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Timm

Home.co.uk Jan 2011

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Sorry if this has already been posted on the forum, but I could only see it on the news-blog.

http://www.home.co.u...Index_JAN11.pdf

The mix-adjusted average Asking Price for homes on the market in England

and Wales has fallen by a further 0.4%.

There were monthly asking price falls in all English regions except Greater

London, whilst prices rose in Scotland and Wales.

The number of properties reduced in price has fallen further to 26,940 for the

month of December, but is still 32% more than in December 2009.

Typical time on market has risen for a 5th consecutive month: Up 13 days to

148 days (median).

Annual change in asking prices: -0.6%

6-month change in asking prices: -1.3%

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Sorry if this has already been posted on the forum, but I could only see it on the news-blog.

http://www.home.co.u...Index_JAN11.pdf

Thanks for that Timm. Very interesting.

I like this part:

Comment

House Prices in 2011

The fortunes of many Britons (and UK banks and building societies) will be dependent on the direction of house prices in 2011. Hence, listed below are the major influences on the price of a UK home in 2011.

Factors Are Pushing House Prices Down

• The mortgage and remortgage market remains in turmoil. In particular proposed mortgage regulation could make it even more difficult to get mortgages. Moreover, banks may be very reluctant to advance mortgage funding when they need to pay back their huge government bailout loans (via the Special Liquidity Scheme).

• Falling buyer demand.

• Distressed sales are becoming more prevalent particularly at the higher end of the market.

• The financial squeeze and lack of consumer confidence dissuade potential buyers from large financial commitments. In particular, the prospect of spending cuts in 2011 is raising fears over a prolonged economic slump. Many jobs cuts are planned in the public sector with knock-on effects.

• As prices drop the equity accrued against a mortgage debt drops and it is harder to remortgage.

• Some new build property on the market and has yet to become fully occupied.

• First time buyers have lost confidence and have lower savings for a sizeable deposit as the cost of living rises.

• The housing market is being viewed as increasingly risky.

Factors Supporting House Prices

• Record low interest rates are likely to persist for foreseeable future. In some instances they have reduced mortgage payments, but most importantly they have served to reduce the number of distressed sales entering the market.

• House prices defied expectations in 2009 and early 2010, suggesting the UK still has an underlying belief in home ownership.

• The rental sector shows renewed vigour.

• The likelihood of rising inflation due to further stimulus measures (Quantitative Easing) will encourage capital flight to hard assets such as property.

• Any extension to bank bailouts will ease mortgage supply.

:lol:

A little freestyle summary:

Factors Pushing House Prices Down: Mortgages in turmoil, and to get worse; Falling buyer demand; Distressed sales are becoming more prevalent; Potential buyers fears over a prolonged economic slump; Many jobs cuts; Falling equities = harder to remortgage; New build property on the market unoccupied; First time buyers have lost confidence and have lower savings for a sizeable deposit as the cost of living rises; Housing market viewed as increasingly risky.

Now, on the down side, we have this:

Factors Supporting House Prices: low interest rates (for now); House prices defied expectations in 2009 and early 2010, we could have another miracle. Rents didn’t collapse, yet. Inflation may will encourage capital flight to property (and not push up Irs, of course). The Gov. may have magic money to pump up the Ponzi.

It doesn't really fully compensate for the previous list, does it? :lol:

Brilliant.

Excellent news. :)

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Each wave is getting longer (in time) / wider too. So this one could go on a while!

What you're seeing is that it takes more time to recover to a (lower) peak. This is then followed by the system collapsing (-ve movement) then abruptly followed by a another +ve peak, which nearly but not quite reaches the level of the pervious peak. It's also a lot shorter in duration than the patten would have suggested.

This (to me at least) is the result of a change in one of the driving fundamentals (i.e. 0.5% IR) and yet while it produces a significant upturn (as you would expect), the duration is suprisingly short.

This suggests that something else is now faulting and the IR reduction has reached the end of it's effective life.

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What you're seeing is that it takes more time to recover to a (lower) peak. This is then followed by the system collapsing (-ve movement) then abruptly followed by a another +ve peak, which nearly but not quite reaches the level of the pervious peak. It's also a lot shorter in duration than the patten would have suggested.

This (to me at least) is the result of a change in one of the driving fundamentals (i.e. 0.5% IR) and yet while it produces a significant upturn (as you would expect), the duration is suprisingly short.

This suggests that something else is now faulting and the IR reduction has reached the end of it's effective life.

Very good point, expressed better than I was going to.

The big question is, what happens next? A longer negative cycle, perhaps with a gentler declining curve, followed by another sharp but short upturn, perhaps initiated by some foolish Government plan? That's how I see it.

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Record low interest rates are likely to persist for foreseeable future. In some instances they have reduced mortgage payments, but most importantly they have served to reduce the number of distressed sales entering the market.

Interest rates at 0.5% until August (probably) propping up the market. Then what?

House prices defied expectations in 2009 and early 2010, suggesting the UK still has an underlying belief in home ownership.

Or unexpectedly low IR's are propping up the market, suggesting that any increase will casue a fall or a crash.

The rental sector shows renewed vigour.

Most FTB'ers still can't afford a home and those people who are able to move are renting out their old house, taking advantage of low IR's and stagnant market conditions.

The likelihood of rising inflation due to further stimulus measures (Quantitative Easing) will encourage capital flight to hard assets such as property.

This should of already happened and what is the liklelyhood of further stimulus measures with economic growth above expectations and inflation near 4%?

Any extension to bank bailouts will ease mortgage supply.

Most if not all British banks are now 'on the mend'. Why would they require an additional bailout and where would the money come from?

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The big question is, what happens next? A longer negative cycle, perhaps with a gentler declining curve, followed by another sharp but short upturn, perhaps initiated by some foolish Government plan? That's how I see it.

While the patten has now been broken, it did suggest that people were finding it harder and harder to afford the cost of buying (longer peak cycles with lower peaks). Then it breaks (-ve movement) which coinsides with a recession.

What the graph alone doesn't say is what people's capacity for debt is. If we annotate the graph using my comments then the major upswing from the negative crash must be due to abnormally low (0.5%) interest rates as this directly affects the cost of debt and therefore people's capacity for it.

It can't currently be gleened whether the patten will restart (if IR's stay at 0.5% then the cycle will probably start to get longer again) or if it continues on to another -ve crash.

I suspect that if IR's remain at 0.5% the graph will propably show a new cycle with increasing cycle length and decreasing amplitude (as before) until it again goes -ve. If interest rates rise before then, then a -ve event will happen sooner.

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"Home prices hit new post crises low"

"housing bad store of wealth" :D

"5.2% real term falls" :D

Yeah, I saw this on the main page yesterday, but I can't rememeber my password to comment on blog entries. The bit above is a sea change moment IMHO! Housing is being described as a bad investment losing over 5% a year, and lets face it, last year the market bearly fell, this year is going to be a bloodbath!

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  • 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%



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