AUSTRALIAN: Other funds face losses: Absolute

THE general manager of Absolute Capital's suspended investment funds yesterday warned that there were managers of other funds who were not admitting their losses from the US sub-prime mortgage crisis to investors.

Motley Fool: Five Dangerous Homebuying mistakes

I'm the Fool's property bear. I've been fretting about rising property prices since 2003, and I sold my house to move into rented accommodation two years ago.As you'd expect, I've taken a lot of stick from people who have seen their wealth rise thanks to UK property's long winning streak. For the record, I strongly believe that now is a truly terrible time to buy property. My view is backed by two leading economic forecasters. The Ernst & Young ITEM (Independent Treasury Economic Model) Club calculates that UK house prices are presently overvalued by up to a sixth. Today, credit-rating agency Fitch warned that UK house prices are overvalued by at least a fifth (20%). So brace yourselves, because I'm calling crash.

Channel 4 News: House prices are 'overvalued'

We all know it, they all know it and at last it seems to be seeping out to the plebs.

Independent: Buy To Let: Landlords are now making tenants play the lottery of sealed bids

Like the Americans committing suicide in their tanks headed for Bagdad, the Independent published two stories last week that are complete fiction. I tell you, i live in central London and property (both sales and rental) is totally stale on the shelves. More fictional stories in the comments

BBC News: UK housing market is 'overvalued'

Yes - we on this site know this already (for years) - but the important point is that this has now got beyond the broadsheets. Let us hope the tabloids and popular papers/sites now inform the public

bloomberg.com: Corporate Bond Risk Soars as Subprime Mortgage Losses Spread

Investors are fleeing corporate credit at the fastest pace in seven years, Barclays Capital said in a report. More than 40 companies have abandoned or reworked loan and bond sales as yield premiums on corporate bonds rose to the highest relative to U.S. Treasuries since 2003. ``It's pure fear,'' said Gary Jenkins, a partner at London- based hedge fund Synapse Investment Management, which manages $650 million of debt assets. ``It's fear of the unknown, fear of hedge funds unwinding, fear of knock-on effects of the subprime meltdown.'' BTL landlords you were warned, worldwide credit crunch = financial armageddon

AOL travel: Weird Hotels

Bored with humdrum hotels? Why not bed down in one of these peculiar properties... Low cost social housing..mmm, What do you think?

Guardian: UK housing market 'overvalued by 20%'

House prices in the UK are more than 20% higher than they should be, making the country's housing market the third most overvalued among the world's major economies. But this doesn't mean a crash is inevitable.

Guardian: UK housing market 'overvalued by 20%'

The question is not "if" the UK housing market is overvalued, everybody knows it, even the BTLers every time they buy are confident to find a greater fool to sell to. The question is "when" a correction will happen, and what type of correction that will be: sudden burst, inflation catching up?

TELEGRAPH UK: UK's house prices are second most overvalued

UK house prices are now the second most overvalued among the world's developed economies, trailing only France, according to a new survey by ratings agency Fitch. The survey shows that in all but two of the countries surveyed the ratio of house price growth to increases in incomes is above the long-term historical average

FT.com: HSBC hurt by exposure to US subprime market

Half-year profits at HSBC were hit by the bank’s exposure to the US subprime mortgage market and a $236m (£116.5m) charge for fee refunds in its UK retail banking operations.

Firstrung: Rising cost of living the number one concern

The findings reveals the top five financial concerns to be:the rising cost of living, insufficient funds for reasonable standard of living, lack of preparation for retirement, level of debt and keeping on top of financial repayments.

www.lloydstsbcorporatemarkets.com: Economics Weekly BoE and ECB to keep interest rates on hold

The Bank of England MPC is forecast to keep interest rates on hold on Thursday at 5.75%. Resistance to higher rates from three MPC members at the July meeting and the publication of the August Inflation Report suggest the MPC is likely to take stock of recent data and inflation prospects in the months ahead before deciding whether more rate increases are justified. UK data this week includes manufacturing and services PMI's which may indicate that the economy is already responding to previous rate rises and that a further hike may not be necessary.

Firstrung: Housing market transactions still lack efficiency

During 2005 and 2006, the average of number of days between notification of sale and exchange was 47 which is already 17% lower than for 2007 to date. The same data also reveals cancellations to be on the rise with well over one in ten instructions being cancelled. This represents a 4% increase since January 2007 and, if this trend continues, the market will be witnessing a 20% cancellation rate by the end of the year.

ft: Subprime woes claim first German victim

IKB Deutsche Industriebank, the German bank for industry, on Monday became one of the biggest European casualties of the fallout in the subprime mortgage market as it ousted its chief executive and issued a profit warning.

BBC News: UK housing market is 'overvalued'

UK house prices are at least 20% overvalued compared with their long term average, according to credit rating agency Fitch. Fitch, which judges how risky debt is, looked at how house prices have raced away from incomes over the past decade.

Money Week: Why the Bank should hike interest rates this week

Amid the panic last week, traders are clinging to one silver lining. At least, they think, the BoE won't raise the base interest rate to 6% this month. Not now. That doesn't mean that it shouldn't though...

/ftalphaville.: The benchmark iTraxx Crossover index, which consists of 50 mostly junk-rated credits and is an important indicator of sentiment, jumped 35bp to 435bp in early trade.

European credit derivatives markets sold off sharply on Friday morning, after steep falls overnight in US stocks and credit.

MoneyWeek: Why the Bank should hike interest rates this week

The Bank of England may be feeling extremely reluctant to pile on the pressure while the City is feeling so wobbly. But that doesn't mean it shouldn't hike the base rate to 6%, says John Stepek.

YAHOO BIZ: Tougher terms for hedge funds

Prime brokerage departments at several investment banks have raised their margin requirements for certain hedge fund clients as they seek to insure themselves against the possibility of new hedge fund collapses as a result of the recent market turmoil

Guardian: Mortgage lending grows at fastest pace for three months

With the MPC now very focus in limiting the spiralling up of debt, we can safely assume that they will care more about this type of data than a reduction in the house price inflation

FT: Signs of US subprime crisis spreading

American Home Mortgage Investment said it is delaying paying dividends on its common stock and may delay payments on its preferred shares because banks demanded it put up more cash after the Melville, New York-based mortgage lender wrote down the value of its loan and security portfolios significantly. The move represents one of the first indications that the crisis facing sub-prime mortgage lenders in the US is expanding to affect lenders like American Home Mortgage whose borrowers tend to have higher ‘prime’ ore ‘near prime’ credit ratings.

efip.co: Spain's Little Britain

The influx of British tourists and holiday homeowners in Spain is now putting investors off Spanish property according to research conductred by GE Money Home Lending. The survey found that more than eight out of ten investors were discouraged from buying a Spanish property by the volume of Brits living there. The number of retirement homes and holiday properties along the Spanish coast has spurred nicknames like Costa Geriatrica and Little Britian.

Metro: Home prices stall as rate rises bite

The Hometrack survey released today agrees with last week's Nationwide survey, showing prices rose by just 0.1% in July. The annual rate of house price inflation dropped to 5.9 per cent from 6.4 per cent in June – the third consecutive month it has fallen. Richard Donnell from Hometrack said: 'It was inevitable that the steady increase in interest rates which began last year would ultimately impact on levels of housing demand right across the market. The slowdown has been accelerated by a rise in the supply of housing for sale over recent months. 'We expect demand to remain weak over the second half of the year as the impact of higher interest rates continues to feed into the market.'

ft: Tougher lending terms for hedge funds

Prime brokerage departments at several investment banks have raised their margin requirements for certain hedge fund clients as they seek to insure themselves against the possibility of new hedge fund collapses as a result of the recent market turmoil.

ft: Denmark, UK vulnerable to house prices fall

Denmark, Britain and New Zealand are the economies most vulnerable to a fall in house prices, says a report released on Monday by Fitch Ratings.

BBC: Fears of fresh stock market falls

Sell Sell Sell!!!!!!!!

Stuff: Property will double in price in decade: marketers

Could property prices continue to double every 10 years? Investment property marketers believe so, but economists doubt it.

Times: Flood homes: prices could fall 80%

In no other country (I mean civilized country) the attention of the media could be turned so quickly from the human cost of the flooding to the repercussions on property market. Brick and mortar is a national obsession, people need mental help! On another note, this story shows the inherent fragility of the "brick and mortar", there is basically no inherent value in housing... you cant get an insurance policy? no value left! Keep investing all your pension in property, yes keep going, solid as "brick and mortar"! Just hope it does not rain!

Firstrung: Cost of living when retired is rising faster than national average

Prudential warns that the cost of living for people aged 65 and over is rising faster than the national average. Analysis of household expenditure between 2002 and 2006 reveals that on average, annual expenditure in households where the main occupant is aged 65-74 has increased by around 9 per cent as opposed to a national average of 4 per cent. The corresponding figure for households where the main occupant is aged 75 and over is 10 per cent...

Firstrung: First time buyers the week in focus - Firstrung

The most disappointing news in relation to first time buyers this past week was the data from Scottish Widows suggesting that up to 56% of graduates still havn't managed to buy their first property up to ten years after graduating. First year Graduate salaries have barely moved in ten years, (circa 20-24K), house prices as we're all to aware have increased by 300%.

CityWire: Landlords should be regulated, Law Commission proposes

"The Law Commission’s proposal requiring all buy-to-let landlords to be regulated could be the final nail in the coffin for some small landlords, already squeezed by higher interest rates and an oversupply of properties in some areas." I am not friend of red tapes and excessive regulations, but things like entrusting my landlord with a couple of grands in rent deposit, then what happens if the punter goes bankrupt? who is assumed to do credit checks? what happens if the loser gets my flat repossessed by the bank? then I lose the deposit? or not? regulating this sector is crucial. "an oversupply of properties in some areas."?? that s interesting, but I though the immigrants, the divorce rates, and all that cheap macroeconomic cr@p a la omni-loquent journalist was true! Not!

essex county standard: homes is this crisis point?

Here we go its started.I loved the comments from the estate agent "not to put them on the market at the moment because the value is not what it was" I expect to see many more articles like this over the next few years. Colchester could be about to hit a repossessions crisis,it has been claimed.Warning bells began to sound as six repossessed flats in a prestigious town centre developement were sold at auction for up to £70,000 less than buyers originally paid.

Guardian: After the deluge, Britian will be swamped by a 6bn pounds tidal wave of costs

Dearer food and negative equity for owners of homes at risk is on the way, writes Zoe Wood. Recent floods have not only added to the likelihood of food price increases, but are also likely to lower the value of houses in the flood-risk areas. Before things get worse, perhaps son-of-the-manse Gordon might like to get on his knees to seek help from a higher source!

The Independent: Cost of Borrowing Starts to Hit Home

HPI down to a miserly 10.9% so "Sputtering house price growth could be the deciding factor if, as looks likely, the Bank of England votes this week to keep interest rates on hold at 5.75 per cent."

Times: At last, good news for buyers

We’ve entered a buyer’s market,” says Lucian Cook, director of residential research at Savills, the nationwide estate agency. “It is a turnaround since the beginning of the year: three months ago, it was definitely a seller’s market. The average homeowner is going to have to take a more realistic look at the market this summer.” “For the first time in ages, buyers, especially if they are cash- and chain-free, are in a strong position.” I wonder the BTLers who bought in the past few months, how they feel now?!?

BBC News: London flooded in disaster film

Look at the picture folks. This is what will happen when the Thames barrier bursts. I think Birmingham will become the new capital in the next 50-100 years.

Gordian: Desperate to get on that ladder? Believe it or not, you could now

Interesting the government is "downplaying" the issue. Maybe they have finally come back to their senses and decided to stop funding these idiotic equity schemes. with taxpayers money. The press should stop inflating this bubble. But they are too stupid to understand.

Firstrung: Interest rate rises fail to dent buy to let confidence in the lobotomy club

At what point to buy to let players finally 'get it'? Property is no longer rising in value (other than small pockets of opportunity throughout the UK), rents are static - if not falling ironically due to the increased competition provided by buy to let investors, and buy to let interest only mortgages currently have an average 'tag' of 8.5-9% meaning for every 100K borrowed they need to achieve £850-£900 per month rent simply to stand still...Madness...

Mortgage Introducer: What the papers say

This is a very low quality article - collection of information from mortgage trade press, but a very truthful account of how the mortgage industry is screwing Britain. "5 years ago interest only mortgages accounted for 5 per cent of new mortgages, today they account for 26%. Heron asks whether borrowers, lenders and advisers are storing up problems for the future by selecting interest only payments. He says that if there were evidence of significant numbers of consumers taking interest only loans solely because they are cheaper and without considering how to repay it, there would be grounds for concern. Griffiths says: “No disrespect to John Heron...but why else would borrowers take out interest only deals? They make a larger property affordable..." PUNTERS!!

Scotsman: Plenty of life left in the buy-to-let market for those who have 'guts'

"some investors are now starting to feel a bit jittery about the possibility of the buy-to-let bubble bursting and there is a parallel worry that those thinking of getting involved in the sector may have missed the boat. Yields are not at the level they once were and some markets have been saturated"... the rest of the article is a desperate appeal to investors to keep buying BTL, like if you must do it. Some readers' comments are interesting

thisismoney.co.uk: Beware sale-and-rent back firms

A growing number of sale-and-rent back companies are targeting those struggling to the meet the cost of living in their homes. Firms offer to purchase homes at below market value and rent them back to the former owners. But the majority of companies offer no residence guarantee beyond six or 12-tenancies, leaving former homeowners at risk of eviction.

Scotsman: Plenty of life left in the buy-to-let market for those who have 'guts'

Many landlords are concerned about the effect of rising interest rates as they may increase ahead of relative income, But the managing director of Landlord Mortgages said, "Don't worry.. you should be able to increase the tenant's rent..." Checking the recommended New Town area of Edin, there seems to be a dearth of 1 bedroom flats for rent, but plenty of 2 beds ranging from 600-900. To buy one of the cheaper flats on the market would cost over 900 over 25 years at 6%. I don't understand how they can claim rent covers the mortgage!

Guardian: Graduates 'struggling to buy a home'

In a job market flooded with graduates 56% who graduated from university during the past 10 years have yet to get on to the property ladder according to Scottish Widows with 58% claiming they did not earn enough and 27% saying they could not even afford to save for a deposit.

BBC News: Graduates 'face housing struggle'

A little something for the Better Weekend Papers to mull over on Sunday as a leading UK insurer reveals that 60% of people who have graduated in the past 10 years have been unable to buy their own home.

smh: The wipeout cost investors about $41 billion and the effects will be felt immediately, as Australia has the highest percentage of private share ownership in the world

STOCK watchers fear the Australian market could be on the brink of sustained correction after concerns about the health of the US economy sent shares into one of their biggest one-day dives since the September 11 terror attacks.

smh: US mortgage debris has not fully hit Australia

Last week, Australian hedge fund operator Basis Capital hit troubles as a result of the US sub-prime mortgage meltdown and Absolute Capital temporarily suspended trading of its funds. Fears are already emerging about the sub-prime market in Australia, with the principal solicitor for the ACT Consumer Law Centre, Amy Kilpatrick, saying "I am now more of a house repossession service than I am a general credit legal service." Ms Kilpatrick said that about 70 per cent of the cases the centre sees involve non-banks, which are not regulated by the Reserve Bank of Australia or the Australian Prudential Regulation Authority.

smh: Sub-prime crisis may trigger global meltdown

A LEADING Wall Street economist has warned of a possible global financial meltdown if the problems in the US sub-prime mortgage market claim more institutional scalps. Moody's Economy.com chief economist Mark Zandi said the pre-conditions for global shock were in place and "one or two more Bear Stearns events" could have a profound psychological impact on investor confidence. Bear Stearns, the fifth-largest securities firm in the US, shocked global markets during the week when it announced that two of its mortgage investment funds previously worth about $US1.5 billion had little or no value left in them.

LandRegistry: House Price Index - June2007

"House price change in England and Wales remained positive for residential property transactions that completed in June 2007. The 0.4 per cent rate of monthly increase is slightly less than the previous month." slightly less!?... yes, it is 0.3% less than last month's growth, small difference? 0.3% less means HALF the growth of last month, dear land registry!!

BBC: US economy sees stronger growth

Not all doom and gloom. I don't understand why some of you are wishing for a crash. That helps no-one. A slowdown would be rational and helpful, but a crash would lead to pain for everyone - even some of you. How would you ever afford a house if you lost your job?

FT: Subprime coming home to roost

The US housing market is looking increasing weak with the number of unsold properties reaching its highest level since the end of the nations last housing recession in 1992. Losses in high-risk lending known as subprime could reach $100bn according to estimates by the Federal Reserve. After a subprime market wobble earlier this year traders has satisfied themselves that the "subprime" problem was contained and a sense that risk could be contained by spreading the risk ensued, boosting markets. However, as with cyclic behaviour, optimism has faded and fears of a credit crunch due to subprime problems is forcing investors to sell healthy investments to cover their losses.

LSE: Buy-to-let 'helps out millions'

Dwindling supplies of social housing have helped boost the buy-to-let sector, according to a property expert. "buy-to-let helps fill the housing gap," Mr Terrington remarked. However, the article is right in pointing out the increasing 'non-profit' nature of the BTL. Thanks landlords :))

FT: Equity turbulence follows credit market sell-off

The FTSE 100 rapidly fell 0.9 soon after opening this moring but at the time of posting this blog has rallyed, up 0.18. David Buik at Cantor said, "With uncertainty prevailing on credit, markets are likely to see levels of volatility like this for many sessions to come, until the strength of losses from sub-prime level are known and whether they are containable”. Fears about an end to the levereged buy-out boom which had boosted share prices has created turmoil due to increasing difficulty in raising funding for takeovers and buy-outs. During Thursday trading London's blue chips experienced their largest sell-off in more than four years. "Bad news has been building for months and these worries have now come to a head”, said Ronan Carr, equity strategist at Morgan Stanley.

Firstrung: The credit crunch starts to bite

John Stepek - Moneyweek. Up until last week, global stock markets had been ignoring the carnage in the credit markets. Not anymore. Yesterday the FTSE 100 had its biggest single day points fall in five years. It dived more than 200 points - wiping out all the progress made since March. The FTSE 250 had the worst points fall in its history, slumping 382. And in the US, the Dow Jones Industrial Average lost more than 300 points - plunging by up to 440 points during the session.

Homes worldside: french relocation helped by Sarkozy effect

New French president, Nicolas Sarkozy is making headway in supporting small businesses in France and helping people onto the property ladder...Nicolas has a raft of reforms that he is already putting in place to imrove the French economy and boost the 'pouvoir d'achat' (buying power). Nicolas would also like to see the number of home owners increase to match the rates in the UK. But how realistic is this French dream? The article is definitely VI, but hey, you can't blame the EAs for trying!

MoneyWeek: When 'buy and hold' simply doesn't work

Recent entrants into the BTL market say they don’t mind subsidising their tenant’s rental payments, because they’re “in it for the long-term.” But buy and hold is a flawed strategy if the asset you’re holding isn’t worth the price you paid for it. And it’s worse still if you are holding it using borrowed money. If you just sit on an overvalued asset, it’s only a matter of time before the market realises that it’s actually not worth what you paid for it, and marks it down accordingly. Then all you’re left with is a huge debt to service...

BBC: Graduates 'face housing struggle'

A groundbreaking survey by Scottish Widows suggests that graduates are finding it increasingly difficult to get onto the property ladder. Perhaps Scottish Widows should have extended their survey to anybody possessing a pulse that was trying to get onto the property ladder. Those Scottish Widows folks are sharp I tell you sharp.

FT.com: Capital projects face funding cuts

Indirectly related to houseprices, but it looks like all that PFI "hidden debt" is about to resurface, hitting capital investment.. such as a plan to build all over the green belt? The move could see the government breaking one of Mr Brown’s two cherished rules for running the economy. But the sustainable investment rule is seen as increasingly discredited and both economists and the Conservatives have been urging a rewrite – something Mr Darling could use the accounting change to achieve with minimal political damage.

BLOOMBERG: Investors flee Bank of Ireland, Allied Irish on Housing Slump

Investors are abandoning Irish stocks as rising interest rates hurt western Europe's fasting-growing economy of the pst decade.

Yorkshire Post: Breaking: Dixon calls in administrator

The company was one of the UK's biggest and most successful motor retailers, with an £800m turnover, when it was bought in 2002 by the Lombard subsidiary of Royal Bank of Scotland.

The Telegraph: World markets plunge as fears rise

"The dramatic falls also make it all but certain that the Bank of England's Monetary Policy Committee will opt to leave interest rates unchanged at its meeting next week, economists said."

More importantly is Japan's IR decision in August - will they hold off.

My guess is that stocks are heavily oversold in the short-term at least. Once stocks rally a bit then Japan may raise its IRs then. The carnage to start proper in the Autumn.

Times: AA-Saga merger under threat as banks fail to find additional underwriters

The writing was on the wall, the various Blackstone flotations, but I am surprised how quickly this is unwinding. There is a lot of hubris in private equity that tons of value can be created through financial engineering. Well, true also that there is a lot of dumb money around. All in all, I am glad some of these plugs will be pulled before irreversible damage is done. Some funds will have to return money to the investors. That's life. Better than having lost the investors' money.

