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Ig Index Turns Positive On House Prices

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For those of you who care what the spread betters at IG think of the housing market all the regions have now turned positive for the next 4 quarters. Up to a few days ago London was still show a slight decline but it is now pricing in gains for all of next year.

There is a lot of optimism out there that prices are now going up again.

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For those of you who care what the spread betters at IG think of the housing market all the regions have now turned positive for the next 4 quarters. Up to a few days ago London was still show a slight decline but it is now pricing in gains for all of next year.

There is a lot of optimism out there that prices are now going up again.

Gamblers eh,sometimes they win sometimes they lose................ :D:D

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For those of you who care what the spread betters at IG think of the housing market all the regions have now turned positive for the next 4 quarters. Up to a few days ago London was still show a slight decline but it is now pricing in gains for all of next year.

There is a lot of optimism out there that prices are now going up again.

I do think that sentiment has changed, generally, and that there's a widespread feeling that we've passed some kind of pivotal point where house prices could have fallen, or alternatively, avoided it, the feeling being that we have avoided it.

I regret to say that some kind of trigger is now needed to cause further falls, IMO, e.g. a couple of IR increases or a sharp rise in unemployment, and that without it we are indeed in for a period of stagnation, with prices moving within a band of + OR - 3% pa for the next 5 years or so.

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I tend to agree with 'casual observer', but I also reckon the "head and shoulders" chart looks interesting.

Something's got to kick start the looming correction, ie multiple drops of 1% a month for six months. I don't think it's going to be IRs, in fact the great worry should be deflation not inflation, however unemployment could be the 'surprise' factor that all these 'experts' have continued to discount. Also debt default.

Don't get me wrong, the crash will come, but it won't be interst rates. Look for the factor that nobody mentions.

The problem at the moment is the scenario thus;

1. Family put house on market for say, 500k

2. Offers come in at around 460k

3. Homeowners get greedy and decide not to sell now, but wait for a "pick up".

4. They don't have to sell so they won't.

Very soon, forced sellers will disrupt the stagnation.

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IG are making the market.

They could be quite simply pricing in gains to shake out all the short positions and clean up some profit.

following the last dubious nationmakeitupaswegoalong monthly figures IG knows they can price next years price higher than the current one and rattle a few doubters to capitulate.

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I do think that sentiment has changed, generally, and that there's a widespread feeling that we've passed some kind of pivotal point where house prices could have fallen, or alternatively, avoided it, the feeling being that we have avoided it.

I regret to say that some kind of trigger is now needed to cause further falls, IMO, e.g. a couple of IR increases or a sharp rise in unemployment, and that without it we are indeed in for a period of stagnation, with prices moving within a band of + OR - 3% pa for the next 5 years or so.

the only trigger I can think of at the moment is bird flu... and I think that has been massively over hyped.

The fact that sentiment has changed so quickly is a real blow, we will probably get some very bullish figures from the Halifax in a few days time. I'm guessing something horrendous like 2%

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This is typical of market sentiment on the "right shoulder" of a head-and-shoulders formation marking an historic market top.

EDIT: Wow that's a big head and shoulders!!

:D:blink::D

Cmon, Durch, you do not seriously believe in technical analysis, do you? ;)

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the only trigger I can think of at the moment is bird flu... and I think that has been massively over hyped.

The fact that sentiment has changed so quickly is a real blow, we will probably get some very bullish figures from the Halifax in a few days time. I'm guessing something horrendous like 2%

You seriously cannot see a trigger :ph34r: ?

I think objectively most can see quite a few converging.

Retailer fallout after sh*t Christmas.

Unemployment rising (retail fallout/businesses struggling)

Personal Debt spiralling as lending tightens (repossessions up / bankruptcies up etc)

US interest rates putting pressure on the pound (Inflation rising = UK interest rates up).

Good God man what are you looking at. Its hardly even about the housing market now, these are seriously choppy economic waters.

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IG are making the market.

They could be quite simply pricing in gains to shake out all the short positions and clean up some profit.

following the last dubious nationmakeitupaswegoalong monthly figures IG knows they can price next years price higher than the current one and rattle a few doubters to capitulate.

Yea aint they just, they just hit my f*ing stop loss.

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I tend to agree with 'casual observer', but I also reckon the "head and shoulders" chart looks interesting.

Something's got to kick start the looming correction, ie multiple drops of 1% a month for six months. I don't think it's going to be IRs, in fact the great worry should be deflation not inflation, however unemployment could be the 'surprise' factor that all these 'experts' have continued to discount. Also debt default.

...yup,and someone rightly said it will be unemployment kicking in properly.

the likes of MG rover folks will be nearing the end of the redundancy pay-off

and likewise with many companies that have shed workforce.

retail sales this christmas could be diabolical,and if so then there will be a BIG bout of lay-offs just after christmas too.

......it's important to stress that you don't have to be laid off yourself to stop spending in the shops.....even an announcement of a couple of redundancies where you work is sufficient for EVERYBODY there to feel under threat and tighten the purse strings.

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the spread betters at IG think of the housing market all the regions have now turned positive for the next 4 quarters.

Didn't IG Index stop taking 'down' bets on house prices after everyone went massively short and left them with an unbalanced book? This would explain the unwarranted optimism of these figures. Also, of course, events do not always unfold as the majority of punters think they will, otherwise horse races would always be won by the favourite.

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So what spread are IG offering on the housing market now? I'm a potential FTB whose terrified of house price falls, but thinking a spread bet could be a good way to hedge any exposure to a falling housing market...any thoughts?

