Halifax House Price Index August

[TheCountOfNowhere]

Government owned bank backed by insanely low interest rate government lending and deposit scheme says house prices are up 5.4 % yoy:

http://www.lloydsbankinggroup.com/media/pdfs/halifax/2013/060913_HPI.pdf

The boom is back.....for now.

Are we back at 2007 peak prices yet ?

Lending up 10%.

This is not going to end well....

Vote UKIP, it probably wont help but there's nothing else we can do.

Thankfully that nice chap at the BoE promised to step in and save us from any house price bubble.....on you go then....

Edited September 6, 2013 by TheCountOfNowhere

[Orsino]

The greatest risk of these reckless policies is that the government loses control of the rigged market. The government and the BoE even admit as much. Incredibly it looks like they are already losing control, and many distorting incentives haven't even kicked in yet.

[Solitaire]

Well, I was only saying to my son last night that there appears to be a change in the market where we are in the SE. Unusually there are quite a number of properties with vacant possession that are priced to sell very quickly. The sort of places that wouldn't even have been openly marketed a few months ago because the agents had a list of buyers ready and waiting; cash buyers, developers, investors etc. So maybe that money has now dried up but I have a suspicion, that the banks may be offloading their repo'ed properties as well. Also quite a number of HMO housing priced to sell so perhaps some BTLers and Landlords are getting out of the game.

It's only a feeling on my part, but I think the property market here is pricing in interest rises and banks maybe want to sell some of their stock before prices come down and some landlords are getting out before the bank (and labour party - rent controls) does it for them.

Clearly something has spooked the local market.

[rantnrave]

I'm pretty about sanguine about this. We've had a stalemate since about 2009 - with average prices stagnating between £160k to £170k. This ramp up in prices is utterly unsustainable and makes a crash and an undershoot on the way down much more likely in my opinion.

Sky is predicting that price rises are going to bring any rise in buyer numbers to an abrupt halt anyway: http://news.sky.com/story/1137882/surge-in-first-time-buyers-to-fall-away

[ccc]

Not happening anywhere around here.

[crashmonitor]

Just a 5K move to October 13 would have seen double digit growth by then......but for the three month moving average which will kill it courtesy of the early autumn 2012 crash which will still figure in their calculations.

I think with the momentum in the market we will get there by October on an unadjusted basis, purely October 13 on October 12 , since buyers are running scared of the Government's stupid help to buy second hand 2014 scheme and trying to pre-empt a mini boom.

Edited September 6, 2013 by crashmonitor

[Giraffe]

With this rate of growth, plus more general price rises above inflation eating into the ability to maintain a larger mortgage the benefit from that government 20% will be wiped in no time. Then what? Plus we have the threat of rising interest rates. I give it 12 months tops before we are in deep trouble.

[“Nasty Piece of work”]

I am in the SE, and seeing that HPI has increased prices so very much Stamp Duty is applicable on the "average" house. This, combined with knowing IR rises are around the corner is, not before time, making certain properties stick on the market. Until we see an increase in IR, we will live in this false "market". It is a direct result of having the Gubberment trying to buy votes for the GE. They dearly hope they have got the timing right, and have not released the hounds too early - they have, it will go t1ts up before the GE.

[hellsbells]

Hmmm not seeing it around here (S. Wilts) other than in pretty "London money" weekend gaffs which seem to be rising ever upwards. Spoke to my new neighbour a couple of days ago who has sold to rent in the area - best offer she had was exactly what she paid for her house 11 years ago.

Lots of the bread and butter utility housing in the area is being steadily eroded in price, not hugely, but a gentle slow steady decline. Good example is an ex-local authority small estate down the road from me - all nice solid (standard construction) semi-detached 3 bedders with good gardens normally 1 or 2 of them sell every year. Tracking on zoopla etc the average sold price on that estate seems to be coming down about £2-4K every year for the last 5 years.

[koala_bear]

Unusually there are quite a number of properties with vacant possession that are priced to sell very quickly. The sort of places that wouldn't even have been openly marketed a few months ago because the agents had a list of buyers ready and waiting; cash buyers, developers, investors etc. So maybe that money has now dried up but I have a suspicion, that the banks may be offloading their repo'ed properties as well.

That is very interesting observation, (as noted in numerous threads) the big UK lenders had largely left purging the residential property issues as the last item on their lists - business or CRE lending being easier (cheaper + comparitively less admin) and less politically messy to do.

