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dryrot

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  1. eh? The RoI in Japan was 1% or less for years. Still made no difference. (no point in taking even an interest-free loan to buy an overpriced "asset").
  2. er - yes they do, I know people who make a living hiring out classic cars, for weddings etc. But their business model is not "expect to make 20% capital value increase on the asset while getting less for each hire than the cost of borrowing the money to purchase the cars" a steady rental on a flat in an OK area, with no hassle, is not a bad part of an investment portfolio. Balance is all. (And if the SO ever chucks me out for throwing up drunk in the hall, I've got a fall-back...)
  3. I agree. this person could be me I have a small flat which I let when I moved in with SO. Strictly on current returns, I should sell and invest - but the flat is easy, with small mortgage, tenants have good deal and seem happy. I'm not a BTL - it was my flat and I lived there for 8 years - just don't want to sell.
  4. Went to Sheffield on business in May - well, advising people being laid off, very sad - and noticed the same executive/luxury newbuilds springing up like toadstools. Just like the Thames Valley. Could'nt see them selling at the list price. (just like the TV - they were sold to BTL or flippers) But I expect the developers could make a profit if they sold ar £60k - love to know what the actual build cost was!
  5. But the £25bn is held against a load of overvalued property, on a 125% mortgage. Give you a quid for it, guv?
  6. Bit off-topic, but this alays struck me as very convenient: http://news.bbc.co.uk/1/hi/entertainment/arts/3749199.stm Fully-insured, unsellable... http://news.independent.co.uk/uk/this_brit...rticle62463.ece Charles Saatchi lost more than 100 pieces including two Tracey Emin pieces, Hell by the Chapman brothers and works by Gary Hume and Sarah Lucas. Damien Hirst lost 16 paintings that were not part of the Saatchi collection.
  7. hi always raises a smile! dryrot http://investors.assetz.co.uk/blog/?mid=14941 Managing Director's blog on property investment November 19, 2007 Interest rates now to fall - house prices will be stable and then begin to grow again It is now near certain that interest rates are falling fast next year following the credit crunch and the Bank of England fear that the economy may slow. As we said earlier in the year, they have overshot the neutral level of base rates (at 5.00 to 5.25%) that we suggested and it now seems the MPC committee agrees and indeed this is the range they are now targeting for a rate reversal that could start as early as December. It would have been nice if they could have avoided raising rates too far in the first place but I guess people make mistakes sometimes. The net result is really rather good for Buy to Let investors - as long as they choose, or are already on, bank base rate trackers they could see very low rates next year. Combined with rents rising strongly (see our previous blog entries for data on this) investors are to see some great rental profits over the next couple of years. If you are looking for a base rate tracker then speak with our Assetz Finance division ( www.assetz.co.uk/btlfinance ) as this looks like the product to have if you don't want to fix your rates for safety instead. In addition there is another issue that will benefit investors (but not developers of uninspiring, large schemes) - the government would like us to be building 240,000 new homes a year rather than around 180,000 or so (net) at present - some lobby groups are even after 270,000. All wishful thinking and another example of the government failing to have joined up thinking on yet another subject. With the credit crunch we are already seeing developer finance getting harder to get and large city centre schemes with ambitious prices are failing to sell to hardened investors meaning that pre-sales are harder to come by. Less pre-sales means no bank finance and no start on-site for the developer - unless of course they discount very hard indeed. We predict a big drop in housing starts on site in 2008 meaning that new homes will actually drop year on year rather than rise over 2008 and 2009 - stabilising prices and helping keep upwards pressure on rents. So discounts will get bigger and savvy investors will be selecting the lower priced, smaller, schemes with excellent rental income - just the type of thing we have always recommended in new build apartments. Generally under around 180k-200k gross prices before discount for 2 bed apartments and under around £135k for one bed units. many of our schemes have been £125-£140k for 2 beds and £100k-£120k for 1 beds). Watch for plenty of big discount lower priced schemes with good (and improving) rental cover coming soon. In the meantime all this bad press gives us great opportunities for older property to be bought at below