Cpi Falls To 2.3%

[erd]

http://www.statistics.gov.uk/CCI/nugget.asp?ID=19

http://www.statistics.gov.uk/pdfdir/cpi1105.pdf

Will have to check it out.

[AteMoose]

Looks like fuel has er fueled the fall ;p

other nuggets include....

The largest downward effect on the RPI annual rate came from

housing costs, particularly depreciation, with house prices used to

calculate this component rising by less than a year ago. House

depreciation costs are not included in the CPI. As in the CPI there

was a small downward contribution from rent with costs rising by less

than a year ago.

They even have some nice graphs

[Time to raise the rents.]

Now ex-squeeze me, but isn't that double the 0.1% expected fall?

[karhu]

Now ex-squeeze me, but isn't that double the 0.1% expected fall?

GRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR.

[Time to raise the rents.]

Another pillar of the great HPC begins to crumble........

[Guest Alright Jack]

So, inflation has finally peaked thus proving rates have peaked also.

I'd like to say well done to the MPC. They have handled the good ship UK to near perfection over the difficulties of the last 18 months.

This is great news, for retailers, employment, housing market, and eventually manufacturing who have suffered the most recently. The bear insurgency must surely be over now ?

[Bear Goggles]

Looks like fuel has er fueled the fall ;p

other nuggets include....

They even have some nice graphs

Nice find. That'll piss on their bonfire.

[OzzMosiz]

CPI figures are all bullsh** anyway.

[Guest Charlie The Tramp]

So, inflation has finally peaked thus proving rates have peaked also.

I'd like to say well done to the MPC. They have handled the good ship UK to near perfection over the difficulties of the last 18 months.

This is great news, for retailers, employment, housing market, and eventually manufacturing who have suffered the most recently. The bear insurgency must surely be over now ?

Yep, the new boom starts next year.

I will spread the good news along my High Street, they need cheering up.

[Time to raise the rents.]

CPI figures are all bullsh** anyway.

As is anything that challenges the thinking of the bears on this site......

[London Landlady]

As is anything that challenges the thinking of the bears on this site......

The best bit about the bears refusing to move in their thinking is that it just ensues/confirms the demand for rental properties - hence why we are about to get another.

[Jason]

Oh good. Everyone where I work should be very happy. They are now getting an inflation beating pay rise of 2.5%! House prices can only go up from now, with the increased affordabililty that is!

[van hoogstraten]

Good news indeed - the economy is back on its feet and the feel good factor has returned with a vengeance. Retailers can now expect a bumper christmas as consumers come back to the shops with renewed vigour in anticipation of several interest rate cuts.

Even more good stories from RICS as House prices are no longer falling, but climbing again in a negative vertical manner

[Bear Goggles]

The best bit about the bears refusing to move in their thinking is that it just ensues/confirms the demand for rental properties - hence why we are about to get another.

Yeah, you're right CPI dropping by 0.2% has changed everything. Houses are now suddenly affordable for everyone.

Problem solved.

[jellybean]

Now ex-squeeze me, but isn't that double the 0.1% expected fall?

It's 0.2%. That is 0.2%. Inflation may go up, or it may come down a bit, intrest rates may go up or go down, but the party is still over. I had a meeting with some American dude's yesterday from Colorado & California and they were pretty definate about it. Sentiment in the US seems to be pretty universal.

[Oxfordite]

http://www.statistics.gov.uk/CCI/nugget.asp?ID=19

http://www.statistics.gov.uk/pdfdir/cpi1105.pdf

Will have to check it out.

Nothing to worry about. Deflationary Depression is on its way in next couple of years or so.

(PS there will be one last surge in house prices before inflation & interest rates hits zero).

[algor]

The best bit about the bears refusing to move in their thinking is that it just ensues/confirms the demand for rental properties - hence why we are about to get another.

Yawn.

I hope you get squatters and squirrels

[London-loser]

The largest downward effect on the RPI annual rate came from housing costs, particularly depreciation, with house prices used to calculate this component rising by less than a year ago. House

depreciation costs are not included in the CPI. As in the CPI there was a small downward contribution from rent with costs rising by less than a year ago.

Alright Jack,

It might be just a TOUCH early to call a peak in CPI inflation based on one piece of information that makes your day (in the same way as I'm sure you didn't worry too much when last month's data came in high).

And TTRTR, you failed to comment at all on the above.

Did I read it correctly? Housing costs were the driving force behind falling RPI and rents are now helping to drive DOWN the CPI?

Yup, all is well in the UK housing market... move along, there's nothing to see here.

[erd]

http://www.statistics.gov.uk/CCI/nugget.asp?ID=19

http://www.statistics.gov.uk/pdfdir/cpi1105.pdf

Looking at the graph on p4 titled 'CPI comparison of 12-month percentage changes':

Clothing and footwear is having a large downward pull on the overall figure, some 7.7% below the average It is a pity they don't put the relative weightings on that graph too.

The largest downward effect on the CPI annual rate came from

miscellaneous goods and services, largely due to financial services.

Increases in charges this year, particularly for bank overdrafts, were

not as steep as a year ago.

Damn if only I had an overdraft, I would benefit more from low cpi

[Time to raise the rents.]

And TTRTR, you failed to comment at all on the above.

Did I read it correctly? Housing costs were the driving force behind falling RPI and rents are now helping to drive DOWN the CPI?

Yup, all is well in the UK housing market... move along, there's nothing to see here.

No, I believe you misread it. Read again & you'll see it says rent rises lower than this time last year. Funny that, they're STILL RISING......

Mate, did I really need to comment deeply on this story? Anyone with an ounce of intelligence would have known that CPI was to fall since we've watched the oil price fall.