For many of the lenders (especially part nationalised or taken over one (or both!) being the most applicable here) there is an optimal write off rate which optimises their tax position so losses are only recognised when needed. The start of larger scale repo disposals (if it is RBS then highly significant as they transferred as many repos to subsidiaries as possible to sweep under the carpet as it were).

Theoughts:

Recognition of bad CRE and business lending has peaked.

This would seem to indicate that stable (or rising in the SE) prices means that the lenders feel that they can off load more volume without seeing the market prices fall.

FLS etc is probably indirectly enabling some of the sales of the properties with mortgages from (other?) lenders. (Bailout - but it only works if prices have stopped falling for the moment).

RBS / Lloyds (actually HBoS being responsible for the later) would presumably need to clear most of the historic repo back log before sale of HMT owned shares could begin (i.e. shrink the potential bad bank in the RBS case.) Has Osborne pressed the go button on the repo off load to try to expedite the share sale timetable?

Cash buyers wouldn't need too dry up but just decrease to see this happen.

It could also be that sellers can now escape without negative equity or a loss and the volume coming to that sub market has shot up.

Interestingly in the republic Ulsterbank (RBS) has decided is is better to change the mortgage terms (switch to 0.5% IR) than Repo as it keeps the money coming in. I.e. they have admitted they are in the for the long haul as repo losses would be to huge...

[koala_bear]

I'm pretty about sanguine about this. We've had a stalemate since about 2009 - with average prices stagnating between £160k to £170k. This ramp up in prices is utterly unsustainable and makes a crash and an undershoot on the way down much more likely in my opinion.

Sky is predicting that price rises are going to bring any rise in buyer numbers to an abrupt halt anyway: http://news.sky.com/...rs-to-fall-away

The schemes have mostly just brought forward future buyer demand by tweaking mortgage conditions (like car scrapeage schemes on the continent did.)

It just looks awfully like trying to make everything look rosy before the 2015 election.

[rantnrave]

It just looks awfully like trying to make everything look rosy before the 2015 election.

Maybe they're planning to ditch the LibDems and call an early election next year??

[scappers]

Then George can roll out the new scheme for those in trouble from HtB 1; SMI 2 where the taxpayer gives them more money and SMI 3 for HtB 2 where the guarantee is increased to 30%. If this doesn't work then there could be a payment holiday and an increase in the mortgage term .... there are loads of ways to prevent prices falling and people being repossessed ... government could 'buy' half the home and rent it back to the home owner . All it needs is a bit of imagination.

So sodding true.

[rantnrave]

Aljabeeba, where this is apparently the 3rd most important news story of the day

Note the brisk transition from rising house prices to the health of the overall economy - lol

Good to see the gilts getting a mention though.

UK house prices rose 5.4% in the three months to August compared to the same period last year, according to the Halifax's latest house price survey.

This is the highest annual rate since June 2010.

Prices over the quarter were 2.1% higher than the previous period, the lender said.

Housing market activity was up thanks to an improving economy, low interest rates, and government-backed schemes such as Help to Buy, it said.

Earlier this week, the Organisation for Economic Co-operation and Development (OECD) increased its 2013 growth forecast for the UK economy to 1.5% from an earlier estimate of 0.8%.

Last month, Nationwide reported a 1.4% rise in the three months to August from the same period last year, the biggest increase since mid-2010, it said.

Martin Ellis, the Halifax's housing economist, said: "Overall, house prices are expected to rise gradually over the remainder of the year."

The Halifax believes below-inflation earnings rises "are likely to act as a brake on the market".

Property bubble The number of mortgage approvals for house purchases - an indicator of completed house sales - rose 4% to 60,600 between June and July.

This is the first time that approvals have exceeded 60,000 since early 2008.

Help to Buy is available to both first-time buyers and people moving into a newly built home worth up to £600,000. It offers a government-backed loan of up to 20% of the price of the property and aims to make it easier to buy property with a deposit of just 5%.

The rise in prices and market activity, coupled with the Help to Buy scheme have increased fears that the country could be heading for another property bubble.

But last month Mark Carney, governor of the Bank of England, said he was "acutely aware" of the risks and had a "toolkit" of measures he could employ to combat unrestrained mortgage lending.

Matthew Pointon, property economist at consultancy Capital Economics, said: "A short-term imbalance between housing demand and the number of homes on the market is driving price increases.

"But the rise in wholesale interest rates seen over the past few weeks may soon start to feed through to mortgage rates, dampening demand."

There are already some signs that market may be slowing, with the Halifax reporting that prices rose 0.4% in August from July, a lower rate than economists had forecast and lower than July's 0.9%.

