Rics Survey Juniper 08

[the end is a bit nigher]

things improved on last month - buyers queuing up for bargains - lenders fault for all this etc. etc

blahdee blah

[WSG]

Bumpy bump bump

[Guest AuntJess]

This a.m.( Today R4) RICs chappie - Jeremy Leaf? - announced that " first-time buyers were the life-blood of the market" ....Took them long enough to work that one out and said that now prices were not going to fall much more that FTBs would be hopping on the ladder, in view of soaring rent prices.

Hmm. Who's kidding who?

[29929BlackTuesday]

Yeah - just heard Leaf on Radio 4 being given a gold-plated platform to stammer out some "strong fundamentals. rents rising blah" rubbish: TOTALLY UNOPPOSED BY PRESENTER.

What a crock of ship the BBC is. You're supposed to COUNTER ARGUMENTS like JOURNALISTS YOU SCROTES.

[Conquistador]

This a.m.( Today R4) RICs chappie - Jeremy Leaf? - announced that " first-time buyers were the life-blood of the market" ....Took them long enough to work that one out and said that now prices were not going to fall much more that FTBs would be hopping on the ladder, in view of soaring rent prices.

Hmm. Who's kidding who?

Yup, it was the falling Leaf! Beneath the calm exterior, he was clearly screaming 'Catch me! Catch me!'

I don't know why Naughtie didn't challenge all the guff from this puffed-up estate agent.

[29929BlackTuesday]

Yup, it was the falling Leaf! Beneath the calm exterior, he was clearly screaming 'Catch me! Catch me!'

I don't know why Naughtie didn't challenge all the guff from this puffed-up estate agent.

It was shameful. We know the BBC are VI scum but this was enough to make me want to throw the radio out of the window.

Leaf sounded like he had a weapon aimed at his head. Voice was wobbling.

[macfarlan]

I heard this too.

Shameful ramping from increasingly desperate VI. Should be ashamed of himself for peddling such guff.

I almost chocked on me porridge* when he started going on about how important to the market FTB's were. Funny how FTB's weren't considered when prices were going through the roof Leafy Nackers.

* Bear food.

[phead]

Yeah - just heard Leaf on Radio 4 being given a gold-plated platform to stammer out some "strong fundamentals. rents rising blah" rubbish: TOTALLY UNOPPOSED BY PRESENTER.

Yes, he moved from "rents are going up" to "rents are going up in some areas" in the space of 3 minutes, this passed the bloke from the bbc by of course.

[29929BlackTuesday]

Just seen the (very neatly dressed) Leaf on BBC TV and they had an EA on a TV link to studio. EA TOTALLY CONTRADICTED LEAF!!! Said he didn't recognise report by RICs and that things were really bad. Were trying to get everyone to DROP THEIR PRICES!!!

The nattily dressed Jeremy looked really cross!

Edit - for editing reasons

THought it used to be Institute not Instituition? Oh well.

Edited July 15, 2008 by 29929BlackTuesday

[the primitive]

It was shameful. We know the BBC are VI scum but this was enough to make me want to throw the radio out of the window.

Leaf sounded like he had a weapon aimed at his head. Voice was wobbling.

Naugtie actually said it was a god time to buy! C**t

I was so sick of it I simply listened to music on the way to work instead of the news for the first time in ages. I feel so much better for it i might do it every day. TRULY SICKENING BBC interview. f*ckk 'em i' not listening any more. It won't make any difference anyway market is toast.

[abharrisson]

While prices are currently falling pretty much everywhere the thing people are trying to work out is where they will stop..... or indeed where they will get to over a period of time.

It did strike me that building cost inflation whilst not a definative model might give us some clues... between the peak last time and now building costs per sqM appear to have doubled.... so using the available data, building a 180sqm house excluding land cost, and I would add anything over "average" fittings would cost more... the price is in the region of £270,000...... add in some land cost of say £60k (no idea really) and that might get you to £330k (obviously the land cost depends on the region.

Rightly or wrongly the interressting thing about this is obviously that in some parts of the country (london and some parts of the SE) this would indictae that prices have a long way to fall before they even come close to being at a par with building and land purchase costs (at and average)....london is probably 2 to 3 times this level if not more in the exclusive parts..... but get into some of the commuter areas and we are not too far from this now.

Of course its not a panacea to say prices can't fall below cost becasue there are parst of the country where prices have been below this level for a while... but I think it is instructive when you think about the rate of building we will see when prices are lower... if there is no profit in some sites then the builders (if there are any left) simply won't build (stands to reason I suppose)... and perhaps it will also help people decide on extension vs move... if construction costs are high compared to added value (and this is getting that way now) then they may well take a view when transaction levels return and chains start to make some sense again to sell and move to a bigger house as its not going to be cost effective to extend.

