August 2008 Archive

Saturday, August 30, 2008

Labour Government Admits Living in a Fools Paradise

Guardian: Economy at 60-year low, says Darling. And it will get worse

Chancellor Darling admits that he was clueless as to how serious the credit crunch would become and declares that Britain is now facing "arguably the worst" economic downturn in 60 years which will be "more profound and long-lasting" than people had expected .

Posted by enuii @ 11:33 PM 88 Comments

David Smith, now you know it didn't take most on HPC by surprise!

Sunday Times: Speed and severity of downturn have taken everyone by surprise

Is this the worst housing recession of modern times? In the past year, mortgage approvals have plunged by two-thirds while house prices, according to Nationwide and Halifax, have recorded double-figure percentage falls since last summer. How does this compare with the peacetime housing slumps in the 1930s, the 1970s and the early 1990s? Government figures, which go back to 1930, suggest house prices fell by 10% in 1932, during the Great Depression, and continued dropping for a couple more years, for a fall of 15% in all.......... When inflation is taken into account, the drop was even more pronounced. From peak to trough, Nationwides index fell by a staggering 37% in real terms. In cash terms it took until 1998 before prices got back to their 1989 peak. In real terms it took until 2002. .

Posted by bufferbear @ 11:04 PM 5 Comments

....but Labour simply doesn't have a mission or message - that's the problem!

Guardian: Labour

Open revolt? ''Britain is facing "arguably the worst" economic downturn in 60 years which will be "more profound and long-lasting" than people had expected, Alistair Darling, the chancellor, has told the Guardian today. In the government's gravest assessment of the economy, which follows a warning from a Bank of England policymaker that 2 million people could be unemployed by Christmas, Darling admits he had no idea how serious the credit crunch would become''

Posted by hpwatcher @ 10:06 PM 19 Comments

More anti-BTL broadsheet comment

Independent Newspaper: The buy-to-let chickens come home to roost

The last 3 paragraphs are very bearish on BTL, and rightly so. 1. Huge increase in rental supply causing falling rents. 2. Fixed rate resets causing increases in costs to landlords. 3. Landlords cannot sell up even if they need to as the market is illiquid.

Posted by voiceofreason @ 09:11 PM 0 Comments

Fox on the run

Breaking News: Fox at bay

It can only be a matter of time before Foxtons collapse under the weight of debt.

Posted by adamsmithii @ 07:49 PM 1 Comments

Gordy and Darling aren't out of the mucky brown stuff yet

Times online: Bradford & Bingley was so close to the edge

Bradford & Bingley gave us a glimpse on Friday of how dicey things were early in July. The bank came uncomfortably close to becoming a second Northern Rock. It might be fanciful, but a collapse could even have brought down the Government if things had got seriously messy and the contagion had spread.

Posted by nooneo @ 02:13 PM 3 Comments

A hurricane threatens to halt much of the Gulf of Mexico's oil production

CNN: Gustav: What's at stake

The Gulf of Mexico is home to 4,000 drilling platforms and 33,000 miles of pipeline, which send 1.3 million barrels a day to the Gulf Coast's 56 refineries. But a hurricane threatens to deal a powerful blow to the oil-rich region. Hurricane Gustav, which just smacked Jamaica with heavy rain and winds, is heading towards the Gulf of Mexico, and forecasters predict its path will steer right through the heart of the region's biggest concentration of oil and gasoline producers.

Posted by mark @ 01:33 PM 1 Comments

Consumers: The 21st Century Weeble

CNN: Consumers: The 21st Century Weeble

Despite tough times, the consumer has wobbled but kept spending. But will Americans pull back now that cash from the stimulus checks are mostly gone?

Posted by mark @ 01:32 PM 0 Comments

Brown in the Berlin bunker....

Mail: Recession and the disturbing lesson of history from a Prime Minister in denial

''...In particular, Brown was utterly certain that he had produced a miraculous formula which had brought to an end the economic cycle. He must have declared hundreds if not thousands of times that, thanks to his policies, there would be 'no more boom and bust'. Gordon Brown was not making this claim for mere political effect. He genuinely believed that he had solved a problem that had baffled some of the world's finest minds for centuries...''

Posted by hpwatcher @ 01:27 PM 1 Comments

Bye Bye B&B

Telegraph: Bradford & Bingley to cut new lending after unveiling 27m loss

Rod Kent, B&B's chairman, said the past few months - when B&B repeatedly re-negotiated a rescue rights issue and saw private equity firm TPG walk away from a plan to inject cash - had been "as tough as it can get". Mr Kent denied B&B's only options were to run the business off or put it up for sale. Richard Pym, who has been B&B's chief executive for just eight days, will present a strategic plan at the interim management statement in the autumn. B&B has already cut 110 of its mortgage advisers and further job cuts are likely. Alex Potter at Collins Stewart said the results were "little short of appalling".

Posted by last_days_of_disco @ 10:52 AM 1 Comments

Sensible advice for FTBers

Telegraph: Why first-time buyers should wait for house prices to fall further

News that house prices are falling at the fastest rate seen since the slump of 1990 prompts a predictable outcry from an unholy alliance of estate agents and politicians: Something must be done! Rather than parade the naked self-interest of middle-aged homeowners or people like you and me most of these calls for action focus on help for first-time buyers.

Posted by quiet guy @ 09:53 AM 2 Comments

Changing sentiments

This is London: Hurrah - now we can stop talking up house prices

It's all been so tickety-boo. The Tv programmes - Grand Designs, Location, Location, Location and so forth, have been nothing but incitements to covet and gloat. Buy this! Or this! Or this! Grab it quick. These shows were always a mucky pleasure. Now that property is depreciating, all this is going to have to stop. There's not much to look forward to in the economic horrors ahead, but maybe at least a change in the attitude we have to property will be to the good. It became morally repugnant during the boom.

Posted by quiet guy @ 09:41 AM 0 Comments

The Wider Picture

F.T.com: Prospect of exchange-rate crisis looms

"Wherever the credit and commodity boom has pushed up property markets to unsustainable highs, there is a serious risk to growth, particularly where banking system portfolios are less seasoned," Russia can play the economic game just as well as anyone else and it would be wiser to be more friendly and respectful to a country that is as much part of the West and its history as we are in reality.

Posted by plato @ 09:27 AM 0 Comments

Georgia Bank fails with $1.1 billion in assets

Credit Writedowns: Georgia Bank fails with $1.1 billion in assets

Yet another US bank foreclosure. Just wait for Friday nights and we're destined to see one.

Posted by edwardnh @ 01:32 AM 1 Comments

There's always a way

FT: UK home sales boosted by desperate vendors

Rather than waiting for chains to clear, agents say vendors have begun to buy the properties of people further down the chain to clear the way for their own home to be sold. One homeowner engaged in such a process told the Financial Times she had only been able to sell her house for 450,000 in order to upgrade to a 700,000 home by buying an apartment at the bottom of her chain for 200,000. I know several people doing this, she said. It allows you to retain some exposure to the property market and gets everything moving so you can sell.

Posted by gardeniadotnet @ 12:22 AM 5 Comments

Friday, August 29, 2008

Sharlene Goff boosted by desperate vendors

FT.com: UK home sales boosted by desperate vendors

Desperate vendors are spending hundreds of thousands of pounds buying houses they dont want in order to sell their homes. And in a related development, desperate property owner Sharlene Goff, no longer able to keep up her shameless property ramping, resorts to VI-ness masking itself as bearishness.

Posted by gnaeus pompey @ 09:28 PM 0 Comments

So called Mortgage Professionals exposed

Guardian: Mortgage fraud adds to Bradford & Bingley's woes

In June B&B revealed a 15m charge to cover losses from fraud..........Chairman Rod Kent explained that most of the scams uncovered in the last six months related to the activities of mortgage professionals and had come to light as a result of falling house prices. He said the alleged culprits were being pursued by the police and the regulator. .

Posted by aje141269 @ 08:04 PM 2 Comments

US: Prime Foreclosures greater than subprime

Credit Writedowns: Prime Foreclosures greater than subprime

It looks like the US is in for a lot more pain than some are anticipating because the foreclosures are moving out of subprime and into prime territory. Brace yourself.

Posted by edwardnh @ 05:11 PM 2 Comments

This should help the cost of living!

TIMESONLINE: Energy groups increase pain with gas price rises

Npower and ScottishPower today became the last of Britain's big six energy suppliers to raise gas and electricity bills, adding at least another 162 a year to millions of customers heating costs. Npower, the UKs fourth-biggest energy group, will increase gas prices by 26 per cent and electricity bills by 14 per cent. From today, the companys 6.6 million customers will pay an average 162 more each year for gas and an extra 60 for electricity. At the same time, ScottishPower has raised its gas bills by 34 per cent, the second largest rise after British Gas increased its gas prices by 35 per cent last month. ScottishPower also announced today that it has increased its electricity prices by 9 per cent, which will come into effect on September 1st

Posted by plato @ 04:03 PM 4 Comments

Land Registry says house prices down 2%

Yahoo: Land Registry says house prices down 2%

as if... anything connected to this government is total lies...

Posted by mark @ 03:24 PM 14 Comments

Is no one going to post this one???

Land Registry: -0.6 drop from Landregistry

Less than I was expecting, but then it is a government stat.

Posted by ms @ 03:17 PM 1 Comments

Peak Oil: When Demand Exceeds Supply

chrismartenson.com: Peak Oil

Forget electric cars. We're running out of energy. Two scary/sobering videos (17 and scroll down for 17b) by Chris Martenson, whose "Fuzzy Numbers" presentation was widely discussed on this site. If you're at work and can't watch them it's worth the wait until you able to do so.

Posted by icarus @ 02:55 PM 4 Comments

Will the UK follow with Cheaper Dartford Tunnel fees?

BBC: Japan unveils economic boost plan

"Japan has unveiled a stimulus package worth 11.7 trillion yen ($107bn; 59bn) to boost the country's economy. The package also includes discounts on motorway tolls.." The plan only includes 2 trillion yen of fresh government spending, with 9 trillion yen in loan guarantees and aid for small businesses.

Posted by alan @ 02:47 PM 3 Comments

No prizes for guessing who didn't make the list

BusinessWeek: The (New) World's Happiest Countries

Not completely directly related to HPC but more a Friday interlude to the constant stream of doom. Curiously, some of these most cheerful places are characterized by high taxes, rugged terrain, poor weather, or low income.

Posted by denzil @ 01:54 PM 5 Comments

US GDP mirage

YouTube: Go Back to Bed! Everything is Fine. Goldilocks is Back!

Think of it like this: It was all just a bad dream....

Posted by sandybeach @ 01:46 PM 1 Comments

Hmm ... looks like the BBC missed this one today

Land Registry: June 2008

Average price 178,364 Monthly change -0.6% Annual change -2.0%

Posted by chinchin69 @ 01:41 PM 0 Comments

Time to kiss goodbye to the oil crisis ...

Tesla Motors: Reducing Dependence on Foreign Oil

A Peaceful Solution to Oil Wars - You need only open the morning paper to understand the importance and urgency of Americas reduced reliance on foreign oil. The instability of the Middle East makes our 58% dependence on foreign oil a dangerous and costly proposition. 0 - 60 mph in 3.9 seconds. 256 mpg, with 220 miles per charge, 8 minutes to charge on 3-phase (3.5hrs single phase with special connector).

Posted by fahrenheit451 @ 12:07 PM 24 Comments

The second-most costly four words in the English language

MoneyWeek: The second-most costly four words in the English language

The cry of 'something must be done' about the property crash is ringing out around the country. But why subsidise those who want to buy or sell a house? What we should really do, says John Stepek, is help people pay off debt and build up their savings, not bail out the housing market. And that means cutting taxes.

Posted by damien @ 11:33 AM 11 Comments

BrightSale writes to Chancellor with Housing Crisis Solution

BrightSale Online Estate Agents: BrightSale Urges Chancellor to Act on Housing Crisis

Today BrightSale announced that it had written to the Chancellor demanding the removal of the restriction on SIPP pension schemes investing in residential property. BrightSale argued that such a measure would have a hugely positive impact on the housing market and (unlike the removal of stamp duty) would cost the Exchequer nothing in lost revenue.

Posted by dr jeremy howard @ 10:09 AM 0 Comments

Credit Crunch part 2

dollardaze: credit crisis 2

The credit crunch looks far from over, with the rot likely to spread. Is Gold the only safe haven?

Posted by david w d @ 09:00 AM 0 Comments

Good forecast for housing market

EDP24: Bleak forecast for housing market

NEWS Bleak forecast for housing market ADAM AIKEN, EDP DEPUTY BUSINESS EDITOR 28 August 2008 19:59 Property prices in the east of England are not likely to return to last year's peak until 2013, according to figures published yesterday. The analysis of the regional market came from property firm Savills on the day it said profits in its estate agency business nationally had slumped 88pc during the first half of the year.

Posted by housebear @ 09:00 AM 3 Comments

Bear food for the man in the street

The Sun: House price fall fastest for 18yrs

HOUSE prices are falling at the fastest rate for 18 years, it was revealed yesterday. They tumbled another 1.9 per cent this month. And that took the annual rate of decline to 10.5 per cent not seen since the 1990 property crash. The drop was revealed as a CBI survey showed high streets are suffering their worst sales slowdown for a quarter of a century. House prices have now fallen for ten months in a row. And Nationwides chief economist Fionnuala Earley warned a recovery was unlikely in the near future. She said builders had reported much lower interest in new houses.

Posted by housebear @ 08:57 AM 4 Comments

House price plunge fuels recession fear

guardian.co.uk: House price plunge fuels recession fear

Fears of recession this winter intensified yesterday after the CBI reported the weakest high street activity in 25 years, the Nationwide building society said house prices were falling at 150 a day and a Bank of England policymaker warned of two million unemployed by Christmas. Amid predictions that 2009 could witness the first year of falling output in Britain since 1991, government hopes of mounting an autumn political comeback suffered a setback when employers' organisation the CBI and Nationwide both said they saw no let-up in the tough conditions facing retailers and the property market.

Posted by housebear @ 08:55 AM 11 Comments

Sub Prime woes hit the Costa

Telegraph: Concerns for Spanish banks after downgrade on mortgage securities

Fitch Ratings has downgraded six sets of Spanish mortgage securities issued by Banco Santander, heightening concerns that the damage from Spain's property crash is spreading to the country's strongest lenders. The loans were "sliced and diced" and packaged in an identical way to sub-prime mortgage bonds in the US, belying claims by the Spanish government that the country had avoided the sort of lending practices seen in Anglo-Saxon economies. The cluster of residential property securities, worth 4.06bn (3.27bn), were all based on mortgages that exceeded 80pc of the house value, and many were 95pc or even 100pc. They were all issued in 2007 at the height of the property boom. Fitch downgraded the lower tier A, BBB, and BB tranches of the securities. The upper levels remain stable.

Posted by jack c @ 08:52 AM 1 Comments

Gordon Brown is set to usher in a new era of council housing

Times: Property crash opens door to the new council house

Gordon Brown is set to usher in a new era of council housing by helping local authorities to buy repossessed and unsold properties. Cash and powers will be made available so that town halls can intervene in the housing market, The Times has learnt. The measures which could be announced as soon as Tuesday will encourage councils and housing associations to offer struggling borrowers financial help in return for a stake in their homes or outright ownership. The number of council homes has plummeted since 1981 from 6.1 million to 2.5 million. Hundreds of millions of pounds of extra cash earmarked for social housing could now be released early to buy up newly built properties.

Posted by jack c @ 08:48 AM 35 Comments

37k to qualify for most competitive mortgages

first rung: First time buyers or those who have entered the property market recently will struggle to qualify for the most competitive mortgages

Homebuyers now need a deposit of 37,119 to qualify for the most competitive mortgage deals, new research from mform.co.uk shows. The average deposit necessary has soared by 43 per cent from last year when it was 20, 980, the online mortgage company says

Posted by matt_the_hat @ 08:41 AM 4 Comments

I'd hate to have bought a BTL in some empty block

press association: Unsold properties plan for councils

Councils could get help to buy repossessed and unsold properties under new plans to be announced by the Government, it has been reported. The measures, which are expected to be announced next week, will give councils and housing associations the means to intervene in the flagging property market. Local authorities will be able to offer financial help to borrowers unable to pay their mortgages in return for a stake in their homes or outright ownership,

Posted by matt_the_hat @ 08:39 AM 1 Comments

One for the sheeple

mirror: BIGGEST HOUSE PRICE FALL FOR 18 YEARS

if the get to the business section

Posted by matt_the_hat @ 08:34 AM 0 Comments

Surprised?

BBC News: Bradford & Bingley announces loss

Bradford & Bingley (B&B), a buy-to-let loans specialist, has reported a loss of 26.7m in the six months to 30 June, with impairment charges up sharply.

Posted by renting2 @ 07:35 AM 1 Comments

Thursday, August 28, 2008

Sounds familiar

Times: Mortgage rescue at the ready as property slump gets even worse

Alistair Darling, the Chancellor, and Caroline Flint, the Housing Minister, are planning to announce an emergency mortgage rescue package next week. Under the plans councils will be encouraged to offer low-income families at risk of repossession the chance to sell a stake of their houses in return for financial help. First-time buyers will also be given council-backed assistance with deposits and town halls will be given extra money to buy up empty unsold new-build properties from developers. A more radical proposal under which councils would have competed as mortgage lenders has been vetoed by Darling.

Posted by little professor @ 11:08 PM 17 Comments

Inflation vs Deflation

Bloomberg: Boeing Payrises

38% pay increase. Nice if you can get it.

Posted by yoss @ 10:21 PM 0 Comments

What recession?

FT: Stocks rally on surprise US GDP boost

Woes of the US sub-prime meltdown have been with us for the best part of 18-24 months but the US is still resolute in not tipping into a technical recession. It's fair to say that the US is certainly not out of the woods yet but this data will provide a much needed boost to an economy that many doomsayers proclaim as being on its knees.

Posted by denzil @ 10:19 PM 1 Comments

Interesting development across the Irish Sea

4NI.co.uk: NI Developer Cuts House Prices By 40%

A Northern Ireland building firm has slashed its house prices by almost 40%, in a fresh bid to inject life into the ailing property market. Fraser Homes has trimmed 90,000 off the price of its semi-detached properties in Glengormley, reducing the price from 229,500 to 139,950.

Posted by quiet guy @ 09:41 PM 13 Comments

Dont be fooled by

CNN: The economic growth mirage

Sure, the economy grew at a decent clip in the second quarter. But economists say the gain may be temporary and warn of tougher times ahead.

Posted by mark @ 09:14 PM 2 Comments

Lehman to lay off 1,500

CNN: Lehman to lay off 1,500

The troubled investment bank's plans to shed up to 6% of its workforce amid a slumping stock price, concerns about its future.

Posted by mark @ 09:12 PM 0 Comments

Brace Brace Brace for more bad news on petrol prices...

CNN: Gulf oil braces for Gustav

With Tropical Storm Gustav setting its sights on the Gulf of Mexico, oil facilities in the region are facing their first major threat since 2005, when Hurricanes Rita and Katrina knocked out nearly every barrel of oil production and sent prices soaring to then-record levels.

Posted by mark @ 09:12 PM 0 Comments

My local EA is selling more than that!

Times Online: Sales at Taylor Wimpey sites slump to half a house a week

Taylor Wimpey is selling less than half a house a week on each of its sites despite offering incentives with its new homes, it emerged yesterday. See also: http://extras.timesonline.co.uk/pdfs/taylor_wimpey.pdf

Posted by whostolemyendowment @ 06:35 PM 0 Comments

Someone deport this guy

Telegraph: MPC dove Blanchflower to vote for rate cut

Blanchflower indicated he would be calling for interest rates to be cut by more than 25 basis points at next week's Monetary Policy Committee meeting. Mr Blanchflower said his earlier forecast that house prices could fall by 30pc was looking optimistic and that the jobless total could soon touch two million as construction companies and banks lay off workers. The US-based academic, who has called for lower interest rates for 10 months in a row, said the UK could learn from Federal Reserve's prompt action and interest rates should be much lower than 5pc as a matter of urgency. "I've obviously voted on quite a number of occasions now for small cuts but we need to act and we probably need to act in larger amounts than that."

Posted by little professor @ 05:28 PM 28 Comments

Lex is a big bear - a BIG bear!

FT - Lex: Bleak Houses

The pace of collapse reflects, in order of significance, the ludicrous valuations ahead of last Octobers peak, a fundamental shift in buyer psychology, and credit withdrawal by lenders. The average house price is now 11.5 per cent down from the summit in nominal terms. Economists forecasting 35 per cent peak-to-trough nominal falls, once outliers, are rapidly finding themselves rejoining mainstream opinion.

Posted by james @ 03:50 PM 0 Comments

The fall is now a crash!!

aboutproperty.co.uk: When does a fall become a crash?

The torrent of negative news for the UK property market continued unabated today, leading analysts to question is this now a house price crash? What's the evidence? Figures from the Nationwide released today illustrate the scale of the problem now facing the market. Average property prices have fallen across the UK by 10.5 per cent over the course of the last year, and what's more the pace of decline is accelerating. While prices fell by an already dramatic 1.5 per cent in July, this accelerated to 1.9 per cent in August, with activity "very subdued", according to Nationwide.

Posted by housebear @ 03:15 PM 7 Comments

Retail sales hit 25 year low

Yahoo: Retail sales hit 25 year low

They always use an excuse like wet weather or snow etc, what about plain speaking people can no longer afford to shop!!!!!!!!!!!!!

Posted by mark @ 02:50 PM 3 Comments

are people now stopping buying cars?

CNN: Toyota lowers 2009 global sales target

When will toyota lay people off? Is it now a matter of time, places like North wales will be affected!!Or will it just affect the USA?

Posted by mark @ 12:27 PM 15 Comments

Dropping like a sack of sh**

bbc: UK House Price Calculator

Look at houseprices in your region, against prices last year and in the last quarter. Intersting stuff this, because I thought prices were going up in the Ribble Valley, but in the last quarter they have registered a 20% drop overall.

Posted by george monsoon @ 12:09 PM 47 Comments

Northern Rock: yet more of your cash down the drain

MoneyWeek: Northern Rock: yet more of your cash down the drain

Surprise surprise Northern Rock's mortgage loans are going bad more quickly than the Government expected. But it's just the tip of a very big iceberg. As banks make borrowing money ever more difficult, Britain is heading for a major slump...

Posted by damien @ 11:46 AM 20 Comments

Peter Bolton King, chief executive of the NAEA threatens to throw his toys out of the pram

FT: Indecision on Stamp Duty impacting property market: NAEA

Consumer confidence in the property market is being hampered by the government's indecision on a possible Stamp Duty holiday. A second survey of members of the National Association of Estate Agents (NAEA) revealed 98 per cent of estate agents now believe consumer confidence has been further damaged by the hold-up. This is up from the previous survey, when 92 per cent said the indecision had increased consumers concerns. The NAEA said the wait was causing property sales to fall through, with 56 per cent of agents claiming to have lost at least one sale since the first talk of a Stamp Duty holiday was made.

Posted by jack c @ 11:06 AM 20 Comments

A Dose of Reality at Last?

Times Online: Deepening recession may throw Britain into full-year GDP fall

"Britain's economy is set to shrink over the next year as a deepening recession inflicts the first full-year fall in national income since 1991, a leading forecasting group predicts today." .......................... "The Chancellor is expected to bow to the inevitable in the autumn and downgrade drastically his present forecast that the economy will grow by at least 2.25 per cent next year."

Posted by renting2 @ 10:25 AM 3 Comments

going down going down going down

bloomberg: U.K. Annual House Prices Drop Most Since 1990, Nationwide Says

The fastest inflation in more than a decade, a stagnant economy and the rationing of mortgages by banks have sparked the worst property slump since the last recession in the early 1990s. Bank of England Governor Mervyn King said this month that home values face ``a significant adjustment'' after a decade-long boom.

Posted by matt_the_hat @ 09:34 AM 0 Comments

Fastest falls since 1989

Time online: House prices falling at fastest rate in nearly 20 years

House prices are falling at their fastest rate in nearly 20 years, new figures show.

Posted by matt_the_hat @ 09:30 AM 5 Comments

Double Digit Drop and Accelerating ...

Should have seen it coming Crash Gordon....

The Renegade Economist: Boom Bust n' Bankers

Three short films here - all relevant.

Posted by neo-serf @ 09:19 AM 0 Comments

Record fall, record rate of fall

Nationwide: House Prices Continue to Fall in August

Fionnuala Earley still squiggling away to the best of her ability on Radio 4, but Evan Davis, gently probing with simple questions, knew she had nowhere to go. He pointed out that the 3-month rate of falls is now around 18%.

Posted by dohousescrashinthewoods @ 07:23 AM 50 Comments

Apparently ''estate agents are optimistic''......hahaha

BBC News: House prices 'fall 10.5% in year'

''...UK house prices have seen an annual double-digit fall for the first time since 1990, according to the latest survey from the Nationwide. The 10.5% annual decline came after house prices dropped by 1.9% in August, the building society said. ...''

Posted by hpwatcher @ 07:04 AM 7 Comments

The Olympics are over and the truth about China's fragile economy will also become increasingly obvious. China's amazing growth and looming global dominance are constantly hyped, but evidence is mounting the country won't avoid a financial and economic cr

abc: The China Bubble

Despite the brilliant spectacle and excellent organization, the Beijing Olympics revealed the true nature of China's ruling regime: goose-stepping soldiers in the opening ceremony and tanks in front of stadiums were pure totalitarian dictatorship. The Olympics are over and the truth about China's fragile economy will also become increasingly obvious. China's amazing growth and looming global dominance are constantly hyped, but evidence is mounting the country won't avoid a financial and economic crisis. A crisis would have a number of implications including an impact on the Australian economy. But it could also seriously affect China's path to political freedom, which began with economic liberalization.

Posted by big chris @ 04:29 AM 3 Comments

End of 0% deals means more belt-tightening ahead

Express (sorry): Card costs are set to rocket

THOUSANDS OF credit-card holders now enjoying interest-free borrowing face a payment shock this autumn when their introductory periods expire and hefty interest bills kick in. Between April and October last year, 5 million people switched their debts to a credit card provider offering a temporary interest-free period, says new research. This means millions of 0 per cent balance transfer deals are now on the verge of expiring. Stricter lending conditions, imposed because of the credit crunch, mean thousands of these customers will struggle to switch the debt to another 0 per cent offer because they cannot count on being accepted by a new card provider. So when the deals end, borrowers may have to meet much higher repayments, with interest charged on top of the money they already owe.

Posted by drewster @ 03:03 AM 6 Comments

Boo hoo hoo, we borrowed more than we could afford and now we can't repay it, please bail us out, waah

Independent: The real victims of the housing market crisis need all the help they can get

Taylor Wimpey's chief executive hit the nail on the head yesterday in admitting there is little the Government can do to fix the housing market. Instead, the Government's priority should be to protect the real victims of the economic slowdown those who face the prospect of losing their homes because they can't keep up with mortgage repayments. In the current housing market climate, these borrowers don't have the option of selling up before the bailiffs arrive and they need all the help they can get. The CML expects repossessions to rise significantly in the coming months and to reach about 45,000 this year. -- IT'S NOT EXACTLY A HUGE NUMBER! How many tenants are evicted or move out of their homes each year when they can't pay the rent? There are 4,000,000 people on council waiting lists!

Posted by drewster @ 01:08 AM 8 Comments

Labour 0, Lib Dems 1 - they've been right about the bubble all along

FT Blogs: The Treasury minister who thought the housing crash was a joking matter

Vince Cable held a press conference this morning to outline various ways to ease the pain in the housing market. Im not sure any of his suggestions will make a massive difference (they include letting housing associations borrow more to buy up empty homes). But credit to the Lib Dem Treasury spokesman, who has long been alert on this issue. As he reminds us, Labour MPs were literally laughing at the idea of an imminent housing crash - as recently as the spring. Here, as a sorry reminder of government complacency, are extracts from the Hansard account of a debate in April on a Lib Dem-led motion on the housing bubble....

Posted by drewster @ 12:42 AM 2 Comments

Wednesday, August 27, 2008

number of repossessions higher at NR

Telegraph: New fears over quality of Northern Rock mortgages

The number of repossessions and the value of problem mortgages in Northern Rock's 40bn securitisation vehicle Granite, which holds the bank's better loans, have jumped far more sharply than at rivals, according to research by credit rating agency Standard & Poor's. Of Granite's total of 40bn of mortgages, 508m of them are behind with repayments, S&P said.

Posted by mountain goat @ 10:37 PM 1 Comments

Londoners borrowed up to the hilt

London Evening Standard: Building profits fall 96 per cent as crunch hits Londoners

I feel a Dire Staights song coming on ... "I want my, I want my, ...." "Examining mortgage and personal loans, overdrafts, credit and store cards and hire purchase agreements for goods such as cars and televisions, the report found that Richmond has the highest total borrowing figures per resident, at 53,533."

Posted by doomwatch @ 08:50 PM 0 Comments

Shut up, Cable

Daily Mail: Banks should be banned from seizing homes, say LibDems

Banks should be banned from seizing homes from families struggling to pay their mortgages except in extreme circumstances, the Liberal Democrats said. People would first be asked to sell off a chunk of their property to the local council or housing association under a 'buy back' rescue package. It would allow cash-strapped families to reduce their mortgage payments without the fear of being made homeless. The Government should also allow councils and housing associations to borrow billions of pounds to buy developers' land-banks and empty new homes, said Lib Dem treasury spokesman Vince Cable.

Posted by little professor @ 07:30 PM 22 Comments

Polish squatters - you couldn't make it up!

London Evening Standard: Families in 1million homes tell of 'nightmare' as 300 squatters take over entire housing estate

Residents in a street where houses cost more than 1 million each have been besieged by an army of squatters because of a council blunder. But the squatters, including around 100 young Polish men, took residence in the 45 flats just before the handover after hearing it was empty by word of mouth.

Posted by alan @ 07:27 PM 5 Comments

Why we are where we are now?

Yahoo Finance: Fannie, Freddie shares rise for 3rd straight day

Very interesting article talking about why Fannie and Freddie's shares have risen in the last three days. Its all based on articles by three analyst. One being positive one being neutral and the last less optimistic. Have a read through the article. It details with excerpts the positive opinion, brushes over the neutral and write one line about the negative and I quote "Other analysts, however, continue to express a gloomier outlook." Thats it.

Posted by deepak @ 07:17 PM 0 Comments

Bankruptcy filings surge 29%

CNN: Bankruptcy filings surge 29%

the number of people and businesses heading to bankruptcy court has spiked. Bankruptcy filings surged 29% in the 12 months that ended June 30, according to government figures released Wednesday.

Posted by mark @ 06:18 PM 0 Comments

Unless they can sell and downsize - illiquid goldmine will be circled by equity release sharks!

MoneyMarketing: UK Elderly sitting on 726bn equity

Homeowners aged 65 and over still have 726.43 billion of equity in their homes. The latest findings from Prudential's Equity Release Index reveals that despite falling house prices, homeowners aged 65 and over still have billions in equity remaining - over 40 per cent of which belongs to those living in London and the South East.

Posted by whostolemyendowment @ 04:01 PM 0 Comments

As my dad used to say 'You'd stick your hand in the fire, if they told you to. Wouldn't yer!''

Findaproperty: Best Mortgage Deals Require 37,000 Deposit

Prospective buyers hoping to capitalise on falling house prices could actually find they need more cash upfront than they did a year ago, according to mortgage comparison site mform.co.uk.

Posted by whostolemyendowment @ 03:50 PM 0 Comments

London market crashes, but some niche property still rising

rat and Mouse: Market's in freefall, but mews houses break records

Mews property in the capital has been breaking record highs during the summer and looks set to continue

Posted by jamesjames @ 03:42 PM 4 Comments

Lost World

BBC: From boom town to ghost town

More than 13,500 apartments were built on this area of scrubland. But less than 3,000 have been sold. Drifting along the empty streets and deserted playgrounds the eerie silence is occasionally broken by the slow creaking of an unused swing.

Posted by peter_2008 @ 03:21 PM 7 Comments

To quote a response - "You really haven't got a clue, Anne."

Timesonline: Savills recovery predictions for the housing market

"By 2012, she suggests that prices in the South East and Scotland should once more be at their 2007 level, thanks to a shortage of homes and local purchasing power. " ........."supply and demand, supply and demand, supply and demand". It's a lot like Dorothy repeating 'There's no place like home, there's no place like home". Supply and demand is just some VI's mantra to help get them up in the morning and therefore total and utter fantasy. "Local purchasing power" must mean she sees a return to mega bonuses and ever decreasing LTV's and ever increasing income multiples. Where do they find these people?

Posted by bystander @ 03:17 PM 7 Comments

Lib Dems Call for housing market 'rescue'

BBC: Call for housing market 'rescue'

Key Quote - "Treasury spokesman Vince Cable said that changes were needed to stop the "downward spiral" of the market. " The scheme sound a little too complicated. It we much easier to give a small income tax cut to home owners.

Posted by luckyjim @ 01:15 PM 11 Comments

Inflation or deflation - which will it be?

MoneyWeek: Inflation or deflation - which will it be?

Whilst imported goods are getting more expensive, houses and financial assets are getting cheaper. And with everyone feeling risk-averse, weve got deflation ahead, writes Dominic Frisby.

Posted by damien @ 12:59 PM 6 Comments

The Man Who Wasn't There

The Renegade Economist: Brown's Bombsite Britain

We sat in the room off the Chancellors office. Brown was absent, and the session was convened by one of his trusted policy advisors. Shriti Vadera pointed to a vacant chair, which she said had to be left vacant out of respect for the man who promised to banish boom/busts.The irony was not lost on me.

Posted by neo-serf @ 12:31 PM 1 Comments

BTL'ers jump ship, but what about their tenants?

Mortgage Strategy: BTL repossessions increase by 100%

Buy-to-let repossessions have significantly increased compared to this time last year, making renters just as prone to repossession as homeowners.

Posted by whostolemyendowment @ 12:30 PM 3 Comments

Solid As A ****

Times Online: Northern Rock defaults leave taxpayers facing bill

Fears that taxpayers may end up footing an even bigger bill for Northern Rock intensified yesterday after it emerged that the nationalised bank was suffering dramatically high default rates.

Posted by renting2 @ 11:45 AM 5 Comments

America's housing market is sinking fast

FT: How to shore up Americas crumbling housing market

The current decline of house prices in the US is the natural result of the bubble that by 2006 had raised house prices to 60 per cent above their long-term trend. The sharp decline since then means that todays prices are about 15 per cent above the trend level. But while a further 15 per cent decline may be inevitable, there is nothing to stop prices declining even further. House prices that could overshoot by 60 per cent on the way up could also overshoot substantially on the way down. During the past 12 months, house prices across the states fell by an average of 16 per cent. The large overhang of unsold homes continues to create pressure for further price declines. The record level of defaults and foreclosures continues to add to the stock of unsold homes.

Posted by drewster @ 10:36 AM 7 Comments

"Ding dong! This is your wake-up call. The final piece in the jigsaw of gloom is about to drop into place!"

The Telegraph: Final pieces in jigsaw of doom drop into place

"Until this year, the missing pieces in the doomsayer's jigsaw were falling house prices and rising unemployment. No matter that consumers on modest incomes were piling up credit-card obligations, taking out mortgages on five, even six, times their annual salaries, and redefining "affordability" to mean servicing rather than repaying debt, as long as house prices defied gravity and jobs were not vanishing, nobody wanted to hear alarm bells" "In case you missed Monday's news ... allow me to pass on a report in The Financial Times: employment lawyers and legal helplines are experiencing a sharp rise in businesses seeking advice on how to sack staff"

Posted by jonathan @ 10:19 AM 0 Comments

Something Is Rotten in the State of Denmark

Telegraph: ECB slammed by Nobel economist as European slump deepens

Denmark suffered its own Northern Rock-style debacle on Monday when the central bank had to launch a rescue of Roskilde Bank after a run of withdrawals by depositors. The state is now guaranteeing $8bn (4.3bn) of debts. It is the biggest bank rescue in Scandinavia since the financial crisis of the early 1990s.