BBC: UK house prices 'stall' in July

Greeting all; When my old Vauxhall Chevette used to "stall" it generally stopped and when it "stalled" going up a hill - such as UK houseprices -, it then used to roll backwards at alarming, uncontrollable rate!! Currently taking a sabbatical in South America but pop in regularly to keep up to date and read the amusing rants and opinions. Suggest the City could do with referencing this site for future economic predictions as they are slowly being uncovered as the muppets they really are... this is getting enjoyable!

BBC News: World stocks fall on rate concern

"Over the past few years there has been a boom in company profits, house price increases, and mergers and acquisitions. Driving this have been low interest rates that have made it cheap for companies and consumers to borrow cash and finance purchases."

Telegraph: Stock markets' global sell-off

The FTSE 100 had its worst day since 2002 and US stocks suffered one of their worst openings this year as concerns about sub-prime lending and an impending credit crunch hit investors' appetite for risk. The Dow Jones Industrial Average opened down 121 points at 13,684 - its second worst performance out of the gate this year. By lunchtime in New York, the index had weakened further and was down 221.20 at 13569.70

Guardian: Why would you leave a place like Wroclaw?

This is interesting reading, especially the testimonies after the article. The views and ambitions of immigrant Poles and how they see our country.

FT: MPC told to give rises time to bite

The Bank of England is in danger of raising rates too far because it is not allowing enough time for the full effect of previous rises to come though, says a respected economic think-tank. Arguing that this month’s quarter-point rate rise to 5.75 per cent “looks pretty unnecessary to us”, the National Institute of Economic and Social Research said on Thursday that some members of the Bank’s rate-setting monetary policy committee might be “overreacting”, especially if they were to vote for another rate rise this year.

FT.com: ADB warns on unwinding of carry trade

East Asia’s financial markets are vulnerable to a sudden unwinding of yen-carry trades and withdrawal of the capital that has lifted many of the region’s currencies, according to the Asian Development Bank. In its latest semi-annual report, the bank warned Thursday that political and monetary authorities in the region, which last year witnessed a record $269bn in capital inflows, needed to forge ahead with measures to prepare for a sudden reversal. The bank’s recommendations ranged from greater currency flexibility to a further liberalisation of capital outflows and tighter financial market supervision.

Prime Location: House for sale

Ah, if only.... does this mean the housing crash is now well and truly here at long last? (You would need to register to see the full details of this house unfortunately, but to put it in a nutshell, primelocation has a house in Exeter listed for sale for £675. Sadly I think they've put it under the wrong part of the site, ie for sale rather than to rent, but never mind, I can dream!

Reuters: Sterling slips on signs UK housing mkt slowing

Sterling fell against the dollar and the euro on Thursday after a series of soft UK housing figures.

BBC: Debt crisis hits Chrysler buyout

The recent volatility in global debt markets has thrown the funding for the buyout of Chrysler into disarray. Banks have failed to find buyers of loans worth $12bn (£5.8bn) to help Cerberus Capital Management buy DaimlerChrysler's loss-making US arm.

YahooFinance: B&B shares

B&B down 3.6% after claiming that BTL is in rude health. Northern Rock down a staggering 4.8% and HBOS down 2.51%

Bloomberg: Yen Advances After Equity Declines Prompt Carry Trade Unwinding

The yen rose against all 16 of the most actively traded currencies as global equities fell and traders bought back yen used to finance investments in other countries.

Bloomberg: U.S. Stocks Decline on Credit Concerns; Exxon, Builders Fall

U.S. stocks tumbled as concern about loan defaults increased, investors balked at funding takeovers and companies including Exxon Mobil Corp. reported earnings that missed analysts' estimates.

Yahoo: Land Securities £253m shopping centre sale

Now it may be a purely good business reason to sell, but could they know something we don't and want to offload this? Before the SH** hits the fan?

FT.com: House price rises slow to 15-month low

"House price growth stalled in July, bringing annual price growth down to single digits and resuming an underlying downward trend..." So, if prices rose only 0.1% this month, and the growth rate is resuming it's downward trend, that means that next month we will get what? Correct, 'negative price growth'...

Independent Ireland: House prices plummet by up to €10,000 every month

The value of average priced homes in some areas of the country is plummeting by €10,000 each month. Estate agents last night confirmed that - despite recent concessions for first time buyers - there has been an alarming drop in house and apartment prices across the country over the past three months.

Bloomberg: Home Craze Gazumps London With Record Prices, $500,000 Parking

The decade-long leap in prices has made London the most expensive city in the world for high-end homes -- costlier per square foot than Monaco, New York, Hong Kong or Tokyo.

Times: Hardliner is prepared to be unpopular

“I think we have done the right thing. We have been raising rates against a backdrop that repeatedly justifies what we have been doing.”

BBC: B&B upbeat on buy-to-let outlook

The UK's biggest lender to the BTL sector Bradford & Bingley believe the BTL sector will outperform the broader mortgage market in the second half of the year. The bank said, "continue to outperform the mainstream market in the second half and beyond, as the supporting demographics continue to drive demand over the medium-term".

Mail: Fixed rate savings nudging 7%

... and bad news for borrowers

Firstrung: Mortgage approvals for house purchase down 11% compared to 2006

"Although the trend in net mortgage lending is being maintained, approval numbers for house purchase are well down on this time last year, suggesting that market demand may be reacting to higher mortgage costs. Spending on credit cards was lower than at the same time last year, reflecting weaker retail sales but the reducing appetite for unsecured borrowing continues the pattern seen over the last two years."

The Telegraph: Bank risks 'overkill' after house prices stall

Prices edged up just 0.1pc this month, down from 1.1pc in June

CNN: Prime borrowers catching subprime ills

second lien loans are bieng cut back. buyers who originally paid over the odds for the house are stuck with aproblem are are starting to default on second lien taken out to make up difference.

BBC: Today Programme

For anyone who missed it, at 6:15 this morning, (half way through this clip) there was an excellent interview on the Today programme where the speaker set out the developing credit crunch. The important point is that banks can't sett their loans to the markets. If they can't sell the loans uickly, it slows down the cycle of "rinse and repeat", where they keep loaning out the same money again and again. That makes it harder for people to get mortgages, which is likely to weigh on the market. Caveat on this link as I can't get in to work here and I know the BBC have been having issues with their listen again.

The Times: House prices show significant slowdown

House prices have grown just 0.1 per cent this month, their slowest growth rate for 15 months and the latest evidence the market has stalled, according to the number-one building society lender the Nationwide. Steep rises in utility prices have also stretched household finances. Nationwide has been predicting that over the full year house prices could rise by as little as 5 per cent.

Every Investor: Better to rent your home than to buy it?

OK, there is no sign of a housing crash in the UK at present, but the simple fact is that house prices cannot continue to rise faster than earnings indefinitely. buying a property should be an investment decision based on a careful assessment of both the rewards and the risks. In many areas and for many types of property, buying will still work out cheaper than renting, and this is especially true for family houses outside Greater London. But for flats aimed at first-time buyers, the numbers will often point to renting as the sounder financial decision.

BBC "News": "US growth outweighs housing slump"

This is the metaphorical equivalent of putting icing on a dump and then polishing it to a high shin and calling it gold. The BBC gives it a cheery enough title but when you read the short article (which thankfully the journalism graduate editor didn't have the balls to try to post on the front page), it smells really really bad. "It reported that consumer prices had been growing at a moderate rate as oil and gasoline prices rose. The report said that businesses were having mixed success in passing on their higher costs to consumers." Ouch. That's bad.

BBC News: UK house prices 'stall' in July

House price growth in the UK "stalled" during July, suggesting that higher interest rates are starting to bite, the Nationwide has said.

FoxNews: Burtsting the housing bubble (webcast)

Is the housing boom like the dot.com bubble? Yes, just make it burst and go on with life (and get rid of BTLers)

smh: Sydney hedge fund freezes withdrawals to prevent run

SYDNEY hedge fund Absolute Capital has frozen investor redemptions from its $210 million Yield Strategies fund, blaming debt markets that have "ceased to operate normally".The move follows estimates the fund would fall in value by up to 6 per cent in July, following widespread re-pricing of sub-investment grade debt.The market value of these debts has been hit hard, following credit rating downgrades related to defaults from the US sub-prime home loan markets.

Stuff.co.nz: NZ lifts rates again

The relentless rise in NZ rates continues, as the country is caught in an inflationary spiral. The Central Bank blames (rightly) the housing market and is making its mission the demise of HPI.

Cold Hard Flash: Flash Animated Philosophy From South Park Creators

Click on "Life and music" (the rest is a little dubious)

Financial Times: Germany looks east as skills shortage bites

"Germany’s ban on workers from new European Union member states, imposed at the time of EU enlargement in May 2004, may be eased next year, a labour ministry spokeswoman said on Wednesday." Landlord - looks like your Polish tenants are going home, Germanys only next door and it holds much better economic prospects than the UK. Oh the property is much, much cheaper than the UK, rent is kept low by law and house prices haven't risen in real terms since I was last there when the wall fell down. Want some more!! Well interest rates are lower, its got good hospitals and schools and the streets aren't full of chavs and naive property developer's.

ft.com: Debt problems may signal end of buy-out boom

Equity and debt markets in the US and Europe faced the clearest signs yet of a credit crunch on Wednesday when it emerged that financing for two of the largest current leveraged buy-outs had struck significant difficulties. In Europe, bankers leading the £9bn debt financing for Alliance Boots, the largest buy-out in UK history, threw in the towel on trying to place £5bn in senior loans and sold more junior debt at far bigger discounts than expected, leaving themselves with losses. Credit crunch! here comes the housing depression of 2010 and beyond.

Bllomberg: Oil Rises After Report Shows Third Straight Weekly Supply Drop

July 25 (Bloomberg) -- Crude oil rose the most in more than nine weeks in New York after the U.S. government reported a third straight weekly decline in oil inventories and increased refinery operations. The BBC should just report facts, and not try to speculate........

The Guardian: CBI asks Bank of England to hold off interest rate rise after sharp fall in factory orders

Britain's leading employers' organisation urged the Bank of England yesterday to put further interest rate increases on hold after its latest snapshot of manufacturing showed rising interest rates and higher energy costs putting the brakes on industry's expansion.

Bloomberg: Home Craze Gazumps London With Record Prices, $500,000 Parking

Good article from Bloomberg on the giddy London property market with some interesting insight into everyone's favourite estate agent, Foxtons. For me this has a real fin de siecle feel - just when the party seems like it will never end, dawn breaks and economic reality gatecrashes.

BBC: Minimum wage to be reduced

The minimum wage is set at £5.35 across the UK, however, if the plans go ahead it will be reduced in NI, Scotland, Wales and the north east of England. THIS WILL LEAD TO BIGGER PRICE DIFFERENCES BETWEEN LONDON AND THE REST OF THE UK

BBC: Oil prices fall on stocks hope

Oil prices have fallen for the fourth day, ahead of US data that is tipped to show a rise in petrol stocks.

Tgraph: The flash way to avoid repossession

"When financial difficulties strike, the last thing on anyone's mind would be selling the family home at a discount. For some, though, there is no option. Faced with repossession and the corresponding costly black mark on their credit rating, growing numbers of homeowners are turning to a new group of so-called "flash sale" property companies"

BBC: Couple claim victory in tax case

Maybe instead of HMRC wasting tax payers money chasing genuine small businesses through the courts, they will end this dogmatic and obsessive witch hunt and focus more on the buy-to-let tax dodgers who are easier to catch.

Mail: House prices 'poised for sudden slowdown'

"Northern Rock said that house prices, which last month showed annual increases of just over 10%, could be rising at the same level as wages by the year-end, which would mean by as little as 4%."... the "just over 10%" shouws the level of madness and delusion in the market... "just 10%"... and risk-free, yes, money grows on trees and a pigs fly in the sky!

Firstrung: The subprime crisis hits the mainstream

John Stepek - Moneyweek. We weren't planning to return to the credit crunch so soon. But when the Dow Jones falls 226 points in a single session, and the FTSE 100 sheds 125 points on the same day, you can't let it pass without comment. We've been talking about the subprime crisis, and how the ill effects wouldn't be confined to the poor and desperate (as many had hoped), for a while now. And the latest slump in the markets has come about because one of the big US lenders has finally confirmed we're no longer looking at just a subprime crisis.

MoneyWeek: The subprime crisis hits the mainstream

The latest market slump has come about because one of the big US lenders finally confirmed we’re no longer looking at just a subprime crisis. We‘re looking at a crisis, full-stop…

Telegraph: Rail improvements will cost passengers billions

Passengers have been handed a multi-billion pound bill to help pay for what the Government hailed as "the most ambitious strategy for growth on the railways for 50 years". As Ruth Kelly, the new Transport Secretary, unveiled a series of improvements designed to improve reliability and ease overcrowding, it emerged that about half the additional cost is likely to come from fare increases.

Telegraph: Buy-to-let repossessed

The emperor is naked! "Birmingham Midshires is the latest lender to trumpet the buy-to-let market. It claims the average return for a landlord was 13 per cent over the past year and argues that the fundamentals underpinning the buy-to-let market remain strong. But the survey disguises the harsh reality that properties are being repossessed less than two years after first-time landlords made their foray into the buy-to-let arena and that some new-build flats have plummeted in value by 30 per cent."

Telegraph: Price of milk and food set to soar

Whilst achnowledging the human suffering and not wishing to be insensitive, there are economic implications to the flood. Food prices already under pressure to soar from supply problems with damaged product and supply chain. Service industry prices, e.g. plumbing, along with construction also set to surge from flood demand. If the inflation issue was on a kife's edge, could this push us over the edge? Could this, combined with stretched households tip the housing market over the edge? If HIPS could be blamed for destabalising the housing market, then why not the biggest flood in modern history?

BBC "News": Housing woes hit US share markets

The news from the US is bad and getting worse as the subprime issue moves beyond subprime and begins to affect the rest of the economy. Coming soon to a UK shore near you.

BusinessDay: A housing perspective

Quote a couple of uncontentious figures, connect two dots... the London housing market can only go in one direction: DOWN

TheGordian: Everyone is entitled to a stake in the nation's soil and bricks

"Cooper will urge councils to use their 2006 powers to stop the buy-to-leave-empty market, where investors find the value grows more by leaving property pristine, so whole blocks are sometimes built, sold and left. She will urge councils to chase owners of any property empty for more than six months and not on the market. What of buy-to-let? There is nothing wrong with landlords renting out, since it still houses people. But the rush to use housing as investment has inflated prices. (A whole Doncaster street was bought with one City bonus.) Will Cooper stop the unfair tax incentive that lets landlords charge their mortgages against profits? That, says the government cryptically, is a matter for the budget, but it should be done in order to cool speculation."

BBC News: UK gets 2.5m new foreign workers

"The 713,000 figure for the latest year is more than double the 349,000 National Insurance numbers allocated to overseas nationals in the year to April 2003. " It's no wonder that buy to letters are cashing in on the rising demand for rented accommodation with so many arriving each year (over 2000 a day, plus dependants). Where will it all end? There are nowhere near this many houses being built each year.

The Times: Countrywide warns on profits and 'prime' loans

Looks like the contagion is escaping.... "Countrywide Financial sent shockwaves across the credit industry today when America’s largest mortgage lender declared that the well-publicised problems with its high-risk "subprime" homeloans had spread to its "prime" loan book and issued a profits warning for the year. "

Information Clearing House: Trouble in Hedgistan

Y’see, the hedge fund industry is based on the bizarre notion that one does not have to produce anything of value to make boatloads of money. You don’t even need assets any more---just a risky loan that can be transformed into an investment grade security through the magic of “securitization” a sprinkling of Wall Street snake oil. It’s like taking shards of bottle-glass and selling it as the Hope Diamond. Who’s gonna notice? The only catch is that--now that these toxic CDOs are going to auction--there are no bids. That’s a bad thing. “No bids” means that $1.4 trillion of shaky investments have no discernable market-value. The CDOs were graded “mark to model” which translates into “mark to fantasy”. It means that the investment bankers and hedge fund managers got together over Martinis

Telegraph: Houses 'account for 60pc of the UK's wealth'

Houses now make up three fifths of Britain's wealth, the highest proportion recorded, according to the latest official figures, demonstrating our increasing reliance on the value of our properties. Who needs manufacturing anyway!

The Guardian: 60% of UK wealth is tied up in homes

The increasing dominance of the housing market in the British economy was revealed yesterday when the government released figures showing that 60% of the country's £6.5 trillion wealth was now tied up in property.

Telegraph: Commuting: the real cost

Exclusive research shows how every minute on the train cuts £1,000 off the average house price. That's why Londoners seeking quality of life are travelling further than ever, writes Caroline McGhie

Tesco Finance: Tesco high interest savings account

If you've got a spare 50K Kicking about earn 6.75% with tesco but hurry the offer closes on 14/8/07. The rate includes a 1% bonus for the first 6 months so you'll have to move some where else in six months but there'll be even better rates then and possible house price deflation resulting in even more yield when you pick up a bargain repo in 2010. Landlord - it beats BTL yield!

mortgagestrategy: Industry hit by floods

Cheltenham & Gloucester have had to close 12 of its branches after they were left under water, but, bless 'em they're still convinced "this disaster will not have an affect on house prices in the area."

Bloomberg: Expedia scales back

Expedia Inc.'s decision to scale back a share repurchase by almost 80 percent underscores the threat that tighter credit poses for the U.S. stock market. The world's largest online travel agency, chaired by billionaire Barry Diller, abandoned a plan announced last month to borrow $3.5 billion and use the money to buy back 42 percent of its stock. Instead, the Bellevue, Washington-based company will spend no more than $750 million for a 9 percent stake.

BBC: The cost of living

Radio 4 listener Adam Potter meets with the governor of the Bank of England Mervyn King in attempt to understand the role of the MPC in setting interest rates. In the interview King states that he would like housing costs to be included in the inflation measure. The podcast includes some input from Bootle and his view on the direction of interest rates. Excess money supply is discussed and comments are made that the BoE take little notice of money supply. WARNING. The program starts about 1 and half minutes into the podcast so be patient! For those on a slower link the program transcript (pdf) is here: http://news.bbc.co.uk/1/shared/spl/hi/programmes/inside_money/transcripts/07_07_21.pdf

Money Week: MPC hawk argues ‘a stitch in time...’

The UK money supply has now swollen by £1.03 trillion since June 2002. That's a greater expansion in cash and credit than the previous 15 years put together. You've only got yourself to blame, gentle reader. You shouldn't have borrowed and spent so much.

The Times: 8bn promise for low cost housing means its boom time for builders

Apparently Brown has decided to increase the use of tax payers money to support absurdly high house prices though the dreaded 'shared equity scheme'. Incompetent or cynical ?

Firstrung: House prices in Scotland rose by just 0.6% in Q2 2007

Please excuse the weak pun matching the image =;¬) House prices in Scotland rose by just 0.6% in Q2 2007, one of the smallest quarterly price rises in the UK. This brings the average price of a house in Scotland is currently £140,262 - 29% less than the UK average of £196,525.

Firstrung: Government's financial assumptions are seriously flawed - National Housing Federation

"We fear that the Government has got its maths wrong on the investment required to build the 70,000 new social homes a year. They need to invest £11.6bn, not the £8bn proposed in the green paper." - NHF

MoneyWeek: Commercial property: investors rush for the exit

Short article on how some private investors have started to withdraw from property funds. It compares recent inflows into property funds to the peak rate of inflows in the tech sector seven years ago – and we all know what happened then.

The move Channel: Rate Woes Shatter Confidence

New research reveals that the rise in interest rates has already impacted upon consumer confidence and the housing market is set for a slower period of growth to come...

Property Investing: London not harmed by buy-to-let

London is different from the rest of the country. More bull news from a site that I haven't seen mentioned here before?...

Various sources: House sellers have flattened their expectations

Press cuttings: July house price rise down-Rightmove, Reuters.uk, Interest rates bite house prices, InTheNews.co.uk, House price growth slows after rate rises, Independent, Tempus: A welcome move, Times Online, Rate rises cool housing market, Guardian Unlimited, Rise in house prices shows signs of slowing, Times Online, House prices hit by rate rises,Telegraph.co.uk...

MSN: BOE BOSS WANTS HOUSE PRICES IN INFLATION!!

Our good Merv wants NOW to put house prices in inflation. With 10 years of boom as they were not included now he wants to put them in and in an age of inflation give the UK negative CPI???? How can anyone trust this corrupt and inept country. I really feel that anyone with a brian should be planning for the exit door.

This Is Money: Jobless couple with 12 kids get £500,000 home

It's the type of highly-desirable family home that is well beyond the reach of many middle-class professionals. A detached period house, with eight bedrooms, a garden, its own driveway and all set in a leafy residential area of well-to-do Newbury, Berkshire. But unemployed Carl and Samantha Gillespie - together with their 12 children - have been able to move in without paying the slightest heed to Britain's sky-rocketing house prices. In fact the couple have been given the keys without lifting a finger in work. It has been revealed that the couple - neither of whom work and who receive an astonishing £44,000 in benefits a year - have been housed in the £500,000 property by their local council.

BBC Panorama: Immigration: How we lost count

Mind boggling programme from the BBC highlighting the rapidly rising population of slough that the government says is falling. 3 Bed Terraced houses with 21 people in them, double glazed brick 'sheds' with all mod cons, bins full 24 hours after emptying, council services failing to cope with BTL inspections backlog that will take 20 years to clear, this is home-counties Slough in 2007.

Mail: Is there any property profit left?