I would also add that the inflation numbers do not include the recent movement in pretty much every type of building material... steel is up more than 70% in the last four to five months, Concrete, bitumen, bricks etc are all on a very steep rise... wouldn't surprise me if the materials elemment of building costs saw a 20% increase over the period...this is not something that has happened before... eg low wage inflation... falling house prices... massive construction related price inflation.

Inflation in construction prices and indeed the cost of construction overall may yet have quite a say in how far and where the pricing of housing goes to at the bottom and in how the recovery will look I suspect.

A lot of people have no clue about how bad the inflation in construction industry has been recently and this doesn't even come through in the stats... some are saying small extension type builders have moved pricing up by around 50% in the last 12 months.... whilst national house builders are more efficient.... there are still some pretty massive numbers out there.

[Little Professor]

Link to the Jeremy Leaf interview on the Today programme:

http://news.bbc.co.uk/today/hi/today/newsi...000/7506787.stm

Any sign of the full report pdf yet?

[Guest AuntJess]

While prices are currently falling pretty much everywhere the thing people are trying to work out is where they will stop..... or indeed where they will get to over a period of time.

It did strike me that building cost inflation whilst not a definative model might give us some clues... between the peak last time and now building costs per sqM appear to have doubled.... so using the available data, building a 180sqm house excluding land cost, and I would add anything over "average" fittings would cost more... the price is in the region of £270,000...... add in some land cost of say £60k (no idea really) and that might get you to £330k (obviously the land cost depends on the region.

Rightly or wrongly the interressting thing about this is obviously that in some parts of the country (london and some parts of the SE) this would indictae that prices have a long way to fall before they even come close to being at a par with building and land purchase costs (at and average)....london is probably 2 to 3 times this level if not more in the exclusive parts..... but get into some of the commuter areas and we are not too far from this now.

Of course its not a panacea to say prices can't fall below cost becasue there are parst of the country where prices have been below this level for a while... but I think it is instructive when you think about the rate of building we will see when prices are lower... if there is no profit in some sites then the builders (if there are any left) simply won't build (stands to reason I suppose)... and perhaps it will also help people decide on extension vs move... if construction costs are high compared to added value (and this is getting that way now) then they may well take a view when transaction levels return and chains start to make some sense again to sell and move to a bigger house as its not going to be cost effective to extend.

I would also add that the inflation numbers do not include the recent movement in pretty much every type of building material... steel is up more than 70% in the last four to five months, Concrete, bitumen, bricks etc are all on a very steep rise... wouldn't surprise me if the materials elemment of building costs saw a 20% increase over the period...this is not something that has happened before... eg low wage inflation... falling house prices... massive construction related price inflation.

Inflation in construction prices and indeed the cost of construction overall may yet have quite a say in how far and where the pricing of housing goes to at the bottom and in how the recovery will look I suspect.

A lot of people have no clue about how bad the inflation in construction industry has been recently and this doesn't even come through in the stats... some are saying small extension type builders have moved pricing up by around 50% in the last 12 months.... whilst national house builders are more efficient.... there are still some pretty massive numbers out there.

Staggering! How DO they/you arrive at those figures?? Given that average wages are not much above 20K, how is the populace expected to buy a home?

Are you taking retail prices for fittings, for eg?

I can't see how anyone can double the price of building homes - even excluding land prices - which truly should not rise drastically. Are we expected to go into a lifetime of debt to fund greedy contractors and land agents?

Time for a revolution, lads. Arm yoursleves with pitchforks and march on Whitehall....It wouldn't be the first time, nor - if things continue in this vein - the last.

[OnlyMe]

It did strike me that building cost inflation whilst not a definative model might give us some clues... between the peak last time and now building costs per sqM appear to have doubled.... so using the available data, building a 180sqm house excluding land cost, and I would add anything over "average" fittings would cost more... the price is in the region of £270,000...... add in some land cost of say £60k (no idea really) and that might get you to £330k (obviously the land cost depends on the region.

Building cost inflation will present no marker whatsoever for the market - the amount of supply is tiny really. Buildings will simply stop being built. A huge proportion of the cost is the land. If necessary the land cost will have to revert to a level where it is economic to build. If dropping the price of the land element still doesn;t make it economic to build it is arguable that that land (a lot of it polluted brownfiield sites) has no value at all.