market value (BMV) as well. See our refurbished/ tenanted student houses in Manchester for example. Cash positive in the first year by thousands of pounds and great free equity that can be used as part-deposit-paid. See http://www.investors.assetz.co.uk/property...htm?propID=2794 for an example. And for those of you seeking more income property to improve portfolio cash-flow we have more - see this new-build student scheme for example ( http://www.investors.assetz.co.uk/property...htm?propID=2755 ) in prime Sheffield University territory or this already built and tenanted one on Manchester university campus ( http://www.investors.assetz.co.uk/property...htm?propID=2810 ) Plenty of great investments to keep you going - but act now whilst the vendors are wobbling and prices negotiable as the press won't be putting the wind up them for ever - six months we reckon at most. -------------------------------------------------------------------------------- October 20, 2007 House prices predicted to rise 27-40% over the next five years The National Housing Federation published some research recently called Home Truths stating that house prices in the UK will rise by 40% over the next five years to reach £302,400. Although it doesn't state it this is equivalent to a rise of 7% per annum on average which over recent years is a reasonable average but given the good recent run in the last few years I would suggest investors should factor in 4% or 5% average growth for the next five years which might lead to a compounded 27% rise in capital values over the same period. On a typical £200,000 property this would lead to capital growth of £54,000 to £80,000 over the next five years per property. At the same time the IMF is saying that UK property is overvalued by as much as 40% - we all know however what would happen if property was 29% cheaper (the equivalent of 40% overvaluation) - there just wouldn't be enough property to go round with the level of demand this would provoke. The rules of economics governing supply and demand in a free market would dictate that it would be impossible to prices to reach this low level before increased demand stabilised prices. We saw a similar effect between the summers of 2004 and 2005 and at the first sign of price weakness increased demand began to drive prices upwards again. Interest rates are expected to lower in the UK imminently and strong further reductions are expected in the US and doubtless elsewhere in the world over the next six months to a year - the risk to the growth projections and to our statement that UK property is not overvalued does depend upon interest rates not going up dramatically. Given the relatively muted response in the mortgage markets to the recent credit crisis it is likely indeed that rates will lower, property is not overvalued and we are likely to see significant growth in years to come driven by the inability of the housebuilders through planning constraints to build enough property for the demand present in the UK economy.
  8. iYes, programme not bad at all. Some of the critcal posts ON HERE are a bit OTT. But the program was a great step forward, and hopefully harbinger of many more.
  9. agree - but 6 Months Tax @ $4073.11 -- sounds ominous health care is free in the US - medicaid and medicare (the government paid healthcare for the uninsured and elderly) are funded greater than the entire UK spending (public and private) though the US is bigger pf course, but the NHS relies on the UK PSBR...
  10. very sad - real life... interesting ancronyms - "BR" for BankRupt - i.e. "Your income = £33k - too much to go BR" ... Is "BR" an HPC ancronym?
  11. and some more relevant links: "La: Housing Woes Cross Border (to Mexico), LA Times article on the flipper condo crash (US)" http://www.housepricecrash.co.uk/forum/ind...c=55269&hl= U.S. housing woes go south -- to Baja PLAYAS DE ROSARITO, MEXICO -- -- The ripples of the U.S. real estate boom began washing up on the shores of this beach town a few years ago. Californians, feeling flush from the steep run-up in housing values stateside, pulled equity from their primary homes and snapped up vacation properties in northern Baja California as if they were buying $10 lobster dinners. Ground zero was this mid-sized community about 20 miles south of Tijuana, where developers sold hundreds of condominiums on spec. Most jacked up their prices as their projects filled, fueling a sense of urgency among U.S. buyers to get in while the getting was good. "We nearly had . . . fistfights" over choice units, said Michael Coskey, sales director of the Residences at Playa Blanca, a 274-unit development under construction north of Rosarito in which the average condo is priced at $500,000. "We were all appealing to people's greed." Greed has turned to regret for some investors who now can't sell their Mexican properties. Upward of 40% of the condos in some northern Baja projects were purchased by flippers who