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Sybil13

Nationwide Says Prices Will Contd To Fall For The Rest Of The Year At Least.

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Nationwide Says House Prices will not Recover this Year

May 27 (Bloomberg) -- Nationwide Building Society, the U.K.’s biggest customer-owned lender, said U.K. house prices may keep falling for the rest of this year as more Britons lose their jobs.

The U.K. economy will remain in recession for the remainder of 2009 and any recovery next year will be “sluggish,” the Swindon, England-based company said today in a statement. Unemployment may continue to rise next year because the labor market will lag behind developments in the rest of the economy.

“I don’t think the fall in house price is over yet and will probably continue for the remainder of 2009 at least,” Finance Director Mark Rennison said on a conference call with reporters. .........

.............Building societies, which account for about 18 percent of the U.K. mortgage market, are facing rising defaults as the country struggles with its worst recession since World War II. Moody’s Investors Service cut its ratings on eight customer- owned lenders, including Nationwide, in April on expectations of increased credit losses.

U.K. house prices may fall as much as 14 percent this year, Chicago-based property broker Jones Lang LaSalle Inc. said today in an e-mailed statement.

Nationwide said net income fell to 162 million pounds ($259 million) in the year through April 4 from 495 million pounds the previous year. Impairment charges rose 271 percent to 394 million pounds.

The U.K. mortgage market contracted last year and will probably shrink again this year, the building society said. Nationwide’s net lending fell to 2.1 billion pounds, from 8.9 billion pounds a year earlier.

Nationwide’s net interest margin, the difference between what it pays for funding and what it earns from lending, narrowed to 0.93 percent from 1.12 percent. “It’s a negative read across for the banks with lower interest rates and increased costs of liquidity putting pressure on margins,” said Leigh Goodwin, an analyst at Fox-Pitt Kelton Ltd. in London

What was Nationwide's fall from peak to date? PLUS 14% got to be nearly 40% by January 2010.

If you were a seller who needed to sell would you sell this year with an offer of 30% off peak or wait until next year and get an offer of 40 - 50% ?

Tough decisions when the only support for waiting comes from people like Rinoa and McTavish

Should have added here but see later post :

MUTUALS BRACED FOR FURTHER FALLS

Edited by Sybil13

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This suggests that the next set of Nationwide figures will be good news (i.e. more "negative growth"). Can't wait to see them. Soon sellers will be looking back on Q2 2009 as the good times; brace yourself for another £10k off the average house price by the end of the summer.

Edited by Akrasia

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We're still ahead of the USA on fall from peak, just got to keep that momentum up and it's greater than -35% from peak by June 2010

50% including our >10% lead that was holding until Nationwide made that jump up away from Halifax.

Edited by Tom Peters

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Nationwide Says House Prices will not Recover this Year

What was Nationwide's fall from peak to date? PLUS 14% got to be nearly 40% by January 2010.

If you were a seller who needed to sell would you sell this year with an offer of 30% off peak or wait until next year and get an offer of 40 - 50% ?

Tough decisions when the only support for waiting comes from people like Rinoa and McTavish

"Unemployment may continue to rise next year because the labor market will lag behind developments in the rest of the economy.

"

http://www.hrmguide.co.uk/jobmarket/unemployment.htm

"The ONS figures confirm that there were 299,000 redundancies in the first quarter of the year. This is in line with the CIPD forecast of 300,000 redundancies, made at the turn of the year, and with our current expectation that UK unemployment will peak at 3.2 million in the second quarter of 2010".

The worst of the HPC is still to come...

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We're still ahead of the USA on fall from peak, just got to keep that momentum up and it's greater than -35% from peak by June 2010

50% including our >10% lead that was holding until Nationwide made that jump up away from Halifax.

I f we have only reached 35% by June 2010 then I reckon we won't see much more and peoples hopes of 40% or 50% will be well and truly over..... if house price falls are really going to be in the region of 50% then I reckon they need to fall more sharply.