Joss Harwood, chartered financial planner at Eldon Financial Planning in Bishop Auckland, County Durham, says: 'Exposure to property is a good thing, but it can be difficult to get across to investors the danger of putting all your eggs in one basket. 'If investors pile all their savings into one buy-to-let property, they do not have a diversified mix of investments. They will also be saddled with an asset that is difficult to liquidate, should they need the money.'

Bloomberg: `No Clear Signs' of Crisis

On Wall Street, where the most lucrative credit markets are barely limping thanks to the worst housing slump in a decade, there isn't a Chief Executive Officer who will tell you there is a crisis.

Telegraph: Buy-to-let repossessed

At an auction room in Covent Garden on Thursday, 52 of the 179 flats and houses that went under the hammer were on sale "by order of the mortgagee" - in other words, they were repossessed properties. A closer look at the auction catalogue reveals that many were new-build flats that had been sold to buyers with incentives such as stamp duty and legal fees paid or rental guarantees, suggesting that they were bought by budding buy-to-let landlords.

Mail: Housing market will 'grind to a halt'

The airplane "will shudder to a virtual standstill next year as aggressive interest-rate hikes finally start to bite, a leading forecasting group has warned". The airplane speed "dropping from well over 10% today to less than 1% by the end of next year, the Ernst & Young ITEM Club forecasts." The airplane altitude is "currently overvalued by as much as 16%, it warns." But do not worry, a crash is unlikely!!

LandlordExpert: Real experts predict a house price crash is unlikely - even those that thought it was going to happen!

This is a BBC article (I am posting the link in one of the comments) from April 12th. Then, the experts are also misquoted in the title, since the article also says "Capital Economics is predicting slow price growth over the next few years but with the caution that any significant rise in interest rates could lead to a crash." but Dean forgot to mention. Dear Dean, we have learned since April that IRs are rising to levels where common wisdom used to think "we will never see IRs at 6% again!" So therefore, Capital Economics is saying that a crash IS likely!

FT.com: Strong euro 'fling' could end in German tears

Falling in love with a strong currency is not unusual for a German finance minister.I would expect Peer Steinbrück's fling to be nasty, brutish and short. Since his statement last week, the euro's exchange rate has risen even further. If the euro continues to appreciate, Germany in particular will suffer from a sustained exchange-rate overshoot, as its economy remains as dependent as ever on a successful export sector. Even though the Germans have a slightly higher exchange-rate pain threshold than the French, we are nevertheless not too far away from that threshold.

Tgraph: House prices hit by rate rises

The average saving accound has fared better in July! A sudden outflow of migrants and renewed emphasis on couple formation, with a sharp decrease in student population and the discovery of new land offshore have caused the sudden stand still of asking prices... amazing eh? Sound like David_2004's supply theories.

Times: The Welsh wobble

"Prices are falling in Wales - is it a temporary twitch or a trend the rest of the country will follow? Llandudno is not some isolated property cold spot; the market in much of the rest of Wales is looking decidedly shaky, too." Probably better separating the country politically into regions in order to sustain the house prices. How about annexing Wales to the Euro? So we can blame the currency. Now Wales is part of the same island, isn't it? It is the same overpopulation and high student rate problem... I am confused! What is happening in Wales?

Firstrung: House prices rise by just 0.3% the lowest monthly rise this year - Rightmove

Between January and April asking prices rose by 6.1%, from £222,859 to £236,490. Between April and July they rose by only a further 1.5%, to £240.001. As a consequence, the annual rate of house price inflation has dropped sharply from 13.2% to 10.3%, the lowest yearly rate since it stood at 9.8% in September 2006.

The Landlord Association: Deloitte Econmic Forecast Q3 2007

John Connolly, Chief Exec and Senior Partner of Deloitte giving his economic predictions for the housing market and general UK economy predictions. Very interesting reading!!!

London Evening Standard: House price rises 'will grind to a halt' as interest rates bite

Peter Spencer, the ITEM Club's chief economic adviser, said: 'One thing you can be sure of is the housing boom has got to stop, and we will get whatever level of interest rates is necessary to do that. 'By the end of next year house-price inflation will be flat or negative.

The Market Oracle: Trouble in Hedgefundistan: "Its gonna get a lot worse"

Mike Whitney explains in simple to understand language what he thinks of hedgfunds and why. He concludes with "The markets are now perfectly poised for a full-system breakdown. FDIC Chairman Sheila Bair expects a CDO time bomb. She summed it up like this: 'Its going to get worse before it gets better. How much worse, I don't know.'" Great explanation for those of us who never studied all this stuff at Uni. What do you knowledeable guys think?

This is London.UK: House price rises "will grind to a halt" as interest rates bite

Unrelenting rises in house prices are finally expected to halt, dropping from well over 10 per cent today to less than 1 per cent by the end of next year, the Ernst & Young ITEM Club forecasts. According to the article, this is the first time the Independent Treasury Economic Model Club has raised fears about the buoyant housing market.

bloomberg.com: New Zealand Dollar May Drop on Housing, Standard Chartered Says

The currency known as the kiwi may fall 3 percent to 93.94 yen and to 77 U.S. cents by Dec. 31, said Callum Henderson, head of global currency strategy in Singapore. The central bank may pause after raising its 8 percent benchmark rate on July 26, because mortgage costs will be high enough to stifle housing demand, a Bloomberg News survey shows. ``The New Zealand property market is the canary in the coal mine,'' Henderson said. ``The currency is very closely linked to the property market so if that starts to crack the kiwi's high- flying days are numbered.''

bloomberg: China's Exported Inflation May Signal Interest-Rate Pressures

July 23 (Bloomberg) -- The rising cost of goods the U.S. imports from China may be an early warning signal that central bankers from the U.K. to India are about to pay a price for a cause they've championed: globalization.

Telegraph: Targets for new homes 'will raise flood risk'

I am sure some will mention that more houses are bad for global warming, crime, etc... how can these people be sooooo boooooooring

Firstrung: First time buyers - the week in focus - Firstrung

First time buyer news was less frantic than in recent weeks, however, we've managed to select all the relevant news concerning first time buyers; FTB numbers have increased slightly according to the NAEA, FTBs are using more of their disposable income on mortgage payments than at any time since 1992, the NHBC backs the government's home building programme, the CPRE pours cold water on it and according to Alliance & Leicester the 100% FTB mortgage market is primed for growth....

The Landlord Association: First-time buyers and borrowers will be hit by increases as early as next month, experts predict

First-time buyers and people with personal loans or credit card debts will experience reductions in their disposable incomes, as interest rates continue to soar. The rising cost of petrol and higher utility bills will further add to a reduction in disposable income...

Observer: Buyers get the upper hand as rising interest rates slow property sales

Buyers: take the upper hand: Five interest-rate rises in the last year have pushed the cost of mortgages up substantially. those who still want to buy should negotiate on price harder than ever. Sellers: how to stay on top: 'The key words are realistic expectations, 'If, as a seller, you ignore the impact of the last five rate rises on buyers' finances you probably won't sell. Previously a £400k property would have been put on the market at £425k and then sold at or near to this higher price, but now vendors have to accept that they may only get £400k or close to that" Ahahahahhah... ahhhhahhahahh.... ahhahahhahhah.. (like Austin Power's Dr Evil laugh)

Times: Banks face mortgage ‘timebomb’

Interesting weeks of profit warnings ahead... "Analysts forecast that leading banks will announce a surge in mortgage arrears as well as bad-debt charges linked to mortgages. UK banks wrote off just £56m in the first quarter of this year. But this is thought to have more than doubled to £140m between April and June. Some analysts now predict that the losses could reach £500m for 2007 and jump to £650m in 2008.However, bankers believe the impact of rising interest rates will be most severe in the second half of 2007 and the first half of next year. More than 2m homeown-ers will be forced to take out new mortgages at higher rates when their two-year fixed-rate deals mature in the next 18 months"

Guardian: To achieve affordable housing, we'll fight selfish nimbyism

I guess her views matter more than most since she is one of the few people in a position to do anything about it and I doubt she would write something that hadn't been sanctioned by GB.

Irish Independent: Will the banks go bust in a property slump?

"....Of course, Ireland's housing market at the moment is not crashing -- it is correcting gradually downward....." BUT bearing in mind current similarities with what happened in the early 1990s in Scandinavia... "all the banks in Finland and two of the largest four banks in Sweden had gone belly-up and had to be taken over by the government..." are we going to see a repeat over here?

Independent: Interest rates set to soar even higher

Will they have the balls? Doves on the MPC probably won't want to be seen panicking, but will they be disciplined by an increasingly vocal and hawkish King? Considering that the consensus seems to be dynamic nowadays, its hard to predict. On the one hand, the doves, who, even when consistently voting for a hold, accept higher IR's when they rise. The Hawks are generally looking up as far as their tolerances allow them. This writer can tolerate 0.75 above current levels, whilst people like Hamish McRae (Independent also) have a tolerance of about 1.5%. He was asking for 6%+ last autumn and has been quoting 7%+ recently. Tolerances aside, nobody is being certain at when and where the peak will be, which makes the storm clouds ever ominious & business planning ever tough, incuding for BTL'rs.

icWales: Wales sees 2.8% fall in house prices

US, Ireland and now Wales... "across Wales house prices saw the biggest fall in the UK in the last quarter, according to Halifax bank."

The Citizen: Landlords clash with council over licensing plan

"Housing landlords clashed with a council over plans to introduce tougher controls in a bid to tackle anti-social behaviour among tenants." Landlords are not too chuffed at being made responsible for the behaviour of their tenants.

Firstrung: First time buyers will not enjoy affordable homes due to releasing more land - CPRE

Increasing the supply of land for housing would make little difference to housebuilding rates or house prices, concludes new research commissioned by countryside campaigners, Campaign to Protect Rural England (CPRE). The study published today (Saturday) shortly before the Government's Housing Green Paper tracks house prices, housing completions and housing land supply over periods of ten years or more in a range of localities, including growth areas and areas with high and low house prices. Its recommendations need to be reflected in the future development of Government policy if we are to meet the nation's housing needs while protecting the environment.

Pendletoday: House prices fall by 10%

House buyers in Pendle could snap up a bargain after it was revealed property prices fell by almost 10% in the first quarter of the year. Prices rose by 13.3% last year but the fall between January and March - the largest in Lancashire - left an average house price of 103,138 according to figures from the Land Registry.

YearBook.gov: 1997 Hong Kong Monetary Situation

Just so you know what's coming when our Chancellor is forced to defend the currency.....IR of 280%

As the banks collectively had sold more Hong Kong dollars to the HKMA than they could settle by using their credit balances in their clearing accounts with the HKMA, there was a shortage of interbank liquidity when these foreign exchange transactions were settled on October 23. As a result, short-term interest rates were driven up and the overnight interbank interest rate briefly touched 280 per cent. The high interest rate reversed the capital outflow and effectively fended off speculators.

BBC: The cost of living

In the first programme of a new series, Inside Money asks how worried we should be about the rising cost of living.

The Landlord Association: UK houses prices rising but FTB's keep coming

When Gordon Brown was Chancellor he was responsible for the production of several reports from various economists which were supposed to shake-up the market for home loans and modernise Britain’s planning laws...

Guardian: When flat buyers cannot get off the starting block

People who own properties in tower blocks struggle to sell them on, because many lenders won't get involved

BBC Radio 4: Inside Money

Including interview with Merv!

Firstrung: Families trapped with falling income as mortgages rise

"We expect consumer spending to slow quite dramatically over the next year as consumers finally realise the reality of their financial situation, which is clearly shown by our index. There is still no sign, however, that this reality has sunk in with consumer spending rising at around 3% in the last quarter. The main reason why we think spending will falter is the pressure from mortgage payments and other outgoings that are not being matched by similar increases in real wages. There is some good news in our wealth analysis since house prices are still rising and equities are strong. These two factors are outweighing a worrying rise in debt and the wealth measure has moved into positive territory for the first time since the first quarter of last year."

Firstrung: Top ten tips when selling your home...make that eleven

Nationwide research has revealed the most important things to consider when trying to sell a property....we notice there's one important omission...erm..it'll come to us...oh yes, lower the PRICE!!

The Landlord Association: Is a House Price Correction Due

When Gordon Brown was Chancellor he was responsible for the production of several reports from various economists which were supposed to shake-up the market for home loans and modernise Britain’s planning laws... ... With so many people struggling to finance their basic need of a home, a correction in prices can only be around the next corner. (sic)

Safe Haven: How Do You Say "Rube Goldberg" in Chinese?

Chinese inflation will be exported to the UK very soon

BBC: Land 'no cure for housing crisis'

The Campaign to Protect Rural England has run a study on house prices and completions too. As with all interest groups, this has a bias... source article: http://www.cpre.org.uk/home

BBC News: Bank: Mortgages part of inflation

"Mr King acknowledges the omission is "controversial" and causes "particular difficulty" for the Bank". Money supply back in fasion, mortgage costs back in fasion, higher rates back in fasion?!

Daily Mail: Mortgage rip-off fees warning

Borrowers have been told (Interest Rates) could rise to 6.25% within months after inflation again breached its official target.

Independent: Surprise on economic growth adds to fears of interest rate rise

"Alan Clark, of BNP Paribas, added: "There is a case to increase even further, to as high as 6.75 per cent, but we doubt the MPC has the appetite to stall growth to achieve a lasting slowdown in inflation". In time, they won't have a choice. The time is running out for the MPC and the housing market. The question on everybody's lips here is, why on earth does the MPC not have the appetite to do its job? Are they holding back the floodgates for an early election? Or are they infact an anarchistic organisation disguised with suits intent on destroying the economy? Are they a wing of Al Qaeda? Is David Branch Flower Power infact Osama's second in charge?! Because I tell you, letting inflation get out of control to this extent will do far more damage to the economy than bombs.

Forbes.com: China central bank raises interest rates to maintain price stability

China's central bank said it is raising benchmark bank lending and deposit rates by 27 basis points, effective tomorrow. It said the move, the third rate hike this year, is designed to guide credit and investment growth, stabilize expectations for inflation and maintain the overall stability of prices. The People's Bank (nasdaq: PBCT - news - people ) of China said in a statement on its website that the benchmark one-year lending rate increases to 6.84 pct while the one-year deposit rate moves to 3.33 pct.

BBC: Food prices on the rise and rise

Inflation under control? Bread to be removed from the CPI basket?! Bread isn't the only staple food whose price has been rising rapidly. According to the research company TNS Worldpanel, in the 12 months to June, the supermarket price of milk has gone up 11 per cent, eggs have gone up almost 18 per cent, butter has gone up five per cent and meat six per cent, all well above the rate of inflation.

Financial Times: Investors seek safe havens from credit storms

World markets saw a sharp “flight to quality” on Friday as credit concerns prompted traders to sell equities and buy into safe havens such as government bonds and gold.

The Landlord Association: House prices to grow by 7% in 2007

The HBOS Economic forecast focuses on the prospects for the UK housing market in 2007. The forecast incorporates a range of official statistics as well as information from the Halifax House Price Index...

Telegraph: New Star recovers from UK fund sell-off

"But earlier this month New Star, and fellow fund manager Norwich Union, reacted to rising redemptions by reducing the price at which units can be encashed - wiping nearly £300m off the value of two of Britain's biggest property funds in the process and sparking a wave of panic buying. Both companies insisted there was no reason to panic at the sudden reversal in the fortunes of their funds. Returns from UK property have been close to 20pc a year for 3 years. Neither fund manager would say how much money had flowed out of the funds." Landlords, lesson learned, head for the exit!

Guardian Unlimited: UK Economy Motors Ahead

The City was today preparing itself for a fresh increase in interest rates after the UK economy completed 15 years of uninterrupted expansion with a stronger than expected performance in the second quarter of 2007.

Telegraph: London Homes 300K

The average cost of a home in London has broken through the £300,000 barrier for the first time, figures have shown.

BBC: London house prices hit £313,000

The average house in London now costs more than £300,000, says the Halifax.

Times: Energy debts jump

"Soaring prices mean two million people owe their energy supplier an average of almost £200, according to the energy regulator" ... add these £200 to the mortgage arrears, to have a more realistic picture

scoop: Get our helium-filled Kiwi dollar back to earth

“The international competitiveness of New Zealand’s food producing economy is now in grave danger. New Zealand’s economy fundamentally rests on being competitive in international food markets,” said Mr Macfarlane.

www.scoop.co.nz: Interest Rate Cut – Not Increase

“Given that the Reserve Bank’s role is to ensure that inflation outcomes remain consistent with the 1 to 3 percent inflation on average over the medium term – i.e. through to the middle of next year – then a clear case exists for the Reserve Bank to force a cut in interest rates when it makes its OCR announcement next Thursday.”

C4: 4homes

Looking at this web page, does C4 have a VI in the property markets ?

Firstrung: The day Britons go overdrawn

The research commissioned by price comparison website moneysupermarket.com reveals, on average, working Brits hang on for 27 days before the dark-side beckons. The survey reveals over 10 million working Brits were overdrawn at least once in the past 12 months - including 2.1 million people who were continually on the wrong side of their current account.

Firstrung: Landlords cover voids by dipping into savings or using salaried income

Research from BM Solutions has shown that half of all landlords do not experience void period. Specialist BDRC questioned over 500 landlords, and found that those experienceded void periods would most likely find their properties empty between 15 and 30 days every year...

BBC: The UK economy grew at a faster than expected rate

"The Bank's rate policy remained "in a pickle" said David Brown of Bear Stearns, agreeing that further rate hikes were likely. "UK growth is very strong, inflation is too high and monetary expansion is running far too fast. There is no end in sight to the current rate tightening cycle"

Times: Borrowers beware

"The Bank of England raised interest rates this month, but its Monetary Policy Committee was pretty much split over what to do next and it looked as if it would take some nudging before it raised rates further. Unfortunately for borrowers, it may have just received the nudge it needed."

Times: UK growth heightens rate-rise fears

... or you can pass the cost to the tenants of course.

moneyweek: Nicholas Sarkozy: will the French piranha demolish the euro ...

They’re now calling him ‘le piranha’. Fresh from attacking the notion of free competition in the EU, French president Nicholas Sarkozy honed onto a new target last week. The European Central Bank (ECB). Worried that a stronger euro is damaging the French economy’s competitiveness, he called into question the bank’s independence, and its focus on inflation rather than economic growth. Thankfully, Europe’s finance ministers promptly told him to shut up.

TELEGRAPH UK: 'Dutch Disease' could shake the pound

tremors are hitting Europe. Hardly junk bonds have been issued for three weeks.Traders are on the sidelines, holding their breath.When the liquidity tide does recede, and beaches the British economy, we will find out what the Brown legacy really is: a bloated state sector that has risen from 37 per cent to 45 per cent of GDP in a decade(on OECD data with taxes to match higher than Germany's; a budget deficit of three per cent of GDP at the top of the cycle, worse than America or Italy; a current-account deficit of 3.4 per cent of GDP; course our own version of America's subprime debacle -yet to hit, although arrears are already shocking.British housing boom will cool, knocking away the interest-rate prop that held up sterling. Global markets will then make a harsher judgment Brownism.

The Economist: Why the markets may be undermining central banks

Thanks to the financial markets, central banks now struggle to police the economy. But this may imply that the bust, when it comes, is as hard to control as the boom that preceded it.

Times Online: How to make money from your home

Interesting that the headline in the print version is a rather more subdued "the new victorians" anh the article is trailed on the front page of the "Bricks and Martar" section as "beat the rate rise". THE DILEMMA: Sharon and Garie Whincrop recently bought an impressive semidetached, seven-bedroom Victorian house in Lincolnshire that they share with their their son Harley, 16, elder daughter Monet, 14, and younger daughter Indy, 8. They had been looking for a house of this size for five years. A hefty mortgage later, they are now the delighted kings of their Gothic “castle”, albeit one in need of a lot of remedial work and the tailoring of its Victorian layout to modern family life.

thisismoney: Today marks debt day

Today marks the day when most Brits go overdrawn and have to rely on their bank to fund the rest of the month's expenses. On average working Brits unable to stay in the black will go into the red on the 20th of each month. However, 2.1m individuals don't have the pleasure of coming out of debt and are constantly in the red.

Times: Cut the cost of your mortgage

“The decision to raise the base rate this month will feel like another nail in the coffin for many borrowers, with very little breathing space since May’s rate hike,” “If you miss mortgage repayments, it will blot your credit history, and in the worst-case scenario your home could be repossessed.” “Renting out a room is one possible option to bring in money to help with the monthly bills,”... here we go, plenty of supply to flood the market

Times: Good houses don’t just happen at the click of a Prime Minister’s fingers - they will take time

From the property cheerleader-in-chief, Judith Heywood... an article full of contraddictions ("Saddled with a giant mortgage and worried about costs that are not so much rising as rampaging? Why not let your property?....This new demand might mean an opportunity for buy-to-let investors... etc) ...As always- her articles are devoid of content and based on fantasy. Dream on, Judith!

Bloomberg: S&P, Moody's masking $200 billion of subprime bond risk

``S&P's actions are going to force a lot more people to come to Jesus,'' said Christopher Whalen, an analyst at Institutional Risk Analytics in Hawthorne, California. ``When a ratings agency puts a whole class on watch, it will force all the credit officers to get off their butts and reevaluate everything. This could be one of the triggers we've been waiting for.'' Investors criticized S&P, Moody's Investors Service and Fitch Ratings because their ratings on bonds backed by mortgages to people with poor or limited credit don't reflect the fastest default rate in a decade. Prices of some bonds backed by subprime mortgages have declined by more than 50 cents on the dollar in the past few months while their credit ratings haven't changed.

