Halifax 8Am Today +0.3%

[19 year mortgage 8itch]

Well with so much bad financial news out there, countries going bust, stock markets crashing it's perfectly reasonable that house prices continue to rise. Merv wouldn't have it any other way

Safe haven.

In fact, I'm going to go out today, buy the first house I can view and call it Safe Haven

[FIGGY]

had a beer with my mums partner last night (lives most of the year in the Bahamas for tax reasons) he was crapping himself about the market fall and dosent want to get into BtL but feels its the only way to get a return. He is booking in to see parcels of investment places in the next two days.

He knows its not right but cant find anywhere to put his money now.

[MrFlibble]

Well with so much bad financial news out there, countries going bust, stock markets crashing it's perfectly reasonable that house prices continue to rise. Merv wouldn't have it any other way

Quite remarkable really, I wonder if the people of Treasure Island will ever wake up and smell the coffee...

[TheCountOfNowhere]

Safe haven.

In fact, I'm going to go out today, buy the first house I can view and call it Safe Haven

That safe haven is worth 2.6% les than last year + inflation, so 7.6 % down.

Safe as houses.

There was mention yesterday on the FTSE thread about the stock market ramping that used to go on, i.e. stock market doubles every 10 years, out paces inflation etc, the same crap the rolled out about house prices. Well, th FTSE is still below what it was about 10 years ago, I suspect the same will be true of house prices.

[Pent Up]

had a beer with my mums partner last night (lives most of the year in the Bahamas for tax reasons) he was crapping himself about the market fall and dosent want to get into BtL but feels its the only way to get a return. He is booking in to see parcels of investment places in the next two days.

He knows its not right but cant find anywhere to put his money now.

He's not loolong very hard then is he? Once you work out net yields you can beat it with a standard savings account in most cases. And seeing as property is very long term investment why not go for long term fix bonds you'd probably double your yield. Also if he's living abroad he need to have it managed so it might even work out negative. I worked one the other day on an another thread. Currently let and offers as investment BTL. Went to auction and even at the guide price the bet yield was 0.6% and I probably under estimated maintenance costs. It sold for a little over guide on the second attempt.

BTL doesn't add up without capital gains.

Edited August 5, 2011 by Pent Up

[The Knimbies who say No]

He's not loolong very hard then is he? Once you work out net yields you can beat it with a standard savings account in most cases. And seeing as property is very long term investment why not go for long term fix bonds you'd probably double your yield. Also if he's living abroad he need to have it managed so it might even work out negative. I worked one the other day on an another thread. Currently let and offers as investment BTL. Went to auction and even at the guide price the bet yield was 0.6% and I probably under estimated maintenance costs. It sold for a little over guide on the second attempt.

BTL doesn't add up without capital gains.

and this morning is a great time to buy stocks. Some yielding over 5% with ease. And you don't have to commit to tens or hundreds of thousand of pounds' worth to get in, unlike BTL..

[rantnrave]

NSA - this is the sixth straight month of increasing prices

[19 year mortgage 8itch]

NSA - this is the sixth straight month of increasing prices

Everything is gonna burn, we'll all take turns, I'll get mine too, this monkey's gone to heaven.

[koala_bear]

The report itself (with a few comments...)

UK House prices

July 2011 (seasonally adjusted)

Annual change -2.6%

Quarterly change 0.5%

Monthly change 0.3%

Average Price £163,981

Commenting, Martin Ellis, housing economist, said:

"House prices in the three months to July were 0.5% higher than in the previous three months. This was the first increase in this key measure of underlying price movements for 14 months. Prices rose for the third consecutive month, increasing by 0.3% in July.

"Overall, there has been little change in either the level of house sales or the number of properties on the market for sale since late 2010.

[/Quote]

WTF data has he been looking at obviously not RICS, Hometrack or Rightmove?

These steady market conditions have helped to stabilise house prices in 2011 following last year's modest decline.

"This pattern is expected to continue over the rest of the year with little genuine direction in either house prices or sales. Sustained low interest rates and a slowly improving economy should help to support demand in the face of pressures from weak earnings growth, relatively high inflation and higher taxes."

[/Quote]

How?

Key facts

•

House prices in the three months from May to July were 0.5% higher than in the preceding three months. This is the first increase in this measure of the underlying trend since May 2010 (0.1%).

•

The average UK house price in July was marginally higher (0.7%) than in December 2010 on a seasonally adjusted basis, at £163,981.

•

On an annual basis, prices in July were 2.6% lower as measured by the average for the three months to July against the same period a year earlier. This was the second successive improvement in the annual rate from a low of -4.2% in May.

