June 2008 Archive
Monday, June 30, 2008 
Going down - faster than ever before
Daily Telegraph: UK house prices in grip of slump that experts expect to deepen
An article describing everybodys views that this crash is faster, deeper and more structural than any before it - so say the estate agents. I can't say I'm surprised. It takes milliseconds to go around the internet, and anyone buying will be second-guessing every day. If you've not exchanged and don't need to - why should you? You WILL gain purchasing power by waiting - or more clearly - you will LOSE money if you buy anytime soon.
More spin suggesting now as a good time for FTB to jump in
The Bath Chronicle: Credit Crunch 'Could Help First-Time Buyers on to Ladder'
There is the usual bluster that things are different this time as IRs are lower and employment is lower. But I am heartened by the admission by the surveyor Stephen Morris of 10-15% falls since their peak last year. Even the worst statistics from the lenders don't reflect that (yet). More worryingly, it says of Richard Pullin, of Pullin Knight "His firm has teamed up with mortgage broker Network Mortgages to launch the Gifted Deposit Scheme, in which vendors can opt to pay up to five per cent of their buyer's deposit." Is this not identical to the allegedly fraudulent incentives offered by big property developers? Does it not amount to a 100% mortgage that the lender would be most interested in hearing about in these days of strict lending criteria?
How Low Can You Go
Telegraph: Lloyds TSB gives Visa cards to 11-year-olds
Lloyds TSB is sending the cards directly to children as young as 11 without informing their parents, raising fears that they are being used to buy cigarettes, alcohol and pornography over the internet. The cards are Visa-enabled and can be used any time a Visa sign is displayed.
BTL is UK's subprime
BBC World service: Analysis
All bubbles eventyually burst and when they burst there is lot of pain Highest debt consumer debt level in western world 30% fall on aution prices IMF says UK market is 30% over valued FTB buying now will be in negative equity High home ownership 80%. All counteries having high home ownership is having high falls 3rd most overvalued housing stock after Ireland and Netherlands Debt binge in the last 20 years. and we will pay for next 10-20 years BTL is UK's subprime. City centre and holiday homes loosing values fastest Cheap credit is over. No more 100% mortgages Higher interest rate and more deposit. Million people paid mortgage on credit card Etc. Etc
Here it comes - the final nail!
Telegraph: Trinity Mirror points to weakening jobs market
'For the first six months of the year, recruitment advertising was down 8.4pc in the regionals division, whose titles include the Birmingham Post and Newcastle's Evening Chronicle. Spool back to the first four months of the year, and recruitment fell just 1.7pc, suggesting a marked decline in May and June.' Here it comes, the final nail in the coffin!
Sub-Prime UK , a painful article
Bloomberg: Hadrian's Town Becomes `Slum' as Subprime Infects North England
Paul Quinn stands among furniture piled in a second-hand store in Wallsend, a town in northeast England where about half of mortgages are subprime. Demand for the chipped tables and cupboards is accelerating, he says. ``One time you couldn't sell, and now they're all buying,'' said Quinn, 57, who minds the shop for Alan Booth Clearances, the local removals company..."
£612k reward for costing British tax payer Billions
Teletext: Rock supervisor gets pay-off
Clive Briault stepped down as managing director of the FSA's retail banking division in April "by mutual consent". This monkey was getting £380k a year before he left 'by mutual consent' http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3586950.ece
WTF!!! Why am I not surprised....
Citywire: FSA directors took home 22% pay rise in year of the Rock
The Financial Services Authority increased the total pay of its directors by around 22% in the year it presided over the Northern Rock debacle.
Given the current state of the housing market, it looks like unlikely timing....
Citywire: Falling home sales prompt renewed calls for stamp duty reform
Plummeting housing transactions have prompted the Royal Institution of Chartered Surveyors to renew calls for reform of stamp tax, calling for a two-tier tax system in which no one would pay the tax on the first ₤150,000 of a house price. Under the institution’s proposals, above the ₤150,000 limit a 2.5% rate would be charged on every pound, up to ₤250,000, after which a 5% rate would apply.
Direct result of lenders bypassing brokers?
Telegraph: John Charcol axes 25pc of staff as mortgage market dries up
.....the broker said it plans to close its offices in Manchester, Guildford and Birmingham, and will lose 69 staff.
From the horse's mouth
Bank of England: Lending to individuals, latest release
This release used to be a frontline stat, but now you have to burrow to find it. They've also stopped showing a rather good graph. I don't know how to stick graphics into posts here, but if someone would like to go into the banks interactive database, type in the code LPMVTUV, output for the last ten years and create a graph from the data, you can see how lending has suddenly fallen off a cliff...
Latest predictions from buy-to-let lender Paragon, are, as always, optimistic
Citywire: The future of buy-to-let: boom or bust?
Latest predictions from buy-to-let lender Paragon, are, as always, optimistic. Paragon maintains that landlords are looking forward to an increase in tenant demand and the opportunity to increase rents. Signficantly there is virtually no mention of falling property prices. But this is at odds with figures from the Association of Residential Letting Agents where the latest survey reveals that in some areas, particularly those with a high proportion of new build flats, rents are actually falling. Moreover, in the face of falling property values, some buy-to-let investors are clearly bailing out. The results from recent auctions where a significant proportion of properties are former buy-to-let properties show that almost 50% are failing to meet their reserves.
Wimpeys lenders relax 'banking covenants'....!
Property Week: Taylor Wimpey confirms emergency fund raising
Housebuilder Taylor Wimpey confirmed today that it was in talks with investors regarding emergency fund raising plans.
Timber!!!!
Reuters: Crash worries grow over housing market
More gloomly figures, how much longer can the UK housing market take before it goes same way as US market, not long I think. What will be the final nail in its coffin?
How does being thrifty help a debt-based economy?
Belfast Telegraph: Viewpoint: Thrift needed to ride out economic slump
"It revealed that 42% of people here are spending more than they are earning. All pleas for people to tighten their belts in the current straitened economic climate are apparently falling on deaf ears." This to me sums up the conflict/joke/lie at the heart of our economy - do they really want us to be thrifty when curbing consumer spending leads to a recession? What happens if we become a nation of savers? Even if we 'spend within our means', is that enough for 'sufficient' economic growth?
Rents are coming down
Essex County Standard: Landlords told to be realistic
‘ Landlords who hold out for inflated rents on their empty flats and houses have been warned they risk seeing their properties "sit in the wilderness". The warning comes from Richard Jones, manager of Letting Solutions: ”it is better to accept a lower monthly rent - which may not cover all the landlords' costs - than to have a void and no income at all.” ‘ - Pages 32&33 on the web (60 and 61 printed in the paper)
Staff fraud soars by 74pc
Telegraph: Staff fraud soars by 74pc
Fraud often increases in times of economic slowdown as people and companies become more desperate, but the sharp rise in recent months underlines the depth of the current crisis. But according to brown we are wealthy and dont have inflation..
This is hilarious - beyond satire
This Is Money: HSBC may repossess own head office
Last year, HSBC sold its Canary Wharf HQ building to the Spanish property group Metrovacesa for £1 billion, in a sale-and-lease-back scheme that allowed HSBC to remain in the building. This was the largest property deal in UK history at the time. Metrovacesa took on £800m of short-term debt to buy the building. It borrowed the money from.... you guessed it, HSBC. Now they are struggling to refinance the debt, as no-one wants to lend to them. HSBC want their money back, and Metrovacesa can't pay. HSBC may now repossess the building. Sweet!
Today's gold fix = $932.75/oz
Kitco: Today's gold fix = $932.75/oz
Given the amount that certain people talk about gold, I thought this might be of interest. Especially when viewed alongside this: http://www.housepricecrash.co.uk/newsblog/2008/04/blog-goldsilver-bull-not-over-12623.php?comment=added
Some gemstone quotes here
Telegraph: UK house prices fall for ninth straight month
Similar to Guardian piece but worth reading for the risible quotes: "At the weekend Professor Stephen Nickell, a leading housing advisor to Gordon Brown, warned that it would take until 2015 for the property market to start booming again. He also warned that the “severe rationing” of mortgages was preventing first time buyers from taking advantage of falling house prices, preventing affordability from improving." A peach that one. How many GCSEs do you have to fail to become a leading house advisor? Even better: "Richard Donnell ... said: “This drop in volumes was always possible as around half of all transactions in recent years have been driven by aspirational or non needs based movers, who are now sitting on their hands." " What shall we do this weekend. I know, let's move house.
It's All Different This Time .....
Guardian: Banks and insurers prepare to sacrifice jobs to protect profits
... Or is it?! The VIs suggest all will be OK - employment is solid. "More than 10,000 City staff face sack this summer Fastest fall in profits of financial firms since 1989" Ooopps.
BCE to increase rates... Mr King, Frankfuft calling!
Yahoo France: BCE will increase interest rates to ease tensions on prices
Jean-Claude Trichet will probably ask for the main rate to be increased to 4.25% following the Euro zone inflation figures for June (4%). This move appears as "almost certain and already integrated in the market" according to Stéphane Deo, economist at UBS. Will this show the way to the BoE?
Why we should be worrying about deflation
MoneyWeek: Why we should be worrying about deflation
"...even though prices are rising at a rate of knots just now, deflation is also a very genuine threat to Western economies. How it plays out remains to be seen, but a period of inflation followed later be a longer period of deflation does look quite possible."
Nationwide June House Price Index Missing In Action ?
N/A: June House Price Index
Anybody seen it today yet ? Final seasonal "smoothing" going on ?
Severely damaged banks being more conservative
BBC News: New low for UK mortgage approvals
''The number of new mortgages being approved for house purchase in Britain has dropped heavily for another month. The Bank of England said 42,000 homes were approved in May, a 28% fall compared with the previous month and 64% down on a year ago. ...
Why not "turn on, tune in, drop out...."
Firstrung: UK house prices fall for ninth consecutive month as house transactions begin to slump to 1970 levels
UK house prices have fallen for the ninth month in a row during June, to cost 3.2% less than they did a year earlier, figures released from today Hometrack have shown...The number of homes selling is now on target to slump to levels last seen in the 1970s as the credit crunch continues to take its toll on the market, the property information grouphas stated. The group said the average home in England and Wales lost a further 1% of its value during June to cost £170,500. Richard Donnell, Hometrack's director of research, said new buyer registrations were now down by 5.7 percent in June alone and have fallen by more than 50 percent since the credit squeeze began last August.
Banks to trample growth in rush to deleverage
reuters: Banks to trample growth in rush to deleverage
Those losses -- which are still mounting and being recognised -- have piled up faster than banks can raise new capital, leaving the system today more extended than it was before the crisis began. *******So what happened to all the tax payers money that was pumped in*********
Japan May housing starts -6.5 pct
reuters: Japan May housing starts -6.5 pct
It was the 11th straight month of falls.
BIS slams central banks, warns of worse crunch to come
Telegraph: The media's uber bear
A year ago, the Bank for International Settlements startled the financial world by warning that we might soon face challenges last seen during the onset of the Great Depression. This has proved frighteningly accurate.
That's gotta hurt!
Times Online: Northern Rock borrowers face big jump in mortgage repayments
Hundreds of thousands of Northern Rock borrowers are facing huge rises in their monthly mortgage repayments because they are trapped in deals with the beleaguered lender. Thousands of Together customers have little option but to move on to the bank's standard rate of 7.49 per cent at the end of their fixed-rate deals. A homeowner who took out a £150,000 fixed-rate loan with Northern Rock at 6 per cent will see their monthly repayments rise by £186 on the bank's standard rate. Melanie Bien, of Savills Private Finance, a broker, said: “Unfortunately, people with 100 and 125 per cent loans who are coming to the end of the fixed-rate don't have much choice.”
Hometrack: -1.0% MoM, -3.2% YoY
Guardian: House prices fall for ninth month running
House prices in England and Wales fell for a ninth month running in June, leaving them 3.2 percent lower than a year ago, a survey by property research company Hometrack showed on Monday. The survey also revealed a rise in the length of time a property spends on the market and a smaller proportion of the asking price being achieved. Richard Donnell, Hometrack director of research, said, "In the short term it seems inevitable that prices will continue to post modest falls until such time as confidence improves."
Sunday, June 29, 2008
Strewth mate - the poms have had it
Telegraph: Australians leave UK to escape credit crunch
Australian authorities have recorded a 50 per cent increase in the number of their citizens returning down under since last summer. Growing numbers of migrants from Poland, India and Nigeria are also said to be leaving in the hope of easier times and more economic stability back home. The cost of raising a family is said to have jumped more sharply in the UK than in any other country in the western world. The departures are harming the building industry and businesses in the City in particular, which relies on seasonal workers from other countries, is suffering.
Another f'd company
Press Association: Taylor Wimpey to unveil emergency cash call
Beleaguered housebuilder Taylor Wimpey is reportedly finalising an emergency multi-million pound fundraising plan as it suffers in the face of a property market slowdown. The firm is said to be hoping to unveil a deal this week, possibly ahead of its trading update on Wednesday, that will see its biggest investors pledge up to £500 million to boost its battered balance sheet. Taylor Wimpey is also understood to be in talks with its banks to relax agreements on debt that it is thought to be close to breaching.
We've Crashed!
Capital Economics: June Housing Monthly
Get a load of this - what a difference a year makes!
America must institute sound monetary policy and stop wasting money war mongering to solve this, but they won't..
Infowars: As economy freefalls, Congress vacations
With reports of gas prices climbing towards $7 a gallon and a continuing foreclosure crisis, Congress is doing what polls show most Americans expect it to. Not a whole lot. So what has Congress been up to recently? Bill sent to President Bush for approval include $162 billion for next year’s war funding, $63 billion for the GI bill and $12.5 billion in renewed unemployment insurance for people whose 26-week benefits have run out, the Associated Press reported. Mexico welcomed a recent measure approved by Congress that sends the country $400 million to deal with a campaign against drug trafficking, Agence France Presse reported. President Bush expressed disappointment that the amount was $50 million less than he had requested. Meanwhile, 8000 homes fall to foreclosure each day!
This is command & Control economics. It is not capitalism!
NYT&Infowars: Mortgage Debt Is Snowballing
Debt is snowballing with some 2.6million in arrears. The government thinks it can solve the crisis by backing 30yr fixed rates and monetising household debt via the Feral Reserve system. Not everybody is behind the scheme. Some Republicans, like Senators Jim DeMint of South Carolina and Jim Bunning of Kentucky, say the proposal would use government subsidies to bail out reckless lenders and borrowers. They suggest that the housing market will correct itself more quickly if Congress does not intervene.
Phase 2: The capitulation of BuyToiLet
FT: Investors secure huge discounts on properties
"Residential property investors are securing discounts of up to 30 per cent on prime new-build developments as housebuilders rush to offload stock before prices fall further. They are finding opportunities in parts of prime central London and the south, typically where development began before the downturn in the housing market. Developers are increasingly desperate to find buyers and will negotiate large bulk discounts, according to agents" this is pretty much it
The Buy-Toilet problems deepen
ThisIsMoney: B&B bosses may pay price for 'stitch-up'
One source close to TPG warned that without the funding to be raised from the current scheme, B&B could face a Northern Rock-style crisis, with panicked savers queuing to withdraw their cash.
More confirmation of the good news ahead
Observer: UK housing sales plunge to record low
"...and he expects prices to decline by 15 per cent this year; by up to 12 per cent in 2009, and by yet another 10 per cent in 2010 - one of the most pessimistic City forecasts." and "...78 per cent fewer mortgage products available than at the pre-credit crunch peak last summer" But ... this is going take ages, how can we speed up the process ? Any ideas?
Er... it's the price stupid !
Observer: 'A conservatory, a Porsche, free flights - how can I tempt you to buy my house?'
"25 per cent more homes on the market now than at the start of the year" "... For most sellers, that means whatever they were thinking of asking, they need to take at least 10 per cent off.' Watch this space to see whether 10 per cent becomes 20 per cent before long."
US House Prices Forecast 2008-2010
The Market Oracle: US House Prices Forecast 2008-2010
The housing market trend suggests that the annualised rate of house price falls could bottom at minus-18% for the July S&P/Case-Shiller house price data, therefore suggesting a continuation of the weakening trend in US house prices for the next 3 months (May,June,July data), after which the pace at which US house prices are declining 'should' improve as the current momentum is unsustainable beyond July 2008 due to sharp declines from a year earlier factoring into the annualised house price figures.
American's held to ransom.
Timesonline: Saudis press United States to put an end to rate cuts
There is something called “the Fed family”. It’s not as shady as a mafia family, but far more powerful. Members include chairman Ben Bernanke and the six other members of the board of governors, appointed by the president; the presidents of the 12 regional Fed banks, five of whom serve on the FOMC; and several influential alumni who are frequently consulted by Bernanke and the White House, and whose public utterances Bernanke cannot ignore.
35% HPC - journey from denial through anger and depression to acceptance
Observer: A Victorian value we couldn't afford to lose
Economists at UBS have researched previous housing crashes around the world and concluded that they unfold in remarkably similar ways, over a three- to four-year period, a financial variant on Elisabeth Kübler-Ross's cycle of grieving. In a paper last month it judged too pessimistic to be released to the press, Capital Economics forecast a 35 per cent fall in house prices, with double-digit drops continuing through 2010 Also about the disdain for saving.
Saturday, June 28, 2008
The deleveraging of the UK housing market
Times: Homes hit as lenders slash values
Down valuations are putting further pressure on sellers who have already had to knock hundreds of thousands of pounds off asking prices. YEESSSSS. Tony Grounds, 50, a writer, first put his home at Broxbourne, Hertfordshire, on the market for £2.4m six months ago but was forced to lower the price to £2m. He later approached estate agents Knight Frank who recommended he drop the asking price to £1.795m a few days ago.
An instant classic: David says it is not overvaluation
TimesDavidSmith: Time to ease the loan stranglehold
Steve Nickell, head of the government’s National Housing and Planning Advice Unit, believes that current developments will exacerbate medium and long-term housing shortages. Prices may be falling now but the long-term trend is “relentlessly upwards”, he said in introducing a new report last week. If the market overshoots down now, it will overshoot up again next time. It is hard to see that is in anybody’s interest. What’s going on? It may be a bit of “can’t move, will spend”... BAHAH
Easy or hard, there's no profit to be made
Times: No more easy profit in the BTL market
Something odd is happening in the buy-to-let market. House prices are falling but landlords are prospering. The mere suggestion that landlords are suffering was enough to prompt a public relations offensive cleverly claiming that the real victims are would-be first-time buyers who are being squeezed by surging rent rises — all of which is music to the ears of buy-to-let investors. Letting agencies are apparently crying crocodile tears at queues of homeless couples begging to rent and being gazumped into even higher rents by landlords overwhelmed by demand. But costs are rising, and it may take only a couple of bad tenants or a long vacant period to turn profit into loss. Above all, it is vital to avoid selling if at all possible in the next few years
Rental market booming - for tenants
FT: Landlords told to lower unrealistic rents
"Estate agents are rejecting landlords looking to rent out properties or advising them to lower their prices as a rush of new instructions, particularly in London, has far outstripped demand from tenants." Today I have seen the first EA closure where I live. The premises is being filled by another agent - a lettings agent (lots of local people wanting to let their house). A local EA says the housing market is the worst he's seen for 30 years.
House prices do (not) fall in prime central London...
Financial Times: Investors secure huge discounts on properties
Residential property investors are securing discounts of up to 30 per cent on prime new-build developments as housebuilders rush to offload stock before prices fall further.They are finding opportunities in parts of prime central London and the south, typically where development began before the downturn in the housing market. Developers are increasingly desperate to find buyers and will negotiate large bulk discounts, according to agents.
Well Hoorah!
FT: Public has firmer faith in housing market
"People have lost the belief that house prices would rise indefinitely. Three-quarters think prices are falling..." Good old British public. There's no fooling them.
Don’t bank on buy-to-let
MoneyWeek: Don’t bank on buy-to-let
More than two-fifths of buy-to-let landlords are still bullish. But with some investors so close to the wire already, repossessions are a distinct possibility....
World stock markets: worst performance in 26 years
Financial Times: Global markets reel after first-half carnage
The FT gives a damning overview of the falls in worldwide stock markets over this year: "worst first-half performance in 26 years"
Ah diddums!
Ah diddums!: Lenders put greed above need
They're not charities, you know!
Quick ... Book Your Place
Mortgage Introducer: Property Investor Show
"Nearly 300 exhibitors will be on hand to provide visitors with the best advice for investing in the current market, both at home and abroad, as well as providing guidance on mortgages, finances, legal advice, commercial developments and the process of buying and selling a property." Now where's the stall that says 'Don't Buy Yet, as Buying in a Crash can Seriously Damage Your Wealth!'.
the m3 money supply
Telegraph.co.uk: Has the Fed really flooded the world with dollars?
This rise is almost entirely due to a “bearish” flight from stocks and suchlike. Nervous investors have parked their wealth in money funds for safety until the crisis blows over. These money funds are distorting the M3 data (as Prof Goodhart also recognizes). “Everybody keeps saying the Fed is dropping money from helicopters and flooding the economy with liquidity, but it is not true. All that is happened is that the precautionary demand for money has gone up. That is not inflationary in any way,” said Mr Ashworth.
Residential land market down by 25% so far in 2008
Telegraph.co.uk: Berkeley Group calls bottom by buying land
"Although the housebuilder stressed there could be further price falls to come it said it was starting to see value in the market after 25pc falls in the price of land so far this year." This is a statistic they have been keeping to themselves!
B&B: Sorry! No Beds or Breakfast Available.
FT: B&B shares plunge as Resolution walks away
Bradford & Bingley on Friday endured a 20 per cent fall in its share price and a further deterioration in its relationship with leading shareholders after Clive Cowdery, the financial entrepreneur, pulled the plug on his proposed rescue deal. Mr Cowdery, backed by a number of B&B’s biggest shareholders, had wanted to carry out due diligence on the UK’s biggest buy-to-let mortgage lender in advance of any deal. He had been blocked, however, by the bank’s board, which is already planning to raise £400m through a £258m rights issue at 55p and a £179m investment from TPG, the private equity group.
That's right Barclays 1 + 1 = 5?
FT: Barclays faces questions over balance sheet
Barclays faced renewed questions about its balance sheet on Friday as one of the City's leading analysts forecast that the banking group would need more capital than the £4.5bn it is raising through a share issue. Banking analysts at Citigroup pointed out that Barclays would need to raise £2.5bn just to bring its balance sheet ratios into line with those of Royal Bank of Scotland, its nearest rival. They also argued that the bank would have to take further writedowns if it valued £7.5bn of loans to private equity groups on its books in line with market prices.
More depressing news.... Still soon we will have the first birthday party of the credit crunch and NR bank run to celebrate!!!!
Guardian: Dow Jones index becomes bear bait after dire month
Wall Street is teetering on the brink of a bear market after a bad day of trading completed the worst June since the Great Depression. A new clutch of warnings about the health of banks, together with a $142 oil, sent the Dow Jones down. Concern about the credit crunch's effect on profits at banks continues to dog financial markets. Lehman Brothers suggested that Merrill Lynch could write off $5.4bn in credit-related losses during the second quarter. Elsewhere, Moody's said it might cut Morgan Stanley's credit rating. Gloomy stuff. Still any suggestions for how to celebrate credit crunches birthday? I thought HPC could hire the Millennium Dome! Remember that? There was a time when we thought nothing of giving £789,000,000 to our leaders so they could buy a tent to party in!!
Are people really carrying on as though nothing has happened?
What Investment: Ignoring the credit crunch
A significant number of people are not concerned by the current economic climate and still have their sights on property as a good investment, according to life insurer, Zurich. Less than a third of consumers have reviewed their finances in light of the credit crunch and a fifth of people claim it is a term that has been created by the media. Worryingly, more than a third of people don’t believe that the credit crunch will affect them, in spite of the talk of the housing market downturn, the difficulties of obtaining credit and the rising cost of living. Tony Solomon of Zurich UK Life, says, ‘It is worrying to find that less than a third of people have reviewed their finances in light of the credit crunch. If IR go down will these people buy start buying over priced houses again?
IR going down? Will people return to reckless borrowing?