CNNMoney: Risky loan business thrives

You lost your job, defaulted on your mortgage and you figure you'll never get a loan again. A blemish on your credit history used to destroy your chances of borrowing money, but a booming high-risk loan market offers an alternative -- for a price. "This (business) has created credit for people who never had it before -- and that creates buying power and jobs," said Bud Ward, a banking analyst at Ernst & Young. Known as "subprime lending" in the industry, the high-risk loan business is booming. Most subprime borrowers are people with good credit who suffered a financial crisis: they lost their jobs, had a catastrophic illness or went through a divorce. They've defaulted on a mortgage, amassed suffocating credit-card debt or declared personal bankruptcy

NYTimes: Big Losses and Bad Accounting Leave 'Subprime' Lenders Reeling

DISPLAYING ABSTRACT - Subprime lending, risky business of extending credit to millions of Americans with tarnished credit ratings or none at all, is reeling from sudden rash of reports of crooked accounting, bankruptcy and unexpectedly high loan losses among several of industry's prominent players; turmoil is rooted in relentless growth in number of Americans with blemishes on their credit records, making the market far too large to ignore; with everyone, from biggest banks and giant credit companies piling in, competitive pressures have exposed cracks caused by ill-conceived growth strategies, poor management of operations and outright greed and has dampened Wall Street's ardor for their shares; financial problems at Mercury Finance Co, Search Capital Group Inc, TFC Enterprise, etc

NewsBank: BIG LENDERS BRING DEBT TO THE MASSES OVERSPENDING OFTEN FOLLOWS NEW ACCESS TO QUICK CASH

NEW YORK -- When politicians talk about equal opportunity, they generally mean the right of even the poorest Americans to a good education and a fair start in life. When Carl Westcott talks about it, he's thinking about used cars and nose jobs. Westcott is chief executive of Dallas-based Jayhawk Acceptance Co., one of a new breed of lenders, many underwritten by the likes of Bank of Boston, Fleet Financial Group, and General Electric Capital, which are making billions of dollars.
http://news.google.com/archivesearch?hl=en&ned=us&q=Jayhawk+Financial&ie=UTF-8

Bloomberg: Banks Sell 'Toxic Waste' CDOs to Calpers, Texas Teachers Fund

Because CDO contents are secretive, fund managers can't easily track the value of the components that go into these bundles. ``You need to monitor the collateral in your investment and make sure you're comfortable there will be no defaults,'' says Satyajit Das, a former Citigroup banker who has written 10 books on debt analysis. Most investors can't do that because it's extremely difficult to track the contents of any CDO or its current value, he says. About half of all CDOs sold in the U.S. in 2006 were loaded with subprime mortgage debt, according to Moody's and Morgan Stanley. Since CDO managers can change the contents of a CDO after it's sold, investors may not know how much subprime risk they face, Das says.

GoldSeek.com: $250 Billion in Subprime Losses?

The problem is that if these offerings lose their investment grades, many institutions will be forced to sell, as they are limited by their charters to only invest in rated paper. But who will buy until the smoke clears? It will get ugly. This will end in tears. Penultimate paragraph

CreditMag: CDO guide: cashflow versus synthethic CDOs

The synthetic solution

The development of the credit default swap market has allowed originators to issue CDOs where the exposure to underlying credits is referenced via a CDS rather than directly to the funded asset.

Balance-sheet and arbitrage CDOs can be structured as cashflow or synthetic instruments, although an increasingly popular formula among originators is to combine the two into so-called hybrid CDOs. The cashflow CDO, which formed the bread and butter of the market in its formative years, is a structure in which CDO notes are collateralised by a portfolio of cash assets purchased by the originator. In other words, in this classical structure the CDO owns the physical bond, loan or other security referenced by the instrument.

Tesco Finance: High Interest Account

Just to let you know guy's if you've got 50K to invest you'll get 6.5% with tesco but hurry because the offer closes on 14/8/07. This does include a 6 month bonus of 1% then you'll have to ship your cash elsewhere but in six months time this savings rate will be the norm.

Calculated Risk Blog: S&P Downgrades 419 Second Lien Classes

NEW YORK (Standard & Poor's) July 19, 2007--Standard & Poor's Ratings Services today lowered its credit ratings on 418 classes of U.S. residential mortgage-backed securities (RMBS) backed by U.S. closed-end second-lien mortgage collateral issued from the beginning of January 2005 through the end of January 2007. . . .

Big Picture Blog: Just exactly what is a CDO?

Since everyone wants to blame today's whackage on the sub-prime debacle, lets look a little closer at CDOs. T "CDOs were first set up in 1987 by bankers at now-defunct Drexel Burnham Lambert Inc., the home of one-time junk bond king Michael Milken. Junk, or high-yield, debt are rated below Baa3 by Moody's and BBB- by Standard & Poor's. Bankers bundle what is often speculative-grade securities into a CDO, dividing it into pieces with credit ratings as high as AAA. The riskiest parts have no rating, and are known as the equity tranches because they are first in line for any losses. Investors in the equity portion expect to generate returns of more than 10%.

International Business Times: Banks losing up to $52 bln over subprime

NEW YORK - Credit Suisse analysts estimated banks could lose up to $52 billion over time due to their exposure to collateralized debt obligations that invested in U.S. subprime mortgages. Most of the losses would stem from loans to hedge funds, compared with an expected $5 billion to $10 billion from banks' direct investment in subprime CDOs, the Credit Suisse analysts said in a report dated July 6. The global financial system can absorb such losses, the analysts said, but the prospects for the subprime mortgage sector remains murky. The risks of CDO downgrades by rating agencies and further depreciation in the U.S. housing market could result in erosion in CDO values, according to the report.

Moneysavingexpert: MoneySavingExpert House Price Poll

Open to all house price survey on a popular financial website. Currently more people think prices will continue going up rather than down, but the gap isn't huge.

Guardian Unlimited: Petrol hits £1 a litre with no end in sight to turmoil in the world's oil market Petrol hits £1 a litre with no end in sight to turmoil in the world's oil market Petrol hits £1 a litre with no end in sight to turmoil in the world's oil market Petrol

Motorists in parts of Britain were being forced to fork out over £1 a litre yesterday but can be expected to pay more soon as crude prices soared again to nearly $77 a barrel. When will people pull their heads out of their collective rears are realise that this is no longer 'short term fluctuation'? Weren't oil prices meant to have dropped back by now? Announcement from the ONS - 'we are removing energy prices from the 'basket' to reflect the fact that the average house is now heated by burning bank notes, which of course are in plentiful supply'

BBC News: Halifax ups house price forecast

Halifax revises it's figures up by 2% over previous estimate for yearly HPI.

USA Today: Subprime loan market grows despite troubles (2004)

"Even if other banks may have turned you down. We don't care — we want to get to know you," says a mailing from Home 123. "We'll get your loan application processed instantly, privately and anonymously over the Internet."

Federal Reserve Governor Edward Gramlich has said subprime lenders helped push homeownership to record levels, making it possible for a growing number of minorities to buy homes.

Nice one Eddie.

Reuters: Charts point to pound at $2.10, maybe after pause

Don't forget 1981 marked a 25 percent slump in sterling from above $2.40 to below $1.90.

FT.com: Fed chief says subprime losses could hit $100bn

Total losses from the subprime mortgage meltdown may be in the order of $50bn to $100bn, according to estimates cited by Ben Bernanke in testimony to Congress on Thursday.

us news: foreclosures

ready steady cry.

housing doom: three little piggies went to market, the housing market

ill huff and ill puff and ill blow yer house down, tales from the other side of the water,

Safe Haven: Mid-Year Review 2007

A good review of the climate in equities, the Dollar, bonds, precious metals, the Fed, energy and credit markets.

MoneyWeek: House prices: whose figures can you trust

As the property market has boomed over the past decade, so has the number of indices measuring the market – all giving slightly different results. This is handy for journalists, who can pick and choose statistics to fit their own outlook on the market. For example, last month the Daily Express proclaimed that homeowners had made £85 a day in April as “house prices jumped by more than £2,500”. Just ten days earlier, the Daily Mail had cited falling mortgage approvals as a sign that “the market is cooling”. With so much conflicting information out there, who should you pay attention to?

Motley Fool: It's Heading For Crunch Time...

"Apocalyptically, the CDO crisis could erode the entire $1,000bn capital base of the US banking system. Less dramatically, it could cause a serious drop in the banking system's ability and willingness to lend."

Times: Mortgage lenders call for interest rate freeze

... and a prompt call of (in)action to the MPC: "The CML urges the Bank of England to wait before acting again on rates despite record £34.2bn June lending figure. The CML said that much of June’s record was driven by remortgaging rather than new home loans. Only two days ago, the CML said house prices could rise by the smallest amount for more than a decade in 2008. House price growth is running at 10 per cent, but the CML expects this rate to halve by the end of the year." last sentence mean "no real price inflation ahead" caveat landlords!!

CML: CML reports highest mortgage lending on record

"Gross mortgage lending reached a new record of £34.2 billion in June - up from £31.4 billion in May - according to data from the Council of Mortgage Lenders. But the mix of transactions is changing with our expectation being a higher percentage of remortgaging, to minimize potential payment shock, and lower numbers of house purchases as fewer people chose to move"... it is a classic Ponzi scheme, my Lord

RGE Monitor: M&T Bank Woes: First Evidence of Contagion from Sub-Prime to Near-Prime Mortgages

A number of observers – including this blog – have been arguing that the mortgage problems are not a niche issue involving only sub-prime mortgage as many near-prime (Alt-A, etc) and prime mortgages have the same reckless features (low or zero down payment, low or no documentation of income and assets, interest rate only, negative amortization, option/hybrid ARMs) of the sub-prime ones. We have now some first hard evidence that the trouble in near-prime Alt-A loans (typically low/no doc mortgages) is now emerging. As reported by the press, M&B Bank is now showing trouble both in its sub-prime and Alt-A loans.

www.morefamous.co.uk: Kirstie angry at House Price crash

Poor Lass. Looking a bit ropey last night. Maybe it's the though of all that hat eating she'll be doing in the Autumn. Off last night's "show", apart from the usual of showing prospective buyers properties 100K over budget, the hapless duo also mentioned that Aldershit was a good place for "investment" due to a "ripple effect" from Guildford. Interesting that, as I recall Phil mentioning on a 5 live interview that they didn't have an interest in talking up the market, but here he is on prime time C4 encouraging investment in Aldershit. Am I missing something here ?

The Telegraph: Dollar to collapse?

Excellent article by Ambrose Evans-Pritchard who dismisses the euro, yen and China as viable alternative currencies to take over from the dollar.

My guess is that once gold peaks from its mania levels somewhere around 2014 (+- 2 years) the money will return to the US dollar.

Reuters: Halifax revises up 2007 house price forecast

LONDON (Reuters) - Britain's largest mortgage lender HBOS, which produces the closely watched Halifax monthly house price survey, revised up its 2007 house price inflation forecast to 6 percent from 4 percent on Thursday. House prices have recorded robust growth this year despite rising interest rates and affordability constraints as hot spots in areas such as London and Northern Ireland drive headline inflation higher. "This revision largely reflects the greater upward movement in prices than expected during the first four months of the year," HBOS said in a statement. Nonetheless, evidence is starting to emerge that five interest rate rises in less than a year are starting to dampen demand in the market.

Firstrung: House of Lords calls on the government to revoke the Home Information Pack

After a further debate yesterday afternoon, the House of Lords voted by 186 to 160 to call on the government to revoke the Home Information Pack (Number 2) Regulations 2007 and the Housing Act 2004 (Commencement Number 8)order 2007...

Firstrung: First time buyers market share increases to 9.8% - NAEA

First time buyers took a greater share of the market in June, increasing their percentage share from 8.9% in May to 9.8%, as the desire to get a foot on the property ladder proved a highly motivating factor, as prices have begun to stabilise slightly...

Times Online: "The Emperor’s Birthday Suit"

From the Times childrens' audio books and Read by Richard E Grant, perhaps a slightly cheeky post, but a relevant alegory for sub-prime, housing bubble and Ponzi schemes in general. I thought this would lighten the somewhat combattive mood of the last couple of days as well as informing and enlightening the debate. This story is as old as the hills but for all the sophisticated financial markets and the spin and counter-spin of increasingly expensive PR, there is a delightful unyielding truth to it.

Moneyweek: Here comes the credit crunch!

It’s taken weeks for its analysts to figure out, but investment bank Bear Stearns has finally unveiled the extent of the losses suffered by investors in its beleaguered hedge funds. The revelation that there was practically no value left in the funds sent markets reeling. But this could just be the beginning… Bear Stearns yesterday revealed to the world just how much value was left in its two hedge funds that were invested in subprime mortgage debt. Investors in the most highly leveraged fund will get none of their money back. Investors in the less risky one, will get nine cents for every dollar they put in - in other words, they’ve lost 91% of their money.

Market Oracle: End of the Financial Markets Boom

For those of you interested in kondratieff-wave theory I have been looking at data and have come up with a revised version based on debt and secular cycles of stocks. Please read comment 1.

BBC News: Fed caution shakes global shares

Bernanke begins to admit what we all know - the US housing market woes will inevitably spread and effect the US economy. (And then Spain, then Australia, then Ireland, then UK...)

The Times: Enjoy your holiday: interest rates have peaked

Anatole is calling a top in the house market alongside a top in rates. Interesting nexus, and contrary to much thought in the markets.

bloomberg.com: China's Economy Grows at Fastest Pace in 12 Years

Accelerating inflation and a rebound in fixed-asset investment heighten the risk of overheating,'' said Wang Qing, chief China economist at Morgan Stanley in Hong Kong. ``Demand in key sectors is not outstripping supply yet, but the government is concerned.''

Telegraph:: Sub-prime road ahead 'not pretty

Sub-prime road ahead 'not pretty' By Tom Stevenson Last Updated: 1:10am BST 18/07/2007 # Funds 'may threaten markets in downturn' The US sub-prime mortgage debacle has only just begun, experts said yesterday, with defaults on risky home loans likely to soar as temporary "teaser" rates come to an end this year and next.

Stuff.co.nz: Economy on 'death spiral' due to exchange rate

The New Zealand economy is on a death spiral by having a free, floating exchange rate combined with inflation targeting, according to a leading US economist. Steve Hanke, fellow of the Cato Institute and professor at Baltimore's John Hopkins University, said New Zealand should abandon its free-floating exchange rate and peg it to a key larger currency such as the US dollar, or a basket of currencies.

Stuff.co.nz: Milk run won't last forever, Fonterra told

Fonterra must act quickly to secure future earnings for its shareholders as unprecedented milk powder prices force some international customers to ditch milk products, says the dairy giant's founding chief executive, Craig Norgate

The Guardian: Homeowner seeks housemate

Basically, its rather simple, people bought expensive houses on cheap interest rates, so got a few more rooms than they would have otherwise, now, ooops, mortgage costs an arm and a leg, so lets rent out those two wasted rooms! Rooms to let up a whopping 50% in London. And these will be cheaper than the stupid BTL flats that go for £250-400/week for a tin can and a roll mat. So, guess what Landlord? If you had any flats, which you don't, coz you're a fraud trying to sell a stupid website at the wrong time, you will have to suffer higher interest rates plus a shed load of competition from people who can and will undercut you (hypothetical in your case of course). SELL SELL SELL!!!!!

news.com: Aussies beaten down by debt

Repossessions of houses has jumped this year in the outer suburbs of Sydney and Melbourne as a rising number of home owners default on mortgage repayments, set against the background of falling or stagnant house prices.

FT.com: On Wall St: Subprime loans go to the neighbours of the Joneses

What of the optimistic (but young) investment banker who takes out 6 times his best year's salary and bonus to buy a £2m pad. He has little hope of ever paying that back - especially after his MEWing options evaporate. 7 years payments then bankruptcy and homelessness. Is he prime? Or subprime?

FT.com: Bernanke remarks add to Wall St gloom

Wall Street was roiled on Wednesday by a combination of factors. These included disappointing earnings and guidance, renewed worries over financials and cautious remarks on the outlook for the economy from Ben Bernanke, the US Federal Reserve chairman. In his prepared remarks before Congress, Mr Bernanke stressed concerns over inflation and the housing market and the Fed lowered its growth forecast for the US economy for 2007 and 2008.

Bloomberg.com: Bernanke Says Fed Will Write New Mortgage Rules

Federal Reserve Chairman Ben S. Bernanke told Congress the central bank will propose new mortgage-lending regulations to strengthen consumer protections, responding to lawmakers' pressure to address the subprime mortgage crisis.

FT.com: MPC decisions charted

Technically a duplicate, but with the lambasting Mr "sniff the air" Blanchflower has had here in the past it seemed only fair to post his record, Click on each member to see how they have voted. Danny boy has only voted twice for a rise, as has Rachel Lomax and Charses Bean at 3. This compares to Andrew Sentance and Tim Besley, who are banging for a rise 8 times (of a total of 11) and Paul Tucker, Kate Barker and the main man Merv, who are pretty in line with movements, Tucker slightly more dovish and Merv slightly more hawkish with Kate in the middle. (good judge or swing voter?) Enjoy :)

BBC: BBC to suspend phone competitions

Maybe Mr Thompson should cast judgement over the copy and paste VI web articles relating to property, which decive the public on a daily basis: They can't even get simple quotation right when reporting on their own DG "There is no excuse for deception. I know the idea of deceiving the public would simply never occur to most people in the BBC.

Times Online: Core inflation rise sparks interest rate fears

Interest rate rises are now filtering through, or will do by the end of the holiday season. Get ready for the 10% SVR. >>> "Prices rose by 2.4 per cent on the consumer price index, down only a fraction from 2.5 per cent the month before and still well above the Bank’s 2 per cent target. On the broader retail price index, inflation rose to 4.4 per cent from 4.3 per cent." >>> "Expectations that the Bank’s Monetary Policy Committee could move to raise rates to 6 per cent, potentially as soon as next month" >>> BEWARE Sub Prime, BEWARE Sub Prime, BEWARE

Times: Sub-prime uncertainty

Aegon and ING, the Dutch insurers, each have exposure of $4 billion to US sub-prime mortgage markets. Not to worry, less than 10% are defaulting....... (But the lenders don't start paying real money till Year 2...Doh!!)

Times: US mortgage contaminate Europe

... but just a few weeks ago David Smith was saying in his blog that "house prices cannot fall in nominal terms"... good luck!

DAILY EXPRESS: HOUSE PRICES SOAR BY £380 A WEEK

Prices still do the unstoppable

BBC wales: Nation braced for school shake-up

The bit about 8000 empty places, this article puts the BS about a shortage of housing in a different light... if schools are closing and population is dropping why are we short of houses? Can anyone give some real evidence our population is growing?

SKY NEWS: Why I dont trust house price indices

Short and sweet article.

Firstrung: First time buyers and tenants of rented property are the main losers - Assetz

Stuart Law, managing director of Assetz, says: "First time buyers and tenants of rented property are the main losers of another rise in interest rates this month. "While costs will increase for buy-to-let investors, landlords are definitely looking to pass these onto their tenants, benefiting from the increased demand for rentals from people who are simply unable to afford a mortgage in the current climate, as well as those who are not yet looking to buy their own property...

Telegraph: Sub-prime road ahead 'not pretty'

The US sub-prime mortgage debacle has only just begun, experts said yesterday, with defaults on risky home loans likely to soar as temporary "teaser" rates come to an end this year and next. Michael Farrell, chairman of Fidac, a US-based mortgage-backed securities investor, said home loans worth up to $1,000bn (£490bn) could revert to much higher floating rates in the next two years. More than half could be accounted for by loans to risky, sub-prime borrowers, many of whom will default on interest payments when higher rates kick in. Mr Farrell said: "What's remarkable is that this is happening when we have had good job growth. You would expect this level of delinquencies in a full-blown recession."

Firstrung: One in ten are relying solely on their family home to fund their retirement

In Retirement Services has warned around one-in-ten are relying solely on their family home to fund their retirement.In Retirement Services said that equity release has an invaluable role in improving the quality of people's lives in retirement, but warned that the one-in-ten people relying on using borrowing against their property to fund retirement may end up in penury...

BBC: Bank voted 6-3 to increase rates

Policymakers at the Bank of England voted six to three to raise interest rates to 5.75% this month, the minutes of their latest meeting show.

the great depression 1920: the great depression 1920

increase in wealth gap leads to the great depression of 1929 a must read for all who feel left out by brittons economic boom

MoneyWeek: Inflation falls - but a rate rise is even more likely

The CPI annual inflation rate fell from 2.5% to 2.4% last month. Good news, you might have thought. But when you look more closely, the latest data concealed some very bad news indeed…

Bloomberg: Bear Stearns Tells Hedge Fund Investors There's `No Value Left'

"US bank Bear Stearns, which had to bail out two hedge funds in June with $1.6bn (£800m), now says the funds have "very little value". The bleak message was made in a letter to investors in the funds, which had bet heavily on risky sub-prime loans. " Well, looks like the auction that was pulled sent the right message - "prime" debt is worth 40% of book value, mezzanine and sub-prime are worthless. How long before other funds have to start admitting this?