[/Quote]

we need some downward months to keep the annual figure negative

•

Little change in housing activity trend. The number of mortgages approved to finance house purchase - a leading indicator of completed house sales – increased by 4% between May and June to 48,421; the highest monthly total since May 2010. Despite this encouraging rise, the industry-wide number of approvals remains within the range of 45,000-50,000 per month where it has been since the beginning of 2010. Approvals in the second quarter were unchanged from the previous quarter on a seasonally adjusted basis.

Steady market conditions help to stabilise house prices and sales. Market conditions - as measured by the ratio of house sales to the stock of unsold properties on surveyors' books (according to RICS) – have been largely unchanged over the past eight months. This is an improvement on much of 2010 when weakening conditions, led by falling demand, accompanied a gentle decline in house prices. There has been little change in either the stock of unsold properties or the number of sales since November 2010. The current stock of unsold properties is in line with the average over the past decade.

[/Quote]

During the 89-95 crash (ignoring the initial 18 months) the Halifax typicall went up during the during the peak season (4-5months April to July or August) and had bigger declines during the autumn and winter (2010 pattern) so I think we might be seeing at return to that.

[Redcellar]

The report itself (with a few comments...)

WTF data has he been looking at obviously not RICS, Hometrack or Rightmove?

How?

we need some downward months to keep the annual figure negative

During the 89-95 crash (ignoring the initial 18 months) the Halifax typicall went up during the during the peak season (4-5months April to July or August) and had bigger declines during the autumn and winter (2010 pattern) so I think we might be seeing at return to that.

It will be fun to see if you are right re autumn.

On a tangent, the volumes of houses selling versus the number for sale is the figure I am interested in. A very low volume in these conditions means prices can fluctuate wildly so I don't pay any regard to the sold prices in this sense. +0.3% on record low volumes means zero reliability in my book.

Personally I see loads for sale and loads that were SSTC coming back on again, and again, and again. Tell me sold prices are increasing lol

[koala_bear]

It will be fun to see if you are right re autumn.

On a tangent, the volumes of houses selling versus the number for sale is the figure I am interested in. A very low volume in these conditions means prices can fluctuate wildly so I don't pay any regard to the sold prices in this sense. +0.3% on record low volumes means zero reliability in my book.

Personally I see loads for sale and loads that were SSTC coming back on again, and again, and again. Tell me sold prices are increasing lol

That isn't a tangent at all, agreed on every point. The only reasons I can see that there shouldn't be an autumn fall off are:

1. UK QE2 / SLS2 / CGS 2 if it Credit crunch part 2 hits.

2. The quality of homes and borrowers for sales actually going through at the moment is probably shifting up (flight to quality) due to the banks lending criteria stiffening up and I'm not sure how long it takes the mechanism in Haliwide to respond to this change (both will respond differently).

There have been months when I suspected that the shifts in Halifax was due to the conditions on a new mortgage product.

also see this thread on survey methodology last week (arround Nationwide release time)

http://www.housepricecrash.co.uk/forum/index.php?showtopic=167205&st=15

[peahead]

based on them still offering 4.5x joint salary, I'm going for +1,000,000,000,000%

t0ssers

:angry:

seriously, +0.3

though, where they are finding these numpties still buying faffles the buck out of me

Now if i'd only put money on it...

[Jason]

http://www.lloydsban...dexJuly2011.pdf

Note prices are still -17.850129250746448109332104282308% down from peak (August 2007). That's nearly four years later!

Edit: to make it red

[FIGGY]

He's not loolong very hard then is he? Once you work out net yields you can beat it with a standard savings account in most cases. And seeing as property is very long term investment why not go for long term fix bonds you'd probably double your yield. Also if he's living abroad he need to have it managed so it might even work out negative. I worked one the other day on an another thread. Currently let and offers as investment BTL. Went to auction and even at the guide price the bet yield was 0.6% and I probably under estimated maintenance costs. It sold for a little over guide on the second attempt.

BTL doesn't add up without capital gains.

It can be managed from the UK no problems (I wont go into how), I dont disagree with what you have said and have told him as much but if you get "leveraged up" put 25% down and inetrest only with 10% voids and no management fee then you are looking at 10% yeild OK you have corpo tax to come off that you still end up with 7.7%. I agree 100% that the risk without an increase in prices just isnt worth it for 7.7% in my eyes

and this morning is a great time to buy stocks. Some yielding over 5% with ease. And you don't have to commit to tens or hundreds of thousand of pounds' worth to get in, unlike BTL..

he would be pulling out of stocks at the moment so given the drop he is looking to cut his losses not go back in

[Redcellar]

That isn't a tangent at all, agreed on every point. The only reasons I can see that there shouldn't be an autumn fall off are:

1. UK QE2 / SLS2 / CGS 2 if it Credit crunch part 2 hits.

2. The quality of homes and borrowers for sales actually going through at the moment is probably shifting up (flight to quality) due to the banks lending criteria stiffening up and I'm not sure how long it takes the mechanism in Haliwide to respond to this change (both will respond differently).

