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Rics Housing Market Survey May/09

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RICS Housing Market Survey...

A very bullish report followed by individual comments that err on the cautious side of balanced.

What the report and the comments agree on is that the market is currently all about stock levels.

Falling inventory = Rising prices, and vice versa.

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Many respondents seem to put the drop in new sellers down to the new HIPs rules

once this has worked through the system new sellers will increase, hopefully just as all the cash buyers disappear, creating a double whammy of a big rise in sellers and a big drop in buyers

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Wow 11.8 sales every three months - how anybody can spin good is beyond me - take vastly reduced numbers of estate agents then compare with May 2007 at 25.1 sales although it is better than February 2007 to February 2009 at 29.2 versus 9.8!

stock levels at 58 still gives 5 properties per buyer compared with just over 2 in 2007.

HPC still on!

Oh and lets not forget we still have no 100% mortgages, no buy to let mortgages, no lax lending of Northern Rock/HBOS, no money market lenders of any note cattles/paragon anybody?

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I also like this misleading "new buyer enquiries highest since 1999" which is utter rubbish. What they are actually saying is that there are more surveyors showing an increase in the number of enquiries than those showing a drop based on the previous month.

buyer enquiries could be 2 this month versus 1 the previous month!

theres lies damm lies and statistics!

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There you go. Read the report.

This is it. Hang on to your hats. HPI on way back.

Sky was it?

Sky breaking news is "1,500 jobs to go in the city" (Lloyds and C&G). Hardly conducive to rising house prices.

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hmm....so few sales, yet so many enquiries and loan apps.

UK, the land of broken chains.

soon, it will be common to hear people talking about the NIGHTMARE of moving home, of deals falling through, chains breaking every month, the stress going on for months...like it was in the "old days" of the early 90s.

the JOY of moving, the happy, EASY experience so well promoted by the property shows.....its a thing of the past.

forget not, we already have a GLUT of rentals on the market, not just flats, but forced landlrds who have been persauded to rent their unsellable home and buy another....a potential TWO TIMES negative equity.

this thing aint over yet. not while a recession, official or otherwise, is gripping the private sector, banks a still needing bailouts, the markets need QE, exports are low, and unemployment is still rising....in the US, the RATE of unemployment is slowing or appears to be, yet its STILL going up.

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House Prices Yet to Hit Floor

The 'floor' for house prices has not yet been reached despite evidence that the housing market is stabilising, economists have warned.Two new sets of data present a positive outlook for property. The first, from the Royal Institution of Chartered Surveyors (RICS), shows the biggest increase in the number of housing surveyors reporting an increase in prices since September 2003. The survey also reveals a continued rise in buyer enquiries and an increase in the number of house sales.

The Department for Communities and Local Government, meanwhile, says house prices increased by 1.1% during April. This follows both Halifax and Nationwide reporting increases in the average value of property in recent months.

However, although the news looks good on the surface, commentators warn house prices will fall further going forward. Charles Davis, an economist at the Centre for Economic Business Research, points out that the increases in activity and interest comes from a historically low level. And with mortgage lending remaining weak, and unemployment continuing to rise, there remain serious barriers to a full recovery now or even in the near future.

“The latest data released today showed reasons to be cautious about the pace at which the UK economy is recovering,†Davis adds. “This fits with our view that the UK recovery is likely to be relatively fragile.â€

Seema Shah, property economist at Capital Economics, agrees. “The latest RICS survey provided further evidence that housing market conditions are improving, although a floor for prices, let alone a recovery, is not yet in sight,†she says. “Although buyer interest is rising, as long as mortgage credit conditions remain tight and unemployment is rising, house prices will remain under downward pressure.â€

Mortgage lending has seemingly improved over the past few months. Bank of England figures show approvals are up, and mortgage brokers report that cheap fixed-rate deals, and offers for people with smaller deposits, are helping to spur-on buyer interest.

But, again, lending remains historically very weak. Paul Tucker, the deputy governor for financial stability at the Bank of England, and a member of the Monetary Policy Committee, has warned that the medium-term outlook remains “highly uncertainâ€.

“For the moment it is unclear – as, I must say, it is bound to be at this stage – whether the financial system can generate the expansion of credit that will most likely be necessary to support recovery,†he said in a speech at an insurance conference.