Telegraph: Bets push sterling to unsteady highs

"Sterling has become a favourite currency for world central banks and petrodollar powers seeking a rock-solid asset for surplus billions, but it is also the target of vast "hot money" flows that could take flight at any time."... but how much of it is speculative pressure? that s the question. At any rate the situation is "unsteady" since the UK economy does not have enough "depth" to ensure stability (i.e. too many "one way bets": the financial sector & the City, the housing market, influx of cheap EastEurope labour to keep wage inflation down, a lax fiscal regime with foreigners, public-"spend today to pay tomorrow")

Mail: Home loans and fuel prices are set to soar as inflation climbs

"The Bank of England could lift base rates to 6.25 per cent within months after inflation breached its official target once again. Some experts predict that rates could even top 6.5 per cent, piling further misery on borrowers"

Telegraph: Covering England in concrete could end Brown

.. but VI press reacts in advance: "However, ministers and officials, led by the ineffable Hazel Blears, are still filling in details of this terrifying plan. It will not now be published until next week, giving us all a few more days to form our own action groups, or to eye up the property market in rural France" ... actually a few people emigrating to France, not a bad idea

BBC: Bear Stearns funds face wind-down

Same as the other articles in essence, just with none of the cumbersome detail or analysis. Who can say standards are falling at the BBC?

The Telegraph: Is M3 money warning of an inflationary blow-off in the US?

Japan lived through this in the 1980s when it allowed property and stocks to mushroom out of control, mistakenly thinking the effects would be benign because retail price inflation was low. (The US did much the same in the 1920s but the collective mind in Washington and New York seems to forgotten that).

Great comments at the bottom.

I go for deflation as the debt in the economy means IRs don't have to go that high to break the consumer. Also there is no sign of a wage price spiral.

Wall Street Journal: Subprime Uncertainty Fans Out

Of particluar interest is the letter to investors. I can't link directly to it, but it's on this page. Nasty reading!

Bloomberg: Bear Stearns Warns Hedge Fund Investors of Total Loss

The Bear Stearns products which hit the skids a month ago are now essentially worthless. Bear shares off 3% in after-hours, USD under further pressure overnight and risk aversion through the roof (again). There is a very nasty storm coming in my view.

berlinonline: GERMANY ON THE SLIPPERY SLOPE EVEN WITHOUT INTEREST RATE HIKES

BERLIN. The economic situation in Germany already left its high point in opinion of experts behind itself. The Mannheimer center for European economic research (ZEW) according to, which appoints itself to an inquiry under 300 analysts, economic situation expectations decreased/went back surprisingly strongly. Therefore growth in the second yearly half will more weakly fail than in first. As causes the Mannheimer researcher called the strong euro, the high oil prices and the rising interest. Like that the euro is no longer far from the 1,40-Dollar-Marke and also the oil price noted on a record level.

Easier Property: UK housing market full of dissatisfied householders

The UK housing market is full of dissatisfied householders wanting bigger, better homes

BBC news: Backlog of tax returns nears 12m

The UK's complex tax system is starting to get the better of itself especially when 11 million PAYE forms from employers can not be matched to workers' records for 2005/6, over 12 months ago. Makes the proposed clampdown on BTL landlords tax affairs and overseas property investment income look like a pipedream for the Revenue.

The Landlord Association: Buy to let investors advised they should evaluate future pressures

But buy-to-let investors who have been snapping up modern flats over the past decade might want to consider if their properties are desirable enough to withstand future price pressure.

The Landlord Association: Obsession with buy to let investment property growing

In the face of increasing house prices, pressure on the private rented sector is set to grow. Affordable housing offers a solution for some, but the importance of the private rented sector is simply too important to ignore...

bloomberg.com: Goldman, JPMorgan Stuck With Debt They Can't Sell to Investors

Bankers, who just a few months ago boasteddemand for high-yield assets so great that they would have no problem raising debt for a $100 billion LBO, are now paying for their overconfidenceBeyond Our Risk' `Many of these things beyond our risk desires,'' said Bruce Monrad, who manages $1.5 billion of high-yield bonds at Northeast Investment Management Inc. in Boston. JPMorgan spokesman Adam Castellani, Deutsche bank spokesman Scott Helfman and Morgan Stanley spokeswoman Jennifer Sala either declined to comment or didn't return calls. All the banks are based in New York, except Deutsche Bank, which is in Frankfurt. Many of these things are beyond our risk desires,'' said Bruce Monrad, who manages $1.5 billion of high-yield bonds t Northeast Investment Management Inc. in Boston. PMorgan spoke

The Argus: Estate Agents Fear Property Drought

This quote is magic... "I'm not sure what's causing the problem in Burgess Hill, maybe it's just that everyone is really content where they are."

Telegraph: Taking his first step at 12 weeks

My two lads both play for football teams. Most of the players want to buy, but can't afford it. The article is all about buying property as an "investment" for 12 week old babies.... (BTL by another name?).

Daily Telegraph: Taking his first step at 12 weeks

It's time to emigrate - people are buying newborn babies flats to get them on the "property ladder" early: So far, Charlie isn't terribly impressed about reaching the first step of the property ladder. The first time his mum took him to see his very superior £250,000 wendy house, which is undergoing building works before being let out, all he did was sleep. But Tonya is convinced that she and Robert, who works for Wellingtons Estate Agents, are doing the right thing. "We live in Fulham, just about seven minutes from the flat, and I am very confident about the area in which we are buying."

Telegraph: Sterling hits new high on inflation rise

"The steady upward momentum in core inflation will be the key driver of overall inflation. We expect this to drag inflation back up towards 2.5pc year-on-year by the end of the year." Economists said the news was likely to push the Bank of England to raise rates to 6pc before the end of the year.

bloomberg.com: Carry Traders in Asia Look for Alternative

Carry traders in Asia, having survived the initial jitters from the U.S. subprime-mortgage crisis, are now looking for funding currencies with less risk. While the Japanese yen and the Taiwanese dollar remain the vehicles of choice for financing purchases of the New Zealand dollar and other high-yielding currencies, the risk of a reversal in these trades is prompting the search for alternatives. The cost of money in Taiwan is rising, partly because the central bank wants to kill the carry trade and arrest capital outflows. Although the yen remains very much in play, no one knows for how long. The Bank of Japan may signal higher interest rates as early as next month. And that makes funding positions in yen very profitable, but dangerous.

BBC News: Spanish housing market fears

The Spanish economy will be devastated.
20-40% of the government's income comes from housing related taxes.
The spanish housing minister won't comment at all.
How many Brits have remortgaged back home to buy in Spain
Germany's economy is going from strength to strength and will see even more EUR rate rises.
It is a catastrophe

moneyweek: The housing boom will end in 2008 - it's official

The Council of Mortgage Lenders has warned that house price growth will fall to between 2% and 3% in 2008. In real terms, given that inflation is more than 3% just now, that suggests prices will fall.

Mail: Mortgage fees soar 600% in two years

"Banks and building societies can manipulate where they appear in best-buy tables by appearing to have low interest rates. In reality, they are simply switching their charge to the arrangement fee." the cheap credit party is over,... but I do not care, because only stupid still borrow

Firstrung: New poverty and wealth maps of Britain reveal inequality to be at 40-year high

A new way of comparing poverty and wealth trends across Britain shows inequality has reached levels not seen for over 40 years. This is according to research released today (17 July) by the Joseph Rowntree Foundation. A second report, published simultaneously, has found that the public believes the gap between rich and poor people is too large...

BBC: UK June inflation slows to 2.4%

The UK's consumer price inflation fell to 2.4% last month, down from 2.5% in May, the Office for 'Notional' Statistics said. However, the decline was smaller than many analysts had forecast, prompting concerns that interest rates would have to climb later this year. The Retail Prices Index, an inflation measure often used in pay bargaining, rose to 4.4% from 4.3% in May.

Reuters: CML chief says housing market to slow sharply

"House prices look set to record their weakest increase in more than a decade in 2008 as higher interest rates bite, Council of Mortgage Lenders Director General Michael Coogan told Reuters in an interview. The market will avert a crash, but higher lending rates mean the 2 million Britons due to come off cheap fixed-rate mortgages in the coming months will have to dramatically cut spending to keep up their monthly repayments, he warns" Landlord, read between the lines, in order to avert a crash folks have to tighten the belt... but why would I want to do that if I can sell at a 15% discount today and still make a shitload of money above the price I paid in 2000?

BBC News: Wealth gap 'widest in 40 years'

The gap between rich and poor in the UK is as wide as it has been for 40 years

Scotsman: CML: dramatic house price slowdown

HOUSE prices look set to record their weakest increase since house prices fell in 1995 as higher interest rates bite, Council of Mortgage Lenders (CML) director-general Michael Coogan has warned. The market will avoid a crash, but higher lending rates mean the two million Britons due to come off cheap fixed-rate mortgages in the coming months will have to dramatically cut spending to keep up their monthly repayments.Official data and surveys put house price inflation at around 10 per cent currently, but Coogan thinks the rate could be half that by the end of this year. Next year, prices will grow by only 2 to 3 per cent, he added

Financial Times: Oil price nudges towards record high

"The oil price on Monday skirted record highs above $78 a barrel, prompting policymakers to warn about the inflationary impact of rising energy costs,, Goldman Sachs, the US bank, warned prices could surge to $95 a barrel within six months without increased production from the Organisation of the Petroleum Exporting Countries". $95 a barrel could send inflation to anywhere between 3-4% in a short time, leading interest rates to anywhere between 6-8% if sustained. In the meantime, petrol will go above £1/ltr very soon and all of this will eventually feed through into food and manufacturing prices. Lets see how that affects the BOE's up and coming inflation report. Can we expect a back to back rise for August?

The Landlord Association: House price crash unlikely confirms Council of Mortgage Lenders

Council of Mortgage Lenders Director Michael Coogan, "I don't believe there will be a house price crash but clearly a slowdown is more likely in an environment of higher interest rates"...

Times: Lenders predict UK property crunch as rates take effect

Lenders are in the best position to predict when this bubble will deflate, since they have inflated it. "Higher interest rates are set to provoke a crunch in Britain’s property market next year with the weakest growth in prices for 13 years, the Council of Mortgage Lenders (CML) said yesterday." I feel sorry for all landlords, honestly.

Mail: Official: House price growth slowing

House price growth slowed during May as the property market showed further signs that it may be losing momentum, Government figures revealed today

BBC: Inflation sends kiwi to new highs

Higher-than-forecast inflation and expectations of interest rate rises have sent New Zealand's currency to its highest against the dollar since 1985. Consumer inflation rose by 1% in the three months from April, which helped push the kiwi to $0.7900 to the dollar. The latest inflation data was above central bank forecasts, and double that seen in the previous quarter. New Zealand interest rates currently stand at 8%, which is the highest in the industrialised world. NZ house prices are more absurd than here. A country the size of the UK with less than a tenth of the population and very lax planning laws. This WILL end in tears!

The Press: Landlord in red tape rage

A LANDLORD may sell up his York properties - because he says the law has swung too much in favour of tenants.

Scotsman: Buy-to-let bonanza in Scotland as returns beat rest of UK

BTLers are experiencing a surge in popularity in the well informed circles. Without the helping hand of these selfless investors, how could increasing masses of pricedout Britons be housed? And in addition, the government finds it enjoyable to pay market rates to some of these benefactors who rent out to council authorities. All of this is certainly sustainable and very logical indeed, as the readers of this Scottish paper write in their comments (and these are not mad HPC bloggers). It only helps reminding that - usually - every "bonanza" is followed by "windfall tax" measures... caveat BTLer!

Myfinances: Rising costs see property investors sell up

... a recent RICS survey indicates that growing number of BTLers (probably the ones who entered the market years ago and have already made gazillions) are exiting! This is indeed good news for the investors as a smaller number of rental properties will be left on the market further squeezing the supply. This will be a "double whammy" for the already priced out FTBs who will be left with no other option than to pay very high rentals.

Telegraph: If spin alone could build a house

We Brits are fascinated by house prices. So, periodically, every self-respecting economics columnist has to respond to this national obsession.

The Landlord Association: Buy to let makes landlords 13% returns in last 12 months

This is an article about buy to let. It is written by someone I do not know. It reflects the last 12 months in the industry. Your aggressive and angry comments may now ensue.... Ready, Set, Argue like mad!

Every Investor: Mortgage meltdown or Daily Mail hype?

Quite a ullish article. Says that it's different this time because of diversification of risk, that UK housing won't follow the US because of supply, but doesn't explain builders' falling shares. Basically says "don't panic" in large friendly letters.

Reuters: Housing market to slow sharply

The Council of Mortgage Lenders has downwardly revised growth rates for 2008, Director General Michael Coogan told Reuters

Guardian: Housing cools in red hot Northern Ireland

"Northern Ireland's property boom has been created by rising demand fuelled in large part by the peace process and the end of hostilities in 1995. Rising employment, low interest rates, huge public spending, a growing population and a strong UK economy have also all been contributing factors."... Folks, can someone find out this "growing population" farce... I think nothing to do with NI. "With house prices in the province now closer in line with the rest of the UK the anomaly that existed before has all but disappeared" yes but guess aligned with what? "The boom means prices in some parts of Belfast are now on a par with London." yeah, yeah... how sustainable my friend

TELEGRAPH UK: Arrogant Germany and fearful France tearing euro apart

Spain is the first candidate for crisis, blighted by an ECB-created property bubble, and a corporate financing gap of 10pc of GDP. "The risk is that Spain will tip over the interest rates rise, and it will find it very difficult to claw its way back out again," said the bank.

MoneyWeek: The hard times are ahead for commercial property

There’s been a lot in the press at the weekend about fears that commercial property funds are running into trouble. The official advice is still “don’t panic.” But if the institutional investors reckon the best bits are gone, then why stick with a losing asset class?

The Landlord Association: House price crash? Not likely!

New figures from Halifax and Nationwide indicate house prices grew in June at an annual rate of more than 10 per cent...That's solid by any standard - and will reassure many of us the good times will continue to roll....

Firstrung: First time buyers in London face a year longer off the first rung

First-time buyers (FTBs) in London are hit the hardest, needing to save for 7 years and 5 months on average in 2006; 2 years longer than they needed to save in 2005 (5 years, 5 months). This reflects the rapidly increasing house prices in addition to the fact that first-time buyer homes in the capital are now breaking the 3% stamp duty barrier (£250,819).

Firstrung: House prices fall according to latest government survey (DCLG)

The mix-adjusted average house price in the UK in May 2007 stood at £211,056, up from £209,454 in April 2007 (not seasonally adjusted). UK annual house price inflation in May 2007 was 10.9 per cent, down from 11.3 per cent in April 2007. Annual house price inflation in London was 14.5 per cent in May, up from 14.0 per cent in April. The UK annual house price inflation rate for the 3 months to May was 11.0 per cent and 14.1 per cent in London...

Independent: Owners warm to renting out and trading up

More homebuyers are switching to a "let to buy" home loan to allow them to keep their existing property while buying a new one. Broker My Mortgage Direct reports a sizeable increase in the number of people using this type of mortgage over the past six months. LTB allows people to trade up to a new home and let their old one out.

Guardian: Sky-high oil prices signal higher rates

Rocketing global oil prices could force the Bank of England to keep interest rates higher for longer to stamp out fears of spiralling inflation, analysts have warned.

Financial Times: Price cuts spark fears of mass withdrawals

"This week could mark the turning point of the investor love affair with commercial property after up to 6 per cent was wiped off the prices of more than £20bn of UK property funds".

Times: The euro's rise and rise is unsustainable

Most commentators seemed to have no doubt about the explanation for last week’s most important economic event – the 26-year highs hit by the pound and the euro against the dollar, which now threaten to open the floodgates on a tide of currency speculation, transforming economic conditions for British and European export industries in the months ahead. The Financial Times explained this momentous event very clearly in Saturday’s leader, saying: “The dollar slide came amid another week of negative market movements, principally driven by more bad news from the US sub-prime housing market. The gap between growth in and outside the US explains some of the fall in the dollar. The large US trade deficit also puts inevitable downward pressure on the currency.”

Daily Telegraph Online: Business comment: Bold Brown can open the door to a housing revolution

I am not advocating the position of the Daily Telegraph but I do find it interesting that the Business Comment focuses upon Land Supply and PLANNERS are the root source of today's housing woes, while acknowledging there are a range of second-order sources. I especially like "The result is that throughout the country, little Hitlers on planning committees inadvertently decide the fate of millions. Normal market pressures are suppressed. " Little HITLERs. This description matches my experiences! The Comment was written by Roger Bootle - a person who clearly doesn't know about markets then. (This is "Tongue in Cheek" for the sarcastically challanged reader)

Guardian: Housebuilders face tax on all new homes

Britian's householders face the prospect of a roof tax on every home they build. The money raised will go toward paying for infrastructure such as roads, schools and medical centres. The move, likely to be outlined in the government's housing green paper, will be one of a range of options to raise money for Gordon Brown's drive to build 3 million homes over the next 13 years.

AUSTRALIAN: House worries swing the vote

THE Pepar family, with two kids, two dogs and a charming little house in the heart of the Parramatta electorate, are exactly the sort of aspirational voters John Howard needs to keep onside if he is to win the next election. Anna and Matthew Pepar, both 30, are professional people on above-average incomes and would generally be considered natural Howard voters. But the couple - parents to Millie, 2, and Elijah, 3 - are under financial stress. Although they earn a combined income of more than $110,000 a year, they are struggling to pay their mortgage charges of $800 a fortnight and childcare costs of $650 a week.

Australian News: Battlers homing in on Howard

HOUSE prices have crashed by as much as 7.8 per cent in crucial Sydney battler electorates since the last federal election, based on exclusive research that confirms the true extent of the Howard Government's political problem on housing affordability.

PropertySnake: NW3

Hampstead and Belsize Park, 2 beautiful areas in North London: 17 pages in propertysnake. Many reductions are just small 5% adjustments, but the sheer number of properties on the market for over 2 months tells more than a thousand words in the property section of the Times. And... Hampstead and Belsize are full of BTL properties. I would not be surprised if a large number of those selling are BTLers

smh: Home truths for Howard

But even though the Government escapes complete blame for the financial pressure squeezing voters, there is no joy for the Coalition in the poll's main findings. Labor maintains its crushing lead over the Government - 58 to 42 per cent, two-party preferred. And it continues to trounce the Coalition in the primary vote, 49 per cent to 39 per cent

BBC: Profit warnings at five-year high

Profit warnings issued by UK-listed firms are at their highest level since the low point of the technology-led stock market crash in 2001.

Lancashire Telegraph: House prices fall in most boroughs

HOUSE prices in most East Lancashire boroughs have on average fallen for the first time in several years, according to official figures. The Land Registry, which collates information on the sale of every house in the country, shows that for the first quarter of this year prices dropped by as much as 9.9 per cent.

Times: Not safe as houses & Northern Rock

Look one third down the article: "THE decade-long love affair with property is over. In the same way trees don’t grow to the skies, we are now being reminded of the investment limitations of commerical and residential property. The valuations of both asset classes have been pushed – for the time being at least – to the maximum. Property has enjoyed such stellar returns over the past five years that a lot of investors thought it was a one-way ticket to riches" "IT is not just property stocks that have taken a hammering. So too have banks exposed to mortgage lending. Their shares have been in sharp decline, none more so than Northern Rock, Britain’s eighth-biggest listed bank and fifth-largest mortgage provider."

1mortgagesuk: Homeowners withdraw £49.7 billion

Figures show that the amount of borrowing against the value of their property is rising, with the mortgage equity withdrawal totalling £49.7 billion in 2006. This figure is up from £36.6 billion in 2005.

BBC News: Charity backs PM's housing pledge

Part of the reason we've got a housing crisis is that the private sector just hasn't ever delivered the decent, affordable, secure homes that people need. And that's why people fought for council housing in the first place.

Firstrung: First time buyers, the week in focus, Firstrung

First time buyers once again featured heavily in the news this week; stamp duty, giving up fags, preparing to spend up to six times salary to buy, fear of fleeing the nest, fear of never being able to buy, 25 year fixed rate mortgages, 11 first time buyers queing up to by ex MOD property..(only eleven?) It's all here and more in the Firstrung weekly round up of first time buyer news from the past week...

Telegraph: Reversal in fortunes at top property unit trusts

Big billboards boasting Jupiter and NewStars "bricks and mortar" "safe as a rock" "18% return p.a. since 2003" are a scenery from the past, thank God! Just make a parallel with commercial property... property speculation, both commercial and residential, is going down the drain. Hope landlord "expert??" stops fantasizing. Maybe can start new business repossession-expert.com?

Money: Brick and slaughter

Bestinvest head of communications Justin Modray says: "I fear that some investors have simply bought off the back of strong three-year performance figures so might get a shock now that reality is kicking in. Hopefully, we will not see many panic-induced redemptions." ...sounds very similar to the recent BTLer boom

Times: Housing crisis? What crisis? The most puffed up panic in the land

Entertaining... "There is no housing crisis. There is just a housing market. There is no housing “need”, unless you are sleeping in the street. There is just housing demand and housing supply. There is also housing panic, housing lobbyists and housing stark raving madness, the last much in evidence last week"Thatcher’s worst of all, subsidised home ownership as a vehicle for savings. Brown cut the subsidy but collapsed confidence in private pensions and reinforced the belief that “a house is a pension. This has driven up house prices, led to panic hoarding of space and burdened young people with debt

The Landlord Association: The UK buy to let market is set to boom, not crash, says Hometrack

The UK housing market is dominated by tenants and landlords each benefiting in their own way. But who looks set to capitalise, Investors or FTB's? This article sheds a little darkness on the situation...