There have been months when I suspected that the shifts in Halifax was due to the conditions on a new mortgage product.

also see this thread on survey methodology last week (arround Nationwide release time)

http://www.housepricecrash.co.uk/forum/index.php?showtopic=167205&st=15

thanks for the link to the thread. I missed that one.

You've got to love statistics. The will say whatever you want.

For now, my money is firmly in cash and not property. I'm far from convinced we've turned the corner on prices.

[Venger]

That was the first such increase in 14 months, indicating that prices were stabilising, according to its housing economist Martin Ellis.

http://www.bbc.co.uk/news/business-14416403

Mix in a massive debt, jobs and financial crisis Ellis to your stabilisation theory you turnip, with house prices supported at near peak levels in many areas.

How long has Martin Ellis been spokesman for house prices because it feels like for over a decade. Martin Ellis this Martin Ellis that. Forget growth. House prices first need to fall back in value to allow new growth.

[Pent Up]

It can be managed from the UK no problems (I wont go into how), I dont disagree with what you have said and have told him as much but if you get "leveraged up" put 25% down and inetrest only with 10% voids and no management fee then you are looking at 10% yeild OK you have corpo tax to come off that you still end up with 7.7%. I agree 100% that the risk without an increase in prices just isnt worth it for 7.7% in my eyes

he would be pulling out of stocks at the moment so given the drop he is looking to cut his losses not go back in

Here you go found the post.

I don't get BTL. Ive seen an house near me advertised as a perfect investment opportunity. They tried to sell it last year for £120k (iirc) then stuck in an auction guide price £100k didn't sell. They then let it for 6 months for £600 per month. It's now back in another auction guide £95k (although who knows what the reserve is. £120k?)

Anyway 7.6% yeild. Right? Well I done a few calculations assuming I bought it (not that i ever would!!) with the minimum BTL deposit of 25%. (all figures are rough)

Purchase price £95,000

Deposit: £23,250 + £2000 fees. £25,250

I'd have to use a letting agent so I'll assume they take 10% (I remember some used to charge 15% not sure about lately)

600/month less letting fee is £540/mont. Assume 1 month a year void (is this realistic?) gives you £5940pa gross.

I'd have to have a fixed mortgage to feel safe. Especially when the trackers are BR+ 2.5%+!! So I'm thinking a five year fix will be about 6%(?)

so ££71,750 over 25 years IO is £356/month. £4272pa.

Add on £150 insurance and £1000pa (?) maintenance.

Gives total cost of £5422. So £5940 - £5422 gives a gross yearly profit of £518 giving a return on your £25,250 of 2.05% before tax. Or 1.64% after tax (for lower rate taxpayer)

I'd be happy for someone to show if I've made and error or assumed wrong anywhere but gping by that youre better off with your money in the bank even with today's atrocious IRs. Is BTL all about capital gains?

Obviously by not using an agent gives a bit better. But a 7.6% yield is no better than a 3% instant access saver. And as it's a 25 year investment you could go with a long term fixed bond and earn at least 5%.

Unless my figures are no good, I made some assumptions and by going with a tracker will yield more obviously.

Edited August 5, 2011 by Pent Up

[Democorruptcy]

Just to show what can happen when you have a crash and buyers stay out of the market.

This link to a very nice house in upmarket Hillsborough Northern Ireland (Where the Queen has a castle and estate)

Aspirational price in 2010 1,150,000-------trying to sell in a dying market dropped to 890K late last year ---- now hoping for 485K.

If there is nobody buying at the top end of the market then prices will drop. Many say that houses in good areas will keep their value. This is only one that I could feature we have many each week.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=167516&view=findpost&p=3075845

Have you bought one yet?

[Sibley's Love Child]

No way ---I'm waiting for value in the market.

60% down is no use to an uber bear like me.

A bear amongst bears. Are you waiting until they pay you to take their debt burden off their hands?

Out of curiosity, how overvalued compared to wages are houses in NI now; surely they must be reaching 'reasonable-ish'?

[pie-eater]

A bear amongst bears. Are you waiting until they pay you to take their debt burden off their hands?

Out of curiosity, how overvalued compared to wages are houses in NI now; surely they must be reaching 'reasonable-ish'?

Didn't NI go mental in terms of HPI - far more than the UK?

