Jump to content
House Price Crash Forum
MrFlibble

Pound Gains As House Prices Increase Adds To Bets Recovery Is Sustainable

Recommended Posts

The pound rose to its strongest level this month against the euro as a report showing house prices advanced added to signs the U.K. recovery is gathering pace while Europe struggles with its debt crisis.

Sterling also reached a two-week high against the dollar. House prices rose to the highest in more than two years in November, a report indicated today. The Bank of England yesterday kept its benchmark interest rate steady and government data showed record imports in October. Government 10-year bonds headed for a weekly decline.

“There’s more gloom elsewhere,” said Chris Furness, head of foreign exchange strategy in London at 4Cast Ltd., a research company that counts central banks among its clients. Sterling will probably advance to 81 pence per euro by June, he said.

The pound gained 0.3 percent to 83.69 pence per euro as of 12:13 p.m. in London, leaving it 1.6 percent stronger this week. It gained earlier to its strongest level since Dec. 1. It was up 0.4 percent at $1.5829, after strengthening to $1.5862.

The average price of a home in England and Wales climbed for a seventh month, gaining 0.2 percent, research company Acadametrics Ltd. and LSL Property Services Plc said in an estimate released today. U.K. producer prices increased for a second month in November, the Office for National Statistics said today in London.

Gilt Yields

The 10-year gilt yield was little changed at 3.49 percent, after climbing yesterday to 3.58 percent, the most since June 15. The two-year note yield was at 1.07 percent, from 1.06 percent yesterday and 1.02 percent on Dec. 3.

Gilts fell this week with U.S. Treasuries after President Barack Obama agreed to extend U.S. tax cuts for two years on Dec. 6. Demand for the securities also fell as the FTSE 100 Index of stocks jumped 1 percent this week.

“We’ve seen a bit more calm in the markets and that’s reduced demand in the safer countries,” said Elisabeth Afseth, an analyst at Evolution Securities Ltd. in London. “Gilts have been dragged along with that. The economic data has been generally decent,” reducing demand for bonds, she said.

Sterling has gained 0.2 percent in the past month, according to Bloomberg Correlation-Weighted Currency Indexes, which track a basket of 10 developed-country currencies. Since the end of 2009, Britain’s currency has lost 3.7 percent, compared with a 9.5 percent decline by the euro.

The Bank of England yesterday kept its main interest rate a record low 0.5 percent and held its asset-purchase program unchanged at 200 billion pounds.

http://www.bloomberg.com/news/2010-12-10/u-k-gilts-set-for-weekly-decline-on-expectations-recovery-is-sustainable.html

It's all coming up roses for the UK it would seem...

Edited by MrFlibble

Share this post


Link to post
Share on other sites

They still believe Acadametrics?! Maybe they think it is still under the FT supervision/ownership. :rolleyes:

Lets see if, when spring comes, with all the new properties on the market, if we will have a matching wave of new buyers+mortgages on the market too... :lol:

Share this post


Link to post
Share on other sites
The pound rose to its strongest level this month against the euro as a report showing house prices advanced added to signs the U.K. recovery is gathering pace while Europe struggles with its debt crisis.

Quoted from the farticle--and some wonder why I am feeling a bit cynical? Talk about weathering the storm--we aren't even in a storm!

There is either the biggest lie on earth being spewed from all the usual sources or Brown desreves a Knighthood--the Garter in fact.

I fnd it hard to believe we, of all countries that participated in HPI madness, are alone in not seeing a monster crash.

Share this post


Link to post
Share on other sites

I find it hard to believe we, of all countries that participated in HPI madness, are alone in not seeing a monster crash.

I'm baffled by it too. I think the low base rate is helping to recapitalise the home owners along with the banks, the trouble is this is just kicking the can down the road as our housing costs are still way too high.

Not sure where this will all end, in tears I suspect.

Share this post


Link to post
Share on other sites

Here is my take on things:

Just because Mr Euro, who is lying in the next bed in the cancer ward, has only 24 hours to live, it doesn't suddenly mean Mr Sterling, who previously had one week to live is miraculously cured.

Or am I missing something?

Share this post


Link to post
Share on other sites

Here is my take on things:

Just because Mr Euro, who is lying in the next bed in the cancer ward, has only 24 hours to live, it doesn't suddenly mean Mr Sterling, who previously had one week to live is miraculously cured.

Or am I missing something?

It's all relative.

Share this post


Link to post
Share on other sites

Massive clutching at straws here, by Bloomberg. GBP is at it's strongest against EUR this month, but we're only at the tenth and it was higher on the penultimate day of November :rolleyes:.

LSL estates (Achedemetrics) showed a rise last month too... http://www.homemove.co.uk/news/16-11-2010/lslacadametrics-house-prices-show-marginal-gain.html

The latest research from LSL/Acadametrics shows house prices in England and Wales rising 0.3% in October, marking the sixth consecutive month in which the market has seen a marginal gain.

http://www.mortgagestrategy.co.uk/economy/lsl-joins-acadametrics-to-produce-report/1014705.article

Share this post


Link to post
Share on other sites
“There’s more gloom elsewhere,” said Chris Furness, head of foreign exchange strategy in London at 4Skin Ltd., a research company that counts central banks among its clients.

Fixed for ya.....