Daily Telegraph: Credit crisis: mortgage market may be over worst, say experts as banks cut rates
C&G is cutting the cost of its tracker mortgages by between 0.2% and 0.26% from Monday. The move will leave a two-year tracker deal for someone who has a 30% deposit at 5.99%– a full point better than the average rate, which broke through the 7 per cent barrier this week. A&L, which had withdrawn its most generous deals over the last few months, yesterday launched a new two-year tracker at base rate plus 0.98% – equating to 5.98% at today's rates. The deal is for any home owner with a 25% deposit and looking to borrow up to £1 million. Will we see the return to reckless borrowing or will banks now limit advances to 3 -5 times certified salary? Or will these products be withdrawn on Tuesday due to excessive demand?
The housing market has lost its grip on reality
The Times: The struggle to rent a flat in London
I feel that the whole housing market seems to have lost its grip on reality. Young people are naturally attracted to jobs in London, and I do wonder how any of them can afford to live there any more. In an age when we naturally deplore seeing young people sleeping on the streets, I find myself wondering who is to blame.
Friday, June 27, 2008
Yay - something we actually excel at ... debt
Telegraph: British household debt is highest in history
British households are now more indebted than those of any other major country in recorded history, it has emerged. Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.
Oh how the 'experts' change their tune
Telegraph: House prices won't recover until 2015, ex-MPC expert warns
The housing market will not return to its pre-credit crunch health for at least six or seven years, an expert adviser to Gordon Brown has warned. Families must wait until 2015 for the property market to start booming again, according to Stephen Nickell, who heads up the unit which advises the Prime Minister on housing planning.
Newbie BTLers face major pwnage.
Telegraph: New buildflat prices getting hammered
New-build flats have been hardest hit by the property downturn. Over-building in some areas, leading to a glut of properties competing for buyers, and tenants, has sent values and rents spiralling downwards. "There is no such thing as a free deposit," says Mr Sandeman. "The lucky ones are those who got repossessed last year. Those who are being repossessed now, at current auction prices, will still owe vast sums to their lender." The low prices these flats are getting at auction are due to the market softening, but if you add in fraud or overoptimistic valuations that is going to cause big drops in the value.
Yet More Mortgage Expense
This Is Money: Halifax launches £245 mortgage 'entry' fee
Halifax has risked the wrath of mortgage borrowers by introducing a £245 charge for new customers - accused of being the return of the mortgage exit fee under a different name. The so-called 'mortgage account fee' will effectively end the bank's fee-free mortgage range as it will apply even to those who choose to pay a higher interest rate to avoid arrangement fees.
Roll up, roll up only £7,699 to reserve your mortgage!! Yep you heard it, it's a bargin!!
Fool.co.uk: HSBC 'Rescue' Mortgage Is Now A Rip-Off
The maximum loan available under HSBC Rate Matcher is £250,000** and the minimum rate HSBC will match is 4.79%. If you were to borrow this amount at that rate, the booking fee will set you back a staggering £7,699!
Is HP's clock still ticking?
Tiscali news: Labour 'should consider sacking PM'
Labour should "seriously consider" ditching Gordon Brown following the Henley by-election drubbing, the party's former chief fundraiser Lord Levy has said. How long before the 'prudent one' is asked to fall on his sword? Next local elections are 7th May 2009, but may be move back to coincide with the 4th June 2009 European Parliament elections.Will he be out after that......can't see that he will survive until May 2010? www.communities.gov.uk/news/corporate/812676
NR MkII?
Times Online: Resolution drops £400m Bradford & Bingley bailout plan
Keep watching ... if the others pull out, start queueing up at your nearest branch.
Operation Astapa - nets corrupt officials and businessmen...
The Oliver Press: New costa corruption scandal
From the 18th June... 20 arrested as Costa del Corruption investigation begins again this time in Estepona. A NEW corruption investigation has engulfed the Costa del Sol. The multi-million euro investigation in the popular resort of Estepona is understood to centre on real estate corruption.
Very short article, statistical sleight of hand ever present
Times Online: House sales fall 50% as prices shrink
As we come over the summit of the house price high, expect the comparison time frame to lengthen. Now we are hitting the point where property pundits can say that house prices are unchanged since a year ago, while completely ignoring the subsequent rise and dramatic falls in between. In fact, the likes of A Ashworth and D Smith will probably claim that prices are rising as compared with 1 year ago, then 1.5 years ago, then compared with 2 years ago etc. etc. Anne Ashworth's salary is paid for by property section advertising. Others on the Times Online should know better (but don't).
...
Motley Fool: Profit From Property Price Falls
It is a truth almost universally acknowledged... that property prices are falling. Despite debate about the extent to which house values will drop -- will we see a ‘crash’, a ‘correction’ or just a small ‘dip’? -- most experts now agree prices go down, rather than up in 2008.
The level of money they cream off must be dwindling fast!
Motley fool: The Worst Property Rip-Offs Ever!
It was the keys that saved me. The keys, and the parking tickets. Without them, I think I probably would have gone insane.
Phew! Relax everyone, they know what they're doing!
Mail On Sunday: Earth will not be gobbled up by black hole during big bang experiment, reassure scientists
The Earth is not at risk of being sucked into a black hole, a safety report into the world's most powerful particle physics experiment has found. Scientists at Europe's CERN lab plan to use the Large Hadron Collider (LHC) to smash highly-energised protons together at super-fast speeds to produce miniature versions of the Big Bang. The collisions will create temperatures more than 100,000 times hotter than the heart of the sun.
Are stock markets waking up to reality?
MoneyWeek: Are stock markets waking up to reality?
The economic outlook is gloomy. World stock markets continue to plummet and oil remains stubbornly high. And in the UK there is no respite, as people swim in debt they are struggling to repay...
That's all right then.....NOT!
BBC online: Royals cost taxpayer '66p each'
'The Queen and the Royal Family have cost each taxpayer 66p during the last 12 months - up 4p on the previous year, Buckingham Palace accounts have shown. The total amount spent on maintaining the monarchy in the year to 31 March rose by £2m to £40m, figures revealed.' According to Forbes she has a personal wealth of £280 billion (give or take a million or two).....so why the free housing, and a £40 million per annum handout!
How come? Perhaps a lag in data!
BBC news: House prices 'unchanged in May'
House prices in England and Wales were unchanged in May and up 1.8% over the year, the Land Registry says.
We've had a look done the sums and it turns out everything is ok... No problems with the house prices..No.. Honest !!!
BBC News - The Ministry of Information: House prices 'unchanged in May'
House prices in England and Wales were unchanged in May and up 1.8% over the year, the Land Registry says.
but renting is booming???? lol
Times: Vacant Office Space in City Nearly Doubles
Falling demand from the financial sector has led to the volume of vacant office space in the City of London nearly doubling over the past 12 months.
Have your say
BBC News: What do you think of Brown's year in office?
I've certainly said my piece, including my thoughts on his time as Chancellor rather than just restricting my comments to the last disastrous year - in summary: OUT! OUT! OUT!
Housing Market Problem "home grown"
BBC: Question Time
56 mins in. I now only trust the Lib Dems; everyone else is ignoring the housing disaster . Evette Cooper "... but, but it's the global credit crunch that ate our homework ... interest rates are only 5% ... blah blah" yawn.
pensioners were being forced to choose between eating and heating.
Western Daily Press: SOMERSET OAP KILLED HIMSELF IN 'BUDGET PROTEST'
A Somerset pensioner was so tormented by rising household bills he electrocuted himself after the latest Budget, an inquest was told. The daughter of 92-year-old war veteran George Mechan told a hearing she found him at his home in Mark, near Burnham-on-Sea, slumped in an armchair on March 13, the day after Alistair Darling's House of Commons address. He had taped wires to his fingers and killed himself surrounded by newspaper articles about the Chancellor's economic blueprint, the hearing in Taunton was told. The widower had become increasingly concerned about the rising cost of living and his family believe the Budget in March was the final straw.
Victor Meldrew's generation stole my future
BBC: Britons feel 'socially immobile'
Nearly three out of four Britons feel either worse or no better off than their parents, a survey suggests. Three quarters of the people asked said they believed that the gap between rich and poor was too big. and I bet the majority of those asked were under 60...
What was is that The Badger was saying ...?
The Times: HSBC charges up to £9,999 for 'rescue' mortgage deals
Nice one HSBC!
The future of credit
Telegraph: Pawnbroking goes high-end
Consumers buckling under the strain of higher living costs are returning to the Victorian age in a bid to get their hands on some cash – they are hot-footing it down to their local pawnbroker. And it is not just those on low incomes who are pawning bits of jewellery and small family heirlooms. Some brokers report City whizz kids and professional footballers offering cars or Rolex watches worth tens of thousands of pounds in return for a loan. This is priceless. But seriously Pawn Brokers look positively moral in comparison with high street banks. They have *real* assets backing the money they lend. Wait a second I think they just got upgraded to Angels of light -- they have 100% backing for their loans with real stuff. Wow. They don't do fractional reserve pawn broking, hahaha
Developers deserting the sinking ship.....?
Property Week: Castlemore abandons £275m Leeds scheme
Castlemore has pulled out of a £275m regeneration scheme in Leeds city centre, saying it is reviewing its ‘appetite’ for large scale schemes in the current market.
Final stages of the oil bubble
The Telegraph: Oil price surge rattles global stock markets
Global stock markets were under pressure today as the soaring price of crude oil darkened the outlook for economic growth.
Meltdown time is close
The Telegraph: Barclays warns of a financial storm as Federal Reserve's credibility crumbles
Another mega bearish article from Ambrose
Kick 'em when they're down
Guardian: Halifax comes under fire for bringing in new mortgage fee
The Halifax came under fire yesterday for introducing a new £245 mortgage fee, making buying a home or remortgaging even more expensive. Britain's biggest mortgage lender was accused of "sneaking in" the fee, which will apply to all new Halifax and Bank of Scotland mortgages taken out from Monday. The move could put the bank on a collision course with the chancellor, Alistair Darling, who urged lenders this week not to take advantage of borrowers by imposing huge home loan fees.
Working for the Treasury
Adamsmith.org: Tax Freedom Day
Tax Freedom Day shows just how long we spend working for the Treasury, rather than ourselves. Overall, the government takes more than 40% of national income. This means that the average UK resident has to work a full five months of the year solely to pay that tax bill.
Happy Anniversary Gordon
Times online: Labour finish behind BNP in election humiliation
Labour came a humiliating fifth place behind the BNP and the Greens last night in the Henley by-election caused by Boris Johnson’s election as London Mayor. Gordon Brown’s first anniversary as Labour leader began with the party securing only 1,066 votes, losing its £500 deposit, and having its working majority in the House of Commons cut to 65, as John Howell, the Conservative candidate, succeeded Mr Johnson in the Oxfordshire seat
Time to sell the holiday home!
Global Property Guide: The end of the global house price boom
Only 13 countries in which dwelling price indices are regularly published saw prices rise during the year to end Q1 2008, while 21 countries saw dwelling prices fall in real terms, i.e., after adjusting for inflation. The biggest house price fall was in Latvia (Riga), down -38.2% by May 2008 from a year earlier. The cause of the downturn is blamed on the boom, inflation and bad regulation of banks.
Shares in fluffy white cats rally.
The Times: Echoes of Great Depression as Dow takes another dive
The Dow Jones dived a further 350 points yesterday, giving America’s key economic benchmark its worst June performance since the Great Depression, as oil hit a record and analysts said that the fallout from the credit crunch was far from over. Citigroup’s shares fell by $1.18, or 6.26 per cent, to $17.67 in New York, their lowest since October 1998, after William Tanona, a Goldman Sachs analyst, tripled the net loss he expects the group to make in its second quarter to 75 cents a share, or $3.75 billion (£1.9 billion). Shares in Merrill Lynch tumbled by $2.41, or 6.8 per cent, to $33.05, as Brad Hintz, an influential analyst with Sanford Bernstein, changed his second-quarter forecast for the group from an 82 cents a share profit to a loss of 93 cents a share, or $832 million.
Following on from Citi's recent warning.
Daily Telegraph: Barclays warns of a financial storm as Federal Reserve's credibility crumbles
"This is the first test for central banks in 30 years and they have fluffed it. They have zero credibility, and the Fed is negative if that's possible. It has lost all credibility," said Mr Bond. Shares in fluffy white cats rallied on the news.
Sad old VI truisms being trotted out again
Telegraph: It's cheaper to buy than to rent
According to new figures from Abbey people are increasingly better off buying rather than renting. The Bank says it is now more than £10,000 cheaper to buy a house than to rent in many parts of the country - six months ago, it was just £5,800 cheaper to buy than rent over 25 years. The greatest savings depend on where you live. In the South East, you will be almost £60,000 better off by paying off your own mortgage rather than your landlord's. Phil Cliff, director of Abbey Mortgages, said: "The housing market has changed. A person is better off, in terms of the payment cost, by getting on the property ladder in all but three of the UK's regions."
Interest Rates worked against inflation. Can it work against Stagflation this time around? Discuss
BBC/YouTube: Pandora's Box
Here is an old documentary by Adam Curtis (of "Power of Nightmares" fame) talking about how technocrats, scientists and politicians tried to "make Britain great" again by growing the UK economy only for their efforts lead to Stagflation (and begging for money from the IMF in 1976 - so much for being Great Britain). If there is anything this video achieves, it is a SOBERING reminder of what Stagflation really means not just for house prices. Would appreciate comment.
Thursday, June 26, 2008
A credit downturn should be familiar territory for banks. Think again
Economist: Tread carefully
THE credit crunch has been an alien landscape for many banks. Exotic products, new accounting rules and an unprecedented liquidity freeze have left them groping for handholds. Banks are also dealing with new types of borrowing. In Britain untested areas of specialist lending, such as buy-to-let and self-certification mortgages, are coming under stress for the first time. HBOS, the country’s biggest lender, revealed in June that arrears in these asset classes had risen much faster during the first five months of the year than among prime borrowers.
Buy-toilet 2
ThisIsMoney: Hammered! Buy-to-let unravels
"We've all read the headlines about the property crash. But what's it like to see your buy-to-let nest-egg auctioned off for less than half you paid for it" Uh uh uh
Buy-toilet
MoneyWeek: Don't bank on buy to let
Already, those who do have significant leverage can’t afford any voids at all now. A full 17% say they have already missed a mortgage payment. What was truly shocking was that this was up eight percentage points in the three months since December. That means that in the first quarter there was an annualised 32% rise in delinquent BTL borrowers. Earlier this month, Bradford & Bingley confirmed as much when they revealed that in the first four months of the year, the number of BTL loans that were at least 90 days in arrears had jumped by 52% to more than 3,000
No Money No Supermarket - Just a Cornershop
Guardian: Moneysupermarket.com adds to housing market gloom
Price comparison website Moneysupermarket.com added to gathering gloom in the housing market today, warning that the mortgages and loans market was deteriorating. Although the company – which aims to help consumers choose the right services in areas such as finance and travel – said its first-half results would meet expectations, it painted a gloomy picture of the wider housing market. In a trading statement today, it said trading conditions at its money division, which accounts for roughly half of its revenues, "remained extremely challenging, especially in loans and mortgages, which on a monthly basis continued to worsen throughout the second quarter".
The Anne Ashworth Show
Times: Country piles and crash pads hold their appeal
The mortgage drought has forced many would-be buyers of flats to rent them instead - a boon for buy-to-let investors who neither overextended themselves nor misjudged the tastes of prospective customers.
Handle with Care!! Fragile Homeowner
FT: Majority of MPC ‘considered rate rise’
A majority of the UK’s interest-rate setting monetary policy committee considered raising interest rates at their June meeting, it emerged from a parliamentary hearing on Thursday. In remarks that made clear that if there is to be an imminent change in interest rates, it will be an increase not a cut, five of the nine MPC members expressed concern over rising fuel and food prices.
B&B: Breakfast not included?
FT: B&B faces flak from investors over Cowdery
Angry shareholders on Thursday bombarded Bradford & Bingley with calls to express their concern that the bank had refused to open the books to Clive Cowdery, the financial entrepreneur who wants to carry out due diligence for a deal. Resolution, the company owned by Mr Cowdery, on Thursday claimed that 40 per cent of all institutional investors on B&B’s register were demanding that the bank’s board open its books to Resolution.
Between a Rock and a Hard Place
campaignforliberty.com: Ron Paul, commentary on Fed's decision to keep rates at 2%
Ron Paul challenges the legitimacy of the Fed and explains that rates will go up after the presidential election, when a real recession will occur. The UK is in a similar situation, albeit further from an election.
"Adjustment" is more severe than in the 1990s
London Evening Standard: Builders on slide after 'worse than Nineties' warning
"Kate Barker, who is the Bank's monetary policy committee's lead expert on housing, said: "I don't think it's particularly good news. Conditions are different to the 1990s. The housing market adjustment is more severe than in the 1990s"
Nowts even selling at auction
London Evening Standard: See houses get hammered
4th Neil Collins article down: "It's horribly fascinating, this new sport of watching the housing market collapse, and now you can see it happening before your very eyes. "
Stil no end in site for oils rise.
Bloomberg: Crude Oil Rises as Dollar Drops, Libya Warns of Production Cut
June 26 (Bloomberg) -- Crude oil jumped above $140 a barrel to a record as Libya threatened to cut production, OPEC's president said prices may reach $170 by the summer and the dollar weakened. Libya may curb output because of a U.S. law that allows terror victims to seize assets of foreign governments as compensation. OPEC President Chakib Khelil said oil may surge on a European interest rate rise, France 24 reported. Oil, gold and copper climbed today as the dollar dropped because the Federal Reserve gave no signal of higher interest rates yesterday.
housing vision
Mortgage Solutions: Scottish Government sets out housing vision
Deputy First Minister Nicola Sturgeon made a statement on housing to the Scottish Parliament yesterday. Commenting on its Firm Foundations plan which was announced last year, which included plans for “more houses of all tenures, built to higher environmental and design standards, meeting the needs of those on lower incomes and contributing to the creation of sustainable, mixed communities” she said the Government wanted to raise the rate of house-building to 35,000 new houses a year by the middle of the next decade.
Get your filthy hands off my gherkin!
Telegraph: Allotments thefts rise as credit crisis causes vegetable crimewave
Allan Rees, chairman of the National Society of Allotments and Leisure Gardening, is concerned the problem could get worse as the economic outlook worsens. "Families are getting poorer and this is one way of putting food on the table," he said. "I believe they are being sold on. Thieves stole potatoes from my own plot and put the stalks back in place so it was two or three days before I noticed."
Top Dollar for faulty new rabbit hutches - whatever next !
BBC: Seven in 10 new houses 'faulty'
Seven in 10 buyers of newly-built homes found faults with the property, according to a study by the Office of Fair Trading (OFT). But most of the problems were only minor issues with decorating, glazing, plasterwork or appliances and did not cost the buyer anything to fix. Those whose moving-in date was delayed faced heavy costs, the study into the state of the homebuilding market said. The report also looked at allegations of firms hoarding land to boost profit. There was a scarcity of sites, and holding land could increase profits, the early findings concluded.
Just for fun....
Youtube: Property Ladder (mick take)
Property ladder p1ss take...
To buy oil futures?
Property Week: Institutions sell out of £1.8bn of property
Institutions sold out of a record £1.755bn of property in the first quarter of the year in a sign of the plummeting sentiment in the market. A lot of investment money washing around looking for a place to go.....into futures, hedge funds, and other forms of legalised gambling!!!!
Wouldn't it be much much cheaper and less risky to send little Johnny to a private school?
Telegraph: House prices soar near top London school
House prices are soaring near a top school in London - with parents willing to pay almost £1m more to move into neighbouring homes, according to estate agents. If you bought a more modestly priced home then that extra £550,000~£800,000 could fund a private education with money to spare (or has the world gone MAD!)
Biggest bank in the world goes pop
Reuters: Citigroup sinks to 10-year low, Goldman urges short sale
"Citigroup Inc (NYSE:C - News) shares fell to their lowest level in nearly a decade after a Goldman Sachs & Co analyst said investors should sell the largest U.S. bank's stock short as losses mount from troubled debt.". I guess the CEO's assertion, not long ago, that the worst of it was over was a little off the mark. That's a potential 350,000 people who's jobs would be at risk if it went down.
Concluding part 2 of 2
ITV: Beating the property slump
Last time he renovated it - now he's trying to sell it.
who do you think talks the most sense, the wealthy guy or idiot in fed?
CNN: Buffett vs. Bernanke: The inflation showdown
Buffett, the billionaire investor behind Berkshire Hathaway (BRKA, Fortune 500), fingered "exploding" inflation Wednesday as the biggest risk to the economy. "I think inflation is really picking up," Buffett said on CNBC. "It's huge right now, whether it's steel or oil," he continued. "We see it everywhere."
tongue in cheek.
Newsbiscuit: http://newsbiscuit.com/article/governor-of-bank-of-zimbabwe-forced-to-explain-inflation-of-1-000-003
Many a true word spoken in jest
No surprises..
BBC: Fed keeps US rates steady at 2%
Looks like the Fed are stuck between the rock and a hard place... I won't bother sticking a post on this one, because the number boffins will have a closed group discussion. tip- if you have no banking history, don't expect a proper reply in this blog. Your valid leymans argument will be completely ignored..
Hamptons latest - true or false?
mortgagestrategy: Hamptons see 40% rise in capital's rental stock
Residential agent Hamptons International is seeing a marked increase in available rental properties across the capital with a 40% rise in rental stock. Areas such as Chelsea and Tower Bridge are seeing rental stock increase by up to three times as much as the levels experienced this time last year. Hamptons says rental stock is soaring as a result of would-be buyers renting out their property while waiting for the sales market to pick up.Kate Whotton, regional lettings director at Hamptons International, says: “The aftermath of the credit crunch has caused some interesting changes to the lettings market.
something to aspire to?
daily male: what credit crunch
i guess some are just beyond the tentacles of hpc uk
The Understatement of the Century
Telegraph.co.uk: Mervyn King: Expect a 'one-year pause' in living standards
Bank of England Governor Mervyn King warned Britons to expect a "one-year pause" in the growth of living standards as rising energy and food bills continue to tighten their grip on household incomes. Mr King also signalled that this year's jump in petrol and food prices left the Monetary Policy Committee little room to cut interest rates from 5pc, and that rates may need to rise should inflation spread across the wider economy, particularly to wage demands.
A rigged market in oil?
Casey Research: Where have all my commodities gone?
Assuming that the 7.3 million new car owners in 2008 each drive 5,000 miles a year, and they achieve 40 miles per gallon, the result would be an additional 45.6 million barrels of crude demand, equivalent to 125,000 bbl/day. In other words, new Chinese drivers will devour 25-30% of the recently promised Saudi production increase in a single year. To those predicting an imminent decline in world oil demand, we say: don't bet on it.
Home-price declines will eat into boomer retirement nest eggs: report
MARKETWATCH: Housing crash hits baby boomers
The collapse of the housing bubble will likely have drastic implications on the wealth and retirement of certain baby boomers, according to a report Tuesday by the Center for Economic and Policy Research. The picture gets even worse if real home prices fall more. If prices, adjusted for inflation, fall 10% by 2009, the median household would see a 35% drop in wealth compared with the same age group in 2004; and if prices fall by 20%, there would be a 46% difference. Plus, many of these boomers are "going to be facing a mortgage payment well into retirement," Baker said. That's a shift from past generations: The major asset that most middle-income families in years past would bring to retirement was their home - and it was often paid off, the report noted.
City Boy unmasked
BBC News: City gossip columnist unmasked
For almost two years a City insider used a London newspaper column to dish the dirt on the life of excess enjoyed by many of his colleagues. Geraint Anderson, a former top stock analyst at a major investment bank, spoke to BBC Breakfast about his alter ago City Boy.
The country will be turned inside out by higher energy prices.
daily reckoning: Boneheaded Miscalculations
Life on the edges of suburbia is beginning to feel untenable," says the Times. Like it or not, Americans are being forced to park their cars. This spring, they cut back on their driving at a sharper pace than anytime since 1942. But it's hard to stop driving when you live far from work and far from shops. The confidence level of suburbanites falls with their house prices. We have no proof, but our guess is that no houses are falling more than those built most recently, most far out. That's where homeowner equity is likely to be lowest…and where the increased price of commuting hits hardest. That is where house prices ought to be most vulnerable. Potential buyers will simply add up the costs of commuting - in time and money - and subtract it from what they are willing to pay cont.
