelling price rises of 57% in 2005, and 25% in 2004.
The great 2007 HPC
MSN Money: House prices have got to come crashing down.
It can't go on like this. House prices simply cannot continue to rise faster that earnings..., say our expert. I argue that they can, if intervention to curb BTL doesn't happen.
Panic: Interest rate hike is premature, says NAEA
Free Help Advice: Panic: Interest rate hike is premature, says NAEA
The National Association of Estate Agents (NAEA) has commented that the Bank of England’s decision to increase the interest rates to 5.25% is premature and disappointing, as enough time was not given for the effect of November’s rate hike to be fully felt. The Bank of England (BoE) surprised many economists and analysts earlier this week, by increasing the bank base rate from 5% to 5.25%.
Speculators dominate the London market
Observer: Buy-to-lets nab London's homes
More than two thirds of new homes in London are sold to buy-to-let investors, increasing fears that the property market's rise - which is squeezing out first-time buyers - is being fuelled by speculators......
House prices have got to come crashing down
MSN: House prices have got to come crashing down
It can’t go on like this. House prices simply cannot continue to rise faster than earnings as they did again in 2006. First-time buyers can’t afford a home in 90% of Britain’s towns........
Saturday, January 13, 2007
Fools not being fooled
Firstrung: Consumers on a financial website survey believe the realistic inflation figure is closer to 7.4%
The Government grossly underestimates inflation figures according to new findings of an online survey by independent personal finance website Fool.co.uk. According to almost 1,500 Fool.co.uk readers, the Government's inflation figures are wrong. An overwhelming 90% of people believe that inflation in the UK is running at well above the Government's figure of 2.7%. On average consumers reckon that a more realistic figure for annual inflation is 7.4%. Over two-thirds of respondents said that in their estimation, the true rate of inflation is in the region of 4% to 9%. Worryingly, 1 in 4 people said their household inflation is more likely to be 10% to 15%!
A politicised attack of Brown's monetary policy
The Telegraph: It's Brown's fault we all have to tighten our belts
The Chancellor's excessive borrowing is the cause of Britain's £1.3 trillion debt mountain, and he is unable to recognise the true nature of inflation, claimes this article. Although this article has a degree of political bias it is hard to ignore, it makes some pertinent points about the way money supplies are being governed in this country.
Surprised lenders end fixed rate deals
The Times Online: Rates panic hits borrowers and lenders
Banks and Building Societies, taken off guard by the MPC's quarter point IR rise this week, rushed to end fixed rate mortgages and similar deals, under fears that they such cheap deals could not be supported should there be another rise in the Spring. Unsurprisingly, financial institutions were not in quite such a rush to increase the interest on their savings accounts.
The problems of generalising about the housing market
This is Money: Who to trust on house prices?
There is little consensus, even among major lenders such as Nationwide and Halifax on forecasts for house prices. They can't even agree on what the average price of a UK home is. What are the reasons for these discrepancies, and who should be trusted?
Is the cheap money supply drying up?
Times: Rates panic hits borrowers and lenders
Swap rates, the money markets that determine fixed-rate lending, jumped in response to the possibility of yet another quarter-point increase as soon as March, leaving lenders panicking that there would not be enough funding to support existing cheap deals. Andrew Hagger, of Moneyfacts, the price comparison service, said: “Lenders are panicking. We have never seen so many fixed rates being pulled so quickly. Even when a rise is expected, it usually takes a week for lenders to respond.”
Novice landlords defy rental downturn
Thisismoney.co.uk: Novice landlords defy rental downturn
Experts fear the buy-to-let investors could be buying at the peak of the housing market and warn that prices could soon fall. Most have become landlords since 2003, long after the property boom began in 1996, which means they are paying much more for each property
Friday, January 12, 2007
Benefits of IR rise
Stock Exchange: Rate rise offers some hope
First-time buyers, previously priced out of the housing market, may benefit from the Bank of England's decision to raise interest rates to 5.25 per cent, a market expert predicts.
Savings rate increased to 5.65% AER with ICICI
This is Money: ICICI savings rate up to 5.65%
The post-rate rise savings war has fired up, with Indian bank ICICI last night raising the rate on its online HiSave account to 5.65% from 5.45%, less than 12 hours after the Bank of England decision to raise rates to 5.25%.
Where were the MPC when we needed them?
The Independent: Jeremy Warner's Outlook: The Bank's been asleep on the job. Surprise of yesterday's rise shows it is awake again
Jeremy Warner assesses the reasons behind the MPC's decision to raise interest rates, and wonders why they didn't do it sooner.
Affordability crisis
Guardian: Conditions worsen for first time buyers, says RICS
The Royal Institute of Chartered Surveyors has claimed that houses are less affordable now than at any stage since 1991. 10 years ago, the average couple could service a house purchase with 25% percent of their net pay. That figure is now more like 81%.
Is house price inflation 'plateauing'?
FT.com: Growth in UK house prices stalls
The FT house price inflation index, published today, shows a year on year decrease for the first time in 15 months. December prices rose 6.8%, compared to November's 7.4%.