Sunday Telegraph: http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/07/15/nmgage115.xml

Young homeowners are facing catastrophe as a result of the recent slew of interest rate rises, experts have warned. Massively in debt as a result of having to take out mortgages many times their salaries, the young are already feeling the effects of higher interest rates, raised five times by the Bank of England in the past 11 months.

The Landlord Association: Rising UK interest rates are benefiting buy to let investors

Rising interest rates are crippling first time buyers. This in turn forces them to rent which plays nicely into the hands of buy to let investors as they have property to let. But they are too feeling the squeeze as they try to cover rising interest repayments. In turn rental yields are increasing. Where is the UK housing market heading? Surely it cannot sustain this tic-tac-toe for much longer...

Times: Britain’s hidden property slump

"While all eyes have been on the housing market, funds that invest in shops and offices have been losing money, prompting a wave of selling.The downturn would threaten the savings of hundreds of thousands of people who have been lured into commercial property funds in the past few years. The schemes were the most popular Isas by far last year and the sector as a whole took £2 billion in the six months to April, the height of the Isa season. Capital Economics predicts that prices will slide 12% over the next three years, with a slump of 20% a distinct possibility. Advisers are drawing parallels with the tech boom of 2000, when investors were lured in just as returns peaked – although property funds are unlikely to suffer such a severe fall" ... and why is that unlikely!?!?!?

New York Times: No Protection for Homeowners

Chapter 13 bankruptcy - the implications for homeowners - carry-on paying that mortgage

Sky Business: Extra Bedroom Costs Up To £115K

Yorkshire Bank's research on home-owners moving up the property ladder, and house price expectations.

The Landlord Association: Fundamentals underpinning buy to let are strong

The fundementals underpinning investment in UK housing are strong. Buy to let is booming and a house price crash seems like a harsh prediction - especially not likely within 2 years!

The Landlord Association: Bank of America predicts 1-in-5 chance of housing market crash!

The Bank of America has predicted that the UK faces a 20% probability that the UK housing market will crash in the next 2 years!

Firstrung: Buy to let returns 13% over past year

New research from Birmingham Midshires shows that the average total return for a buy to let (BTL) investor was 13.0% over the past year to June 2007 (exclusive of fees and mortgage interest costs). This is up slightly from a total return of 11.9% for the year to June 2006...

Telegraph: Bank of America predicts 20pc probability of a 'severe crash'

One area of particular concern is the buy-to-let market where higher interest rates could trigger a sell-off as unsophisticated investors struggle to meet debt payments. A more likely scenario, said Mr Sharratt, would be "very subdued house price inflation until 2010". He estimates that house prices are currently 20pc overvalued and it could take until the next decade for prices to rebound.

Guardian: Labour U-turn on council house building

Labour is to abandon its 10-year opposition to council house building by committing itself to a programme of thousands of new homes which will provide another dramatic break from the Blair era, the Guardian has learned.

Times: The new home loan scam

"What should you do if you can’t afford the house of your dreams? Simple – downsize or start saving. But some homebuyers have sought out an easier alternative, faking their finances to make it seem that they are earning much more than they are. A plethora of websites produce “duplicate” bank statements, payslips, utility bills and P60s at the click of a mouse. Some claim that these are legitimate services for people who have lost their P60." Are banks doing anything about it, nooooooo, it's a new era we check "affordability"!

Times: No secret to longer-term deals

Her Majesty’s Government used to rely on secret agents such as 007 to sort out its tricky problems, at least in Ian Fleming’s imagination. But Alistair Darling this week revealed his secret weapon to encourage borrowers to take out long-term home loans. The name is Bond. Covered Bond.

Times: Homeowners feel squeeze as some rates top 8%

SVRs have crossed the 8% barrier. Sounds like a million years ago where pundits of the "new debtconomy" were guaranteeing low interest rates forever. Welcome back to reality.

Times Online: The new home loan scam

Gráinne Gilmore and Mark Bridge investigate the websites that allow you to fake your income – opening the way for you to borrow more than you should

Mail: Nationwide launches 25-year fix

In reality Nationwide's 25 year fixed has always been there, but how does this address the problem?

Bloomberg.com: CDOs Lose Marbles; Credit `Kerplunks!': Mark Gilbert (Update1)

'No wonder RealtyTrac is predicting that more than 1 million borrowers will join the 761,343 already facing foreclosure proceedings this year.'

Telegraph: UK property could face 'severe crash' in 2008

Just change "could" into "will" and thery you have the perfect storm. "While there have no been no clear signs of problems in the buy-to-let market, Mr Sharratt warned: "With the buy-to-let sector yet to be tested in a serious downturn, the risk remains that this sector could serve to amplify any slowdown in the broader market." Yes, like we in this site have been saying for a year.

Reuters: "20 percent" chance of house price crash

Bank of America reckons house prices are 20 percent overvalued and there are now signs that the market is peaking. "Leading indicators and our own econometric work point to a significant slowdown in the UK housing market later on this year and into next," said Matthew Sharratt, an economist at the investment bank. "We put the probability of a crash sometime during 2008/09 at around 20 percent." The bank's central view is that house price inflation will remain very subdued until 2010

BBC News: Unexpected fall in US Retail Sales

Excellent! More bad news about the US economy. Although only monthly (not quarterly figures)

Reuters: BofA says 1-in-5 chance of UK house crash

Bank of America reckons house prices are 20 percent overvalued and there are now signs that the market is peaking.

Bloomberg: Lehman Says Worst Is Over, Buy Corporate Credit (Update1)

July 13 (Bloomberg) -- Lehman Brothers Holdings Inc., the biggest underwriter of mortgage bonds, says the worst of the global credit market rout caused by subprime mortgage defaults is over and investors should buy European investment-grade debt. ``Much of the pain has been squeezed out,'' Lehman's London-based credit strategist David Brickman said in an interview. ``There may be some aftershocks, but investors are showing a willingness to take exposure to investment-grade credit.''

Times: Why not use the 420,000 empty homes to solve the housing crisis?

More lower-priced homes are to be built; meanwhile easy-to-understand, long-term fixed-rate loan deals will be the cure for the repayment shock blues, the malaise of the summer of 2007. About 750,000 people are now contemplating an increase of roughly a third in their mortage repayments, as the discounted fixed-rate offers that they took out two years ago expire. It is as if their lender had suddenly turned from Primark into Harrods.

ReportonBusiness.com: Subprime fallout: Let the litany of lawsuits begin

WASHINGTON -- Lawsuits blossomed after Enron Corp.'s collapse, many targeting the energy giant's bankers. Now, Wall Street firms could again become a bull's-eye for investors seeking recourse from the subprime mortgage debacle. Homeowners are suing lenders. Shareholders are suing collapsed mortgage companies. Investors in complex mortgage securities are starting to sue big Wall Street banks. Those investment banks are turning around and suing the mortgage companies.

Times: How to sell your home in a hurry

IF YOUR house stubbornly refuses to sell, never fear – here are some expert tips to help you get things moving: Sarah Beeny, presenter of Channel 4’s Property Ladder, says: I strongly believe there’s no such thing as a house that won’t sell. If it isn’t selling it’s too expensive. The Martins (see story on left) may have dropped their price by £100,000, but that’s clearly not enough.

Times: Why can’t we sell our home?

Because your expectations are not realistic ? [read, because you're greedy fookers]

Times Online: Why not use the 420,000 empty homes to solve the housing crisis?

There is a far easier way that GB could be of assistance. According to the Property finder website, some 420,000 homes stand empty in a state of disrepair. Surely these should be part of the solution to our housing crisis?

Times Online: GE Bails out of US sub-prime market

General Electric (GE), the US conglomerate, is set to offload its sub-prime mortgage business ....

Acadametrics: FT HOUSE PRICE INDEX

The latest FT House Price Index shows that house prices rose by 0.7% in June and by 9.0% over the past 12 months. The Regional Data Table highlights a sharp reduction in monthly house price inflation in the North; a gain of 1.1% in January has been followed by consecutive falls in the average price during March, April and May and we have seen falls for two consecutive months in the East Midlands and Wales. The West Midlands, by contrast, after two successive months of decline recorded a modest increase in May (0.6%). At the other end of the scale, Greater London prices have risen by at least 1% in seven of the last twelve months.

The Landlord Association: UK house prices - to go up or to crash?

If a collective noun existed for the myriad of housing market surveys it would probably be 'a confusion' -- one week headlines declare house prices are soaring, the next that the market is cooling fast...

Reuters: S&P admits $5 bln blunder in subprime review

"Standard & Poor's admitted to making a nearly $5 billion blunder in correcting its own estimate for subprime securities it is reviewing for ratings cuts. S&P corrected the volume of residential mortgage-backed securities it placed under review for downgrade on Tuesday to $7.35 billion from $12.1 billion. "

BBC: Q&A: What's weighing on the markets?

Stock markets and bond markets around the world are wobbling over the impact of higher interest rates. But why are financial markets so rattled?

YorkPress: House prices fall

"Good...i want to buy a house but can't afford it. If prices don't come down i'll have to swap my girlfriend for a younger model. I reckon if i get a teenager pregnant, buy a parrot, get turned down for booze at Tesco even though i've got my passport...then complain to the press i'll jump to the top of the council housing queue." (Reader's comment)

Guardian: Mortgage madness

Please let us make permanent links on the home pages to this wave of negative comments that appear in the press. Let us give our contribution to changing the sentiment.

Firstrung: House prices surge by 2.3% in the South East of England in the past month - Home.co.uk

Asking Prices for homes in England and Wales are up 0.8% this month and are up 5.7% from a year ago. Scottish Asking Prices have soared by 21.2% year-on-year (YoY). Greater London Asking Prices have increased 12.8% YoY, but this month's rise of only 0.5% may now be signalling a slowdown in price growth...Asking Prices in the South East surged by 2.3% this month and 8.6% YoY. Asking Prices in the North suffered a fall of 2.0% this month but rose 1.8% YoY.

BBC: Estate of the 70s divided by its future

Gordon Brown has promised to build three million new homes as the campaign group Defend Council Housing has repeated its call for more accommodation provided by local authorities. So what do residents on a council estate that became emblematic of Labour's poverty policy think of plans to replace it with a mix of rented housing association properties and private homes?

Firstrung: Law firm warns that sub prime mis-selling crisis could equal endowment scandals of the past

A leading City law firm is warning that The Financial Services Authority's damning report on the sub-prime mortgage industry last week could eventually lead to a flood of claims against lenders and advisers. Law firm Reynolds Porter Chamberlain is predicting cash-strapped borrowers struggling with payments could capitalise on the FSA's report and make claims against both lenders and advisers.

bloomberg.com: GE Plans to Seek Buyer for Subprime Mortgage Unit

General Electric Co. plans to sell its three-year-old U.S. subprime mortgage unit, the company said in an e-mail to employees. ``The mortgage industry has greatly changed since the purchase of WMC,'' Laurent Bossard, chief executive officer of the division, said in the memo to employees today. ``The current subprime market environment has made a significant negative impact on the business.''

Times: All set for slowdown

The Times blames the MPC for - finally - doing their job. These greedy property cheerleaders, with their boss Anne Ashdown, crying and crying about rate rises. For love sake, prices have gone up 100% in the past 4 years now these b@...rds have to write entire pages that if house prices just flatten the blood is on the BoE hands! The best of it is that they will not be able to talk the market up for long, BTLers will exit en masse as soon as they stand no chance to make capital gains (i.e. now)

Times: I didn’t want a profit;I just wanted out

"Perhaps you were a buy-to-let landlord and lost heart, or you might just need to move fast, without fuss. So you want to turn bricks into money, stop paying the council tax and never again correspond with its utility companies. You do not demand a profit – you just want out. After a while, if the property sticks on the market, you contemplate a “loss” with a smile. Just take it! Out, out, out! " wow this is talking

businessweek: More Heartache for Housing

Bad news piles up for the sector as homebuilder Ryland warns of a big loss and an industry group issues gloomy forecasts on sales and prices by Karyn McCormack

Bloomberg News: U.S. Foreclosure Filings Jump to Record in First Half (Update3)

This story says that there will be 1.8 million foreclosures in the U.S. by the end of the year. 58 will be subprime. That means 42 percent -- or about 750,000 PRIME borrowers -- are facing foreclosure.

www.finfacts.: Spanish companies face credit squeeze on fears that Spain's house price bubble is about to burst

The Financial Times says that according to rating agency Standard & Poor's, Spanish corporate debt is at an historic high point, totalling 106 per cent of gross domestic product last year compared with a Eurozone average of 70 per cent.

dailyreckoning.com: Global “Dash for Cash” Puts Pressure on Debt Markets

Almost 60% of credit professionals surveyed by In-House Lawyer magazine think the bubble in Europe’s leveraged finance market is now “unsustainable”. Four in five of those gloomy professionals reckon the bust will strike inside 12 months. “European investors have had their fill,” said Luis Sanchez-Guerra, head of capital markets at Ahorro Corporacion Financiera in Madrid, to Bloomberg yesterday.But fear not! If you can’t get your bond issue away to cheese-eating continentals, simply go west. “The Dollar market opens an avenue to new investors,” says Sanchez-Guerra. His firm, owned by 43 savings banks, plans to sell US$2 billion of notes backed by Spanish home loans into the US debt market. He might just find willing buyers, too.

The Daily Mail: Mortgage meltdown

Now that there is a full blown housing crisis, with a shortage of properties driving up prices ever higher and placing enormous pressure on family budgets, the new Prime Minister has been forced to recognise desperate difficulties in the market-place.

smh: Hedge fund limits withdrawals

SYDNEY-based hedge fund manager that manages $US2.5 billion has put a limit on withdrawals from two of its funds that invest in risky debt products known as collateralised debt obligations, expressing fears the funds would otherwise not survive. Basis Capital offers two funds with funds under management of $600 million to Australian retail investors, the Basis Yield Fund and the Basis Aust-Rim Diversified Fund. It was unclear last night whether the problems of the offshore-domiciled funds were reflected in the Australian domiciled funds. Standard & Poor's rates the Australian funds as five star.

The Landlord Association: UK House price growth is slowing

The never ending debate makes for good reading. This article sheds some firm evidence that a house price crash is on the card. I think we all expect it at some stage but we didn't expect it quite so soon.

The Telegraph: Why I find the doom and gloom rather reassuring

Call it perverse, but I find all this gloom and doom reassuring. The euphoria which traditionally marks the peak is noticeably absent. The market is climbing its old friend the "wall of worry".

There will be no parabolic phase to the DJIA this time. That was done in 2000 by the Nasdaq. The bubble is in debt and not in stocks.

The Telegraph: Dollar problems audio

Great auduio about the falling dollar, credit crunch and the future effects in the eurozone.

BBC: Plea to build new council houses

A campaign group fighting for more council houses is holding its national conference, buoyed by Gordon Brown's plans for three million new homes.

BBC: More 25-year fixed-rate mortgages?

With housing now top of the political agenda, Prime Minister Gordon Brown has put forward a plan to provide more long-term, fixed-rate mortgages as a key measure to control house prices. But will it work?

Reuters: UPDATE 1-UK house price inflation weakest since Jan 06 -RICS

"despite rising interest rates (and) most economists do not believe the market is about to come off the rails" - I thought the market came off the rails about 5 Years ago.

FT.com: Australian hedge fund warns about withdrawals

An Australian hedge fund manager with $1bn in structured credits and junk-rated loans warned investors yesterday it could restrict withdrawals to ensure its survival as it reported losses of 14 per cent in one fund in June. Basis Capital, based in Sydney, said in a letter to investors it had been hit by “indiscriminate” repricing of “otherwise fundamentally sound collateral” amid the crisis in US home loans to less creditworthy investors. It said it had deliberately avoided the worst-hit 2006 subprime loans.

PropertySnake: Battersea & Clapham

Slashing asking prices has become quite common south of the river, and EAs are also talking the prices down (I mean privately) since there is many more EAs competing for fewer sales. Race to the bottom has started!

scotsman.: Warning of rate rise 'disaster' for families

In May, it was reported that 2007 could go down as the worst ever year for Britain's "debt crisis". In all, 30,075 people went bankrupt or took out an Individual Voluntary Arrangement (IVA) between January and March - representing more than 330 personal insolvencies for every day of winter. It reaffirmed predictions that 2007 will be the worst ever year for personal insolvencies in England and Wales, surpassing last year's record total of 107,288.

Firstrung: propertyfinder.com reveals the empty homes scandal in the UK

propertyfinder.com has revealed the scandalous fact that 420,000 properties stand empty and in a state of disrepair, despite there being a shortfall of 600,000 homes to meet England's current housing needs....

Firstrung: First time buyers, don't assume interest rates are at the top of the cycle - RICS

First time buyers should not assume that rates are at the top of the cycle. Any evidence that inflation pressures are persisting in the economy would see rates move higher for longer than currently expected. Those 2 million or so who are soon to come off fixed rate deals know only too well the hardship that is faced and the benefits that a longer term fix could have offered.

Telegraph: Borrowers 'at breaking point over debts'

Ian Perry, spokesman for Rics said: "House prices have finally started to cool significantly for the first time since the recent mini boom in the housing market got under way in 2006. "Interest rates hikes have begun to affect the psychology of the market with potential new buyers starting to think twice before buying a home. "The July rate increase may not mark the peak of the current interest rate cycle and earlier rate rises have yet to fully filter through. "A softer landing for the housing market is in store as we move into the Autumn." RICS is basically saying we ll have a crash in the Autumn... in their book "softer" means harder

Times: Prudent buyers beware

The Times has really lost it! After the property editor Anne Ashworth launched an unprecedented attack on the MPC hawks, her deputy cheerleader, Judith Heywood, is now basically saying to home buyers... do not worry about your investment, Gordon isnt serious, his policies will eventually help a few lower class teenagers renting a council flat in some forgotten new township. Then what is the meaning of the title... should buyers be more prudent? or less prudent?

BBC NEWS: Rate rises 'slowing house prices'

Latest RICS snapshot showing rate of increase has halved since May with a balance of 10% of surveyors claiming prices are rising in their areas. Remember this data is based on the period before the latest rate rise.

FT.com: Australian hedge fund warns about withdrawals

An Australian hedge fund manager with $1bn in structured credits and junk-rated loans warned investors yesterday it could restrict withdrawals to ensure its survival as it reported losses of 14 per cent in one fund in June

Jerusalem Post: Beijing backs Syrian Golan claim

China steps in and guarantees Syria protection against an impending Israeli assault. This is in addition to Russia providing direct militaryassistance and Iran having a pact with Syria. A shooting war is what you get then the entire financial system is about to collapse. No oil from the Middle East is coming West anytime soon.Expect West Africa and Canada to be our oil suppliers in future at massive cost.
Chinese Prime Minister Wen Jiabao said on Tuesday that his country supported Syria's rights to the Golan Heights, the Syrian news agency SANA reported.The government-controlled service also claimed that in a meeting with Syrian Deputy Premier for Economic affairs, Jiabao expressed China's commitment to boosting ties with Syria and developing them in all areas.

Independent: Dollar plunges to fresh lows

The dollar has plunged to its lowest level ever against the euro amid evidence that the American housing market slowdown may be leaching into other areas of the economy. And sterling also hit a fresh 26-year high against the US currency, with £1 at one point buying close to $2.03.

FT.com: Spain caught in credit freeze

Spanish companies face much tougher credit conditions as a result of a dramatic change in perceptions of country risk, brought on by fear that Spain’s house price bubble is about to burst. According to rating agency Standard & Poor’s, Spanish corporate debt is at an historic high point, totalling 106 per cent of gross domestic product last year compared with a Eurozone average of 70 per cent.

spiegel.de: Sarkozy's 'General Attack' on the Eurozone

French President Nicolas Sarkozy is not playing ball when it comes to European fiscal policy. He wants to postpone France balancing its books by two years, and is questioning the independence of the European Central Bank -- much to Berlin's chagrin.

FT.com: Investors’ flight from risk picks up pace

JPMorgan observed that swings in derivatives prices were so extreme they implied “scenarios in which the core of the global liquidity system suffers a serious assault”.

Reuters: Let-to-buy to move up without selling up

A growing number of homeowners are using let-to-buy mortgages to free up funds to move up the property ladder without selling their current homer.

Guardian: Brown pledges 3m new homes

HPI is about supply & demand - but there are 700,000 houses and flats standing empty around England, 850,000 outstanding buy-to-let mortgages at the end of 2006 and over 100,000 non-domiciled people in Britain!! Sounds more like bad planning and assest bubble investment!!? Could be wrong?

Property Investment Project: Property History TImeline

An interesting/amusing video showing a few property facts through a timeline; covering areas like the property crash and boom. The timeline is drawn on a woman's body.

BBC: Firms to close more work pensions

8 out of 10 final salary pension schemes have closed to new joiners, research from the Association of Consulting Actuaries (ACA) suggests.

BBC: Sub-prime mortgages 'set to grow'

Sub-prime mortgages are set to grow faster than mainstream mortgages, independent market analyst Datamonitor has said.

Reuters: UK commercial property not set for crash -New Star ???

Webster also said he had sold his own personal buy-to-let residential property within the last six months due to his concerns about the British residential property market and had invested part of the proceeds into the New Star International Property fund. "Residential property has gone through the roof. There may be a correction in some areas," he said

CNN Money: Housing slump gets longer, and longer

The recovery is further away than they previously thought.