More on the Supply side to add to the slump in prices
Sky News: Millions Planning To Sell Their Homes
About one in eight homeowners are planning to sell their property in the coming year despite the current housing market downturn
Title says it all really ....
thisismoney.co.uk: Hammered! Buy-to-let unravels
Want a cut-price, new-build dream apartment (albeit one overlooking a canal and the roof of the local B&Q store)? Looking to pay £100,000 less than the estate agent price of an identical duplex on the Thames? Then the Dauphin Suite of the Cafe Royal was the place to be. The losses on such former 'investments' were often dizzying - if they did sell at all.
Only good thing the PM did was to make this bank independent
Thomson Financial: BoE's King sees significant drop in housing market activity
LONDON (Thomson Financial) - Bank of England governor Mervyn King said UK housing market activity is likely to slow markedly and it is very unclear how long it will be until a recovery sets is. Appearing before the Treasury Select Committee, King said house prices had reached a level that was difficult to rationalise and it is now very uncertain how far they are likely to fall, meaning people will stay away from the market.
Carnage and gridlock on the radar....
Firstrung: Homeowners plannning a panic stampede in order to sell
One in eight homeowners are planning to sell their property during the coming year, despite the current housing market downturn, recent research from Alliance & Leicester has shown....Approximately 13% of people plan to put their property on the market during the next 12 months, the equivalent of 3.3 million homeowners, according to Alliance & Leicester. One in five people plan to carry out improvement work on their home in the hope of boosting its value or increasing its saleability. 50% of people said they would be carrying out work to improve their current property and avoid the expense and upheaval of moving.
Memories: Thatcher on the EU
Youtube: Thatcher: "No! No! No!"
What people don't realise, this lady, was saying NO, whilst she was doing the opposite.
Mervyn King briefing to Treasury Select Committee (TSC)
BBC Business: King confident on inflation fall
The governor of the Bank of England, Mervyn King, has told MPs he is confident that inflation will fall back to the government's 2% target. But an economic slowdown was needed to ensure inflation returned to the goal in the next year or so, Mr King said. He warned rising food and energy prices may push inflation above 4% this year. His Treasury Select Committee appearance comes a week after he wrote to the chancellor, explaining why inflation had hit 3.3%.
Irish eyes not smiling
Irish Independent: Average house price down €30,000 year on year
New figures out yesterday showed that the average house price in Ireland was now down by almost €30,000, after prices fell by 9.5pc in the past year. And the fall in house prices accelerated in May, according to the Permanent TSB/ESRI house price index. The index shows that average prices fell by 1.2pc in May. This was a sharper fall than the 1.1pc reduction in April. Prices have now fallen by 4.4pc in the first five months of this year. And economists yesterday predicted continued sharp falls in house prices.
Inflating away the debt crisis
MoneyWeek: Buy gold now, before they ban it
The good news for Ben Bernanke is he doesn’t have to do anything as obvious as cut interest rates. Rising inflation does the job for him. Interest rates are already essentially negative – in other words, people are being penalised for holding onto their money. Inflation erodes the value of the US consuemrs' debt. Inflation might be bad in the West, but it’s absolutely rampant in emerging markets. Vietnam has recently withdrawn licenses for further gold imports, after its citizens began to lose faith in the Vietnamese currency due to red hot inflation. The US confiscated gold in 1933. Vietnam is interfering with the market now. How high would inflation have to get in this country before we saw something similar?
Cluttons (EA) predicting forced sales will begin making an appearance on the London market in the coming months as home owners come off fixed rates
mortgagestrategy: Forced sales to come on the market, says Cluttons
Cluttons is predicting that forced sales will begin making an appearance on the London market in the coming months as home owners come off fixed rates. The London-based estate agency says that the lack of City bonuses will also contribute to the trend as home owners realise they have overstretched their finances to buy property. Cluttons says sales of second homes are also set to increase at reduced prices, as owners sell before the market slips further.
What the "smart" money are doing
Thomson Financial: UK Q1 business investment slumps by 1.8 pct vs Q4
LONDON (Thomson Financial) - UK business investment dropped sharply during the first quarter as the credit crunch dampens companies' willingness to invest, official figures showed.
Will The Last Person To Leave, Actually Find Any Lights To Turn Out?
The Oil Drum: Europe: Why UK Natural Gas Prices Will Move North of 100p/Therm This Winter
Whichever way you look at it, life in the UK is going to become pretty dire over the next 5 years. Maybe the major parties should have nicked the Green Party's manifesto way back in 1986, instead of waiting 20 years - when it was far too late to act on it. 'The Oil Drum' is a great site - a highly recommmended read for what's happening, and why, with energy issues; no loony theses, just forensic number-crunching by people who know what they're talking about. Check out Chris Vernon's contribution, then backtrack to Euan Mearn's item for even more grim tidings. And for the inevitable individual who'll say 'but what's it got to do with house prices?', read them both - carefully.
Do they have something to hide ?
BBC News website: B&B puts block on Resolution move
Investment group Resolution, which wants to pump £400m into troubled UK lender Bradford & Bingley has been denied access to the bank's books.
London falling, so says Savills
ThisIsMoney: The house that lost 40% in four months
Lucian Cook, research director of Savills: The contraction of mainstream mortgage markets, which we have seen since February, together with the rise in the costs of mortgages, are now biting in London. Agents' stocks are three times last year's levels and sales are well down. Over the spring and early summer there has been a realisation that the credit crunch will have a lasting impact and that we are living with a completely different set of market conditions. So, even though affordability is not the main driver, prices have fallen much more rapidly over the past three months than in the early part of the downturn
Wednesday, June 25, 2008
Rates on hold all summer?
Times: Fed leaves key rate unchanged at 2%
America's central bank kept interest rates on hold at 2 per cent for the first time in a year as it warned that inflation will continue to rise. The rate decision came as Warren Buffett, the billionaire investor, warned that inflation in America is "exploding" and urged the Federal Reserve to remember its dual role of both nurturing economic growth and keeping costs stable.
OFFICIAL Press Release from ARLA: Rents are static
ARLA (Association of Residential Letting Agents): No Soaring Rents as Supply and Demand Levels Come Into Balance Quarterly ARLA Survey Shows
Average weighted rents for houses are down by 7% and for flats by 9%. ARLA says the main cause is the developments of new blocks of two-bedroomed flats coming on-stream. The average capital asset values of rented houses and flats has also fallen [by 3.1%]. 17% of all tenants are immigrants.
Back door rate hike
The Times: Halifax hikes mortgage fees
Britain's biggest lender causes more pain for borrowers by adding to the cost of setting up a homeloan
The bigger offensive of the Times ever!! Robert Mugabe is happy the Times seems to ignore him just to pound renters!!
Times: Rent squeeze: 'Flats would be gone as soon as they appeared'
"After dozens of disappointing viewings the couple had almost given up hope of finding any place at all" I can t believe that!! But wait... "They will move in August." What?!!
Uhm this seems to contradict some of the other articles
Find a new home.com: Rents On The Slide, Says Arla
As the latest survey from ARLA (Association of Residential Letting Agents) reveals, all was not plain sailing in the buy-to-let market during Q2 2008. With house prices falling and the supply of rental property stabilising relative to demand, rents and returns were on the slide
Lets not miss the party on treasure island
BBC News: Three mortgage firms raise rates
Mortgage lenders Bradford & Bingley, First Direct and the Co-operative Bank have all raised the cost of their fixed-rate home deals.
Today Countrywide, tomorrow "attractive takeover targets" UK Banks
bloomberg: Countrywide Sued by California Over Mortgage Loans
Countrywide Financial Corp., the mortgage lender that lost $2.5 billion amid rising defaults and foreclosures, misled borrowers into taking risky loans they couldn't afford, California Attorney General Jerry Brown said. ``Defendants turned a blind eye to the ongoing deceptive practices engaged in by Countrywide's loan officers,'' according to the complaint. ``Defendants cared only about selling increasing numbers of loans at any cost in order to maximize Countrywide's profits on the secondary market.''
New-build city-centre flats - prices are plummeting by up to 70 per cent
Times: The 10 worst property investments ever
The outlook for house prices suffered a further setback this week when the British Bankers Association reported that mortgage lending in May fell 56 per cent on the same month last year. The news came as it emerged that the average fixed-rate mortgage has now risen above 7 per cent. House prices have already fallen by 6.3 per cent through March, April and May, according to the Halifax, and most experts are predicting further falls over the months ahead.
Where do I sign ?
BBC News: Dubai plans 'moving' skyscraper
The world's first moving building, an 80-storey tower with revolving floors giving a shifting shape, will be built in Dubai, its architect says. Thank god it's not over here.
So which is it?
FT: Insight: Commodities rally driven by fundamentals, not speculators
Writer says blame the Fed's low interest rate policy, not the players on the indexes or futures markets.
Lenders are not only pushing up rates, but they are also increasing charges
Citywire: Lenders and developers hedge their bets in a falling market
The mortgage lenders have got homebuyers and their mortgage advisers over a barrel. With a shortage of funds in the market, lenders are imposing ever more impossible terms and conditions and pushing up charges across the board. Life is becoming increasingly difficult for brokers looking for a high loan-to-value (LTV) for their first-time buyer customers and others with a small deposit
Great headline!
Evening Standard: Slump knocks 40% of price of home in four months
The six-bedroom Victorian house in sought-after Bedford Park, west London, went on the market in early March for £3.2 million. Since then, the collapse in interest from buyers has forced the sellers to cut the price, first to £2.6 million in April, then to £2.25million in May and finally to £1.9 million this month - a total reduction of £1.3 million.
Some wishful thinking?
Citywire: Pent-up demand for houses could lead to sharp upturn
"Now may not be the best time to buy a home but it certainly isn't the worst. In spite of the dramatic slowdown in the housing market with house prices having lost virtually all the gains of the past 12 months, evidence is beginning to emerge that when confidence returns to the market, the upturn could be sharp, releasing considerable pent up demand from buyers."
Illinois to sue Countrywide; BofA’s big tax break
CNN: Illinois to sue Countrywide; BofA’s big tax break
There are some new wrinkles in Bank of America’s (BAC) plan to buy struggling mortgage lender Countrywide (CFC). Illinois’ attorney general is planning to sue Countrywide
BTL Apocalypse
Daily Mail: Hammered: What it is like to see your buy-to-let nest-egg being sold off for less than half you paid for it
A famous party venue for 140 years, the Cafe Royal is perhaps an unusual location for a wake. But yesterday, several hundred people gathered under its crystal chandeliers to mark a further nail in the coffin of the property boom.
The gloomiest news yet... millionaires lose a fortune
thisismoney: The house that lost 40% in four months
This is brilliant - a six-bedroom Victorian house in west London went on the market in early March for £3.2m. They've had to cut the price to £1.3m. So were they greedy owners or greedy estate agents?
House Repossessions In Lincoln Up 45 Per Cent
Lincolnshire Echo: Main article
Richard Dale, of Dale and Co Solicitors based in Beaumont Fee, Lincoln, said: "It's an indication of the downturn in the economy. "Because of this the borrower may not have any money and then people are likely to have their homes repossessed. "Many people were previously lending like mad and now some people are suffering. "It's very worrying if this becomes a trend and what the figures don't show is the amount of human tragedy."
The proBTL media offensive is in full swing
Times: Smart landlords are snapping up desirable properties
"Amateur landlords who borrowed wisely and put their money into well-located properties, with tenant-pleasing features, such as proximity to public transport and neutral decor, are doing OK, thank you." We should have pity of people like Anne Ashworth who will never financially recover for having bought overpriced properties in 2005, 2006 and 2007. Yeah, rents are going up and so are mortgage rates, but capital value is falling, renters are doing OK, thank you!
massive losses in the mortgage-backed securities boondoggle
information clearing house: Gas-Pump Gouging; Just Don't Blame The Saudis
This is not about shortages or scarcity; it's about gaming the system to fatten the bottom line. The whole scam is being executed with excruciating precision by the same carpetbagging scoundrels who engineered the subprime fiasco; the investment bankers. The Wall Street Goliaths are using the futures market to recapitalize their flagging balance sheets after sustaining massive losses in the mortgage-backed securities boondoggle. That's the whole thing in a nutshell. Now they're on to their next swindle; distorting the futures market with humongous leveraged bets on food and oil. So its not really Big Oil or "greedy Arabs" after all? Nope, it's the cutthroat banksters again. WHAT HAPPENED IN JIDDAH
Law lords vote down our right to Lisbon Treaty vote
Stuart Wheeler: Unfortunately we have lost
This is extremely important to houseprices. At least at the moment, we have a Bank of England, that can set interest rates for our domestic needs. They can still be reigned in by our treasury. In Europe, Germany is starved of credit, whilst Spain is flooded in it. A central bank to rival the Federal Reserve, taking decisions for corporate needs, without reference to national requirements. The Lisbon Treaty gives precidence to European Law over British Law, effectively meaning that the Europeans could legally push us into the Euro without the consent of the British people. "- Judgement was given this morning and unfortunately we have lost, but I am thinking very hard what to do. There will be further information on the website later today."
There is much more money being put to work by hedge funds now
independent.co.uk: Revealed: Hedge fund managers betting on plunge in bank shares
The American hedge fund group Harbinger Capital Partners revealed that it has made a significant bet on HBOS's price falling, while its UK counterpart GLG admitted it is targeting the rival mortgage bank Bradford & Bingley, as investors were forced yesterday to disclose their short positions to the market for the first time.
Beware the Land of Leather Fallacy
Reuters: Investment unmasked as consumption as UK pops: James Saft
Think of it as the "Land of Leather Fallacy, " after the British furniture company now coming to grief due to people no longer thinking that buying a lemon yellow L-shaped sofa will be repaid with a higher house price or is part of a viable buy-to-let retirement plan
Crash NOT crunch
telegraph.co.uk: Now we know this is a real property crash
Now we know this is a real property crash Edmund Conway, Economics Editor Last Updated: 2:38am BST 25/06/2008 Even the gloomiest commentators have been taken by surprise by the relentless flow of bad news about the property market. Every week seems to bring another dismal statistic. But if ever confirmation were needed that this is no longer a housing slowdown but a full-blooded crash, it has arrived with the British Bankers' Association mortgage approvals figures. When people stop borrowing, a fall in house prices will follow as surely as night follows day. Even the most level-headed economists predict falls of 20 per cent or more.
Scotland to drop 20- 25%
Herald: Grim picture for housing market in loan approvals
Fresh mortgage approvals for house purchase in the UK plummeted even further to yet another record low in May, according to industry figures yesterday which point to prolonged weakness in the residential property market.
Yes! the outlook is good, they are going down Mr Law
mortgage introducer.com: Outlook good for house prices
Stuart Law, chief executive of Assetz, commented: “We are in a period of weakness, not a crash, and vendors are more easily negotiated with, provided they are a forced seller. I would recommend that investors take advantage of the current market and continue adding to their portfolio by buying from motivated sellers.
The tide is high
Money Week: Why it will be a long wait for the tide to turn
Readers will know that we regularly use the phrase, ‘the tide is going out’ as a simile for the credit contraction. For asset markets ever to recover, which they eventually will, that process of the tide going out has to end. Premature talk of a market bottom, as occurred in March this year, has no merit or relevance to the utter reality that the tide has nowhere near finished going out.
Tis but a scratch said the dark knight .
FT Adviser.com: UK house prices to rise again, says Assetz
The declining market for start-up homes will force UK house prices up, according to property investment advisers Assetz. Stuart Law, the chief executive for Assetz, said: "Recent research has suggested that new home starts will fall to dangerously low levels this year, with only 110,000 new homes to be built by the end of 2008, less than half those cited by Gordon Brown as necessary to meet demand.
A Depression Not A Recession Is Coming
financialsense: The United States Fiat Money
AN ECONOMIC COLLAPSE IS HAPPENING Darryl Robert Schoon Central banks are the mechanism by which society’s productivity is drained and indebted. Credit-based money issued by central banks turns into debt, debt which immediately begins to accrue compounding interest paid by productive members of society, e.g. workers, businessmen, farmers, savers and taxpayers. The interest, of course, is paid to bankers, non-productive members of society. also on reddit silobreaker kitco digg and goldseek - http://www.survivethecrisis.com/ and 321gold
Hurtling into a crash
Guardian: Squeeze, crunch, crisis - next stop crash
"The fact is we are no longer in a downturn, we are hurtling into a crash."
Expect more fraud to crawl out
Telegraph: Hard times are back, and so are the fraudsters
Shades of the 1990s and the end of Thatcherism.
Desperate for cash
FT: "Not a rights issue," but Barclays raises £4,5 billion
Barclays today announces it is to issue 1.4bn new shares at 282p-a-share, a discount of 9.3 per cent, with the aim of raising £4billion in cash. It will also sell stakes in itself to Qatar, China, Singapore and Japan. Unnamed institutional investors have agreed to provide another £1.34bn
VI renting spin from The Times
The Times: First-time buyers trapped by rent rises
"Monthly bills for a rented home have risen by an average 11.7 per cent across Britain in the past year, according to research from Paragon, a buy-to-let mortgage lender." Hmm ...
Hmmmm
BBC: Barclays to sell £4.5bn of shares
Barclays has said it will raise £4.5bn ($8.8bn) in a share issue to bolster its balance sheet. The firm has sold shares to new investors such as the Qatar Investment Authority, and existing shareholders including China Development Bank. Barclays said the fundraising move would "strengthen its capital base".
Essential Auction News - June newsletter that reviews auction activity for May 2008
Essential Information Group: Essential Auction News
David Sandeman of EIG was speaking on BBC radio for the North this morning and stated that Riverside flats in the Newcastle upon Tyne area have been selling at auction at around 50% off the price paid approximately 2 years ago. The regional figures make very interesting reading ! "Continuing market conditions have seen the overall sales rate slip 3 points from last month to 56%. It should not be forgotten however that the auction process did sell over 2,100 lots in May, no mean achievement in this market"
Rates rise to more normal levels
mail: Lenders send two-year fixed loan rates soaring past 7% for first time in a decade
''...The average rate on a two-year fixed loan has jumped above seven per cent for the first time in more than a decade, it was revealed today. The devastating research, from the financial information firm Moneyfacts, highlights the nightmare facing homeowners who need to remortgage this year. Lenders are charging crippling rates of interest, piling pressure onto cash-strapped families already struggling with record household bills...''
Coming here soon
Times: Fears for US consumption as house prices fall 23%
House prices in the US have fallen by almost 23 per cent over a three-month period and a decline in American consumer confidence is seen as signalling the biggest drop in consumption to occur since 1974. Wall Street economists described the data as “incredibly awful” and said that the likelihood of the US Federal Reserve raising interest rates is remote. According to the S&P Case-Shiller house price index, considered the most authoritative gauge of US property values, the price of the average American home fell by 1.4 per cent in April, from March, and fell by 22.8 per cent over a three-month period.
SOUTH-EASTERN Australia is close to recession, with growth in spending likely to slow to about 1% and business investment falling 5% as high interest rates drive down economic activity, Westpac is warning
the age: Boom talk followed by gloom
The ANZ has also forecast a two-speed economy, predicting in April that Victoria's output would grow just 1.5% in 2008-09.Victoria's Treasury, however, has boldly forecast growth of 3%, virtually a normal year.Mr Evans said that in past slowdowns, housing construction had taken the brunt of the slump in demand. This time, construction was already so low relative to underlying demand that most of the slump would be felt in business investment and consumer spending. Westpac predicts that in the south-east, growth in household spending will slow from 4.3% last year to 2.4% in 2008 and 2009. Business investment, which grew 5% last year, will shrink by 5% next year.
Tuesday, June 24, 2008
Industrialist to head Revenue & Customs
FT.com: Industrialist to head Revenue & Customs
"maximise revenues"
Sharks smell blood
Independant: Resolution moves to seize control of Bradford & Bingley
Resolution launched a dramatic bid last night to gatecrash the financial restructuring package announced this month by Bradford & Bingley, with a deal that would see it take control of the mortgage lender
Let's do the timewarp again...
Moneyweek: Are we heading for a house price crash?
...to Oct 2007, back to what seems like a lifetime ago (last October). I particularly like James Ferguson's laying into one our our favouriteZ on the panel. By the way, last house price round table at Moneyweek (Jun 2008), John Wriglesworth now says "down 25% over three years". He's getting better at it, close but no 'Elvis' The Blog Monster won't let me post the link as it's in the archive elsewhere... http://www.moneyweek.com/file/36191/are-we-heading-for-a-house-price-crash.html
Please can we have some more sir?
Mirror.co.uk: Home loan approvals dive to record low in May
New home loan approvals nosedived at their sharpest annual pace in at least a decade to hit a record low in May, figures showed on Tuesday, raising fears the housing slowdown is about to escalate into a crash.
Don't Panic!!!!!
ITN: Further house price crash fears
Home loan approvals have nosedived at their sharpest annual rate to hit a record low in May, fuelling more fears of a house price crash. As house prices fall at monthly rates not seen since the slump of the early 1990s, the number of mortgage approvals accepted by the UK's biggest banks dropped to 27,968 during the month from 34,752 in April.
Stuart Law, chief executive of Assetz, said: "We are in a period of weakness, not a crash
onlyfinance.com: House prices appear to be falling
House prices in the UK, grew by 0.3 per cent during the year to May 2008, but this signalled a decline in the annual growth rate recorded in April 2008 of 1.7 per cent, according to property investment firm, Assetz.
Win a tennis match with Tony Blair
Labour Party: Celebrating the future of sport with Labour
Some great prizes to be won here, "to help raise funds for Labour’s campaign to fight and win the next General Election". If a tennis match with Tony Blair is not enough to whet your appetite then maybe Tea with Nancy Dell’Olio at Claridges or the chance to be a character in Alastair Campbell's new novel will float your boat. Yes I know it is of little direct relevance to HPC but it made interesting reading.
We are "Crap" declare Labour Ministers, backbenchers and party activists
Times: Who will finish off Gordon Brown? Follow the money
With the Labour party being close to bankrupt it would appear that things can only get worse with cash donors reported to have become reluctant to hand over any cash whilst Gordon Brown is still in charge. One wealthy benefactor is reported to have said, "I'm not going to give them any more money while Gordon Brown is leader". The report also backs up my own belief that Brown is currently announcing "popularity" policies to appease both the Left and the Right but is simply making himself look clueless, “Gordon says one thing to please the Left, another to please the Right but there's no overriding message.”
Consolidation or market manipulation?
Myfinances: HSBC takeover rumours boost UBS shares
Rumours HSBC could announce a takeover for UBS sent shares in the Swiss bank higher in morning trading. UBS stock rose almost four per cent this morning on speculation HSBC is planning an $80 billion (£40.7 billion) bid for the bank.
Bradford & Bungle
Myfinances: Bradford & Bingley takeover bid launched
Bradford & Bingley faces a takeover bid, weeks after announcing a fund deal with US investors and a rights issue. Resolution – the investment vehicle of entrepreneur Clive Cowdery – yesterday launched an audacious bid to assume control of Bradford & Bingley.
Straight-talking hard-hitting truth
BBC: Falling House Prices - Merryn Somerset
Yesterday I posted an animated video. This one is real, sensible and more hard-hitting. Please watch and comment.
A Further Nail in the House Price Coffin
Guardian: Household fuel bills could rise 40%
Energy prices eventually filter down to everything, house prices can eventually only ever reflect what people can Afford to Pay, after all what is the use of buying a house if you cannot afford to heat it!
16% fall in house prices in 20 US metros
Yahoo: US Home prices extend record slide in April: S&P
Its only gets better.
... and if even the Times says that, you better believe it
Times: Sell sooner rather than later!
"Capital Economics is a notable bear, however, and has been proved wrong in the past. Even normally bullish commentators still recommend acting sooner rather than later, though. Martin Gahbauer, senior economist at Nationwide said: “There is a tremendous amount of uncertainty at the moment. If you are already thinking of downsizing it would be better to do it sooner rather than later.”
The Celtic Pussycat is heading for the litterbox.
Irish Independent: We blew the Boom
During a fifteen-year boom in house prices, construction and consumption, the Irish government has squandered its tax revenues (and quite a bit of European Union largesse), and is ill-prepared for the next few years of recession: "In a devastating economic analysis, the Economic and Social Research Institute (ESRI) forecast the first recession in the Irish economy since 1983. Outlining gloomy prospects for the economy over the next few years, the ESRI said output of goods and services will fall this year -- an Irish definition of recession. ... The main culprit is still the collapse in house construction, which has plunged from 75,000 units last year to just 30,000 next year. This fall is so serious, it wipes out all the growth in the rest of the economy. "
Ouch! Thats gotta hurt!