Place your bets for next month
The Telegraph: Scare for City as price index catches alight
It was perhaps the biggest shock ever delivered by the Bank of England since it was granted independence. But, as traders counted their losses last night after the surprise increase in interest rates, it was becoming increasingly clear that the seeds of their misery had been sown many hours before, by an apparently innocent-looking note sent to the office of Mervyn King.
Monthly house price growth appears to have reached a plateau with monthly growth of 0.6% in December
Firstrung: FT house price index shows house prices rose 6.8 percent in 2006
The latest FT House Price Index, updated with the most recent monthly data from the Land Registry, shows that house prices rose by 0.6% in December and by 6.8% over the past 12 months....
First Nazi, opps I mean Bank to raise it rates
BBC news: Nationwide first to raise rates
The Nationwide building society has become the first major lender to respond to yesterday's surprise rise in interest rates by the Bank of England.
Norwich Union Endowment Shortfall
BBC News: Norwich Union Endowment Shortfall
Nine out of ten "with-profits" endowment policies sold by the Norwich Union (NU) will probably fail to repay their customers' mortgages, it says.
Are pips squeaking?
FT.com: Rush for fixed-rate mortgages
Seconds after noon the telephones began ringing at the offices of Landlord Mortgages in Wokingham, Berkshire. Customers, learning of the Bank's decision, were rushing to remortgage."It was all a bit mad. It's difficult to handle this kind of volume. Everyone's working late," said Lee Grandin, a managing director with Landlord.
FT says HPI stalling
FT.com: Growth in house prices stalls
House price inflation has fallen for the first time in 15 months on an annual basis, suggesting that inflation in the housing market has reached a plateau, according to the FT house price index published on Friday.
Another Nail In The Coffin For UK House Prices
home.co.uk: Another Nail In The Coffin For UK House Prices
"Each turn of the screw takes the UK housing market closer to the brink and in a market hamstrung by affordability constraints there is very little room to manoeuvre." To underline the seriousness of the situation, the report draws a parallel with recent events on the other side of the pond, "The current US housing slump is a direct consequence of a series of interest rate hikes in 2005, by their central bank, in an attempt to curb inflation. A similar chain of events appears to be now unfolding in the UK."
Another Nail In The Coffin For UK House Prices
home.co.uk: Another Nail In The Coffin For UK House Prices
"Each turn of the screw takes the UK housing market closer to the brink and in a market hamstrung by affordability constraints there is very little room to manoeuvre." To underline the seriousness of the situation, the report draws a parallel with recent events on the other side of the pond, "The current US housing slump is a direct consequence of a series of interest rate hikes in 2005, by their central bank, in an attempt to curb inflation. A similar chain of events appears to be now unfolding in the UK."
HPI key to IR rise - well I never?!
Reuters: Fast house price growth lurks behind rate hike
The Bank of England is reluctant to admit it, but the surging housing market may lurk behind Thursday's shock decision to hike the cost of borrowing.
Growth in UK House Prices Stalls
Growth in UK house prices stalls: Growth in UK House Prices Stalls
House price inflation has fallen for the first time in 15 months on an annual basis, suggesting that inflation in the housing market has reached a plateau, according to the FT house price index published on Friday.
The Bank of England delivers a short sharp shock
MoneyWeek: The Bank of England delivers a short sharp shock
The Bank of England's decision to raise interest rates yeterday came as something of a surprise. But in the light of the latest inflation data, not to mention the UK's housing hysteria, the question is: will it be enough?
House price inflation? It's history in this cycle
Firstrung: Firstrung - the day house price inflation died
"It is far too early to celebrate, after all the rate rise is a defence mechanism versus the mismanagement of the economy in allowing a run on printing money to obscene levels at a time when interest rates were far too low for too long. The effect has been a rise in asset prices due to speculation, which has in turn caused misery to a generation of priced out first time buyers".
Up, up and away...
Reuters: Global interest rates locked in upward mode
An upward shift in global interest rates looked more than ever inevitable after a surprise increase by the Bank of England on Thursday and signals of more to come from the central banks of Switzerland and the euro zone.
More job losses
the register: SAS shuts EMEA HQ
Almost 300 of SAS Institute's European staff are to be disbanded this quarter, as the business intelligence and analytics company closes its EMEA HQ.
Thursday, January 11, 2007
The Guardian shocked by IR rise
Guardian: Inflation the key to Bank's surprise move
If the Bank of England took 'everyone by surprise' as this article in the Guardian claims, I would be interested to know why for the past two weeks I've been posting articles on this blog saying that the markets have already factored in a quarter point rise.
Rate rise likely to hit housing market
Guardian: Rate rise likely to hit housing market
David Bexon, head of SmartNewHomes.com, called the Bank's decision "dangerous". Presumably just as dangerous as the unnecessary, market ramping comments he's so fond of peddling....
RICS Warns Over Repossessions
BBC News: Warning over home repossessions
I guess they don't want any more rate rises. Surprise surprise. From the article: "Home repossessions could become more common if UK interest rates keep rising, the Royal Institution of Chartered Surveyors (RICS) has warned."