This is money website: Panic selling hits property funds

Commercial property trusts, Norwich Union Property Unit Trust and New Star Property Unit Fund slash values. From yesterday Norwich Union's investments worth 4.72% less and New Star's 3.9% less. Large numbers of investors want to bail out but the funds cannot immediately sell the properties and do not have enough liquid assets. Withdrawal penalties introduced to stop investors jumping ship.

FT.com: Brown to rethink property developers’ tax

Gordon Brown on Wednesday in effect ditched government plans for a tax on property developers, saying a bill for a planning gain supplement would be introduced provisionally while ministers sought a better alternative. Mr Brown put a drive to provide more affordable housing at the centre of his legislative agenda, promising a total of 3m new homes across the country by 2020. He also pledged to increase the annual housebuilding target for England by 2016 from 200,000 to 240,000. The Treasury is to consult on a new regime for “covered bonds”, which would make it easier for mortgage lenders to provide more affordable 20-25-year fixed-rate loans, he said.

Youtube: Estate Gazette

Full of b/s**t but enjoyable in its own twisted way

BBC Radio 2: Jeremy Vine: AFFORDABLE HOUSING

Gordon Brown announces his plans for affordable housing today as the Council of Mortgage Lenders says that first time buyers are taking on record levels of debt. We ask what people can do to get their foot on the property ladder. Er, wait for the crash of course Jeremy ?! Allegedly Mr Vine was done up like a kipper at the last crash, and in negative equity for a while.

FT.com: Boom bing bang crash..

Some of this is a bit technical, but there are some relevant and readable bits in there, notably: "there is the long-held concern that problems in one segment of the US mortgage market could spread to other areas and spark a spiral of falling house prices and slowdowns in consumer spending. The knock on effects of this to the US economy broadly and then the global economy could harm the corporate credit boom of the past few years." Essentially it's saying that the price of insuring debt has jumped and that there is a danger of a "spiral of sales and falling values in complex credit products of many different kinds".

youtube: House Prices - The Psychology of Boom & Bust Cycles

Psychology drives all markets. Gordon Brown's miracle 'no more boom & bust' economy is a myth. Boom & Bust has been a factor of all business cycles for over 600 years. Housing Markets run in 18 year cycles.

Firstrung: Tenants will lose out due to interest rate increases - Assetz

According to Assetz tenants will pay the price of five interest rate rises in the last 12 months, as buy-to-let landlords will need to increase rents to cover their mortgages. Higher mortgage costs will result in fewer and fewer people being able to afford their own homes which will in turn drive demand for rental property and enabling landlords to increase rents, says Assetz.

Firstrung: First time buyers - up to 290,000 plan on borrowing six times salary to climb onto the first rung

Alarming new research* from the online mortgage company mform.co.uk reveals that 2.08 million people aged 34 or under who plan to apply for a mortgage over the next three years intend to borrow over four times their salaries...

FT.com: Hedge funds profit from subprime bets

$2bn fund run by New York’s Paulson & Co was the single best-performing fund, rising 39.95 per cent after fees in June thanks to its dedicated bets against subprime mortgages – loans to less credit-worthy homeowners. Other hedge funds following similar strategies produced returns as high as 27.5 per cent in the month, while another manager has tripled investor money this year, according to investors.

Bloomberg Markets Magazine: The Posion in Your Pension

"Bear Stearns Cos., the fifth-largest U.S. securities firm, is hawking the riskiest portions of collateralized debt obligations to public pension funds. At a sales presentation of the bank’s CDOs to 50 public pension fund managers in a Las Vegas hotel ballroom, Jean Fleischhacker, Bear Stearns senior managing director, tells fund managers they can get a 20 percent annual return from the bottom level of a CDO."

Mail: Home buyers crisis as mortgages approach crash rates

The problem is being fuelled by a sharp rise in the number of borrowers allowed to 'self- certify' their income. Mortgage brokers and lenders stand accused of turning a blind eye when customers have lied about their salary to get a bigger loan, in the confidence that the value of their property would rise

Market Watch: S&P finally says subprime is mostly junk

"But the bigger news is that S&P isn't going along with the charade anymore. A lot of debt will be downgraded to junk status. A lot of that debt will have to be sold at fire-sale prices. A lot of pension funds and hedge funds that once thrived on the high returns they could get from investing in subprime junk will now lose a lot of money. S&P's announcement is a death warrant for the subprime industry. No longer will mortgage brokers be able to help buyers lie their way into a home. Fewer stressed homeowners will be able to refinance their mortgage, thus extending and exacerbating the housing bust. "We do not foresee the poor performance abating," S&P said." .

Independent: Money section

Have a look at the front page of the Independent "money" section... the first three property news are bearish. If the press keeps talking this way momentum will soon vanish.

BBC News: Housing to dominate Brown agenda

I don't like Gordon Brown and I don't think he has been a very good Chancellor. IMHO, he was lucky for a long period. I am also thoroughly fed up of New Labour. I was so looking forward to voting Tory again - which I used to do pre-Blair - and thought I could do again under David Cameron.......However, Brown just got my (swinging) vote back - or, more precisely, the Tories have lost me again. For me affordable living space is of far greater importance than green belt - and I will vote for whoever pushes those priorities.

Yahoo: Property Market Faces Bad Debt Scare

"Homebuyers in the UK may soon be feeling the effect of a bad debt crisis in the US." Mainstream coverage of bear news, I logged on to me emails this morning to find this link!

The Times: S&P fears credit crunch as mortgage crisis hits house prices

Fears of a global credit crunch grew yesterday after Standard & Poor’s predicted that house prices in the United States would plunge 8 per cent this year, dragging down America’s capital markets and hitting economic growth.

Reuters: U.S. subprime woes push sterling to 26-yr peak vs dlr

Sterling scaling its highest level in 2-1/2 decades against an ailing dollar on Wenesday morning.

BBC News: Housing to dominate Brown agenda

Mainly brown for the big long positions in property, I guess. Flood of liquidity on the horizon by the looks, which will both collapse the housing market AND annoy the Tory bores. Ideal.

The Times: Dollar hits euro low as credit fears widen

The liquidity crisis is gathering pace.
The S&P500 has put in a triple top and IMHO will be up to 20% off its highs by the end of the year
Prepare for all asset classes to get hammered in the rush for liquidity.

The Independent: Buy To Let: Central London was once said to be safe as houses. Not any longer

Sorry for the multiple postings today but I thought this was too interesting. This article expresses the difficulty of making profit through BTL in central London. It also reports that other London areas might not be gold-mines either. I like "... East London may have an oversupply of flats ... " for example. Hopefully the 2012 Games will be played out in an area where house prices are declining. Who knows what will happen by then ...

The Independent: Huge increase in those forced to default on mortgages payments

A doom and gloom article which reports an increase in the number of people in mortgage arrears. Overall not a bad piece but there are some bad bits of journalistic inaccuracy. For example, "In Gordon Brown's new Cabinet, ministers discussed plans to move more people on to the property ladder ... " Errr. That's not what was said.

Times: It’s time to make ‘non-doms’ feel at home

Tired to pay taxes? come to London! Too tired to work? become a BTLer in the "city-state" (like Yolanda calls it).

gata.org: S&P, Moody's masking $200 billion of subprime bond risk

NEW YORK -- Standard & Poor's, Moody's Investors Service, and Fitch Ratings are masking burgeoning losses in the market for subprime mortgage bonds by failing to cut the credit ratings on about $200 billion of securities backed by home loans. The highest default rates on home loans in a decade have reduced prices of some bonds backed by mortgages to people with poor or limited credit by more than 50 cents on the dollar and forced New York-based Bear Stearns Cos. to offer $3.2 billion to bail out a money-losing hedge fund. Almost 65 percent of the bonds in indexes that track subprime mortgage debt don\'t meet the ratings criteria in place when they were sold, according to data compiled by Bloomberg

Bloomberg.com: Paulson Hedge Fund Gained 40% in June as Bear Sank

``We expect credit performance of subprime mortgages to continue to deteriorate, house prices to continue to fall and subprime financing to continue to decline, leading to the eventual collapse of the subprime mortgage market,'' Paulson managers told investors in April.

sfgate.com: al-Qaida Threatens UK Over Rushdie Honor

Addressing British Prime Minister Gordon Brown, the al-Qaida deputy chief said Britain's strategy in the Middle East "has brought tragedy and defeat upon you, not only in Afghanistan and Iraq but also in the center of London." This appeared to be a reference to the deadly London transit network bombings which occurred just about two years ago. "And if you did not understand, listen, we are ready to repeat it for you," al-Zawahri was quoted as warning the British prime minister.

market watch: S&P may downgrade $12 bln of subprime securities

SAN FRANCISCO (MarketWatch) -- Influential rating agency Standard & Poor's said on Tuesday that it may downgrade $12 billion of subprime mortgage-backed securities because losses in this low-end part of the home-loan market have increased and will probably get worse.

CNN: S&P to slash subprime bond ratings

Another factor adding to the poor performances of these loans was that many of them were so-called "liar loans" in which claims by applicants about income, assets and employment were unsubstantiated. S&P cited an analysis made by the Mortgage Asset Research Institute, an information provider to the mortgage and financial services industry, which found that there had been a big jump in misrepresentations on credit applications.

Firstrung: First time buyers are not priced out due to spending on luxuries or stamp duty

We receive regular feedback from priced out first time buyers regarding the initiatives the government could instigate in order to alleviate pressure on first time buyers; "build us out of this 'mess', tax second home owners yearly for their privilege, charge double community charge for vacant homes or holiday homes, introduce a swingeing tax at source when purchasing any other home than your first, regulate the buy to let market..." are just some of the pleas from our mailbag. However, hardly any priced out first time buyer calls for the abolition of stamp duty as they recognise a £1500 saving does not make a 150K home come within easy reach.

The Times: Bovis banks on summer and autumn sales after a slump in homebuyer confidence

Bovis, the builder of upmarket homes, has reported that demand for its properties has all but dried up and that average sale prices are stagnating. Analysts said that Bovis would be forced to scrap its declared target of raising profits by 10 per cent for 2007 as a result of a sudden slump in confidence among homebuyers.

BBC News: Al-Qaeda condemns Rushdie honour

Terrorism in London will reduce prices faster than any interest rate rises. Think about it!

Bloomberg.com: S&P May Cut $12 Billion of Subprime Mortgage Bonds

"Ratings of 612 pieces of residential mortgage-backed securities were placed on CreditWatch with negative implications, New York-based S&P said today in a statement. The bonds represent 2.1 percent of the $565.3 billion of similar bonds rated by S&P."

Forbes: US Consumer Borrowing Jumps in May

David Wyss, chief economist at Standard & Poor's in New York, said some of the surge in credit card debt reflects the fact that it is getting harder to get home equity loans with banks tightening up on standards and home values not soaring as they did during the housing boom.

"We think that people who had been refinancing their credit card debt into home equity loans are finding that harder to do now," Wyss said. That would explain part of the big rise in credit card borrowing in May, he said.

BBC News: Brown the Builder

Tony Blair had education, education, education, Gordon Brown has gone for housing, housing, housing. She said building the homes would have to take priority over environmental concerns, and she refused to rule out building on the green belt. And, predictably, the Tories reacted swiftly, claiming Ms Blears had revealed Gordon Brown's plans to "systematically concrete over the green belt". WHY CANT THE TORIES SEE THIS AS A GOOD THING!!

Hemscott: London shares down midafternoon as US futures weaken on US sub-prime worries

LONDON (Thomson Financial) - Leading shares slumped in midafternoon deals, as US futures weaken on US sub-prime worries that dragged the US dollar to its lowest recorded level against the euro. At 3.14 pm, the FTSE 100 index was 60.4 points lower at 6,652.3, while the FTSE 250 index was down 100.6 points at 11,759.

Times: Homes in parts of Northern Ireland as expensive as London

By why are NI prices so high? Is it immigration? Is it divorce rate? Is it the students? Ah... now I get it, it must be the Russian oligarchs!! Belfast is the second UK "city-state", like that brain-dead of Yolanda Savills like to say...

Belfast Telegraph: Belfast house prices more expensive than London

Surely the fat lady singing.

SMH: Bankruptcies hit record high

In an age when people are relying more and more on credit, something has to happen, we can't continue to raise debt levels without long-term consequences."

Expert: UK house price crash? Not when figures are better than expected!

A cr@ppy article but it begs a question: if the economic models of Nationwide and Halifax reflect market fundamentals... then the "abnormal" return of housing on the Nationwide and Halifax forecast is the irrational bubble. So, dear Optimist readers, if you wanna know how much house prices will drop, just take out the difference between the actual prices and the Nationwide / Halifax forecasts for the past 7 years... i.e. expect some 30% drop soon

Bloomberg: U.K. Mortgage Lenders Rebuff Darling's Call on Loans

It took a couple of hours, but the mortgage industry is reacting to AD's interview. Well, may I say, I found surprising that the Chancellor mentioned housing as his first priority during his first interview. Could it be the govt will destabilize the market (on purpose or -more likely- by chance)?

MoneyWeek: Bought a house recently? You're losing money

If you bought a house six months ago now probably isn’t the time to sell it: do so and the odds are you are going to lose quite a lot of money on the deal. Say the house cost £500,000 back in January. Add in your stamp duty, legal fees and so on and the total cost to you would have been about £525,000. So you need to get at least that to break even. But in most places house prices have barely budged in the last few months...

Home.co.uk News: Tesco slams obstructive agents

Tesco property boss Mark Davis lambasts estate agents for denying their clients access to free advertising for their houses.

The Landlord Association: Buy to let exclusive: What makes a good property investment?

UK house prices are under the microscope but good buy to let opportunities are still available. What makes a good investment in times of uncertainty and rising UK interest rates?

Guardian: Darling's first budget to target private equity as public sector pay is squeezed

Chancellor hints at curbs on venture capital tax breaks. Treasury to get tough on spending and inflation. He also warned public sector workers that they would have to accept a below-inflation pay rise this year as part of a Treasury clampdown on public spending.

Guardian: Darling in pledge on new housing

The press is red-hot about the first government step into the housing market... are they posed to destabilize it? The Guardian stresses the "more houses" side of the announcement. I honestly think the government will not mess with the mortgages.. but let s see.

MSN: There's Nothing Wrong With Renting

With interest rates heading upwards once more and further rises expected this year, it's not surprising that people are having a tough time getting onto and moving up the property ladder. What is surprising is that more people do not choose to rent instead of going through the pain of trying to buy. Being a tenant rather than a home owner used to be the norm in Britain and it's still the very popular in many countries around the world. It's only in the last couple of decades that home ownership has become a goal for most people in the UK...

Independent.ie: How do I get my foot on the property ladder?

Finally, while your parents may not be in a position to give you money, they could help by guaranteeing the mortgage. You can borrow more money and if you fail to make the repayments then the lender can go after your parents for it. This is the downside of this type of loan. Ultimately your parents' home is also at risk if you default on the mortgage. This is great advice being given is get your parents into the the shite as well.

BBC News: China Trade Surplus Hits Record

This article suggests that China's June trade surplus was boosted by tax changes on July 1st - however, as the tax changes were only announced two weeks before, and space on container ships usually has to be booked at least a month ahead, I doubt that was much of a factor. The Chinese want to be in a position of economic strength, especially in their dealings with the US - but with a surplus this large they will know that it makes sense to let their currency appreciate - which will propel western inflation...

Telegraph: Chancellor plans mortgage shake-up

A shake-up Britain’s mortgage market is being planned by the Government to help increase the number of affordable homes, Alistair Darling, the Chancellor disclosed last night. Mr Darling and Gordon Brown are increasingly concerned that a shortage of homes, particularly for first time buyers, could trigger a political backlash against Labour. Mr Darling said that Labour would issue proposals shortly to boost the supply of long-term fixed-rate home loans for periods of up to 25 years.

TELEGRAPH UK: France is now launching a "dash-for-growth" at the top of the cycle, threatening to push up inflation for the whole eurozone bloc and tempt others to follow suit

Germany has reclaimed her place as the world's biggest exporter. By holding down wages through a relentless squeeze, German has gained 22pc in cost competitiveness against France since the launch of EMU. France's slipping competitiveness is the reason why he repeats calls for activist measures to force down the value of the euro, a move that would effectively strip the European Central Bank of its independence. This too risks a bitter dispute with Germany.

Guardian: Darling plans mortgage shakeup

"Planning is a sensitive issue. I will yield to no one in my determination to protect our heritage, but if we don't increase the supply of houses the problem will get worse and worse and worse." The chancellor said he was keen to minimise the environmental impact of house-building, but "the idea that we should stop building houses is one I don't accept. It's something we have got to deal with and I'm determined to take action."

10 Downing Street website: Petition to Abolish Stamp Duty for first time buyers

This website has many petitions that have far too few names added in favour of first time buyers. There are petitions to end the tax relief on buy to let mortgages, petitions to introduce a tax on second homes, petitions to limit the number of buy tolet properties an individual can own, and many more worth a look. These petitions are considered by the PM's office and are taken as an indication of how the government can be seen as popular from what I can see. This site is a real way to vote, as all political parties are currently the smae, but the petitions control what they actually do it seems.

Guardian: Mortgage shake-up to tackle homes crisis

Ministers plan to shake-up Britain's mortgage market as part of a three-pronged approach to tackle the crisis in affordable housing that is posing a threat to the economy and triggering a political backlash

The Independent: Bovis Shares Slide 11 Percent on Housing Outlook

Bovis Homes has sounded a warning to the UK house-building sector after reporting a collapse in customer orders for new houses on the back of rising interest rates.

guardian: On borrowed time: markets stare into abyss

Bonds are meant to be safe, predictable and boring. Yet the earthquake in the debt markets which has sent bond yields shooting up over the past month will be felt around the world, from Britain's teetering housing market to the pockets of private equity barons. Cut-price borrowing has fuelled a multitude of booms; and as the price of debt rises, investors everywhere are vulnerable.

NZherald: Is the housing market about to crash?

Warnings of potential collapse in housing marketNew Zealand have emerged inbanking report Moody's Investor in SydneyA leading Auckland apartment realtor is also warning that "a chill" is about to descend on the market and is suggesting to homeowners that now might be a good time to sell "with our masters in Wellington hellbent on making you suffer".A recent article comparing the price of house inAuckland vs a similarly priced house in SydneyMelbourne showed something very simple I am surethat a lot of other people saw it too. When you can buy a better housein city with larger labour market,a significantly higher average income and lower crime rates,a no brainer

libertypost.org: The yen carry trade is continuously flooding the world with cheap money

NY Fed Reserve Bank issued an unprecedented public warning regarding the hedge fund industrywherein they made note of a variety of what I thought were interesting statistics. This was issued as a warning that the $17-trillion hedge fund industry, 93% of which is debt financed, or in other words,based principally on borrowed money derived from the yen carry trade,has created so many global credit and other speculative asset class bubbles that the principal driver of the global economic collapse scenario is and will be the hedge fund industryThe yen carry trade is continuously flooding the world with cheap money. It works by borrowing money at a half a point from the Bank of Japan and re-lending that money at a higher rate through some other instrument. Or by using it to purchase o

This is London: First time buyers face £1,500 stamp duty bill

HM Treasury has lucratively raised its stamp duty take from £675 million in 1997 to £4.6bn in 2006, most of this money would have been funded from mortgage borrowings. So we could rename this article as a Tax on Debt or the UK Government makes ends meet through its citizens personal debt. Can't wait for the 2007 figures!

Times: 29 graduates chasing every new vacancy

Competition for degree-level jobs is so intense that every vacancy is being chased by 29 new graduates, according to the latest graduate recruitment survey.
Recipe: Debt + Poor Job Prospects + High HPI = No FTBs

Firstrung: First time buyers urged to give up fags to get on the 'first rung'

They have lent increasing ridiculous income multiples, upped the maximum amount forwarded to 125% of valuation, introduced self-certification 'liar' mortgages, tried to guilt parents into providing large deposits, tried to push naive FTB's into shared purchasing schemes with complete strangers, duped inexperienced BTL's into propping up the market (now devoid of FTB's) in the short term ... etc .... and are now suggesting that ex-smokers should now use the money saved to get on the market. It is becoming increasingly comical how desperate the lenders are getting in order to maintain the illusion of increasing house prices. Thankfully for those with a little bit of nouse, these desperate measures only act to reinforce the fact that HPC is now inevitable.

www.iht.com: Around the Markets: Cheap yen is seen as threat to innovation

"Honestly, the yen is too cheap," said Michijiro Kikawa, chief executive of Hitachi Construction Machinery, which competes with the Peoria, Illinois-based Caterpillar in selling mining equipment. "There will be trade friction should the yen fall further." The yen slid to 124.13 against the dollar, the lowest in four and a half years, and a record low of 166.94 against the euro on June 22 as hedge funds and Japanese pensioners borrowed and sold the currency to purchase higher-yielding assets in so-called carry trades. It reached the lowest since 1985 against currencies of major trading partners in May, according to the real effective exchange rate compiled by the Bank of Japan.

Home.co.uk News: Borrowers in job security fear

"The slowdown has begun and a crash is long overdue, meaning that many financially stretched homeowners will not have a viable exit plan in the sale of the property."

bbc: Mr Sarkozy argues France needs to cut taxes by 11bn euros (£7.5bn) to tackle its spiralling unemployment problem.