Timesonline: Lenders send two-year mortgage rates through 7%
Homeowners are at risk of paying nearly 35 per cent more in monthly interest payments after the cost of a two-year fixed-rate mortgage rose above 7 per cent. Borrowers now face interest-only repayments of £875 a month on a £150,000 two-year fixed-rate loan, according to new research from Moneyfacts.co.uk. Just two years, monthly repayments on the same loan on a 4.59 per cent deal that was available at the time would have been 34.3 per cent lower at £574
Now will the sheeple stop buying houses??
reuters.com: Home loan approvals dive to record low in May
Two thirds of Britons own their homes, putting millions at risk of negative equity -- when the house value falls below its mortgage -- if house prices crumble. However, that may be a way off yet, given that prices trebled over the last decade. TOUGH TIMES While soaring commodity prices across the globe have forced inflation to the top of the political agenda and convinced financial markets that interest rates are heading higher, most economists expect rates will eventually have to fall.
This time from an EA!
Thisismoney: London house prices set to drop by 25%
It was Savills' most negative outlook yet for the housing market and fuelled fears Britain is heading towards a crash. Economists are warning interest rates may rise this summer - pushing the price of mortgages ever higher.
Even King Canute would have baulked at this ...
Evening Standard: Reduce rip-off mortgage fees, Darling tells banks
Of maybe The Goblin King realised he'd made a complete fool of himself at OPEC recently and wanted The Badger to take some of the heat...?
Time to buy the yuan and rupee then
Evening Standard: City 'must move to stay ahead'
London will lose its status as the world's top financial centre unless urgent action is taken, Boris Johnson's new City adviser says today. Bob Wigley, a senior Merrill Lynch banker and leader of a new protection squad assembled by the Mayor, has warned that changes are needed to prevent complacency and keep the capital at the top of its game. He says his team, comprising London's most important finance chiefs, will look at expanding markets in the Middle East and other international centres to measure the City's success.
From coke to prozac
Evening Standard: Slump gives City mental health crisis
More City workers are suffering mental health problems because of extreme stress caused by the credit crunch, it was revealed today. Clinics serving the City are reporting a huge rise in calls from bankers and traders facing the threat of redundancy
Stocks head for lower open as oil prices rise, UPS warns on profit ahead of Fed meeting
Yahoo: Stocks head for lower open ahead of Fed meeting
U.S. stocks headed for a lower opening Tuesday, as investors winced at rising oil prices and a UPS Inc. profit warning ahead of the Federal Reserve's rate-setting meeting. Energy prices show few signs of waning, leading to worries on Wall Street that high fuel costs will prevent the economy from growing and aggravate inflation at the same time. Light, sweet crude rose $1.01 to $137.75 a barrel in premarket electronic trading on the New York Mercantile Exchange.
Soon they'll be agreeing with me!
Telegraph: House prices to fall more than 25pc as BBA warns on mortgages
The predictions get bigger and bigger! When they say 'more than 40%' they will be somewhere nearer the mark!
Erm... WTF?
FT: Buy-to-let continues to boom
Demand for rented accommodation boomed in May, according to new data from estate agent Your Move. The UK lettings agent found that lease commencements were up 41 per cent in May 2008 from May 2007. Managing director of Your Move estate agents, David Newnes, said “Buy-to-let will grow this year. Opportunities to invest are ripe for professional landlords able to secure financing. “With rising tenant demand comes rising rents, buy-to-let yields will consequently improve. House prices are under pressure at the moment, and there’s scope for buy-to-let investors with collateral to get good deals to expand their portfolios.”
Fred Harrison Bypasses Authority and Tells It Straight...
Renegade Ecnomist: We'll All Pay a High Price for Boom and Bust...
Harrison has had enough of consulting 'experts' and is now focusing his time on educating the public to the way the system actually works. His forecast of the present crisis was originally published in 1997 just as New Labour was taking over in Downing Street. He flagged the warning again in 2005. He told Gordon Brown and Tony Blair what was going to happen - they didn't listen. The responsibility now lies with the public to wise up.
I thought the tiger economies were immune to the West's problems - NOT!
Economist: China's property bubble is about to burst
The sizzle is off China's property markets, and that's potentially bad news for the country's social stability.
How low can this go??
Firstrung: Mortgage approvals for house purchases reaches a record low and falls 57% year on year
May's mortgage lending was much weaker than April and a record low number of house purchase approvals means the subdued picture will continue. Mortgage approvals for house purchase fell 56.8 percent on the year in May to a record low of 27,968, the British Bankers' Association says...Consumer credit rose, largely reflecting lower credit card repayments and, after April's strong inflow, personal deposit growth was weaker in May.
Why shares in HBoS could fall yet further
MoneyWeek: Why shares in HBoS could fall yet further
With the FSA's new short-selling rules prompting investors to desert HBoS in their droves, and the parlous state of the UK property market, who in their right mind would take up the bank's rights issue now?
New evidence....orchistrated boom....orchistrated bust
The Telegraph: Speculators' domination may fuel oil price rises
The oil market is now dominated by speculators who account for almost three quarters of its activity, new evidence has shown.
What about their huge 100%, 25 year mortgages?
Mail: City bosses 'ready to cut 440,000 jobs' as economic slowdown hits bank profits
''...Employers are preparing to cut hundreds of thousands of jobs as the economic slowdown hits their profits, two studies show. One found that up to 440,000 workers could be made redundant in the next two years as bosses try to contain salary costs. ...''
"House prices have already started to fall at monthly rates not seen since the slump of the early 1990's"
Reuters: Mortgage approvals dive to record low in May
LONDON (Reuters) - Mortgage approvals fell at their sharpest annual pace in at least a decade to hit a record low in May, a survey showed on Tuesday, raising fears the housing market slowdown could turn into a crash. The British Bankers' Association said mortgage approvals for house purchase -- an indicator of house prices in the future -- fell to 27,968 last month from a downwardly revised 34,752 in April. That translated into a 56.1 percent drop on the same period a year ago -- the biggest such fall since the survey began in September 1997.
Lowest loans since records began
BBC News: Bank mortgage lending falls 20%
It seems some of you lot are not purchasing properties. Lowest loans since records began (well until next month). You are subduing the market you naughty people.
More action on Mortgage fraud now it's all gone wrong
BBC News: FBI promises more fraud arrests
A senior FBI officer has told the BBC that more arrests will be made as part of its probe into mortgage fraud and the credit crunch. Section chief for Financial Crimes, Sharon Ormsby, said hundreds of arrests already made were just a "good start". More than 400 US real estate brokers have been arrested and charged with fraud in the past few months.
Buyer's market?
Finance Markets: One million homes for sale in England and Wales
"With buyers in short supply, there are now approximately 15 properties for sale for every prospective purchaser."
Trashed foreclosures in Orange County, California- this is the reality.
Orange County Register: The real foreclosures of Orange County
Formerly $600,000 homes are now vacant and coated in graffiti- and up for auction at $89,000. See an amazing slideshow of the economic and physical destruction.
Offbeat but none the less it won't help sell houses
Daily Telegraph: Manchester more dangerous than New York said American gunman
An American visitor who fired a handgun in Manchester persuaded a court that he was carrying the weapon because the city was more dangerous than his native New York. And the BTL still want 300k for their two bed flats!!!!!!!!
25% of people would but now if they could get a mortgage
Find a New Home.com: Right Time To Buy? One In Four Say Yes
The Building Societies Association new Property Tracker survey has yielded some surprising results. When asked if now was a good time to buy residential property, the majority of respondents (51 per cent) unsurprisingly declared that it wasn't. However, a not inconsiderable 27 per cent – failed to be discouraged by gloomy forecasts and prophecies of interest rate rises and a general recession. However, the top reason for buyers not biting wasn't the threat of further house price falls (that polled 46 per cent of the vote) but the inability to afford monthly mortgage payments. A massive 70 per cent of people could not afford the heightened rates offered by lenders on top of their other growing expenses.
A mighty hangover.....
Mail: Property market slumps by 40% in a year while fall in house prices in London is fastest in UK
''...The number of properties sold has tumbled by 40 per cent in a year. In May, only 100,000 homes and offices which had been put up for sale found a buyer, according to HM Revenue and Customs....''
Monday, June 23, 2008
What goes up fastest...
This Is Money: New-build property prices plunge 26%
Once seen as a sure-fire way of making a small fortune, newly-built flats have become the worst victims of the housing market meltdown. Prices of new-builds in city centres have collapsed, with many sold at auction for a fraction of their value only two years ago.
Against the run of play, surely?
Standard: Steel tycoon buys third property on Billionaire's Row
Lakshmi Mittal, Britain's richest man and a prominent Labour Party donor, has bought his third property in London's most expensive street for £70 million. In March 2008, Mittal was named as the world's fourth wealthiest person by Forbes Magazine. His family owns 44 per cent of steel giant Arcelor Mittal.
Very funny but something to think about
YouTube: A Post-Oil Man
Sometimes a very serious point can be made clear by a funny animated video. Please watch and comment.
HBOS shares being openly shorted
BBC Business: HBOS share price dealt new blow
A £4bn call for cash by HBOS has come under more pressure after the banking giant's shares dropped beneath the rights issue asking price. Existing shareholders can buy at a "discount" price of 275p per share - but they fell 4.3% to 270.5p. The drop came after a US hedge fund revealed that it had "shorted" the firm's shares - essentially betting that they would fall in value. Under new rules investors in this position must declare their interest. Analysts said that the share price had also been dented as a result of investment bank UBS predicting that HBOS would see mortgage arrears continue to rise into the second half of next year.
There will be millions of forced sellers this year
Times: Sellers spend thousands to shift their home
"Even within the current climate, there are still millions of people who are looking to move and they are doing all they can to get the best price for their property” of course! to be forced to sell suffices that people have to move, change job etc. The idea that only being unable to service the mortgage is a reason to be forced to sell is wishful thinking
Oooops, poor cash-rich oil-laden foreign buyers!
ThisIsMoney: London property falling faster than rest of UK
"vendors are at last realising overpriced homes will not attract buyers and that the capital's property market is not resilient to the credit crunch, while supporting predictions of substantial price falls to come"
Tip of the iceburg? Too right!!!
Mortgage Solutions: FSA bans East London brokers for mortgage fraud
The FSA has banned three East London brokers for submitting false mortgage applications to lenders backed by false or misleading documents. The brokers are Muhammad Adnan Ashraf and Muhammad Asim Iqbal, directors of OCS Property and Financial Services Limited (OCS) of Barking, and Mohammed Atif Mayo, a director of Mac & Mayo Property Services Limited of Forest Gate.
Wrong - depressed by buyer issues!
Hotproperty: UK housing market 'to be bolstered by supply issues'
The comparative supply situation means the UK will not suffer the kind of large falls in house prices the US is facing, entrepreneur Donald Trump has said. *** More likely his is trying to protected his vested interests in Scotland!
...
Guardian: Cowdery in bid for Bradford & Bingley
Major City investors in Bradford & Bingley have joined forces with financier Clive Cowdery to take over beleaguered buy-to-let lender Bradford & Bingley.
Dishonest and Manipulative
times online: Sacked estate agent jailed for torture of former boss
Judge Taylor told her: “Throughout this case you have shown little remorse, and consistently shown yourself to be dishonest and manipulative, prepared to do or say anything to save yourself even writing to Mr Malik to try and get him to change his mind about pursuing this case.”
Eastern European workers leave Britain, no effect on rental demand?
Reuters: In parts of Europe, migrant workers head home
British government data show that work applications from the eight east European countries that joined the EU in 2004 were down 13% in the January to March period from last year. "The Polish zloty has appreciated by about 40% against the British pound since 2004. Given the cost-of-living differential between the two countries it makes little sense to be an economic migrant now in the UK," said Michael Dembinski of the British-Polish Chamber of Commerce. Poland's economy grew by 6.1% in the first quarter of 2008, Slovakia's by 8.7% and the Czech Republic's by 5.4%. Britain, battered by a global credit crunch and tumbling house prices, is expected to grow by just 1.8% in 2008. Polish corporate sector wages were up 12.6% in April from a year before.
Double-digit falls for two years
Times Online: Housing slump forces sellers to slash prices
Nice article and a "get real" feel from RICS ended with Global Insight predicting double-digit drops this year and next.
Darlings words of wisdom have been adhered too.. NOT!!!
BBC: Council workers vote for strike
Council workers have voted in favour of industrial action in a dispute over pay, the union Unison has announced. Members in England, Wales and Northern Ireland voted by 55% to strike, after rejecting a 2.45% pay offer. Unison general secretary Dave Prentis said this was "a clear message" to employers "that our members are willing to fight for a decent pay rise. I personally know about two people who are members and they are really struggling. They deserve every penny!!!!
Is this going to be part of the new certification process for EAs?!
Yahoo - Sky News: Sacked Estate Agent Tortured Her Boss
An estate agent who hatched a brutal revenge plot against her boss after being sacked has been jailed for 10 years. (Advertisement) Ambreen Gul, 23, lured Waqas Malik to her flat where he was tortured and ordered to raise a £200,000 ransom or be killed with his son. She had recruited another sacked colleague and two other thugs to make him pay for her dismissal
Paragon stake early claim for comedy club champions of June 2008
mortgagestrategy: Rental yields highest for two years
Paragon Mortgages has revealed rental yields have hit their highest levels for more than two years, in its latest buy-to-let index. Paragon says landlords’ rental incomes have risen nearly 12% in the past year and 6% during the past six months. Meanwhile, property values have risen 7.5% year-on-year, although by just 0.2% over the past six months.
There are now far more sellers than buyers
BBC: Figures show plunge in home sales
The number of UK property sales has fallen by 32% this year, according to HM Revenue and Customs (HMRC). There were 504,000 sales in the first five months of 2008 that were worth more than the new stamp duty notification limit of £40,000. That compares with 743,000 such sales in the same period last year. Meanwhile some big lenders have again put up the cost of their mortgages for new borrowers, with the Halifax and Lloyds TSB raising interest rates.
70% off
Evening Standard: Recession UK
New-build flats have lost up to 70% of their value.
Citi poised to fire thousands
CNN: Citi poised to fire thousands
The Journal, citing people familiar with the matter, said the layoffs are part of a plan to cut about 10% of the staff of the 65,000-member investment-banking group.
New build scam
The Mail: The £238,000 flat that has lost 70% of its value in two years
There are hundreds of examples of similar disasters, according to David Sandeman, managing director of the auction experts Essential Information Group.Mr Sandeman added: ‘People believed all the hype and the marketing that they would be able to rent out their flat for £1,200 a month to a professional couple. ‘They could only actually get £800 a month renting it out to students who have trashed it.’ Well that's what happens when you believe that the wind can't blow away a house of cards.
State, city layoffs: 45,000 and counting
CNN: State, city layoffs: 45,000 and counting
There are nearly 20 million state and local government employees in the country. So a 1% decline in employment at cities, towns, schools and states would result in a job loss of almost 200,000 people, a much larger amount than we've seen from battered sectors such as automakers or home builders in the past two years.
-3k per week
FTAdviser: House prices tumble 1.2 per cent in June
This tumble in prices equates to an average reduction of £3,000 a week. London has taken the biggest average, with asking prices having dropped by £4,500 or 1.4 per cent in June. The average house price in the capital now stands at £399,010, down from £404,541 in May.
Desperate times, desperate measures
Telegraph.co.uk: Three million people have sold goods to pay for their housing, says charity
This article states, amongst other things, that rents are 'soaring' at the same time as mortgage costs, which doesn't quite add up, or tally with my experience. Also see the claim by the woman who had her house repossessed that it was 'sold for what I think is a fraction of its value'. Wishful thinking indeed.
The bright side to high oil prices
MoneyWeek: The bright side to high oil prices
High oil prices are making us miserable. But a bit of panic now, while we've still got oil left to pump, is good for us. Because it's only in times like these that we get truly innovative thinking...
The search term "House Price Crash" has more than tribled in the search engines
New Media Age: Searches reveal users economic concerns
The number of times people are searching for 'house price crash' on Google and other search engines has more than trebled over the last 12 months. People searching for the basic term 'house prices' are increasingly going to news and media sites to find out the latest bad news. As HPC are number 1 in Google for the term "House Price Crash" it would be interesting to see if their site stats tell the same story
Did Ireland's HPC play a part in the NO vote?
The Telegraph: Has Europe's terminal crisis begun with a triple no vote?
A property bubble - caused by EMU interest rates of 2pc until 2005 - has left Ireland with frightening household debt of 176pc of gross domestic product. The country now faces a quadruple shock: a credit crunch, rising interest rates in Frankfurt, a plunge in sterling and the dollar, and a sharp slowdown in its Anglo-Saxon export markets....and you forgot Ambrose, the HPC in Ireland is well under way
WTF! Now Miles Shipside is an economics expert!!!
Guardian: House prices fall as sellers 'recognise market realities'
In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking record prices. It was a mad state of affairs that defied the laws of economics.
Asking prices plummet in just one month
Rightmove: June House Price Index
Down 1.2% Nationally MoM, and 2.4% in South East. “In spite of the lowest housing transactions for 30 years, new sellers had been coming to the market asking record prices. It was a mad state of affairs that defied the laws of economics. Thankfully, new sellers are now taking some proactive steps to price more realistically from the outset to attract increasingly hard-pressed buyers.”
Supply and Demand!
Telegraph: Credit crunch: 15 sellers to every buyer
Only one in every 15 properties on the market were sold last month, according to figures published today (Mon). The oversupply has forced owners to slash nearly £3,000 off the average house price in the last five weeks.
Most Uk Property Buyers Believe The Downturn Will Last 1-2 Years, Findaproperty.com Poll Reveals
FindaProperty.com: MOST UK PROPERTY BUYERS BELIEVE THE DOWNTURN WILL LAST 1-2 YEARS, FINDAPROPERTY.COM POLL REVEALS
A snap poll of consumer confidence in the housing market, conducted by property search portal FindaProperty.com, has determined that most UK buyers believe the current downturn will last around one to two years. The poll of property buyers from across the UK demonstrated that 33% of buyers felt that the downturn would last around one year, while an almost equal 32% of buyers felt that it would last up to two years. 20% however believed that it could last even longer.
And the downward spiral continues!
Bloomberg: U.K. House Prices Drop the Most This Year, Rightmove Says
June 23 (Bloomberg) -- U.K. house prices declined by the most this year in June as buyers shunned the market, deepening Britain's property slump, Rightmove Plc said. The average asking price for a home dropped 1.2 percent from May to 239,564 pounds ($473,000), Britain's most-used property Web site said in a statement today. Prices in London declined 1.4 percent. On the year, the cost of a U.K. home rose 0.1 percent. ``New sellers are now taking some proactive steps to price more realistically from the outset, to attract increasingly hard-pressed buyers,'' Miles Shipside, commercial director of Rightmove, said in a statement.
UK Housing Market Depression to Last 10 Years
The Market Oracle: UK House Prices GDP Adjusted Real Trend Forecast
The UK housing market is very sentiment driven, and in many ways exhibits the same sort of behaviour as that of stock market investments moving between extremes of over valuation and undervaluation against the UK 's GDP growth trend.
Paul's Pal!
Timesonline: Slow growth will tame the inflation beast
YOUR starter for 10. Who said: “The rise in inflation that we are experiencing today is a worldwide phenomenon . . . Indeed, on a genuinely comparable basis, inflation in this country has increased over the past six months by less than in the G7 as a whole.” It was Nigel (now Lord) Lawson, of whom we have seen quite a lot recently. He was speaking in June 1989 about the rise in inflation on his watch.
The suppy and demand argument again!
Timesonline: Donald Trump says UK will avoid worst of property plunge
Donald Trump, the property developer seeking to build a £1 billion golf course on environmentally sensitive sand dunes in Scotland, has predicted that Britain's housing market will not suffer the same fate as the homes market in the United States because there has been far less over-building in the UK. Mr Trump's comments come days after Goldman Sachs, the Wall Street broker, gave warning that the UK may be on the brink of a three-year property slump, with house prices forecast to fall 6 per cent this year and 8 per cent next. HBOS, Britain's biggest mortgage bank, last week predicted a 9 per cent fall in property prices this year.
The results speak for themselves. Even though it is accepted throughout most of the gold-bug community that gold rises in bad economic times, Table 1… shows that such is not the case.
elliottwave.com: Is Gold REALLY a Safe Haven in Recessions?
The results speak for themselves. Even though it is accepted throughout most of the gold-bug community that gold rises in bad economic times, Table 1… shows that such is not the case.
Still a long way down
Times: Nakheel chief Chris O'Donnell says US real estate yet to hit the bottom
Chris O'Donnell, chief executive of Nakheel, the $80 billion Dubai property business, gave warning yesterday that the real-estate recession in America is far from over and will deteriorate rapidly should the price of oil reach $200 a barrel. He said the US property market had never had to cope with the combined impact of a sub-prime mortgage crisis and a surging oil price. “We have not hit the bottom yet,” he said. "No one knows for sure the outcome of the possibility of $200-a-barrel oil. Where is the bottom of this cycle?”
Is that code for CRASH?
AP - Yahoo: Wall Street balks as Fed's tightrope gets thinner
After the Federal Reserve's meeting this week, the Fed policymakers are expected to voice a tough stance on inflation. Talk about poor timing. Though Wall Street's inflation concerns have not abated -- crude oil remains above $134 a barrel -- worries about the health of the U.S. financial system and broader economy have returned in force. "If they were to raise (rates), that could put further weakness in economic activity. But by the same token, by raising, that could help stabilize the dollar and help reverse inflation," Cardillo said.
Another Bear Sterns?
Reuters UK: Merrill Lynch drops on warning rumors
Shares of Merrill Lynch & Co dropped more than 4 percent to $36.10 before the bell on Friday, a drop that traders in the United States and Europe said stemmed from market rumors that the U.S. brokerage will issue a profit warning. A company spokeswoman declined to comment.
Rightmove down 1.2% -£3000 this month. First official confirmation of June index
Daily Mail: A flat in the block below sold for £238,000 in 2006. Now it’s been resold at auction for just £71,000
Once seen as a sure-fire way of making a small fortune, newly-built flats have become the worst victims of the housing market meltdown. Prices of new-builds in city centres have collapsed, with many sold at auction for a fraction of their value only two years ago. In one case, a three-bedroom flat in Kelso Heights, a development on Belle Vue Road in Leeds, was bought for £237,999 in March 2006 but has just sold for £71,000 – a fall of £166,999.
Sunday, June 22, 2008
Better get the umbarellas out
theherald.co.uk/: Are we really ready for this financial storm?
So, just how bad is this financial crisis going to get? Well, according to Bob Janjuah of the Royal Bank of Scotland: "A very nasty period is soon to be upon us. Be prepared."
For your information
Calleman.com: Next Level interview with Calleman
S2Rent1 consistently uses the Mayan Calender to try and predict speculative bubbles and movements in houseprices. Right or wrong, some of you may wish to have a basic understanding of it, either to join in, or to be in a position to critique his position. So, for once only, here's an interview with Calleman, where he summarises in a shortish time his world view.
8pm: C: How TV Changed Britain: Property
Channel 4: How TV Changed Britain: Property
This film asks what contribution has TV made to our obsession with the property market. Has it helped to transform our thinking about homes into places we invest in rather than nest in? Or did TV just reflect the reality of an over-valued market that is only now beginning to hit home?
Why I wont cry a tear on Estate Agent closures
Rightmove.co.uk: Why I wont cry a tear on Estate Agent closures
I have been watching the above property for a 3-4 years now. The owner tried to put it on rent initially but never got a tenent for more than a year. Then tried to sell it. for the next 3 years not even a zilch. It was on the market for £350,000. Good spacious bunglow. A builder bought this property last year. Needless to say he would have not paid the asking price. He then divided the plot and built this EXTENSION And guess what the extension is worth £375,000 and also the original property is on the market for £345,000. I did confront the Estate agent how had he valued the property given the above facts. Funny. Got no answer.
If only half the predictions for next year come true...
Guardian: Unions gear up for wave of strikes
The British economy needs to brace itself for a prolonged period of industrial strife, the like of which has not been seen for 30 years, the country's top union leaders have told The Observer.
How do these imbeciles dress themselve in the morning?