The real question now is - what will happen now that high oil prices are built into the figures?

[London-loser]

The best bit about the bears refusing to move in their thinking is that it just ensues/confirms the demand for rental properties - hence why we are about to get another.

London landlady,

I'm still awaiting a single bull who can explain the logic of the above argument. Can you please clarify it for me?

I am renting in London because I think property prices are too high and rental yields are too low. How does my continued view that the above is true support the purchase of new BTLs?

I can see that my paying rent at less than 5% of the current "value" of the property allows my landlord a tiny profit (assuming prices stay static) but that is only because he bought years ago. If he bought today then he gets a less than 5% yield, why would that make sense?

If you buy a property from someone who chooses to STR then the net balance of supply/demand for property has not changed at all... you just rent it for a minimal return (unless you are able to buck the trned and find high-yielding properties set for significant capital growth).

No, I believe you misread it. Read again & you'll see it says rent rises lower than this time last year. Funny that, they're STILL RISING......

Mate, did I really need to comment deeply on this story? Anyone with an ounce of intelligence would have known that CPI was to fall since we've watched the oil price fall.

The real question now is - what will happen now that high oil prices are built into the figures?

TTRTR,

I didn't mis-read it, I understand the idea that rents are rising more slowly than last year.

My point is that if a landlord buy property on the basis of its discounted future cashflows (perhaps a strange concept for BTLs?)... and those future cashflows are apparently rising less rapidly than the landlord expected then doesn't that make the investment worth less?

What I mean is that if you make an assumption of 7% annual capital growth in house prices... and it doesn't materialise (horror, they even fall) you find you bought a duff investment. Similarly, if you buy anticipating 5% annual rental growth... and it doesn't materialise... I'm sure you understand my point.

As for the oil price, Brent crude is a mere $55 and WTI a mere $58. Yup, an absolute bargain... and unlikely to have any secondary effects.

Personally, you'll remember that I've agreed with you that lower IRs are likely... although I think they will be joined by lower house prices.

[Time to raise the rents.]

London landlady,

I'm still awaiting a single bull who can explain the logic of the above argument. Can you please clarify it for me?

I am renting in London because I think property prices are too high and rental yields are too low. How does my continued view that the above is true support the purchase of new BTLs?

I can see that my paying rent at less than 5% of the current "value" of the property allows my landlord a tiny profit (assuming prices stay static) but that is only because he bought years ago. If he bought today then he gets a less than 5% yield, why would that make sense?

If you buy a property from someone who chooses to STR then the net balance of supply/demand for property has not changed at all... you just rent it for a minimal return (unless you are able to buck the trned and find high-yielding properties set for significant capital growth).

Although I am struggling to see the sense in your question, her goes for the umpteenth time:

Notice the peak of this population graph is currently of perfect investor age:

http://www.census.gov/cgi-bin/ipc/idbpyry....it=Submit+Query

Now notice that there are PLENTY of people following in their footsteps. These 35-44's are your landlord. The younger ones are their tenants, plus a few million immigrants to the UK.

Still see an oversupply of rentals and a rush to sell? I thought you would........you always do.

What I see though is a perfect age to CONTINUE to re-invest profits from previous successes because retirement for the 35-44's is so far away it's not funny.

[muppet1]

Another pillar of the great HPC begins to crumble........

As the demand for oil outstrips supply what do you think will happen to the inflation numbers then?

[Time to raise the rents.]

TTRTR,

I didn't mis-read it, I understand the idea that rents are rising more slowly than last year.

My point is that if a landlord buy property on the basis of its discounted future cashflows (perhaps a strange concept for BTLs?)... and those future cashflows are apparently rising less rapidly than the landlord expected then doesn't that make the investment worth less?

What I mean is that if you make an assumption of 7% annual capital growth in house prices... and it doesn't materialise (horror, they even fall) you find you bought a duff investment. Similarly, if you buy anticipating 5% annual rental growth... and it doesn't materialise... I'm sure you understand my point.

As for the oil price, Brent crude is a mere $55 and WTI a mere $58. Yup, an absolute bargain... and unlikely to have any secondary effects.

Personally, you'll remember that I've agreed with you that lower IRs are likely... although I think they will be joined by lower house prices.

As you know I don't support the notion that the future can be predicted with certainty, so your comments IMO tend to ignore the fact that people ,make decisions based on the best available information they have at the time, if the result is a few % off what was expected, big F***ing deal!!!!

As the demand for oil outstrips supply what do you think will happen to the inflation numbers then?

Yes you're right. House prices will rise with inflation when oil lifts inflation, because the existing housing stock feels an impact from the cost of building new houses, which will obviously rise with inflation.

You are spot on!!

[London Landlady]

London landlady,

I'm still awaiting a single bull who can explain the logic of the above argument. Can you please clarify it for me?

I am renting in London because I think property prices are too high and rental yields are too low. How does my continued view that the above is true support the purchase of new BTLs?

I can see that my paying rent at less than 5% of the current "value" of the property allows my landlord a tiny profit (assuming prices stay static) but that is only because he bought years ago. If he bought today then he gets a less than 5% yield, why would that make sense?

If you buy a property from someone who chooses to STR then the net balance of supply/demand for property has not changed at all... you just rent it for a minimal return (unless you are able to buck the trned and find high-yielding properties set for significant capital growth).

The logic is that house prices will not "crash" - so it is OK to buy.

If more people (potential FTB's) do not buy and rent instead then the rental population will increase.

If rental poulation increases, demand increases, so rents go up.

For BTL this means increased return plus capital growth.

Also, I (personally) buy places that need to be done up prior to renting out - so lower purchase price than something "ready to let"