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I f we have only reached 35% by June 2010 then I reckon we won't see much more and peoples hopes of 40% or 50% will be well and truly over..... if house price falls are really going to be in the region of 50% then I reckon they need to fall more sharply.

There is a time lag between the realisation of, decision to eliminate the, and elimination of the spare capacity - peak unemployment not predicted until June 2010

Then there is a further lag between the latter and the repossessions - further 3-6 months from June 2010 for statutory and insurance payments

Go figure now the HPC bottom

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I f we have only reached 35% by June 2010 then I reckon we won't see much more and peoples hopes of 40% or 50% will be well and truly over..... if house price falls are really going to be in the region of 50% then I reckon they need to fall more sharply.

I think that depends on what drives the falls.

If we get a gradual decline based on factors already in play, then I'd tend to agree with you.

Events in 2010 (e.g. interest rate rises leading to increased repossessions, or job losses following a general election as the borrowing binge ends and the public sector shrinks under the Tories) could drive further falls though, in which case the HPC could accelerate from June 2010.

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I think that depends on what drives the falls.

If we get a gradual decline based on factors already in play, then I'd tend to agree with you.

Events in 2010 (e.g. interest rate rises leading to increased repossessions, or job losses following a general election as the borrowing binge ends and the public sector shrinks under the Tories) could drive further falls though, in which case the HPC could accelerate from June 2010.

The only factor in play so far is the ending of free money for all - ending of securitisations and reversal to pre-2001 lending levels

We have not seen yet real price movements that were driven by recession factors - unemployment and falling wages.

This is why the real carnage is still well ahead of us

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It's not rocket sciense is it. House prices fall in a recession. Simple. Makes the bulls on here look stupid if they deny otherwise. And house prices won't start rising again until we are well over this recession and people are back in employment for a good year or two.

At the very least it's going to be 40% off from peak.

This recession is the equivilant of a nuclear bomb going off. The last one was like a few fireworks and look how long prices fell in that.

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It's not rocket sciense is it. House prices fall in a recession. Simple. Makes the bulls on here look stupid if they deny otherwise. And house prices won't start rising again until we are well over this recession and people are back in employment for a good year or two.

That's because people on unemployment benefit can afford mortgages.

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I f we have only reached 35% by June 2010 then I reckon we won't see much more and peoples hopes of 40% or 50% will be well and truly over..... if house price falls are really going to be in the region of 50% then I reckon they need to fall more sharply.

In theory to come back together Nationwide should fall a massive amount like a figure of -4.0% when it is revealed on Friday, that would pull it back to the other lines

very quickly and set a new record I think. Previous figure is -0.9% and predicted -0.4% so that's way out there by a factor of 10

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Mutuals Braced for Property Price Falls

Mutuals braced for drop in property prices - survey

Building society bosses are expecting on average a 10 per cent drop in house prices this year followed by further 0.8 per cent decline in 2010, according to a survey by the Building Societies' Association.

But they do see a light at the end of the tunnel of economic gloom with more than half of building society chief executives saying they are optimistic about 2009.

About 39 per cent of bosses polled predicted house prices would fall between 5 per cent and 10 per cent this year and a further 29 per cent forecast a drop of between 10 per cent and 15 per cent.

Amid the downturn in the property market, they expected an average 22 per cent fall in net lending this year compared with last.

They fear more borrowers would struggle with their debts and are anticipating on average a 51 per cent jump in the number of borrowers in arrears and a 52 per cent increase in the number of possessions.

More than half thought a major challenge this year would be the lower interest rate environment. This comes amid stiff competition for deposits, particularly from the nationalised or part-nationalised banks.

The majority also fear the Financial Services Compensation Services' levy would have a big impact on their business.

Six out of 10 bosses believe mortgage rates will have to rise as a result of the cost of the levy and more than half believe savings rates could fall because of the extra burden.