Guardian: Labour heads for financial collapse
Party in crisis with £24m debt as donors back off in wake of poll disaster and funding scandals. AFTER A year of Gordon Brown's leadership the Labour Party is in financial crisis, it emerged last night amid warnings of cutbacks that seriously threaten Labour's ability to fight the next general election. Loyalists including the venture capitalist Sir Ronnie Cohen and the millionaire former science minister Lord Sainsbury are understood to have bailed the party out temporarily in the past few weeks So the ruling party is now majority owned by venture capitalists?
Badger can urge pay restraint from a bigger sett
Sunday Times: MPs set to claim £40,000 perk
What's there to add?
The comparison to the 1990's Crash
FT: FTSE 350 real estate sector being demolished
While the City of London's skyline is still cluttered with cranes, the wrecking ball has been taken to the FTSE 350 real estate sector's market capitalisation. From an all-time peak of £51bn, the industry shed 50 per cent of its stock-market value in just 16 months. In the early 1990s crash, by contrast, it lost 64 per cent over three years. And there are good reasons to believe the present demolition job may have further to go.
Cut £2m off the price of your London mansion!
Snake: Acacia Place NW8 6AJ
A house in NW London drops from £8.5m to £6.5m... but I thought the super-rich had cash to spare, oil money, rubbish money and all that. Still this house priced at £1.5k / sqft. That's waaaaayyyy too much even for NW8! I bet will sell for less than £4m in 2009
Eye watering financials....
Independent: Can You Afford It? Seacon Tower, Isle of Dogs
Fancy a new appartment in E14?
Deceving as usual... it's the Times!
Times: Britain’s largest property developer offers interest free deposit to buyers
The orginal title of this article, very telling about the desperate reality of the housing industry, was "A Built-In Negative Equity Package". This link can still be found at http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/
UK housing - the pyramid scheme comes unstuck!
Independent: As first-time buyers vanish, the lights go out across Britain
House price inflation scared them away. Now prices are falling but they're still not coming back – undermining the market and putting estate agents and builders out of business. Richard Northedge reports '....CML is so unsure of the housing market's future that it has abandoned forecasting prices beyond predicting a 7 per cent fall this year – which the Halifax says has already happened. "We see this as a very difficult market to call," admits Ms Anderson at the CML. "The really core thing for us is what sort of effect the Bank of England funding intervention has." '
Eurozone the one to watch over the next 12 months?
Independent: Hamish McRae: Finances are fragile and shocks could happen. But cheer up - at least we're not in the eurozone
Long but interesting, well wriiten article.....
Too late Mr Darling ......
MSN: Darling urges pay restraint
Well, well. So now we are all going to listen to this fool! The answer to INFLATION is the same as it was for the Tories : HIGHER INTEREST RATES. And to STOP BORROWING AND PRINTING MONEY. This govt is now being shown up for all the incompetence. I have run my own company for 11 years and have to mange my books accordingly, a lesson a Labour govt will never ever learn. Bit of a sticky corner for Mr Brown after all his claims ' an end to boom & bust'. LOL - I am really enjoying watching this bunch of idiots burn ... shame is the UK has been ruined in the process.
If any EAs are still around that is....
Housefund: Approval given for estate agents redress scheme
The Office of Fair Trading has given the Ombudsman for Estate Agents Company Limited (OEA) approval for its estate agents redress scheme under the Consumer Estate Agents and Redress Act 2007 (CEARA).
Founder of Foxtons may be planning a rescue bid
Guardian Online: Founder of Foxtons may be planning a rescue bid
Foxtons founder Jon Hunt is thought to be considering reinvesting in the estate agency chain he sold for £390m at the height of the UK property boom last year. Neither Hunt nor the purchaser, BC Partners, would comment, but sources speculated that the entrepreneur could be lured back at a discount to help Foxtons meet interest payments on its substantial debt. BC funded the deal with around £260m of debt and is thought to face crippling annual interest charges.
Will Hutton running scared
Guardian: If we rely on free markets, we are looking disaster in the face
Mr Hutton argues the case for adopting an American style mortgage system complete with slashed interest rates: "So what public intervention is needed? The US provides the answer. In these conditions, central banks slash interest rates despite what is happening to oil prices; the risk of a credit implosion is vastly higher than an upward wage and price spiral. Also, the US has only been able to avert disaster in its mortgage market via the guarantees offered by two huge public mortgage banks - Fannie Mae and Freddie Mac - which directly or indirectly have provided 80 per cent of all new US mortgages over the last six months. Together, they guarantee more than half of the US's £5 trillion of mortgage debt." WTF ???
The property bulls very own "Lord Ha-Ha" aka David smiths weekly propaganda sinks to new lows
Sunday Times: Bank of England denies rate hikes are in the offing
THE Bank of England’s message on interest rates in recent days was intended to be neutral, sources say, and not a signal that the monetary policy committee (MPC) is contemplating early rate rises. Money markets had a roller-coaster ride last week, when the publication of figures showing a jump in inflation to 3.3% was followed by what the markets saw as a dovish letter from governor Mervyn King to chancellor Alistair Darling. Fears of higher interest rates were then revived with the publication of the minutes of the MPC’s meeting earlier this month, in which the committee had discussed whether a rate hike was needed. Then, in his Mansion House speech in the City, King stressed the Bank was committed to meeting the 2% inflation target and would take whatever action was needed.
In a seller market EAs work for the seller, but in a buyer market EAs work for the buyer!
Times: A bad year for estate agents
“How about a price-reduction competition?” Last time round, with owners reluctant to trim prices in a falling market, a hush-hush incentive scheme to persuade sellers to drop their asking prices helped to keep sales turning over. Each office logged the price cuts on a confidential form, and the office and individual that achieved the highest percentage reduction on their total register pocketed bonus payments. “I like it,” the bean-counter nods, as H scowls across the room at me. “Only we need to keep it quiet. I don’t want owners knowing we’re actively slashing prices across the board.”
A healthy correction is welcome
Independent: Homes and economy drag each other down
"And once prices stopped rising, the reason for much property buying disappeared: there was no prospect of an easy capital gain from trading up, buying second homes, investing in buy-to-let or financing the student homes of one's offspring" but do not expect house prices to start rising again any time soon!
Mugabe Politics
Timesonline: Ireland under Franco-German pressure to hold new EU vote
The Irish government is expected to bow to Franco-German pressure and hold a second referendum to try to rescue the Lisbon treaty that voters rejected this month. The plan for a possible new vote in Ireland, being discussed by some ministers in Dublin, will be greeted with outrage by opponents of the treaty in Britain. Irish ministers believe it may be able to rescue the treaty if they can secure concessions from Europe to placate voters on a list of issues. “A yes vote can be achieved if the Irish people are offered guarantees on issues like defence and taxation,” said one senior Irish official.
Welsh houseprices down
Observer: After chasing richer parts of the UK, prices start to go downhill in the Valleys
Not long ago property journalists were reporting how Welsh house price rises were bringing the Principality into line with wealthier regions of the UK. But the latest figures from the Land Registry, for property transactions completed in April, show dramatic falls from Cardiff to Anglesey.
Fed Emergency Liquidity Flood Not Bourn Out by the Facts
Market Oracle: Fed Emergency Liquidity Flood Not Bourn Out by the Facts
We constantly hear from the talking heads that the Fed's recent policy actions are creating mammoth amounts of financial liquidity. But have these talking heads bothered to look at the data? If they did, they would have to change their tune.
Expect to see Mervyn King with his 'financial stability' money wheelbarrow of plenty outside the bank soon
Guardian: Investors say Barclays needs more than £4bn
One top 10 shareholder pointed out that it will still leave Barclays as the world's weakest bank.
He considered stepping in to buy Northern Rock
yahoo news: Lloyds TSB eyes potential German deal
Good Morning Vietnam oops I mean England how are we all today? LONDON (Reuters) - Lloyds TSB would consider a significant acquisition and is looking at a possible deal in Germany, people familiar with the situation said on Saturday. (Advertisement) It is considering deals for Dresdner Bank, owned by insurer Allianz, and Deutsche Postbank, the retail bank at the centre of takeover speculation, one of the sources said. Lloyds declined to comment on whether it is looking at Dresdner, Postbank or the German operations of U.S. bank Citi, which are also up for sale. Lloyds Chief Executive Eric Daniels has signalled recently that the bank would consider a deal. It outperforms rivals in its core UK market and a sharp fall in bank valuations has created opportunities.
Saturday, June 21, 2008
This superbear is a long way from bottom
MoneyWeek: This superbear is a long way from bottom
If you were hoping for a quick recovery, you might have a long wait. Western stockmarkets are a long way from bottom – and are infecting emerging markets. The only safe place is Japan...
Anyone got advice on ending a tenancy
LandlordZONE: History of Landlording
This history tells all about landlords' attitudes to tenants - very instructive - but can anyone help me with some advice on ending my tenancy?
nice chart!
Elliott W Intern: European Housing Bubble Makes U.S.'s Look Tame
EWI trying to sell a report - but a nice graph!
Going for Gold
bloomberg.com: Gold May Rise to $5,000 on Inflation, Schroder Says (Update1)
``You could easily see for the next several years that prices rise not to $1,000 an ounce, but prices rise to $5,000 an ounce or beyond as inflation psychology becomes more and more embedded and people become desperate to have a source of value,''
Oil to higher this week
The Telegraph: Oil prices soar as leaders gather for Saudi Arabia summit
Oil prices surged as some members of the Opec producers' cartel rejected demands to increase output ahead of tomorrow's meeting in Saudi Arabia to discuss soaring fuel costs
2 year fixed rates up to 6.99%
The Mail on Sunday: End of the cheap fixed mortgage ...
... Halifax is last of big four lenders to hit homeowners with punishing rate rises
One thing the UK can still manufacture - News
The Independent: Shock boost to retail sales heightens fears higher interest rates on the way
There's no boost to retail sales - it's all down to the Contrived Price Index. I know this story has been posted before but we didn't deal with it fully at the time.
Gordon Brown's last year!!!!!!
Telegraph.co.uk: Gordon Brown's first year
What do you mean you haven't got your street party organised yet? Next Friday will mark the first anniversary of our great leader, Gordon Brown, moving into Number 10 Downing Street. So, if you don't get down to the local shop sharpish, you might well find they have run out of bunting and the like. advertisement Sadly, after the events of recent days and years, savers and investors may be reluctant to break out the party hats and streamers. This week saw Royal Bank of Scotland (RBS) analyst Bob Janjuah warn of a global stock market crash within the next three months.
Which advice to take, head or tails?
What investment: The Money Doctor
What’s the difference between guesswork and forecasting? Consider the following range of recent ‘forecasts’ and tell me, because I’m not sure: ‘A correction of approximately one-third in house prices could be on the cards in the next two or three years’ (MPC member); ‘Price of homes will drop by 10 per cent’ (Lloyds TSB); or: ‘Citi chairman joins bulls by predicting end to meltdown’ (Citigroup); ‘We are on the cusp of an equity meltdown that will slash and shred portfolios like Freddie Krueger’ (Soc Gen).
Buy to dept
Telegraph.co.uk: Word on the street
Johnny-come-lately property investors will find it tough out there. By Edmund Conway Recent weeks have confirmed what many of us suspected for some time: that buy-to-let would be Britain's own subprime crisis. In an eerie echo of the United States experience, it was the collapse of one relatively small part of the property market that helped to trigger a full-blown fall in nationwide prices. The only difference is that whereas the main US epicentre was sub-prime - the mortgages of poor families - our Achilles' heel was the comparatively more middleclass world of private property investment.
Worth a read!
Telegraph.co.uk: What the boom years did for us
How did it go ro right? And, looking back, was it sheer madness? The rise and rise of the property market has affected everyone - for better or worse. Caroline McGhie traces its stratospheric progress while, Ross Clark relives the key events of a tumultuous era It seems now like another era: a golden age when money poured in through the rafters and entire lifestyles could be funded through the rise and apparently unstoppable rise of property values. It has ended, finally, with a sickening crunch alongside last week's report of the fewest sales since records began, and the prospect of negative equity raising its ugly head. Toprak Mansion; Hascombe Court; a street in Chelsea
How to make money from property
Guardian: Factory's high-flying employees head for property hotspotsFactory's high-flying employees head for property hotspots
This is the way to make money from property - SELL GUNS!!
Private Sector Leasing: Socialising Property Market Losses?
The Scotsman: Sellers finding ways round the housing crisis
"One option being taken by a growing number of frustrated Edinburgh property owners is the Private Sector Leasing (PSL) scheme. Run by Orchard & Shipman, the scheme – the largest of its kind in the UK – secures properties for the City of Edinburgh Council to offer to those in need of housing. Run since 2005 with the aim of 1,500 properties, 1,300 are on its books already." On the surface, this appears to be a roundabout way to get taxpayers to bail out those who can't sell their properties because we don't have enough social housing. Anybody know any better?
Banks Generosity Hits Home
DailyMail: First Northern Rock borrower to be thrown out of her home by the Government
We took out a loan for around £300,000 with Northern Rock in 2006. In an astonishing twist, they were handed an extra £60,000 by Northern Rock on September 20 last year, days after customers queued outside branches in the first run on a British bank for 100 years.
Low Inflation, Low Unemployment, better placed to weather.....
The Guardian: Housebuilders suffer 60% slump in starts as mortgage market tightens
The number of house builds has sunk by nearly 60% in 12 months as tighter mortgage lending puts off buyers. The National House Building Council, with 20,000 registered housebuilders on its books, said there were 6,890 starts in the private sector in May, compared with 15,713 last year. This is a drop of 56%. The number of public-sector houses being built is also decreasing with 2,699 houses being built this year, compared with 4,306 in May 2007. About 60% of social housing is built by private developers. This news came on the same day as Halifax, Britain's biggest mortgage lender, announced that it would raise its fixed rates on loans by 0.5% from today - the 20th time Halifax has changed its rates since the start of the year.
Friday, June 20, 2008
Look you pesky voters you - just stop being miserable
Telegraph: Tom Harris tries to laugh off 'bloody miserable' gaffe
A junior transport minister has sought to laugh off criticism after he advised hard-pressed families struggling with the credit crunch to cheer up and stop being so "bloody miserable".
Sorry - can't raise the deposit
Reuters: Credit crunch hits Olympic Village financing
"The one billion pound Olympic Village for the London 2012 Games will require greater public financing than previously expected because of the global credit crunch, organisers said on Friday. The village -- to house athletes and officials -- is the single largest project of the Olympics development in the east of the capital, and was intended to be largely financed by the private sector".
Friday Night comedy - David Bexon is top of the bill
mortgagestrategy: Smartnewhomes.com reports rise in London and the South-East house prices
Smartnewhomes.com has reported price growth in London and the South-East in May, making this the third consecutive month of rising prices. Over the past two months, Smartnewhomes.com says the South-East has accounted for the vast majority of all new homes being marketed in the UK and the high demand has been matched by steady monthly price rises. "Flats (new build) were the strongest performing property type in May across the country"
Estate Agent Properties Up for Rent
Bradleys: Bradleys Commercial Property Search
Take a look at the Commercial Property section at Bradleys Estate Agents. Particularly the 1st, 4th, 5th & 6th properties. There are 40 properties listed and 10% of them are Bradleys' own offices.
Something for the weekend Sir?
Youtube: HOUSE PRICE CRASH (by andyparf)
Regulars at HPC have probably seen this before - but worth another look....
Moving Target
The Times: Another week, another rate increase from HBOS
HBOS has made 19 changes to two-year fixed-rate mortgage deals in the past six months
Humberts bought by Mercantile Group
Somerset County Gazette: Humberts bought by Mercantile Group
THE two Taunton offices of estate agents Humberts have been bought out by the Mercantile Group. Mercantile has snapped up 34 Humberts offices, as well as ten franchisees, including the Taunton operation.
Err, that's all right then....(?)
Times online: House builders rally on reports of Barratt loan agreement
House builders were the biggest risers in the FTSE 100 this morning after reports that Barratt Developments’ banks are willing to waive its loan covenants if the company were to breach them. {probably had no other option - but to let then go to the wall...., which is likely to happen anyway}.
How many rate rises to Christmas?
Times Online: Halifax makes twentieth change to mortgage rates
Halifax, the UK's biggest mortgage lender, is expected to deliver more woe to homeowners and first-time buyers tomorrow when it raises its fixed rates on loans by 0.5 percentage points. The move, Halifax’s twentieth rate change since the beginning of the year, will hit homeowners on all levels, including those who hold a high level of equity in their property.
A story of repossession has sparked talk of a gender divide in the property market, says Hilary Osborne
Guardian online: House price clash
Our piece about a family having their home repossessed has been picked up by bloggers on Housepricecrash - and the conversation has taken a strange turn.
Bank: Looking for Cash
MoneyWeek: Japanese to bail out Barclays with £473m
Barclays was today on the verge of securing a massive bailout from Japan as it looks to Asia to bolster its finances. The bank is in line for a 100bn yen (£473.4m) capital injection from Sumitomo Mitsui Financial Group (SMFG) that would give the Japanese firm a stake in the British lender.
More to come
MoneyWeek: Bad debt to keep growing, says HBOS
Halifax owner HBOS warned that the alarming rise in borrowers falling behind with repayments shows no sign of slowing down. Britain's biggest lender said the value of mortgages in arrears have jumped by 17% since the start of 2008 to £5bn.
Investors being told to expect rate rises
Interactive Investor: Are interest rate rises on the horizon?
"Looking further ahead, the next move is now expected to be a rate increase. As a consequence, swap rates, which reflect the cost of raising funds over specific time periods, have risen and there has been an increase in the price of fixed rate mortgages."
Mr Bean will take over responsibility for monetary policy
press assoc: Gieve predicts uncomfortable year
Outgoing Bank of England deputy governor Sir John Gieve has added his voice to warnings over the economy and said the next year "was not going to be comfortable for anybody". (Advertisement) Sir John, who resigned as deputy governor in charge of financial stability on Wednesday, told North East business leaders the current climate was the "most challenging" faced by the Bank in 11 years of independence.
Abolish those orgs & confiscate their managers' assets!
MoneyFiles: The Problem With The WTO/UN/WB/IMF
Do The People Running Those Orgs Deserve To ... [346 votes total] be jailed (life time) (85) 25% be ousted and replaced (18) 5% be sent to death row (56) 16% Abolish those orgs & confiscate their managers' assets! (187) 54% (poll chart) via http://www.moneyfiles.org/soundmoney.html
“Believe it or not — I’ve been able to convince people to add more money.”
NY times: Prosecutors Build Bear Stearns Case on E-Mails
In the spring of 2007, as the mortgage market came unglued, two Bear Stearns executives shared their growing fears in a series of e-mail messages to each other about the perilous condition of the giant hedge funds they oversaw. The two funds had names as abstruse as the complex subprime securities in their portfolios — High Grade Structured Credit Strategies Fund and its riskier sister offering, the High Grade Structured Credit Strategies Enhanced Leverage Fund.
A jump in one-week interbank lending rates
Reuters: Europe shares hit session lows as banks slide
LONDON, June 20 (Reuters) - European shares fell to session lows by midday on Friday as a sell-off in banks gathered pace, while miners continued to weigh on the broader market after an earlier dip in the gold price. A jump in one-week interbank lending rates put further pressure on the equities market, pushing the FTSEurofirst 300 index of top European shares down 0.9 percent to 1,232.70 points by 1102 GMT.
government froze thermal coal prices
Reuters: HK shares slip on profit-taking in oil,power cos
HONG KONG, June 20 (Reuters) - Hong Kong shares closed 0.23 percent lower on Friday, reversing strong morning gains, as speculators booked profits on refiners and power producers after Beijing unexpectedly raised energy prices.
Guess standard practice is not a code of practice!
Office of Fair Trading: Hertfordshire estate agent banned
The OFT has made a prohibition order against Daniel Zane, director of former Hertfordshire estate agents Vue Estates Ltd, banning him from estate agency work.
Why the FTSE 100 could fall below 5,000 by September
MoneyWeek: Why the FTSE 100 could fall below 5,000 by September
If you thought the sub-prime crisis was the only thing to worry about, you were wrong. There’s another big storm brewing, and this one’s heading for the company debt markets...
Off message but still has implications across many levels of the economy
Economist: Short-selling: Nasty, brutish and short
IT IS difficult being a short-seller. Most shareholders and managers agree that you are an important part of an efficient stockmarket—until you dump shares in their company. Then things can turn nasty. How much of the current rise in oil price is speculative? Most I think....but we are all hurting. One thing is certain someone somewhere will be getting very rich.
Real inflation over past 2 years - 26%
MSN: Monthly outgoings 'soar 26%'
Consumers have seen their monthly outgoings soar by 26% during the past two years driven by higher housing and energy costs, research has shown. The amount people spend on bills and living costs has soared from an average of £945 in June 2006 to £1,281 now, according to insurer Combined Insurance. Consumers are spending around a third more on rent and mortgages than they were two years ago, with rents rising by an average of 30% and mortgage repayments jumping by 33%.
Are we going the way of the Japan bubble?
FX Street: How To Get Out Of This Mess
The Japanese credit bubble completely sank the Japanese economy: property collapsed by 44%. "Their real estate market is still bouncing around a bottom after declining every year for 18 years"
Problems, Problems, Problems
Guardian.co.uk: 'I didn't think it would be so hard letting go of a house'
Amid talk of the credit crunch and negative equity, and with house prices falling faster than they have since the crash of 1992, it is easy to forget that for each repossession statistic there is a family who have lost their home. Last month, Maxine King joined the estimated 53,000 people who, according to the homeless charity Shelter, will lose their homes this year. I met her days before the repossession date at her three-bedroom semi on an estate in Gravesend, the last large town on the south bank of the Thames before it runs into the Channel. She said she knew there was no chance to save it but, tellingly, she hadn't started packing.
Housebuilding industry in huge crisis
MSN: Housebuilding industry in crisis
Britain's housebuilders are looking more rickety than a plywood garage in a gale. One more gust, and one or two might actually not be worth anything at all to shareholders. Yet house prices have only just begun to fall. For the industry, this is the biggest crisis in two decades, and it will get much worse before it gets better
Eyes in the back of their heads
Telegraph: House price forecasts that aren't really forecasts at all
"If higher falls in house prices mean higher impairment charges, do higher forecast mean higher provisions in accounts? Not good for the banks' balance sheets or their bottom line. Either that or the banks are just dreadful at forecasting."
A bearish artical from Fool
fool.co.uk: A Handful Of Housing Horrors!
In his annual Mansion House speech on Wednesday night, the governor of the Bank of England warned that the UK faces a few tough years ahead. Mervyn King said that Britain is facing its ‘most difficult economic challenge for two decades’, thanks to falling growth and the steeply rising cost of living. In some cases, household finances will be stretched to the limit, thanks to modest pay rises being gobbled up by soaring food and energy bills.
IR hunting tax didging BTLers
myfinances.co.uk: Buy-to-let landlords face tax crack down
Buy-to-let landlords are set to face the attention of the taxman over undeclared rental income – even if they have now sold the property in question. According to wealth advisors Route Group, HM Customs and Revenue (HMRC) has launched a clampdown in recent weeks, forcing buy-to-let investors to consider their tax position.
Fund Managers arrested - Housing Meltdown - Never!!!
AP - Yahoo: 2 former Bear Stearns hedge fund managers charged
Two former Bear Stearns hedge fund managers were hauled into jail Thursday and charged with lying to investors about the collapse of the subprime mortgage market, perhaps signaling the start of a wave of prosecutions arising from the housing meltdown.
Wage Price Inflation Spiral Plus House Price Deflation Equals Stagflation
The Market Oracle: Wage Price Inflation Spiral Plus House Price Deflation Equals Stagflation
Warnings of a further 40% hike in energy costs this year puts the Bank of England on high alert for a wage price spiral kicking in which will lead to much higher and prolonged inflation. The first signs of this are in the 14% pay hike agreed with the Shell subcontracted tanker haulers over 2 years at 7% per year which is more than double the current CPI inflation rate of 3.3%. The public sector unions are seizing this event to warn that recent pay agreements that cover the next 2 years will have to be negotiated in line with the rising cost of living signaling a 'Winter of Discontent' for Gordon Browns Labour government.
