Tuesday, Jun 01, 2010
Hooray!
BBC: House price inflation hits 8.5% in England and Wales
"House prices in England and Wales are continuing to rise strongly, according to the latest figures issued by the Land Registry. Prices in April rose by another 0.2%, pushing up the annual rate of increase to 8.5%. This was the fastest rate of growth since September 2007. Meanwhile, the number of mortgage deals on offer has risen again to more than 2,000 as lenders continue the modest relaxation of their lending criteria
Posted by mark wadsworth @ 11:49 AM (2892 views) Add Comment
38 Comments
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1. Blackswan said...
Soooo, there are nows LOADS of great mortgage deals for buyers which will help pump this market from now on....
...doesn't really sit well with last week's whining about a lack of finance does it.
I also love the irony of the line nera the bottom "Despite the acceleration of prices, sales are still very sluggish."
Surely the word "despite" should be replaced with "because of"
2. Thecountofnowhere said...
They werent so keen on saying what a great day for everyone it was last month when they dropped 0.6%
The BBC editors need taken to task about this.
3. mrflibble said...
Champagne it is then, sorted.
4. tudorian said...
Sorry, I just don't believe it !
Why are house prices now any more sustainable now than they were in 2007?
Has the economy really started to grow sufficiently that we're back to boom again?
Who is it buying these houses?? (if indeed houses in any number are being sold)
Where is the money coming from?
Who has a job / income that is rock solid safe at the moment?
I'm seeing more houses on the market now that 6 months ago. More for sale signs than sold.
I'm more convinced of a further coming correction now than ever
5. paul said...
@turdorian
The numbers are very very small. The BBC is whooping as usual (over 200 of their executives are paid more than £150k a year so have extensive property portfolios) but their cheering to sound very hollow.
inflated entirely (first time too!)
6. mark said...
i dont believe it either.
this is what i have witnessed
1) a house is on market
2) a sold sign goes up
3) the sign vanishes ( assumed sold)
4) a month goes by then another agents sign appears
5) back on market at a slightly different price with a different agent
this above process seems to repeat on the same properties, often with 3 different agents involved, I can only assume this is a scam to try and get the market moving, this is something that should really be investigated.
7. karlos said...
The BBC have used the phrase "House Price Inflation", which I haven't seen all that often. After all, inflation is a BAD THING... (sometimes)
8. hpwatcher said...
I'm not really surprised as the UK currency is being devalued in order to maintain the illusion of high / stable house prices.
Underneath, of course, there is a massive currency and house price crash in full progress.
9. sneaker said...
I watch the prices in agents' windows in London like a hawk - several times a week.
I don't see prices that look more expensive. If anything I've found myself thinking "hmmm, that doesn't look so expensive any more - back to more normal, but still some way to go."
If anything, all I see is more top-end houses on the market. A few years ago, all you could see was sh!tty stuff.
Maybe that's why the indices are rising - expensive stuff that was off the market is now being offered for sale.
reCaptcha: riotous roles
10. Exiges said...
Can we have the figures without London skewing them please.
11. doomwatch said...
This is something to celebrate. I'll only be happy when the UK is collectively spending every
last penny of desposable income on mortgage payments.
12. Letmein said...
Have you not realised you cannot talk the market down, there is always a market for for property as we all need somewhere to live. As its a necessity you have to pay, where there is payment there is profit. Where there is profit there are people with more money than you looking to exploit the profit. Your solution, either join the game or walk away. But talking about it will get you no where....
13. uncle tom said...
There's a global 'dash from cash' going on - in China, in the USA, in the UK..
..people want anything but actual money..
..inflation is also taking hold - I've just returned from ten days in China, and everyone there is saying the same thing - rocketing prices of everyday goods..
Officially, Chinese inflation is close to zero; but the reality is probably closer to 20%..
14. jack c said...
uncle tom - most interesting comments - no doubt this will further filter into the UK. As I have said before on here once the inflation genie is out of the bottle..............
15. icarus said...
UT 9 The Chinese currently seem v keen on gold, so the gold bubble looks likely to inflate a bit more.
16. titaniccaptain said...
Correct Uncle Tom anything is perceived as better than cash and becomes self fulfilling.
I have also noticed as has been mentioned on this thread that only top end properties are moving.
As I said in an earlier thread house prices ARE falling in Wales......there are probably very few people in Wales who scan the price of houses here like I do.....yet the figures show an increase in prices.......
WHY?
And why is that prices seem to be falling?
because if one or two very expensive houses sell doesn't mean the rest of the market from the bottom up is moving.
17. titaniccaptain said...