Posted by mountain goat @ 09:59 AM 5 Comments

Buy to Loose

Mail Online: Buy-to-let backfires as number of failures doubles in a year

Soaring numbers of buytolet landlords are struggling to pay their loans or having their properties repossessed, figures revealed yesterday. Between January and June, nearly 1,800 buy-to-let properties were repossessed - twice as many as the same period last year.

Posted by steve @ 09:52 AM 0 Comments

House price crash? Bring it on.....

OneStopView Property Blog: Has the Government got a rescue plan up its sleeve?

With all the economic figures going the way of a recession and a hard fall in house prices, do we really reckon that the government that has lead us all to this crisis has really got a rescue plan up it's sleeve?

Posted by eve @ 09:40 AM 0 Comments

Oh, pwned

BBC: Taylor Wimpey hit by massive loss

Housebuilder Taylor Wimpey has reported a huge loss for the past six months after having to write down the value of assets including land. The firm slumped to a loss of 1.54 billion in the six months to 30 June. The firm is cutting about 900 jobs in the UK as the squeeze on mortgage finance has severely reduced demand for new homes.

Posted by little professor @ 08:09 AM 14 Comments

UK's Debt league table

daily mail: Middle-class families struggling with the biggest debts in Britain

Middle-class families have the biggest debts in the country with many borrowers owing more than 50,000, a study reveals. Those living in wealthier areas such as London and the South-East have borrowed almost four times as much as those living in Scotland and parts of the North-West. It shows how those living in regions with the highest house prices have been allowed to run up the largest debts.

Posted by sold out @ 07:55 AM 3 Comments

Times headline based on figures below.

Times: Mortgage lending figures give some hope

A total of 22,448 loans for house purchase, rather than remortgaging, were approved by banks during July. Although this was still a drastic 65 per cent lower than levels a year earlier, it marked a small rise from the record low of 22,369 set in June, according to the British Bankers' Association.

Posted by gardeniadotnet @ 12:33 AM 17 Comments

The UK is catching up with the USA

Times: British mortgage approvals plunge by 65%

Fresh gloom descended on the housing market today as it emerged that fewer than 22,500 mortgages were approved last month, a 65 per cent decline on last year and only fractionally above record lows for June. It is thought that the annual, near two-thirds slide in approvals is among the biggest ever recorded by the British Bankers' Association. The figures, which also show an 11.9 per cent slide in the average loan value to 138,000, suggest that there is little relief in sight for embattled British homeowners. David Brooks, the BBA's statistics director, said: "It would be premature to think that the housing market will now start to recover, because overall approval activity continues to be very low."

Posted by drewster @ 12:07 AM 1 Comments

Tuesday, August 26, 2008

The rate decline isn't quite as sharp as before.....

Times: US house price fall steadies as confidence rises

AMERICA'S ECONOMIC PROSPECTS appeared to take a turn for the better today as new data showed that US house prices, the volume of home sales and consumer sentiment were holding up better than expected. Although house prices are still falling, the rate of decline in the second quarter was only about a third of the drop recorded in the previous three months, according to the S&P/Case Shiller national home price index. ------- Wow this really takes wishful thinking to a new level. This is just a breather before the next wave of price falls. The 2006 and 2007 vintage fixed-rate mortgages have yet to reset to the SVR; when that happens, price falls will accelerate again. The UK is still up to twelve months behind the US....

Posted by drewster @ 11:59 PM 7 Comments

Mish on UK White Elephants

Global Economic Analysis: More White Elephants

More on our glorious leaders

Posted by frizzers @ 11:25 PM 0 Comments

Japan individual traders who have made risky purchases of the Australian and New Zealand dollars may be getting closer to a point where they are forced to sell, potentially fuelling a further drop in those higher-yielding currencies. Analysts at JPMorgan

ninenews: Analysts warn Japan traders may dump Aussie and kiwi

The yen short position is still quite large," said Sasaki, who estimated that the traders' bets against the yen and favouring foreign currencies totalled about 5 trillion yen ($45.7 billion). "The risk is to the downside."

Posted by big chris @ 10:33 PM 0 Comments

the magic beans of banks...lol where is jack when you need him most..

CNN: Problem bank list keeps growing

More banks are in trouble than just three months ago according to the FDIC. In its quarterly review of the nation's banking industry, the Federal Deposit Insurance Corp. reported Tuesday that the number of firms on its so-called "problem bank" list grew to 117 during the second quarter - its highest level since the middle of 2003. There were 90 banks on the problem list in the first quarter of this year.

Posted by mark @ 09:19 PM 0 Comments

Views of the Eiffel Tower from the balcony...

Bloomberg: French Unsold New Homes Reach a Record as Economy Contracts

"France's stock of new, unsold homes reached a record in the second quarter, when the euro region's second-largest economy shrank. The difference between the number of new homes put on the market and those purchased reached 110,500 in the three months through June, the Environment Ministry said in an e-mailed statement sent late yesterday. Sales dropped 34 percent in the quarter from a year earlier, it said".

Posted by alan @ 08:40 PM 3 Comments

the Fed hinted its likely next move may be to raise rates.

CNN: Fed worried about inflation and slowdown

The Federal Reserve expressed concern about both greater inflation risks and a slowdown in the economy that could extend into next year, according to minutes of its most recent meeting.

Posted by mark @ 07:26 PM 5 Comments

No real shock here

Yorkshire Evening Post: Shock rise in cases of mortgage fraud

"We're now finding that high levels of mortgage fraud has occurred across both the residential and commercial sectors." Surely not.

Posted by yorkshireman @ 07:23 PM 0 Comments

How long before unlet speculative commercial new-builds are demolished?

BBC: Buildings 'razed to avoid taxes'

The BBC reports that more commercial properties are succumbing to the bulldozers as landowners attempt to minimise their losses as the dearth of commercial renters deepens.

Posted by enuii @ 07:14 PM 3 Comments

BBC chronicles housing bust in Northern California

Credit Writedowns: The Housing Bubble and Bailout

The BBC released some great background on the US housing bust in Northern California. Two 20-minute audios of BBC reporter Michael Robinson give a very good on-the-ground feel for what is happening in the housing market in the US right now. Will Britain suffer similar damage? The falls may be as extreme, but do t lack of overbuilding I imagine Britain should escape the blight of massive enclaves of foreclosed housing subdivisions that dot the US landscape. Very sobering account.

Posted by edwardnh @ 06:29 PM 0 Comments

Back to the 70s

The Independent: Economy 'as bad as the Seventies'

The new Deputy Governor of the Bank of England warned that the financial situation was at least as bad as that of the 1970s. Charles Bean said that the slowdown may "drag on for some considerable time" and that social problems could be caused by the squeeze on household incomes. Vince Cable, the Liberal Democrat Treasury spokesman, said that the economy was in "free fall". A survey published by the price comparison website uSwitch warned that disposable incomes had fallen in cash terms for the first time since 1997, dropping by 15 per cent since last year to an average of 14,520.

Posted by dohousescrashinthewoods @ 05:52 PM 4 Comments

Is the buy 2 letter the filofax of the noughties?

Citywire: Is Buy to Let Ethical?

When we look back nostalgically in years to come, what will be the thing that best symbolises the decade of New Labour boom and bust?

Posted by a peroni @ 04:58 PM 0 Comments

Where house prices will go next - set to music!

Alice Cook's UKBubble Blog: A Short History of UK House Prices

Alice Cook gives historic graphs and comment on how three UK house price bubbles have exploded, the reasons for them, and why the current bubble is much, much worse.

Posted by brian in canterbury @ 04:56 PM 2 Comments

US Homes down 15.4% in the April to June quarter

BBC News Website: US house prices 'see record fall'

It seems to be absolute melt down in the US housing market. The good thing is that the market there is adjusting rapidly and ultimately with cheap homes and consequently smaller and cheaper mortgages I can see the US recovering. Without the inflated prices, people will again be able to afford to live. I am not sure what is going to happen in the UK though, somehow I feel we will be in for more of a Japanese experience

Posted by mikelivingstone @ 04:26 PM 0 Comments

The Writing on the Wall?

Bloomberg: Merrill, Wachovia Hit With Record Refinancing Bill (Update1)

My prediction from last week following the IMF's statement about a major investment house and bank going bust is looking good. Some great quotes too: "Banks, securities firms and lenders have a record $871 billion of bonds maturing through 2009, according to JPMorgan Chase & Co". "The gears of capitalism are grinding to a halt", "The credit crunch is only now beginning because bank capital is so constricted by losses to date, that they will have to begin shutting off credit to households and corporations and that's when we get the defaults", "Lending long and borrowing short is the classic mistake that led to all the big bank failures in the past"

Posted by layers @ 03:40 PM 0 Comments

Or will they slash house prices in high crime areas?

bbc: Will crime maps work?

Last month the Home Office announced that everyone in England and Wales will have access to crime maps of their local area by the end of this year. But will they help cut crime, or could they have unforeseen consequences?

Posted by mark @ 03:26 PM 10 Comments

Monthly data for July show that the broad money growth has almost collapsed

TheSmirkingChimp Economic Policy: CRUNCH TIME: Set the crash-alert flags at half-mast

Sharp contractions in the money supply and recession are two spokes on the same wheel. When the money supply shrinks, there's less economic activity, and the economy slows; it's as simple as that. An article in this week's UK Telegraph by Ambrose Evans-Pritchard shows that the country is sliding inexorably into the jaws of a deep recession. The persistent credit-drain from rising foreclosures and deleveraging financial institutions is shrinking the money supply. Now it's visible in the data. Bernanke's low interest rates haven't stopped the hemorrhaging The whole "stimulus" plan backfired. Americans did the responsible thing and used the money to pay off debts or stash it in savings instead of than wasting it Walmart or Target on more useless knick-knacks.

Posted by malct @ 03:24 PM 2 Comments

Couple raffle off their Devon Estate for 25 per ticket

BBC News: Devon estate for sale in raffle

A couple from Devon are hoping to beat the property slump by raffling off their home. Brian and Wendy Wilshaw are selling the tickets for 25, but the winner could become the new owner of a 1m estate.

Posted by soundman74 @ 01:41 PM 47 Comments

Why Borrow When You Know The Value Of Property Is Crashing????

yahoo: More lenders slash rates

The survey found that 45% were finding food and utility prices the biggest pain of the credit crunch, followed by 27% who felt petrol prices had hit them the hardest. In contrast, just 11% felt payment shock on mortgage payments was the biggest consequence of the economic downturn.

Posted by mark @ 01:23 PM 3 Comments

A quadrillion US dollars? Surely only Zimbabwe has that many dollars

MoneyWeek: Diversionary tactics or simple coincidence?

Bit of a rambling article but then suddenly in para 9 they come up with "these indications of personal pain to come merely scratch the surface of what is now estimated (by whom and how they don't say) to be a $1 quadrillion dollar magma chamber which is steadily rising to the surface". That's ten to the power of fifteen, a thousand trillion, a million billion. Shurely shome mishtake?

Posted by icarus @ 01:02 PM 0 Comments

Censorship 2008 style

Market Oracle: Market Oracle unavailable following a sustained hacking attack

Not a post as such but thought this was interesting since lots of people read this site. "The Market Oracle website is temporarily unavailable following a sustained hacking attack on the 23rd and 24th of August 2008, which follows a series of articles on the Russia / Georgia Conflict - We hope to resume a normal service as soon as possible."

Posted by mountain goat @ 12:09 PM 4 Comments

this is starting to smell a little fishy now... what is the real truth?

cnn: Fannie and Freddie woes spread

The sharp decline in the value of preferred shares of the troubled mortgage finance firms could lead to billions of dollars more in bank writedowns.

Posted by mark @ 11:42 AM 1 Comments

Why Spains banking sector could be facing a death blow

MoneyWeek: Why Spains banking sector could be facing a death blow

The ECB is about to stop bailing out eurozone commercial banks, which could mean another big lender going bust. And with Spanish banks in hock to the ECB to the tune of almost 50bn, it could well be one of them.

Posted by damien @ 11:26 AM 4 Comments

Olympic spirit lives on! But for how long?

Telegraph: Beijing swells dollar reserves through stealth

China has resorted to stealth intervention in the currency markets to amass US dollars, using indirect means to hold down the yuan and ease the pain for its struggling exporters as the global slowdown engulfs the economy. Kinda thought that the $ bounce looked unnatural.

Posted by harold @ 10:21 AM 0 Comments

Some good stats in this one.

MSN Money: How did we get into this debt black hole and how do we get out?

The British people now owe more money than our entire country generates in a year. Accountants Grant Thornton report that, at the end of June, consumers owed a total of 1.444 trillion through mortgages, loans and credit cards.

Posted by inbreda @ 09:55 AM 20 Comments

The news is a further blow for borrowers struggling to find the extra cash to meet the rising cost of living

Telegraph: Borrowers must apply 'four times' to get mortgage, survey says

A few days old but at least it's on topic, I think. By Myra Butterworth, Personal Finance Correspondent Last Updated: 11:02pm BST 20/08/2008 Nearly half a million mortgage or loan customers are having to apply more than four times in order to successfully secure credit, a survey shows today. While just over 400,000 could not get a mortgage or loan despite repeated attempts, according to GE Money Home Lending. The findings follow hard on warnings from the Bank of England and the Council of Mortgage Lenders that homeowners may find it even more difficult to get a mortgage in the coming months. The survey said that with lenders tightening their lending criteria in the face of the credit crunch, previously credit worthy people being classed as a higher credit risk.

Posted by malct @ 09:50 AM 0 Comments

As the US housing market continues to collapse, trillions of dollars in equity and credit are disappearing in a deflationary bonfire.

SOTT various: Signs Economic Commentary for 25 August 2008

As the US housing market continues to collapse, trillions of dollars in equity and credit are disappearing in a deflationary bonfire. When a $400,000 home--with no down payment and negative equity--goes into foreclosure; $400,000 vanishes from the digital-pool of credit and has to be written down as a loss. So far, much of the losses have not yet been accounted for because the banks are using their own internal models for determining the value of their downgraded assets. Two weeks ago, Merrill Lynch sold $30 billion of mortgage-backed junk for 20 cents on the dollar. But they also financed the deal, which means that they really only got 5 cents on the dollar! This reflects the true "market value" of these assets. They are virtually worthless.

Posted by malct @ 08:43 AM 4 Comments

Still making money, though

BBC: Bovis profits fall 83%

Profits at house builder Bovis Homes have plunged 84% in the first six months of the year, as the squeeze on mortgages hurt the property market. Bovis, which is cutting 400 jobs, said it had experienced its toughest trading since it became a public company. Profits fell from 58.4m to 9.5m Last week Persimmon announced profits were down 87%.

Posted by little professor @ 08:10 AM 2 Comments

The Professionals Are Hit Too.

CBI: PRESSURE ON PROFITABILITY SPREADS TO BUSINESS SERVICES - CBI SURVEY

Steep falls in service-sector profitability, which were mainly affecting consumer services, have spread to business and professional services, the latest CBI Services Sector survey shows.

Posted by renting2 @ 07:33 AM 0 Comments

Slowly Americans starting to save, turning around a 20 year trend

Seeking Alpha: The Great Consumer Crash of 2009

A long comprehensive article on the debt situation of the average american. More debt onto credit cards now that home equity withdrawal has dried up. I expect the UK to be looking like this very soon. "According to the Federal Reserve, 40% of American families spend more than they earn. The reversal of this trend will be necessary but traumatic. It has already begun, with the savings rate increasing to 2.6% in early 2008. David Rosenberg, the brilliant economist from Merrill Lynch, describes what has happened and what is to come: "This is an epic event; we're talking about the end of a 20-year secular credit expansion that went absolutely parabolic from 2001-2007. Before the US economy can truly begin to expand again, the savings rate must rise to pre-bubble levels of 8pc."

Posted by mountain goat @ 12:53 AM 4 Comments

Monday, August 25, 2008

Are UK corporations paying enough taxes?

Credit Writedowns: Are US corporations feeding at the trough of low taxes?

A lot of UK companies have been whingeing about taxes and some have picked up and left. Are they paying too much? Apparently the UK ranks 11th amongst advanced economies in tax rates. Ireland is way down near the bottom due to its 12.5% corporate tax rate.

Posted by edwardnh @ 10:53 PM 0 Comments

Shapeupmom says run your family like a business

Dallas News: Use business techniques to keep your home on track

There's no escape from American management principles, not even in the home if 'life coaches' have anything to do with it. Shapeupmom should have stopped breeding and saved us from this onslaught, we don't want the American Dream we just want a life and retirement free of debt!

Posted by enuii @ 10:10 PM 2 Comments

Who is responsible for the current crisis?

Channel 4: How The Banks Never Lose

Channel 4 Dispatch. Kind of ironic it is the same channel does Location Location Location.

Posted by peter_2008 @ 09:09 PM 12 Comments

Bank of England deputy turns Bear now the Summer Holidays are over

Times: Bank Deputy Charles Bean warns on impact of slowdown

OMG, The Holidays are now over and Charles Bean warns that Britain is facing a bout of social trauma as millions of overstretched families are hit by the financial fallout from another year of economic pain. Charley then highlights the danger of stress and social upheavals facing many families as the still deepening economic downturn worsens financial strains. "It's going to be a tricky period. Household real income is very low. That will make it difficult for households and there are difficult social issues that will arise". Now whose fault is that then!

Posted by enuii @ 05:40 PM 5 Comments

Reality is hitting home in the USA, how long before it hits home in the UK

CNN: U.S. view of economy is getting worse

Americans' opinions on the health of the economy have worsened significantly over the last year, according to the results of a CNN poll released Monday. Seventy-five percent of participants in a national CNN/Opinion Research Corp. poll believe the U.S. economy is in bad shape, compared to just 43% of respondents who shared that view a year ago.

Posted by mark @ 02:57 PM 1 Comments

U.S. dollar rallies as Europe, Asia fade

reuters: U.S. dollar rallies as Europe, Asia fade

The U.S. dollar is enjoying its strongest rally in three years largely because of bad news abroad rather than good news at home.

Posted by mark @ 02:52 PM 2 Comments

Estate Agent Jargon Busted

fool: Don't Be Swayed By Estate Agent Jargon

So, if youre currently trying to work out what estate agents say and what they actually mean, an A to Z of popular terms and their true meanings are below:

Posted by peter_2008 @ 11:37 AM 1 Comments

Paragoing......

FT: TPG drops move for Paragon

TPG Capital, the US private equity group, has dropped out of the bid process for Paragon, the troubled buy-to-let lender, just weeks after it pulled out of a 179m rescue of Bradford & Bingley, the UK's biggest lender to property landlords.

Posted by whostolemyendowment @ 10:04 AM 3 Comments

Another humorous financial article from the Express

Daily Express: Homebuyers shouldn't wait for Darling

Coming on the heels of "House Prices Set to Soar in next 3 Years", the Express has followed up with a plea to prospective FTBs. Buy Now..............pleeeeease. Why? because, wait for it...............The housing market will get worse if people start holding off buying a property" Perhaps the VIs are hoping to capitalise on the patriotic fervour generated by the Olympics by portraying tumescent house prices as a barometer of national virility. So we're all supposed to rush out to our local Estate Agent in a heroic attempt to save the housing market. Nice try, but no gold medal.

Posted by ingermany @ 08:54 AM 5 Comments

The International Monetary Fund has estimated that financial institutions will suffer a total $945 billion in credit losses.

MarketWatch: Financial crisis enters new, uncertain stage

JACKSON HOLE, Wyo. (MarketWatch) -- The financial crisis has entered a new phase and will likely bring total credit losses above $1 trillion, according to a leading academic who has been studying the turmoil since its beginning a year ago. Princeton University economics professor Hyun Song Shin says the subprime mortgage crisis has already cost financial institutions roughly $500 billion. Now, however, the problem has spread to the real economy, and losses on credit cards, consumer and business debt should match or exceed those from subprime mortgages and the like, he said.

Posted by malct @ 07:59 AM 8 Comments

Sunday, August 24, 2008

Draw Your Own Conclusions

FT: ... costs soar

The crisis is deepening because people are very worried about the health of some financial institutions. Will more fail? The fact is if you mark to market some of the illiquid assets the banks hold at prices they could sell them in todays climate, it could make many of them insolvent.

Posted by gardeniadotnet @ 11:18 PM 2 Comments

Bring it on!

Times: NM Rothschild called in to save estate agent Foxtons

"THE private-equity owner of estate agent Foxtons has appointed the investment bank NM Rothschild to review the business just one year after buying the company. Best known for its branded Minis and aggressive sales tactics, Foxtons was bought by the private-equity group BC Partners for 390m in May 2007 at the height of the buyout boom".

Posted by alan @ 08:25 PM 11 Comments

Glasgow's riverbank projects in limbo

times: Credit crunch makes Clydeside work flow dry up

A string of regeneration projects on Glasgow's riverbank have been put on hold

Posted by mken @ 02:59 PM 0 Comments

Lehman has more than $60 billion of mortgage assets that investors fear will be written down

NewsDaily Reuters: S. Korea's KDB says buying Lehman a possibility

By Kim Yeon-heePosted 2008/08/22 at 1:25 pm EDT SEOUL, Aug. 22, 2008 (Reuters) State-run Korea Development Bank said on Friday that Lehman Brothers Holdings Inc is one of its options for acquisitions, as the struggling U.S. investment bank considers securing much-needed capital from investors. The Financial Times reported on Thursday that Lehman sought to sell up to a 50 percent stake to either KDB or China's biggest brokerage, CITIC Securities Co Ltd . The two Asian companies walked away in the first week of August after deciding the asking price was too high, the newspaper reported.

Posted by malct @ 10:31 AM 2 Comments

Housing market may not recover for a decade.

observer: Savills to cull jobs as house deals slump

The dire state of the British housing market will be underlined this week when Savills, the upmarket estate agency chain, reveals that it is axing scores of jobs as deals dry up and selling prices tumble.

Posted by mken @ 09:13 AM 11 Comments

RIP Foxtons

Times: NM Rothschild called in to save Foxtons

Rearrange some Titantic deckchairs?

Posted by cha55a @ 09:12 AM 0 Comments

VIs attempt to defend and redefine BTL

observer: Has Britain's buy-to-let market been rent asunder?

During the property boom it was seen as a sure-fire way to make a profit, but landlords are now on a downward spiral and nobody is sure when the yields will return. VIs talking-up e.g. Fionnuala Earley, still "chief economist" at Nationwide: 'A typical purchaser in 2006, even with the payments shock [of higher mortgage rates] will still have good enough rental cover because of the rise in rents. If there are strong rises in rents to come, why would they sell out?'

Posted by mken @ 09:08 AM 2 Comments

How many similarities to the housing market in the United Kingdom?

IMF: The Rise and Fall of Albania's Pyramid Schemes

Fascinating Article. The pyramid scheme phenomenon in Albania is important because its scale relative to the size of the economy was unprecedented, and because the political and social consequences of the collapse of the pyramid schemes were profound. At their peak, the nominal value of the pyramid schemes' liabilities amounted to almost half of the country's GDP.

Posted by stevie dee @ 07:53 AM 0 Comments

Times journalist comes out as a BTLer - who would've thunk it?

Times: A landlord's tale of woe

It all seemed so easy. I decided to let out my two-bedroom flat in Edinburgh when two years ago, when I moved to London. I enlisted the help of a letting agent the one who said it could achieve the highest rental income. I was sanguine: this could put me on the road to riches. Since then, the rent has increased by a meagre 25 per month to 775, from which the agent takes a meaty 15% cut. That is unlikely to improve anytime soon. Supply has surged, as a vast number of sellers decide to let their property instead. Costs have mounted. Maintenance, repairs and factoring fees have set me back something approaching 5,000 in the past two years. Simply breaking even each month is a fortunate occurrence. House prices are plummeting at their fastest rate since the 1990s.

Posted by little professor @ 12:46 AM 7 Comments

Saturday, August 23, 2008

Jim Rogers tells it like it is

Seeking Alpha: Interview with Jim Rogers, Part I: Bigger Financial Shocks Loom

USA in decline, but it still will take some time.- "The U.K. situation I just explainedthat decline was over 40 or 50 years, but they had so much money they could have continued to spiral downward for a long time." "Is there a specific signal that this is over? (for the USA) - Surewhen our entire U.S. cabinet has Swiss bank accounts. Linked inside bank accounts. When that happens, well know were getting close because theyll do it even after its illegal after Americas put in the exchange controls."

Posted by mountain goat @ 10:10 PM 2 Comments

Mr & Mrs Average will never have it as good again

Times: Recession: boom years are over as economy slows to halt

Article contains some interesting snippets like 'In a symptom of how people are struggling to make ends meet, it has emerged that Asda is now regularly seeing a sharp fall in sales in the third week of the month as people run out of cash before pay day.'

Posted by enuii @ 09:12 PM 4 Comments

UK mortgage crunch - How did things get so out of hand?

Credit Writedowns: Random Musing: 23 Aug 2008 - UK mortgage crunch

8 times salary, over 100% LTV, forget your bad credit score: those were the boom times. how did we get there? What's your opinion?

Posted by edwardnh @ 04:57 PM 0 Comments

Beatrix Potter - Writes about the Credit Crunch.

creditcrunch: Beatrix Potter - Writes about the Credit Crunch.

Did you know the credit crunch phenomena is as old as the hills? Here is an extract from a story written by Beatrix Potter around the time of the last great depression. " Ginger and Pickles gave unlimited credit. Now the meaning of "credit" is this--when a customer buys a bar of soap, instead of the customer pulling out a purse and paying for it--she says she will pay another time. And Pickles makes a low bow and says, "With pleasure, madam," and it is written down in a book. The customers come again and again, and buy quantities, in spite of being afraid of Ginger and Pickles. But there is no money in what is called the "till." "

Posted by waittobuyer @ 04:46 PM 0 Comments

Some bear food from Reuters

Reuters: Banks face double property crash

Commercial property developers and house buyers both drank deeply at the well when loans were being made freely in past years, using increasing amounts of leverage despite the fact that the income the asset could generate was often not enough to cover the payments. Both markets have now come unstuck spectacularly. British house prices are down about 11 percent from the peak and derivatives markets are pricing in another 20 percent fall from here.

Posted by quiet guy @ 03:53 PM 1 Comments

Never before have there been so many squalid, dilapidated homes on the market - and they're helping to exaggerate already-plummeting home prices.

CNN: These homes for sale suck

Mold, maggots and piles of festering trash - no wonder home prices are in freefall.

Posted by mark @ 12:46 PM 3 Comments

The increasing madness of Prime Minister Gordon Brown

Daily Telegraph: Gordon Brown's optimism startles experts

Gordon Brown's optimism startles experts Gordon Brown's private belief that the British economy is almost out of the woods has surprised the Treasury and the Bank of England who are growing increasingly pessimistic about the country's prospects.

Posted by interested party @ 09:37 AM 20 Comments

Landlords complain about being taxed, and react irrationally

FT: Concern grows over 'bombsite Britain' tax

British cities are beginning to look like broken teeth, with hundreds of buildings being razed as the result of a damaging tax on empty property, a government regeneration chief said on Friday. The levy on empty shops, offices and warehouses introduced in April this year has been dubbed by private and public sector opponents the bombsite Britain tax. Aimed at landlords who left buildings deliberately empty as they waited for rents to rise, it intended to reduce rents, raise property supply and earn the Treasury almost 1bn in tax. But opponents say it is leading to properties being demolished across Britain, with Swindon Council, for example, saying it will crush a factory on a 14-acre site at North Star Avenue in the town to avoid paying 110,000 in tax. The demolition costs 430,000.

Posted by drewster @ 02:39 AM 16 Comments

Housing becomes a big issue in the US presidential campaigns

Times: Video: The Obama-McCain war of the houses

In a recent interview, John McCain couldn't remember how many houses he owns. The answer is seven. The Obama campaign wasted no time in pouncing on this, releasing the following video ads within hours....

Posted by drewster @ 02:22 AM 3 Comments

"There is a strong case for letting market forces do their damnedest."

Times: Gordon Brown needs to do a U-turn on Sipps

HBOSs decision to shut a quarter of its estate agency branches speaks volumes about the housing market. Transactions are rare, lenders are cautious, prices are falling and theres no sign of respite any time soon. Gordon Brown faces pressure from some quarters to do something about it and his advisers have hinted at a package of measures once he gets back from Beijing. Whether he should intervene in the housing market, however, is a moot point. There is a strong case for letting market forces do their damnedest. At some stage, prices will fall far enough to flush out buyers and financiers and create a new equilibrium. The Governments supposed goal of affordable housing is getting closer with every passing month.

Posted by drewster @ 02:02 AM 23 Comments

Buffett declares the mortgage giants dead

Telegraph: Fannie Mae and Freddie Mac game over

Billionaire investor Warren Buffett declared that the "game is over" for Fannie Mae and Freddie Mac, as shares in the American mortgage finance houses came under renewed pressure. Mr Buffett, the celebrated "Sage of Omaha," believes that shareholders in the two mortgage companies look set to be wiped out as the pair attempt to raise more capital. "They're looking for help, obviously. And the scale of help is such that I don't think it can come from the private sector," he said during an interview on business television channel CNBC. He went on to claim that the pair "don't have any net worth" and told market-watchers to expect some form of government action soon. A few insurers holding equity in US mortgage giants could also see big losses if the Government takes over Freddie & Fannie.

Posted by drewster @ 01:54 AM 1 Comments

Friday, August 22, 2008

Recession = rapid house price fall

BBC News: UK economy comes to a standstill

The Office for National Statistics said the economy stalled, showing no growth from the first quarter of 2008. It ends a run of more than 15 years of consecutive growth in the UK. "For years Gordon Brown boasted about consecutive quarters of economic growth," Shadow Chancellor George Osborne said. "Now economic growth has ground to a halt and Brown's bubble has burst."

Posted by mytimeisnigh @ 11:14 PM 1 Comments

Webcast about American banks' vulnerability to failure (very end-user orientated)

moneyandmarkets.com: The Great American Nightmare

The webcast starts off with a list of US based banks (large & small/owned by foreign banks or US domestic) that are likelier to fail than peers. The emphasis is on probability of failure rather than on forecast failure (which I felt was quite balanced). They then move on to discussing various deposit/investment safety aspects for bank depositors as well as shareholders (again, quite a balanced view to take). If you have an hours' time to listen/view this audio and if you are interested in the current banking crisis this will provide you with a good half hour's infotainment. I get the feeling this was somewhat sponsored by thestreet.com because their safety ratings was used and the presenters made quite a few reference to this website.

Posted by trough2010 @ 09:20 PM 0 Comments

Ulster Bank desperate to lure first time buyers

Ulster Banking Group: Ulster Bank and leading NI property developers open doors for first time buyers

"A new initiative will allow first time homebuyers access to the local housing market without the need to fund a deposit, and including added protection against house price volatility. The scheme which is being rolled out in conjunction with a number of leading residential property developers from across Northern Ireland will be available to first time buyers from early September. A key feature of the new mortgage product includes a five per cent deposit on the property contributed by the developer, repayable by the buyer only in the event of the property price rising by 5% or more after 5 years. The buyer will also be safeguarded up to an additional 10% against any fall in property value over that 5 year period." Spot any problems?

Posted by quiet guy @ 08:39 PM 5 Comments

Kurtis and Cindy Squyres, Fa

FOX Business: House Flippers

7 minute video "Kurtis and Cindy Squyres, Farbelowmarket.com, discuss how they make money from buying repo homes and flip them to investors." - Bottom fishing in a crashed Californian housing market.

Posted by mountain goat @ 07:59 PM 2 Comments

Bank gives up on estate agents

guardian.co.uk: HBOS shuts 53 Halifax estate agency branches

HBOS today took a knife to its Halifax estate agency chain, cutting 53 branches and at least 100 jobs. The bank, which saw its profits plunge by 70% in the first half of this year, will also relocate around 450 staff affected by the move to other posts. Analysts said the cuts would be the first of many after a year in which Halifax has become one of the British banks worst affected by the credit crunch. Chief executive Andy Hornby has already said he is considering "selective asset disposals" after he predicted a gloomy outlook for the next 18 months, when he expects house prices to fall by 18%.

Posted by plato @ 06:47 PM 1 Comments

US inflation just won't go away

BBC 'News': Bernanke warning on US inflation

Despite the the Fed talking about 'downside risks' and deflation, inflation still seems to carry on going up in the US despite their recession. Sound familiar?

Posted by paul @ 05:35 PM 1 Comments

"Frustrated landlords can't get funding - they want to keep buying but are hindered by the dwindling buy-to-let lending market"

moneymarketing: Landlords, landlords everywhere, but not a mortgage in sight

This week the Royal Institute of Chartered Surveyors revealed there has been a record rise in the number of properties available for rent. Some 43 per cent of surveyors polled by RICS reported a rise in new landlords - a 10-year high. RICS attributed this statistic to the fact that more people are unable, or unwilling to sell their properties right now, choosing instead to let. Many new landlords are taking a wait and see approach, preferring to hold on to their assets rather than selling for a potential loss.The study also found rents continued to rise while house prices fell, pushing yields up. Basically RICS reported perfect landlord conditions up and down the country.

Posted by jack c @ 04:26 PM 11 Comments

Wonder why she has been quite

Mail: Celebration, Celebration, Celebration! Kirstie Allsopp welcomes new baby boy

TV property queen Kirstie Allsopp is welcoming the latest arrival to her family - a 9lb 3oz son. The new baby, born yesterday by caesarean section at St John's & St Elizabeth's Hospital in St John's Wood, joins Kirstie's first child, two-year-old Bay. 9lb 3oz? That's huge!!

Posted by peter_2008 @ 04:15 PM 9 Comments

when will the rest shut...lol

yahoo: Quarter of Halifax estate agents to shut

The gloomy housing market has forced the Halifax to close 53 of its estate agency branches, the bank confirmed Friday.

Posted by mark @ 02:16 PM 5 Comments

Social Time-Bomb

MSN Money: No Summer Lovin' as Divorce Rate Soars

This summer Britain's divorce rate increased 150 per cent from last year and experts are blaming the surge on the credit crunch and the annual family summer holiday. This has been discussed previously on this site as part of the potential fall-out. But the social implications for the future with so many broken homes may be huge and far reaching.

Posted by renting2 @ 02:09 PM 15 Comments

Recession recession recession recession recession

yahoo: Sterling slumps as UK recession fears bite

this is what we have all been predicting on housepricecrash.......

Posted by mark @ 01:52 PM 1 Comments

Good Bye to Bad Rubbish

BBC News: Halifax to close 53 estate agents

The Halifax has said it is to close 53 of its estate agency branches in a move that will lead to the loss of 100 jobs.

Posted by mr cobblepot @ 12:56 PM 0 Comments

Second only to London, But not in a Good Way.

Salisbury Journal: Financial Crisis Hits Home

SALISBURY residents are struggling amid mounting debts and rising numbers of repossessions. The city has topped two national tables - for the highest level of personal debt outside the capital, and the biggest increase in actions launched to repossess homes.

Posted by renting2 @ 12:01 PM 0 Comments

Two Decades Worth Of Bad News For House Prices

BBC News: Children outnumbered by over-60s

Take the figures quoted in this article and the back of an envelope and a 35% reduction in house prices seems a very conservative estimate and the chances of a recovery beginning in 2012 is pretty remote. In fact the property market is likely to remain dire as the 'grey bulgle' works its way out of the system.

Posted by peter kruger @ 11:03 AM 9 Comments

One for all the gold bugs here...

FT Alphaville: The American Eagle flies Away

Of note, but maybe not of great significance, the US Mint stopped selling American Eagle gold coins yesterday due to high demand.

Posted by james @ 10:25 AM 41 Comments

Brilliant programme: Thousands of empty houses exposed

BBC3: Cheap Homes for Sale ?