intended to resell them even before construction was finished. Their aim was to pocket a fast profit in an area where prices had been appreciating 20% to 30% annually in recent years. ---- another favourite of mine - from the National Review - (U.S. conservative magazine) http://www.housepricecrash.co.uk/forum/ind...c=53841&hl= Let's Do the Ponzi Flip! - The real-estate market cruises for a bruising Let's Do the Ponzi Flip! - The real-estate market cruises for a bruising ROB LONG If you want to know about the collapse in the home-mortgage business, I suppose you could read the New York Times, The Economist, Forbes, or the Wall Street Journal. The problem with that tactic is you'd then have to wade through a lot of hard words - things like collateralized debt obligations and PIK-toggle notes. Or, you make yourself a big batch of popcorn and tune into Bravo, the cable channel that brings us Top Chef and Project Runway - two of the most popular and successful reality programs on television - and watch its newest show, Flipping Out, which stars a highly leveraged, Los Angeles-based "house flipper": a guy who buys houses, does a minimal amount of cosmetic primping, and then "flips" them a few weeks later for (presumably) a handsome profit. The show follows Jeffrey, the house flipper, as he glides through town in his expensive car, screaming at underlings, plotting with contractors, and, especially, fretting over what the appraiser is going to say about his next purchase. Jeffrey is a gambler, it quickly unfolds, and his cash-flow position is, as they say on Wall Street, problematic. He needs the appraiser - the guy who works for the lender, usually a guy who lives in a cheaper part of town, driving a cheaper kind of car - to appraise his newest purchase at its highest, most optimistic, most the-world-is-a-wonderful-wonderful-kind-of-place valuation because, as Jeffrey tells the camera over and over again in increasingly strained and panicked tones, it's all about leverage. One property collateralizes another property which collateralizes a third property, and the wheel keeps tumbling along for as long as there are appraisers in cheap suits to charm and wheedle and, it is darkly implied, give inappropriate gifts to.
  12. Perhaps: http://www.housepricecrash.co.uk/forum/ind...=nulab+northern Wonks for Sale : New Labour's favourite think-tank and source of policy ideas has confirmed it received funding from Northern Rock. IPPR has yet to get back to Guido, so am as yet unable to confirm that they received hundreds of thousands of pounds in donations from Northern Rock. Reminds Guido of how generous Enron was with political donations before the end... UPDATE : Northern Rock promised £191,018 to IPPR in May 2006 alone. Still awaiting total amount to be confirmed. UPDATE II : Another £180,000 spotted in the 2003 IPPR accounts. Source says it will total over half-a-million. http://www.order-order.com/2007/09/siths-d...advisor-to.html Gordon Brown's personal pollster, Deborah Mattinson, advises Northern Rock on corporate responsibility programmes. Presumably it was she who advised giving circa half-a-million quid to New Labour's IPPR think-tank. How many more of Gordon's circle have their hand in the Northern Rock till?
  13. thx, nice article. My favourite quote! “One of the reasons why this has come about is because a lot of people are getting caught out buying off-plan in a flooded market, they have ended up saddled with it because they couldn’t offload it before it was completed.” [David Ireland, the chief executive of the Empty Homes Agency] also: Savills estimates that in London as many as 50 per cent of new flats, which are concentrated in the regenerating East London area, are sold to investors who intend to sell on before completion or “flip” them.
  14. Seems a bit mean to bash the Notting Hill set now. Ar'nt they worried enough about the coming collapse in "value" of their homes?
  15. Ah - the Global Cooling Catastrophe! Check out the 1970s climate change nonsense, the Newsweek 1975 article "The Cooling World" at: http://www.denisdutton.com/cooling_world.htm Same doomsday scenario, same causes, same need for drastic actiom, but diametrically opposite conclusion! "Climatologists are pessimistic that political leaders will take any positive action to compensate for the climatic change, or even to allay its effects. They concede that some of the more spectacular solutions proposed, such as melting the Arctic ice cap by covering it with black soot or diverting arctic rivers, might create problems far greater than those they solve. But the scientists see few signs that government leaders anywhere are even prepared to take the simple measures of stockpiling food or of introducing the variables of climatic uncertainty into economic projections of future food supplies. The longer the planners delay, the more difficult will they find it to cope with climatic change once the results become grim reality."