The Truth Behind the Retail Sales Headlines
The Market Oracle: http://www.marketoracle.co.uk/Article5141.html
In the midst of the worst economic conditions in nearly 20 years, May saw retail sales soar by a surprising annualised rate of 8.1%, the highest rate in 20 years, up 3.4% for the month. The surge is more akin to that expected during boom times rather than the bust that the UK is fast heading towards. The mainstream media immediately seized on the headline rate to announce Britain is experiencing a mini high street spending boom. However looking behind the headline figures tells a different story.
Wow you need an F1 racing car to get a mortgage these days!
Guardian: Mortgage mayhem as Bristol & West withdraws deals and First Direct raises cheap rate
Bristol & West, said yesterday it was withdrawing 7 of the 29 mortgage offerings - mostly fixed-rate and buy-to-let deals - it launched on Tuesday! The bank said it took the decision in response to "unprecedented volumes of business received during the past week". Wow need to be fast to get a mortgage these days! First Direct added to the turmoil yesterday by raising the cost of what had been Britain's cheapest two-year fixed-rate mortgage the rate would rise from 5.49% to 5.99% - although borrowers still have to come up with a 20% deposit and a £1,499 fee!!
Virgin Blue says high oil prices will force some major airlines around the world to shut down within the next six months.
abc: Major airlines facing closure 'within six months'
Virgin Blue says high oil prices will force some major airlines around the world to shut down within the next six months.
The next wave...
Marketwatch: Moody's downgrades Aaa rating of Ambac, MBIA
I can't stress how important this story is with regards to implications for the credit default swaps markets. Now the big bond insurers have lost their ratings, the bonds that they insure must lose their ratings too, causing investors to sell. This is massive - and lvmreader predicted this a long time ago. It is the reason that writedowns are going to continue as many billions of dollars worth of debt gets re-rated lower.
Thursday, June 19, 2008
HBOS £5bn headache prompts downgrade
Times: HBOS reveals £5bn in problem home loans ahead of rights issue
BTL and selfcert are the real UK subprime. Standard & Poor's, the ratings agency, knocked HBOS's rating down from “stable” to “negative” because of the potential hit to its business from Britain's slowing economy. Expect another lively rights issue.
ONLY 5bn at HBOS! Gives an indication on the levels other banks have.
Timesonline: HBOS reveals 5bn in problem home loans
HBOS has a huge amount of problem mortgages already. And the bad economic news just keeps coming, what will errears be in a years time. If you have 5bn at HBOS what are the levels at with the likes of B&B, Barclays, ScottishWidows, Northern Rock then?
Humberts office's closing in North Somerset
Clevedon Mercury: BOSS'S ANGER AS PROPERTY AGENTS CLOSE
Never posted before but been watching for well over a year. In my opinion, SW market is on its knees - demonstrated by the fact that the new owners of Humberts have chosen to close 14 branches nationwide, 11 of them being in North Somerset.
No subprime loans here, only one fat greedy fraudster
Thisislondon: 'Rogue trader' suspended after losing Morgan Stanley £60m
Does anyone remember the Société Générale fraudster Jérôme Kerviel? At the time, SocGen were adamant that the piles of money he lost were because he had acted alone, without the knowledge of SocGen's senior management. What happened to him? Google it to find out - it'll surprise you.
Commentators finally getting real
Telegraph: UK house prices forecasts get bleaker with prediction of 35pc drop
If they keep this up, HPC predictions will soon look positive.
Is this a sign of things to come?
BBC News: FBI holds 406 for mortgage fraud
The FBI says it has arrested 406 property market players as part of its crackdown on mortgage fraud. The arrests include estate agents and loan originators, who help homebuyers to take out loans. Reported mortgage fraud has soared in the past year, with the most common type being mis-statement of assets.
Another hole in Darling's pocket !
Telegraph: Housing downturn will leave Treasury short of £3bn in stamp duty
Stamp Duty has become a serious source of revenue for the Treasury, with more than six out of ten home buyers having to pay it. Last year the Treasury made £6.45bn out of the tax on residential property transactions.
Cracks appear at BoE....
Independent: Bank of England deputy governor falls on his sword
The Bank of England's deputy governor for financial stability has resigned. Sir John Gieve had come under increasing pressure as scrutiny of his role during the credit crisis and the collapse of Northern Rock intensified. Matters came to a head with the vacancy created by the retirement of the Bank's deputy governor for monetary policy, Rachel Lomax, which takes effect at the end of this month
Only 9%!
Liverpool Daily: HBOS reveals £1billion in writedowns
Halifax Bank of Scotland spread more gloom in the banking sector today as it revealed £1 billion in write-downs and warned that house prices could now fall 9% this year.
And the DEMOCRATIC process continues!
Timesonline: Ireland given four months to save Lisbon Treaty
European Union leaders have given Ireland's Prime Minister four months to come up with a plan to save the Lisbon Treaty. Brian Cowen said as he arrived at today's Brussels summit that it was too soon for him to explain the dramatic referendum rejection of the document last week. Mr Cowen says he has agreed to come back to the next meeting of EU leaders in October to tell them if he believes a second referendum could succeed, and what his government needs from the EU to run a successful campaign.
Bet they pooped their pants.
financialpost.com: FBI arrest two Bear Stearns managers in subprime probe
Two former managers at Bear Stearns Cos. hedge funds were arrested at their homes Thursday morning by agents of the Federal Bureau of Investigation over their roles in the collapse of hedge funds that ignited the subprime mortgage crisis last year. Also, the BBC tickertape claims 'FBI says some 300 people have been arrested over subprime crisis since March. More soon.'
HBOS - House Prices Falling off a Cliff
Reuters: HBOS warns of sharp house price falls
Britain's biggest mortgage lender HBOS warned of a sharper fall in house prices and said more of its customers were falling behind on their repayments, sending its shares sharply lower.
Architects of Credit-Fuelled Housing Mania Off to Jail
NY Times: 2 Former Bear Stearns Managers Arrested
The case hinges on the prosecution demonstrating that the two managers wilfully misled investors to keep their money in funds that they knew were failing. Unfortunately, the defense could just claim that the managers acted in good faith rather than out of deliberate market-fixing. If they are convicted, however, it might serve as a good precedent for bankrupt BTL-ers to sue the Kirsty Allsopps of the world who are still urging everyone and his dog to get into property, insisting that it's a good time to buy.
China to lift fuel prices by 18%
FT.com: China to lift fuel prices by 18%
I thought it was due to speculation. Then it's demand. Then it's speculation again. Which is it? When it goes higher again is that now down to demand or speculation?
Thursday's comedy club entertainment (Classic comments)
mortgagestrategy: NAEA members see confidence rise
Members of the National Association of Estate Agents are reporting a rise in consumer confidence in May with the latest surveys revealing stabilisation in the housing market. It bases the claim on an increase in first-time buyer sales and the the amount of house hunters.
Boot on the other foot at last!!
Guardian: How to avoid being gazundered
I like this one: "Get evidence State you want proof of the buyer's reasons for reducing the offer." Surely all the evidence they need is the fact that the house is worth less now than it was when they started the process!
CML: No new buyers
Finance Markets: Gross mortgage lending falls by 19% in May
The CML said it was mainly just existing homeowners supporting the mortgage market now.
The EU. A true democracy!
Telegraph: Our EU masters have no sense of shame
Guinness and oysters combined can make for a dreadful hangover. Celebrating the Irish way, after the good citizens of the republic had bravely rejected Lisbon and all its works, seemed like a good idea at the time. But after the party that followed such a rare piece of good news for Euro-sceptics, comes the blistering hangover. Why can those involved not see that the Euro-project lacks any popular mandate? Irish voters may have thought they had killed the treaty, but, in the European Union, no never quite means no; or rather no seems not to matter. And, our peers also bulldozed it through the Lords.
Why housebuilders are facing a severe crunch
MoneyWeek: Why housebuilders are facing a severe crunch
Housebuilders made the same mistakes buy to let landlords did – they bought land thinking that prices would never fall. Now the land is worth a lot less, and the banks are on their backs...
The final oil collapse is close
The Guardian: Bush calls for lifting of ban on Alaska oil drilling
George Bush, responding to public alarm over soaring petrol prices, yesterday proposed overturning decades-old bans on drilling for oil off the US coast and in the pristine Alaskan wilderness. "There's no excuse for delay," the president told a White House press conference. America was too dependent on countries abroad, many of them in unstable regions.
Squeeze, what squeeze?
BBC: Retail sales rise at record pace
Mervyn King stated last night that take-home pay would stagnate making life difficult for some families but figures from the Office for National Statistics (ONS) regarding retail sales paint a rosy picture indeed. Year on Year (YoY) sales were up 8.1%, the fastest rate since April 2002. Figures produced by the ONS are viewed by many as highly dubious but the ONS figures are echoed by the British Retail Consortium (BRC). Personally I know many people feeling the pinch so I'm surprised by the figures. Is this simply the punter indulging in some "retail therapy" to cheer themselves up or is there simply enough cash sloshing around?
Life in the old dog yet or could it be inflation
BBC: Retail sales rise at record pace
The spell of warm weather in May helped to trigger a record jump in UK retail sales, official figures have show. Overall sales rose by 3.5% during May, the strongest monthly growth in sales since the series began in January 1986.
No light on the horizon
BBC News: Bank governor offers bleak view
More doom and gloom predictions for family life. It does interest me that since the inflation figures were released this week, numerous comments have suggested that the current situation is not a return to the bad old days of the 1970's 26% inflation era but can anyone tell me what the CPI/RPI equivelant measuring barometers were used around that time? It is my opinion as well as many others that inflation is well above the current 3.3% quoted this week, if we used 1970's measuring criteria for inflation what I wonder would be the expected result?
Parting fools with their money
Motley Fool: Investing in wine: A beginners guide
Sorry this is off-topic, but I thought I'd include it because it shows that when one foolish wheeze for getting people to part with their hard earned (such as BTL) comes to an end, along comes another.. I know a little bit about the wine trade, having over 2000 bottles in the cellar (for drinking, not investment) I can therefore say with some authority that not only is the fine wine trade in bubble mode (and not just Champagne..!) but also that the margins charged by the trade, coupled to the costs of professional storage, make the prospect of a profit minimal, and the prospects of a loss near certain. But I shouldn't complain - I stock my cellar from trade sales, usually paying less than the punters who bought 'as an investment' ten years ago!
But no one's laughing at these jesters
Telegraph: Last night's Mansion House feast was a banquet of fools
Only the first section of the article is of interest, but worth it for the headline alone. The author is right about the joker at the Treasury, but note the old Tory-supporter dig at the public sector, as though the answer to inflation lies in screwing predominantly low paid workers. We are all petrol tanker drivers now.
So what did the G-8 do?
market oracle: G8 Fail to Address Growing Global Instability
With market watchers the world over feeling increasingly alarmed by spreading economic problems, much hope and attention was focused on Japan last weekend as finance ministers and central bankers of the G-8 (Group of Eight) nations gathered to apparently map out a coordinated global response. In particular, all hoped that the delegates would conjure a plan to save the dollar from the dustbin and stop the price of oil and food from pushing the world into crisis As very little of promise or substance emerged, I can only hope, against all evidence to the contrary, that much was accomplished behind closed doors. So what did the G-8 do? They talked and did little. Admittedly, they discussed some laudable issues like world poverty and green alternative energy (which will most likely be the nex
If the house goes down in value, Rex & Co. will eat half of that loss as well
cnbc: Homeowners Offered New Way to Tap House's Equity
the Dollars signed up for a relatively new product called a Rex Agreement. It gave them $117,000 in cash to spend however they wanted, and they owe no payments until they sell the house. At that time, they'll owe Rex & Co. the $117,000 plus half of the appreciation in their home's worth between the time they signed the agreement and the time they sell the house. If the house goes down in value, Rex & Co. will eat half of that loss as well.
Paying interest to pay interest !
Daily Mail: More than 4m families use a credit card to pay mortgages
More than four million families have used a credit card to pay the mortgage or rent in the last year. The figure exposes the dramatic impact of the economic squeeze on ordinary families. Settling debts by withdrawing cash on a credit card is probably the most expensive way possible with interest rates as high as 28 per cent, and indicates a disturbing level of desperation on the part of homeowners.
VI's gradually change tune
BBC: House prices 'to fall 9% in 2008'
Not a particularly interesting article, but here for the record. There was something in City AM about two chaps from HSBC saying that they expected house prices to fall by 1-% this year and 10% next year, but I can't find that online.
Labour attempting to prop up the property bubble
Times online: Britain's social housing industry suggests £1bn spree on empty stock
The group representing Britain's social housing industry is in talks with the Government to free £1 billion of public money to help to bail out the new homes market. The funds would be used to buy tens of thousands of mostly inner-city flats and family homes at a heavy discount from beleaguered housebuilders.
More pain on top of misery.
BBC News: Energy bills could go up by 40%
The increases could mean households paying £400 more a year on average for their gas and electricity, senior industry sources have said. The increase is far more than analysts have predicted in recent months. It would put more pressure on homeowners already struggling with higher food and fuel costs.
Keep on spending......
This is Money (daily Mail): Brits shaking off credit crunch worries
Despite malignant market conditions, a housing market in stalemate and soaring inflation more than a third of Brits do not believe that the credit crunch will affect them...........
Cash rich Aberdeen property slide
Press and Journal: housing bubble could be on the brink of bursting
Who said Scotland was going to be different to other parts of the UK even in the oil capital of europe prices are going to take a big hit .
Wednesday, June 18, 2008
The Governor of the Bank of England has issued a grim warning over Britain's financial future
Sky News: 'Biggest Threat To Economy In 20 Years'
The Governor of the Bank of England has issued a grim warning over Britain's financial future.Speaking at the Lord Mayor's dinner to the bankers and merchants, Mervyn King said the country faces its biggest economic challenge in two decades. He said consumers could expect sharp rises in gas and electricity prices - and a steep fall in purchasing power with no pay rises likely. Mr King warned that families could expect to bear the brunt of the slowdown.
UK houses more overvalued
FT: Hedge fund chief pessimistic about UK property
Financial companies could wind up losing as much as $1,300bn in the credit crisis. This is far more than the $945bn in losses predicted by the International Monetary Fund or the $380bn in write-downs already reported by banks
Laurel & Hardy look to pass the buck to the BOE
BBC: Darling sets out new Bank remit
Chancellor Alistair Darling has outlined plans to give the Bank of England new responsibilities in his Mansion House speech. Speaking in his first keynote address to City chiefs, the chancellor said the Bank will now also be accountable for the UK's financial stability. This is in addition to its statutory objective of setting interest rates. The radical new measures come in the wake of the collapse of Northern Rock amid global credit problems.
Globalisation was always going to risk putting G7 bankers
truthseeker: RBS issues global stock and credit crash alert
The authorities cannot respond with easy money because oil and food costs continue to push headline inflation to levels that are unsettling the markets. "The ugly spoiler is that we may need to see much lower global growth in order to get lower inflation," he said. The Fed is in panic mode. The massive credibility chasms down which the Fed and maybe even the ECB will plummet when they fail to hike rates in the face of higher inflation will combine to give us a big sell-off in risky assets. Ambrose Pritchard-Evans – Telegraph.co.uk June 18, 2008 why? putting G7 bankers into a dangerous corner - The ECB is hell-bent on raising rates.
John proposes an alternative strategy
John Redwood: Mansion House - more spin or confession time?
John proposes that if you cut public sector waste you will then be able to cut interest rates. If you don't then families will feel the pain.
According to Brown, F##k the Irish!
BBC News: EU treaty delay proposal defeated
The government has defeated a last ditch attempt to delay the ratification of the EU Treaty for four months. Conservative peers had pressed for the ratification process to be postponed until the response of EU leaders to the Irish referendum "No" vote was clear. But the move by Tory foreign affairs spokesman Lord Howell of Guildford was defeated by 277 votes to 184.
Who will lend them the £2bn they need?
Guardian: Taylor Wimpey debt regraded to junk status
The housebuilding sector suffered another blow yesterday when Taylor Wimpey debt was downgraded to junk status. The downgrade, by credit-rating agency Fitch Ratings, comes amid an unprecedented decline in the housing market. Fitch said Taylor Wimpey, Britain's biggest homebuilder, was likely to suffer a "material reduction" in earnings for at least the next two years. It also raised concerns that the company may be in danger of breaching its banking covenants. Most building firms agree to keep their debt at a certain percentage of their asset values.
Buried by mainstream media
Teletext (of all places!): MPs in expenses breach
These people have been breaking parliamentary rules by defrauding the taxpayer into paying for a flat they owned outright. Their punishment? Politely asked not to do it again, but allowed to keep on defrauding the public till later this year. One rule when chavs defraud the public purse in benefit fraud, another when those in power defraud the public purse with bogus expense claims. It beggars belief.
Good old vince!!
Guardian: Vince Cable welcomes prospect of Northern Rock legal action
One of the most vehement critics of the former board of Northern Rock has welcomed the news that they face the prospect of legal action over the bank's crisis last year.
Cpi 3.3%
BBC News: Energy bills could go up by 40%
Household energy bills could increase by as much as 40% this winter, the BBC has learned, as oil and wholesale gas prices hit record highs. The increases could mean households paying £400 more a year on average for their gas and electricity, senior industry sources have said. The increase is far more than analysts have predicted in recent months. I love the Capital Economics comment that RPI would only jump 1% if energy prices rose 40%. Says it all really!
sales of mortgages repackaged into bonds are down a whopping 89 per cent
informationclearinghouse: Bush's "ownership society" hits the canvas
The economy is in tatters. Consumer confidence has plummeted, food and energy prices are soaring, and the housing market is experiencing its biggest crash since the Great Depression. Manufacturing is down, unemployment is up, gasoline is topping $4 per gallon, and tent cities are sprouting up throughout the Southwest. If there's a silver lining to this mess; it's not visible from planet earth. The trillion dollar mortgage-backed securities (MBS) market is barely limping along. Investors are brushing off the higher yields and staying on the sidelines. How bad is it?
strange that Goldman thinks house prices will only drop 6% this year, aren't they already at 4.4 yoy?
Yahoo News: Housebuilders suffer as Goldman sees
Housebuilders suffer as Goldman sees "deep downturn" By Jana Weigand Send Article by Email | Send Article by IM | Blog This with Y! 360 | Printable View LONDON (ShareCast) - Housebuilders were under pressure again today after Goldman Sachs (NYSE: GS - news) warned of a "deep downturn" in the property market that could last up to three years. Goldman predicts that house prices could fall 6% this year and 8% in 2009 as sales volumes continue to fall. "We believe the sharp contraction in mortgage availability has accelerated the house price correction and as a result, the downturn should be shorter than in the early 1990s," said Goldman analysts in a note to clients. "However, we believe that this is highly dependant on lending banks returning to the market w
on a scale not seen since the 1930s
Bankingtimes: BIS warns of Great Depression
The Bank for International Settlements (BIS), the organisation that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s. In its latest quarterly report, the body points out that the Great Depression of the 1930s was not foreseen and that commentators on the financial turmoil, instigated by the US sub-prime mortgage crisis, may not have grasped the level of exposure that lies at its heart.
Mervyn's other letter to Alistair Badger
The Daily Mash: Inflation Targets...
''It might also have something to do with an unhinged jocko n*t fiddler who has spent the last ten years blowing hot air up the a***hole of every homeowner in Britain.''
Ex MPC members take on the BoE current inflation position
Timesonline: Inflation: we can pay now or later
From The TimesJune 18, 2008 Inflation: we can pay now or later The Governor of the Bank of England thinks he can hit his target painlessly. He is wrongWillem Buiter Here is the bad news: inflation, which in May reached 3.3 per cent, is above the Government's 2 per cent target and rising. The Bank of England expects it to top 4 per cent this year. Inflation expectations are also above target and rising. The Bank's own survey puts public perception of current inflation at 4.9 per cent (against 3.9 per cent in February) and its expectation of inflation a year ahead at 4.3 per cent against 3.3 per cent in February).
Over 200,000 on the property snake!
propertysnake: Over 200,000 on the property snake!
48.39 % discount and getting higher, 200,124 reduced homes and increasing at a faster rate!
How does Blanchflower manage to keep a straight face?
BBC News: Bank 'considered raising rates'
Some members of the Bank of England's Monetary Policy Committee considered raising rates to curb inflation at its June meeting, minutes have shown. However, the MPC decided an unexpected rise might have exaggerated the level of its concerns about the outlook for inflation, the minutes said. Following its discussions, the committee voted 8-1 in favour of keeping interest rates at 5% in June. One member, David Blanchflower, voted to reduce rates to 4.75%. The committee voted to keep rates on hold for the second month in a row in June after a number of cuts since December last year.
And the next bank is...?
Guardian: Northern Rock had Secret Plan
Scares me to think that by the time I have found out that an irresponsible bank is in trouble, it might already be to late to get my money out. Best get cash out of some of the more dodgey ones now.
Darling mentions the possibilities of a return to the 70's
BBC News: Darling calls for pay restraint
Chancellor Alistair Darling has called for restraint in pay settlements and said there is "no doubt" the UK economy is slowing. Speaking to the BBC, he said it would be "disastrous" if we "allowed inflation to take hold". Rising food and fuel prices would make is a "difficult year" for consumers, the chancellor said. He was speaking a day after consumer inflation jumped to 3.3% in May, the highest level in 10 years. "We have got to be vigilant in relation to all pay settlements, public and private," Mr Darling told Radio 4's Today programme. "If we get back into that [inflationary] spiral, it will take years to get out of it," he said. It could even herald a return to 1970s-style inflation, he said.
BTL is the UK subprime
FT: BTL landlords are touching the 'void'
"More than 50 per cent of landlords admitted having experienced a "void" time when their property did not generate rent. As a result of these voids, 17 per cent of landlords missed a mortgage payment in the past 12 months – up from 9 per cent in quarter four 2007 and the highest level since the research began. still significant demand for the rental sector with people coming off fixed-rate mortgage deals and others selling their property portfolios amid credit uncertainty" Run for cover... Loads of contraddictions!
S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September
The Telegraph: RBS issues global stock and credit crash alert
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
Jeff Randell on housebuilders
Telegraph: Housebuilders scream for help after losing their 'one-way' bet
Remarkable, isn't it, how industries that complain about Government interference during boom times are quick to scream for state aid when the going gets tough. First it was the bankers, poor darlings, who demanded help, now housebuilders are calling on ministers to "do something".
A Happy Ending
Daily Mail: Strike threat hands Shell tanker drivers inflation-busting pay deal
Shell tanker drivers last night won an inflation-busting pay rise after their four-day strike brought chaos to forecourts. The deal, which is worth at least 14 per cent over two years, will take their average salaries to nearly £42,000 a year.
A Lively House Price Blog Debate
Citywire: Why won't home sellers drop prices? Is it just greed?
"Everywhere you go right now there seems to be ‘For Sale’ signs stacked up along every street. The worsening economic outlook and the spiralling cost of mortgages has clearly put a major dampener on people’s willingness and/or ability to buy houses - certainly at current prices, anyway."
Is this the start of reconnecting MP's with the real world?
Daily Telegraph: Gordon Brown blocks pay rises for MPs
Gordon has blocked a 650quid per year pay rise for MP’s stating that it is important to limit pay rises and thereby inflation. In addition, Gordon has called for a review of MP’s gold plated, index linked, final salary pension schemes. Is this the start or reconnecting our MP’s with the real world? For this to happen MP’s salary, pension, expenses and taxes must be the same as everyone else. It’s a start, but lets not be fooled in to thinking this move will solve it. For MP’s this moves leaves open two escape roots, these being increased expenses and further liberty with the tax laws. The next move must be to shut down the special department in HMRC that deals only with MP’s taxes – why do MP’s need such a special department? Oh to apply the laws differently!
Deflation
Telegraph: Deflation rather than inflation could soon be our big worry
Imagine my pleasant surprise when I typed in 'UK deflation' to google and instead of the same old old articles that always come up, this little gem appeared. The mixed comments at the bottom are good. Makes the point that current inflation is the final inflationary flare off before deflation. Actually it doesn't state this exactly but suggests a strong possibility. I have a new respect for Roger Bootle.
Aberdeen house prices about to fall
The Press and Journal: Housing bubble on brink of bursting
Even in the oil rich!!Aberdeen and the North East of Scotland house prices are starting to drop .OH but it will not happen in Scotland !! Yea whatever and why not ????
Tuesday, June 17, 2008
Wigwam and a pony anyone?