Well worth a watch. I especially like the bit where he phones the association of EAs to ask about qualifications. As usual, we can trace the source of another UK disaster back the Maggie. "Documentary in which newly-married presenter Alex Riley finds out what it takes to climb on to the property ladder. Alex has a dream of buying a home for himself, his wife and possible future children, but as he embarks on a jaw-dropping journey he discovers nearly a million properties lying empty and soon realises that Britain's property ladder is more than just broken."

Posted by doomwatch @ 10:14 AM 19 Comments

Another Straw for the Camel's Back

Times Online: E.ON and Scottish & Southern rise power prices by 30%

"More than ten million British households were dealt a fresh blow to their finances yesterday as E.ON and Scottish and Southern Energy (SSE) became the latest power companies to raise gas and electricity bills by as much as 29 per cent." How much of this will appear on credit card balances?

Posted by renting2 @ 09:56 AM 1 Comments

China and Korea to Lehmans

Yahoo: FT: Lehmans secret talks fail to offload 50% stake 20-Aug-08 06:37 pm

Lehman Brothers, the beleaguered US investment bank, held secret talks to sell up to 50 per cent of its shares to South Korean or Chinese parties in the first week of August but failed to reach agreement with either.

Posted by magnaman @ 09:48 AM 0 Comments

The supertanker is turning

BBC: UK economy comes to a standstill

UK economic growth ground to a halt between April and June, according to the latest official data

Posted by holding out @ 09:42 AM 10 Comments

Mortgages are back to 2007 levels .... so where are the BUYERS?

BBC News: Mortgage rates 'at 2007 levels'

Mortgage rates are back to where they were in August 2007 at the onset of the credit crunch, according to research by price comparison website Moneyfacts. Seeing how things are back to normal .... why isn't everybody running out to buy one of the many "property bargains"? Roll up ..... small pokey flat (executive suite) for ONLY 275,000 .... last few remaining :-)

Posted by battle of the bulge @ 09:35 AM 7 Comments

Vince hits the nail on the head

The Independent: Retailers cry foul as economists question official data

Renewed doubts about the quality of official data surfaced yesterday as the Government postponed publication of figures on the housing market. A spokesman for HM Revenue & Customs (HMRC), responsible for the property market data, explained that statisticians and economists at HMRC thought that "something didn't sit right" in the data when they compared them with previous months' results, hence the decision to withhold the information. The Liberal Democrats' Treasury spokesman, Vince Cable, said: "It seems strange that when figures are bad, they are also often late. If we are to have any confidence in government figures, we must know that they are fully independent. Late or inaccurate statistics only go to further undermine this Government's credibility."

Posted by should_of_banked_it @ 08:41 AM 6 Comments

Another great headline, alliteration fans!

BusinessWeek: The Final Fate of Fannie and Freddie

Fannie and Freddie make up about half of the U.S. mortgage market, and with them on the ropes, there's little chance for a housing recovery. Without a housing recovery, the credit markets will continue to be jammed up. And things promise to get worse before they get better. Fannie and Freddie have about $250 billion in debt to refinance in September, and everyone will be watching to see if they're successful. As long as their futures are uncertain, much of the credit market will remain in the doldrums. "They're the pivot point of the whole credit market," says Samson Capital Advisors' Benjamin Thompson.

Posted by gardeniadotnet @ 07:41 AM 0 Comments

Australia's foreign debt has ballooned since the 1980s, topping more than A$600 billion. Our current account deficit continues to exceed the "Banana Republic" levels experienced during the Hawke-Keating era.

candobetter: Immigration and Australia's current account deficit

By the early 1990s, Australia - with a population of only 17 million - had accumulated a foreign debt of over A$140 billion, equal to 40 percent of GDP and exceeding other major 'debtor' countries such as the former Soviet Union. A key cause of this debt 'blowout' was the high and unsustainable levels of immigration during the late 1980s.

Posted by big chris @ 07:26 AM 2 Comments

Half the world economy, including the UK, is in recession or on the brink, according to research from Goldman Sachs.

telegraph: Recession fear for half the globe, says Goldman Sachs

t also raised fears that the slump could have a profound knock-on effect for China, whose thirst for raw materials and consumer products has been propping up many economies.

Posted by big chris @ 04:03 AM 0 Comments

Still debt junkies ... and it's getting worse not better

Yahoo: Personal Debt exceeds Britain's GDP (again)

Stephen Gifford, Grant Thornton's chief economist, said: "[..]there is no cause for panic as personal debt is well covered by the UK housing stock'. Great, so nothing to worry about there then.

Posted by montesquieu @ 03:23 AM 7 Comments

The ECB has to stop propping up banks

Credit Writedowns: The ECB has to stop propping up banks

This is not good for weaker global players like RBS or HBOS in particular. It also could affect Barclays. This is more of a Eurozone problem but it is a bad omen regarding liquidity for all European banks. Is the ECB actually going to let banks fail?

Posted by edwardnh @ 02:32 AM 1 Comments

Falling house prices mean that lots of them prefer letting to selling

Times: Why everyone wants to be a landlord

[Note: same RICS figures as Monday, this time with an upbeat spin by the relentless optimists of the Times' Property section. All is happy in BTL land if you believe these guys!] As house prices fall and the mortgage drought prevents people from buying, frustrated homeowners are choosing to let their properties rather than sell them at a discount, and are renting other homes elsewhere. Michael has played the buy-to-let market very well. He bought his first property four years ago, he now owns 21 buy-to-let properties and is in the process of buying three more. Stephanie, pictured, entered the buy-to-let market six years ago. She is not looking to expand her portfolio, however. I'm happy with the three I have got, she says.

Posted by drewster @ 12:50 AM 4 Comments

Official government figures losing all credibility

Guardian: Retail spending rises. It's unbelievable, say experts

Retail experts reacted with incredulity yesterday to shopping sales figures that showed a rise in spending, despite all other evidence pointing to a downturn for the sector amid a squeeze on household budgets. Although official government figures showed yesterday that retail sales were up 0.8% last month, the numbers were greeted with scepticism by the British Retail Consortium, the main trade body for shops and stores in the UK. It said that the report did not "seem to reflect the current retail reality" and that "few retailers will recognise this positive picture". It's hard to see what could produce the sales-growth boost the ONS are reporting.

Posted by little professor @ 12:31 AM 7 Comments

Mortgages are harder to obtain - July's mortgage lending is lowest since 2002

Telegraph: Borrowers must apply 'four times' to get mortgage, survey says

NEARLY HALF A MILLION mortgage or loan customers are having to apply more than four times in order to successfully secure credit, a survey shows today. Just over 400,000 people could not get a mortgage or loan despite repeated attempts, according to GE Money Home Lending. The findings follow hard on warnings from the Bank of England and the Council of Mortgage Lenders that homeowners may find it even more difficult to get a mortgage in the coming months. The survey said that with lenders tightening their lending criteria in the face of the credit crunch, previously creditworthy people are being classed as a higher credit risk.

Posted by drewster @ 12:29 AM 0 Comments

Thursday, August 21, 2008

In America, local taxes are based on the [plummeting] value of your property....

Mish's: Tax Assessors Nightmare

FOR LESS THAN the price of a decent used car, you can buy a home in Atlanta today. Real estate agents list hundreds of choices for $20,000 or less. Sadly tax assessors have not figured this out. Even worse, cities are counting on that tax revenue, spending like there's no tomorrow. One agent said when tax values and true values are way apart, it can keep properties from selling and further depress values. He said he'd had a $95,000 deal on a duplex fall through recently because it was being taxed at $300,000. The buyer didn't want to be saddled with taxes at that level. "The government are going to have to take a look at this," said the real estate agent. "Taxes are so high they drive down value." A taxpayer revolt and city budget crises are coming in mass. Is any city prepared for it?

Posted by drewster @ 11:54 PM 4 Comments

BBC 3 property documentary (well worth watching)

BBC: Cheap homes for sale?

Documentary in which newly-married presenter Alex Riley finds out what it takes to climb on to the property ladder. Alex has a dream of buying a home for himself, his wife and possible future children, but as he embarks on a jaw-dropping journey he discovers nearly a million properties lying empty and soon realises that Britain's property ladder is more than just broken. Broadcasts 21 Aug 2008 23:50, 26 Aug 2008 01:10, 27 Aug 2008 03:10 & 28 Aug 2008 01:35

Posted by jack c @ 10:10 PM 4 Comments

Lies, dam lies and....

International Business Times: Housing statistics

Statistics. Just for any permabulls out there clinging to the government's postive stats. It seems they have found a little problem

Posted by cityfool @ 06:16 PM 0 Comments

The bottom line is that one has to look not only at what M3 is doing, but why it is doing it. Nearly everyone got this wrong.

Global Economic Trend Analysis: M3 Contraction - The Future Is Now

The Telegraph is reporting Sharp US money supply contraction points to Wall Street crunch ahead. The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months. On a three-month basis, the M3 growth rate has fallen from almost 19pc earlier this year to just 2.1pc (annualised) for the period from May to July. This is below the rate of inflation, implying a shrinkage in real terms. The growth in bank loans has turned negative to a halt since March. "It's obviously worrying. People either can't borrow, or don't want to borrow even if they can," said Mr Stein.

Posted by malct @ 05:38 PM 5 Comments

It has been a fun ride, but the ride is over. We cant get steroids from our dealer (banks) anymore.

PrudentBear: The Great Consumer Crash of 2009

I hate to tell you, but the storm has reached your location and it is a Category 5 hurricane. The levees are leaking. Ignore it at your own peril. The 6,000 sq ft McMansion buying, BMW leasing, $5 Starbucks latte drinking, granite countertop upgrading, home equity borrowing days are coming to an end. The American consumer will not go without a fight. For the last seven years the American consumer has carried the weight of the world on its shoulders. This has been a heavy burden, but when you take steroids it doesnt seem so heavy. The steroid of choice for the American consumer has been debt. We have utilized home equity loans, cash out refinancing, credit card debt, and auto loans to live above our means.

Posted by malct @ 05:33 PM 7 Comments

One ECB source told The Daily Telegraph that over-reliance on the ECB funds has become an increasingly bitter issue at the bank because the policy amounts to a covert bail-out of lenders in southern Europe.

telegraph: "Nobody dares pinpoint the country involved because as soon as we do it will cause a market reaction and lead to a meltdown for the banks," said the source.

The latest data from the Bank of Spain shows that the country's banks have increased their ECB borrowing to a record 49.6bn (39bn). A number have been issuing mortgage securities for the sole purpose of drawing funds from Frankfurt.

Posted by big chris @ 04:53 PM 15 Comments

More bad news for BTL

FT.Com: UK Homes For Rent Exceed Demand

Supply of rental accommodation rose at its quickest pace on record in the three months to July, outstripping the increase in demand from tenants, according to the latest data from the Royal Institution of Chartered Surveyors..........

Posted by aje141269 @ 04:29 PM 6 Comments

The latest market bottom call

Times: Persimmon says housing market will not worsen

"We still have visitors coming to our sites who want to buy, but sales are worse simply because of the difficulty in getting a mortgage, ...". In other words house prices are still too high.

Posted by letthemfall @ 04:24 PM 5 Comments

The Misery Index is set to make a comeback

MoneyWeek: The Misery Index is set to make a comeback

When the Misery Index goes up, we all feel it hurting. And in Britain right now, with consumer prices rising at 4.4% year-on-year and unemployment up to 5.4%, the index has just hit 9.8, its highest point for almost 12 years

Posted by damien @ 03:33 PM 0 Comments

Everything is fine because we say so

guardian.co.uk: City sceptical on retail sales figures

Office for Notional Statistics doing a great job for the Ministry of Truth again. In a similar way I wonder if the Land Registry numbers will show that property is achieveing that soft landing/levelling out after all.

Posted by ontheotherhand @ 03:11 PM 3 Comments

Oil Partly to Blame for 'New Age of Authoritarianism,' says FT Editor

FT: The new age of authoritarianism

Off topic post, sorry. "In 1989, the Berlin Wall fell, democracy was on the march and we declared the End of History. Nearly two decades later, a neo-imperialist Russia is at war with Georgia, Communist China is proudly hosting the Olympics, and we find that, instead, we have entered the Age of Authoritarianism. Remember Francis Fukuyamas ringing assertion: The triumph of the west, of the western idea, is evident first of all in the total exhaustion of viable systematic alternatives to western liberalism. " All the investment money pouring into undemocratic countries like Russia and China has not made them embrace western values, simply made them stronger adversaries. As we get weaker under our debt burden they get stronger. The "western idea" not serving us too well is it?

Posted by mountain goat @ 02:31 PM 13 Comments

Cashless Society.

Daily Mail: Every petrol pump 'will be prepay by 2011'

A little bit of topic for this site but very very important all the same. Here are some of the readers comments on the article in question. "Another reason why people pay in cash is that they work in the 'cash economy'. A side benefit of this proposal will be to make the payments more traceable as the transactions will appear in a bank account." "This is the New World Order ,In cashless society you can be controlled competely. If you step out of line, your money is switched off. Would you really trust anyone in the "Government" to have that kind of power over you." As with the Housing Crash and the Global Economic Crisis(WHICH HAS BEEN ENGINEERED)you can see where we are heading

Posted by serious guy @ 01:04 PM 6 Comments

Tesco concludes property deals

yahoo: Tesco concludes property deals

can anyone expand on why Tescos would do this?

Posted by mark @ 11:09 AM 19 Comments

Is Your Bank Safe from Collapse?

old article from 2007, not sure if anyone has seen it, but interesting stuff..

agorafinancialpublications.com: Selling Dollars, Buying Stuff

Both countries blamed the dollar-peg for promoting inflation within their borders. The Syrian inflation rate topped 10% last year, up from 7.2% in 2005. "The weaker dollar is fueling inflation," says an analyst at ING Bank in London. "We see the United Arab Emirates as the next possible shifter." Syria's announcement merely formalizes a well-established trend, both inside its own central bank and throughout the rest of the world. Let's call that trend, "dollar aversion." In Syria, the central bank had already been purging dollars from its foreign currency reserves, replacing them with gold and euros. But with only a few billion dollars of reserves, Syria's monetary machinations will hardly dent the dollar's stature. The same cannot be said of Syria's neighbors

Posted by mark @ 10:42 AM 1 Comments

The proverbial "rats" are leaving the sinking ship

BBC: Migration to the UK falls sharply

The number of Eastern European migrants coming to work in the UK has fallen to its lowest level since EU expansion in 2004, Home Office figures show.

Posted by george monsoon @ 10:41 AM 7 Comments

No wage price spiral here.

The Telegraph: Relief for Bank of England as wage rises slide to five-year low

Wages are increasing at the weakest rate in five years as the economic downturn takes its toll on families' incomes, official figures have shown.

Posted by sold 2 rent 1 @ 10:18 AM 25 Comments

Predictions

Sky: Droves Of Estate Agents Go Bust

"Some 4,000 estate agents could be out of business by the end of the year, if industry estimates are correct". "According to figures from business monitor company Debtwire, the country's 12,000 businesses are closing down at a rate of 150 a month".

Posted by alan @ 09:53 AM 12 Comments

Persimmons profits Plung on UK mortgages

telegraph.co.uk: Persimmons profits Plung on UK mortgages

Troubled housebuilder Persimmon has seen profits crash in the first six months of the year and warned it sees no immediate end to the mortgage drought that has brought the UK housing market to a virtual standstill.

Posted by housebear @ 09:29 AM 1 Comments

Fun online poll

Pollcode.com: How much will house prices drop from 2007 peak?

This is just a straw poll, which we can run again in a few months time.

Posted by mark wadsworth @ 08:45 AM 18 Comments

There nearly there

Times: Top ten tips on how to sell your property

What more can I say, DROP THE PRICE

Posted by matt_the_hat @ 07:40 AM 5 Comments

This should not be happening

Times: Council leaders call for power to offer mortgages

Council chiefs have called for extra powers to allow them to offer mortgages in an attempt to rescue the housing market. In a letter published in today's Times, they argue that the public sector should be able to help first-time buyers and those unable to secure a home loan. Caroline Flint, the Housing Minister, is said to be sympathetic to it but Treasury ministers are less so.

Posted by little professor @ 01:39 AM 30 Comments

A much grimmer view of the construction industry than even just a month ago

Sky news: House Sales Drought Hits Firms

Another building firm gets further in the doo-doo as it appears there isn't a shortage of housing after all (nobody seems to want to buy theirs). Having already pulled out of it's partnership with the guv'mint to build an 'Eco town' they look set to start actually losing money soon as profits are already down 70% and we've only just fallen into the chasm!

Posted by nooneo @ 01:21 AM 0 Comments

Wednesday, August 20, 2008

EA lets go

Timesonline: Salmond claim that housing market is beating credit crunch is 'nonsense'

The head of Scotland's largest estate agents has broken ranks to launch an extraordinary attack on politicians, including Alex Salmond, and property experts who have claimed repeatedly that house prices in Scotland are still rising despite the credit crunch.

Posted by ash4781 @ 10:53 PM 4 Comments

North Sea Gas Field Shutdown until 2009 due to gas leak - Gas prices to soar again.

TimesOnline: Winter gas supply fears grow on North Sea leak

UK wholesale gas prices soared by nearly 14 per cent today after a leak on a North Sea pipeline fuelled fresh concerns about a supply crunch this winter. Norways Statoil Hydro said it had discovered the leak on a gas pipeline linking its Kvitebjoern field in the North Sea to the Kollsnes processing plant onshore. It warned the pipeline, which pumps an estimated 5 per cent of Norways total gas output, could remain closed until 2009.

Posted by johnny @ 09:32 PM 0 Comments

..But where are the Chinese banks?

Bloomberg: Banks' Subprime Market-Related Losses, Capital Raised: Table

"The following table shows the $503.8 billion in asset writedowns and credit losses at more than 100 of the world's biggest banks and securities firms as well as the $352.5 billion capital raised to cope with them. Those with a star next to their name have figures that were updated since the table was last published. You can see quarterly breakdowns for each bank and different regions by typing WDCI".

Posted by alan @ 08:50 PM 2 Comments

The future looks bright..NOT.

CNN Money.com: The Next Credit Crunch

Well this isn't much of a surprise,just by the queue at the petrol station and the supermarket this was always on the cards! Get it ..THE CARDS!

Posted by serious guy @ 07:59 PM 0 Comments

Four Horsemen of the Apocalypse on Front Cover!

Brixton plc: Half year report 2008

Ye gods, there they are - War, Famine, Death and Conquest in glorious technicolour on the front page of a UK plc official report!

Posted by cha55a @ 05:28 PM 0 Comments

The Doors - The End ( www.lyricsmode.com/lyrics/d/doors/the_end.html )

Telegraph: Apocalyptic times for Britain's economy

...As debt increases the pressure for higher interest rates to kill off inflationary pressures may become impossible for the MPC to resist.

Posted by whostolemyendowment @ 04:30 PM 19 Comments

Thursday's HMRC sales data pulled

BBC: Revenue withdraws house sale data

The government's official statistics on property sales in the UK have been withdrawn from publication because they appear to be wrong. The figures are published each month by HM Revenue & Customs (HMRC) for sales worth more than 40,000. HMRC said that revisions to the previous months' figures, going back to March this year, had cast doubt on their accuracy. Figures for July were due to come out on Thursday, but have been postponed.

Posted by doomwatch @ 04:13 PM 26 Comments

The future looks bleak, according to Datamonitors latest forecast into the mortgage and consumer credit markets

mortgagestrategy: New lending to fall by almost 20% this year

Datamonitor predicts that new lending will contract in 2008 falling by 19.3% and 3.2%, to a total of 492.5bn, compared with 569.3bn in 2007. Karina Purang, financial services senior analyst at Datamonitor and author of the report warns: In current uncertain market conditions, its neither good to be a lender nor a borrower. Its reports shows after stagnating in 2005, the UK mortgage market increased by a staggering 26.1% to reach a new peak of 363.8bn in new business in 2007. However, 2008 saw the credit crunch taking its toll on the market. At the end of June 2008, gross lending amounted to just 149.5bn for the first six months of the year, a reduction of 18.9% over the 177.8bn realized in H1 2007.

Posted by jack c @ 04:01 PM 0 Comments

Giants shrinking into oblivion

CNNMoney.com: Fannie, Freddie plunge after the open

NEW YORK (CNNMoney.com) -- Battered mortgage giants Fannie Mae and Freddie Mac took yet another hit at the start of trading Wednesday as concerns grew about a possible government bailout. The stock for Fannie (FNM, Fortune 500) dropped 16% and Freddie (FRE, Fortune 500) tumbled 18% as the markets opened. This was in addition to steep declines of more than 20% so far this week. So far this year, Fannie and Freddie shares have each plunged more than 80%.

Posted by plato @ 03:51 PM 4 Comments

But if you are desperate to find decent accommodation this may be your lowest priority.

GAAPweb: Students told to check on deposits

Students have been urged to check that their landlords are correctly protecting their deposits that are charged on their accommodation.

Posted by whostolemyendowment @ 03:04 PM 3 Comments

Times guide to London property

Credit Writedowns: Times guide to London property

This site has a link to the Times' breakdown of property prices by borough in London and their 12-month return. The biggest price decline? Sutton. The attached document from the Times is a PDF.

Posted by edwardnh @ 01:51 PM 0 Comments

Fun Online Poll

Pollcode.com: Which property pornstar will go bankrupt first

This is just a follow up to the thread about the experts' predictions in last November's Daily Mirror.

Posted by mark wadsworth @ 01:31 PM 14 Comments

B2L is one hell of a tax dodge

BBC: Save tax when moving and letting

If they rent out their home, rather than trying to sell it in a depressed market, they have some opportunities to save tax while waiting for the housing market and the availability of mortgages to improve. That is because there are a number of tax breaks available to the home owner who moves away and lets his home, and either buys another property elsewhere in the UK or rents.

Posted by w smith @ 01:19 PM 0 Comments

More bear porn

BBC: Mortgage lending slump continues

"House sales have dropped by 50% this year and will probably fall further.. The bulk of mortgage lending this year has been to people who are not, in fact, moving house. only 29% of mortgage lending has been to house buyers... The rest has been to people staying put but moving to new mortgage deals, such as former customers of the Northern Rock, or to people borrowing extra sums against the value of their homes"

Posted by mark wadsworth @ 12:35 PM 0 Comments

Heart warming storeis from Rightmove

Kernow: Your Stories of "Brickor Mortis"

"Sold in March with a June completion date I quit my job at the end of May to get sorted. The buyer wanted to move 27th June but as my son was getting married that day I asked to move anytime after that. Then they pulled out. So Ive no job, no money and a property which is difficult to sell. Its worth 270k but no one will pay that because of this stamp duty, so Ill never get an offer above 250k." WTF, she quit her job when selling her house? Plenty of other jems. "I bought my house 2 years ago for 120k. Its been on the market for 9 months with 15 viewings but no offers. I've dropped the price by 18k but still no interest, its now on the market for 110k. I feel I'm being robbed and still can't even sell."

Posted by kernow @ 11:03 AM 26 Comments

and it starts over from a new angle

CNN: The Next Credit Crunch

But a big crunch is coming - and here's why. Credit card debt, like mortgage debt, gets bundled, securitized, and sold off by banks. Citigroup (C, Fortune 500), one of America's largest credit card lenders, just reported that it lost $176 million in the second quarter through securitizing such debt. That happens when the buyers of those securities observe rising delinquency rates and rising interest rates, and decide the debt is worth less than Citi thought.

Posted by mark @ 10:19 AM 22 Comments

Good ol Danny voted for a cut again

Telegraph: Bank of Enlgand split 3 ways over interest rate decision

Minutes of the MPC meeting this month reveal another three way split over the decision to keep rates on hold at 5%. Timothy Besley voted for a rise by 0.25%, while David Blanchflower voted for a cut of 0.25%

Posted by little professor @ 10:19 AM 23 Comments

NAEA notes market is stabilising (should read "stagnant"

mortgagesolutions: NAEA notes market is stabilising

Members of the National Association of Estate Agents (NAEA) have reported that the current market is levelling out, with a stability noted in the number of sales agreed, number of viewings before a sale is secured, and the percentage of agreed sales that have fallen through. However there are still signs of uncertainty, with July's figures demonstrating that there is a lack of consumer confidence, with less people entering the market. Chris Brown, president of the NAEA, commented: "The figures reported by agents in July show that there is still an indication of stability in the market, however consumers continue to adopt a wait and see' approach in the hope that there will be an improvement in the market. "Consumers are feeling anxious and have every right to be .........

Posted by jack c @ 10:17 AM 3 Comments

Hot off the press - July 2008 mortgage stats

CML: Gross mortgage lending subdued in July

Gross mortgage lending totalled an estimated 24.8 billion in July, up 5% from June and down 27% from July a year ago, according to the Council of Mortgage Lenders. Bob Pannell, CML head of research, said: While there was a small month-on-month increase in activity, it represented a notable decline from a year ago. This continues the weaker picture seen in June and points towards the more subdued levels of lending we are likely to see in the second half of 2008.

Posted by jack c @ 10:07 AM 4 Comments

Central banks' sentiment will be more important than USA Treasury manipulations

Reuters: Fannie and Freddie face overseas confidence crisis

An extraordinary Treasury capital infusion may be needed to restore faltering foreign demand for debt issued by Fannie Mae and Freddie Mac, the two top home funding sources that the government is willing to rescue to save the housing market.

Posted by whostolemyendowment @ 09:45 AM 0 Comments

Trickle before the flood

South Yorkshire - The Star: Three a day lose homes

THE number of homeowners facing eviction for failing to meet mortgage payments in Sheffield has jumped by more than half to almost three a day, shock statistics today reveal. Sheffield County Court judges made 247 possession orders between April and June - up by 51 per cent on the second quarter of last year.

Posted by whostolemyendowment @ 09:32 AM 3 Comments

'There is confusion - and an element of denial - over direct property pricing due to lack of transactions,' Mr Wheeler declared.

Daily Mail: Property market is so apocalyptic the bosses have started quoting Bob Dylan

Here's another Bob Dylan quote: "People seldom do what they believe in. They do what is convenient, then repent. "

Posted by paul @ 09:18 AM 1 Comments

Great summary of the BTL demise

Firstrung: Why buy to let landlords won't profit from the so called 'rental boom'

"Rental demand is rising, but so is the supply of rental properties. So it seems that buy-to-let landlords aren't in for the bonanza the pundits had promised. The number of landlords selling out of the market remains low - it fell to 2.1% according to Rics, in the past quarter. But that's probably got more to do with the collapse in the market"

Posted by confused76 @ 08:08 AM 7 Comments

When the casino gets bearish

The Times: Hedge funds at a loss to cope with mood swing

The hedge fund group that took a huge bet on Northern Rock as it was imploding last autumn has reportedly lost 85 per cent of its investors' money, amid evidence of a terrible spell this summer for many hedge funds. SRM, the Monaco-based group that raised $3billion from investors in September 2006, is down by 85 per cent, according to The Wall Street Journal, including a minus 77 per cent performance in the past year. Tight lock-up terms prevent investors from withdrawing their money.

Posted by quiet guy @ 02:14 AM 13 Comments

London flat discounted 66% and still doesn't sell

Andrews Robertson Auctioneers: Unsold Lots

Just browsed the unsold list at Andrews Robertson and if you check lot 149 you will see that a flat in Greenwich which was purchased at 325,000 in 2005 (according to land registry data) didn't even sell at the reserve price of 110,000. This is prime new build London BLT in the zone which apparently will benefit from the "Olympic Effect" http://www.abacusestates.co.uk/Maritime-House-Greenwich-AbacusEstates.pdf.

Posted by sc @ 01:14 AM 10 Comments

Tuesday, August 19, 2008

Flashback - November 2007

Daily Mirror: Are house prices set to crash?

Makes hilarious reading - honestly, you've got to read this assortment of property pundits stating that there is no way prices will crash. Only Sarah Beeney is even remotely bearish, forecasting upto 6% falls for 2008. Melissa Porter, (Britain's Dream Homes): "I dont believe there will be a crash because interest rates are still low, the economy is strong and employment is high. And the market will remain robust in areas where people are moving for work, such as London" Kristian Digby (To Buy or Not To Buy): "We will see rises of 1-2% next year. Manchester and Birmingham will do well." Louisa Fletcher (London Tonight): "I will stake my property on the fact that there will not be a crash like the 1990s." Rosie Millard: "The market will continue to rise in London."

Posted by little professor @ 08:17 PM 17 Comments

Home repossessions up 48% Its rarely too late to get advice.

Payplan: Repossession - Get Advice As Early As Possible

I think the most important thing that people can do is to get advice as early as possible. In about 80% of mortgage repossession cases its possible to avoid repossession simply by getting the right advice at the right time. He added: Its rarely too late to get advice. The Royal Bank of Scotland is the latest bank to record substantial profit losses, and questions are being asked about what the future now holds for the economy, lending and peoples personal finances.

Posted by malct @ 06:30 PM 4 Comments

Were not just going to see mid-sized banks go under in the next few months, were going to see a whopper,

Timesonline: Credit crunch may take out large US bank warns former IMF chief

The deepening toll from the global financial crisis could trigger the failure of a large US bank within months, a respected former chief economist of the International Monetary Fund claimed today, fuelling another battering for banking shares. Professor Kenneth Rogoff, a leading academic economist, said there was yet worse news to come from the worldwide credit crunch and financial turmoil, particularly in the United States, and that a high-profile casualty among American banks was highly likely. Among the biggest fallers in London trade were HBOS, down 6 per cent, Royal Bank of Scotland, whose shares plunged by 5 per cent, while HSBC fell 3.6 per cent. Rising anxieties over worse to come in the credit crisis sent shares tumbling in Europe and Asia.

Posted by malct @ 06:23 PM 0 Comments

Imagine how Anthea feels!

Evening Standard: Bovey is in a spot of bother

Hankies out for Grant Bovey's troubled buy-to-let partnership. Imagine Homes, as it is touchingly called, has made 15 out of its 61 employees redundant. Unusually for a confirmed publicity addict, Bovey (aka "Mr Anthea Turner") is declining to comment. But the Hampshire-based company is implementing a "change in focus". The most recent accounts reveal that Imagine lost 6.4 million in the year to the end of 31 March 2007. Since then a further 20 million loan has come from HBOS - which owns 20 per cent of the group - and the entire stock has been transferred to a new holding company.

Posted by old enough to know better @ 04:57 PM 1 Comments

Mortgage famine to continue

Times: Datamonitor claims mortgage market to shrink by a fifth

"with fewer lenders and loans, higher prices and stricter rules, the group predicts that mortgage lending will continue to fall, by a total of 19.3 per cent in 2008 and by a further 3 per cent in 2009" "criteria are not easing"

Posted by confused76 @ 04:57 PM 0 Comments

There must be some way out of here, said the joker to the thief. Theres too much confusion, I cant get no relief

Times: Brixton quotes Dylan to explain dire results

"Brixton Estates today unveiled a 237 million loss and resorted to the lyrics of Bob Dylan to describe the apocalyptic mindset of the UK commercial property market. Picture of the four horsemen of the apocalypse. Tim Wheeler, chief executive of Brixton, adopted the metaphor to compare equity-based opportunist buyers with "thieves" and owners who would not sell to "jokers", claiming there is no solution until distressed properties appear on the market"

Posted by confused76 @ 04:45 PM 0 Comments

Canadians slow to realise their party is over too

Globe and Mail: Household debt rises as economy slows

"Canadians haven't stopped borrowing, however - and that's a divergence that just can't last. The mortgage market has expanded 13.4 per cent over the past year, and consumer credit has grown more than 10 per cent. Both growth rates are far above recent averages, even though Canadian economic growth has ground to a halt. If consumer behaviour were to continue on that kind of track, Canada would no doubt be in store for a dangerous credit bubble, Mr. Tal said. Ottawa has decided to essentially ban 40-year mortgages as of mid-October - a decision that some financial institutions have already implemented on their own, said Craig Alexander, deputy chief economist at Toronto-Dominion Bank."

Posted by mountain goat @ 04:41 PM 0 Comments

Down down deeper and down

Rightmove: The Rightmove, house price index - August

London worst hit as new sellers knock off 21,000 in a month; Monthly falls accelerate as summer sellers drop average national prices by 2.3% (5,403); Number of new sellers hits historical August low, though buyers still have widest choice for years as unsold stock levels rise to record levels; Danger of short-term incentives to boost the market doing more harm than good

Posted by whostolemyendowment @ 03:22 PM 0 Comments

Courts getting clogged up with repossessions

Time Online: How the courts are coping with the mortgage crisis

"It comes as no surprise to the courts that mortgage possessions are up 48 per cent for the first half of this year. They have been steadily increasing for at least the past two years and are now accelerating at an alarming rate. At my court alone we have had to allow for extra days to deal with mortgage possessions which, by rule, have to be heard within eight weeks of the issue of proceedings."

Posted by quiet guy @ 02:32 PM 10 Comments

A&L warns its future may be in doubt if the takeover is not supported

BBC: Warning from Alliance & Leicester

The Alliance & Leicester (A&L) bank has warned of "significant external risks" to itself if Banco Santander's planned takeover is rejected by shareholders. More than 560,000 A&L shareholders are being urged in a letter to support the 1.3bn takeover, announced in July. Roy Brown, the bank's acting chairman, said if the deal did not go through then the bank would be exposed to the worsening economic slowdown.

Posted by jack c @ 02:12 PM 3 Comments

MoneyWeek predicts 18-24 months til bottom, then flat for a long time

MoneyWeek: Why house prices could fall by 50%

"The average estate agent now has a record 78 unsold properties on its books. That represents a seventh consecutive monthly increase in the amount of unsold stock. If sellers can't sell they are going to have to cut those asking prices a lot further. Buyers know this perfectly well and that's why they aren't buying: why buy now what you know you can buy cheaper next year? House prices are likely to drop by 50% but even that will only bring them back to fair value. How long will all this take? Give it 18 months to two years and you'll find some serious bargains about. However that doesn't mean you're going to make a killing on it in a hurry. By all means look for a bargain in a year or two but don't expect to be able to sell it on at a profit for a good five years."

Posted by drewster @ 01:43 PM 7 Comments

The housing industry cannot sustain current levels of trade

Wolsey Securities: Activity levels down over 60% from last housing market crash

Wolsey calls for Government action or face the consequences. While the Government continues to flounder on the sidelines, activity in the housing market has sunk to an unprecedented low level. Wolsey Securities is calling on the Government to take urgent action, as activity falls to a low level that even surpasses the slump during the last housing market crash. With the Bank of England figures showing that only 36,000* mortgage approvals were made in June, the number of housing transactions is currently set to total just over 400,000 this year. This low level represents over a 60% drop in activity on the worst year of the 1990s housing market crash, when transactions ran at around one million.

Posted by jack c @ 12:46 PM 7 Comments

Now This Is What I Call a Property Crash!

World Socialist Web Site: Bank seizures of US homes reach record high

Staggering figures for how bad it's currently in the US, and how much worse it's going to get: Bank repossessions grew significantly as a percentage of all foreclosure activity, posting a 184 percent year-over-year increase." Some 6.5 million US properties are set to fall into foreclosure by the end of 2012.... Home values in Sacramento, the states capital, fell by 36 %in the past year, Riverside/San Bernadino fell by 32.7 %, Los Angeles fell 30 %.

Posted by layers @ 11:57 AM 2 Comments

"Fasten your seatbelts. It's going to be a bumpy night."

BBC: US bank 'to fail within months'

The global financial crisis is set to get worse, with a large US bank likely to collapse in the next few months, a former IMF chief economist has warned. Kenneth Rogoff's comments came as shares in Fannie Mae and Freddie Mac sank on a report that the home lenders would, in effect, be nationalised. Despite hopes that the US economy had turned the corner, Mr Rogoff claimed it was "not out of the woods". "I would even go further to say 'the worst is to come'," he said. "We're not just going to see mid-sized banks go under in the next few months," said Mr Rogoff, who held the IMF role between 2001 and 2004. "We're going to see a whopper, we're going to see a big one, one of the big investment banks or big banks."

Posted by jack c @ 11:43 AM 9 Comments

Interesting disucssion of headwinds facing B2L

Citywire: Morning Line: Could buy-to-let be the UK's subprime?

