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Property Sales Plummet By 11%

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Since the BBC always use misleading adjectives I thought "plummet" sounds better

http://www.bbc.co.uk/news/business-11828912

UK property sales were down 11% in October from a year ago, according to HM Revenue & Customs, giving fresh evidence of the sector's downturn.

Just 79,000 residential properties were sold in October, HMRC said.

That was up 1,000 from September, but was 10,000 lower than in October last year.

The year-on-year fall suggests sales as well as prices are now coming under pressure as a result of mortgage rationing and economic uncertainty.

On Tuesday, the Nationwide building society, one of the UK's biggest lenders, suggested that house prices might continue falling in the coming year, after starting to slip in the past few months.

The lender said a key factor causing the subdued state of the market was a lack of consumer confidence, together with economic uncertainty because of the government's public spending cutbacks.

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79,000 in a month. That seems strangely high. Much much higher than mortgage numbers. Hmmm... :rolleyes:

Cash sales?

Does the fact that this is down 10,000 YoY mean that cash sales are finally falling?

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Yes it's funny how 2-3% upside is always reported as 'soaring' but the same hyperbole never quite seems to make it into describing the drops.

Have you noticed the phrase 'mortgage rationing' being used more and more aswell?

The definition of 'mortgage rationing' apparently being that the kinds of subprime mortgage products necessary to sustain current price levels are now no longer available to all and sundry.

All part of the propaganda involved in making people believe that we are only experiencing a blip, and soon house prices will be 'back to normal' i.e. it''s up, up ,up! Buy now or regret it for the rest of your sad, lonely renter lives!

Does make me laugh (but only in a sardonic way).

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Im feeling the HMRC figures are pretty insipid, nothing to get excited about. If we dont see a rout this winter, I will be left feeling there is going to be no HPC, just stagnation + inflation of everything else.

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Im feeling the HMRC figures are pretty insipid, nothing to get excited about. If we dont see a rout this winter, I will be left feeling there is going to be no HPC, just stagnation + inflation of everything else.

Whichever way things go, house prices must fall relative to wages. Young people simply can't afford to buy, and the market isn't clearing.

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79,000 in a month. That seems strangely high. Much much higher than mortgage numbers. Hmmm... :rolleyes:

http://www.hmrc.gov.uk/stats/survey_of_prop/menu.htm

I agree with the cash sales as a reason comment.

Why not? Bankers bonuses back in, FTSE bosses 55% pay rises last year, lots of public sector fat cats getting large redundancy payments and cash lump sums from enhanced pension pots. Mortgage approval figures are a bit yesterday aren't they in The United Greedom?

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Cash sales?

Does the fact that this is down 10,000 YoY mean that cash sales are finally falling?

Are you suggesting that cash is being sucked into a black hole and when the cash drys up, it will lead to deflationary collapse (of the housing market at least)?

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Yeah, it's because prices arn't too high, its just the banks won't lend enough money!

I saw their comment on that. Nothing about being overpriced. It's just mortgage rationings fault. LOL fools the lot of them.

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Here’s the latest chart for property transactions as recorded by HMRC:

hmrctrans1010.gif

As bricor mortis said above, there’s not much to get excited about at present, any more than there is with mortgage approvals. Basically we have a flat housing market, with approvals/transactions bumping along at much the same level this year. Monthly changes are largely noise, with bulls/bears latching on to specific monthly changes according to their prejudices.

Redhat Sly’s tongue-in-cheek comment has a large element of truth in it. As it stands at the moment, central bank policies are impoverishing the middle classes and rewarding a small niche of society on an almost grotesque scale. So far there has been very little resistance to this, although I suspect that most individuals simply aren’t aware of the wealth transfer that is taking place.

As a result cash purchases of residential property as a proportion of total transactions are high at present, and the average income of those individuals who are able to access mortgage finance is rising. In Scotland for example the average recorded income of new mortgagors in Q2 2010 was £49,000 compared to £36,700 in 2005.

Those HPC’ers who have large investment funds that are keeping up with RPI inflation (after tax) should be sitting pretty because property prices are falling in real terms. The problem is more for those who are relying on income to purchase a house. Wage increases are lagging RPI, and therefore house prices aren’t falling in the same way for this group.

It may not be what some people want to hear, but present policies by both the Government and the BoE are increasingly taking away the opportunity for the average Joe to buy residential property and handing that option to an elite of high earners and those with large amounts of capital (including overseas investors). Of course, officials at the BoE and HM Treasury would flatly deny this, but can anyone point me to a paper anywhere, either at the Fed in the US or here at the BoE which analyses the wealth distribution effects of QE? Only a very small postcard will be required for your answer.

This is the only economic model you need for QE:

coins.jpg

You pump new money in, it circulates for a while, but the cash gets siphoned off by the house and ends up in the pockets of a minority. That’s QE in a nutshell.

I probably shouldn’t be posting a comment like this because I have to admit that I’m doing exceptionally well out of QE, but frankly I think what’s happening right now is utterly disgusting. I find it hard to believe that Mervyn King and other high ranking officials at the BoE aren’t cognisant of the wealth transfer that is taking place, but on the other hand they seemed pretty clueless about the dangers of the credit boom until it smacked them in the face, so maybe it’s just the ivory tower syndrome at work again. All the same, I note that one of the most important clauses in the Banking Act 2009 relates to immunity from liability in respect of action or inaction by the BoE, including its employees. Saving the UK economy was number two on their list of priorities. Making sure their personal assets and pension funds were ring fenced was priority number one.