ECB keep rates at 3.5%
Reuters: Euro zone interest rates left unchanged
Interest rates in the Euro zone have been held at 3.5% following this month's policy meeting of the European Central Bank. There is some uncertainty among analysts as to whether Trichet will follow the Bank of England's example and raise rates further into 2007.
Is that the horizon coming?
Guardian: Norwich Union in the danger zone
A few shocks on the way for property owners, in addition to when they suddenly drop off a low fixed rate.
Telegraph's reaction to IR rises
Telegraph: Shock increase in interest rates
The Bank of England Monetary Policy Committee has reacted to inflationary pressures by raising the cost of borrowing to 5.25% in a move that was either a massive shock, or yawningly predicatble, depending on what you read.
since people are posting job losses,
the regsister: NCR cuts 650 Scottish jobs
650 jobs a'going in scotland. Pretty spectacular thought. not even the second half of Jan and the bad news is rolling in. expect blair to jump ship any day now.
Another rise seems on its way… and there may be more after that
Bloomberg: Bank of England Unexpectedly Raises Interest Rates
The Bank of England unexpectedly raised its benchmark interest rate by a quarter-point, the third increase since August, saying inflation may accelerate from the fastest in a decade.
Another 500 jobs to go in the North-East
BBC: Birds Eye plant to shed 490 jobs
Nearly 500 jobs are being cut by food producer Birds Eye with the closure of its fish foods range factory in Hull. The company has blamed "excess capacity in its supply chain, particulary fish". The fish foods range will now be produced in Bremerhaven and Lowestoft.
300 jobs to go in South Wales
MSN: Burberry under attack over 300 axed jobs
Designer clothing firm Burberry has come under attack after confirming the closure of a factory, resulting in the loss of 300 jobs. The company is moving production to China and said it will go ahead with the closure of its plant at Treorchy in South Wales.
If Stirling Falls, Inflation will Rise
MoneyWeek: Why would anyone want to buy Sterling?
Today the MPC put interest rates up 0.25%. If stirling falls, imported goods will cost more. This is a very readable piece from MoneyWeek which suggests the fall of stirling is imminent. A good quote from the article is " ... the UK economy looks uncannily like late '80s Japan Inc today...only in miniature and minus the trade surplus. " Can we recall a previous time when the £'s fall was preceeded by a fall in the US $?
Standard Life: UK property market "might be heading for a fall in a few years time"
The Scotsman: SLI launches two new property funds aimed at UK and Europe
This is an article about two new REIT-based property funds which have just been launched by Standard Life. The interesting thing is that they don't sound at all enthusiastic about the UK housing market: the fund manager says "We're not looking at the UK through rose-tinted spectacles. The UK is moving towards the end of its property cycle and returns will slow to low single-digit returns in the next two to three years." and "If we see no value in a particular country, it might be the UK, which is looking like it might be heading for a fall in a few years' time, we will come out completely".
rates up 0.25%, official press release from BOE
Firstrung: Bank of England surprises analysts by raising rates by 0.25 points to 5.25%
The Bank of England's Monetary Policy Committee today voted to raise the official Bank Rate paid on commercial bank reserves by 0.25 percentage points to 5.25%. In the United Kingdom, output continues to rise at a firm pace. Domestic demand has grown steadily and credit and broad money growth remain rapid. The international economy continues to grow strongly.
Bank increases UK rates to 5.25%
BBC: Bank increases UK rates to 5.25%
The Bank of England has raised interest rates by a quarter of a point to 5.25% in an effort to curb inflation
Remember this?
FT.com: Rise in rates this month unlikely, say economists
An old article but well worth another look at in the circumstances. I wonder who the one in 50 was that got it right?
Bank raises interest rates to 5.25%
BBC News: Bank raises interest rates to 5.25%
BoE raised UK interest rates to 5.25% in effort to curb rising inflation.
Bank increases UK rates to 5.25%
BBC News: Bank increases UK rates to 5.25%
The Bank of England has raised interest rates by a quarter of a point to 5.25% in an effort to curb inflation.
Interest Rate Rise
This is Money.co.uk: Bank shocks with rate rise
Borrowers' bills will be going up sooner than expected after the Bank of England today surprised commentators and the City with a quarter-point bank rate rise to 5.25%.
The BOE have teeth?
BBC News: Bank increases UK rates to 5.25%
The almost unthinkable has happened and rates have moved to 5.25%. This makes the CPI reading from next Tuesday even more interesting. http://news.bbc.co.uk/1/hi/business/6251963.stm
Up Quarter Point
Guardian This Morning
Guardian Online (this morning): World 'inadequately' prepared for shocks
A series of intensifying global risks from climate change to tumbling house prices pose a mounting threat to the longest period of sustained growth in the world economy since the 1960s, according to a report released today.
Sabre-rattling from RICS
BBC News: Warning over home repossessions
Home repossessions could become more common if UK interest rates rise this year, the Royal Institution of Chartered Surveyors (RICS) has warned. Ho hum, just in time for the MPC meeting...