Rental supply is increasing, while more amateur landlords are coming under pressure to sell. All is not rosy in the buy-to-let garden.

Posted by w smith @ 11:42 AM 4 Comments

They Can See The Big 'R' Coming

TimesOnline: Marks & Spencer proposal to cut redundancy benefits sparks fear of job losses

Marks & Spencer plans to slash the redundancy benefits for its 60,000 staff by up to 25 per cent in a move that has infuriated employees and triggered fears of a middle management cull.

Posted by renting2 @ 11:37 AM 2 Comments

The long term investment pillar falls!

The Telegraph: Investors may pull 18bn out of buy-to-let properties

Residential investors will sell around two thirds of their properties in the face of falling prices, according to a new study by Skandia. It comes amid growing consternation about the state of the residential investment market, which some have likened to the sub-prime sector in the US.

Posted by cheekie charlie @ 11:28 AM 0 Comments

Rents following house prices down

Guardian: The 'forced landlords' may become forced sellers

Assorted views of the future of rents here. It seems that those who think rents will continue to rise still think there is an infinite supply of money.

Posted by letthemfall @ 11:09 AM 1 Comments

Why landlords won't profit from the rental boom

MoneyWeek: Why landlords won't profit from the rental boom

Demand for rental property might be rising, but the supply side is rocketing too: home-owners who can't sell their own properties are putting them up for rent instead. Buy-to-let landlords should be selling up while they can.

Posted by damien @ 11:08 AM 0 Comments

More bear porn - rental properties flood market

BBC: Supply of rental properties rises

Oh dear, oh dear. Not.

Posted by mark wadsworth @ 10:30 AM 13 Comments

When the Government nationalise properties in the UK, it is for the betterment of society & future generations.

BBC: Seized properties shame Poland

Trust the BBC to come up with a bias towards "the crime" of not compensating property nationalised by the state. A VI story if ever saw one!. I'm so glad I don't have to pay my TV Licence (as I don't have a TV). The BBC are pure hypocrits!!! Since communism ended in Poland almost 20 years ago, the country has come a long way, embracing the future as a member of both the EU and Nato. This grand Warsaw building belonged to Piotr's family. But in the eyes of many Poles the historical legacy of property claims blights its onward march.

Posted by stevie dee @ 10:19 AM 3 Comments

Welcome back to reality!!! Doesn't matter how many dollars central banks purchase, you can't make your property market rebound!

FT.com: Financials suffer, FTSE down, Fannie & Freddie bailout looks more likely

Fears of further fall out from credit markets put pressure on Londons financial sector in early trade, following sharp losses overnight for the US sector on Wall Street. By mid morning, the FTSE 100 was down 66 points, or 1.2 per cent at 5383.5, just back into bear market territory. The mid-cap FTSE 250 was down 1.7 per cent to 8,968.4.

Posted by beartil2010 @ 09:54 AM 5 Comments

Any diamonds amongst the turds?

National Post (Canada): Liquidity key to picking U.S. homebuilder stocks: Citi

New and existing home prices in the United States will likely deteriorate by up to 15% over the coming months, says Citi Investment Research analyst Josh Levin, and near-term liquidity will continue to drive valuations of homebuilder stocks.

Posted by crutchley @ 09:51 AM 0 Comments

Darling dithers while EA's burn

Housefund: Stamp duty indecision causing sales to drop

A survey of members conducted by the National Association of Estate Agents (NAEA), has produced one of the largest responses from estate agents with over 1350 replies demonstrating what a contentious issue the recent stamp duty announcement is and the effect it has had on the property market.

Posted by whostolemyendowment @ 09:37 AM 0 Comments

Don't sell - become a landlord!

Property Week: Rental market booms as July housing sales diminish

This article says more and more people re choosing not to try and sell their house at the moment - achoosing instead to rent it out until prices recover. Interesting what it says about the demand for homes.

Posted by peter whelp @ 09:34 AM 7 Comments

They live and they die by the square root of pi

MSN: Now Greenspan doesn't like bailouts?

Greenspan is utterly clueless and unable to learn from his mistakes. Delusions of infallibility bring me to another subject: quantitative trading. Quantitative analysts have pursued a strategy based on the notion that the money to be made in stocks comes via mathematics rather than from company fundamentals. I believe that this strategy is responsible for much of the pandemonium we see on a regular basis. No market seems to be safe from these maniacal, algorithm-wielding computer beasts. In a way, their systems have made it possible (in the short run) for almost anything to trade at any price, whether foreign exchange, stocks or commodities in general.

Posted by malct @ 08:35 AM 6 Comments

There nothing like kicking someone when there down

Times: Rightmove shares tumble with free rival set to launch

I wonder if the free one will let property snake track their listings

Posted by matt_the_hat @ 08:34 AM 8 Comments

Repossession is a zero sum game

financial times: headline letter

So much for economic fundamentals....the Government is now proposing distorting the housing market for short term ends, rewarding speculators and the profligate to try and avoid politically disastrous scenes of price falls and repossession. The housing market is best served, however by being allowed to fall to a sustainable level. Whilst repossession may seem a tragedy - it is a zero sum game - for every family forced to relinquish a property they cannot afford, another has the chance of buying at a price they can.

Posted by peter harvey @ 02:11 AM 13 Comments

M3 southbound, flowing freely

Telegraph: Sharp money supply contraction points to Wall Street crunch ahead

The US money supply has experienced the sharpest contraction in modern history, heightening the risk of a Wall Street crunch and a severe economic slowdown in coming months. Data compiled by Lombard Street Research shows that the M3 ''broad money" aggregates fell by almost $50bn in July, the biggest one-month fall since modern records began in 1959. Monetarists say it is the sharpness of the drop that is most disturbing, rather than the absolute level. Shifts in M3 are a lead indicator of asset prices moves, typically six months or so ahead. The latest collapse points to a grim autumn for Wall Street and for the American property market. As a rule of thumb, the data gives a one-year advance signal on economic growth, and a two-year signal on future inflation.

Posted by drewster @ 12:49 AM 20 Comments

Supply of rental accommodation rose at its quickest pace on record in the three months to July,

FT: UK homes for rent exceed demand

Estate agents in London and the south-east have already started to see rents come under pressure as competition between new landlords becomes fierce. Agents such as Savills and Knight Frank have reported sharp price falls for some rental accommodation, particularly in prime areas of London. We feel rents have come down as supply has come through from the sales market, said Jane Ingram, head of lettings at Savills. It has been much more of a tenants market. She said the reduction in rents which had been as much as 10 per cent in some areas of London and the south-east had meant landlords were not obtaining the high yields they might have been hoping for.

Posted by pdp @ 12:46 AM 6 Comments

Off-topic, another bubble linked to the super-bubble of finance

Flying Magazine: Was There an Airplane Bubble?

"THE value of anything, whether it be real estate, stocks or airplanes, is set by supply and demand. In the 1990s we clearly had a larger group of pilots with demand than there was supply at popular price points. ... Supply was constrained and prices went up. Now, without enough pilots to replace those who are timing out, demand for airplanes at all price points is shrinking slowly. Used airplane values haven't burst as much as the price of houses have in some locales, or some investments have after their bubbles ended, but we are returning to normal. Current airplane owners probably won't see appreciation, but then shoppers may now be able to qualify for ownership as prices come down."

Posted by drewster @ 12:18 AM 0 Comments

But Paragon says rents are going up?

Guardian: Rental market flooded by frustrated sellers

Record numbers of homeowners are letting out properties after failing to sell them in the worst housing market downturn for more than a decade, the Royal Institution of Chartered Surveyors (Rics) says today. The flood of properties is expected to depress rental levels, which Rics warned may fall this year. A fall in rents, combined with higher mortgage costs, will place recent buy-to-let landlords under intense financial pressure and could accelerate the housing downturn as they dump properties on to the market.

Posted by little professor @ 12:18 AM 10 Comments

Monday, August 18, 2008

"But the rate at which tenants are seeking property is being outstripped by the number of rental properties coming on to the market, leading some to speculate that rents, which have been rising, may flatten out"

Times: Families forced to let homes they can't sell

...just as we predicted on this site! However, I am missing the rationality of this situation :))

Posted by confused76 @ 11:58 PM 1 Comments

Estate agents club together to oust Rightmove

Bloomberg: Rightmove Declines on Prospect of Rival Free Web Site

The NAEA are starting their own free (to their members) alternative to Rightmove. After all, every competitor on the internet is but a click away.

Posted by voiceofreason @ 11:13 PM 1 Comments

New Zealand property scam roasts English immigrants

New Zealand Herald: immigrant banker put 1.7million into blue chip

Never mind the Land of the Long White Cloud, New Zealand has almost become the Land of the Long Devious Property Scam as this example richly illustrates. As the property bubble deflates many of the sharp practices around New Zealand property have been revealed. Immigrants should be keenly aware that property 'professionals' in N.Zealand see you as easy pickings.

Posted by andyh @ 10:34 PM 0 Comments

London house prices fell 14% if considered in USD

Seeking Alpha: London House Price Datapoint of the Day

"The average asking price in Wandsworth fell from 522,000 to 481,000 in a single month - or 7.9%. In dollar terms, of course, it's much worse: 522,000 on July 15 was $1,045,000, while 481,000 on August 15 was $896,000. That's a drop of $149,000, or 14.3%, in one month."

Posted by mountain goat @ 10:30 PM 6 Comments

And I thought London was immune to this old HPC nonsense

This is money: London asking prices fall 21k in a month

House sellers in London are finally coming to terms with the credit crunch and have slashed the asking price of their homes by more than 20,000 in a single month.A new survey shows the price for a London home dropped by more than 5% between July and August - the equivalent of 21,096. It now stands at just under 379,162.

Posted by jk @ 09:31 PM 0 Comments

I'm sure all of those BTLer's will enjoy the competition

FT: UK homes for rent exceed demand

Supply of rental accommodation rose at its quickest pace on record in the three months to July, outstripping the increase in demand from tenants, according to the latest data from the Royal Institution of Chartered Surveyors.

Posted by jk @ 09:26 PM 0 Comments

Brickor Mortis

M&G Investments: London house prices 'being slashed'

Homeowners entering London's property market have responded to the price falls seen elsewhere in the country by drastically slashing prices, figures have shown. According to Rightmove's price index report, sellers in the capital have "recognised the need to price aggressively" to make London homes more affordable for potential buyers. The change, Rightmove suggests, is so that sellers can avoid 'Brickor Mortis' - a recent term added to the property lexicon to describe houses that will not shift from the housing market. Small article. Big impact!

Posted by plato @ 08:44 PM 1 Comments

Just for fun

thisismoney.co.uk: Four reasons to be optimistic on house prices

A little more than a year ago, I published a tongue-in-cheek blog post about my new property price predictor that suggested the market was about to tumble: My 'dismal' house price predictor. Published in June 2007, it now appears to have been oddly prescient coming two months before credit began to be crunched and the beginning of the fastest annual slide in house prices since records began.

Posted by housebear @ 07:18 PM 3 Comments

Running scared from BTL 'investments'

Times: Landlords to withdraw billions from buy-to-let

Around 18 billion of cash will be pulled out of the buy-to-let market in the next few years, further destabilising the housing market, according to a new study. The research, by the financial services firm Skandia, suggests that landlords will be driven from property investment by falling house prices, higher mortgage rates and sluggish rental growth. It forecasts that the stock of buy-to-let mortgages will collapse to 44 billion from 120 billion at the end of 2007. Assuming the average loan-to-value ratio of 80 per cent that would be sufficient to release 18 billion of cash tied up in property investments.

Posted by bufferbear @ 07:04 PM 4 Comments

Not all Sunny in Spain!

Bloomberg: Spanish Loan Delinquencies Increased by EU3.2 Billion in June

"Spanish loans in arrears climbed by 3.2 billion euros ($4.7 billion) in June as the country's economic slump deepened after the collapse of a 14-year real estate boom"

Posted by alan @ 06:34 PM 5 Comments

How long will the Dollar rally last?

Bloomberg: Fannie, Freddie Fall as Barron's Says Bailout Likely

Fannie Mae and Freddie Mac fell to almost 18-year lows in New York trading on concern the government will be forced to bail out the mortgage-finance companies, wiping out common stockholders.

Posted by holding out @ 04:48 PM 1 Comments

Thamesmead development - new build flats sold at inflated prices (Surely not)

FT: Six to face court over Thamesmead mortgage fraud investigation

people are to appear on bail at the City of Westminster Magistrates Court on Friday (22 August) on charges relating to a mortgage fraud investigation in Thamesmead. The fraud came to light last year following reports from banks and building societies when the properties came to be either sold or re-possessed and the true property value was realised by the lender. Eleven arrests were made as part of an investigation by the Metropolitan Police's money laundering team between May and November last year. It is alleged a company bought 84 off-plan new build flats in Thamesmead, south-east London, and resold them at inflated prices.

Posted by jack c @ 04:26 PM 5 Comments

Eeny Meeny Miny Mo

Bloomberg: Bernanke Tries to Define What Institutions Fed Could Let Fail

Ben S. Bernanke is still trying to define which financial institutions it's safe to let fail. The longer it takes him to decide, the tougher the decision becomes

Posted by alan @ 02:25 PM 1 Comments

Skandia predicts that the mortgage-backed BTL market will shrink to its average size over the past decade

FT: 18bn to be released from BTL property: Skandia

An estimated 18bn of equity tied-up in property is expected to be released as the mortgage-backed buy-to-let (BTL) market shrinks. Skandia forecasts sliding residential property prices, higher mortgage servicing costs and sluggish rental growth will drive many aspiring landlords from BTL property, releasing much private investment capital that has gone into property speculation in recent years.As a result, Skandia predicts that the mortgage-backed BTL market will shrink to its average size over the past decade. In recent years stock of BTL mortgages rose from 2bn in 1998 to 120bn by the end of 2007. The BTL share of the total UK mortgage stock also increased, from less than 1 per cent to 10 per cent over the same period.

Posted by jack c @ 02:10 PM 2 Comments

Housing prices are falling, and first-time buyers can't get credit. Sound familiar?

SOTT Assoc Press: U.S. subprime collapse reaches Welsh town

The problem in Wrexham is the sudden cutoff of mortgage credit to first-time buyers, who would normally benefit from lower prices. Britain's housing market is based on a chain system, meaning sellers must wait for their purchasers to complete the sale of their own property. It's a house of cards that collapses if one deal falls through, making first-time buyers the key because they don't rely on the completion of another deal. The loss of those first-time buyers has had a secondary effect on mid-range sales and will eventually permeate the higher end of the market, Jones added. "It's a huge problem," Jones said. "Unless you have got the key to start the engine, it isn't going to go, is it?" Those troubles are increasingly seen as a microcosm of the situation around Britain.

Posted by malct @ 02:01 PM 1 Comments

Neither is a good bet!

City Wire: Buy to Let vs saving in a pension

The fall in property prices is not good news for those who are relying on property for their pensions. According to IFA Hargreaves Lansdown 18% of all outstanding buy to let debt was taken out in 2007 when property prices peaked and some of these investors could now be in negative equity.

Posted by whostolemyendowments @ 02:01 PM 0 Comments

Hiding Inflation

Evening Standard: Shoppers 'cheated' as supermarket brands downsize - so you pay the same for less

Shoppers are paying more for their goods without realising - as manufacturers shrink the pack sizes. In the face of rising costs, firms try to protect their profits. But many brands are reluctant to put up prices for fear of a consumer backlash - particularly when household budgets are squeezed. One solution is to charge customers the same - but make packs smaller.

Posted by sold out @ 01:04 PM 18 Comments

But prices don't fall in London.

Evening Standard (This is London): Asking prices fall 20,000 as house sellers cave in to the credit crunch

This looks like a rehash of the earlier articles on the 5.7% Rightmove asking price drop, but I guess the good thing is that the Standard has penetration right where it hurts. Lots of commuters will be left feeling bruised by this.

Posted by mikelivingstone @ 11:57 AM 4 Comments

UK house prices could easily decline 50pc from the peak

The Telegraph: Dollar surge will not stop America feeling the effects of a global crunch

"The UK housing event is probably second only to the Japanese 1990 land bubble in the Real Estate Bubble Hall of Fame. UK house prices could easily decline 50pc from the peak, and at that lower level they would still be higher than they were in 1997 as a multiple of income," he said. "If prices go all the way back to trend, and history says that is extremely likely, then the UK financial system will need some serious bail-outs and the global ripples will be substantial."

Posted by sold 2 rent 1 @ 11:00 AM 21 Comments

Simple maths lesson, history repeating itself

The Times: Savills: Residential building land value drops 20pc

House prices = bricks/mortar plus land value. Bricks/mortar value is fairly constant. At last year's peak, about half the cost of a house related to land value, and half to bricks/mortar. Therefore, if house prices fall 10% and bricks/mortar element is constant, land values will have fallen by ... er... 20%. As I explained in more detail on my blog, land values have gone up five- or tenfold since the early 1990s, so look set to fal by 80%-plus over the new few years..

Posted by mark wadsworth @ 10:36 AM 8 Comments

The Permabear

The New York Times: Dr Doom

On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, I think perhaps we will need a stiff drink after that.

Posted by sold out @ 10:26 AM 7 Comments

and the theft continues as the bank is clearly failing

Yahoo: B&B cash call gets 28% take up; new CEO announced

Pyms basic salary will be 750,0000 per annum, plus he will also participate in the companys Executive Incentive Plan. For the remainder of 2008 and the first six months of 2009 Pym will be guaranteed a minimum cash award equal to at least half of his salary for both of these periods. Additionally Pym will receive deferred shares equal to the value of his cash bonus and a one-off grant of options to buy up to 1.5m of Bradford & Bingley shares at the current share price.

Posted by mark @ 10:26 AM 1 Comments

Another correction.....

Times online: Rightmove shares plunge on new housing blow

''...Shares of Rightmove, the UK's largest online housing website, plunged more than 8 per cent today after it said that prices were shrinking further. Sellers are asking 5,403 less for their homes than they were only a month ago, with the average asking price for a property down, on average, by 2.3 per cent to 229,816, according to Rightmove....''

Posted by hpwatcher @ 10:14 AM 1 Comments

Northern Irelands housing market in trouble

University of Ulster: Northern Ireland Quarterly House Price Index (Q2 2008)

The price correction in Northern Irelands housing market is now one year old although few will find cause for celebration. Last summer, as the boom reached its final frothy stage, average prices peaked at close to the 250,000 level but as this latest and most comprehensive barometer of the local market reveals, the average price has declined to c227,000.

Posted by ash4781 @ 09:59 AM 0 Comments

BCC plead for interest rate cuts

BBC News: Recession in UK 'is months away'

"Recession looms in the UK in the next six to nine months as firms face "a difficult and risky climate", the British Chambers of Commerce warns. UK growth will be slightly negative or zero in the next two or three quarters, but a major recession is unlikely, the BCC says in its latest forecast. But prospects will be worse if interest rates are not cut soon, it adds." More short-termism from the BCC.

Posted by shipbuilder @ 09:58 AM 1 Comments

Who Would Take on a Mortgage in the Current Economic Climate?

The Times: Economic slump puts 300,000 jobs on the line

Up to 300,000 workers will lose their jobs by 2011, pushing the number of people out of work close to 2 million, a leading business group says today. In the same way house price forecasts have been wrong, then maybe 2 million unemployed is far short of the reality to come.

Posted by renting2 @ 09:41 AM 0 Comments

Can't sell, reverse-mortgage instead

FT: More retirees look to equity release

Older homeowners are stepping up their interest in unlocking equity built up in their homes as the credit crunch and falling property prices reduce their potential income in retirement. Hodge Equity Release a provider of schemes that can unlock the value of a home while letting the owners continue to live there has reported a 75 per cent increase in inquiries to independent financial advisers in the past three months. Prudential said it had seen a similar increase in the sales of its lifetime mortgage products in the first half of 2008 compared with a year ago. Norwich Union has revealed it has more than doubled the number of quotations it gives for equity release plans since the beginning of the year.

Posted by drewster @ 05:31 AM 3 Comments

But London's different, innit!

The Guardian: London house prices fall 5.3% in a month

Londoners selling their homes have cut thousands of pounds off their asking prices as the downturn finally arrived in the capital. Asking prices in London fell 5.3% in August, according to the Rightmove house price survey - equivalent to a 21,000 drop in a single month. Prices in some of the most sought-after suburbs are falling much lower. The average asking price in Wandsworth fell from 522,000 to 481,000 in a single month - or 7.9%. Homes in Brent, Kingston-upon-Thames, Richmond-upon-Thames and Greenwich were down more than 6.5%.

Posted by bufferbear @ 01:12 AM 15 Comments

House prices fall as buyers fail to take up a bargain (Rightmove)

Times: House prices fall as buyers fail to take up a bargain

In London, where the market has deteriorated sharply, asking prices have dropped by 21,096, or 5.3 per cent, to an average 379,162 in a month. Prices are down 3.8 per cent in the capital over the past year, compared with 4.8 per cent across the UK.

Posted by hogwash @ 12:10 AM 11 Comments

Sunday, August 17, 2008

Its not my fault - its yours (honest)!

Times: Cross me at your peril, Brown warns plotters

Brown plans to relaunch his premiership by telling his enemies that they should not be playing politics at a time of economic troubles.

Posted by enuii @ 11:51 PM 7 Comments

And Now for Something Completely Different..

BBC: Minister calls for 'tax on rich'

Ivan Lewis "has called on the government to consider a tax on high earners to help the middle classes through the economic slowdown". "Other suggestions include a windfall tax or a temporary freeze on stamp duty payments". "Earlier this month, Chancellor Alistair Darling said that a stamp duty holiday was one option the government was considering to boost the stagnant housing market"...That's sooo original Ivan!

Posted by alan @ 09:28 PM 8 Comments

Sunday Prayers - Maybe it could work for the house market?

BBC: Petrol pump pilgrims keep faith

A prayer group in Washington DC is claiming the credit for the recent sharp drop in the US price of petrol. Rocky Twyman, 59, a veteran community campaigner, started Pray At The Pump meetings at petrol stations in April. Since then, the average price of what the US calls gasoline has fallen from more than $4 a gallon to $3.80.

Posted by stevie dee @ 04:19 PM 6 Comments

Another nail in the Buy to Plummet market ?

Times online: Rent out your home and move abroad

With the UK economy heading for the duldrums or worse and the property market in freefall with the buy-to-let market feeling the influence of huge amounts of people trying to let and sell their property simulatneously what the market really needs now are a chunk of middle England trying to let their homes on the open market because the want to escape the gloomy weather and doom laden economic climate ! "Fed up with the inclement weather and the gloomy economic climate, they are heading abroad not merely for the summer, but for a year or two. Call it a grown-up gap year, if you will."

Posted by nooneo @ 03:41 PM 15 Comments

I just love the word 'glut'- only four letters, ideal for subs

Observer: Property glut drives down rents

'This downward trend in average rents may well start to spread as the rental market becomes saturated with new properties,' said Daniel Lee of Globrix. 'There is a strong probability that for a significant number of new landlords the rental returns will not cover the mortgage payments.'

Posted by kagiso @ 03:08 PM 6 Comments

Time to tear up Gordon's little book of clichs and have an honest conversation

The Observer: Chancellor doesn't seem overly unsettled by the chill in the air

The Bank of England governor tells us he detects a 'feeling of chill in the economic air', but Alistair Darling is still eagerly seeking patches of blue sky between the clouds, while repeating the faintly desperate-sounding mantra that 'the economic fundamentals remain strong'. House prices are plunging faster than during the early 1990s crash, and unemployment has increased for six months in a row, with last month's 20,100 increase in the number of people claiming jobless benefits the largest in 16 years. King seems irritated at the impression created by hints and rumours from ministers that a clever little measure or two could unlock the mortgage markets, or restore the housing market instantly to health. 'Pretending there's a magic solution is not the answer,' he said.

Posted by mytimeisnigh @ 01:05 PM 7 Comments

New(est) Labour: from "right to ownership" to "right to doube holidays"

Times: Minister wants supertax on Britains top earners

"Lewis points to families who take two holidays a year, belong to private gyms and eat in restaurants, but struggle to pay soaring bills, as the group in need of help" what arent these clowns prepared to say in order to get votes!!??

Posted by confused76 @ 12:53 PM 1 Comments

Quick, cut rates again! yes that's the answer (again)

telegraph: Economists warn inflation could fall below 1 per cent

"Although there is bad inflation news around, there isn't much [the Bank of England] can do - it is too late"

Posted by paul @ 11:30 AM 11 Comments

Don't worry, be happy

Scotsman: Council of Mortgage Lenders plays down fears of negative equity

THE problem of negative equity for home owners is being overblown and is not an issue as long as borrowers can meet their mortgage repayments, according to the Council of Mortgage Lenders (CML). The trade body is trying to play down claims from ratings firms, investment banks, researchers and politicians that negative equity places homeowners at risk of repossession.

Posted by little professor @ 11:02 AM 5 Comments

the unprecedented propping up of the dollar and bombing of gold and oil the week before the curtain opened

Information Clearing House: How To Conceal Massive Economic Collapse

On July 16, 2008 . . . , the Federal Reserve reported holding $2,349 billion of US government paper in custody for central banks. In its report released today, this amount had grown over the past three weeks to $2,401 billion, a 38.4% annual rate of growth. . . . So central banks were accumulating dollars over the past three weeks at a rate far above what one would expect as a result of the US trade deficit. The logical conclusion is that they were intervening in currency markets. They were buying dollars for the purpose of propping it up, to keep the dollar from falling off the edge of the cliff and doing so ignited a short covering rally, which is not too difficult to do given the leverage employed in the markets these days by hedge funds and others.2 Gold and oil had to be pushed down

Posted by malct @ 09:43 AM 3 Comments

Cheaper Mortgages? Check the article's comments

Times Online: Ban compound interest to save the planet

Don't know how this one slipped through first time, but valid article it is. Compound interest has been with us so long that we take it for granted. We borrow money and accept that we must pay interest to compensate the lender. But look what happens. If we pay 3% on 100 then at the end of the first year we should pay back 103. If we fail to repay that then we must also pay 3% on the 103. This seems innocuous but the debt increases exponentially. A debt left unpaid, at 3%, doubles every 24 years. At 6% it doubles in 12 years. And doing without money that was lent at interest didn't stop our predecessors trading, or building incredible monuments, from Westminster Abbey to the colleges of Oxford and Cambridge.

Posted by malct @ 09:29 AM 10 Comments

"Russian armies can't march into other countries while Russian shoppers carry on marching into Selfridges"

Standard: Slap shopping ban on Russians: Tory

I think it is time the Western governments wake up under the burden of $110 a barrel oil, in order to protect our standard of living, not to improve the Russian and Middle Eastern-cum-Chavez finances

Posted by confused76 @ 09:17 AM 3 Comments

Judith is way out of touch

Times: Apartment prices in Belfast continue to boom

"City apartments are a blight in the market in many UK cities, but in Belfast they are still booming - with the average price for a flat in the city up 25.1 per cent, helping to push up prices for all types of homes in the city by 3.3 per cent"... anyone able to confirm?

Posted by confused76 @ 08:55 AM 4 Comments

Buy-to-Regret risk management

Fool: 22 Buy To Let Mortgage Bargains

Most buy-to-let deals now require at least a 25% deposit and the most competitive deals are reserved for those with 40% or 50% upfront. TMW offers a two-year tracker rate from 5.49%, but you will need a massive 50% deposit to get it. If you have 35% a rate of 5.59% is available, and both deals come with a large fee of 2.5%.

Posted by pendulum @ 08:36 AM 4 Comments

No More Spin

Guardian: Things will get worse: you can bet the house on it

...the property boom which began to gather pace in the mid-1990s, and more than tripled house prices in a decade, turns to bust.... part of the reason house prices have turned so quickly since last autumn is that, deep down, we all half knew the market had gone mad. Now, analysts are scrambling over each other to increase their predictions of how far prices could fall from their peak.

Posted by pendulum @ 08:29 AM 13 Comments

How long can they hold?

Independent: Buy-to-let landlords in mortgage arrears

An estimated 10,000 buy-to-let landlords are more than three months behind with their mortgage, according to research from independent financial adviser Hargreaves Lansdown. More may follow and start struggling to meet their repayments as large numbers of landlords are due to come off cheap two- and three- year fixed-rate mortgage deals in 2009 and 2010.

Posted by peter_2008 @ 01:37 AM 1 Comments

Saturday, August 16, 2008

Service economy blues

BBC News: Sterling: Pound slumps against dollar as analysts predict UK rate cuts and recession

Fears that the UK economy is heading into recession sent sterling tumbling against the dollar for the eleventh day in a row yesterday - its longest losing streak since the break-up of the Bretton Woods fixed exchange system in 1971.

Posted by quiet guy @ 10:52 PM 7 Comments

Want to catch a "falling knife"?

TIMES: Lehman Brothers in talks over sale of $40bn real estate assets

"Lehman Brothers, the Wall Street investment bank, is understood to be in talks to sell its entire $40 billion (21.5 billion) real estate portfolio in a move to stem losses incurred during one of the worst property slumps since the Great Depression. The bank whose stock has fallen 69 per cent since the credit crisis erupted just over a year ago is believed to be prepared to take a $5 billion hit on the sale of the assets and securities".

Posted by alan @ 05:18 PM 1 Comments

Guess weve reached the Tipping Point then?

BBC News: Jobless total up as economy slows

The number of people out of work rose by 60,000 in the three months to June, taking the official unemployment rate to 5.4%, official figures showed. The Office for National Statistics (ONS) said unemployment increased to 1.67 million between April and June.

Posted by ian hills @ 05:11 PM 0 Comments

Builder incentives that helped to overheat the market probed by the feds.

The Wall Street Journal: FBI Probes Unusual Incentives for Home Buyers

When home sales began to slow at the start of the downturn, home builders offered buyers incentives -- instead of reducing prices -- to stimulate demand. The incentives included cars, tuition and credit-card payments, and even cash. Now, federal investigators are questioning whether some of those incentives misled lenders and caused them to write mortgages that were artificially inflated, contributing to today's home-price crash.

Posted by landedgentry @ 04:32 PM 1 Comments

Hundreds of families potentially losing their homes.

Express and Star: Stafford town is UK hotspot for repossessions

Stafford has emerged as one of the fastest-growing areas in the country for home repossessions, according to the latest statistics.The affluent town might have been expected by most people to weather the credit crunch better than its less well-off neighbours. But new statistics show that over the past few months, repossessions have exploded by more than 70 per cent, prompting fears of an increase in homelessness in the area. In July, Stafford councillors anticipated a big increase in the number of people needing help with re-housing.

Posted by mytimeisnigh @ 03:49 PM 7 Comments

And sterling is dropping because the BoE is snoozing on inflation ...

Independent: Cost of overseas travel soars as sterling drops 11 days in a row

BoE has stopped worrying about inflation, so sterling plummets, making overseas travel more expensive, raising inflation! The BoE is bringing about the recession.

Posted by paul @ 01:58 PM 4 Comments

A Short History of UK House Prices

Alice Cook's UKBubble Blog: Blog article

Alice' Cook's commentated graphs put everything very succinctly about what has happened, and may happen, as the housing Market goes down - a severe downward overshoot.

Posted by brian in canterbury @ 01:38 PM 0 Comments

Just when would you like to start World War 4 ?

Times Online: A catastrophe in the making

"The Russians believe that the interceptors have nothing to do with Iran but are part of a Western defensive shield that could one day make the Kremlins huge stockpile of ballistic missiles obsolete." ... "the Polish move, and the Russian threat, provide the clearest evidence yet that the six-day Georgian war has spread to Eastern Europes ancient fault-lines." WW3 was the cold war. WW4 will be the economic war, - but defined by national intervention.

Posted by fahrenheit451 @ 11:04 AM 7 Comments

my bricks are my pension

Metro: Buy-to-let pensions facing trouble

Tens of thousands of buy-to-let investors who opted for property as their pension and bought at the top of the market could now be seriously out of pocket, according to new research. Almost 10,000 buy-to-let mortgages are now more than three months in arrears, but the real test of affordability is yet to come in 2009/10, when those who borrowed large sums at relatively cheap rates in 2007 come off their two and three year fixed deals. uh uh uh

Posted by confused76 @ 09:58 AM 1 Comments

"In some of the country's most prosperous areas, home repossession cases have increased up to 95 per cent"

Mail: Middle-class homes crisis: 39,000 facing repossession as spectre of the Nineties returns

Why should the middle class and even the rich be immune: the higher the income the more massive the debt burden naive house buyers have saddled themselves with! waiting to see blood and tears on the streets here in London

Posted by confused76 @ 09:35 AM 1 Comments

But I thought house prices were going to go up!!

Daily Express - The World's Greatest etc: NUMBER OF PEOPLE LOSING HOMES SOARS

''...REPOSSESSION demands are soaring as home owners fail to pay their loans, figures show. The number at risk of losing their homes has risen by nearly a quarter in the past year. A total of 28,658 mortgage possession orders were made in England and Wales from April to June, up four per cent on the previous quarter and 24 per cent more than for the second quarter of last year, said the Ministry of Justice...''

Posted by hpwatcher @ 08:25 AM 8 Comments

Conway talking cr@p

Telegraph: Property market: Word on the street

The FTB can't afford to enter the marketplace. [agreed]. This is not because prices are too high but because it is prohibitively expensive for a young, less well-off person to borrow money. [darling, where are my pills?]. Unless the Government helps, it is difficult to see this improving for at least two years. [yes, by leaving it alone]. This would be disastrous for the market.[?] I have even heard one expert predicting a 40 per cent fall in prices. [sensible bloke, then].

Posted by pendulum @ 07:06 AM 12 Comments

Vince knows the score!

Metro: Recession threat 'could last ten years'

'When I talk about recession, I'm talking about it not in the economic sense two consecutive quarters of negative growth but as most people see it, with job losses, house repossessions and a lack of consumer spending. The doomsday scenario would be that we finish up like Japan did, with ten years of stagnation.' With unprecedented levels of debt, at best, preventing people from spending, at worst, not being paid back at all, this prediction is most likely. Problem being we are not Japan, home of Sony , Honda, Toyota, etc. etc. We have nothing to fall back to.

Posted by cheekie charlie @ 12:16 AM 12 Comments

Friday, August 15, 2008

Money is king as far as the law is concerned

Times: Surge in repossession orders clogging up the courts

Courts are having to delay adoption hearings, contract disputes and personal injury claims to deal with a surge in mortgage repossessions which must legally be dealt with within eight weeks of being filed. Just goes to prove that as far as the legal system is concerned money really does talk loudest.

Posted by enuii @ 11:37 PM 2 Comments

Hope for a sale,,,

Telegraph: Buy-to-let landlords: how to avoid repossession

"It is worrying that 183,000 buy-to-let mortgages were taken out close to the top of the market," says Hargreaves Lansdown. "The real test of affordability is yet to come, in 2009 to 2010, when those who borrowed large sums at cheap rates in 2007 come off their fixed-rate deals."We are getting an increasing number of inquiries from professional buy-to-let landlords who are no longer able to churn their property portfolios to ensure they stay afloat."

Posted by pendulum @ 07:27 PM 3 Comments

Genius graph explaining the thoughts of Buy-to-regret landlords

Patrick.net: HPC Buyer Mentality

No summary. Just a great graph!

Posted by beartil2010 @ 05:42 PM 8 Comments

Still think your house is your pension?

This is money: Buy-to-let pensions facing trouble

Borrowing to invest can be a hazardous strategy, just as much with property as with any other form of investment, because you magnify losses as well as gains. - Brutally true

Posted by peter_2008 @ 05:35 PM 0 Comments

London Flagship EAs CLOSE. So, holding up well ?

London Evening Standard: Estate agents shut as housing market slumps

Flagship branches of major estate agents in central London are being closed as house sales nosedive. Offices in prime locations including Chelsea, Knightsbridge and Fulham have shut and some industry figures are admitting the market is now worse than ever.