[koala_bear]

Maybe they're planning to ditch the LibDems and call an early election next year??

Given the time lag needed for some of the stuff i.e. HTB part 2 etc., Lloyds offload and announcement of RBS offload (RBS offload would be post election) then i think we are looking at May 2015. Plus it makes the tories look more trust worthy if they stick to the 2015 date they originally agreed.

The Housing Benefit bill might have stabilsed or start to fall by then as the changes there have very long time to make significant effects?

PS RBS likely on the hook for £650m* in direct compensation for the SME swaps miselling and then consequential losses on top of that. Admin cost £70m so far apparently. RBS will not be quick to get into an off loadable position.

* my calc based on FCA data so far...

[koala_bear]

The Halifax believes below-inflation earnings rises "are likely to act as a brake on the market".

Those pesky affordability criteria and the need to somehow repay capital ruining everything

Even they realise that this has just brought forward demand...

[zugzwang]

Then George can roll out the new scheme for those in trouble from HtB 1; SMI 2 where the taxpayer gives them more money and SMI 3 for HtB 2 where the guarantee is increased to 30%. If this doesn't work then there could be a payment holiday and an increase in the mortgage term .... there are loads of ways to prevent prices falling and people being repossessed ... government could 'buy' half the home and rent it back to the home owner . All it needs is a bit of imagination.

Only if you're intent on resurrecting the corpse of Fannie And Freddie in the UK. Last time I checked they'd lost around $400bn since 2008. In fact they lost more in 2008 alone than they'd made in their entire 37 year history (1971-2008).

Edit. spelling.

Edited September 6, 2013 by zugzwang

[FreeTrader]

The date for the next general election is fixed by law (7th May 2015).

The Fixed-term Parliaments Act 2011 provides for general elections to be held on the first Thursday in May every five years. There are two provisions that trigger an election other than at five year intervals.

• A motion of no confidence is passed in Her Majesty's Government by a simple majority and 14 days elapses without the House passing a confidence motion in any new Government formed

• A motion for a general election is agreed by two thirds of the total number of seats in the Commons including vacant seats (currently 434 out of 650)

http://www.parliament.uk/about/how/elections-and-voting/general/general-election-timetable-2015/

[19 year mortgage 8itch]

I'm pretty about sanguine about this.

Me too.

Where I want to buy, prices never quite met my affordability. Rising prices take it out of my hands now.

I'll see you on other side

[rantnrave]

Totally irrelevant if all you want to do is win the election. The decimation of the UK economy is a price worth paying to win the election. I think most sane people see HtB 1 and 2 as being stupid but George is assuming that self interest ie rising property prices, low mortgage rates and free money will sway them to vote for it to continue.

For this reason alone, I hope the Tories get an utter flaming at the election. It will shatter the link between hpi and winning elections.

[Vagabond]

Government giving free money away to spend on asset class causes asset class to rise.

Shocking news.

[TheCountOfNowhere]

has anyone read the comments under the Halifax data posting the front page?

have a read...looks like the return of the desperate e.a. posts !

there is a definite different tone to the posts here.

what's going on?

[Bruce Banner]

has anyone read the comments under the Halifax data posting the front page?

have a read...looks like the return of the desperate e.a. posts !

there is a definite different tone to the posts here.

what's going on?

Coordinated ramping.

[TheCountOfNowhere]

Coordinated ramping.

coordinated by the same 2 desperate estate agents perhaps.

its interesting that they choose to post on the main page story...they get shot down elsewhere...they must think casual browsers are reading it.

just been reading the bbc comments on the story...there is a definite split in the comments between..the really angry....the fed up and the estate agent v.i. idiots.

im guessing the really angry are hpc posters

people seem to he oblivious that house prices are down 30%+ in real terms since 2007...renting is a better bet for now ...the government are keeping up prices for the sake of the banks.

they also seem to think there will be a new bubble...with rising prices...even though wages have gone down...more people in low paid jobs...euro crisis not solved...Britain debt still growing...no prospect of real sustainable growth ...government borrowing rate increasing...savers angry....at least one UK hank in serious trouble...house price s dropping all round Europe...inflation making essentials affordable...houses effectively as unaffordable now as 2007 and imortgage rate rises inevitable....its not possible for any sort of sustainable bubble...London prices must be teetering on collapse now and when it goes say hello to the continuation of the nominal how

Edited September 6, 2013 by TheCountOfNowhere

[Maynardgravy]

If I were a seller, I'd sit and wait for HTB2, wouldn't you? Potential flood might be interesting.