@Icarus
There are many people who would never have given gold a second thought that are now looking at it with new eyes since the inflation figures started turning naughty.
Funny really when you think about it.....the money supply is contracting yet we have inflation. Our inflation has b*gger all to do with QE more to do with oil prices and cost of imports. Our exports should be booming....but their not.
For anyone who fears high or even hyperinflation there is one thing to remember. It can only happen in a deflationary environment........like the one we have now.
If we have inflation and economic growth burning too high then on go the interest rate brakes.
But if we have limited growth and inflation based on the cost of imports, oil etc..... then there is now reason for interest rates to go up.
Savers abandon ship and turn to anything that looks like its going to out perform inflation.....like gold.
The risk with gold is real though......if there is a market collapse without a currency collapse then it will get caught in the stampede.
18. jack c said...
titaniccaptain - note icarus refers to the gold bubble and it's difficult to disagree (eggs in one basket scenario)
19. Titaniccaptain said...
oooopsssss should read "then there is NO reason for interest rates to go up.
20. titaniccaptain said...
OOoooppssss that should read " then there is NO reason for interest rates to go up."
21. titaniccaptain said...
Hi Jack C
I see that Jack but what I am thinking is slightly off the wall but........what if our currency is in a bubble also? and the bubble is nearing its pricking point?
Sounds a bit Revelations (One can live in hope lol)..
And following that there is the question of do you invest in ANYTHING which is subject to the ebbs and flows of currency volatility at present?
Yes gold is subject also to the markets but the call is do you think that currencies are safe right now?
22. jack c said...
titaniccaptain - on reflection (great thing hindsight) we should have jumped on board when S2R1 was first trumpeting Gold but I think his other off somewhat the wall predictions rather sidetracked things. Best of luck with whatever course you take.
23. icarus said...
UT, titanicc, jack c - dash from cash + no gain from investing in the real economy (lack of demand) = investors piling into one asset bubble after another (commodities, stocks, high end of the property market, fine wines, gold etc. - and gold has no special status). Investors all rush from port to starboard and back again. It will be a rough trip.
24. Blackers said...
Actually whatever happens the maths are surely going to work against these sort of ridiculous BBC headlines - even at 0.2% inflation for the month (april) surely at that rate over the next 12 months annual inflation will reduce to 2.4% - so annual inflation is in fact heading down - be interesting how the headlines play out over the next few months
25. jack c said...
icarus - wise words (IMO) - I have no problem with people gaining exposure to the things you mention but it does strike me that they only want to pick one horse in the race (Gold for example) rather than go for a well diversified portfolio with a sensible exposure level. Lots of investors are going to get their fingers burned as this plays out.
26. icarus said...
jack c - gold is like any other bubble - the trick is knowing when to get out.
27. titaniccaptain said...
@Icarus
"gold has no special status"......absolutely....except it is perceived to be the only real store of wealth along with land which is endemic in the public conciousness.
Even though both will be in some stage or another of a bubble.
Its trying to gauge what Joe bloggs (The Man on the street) and Janet Bloggs (The investor on the street) will take flight to if they lose confidence in the bond markets and are not sufficiently able to ride the stock market with any confidence during these turbulent market conditions.
The one way to gauge it is ask yourself one question.
If there was a high taxation of land/property ahead on the horizon and the economic system was about to collapse leaving your savings worthless....what would you convert your money into?
NOW THEN I am not saying that is the case or going to happen but that is the way herd mentality and fear can drive the flock...theses times may be more predictable than we care to imagine provided we look at the way people react in fear.
28. Debtiswealth said...
Down 0.1% in East Sussex.
Hopefully this is the turning point for us. People talk a lot about monthly fluctuations in the direction of prices but the Land Registry trends seem much more steady. Looking at the "going up" and "going down" periods of the past 5 years or so, it will be a surprise (and obviously extremely bad news) if next month's figure is positive.
29. quiet guy said...
@TitanicCaptain
"The risk with gold is real though......if there is a market collapse without a currency collapse then it will get caught in the stampede."
Yes, you're not the first to make that observation. I'm probably teaching you to suck eggs here but keeping an eye on the DOW/gold$ is worth considering. Some goldbug sources expect the Dow-to-gold ratio to return to 1 to 1. If the Dow-to-gold gets to three, I'll sell off about 33%. If the Dow-to-god drops to two, I'll sell off another 33%. If the ratio goes any lower than 2, I'll be very nervous about gold.
30. hpwatcher said...
UT 9 The Chinese currently seem v keen on gold, so the gold bubble looks likely to inflate a bit more.