Sabre-rattling from RICS
BBC News: Warning over home repossessions
Home repossessions could become more common if UK interest rates rise this year, the Royal Institution of Chartered Surveyors (RICS) has warned. Ho hum, just in time for the MPC meeting...
Building less houses = higher prices, really?
Firstrung: Household growth will lead to housing shortage and higher house prices - CIH
If new figures on household growth are accurate, we are heading for a housing shortage and even higher prices unless we build significantly more houses, writes Steve Wilcox, from the University of York, in the latest UK Housing Review 2006/7.
Consumer confidence lowest since 1983
Firstrung: Consumer confidence has fallen to a new low - Nationwide
Confidence Indices have fallen for the second consecutive month. People are particularly pessimistic about the prospects for the economy and employment in the first 6 months of 2007 and overall confidence has fallen 15 points in two months and is now back at its low point of 83....
Wednesday, January 10, 2007
The real UK "Miracle Economy"
Credit Action: UK Debt Statistics - January
Published last week, but makes some incredibly scary reading. Just a few highlights ... Average household debt in the UK is ~ £8,765 (excluding mortgages) and £52,811 including mortgages. 1.4 million adults in over £10k of unsecured debt, report that they are ‘quite likely’, ‘likely’ or ‘certain’ to declare themselves bankrupt or take out an IVA. Half the population (52%) could survive financially for just 17 days, should they suffer an unexpected loss of income. 32% of mortgages taken out by home movers in October 2006 were “interest only” mortgages ... AND YET .... the CML said 2007 will be a record year with an extraordinary £360 billion borrowed in mortgages.
Households face financial squueze in 2007
Manchester Evening News: Brits braced for a pounding
As Eastern European immigrants continue to keep the supply of labour high, wages are unlikely to keep up with the increasingly high cost of living. Allied to a potential increase in interest rates this month, people may find themselves with significantly less cash in their pockets at the end of the month.
House Prices to Double
houseladder.co.uk: House prices to double by 2030 says broker
House prices in the UK are set to double between now and 2030, financial broker Tradition Financial Services (TFS) has claimed
HBOS predicts savings to exceed 1 trillion in 2007
Guardian Unlimited: Savings set to peak as Britons shun extra debt
Martin Ellis, Chief economist at HBOS predicts that people will be saving 6.2% of their disposable income this year, and house prices will only increase by 4%. He claims that "Households are rediscovering the savings habit".
The party is over but BTLers are buy-and-holders
Telegraph: New buy-to-let investors face profit crunch
"The booming buy-to-let market continues to attract inexperienced investors despite the rental yields available to new landlords slumping to a five-year low." Nothing we've haven't read here before (double negatives, ouch!) other than that "only about one in 50 said they would sell if house prices were to fall." Given the boundless enthusiasm in this sector it doesn't look like the often touted "rush for the exits" is going to happen anytime soon.
Tuesday, January 9, 2007
BBC: "price of a loaf of bread"
BBC Online: Why is the price of bread important?
Anodyne and content-free, though it does point out the price of bread should affect the CPI. Some reader comments are stinging - more headline material than the article itself!
FSA ask for improvement in mortgage advice
Firstrung: FSA says firms need to improve mortgage advice processes
The Financial Services Authority (FSA) today called on firms giving mortgage advice to improve their processes after new findings showed that only one third of the firms it sampled had robust processes in place to provide customers with suitable advice...The Financial Services Authority (FSA) today called on firms giving mortgage advice to improve their processes after new findings showed that only one third of the firms it sampled had robust processes in place to provide customers with suitable advice.
Buy to let 'rules' ripped up
Firstrung: Buy to let mortgage gauntlet thrown down by GMAC-RFC
GMAC-RFC has unveiled a new buy-to-let tracker that it predicts will force other lenders to compete, or risk losing market share. The lending giant has launched the product in response to the widening gap between purchase prices and achievable rents, which GMAC-RFC says is increasingly becoming a problem for landlords. The buy-to-let product offers investors a lower rate of interest than competitors and existing products in the market, and requires 27% less rental income enabling the landlord to purchase or remortgage more properties with GMAC-RFC.
Monday, January 8, 2007
Is it starting to go?????
FT.com: Property agent calls top of house market
A leading estate agent has called the top of the property market, claiming an influx of sellers "motivated by greed" is increasing the supply of homes for sale and creating a vicious circle that will send prices lower in 2007.
I just wanted to post this article for this wonderful quote,
FT: Just a note to say: can I buy your house?
"On the other hand, leafleters may be wise to try and bypass estate agents, who only act in the seller’s interest, not the buyer’s."
Prices not 'chickening' out in Kiev! Groan...I'll get my own coat
Firstrung: Kiev property - "House price bubble? Of course it's a bubble! Who is buying these places?" - Moneyweek
One estate agent in the BBC piece says that she bought a flat for $30,000 three years ago, and it's now worth "up to $200,000". Well, she would say that wouldn't she? She's trying to sell flats to naïve foreign investors who think that they too will be able to make seven times their money in three years. My initial reaction is, that if the average salary in the region is $2,400, then why hasn't she sold her great investment flat and retired? It's these kind of stories that show the unsustainable hysteria that lies beneath the global property boom. When you hear of properties in Kiev going for 100 times average earnings, that's when you start to think about the triple-digit p/es of the dotcom bubble era.