I lived out there from 97 - 01 and recall prices doubling in an 18 point due to the new peace they had. Not sure what period this was, but the whole country went from being in the doldrums to being on the up, overnight. Probably on the back on their Southern Tiger neighbours.

[pie-eater]

That's right the Celtic Tiger - huge rises down south -- lax lending by the banks -- all contributed to the madness -- at one point houses were as unaffordable as London --12 times salary.

Yeah, I recall driving to Belfast one Saturday, probably late 1998/99 and listening to a local radio show blasting about how you could buy a 3 bed house for £15k in 95, but how it was worth £80k and rising because of the new peace.

I also remember people nipping south to fill up with petrol. Even with a 70 mile round trip you could save £30 on a tank. No idea what petrol prices are in ROI, but I bet that's stopped now.

[Sibley's Love Child]

Didn't NI go mental in terms of HPI - far more than the UK?

I lived out there from 97 - 01 and recall prices doubling in an 18 point due to the new peace they had. Not sure what period this was, but the whole country went from being in the doldrums to being on the up, overnight. Probably on the back on their Southern Tiger neighbours.

Funnily enough, you've reminded me of an article I read a few years back which aportioned the decrease in sectarian violence to the newfound wealth the Irish (particularly Eire of course) were enjoying. Once the sh*t hit the fan they predicted a return to the 'bad old days'. Lo and behold.

My brother and his wife live out Stormont way, christ knows what they paid for their gaff; as you say the Irish bubble was more pronounced than ours.

[Sibley's Love Child]

In the terrace house market they are definitely affordable now for starter homes and apartments in suburbs. The major sticking point is the deposit demanded by the lenders - many do not have it and the credit unions who used to supply these deposits are struggling now.

Detached and bungalows are still sticky on price and still well above affordability.

Average wage is about 20k - average household income 40K so still 5-8 times joint income in some areas.

These houses require couples to delay families since there is no room for childcare costs in their tight budgets and this is with rates at an all time low.

I'm just waiting for an older house with a big garden at a reasonable price. The 'recently refurbished' houses do not interest me at all and I have no intention of paying over the odds for luxury granite counters or a swish shower unit.

Cheers Doc, my emboldened part concerned me most.

Let's face it; any measure of affordability predicated on two people working is fallable at best.

A few more years then, eh?

[19 year mortgage 8itch]

At this rate though, NI is the only place prices will fall and we'll have to get BTLs there to afford our rent on the mainland.

[jywerhyx]

Here you go found the post.

Pent Up, on 10 June 2011 - 10:57 AM, said:

I don't get BTL. Ive seen an house near me advertised as a perfect investment opportunity. They tried to sell it last year for £120k (iirc) then stuck in an auction guide price £100k didn't sell. They then let it for 6 months for £600 per month. It's now back in another auction guide £95k (although who knows what the reserve is. £120k?)

Anyway 7.6% yeild. Right? Well I done a few calculations assuming I bought it (not that i ever would!!) with the minimum BTL deposit of 25%. (all figures are rough)

Purchase price £95,000

Deposit: £23,250 + £2000 fees. £25,250

I'd have to use a letting agent so I'll assume they take 10% (I remember some used to charge 15% not sure about lately)

600/month less letting fee is £540/mont. Assume 1 month a year void (is this realistic?) gives you £5940pa gross.

I'd have to have a fixed mortgage to feel safe. Especially when the trackers are BR+ 2.5%+!! So I'm thinking a five year fix will be about 6%(?)

so ££71,750 over 25 years IO is £356/month. £4272pa.

Add on £150 insurance and £1000pa (?) maintenance.

Gives total cost of £5422. So £5940 - £5422 gives a gross yearly profit of £518 giving a return on your £25,250 of 2.05% before tax. Or 1.64% after tax (for lower rate taxpayer)

I'd be happy for someone to show if I've made and error or assumed wrong anywhere but gping by that youre better off with your money in the bank even with today's atrocious IRs. Is BTL all about capital gains?

Obviously by not using an agent gives a bit better. But a 7.6% yield is no better than a 3% instant access saver. And as it's a 25 year investment you could go with a long term fixed bond and earn at least 5%.

Unless my figures are no good, I made some assumptions and by going with a tracker will yield more obviously.

All these figures prove is that paying 6% interest to borrow money to invest is a mug's game with base rates at 0.5%. Look at the same figures for someone who has the £95,000 in cash to invest, and doesn't need a BTL mortgage. They're getting £4,790 per annum after deducting voids, management, maintenance and insurance costs. That's a return of over 5%, with the possibility of capital appreciation as well, and is a great deal better than you'll get if you put £95,000 in the bank.