Just echoing really what CML said last week regarding BOE figures:

It looks almost inevitable that May approvals will be higher than a year ago for the first time since early 2007. However, activity remains at extremely low levels on any historic comparison – and weaker than at any point in the early 1990s. Limited lending capacity and the impact of further job losses are likely to act as a ceiling for how far the improvement can continue, although there could be further modest rises in the coming months."

And indeed what RM have said:

"Some sellers are still pricing wishfully high, though it is encouraging that elements of the market have adapted relatively quickly to find a new price floor at a discount of around 25% from peak. " "Until banks get their own houses in order, the active minority of sellers and agents who have drastically adjusted pricing will remain frustrated by the limited functioning of the financial services sector."

So, after its initial optimism the Rightmove index enforces the realisation that the UK property market recovery hinges on two things: vendor realism and mortgage availability. The latter more than likely hinged on a recovery to the wider UK economy, which in my opinion is also necessary to increase buyer numbers sufficiently to bring vendor realism

As you know, CEBR earlier this year said that even if approvals doubled by the summer property prices would still fall 35% , if approvals didn't double they expected 40% falls. Last month they changed their stance on this, but it is hard to see on what basis they would have done so except maybe it didn't make them a popular choice for papers to quote if they did not make their figures more bullish. A bit like Rics who earlier this year said:

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

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There you go. Read the report.

This is it. Hang on to your hats. HPI on way back.

Go and put money on it then. Oh a scan of the betting slip would be good.

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Times said today:

About 6 per cent of estate agents across the UK said that property values had risen in May, while 42 per cent said that prices fell, according to figures from the Royal Insitution of Chartered Surveyors (RICS). The resulting seasonally adjusted balance of -44 is up from -58 in April, suggesting that the pace at which prices are falling is easing. May’s reading was the highest since November 2007.

Doesn't sound like something to get excited about does it! ?

Always leaves me asking, what did the other 52% say?

The Building Soc Survey last week said:

Building society bosses are expecting on average a 10 per cent drop in house prices this year ..........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.

However, we were not told what the other 32% thought!

Edited by Sybil13

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Here was me expecting to see something really bullish, and there's only 6% reporting rises nationally! The only region with a percentage reporting a rise that's worth talking about is London at 26%.

Looking at those numbers, I don't see how you can draw any conclusion other than "the pace of falls has slowed from the outright plummet of last year".

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Mortar Torture

[

b]Mortar torture

Published: June 9 2009 09:16 | Last updated: June 9 2009 11:46[/b]

Set aside the nonsense about the return of gazumping in the UK. Ignore estate agents telling prospective homebuyers they will have to move fast to snap up the bargain that has languished unsold since last summer. For as far as “signs of stabilisation†go, the news from the Royal Institution of Chartered Surveyors, which may even have boosted sterling, was pretty unconvincing. The balance of surveyors reporting house prices drooping further rather than zooming off again is certainly falling, but it remains spectacular.

Dig into the numbers of RICS’s May housing market survey and it is clear that most valuers remain resolutely gloomy. The seasonally adjusted net balance of surveyors reporting falling prices narrowed again in May and is now almost half the levels it reached in June last year. But the latest reading of -44.1, still well in negative territory, is around levels seen during much of the early 1990s correction. Celebrate that if you like. True, some more forward-looking measures are picking up. The RICS survey also contains more definitive signs that the rebound in enquiries underway for the last seven months is now feeding through into increased transactions.

But the extraordinary jump in two-year swap rates – up 50 basis points in the last week – is pushing up bank financing costs. If lenders attempt to recapture the lost margin, particularly for the fixed-rate deals priced off swaps, many borrowers will find it difficult to make the maths work on purchases of a slice of Britain’s still overvalued housing stock.

Two-year futures for the Halifax house price index, which notched up an unexpected, and perhaps one-off, rise last month, no longer suggest a further fall of the order of 20-25 per cent, merely one of about 10 per cent. But as affordability ratios deteriorate because of higher financing costs, and as rising unemployment triggers more forced sales, putative homebuyers have little reason to fear a return of the housing bubble. The correction still has further to run.

Couple this with these two threads and I am thinking how nice it will be to say BYE BYE to Hamish / Rinoa and Sibley!

Surveyors Value at TODAYS Prices THANK GOD

Approvals Might be Up but Oh Dear they are then Withdrawn!

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