Times Online: Fuel, food and a roof over your head - the pressure is on
Rising prices adding to struggle for young professionals to get their foot on gthe ladder - or in fact be able to stay there.
Cross-section of index'es, and graph
Times Online: How house prices have fallen during credit crunch
Should you drop your house price to sell? see main article at http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/article4122799.ece
A mismanaged economy, getting deeper into trouble
Telegraph: Mervyn King's inflation letter signals interest rates will flatline this year
''.....With the consumer price index hitting an 11-year high of 3.3pc and Mervyn King warning that inflation will rise above 4pc, your initial assumption might be that this will mean higher interest rates. However, the letter from Mr King to the Chancellor this morning has, on the contrary, allayed such worries, and if anything seems to rule out any further interest rate hikes....''
Media Lies
The Huffington Post: Is the Media's Manipulation of Market News to blame for the Current Market Meltdown?
The problem is that Big Media in America has, over the past fifty years, consolidated into a copyright cartel.False GDP numbers, false employment numbers and false inflation numbers have become the daily grist for CNBC and Fox Business. It stands to reason that Americans making economic decisions for themselves and their families are making bad decisions.
Open letter to the Governer and the Chancellor
BBC News: Peston on the warpath
I don't recognise the economy you describe, even though I am supposed to live in it. You could be referring to economic conditions on Mars, not the financial pressures facing our family. The thrust of your letters appears to be that salaries and wages must, under no circumstances, rise to compensate for the squeeze in living standards precipitated by the recent jumps in fuel, power and food prices. Mr King is implying that families like mine should grin and bear a fall in our living standards. Our main outgoings - food, energy and petrol - have gone up by much more than the 3.3% figure.
Credibility of U.S. financial markets is zero
The New York Times: Booming, China Faults U.S. Policy on the Economy
In the last six weeks alone, a senior banking regulator blamed Washington’s “warped conception” of market regulation for the subprime mortgage crisis that is rattling the world economy; the Chinese envoy to the World Trade Organization called on the United States to halt the dollar’s unchecked depreciation before the slide further worsens soaring oil and food prices; and Chinese agencies denounced a federal committee charged with vetting foreign investments in the United States, saying the Americans were showing “hostility” and a “discriminatory attitude,” not least toward the Chinese.
Four-year wait for house price rally
FT: Four-year wait for house price rally
FT seems to believe the market will bottom out next year? Only 1 year of prices declining, that's not good.
Petrol station drops £1.99 charge
BBC: Petrol station drops £1.99 charge
There you go. Group think. Pushed into a less flexible pricing model by a group of people who thought they knew better and didn't. But hey so long as the lights go out at the same time for all of us .. that's better.
By throwing tax payers's money at it!
Property Week: Flint says Government can cope with housing crisis
Housing minister Caroline Flint said today that housing supply was her ‘main priority’ and said the government had a range of plans to alleviate the poor housing market conditions. And low cost home ownership plans for households with incomes of less than £60,000 I wish I could aspire to even half that amount!
Follow Your Leaders
Evenind Standard: Crunch, what crunch? MPs ask for 21% rise
MPs were today revealed to be asking for a 21 per cent pay rise - worth £13,180. Their demand caused outrage on a day the economy fell deeper into crisis, with inflation bursting its official ceiling to hit 3.3 per cent. It came as the Government is ordering ordinary people to show pay restraint.
A lot of money to provide a drop in the ocean!
Inside Housing: HCA formation to save one billion pounds
The creation of the Homes and Communities Agency will save over a billion pounds in its first five years of operation, the housing minister has said. Caroline Flint told the Chartered Institute of Housing conference in Harrogate that the savings would allow around 15,000 social homes to be built.
Who will they lend to?
Channel 4: Woolwich drops two home loan deals
The Woolwich withdrew two of its products as it became the latest lender to raise its mortgage rates. The group is no longer offering a lifetime tracker mortgage for people wanting to borrow 80% of their home's value, while it has also temporarily withdrawn its two-year fixed rate mortgage deals. It is also increasing the rate it charges on its lifetime tracker mortgage by 0.25%.
importing inflation
bbc: China's yuan rises as talks begin
The yuan rose to a high of 6.8918 per dollar - a gain of 20% since it ditched the fixed exchange rate.
Frankenstein forecasts 20% drop
Knight Frank: June News Release
So, the ex-public school drop-outs finally accept that gravity pulls south. Interestingly, this is release 2 - so one wonders what they put in the first draft before going public. On top of Humberts getting torpedoed last week, this is terribly awful news for the poor Henries and Carolines currently flunking their 'A'-levels - no cushty agency job in uncle George's firm to go to - ahhh. What are all these useless non-agents and ex-agents going to do?
The social cost of property porn
BBC News: Families face six year home wait
A family whose home is repossessed may have to wait more than six years before they are permanently rehoused in a two bed home, council leaders have warned. The number of families on social housing waiting lists in England will hit five million by 2010, they claim. They blame a combination of falling house prices, the credit crunch and a lack of affordable homes.
Denial, Denial, Denial
Reuters: Bank cools rate rise outlook
Inflation's running rampant, no-one actually believes the Corrupt Porkies Index, yet the BoE are signalling that they won't raising interest rates. The longer they leave it, the harder we all fall...
Recession looms for UK economy and will make house crash worse.
MSN: Recession looms for UK economy
House prices to fall by at least twenty percent and it could easily be much worse. Hehehehe
“BIS warns of Great Depression” is actually a year old already
bankingtimes: Central bank body warns of Great Depression
The Bank for International Settlements (BIS), the organisation that fosters cooperation between central banks, has warned that the credit crisis could lead world economies into a crash on a scale not seen since the 1930s. In its latest quarterly report, the body points out that the Great Depression of the 1930s was not foreseen and that commentators on the financial turmoil, instigated by the US sub-prime mortgage crisis, may not have grasped the level of exposure that lies at its heart.
Anne Ashworth rewarded for loyal VI service
Press Gazette: Times' Anne Ashworth scoops hat-trick at headline property awards
Go Anne - all that ramping and HPC denial was worth it in the end!
Dear Chancellor by Willem Buiter
FT: Dear Chancellor...
Dear Chancellor, There it is: 3.x%, with x > 0. What can I say? As that great philosopher Forrest Gump said: “shit happens”. I won’t insult your intelligence the way both of us have at times seen fit to insult the intelligence of the British public - by claiming that the rising world prices of energy, food and other commodities lie behind the increase in the rate of inflation in the UK, the USA, the Eurozone and most of the rest of the world. When the currency floats, as is the case for sterling, central banks make inflation.
Beat the Property Slump
ITV1: Tonight: Beat the Property Slump
Mark Jordan gambles £225,000 of his own money to see if he can still profit in Britians tumbling housing market in an nod to Beenie & Kirsty.
Write to Alistair Darling
BBC Five Live: A letter to the chancellor
This morning we want you to write your own letter to the Alistair Darling about your money situation - are you feeling poorer? And what do you want him to do to help you? We'll send your letters on to the Chancellor and see how they compare with Mervyn King's letter.
Letter from the Chancellor of the Exchequer to the Governor of the Bank of England regarding inflation 17/06/08
HM Treasury: Letter from the Chancellor of the Exchequer to the Governor of the Bank of England regarding inflation 17/06/08 (PDF 656KB)
In May 2008, the CPI inflation figure exceeded 3 per cent, and the Governor published an open letter to the Chancellor at 10:30 on 17 June 2008, explaining the reasons why inflation moved away from the target, the policy action being taken to deal with it, and the period within which the MPC expects inflation to return to target. The Chancellor published a letter to the Governor at 10:30am on the same day.
Contrived Price Index
Telegraph: Government's measure of inflation might as well stand for Chinese Prices Index
Inflation is rising so rapidly that, contrary to what most experts predicted just a few months ago, interest rates may soon have to go up - not down. The Government's favoured measure of how fast prices are rising - the Consumer Price Index (CPI) - has today registered inflation hit 3.3 pc last month. But that is so far removed from most people's experience of prices in the shops and at the petrol pump that CPI might as well stand for the Chinese Prices Index. This is why The Daily Telegraph has launched the Real Cost of Living Index (RCLI).
Letter from the Governor to the Chancellor
Big job cuts at Goldmans
City A.M.: Goldman Sachs lays off hundreds of investment bankers
It's allegedly sackiong 25% at VP level; just the demographic that are likely to beu p to their eye balls in 6-10 x salary mortgages and never though property prices would fall.
Inflation Rate Rises To 3.3%
Yahoo: Inflation Rate Rises To 3.3%
The official rate of inflation has jumped to 3.3% - its highest level since Labour came to power in 1997. The figure for May was well above April's level of 3%, pushed up by high fuel and food prices.
Governor Mervyn King has to write an open letter to the government
Reuters: Bank to explain higher inflation in May
LONDON (Reuters) - Inflation rate rose more than expected in May to its highest since the Labour government came to power in 1997 and the Bank of England will now have to explain how it will bring prices back under control.The Office for National Statistics said on Tuesday consumer prices rose 0.6 percent last month, taking the annual rate up to 3.3 percent from 3.0 percent in April. Analysts had expected a reading of 3.2 percent and May's figure is the highest since the series began in 1997.
Not a suprise.. but still not reflecting the true level
BBC: UK consumer inflation up to 3.3%
Rising food and energy prices have pushed UK consumer inflation up again, the Office for National Statistics (ONS) has said. The Consumer Prices Index (CPI) measure of annual inflation was 3.3% in May, up from 3% the previous month.
Mervyn King's first draft
FT - Lex: Mervyn King's first draft
Much maligned on hpc, Mervyn's first draft to Darling...
Fury as Britain's greediest petrol station charges £1.99 a litre
Daily Mirror: Fury as Britain's greediest petrol station charges £1.99 a litre
Two things: 1. A higher price with less supply would indeed moderate demand in a sensible fashion would it not? 2. If the guy has half the petrol to sell in a week than he normally has - doesn't he have to sell it at twice the price to remain in business. Otherwise - he will go out of business and there will be less service stations.
"In November, there was a second run"
MailOnline: Revealed: The secret plans Northern Rock made to pull the plug
Secret plans were drawn up by Northern Rock which would have closed the bank within hours in Operation 'Rapid Plan', the Daily Mail can reveal. Accounts would have been frozen, cash machines switched off, every branch closed and online services axed for the closure on what was dubbed 'D-Day'. The measures show how the stricken bank had made intricate plans if it needed to hit the panic button.
How sentiment has changed in a just a few months
Mirror.co.uk: The house price slump.. one street tells its story
For hard-pressed homeowners the news just keeps on getting worse. The value of your home could tumble by as much as 30 per cent, according to the latest research. And experts are warning that house prices could take up to four years to climb back to 2007 levels. It's yet another blow for families already struggling to meet rising mortgage repayments, needing to move or at risk of falling into negative equity.
Interest rate rises today?
Guardian: Inflation fears force Bank into a corner
The article subtitle is 'City expects price pressures to trigger rise in interest rates instead of cuts.' Could this be the start of a trend or will the BoE hold rates again?
What a difference a few months makes!
Timesonline: Families in a fix as the crunch gets worse
The credit crunch tightened its grip on families last night as two big mortgage lenders raised their rates or withdrew deals, the price of oil hit another record and figures showed that new housebuilding projects are about to fall to their lowest level since the Second World War. There are growing fears about funding shortages. High street banks, which have been battered by the credit crunch, are asking shareholders for extra cash to plug the gaps caused by losses they suffered as a result of the American sub-prime crisis.
Monday, June 16, 2008
Goldman close to restructured $7bn SIV deal
FT.com: Goldman close to restructured $7bn SIV deal
I don't understand the detail of this. Does anybody else?
CBI says growth will be slow (but not negative, never!)
CBI: Slowest growth in seventeen years expected for 2009
"Rising commodity costs and weaker consumer demand will combine to push down next year’s GDP growth to the lowest rate since 1992, according to the CBI’s latest UK economic forecast. The UK’s biggest employers’ group said today (Monday) that it has lowered its forecast for GDP growth in 2009, by 0.4% to 1.3%. The forecast for growth in 2008 is essentially unchanged, at 1.7%, down only 0.1% on March's forecast."
Property Ladder wannabe gets burned
Telegraph: I'd dance nude in the street if my buyers wanted
From the guy who brought you tonight's Tonight show, comes this tale of woe of a would-be property developer who buys a run-down ex-council house in London in the hope of making the big bucks. Everything goes wrong, but in true Property Ladder stylee, he still makes a (small) profit.
Well worth watching a re-run (Part 2 on Friday of this week)
ITV.com: Beat the property slump: Tonight, Mon 16 June, ITV1, 7.00pm
ITV1’s Tonight programme has commissioned an exclusive survey to give us a real sense of what is going on in the property market. It is the most independent authoritative forecast since the credit crunch began. We asked the Society of Business Economists - the leading organisation representing business economists in the UK - to survey their members on what they thought would happen to the housing market over the next few years. 225 of the best informed minds in the country replied. SEE SURVEY RESULTS
Where are the fault lines? Property prices?
Telegraph: Morgan Stanley warns of 'catastrophic event' as ECB fights Federal Reserve
"The clash between the European Central Bank and the US Federal Reserve over monetary strategy is causing serious strains in the global financial system and could lead to a replay of Europe's exchange rate crisis in the 1990s, a team of bankers has warned".
Yet another bites the dust
FT: HSBC closes HFC Bank division
HSBC Group is to terminate all second charge mortgage lending through its intermediary brand Endeavour Personal Finance (EPF), FTAdviser.com can reveal.Seventy EPF staff have entered into a consultation period and intermediaries have been told that all applications need to be completed by the close of business today (16 June). Any pipeline business needs to be completed within 30 days.EPF was operated as a division of HFC Bank, which HSBC bought as part of the purchase of US specialist lender Household. However, the US parent company has been under increasing pressure due to bad debts from the US mortgage crisis.
Industry Bad Name?
times: Estate agents should sit an exam before they sell a house
Estate agents should be forced to sit an exam before they are allowed to sell a house, an influential report has recommended. Estate agents should sit an exam before they sell a house Estate agents might be sitting more of these There are too many "rogues" giving the industry a bad name, Sir Bryan Carsberg said, unveiling his year-long report into the residential property market.
On historical trends I predict nearer 10 years would be a fare bet...
This is money: House price slump 'to last four years'
The gloomy message comes from some two-thirds of 225 members of the Society of Business Economists surveyed for ITV1's Tonight programme. I've plotted what could happen based on historical trends.....and estimate that it could take 6-7 years to fully bottom out, and a further 3 years to see any noticable rise, and no prices close to the last peak until after 2020! Time to batten down the financial hatches!
Thought I'd post this in case you want to research further???
First Rung Now: 10% off New Homes at The Gateway
"The 10% offer reflects our commitment to helping first time buyers to get onto the property ladder and will enable them to use the money they have saved for furnishings, a summer holiday, a new car or towards their first mortgage payments. The offer is only available until the end of June so interested purchasers should visit as soon as possible in order to avoid disappointment."
More dry rot found in foundations of UK banking?
Reuters: HBOS faces scrutiny on UK housebuilder exposure
HBOS owns 50 percent of private housebuilding firm Crest Nicholson, and the value of that stake could be marked down to reflect a slump in the value of its debt and in the share price of listed housebuilders, analysts said.
After the comedy from David Smith, reality really stinks for homeowners and BTLs!
Times: Woolwich pulls out of two-year fixed-rate mortgages
Tough luck for those who have to remortgage in 2008. "The Woolwich, the lending arm of Barclays, will tomorrow withdraw all of its two-year fixed rates from the market, citing the need to control customer volumes. The lender has also increased fees from £595 to £995 on tracker rate deals." The Woolwich announcement comes on the same day that the Nationwide Building Society, the UK's second largest mortgage lender, ramped up rates by up to half a percentage point for the second time in two weeks" Got the new meaning of "supply & demand"?? There is alot demand for mortgages and nada money supply! Bet mortgage rates will hit 10% by year end
A Four-Year Cycle
London Stock Exchange: Economists predict four-year wait for house price recovery
They believe 2012 prices will equal 2007 prices. Bless.
Equity release
BBC Radio 4: Money Box Live: Equity release: your questions
On Monday's Money Box Live, Paul Lewis and a panel of experts took your calls on using the value of your home to generate extra income in retirement, what's known as 'Equity Release'.
The Bank of England could be forced to raise interest rates this year as part of its battle against inflation
Citywire: Rising swap rates drive fixed mortgages higher
Soaring swap rates are pushing the cost of fixed-rate mortgages through the roof but they may be the only option for borrowers who cannot afford the risk of a Bank of England interest rate hike to control inflation. Figures from the Bank of England suggest the average cost of fixed-rate mortgages are at an eight-year high, averaging 6.92%. But historically, fixed-rates are low; the Bank of England’s average fixed-rate mortgage spiked to around 7.55% in 1998.
How long has Poxtons got?
Telegraph: Countrywide and Foxtons have more than property on their books
Countrywide is in the fortunate position of having no covenants on its bonds; it just has to keep meeting interest payments until things pick up. Foxtons, on the other hand, does have banking covenants. It has quarterly targets that it must hit, which measure its turnover in relation to the amount of debt it has.
Paid for with blood money!
Independent: Mystery as Euan Blair buys flat in London for £550,000
Euan Blair, the son of the former prime minister, is thought to be the new owner of a £550,000 two-bedroom flat in Islington, north London – despite not starting his graduate traineeship at the bank Morgan Stanley until the end of this month.
Pinky: What now brain? Brain: We should flee for our lives, yes that would be the wisest course!
thisismoney.co.uk: Advice for Bradford & Bingley customers
From 2nd June, but still interesting: "This is NOT another Northern Rock. That was the message today from everyone involved in the Bradford & Bingley cash injection." Ok, so here are your choices as a depositor with B&B: 1. Trust B&B to look after your cash for you. 2. Trust the government to protect your savings when B&B goes pop. 3. Discreetly start removing your cash and put it somewhere safer. I know what option I would choose.
Estate agents 'need regulating'
BBC: Estate agents 'need regulating'
I have lost count of the number of times this has been "called for" as the press likes to put it, but nothing is ever done. Wonder why ?
Great comedy!
DavidSmith: Good news in the housing market
"The house-price index produced by the Department for Communities and Local Government (DCLG) showed a rise of 0.7% in April and was 4.9% up on a year earlier" "Jeremy Leaf, housing spokesman for Rics, saw some green shoots in the figures, with an easing of the pace of decline in new buyer inquiries and the fact that the gloom on prices did not increase further (not that there was much room for it to do so)" My sides are splitting, can anyone please laugh for me?
Mortgage rates on the rise (again)
mortgagestrategy: Nationwide hikes fixed rates
Nationwide is increasing fixed rates across its product range and on the 90% LTV tier of lifetime tracker deals. The changes are largely due to the rising costs of funds and they take effect from Tuesday June 17.
After the flood
Guardian: The City has got its head in the clouds if it thinks business can go on as usual
The case for tighter regulation of the banks. No question that this is needed in my view. It's certainly a prerequisite for a more stable, and dare I say fairer economy.
The good news about the housing crash
MoneyWeek: The good news about the housing crash
Desperate housebuilders are demanding the government 'do something' about the housing crash. But the credit crunch should mean that house prices settle at a level that genuinely reflects supply and demand...
Take Gazundering to a whole new level!!
ThisIsMoney: Housebuilders hit by gazundering
"Housebuilders, already reeling from the fallout from the credit crunch and tumbling house prices, face a new menace - 'gazundering' by buyers after they have exchanged contracts" but buyers are sha*ted anyhow, 'cause "'It is sometimes cheaper for them to walk away from the deposit.'
How Much is/was Humberts Worth?
Estate Agency News: HUMBERTS RESCUED
THE Mercantile Group, co-owners of Chesterton, has come to the rescue of Humberts by paying £3.1 million for most of the business. Mercantile has bought 34 Humberts offices, 10 franchises, including the Farley and Wellington estate agencies, and the Humberts brand name. I know a Nigerian with £340,000,000 he needs to move out of the country, wonder if Mercantile would be interested in that too?
Credit Crises Worse is Yet to Come
The Market Oracle: Credit Crisis Crushing UK Banks
One of the primary indicators of the depth of the ongoing credit crisis is the interbank LIBOR market which as the below graph clearly indicates that the credit crunch Tsunami waves have turned into a perpetual flood of risk averseness as banks refuse to lend to one another.
Foxtons on the rocks
FT: Sale of the century
A great article. Clear that the company is headed for receivership.
Self-fulfilling prophecies...
Metro: House prices 'to fall 20 per cent'
I love headlines like this, who in his right mind is going to buy today?
FT Index shows 3 month consecutive falls for first time since 1995
Firstrung: UK house prices fall for the third consecutive month- FT Index
UK house prices fall for the third consecutive month- FT Index Dr Peter Williams, Chairman of Acadametrics, comments, "House prices in England and Wales fell by 0.6% in May making this the third consecutive month of nominal price falls recorded by the FT index - the first time this has happened since April 1995. The average house price has fallen by £2,715 from a peak of £231,539 in February to £228,824 in May; back to where we were in August and September 2007."
Limbo Time - How low can you go.
BBC: CBI cuts UK growth forecast again
UK economic growth will slow to its lowest level since 1992 next year, employers' group the CBI has warned. In March, the CBI lowered expected GDP growth for 2009 from 2.1% to 1.7%. It has revised the number downwards once more, now putting expectations at 1.3%, as households tighten belts due to higher food and fuel prices.
New Zealand is on the cusp of a downturn and risks seizing the dubious honour from the US of becoming the world’s first developed nation to sink into recession, as measured by two consecutive quarters of negative gross domestic product growth
ft.com: New Zealand poised to fall into recession
New Zealand poised to fall into recession he land of the long white cloud has enjoyed a 10-year economic boom driven by exports of milk, butter and cheese, a population riding a housing market boom and tourists eager to sample the landscapes depicted in Hollywood films such as The Lord of the Rings. But New Zealand is on the cusp of a downturn and risks seizing the dubious honour from the US of becoming the world’s first developed nation to sink into recession, as measured by two consecutive quarters of negative gross domestic product growth.
How to lose £87million?
Telegraph: Property investment: 'Don't choose flats, go for houses'
"Talk of the housing market falling is misleading," says Fergus Wilson. The Wilsons have over 877 properties in their portfolio and 35% equity. Present 'valuation' is £250,000,000. If prices drop 35% in the next few years - they will have 'lost' £87,000,000 that they could have had now - if they could sell them all without crashing their local market...
housing rebound will take years
yahoo news: housing rebound will take years
so called experts changing their minds by the day..personally I would say 15 years to hit the 2008 highs
Senior figures described the Government as "dithering" and having its "head in the sand" and warned of mass redundancies across the sector without state intervention.
Daily Telegraph: Housing chiefs call for state action
Leading housebuilders have blasted the Government for failing to help out the ailing sector...............Senior figures described the Government as "dithering" and having its "head in the sand" and warned of mass redundancies across the sector without state intervention.
20% in 4 years?
the daily male: house prices to plunge
just in time for the end of the world 2012.
In short, if our luck runs out we'll slow to the point of recession. If we do reach that point, my bet is the recession will be a severe one.
smh: Ketchup theory will slow economy sharply
If I'm anywhere near right, concerns about inflation will soon evaporate, as will the financial markets' expectations of more interest rate rises to come
Sunday, June 15, 2008
Former U.S. Federal Reserve Chairman Alan Greenspan said on Friday the Fed will have to tighten monetary policy to put a brake on inflation, adding that the worst of the credit crisis may have passed.
reuters: Greenspan sees Fed getting tough on inflation
Growing price pressures have led the U.S. central bank to recently shift to more aggressive anti-inflation rhetoric, and expectations are rising that policymakers will raise benchmark U.S. interest rates within months.
After Ireland's rejection of the Lisbon Treaty, a split began to emerge Sunday in European capitals over whether to press Dublin to hold another vote - with an implicit threat to consign the Irish to an outer ...
iht.com: Split emerges in EU after Irish rejection of Lisbon Treaty
Split emerges in EU after Irish rejection of Lisbon Treaty International Herald Tribune - 1 hour ago : After Ireland's rejection of the Lisbon Treaty, a split began to emerge Sunday in European capitals over whether to press Dublin to hold another vote - with an implicit threat to consign the Irish to an outer ...
100,000 homes built in 2008 - any buyers?