  16. hi on newsstands now - nutritious bear food! http://www.businessweek.com/magazine/conte..._position=link1 Housing: That Sinking Feeling Homeowners are getting slammed as builders slash prices. The big question: Will this shock treatment help hasten the end of the painful downturn? Las Vegas was once the hottest of the red-hot real estate markets. But when sales really started choking up last year, developer KB Home (KBH ) did something drastic. Determined not to be caught with a big backlog of unsold homes through one of the industry's notorious down cycles, the builder started slashing prices. A lot. In the 1,400-home Huntington community, a subdivision of two-story stucco houses west of the famed Strip, homes that started at $320,000 a year ago are now listed for $270,000--just a starting point for potential deals. Those sorts of discounts seem to be attracting buyers. Pending sales contracts jumped 23% after KB cut list prices by $25,000 in May, one of the recent price breaks in the Huntington subdivision, according to the market research firm Hanley Wood. That may be good for KB, or at least less bad than holding on to a lot of unsold units. It may also be good for current buyers who snap up homes at huge discounts to recent asking prices. "We try to make prudent decisions regarding pricing," says Jim Widner, regional general manager for KB in Las Vegas. "Prices are going to rise and fall over the short term, but long term a home is one of the best investments." For homeowners who jumped in at the height of the boom, the discounts aren't so good. In Quayside Court, a quiet cul-de-sac in Huntington, many residents who bought last year suddenly own homes worth a whole lot less--making it hard for anyone who has to refinance, sell, or borrow against the equity. "When we first moved here [in the summer of 2006], the housing market was incredible," says Tammy Elder, a mother of three. "Unfortunately we bought a house that was overpriced, and we don't know if we'll ever break even." KB's extreme strategy at Huntington is playing out across the country--even in places like Minneapolis and St. Louis that were bypassed by housing mania. For the first time, big builders are offering massive, often six-figure, price cuts in overbuilt developments nationwide, giving the industry a kind of shock treatment designed to move inventory off the books fast. It remains to be seen whether these radical measures will revive the market or deepen the slump, but it's certainly having an impact on the local communities. On Sept. 14, Hovnanian Enterprises Inc. (HOV ) kicked off a 72-hour Deal of the Century, in which it slashed prices by as much as $100,000 in 19 states. That same day, Standard Pacific Corp. (SPF ) launched its Mission: Possible campaign in 49 communities across Southern California, promising $20 million in total discounts. And on Sept. 29, D.R. Horton Inc. (DHI ) auctioned off 53 homes in San Diego with bids starting at $150,000, half off the list price. "We wanted to get the message across louder," says Hovnanian CEO Ara K. Hovnanian. "Customers needed a stimulus." UP-FRONT PAIN Builders' balance sheets needed a boost, too. Even though the five-largest publicly held residential builders have cut the value of their land and unsold homes from $49.7 billion in 2006 to $41.9 billion today, that inventory as a percentage of sales has soared 33% during the past year, according to Banc of America Securities (BAC ). Those idle assets have taken a toll on the industry's health. A year ago builders' debt payments were roughly the same as their cash flow. Now debt is 2.5 times cash flow. Profits are disappearing as well, with KB Home, D.R. Horton, and other big builders all reporting losses in the third quarter. On Sept. 25 the country's No. 2 builder by homes sold last year, Lennar Corp. (LEN ), reported a $513.9 million quarterly loss, the biggest in its 53-year history. And while there have certainly been other influences on the market, builders bear a lot of the blame for their woes. The real question is whether the drastic price-cutting will short-circuit the usual long, painful downturn builders seem destined to undergo in this economically sensitive business. This is the first housing slump in which the industry has been big enough and well enough capitalized to even consider such extreme measures. And they are extreme. Margins, which ran as high as 35% at the peak of the housing boom, are close to nil when builders sell at fire-sale prices. If by doing so the builders can force the market to accept the reality that housing values have fallen--and accept it fast--there's at least the possibility of emerging from the current bust sooner than in earlier down cycles. "The discounts depress the market, and that's why we think home prices have got more to fall," says David Wyss, chief economist for Standard & Poor's, which like BusinessWeek is owned by The McGraw-Hill Cos. (MHP ) "But rather than a prolonged bust, you take the pain