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Unlike property investors (who always win) and STR's (who always lose).

:D

I don't know about STRs (don't know any) but I know a few property investors who have lost their shirts! Although I'm probably older than you, so have more experience. They say that all markets need a fresh generation of mugs, with no previous experience!

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The IG market looks an interesting way to hedge against a market crash, but the spreads that they offer are rather wide. I have found a similar market at www.spreadfair.com, they allow anyone to make a price for others to trade against. I have to say that the prices currently being offered there are far more favourable than those at IG.

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One of the most positive things that I've seen here is the feeling that nothing's going to happen yet. Essentially we are seeing a number of bears turn (at least in the short term) neutral. I seem to remember a similar thing happening with the dot com bubble.

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You seriously cannot see a trigger :ph34r: ?

Retailer fallout after sh*t Christmas.

Unemployment rising (retail fallout/businesses struggling)

Personal Debt spiralling as lending tightens (repossessions up / bankruptcies up etc)

US interest rates putting pressure on the pound (Inflation rising = UK interest rates up).

Good God man what are you looking at. Its hardly even about the housing market now, these are seriously choppy economic waters.

Pdg, I also 'see' your signs, but I'm cautious as Ive seen bearish 'negative factor - blends' many times before, which came to nothing. In the late nineties the bears predicted chaos resulting from Y2K, Dotcom bust and the Asian 'Tigers' crash hangover.

I would like a crash but I sense many bears cant see the woods for the trees when it comes to outcomes.

Bankcruptcy for example might not be a simple reflection of the fact more people are in debt but more a manifestation of relaxed bankcruptcy rules (my brother recently went bankcrupt, it was a breeze).

Edited by dogbox

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And another thing. The last bit of excitement in the market was triggered by an interest rate cut of 0.25%. The bulls (and moderate bears) may like looking at the half glass full - that is the market is still responding to interest rate falls. Of course if the market were in a true funk then it would barely notice interest rates falling.

However the glass is also half empty. Firstly the first cut is going to produce the most results, subsequent cuts will have diminishing returns. Secondly it shows that the market is febrile and very dependent on interest rates. In a funk the market doesn't notice interest rates that much, so it doesn't when it's going full ahead. The market is at the moment stagnating. An interest rate rise will have an exagerated effect on the market.

Yes, the current state of the market is not unremitting gloom - but neither is it getting a second wind.

On a final note I would say to the moderate bears out there not to confuse what you see now with what is goig to happen in the near future. This is a natural impulse. Prices are static, more or less - but the fundamentals of the housing market are way out of whack and there is no historical precedent for a long (more than two years) stasis in house prices while the fundamentals catch up.

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but the fundamentals of the housing market are way out of whack

One 'fundamental' missing in the bear - camp is interest only mortgages. Never before have we been in these waters where every other person is taking out a pure IO mortgage.

As I keep saying IO is a major factor in underpinning current price levels. Dr Bubbs graphs and 'heads n fannies' simply doesnt take account of this new fundamental at play.

Outcomes are often scewed by that 1 unknown unaccounted for new fundamental.

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One 'fundamental' missing in the bear - camp is interest only mortgages. Never before have we been in these waters where every other person is taking out a pure IO mortgage.

As I keep saying IO is a major factor in underpinning current price levels. Dr Bubbs graphs and 'heads n fannies' simply doesnt take account of this new fundamental at play.

Outcomes are often scewed by that 1 unknown unaccounted for new fundamental.

Dogbox, you're a bloke that usually comes out with a reasoned argument.

The market has absorbed IO mortgages (house prices have gone up as a result).

The market has absorbed massive lending multiples (house prices have gone up etc.)

The market has absorbed massive investment (BTL investment whose figures do not add up (rent less than mortgage) - all based on hoped for future capital appreciation)(house prices have gone up etc.

What is left to drive the market?

I would be interested in your views on the question below.

Can you tell me how the AVERAGE FTB (aged 34 we are told and, therefore, at or near the peak of his or her earning power), who is stretching himself to the limit to buy a cr@ppy 150k flat - is ever going to be able to move up the market to a 300k house by the time he is what 50?

He already has a mortgage of best part of 150k (ignoring the insignificant deposit) which is pretty scary even at today's low interest rates. He's on an average 25k lets say and his wife's on 20k. One day they'd like to have children (hopefully before her menopause) - if they both stay at work they have childcare fees as well as all the usual expenses of bringing up children. Either way, with or without children, assuming no HPI, they will have to take on a mortgage of 300k to move up the market.

How does this work in today's low wage inflation economy?

(All this proves to me is that the market may stumble along for a while longer - but, sooner or later, it just does not stack up. It's happening already where I live - the 3/4 bed detached stuff either does not sell or goes for a lot below asking price.)

Edited by Marina

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The IG market looks an interesting way to hedge against a market crash, but the spreads that they offer are rather wide. I have found a similar market at www.spreadfair.com, they allow anyone to make a price for others to trade against. I have to say that the prices currently being offered there are far more favourable than those at IG.

Hi, what are the spreads? is it based on Halifax?

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I think it's going to take years for people to realise that the fundamental change now is that they have a huge debt to fund somehow. People seem to think that inflation erodes debt. It does but very slowly at today's inflation rates.

IO is 30% cheaper than Repayment and with so many people taking out IO mortgages (including the BTL brigade) perhaps this is an argument as to why many people on this site think prices are 25-50% over-value.

Unfortunately these people are not paying off the debt. It will still be 100% of their borrowing in 25 years time if they haven't started to save for the future. What kind of country will the UK be in 25 years?

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  • 338 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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