2007 - Year of the Brown?
Times Online: Can Brown bring feelgood factor?
Will the transistion of Gordon Brown to the seat of power be smoothed by favourable economic conditions? Despite seemingly sustainable high levels of growth in the economy, the national is hardly eurphoric, as the tax bill is higher than ever, leaving us with less money in our pockets at the end of the month.
49 out of 50 economists say no IR rise in January
FT.com: Rise in rates this month unlikely, say economists
In a poll conducted by Reuters, only one out of fifty economists believe the Monetary Policy Commitee will raise interest rates above 5% when their meeting ends on Thursday. This conflicts with the financial markets view, which have already priced in a quater point increase.
Recommended - The argument for a land value tax
The Guardian: A land tax is 200 years overdue
Ashley Seager assesses the socio-economic impact of sustained house price increases. He argues that this reinforces the idea of an 'underclass' as they are unable to take advantage of this mechanism to create wealth. As land increases in value, therefore, these gains should be taxed, which will enable the government to reduce council tax or VAT, and discourage speculation from property developers.
Cowboys regulating cowboys
TimesOnline: Self-appointed debt watchdog under fire
A cowboy organisation declares itself regulator for the booming IVA market. I would find it difficult to make this up. One nurse from Sheffield, £50,000 in debt, accused a named firm of taking a £500 fee she could ill afford just to refer her to another firm. A Merseyside manager £93,000 in debt said she felt “let down and ripped off” after paying out a non-refundable £1,566 and failing to get an IVA.
Pay deals show true inflation
BBC News: Pay settlements 'on the increase'
New pay deals are increasing because of pressure from rising inflation, a survey has suggested. Incomes Data Services (IDS) said its first snapshot survey of the year put wage settlements at about 4%, up from 3% in the last three months of 2006.
Sunday, January 7, 2007
New car registrations drop
ABC Money: New car registrations in Britain drop in December
New car registrations in the U.K. slump 14.7 per cent in December compared with December of 2005, various excuses are given which down hold water when the rest of the article is read. Is everyone mewed out, can't wait for January's figures as new car sales are always a good indication of how flush people feel.
Good explanation of why HPI is rising
The Telegraph: Supply and demand keeps house prices bubbling away
Wrong measure of affordability and demand exceeding supply are reasons for no crash yet.
banks are fanning the housing market
The Telegraph: Do you know who owns your mortgage?
The housing boom needs a ready stream of cheap credit – and the banks are increasingly selling mortgage-backed bonds to supply it, says Iain Dey
The great mortgage securitisation boom. A scandal in the making?l
Sunday Telegraph: Do you know who owns your mortgage?
underpinning thie boom in Britain's housing market is a different, more ethereal phenomenon. Increasingly, Britain's lenders are selling off residential mortgages to the capital markets – and they are doing so by the thousand. Last year British mortgages worth more than £90bn were sold off through securitisation vehicles to investors across the globe, according to Citigroup, the banking giant. The figure has almost doubled in the past 12 months.
Sunday snooze: Lessons from the past for the future
GoldSeek: Fiat Money: History Repeats Itself
Fun blog article that places paper money in a historical context and looks at the economic conditions in France before the revolution... maybe our bankers will be for the chop too (we can dream).
Russian money adds to house price increases
Sunday Telegraph: UK's remote counties face a Russian invasion
They already own some of Britain's biggest football clubs and swathes of west London's most desirable properties. But now it seems that wealthy Russians think nothing of spending millions of pounds on holiday homes in some of the country's most remote and beautiful regions.
Food price inflation rising fast
Observer: On the breadline: Britons to pay £1 a loaf... and rising
Gerard Lyons, chief economist at the Standard Chartered Bank, said the rising cost of wheat, as well as corn, sugar and soya beans, could help raise the inflation rate and the cost of food generally. 'Intense competition has been keeping inflation down... But those rises are adding to inflation jitters. The Bank of England has already expressed concern.'........
The Blairs about to sell up?
Firstrung: Could the Blairs net £1 mil profit selling their Connaught Square investment?
Interesting article courtesy of This is London, however, the Blairs bought number 29, No. 27 sold for £3.25mil 5 months ago according to houseprices.co.uk. Now here's a thing, the Blairs' purchase does not show on the Land Registry database. Can anyone else visualise various New Labour mandarins busily crafting this latest piece of spin in order to help the Blairs vacate their disastrous investment without leaving too much egg on their faces? Expect to see a sale in the summer at an undisclosed price...
Saturday, January 6, 2007
Top estate agent predicts downturn for house prices
FT.com: Property agent calls top of house market
Henry Pryor, whose website prime-move.co.uk lists 800,000 properties, has predicted that the 4th quarter of 2006 will be the peak of the housing market. Motivated by high prices, people are taking the opportunity to 'cash in their chips', increased the supply of empty housing stock.