up front." A fast recovery in the housing market wouldn't just be a tonic for builders; it could also give a much needed boost to the overall economy. There is, of course, much that could go wrong. Indeed, potential risks with this untested strategy abound, especially for smaller players. If the price cuts aren't deep enough or builders don't rein in production enough, they won't clear out the glut of unsold homes. Then there's the worry that the discounts lower prices too much, forcing builders to write down even more of the raw land held on their books. And if prices keep falling, buyers could decide to cancel contracts in hopes of getting a better deal later, as they've already started to do. There are also broader markets forces at play, ones that builders may not be able to surmount even by slashing prices. For example, the rising number of foreclosures could add to the backlog of unsold homes faster than they can clear them out. "It's a losing battle," says Jim Belfiore, president of Belfiore Real Estate Consulting, a research firm. Still, builders figure they're better off cutting supply fast rather than letting it drag down earnings for months or even years. "You have to keep moving inventory," says John F. Eilermann, Jr., chief executive officer of McBride & Son Homes, a privately held regional firm that's offering discounts of up to $100,000 and hosting block parties with pig roasts to lure buyers in St. Louis. "Our biggest cost is the land sitting out there. You have to get yourself in a better position for when the market does turn." Following its deal of the century, Hovnanian, the nation's No. 7 builder, booked more than 2,100 gross sales with 1,700 contracts and 400 sales deposits. Standard Pacific has 227 pending contracts from its sale. Assuming those and other such deals ultimately close, the homebuilders could recoup some of the capital tied up in their unsold properties and generate enough cash flow to keep up with their debt payments. That's paramount for builders' survival. "They're better off clearing the showrooms than sitting on an asset that's likely wasting," says Lawrence J. White, a professor of economics at New York University's Stern School of Business. "That's like idle capacity on a factory floor." When builders cut their prices in one fell swoop, rather than letting them drift slowly downward, they in essence force sellers of existing homes to do the same. At the very least, that can be a severe psychological blow that in earlier slumps was absorbed over a period of time rather than all at once. For some homeowners, it's a catastrophic financial blow as well. With new, clearly established market prices, troubled homeowners who paid peak prices will have a harder time refinancing. Others, who need to sell fast, will most likely do so at a steep loss. If they sell for less than their mortgage, they'll be left owing money to the bank. And speculators who banked on being able to flip properties fast in a rising market or strapped homeowners struggling with adjustable-rate mortgages that are now resetting with higher payments face their own particular hell. As painful as such situations are, however, the excesses must be wrung out of the market before the sector or the broader economy can recover. "It's unfortunately a necessary part of the process," says Richard J. DeKaser, chief economist for Cleveland lender National City Corp. (NCC ) "Once you see developers acting as aggressively as they are, the rest of the housing market is not too far behind." Homeowners are almost always slower than builders to bite the bullet and cut their asking prices. That's why prices on sales for existing homes haven't dropped as precipitously as prices for new homes. The average price for a new home in Las Vegas, for example, is down 10% from the previous year compared with 3.8% in the resale market. With owners unwilling to accept lower prices, there's a growing glut of unsold existing homes here and across the country. On Sept. 25, the number of existing homes for sale nationwide, including vacant and owner-occupied listings, hit a 19-year peak of 4.58 million, up from 2.15 million in January, 2005, according to the National Association of Realtors. The resale market will eventually have to realign--meaning homeowners will have to cut their prices--before the slump can end. Driving along interstate 215 west of McCarran International Airport, it's easy to forget that Vegas' lifeblood is gambling and not homebuilding. Acres of brand-new subdivisions stretch for miles toward the red rock mountains in the distance. Out here, the brightly colored billboards on the highway aren't hyping entertainers on the Strip but rather new communities with aspirational names like Canyon Estates and Inspirada. A string of low-rise office buildings read like a who's who of the housing boom, with signs for Pulte Homes (PHM ), Countrywide Home Loans (CFC ), and Prudential Americana Realtors. Welcome to Constructionland. A strong job