Posted by doomwatch @ 04:37 PM 8 Comments

Off to hell in a handcart

ThisIsMoney: Britannia pays as mortgage arrears soar

Arrears were rising most sharply on mortgages with high loan-to-value advances made to first-time buyers. New city-centre flats that have plummeted in value in the housing downturn are also proving to be a big source of arrears, it said.

Posted by paul @ 04:32 PM 1 Comments

expect lines of people cashing out of B&B soon...lol

Yahoo: Nervous wait for B&B underwriters

All could be left with millions of unwanted shares in a possible re-run of the 4bn right issue launched by HBOS a few months ago. Just 8.3% of shareholders backed that deal, leaving Morgan Stanley (SPU - news) and Dresdner Kleinwort with a massive 1.4bn share to sell.

Posted by mark @ 03:10 PM 2 Comments

House prices double in 6 months!

Guardian.co.uk: Basra: It's absolutely booming!

House prices have doubled in a matter of months. Restaurants are opening alongside the waterside corniche by the Shatt al-Arab waterway. Oil-rich Kuwaitis are beginning to move in, and trade at the port is booming. This is the rosy picture painted by the British. Could Basra see the next BTL boom?

Posted by davidg @ 02:15 PM 1 Comments

But the man from BOE says NO

Yahoo: Gatwick braced for bank holiday misery

Workers voted overwhelmingly to take industrial action after rejecting a 3% pay increase, way short of the 5% they're after.

Posted by mark @ 01:55 PM 3 Comments

Time to Lower the Rents?

Grauniad: Tenants sitting pretty as rents fall

Quite simply the most hilarious thing I have read for some considerable time. Utter bear porn, but one won't feel quite so shameful after indulging. Enjoy!

Posted by fancypants @ 01:24 PM 37 Comments

Will we beat the 1991 record for repossessions?

Guardian: Repossession orders up by a quarter

The number of homeowners in England and Wales threatened with repossession rose by a quarter in the year to the end of June, official figures showed today. The Ministry of Justice said lenders made 28,658 possession orders against borrowers in the second quarter of the year, 24% more than in the same period of 2007.

Posted by quiet guy @ 01:10 PM 3 Comments

Was this the REAL reason for our invasion of Iraq?

Guardian: Oh for a Basra buy-to-let

According to Major General Barney White-Spunner, just back in the UK from his post commanding British forces in southern Iraq, the market in Basra is hot.

Posted by papabear @ 12:45 PM 6 Comments

How Does This Affect House Prices?

Associated press: Russia: Poland risks attack because of US missiles

MOSCOW (AP) An agreement that will allow the United States to install a missile defense battery in Poland exposes the ex-communist nation to an attack, a Russian general said Friday. Poland and the U.S. struck a deal on Thursday to deepen military ties and place a missile interceptor base in Poland. Gen. Anatoly Nogovitsyn, deputy chief of the Russian general staff told reporters Friday that the agreement exacerbates U.S.-Russian relations that are already tense because of fighting between Georgian and Russian forces. He said the deal "cannot go unpunished." Worth a little consideration.

Posted by plato @ 12:38 PM 14 Comments

Desperate times in the housing market call for desperate measures

FT: Councils push to become mortgage lenders

The New Local Government Network (NLGN) is lobbying support from local councils in a bid to persuade the government to allow councils to offer mortgages to those struggling under the credit crunch. NLGN has been campaigning for local authorities to be able to offer financial support to those affected by the credit crunch. It hopes this would stave off repossessions and evictions, prop up the housing market to prevent remortgage difficulties and support first-time buyers to buy locally. Currently, the NLGN is gathering signatures to a letter from council leaders calling for the government to support local authority mortgages. (See letter attached.)

Posted by jack c @ 10:41 AM 37 Comments

Mortgage possession claims grew by 17% in the first three months of 2008

BBC: Repossession orders climb by 24%

The number of homeowners in England and Wales facing repossession after falling behind on their mortgages has risen. The Ministry of Justice said 28,658 orders were made by the courts in England and Wales in the second quarter of 2008. That was up 24% on the same period in 2007 and 4% higher than the first quarter of 2008. The figures come a week after lenders' data for actual repossessions across the UK also showed a leap in numbers.

Posted by jack c @ 10:36 AM 0 Comments

Another Nail in the GBP Coffin

FT: Merrill set to avoid UK tax after $29bn loss

Merrill Lynch is unlikely to pay corporation tax in the UK for several decades after $29bn (16bn) of losses suffered by the US investment bank were charged to its London-based subsidiary. "After the latest sale, Merrill has a UK operating loss of about $29bn that it can carry forward indefinitely for tax purposes" - What the Hell?

Posted by layers @ 10:25 AM 9 Comments

$ is no safe haven with this news

FT: Higher rungs of housing ladder feel mortgage pain

"US Prime borrowers are falling behind on their mortgages at more than three times the rate they were in 2007, a pace far exceeding the rate at which Alt-A and subprime borrowers are becoming newly delinquent on their home loans, according to data from Credit Suisse and Loan Performance." Even prime borrowers will fall behind in their mortgages when they go into negative equity even though they can afford to pay. When you realise you have made the mistake of your life buying that $3.5 million home that is now worth $2 million, you walk away.

Posted by mountain goat @ 10:17 AM 1 Comments

A black hole forming (not in outer space)

Financial Times: Merrill leaves hole in Londons finances

"But following the credit crunch it is likely to be many years before Merrill needs to worry about paying British corporate taxes again. As a result of a quirk of the investment banks internal structure, the majority of huge losses it has suffered as a result of the global credit crisis have been booked through its London-based subsidiary."

Posted by cheekie charlie @ 10:13 AM 0 Comments

I'll buy that for a dollar!

The Daily Telegraph: House sold for $1 in sign of US property crisis

In a sign of how desperate the property crisis has become in parts of the US, a foreclosed house in Detroit has sold for just one dollar around 50 pence. But even at that bargain price, the two-storey, lawn-fringed house on the city's impoverished east side took 19 days to sell.

Posted by timelash @ 06:05 AM 8 Comments

The U.S. multiyear downtrend is over. The process we described as "carving out a bottom" has been completed.

fxstreet: The Dollar Finally Escapes the Bear Den

Recent days have been a watershed, but it has been a long time in the making. The dollar bottomed against the British pound and Canadian dollar (half of the G7 currencies) last November, as the Federal Reserve expanded its lending facilities and these countries prepared to cut rates. The dollar bottomed against the Japanese yen and the Swiss franc in late March, around the time that the Fed made a stand to protect what it perceived to be a potential systemic risk in the demise of Bears Stearns. The dollar recorded its low against the euro in early July, as the U.S. Treasury and Fed made it clear that a failure of government-sponsored agencies

Posted by big chris @ 03:13 AM 36 Comments

Thursday, August 14, 2008

Today's Article - an Interview....

Wall St Journal: Greenspan Sees Bottom In Housing, Criticizes Bailout

"Alan Greenspan usually surrounds his opinions with caveats and convoluted clauses. But ask his view of the government's response to problems confronting mortgage giants Fannie Mae and Freddie Mac, and he offers one word: "Bad"."

Posted by alan @ 10:00 PM 2 Comments

12,571 companies where the administration or liquidation process began more than 15 years ago are not finalised.

Guardian: Insolvency: a licence to print money

David Cameron wants to reform insolvency procedures. Insolvency is a licence to print money. Practitioners are paid before any creditor and can charge more than 600 for an hour's work. They do not owe a "duty of care" to all stakeholders affected by their practices, and that provides plenty of incentives to prolong insolvencies. Both Maxwell Communication Corporation plc (looted by Robert Maxwell) and the Bank of Credit and Commerce International (BCCI) began liquidation proceedings in 1991. Neither has been finalised, but MCC plc has generated 88m in fees for the insolvency practitioners and BCCI's liquidators have collected over 400m. Nor are these cases unusual. Is the Tory leader willing to take on big accounting firms and open a new chapter in saving jobs?

Posted by malct @ 09:23 PM 6 Comments

Better out than in, better late than never. Prem Sikka never said this

Guardian: We must break the prism of corporate interests

It is difficult to see how the corporate elites can offer us a fresh way of thinking about regulation, especially as they have a financial interest in the outcomes. At best, they may make marginal changes consistent with their financial interests. Their values are the source of crisis. They have shown little interest in openness, responsibility, accountability, honesty or ethical conduct. Daily headlines about off balance-sheet accounting, consumer rip-offs, tax avoidance and conflict of interests provide abundant evidence of the bankruptcy of their values and ideas. Huge amounts of wealth have been transferred from normal people to corporate elites and wheeler-dealers through the pensions mis-selling, mortgage endowment, split trusts, protection payment insurance and other scandals.

Posted by malct @ 09:10 PM 4 Comments

David Bloom, the head of currency strategy at HSBC, warned that sterling was "going to hell in a handbag", and expects it to end the year at $1.75.

telegraph: Sterling's slide set to deepen, UK banks warn

Paul Robson of Royal Bank of Scotland: "I expect sterling to weaken against the euro over the next few weeks, perhaps to 80p as the Bank of England is set to lower interest rates before the ECB.

Posted by big chris @ 09:01 PM 3 Comments

Stabilizing U.S. economic growth, falling oil prices and a deteriorating outlook outside the United States have led Goldman Sachs to abandon its ten-year bearish stance on the U.S. dollar.

reuters: Goldman says U.S. dollar has bottomed, euro to fall

In a research note on Thursday, the largest U.S. investment bank said the dollar's long-term downtrend has ended and its undervaluation could lead to a substantial improvement in the U.S. balance of payments position.

Posted by big chris @ 08:55 PM 0 Comments

If everyone stopped borrowing today, the economy would gradually collapse because the money supply would contract as past loans and interest were paid off

Times online: Is interest-free lending inevitable?

from comments - Wow. It's amazing to see this subject pop up in a mainstream environment. As a former investment banker and trader I can only affirm what Richard is saying. The banking system is on the verge of total collapse not just due to a complete binge in the creation of new credit by banks but in the way the system is actually structured. Did you know that there has been an Early Day Motion in Parliament calling for public interest free money for the last 6 years? "we will have to start putting money into circulation in an entirely different, interest-free way if a serious depression is to be averted." RD "Do you really think banks will allow anybody to deprive them of that right? " JPF (interview) sorry it's a bit late (days) but it's still news to HPC ie valid article

Posted by malct @ 08:26 PM 10 Comments

It looks to me like Bear Stearns got riddled with bullets The buyers were confident the stock would crash.

bloomberg: Bringing Down Bear Began as $1.7 Million of Options (Update2)

On March 11, the day the Federal Reserve attempted to shore up confidence in the credit markets with a $200 billion lending program that for the first time monetized Wall Street's devalued collateral, somebody else decided Bear Stearns Cos. was going to collapse. In a gambit with such low odds of success that traders question its legitimacy, someone wagered $1.7 million that Bear Stearns shares would suffer an unprecedented decline within days. Options specialists are convinced that the buyer, or buyers, made a concerted effort to drive the fifth-biggest U.S. securities firm out of business and, in the process, reap a profit of more than $270 million.

Posted by malct @ 08:05 PM 2 Comments

House bought for 30,000....Sold for 50p !!

Daily Mail: US Property Market Hits All Time Low

Forclosed house, stripped by thieves and lived in by squatters. Extreme case of the housing crash.

Posted by aje141269 @ 07:42 PM 0 Comments

Needs Landlord Licensing as well as regulations for tenants to be protected.

BBC: Rental sector 'needs a shake-up'

Too much property in the private rented sector is in a poor condition, is badly managed and requires better regulation, according to a Law Commission report. It wants a central regulator to oversee landlord associations and professional bodies in England and Wales. The proposal is for this to replace the courts or tribunals as the first port of call for disputes between landlords and tenants. The report says the private rented sector has a "poor reputation".

Posted by stevie dee @ 05:51 PM 9 Comments

Simply no buyers!

BBC: Slump delays 'Cheesegrater' plans

"British Land will delay the development of the Leadenhall Tower in London's financial district, nicknamed the Cheesegrater, by at least a year. The firm blamed weak demand for office space and rising construction costs".

Posted by alan @ 04:22 PM 0 Comments

Latest Report from the National Association of Realtors (US)

CNN Money: Home prices have fallen 7.6% over the past 12 months

Real estate prices continued to post steep year-over-year declines during the three months ended June 30, according to a new report from the National Association of Realtors (NAR). Nationwide, the median single family, existing home price plunged 7.6% to $206,500 from $223,500 in the second quarter. The median price is one in which half of all homes sold for more and half sold for less.

Posted by stevie dee @ 03:42 PM 2 Comments

So the UK are looking at early 2010 and beyond?

Wal Street Journal: Greenspan Sees Bottom - In Housing, Criticizes Bailout

"Home prices in the U.S. are likely to start to stabilize or touch bottom sometime in the first half of 2009," he said in an interview. Tracing a jagged curve with his finger on a tabletop to underscore the difficulty in pinpointing the precise trough, he cautioned that even at a bottom, "prices could continue to drift lower through 2009 and beyond." His quarrel is with the approach the Bush administration sold to Congress. "They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units," which the government would eventually auction off to private investors, he said.

Posted by stevie dee @ 03:32 PM 6 Comments

up for sale for $1.

Detroit News via SOTT: Foreclosure fallout: Houses go for a $1 And it still took 19 days to find a buyer.

This house at 8111 Traverse in Detroit has been stripped of its siding, plumbing, copper wiring, hot water tank and furnace. Desperate to sell, the bank that owns it has put it up for sale for $1. One dollar can get you a large soda at McDonald's, a used VHS movie at 7-Eleven or a house in Detroit. The fact that a home on the city's east side was listed for $1 recently shows how depressed the real estate market has become in one of America's poorest big cities. And it still took 19 days to find a buyer.

Posted by malct @ 03:29 PM 6 Comments

lines for dinner parties

creditcrunch.co.uk: Down trodden first time buyers get social revenge.

Now the sensible people who were not suckered in by programs such as location location location, have been vindicated by todays (and the past few months) haliwide statistics. Up to half a decade of pent up emotions being on the receiving end of stick from the unquestioning herd, they have finally snapped and are preparing their own lines for dinner parties. - 'You bought a BTL last November? You f***ing dimwit!' - 'You paid 200K for a 2 bedder in central Manchester? You daft c**t!' - 'Seen these Haliwide monthly figures - I bet you're well gutted!'

Posted by mountain goat @ 03:24 PM 21 Comments

Coming to a UK near you today.... Don't miss "inflation" starring Gordon Brown, showing first in the USA with guest star Bush

CNN: Inflation surges by 5.6%

Consumers feel the sting as prices jump again to highest point since 1991 - monthly increase twice what was expected.

Posted by mark @ 02:57 PM 1 Comments

If even the autocratic Chinese can't prevent their bubble bursting, what hope does Mervyn have?

Economist: Boom to bust: China's property bubble is about to burst

The sizzle is off China's property markets, and that's potentially bad news for the country's social stability. In the past two years China's property market has enjoyed a spectacular rise, with average prices in some cities doubling. But that raised a red flag with Chinese economic policymakers, and in late 2007 the central government made controlling the rise of asset prices a policy priority. Since then, the State Council has rolled out a series of regulationsfrom credit ceilings to a 40% down-payment requirement for second mortgagesin order to combat property speculation. The effect was immediate. In early 2008 previously soaring housing markets in southern China began to go into a tailspin.

Posted by drewster @ 02:49 PM 1 Comments

Missile talks with Poles gain urgency

FT.com: Missile talks with Poles gain urgency

I thought this was to do with defending against missiles from Iran, so why is it gaining urgency? surely it has the same level of urgency.

Posted by whiteknight @ 02:05 PM 7 Comments

King argues against irresponsible lending

Independent: Bank is powerless to rescue housing, King warns

After six months of falling prices, a rising tide of repossessions and the prospect of millions of families slipping into negative equity, the Governor of the Bank of England, Mervyn King, said yesterday that there was little the authorities could do to prevent a housing crash, if that is what the market demanded.

Posted by quiet guy @ 02:05 PM 2 Comments

OMG - A show on how to be an estate agent!

BBC iPlayer: Double Agents: Lettings

Kristian Digby and Dominic Littlewood put their property knowledge to the test in the real world of estate agency. The guys sample the fast-paced world of the Birmingham rental market. Will the boys resort to dirty tricks in order to net the most potential tenants? Does anyone really care about the trials and tribulations of an estate agent? Do the BBC have any other programming ideas other than those which are property related? How sad.

Posted by landedgentry @ 01:29 PM 1 Comments

Euro under pressure

guardian.co.uk: Euro pinned down as euro area growth contracts

LONDON, Aug 14 (Reuters) - The euro came under pressure on Thursday, as figures showing contraction in the euro zone's economy backed an increasingly gloomy view of global growth, giving a further boost to the U.S. dollar. German and French growth shrank in the second quarter, culminating in a 0.2 percent contraction in overall euro area growth that raised the spectre of recession in Europe.

Posted by plato @ 01:16 PM 0 Comments

cebr's latest consumer and housing prospects report

Professional Adviser: Cebr: house price boom in 2010

The impact of the credit crunch has already sown the seeds for a renewed house price boom from 2010, according to the cebr. The economics analysts said there will be a 20pc dip in new home completions this year. And, with completions tipped to remain below government targets for the next five years, this will fuel a medium term supply shortfall and consequent upwards price pressures. The conclusions were reached in the cebr's latest consumer and housing prospects report, which sees average prices falling by 14pc, peak to trough, from end-2007 to mid-2009.

Posted by jack c @ 11:28 AM 20 Comments

Bellway - Cancellations up whilst Sales, prices, reservations and margins are all down

Citywire: Housebuilder Bellway's sales fall 14% as cancellations rise

British housebuilder Bellway has seen sales fall substantially in the last year as the impact of flagging consumer confidence and an 'unprecedented' number of cancellations impacted the business.The group, which sells homes across the country and employs around 2,000 staff, revealed sales had fallen by 14.2% in the last year to the end of July, down to 6,556.It has also seen the price of its deals decline to 169,000, from 173,000, with the group attributing some of the decline to the fact that 20% of the completions were to housing associations.

Posted by jack c @ 10:56 AM 0 Comments

Will Herbert Asquiths radical Peoples Budget of 1909 be re-visited?

Citywire: A fresh approach to house price boom and bust

While the current financial crisis is yet to run its full course, it is right that some thought is now being given to how to avoid similar problems in the future. The most widely touted measure is tighter regulation, particularly of banks and the finance sector more generally. And that is surely right, as the events of the past twelve months have proven beyond doubt that banks cannot be left to their own devices. An essential problem we in the UK need to address is that our political and tax system encourages speculation in property.

Posted by jack c @ 10:45 AM 14 Comments

In 6 month time, it will be a Million

Guardian: Fastest rise in jobless since 1992 as King predicts bad year ahead

The claimant count level for July rose for the sixth month in a row by 20,100 to reach 864,700. This is far worse than even the USA. Why? Historical the number of claimant has been about 50% of unemployment. This means the increase in unemployment is probably about 40,000. The USA has a population of about 300 million and they are only losing about 50,000 - 60,000 job a month. The UK only has a population of 60 million. You do the math.

Posted by peter_2008 @ 10:16 AM 0 Comments

No she doesn't......and I've just put my fist through my monitor!

Youtube (7th Aug): Credit crunch? Kirstie Allsopp explains the housing market

'people are trapped in their homes' because of a stagnated market, according to the property p@rnstar.....spouts on as usual.

Posted by whostolemyendowment @ 10:03 AM 0 Comments

Another Builder in Trouble

Guardian: Housebuilder: reservations down 45%

British housebuilder Bellway said today reservations for its homes slumped by 45% in the last six months compared with a year ago as the housing market experiences one of its worst downturns since the early 1990s.

Posted by peter_2008 @ 10:02 AM 0 Comments

Moneyacts research "Mortgages will never again become as easily and widely available as they were a year ago"

FT: Damage to mortgages is irreversible: Moneyfacts

Research into the market by financial advice website Moneyfacts, published on Monday, shows the full extent of the credit crunch, with the number of available products down about 70 per cent to fewer than 4000 this August. Average rates and fees are up across fixed and tracker mortgages while average maximum LTVs have dropped to 80 per cent. And lenders have stopped offering 100 per cent plus products altogether, while only two offer 100 per cent mortgages, compared with 33 last August. SEE TABLE

Posted by jack c @ 10:01 AM 10 Comments

Buyers are taking a wait and see attitude,uncomfortable with buying a home which may be worth less in six month's time

FT: Third of homebuyers waiting for prices and rates to fall

More than a third of homebuyers are putting off purchasing because they believe rates will be cheaper in six months time, according to HSBC.Research from the lender found that despite 98 per cent of people being able to secure mortgage finance, people are not confident to fund a new property due to further rises expected in the cost of living. The study found that while one in 10 people were keen to get on the housing ladder, 37 per cent said they were waiting for prices to fall further while 36 per cent said they were concerned over the rising cost of living.

Posted by jack c @ 09:54 AM 5 Comments

Better odds on a lotto jackpot than your endowments will break even!

Mortgage Introducer: Most endowments mis-sold

Fairinvestment.co.uk has discovered that 87 per cent of Brits with an endowment policy believe that it was sold under false pretences. * One of Thatcher's many legacies!

Posted by whostolemyendowment @ 09:43 AM 1 Comments

Where is this all going to end?

BBC: US home foreclosures increase 55%

More than 272,000 people in the US received a foreclosure notice in July, a rise of 55% on a year earlier, according to analysts Realtytrac. Florida and California had the highest rate of foreclosures, figures showed. In a further indication of the severe problems affecting the US housing market, more than 77,000 homes were repossessed in July. As a result of this increase, 17% of all homes for sale in the US are repossessed properties.

Posted by stevie dee @ 09:31 AM 0 Comments

So near but yet so far...

Yahoo - Tech Ticker: China's Economic Miracle Comes Down to Earth

Old China hands have maintained for years that the country's economy would stay strong through the Olympics. Well, now the Olympics are almost done, the stock market has crashed, and inflation is out of control. So is this the end?

Posted by stevie dee @ 09:21 AM 0 Comments

Action needed

Times: We need stamp duty reforms, not rumours

Many investors are said to be insanely anxious not to miss the floor, the point at which prices stop sliding; they could see the stamp duty holiday as that moment.

Posted by confused76 @ 07:56 AM 7 Comments

King squares up to Darling

Times online: King opposes Treasury's liquidity plans

Mr King dismissed the idea of public backing for new mortgage securities. He said: It would be a very dangerous move to [have a] situation where the Government saw its major role as guaranteeing lending. Why should the taxpayer take on the risk of borrowing by individual borrowers, some of whom are risky? Its the lenders who should take the risk . . .

Posted by sold out @ 07:32 AM 3 Comments

but growing fears about the fragile state of the UK economy and the global flight to the US dollar have hit hard.

The euro is now the skunk at the garden party: a net 71pc say it is overvalued and most think it will fall next year.

telegraph: A net 58pc of fund managers think the greenback is undervalued, the highest level since the survey began

David Bloom, HSBC's currency chief, said the greenback's moment of schadenfreude had come, ending a seven-year slide that has called into question its viability as the world's reserve currency. "It has become apparent that other economies are deteriorating fast, and the whole decoupling thesis has started to come apart at the seams. Canada is frozen over. We have Arctic conditions in Sweden, a landslide in Germany, and the UK is falling off the white cliffs of Dover," he said

Posted by big chris @ 01:44 AM 5 Comments

Wednesday, August 13, 2008

A sign of Mortgage Market Recovery?

BBC: HBOS to cut mortgage sector jobs

HBOS is to cut 325 jobs by the end of March next year as it closes one of its specialist mortgage brands.

Posted by peter_2008 @ 10:28 PM 1 Comments

Oh Dear I realy do not want to know this.

The press association: Bush sends US troops to Georgia

The US is sending troops to embattled Georgia in the form of a humanitarian aid exercise, President George Bush said. Mr Bush said military planes would deliver supplies in a move which would put American forces in the heart of the region. The president said he was concerned that Russia might be violating the ceasefire in Georgia and he expected all Russian forces to withdraw. He is also sending Secretary of State Condoleezza Rice to Paris for talks with EU peacemakers and then to Georgia to express solidarity with the democratically elected government there. Mr Bush said he strongly supported France's efforts to broker an end to the fighting. He said the massive US humanitarian effort was already in progress and would involve US Naval forces as well as aircraft.

Posted by iain greig @ 09:45 PM 13 Comments

The economy is in safe hands

wall street journal: U.K. Inflation Rate Jumps to a 16-Year High

LONDON -- Consumer inflation hit a 16-year high last month in the U.K., rising to more than double the Bank of England's target. Consumer prices rose 4.4% from a year earlier, after rising 3.8% in June, the Office for National Statistics said. Last month was the third in a row in which inflation was more than a percentage point above the central bank's 2% target

Posted by eternal sceptic @ 09:04 PM 0 Comments

Hummer production line for sale?

Bloomberg: GM Debt Rating Lowered Further Into Junk by Moody's

"General Motors Corp. had its credit rating on $29 billion in debt lowered one step further into junk status by Moody's Investors Service on concern that falling U.S. sales will hurt efforts to boost cash flow". Without cash from the Fed, an industrial train wreck is almost upon us.

Posted by alan @ 08:56 PM 2 Comments

Future import of inflation.

BBC: Venezuela lifts basic food prices

Something we don't talk about on HPC which is equalling important. Importing inflation. China producer price inflation ( PPI) 10%, India's PPI 12% Vietnam 25%. Why is this important. we import most of our good and services from these companies, hence we will have to pay more in future. Respite for inflation downturn. I don't think so. Also remember that Oil, Petrol, diesel is still subsidised in these countries and price pressures are slowly being released into the economy.

Posted by deepak @ 08:04 PM 1 Comments

Japan in 1/2 a recession

BBC: Contraction in Japanese economy

First quarter of negative growth.

Posted by deepak @ 07:57 PM 0 Comments

Sterling hits 22-month low vs $ at $1.8650

Telegraph: Sterling slumps on BoE's gloomy Inflation Report

The Bank of England's Inflation Report took currency markets by surprise with the pound slumping as expectations of a rate rise vanished and traders began to bet on a fresh round of cuts in coming months.

Posted by alan @ 06:36 PM 10 Comments

No staff, no sale....no fee?

Cambridge Times: EA: Harrison Murray cuts back its working hours at its March office but business as usual

Picture taken from outside says a thousand words....The company this week refused to confirm how many staff have lost their jobs and said the Broad Street office will be open when other staff are not out on appointments. However, the spokesman could not say what those times would be.

Posted by whostolemyendowment @ 05:43 PM 0 Comments

Och aye - it's different buyin hooses in Scotland

mortgagesolutions: House purchases fall but prices ease upwards

Scottish house prices continue to increase at a modest rate but the volume of transactions has fallen by 27%, according to the latest Scottish House Price Monitor from Lloyds TSB Scotland. In the three months to 31 July 2008, the quarterly price index for the average domestic property in Scotland rose by 1.6% to give an average mix adjusted Scottish house price of 172,185. On an annual basis, Scottish house prices have risen by 9.3%. Conversely, the number of house purchase transactions within the Scottish House Price Monitor has fallen by 27% since the same period last year. Professor Donald MacRae, chief economist at Lloyds TSB Scotland, said.....

Posted by jack c @ 03:58 PM 16 Comments

and it starts......20% CPI here we come..lol

Yahoo: Strike Set To Cause Disruption

Tube travellers are facing "massive" disruption after London Underground maintenance workers voted to stage two 72-hour strikes. Members of the Rail Maritime and Transport union at Tube Lines will walk out at noon next Wednesday and again from noon on Wednesday, September 3.

Posted by mark @ 03:41 PM 29 Comments

and inflation is going to peak at 5% my Ar*e

CNN: China's cost spike

As China makes big moves to break into the first world, U.S. companies that manufacture there face soaring costs in a region that used to be the home of cheap, outsourced production. Here's why prices have jumped - and how 4 small companies are being crunched. -------------------------------- If the cost of Chinese made goods goes up we are all heading for a huge inflation increase.

Posted by mark @ 02:16 PM 3 Comments

Roubini says world economy is ****ed - full text

RGE Monitor: Roubini: The Perfect Storm of a Global Recession

"Still all G7 central banks are now worried about the temporary rise in headline inflation. So for now they are all on hold or threatening to hike policy rates to fight potential inflation risks. But over time severe recession risks and the risk of a severe banking and financial crisis - with credit losses now estimated to be at least $1 trillion and possibly as high as $2 trillions and hundreds of banks going bust - will force all G7 central banks to cut further policy rates. But this policy easing will be too slow and delayed, especially outside the US, and will occur only when the G7 and global recession will become entrenched. Thus, the policy response to this upcoming perfect storm will be too little too late to prevent it."

Posted by mountain goat @ 01:36 PM 5 Comments

Small losses add up

This is Money: Britannia pays as mortgage arrears soar

Britain's second-biggest building society today admitted that profits had plummeted due to the rising numbers of people falling into arrears with their mortgage repayments.

Posted by peter_2008 @ 01:32 PM 0 Comments

NEW ACTION FILM There are no car chases and nothing blows up. Except, possibly, for the entire economic future of the United States.

Washington Post: Indebted Ever After

The movie, "I.O.U.S.A.," debuting Aug. 21, is an 87-minute alarum A private-equity billionaire, a former federal government official and a Baltimore newsletter editor have made a documentary film that they hope can do what an endless parade of policy papers has not: Persuade Americans that debt has created a looming economic crisis that would make the Great Depression look like a market correction. What you don't know is how bad things really are. If you include all the unfunded entitlement obligations -- Social Security, Medicare, Medicaid and so forth -- we are actually in a $53 trillion hole. A debt that high, even super-investor Warren E. Buffett says in the film, "could create real political instability."

Posted by malct @ 01:12 PM 9 Comments

August 08 Inflation Report - including webcast

Bank of England: Inflation Report - August 2008 (direct link)

+ CPI Projections + GDP Projections + Q & A section in webcast

Posted by jason @ 11:05 AM 2 Comments

They May Be Looking ... But Are They Stupid Enough To Buy??

Mortgage Introducer: First timers re-emerge

First time buyers are showing signs of returning to the property market as house price reductions begin to take effect and lenders look to reduce mortgage rates.

Posted by renting2 @ 10:39 AM 18 Comments

Fed

BBC: US central bank in $25bn auction

The US Federal Reserve has auctioned $25bn (13.1bn) in loans to banks in its latest bid to boost credit markets. The results of Monday's auction were revealed on Tuesday and showed the auction was oversubscribed with 64 bidders seeking $54.8bn from the bank. This latest auction involved lending firms money for 84 days - rather than the 25 days of previous auctions.

Posted by jason @ 09:59 AM 0 Comments

BoE Inflation Report

BBC: Bank to signal inflation pick-up

The Bank of England is likely to provide evidence of tougher times ahead for the economy when it publishes its latest quarterly report on inflation. The report comes after the UK's annual rate of inflation rose to 4.4% in July, its highest level since 1997. Analysts said the Bank is likely to predict that inflation could touch 5% before falling back, leaving no scope for an early cut in interest rates.

Posted by jason @ 09:57 AM 6 Comments

Unemployment

BBC: Jobless total up as economy slows

The number of people out of work rose by 60,000 in the three months to June, taking the official unemployment rate to 5.4%, official figures showed. The Office for National Statistics (ONS) said unemployment increased to 1.67 million between April and June.

Posted by jason @ 09:54 AM 5 Comments

Video on how and why inflation numbers are messed with

the crash course chrismartenson.com: Fuzzy Numbers

15 min video on how inflation is fiddled, definitely worth a look. The same 3 techniques used to suppress inflation numbers are used to boost GDP numbers. Why do governments go to all this trouble? It's called "anchoring". Anchoring refers to peoples expectations of inflation. So the tricks and lies are all meant to convince us that everything is ok and keep us acting like good consumers.

Posted by mountain goat @ 09:44 AM 10 Comments

Better late than never

Citywire: How bad is the 'liar loan' problem?

Liar loans are causing havoc in the US housing market, and the FSA is in the midst of a major crackdown here in the UK. But how big is the problem, who is to blame, and why was nothing done sooner?

Posted by w smith @ 08:50 AM 0 Comments

the early impression that the worst of the subprime crisis was over turned out to be illusory.

SOTT Washington Post: UBS Takes More Hits in Subprime Crisis

UBS, one of the hardest-hit banks in the subprime mortgage crisis, said Tuesday that it lost $331 million in the second quarter as it took another $5.1 billion hit in write-downs on bad assets. The net loss for Switzerland's largest bank in the April to June period compared with a profit of $5 billion a year earlier, while the write-offs on dwindled holdings brought the total for the past year to $42.5 billion.

Posted by malct @ 08:26 AM 0 Comments

No supprises there then!

BBC news: Flats 'lead' the housing slowdown

A 3.6% drop in the price of flats in the UK between May and June contributed to the price of the average home falling from 216,625 to 215,029.

Posted by ian hills @ 07:42 AM 2 Comments

New world currency disorder.

Telegraph: Stage two of the gold bull market is just beginning

A war breaks out in the Caucasus, pitting Russia against a close ally of the United States. Inflation reaches a new peak in the euro-zone. The CPI reaches the highest in Britain since Bank of England independence. Rampant inflation sweeps the developing world. Yet gold crashes. It has failed to deliver on its core promises as a safe-haven and inflation hedge, at least for now. Why?

Posted by sold out @ 07:34 AM 18 Comments

First it was mortgages, now credit cards take the hit

FT: Rise in credit card debt charge-offs

UK consumers are walking away from their credit card debts in rising numbers, according to a report to be issued on Wednesday by Standard & Poors, the credit agency. Average charge-offs defined as repayments of principal and interest which credit card companies no longer expect to receive rose to 6.9 per cent by the end of June, up from 6.62 per cent at the end of March. Meanwhile, the data also suggest that British consumers are becoming increasingly dependent on their credit cards. .....

Posted by drewster @ 03:06 AM 0 Comments

Think tank calls for massive internal migration from north to south

Politics.co.uk: 'Make London bigger' to tackle inequality

"London must be massively increased in size to tackle national inequalities, a centre-right think tank has suggested. Policy Exchange is saying a substantial increase in London's size will allow people from poorer parts of the UK mostly in the north to move down to where there are better job prospects." HOW ABOUT MOVING THE JOBS UP NORTH INSTEAD?? No mention of how the creaking transport infrastructure in London would cope with another half million people commuting to work each day. No mention of how the water and sewerage systems, already overloaded, would cope. I'm all for growth but let's get the infrastructure in place first!

Posted by drewster @ 02:56 AM 20 Comments

Changes to tax on empty commercial property has interesting side-effects

Independent: Buildings destroyed after rate relief is abolished

Landlords of retail and office property now have to pay full business rates after a three month grace period whereas previously they received 50 per cent tax relief. A Treasury spokesman said: "Reforms to empty property relief are aimed at ensuring a fair balance between incentives to re-let property, and giving property owners a period of relief while they manage vacancies." Needless to say, the landlords aren't happy about what is effectively a Land Value Tax, even though economists agree that LVT is one of the best and fairest possible taxes.

Posted by drewster @ 02:41 AM 9 Comments

What do estate agents do all day?

Guardian: What do estate agents do all day?

Why doesn't an estate agent look out of the window in the morning? Because it would give them nothing to do in the afternoon.

Posted by peter_2008 @ 01:06 AM 12 Comments

Banks' Writedowns Top $500 Billion

Bloomberg News: Banks' Subprime Losses Top $500 Billion on Writedowns

To see the news stories associated with these writedowns go to this weblink: http://www.creditwritedowns.com/2008/05/credit-crisis-timeline.html

Posted by edwardnh @ 12:57 AM 0 Comments

Larry Elliot: rate cuts not for a few months yet

The Guardian: Threadneedle Street blues

So what should Threadneedle Street do? ... If wage inflation does remain muted, the Bank should be looking to cut rates by the end of this year or at the latest early next.

