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21 December 2005

SAFE AS HOUSES

MORTGAGE lending is at its highest level for nearly 18 months - in a fresh sign that the housing market is bouncing back to life.

Figures yesterday showed banks handed out £5.1billion in new home loans last month.

That's the highest level since July 2004 - and well above the average £4.4billion increase in the past six months.

A separate survey showed overall mortgage lending was 31 per cent higher than a year ago.

Experts said the Bank of England's rate cut in August had put some life back into the property market.

Standard Life economist Gavin Redknap adds: "This is the final nail in the coffin for predictions of a housing market crash."

+++++++++++++

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Guest The_Oldie

Looks like more spin on yesterday's RICS Report.

We can expect some mega spin from Standard life, as they were badly hit by SIPPS decision ;).

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21 December 2005

SAFE AS HOUSES

MORTGAGE lending is at its highest level for nearly 18 months - in a fresh sign that the housing market is bouncing back to life.

Figures yesterday showed banks handed out £5.1billion in new home loans last month.

That's the highest level since July 2004 - and well above the average £4.4billion increase in the past six months.

A separate survey showed overall mortgage lending was 31 per cent higher than a year ago.

Experts said the Bank of England's rate cut in August had put some life back into the property market.

Standard Life economist Gavin Redknap adds: "This is the final nail in the coffin for predictions of a housing market crash."

+++++++++++++

Comments?

I know that this increase in mortgages is mostly remortgaging but the article refers to an increase in mortgages as a good thing.

If the UK was that wealthy surely most people would be buying houses without mortgages or with small mortgages.

I don't get this attitude of "Congratulations UK, you have a beautiful bouncing baby mortgage problem, a welcome addition to your economy. I am sure that its siblings credit card debt, mortgage equity withdrawal etc. will be delighted."

"This is the final nail in the coffin for predictions of a housing market crash." - Who apart from us and that money programme earlier in the year has been predicting a house price crash? I don't want to think I am part of the mainstream, if I'm going to be a contrarian I would have to go and buy one of those newbuild shoe boxes - surely not?

Edited by underpressuretobuy

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Why has no media asked why mortgage lending is up but house transactions are down? That will either mean prices have gone through the roof this year (which is not the case), or the mortgage lending is actually remortgaging (which is what I believe it is).

Now, assuming it's remortgaging then it's either MEW (which we know is down although increasing slightly in recent months), or people coming out of their fixed deals from two years ago (again this is what I believe it is).

Edited by Portent

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Standard Life economist Gavin Redknap adds: "This is the final nail in the coffin for predictions of a housing market crash."

The fact that the VIs are talking about a crash at all is informative. If there really was no prospect of a crash it would probably not occur to them to dismiss the possibility.

On the increase in home loans, it is not clear how much of this is new money and how much is remortgaging at the end of existing fixed deals. In any event an increase in lending does not necessarily result in an increase in prices.

Generally this is typical of VI behaviour at the moment. Good news stories are spun as the end of fears of a crash, bad news stories are ignored. When Gavin Redknap says "Hometrack shows prices have fallen 5% in the last 18 month, perhaps predictions of a crash are correct", then and only then will I consider his opinion to be objective. Until then it sounds like a desparate attempt to prop up the the market for as long as possible.

Edit:

Just a thought: is this actually a sign of the crash gathering speed? Sellers accepting reduced offers to lock in their capital gains bringing an increase in transaction volume but at a lower price?

Edited by Young Goat

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..........On the increase in home loans, it is not clear how much of this is new money and how much is remortgaging at the end of existing fixed deals........

From the BBC yesterday.......

Remortgaging ..........

........... the CML pointed out that the figures were being bolstered by high levels of remortgaging.

This happens when people stay put but simply move their mortgages to another lender to take advantage of a more favourable deal.

This currently accounts for about half of all new house lending.

BBC

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This jump in mortgage lending also happened at a similar stage in the last crash.

According to MoneyWeek a few weeks ago that reported this in an article the sensible suggestion is that it represents all those households that have become addicted to spending more than they earn and remortgaging to repay other debts etc. It is possibly a sign of the very over indebted making last final gasp attempts to borrow more money from their now depreciating housing assets.

I'll try and find the article and report back.

in the third and fourth quarters of 1989, just as house prices were turning negative, MEW briefly ralled, even though by this time IRs were double what they had been the year before...at this stage of the cycle it is now most likely that it reveals the desperation of those who can only finance their lifestyles through debt.....for those that who don't, or can't cut back expenditure, this rally in MEW is the harbinger of the twin evils, so rarely mentioned for the last few years, of repossesion and personal bankruptcy

If sales volumes are down and prices ard down then there is nothing good about an increase in mortgage lending now, it will have no positive effect on the market, it is simply the desperate attempts of people boring yet more money by remortgaging to fund their over consumption.

Edited by munimula

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I think this just goes to show again how powerfull the VIs are...