market, the thriving casino and convention industry, and the highest population growth in the country made Vegas a boomtown for builders. Sin City represented one of the top five markets. Industry researcher Steve Bottfeld of Marketing Solutions estimates there are roughly 568 subdivisions being developed and marketed, the highest per capita in the nation. As recently as two years ago, prospective buyers would camp outside new developments to bid on dirt lots. Today, new homes are empty and communities half-built. The number of unsold homes has reached as much as 48,000, by some estimates, up from a more or less steady level of 10,000 over the last several years. "Builders have a glut of houses that's going to weigh on home prices for awhile." says Dennis L. Smith, president of Home Builders Research Inc., a local consultancy. Mike Alley has gotten whacked hard by the area's declining housing market. In the spring of 2005, Alley, an independent real estate agent in Racine, Wis., moved to Las Vegas, lured by the warm weather and the strong real estate market. He quickly found a sales job with Pulte, where he says agents were pulling in $500,000 a year for basically taking orders. "It was nutty," says Alley. "Houses were flying off the lot." A year later, he decided to jump into the market himself and buy a home. He spent a month searching, settling on KB's Huntington subdivision. The neighborhood attracted a mix of folks, from couples just starting out to empty nesters. More important, there were a lot of families with young kids the same age as his. The $86,000 worth of upgrades, including higher-end cabinets and granite countertops, thrown in by KB Homes at a discount clinched it. Alley thought he was getting a deal: In August, 2006, he paid $360,000 for a three-bedroom home in Quayside Court, which was appraised for $415,000. Yet even Alley, who made his living in this industry, says he was blindsided by the markdowns. Today he reckons his home is worth around $300,000. "I didn't quite keep my finger on the pulse of what [KB is] doing in this community," says Alley, who's largely gotten out of the real estate business. "I'm looking at the sales data, and they were selling my model for $50,000 less even months after I bought it." For Valentina Decarlo, who lives down the block, the situation is even worse. A longtime Las Vegas resident, the 39-year-old has spent almost 20 years working as a cocktail waitress, currently at Wynn Casino where tips supplement her $32,000-a-year paycheck. She took a gamble of her own last July when she put down $77,000 on a four-bedroom house. After DeCarlo got stomach cancer last October, though, she missed work and started relying on credit cards to stay afloat. She's struggling to keep up with her $2,140 monthly payment. While she paid $367,500 in July, 2006, DeCarlo thinks similar properties are now going for less than $300,000. That means her home may not be worth more than her outstanding mortgage, so she can't easily refinance. Her lender, Countrywide, suggested selling the home at a loss or finding roommates, she says. "I'm going to lose everything that I've worked so hard for," says DeCarlo. "Our primary objective is to keep people in their homes," says Jumana Bauwens, a Countrywide spokeswoman, who adds the lender has completed more than 35,000 workouts on troubled mortgages in 2007. If DeCarlo can't find a solution, she will face foreclosure, an increasingly common occurrence in this rapidly deteriorating market. Foreclosures in Las Vegas are the highest in the nation. And there's no sign of a slowdown: New filings in the city topped 33,000 through August, vs. 19,909 in all of 2006, according to the data firm RealtyTrac. The fallout in Las Vegas has been so bad already that Nevada Governor Jim Gibbons has called for a housing summit on Oct. 4 with the city's five largest builders, five largest banks, and others like Freddie Mac (FRE ) and Fannie Mae (FNM ) to figure out how to help troubled home­owners. "We are trying to target those folks who are headed downstream toward the waterfall before they get into trouble," says Lon A. DeWeese, chief financial officer of the Nevada Housing Div. Speculators, especially those who bought late in the cycle, are likely to get hit the hardest. Roxasita Yasul, a 66-year-old retired hospital assistant, decided in late 2005 to supplement her Social Security and her husband's pension by investing in real estate. Back in the 1980s in California, she had tried her luck picking up houses at auction. It was a pretty successful venture. So she got her real estate license and bought four houses last year in new Vegas communities, including one in Huntington. Like most investors, a group who's rapid-fire buying and selling helped fuel the boom in this area, she figured she could always sell the properties in a rising market. It hasn't worked out that way. Yasul paid $350,000 for the two-story home on Quayside Court in June of last year, but she expects it