In this country it is impossible now to compete in a large number of business sectors, that housing cannot be built for affordable sums is to be of no surprise. Due to inflation the population is getting poorer. We are and have been seeing incredible divergences between costs and wages and living standards. If anything the siatution is getting worse, rapidly. Look at the 30% increase in manufacturing input costs.

[Concrete Jungle]

Link to the Jeremy Leaf interview on the Today programme:

http://news.bbc.co.uk/today/hi/today/newsi...000/7506787.stm

Any sign of the full report pdf yet?

Nothing on the RICS site

Edited July 15, 2008 by BeenieSiegleDesertEagle

[Joey Buttafueco Jr]

NSA it is the lowest number ever -86%

[right_freds_dead]

This a.m.( Today R4) RICs chappie - Jeremy Leaf? - announced that " first-time buyers were the life-blood of the market" ....Took them long enough to work that one out and said that now prices were not going to fall much more that FTBs would be hopping on the ladder, in view of soaring rent prices.

Hmm. Who's kidding who?

this kind of lying would have drove me crazy in 05.

doesnt bother me now, because even if 60 million home owners believed it, its not going to change the fact that this cant be stopped.

its entertainment. all you do is continue to wait 1 week, then something even more devastating comes in.

then more lies etc.

[Concrete Jungle]

Activity at all time low but opportunists enter the market

The average number of transactions per surveyor fell further in June but some would-be-buyers are again showing interest in the market, says RICS.

The RICS house price balance improved slightly for the second consecutive month but still remains a significantly depressed figure.

88% more Chartered Surveyors reported a fall than a rise in house prices, a decrease from 92.2% in April.

The regional picture remains gloomy with surveyors in the West Midlands unanimous that house prices are falling.

The inability of many to get secure mortgage finance is reflected in the collapse in transactions.

The average number of transactions per surveyor (over the last three months) is now at 15.3, the lowest figure since the survey began and the net balance of new agreed sales remains in negative territory.

Demand is weak with the balance of surveyors reporting new buyer enquiries still well into negative territory.

However, there has been a noticeable improvement in the trend with 35% more Chartered Surveyors reporting a fall in buyer enquires compared to 50% in May and 69% in April.

Surveyors report that some buy-to-let investors are entering the market to take advantage of rising rents and equally that 'predatory buyers' are looking to bargain for reductions in a falling market.

The lack of new instructions to sell property continues to provide a layer of support to the market.

Large numbers of distress sales (either repossessions or sales from those attempting to avoid the repossession process) have not taken place and the employment picture has not deteriorated to a degree where repossession levels have started to accelerate.

The balance of Chartered Surveyors reporting new instructions to sell property fell to -13% from -25% in May.

Commenting, RICS spokesperson Jeremy Leaf said:

"With demand so low, would-be-buyers are negotiating from a position of strength.

"Even in a weak market there are always opportunities for investors and buyers to profit and some are starting to circle for bargains.

"However, transaction levels remain incredibly low with many buyers cut out of the process by tight lending conditions."

Access a historical index of the Housing Market Survey at www.rics.org/hms.

All I can unearth so far.

[Guest pioneer31]

Declan's Business buddy on breakfast (the guy who looks like Dale Winton) said that he had a 'qualified Estate Agent' coming on the programme.

Qualified Estate Agent

and now on Breakfast, a qualified carrot and turnip seller from Wigan Market, will tell us about the World Food Crisis

[abharrisson]

Building cost inflation will present no marker whatsoever for the market - the amount of supply is tiny really. Buildings will simply stop being built. A huge proportion of the cost is the land. If necessary the land cost will have to revert to a level where it is economic to build. If dropping the price of the land element still doesn;t make it economic to build it is arguable that that land (a lot of it polluted brownfiield sites) has no value at all.

In this country it is impossible now to compete in a large number of business sectors, that housing cannot be built for affordable sums is to be of no surprise. Due to inflation the population is getting poorer. We are and have been seeing incredible divergences between costs and wages and living standards. If anything the siatution is getting worse, rapidly. Look at the 30% increase in manufacturing input costs.

I'd agree that to a point the market will correct itself without regard to construction prices, and I'd also agree that land prices are more variable than construction prices... however with the historic rises and recent meterioric rises (driven by the oil price and impacts on steel, concrete etc) in construction costs.... there are some interessting impacts... if its not economic to build then supply will become limited and it'll lock out first time buyers to a degree in some parts, and equally if it becomes uneconomic to build then people will move rather than extend and that will effect prices.