Observer: New homes slump worst since 1945
The number of homes built in Britain this year will plunge to its lowest level since 1945 and plummeting construction activity is expected to lead to the loss of 100,000 jobs. The country's most senior housebuilders confirm that completions will be around 100,000, some 70,000 less than last year.
Better late than never!
Independent: Review calls for letting agents shake-up
"Property agents in the rental sector must be better regulated, a major housing report launched tomorrow will conclude. The Carsberg Review of Residential Property is expected to argue that the 1979 Estate Agents Act needs to be updated so that estate and letting agents require an entry-level qualification".
CEO of ailing Barratt says "It's all a conspiracy!"
Guardian: Falling like a ton of bricks
Oh dear. When it comes to desperation, saying its all a conspiracy by people out to get you usually means the game is up and its time to go quietly.
The Bricks Chick suprema hits again
TimesRosieMillard: It's a good time to be a buy-to-let landlord
"it is not a good time to sell a house, a lot of people are not doing so. They are staying put and hoping the downturn will blow over (which, in due course, it will). So, because nobody is selling much, there is a growing volume of people who want to buy, but can’t. In the meantime, because they need to live somewhere, they are renting. There’s a second group - whom I rather disparagingly described as vultures in my column last week - beady-eyed purchasers who hope to get a bargain if they hang around for long enough. These people are also renting. Then there are those who are in the rental market, because renting suits them or because they can’t afford to buy. Yet. Meaning what, dear reader? It is a jolly good time to be a buy-to-let landlord"
We CAN do it
i power: How to stop Corporations killing the Internet
I recently posted about plans to end the free access internet system. It was a negative article with no real hope. However, I have written an article in i-power's forum that I hope can engage people into solutions to the risk to our freedom to meet in websites like houspricecrash.co.uk and discuss and debate. This is extremely important to houseprices, because, without websites like this, we would only have been exposed to vested interest articles and would not have been able to debate lies in the press. Without it, many of us would be significantly poorer. I for example almost mortgaged my life away on a £250k hovel in Hackney! So I encourage you to take on board this approach and take it back to your other online communities.
David Smith's at it again. Now he tries to tell everyone that rates won't rise
Times Online: Bank of England moves to dampen fears of rate rise
In many mays, David Smith is extraoridnarily naiive when he puts pen to paper. He believes that by stating something, it might just become so. Example - the first line of his article reads "THE Bank of England is set to calm fears this week that it will respond to inflationary worries with early interest-rate rises." Why is the bank set to do this? Becuase he says it is in today's Times Online! Even though this odd strategy has never worked, and has indeed sunk his own credibility in the process, he persists. I suppose Smith hopes that contrary to what the LIBOR is doing, and contrary to what the ECB is doing, somehow Mervyn King telling the UK that 'inflation will return to the long term target' might just make everyone forget about soaring food costs and soaring petrol prices.
Just can't bear to sell for less
Observer: Sellers beat the slump by renting homes
Seems a strange decision to let. Even if one is rich enough to be able to afford to buy two houses, the tax implications and the hassle of letting, not to mention the steady decline in equity, does not make letting look a particularly tempting option. Still, more choice for us renters.
Sale of the Century
FT.com: FT Magazine
A genius tale of corporate egos and unshakeable self-belief culminating in some serious head-scratching for Private Equity investors. Sublime.
The penny drops for citizen O'Kane
Times: Should you drop your house price to sell?
"her immaculately renovated home was put onto the market at £650,000 - some £250,000 more than she had paid for it 18 months earlier. The valuation was, to put it mildly, somewhat optimistic" Now, after receiving just one offer - of £500,000, rejected at the time as derisory" that was still 10% hgher she had paid... she will regret in due course!
He should read the HPC......where has he been?
Observer: Darling to warn about parlous state of UK plc
Alistair Darling will offer a sombre assessment of an economy buffeted by rocketing commodity prices and the credit crunch when he delivers his first Mansion House speech on Wednesday. Rising food and fuel prices have boosted inflation, just as the Bank of England struggles to contain the impact of falling house prices. Darling will warn that this is by far the toughest test yet for the policy-making framework set up by Gordon Brown in 1997.
Private Equity hit the rocks... like in 2002!
Times: Deals head for rocks
"Housebuilder Crest Nicholson and retirement-home operator McCarthy & Stone have both seen their debt trade at distressed levels, as have estate agents Foxtons and Country-wide. All were bought by private equity last year" There is an in-depth analysis of the upcoming collapse of Foxtons in the FT this weekend (but can't find on internet)... a joy to read!
Help! We're going under! Splash!
The Telegraph: City plots rescue plan for ailing housebuilders
A group of Britain's biggest institutional investors are working on secret plans to provide direct funding to shore up the beleaguered housebuilding sector. Housebuilders have been squeezed by the slowdown in the housing market, while still having to pay for building works Bankers at UBS have drawn up possible plans for a wide-ranging placing by major shareholders in companies including Taylor Wimpey and Barratt Developments. The radical move comes after a plea from investors to the housebuilders, through their financial advisers, to abandon any plans to launch rights issues. One top investor said: "The message was, 'Please don't do a rights issue, just come to us and we'll put some money into a kitty and recapitalise the businesses directly'."
Noone can save housebuilders from themselves!
Times: The roof caves in on Barratt CEO Mark Clare
" using big incentives to drum up custom. It is offering homebuyers a quarter of the value of a new home interest-free for 10 years" why not to cut prices? simple: “This may come out the other side as quickly as we went in. By next spring the mortgage banks will be lending again.”
Workers too poor and weak to cause stagflation
Gurdian: Can we keep stagflation at bay this time?
The essence of this article is that we won't have a rerun of 70s style stagflation because globalisation and union weakness have removed power from the workers to push through inflationary wage rises. So this is an argument for not raising IRs. Cue more HPI. The only people with any wealth after this will be primary industry shareholders and workers, and owners of assets. The rest of us will be much much poorer.
More Bearfood
Guardian: Homeowners need housing benefit too
"It's hard to see what the government can do to stop the UK's decline into recession, with the ensuing property slump, unemployment and repossessions."
Councils urged to help homeowners????
BBC News: Councils urged to help homeowners
This is rich!! I was around during the last crash in the late 80's, this was never discussed, I was on my own and hung out to dry!! In the unlikely even the councils do step in to assist in this carnage, how can it be justified??
Saturday, June 14, 2008
Councils should offer financial support to homeowners
Yahoo News: New Local Government Network
A new report published this week will argue that local councils should offer financial support to homeowners threatened by the credit crunch. The New Local Government Network (NLGN) argues that local authorities should adopt US style Mortgage Support Plans and offer below market rate, whole or partial mortgages to either stave off repossession and eviction, prop up the housing market to prevent remortgage difficulties, or support first time buyers to buy locally.
Another one bites the dust !!
Bristol Evening Post: BRISTOL HOUSE SELLERS WORRIED AFTER ESTATE AGENTS FOLD
A chain of 10 estate agent offices across Bristol and North Somerset has closed down after the owners became the latest victim of the downturn in the property market.
speculators are increasingly rinsing money from all our pockets
Spiegel Online International: How Speculators Are Causing the Cost of Living to Skyrocket
After investing in high-tech stocks and real estate loans for years, legions of speculators have now discovered commodities like oil and gas, wheat and rice. Their billions are pushing prices up to astronomical levels -- with serious consequences for ordinary people's quality of life and the global economy
With mortgage defaults up 17 percent this year, and likely to top 100,000 This could help up to 15,000 people out of difficulty
Reuters: Councils
LONDON (Reuters) - Local councils should offer financial help to homeowners threatened by the credit crunch, an independent think-tank said on Saturday. (Advertisement) The New Local Government Network (NLGN), which aims to transform public services, says local authorities should offer entire or part mortgages at below market rate to those struggling to meet mortgage repayments, facing repossession, or first-time buyers unable to get a foothold on the market.
Let the government provide subsidised mortgages
Yorkshire Post: Don't let regeneration become another victim of credit crunch
A little known fact is that local authorities have a history of providing mortgages and would routinely lend to hundreds of thousands of local residents right up until the early 1980s. Today, the New Local Government Network is calling on the Government to look afresh at the potential for councils to step in to directly help those residents facing greatest difficulty. Under the scheme, councils could act as mortgage providers under prudential borrowing rules, in which interest rates can be lower than commercial rates. Many Yorkshire cities have encouraged city centre living, and a collapse in this market could reverse the prosperity that has seen an economic and retail renaissance over the past decade.
Saturday night comedy club
Assetz: Housing starts collapse, as we predicted
Developers mothballing sites is going to mean lower supply - it is has taken until today for the trade to admit it fully and the BBC have really picked up on it today finally. House prices will rise again through raw supply and demand imbalance with rents rising too extremely strongly in the short term and firmly for many years to come. It is clear it is existing landlords who will benefit from huge income rises.
Psst! Wanna piece of the action
cbsnews.com: More Americans Turning To New Source Of Money: Person-To-Person Lending
Justin Brown didn't think he was being extravagant when he borrowed $4,700 to buy his motorcycle. But he already owed $5,000 on his credit card and the interest was crushing. He was paying 31 percent on his credit card. And now he's paying … "Ten percent," Brown said. Nice idea. Would it work over here ?
"Warning"? Does the BBC mean "Plea"?
BBC 'News': 'Warning' over petrol panic buying
It is so typical of the BBC and current government. The highest taxed petrol of any EU country and the government sends "warnings" to the public through the state media channel not to try to take the initiative by stocking up. Perhaps if they were more polite, and sent out a "plea", people might just do what they want. Or maybe not. The governement's preferred Contrived Price Index (CPI) inflation measures will not be affected.
Never, ever trust a bank
Financial Advice: RBS Chief Warns That UK Slump Could Last For 15 Months
Wednesday 11th June 2008 Sir Fred Goodwin, the chief executive of Royal Bank of Scotland (RBS), has suggested that the UK economy may suffer for at least another 15 months before we see any sign of improvement. Sir Goodwin’s comments have not gone down particularly well in the City, just days after the Group secured a £12 billion rights issue to increase the financial strength of the bank. Another small piece - but still interesting.
Ding ding, round 2
Financial Advice: Are We Set For Credit Crunch Part 2?
Thursday 12th June 2008 Investors in both the UK and US were running scared yesterday as rumours rampaged through the markets that more security firms in the US will be writing down the value of their loan books when the reporting seasons starts next week. For those who have been watching the credit crunch closely, this was the reason that we saw the initial shock last year which led to the worldwide economic slowdown. Real small piece - but something to look forward to over the next couple weeks.
Morgan Stanley's negative-equity-o-meter
Saturday Times: More pain for borrowers
This article appeared in today's Times (although it is dated 12 June?), the killer sentence is "Morgan Stanley, the investment bank, believes that a further two million households are at risk of owing more than the value of their property if house prices fall 20 per cent by 2010" So that's a nice round 100,000 households in Nequity for every 1% fall in prices!
Property Stand Still - 15 Years!
Hiday.net: HOUSE PRICE CORRECTION UK
For property to become affordable again to large sections of the population; in particular first time buyers, there has to be a substantial correction in price. However those that expect an immediate full blown 'property crash' may be in for a dissapointment. The likelyhood is that it is going to be a long drawn out affair with three main factors interacting with each other.
Is the government going to extend this kind of help to other ailing industries?
Guardian: Lenders and house builders revived by FSA
"The Financial Services Authority (FSA) has decided to clamp down on investors shorting a company's shares if it is in the middle of a cash call, since it believes this practice helped drive the likes of HBOS and Bradford & Bingley below their rights issue price." Wonder what's driving that then? The FSA never interfered in the market before when these companies were doing well and their shares prices were going up ...
Untikable just a year ago (except on this site)
Independent: Private Investor: House-builder limbo - how low can they go?
the 90% crash club: "Land of Leather (down 94.4 per cent); Paragon Group, of buy-to-let fame (off 93.2 per cent); Barratt Developments (92.8 per cent to the bad)"
Another eventful week
Diary of a Property Bear: Weekly round up - week ending Friday 13th June 2008
Another eventful week...
I wish to register a complaint.
guardian.co.uk: The economy has gone to meet its maker.It is no more
As far as the voters are concerned, the plumage don't enter into it. They seem utterly unmoved by the idea that Britain is, by all accounts, envied as a bastion of creativity when their homes are dropping in value and their real incomes are being squeezed. Rather like the angry customer in the pet shop, they have taken a closer look at the parrot and decided that the only reason it stood on the perch for so long was that the government nailed it there with both public and private debt.
Does anything that GB promise materialise?
BBC News: New homes target 'will be missed'
"We've not seen anything like this post-war," he said. "It's essentially a financial crisis, more like 1931 than anything else that we've seen. "House builders are not going to be starting new sites, they're going to be laying people off, they may even be mothballing sites. "It really is on a scale we've not seen before."
The fuel for the boom has run out
FinancialAdvice.co.uk: LIBOR Rate Hit Three Month High
It seems as though speculation that the next interest rate move in the UK will be higher is starting to feed through to the money markets. LIBOR, which is the rate at which banks lend money to each other, hit a three month high of 5.95% today as many dealers reluctantly agreed that UK interest rates are set to rise in the short term.
house prices must drop 63%
daily mail: house prices must drop 63%
reality is starting to set in that the housing bubble will not end with a 20% correction. I have said all along the problem of disaffected youth starts with the inability to 'buy in' to normal society
Fuel Strike Forces Closure At BMW
Oxford Times: Cowley production halting after fuel strike
"We haven't had any lay-outs like this for a long time, they cannot guarantee what work we will have next week." The Spanish lorry drivers were today warned to get back to work as the government took a hard line against their protest.
Tiers flow?
Daily Telegraph: Speculation mounts over Barclays fundraising
Barclays has "plenty of opportunities" and is "clear" about its strategy, finance director Chris Lucas told a Goldman Sachs conference yesterday, as speculation continued to mount that the bank will have to raise capital to shore up its balance sheet. Analysts reckon Barclays may need to raise as much as £7bn to improve its "very tight" core tier-one capital ratio of 5.1pc, below the bank's own targets of 5.25pc.
What's sauce for the goose is sauce for the gander.
Daily Telegraph: FSA's crack down on short selling is very strange indeed
The Financial Services Authorityhas, of course, had to make some sort of response to public disquiet on short selling but it knows full well that its hands are tied. Short selling is not illegal or even morally indefensible. Most of the time it is just the view of one person over another. The US attempts to restrict short selling, to a certain degree, by insisting on quite high margin requirements, but the problem with creating this type of legislation is that you end up with much of your business disappearing to other financial centres. The rather refined variation put forward by the FSA of trying to restrict short selling solely in the event of a 'rights issue' taking place seems very strange indeed.
Prevention is better than cure.
Daily Telegraph: Bank of England may not be able to 'mop up' on house prices
The "nasty" inflation shock of recent months means the Bank of England may not be able to "mop up" if house prices slump sharply, one of the Bank's leading authorities has warned. Paul Tucker, the Bank's executive director for markets, questioned the Alan Greenspan doctrine that central banks should not attempt to stop bubbles but merely to clean up the mess after they burst, in comments which may undermine hopes that the Monetary Policy Committee will slash borrowing costs if house prices slump further.
The worst is still to come.
Daily Telegraph: HSBC warns of worse to come for UK economy
The worst is "still to come" for the UK economy as household spending winds down due to credit shortages and more jobs are shed as a result of record oil prices, a top economist warned today. Karen Ward, UK economist at HSBC, said in an analyst note that spiralling oil prices will lead to a series of knock-on effects for the UK at a time when it is already being rattled by the credit crisis. Sterling oil prices are up 10pc in the past month alone and for the household sector, rapid commodity price inflation directly affects roughly 26pc of UK consumption.
Interest Rates to rise?
Yahoo News: Greenspan sees Fed getting tough on inflation
"Growing price pressures have led the U.S. central bank to recently shift to more aggressive anti-inflation rhetoric, and expectations are rising that policymakers will raise benchmark U.S. interest rates within months."
Friday, June 13, 2008
Rent now buy later
Dezrez: Is this even legal!!
The NO LOSE scheme for FIRST TIME BUYERS exclusive to Sandown Court, Bawtree Road, Uxbridge. Rent flat for 12 months & buy, with a FUL refund of your rental monies to be off-set against the purchase price*
Estate Agent Hill
Telegraph: Britain’s estate agents feeling the pain as phones stay silent
On a stretch of Lavender Hill - a stone's throw from Britain's busiest railway station Clapham Junction - there are a handful of takeaways, a pub, and just the twenty-six estate agencies.
Oz view on UK Banking Sector
The Age - Melbourne: No hair of the dog for UK banks
Reporting from London, The Age manages to dig up a few pessimist- and optimist-commentators on UK Banks. Comparison to (Banking) situation in Oz would be interesting.
backed by the European Parliament
alanindyfed: letter-from-cornishman
The results from the 2001 UK population census show over 37,000 people hold a Cornish identity instead of English or British. On this census, to claim to be Cornish, you had to deny being British, by crossing out the British option and then write Cornish in the others box. Additionally the decision to collect information on Cornish identity was extremely badly publicised. How many more would have described themselves as Cornish if they did not have to deny being British or if there had been a Cornish tick box? How many people knew that it was an option? How many ticked British but feel themselves to be Cornish British? The Cornish Assembly petition was signed by 50,000 people
I didn't exactly see my pay go up by this
Telegraph: The Real Cost of Living Index: 9.5 per cent The Real Cost of Living Index: 9.5 per cent
Rising food and fuel prices, as well as increased taxes and other household bills, mean the average family must cope with inflation that is twice as high as official estimates, according to new research by The Daily Telegraph and moneysupermarket.com, the price comparison website. Taking all these factors into account, the Real Cost of Living Index (RCLI) is rising at 9.5 per cent.
“People were attracted by the apparent upward one-way bet on property”
Times: Buyers find homes turning from cash cows into millstones
"For many homeowners, houses have become more than just a place to live – they are seen as an investment vehicle, a pension or even a savings bank" I can't help laughing hard...
Pretty animated slide show of house destruction
guardian: Credit crunch: the collapse of the UK building industry
Pretty animated slide show of house destruction revealing ...
Property club investors who face losing millions in the property slump could be due compensation, according to Powell Callen Solicitors
ifaonline: Property club investors due compensation
Andrew Callen, partner at Powell Callen, claims that although property clubs are not party to a contract of purchase, they do still hold some responsibility under the law of agency. Property Clubs have become popular over the last decade as house prices have increased rapidly in many parts of the world, but Callen says many have over-promised and under-delivered, with investors losing out on millions.
How much will any savings be worth next year?
Telegraph: Emerging markets face inflation meltdown
"The inflation genie is out of the bottle: easy money is the culprit," said Joachim Fels, chief economist at Morgan Stanley. "Weighted global interest rates are 4.3pc, while global inflation is above 5pc. The real policy rate in the world is negative," he said
Keep clicking and praying!
Irish Referendum - official website: Referendum results
Just for fun, totally o/t, I know, I know.
AIB votes Yes to mortgage rate hikes.
FinFacts Ireland: AIB Bank hikes mortgage rates
Now that the Irish referendum on the Lisbon treaty is over, the housing crisis resumes. Allied Irish Bank, have increased first-time mortgage rates by 0.40%, and imposed smaller increases on other mortgages. However, they will still lend up to 92% loan-to-value, and claim no restrictions on mortgage availability. (Now, about the restrictions on customers' ability to pay those mortgages..?) (This is relevant to HPC, since the Irish situation is a funhouse mirror reflection of the UK situation. The housing market in Dublin is insane, with average 3-bedroom houses typically priced in the millions.)
Governments On Alert
hurriyet.com: Fuel protests spread globally as oil continues its surge
Protests over soaring fuel prices erupted in Asia on Tuesday as truckers in Hong Kong and tire-burning demonstrators in India and Nepal added their angry voices to protests that began last month in Europe. As oil hit a record $139 a barrel, large and small businesses that depend on gasoline and diesel said they can no longer cope with pump prices that have doubled or tripled, with the steepest increases coming in recent months. Only a trickle of fish passed through
FT/Acadametrics needs to review its methodology
FT: FT index shows third monthly fall in house prices
The FT house price index is showing a modest fall. In trying to explain why it doesn't track the behaviour of other indices, Peter Williams of Acadametrics tries the argument that his index is more "representative". He fails to mention the fact that for the current and recent months, the index in fact relies mainly on a model using other indices, rather than real data; nor that it supposedly represents completions rather than current offers. Even so, it is quite noticeable that changes in behaviour of buyers and sellers are invalidating previous model correlations: vendors now set asking prices way high, expecting to discount, and sellers gazunder even after they have a mortgage offer.
No! No! No! No!
Timesonline: Ireland votes No to Lisbon Treaty
Ireland has voted No to the Lisbon Treaty, plunging the European Union into a new crisis. With results coming in from across the country, a final result of 52 per cent against and 48 per cent in favour of the treaty was rapidly hardening. A final declaration is not expected until after 4 pm
Biggest monthly drop in this index since 1995
FT: Acadametrics: FT House Price Index
Language in this is anything but objective...
Mervyn has his pen and paper at the ready
Citywire: King could be forced to pen historic first inflation letter within days
New Star Asset Management's chief economist, Simon Ward, has predicted that the Consumer Price Index (CPI) for May could breach 3% when figures are released next week, forcing the governor of the Bank of England, Mervyn King, to write a letter to the Chancellor. Commenting before the latest consumer price index (CPI) report is published on Tuesday, Ward said although CPI of 3.1% was not a done deal, he would be 'surprised' if upward pressure from food, fuel and import cost rises did not take the figure to such a level. He said: 'Governor Mervyn King will already know whether the annual increase reached the 3.1% letter-writing level. Recent news suggests it did, which may explain the lack of any discussion of monetary policy in Mr King's speech to the British Bankers Association this week.'
A good summary of housebuilders' woes
Daily Telegraph: Tough times for housebuilders but they won't last forever
"Merrill Lynch analysts' list of the top 10 housebuilders by market share from 20 years ago shows only three survivors." If it is "different this time" maybe none will survive!
GB properties loss in value is over £1 billion per day during last 9 months
mortgageintroducer: GB properties total £5.8 trillion
New figures reveal that the total combined value of all residential properties in Great Britain currently stands at over £5.8 trillion (£5,835,563,534,903). This figure is down, however, by almost £300 billion (£288,419,620,195) since the housing market peak in September last year, when the combined value of all homes topped £6.1 trillion, equating to a value loss of over £1 billion per day over the last 9 months.
Further anecdotal evidence and other evidence ..
The Times: Carphone Warehouse falls victim to housing slump
Just a bit of added colour. A friend in Wimbolden also has a market litmus test; He walks past Foxtons on a Saturday morning and counts little minis parked outside. These days most of the local fleet is sitting there with EAs inside not so busily tapping away at keyboards ... For years, he would have been surprised to see a single mini there on the busiest morning of the week. Local EAs have also reduced fees to 0.5%
FSA to crack downn on short-selling
BBC: FSA cracks down on short selling
FSA says enough to banks and builders and candlestick makers being shorted by Hedge Funds.
Average FTB deposit now 13%
Times: First-time buyer loans fall 36% as deposits jump
"Mortgage lending slowed by 5 per cent in April to £26.1bn, with 'further weakening' expected in the coming months. A number of UK banks have tightened up lending criteria in recent months following the US sub-prime mortgage crisis and the near collapse of Northern Rock. Halifax is planning to introduce tracker mortgages requiring a 40 per cent deposit from borrowers." ---- Further weakening?? More like "full-blown crash expected in the coming months"! Good selection of comments from Times readers too.
10% interest rates here we come......
BBC News: Fixed-rate mortgages rise again [avg = 6.75%]
''...The cost of borrowing to buy a house has been driven higher by a flurry of rate rises from some mortgage lenders. At least 14 lenders have increased the cost of various fixed-rate deals during the past two days...''
Deposits up, multiples down ...
Council of Mortgage Lenders: Resurgence of fixed rate loans
"The average first-time buyer put down a deposit of 13% in April, which is the highest level in over 3 years. First-time buyers typically took out loans for 3.3 times their income, down from 3.35 in March. The average home mover loan was 2.96 times their income, down from 3 in March." Plus lots of other useful statistics.
Blast from the ... last October
Metro: 'House prices to cost 13 times salary'
Has Prof S Nickell resigned in shame over this blatant misinformation yet? Nope, thought not...