wouldn't bring in more than $300,000 today--if she could even find a buyer. She's not interested in selling now, hoping to wait for the market to rebound. "I'm not lucky with this one," says Yasul. "Those easy rates and interest-only loans will come due, and people will get hit with reality. The outlook is very gloomy." In the meantime, Yasul is desperately searching for tenants. That causes its own problems. Too many renters in a neighborhood can further depress prices, a worry that's already causing consternation among her neighbors. "It's like living in an apartment community," says Elder, her Huntington neighbor. "Renters don't care as much about the homes if they don't own them." The current housing downturn and the damage it's inflicting on the overall economy are far from over. With a slew of risky, adjustable-rate mortgages still to reset next year, foreclosure rates could climb even higher. That's a big reason why the stocks of the nation's 20 largest homebuilders have fallen an average 65% since the start of 2007. But there a few weak rays of light at the end of the tunnel. Builders are taking the painful step of cutting production. Permits are down 49% from the market's September, 2005, peak. That's half the time it took to reach this point in the last decline. "Builders definitely responded more quickly this time, and that's a good thing," says Banc of America Securities analyst Daniel Oppenheim. "But the inventory overhang is so great, it's going to take a long time to work through this. They still have a ways to go before there's a recovery."
  17. 48. Bought house for £70k in 1995, sold for £210k in 2003. Same house went for £249k last year, but I'm not complaining - I was lucky enough. And £210k at 5% gets ~1k per month or near as dammit the same Live with SO in her house - paid half mortgage. One cheap flat rented out - I should sell, but wtf. (The rent would be nowhere near the cost of servicing the loan at the reputed market price). Hate the British property market with a passion. Remember the last crash, rented thru that more by luck than judgement.
  18. "New savers with NR will have the same safeguards as they would enjoy with any other british bank..." http://uk.biz.yahoo.com/20092007/214/north...es-sliding.html and not a penny more than £32k les 10%... Northern Rock terms send shares sliding again LONDON (ShareCast) - Shares in mortgage lenders slumped again Thursday as the government indicated its rescue of Northern Rock (LSE: NRK.L - news) (Advertisement) would only apply to accounts opened or re-opened by last night. The move could put off any potential bidders for the beleaguered group, say analysts. Lloyds TSB had been rumoured to be considering an offer of around 200p per share. In a statement, the government said it its proposed guarantee for mortgage lender depositors would cover all accounts existing at midnight on Wednesday 19 September and reopened accounts. It has agreed to cover future interest payments, movements of funds between existing accounts, new deposits into existing accounts and existing, renewed wholesale deposits and existing and renewed wholesale borrowing that is not collateralised. "Since it would otherwise be unfair to other banks and building societies, the arrangements would not cover any new accounts set up after 19 September, other than re-opened accounts," the Treasury said on Thursday. The government added that the guarantee will not cover other debt instruments including covered bonds, securities issued under the "Granite (GRNT.TA - news) " programme, and subordinated and other hybrid capital instruments. Northern Rock, meanwhile, has been criticised by taxpayers group for insisting it will pay its latest dividend despite effectively going bust. A spokesman for the Taxpayers' Alliance told reporters that Northern Rock shareholders should be made to "take a hair-cut" while the government was underwriting the bank's operations
  19. hi or so Guido Fawkes has it, and I for one believe it. http://www.order-order.com/2007/09/source-...ed-massive.html Wonks for Sale : New Labour's favourite think-tank and source of policy ideas has confirmed it received funding from Northern Rock. IPPR has yet to get back to Guido, so am as yet unable to confirm that they received hundreds of thousands of pounds in donations from Northern Rock. Reminds Guido of how generous Enron was with political donations before the end... UPDATE : Northern Rock promised £191,018 to IPPR in May 2006 alone. Still awaiting total amount to be confirmed. UPDATE II : Another £180,000 spotted in the 2003 IPPR accounts. Source says it will total over half-a-million. http://www.order-order.com/2007/09/siths-d...advisor-to.html Gordon Brown's personal pollster, Deborah Mattinson, advises Northern Rock on corporate responsibility programmes. Presumably it was she who advised giving circa half-a-million quid to New Labour's IPPR think-tank. How many more of Gordon's circle have their hand in the Northern Rock till?