Mr Sarkozy asked EU finance ministers in Brussels to bend its fiscal rules to help avoid a French economic slowdown France believes the strong euro - which has appreciated 60% against the dollar in the last six years - hurts its exports

FT.com: German figures key to likely eurozone growth

With the European Central Bank indicating that further increases in eurozone interest rates are likely, investors are asking if there could be a sharp slowdown in growth next year. The eurozone is expected to grow by 2.7 per cent this year but analysts are more divided about the sustainability of the recovery in 2008. Forecasts for eurozone economic growth in 2008 are in the range of 2-2.5 per cent, according to Consensus Economics, the consultancy.

The Times: Global oil agency warns of supply squeeze

The International Energy Agency warned today of increased tension on global oil markets after 2010 as spare capacity in the OPEC production cartel shrivels at a time when buoyant economic growth is driving up demand.

Independent: Buy To Let: Property investors are getting together via new websites

Websites encouraging BTL co-buying. I've had friends do this. Didn't work as people want to do their own things eventually as people do. However, it's a tactic to survive the increasing IR strain!

Firstrung: 460,000 mortgage payments missed in the past six months as interest rates bite

Mortgage customers are feeling the pain as interest rates rise with more than 460,000 missing monthly payments in the past six months, new MoneyExpert.com research shows...Around 77,000 mortgage payments are being missed every month, the independent financial comparison website says. And it fears the number could be set to rise as the Bank of England continues to pile on the pressure.

Telegraph Online: Emerging sector cashes in on rate rise despair

This article is depressing me. Rather then sell up and rent, people are selling to a specific company, clearing debts, and then renting their home back from the same company. They live in their own home and appear exactly the same as before. This will reduce the number of properties coming onto the market and therefore, could prevent a decline in house prices. It will also lead to an increased number of people renting and lo, we are back to the bad old days. Well done New Liebour!

Times: Homeowners struggle as higher rates bite

"The number of people missing mortgage payments has more than doubled since the start of the year as the impact of rising interest rates is beginning to bite, according to research released today. The study by moneyexpert.com, a price comparison site, estimates that 77,000 mortgage payments are being missed every month, up from 36,000 at the beginning of the year." LET S REMEMBER: between 1990 and 1993 there have been "only" 430k repossessions...

Foreclosure.com: Home Foreclosures, Pre-Foreclosures, Bank Foreclosures

Not sure if this has been posted before, but this site purports to be an online search engine / auction for US foreclosures. It's quite gory in its detail, allowing you to surf different areas and see forclosure stats. Seems you can then put in a bit to buy property. "Act now – These hot deals go fast! Find the right property and submit a bid online today before it's too late" Getcher falling knives here, ladeez ann gennelmen!

bloomberg: BOVIS HOMES ISSUES PROFIT WARNING

further evidence that mortgage rates are biting as less traffic hits new home builders...this is on the back of taylor wimpey and others...its all there.

Bloomberg: The Poison in Your Pension

From the July edition of Bloomberg Markets Magazine. Insterestingly it looks like it was researched and published in May, well before the most recent Bear Stearns headlines.

FT.com: Premier warns of bread price rise

Premier Foods said on Monday it would have to put up the price of bread “in the coming weeks” to recoup higher wheat prices. The group, which in March acquired RHM, the Hovis bread maker, also warned that higher interest rates on its £1.7bn debt would mean a bigger than expected interest charge for the year. The group has £700m of debt at fixed rates and another £700m capped at around 6.2 per cent.

Guardian: Dinner table chat about house prices turns nasty

"At a gathering of my wife's family last weekend I was sharply reminded of the generation gap when it comes to property. The over-35s are winners with their cushion of equity, which grows vast the nearer they are to pensionable age; the under-35s have debts that make them feel fearful at becoming losers in the property jungle."

FT.com: UK factory gate inflation weaker than forecast

But concerns about stubborn inflationary pressures at the beginning of the supply will continue to fester as long as input prices remain high and climbing. The ONS said that its seasonal adjusted index of input prices was up by 0.6 per cent in June. This was down from 1.4 per cent the previous month but still leaves the non-seasonally adjusted annual pace of input price growth at 2.1 per cent. Howard Archer at Global Insight said: “Input prices rose for a fifth successive month pushing the year-on-year increase up to a 6-month high of 2.1 per cent, thereby maintaining the incentive for manufacturers to try to raise prices to boost their margins.”

bloomberg.com: New Zealand Dollar Drops as Moody's Says Housing Market to Slow

New Zealand's dollar dropped after Moody's Investors Service housing market may slow, raising speculation central bank won't add to three interest- rate increases this year.You've had the Reserve Bank's concerns with the housing market and Moody's stepping in with their 10 cents worth,'' said Joshua Williamson,senior strategist at TD Securities Ltd. in Sydney.That led to the New Zealand dollar coming down from its elevated levels.'The Moody's report saw a lot of clearing out in the kiwi because it adds to the picture that housing might be coming off,''said Tony Allen, currency trader at ANZ National Bank Ltd.in Wellington.We've seen lots of profit-taking from Asia.'The Moody's report, entitled ``Banking System Outlook: New Zealand,'' said the housing slowdown may be triggered as homE

The Times: What happens when house prices collapse?

Dresdner Kleinwort, an investment firm, says that Britain's housing market is "more over-valued than at any time since 1948".

"Price of houses in Britain relative to real income fell by 50 per cent between 1948 and 1957"
The savings ratio has gone negative.
The UK Economic Outlook also says that 10 of the 12 UK regions have experienced a real fall in disposable income growth since 2000, with Wales and Northern Ireland the exceptions.
Sterling at a 26 year high.
China's "inflation effect" is now in reverse
Will this crash be much worse than in 1948???

The Times: Bovis hit by stagnating house market

Bovis, the FTSE 250 builder, brought fresh misery to the housing market today as it reported that customer orders for its new-build homes have all but dried up and average sales prices have stagnated. Average selling prices for a Bovis home rose by less than inflation to £189,000, only £300 higher than the £188,700 price at the halfway stage last year, the firm said. Bovis's property market dampener followers a string of recent surveys, including from Halifax and Nationwide, highlighting that prices have come off the boil over the past three months. Five successive interest rate rises since August have hit household budgets and made buyers more wary. Bovis shares tumbled 8% on the news.

BBC News: M&S 'to warn recovery derailed'

Bad weather and interest rate hikes are hampering Marks & Spencer's recovery, its boss will warn investors this week, according to reports.

BBC News: Outsourcing impact 'exaggerated'

Claims that the UK is losing large numbers of white-collar jobs through outsourcing to India and other nations is overstated, a report has said.

FT.com: Balls to press for financial education

Changes to the national curriculum that will encourage schools to teach children about tax, interest rates and personal budgeting will be unveiled later this week by the government, but will fall short of City demands that financial education be made compulsory. Ed Balls, the new secretary for children, families and schools, will call for 11- to 16-year-olds to be taught “economic wellbeing and financial capability”, but only if schools chose to include in it classes.

Metro: First Time Buyers Priced Out

A cheery front page on Monday morning in London Commuters read of choice..... "Gordon Brown has been accused of pricing first-time buyers out of the housing market after research showed they face an average stamp duty bill of nearly £1,500"

The Independent Online: Stephen King: A reminder to Mr Darling as sterling keeps on rising

In 1994 Mr Darling highlighted a conflict of interest which would always occur as a result of granting the BoE independence. The then Labour Opposition opposed the motion, raised by the Tories (Nicholas Budgen MP) to grant the BoE independence. In the light of increasing interest rates upon an indebted nation, is the Labour Government starting to loose its love for an independent BoE?

nikkei.net: ANALYSIS: Weak Yen Threatens Japan's Global Stature

Saturday"s Nikkei notes that the dwindling value of the Japanese Yen on a trade weighed basis has put the JPY at the lowest level in 22 years.The article states that while in the past Japanese authorities and Japanese industry thought that a strong JPY was bad and a weak JPYwas good, those perceptions are tarting to change.The article goes to saythe weak JPY has dented Japanese purchasing power is starting to impact on the quality of life by pushing up the price of all imports. The weak JPY also resulting in diminishing international presence of Japan.Gyoten Toyoo,a former vice-minister of finance for international affairs was quoted in the article as saying"A weak yen will reduce Japan"s presence in the world economy in the long run and thereby lower its international clout.

TELEGRAPH UK: Wall Street life: Americans become uneasy at the relentless tide of Chinese imports

After spending Christmas surrounded by Chinese made toys, Bongiorni's family embarked on a year-long boycott of Chinese products. They wanted to see for themselves what it would take, in will power and creativity, to live without the world's fastest growing economy - and whether it could be done at all. Her trials are the subject of a new book - A Year Without Made In China - and her story makes grim reading for the Shop Local movement. Bongiorni tells of having to spend $70 on Italian shoes for her 4-year-old son because the $15 versions in her local shops were all made in China.

bloomberg.com: New Zealand's Dollar `Overvalued' and Will Weaken, Says Goff

Exporters Hurting Exporters say they're being hurt by the central bank's determination to crimp inflation fueled by consumer spending. The New Zealand dollar's gain is ``killing us,'' John Bongard, chief executive officer of Fisher & Paykel, New Zealand's largest home appliance maker, said on July 3. New Zealand's exporters can't rely on a low dollar to boost overseas sales, said Goff. Central bank sales of the currency on June 11 were designed to trim the top off the New Zealand dollar's appreciation rather than change its direction, he said.

Kuwaiti News Agency: Oil prices may soar to 100 dpb in two years -- ranking Kuwaiti figure

"He forecast the oil price would remain below the level of 80-85 dpb during the summer time before picking up above that level in the winter where it may soar to 100 dpb."

bloomberg.com: Ireland's June Jobless Rises Close to Four-Year High

Ireland's unemployment rate rose to 4.6 percent in June, the highest in almost four years, as companies including Procter & Gamble Co. cut jobs and a building boom slowed.

thomson ifr: Japanese companies based in Osaka worried about yen suddenly strengthening

Companies based in or near the western Japanese city of Osaka are increasingly worried that the yen might suddenly strengthen, a senior official of the Bank of Japan said Friday. "Managers at Osaka-based companies are now expressing concern about an abrupt reversal of the recent trend of the yen," the manager of the Osaka branch of the central bank, Masahiro Samejima, told a news conference. "The yen has so far been staying at levels that are beyond the budgeted export hedging rate, thereby yielding a net positive impact on companies in this region, even after taking into account negative effects such as higher cost of imported products," Samejima said.

FT.com: Hedge fund financing

There is nothing like a hedge fund blow-up to concentrate minds on Wall Street. The implosion of two Bear Stearns funds and this week’s news of attempted redemptions at another smaller hedge fund have focused attention on the quality of the underlying assets. Credit hedge funds with a penchant for subprime asset backed securities (ABS) have become more than a tad worried about the liquidity and the value of the underlying investments.

Bloomberg: Yuan Strength Fails to Quiet Sanction

As a major importer of Chinese goods, this will affect UK import prices in a big way. If UK rate rises peak or/and Sterling falls it would have an even bigger effect. Short/Medium/Long inflation is here to stay in the UK, and this is yet more evidence why rates will continue to rise through 2008 and maybe beyond.

Times: Big borrowers denied top mortgages

New borrowers started feeling the pich of subsequent IR rises, but apparently you can still get what you want... but on artificially low introductory rates, of course. But since "40% economists expect IRs have peaked" what do you worry about?

Guardian: Holidaymakers oust the Arran islanders

...yet more heartache for the 'average' people of this God forbidden country. You may be happy in your expensive holiday home, but don't count on having any emergency cover in the future. This makes me sick.

Observer: Dollar takes a pounding from world interest rates

"Brent Crude was close to record highs, at $76 a barrel, and Kona Haque, commodities editor at the Economist Intelligence Unit, warned that cuts in oil supplies by the producers' cartel Opec would keep energy costs high. 'The market is actually in deficit,' she said. 'Supply is not meeting demand. We're looking at a tight market for the rest of this year.'" - Supply diverging from demand is the very definition of peak oil. Are we there? Is OPEC reducing supplies involuntarily because Saudi Arabia's has peaked? That would amount to a structural shift in global inflation, resulting in elevated interest rates worldwide, most likely settling on or close to double didgets.

Scotland on Sunday: Property market on shaky footings

They've certainly changed their tune: "SIGNS of a significant slowdown in the Scottish property market emerged as the Bank of England delivered another payment shock to borrowers by raising interest rates ..." "Halifax group economist Tim Crawford said: "This could be interpreted as a tentative sign of a slowdown. ... this looks like a marked slowdown ..." "Repossessions look certain to rise... "Falling values, though, would be a catalyst for a nightmare cycle of rising repossessions and a property crash."

Scotland on Sunday: House price inflation hits two-year low

"THE housing boom in Scotland appears to be slowing as new figures show the growth in prices has slumped to its lowest level for two years. "

Independent: Homeowners bear brunt of latest interest rate increase

"While interest rates at this level don't appear high, compared to the early 1990s when base rates reached 15 per cent, the level of consumer indebtedness - 2.5 to 3 times the level back then - makes consumers more sensitive to even modest rate rises."

Firstrung: Bulgaria is over, the country had been a disaster for UK and Irish investors

David Cosgrave, representative of Romanian real estate company, Off-Plan, reveals in a frank interview that real estate has been oversold by agents. He said that "Bulgaria is over." The country had been "a disaster for investors in the UK and Irish markets," he said, as quoted by the Romanian magazine The Diplomat. Property prices in Bulgaria "have not grown and rental yields are low."

Telegraph: Property starts to crack

New signs of distress in the UK's shaky commercial property market have emerged after Standard Life slashed the unit prices of five of its real estate funds in response to nervous investors cashing in their holdings. Inevitable really.

Guardian: Cost of fixed rate mortgages set to rise sharply

"The cost of fixed rate mortgages looks set to rise sharply next week after banks and building societies started withdrawing products in response to Thursday's bank rate rise."

you tube: UK house prices? Future of housing market?

A Dr Patrick Dixon's video about house prices. He seems to be quite optimistic about emigrants and the way they supports house prices, does he really think Poles will stay here for ever? In my opinion: no way.

Right move: St. Andrew's Place, Chester

Thought you might all enjoy this, the caption time is running out! For who we ask, this property has been dropped in price recently!!...lol Anyone want to take bets on who time is running out for Enjoy the laugh

Firstrung: Independent Network of Estate Agents - Tesco proposition fatally flawed and skirting rules

The Sun on Sat 30th June states TESCO will not be an agent, but a 'property portal' that will (for £199) show sellers (The Sun's words) how to become estate agents. "TESCO have linked with various experts" and will allow owners to upload up to 20 pics etc. All they'll need is; internet access, a tape, a digital camera and here's the good bit, "For Sale Boards" for outside the home which will be provided.

Guardian: Tesco aims to stack 'em high with move into property

With no barrier to entry, there will be at least a couple or more serious entrants here. Maybe a "VirginHome"? But the established "marketplaces" like eBay and Amazon.... I am sure they too are thinking about it. There will be a lot of money to be made in the falling market, think about "repossession avoidance" packages, "bridge financing" at 20% interest ... and stuff. What a mess! What a show!

Daily Mail: News Aritcle

Here is an interesting article from April. The comments in particular make interesting reading. It would appear there has always been this conservative attitude of negativity about debt, so who let the situation become so critical in the first place? Where are the repossessions? Interest Rates have gone up twice since haven't they?

Daily Telegraph: Banks 'set to call in a swathe of loans'

The United States faces a severe credit crunch as mounting losses on risky forms of debt catch up with the banks and force them to curb lending and call in existing loans, according to a report by Lombard Street Research. The group said the fast-moving crisis at two Bear Stearns hedge funds had exposed the underlying rot in the US sub-prime mortgage market, and the vast nexus of collateralised debt obligations known as CDOs. The United States faces a severe credit crunch as mounting losses on risky forms of debt catch up with the banks and force them to curb lending and call in existing loans, according to a report by Lombard Street Research.

Telegraph: As 'China effect' reverses, inflation threatens

Lead prices have jumped to $2,900 a tonne (£1,440), up 160pc since last summer. Corn prices are up 60pc in a year and are now flirting with $4 a bushel. Soybean prices up 50pc since October. Higher grain prices are inflating animal feed. "There is now a whiff of the late-1960s in the air as benign boom turns to a faintly menacing, late-cycle, nexus of excesses. Rampant global liquidity has driven up asset prices. This inevitably spills over into ordinary inflation, albeit with a time-lag." Higher interest rates should precede a structural rise in ordinary inflation by approx two years to contain it. Should we be at 8% IR's already with 1% CPI to future proof the economy?

Guardian: Petrol 'to break through £1 a litre'

A rather damning article, showing that petrol could surge above £1/ltr. More worrying, it cites reasons why this will not abate in the short-term and that it could get much worse, with other factors to play. More interestingly, OPEC are refusing to increase quota's. Could this be because they don't have spare capacity to absorb such shocks? £1 petrol prices alone could send CPI upwards again on a trajectory towards 3% in a very short timescale, with pipeline pressures to follow in the medium term if higher prices persist. Could this trigger a back to back rise, or will the MPC decide to sail through this "short-term" turbulence?

Times: Buy to let or to fret?

With these dark clouds on the horizon, is buy-to-let investment still a good idea? The experts say that there remains money to be made, but there are dangers. Strong competition among lenders has provided an array of low-rate deals. Among them is Chelsea Building Society’s 4.99 per cent loan with a flat fee of 2.5 per cent, which is added to the cost of the mortgage. This sounds like a large additional cost but Mr Grandlin says that landlords should pass on the fee to tenants by adding it to the rent. “This is a great way of being able to buy a property now,” he says

Times: Estate agents angry at Tesco property website

This is free market and competition at its best! GO TESCO! Every little helps!

Times: Standard Life in property price warning as it cuts funds’ values

Standard Life has slashed the value of its £4.5 billion property funds, becoming the first investment house to give a serious warning about price falls in the £700 billion UK commercial property sector. Capital Economics this week forecast price falls across commercial property of 12 per cent – 18 per cent in real terms – between the end of this year and the end of 2010

FT: Rate rise heralds a return to a buyer’s market

"Peter Bolton King, chief executive of the National Association of Estate Agents, this week pressed the Bank of England to think seriously before raising interest rates again any time soon. “We urge the Bank to seriously consider the potentially adverse effect of any further interest rate changes and the consequences that this will have on the housing market, especially bearing in mind how vital this sector is to the UK economy,” he said" ... with that last name and such a confused idea of what the BoE mandate is, this clown may end up sitting on the MPC soon

eGov Monitor: Painful rate rise will hit families

Commenting on today’s interest rate rise, Liberal Democrat Shadow Chancellor, Vince Cable MP said: "Today’s interest rate rise is almost certainly not the end of rising rates, thanks to the Bank of England allowing the expansion of credit and the bubble in the housing market to get out of control."A painful correction would be paid for by millions of families struggling with mortgage payments. "We are already seeing rising repossessions and insolvencies. This will only get worse as previous rate rises start to bite, especially with more than a million people coming off fixed rate mortgages in the coming months. "We face the possibility of falling house prices and negative equity last seen in the late 1980s.

Daily Express: Average British Family is now £55,000 in debt

Will this effect sentiment? "Up to nine million Britons now confess to having a serious debt problem."

Telegraph: Blair's legacy is a nation engulfed by debt

Watching many British consumers en route to a debt crisis has been like observing drivers of cars with faulty brakes, heading confidently towards the edge of a cliff. When alerted to looming disaster, these debtors and motorists kept giving the same reply: "Relax, everything's in control." Then, whooosh!

BBC News: Nigeria fears push oil over $76

Oil prices have surged past $76 a barrel amid growing concern that unrest in Nigeria will hit exports. The kidnap of a three-year-old British girl this week has been seen as an escalation of the violence that has plagued the oil-rich Delta region.

LandlordExpert: Are buy to let landlords selling up fast?

Recent RICS (Royal Institute of Chartered Surveyors) reports state that a growing number of buy-to-let landlords are now selling up due to rate increase fears which could see their profits marginalised. These figures indicate that there has been an increase in the numbers of buy-to-let investors placing their properties on the market - which may be related to the rising interest rates and the decline in rental yields over recent months.

Firstrung: Self cert buy to let mortgage launched by Kensington

The Kensington Self-Cert Buy to Let product is designed to help the thousands of homeowners, who do not need to rely on rental income to cover their buy to let mortgage repayments because they have the excess personal income to service another mortgage.

Firstrung: House prices for new homes fall by up to 23% in Malaga

The latest property market statistics confirm the recent downward trend in price increases in the province of Malaga with the cost of new homes actually falling in some areas. The recent report published by Salvago Inmobiliaria, concerning the months of April, May and June of 2007, reveals that the cost of new properties has fallen by as much as 23 per cent on the east side of the city of Malaga.

BBC News: Are markets hurricane-proof?

Looks he's think what we're thinking - sorry to nick your line Michael Howard ( I feel dirty now)

MoneyWeek: The end is nigh - for soaring house prices

Yesterday's interest rate hike was accompanied by a spectacular outcry. But the lobby groups supposedly protesting on behalf of homeowners seem to forget that there's more to an economy than house prices.

The Landlord Association: Uk house prices likely to slow down in second half of 2007

House prices in the UK are always a subject for debate. Does this news article shed any clear evidence that a house price crash is likely or is it yet more