Posted by sevenbasic @ 12:03 AM 0 Comments

Tuesday, August 12, 2008

Darling wants FTBers to start borrowing right now

The Times: Alistair Darling scrambles to end mortgage drought

"Measures to revive the dormant housing market by increasing the supply of mortgage lending are being planned by ministers, The Times has learnt. Alistair Darling is poised to intervene to help banks and building societies to secure more finance to grant new mortgages. The likely move comes after the virtual drying-up last year of the mortgage-backed securities market, which had become a crucial source of mortgage lending."

Posted by quiet guy @ 11:32 PM 6 Comments

Second guessing our betters

Times: Inflation: keeping the target

This article is one of many recently about abandoning inflation targeting. As usual, there is no mention of the consequences of not using inflation as a means of controlling monetary policy. Given that we are born in a system completely dependant on an anticipated rate of inflation, this article is meaningless supposition in my view. The problems we face require a transfer of wealth. Simply that. From the pensioners, taxpayers, people who lose bank deposits, basically one or another group is losing some real wealth.

Posted by stillthinking @ 11:18 PM 3 Comments

Auntie Educates us on the Black Art of Statistics

BBC: The myth of counting

The economy is big news at the moment, but it isn't always easy to see whether a particular statistic is good or bad so Auntie Beeb is publishing a series of short articles to explain the mysteries of economics, statistics and basic maths to the un-enlightened.

Posted by enuii @ 10:46 PM 1 Comments

The slow learners club are recruiting

Independent: Physics boffin who worked for LTCM sets up London hedge fund

"A City trader who formerly worked at Long-Term Capital Management, the hedge fund that spectacularly blew up a decade ago forcing the Federal Reserve to step in with a rescue package, has teamed up with a former colleague to launch a new fund in London" ... "John Godden, managing partner at the hedge fund services group Igs Group, said: "There's a huge amount of forgiveness in the hedge fund industry. Ko wasn't the one pulling the levers, and a lot of the people who worked there are regarded as very clever."

Posted by quiet guy @ 09:14 PM 8 Comments

More stressed household budgets on the way

thisislondon.co.uk: Redundancies could soar with a quarter of firms planning to cut jobs

"Redundancies are set to soar over the coming months as the economic downturn continues, a survey reveals. More than a quarter of employers are planning to axe jobs to cut their wage bills, according to the Chartered Institute of Personnel and Development. " This is the dark side of the house price crash: prices will be cheaper but will I have a job?

Posted by quiet guy @ 08:45 PM 2 Comments

"How can I profit from this"? says George

Bloomberg: Soros Recommends `Danish Way' to Clear Up U.S. Mortgage Mess

"U.S. house prices plunged and will fall further unless mortgages are made available on more favorable terms to a wider range of people, so the recent accord on Fannie Mae and Freddie Mac between the Treasury and Congress Democrats is worse than useless", George Soros said.

Posted by alan @ 08:43 PM 1 Comments

The bear clutches at straws?

Asia times on line: Oil in troubled mountains

MONTREAL - The armed conflict between Russian and Georgia has further exposed the fragile position of the energy links running through the smaller country from the Caspian Sea to developed market economies. Russian forces are placed to disrupt oil flows through the Baku-Tbilisi-Ceyhan (BTC) pipeline, which has carried Caspian Sea oil from Azerbaijan across Georgia to Turkey since 2006, and the Baku-Tbilisi-Erzerum pipeline, which opened last year and exports gas to Turkey, as well as the older Baku-Supsa "early oil" line that runs to the Georgian Black Sea coast

Posted by iain greig @ 06:21 PM 0 Comments

Pain across the pond.

Bloomberg: A third of new U.S. homeowners in negative equity

Almost one-third of U.S. homeowners who bought in the last five years now owe more on their mortgages than their properties are worth, according to Zillow.com Second-quarter home prices fell 9.9 percent from a year earlier, giving 29 percent of owners negative equity, said Zillow, the Seattle-based service that offers values for more than 80 million homes. For those who bought at the 2006 peak of the housing market, 45 percent are now underwater, Zillow said.

Posted by little professor @ 06:04 PM 3 Comments

When they accomplished something it was a shot in the foot

bbc news: Ministers have 'frozen' housing

David Cameron has attacked the government for a "completely reckless" briefing that stamp duty could be axed temporarily to boost house sales. "Far from freeing up the housing market, they have actually frozen it," the Conservative leader told reporters.

Posted by iain greig @ 02:37 PM 19 Comments

It was a dramatic week in the markets last week

SOTT: Signs Economic Commentary for 11 August 2008

Summary: It was a dramatic week in the markets last week, with gold falling 6% against the dollar, oil falling almost 9%, and the dollar gaining 4% against the euro. The dollar's strength was attributed to the realization that the whole world will share in whatever downturn is facing the United States.

Posted by malct @ 12:28 PM 2 Comments

How the cheap money era led to the war in Georgia

MoneyWeek: How the cheap money era led to the war in Georgia

Russia has built its recent might on high fuel prices. But as the credit bubble pops and the economy slows down, oil prices are falling. Russia is flexing its muscles while it can...

Posted by damien @ 12:10 PM 48 Comments

this article compares the worst with the UK...

Yahoo: The Worst Place In Europe To Invest

The causes were basically the same as they were in the UK market: over-inflated house prices, over-borrowed consumers, and spiraling energy costs. A couple of factors, though, have accentuated the problems in...................

Posted by mark @ 11:07 AM 1 Comments

The frailest of Detroit's automakers has been in private hands for a year. CEO Bob Nardelli badly needs a hit if the company is to endure.

CNN: Can Chrysler survive?

Knowing this would you buy a Jeep or 300C in the UK? What about backup, warranty etc, if Chrysler goes bust what happens to UK dealerships? Layoffs? Empty premises etc

Posted by mark @ 10:54 AM 8 Comments

Prime mortgages get hit, dashing recovery prospects

CNN: Prime mortgages get hit, dashing recovery prospects

More borrowers with good credit are defaulting on their home loans, and that's going to make it even harder for the staggering housing market to recover.

Posted by mark @ 10:44 AM 3 Comments

According to the government - house prices have risen over the year

Reuters: House prices rise year on year

..by a whopping 0.6%! shame inflation is 4.4% (and the rest!)

Posted by acidrob @ 10:38 AM 11 Comments

CML "Mortgage lending activity remains weak and will likely decline further in the coming months"

BBC: Mortgage market 'remains subdued'

The number of loans approved for house purchases in the UK in June fell to fewer than half the number of the same month a year ago, new figures show. Some 47,000 home loans were approved compared with 98,000 in June 2007, and also down from 52,000 in May this year. The figures from the Council of Mortgage Lenders (CML) show that the mortgage squeeze, caused by the credit crunch, is continuing. The CML added that the slowdown in mortgage lending was likely to go on.

Posted by jack c @ 10:16 AM 1 Comments

RPI 5pc - CPI 4.4pc

The Telegraph: CPI Inflation surges to 4.4pc as squeeze on consumers grows

CPI Inflation hit 4.4pc in July, more than double the Bank of England's target, as the rising price of food and fuel continued to eat away at Britons' consumers. CPI inflation now expected to hit 5pc before the end of the year

Posted by sold 2 rent 1 @ 09:56 AM 12 Comments

Ouch!

BBC: UK inflation up to 4.4% in July

The UK inflation rate rose to 4.4% in July, up from 3.8% in June and more than twice the government's target of 2%. The increase in the Consumer Prices Index (CPI) was higher than expected. The Retail Prices Index (RPI) inflation measure - often used as a benchmark in pay negotiations - rose to 5% in July from 4.6% in June.

Posted by stevie dee @ 09:45 AM 9 Comments

Would-be buyers now negotiating from a position of strength to find bargains in a weak market

BBC: 'More realism' over house prices

More "realism" has entered the UK housing market, with sellers dropping their asking prices for properties last month, surveyors have reported. But the number of people moving house still fell to its lowest level since the Royal Institution of Chartered Surveyors' (Rics) survey began in 1978. Rics said that the squeeze on mortgage availability continued to dampen the UK housing market. And it added that "confused messages" over stamp duty could hit confidence.

Posted by jack c @ 08:42 AM 6 Comments

Fixed rates with 25%+ deposits get cheaper by 0.0001%

Daily Express: HOME LOANS GET CHEAPER AT LAST

Property experts also expect there to be increasing choice as the mortgage drought which has frozen the housing market since the onset of the credit-crunch starts to ease. Ray Boulger, of mortgage broker Charcol, said: Weve now got lenders competing with each other on rates to get more business. ......back to the good old days again - supply/ demand/ affordable housing, only way is up!!!! blah, blah, blah!!!!

Posted by bystander @ 08:21 AM 9 Comments

Decrease in House Prices Shows No Sign of Abating

Home.co,uk: Asking Price Index

"A bottom for the housing market is still not visible". All nine English regions record asking price falls, with only Wales bucking the trend. (For pity's sake - WHY?)

Posted by mr pleasant @ 06:53 AM 2 Comments

More from RICS

Telegraph: House sales drop to lowest level on record

Estate agents are selling just one property a week, as figures show the worse drop in sales for 30 years. The Royal Institution of Chartered Surveyors (RICS) said the number of properties sold had dropped to its lowest level since records began in 1978.

Posted by little professor @ 12:29 AM 9 Comments

Monday, August 11, 2008

Captain Bank of England abandons the wheel, taking all the liferafts and a bottle of ships rum with them

Times Online: Inflation set to hit 5 per cent as goods prices surge

If most people truly understood what inflation really is, they would take to the streets and raze Threadneedle Street to the ground. Inflation is a knife in the back of the prudent, and a generous bounty for the reckless. Inflation is not an act of god, it is an economic effect arising from a set of deliberate policy decisions. Inflation is moving money from those that have managed their finances to those who have ignored advice and bought whatever they wanted. Inflation will create more inflation as the pound sinks in value (which is what created this round of inflation too!). Inflation is what happens when the Bank of England fails in its duty. Inflation is the sound of policymakers' indifference. Inflation is the sound of the UK economy writhing.

Posted by paul @ 11:07 PM 4 Comments

The prospect of 5% inflation loomed closer today.

Guardian.co.uk: 5% inflation is a dead cert.

The Office for National Statistics said that producer price inflation jumped to a higher-than-expected 10.2% on the year to July - the sharpest annual rise since the series began in 1986. The yearly rise in core output prices, which strips out erratic elements like raw materials and oil, also signalled further inflation pressures in coming months, with this rate hitting its highest point since 1981. Alan Clarke, economist at BNP, warned that today's rise in output prices posed a "significant risk" to consumer prices inflation over the coming year "even if energy prices begin to come down". Separate trade figures from the ONS today added to the gloom. The UK's trade deficit in goods with the rest of the world widened more than expected to 7.7bn in June compared with 7.4bn in May.

Posted by mytimeisnigh @ 10:54 PM 1 Comments

RICS report out today

Times: Property market grinds to a halt amid mortgage drought

The housing market ground to a virtual standstill last month as the drought in the mortgage market helped to drive down the number of homes changing hands to levels not seen for four decades, a key survey shows today. In the latest symptom of dire housing market conditions, the average number of property sales handled by surveyors across the country tumbled to fewer than five a month, according to the Royal Institution of Chartered Surveyors. In a rare dose of more positive news, the RICS survey shows that the proportion of surveyors reporting falling house prices was lower last month, for a third month in a row. Some 83.9 per cent more surveyors still said that prices had fallen in July than said they had increased, compared to 94.7% in April.

Posted by little professor @ 10:23 PM 4 Comments

Swept Under the Carpet?

The Cutting Edge: The Balance Sheet Lies of Merrill Lynch and Wall Street's Failing Cabal

"The Fed, Treasury, FASB, major banks and investment firms are colluding to delay the recording of losses as long as possible. The Fed is allowing toxic waste investments to be exchanged for Treasury notes. The Treasury Department will step in and buy the stock of Fannie & Freddie. The FASB will delay implementing rules that would actually let investors know the risk of these financial institutions. The banks will shift as many assets to Level 3 (management evaluated) as possible, to falsely value them, in order to delay the inevitable write-offs". Everyone will speak optimistically about the future in order to pump their stock prices up. Then they will try to lure more unsuspecting foreign Sovereign Wealth Funds to pour more money down this never ending hole.

Posted by alan @ 09:55 PM 4 Comments

Only a year ago RBS was riding high, leading a consortium takeover worth 100 billion dollars for Dutch bank ABN Amro

AFP: RBS to sell 4bln of loans: report

LONDON (AFP) - The Royal Bank of Scotland is selling loans worth up to 4.0 billion pounds to private equity firms after it suffered huge write-downs linked to the global credit crunch, a report said on Monday. RBS is selling to Apollo, GSO Capital, Blackstone's debt investing arm, and TPG, said people familiar with the deal according to the Financial Times. RBS was unavailable for comment on Monday. On Friday, the bank had revealed an 6-billion-pound hit from the US subprime crisis and credit squeeze, and a resulting half-year loss among the biggest in British banking history. RBS, the second-biggest British bank, admitted being humbled by exposure to the subprime crisis and reported a first-half net loss of 802 million pounds.

Posted by malct @ 09:23 PM 0 Comments

In these tough financial times employers are facing a difficult challenge to keep their staff motivated

reuters via yahoo: Top bosses feel chill of credit crunch

LONDON (Reuters) - Over a third of leading businessmen expect their companies to suffer redundancies due to the economic downturn, according to a survey released on Monday. (Advertisement) Commissioned by the Leaders in London International Leadership Summit 2008, the poll of over 1,000 business leaders found 36 percent of them believe jobs will be lost, with 10 percent suggesting senior management could be made redundant. The gloomy economic outlook has left 51 percent of bosses finding it tough to keep staff motivated, with a third reluctant to employ people who have high expectations of rewards or rapid promotion. Over a half of those polled plan to keep their staff motivated by offering flexible working hours rather than increasing their salary, with nearly a quarter having t

Posted by malct @ 09:20 PM 1 Comments

The bank is increasingly concerned that the world economy is caught in a vicious cycle that could bring an end to the commodities boom.

australian: Rates for cut as growth slows

Any further deterioration in the outlook for global growth would represent a significant downside risk to the domestic activity profile, particularly if it led to a marked slowing in growth in China and India," the bank said in its quarterly review of the economy.

Posted by big chris @ 09:18 PM 0 Comments

THE Reserve Bank is predicting an economic slowdown so severe that 100,000 people will be thrown out of work in the next 12 months, pushing the unemployment rate to 5 per cent and possibly higher if the financial crisis worsens

australian: RBA warns 100,000 jobs at risk from economic slowdown

The bank has slashed its forecast for economic growth over the coming year, and expects job creation to slip to its lowest level in seven years.

Posted by big chris @ 09:17 PM 0 Comments

Mortgage-Market Trouble Reaches US Credit Unions

Wall Street Journal: Mortgage-Market Trouble Reaches Big Credit Unions

This is a front page story at the Wall Street Journal in the US. The long and short of it is that huge losses are lurking in credit unions in the US. These are supposedly safe building society-like institutions which are quite conservative. But, they have lost so much, they may be wiped out. I'm not sure if the article has free access, so please see my blog entry for further commentary on the article: http://www.creditwritedowns.com/2008/08/credit-unions-in-trouble.html

Posted by edwardnh @ 07:00 PM 0 Comments

Not strictly news - but thought it interesting that you can get 30% discount

Polaris World: Off Plan resales

Fantastic opportunities to purchase existing off plan contracts and resale properties within Polaris World Resorts. Maybe not today......well never, actually!

Posted by whostolemyendowment @ 06:53 PM 3 Comments

Good News for HPC readers!!

AP - Yahoo: Stocks extend gains as oil prices fall below $113

Wall Street extended its advance Monday as the price of crude oil fell briefly below $113 a barrel, easing investors' concerns about the impact of inflation on the economy. The Dow Jones industrial average rose about 100 points and the price of government bonds fell as investors shifted to stocks.

Posted by stevie dee @ 06:45 PM 0 Comments

And it's worse in Spain

Motley Fool: House prices have crashed by 35% in Spain

If you think the British property market is in a mess, then a quick trip to Spain will put things in perspective. Property prices have fallen by a crushing 35% in the last year, four times faster than in the UK, and haven't stopped plunging yet. This spells disaster for an economy where investment in housing is worth 10% of GDP. And it's going to get worse. We were awestruck by the scale of construction along the coast, massed ranks of half-built villas and apartments squeezed into every dusty hollow and ditch. Who is going to shell out for all this whitewashed concrete, even at today's knock-down prices? The Spanish property market bubble has been well and truly pricked, but sadly too late to save the beauty of the country's coastline.

Posted by little professor @ 06:02 PM 6 Comments

More pwnage across the Irish Sea

Bloomberg: Irish June House Prices Fall 0.6% as Slump Deepens

Irish house prices fell for the sixteenth month in a row, dropping 0.6% in June, according to the latest TSB/ESRI price index. Prices have fallen by 5% over the last 6 months, the worst half-year results for over a decade. Year on year, prices were down 9.7% from June 2007. The average price for a house in Ireland in June stood at 273,392, compared to 287,887 in December 2007 and 302,605 in June last year.

Posted by little professor @ 05:57 PM 0 Comments

Repayments outstripped new loans by almost 700m in June

FT: Dramatic cut seen in mortgage lending

"According to data from the Bank of England, the net withdrawal of mortgage lending by building societies is unprecedented; not even in the darkest days of the last property recession did net lending become negative."

Posted by mountain goat @ 04:35 PM 13 Comments

Yawn - please tell me something I didn't know!

Citywire: Years of stagflation ahead, warns AAA-rated veteran manager

'Stagflation is a real possibility for the next few years,' he says. However, he says that if this situation does arise, it should not go on for as long as it did during the 1970s." Unfortunately, he made a good start - but failed when he turned over the question paper - saw the intricacy of the initial question - panicked - then totally lost the plot. Oh, well, what is new also, as far as, recent glubbermint decisions are concerned. No, let me substitute recent with complete.

Posted by paranoia blue @ 04:18 PM 1 Comments

First in a rather long line - hopefully!! :)

City wire: Broker fined 100k over false mortgage applications

The Financial Services Authority (FSA) has fined a mortgage broker 100,000 for submitting false mortgage applications.

Posted by paranoia blue @ 04:07 PM 3 Comments

Mounting pressure on the BTL brigade

FT: Buy-to-let borrowers hit by scarcity of products

Mortgage products available for buy to let borrowers have fallen by 93 per cent in the past year, as the credit crisis continues to limit the number of deals in the market. In the last 12 months, the total number of mortgage products available has fallen from 4,384 to 307.On top of the scarcity of products, those in possession of buy to let mortgages are also facing steeper interest rates on those mortgages that are still available, according to figures from price comparison site moneysupermarket.com. The average rate for 75 per cent loan-to-value BTL products has increased by 0.35 per cent to 7.33 per cent in the past year, and by 0.63 per cent to 7.46 per cent for 85 per cent LTV products. The increase in interest rates may mean landlords will have to increase rents or find the sh

Posted by jack c @ 03:18 PM 2 Comments

Absolutely love this guy

Patrick Dixon aka a mr motivator: UK house prices? July 2007 comment on longer term outlook and warning of potential short term 10-15% house price fall.

CDs are costing nothing, Cars are going down to zero. So you can manage 8 times your salary. Brilliant- where do i sign? Please tell me he still believes it.

Posted by techieman @ 03:08 PM 1 Comments

Hmmm not so sure about this.

Guardian.co.uk: Student rents increasing 'due to credit crunch'

Towards the end of the article: Malcolm Harrison, a spokesman for the Association of Residential Lettings Agents, a professional and regulatory body, said he expects rents to continue to rise. "Rent will not go down as long as we have the credit crunch. When house prices fall, rental goes up," he said.

Posted by eyes_wide_open @ 02:49 PM 1 Comments

Private Rented Sector is forecast to continue outstripping other types of investment property

Telegraph Property Club: Private rented sector outstrips all other investment property

In a report on the housing market for ARLA, Michael Ball, Professor of Urban and Property Economics at the University of Reading, comments: the modern private rented sector is helping to stabilise the housing market because it is housing people who, if they had become owner occupiers in the past few years, would at this stage of the housing market cycle be over-stretched borrowers with rising negative equity. Landlords are generally more financially able to withstand housing market shocks and, as tenants rather than holders of negative equity, younger households will be in a better position to purchase properties as the market begins to pick up again. Housing investors are also likely to be some of the most active purchasers over the next few years, as they search out bargains.

Posted by developer @ 02:42 PM 0 Comments

Very interesting - Banks to pay more.

Bloomberg: FDIC Fund Strained by Bank Failures May Have to Raise Premiums

The failure of IndyMac Bancorp Inc. and seven other banks this year may erase as much as 17 percent of a government insurance fund and raise premiums for all banks, from Franklin National of Minneapolis to Bank of America Corp. ``It's going to be a bloody, expensive mess for the banking industry,'' said Bert Ely, president of Ely & Co. Inc., a bank consulting firm based in Alexandria, Virginia. ``Healthy banks are paying for the mistakes made by failed banks.''

Posted by tyrellcorporation @ 02:01 PM 1 Comments

"An Inconvenient Truth" for the economy

seattle times: "I.O.U.S.A." a big-screen look at the U.S.' monster debt

"A private-equity billionaire, a former federal government official and a Baltimore newsletter editor have made a documentary film that they hope can do what an endless parade of policy papers has not: Convince Americans that debt has created a looming economic crisis that would make the Great Depression look like a market correction. The movie, "I.O.U.S.A.," debuting Aug. 21, is an 87-minute alarum on what it calls the tsunami of debt bearing down on the United States' future, caused by the rising national deficit, the trade imbalance and the pending costs of baby boomers cashing in on entitlements."

Posted by mountain goat @ 02:01 PM 12 Comments

The slump in oil prices is a bad sign

MoneyWeek: The slump in oil prices is a bad sign

The recent fall in oil prices can't save us from recession, says John Stepek. The rising price was a symptom, not a cause, of the unchecked global boom and its fall is a sign that we're in a huge downturn.

Posted by damien @ 01:07 PM 13 Comments

Still pushing the high risk debt drug "investment"

Sunday Times: Bag a bargain in bricks and mortar

"As prices fall investors see opportunity knocking on the home front. PROFESSIONAL investors are starting to see buying opportunities in that most bombed-out of areas property. UK house prices have tumbled more than 11% to an average 177,351 since last Augusts peak, based on the Halifax index, after a decade of booming prices that added 145% to the average homes value. However, moves are afoot to reignite the market: the Treasury is working on a package of measures, including the suspension of stamp duty, to help hard-pressed families. And lenders are cutting rates."

Posted by doomwatch @ 01:03 PM 5 Comments

Sound Employment Fundamentals?

BBC: More bosses 'planning job cuts'

Employers expect a gloomy time ahead in the jobs market, with a rise in redundancies accompanied by a downturn in recruitment, a survey suggests.

Posted by peter_2008 @ 12:59 PM 0 Comments

Problems stem from deeply embedded beliefs

RGE Monitor: Snake Oil and Deflation

"investment in unproductive works is so widespread as to form part of the popular culture." This article makes the point that our problems are caused very popular false beliefs enjoyed by the whole population (politicians, dolers, bankers, workers), such as delayed payment for consumption etc. The author advocates a change in attitudes, but we are unlikely to rebalance the economy as both politicians and the population have no real desire to do so, and so on to disaster. Begging the question, is this the real crunch ? Or can yet another delay be obtained at the price of a bigger collapse in the future?

Posted by stillthinking @ 11:25 AM 10 Comments

FSA points finger at bonus culture encouraging excessive risk

Mirroe .co.yk.news: Fat cat bankers blamed for economic mess

Britain's banking watchdog has launched a devastating attack on City pay. Hector Sants, head of the Financial Services Authority, used the first anniversary of the credit crunch to call for a crackdown on the bonus culture which encourages bankers to take huge risks with investors' cash. He said the economic mess was partly caused by bankers being rewarded for taking "foolish" risks.

Posted by iain greig @ 11:18 AM 7 Comments

UK loses 600bn in credit crunch

The Guardian: UK loses 600bn in credit crunch

The credit crunch, which has dragged the UK economy to the brink of recession, has wiped 600bn from the wealth of the UK - more than 1m a minute - since the crisis began a year ago, accountants said today. A study by PricewaterhouseCoopers showed that housing wealth has plummeted by 400bn while sharp falls in the share prices ofbanks and financial institutions have wiped out another 200bn.

Posted by edwardnh @ 10:47 AM 1 Comments

Plunging house prices, down 9pc year-on-year, are forcing consumers to cut back on discretionary spending on goods and services.

Telegraph: Britons cut back on spending as their assets sink 600bn

Britons are 600bn worse off than a year ago as the economy veers perilously close to recession, leading accountants have warned. According to PricewaterhouseCoopers, the year-long global credit crisis has slashed housing wealth by 400bn, while the value of other assets has plummeted by 200bn due to share price falls. Plunging house prices, down 9pc year-on-year, are forcing consumers to cut back on discretionary spending on goods and services.........

Posted by jack c @ 10:25 AM 13 Comments

There's a new land grab starting in America.

NYpost: LOST SOVEREIGNITY

Foreign money, which up to now has focused its attention on investing in iconic commercial real estate - like Barneys New York and the Chrysler Building - is now moving to scoop up tens of thousands of discounted foreclosed homes across the country. One sovereign fund, said to have earmarked $29 billion to purchase foreclosed residential real estate, recently hired a West Coast mortgage broker and is starting to search for bargains, The Post has learned.

Posted by malct @ 10:21 AM 9 Comments

Buy to fret as rent arrears grow

FT: BTL owners face rising number of renters in arrears

Increasing numbers of people are unable to afford their rent, as rental costs continue to rise. As home-owners face the prospect of mortgage arrears and repossessions in the dipping housing market, private renters are also slipping into arrears. According to research from Axa, 13 per cent of renters have gone into arrears in the past 12 months because they cant afford the rent and 7 per cent have done so in the past three months............

Posted by jack c @ 10:04 AM 3 Comments

The current crisis is the natural result of the mammoth housing bubble.

Telegraph: This credit crisis is like the plague and nobody is safe yet

''...With house prices falling, banks face further writedowns that will restrict their ability to lend. This problem cannot be cured by injections of liquidity. The nature of the problem has changed from one essentially about liquidity to one about bank capital, and now also about aggregate demand...''

Posted by hpwatcher @ 09:42 AM 7 Comments

Going Down Going Down Going Down

BBC: Arsenal builds financial foundations

...there are fears that the credit crunch and falling property prices could now hit Arsenal's financial plans, both on and off the playing field. Football business guru Alex Fynn is the latest commentator who feels the club may be regretting the decision to rely strongly for future income streams through the property market.

Posted by luckyjim @ 09:37 AM 4 Comments

Strangely coincidental: Have the Russians come to spoil the party or join the pantomime?

AP - Yahoo: Oil near $117 in Asia on Russia-Georgia conflict

Oil prices rebounded Monday in Asia to near $117 a barrel on concerns a widening conflict between Russia and Georgia over a breakaway province could disrupt supplies in the region. Light, sweet crude for September delivery rose $1.64 to $116.84 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell $4.82 on Friday to settle at $115.20 a barrel.

Posted by stevie dee @ 09:34 AM 1 Comments

Mmmm.. Buy your toys now for Christmas! The leaded ones I mean!

AP - Yahoo: China's July wholesale prices up 10 percent

China's wholesale inflation in July accelerated to its highest rate in 12 years, adding to the government's headaches as it tries to rein in surging consumer prices, according to data reported Monday.

Posted by stevie dee @ 09:23 AM 3 Comments

You couldn't make it up - or could you!

Times: Treasury fury at No 10 as estate agents demand talks on stamp duty

National Association of Estate Agents spit their dummies out and the glubberment i.e. Mr Brown is also considering a one-off windfall payment, of up to 150, for seven million families in receipt of child benefit struggling to pay fuel bills this winter. Info leaked courtesy of Sir Brian Bender (real name) , Permanent Secretary to the Department for Business, Enterprise and Regulatory Reform, who was overheard discussing the plans in front of fellow passengers on a GNER train between Leeds and London.

Posted by enuii @ 12:29 AM 13 Comments

Sunday, August 10, 2008

Oz staring into the housing abyss too - The government there is getting worried .

Bloomberg: Australia's Deputy Prime Minister Pressures Banks to Cut Rates

``If official interest rates were to fall, then we expect banks to pass that on to mortgage holders,'' Gillard told the ABC Television's Insiders program today. Her comments echo those of Prime Minister Kevin Rudd, who said in Beijing on Aug. 8 that lenders ``have a responsibility'' to pass on central bank rate cuts to mortgage holders. Reserve Bank Governor Glenn Stevens signaled this week he may lower the overnight cash rate target from a 12-year high of 7.25 percent for the first time in seven years.

Posted by tyrellcorporation @ 10:32 PM 8 Comments

US Bailout Ahead

Bloomberg: Paulson Says No Plans to Add Cash to Fannie, Freddie

"Paulson and Congress last month brokered a plan to bolster the two government-sponsored enterprises that includes giving Treasury the right to buy their shares. Fannie and Freddie, which account for almost half of the $12 trillion mortgage market, reported losses three times worse than estimated, prompting some analysts to predict that Paulson will have to act". "Shares in Fannie and Freddie have plummeted more than 80 percent this year on concern they don't have sufficient capital to withstand record foreclosures on the $5.2 trillion of mortgages they own or guarantee. Bill Gross, manager of the world's biggest bond fund at Pacific Investment, last week said the Treasury will probably be forced to buy as much as $30 billion of preferred shares in the two".

Posted by alan @ 09:37 PM 2 Comments

It is not just houses causing a wee headache

telegraph.co.uk: Have we reached the end of the road for oil? (By David Strahan

The rise and fall? of the price of oil -demand destruction-peak oil-consumption outstripping discoveries for the last four decades-political instability jiggling the price-declining oilfields...etc.

Posted by iain greig @ 09:16 PM 0 Comments

1990s style recession for 2009.

The Times: Inflation heading for 5%, say forecasters

"Hector Sants, chief executive of the Financial Services Authority, meanwhile, has warned Britains banks to prepare for a recession on the scale of the early 1990s." I remember the early 90's, I graduated then. I was the last recruit into my company for a good few years...

Posted by voiceofreason @ 09:02 PM 9 Comments

Fairness from BTL landlords

Prime Minister e-Petition: ...private housing landlords must accept housing benefit

Please support this petition. If BTL landlords are to keep people out of the housing market, we should at least have fair tenancy rights.

Posted by captain sensible @ 08:53 PM 21 Comments

Get your teeeth into this

BBC 'News': Desperately hoping for a new home

David and Nicole Redman are in danger of joining the thousands of Britons who have lost their homes amid spiralling repossessions. They are due in court later this month, unable to meet increased payments set by their lender after they fell into arrears. The couple, who live with Mr Redman's mother and their two-year-old son, have another baby due in November. They find they are unable to sell their home to clear their debts. "We were stitched up with the original mortage deal. We took out the mortage in August last year because my mum went bankrupt, and we had to buy the house - otherwise we would all be homeless. "Even if we manage to pay off the arrears, we can't afford the mortgage once it comes off the fixed-term in January"

Posted by little professor @ 08:23 PM 13 Comments

For Newbies Discussion of the property cycle

You Tube: Property Bust after 14 year Boom- Fred Harrison, part 1

Property cycle - you mean boom and bust? What ya talking about. Also see the 2nd part.

Posted by techieman @ 06:36 PM 0 Comments

Didn't HBOS profits plummet, and the rights issue bomb?

Times: HBOS to prop up builder

If HBOS, which owns 50% of Crest Nicholson, decides that it is unwilling to support the builder, its investment could be wiped out and the lending banks could step in and take control.

Posted by whostolemyendowment @ 05:14 PM 2 Comments

There is no plan for the housing market

Guardian: So what's the big idea, Chancellor?

Starts off talking about how bad the economy is but then quickly equates "economy" with "housing market". She throws around some rather fanciful ideas on what to do about the housing market (because something really "needs to be done") and then moves on.

Posted by paul @ 03:01 PM 11 Comments

Stamp duty holiday is called off.

The Observer: Darling backs away from stamp duty cut

Alistair Darling, is prepared to disappoint millions of would-be home buyers by ruling out proposals to revive the housing market, Treasury insiders warned last night. After a chaotic week of claim and counter-claim about Treasury plans to suspend stamp duty for first-time buyers, Darling has hardened his stance against the move, which he believes could cost billions to little positive effect.Vince Cable, the Liberal Democrat Treasury spokesman, said the stamp duty idea was ridiculous. 'What sort of a signal does it send when the government has to offer a bribe to get people to enter a declining market?' he asked.

Posted by mytimeisnigh @ 01:08 PM 10 Comments

Applegarth's BTL on the side

News of the world: Northern Rock chief's mistress, the 5 mortgages and the secret 1m property empire

THE secret mistress of ex-Northern Rock boss Adam Applegarth bought FIVE homes in THREE years using loans from the bank to build a property empire now worth more than 1 MILLION. Slim brunette Amanda Smithson was granted a succession of mortgages to fund the deals between May 2003 and July 2006while she was a Rock employee on just 30,000 a year and Mr Applegarth was chief executive.

Posted by sold out @ 12:18 PM 21 Comments

No safety net for mortgage payers

Firstrung: Struggling homeowners have less protection than in the 90s, but most people don't even realise it - Shelter

The housing minister Caroline Flint MP visited a Shelter Housing Aid Centre in Leeds to find out how staff on the frontline are coping with the repossessions crisis. The minister met with Shelter advisers and county court desk workers, who use their legal expertise to fight for a fairer deal from mortgage lenders. They help people keep their homes by persuading the court to allow a longer period for debts to be paid off. The visit came after new figures from the Council of Mortgage Lenders (CML) show the number of homes repossessed in the first half of 2008 now stands at 18,900, a 48 per cent increase since the same time last year.

Posted by converted lurker @ 12:05 PM 2 Comments

The new math of lending

CNN: The new math of lending

With banks tightening their credit standards, many have to walk a fine line when it comes to lending to consumers.

Posted by mark @ 11:07 AM 2 Comments

Happy anniversary darling, I'm writing to tell you that the economic outlook is poo.

The Observer: It's worse than we thought, admits CBI. Letter warns of 'darkening mood' in the economy.

Leading employers' organisation the CBI will this week perform a significant U-turn and warn its members that the economy is deteriorating at a faster rate than it had predicted. As recently as June, Richard Lambert, the CBI's director-general, took a relatively optimistic view, saying we should avoid talking ourselves into recession. But in a letter to mark the first anniversary of the credit crunch, he writes: 'There is no doubt that the mood has darkened in the last two or three months,' and warns that growth prospects for next year and 2010 'look no better than anaemic'.

Posted by mytimeisnigh @ 09:47 AM 5 Comments

Owners of a place in the sun will feel the chill as carriers axe budget European routes in face of economic slowdown

timesonline: Airline squeeze hits holiday homes

So now the Airlines are to blame for their greed for two homes (one empty for 90%) of the year! Let the good times roll.

Posted by lloyd @ 07:55 AM 1 Comments

Negative equity comes to New Zealand

New Zealand Herald: Coolapsing values hit tome

Local commentator said it could never happen - it has.

Posted by andyh @ 04:47 AM 1 Comments

Bank of England to try scare tactics on Joe Public

Times: Bank needs to keep pay demands in check

Article in the Times theorises that we should not be surprised if the Banks official pronouncements on the economy in coming weeks are gloomy. What King and Co really want is to avoid the inflation felt by consumers being transferred into aggressive wage demands that launch the economy into an inflation spiral. The article concludes that if the simple people of this country think the economy really is in trouble, they are less likely to ask for higher wages.

Posted by enuii @ 12:14 AM 12 Comments

Saturday, August 9, 2008

Stamp duty rumours 'hits sales

BBC News: Stamp duty rumours 'hits sales

"Housing Minister Caroline Flint said lack of affordable credit was a bigger issue keeping house sales low". As usual she ducks the fact that it's a lack of affordable housing that's keeping house sales low.

Posted by becky @ 08:49 PM 10 Comments

What now gas prices?