  20. That is unfair. Unfortunately existing dwellings - and gardens - are designated as "brownfield" and councils cannot object - especially if the SEERA (EU regional assembly for the south-east) has determined that x amount of new dwellings will be built.
  21. er.. we discussed this on R5Live this a.m. If the "securities" were worth the value they were booked at NR could borrow the money elsewhere. But we all know that the £160billion in NR assets is secured against a bunch off overvalued property. and not worthe anythig like £160billion. Hence the securities are a bad debt and the BoE is baling NR out.
  22. Funny u should mention that - this hit my inbox today! In Tony Blair's constituency, too! Form an orderly queue, please.. :-) (I take a sadistic pleasure in these come-ons - the're so 2005, and note the £800 p.a. service charge!) http://investors.assetz.co.uk/property-det...0&mid=12196 Property Details - Greenknowles, Sedgefield New Build Property For Sale» United Kingdom £ 110,925 This is an excellent capital growth investment, with completion due in September 2007, offering a range of two bedroom apartments on the outskirts of Sedgefield, Co. Durham, Tony Blair’s former constituency. The two bedroom units will provide an instant equity of up to £20,663. Given the competitive prices and strong rental demand, the investment can give realistic interest cover from 106% to 109%. We have spoken to local letting agents, who confirm that the 2 bedroom apartments will achieve £500 - £525 per calendar month in the present market. In order to reserve an apartment, a £500 reservation deposit and our 2% finders’ fee plus VAT are initially required. Upon exchange of contracts, a 10% deposit is required, less the reservation deposit, with the remaining 5% due upon completion. Post completion, the investor will receive a 15% incentive return. Assetz have secured 18 units on this development for our investors, with one parking space per apartment included in the price. The properties are available with a long lease of 1000 years, with a ground rent of £100 per annum, and a service charge of £768 per annum.
  23. hi hols in LA, noticed this on front of LA Times business section... Good stuff. 8 pages, I enclose the first two and the link http://mobile.latimes.com/news.jsp?key=51450 U.S. housing woes go south -- to Baja By Marla Dickerson Los Angeles Times Staff Writer September 8, 2007 12:00 AM PLAYAS DE ROSARITO, MEXICO -- -- The ripples of the U.S. real estate boom began washing up on the shores of this beach town a few years ago. Californians, feeling flush from the steep run-up in housing values stateside, pulled equity from their primary homes and snapped up vacation properties in northern Baja California as if they were buying $10 lobster dinners. Ground zero was this mid-sized community about 20 miles south of Tijuana, where developers sold hundreds of condominiums on spec. Most jacked up their prices as their projects filled, fueling a sense of urgency among U.S. buyers to get in while the getting was good. "We nearly had . . . fistfights" over choice units, said Michael Coskey, sales director of the Residences at Playa Blanca, a 274-unit development under construction north of Rosarito in which the average condo is priced at $500,000. "We were all appealing to people's greed." Greed has turned to regret for some investors who now can't sell their Mexican properties. Upward of 40% of the condos in some northern Baja projects were purchased by flippers who intended to resell them even before construction was finished. Their aim was to pocket a fast profit in an area where prices had been appreciating 20% to 30% annually in recent years. But with contagion from the U.S. sub-prime mortgage debacle now spooking many would-be purchasers and credit drying up, the Baja real estate market is flagging. Speculators are starting to sweat. Californian Chris Romero's biggest worry two years ago was missing out on the action. He had his eye on a $200,000, two-bedroom condo in a project called La Jolla Real in Rosarito. But by the time the then-Diamond Bar resident was ready to commit, the developer had raised the pre- construction price to $250,000. Instead of folding, Romero doubled down, handing over a $120,000 down payment to lock up two units -- one for $238,000, the other for $270,000 -- before prices increased again. The retiree and his wife reckoned they'd sell the cheaper one just prior to closing and use the profit to help finance the other. "The market was booming," said Romero, 60.
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