Inflationary concerns for the Fed
Times Online: Booming growth in American jobs raises new inflation fears
167,000 jobs were created in the US in December, more than at any point throughout 2007. This has increased fears that inflation will rise and an interest rate rise will become inevitable. The Dow Jones fell 90 points on this uncertainty.
Land registry figures for November
Yorkshire Post: House prices still rising
Figures just released by the Land Registry show a 0.6% increase in house prices during November. This is a smaller month on month increase than throughout the rest of the year. There is significant regional variation within these stats, such as the 2% increase experienced in the Midlands, and the 1% decrease experienced in Yorkshire and London.
Halifax figures show house prices decrease in December
Telegraph: House prices decline in December
Figures from the Halifax show a 1% month on month decrease (yes, that's right, decrease) in the average house price. Analysts are reluctant to see this as a clear indication that the housing market is starting to slow, although allied with the figures concerning affordability released this week, they could prove prophetic.
Agent swimming against the tide
Firstrung: Take a bow Henry Pryor - Primemove.com's charasmatic C.E.O.
Henry has caused quite a stir this week, and justifiably so. How dare he swim against the tide in the mainstream media and actually suggest that all is not well in a housing market that needs eight times average income to afford the average property...Nice work Henry, when the tide finally goes out on house price inflation Firstrung tip Henry's words this week to become quite prophetic ...
Without parental help FTBs would be extinct
Firstrung: First time buyers aided by four million parents to climb onto the 'first-rung'
The average house price in the UK in October 2006 for first time buyers now stands at £153,083 which is an annual increase of 8.5%. First-time buyer income multiples in October were 3.27 times the average income, according to the Council of Mortgage Lenders (CML). The average new mortgage for first time buyers has now reached £111,465. The average age of a first-time buyer is 29.
Friday, January 5, 2007
Firstrung Reports House price crash predicted within 18 months
Firstrung.co.uk: House price crash predicted by 24% of UK adults within 18 months
The first cracks in Britain's personal debt laden economy were revealed today as debt solutions consultancy, Thomas Charles announced a widespread lack of faith in the stability of the UK housing market.
Soft landing for US economy
FT.com: Fears of US slowdown recede
US Employers created 167,000 jobs in December, the most of 2006, allaying fears of a receding US economy and strengthening the dollar. The figures suggest the Fed will be unlikely to reduce interest rates next month.
Blancheflower - Immigrants keep down wage inflation
The Herald: Immigrant labour ‘good for economy’
David Blancheflower, the US based academic who sits on the bank of England's Monetary Policy Committee, has published a paper arguing that immigrants are good for the UK economy and are vital to keeping down wage and price inflation.
'Rude health' of housing market and growth in service sector makes IR rise inevitable
Scotsman: Strong data supports case for Feb rate hike
The financial markets have already priced in a interest rate rise to 5.25% in February, according to this Reuters item. This will take interets rates to their highest level since 2001
Inflation figure questioned
Daily Telegraph: Official: Inflation Figure isn't trusted
The govt's top statistician admits inflation figures are not widely believed. More evidence of an underlying shift in opinion.
Relying on an immigrant worforce to pay that BTL mortgage? Think again
Firstrung: The impact of recent migration from Eastern Europe on the UK economy
Plenty of myths exploded in this piece of research, particularly in relation to the overall impact migrant workers have on the UK economy...
Is the 1% fall a surprise? Or well timed?
Firstrung: Halifax stun market showing one percent fall in house prices in December 2006
Yeah but no but..."The number of people in employment continues to rise with a 216,000 increase over the past year to a record 29.0 million in the three months to October, according to the ONS. The number of people in full-time employment, however, fell by 93,000 between the three months to July and the following quarter, suggesting a possible weakening in labour market conditions."...and readers wonder why some don't tae these surveys seriously..
Office of Notional Statistics Reality Check
Indy Online: Website will allow you to calculate your own personal rate of inflation
The Office for National Statistics (ONS), a Treasury agency, will later this month unveil an online "personal calculator" that will allow people to see if their own inflation is higher or lower than the national average. Nothing here is new but the interest is within the ONS' comments. Given it is an online database, the ONS could capture and average the personal inflation rate of everyone who uses it. I wonder if they will - and if so, will they publish the results?
Oh no...
TimesOnline: Shock December house price dip
Perversely I don't really want prices to drop anymore - I want them to keep going until they suffocate in the rareified atmosphere (along with the army of amateur landlords). Halifax today reported that house prices fell by 1 per cent in December. The bank's chief economist Martin Ellis said the fall could be an early sign of market slowdown. "This could be a first indication that the interest rate rises we've seen have had an effect," he said
1% House Price Fall - Halifax Report
Guardian Online (this morning): Surprise Drop in House Prices
Halifax prices posted a 1% drop last month
House prices fall
Guardian: House prices fall
Halifax said that house prices actually fell last month by 1%, the first decline since June last year
House prices fall 1% in December
Reuters: House prices fall 1% in December
House prices fell 1.0 percent last month, taking the annual rate to 9.9 percent, a Halifax survey showed on Friday. Last month the Halifax said prices rose 1.7 percent in November for an annual three-month rate of 9.6 percent. The nation's largest mortgage lender said the cost of an average home fell to 186,035 pounds in December.