BBC: Peace bid as Ossetia crisis rages

"A delegation including envoys from the US, EU and OSCE is heading to Georgia as its conflict with Russia over the breakaway South Ossetia region deepens." Will this increase pressure on the hard pressed family finances and mortgage payments?

Posted by renting2 @ 07:29 PM 7 Comments

It's Not That Bad, Things Could Be Worse

International Heral Tribune: Britain's housing bust is bringing down the economy

Repossessions, bankruptcies and unemployment are still at relative lows however many economists are predicting that the situation will sharply deteriorate over the next six months, leaving Britain to face a longer, more painful downturn than the United States.

Posted by yoyo1 @ 07:20 PM 5 Comments

And what are they going to do about it?

Reuter: FSA warns of economic downturn

The Financial Services Authority has warned the industry to brace itself for the possibility of a downturn similar to the 1990s recession, chief executive Hector Sants said on Saturday.

Posted by peter_2008 @ 05:45 PM 8 Comments

The banks are only interested in saving themselves. People who borrowed too heavily or who lose their job are thrown out onto the streets.

Telegraph: Mortgage lenders lose patience as repossessions jump

Figures from the Council of Mortgage Lenders show that not only has the number of repossessions in the first half of the year risen by 50pc compared with last year, but the speed with which lenders are seizing properties is at the highest level since comparable records began in 1982. The rise in this "intolerance threshold" indicates the pressure felt by banks to shore up their balance sheets in the face of the sharpest housing slump since the early 1990s.

Posted by mytimeisnigh @ 03:42 PM 11 Comments

Unemployment looks set to increase further

The Times: Managers walk fine line on redundancies

"But with every passing day, this has the makings of a nastier slowdown. Yesterday's repossession figures were grim. Faced with flat or falling sales and rising input costs (notwithstanding the welcome plunge in the crude oil price in the past month), company bosses will be returning from their summer holidays under growing pressure to winkle out big savings. At most companies, these are to be located in the wages bill. Human resources directors are set for a busy, uncomfortable autumn".

Posted by becky @ 03:25 PM 1 Comments

Whao...even the EAs are finally talking sense now.

FT: Stamp duty talk hits sales

Estate agents say any plans from the government to help first-time buyers onto the property ladder will have no impact on wider house prices - and are jeopardising existing house-sale chains.

Posted by peter_2008 @ 12:20 PM 6 Comments

Another nail for BTL?

Yahoo: More tenants said falling behind on rent

Hope those 'professional' BTL investors have factored rising bad debts into their business plans.

Posted by captain sensible @ 12:15 PM 2 Comments

Of course that camel can take another straw!

Independent: Estate agents & Home buyers getting cold feet over stamp duty

....Graham Robinson of Bryan Davies and Associates, which covers Llandudno and Colwyn Bay, said buyers and sellers had been phoning all week expressing concerns over stamp duty. "We currently have one chain which has 53,000 of stamp duty in it," he said. "We've had a huge response for a very worried public people can't wait indefinitely for an answer. Over the last few days, the number of inquiries we have had about properties has just died."....

Posted by whostolemyendowment @ 11:16 AM 3 Comments

How long will it last?

SKY: One Year On: Will Crunch Get Worse?

David Bulk says" It took three years to take the UK out of recession back in the seventies" .

Posted by alan @ 11:12 AM 2 Comments

A reversal indeed, but as pronounced as others would have us believe?

FT.com: Regional house prices suffer falls

The contrast between the FT House Price Index and those of Halifax and Nationwide, two of the UKs biggest mortgage lenders, in part reflects the fact that each measures somewhat different things. The FT Index ... tracks actual transactions adjusted to reflect the mix of housing nationwide ... and includes properties purchased without a mortgage. Nearly 40 per cent of UK homes are owned outright without a loan and these sellers are able to bypass mortgage lenders.

Posted by jayk @ 11:04 AM 8 Comments

Confirmation - The worst is yet to come

BBC News: Banks warned of economic worries

Better late than never, the FSA is finally getting round to stating the obvious. That the current financial troubles may well be down to U.S sub prime, but when the UK sub prime hits, the banks had better have a big war chest, because the current situation is nothing more than a bit of pre-amble compared to the titanic UK sub prime turd that is fast approaching a high revving fan. Who knows it my prompt them to put up savings rates, now theres a nice thought.

Posted by mr cobblepot @ 09:25 AM 2 Comments

You know where the door is

Times: Credit crunch and the mortgage market: a vicious circle

This time last year, competition was rife with loss-leading deals. Banks thought their money was safe because of property price inflation. Now, greater margins have been allocated to cover the increased probability of defaults....We are not expecting that better mortgage availability will be enough to resume pre-crunch activity levels, but time is a great healer.

Posted by pendulum @ 09:01 AM 8 Comments

What a change in a year, or where has my money gone.

Guardian.co.uk (august 2007): City bonuses hit record high with 14bn payout

The Guardian, Tuesday August 28 2007 City bonuses have increased by 30% to a record 14bn this year. The rise is twice as big as in 2006 and likely to exacerbate the widening gap between executive and shop-floor pay. The bonuses come against a background of record debt, rising bankruptcies and home repossessions. Analysis by the Guardian of preliminary data from the Office for National Statistics (ONS) shows that bonuses across the economy rose 24% this spring to 26.4bn, comfortably exceeding the country's entire transport budget. More than half, 14.1bn, was earned by the 1 million people in the financial services sector. The figure for 2006 bonuses was 10.9bn

Posted by iain greig @ 08:23 AM 4 Comments

And 8 Who Didn't see the Credit Crisis Coming

Fortune - CNN Money: 8 Who Saw the Credit Crisis Coming

One year after the credit crunch began, Fortune looks back at who saw trouble ahead, and who just ended up in trouble.

Posted by stevie dee @ 07:36 AM 0 Comments

The International Monetary Fund says the dollar has fallen 25pc to 30pc on a global basis, just as it did in the late 1980s. There was no shortage of dollar doomsters at that time, warning that America was finished - left behind by Japan and Germany. Even

telegraph: US dollar rallies as extent of worldwide recession becomes clearer

the Habsburgs used to say, "the situation is desperate, but not serious".

Posted by big chris @ 07:24 AM 0 Comments

BTL novices in trouble

Telegraph: Buy-to-let mortgages plummet 93pc in a year

"The number of buy-to-let mortgages has plummeted by 93 per cent in the past year leaving tens of thousands of novice landlords struggling to find affordable deals." Game over for the alternative pension.

Posted by quiet guy @ 12:28 AM 16 Comments

Friday, August 8, 2008

One to Watch - Next Week

Minyanville: With Fannie Falling, All Eyes on Paulson

"It turns out buying mortgages with nothing but a superficial glance at the paperwork -- something Fannie and Freddie excelled at during the housing boom -- just isn't good business. Although the 2 firms only lightly dabbled in subprime loans, originators easily duped their automated risk engines into buying fraudulent or otherwise shoddy loans". "It's no longer a matter of if they collapse, but when"."But since banks like Citigroup, Bank of America and Wachovia are saddled with troubles of their own, Fannie and Freddie have been asked to expand their role in the market. They now provide the only liquidity left for new mortgages". D'oh!

Posted by alan @ 10:38 PM 2 Comments

What do you think?

BBC R4: Was the chancellor inept in suggesting suspending stamp duty?

I heard this in the car today. About 15-20 minutes in Billy Bragg and Paddy Ashdown speak the most sense that I have heard on the radio for a long time

Posted by crash bandicoot @ 10:01 PM 8 Comments

Don't Panic - Kirstie Advises Banks

Telegrath: Home repossessions hit highest level in 12 years

As repossessions reach a 12 year high and the number of households with mortgage arrears of more than 3 months rises to 155,600 Kirstie Allsopp, a property expert and TV presenter of Channel 4's Location, Location, Location, called on banks and mortgage companies not to panic.

Posted by enuii @ 09:29 PM 14 Comments

Mortgages get more expensive - again and again and again

CNN: Mortgages get more expensive - again

The bad news: You're going to pay for it when you take out a mortgage.

Posted by mark @ 09:23 PM 2 Comments

Heavy article but worth a read....

Independent: Here comes the credit crackdown

You don't lose half a trillion dollars and then go merrily on your way as before. When the dust settles and we are still stumbling blindly through clouds of the stuff at the moment the investment banking industry is going to emerge from the credit crisis looking very different. What is difficult is getting an agreement on what it might look like.

Posted by whostolemyendowment @ 05:57 PM 2 Comments

Remember, she uses this same acumen and foresight to set our interest rates

Guardian (last October): Influential loan rates setter sees no crash ahead

Kate Barker, one of the nine people who set interest rates each month, said it was "not immediately obvious" why recent developments should provide a "trigger which significantly alters expectations of continued robust house price growth".

Posted by paul @ 05:43 PM 21 Comments

Hard times for Hollywood

The Guardian: Hard times for Hollywood

'You feel bad. You don't want to take their wedding rings from them - that's their memories and everything," says Michael Bruce from behind a row of thick steel bars. "But they need the money and that's what we are here for." Does this mean we will be experiencing the same in 12 months time?

Posted by pintail @ 05:21 PM 2 Comments

Loss aversion and finding a bottom

Credit Writedowns: Loss aversion and finding a bottom

Daniel Kahnemann proved that people will go to extreme lengths to avoid taking a loss. For his efforts he was awarded the Nobel Prize. His theories go a long way in helping to explain why this will be a long, drawn out affair before we find a housing market bottom in the UK and elsewhere.

Posted by edwardnh @ 05:21 PM 4 Comments

MPC snoozes on inflation = pound hits new lows

BBC 'News': Euro and pound dip against dollar

"The European Central Bank's decision to leave rates on hold was the main driver of the fall, traders said. " But no mention of why the pound fell. Same reason perhaps? No, no. That would be "off message". Inflation is low - look at the CPI measure we use ... forget everything else ... look at the CPI ... it tells the truth ... these aren't the droids you're looking for ... move along there ...

Posted by paul @ 05:07 PM 1 Comments

Wall Street should not be surprised to see pain in the financial sector linger on for much longer.

CNN: $1 trillion in losses? Bank on more

Make no mistake: The worst probably is not over for financial firms. Not by a long shot. Many bank stocks have bounced sharply from their panic-induced lows of mid-July on hopes that the bleak second-quarter results represented the bottom. But the bigger-than-expected losses reported by Freddie Mac and Fannie Mae this week, accompanied by dismal forecasts for the housing market, are strong indicators that there are likely more credit-related woes to come.

Posted by mark @ 04:39 PM 2 Comments

The Market is Wrong. We Have "Sound Fundamentals"

Reuters: Sterling hits 21-month low vs broadly rallying dollar

"Sterling tumbled as low as $1.9146, its lowest since November 2006, and was en route to its worst weekly performance in percentage terms in roughly three years, as investors dumped the pound against the dollar as the UK economy struggles".

Posted by alan @ 04:00 PM 9 Comments

= fewer buyers!

Guardian: Housing waiting list 'to rise to 5 million'

Five million people will be on waiting lists for social housing by 2010 because of problems in the property market, council leaders warned today. The Local Government Association issued its prediction following the release of figures showing that there were 18,900 mortgage repossessions in the first half this year - 48% more than in the first half of 2007.

Posted by whostolemyendowment @ 03:47 PM 2 Comments

Playing for Time: Will it Work?

AP - Yahoo: Stocks advance as oil prices fall

Well, it was called here on HPC, S2R1, said it, oil would plummet from a certain date. It seems apparent that every hike in the DlIA is working in synergy with the reduction in the price of gold & oil at present. A similar thing happened in the 80's when sterling was nearly on a par with the dollar (sterling is going down too at the mo against the dollar). But when the oil returns to sensible prices, not GM. What happens next? Because I believe the whole strategy is about playing for time. If this reduction is to continue, will it translate and save the stockmarkets & the global financial system we are accustomed too. My opinion: NO!!!

Posted by stevie dee @ 03:47 PM 6 Comments

Let The Whole Sorry Saga Play Out - Quickly!!

BBC: Solutions may make credit crunch worse

"It is 16 years since the British economy was last in a recession. Most of our leading politicians and bankers have forgotten what it's like. They will soon relearn". .............. "It may sound like a counsel of despair but the best thing may simply be to hunker down and wait for prices to adjust and for the banks to restore their reserves so they're once again willing to lend."

Posted by renting2 @ 02:58 PM 2 Comments

Still a Seizure in Credit Markets

Bloomberg: Money Market `Plagued' by Libor That Fed Can't Reduce

"The U.S. market for commercial paper, or short-term IOUs, backed by assets such as mortgages has shrunk 40 percent from its peak in July 2007. The amount borrowed in pounds between banks in the U.K. fell by 70 percent in June from a record in February 2007. The European Central Bank received $100 billion of bids for the $25 billion it offered to financial institutions on July 29, the most since the sales began in December"

Posted by alan @ 02:21 PM 1 Comments

Why it is different this time - overextended lenders as well as borrowers

Citywire: Housing fails to rise to Olympian ideals

UK housing market numbers once again fell short yesterday, which is not surprising given the sparsity of credit and falling mortgage approvals. Let's focus is on the speed of decline. During the last housing market crash in the early 90s, it took over three years for house prices to fall by 10% from their peak. Compare this to the current crisis - figures released by HBOS today show that UK house prices have fallen by 10.2% in the last six months alone...................

Posted by jack c @ 02:14 PM 2 Comments

Some of us didn't need hindsight Mr Coogan

BBC: More UK homes repossessed

Some 18,900 homes were repossessed in the first six months of this year. Director General for the Council of Mortgage Lenders Michael Coogan explains the figures.

Posted by doomwatch @ 01:39 PM 3 Comments

Buying could soon be cheaper than renting

Times Online: Buying could soon be cheaper than renting

That's what Savills is saying. You don't buy it? Neither do I.

Posted by edwardnh @ 01:29 PM 7 Comments

Fannie & Freddie - Sisters in distress

BBC: Fannie Mae unveils loss of $2.3bn

Problems in the US housing market have pushed mortgage finance company Fannie Mae into the red. The group sank to a net loss of $2.3bn in the three months to 30 June, against a profit of $1.97bn last year. It comes days after its sister company Freddie Mac posted worse-than-expected results and its top executive warned house price falls are not over yet. Both government sponsored firms own, or guarantee, nearly half of the nation's mortgage debt. As mortgage guarantors, the pair must pay out when people default on their loans.

Posted by jack c @ 01:27 PM 2 Comments

Generational secular shift

Daily Reckoning: Generational secular shift

This article suggests that we are about to change attitude, and that housing will cease to act as a store of wealth. Basically, people will look to save money rather than acquire housing assets. Suggests also that the boomers in particular are going to have start saving money now because the idea of funding their retirement from housing just collapsed. I kind of agree with this thinking. I always feel that the Japanese deflation was kind of inevitable because their social mindset is orientated towards saving not borrowing, the requirements of a rainy day are probably higher in earthquake ridden countries. Basically they never had a borrowing culture so money as debt was never going to work. At the moment in the UK I think people have shifted to saving (continued as a comment...)

Posted by stillthinking @ 10:14 AM 3 Comments

Official - values down 50%

The Times: Property market's winners and losers

So, here we have it. EA's and private sellers are still deep in denial. But the bottom line is Crash Gordon's ministry presiding over a 50% drop. Fresh pair of panties time.

Posted by cha55a @ 08:52 AM 6 Comments

Times reports record-breaking falls in house prices

Times: House prices back to 2006 and still falling - 22,000 is wiped off average house

Record-breaking falls in house prices have now wiped more than 22,000 off the value of the average home, erasing all the past two years of financial gains for homeowners, figures revealed yesterday. Average house prices tumbled by another 1.7 per cent last month, equivalent to more than 3,000, adding to a series of plunges in home values since the spring, Halifax, Britains biggest mortgage lender, said. This pushed the drop in house prices suffered since the markets peak to 11 per cent, taking the annual fall into double digits for the first time since the end of the last recession in 1992. Prices have fallen 7.6 per cent since April alone.

Posted by jack c @ 08:42 AM 28 Comments

CML Press release

CML: No surprises in CML mortgage arrears and possession numbers

The latest data from the Council of Mortgage Lenders show no surprises in terms of the number of mortgage arrears and possessions cases in the first half of 2008. While both have increased from their low base as expected, the overwhelming majority of the UK's borrowers continue to pay their mortgages in full every month, and will continue to do so.The CML is maintaining its forecast of 45,000 total possessions and 170,000 mortgages in arrears of more than three months by the end of the year. These numbers remain extremely small when seen in the context of the 11.74 million mortgages in the UK.The CML numbers relate only to first mortgages, not to other consumer loans secured on people's homes.

Posted by jack c @ 08:35 AM 2 Comments

Oh dear ! Things don't seem to be getting any better

BBC News website: Home repossessions rise by 41%

Repossessions have been rising since the second half of 2004 but have now begun to accelerate. The number of mortgages in arrears has also risen, up by 20% in the first half of the year, to 155,600.

Posted by angonamo @ 08:29 AM 0 Comments

Its time to sell the euro

Money Week: Its time to sell the euro

The eurozone now looks like it could get a dose of recession before either the US or the UK.

Posted by sophia @ 07:41 AM 4 Comments

UK Housing Market Freezes as Chancellor Dithers Over Stamp Duty

The Market Oracle: UK Housing Market Freezes as Chancellor Dithers Over Stamp Duty

The crashing UK housing market is heading for a further deep freeze following speculation that the Chancellor, Alistair Darling is about to suspend the Stamp Duty tax charged on house purchases in an attempt to stabalise the housing market. The few buyers that are in a position to proceed with home purchases are now delaying completing contracts or pulling out altogether and thereby likely to make the collapse in the level of market transactions even worse

Posted by nadeem walayat @ 06:48 AM 18 Comments

Oops!

BBC: RBS has 691m loss in first half

Banking group RBS has posted a pre-tax loss of 691m during the first six months of 2008, the second-biggest loss in UK banking history.

Posted by renting2 @ 05:45 AM 1 Comments

Was 'Krusty' on the pay roll!

UK Telegraph: Inquiry into television shows funded by ministers

"Ministers are at the centre of a row over the use of taxpayers money to fund television documentaries." So which other market segments have our political masters been congnizant of hyping? And for who's agenda - Cui Bono indeed! ex Saatchi & Saatchi chap, Alan Bishop, who runs the gov's 'Central Office of Information' (Orwellian or what?) - wonder if he was involved with Bush's 'no child left behind' properganda.

Posted by layers @ 12:56 AM 19 Comments

Australian Home Buyers Feeling the Pinch

Money AU News: Home Loans Decline For Fifth Straight Month

Australian Economy is now slowing with prices starting to fall and approval rates way down. The AU market was previously thought impervious to the credit crunch but the big banks are starting to reveal large rightdowns as in the US and UK.

Posted by ross travill @ 12:38 AM 0 Comments

Thursday, August 7, 2008

Prices falling at 20 pct annualised based on last 6 months

The Guardian: Biggest house price fall since 1983

The Guardian has this on the front page. And they obviously aren't buying the spurious 8.8pct based on 3 month against same 3 month last year malarkey. They have looked at the figures and tell it like it is.

Posted by bleakhouse @ 11:54 PM 10 Comments

Financial Times does a Daily Mash

FT: One way to heat up house prices

I can save the housing market. For the cost of a few matches, we could burn down a good chunk of our housing stock. Desire for accommodation from the newly homeless would stabilise house prices and shore up the buy-to-let sector. Hotels would benefit from the new demand for temporary accommodation. Unemployed construction workers would be saved from the dole by a rebuilding boom. The rise in prices and construction would help the banking sector to cope with the credit crunch. Insurers might not be pleased. But government could offer liquidity support through the Bank to get the companies through their cash-flow problems.

Posted by little professor @ 10:36 PM 9 Comments

Getting worse in the USA

Wall St Journal: Mortgages Made in 2007

"Mortgages issued in the first part of 2007 are going bad at a pace that far outstrips the 2006 vintage, suggesting that the blow to the financial system from U.S. housing woes will be deeper than many people earlier estimated".

Posted by alan @ 08:51 PM 1 Comments

British Banks Facing Second Wave of loses

Economist: Northern Rock: of banks and men

The article looks at the problems facing Northern Rock and how other banks that lended recklessly may soon face similar problems. After writing off lots of bad debts from America the banks now face loses from their loans in the UK. The article predicts that banks will again have to go back to shareholders for more cash.

Posted by becksmycat @ 07:56 PM 0 Comments

Dear oh dear

Evening Standard: House sales start falling through after Darling warns of a 'stamp duty holiday'

House sales have begun falling through because of Alistair Darling's hints of a stamp duty "holiday", it was revealed today. Furious estate agents reported that some buyers have pulled out at the last minute in the hope that they may escape paying thousands of pounds in tax by hanging on. One London homeowner whose house sale has fallen though this week said, "My house, an ordinary Victorian terrace in south-west London, was going for 770,000 which meant a stamp duty bill of 30,800. "I completely sympathise with my buyer who is understandably unhappy about paying that amount if there is a chance of avoiding the tax but it has left me in a real mess." Stamp duty costs the average London homebuyer almost 9,000.

Posted by little professor @ 06:13 PM 19 Comments

Looking at the real data, not Halifax "spin"

Guardian: House prices 'see first double-digit fall'

House prices fell by almost 11% in the 12 months to July, Halifax said today - thought to be the first double-digit drop since the lender began publishing a monthly survey in the mid-1980s. The 10.9% drop revealed by comparing the seasonally adjusted average price in July 2007 with that in the same month this year is bigger than the 8.8% year-on-year fall quoted by the lender.

Posted by niclab2001 @ 05:44 PM 0 Comments

Government now denies that any proposals have been put forward at all, saying the stories are speculation.

BBC: Treasury denies stamp duty 'plan'

Suggestions that the government has put forward a proposal to let homebuyers delay stamp duty payments are "simply wrong", the Treasury has said. On Tuesday, Chancellor Alistair Darling failed to rule out changing the tax in order to free up the housing market. The Tories accused him of playing "short-term games", while estate agents warned of greater "uncertainty". But the Treasury has now said the story had been "speculation" and a "number of options" were being looked at. See also news.bbc.co.uk/1/hi/business/7547264.stm

Posted by jack c @ 04:19 PM 10 Comments

Bankers: how do we prevent losing so much money next time?

Guardian: Warning: toxic debt can damage your wealth

A panel of top Wall Street bankers has recommended cigarette-style health warnings on complex financial instruments and suggests that ill-considered bonus packages may be encouraging financiers to take excessive risks.

Posted by mountain goat @ 03:03 PM 3 Comments

Lib Dem Treasury Spokesperson warns on suspending stamp duty

mortgage solutions: Home auction sale prices plunge a fifth

The average price of homes sold at auction has fallen by almost one fifth since 2007, the Liberal Democrats have warned. Calculations by the Liberal Democrat Treasury Spokesperson, Lord Oakeshott, found that the average price of residential properties sold at auction in the second quarter of 2008 was down 18.7% from the same quarter of 2007 - an average fall of 32,000. Lord Oakeshott said Deferring or suspending stamp duty with house prices in free fall would be like throwing a bucket of water at the Great Fire of London and risks sucking vulnerable first time buyers into negative equity.

Posted by jack c @ 02:42 PM 4 Comments

Phil takes on the merchants of doom and gloom

Garrington (Phil Spencer): Market Comment: Perspective depends on where you're standing

From Tuesday. Phil has to think up something to say. Ummm. Summer always bad... waffle waffle... 5m + 'market' resilient (market indeed? How many sales is that exactly?).... waffle waffle... upcoming supply problems becuase builders have mothballed sites...waffle... ARLA says rents to go up and turkeys say Christmas is cancelled.

Posted by ontheotherhand @ 02:16 PM 10 Comments

Trader's view of the credit crunch

BBC: Trader's view of the credit crunch

Sohail Janjuha was a subprime mortgage trader when the credit crunch started last hear. He spoke to Hugh Pym about what happened - and what went wrong.

Posted by doomwatch @ 12:20 PM 0 Comments

FTB'er struggles to buy 150k house with 35k deposit

BBC News: First Time Buyer Feels the Squeeze

Nothing new here but may catch the attention of a few FTB'ers in the same senario.

Posted by soundman74 @ 12:10 PM 25 Comments

House Prices Bombing in N I

Bloomberg: Housing Slump Hits Northern Ireland Economy Harder Than Bombs

The reality behind this bit of the house price bubble is starting to show, 19% average fall in prices this quarter...

Posted by li cat @ 12:06 PM 5 Comments

BOE base rate held by MPC @ 5%

BBC: Bank holds UK interest rate at 5%

The Bank of England has kept interest rates on hold at 5% as it struggles to deal with a slowing economy and spiralling inflation. Many reports have shown the economy heading for a significant slowdown or even a recession. But the Monetary Policy Committee's primary goal is to keep inflation at 2% and it currently stands at 3.8%. Although the bulk of members voted to hold rates last month, one supported a cut, while another backed an increase.

Posted by jack c @ 12:01 PM 20 Comments

Far From

reuters: Have house prices bottomed out?

Howard Archer, chief UK and European economist at Global Insight, said it was odds-on that house prices will continue to head rapidly south.' He expects prices to fall by 15percent this year, with further falls of 12 percent in 2009, to leave the average home costing 136,196 pounds.

Posted by mark @ 11:00 AM 7 Comments

look i tell you look

CNN: Freddie's risks all too plain to see

On Wednesday, CEO Richard Syron said the big government-sponsored mortgage company would offer "significantly more information about our credit position." Freddie said the numbers should give investors confidence that the company has adequately reserved for future credit losses.

Posted by mark @ 10:54 AM 0 Comments

Vested Interest survey goes negative on Buy 2 Let

mortgage solutions: Fewer landlords adding to portfolio says CHL (Capital Home Loans)

The latest survey from CHL has revealed the number of landlords to increase their portfolio has fallen over the last 6 months. CHLs buy-to-let landlord customers were asked for their views on future purchases. Based on a scale of 1 to 5 corresponding with strongly disagree (1), disagree (2), neutral (3), agree (4) and strongly agree (5), the average score for the question, Do you intend to increase your portfolio in the next six months?, was 3.46, a significant fall from the average of 4.13 in Quarter 1 2008.

Posted by jack c @ 10:28 AM 2 Comments

You can't knock their timing!

BBC: House prices 'fell 1.7% in July'

The lender said prices fell another 1.7% last month, taking the annual rate of decline down from 6.1% to 8.8%.

Posted by cheekie charlie @ 09:35 AM 0 Comments

Annual rate now -8.8% - Keep it comin'

BBC: House prices 'fell 1.7% in July'

The house price slump continued in July according to the latest monthly report from the Halifax.

Posted by holding out @ 09:30 AM 33 Comments

It's out - finally! Major pwnage all round.

Bloomberg: Halifax: prices down 1.7% MoM, 8.7% YoY

House prices fall 1.7% in July - smaller than the previous months falls of 1.9 and 2.5%. House prices are 8.8% lower than a year ago. Without the quarterly smoothing, prices were actually 10.9% lower in July than in July last year. Prices are back at June 2006 levels. Commenting on the figures, Halifax states "The average UK house price is still more than a third higher than five years ago" [LOLZ!!!]

Posted by little professor @ 09:30 AM 8 Comments

It's here and it's big. 10.9% in 12 months and over 10% since January. Unbelievable

Halifax: Halifax House Price Index

"House prices fell by 1.7% in July. Pressure on householders' income, together with a very significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers' ability to enter the market. This is resulting in both lower prices and activity levels.

Posted by andys @ 09:28 AM 0 Comments

Halifax House Price Index - July 2008

HBOS Plc: House Price Index

House prices fall 1.7% in July

Posted by katalan @ 09:19 AM 0 Comments

Monthly Change -1.7%

LSE: Halifax House Price Index - July 08

"House prices fell by 1.7% in July. Pressure on householders' income, together with a very significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers' ability to enter the market. This is resulting in both lower prices and activity levels......"

Posted by whostolemyendowment @ 09:16 AM 0 Comments

Will oil and gold go their separate ways?

The Telegraph: Commodities: time to buy in or bail out?

The chain of events has led to Deutsche Bank this week calling the top of the commodity cycle and advising clients to take profits before the economic downturn casts its spell on the sector. It warned that oil will slide back towards its "marginal production cost" of $60 to $80 a barrel; gold will slump to $650 an ounce as the dollar recovers against the euro; copper, lead and tin will slowly halve in price; grains will calm down as harvests in Australia and the Eurasian Steppe return to normal.

Posted by sold 2 rent 1 @ 08:37 AM 14 Comments

A decade of cheap credit fuelled by rising house prices came to a shuddering halt last summer

Telegraph: Credit crisis: After the binge, the mortgage hangover

The heads of Britain's biggest mortgage lenders may not be trumpeting it from the rooftops, but in private they are all agreed. Homeowners will never have it so good again. "People will look back at the last decade as the halcyon days of cheap mortgages," one senior banker said. "It's not going to get like that again." Hector Sants, chief executive of the Financial Services Authority, said: "I don't think the markets here will ever return to the way they were... Easy credit is not necessarily good for either consumers or the economy in the long term." The message is clear. Expensive mortgages are here to stay.

Posted by drewster @ 02:35 AM 11 Comments

Badger gets a telling-off from estate agents

Independent: Stamp duty fiasco threatens summer 'property slump'

"House sales could collapse over the summer because of confusion over the future of stamp duty, the Chancellor has been told by estate agents and surveyors. They fear the beleaguered property market could stall for up to three months as potential buyers delay their planned purchases. Critics say the signals from the Treasury could backfire in the short-term by paralysing the market as buyers wait for a formal announcement from the Government. The average buyer could save between 5,000 and 9,000 if the levy is suspended."

Posted by drewster @ 02:23 AM 7 Comments

The mans probably right, the UK economy is a one trick pony.

Sky News: UK Interest Rates - Stick Or Twist?

"All bar one of the Sky News Money Panel, prominent figures in a range of professions across business and the City, believe the bank will hold rates. And most agree it would be right to - though one of the members, property expert Gary McCausland, says the rate should be slashed by more than 1%. McCausland, presenter of Five's "How to Be a Property Developer", said: "The economy and housing market need serious help to stem off a recession and limit a large scale property crash."

Posted by cheekie charlie @ 12:08 AM 3 Comments

Wednesday, August 6, 2008

You aint seen nothing yet.

International Herald Tribune: A second, far larger wave of U.S. mortgage defaults is building.

NEW YORK: The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is building with alarming speed.

Posted by planning4acrash @ 11:33 PM 1 Comments

More Toxic CDO fallout

Bloomberg: Ambac, Using an Accounting Change, Posts Net Income

"Ambac Financial Group Inc., the bond insurer that lost 92 percent of its stock market value in the past year, posted second-quarter net income after using an accounting change to record a $5.2 billion gain related to its debt securities". "Claims on Collateralized Debt Obligations -- responsible for $492 billion in credit losses and asset writedowns at financial firms worldwide -- will rise to $1.1 billion at Ambac, taking likely impairments to more than $3 billion, the company said"

Posted by alan @ 06:43 PM 4 Comments

Gordon Brown on Stamp Duty with Jonathon Davis!

BBC Radio 2: iPlayer

Click on play and fast forward (drag bar) to 1:07 to get to the start.

Posted by yoyo1 @ 06:16 PM 11 Comments

A Long Way To Go!

Yahoo - Tech Ticker: No Bottom for Housing Until '09 and No Quick Recovery, says NYU Prof

The housing correction "has some distance to go" and prices will fall another 5% "if we're lucky," says Lawrence White, professor of economics at NYU's Stern School of Business. And if we're "unlucky," White sees another 10%-15% downside in the national average for house prices, which would wipe out over $1 trillion in household wealth. Either way, the economist does not see housing bottoming until the second half of 2009 at the earliest, and foresees no quick snapback for real estate after the bust.

Posted by stevie dee @ 06:03 PM 1 Comments

Sliverline? Ha!!

BBC: IMF downgrades UK economic growth

The International Monetary Fund (IMF) has cut its forecast for UK economic growth over the next two years. The IMF predicted the UK would grow by 1.4% in 2008 and 1.1% in 2009, down from the 1.8% for 2008 and 1.7% for 2009 that it predicted in July.

Posted by peter_2008 @ 05:56 PM 0 Comments

Oil seems to be falling quite quickly. Helping the Dow?

AP - Yahoo: Oil prices fall after US inventory report

Oil prices fell below $118 a barrel Wednesday after the government reported bigger-than-expected jumps in supplies of crude oil and distillates, suggesting high energy prices are still eating into demand.

Posted by stevie dee @ 05:35 PM 0 Comments

Why the credit crunch could threaten your pension

MoneyWeek: Why the credit crunch could threaten your pension

Big company pension schemes have now gone under water again. In other words, deficits are back. And that could spark even more trouble ahead for beleaguered UK Plc and maybe for your own pension, too.

Posted by damien @ 05:07 PM 15 Comments

Suitable jobs for ex-city traders?

Telegraph: McDonald's to create 4,000 McJobs as part of expansion

McDonald's is to launch a UK recruitment drive aimed at hiring 4,000 new staff as the fast food chain looks to take advantage of consumers trading down in the wake of the consumer downturn. The recruitment will increase the size of McDonald's 67,000-strong UK workforce by 6pc, a number approaching the combined strength of the Royal Navy and RAF. So, seriously, who in their right mind would swap an evening meal at the pub for a McDonald's?

Posted by musn't grumble @ 04:43 PM 24 Comments

the big bang..........

CNN: Big Three face bankruptcy fears

After huge losses and plunging sales, experts aren't ruling out the possibility that GM, Ford or Chrysler might eventually be forced to declare bankruptcy

Posted by mark @ 04:38 PM 8 Comments

heavy blows from tumbling house prices, the credit crunch and rising unemployment coming this way

The Times: UK downturn is set to last for two years

"With slumping house prices a drag on growth, the IMF said that its main scenario for the UK was based on a fall in home values of "about 15 per cent" over two years, "rather than a precipitous correction". However, it noted that "some market indicators" suggested a more severe plunge in prices of 20 to 25 per cent by 2011." In other words, the IMF are covering their previous number to cover 25%

Posted by growler @ 04:21 PM 1 Comments

No clear economic view on UK property price recovery

propertywire: No clear economic view on UK property price recovery

Economists are divided over how quickly UK property prices will recover when the current downturn is over. One leading property economist is warning that it could take 25 years for house prices in the UK to recover. Another predicts a 30% rise between late 2009 and 2012.

Posted by andy @ 03:21 PM 0 Comments

Sweet .... ...!!!

AP - Yahoo: Wall Street opens lower on Freddie Mac loss

Stocks declined Wednesday, a day after a big rally, as troubled mortgage financier Freddie Mac reported a larger-than-expected second-quarter loss and touched off fresh concerns about the financial sector. Freddie Mac, which substantially increased its reserves for souring loans, lost about three times what Wall Street expected on a per-share basis. The company also announced that it expects to cut its third-quarter dividend as it seeks to preserve capital.

Posted by stevie dee @ 03:12 PM 0 Comments

...but only if you can put down 25%!

BBC News: Banks cut mortgage rates further

'Abbey, one of the biggest mortgage lenders in UK, has announced another round of cuts in mortgage interest rates for new borrowers. The cost of two- and three-year fixed and tracker rates is coming down by up to 0.1% after similar cuts last Friday. ' 'The past month has seen a series of rate reductions from major lenders as well as some smaller ones. ' Yeah right, more BBC spin but worth reading through to the end of the article where it states that the best deals are for those who can put down 25%. So, tough luck for first time buyers then.....

Posted by loneranger @ 01:58 PM 0 Comments

LOL! Those kerazy Yanks!

Bloomberg: Freddie Mac Posts Fourth Straight Loss, Cuts Dividend

Freddie Mac, the U.S. mortgage-finance company hobbled by record foreclosures, will slash its dividend at least 80 percent after posting a quarterly loss that was three times wider than analysts' estimates. ``This correction is more severe than what we've seen in the recent past,'' said Christopher Whalen, co-founder of independent research firm Institutional Risk Analytics in Torrance, California. ``Both Fannie and Freddie are going to be profoundly insolvent by the time we're done with this.''