There is so much money to be made by VIs in a rising house market they will always present any figures in a positive light.

Its a shame the market is not more even with it being just as easy to make lots of money on a falling market then the reporting would be a lot more balanced.

Bring on house price derivatives....

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Standard Life economist Gavin Redknap adds: "This is the final nail in the coffin for predictions of a housing market crash."

You can sense Gavin's desperation here.

It's like when Charles Kennedy tells us that he has finally silenced the critics in his party and that he is staying on as leader - yeah right Charles. Good luck in your new job.

Or perhaps poor Gavin has just bought a house.

...another article for the file me thinks. I'm going to have so much fun reading through this stuff again in a few years time. :D

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its annoying that you can no longer get balanced news in this country due to the 'papers' being owened by commercial interests. its a poor state for a democracy to be in. i cant think of any news channel thats simply reporting facts.

if they lie about housing - what else are they lying about ?

thats the mirros credibility gone down the pan.

i suppose its just a tits and bingo rag with hot gossip for the x-factor stars ect.

thats no newspaper. its just worthless pap.

its a shame you cant act on their housing advice and then sue them if it was shown the facts they were reporting were known to be untrue ? i.e. buy a house and not get a 3% rise.?

could there be a case for litigation.?

i think it cant be ruled out.

Edited by right_freds_dead

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its annoying that you can no longer get balanced news in this country due to the 'papers' being owened by commercial interests. its a poor state for a democracy to be in. i cant think of any news channel thats simply reporting facts.

if they lie about housing - what else are they lying about ?

thats the mirros credibility gone down the pan.

i suppose its just a tits and bingo rag with hot gossip for the x-factor stars ect.

thats no newspaper. its just worthless pap.

its a shame you cant act on their housing advice and then sue them if it was shown the facts they were reporting were known to be untrue ? i.e. buy a house and not get a 3% rise.?

could there be a case for litigation.?

i think it cant be ruled out.

Journalists have an exemption when it comes to this sort of thing. Otherwise the weekend broadsheets would be half the size, since editors would be too afraid to publish any investment advice on shares, bonds, pensions, tax issues, savings or whatever.

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Journalists have an exemption when it comes to this sort of thing. Otherwise the weekend broadsheets would be half the size, since editors would be too afraid to publish any investment advice on shares, bonds, pensions, tax issues, savings or whatever.

Hi,

Just check the links here for the media coverage of the last crash. Just look at all the conflicting news stories we are getting day after day, aiming to create a cloud of confusion. I remember the last crash vividly. Even well into it you would be reading every week in the papers and the telly about how "the market has turned", "next year the market is set for a big boost", blah, blah, blah. Infact, exactly what you hear now. The media only really got very truthful about the whole situation last time when it was nearly over and when they were starting to receive some backlash from the public. It just seems that the biggest purchase most people will make is just about immune to any kind of responsible behaviour or codes of conduct in the Uk. Could you imagine some media-exposed economist or spokesman or other coming on the Telly or the newspapers and saying "I confidently predict XYZ and for this reason share values will surge next year, now is the time to purchase shares bigtime! It's now or never". No, there are only very limited circumstances in which such claims could be made through mainstream media and even then would have to be qualified and tagged with the usual mantra of "share prices can rise and fall". When it comes to houses? No problems.

Boomer

Edited by boom_and_bust

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Journalists have an exemption when it comes to this sort of thing. Otherwise the weekend broadsheets would be half the size, since editors would be too afraid to publish any investment advice on shares, bonds, pensions, tax issues, savings or whatever.

Exactly: newspapers (and you have to be registered with the PO to be one still, I think) are specifically exempted from being covered under FSMA 2000, unlike tip sheets. Big case of caveat emptor. However, get caught for market manipulation (a la Mirror's City Slickers) and you're cactus.

And I thought that my FSA exam would never come in handy...

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21 December 2005

SAFE AS HOUSES

MORTGAGE lending is at its highest level for nearly 18 months - in a fresh sign that the housing market is bouncing back to life.

Figures yesterday showed banks handed out £5.1billion in new home loans last month.

That's the highest level since July 2004 - and well above the average £4.4billion increase in the past six months.

A separate survey showed overall mortgage lending was 31 per cent higher than a year ago.

Experts said the Bank of England's rate cut in August had put some life back into the property market.

Standard Life economist Gavin Redknap adds: "This is the final nail in the coffin for predictions of a housing market crash."

+++++++++++++

Comments?

Well speaking for myself, I don't get this argument that the tiny little August rate cut should make much difference to anything really, other than to fools who get a boost to their "sentiment". I've got a mortgage, and the reduction in monthly payments makes no significant difference to me. It certainly doesn't make me think "hey, I think I can afford to go out and spend another 50K on houses".

The way I read it, those "Experts" don't seem to be expert in much except spin. I think the truth is that there are still a lot of people scared that the market could still drop.

Edited by Levy process

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  • 301 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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