A lot of people have been saying this for a while. But I don't really accept it - because no-one I know owns gold...and I mean never-ever owned it. There will be a bubble in Gold, but not for a while yet.
It's only when main street starts buying, we are likely to have a bubble, until then - I just don't see it. Perhaps you have been burned in the past.
31. titaniccaptain said...
@QG
Yes there is always going to be a get out point and keeping an eye on gold in relation to all currencies and markets is a worthwhile venture if your investing in it but the only real currency that affects you pocket is the one you invested in or will transfer back to.
I read gold articles that will tell you one day that gold is going to peak this year then drop like a stone....then I read articles that say it is going to rise 100 fold in value.
This is one interesting article in the FT about Gold Sovereigns and the higher premium being charged on them.
Theoretically the spot price of gold could fall yet the increase in sales premium could mean that the gold would hold its value if not go up marginally and proportionate to the increase on premium offset by the fall in spot price.
http://www.ft.com/cms/s/0/02bd46a2-6abb-11df-b282-00144feab49a.html
If CGT at 40/50% (especially on second homes) does go ahead there WILL be a flood of new houses on the market and I can tell you that there IS the beginnings of a flood coming....I speak to many estate agents and they are all VERY busy taking new instructions on.
Lets see if Gold Sovs get included in CGT!!!!!....now that would be a killer to investing in gold.
Its at that point I start selling hard drugs to the vulnerable in society to earn my honest crust........well it would be more honest than most politicians and senior bankers!
32. titaniccaptain said...
@Exiges 10
"Can we have the figures without London skewing them please."..........Bravo...........London = England and Wales Stats combined lol
Dirty bloomin place....I have no idea what people see in the place.
33. 51ck-6-51x said...
Letmein said, "Have you not realised you cannot talk the market down, there is always a market for for property as we all need somewhere to live. As its a necessity you have to pay, where there is payment there is profit. Where there is profit there are people with more money than you looking to exploit the profit. Your solution, either join the game or walk away. But talking about it will get you no where...."
- It sickens me how people can believe themselves when they spout such nonsense.
The logic appears to be: there is and will always be more demand for houses than supply hence prices will go up forevermore. Actually if that were the case the price of a house now would be the present value of the rental income stream (less voids & maintenence) plus that of the expected higher house price at the time of future sale, this, however is most certainly not the case or I would be buying up houses right now (it's actually less than the present value of the income stream). The arbitrage of which you speak is only being maintained off the back of current legistaltion, taxation state, and monetary state - these things may well change (GCT ,maybe, or interest rates; probably both plus more), and then the seemingly never ending upward spiral of house prices would turn down... How about reading up on homeownerism - the seed was a mistaken belief that housing equity was wealth which has now been shown to be flawed, the only thing keeping the sharade up is that the size and power of the interst group (politics rather than unattached social management).
If anything is certain in this world it is the first of the Noble Truths:
All composite phenomena are impermanant.
Tides change.
34. mark wadsworth said...
666, in his weaker moments, Willem Buiter is a land value taxer, but this contrast from that link is false: "... the collateralisability of housing wealth and the non-collateralisability of human wealth."
Your 'human wealth' (i.e. future earnings capacity) is very much collateralised when you take out a mortgage of several multiples of your income which you can only repay out of future earnings. Basically, you have sold yourself and a large chunk of your future.
35. doom&gloom said...
@UT. Don't suppose you looked into opening a remnimbi bank account while you were over there? Been looking for a way to diversify into chinese currency, and it seems the only way it can be done is to open a bank account in person from within China or HK (which you can then manage from anywhere).
I'm heading out in a few weeks time so in the process of researching this.
36. 51ck-6-51x said...
MW,
Whilst one certainly promises one's future earnings when obtaining a mortgage the collateral is not one's future earnings, rather it's the house itself - if you fail to earn you may fail to keep up payments in which case the house is seized, you are not put to work as a slave (or more accuratly, since it would have been collateral, your labour is not sold on by the lender).
37. doom&gloom said...
@MW/666 If your repossessed mortgaged property fails to sell for at least the amount of the oustanding mortgage, you remain liable for the difference and will have to work to earn and repay the lender (under UK law but not US law). The bank can also sell on your liability to a third party, so does this not mean that MW's point about future earnings capacity being collateralised holds true?
Recaptcha: needlessly slitted
38. 51ck-6-51x said...
D&G ,
You make a good point - however this is part of the "promise" rather than the "collateral"; for example an unsecured loan must still be paid by law and there is, by definition, no collateral.
That is my savings pot is collateral (whilst it exists) but my future labour is not (similarly if I win the lottery I may stop working and pay off my mortgage).