Anthony Badaloo, principal of London-based IFA Church Hill Finance, said: "What this says is that savers and borrowers will pay for the errors and mistakes [of some financial institutions], which is a very unfair state of affairs."

I wonder where they get an average of 10% from? We have :

39% predicting falls between 5% & 10%

AND

29% forecasting 10% - 15%

So what happened to the other 32% did they predict more than was printable?

Given that we are talking building societies the FACT that they are prepared to admit to expecting any kind of falls is remarkable but whatever they are predicting WE ALL KNOW it is CONSERVATIVE.

Nice to have it confirmed however that property prices will be down at least 35% by Christmas or:

£300000 property £195000.

As I asked in a thread yesterday , what are sellers waiting for, prices to bottom before they sell?

Property was already selling 30% down (Rightmove average asking vs Nationwide/ Halifax selling price ) and that was with everyone speaking spring bounce, should see 35% soon, 40% by the end of the year as everyone begins to understand that 2007 is not coming back for a long long time.

Edited by Sybil13

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Property was already selling 30% down (Rightmove average asking vs Nationwide/ Halifax selling price ) and that was with everyone speaking spring bounce, should see 35% soon, 40% by the end of the year as everyone begins to understand that 2007 is not coming back for a long long time.

For the avoidance of doubt, there is no index reporting falls anywhere near 30%.

Nor, as you implied in your opening post, did Nationwide predict 14% falls for this year.

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For the avoidance of doubt, there is no index reporting falls anywhere near 30%.

Means bugger all.

Out on the street, in the REAL world, you'd be lucky if you were offered -30% from Summer 2007 prices. It's already becoming -35% at best.

"Official" figures mean bugger all.

Edited by eric pebble

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For the avoidance of doubt, there is no index reporting falls anywhere near 30%.

Nor, as you implied in your opening post, did Nationwide predict 14% falls for this year.

MMMmmm....I don't think I said Nationwide is predicting 14% falls my opening post said:

Nationwide Says House Prices will not Recover this Year

I quoted the headline.

With regards 30% I was simply basing the figure on :

1. Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors said in March:

Most of the house price indices suggest prices have fallen by up to 20pc from the peak. However, many of our members [surveyors and estate agents] cast doubt on this and calculate independently that the scale of price falls has been even greater − 30pc or more already. They suspect the Nationwide and Halifax figures are underestimating scale of the peak-to-trough fall to date.

Looking at the surveys you have to come to the conclusion that we aren't at the bottom by any stretch yet. Our members are still expecting further falls in prices, according to our survey, and if there's anyone you might expect to be talking up the market it is them. /quote]

2. On Rightmove saying that average asking price was something like £220000 and that average SELLING seems to be around £155000 about 30%.

3. That "Mutuals braced for drop in property prices - Building society bosses are expecting on average a 10 per cent drop in house prices this year , and that I believe property is down 23% ish.

4. That Rightmove and Savills have been saying since January 2009 that sellers needed to reduce 25 - 30%.

5. That I believe lenders are valuing 30% off peak and more like 40% for remortgages.

And I think it was very clear that it was the Chicago based property broker Jones Lang La Salle who said that U.K. house prices may fall as much as 14 percent this year.

Sorry if there was some confusion I try to make my postings as much based on FACTS as I can.

However thanks for letting me know that you were confused by my thread good to get confirmation once again that bulls have little brain as well, although in bulls could be latent CJD .

Edited by Sybil13

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Means bugger all.

Out on the street, in the REAL world, you'd be lucky if you were offered -30% from Summer 2007 prices. It's already becoming -35% at best.

"Official" figures mean bugger all.

I just wish that was true where i come from outside the Glasgow area absolutely nothing is dropping anywhere near 2007 prices never mind -35%. Heres hoping one day soon i will be agreeing.

Edited by overlander

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What was Nationwide's fall from peak to date? PLUS 14% got to be nearly 40% by January 2010.

:rolleyes:

See sig.

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