B

Share this post


Link to post
Share on other sites

I'm baffled by it too. I think the low base rate is helping to recapitalise the home owners along with the banks, the trouble is this is just kicking the can down the road as our housing costs are still way too high.

Not sure where this will all end, in tears I suspect.

Could it be that the ultra low interest rates will only continue until the banks can absorb the losses from 40% ish house price falls, and when they get to that point the rates will rise? I'm sure that carnage will swiftly follow.

Of course, it could be that rate rises are forced upon us by external circumstances, in which case we'll have both carnage in the housing market, and probably have to bail out the banks again....

Share this post


Link to post
Share on other sites

Could it be that the ultra low interest rates will only continue until the banks can absorb the losses from 40% ish house price falls, and when they get to that point the rates will rise? I'm sure that carnage will swiftly follow.

Of course, it could be that rate rises are forced upon us by external circumstances, in which case we'll have both carnage in the housing market, and probably have to bail out the banks again....

It's already happening. Gilt yields are rising on expectations of a continued recovery.

The carnage in the housing market is already here too. The banks can do little except to continue offering shitty mortgage rates for new borrowers. This doesn't mean that further bail outs will be necessary though.

The Land Registry will be showing 1% + monthly falls for the next 6-12 months. The economy looks like it will now be able to take it which is a very good thing. In fact the best outcome possible now looks the most likely. That is a growing economy, moderate inflation and falling house prices. Just make sure you are not in bonds or gold. (There isn't going to be deflation or hyperinflation and there never was).

Share this post


Link to post
Share on other sites
Guest spp

If the £ fails to strengthen against the $ the U.K is in deep trouble!

November Budget Deficit $150.4 Billion, Worse Than $138 Billion Consensus, Biggest November Deficit On Record

http://www.zerohedge.com/article/november-budget-deficit-1504-billion-worse-138-billion-consensus-biggest-november-deficit-re

what is most notable is that in November total debt increased by $192 billion to $13.861 trillion from $13.669 trillion. In other words, we are now at a point that every dollar in receipts is matched by 1.3 dollars in incremental debt.

Does anyone see the U.S getting out of that without destroying the world's reserve currency???

Share this post


Link to post
Share on other sites

Camden (London) house prices are rising by 27% per annum at the moment apparently according to Acadametrics. Should be a Daily Excess headine tomorrow 'Camden house prices SOAR by 27%'

Why? do you think that is....too many rich tourists, in a market with too much money to spend?...Camden was so nice when you could drive there and park anywhere......no charge ;)

http://www.youtube.com/watch?v=Iq74uCotnfs

Share this post


Link to post
Share on other sites

If the £ fails to strengthen against the $ the U.K is in deep trouble!

November Budget Deficit $150.4 Billion, Worse Than $138 Billion Consensus, Biggest November Deficit On Record

http://www.zerohedge.com/article/november-budget-deficit-1504-billion-worse-138-billion-consensus-biggest-november-deficit-re

Does anyone see the U.S getting out of that without destroying the world's reserve currency???

They are ******ed and they know, they dont intend paying it back, they will be take the whole world down with them.

Share this post


Link to post
Share on other sites

They are ******ed and they know, they dont intend paying it back, they will be take the whole world down with them.

all debt will be reset.....no panic. ;)

panic-button.jpg

Share this post


Link to post
Share on other sites

I fnd it hard to believe we, of all countries that participated in HPI madness, are alone in not seeing a monster crash.

Possibly then UK housing is not overpriced.

At least, not given current wage levels.

Just sayin

Share this post


Link to post
Share on other sites

Come on. Its all about supply, or lack thereof, now.

not it isn't. its about yield.

if more yield is to be had owning UK property than is easily available elsewhere, including globally then house prices will go up.

it is a fallacy to suggest that UK house prices are a factor of domestic supply and demand.

they are a factor of the yield on this asset compared to assets of similar risk elsewhere in the world.

Share this post


Link to post
Share on other sites

not it isn't. its about yield.

if more yield is to be had owning UK property than is easily available elsewhere, including globally then house prices will go up.

it is a fallacy to suggest that UK house prices are a factor of domestic supply and demand.

they are a factor of the yield on this asset compared to assets of similar risk elsewhere in the world.

Sorry, but the liquidity, or lack thereof, cost of property plays a major role. Most investors in shares much less property are inefficiently focused on their own country. You are imagining a perfect world of liquidity in which houses are traded online internationally with ease.

Share this post


Link to post
Share on other sites

not it isn't. its about yield.

if more yield is to be had owning UK property than is easily available elsewhere, including globally then house prices will go up.

it is a fallacy to suggest that UK house prices are a factor of domestic supply and demand.

they are a factor of the yield on this asset compared to assets of similar risk elsewhere in the world.

saupload_pennies.jpg

Share this post


Link to post
Share on other sites

Possibly then UK housing is not overpriced.

At least, not given current wage levels.

Just sayin

This may be true. Its what the market continues to bear. If prices are not what the market can bear something has gotta give.

What is that "something?" Jobs, manufacturing, £, bonds, BTL (this evil may be a lot more influential than many think).................... All of these fundamentals are incredibly strong so nothing is giving at the moment.

The bottom line for us is that the miracle lives on and it has remained intact throughout the biggest banking meltdown in history.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.