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.