NHS scandal as 37,000 jobs go
Daily Express: NHS scandal as 37,000 jobs go
37000 Jobs are predicted to be lost in the NHS this year as the Government desperately seeks to lower the NHS wages bill with a 2.7 per cent cut in the workforce.
Thursday, January 4, 2007
£9.8bn lent in mortgages in Nov !!
BBC News: Mortgage deals near 3-year high
UK mortgage approvals have climbed to their highest level in almost 3 years, BoE figures show.
Big Boom or a Potential Big Bust?
FT.com: Boom for UK service sector jobs
UK service sector highest pace growth in 2006 since 1997. A celebration or a crisis - esp. if there's a Global slowdown?
Property Investment Funds
FT.com: Investors urged to diversify away from property
"Property funds look set to become one of the most favoured destinations for investors’ money in 2007 following a bumper year in 2006, financial advisers predict." From a few days back this, but not posted. Note the bit about Japanese equities down at the bottom: "In the same poll last January, scores of fund managers predicted the performance of the equity market in Japan would surpass that of all other parts of the world. " However...
Changing tide: Property price panic
Daily Mail: Property price panic
I don't trust the Mail or EA's, but the sentiment of the article looks promising: "The first signs of panic in the property market were reported today by a leading estate agent. Henry Pryor, founder of one of the UK's biggest property websites, says a rush of sellers among home owners who believe the boom has passed its peak is threatening to produce a glut that will push prices down."
Nationwide quarterly report
Firstrung: House price growth accelerates across all UK regions in final quarter - Nationwide
Commenting on the figures Fionnuala Earley, Nationwide's Group Economist, said: "Stronger house price growth across the whole of the UK pushed the annual rate of house price inflation in the UK up to 9.3% in Q4 2006. This represents a £40 increase per day and pushed the price of a typical house up to £172,065. The top three performers in the final quarter of the year were Northern Ireland, Scotland and London, but even the relatively weaker regions in the Midlands and North have seen a strong pick up in house price inflation this quarter.
Inflation rising, output falling. Looks like stagflation.
BBC News: Fed hints at future rate increase
In a statement accompanying its rates decision last month, the Fed left the door open for further rises to rein in inflation should it be needed. "Several members judged that the subdued tone of some incoming indicators meant that the downside risks to economic growth in the near term had increased a little and become a bit more broadly based than previously thought," minutes of the meeting showed. "Nonetheless, all members agreed that the risk that inflation would fail to moderate as desired remained the predominant concern."
Wednesday, January 3, 2007
There will be less spending, but a healthy economy, in 2007
Yorkshire Post: Confident outlook for conditions in the year ahead
2007 will see reduced consumer spending due to relatively high (and possibly increasing) interest rates and high energy costs. This will bring inflation back to expected levels by the middle of the year. However, the UK will sustain economic growth due to a growing labour force.
A reduction in house prices is likely in the coming years
Telegraph: Overvalued house prices threaten crash
Morgan Stanley and PriceWaterhouseCoopers says there is a good chance house prices will reduce sharply as homes become increasingly less affordable for first time buyers.
Music Zone enters administration
BBC News: Music Zone enters administration
CD and DVD retailer Music Zone has gone into administration.
Recognition of the state of the UK's economy.
Brown 'faces worst mess for decades': Telegraph Online
Ha Ha Ha. Brown's pigeons are coming home to roost. Professor Smith, who chairs the independent Shadow Monetary Policy Committee and was formerly chief economist at Williams de Broe, believes IRs could be 6.25% by 2008. Ho Ho Ho. Hah Hah Hah.
First time buyer plan from the 'Landed Gentry'
Firstrung: They have a dream, Tories hope to help first time buyers and bring down the barriers to home ownership
Was it just the Firstrung team that were slow to spot the obvious similarities between David Cameron and Martin Luther King in their life long persuit for social justice and civil rights...? What follows is a party political broadcast from the Conservative party
Property shortage, what property shortgage?
Firstrung: At least 700,000 vacant dwellings in the UK each year since 2001
The Firstrung team missed this item in the 'Xmas rush' on news, however, it's worth noting now the objections raised by the Lib Dems in relation to the vast swathes of vacant housing in the U.K. Property shortage, what property shortage?
Debt chickens come home to roost
BBC News: Insolvency risk from festive debt
Overspending over the festive period will force 10,000 people to declare themselves insolvent in the next few months, say accountants Grant Thornton. The firm predicts that before April, there will be 30,000 personal insolvencies in the UK. It blames the increasing trend on greater borrowing and spending, higher interest rates and big utility bills.....
Tuesday, January 2, 2007
Tory Peasant Plan to Help FTBs
Telegraph: Tory plan 'can give new hope to first-time buyers'
The Conservatives will unveil an affordable housing scheme today which borrows from the ideas of the Levellers, the C17th English socialists, and Martin Luther King.