The problem for all parasites is keeping that fine balance which maximises personal gain without killing the host. The continual indifference of the general UK population to what amounts to financial rape has maybe persuaded the perpetrators that they can keep coming back for more abuse.

Will there ever be a straw that breaks the camel’s back?

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Jeez, Free Trader. Why don't you tell it like it is!

Yeah, don't hold back, and all that!

I too am doing well (so far) out of QE but think it is disgusting. As someone with a big mortgage it is only now that I am starting to believe that the real falls are starting. If that's any consolation to the HPC community!

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Will there ever be a straw that breaks the camel's back?

The endlessly rising cost of buying all the basics that we import, which eventually leaves so many people with no money left over at the end of the month to spend that the majority can no longer actually make any meaningful contribution to the UK economy?

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McTavish was correct...for a time, mortgages are going to be out of reach of ordinary earners.

The Bust is going to be a doozy.

meanwhile, commodities are rising as loans unsecured are passed from Sovereign to Sovereign....money that is lent with no chance of pay back is money lost in the black hole....the same as QE.

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Here’s the latest chart for property transactions as recorded by HMRC:

hmrctrans1010.gif

Snip

Will there ever be a straw that breaks the camel’s back?

Great post.

There will be a straw that breaks the camel's back, but not until the last penny has been plundered and then people will wake up from their celebrity x-factor slumber. The protesting students were the first of course, they had nothing left to take.

Oh can anyone remember the BOE pension fund components? I'm sure it was posted up a year ago. As they say, follow the money.

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The endlessly rising cost of buying all the basics that we import, which eventually leaves so many people with no money left over at the end of the month to spend that the majority can no longer actually make any meaningful contribution to the UK economy?

Yes, that's the thing, for the economy to work properly, people need to be both able to pay their mortgage/rent and essential bills, *and* have money left over to purchase discretionary items, luxuries etc.

At the moment we are moving further away from the second model and further towards the first. That will be compounded by the VAT rise, fuel duty rise etc...

I just cannot see an end to it. My children are in for very difficult lives I would say...

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""The year-on-year fall suggests sales as well as prices are now coming under pressure as a result of mortgage rationing and economic uncertainty.""

Is anyone aware that there is a mortgage ration in UK?

Has government intoduced a "one mortgage per family" law without telling anyone (sorry, your gran's got your family's mortgage ration)?

I can't understand how nobody challenges this sort of statement, no editor, no financial journalist. How can nobody notice?

Edited by ingermany

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Here’s the latest chart for property transactions as recorded by HMRC:

hmrctrans1010.gif

As bricor mortis said above, there’s not much to get excited about at present, any more than there is with mortgage approvals. Basically we have a flat housing market, with approvals/transactions bumping along at much the same level this year. Monthly changes are largely noise, with bulls/bears latching on to specific monthly changes according to their prejudices.

Redhat Sly’s tongue-in-cheek comment has a large element of truth in it. As it stands at the moment, central bank policies are impoverishing the middle classes and rewarding a small niche of society on an almost grotesque scale. So far there has been very little resistance to this, although I suspect that most individuals simply aren’t aware of the wealth transfer that is taking place.

As a result cash purchases of residential property as a proportion of total transactions are high at present, and the average income of those individuals who are able to access mortgage finance is rising. In Scotland for example the average recorded income of new mortgagors in Q2 2010 was £49,000 compared to £36,700 in 2005.

Those HPC’ers who have large investment funds that are keeping up with RPI inflation (after tax) should be sitting pretty because property prices are falling in real terms. The problem is more for those who are relying on income to purchase a house. Wage increases are lagging RPI, and therefore house prices aren’t falling in the same way for this group.

It may not be what some people want to hear, but present policies by both the Government and the BoE are increasingly taking away the opportunity for the average Joe to buy residential property and handing that option to an elite of high earners and those with large amounts of capital (including overseas investors). Of course, officials at the BoE and HM Treasury would flatly deny this, but can anyone point me to a paper anywhere, either at the Fed in the US or here at the BoE which analyses the wealth distribution effects of QE? Only a very small postcard will be required for your answer.

This is the only economic model you need for QE:

coins.jpg

You pump new money in, it circulates for a while, but the cash gets siphoned off by the house and ends up in the pockets of a minority. That’s QE in a nutshell.

I probably shouldn’t be posting a comment like this because I have to admit that I’m doing exceptionally well out of QE, but frankly I think what’s happening right now is utterly disgusting. I find it hard to believe that Mervyn King and other high ranking officials at the BoE aren’t cognisant of the wealth transfer that is taking place, but on the other hand they seemed pretty clueless about the dangers of the credit boom until it smacked them in the face, so maybe it’s just the ivory tower syndrome at work again. All the same, I note that one of the most important clauses in the Banking Act 2009 relates to immunity from liability in respect of action or inaction by the BoE, including its employees. Saving the UK economy was number two on their list of priorities. Making sure their personal assets and pension funds were ring fenced was priority number one.

The problem for all parasites is keeping that fine balance which maximises personal gain without killing the host. The continual indifference of the general UK population to what amounts to financial rape has maybe persuaded the perpetrators that they can keep coming back for more abuse.

Will there ever be a straw that breaks the camel’s back?

Superb post.Thanks.

Nick

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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