South West popular destination for UK migrants
The Telegraph: Heading South West for the good life
Research by the Halifax shows that the South West has received the largest net migration over the last 10 years, boosting its population by 300,000. This has helped to push house prices ever higher.
Housing Affordability Crisis
Guardian: House prices 'in danger zone'
A Lombard Street Research study suggests that homes are at their most overvalued since the crisis of the early 90s. The UK Housing Affordability Index, is at 94.3 (against a post 1962 average of 100), the lowest since 1991.
Guardian's coverage of land registry figures
Guardian: House prices growth cools
House price growth at current levels is sustainable - despite a slight drop towards the end of 06. Prices in London dropped .6%, and 1.5% in Yorkshire and Humber.
Bearish news from BBC?
BBC News: House price growth 'easing off'
The rise in house prices eased off towards the end of 2006, says the Land Registry for England and Wales.
Houses Most Overvalued in 15 Years
This is Money: Houses Most Overvalued in 15 Years
Obvious really but afordability is down.. and Mervyn King, the Bank of England's governor, said last May: 'Relative to average earnings or incomes, or anything else you could look at, house prices do seem remarkably high.'
Gird your loins!
Telegraph: Experts on stand-by for Black Tuesday
New Year hangovers have faded and the last of the Christmas turkey has been dispatched. But the true cost of this year's festive battle has yet to be counted. And the reckoning begins today — "Black Tuesday". As Britain returns to work after a fortnight of excess and enforced intimacy, armies of bank managers, divorce lawyers, debt counsellors, addiction experts, life coaches and car mechanics are braced to deal with the fall-out.
Could we see a flood of 'bad news' headlines in Jan?
Telegraph: Overvalued house prices threaten crash
House prices are at their most overvalued for 15 years, new figures showed yesterday, as hard-pressed home-owners struggle to pay their mortgages. And with the gloomy prospect of a record tax burden and unprecedented rises in household bills comes a warning that interest rates could rise by far more than expected. Morgan Stanley and PriceWaterhouseCoopers warn there is a high chance of a severe fall in house prices in the coming years A study commissioned by The Daily Telegraph shows that house prices are moving well beyond the reach of many families as the rapid growth in property values outpaces increases in incomes.
Overvalued house prices threaten crash
Telegraph: Overvalued house prices threaten crash
Overvalued house prices threaten crash By Edmund Conway, Economics Editor Last Updated: 2:25am GMT 02/01/2007 Comment on this story Read comments House prices are at their most overvalued for 15 years, new figures showed yesterday, as hard-pressed home-owners struggle to pay their mortgages. And with the gloomy prospect of a record tax burden and unprecedented rises in household bills comes a warning that interest rates could rise by far more than expected. Morgan Stanley and PriceWaterhouseCoopers warn there is a high chance of a severe fall in house prices in the coming years A study commissioned by The Daily Telegraph shows that house prices are moving well beyond the reach of many families as the rapid growth in property values outpaces increases in incomes. The Daily Telegraph/Lombard Street Research Housing Affordability Index shows that they are more overvalued than at any time since 1991 — when prices were plunging after the last major slide
Hard times ahead for the UK economy
Daily Telegraph: Prospects for 2007
Mark Berrisford-Smith, Senior economist, HSBC: Consumers are coming under pressure from rising unemployment, higher taxation, the surge in fuel bills and the ever-growing mountain of debt. Households now owe more than £1.2 trillion, double the level of six years ago, and a fifth more than in 2003 when the Bank of England last tightened the interest rate screw. Under these circumstances, even the two rate rises of recent months will be enough to sap people's appetite for spending. Further interest rate rises cannot be ruled out......
The End is Nigh
Edmond Conway: The Telegraph
The great property boom is heading for the gallows, its face looks disbelieving and confused - almost detached from reality. But when the trap doors open with a deafening clatter there is only one direction it can go and this dictator of greed will never raise its ugly head again - atleast not until all memory is raised.10 years?
Monday, January 1, 2007
Business Failures Up 10.7% in 06
Experian: Predictions for rising insolvency ring true
Bad news for our services industry. The largest number of failures in a single sector was in Business Services - up 24.6%
London, another record breaking year?
Firstrung: Will London house prices will continue to go 'through the roof' in 2007?
As Britain continues to attract major foreign investment - including for takeover of British companies by overseas investors - new millionaires from India, China and other parts of the world are driving property prices in London.
Were house prices static in 2006?
Firstrung: How much did house prices rise by in 2006?
Unashamedly Firstrung have always suggested keeping a 'weather-eye' on: Land Reg figures, Home.co.uk and Hometrack. Not because these organisations are lower in their calculation of the real house price inflation the UK has experienced over the past twelve months, moreover due to their method of calculation which is altogether more realistic than perhaps Halifax, Nationwide and Rightmove.
The South East was the most popular destination for people to move to with 2.25 million arrivals
Firstrung: South west gets biggest boost from internal migration over past decade
New research from Halifax shows that the South West has recorded the largest net gain from internal migration of any of the UK's 12 regions over the past ten years. Over 300,000 more people have moved to the South West from elsewhere in the UK than have left to live in another region, boosting the region's population by 6%