Posted by tyrellcorporation @ 01:38 PM 2 Comments

Stamp Duty

Channel 4: Phil & Kirstie's Stamp Duty Plans

In the new series of Location Location Location, Phil Spencer and Kirstie Allsopp announced that they were going to be lobbying the government to make changes to Stamp Duty. As Kirstie said, 'I've been advising the Conservatives on some policies but this is bigger than party politics it's peoples lives.' They're obviously serious, but what are their plans exactly? Here, they tell us...

Posted by sold out @ 01:10 PM 35 Comments

Debt recovery favours repossession

Guardian: Repossession has to be the last resort, FSA warns lenders

Banks want their money back. They get their money back from 1) repayments or 2) repossession. At the moment they can get more of their money back and avoid risk through repossession. Soon though, house prices will fall sufficiently for recovery to favour repayments. Falling prices are the brake on repossessions as was clearly seen from the last house crash in the UK. As this is the real world, not fairy land, we should welcome repossessions because they spread the current absurd mortgage debt among more people and reduce the chance of bank failures and a complete disaster for the UK. Really, we need to worry when repossessions slow down.

Posted by stillthinking @ 11:43 AM 11 Comments

Pigeons coming home to roost

The sun: Forced to live in a pigeon shed

HOME repossessions are soaring in the credit crunch according to a shock new report with one desperate family forced to live in a pigeon shed.

Posted by sold out @ 11:42 AM 25 Comments

Persimmon Homes and Halifax - Double your Deposit scheme

mortgagestrategy: Persimmon and Halifax offer First Time Buyer lifeline

House builder Persimmon Homes and Halifax are giving first time buyers the opportunity to double their savings to use as a deposit on a first home. The Double your Deposit scheme has been designed to bridge the gap between client savings and the minimum deposit needed for their home. By making regular deposits into a Halifax or Bank of Scotland savings account for a minimum of six months (up to 5,000), if those savings are then used as a deposit on a new Persimmon home, Persimmon will match the savings pound for pound, thereby doubling the deposit.

Posted by jack c @ 11:27 AM 15 Comments

What will they do if it goes again?

Daily Mash: ESTATE AGENTS CELEBRATE RETURN OF SCRABULOUS

BRITAIN'S estate agents were last night celebrating the return of popular word game Scrabulous to the Facebook social networking site. Image At the time it was suspended more than 90 per cent of the game's 500,000 daily users were sitting around in one of the UK's six million estate agencies with nothing else to do.

Posted by crash_bum @ 10:27 AM 0 Comments

What the Fed Giveth, Fannie Taketh Away

Bloomberg: Fannie Mae to Lift Mortgage Fees, Raising Loan Costs

Fannie Mae, the largest U.S. mortgage- finance company, will raise a fee it charges lenders to buy their mortgages or guarantee home-loan securities, a move that may increase costs for borrowers. Fannie Mae's ``adverse market delivery charge,'' introduced earlier this year for all mortgages that the company helps finance, will rise to 0.50 percentage point on Oct. 1, from 0.25 percentage point, according to a letter to lenders posted on the Washington-based company's Web site.

Posted by renting2 @ 10:23 AM 2 Comments

18.6% off semi-detatched prices in the last quarter

Bloomberg.com: Northern Ireland House Prices Fall By 4%, Sales Plunge By 50%

"The 4 percent drop was largely ``because the apartment sector, highly represented in the sample, appeared to be running counter to the overall trend, buoyed up by new high-profile schemes in Belfast,'' the report said. Semidetached house prices fell by 18.6 percent to 191,166 pounds in the second quarter from a year earlier, the sharpest decline of any area, the report said. Terraced and detached houses fell by 10.5 percent to 176,915 pounds and 311,804 pounds respectively."

Posted by shipbuilder @ 08:24 AM 4 Comments

Do I need a bunker or a parachute - Anyone for Mars?

Fortune Magazine:: The woman who called Wall Street's meltdown

"I'm at the epicenter of the biggest financial crisis in history" says Oppenheimer Analyst Whereas her peers keep searching for some sort of light at the end of the tunnel, Whitney thinks the tunnel is about to collapse. Bank stock investors will get crushed if they jump back in now, she contends, because the banks are facing much, much bigger credit losses than what they've reported so far. Moreover, Whitney is convinced the economy is about to sink into an "early 1980s-style" recession that will devastate the 10% of the population that became overextended during the housing boom. "It feels like I'm at the epicenter of the biggest financial crisis in history," says Whitney.

Posted by iain greig @ 02:28 AM 0 Comments

Absolute insanity - nuLabour is losing the plot

Independent: Rescue plan to save property market

"Alistair Darling is drawing up a series of radical proposals to revive Britain's beleaguered housing market as new figures show soaring numbers of homes being repossessed. Among the measures being considered by the Chancellor are: *A plan to reintroduce income support for mortgage interest payments for homeowners who lose their jobs. *Suspending stamp duty so buyers only pay the tax after several years in their new home, or perhaps not until they sell the property. *Creating a new, tax-free fund to help first-time buyers raise the deposit they need to get on the housing ladder."

Posted by quiet guy @ 01:10 AM 52 Comments

More analysis of the Rock's problems

Telegraph: Housing slide has shown just how untogether Northern Rock was

"From the moment Northern Rock released its "Together" product providing borrowers up to 125pc of the value of their property, the bank was too racy. Northern Rock's repossession numbers are climbing fast and 70pc of them are Together customers. The average loan-to-value on the Together book is 105pc. And Together accounts for a quarter of all Northern Rock's borrowers. Given that the typical Together customer was a first-time buyer who couldn't otherwise afford to get on the housing ladder, it's worrying. No other bank is going to take these Northern Rock "orphans" - all 172,000 of them - when their current mortgage deals expire."

Posted by drewster @ 01:09 AM 7 Comments

In the present market slump, there are great bargains among houses with a downside

Times: Cheap homes in noisy neighbourhoods

Blighted properties should always sell at a discount, says Yolande Barnes, director of Savills Research. The size of that discount shrinks when the market booms. If the market is really mad it may even disappear, but it always grows in a downturn. --- (Yup, I agree with that - at the height of the boom people were shelling out silly money to buy hideous houses in terrible locations!)

Posted by drewster @ 01:06 AM 2 Comments

They could be the answer to our housing problems, so why are people opposed to new towns?

Times: Eco-towns: a design for life

"A YouGov poll in June showed 46 per cent of the public in favour of building eco-towns, with just 9 per cent opposed. Yet there's no disputing the strength of local protest at many of the sites on the Government's shortlist." --- "Shoddy design, that curse of so much British housing, would be avoided with a commitment to high standards of architecture, an architectural competition in each town, and designs overseen by various professional bodies. The Housing Minister at the time, Yvette Cooper, promised a mix of styles not the grand vision of a single architect that still blights many of the postwar towns. What's not to like?"

Posted by drewster @ 01:02 AM 21 Comments

Yes - In OZ we have no Sub-Prime - har har har !

The Age: Anger over 100% home loans

The real estate madness over here in Australia is still at its most elevated levels of the sublime and the ridiculous. We have a very, very long way to fall. Complacency and greed will lead many down the path to ruin once fear makes an unwelcome return......

Posted by bob from oz @ 12:58 AM 0 Comments

Still think buy-to-ley is a good idea?

Telegraph: Metrovacesa seeks partner for 1.1bn tower

Great snippet of news that seems to have slipped through the radar. At the height of the property market last year, HSBC sold their own UK headquarters under a sale and lease agreement (they sold their building and are now renting it back from the owners). This registered as the highest value real estate deal in the UK (essentially the most valuable piece of real estate in the country at circa 1bn). Incidentally, they also financed the deal that allowed new owners Metrovacesa to take ownership. Funnily enough, 8 Canada Square has lost 10% of it's value in the last 12 months and Metrovacesa are seeking an investment partner to help them meet the repayments. Still think buy-to-let is a good investment? If property was such a safe bet, why would you sell the jewel in the crown?

Posted by paulokes @ 12:57 AM 0 Comments

Tuesday, August 5, 2008

At last some sensible plans for the future of UK housing!

Evening Standard: Silver lining of housing slump

"If the now-commonplace forecasts for this recession of a 30% drop in house prices prove to be correct, Gordon Brown will rightly be able claim that no government in 15 years will have done more than his to make housing affordable to people on low incomes." --- "We could turn the current housing disaster into something good. We could step back from the blind pursuit of 100% home ownership and seek to develop a properly managed, institutionally financed rented sector. Pension funds and others would supply the capital to build properly designed and managed accommodation for rent, just as they currently finance the development of office blocks and shopping centres. The asset would yield an income and, as domestic rents are closely linked to inflation, it would be perfect for pension funds."

Posted by drewster @ 11:59 PM 4 Comments

"We must let the housing bubble burst"

Guardian: Comment: Don't stamp out stamp duty

"Now property prices are finally falling, and sanity is returning to the UK's housing market. Why then is the government even contemplating the notion of suspending stamp duty? This would be a flawed policy both politically and economically. Just because a bad policy comes from the Tories doesn't mean Labour have to steal it. The timing of this proposal is also rather foolish. Any prospective homebuyers still out there will simply delay their purchase until stamp duty has been suspended causing an even greater paralysis in the market."

Posted by drewster @ 10:59 PM 18 Comments

Cold Shoulder

Bloomberg: Morgan Stanley Said to Freeze Client Home-Equity Credit Lines

"Morgan Stanley, the second-biggest U.S. securities firm, told several thousand clients this week that they won't be allowed to withdraw money on their home- equity credit lines, said a person familiar with the situation". "Morgan Stanley has already taken about $14.4 billion of losses related to leveraged loans and collateralized debt obligations. The clampdown on home-equity loans mirrors similar efforts by commercial banks".

Posted by alan @ 10:42 PM 0 Comments

The Times points out that it's 1991 all over again.

Times: A stamp duty holiday? Not that mistake again

Ross Clarke analyses the stamp duty wheeze and concludes that the effects would be the same as in 1991, suspending stamp duty won't stimulate the housing market, as the events of 1991 tell us. Some may even argue that he has built his article from todays comments on this site, or is common sense infectious.

Posted by enuii @ 10:18 PM 3 Comments

Did you buy off-plan in Dubai?.....HA HA HA HA HARRRR

Property Wire: Dubai developers take steps to curb selling on the secondary property market

Developers in Dubai are taking a warning about rampant speculative activity across the Emirates' property market so seriously that there are moves to discourage and even prevent selling on the secondary market.

Posted by whostolemyendowment @ 10:07 PM 3 Comments

All Good in the Hood. DJIA Up 250

Bloomberg: Fed Keeps Rate at 2% as Inflation Accelerates, Growth Stagnates

The Federal Reserve kept its benchmark interest rate at 2 percent for the second consecutive meeting as inflation accelerates and the economic slowdown shows signs of deepening. ``Although downside risks to growth remain, the upside risks to inflation are also of significant concern to the committee,'' the Federal Open Market Committee said in a statement today in Washington.

Posted by stevie dee @ 07:36 PM 2 Comments

Bonuses are for average performance apparently

Telegraph: Never trust the banks when they say: 'Don't worry, we'll be careful'

One City executive told me recently he is finding it really hard to motivate his team at the moment, because they know they won't get big bonuses this year. Is there any other industry that would survive if its staff lost interest in doing their jobs when times get tough?

Posted by quiet guy @ 05:58 PM 5 Comments

Say goodbye to your tax money

Telegraph: Northern Rock in 3bn bail-out from taxpayer

Taxpayers are to provide more than 3 billion to Northern Rock which is unlikely to ever be repaid in another emergency bail-out package to keep the nationalised bank in business. The Treasury has agreed to convert 3.4 billion of the 27 billion it has loaned Northern Rock into what may be virtually worthless "shares" in the bank. Northern Rock faces bankruptcy if the European Commission does not approve the billion-pound bail-out package to be provided by the Government. Alistair Darling assured Parliament that taxpayer loans to Northern Rock would be fully secured on mortgage assets.Now 3.4bn of the loan is being converted to ordinary shares, ranking right at the bottom for repayment if the company goes under.

Posted by little professor @ 05:56 PM 12 Comments

It's okay, the government have deep pockets

No way.....I really mean 'no way'!

Thisiscornwall: 'Free 50,000 car with your home' ploy hailed a success

A PLOY to shake off the housing market blues by giving away 50,000 executive cars with every apartment sold has been a success, a Newquay estate agent has claimed. "The buy to let market is a great option for people to not only cover their mortgage but also make money. * What a load of Bo11ockz!

Posted by whostolemyendowment @ 05:05 PM 3 Comments

By Whitney's reckoning, banks have laid off about 7% of their employees; she thinks the cuts need to reach 25%.

CNN: Whitney: Credit crunch far from over

Whitney, who audaciously - and correctly - predicted last October that Citigroup (C, Fortune 500) would have to cut its dividend, tells the magazine that banks in general today are still facing much bigger credit losses than what they've reported so far. The Oppenheimer & Co. analyst warned last year - and continues to warn today - that the "incestuous" relationship between the banks and the credit-rating agencies during the real estate bubble will have a long-lasting impact on banks' ability to recover.

Posted by malct @ 05:01 PM 1 Comments

Is suspending stamp duty on home purchases really a good idea??

Citywire: 'Is suspending stamp duty on home purchases really a good idea??'

If you are to believe this mornings media reports, the government is now considering suspending stamp duty on house purchases in a bid to kick start the housing market.

Posted by w smith @ 03:43 PM 10 Comments

Repossession Repossession Repossessions

Times: Repossessions rise 40% as mortgage arrears worsen

Housing repossessions rose by more than 40 per cent in the first three months of the year as the number of people in arrears on their mortgage payment soared to over 300,000.

Posted by peter_2008 @ 01:57 PM 8 Comments

Not axed, but a 'temporary deferral'....WTF!

BBC online: Government 'may defer' stamp duty

Chancellor Alistair Darling has refused to rule out changes to stamp duty after reports it may be temporarily axed to boost the housing market. And, Alistair Darling on BBC radio 4 Today programme http://news.bbc.co.uk/today/hi/today/newsid_7542000/7542400.stm (While McBroon keeps a low profile, Darling takes the Flak!).

Posted by whostolemyendowment @ 01:35 PM 20 Comments

BBC news also covered this today...

FSA: FSA reiterates call for firms to treat customers fairly in current market conditions

This latest warning comes as new data on mortgage lending from the FSA shows that the number of consumers facing arrears and repossessions, while historically low, is increasing. Set against a background where the level of new residential lending by FSA regulated firms has declined from a peak of 102bn in Q3 2007 to 75bn in Q1 2008. The data also shows that lending to customers with an impaired credit history accounted for two per cent of overall new lending during Q1 2008.

Posted by whostolemyendowment @ 01:12 PM 3 Comments

Interesting graphs for household income squeeze and house values

BBC News: The Squeeze: Key Factors

Interesting data not usually seen together. I would have liked to see the Government spending figures in here as well over the last 10 years to compare to the unemployment figures. Also the house price and inflation graphs are good.

Posted by beartil2010 @ 12:38 PM 4 Comments

The references in the BBC article to Northern Rock being a victim of the credit crunch have been removed.

BBC 'News': BBC caught rewriting old articles

The link goes to the posting on this site a few days ago, covering the original BBC article. In what seems to be a new chapter in the UK state media's battle to save face for the government, the BBC have rewritten an article expressing sympathy for Northern Rock employees, and portraying The Crock as a victim rather than a perpetrator in the credit crunch. Check the HP posters' quotes taken from the original article and compare to the version currently on the website. The BBC are now able to suggest that in light of the losses announced, the BBC never portrayed themselves as symapthetic to Northern Rock, when the opposite is the truth. Unfortunately Revisionista did not pick up the changes, probably because the BBC are trying to subvert detection of their revisions.

Posted by paul @ 12:14 PM 12 Comments

Property brokers fear bank-style jobs cull

reuters: Property brokers fear bank-style jobs cull

With much of the European real estate market on its knees, the painful death of job security is now haunting property brokers as well as investment bankers.

Posted by mark @ 12:09 PM 1 Comments

Yes he never read housepricecrash.co.uk

reuters: Freddie Mac chief disregarded warning signs

he could have stopped the rot if he had read the well respected HPC website.....

Posted by mark @ 11:59 AM 5 Comments

The banks will become insolvent because of mounting losses as a result of the housing bust

reuters: Hundreds of banks will fail, Roubini tells Barron's

NEW YORK, Aug 3 (Reuters) - The United States is in the second inning of a recession that will last for at least 18 months and help kill off hundreds of banks, influential economist and New York University Professor Nouriel Roubini told Barron's in Sunday's edition. Taxpayers will pay a big price for helping bail out the rest of the financial services industry as well, Roubini said -- at least $1 trillion and more likely $2 trillion.

Posted by malct @ 11:28 AM 4 Comments

Reflate at any cost - my jobs on the line!

Guardian: Chancellor hints at stamp duty suspension

"There's no doubt today that what is happening now is far more profound and will be more prolonged than people thought 12 months ago when the problems first arose," he said. But Darling was much more definitive about the prospect of imposing a windfall tax on oil or energy companies. "Two years ago people were calling for a windfall tax on the banks. I don't think anyone will be doing that today," he said.

Posted by paul @ 11:10 AM 36 Comments

And this will help how?

Yahoo: 'Stamp Duty May Be Suspended'

Will this make it easier to borrow money??? Will the bank lend 10x salary because there is no stamp duty? lol

Posted by mark @ 10:35 AM 19 Comments

And now the market will freeze to a complete halt waiting for stamp duty to be removed!

Times: Plan to suspend stamp duty for all home buyers

Officials will present their findings to the Prime Minister when he returns from the Olympic Games closing ceremony at the end of the month.

Posted by confused76 @ 10:16 AM 1 Comments

Then it's not the time of "maximum pessimism" is it?

BBC News: Wary Investors See Banks As Cheap

Because everyone is so pessimistic about bank shares, it may be the time to buy banks. Or perhaps pharmaceuticals. Or maybe cars.

Posted by bigbadwolf @ 10:02 AM 0 Comments

How prices set to get more 'affordable' in Australia

OZ Debtwatch: How much worse can "It" get ?

The level of overvaluation of asset markets reflects the unprecedented scale of private debt, both here and in America - since the vast bulk of that debt was undertaken to finance Ponzi speculation on shares and housing. This is the reason that this recession will be so severeas will the asset market bust.............

Posted by bob from oz @ 09:12 AM 0 Comments

"We should envy Sara's lifestyle" (sure)

Times: Budgeting for a London lifestyle

"Sara bought the house three years ago for 91,000 - beating an asking price of 93,000 - and lived there through her final year at Swansea University, using rent from two flatmates to cover repayments on the mortgage. The property is now worth about 108,000, but Sara is concerned that this could fall in the slowing housing market."

Posted by confused76 @ 08:57 AM 11 Comments

Houses still far, far too expensive

Times: More repossessions than stated, says Shelter

''...Thousands more homeowners are having their houses repossessed than official figures suggest, a leading housing charity has said as the City watchdog prepares to publish repossessions data for the first time today...''

Posted by hpwatcher @ 08:21 AM 5 Comments

...partly because of a blow-out in borrowers failing to meet their interest bills

Times Online: Northern Rock losses hit almost 600m

''...Northern Rock crashed to a worse than expected 585 million loss in the first six months of this year partly because of a blow-out in borrowers failing to meet their interest bills. ...''

Posted by hpwatcher @ 08:16 AM 7 Comments

Yes, of course house prices are going to rise another 30%.....

BBC News: Northern Rock makes a 585m loss

''...Northern Rock has announced bigger-than-expected losses of 585.4m for the first six months of the year. Much of the loss came from the charges it takes to cover losses from struggling mortgage borrowers...''

Posted by hpwatcher @ 08:03 AM 3 Comments

Blah! Blah! Blah!

AP - Yahoo: No change expected in Fed interest rates

The Federal Reserve, caught between mounting job losses and rising inflation, is likely to sit tight and hope that the interest rate cuts it has already provided will be enough to heal a sick economy.

Posted by stevie dee @ 07:54 AM 1 Comments

Yawn!

AP - Yahoo: ECB, BoE expected to leave rates unchanged

The European Central Bank and Bank of England will likely leave interest rates unchanged Thursday, paralyzed by mounting inflation and slowing growth. Accelerating prices and signs that growth has stalled are major dilemmas for both banks.

Posted by stevie dee @ 07:50 AM 1 Comments

Priceless!!

Express: HOUSE PRICES WILL BOOM (THANKS TO THE CREDIT CRUNCH)

Property prices are set to soar within the next four years as demand outstrips supply, it was predicted yesterday. The credit crunch will lead to a virtual stop to house building, which in turn will create a shortage and this could fuel a 30 per cent rise in prices between 2010 and 2012. What tosh!

Posted by confused76 @ 01:05 AM 39 Comments

Monday, August 4, 2008

The average British bank balance contracts 5% as inflation bites

Times: Current accounts shrink by 5%, says HSBC

Britons are suffering from declining current account balances and typically have 5 per cent less money in their bank accounts than a year ago, as revealed by the HSBC in one of the most graphic illustrations of the rising cost of living.

Posted by enuii @ 11:23 PM 1 Comments

Bluewater hit by crunch - best demolish it, it serves no useful purpose...

Times Online: Lend Lease lops 80m from Bluewater stake

The value of the Bluewater complex, one of Europes biggest shopping centres, has fallen by almost 80 million, according to Lend Lease, the Sydney developer that is its co-owner and which is also building Londons 2012 Olympic Village. In further evidence of plummeting values of British commercial property, Lend Lease cut the value of its 30 per cent stake in Bluewater, Kent, yesterday by 76.8 million, or 12 per cent, in the year to the end of June.

Posted by zandrew2000 @ 11:11 PM 0 Comments

Behind every silver lining...

CNN: Falling oil prices: The downside

Oil prices are falling sharply, and that's good news. But not nearly as good as you might think. No doubt the drop, down to $120 by mid-day Monday, gives strapped consumers relief at the gas pump. Prices have dropped below 54p per litre and could be headed toward 47p. Any decline will be welcomed by Americans struggling under the burden of falling house prices, rising layoffs and stagnant wages. But falling oil prices also suggest that the recession the U.S. has so far avoided is well on its way, as consumers pull back from the spending spree that drove economic growth. A drop in the price of oil won't bring back many of the jobs lost over the past year to the energy-cost surge. Even were gas to fall 40p/L, no one is going to beat a path to the dealership to buy pick-ups and SUVs.

Posted by little professor @ 10:10 PM 13 Comments

Nationalisation of losses

BBC: Northern Rock makes a 500m loss

The question we got to ask, Who pays the bill for this? The TAX PAYER. Remember Adam Applegarth got 760,000 to leave. Should people who made the money not be taken to court and made to pay for this??

Posted by deepak @ 10:03 PM 9 Comments

Falling rents in London

evening standard: Buy-to-let landlords hit as rents fall by 20%

Rents are falling by 20 per cent across London as landlords are forced to slash prices because of over-supply. Thousands of people who hoped to ride out the credit crunch with lucrative buy-to-let investments are being hit.

Posted by sold out @ 09:40 PM 8 Comments

Building Bubble Bursts in Spain

Bloomberg: Spain's July Jobless Claims Rise as Home-Building Collapses

"Registered unemployment in Spain, where construction firms added more than a million jobs this decade, increased for a fourth month in July as home-building collapsed". "The number of people claiming unemployment benefits rose 1.5 percent, or 36,492, from the previous month to 2.43 million, the Labor Ministry said. From a year earlier, the number of claimants increased 23 percent, or 456,578".

Posted by alan @ 08:27 PM 1 Comments

Credit Card Delinquency Wipes Out Profits

Bloomberg: Citigroup Posts Loss on Credit-Card Securitizations

"The biggest U.S. credit-card lender lost $176 million in the second quarter packaging card loans into securities, the company said in an Aug. 1 regulatory filing". "Citigroup manages about $202 billion of credit-card loans worldwide, about $111 billion of which have been turned into securities and sold, according to the filing. Delinquencies on the securitized portion have jumped by 16 percent since the end of last year to $2.16 billion as of June 30, Citigroup said. The firm's results may portend similar losses for rivals".

Posted by alan @ 08:01 PM 1 Comments

Yeh right!

Channel 4 news: Property prices 'may boom by 2010'

Property prices may be booming again by 2010 as the sharp fall in housebuilding threatens to see demand outstrip supply, according to a report. The Centre for Economic and Business Research (CEBR) said a halt in housebuilding amid the credit crunch could fuel a 30% rise in prices between late 2009 and 2012.

Posted by whostolemyendowment @ 06:12 PM 3 Comments

A bit lateral to HPC but you can do always do with a latte when times are tough.

FOODBEV: Starbucks cuts jobs and closes stores

Following the announcement of store closures in the US, Starbucks has announced further closures in Australia, with 61 of 84 outlets set to go that's about 685 jobs. *As the economy toughens up, then we can all do without those little luxuries of life if it means keeping a roof over your head.

Posted by whostolemyendowment @ 06:09 PM 0 Comments

Credit Crunch Anniversary

The Market Oracle: Credit Crunch Anniversary and Mega Trends Investing

The 'official' anniversary of the credit crunch is linked to when the European Central Bank stepped in to provide an unprecedented amount of liquidity by pumping in $130 billion into the European banking system following news of the French bank Paribas freezing three of its hedge funds due to exposure to the US subprime mortgage market as panicking investors had been dumping holdings of mortgage lenders and mortgage backed derivatives and so began the self feeding credit crunch cycle of mortgage backed losses leading to asset price deflation

Posted by nadeem walayat @ 05:31 PM 0 Comments

Why theres more bad news to come from the banks

MoneyWeek: Why theres more bad news to come from the banks

"The British bank reporting season is now in full flow. Its the time of year for all those lenders, whove been happily turning down all your pleas for that extra loan or higher overdraft, to admit to all the cash they have managed to mislay over the last six months."

Posted by damien @ 05:29 PM 1 Comments

One to watch on BBC @ 6.30pm tonight

Mortgage Solutions: Mortgage brokers fixing immigrant loans: BBC

A BBC report is set to expose a network of mortgage brokers willing to help illegal immigrants get home loans when it is broadcast tonight. The broadcasters investigation began after it was approached by three former trainee mortgage advisers employed by the London Professional Academy (LPA) based at an office block in Barking. The LPA trainees were sent to various companies including - CMS Mortgages - which operated from LPA's headquarters during 2007. While at CMS Mortgages the former trainees allege that they were instructed to falsify the passport details of foreign nationals, told to put down British in the nationality box ......

Posted by jack c @ 05:14 PM 11 Comments

Mother of all bubbles!

Property Wire: Premiums on off-plan villas and apartments in Dubai soaring

Villas and apartments nearing completion in Dubai are generating premiums of as much as 70 to 200% a year, according to property market experts.

Posted by whostolemyendowment @ 03:55 PM 7 Comments

i thought it was all over....lol

CNN: Looming job cuts march on - report

The number of job cuts announced in July jumps 26%. Airlines and financial firms top the list, according to a monthly study. Challenger, Gray & Christmas, an outplacement consultancy firm, said Monday that planned job cuts announced by employers in July jumped 26% to 103,312 from 81,755 announced in June. That's up 141% from a year ago, when employers announced planned job cuts totaling 42,897.

Posted by mark @ 03:39 PM 3 Comments

US agent steals Picassos from his listings to supplement income

Zoomf Blog: The light-fingered estate agent

Its not the easiest of times for estate agents, and its even worse over in the States. So whats a struggling real estate agent to do to supplement his income? Josh Flagg thought he had the answer, he started stealing paintings from his high-end listings. And were not talking nice paintings bought from the local gallery, were talking Picassos and Chagalls.

Posted by gordo @ 03:36 PM 0 Comments

More 'shock' news

hereisthecity: RBS Said Likely To Post The Biggest Loss In British Banking History

The Mail-on-Sunday reports that Royal Bank of Scotland (RBS) is to post its first-half profits Friday, and that analysts are predicting that the bank will likely post the biggest loss in British banking history - some $3bn, after writedowns of $9.8bn. Most of the writedowns are thought to be related to the US subprime lending crisis.

Posted by crutchley @ 02:48 PM 0 Comments

Ha! ha! ha!

City wire news: Have House Prices Bottomed Out?

Property veteran Simon Agace, chief executive of estate agent Winkworth, is optimistic that the autumn will see renewed activity in the housing market.

Posted by paranoia blue @ 02:30 PM 12 Comments

HSBC Profits fall

BBC News: Warning as HSBC profits fall 28%

HSBC has warned that conditions in financial markets are at their toughest "for several decades" after suffering a 28% fall in half-year profits. Europe's largest bank saw profits drop by $3.9bn to $10.2bn (5.2bn) in the first six months of the year, as its North American arm made a $2.8bn loss. The firm announced $3.7bn in fresh credit writedowns. HSBC has been among the banks worst hit by the credit crunch, whose financial toll has run into the many billions.

Posted by jason @ 02:25 PM 1 Comments

Fixed rates fall slightly

BBC News: June peak in fixed-rate mortgages

The cost of fixed-rate mortgages deals hit an eight-year high in June before falling back in July. Figures from the Bank of England show that the average rate for a borrower with a 25% deposit was 6.6% in June, up from 6.26% in May.

Posted by jason @ 02:23 PM 0 Comments

Staff at banks emails show they knew CDOs were toxic

democratic underground: Wall St. Journal: Standard & Poor's Ratings Services Email: 'We Should Not Be Rating It'

In one email, an S&P analytical staffer emailed another that a mortgage or structured-finance deal was "ridiculous" and that "we should not be rating it." The other S&P staffer replied that "we rate every deal," adding that "it could be structured by cows and we would rate it." and "Let's hope we are all wealthy and retired by the time this house of cards falters"

Posted by mountain goat @ 01:43 PM 12 Comments

Reality bites in Maida Vale

Guardian: I could have had thousands in rent, but my letting agency let me down

Maida Vale (aka Media Vale) is a typical middle-upper-wanna-be-class neighborood populated by the financial illitterates. It was the preferred hunting ground of Foxtonians in their mini's. This has all changed now. If you wanna fork 1.3k pw for a 2 bedroom, you may as well want to sport a South Ken address, wouldn't you? Historically, Maida Vale was the quarter of the London mistresses. Not exactly upper class, with all due respect for the oldest profession. Now MV is a mix of converted "communal" houses (former bedrooms with a common kitchen and bathroom) crumbling behind their stucco facades and a few grim high rise blocks very popular with Near/Mid&Far East migrants. It is a Cheap South Ken, a fringe zone of the London boom and house prices are plummeting.

Posted by confused76 @ 01:40 PM 8 Comments

Banks could be hit by billions of pounds of future liabilities adding to the woes of the financial sector

FT: Artemis paints bleak picture for banks

James Foster, co-manager of the 282m Artemis Strategic Bond fund, said the structured investment vehicles that ran into trouble last year would soon be due to pay back their debt. This would land institutions with even greater liabilities, he said. "Banks have marked up rates because they can't get funds, which they used to get from Sivs. On top of that, the Sivs are maturing, which means they will have to repay tens of billions of pounds a year."

Posted by jack c @ 01:28 PM 0 Comments

Rental market to become heavily oversupplied

Observer: Can't sell your home? Rent it out instead

Try what all the canny home owners say: "Im landlady & tenant" (sic!) A growing number of families who cant sell their homes but are desperate to move are letting them out to tenants instead. Although I havent had any takers as yet, Im hopeful that the rent were charging 850 per month will be competitive enough to entice someone soon. Good luck Martina!

Posted by confused76 @ 01:28 PM 7 Comments

Fun in store for UK lenders in 6-12 months

NY Times: Housing Lenders Fear Bigger Wave of Loan Defaults

"The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is quickly building. Homeowners with good credit are falling behind on their payments in growing numbers ..."

Posted by doomwatch @ 11:10 AM 3 Comments

Is This Really a Shock? Any Bets?

MSN Money: Shock Interest Rate Rise Warning

Homeowners and borrowers could be hit with a shock interest rate rise when the Bank of England meets this week, experts have warned. Steep rises in energy bills - such as British Gas's record hike last week - have heaped pressure on the Bank's rate-setters despite recession risks mounting.

Posted by renting2 @ 10:20 AM 39 Comments

Bonds beckon?? Not so sure about that

The Telegraph: Bonds beckon as commodity boom flags

Deutsche Bank has called the top of the commodity cycle. The uber-bulls of the oil, food and metals boom have advised clients to take profits before the downturn engulfing most of the global economy works its inevitable effects. Oil will slide back towards its "marginal production cost" of $60 to $80 a barrel; gold will slump to $650 an ounce as the dollar recovers against the euro; copper, lead and tin will slowly halve in price; grains will calm down as harvests in Australia and the Eurasian Steppe return to normal.

Posted by sold 2 rent 1 @ 10:05 AM 10 Comments

Follow the money

FT: Property prices may fall 30% by 2011

House prices are expected to fall by almost 30% during the next three years according to the leading indices of property price futures. About 50,000 will be wiped off the value of the UK average house price of 185,000 by 2011 judging by current trading on spread betting platforms, more than most commentators currently expect. Residential price derivatives, which are commonly used by institutional investors, are also implying a fall of between 25 and 30 per cent. Meanwhile Tradition, an interdealer broker, says that the average UK house price is expected to fall to 153,591 next year and to 137,233 in the next three years.

Posted by little professor @ 08:37 AM 11 Comments

Undersupply could bring back house price inflation

Telegraph: Not likely

Undersupply in the housing market could lead to a return to rapid house price inflation by 2010, according to a report published today. Falling output from housebuilders could lead to a 30% increase in house prices between 2009 and 2012, according to the Centre for Economic and Business Research. The organisation makes its prediction on the proviso that the mortgage market returns to normal by the second half of 2009. Last week the National Housing Federation predicted that average house prices in England will rise 25% by 2013, with a recovery expected to begin in 2010.

Posted by little professor @ 08:34 AM 22 Comments

Roger Bootle

Telegraph: The faster house prices fall, the better off well all be

Something must be done! This is something. Therefore it must be done. Following such logic, governments have blundered into all sorts of interventions which they have subsequently lived to regret. By contrast, last week's interim report from Sir James Crosby on the mortgage market came up with virtually no proposals for action. But was this a mark of failure or of success?

Posted by jason @ 07:21 AM 3 Comments

more misery for landlords

FT: Glut forces deep cuts in London rentals

Rents across London have started to fall by as much as 20 per cent as a glut of supply forces landlords to cut prices. After a year of strong growth, rents on properties ranging from family houses in Kensington to two-bedroom apartments in Canary Wharf are now being slashed by hundreds of pounds a week, according to estate agents. The owner of a house in Chelsea, let last year for 2,700 a week, was now taking offers of more than 2,000, said Tim Hyatt, head of lettings at Knight Frank. Riverside apartments that were being let for up to 1,500 a week this time last year were now going for about 1,200. "We have noticed a huge increase in stock in the last three to four months, while inquiries have only increased marginally," said Mr Hyatt. While rents in parts of the UK cont

Posted by foggy @ 04:10 AM 9 Comments

Sunday, August 3, 2008

Loans will keep on defaulting as the credit crunch never ends

The Oil Drum: Peak Oil and the Financial Markets

"Lenders assume that the future will be much like the past. If there is a problem with loan defaults, the assumption is made that higher defaults are likely to be temporary. But models based on this assumption are faulty, because resource shortages [peak oil etc.] are likely to raise the price of all types of energy products and food, year after year. This will tend to cause progressively more loan defaults, because people will have less and less money available to repay loans, after buying basic necessities. Failure of financial markets to recognize the increasing risk of defaults due to resource depletion can be expected to result in a consistent underpricing of risk. Individuals and institutions owning debt-based financial products are likely to suffer huge losses, year after year...."

Posted by drewster @ 11:34 PM 7 Comments

Death of 1,000 cuts for Brown

BBC: Ex-ministers' challenge to Brown

Skills Secretary Mr Denham told BBC One's Andrew Marr programme that Mr Brown had a "profound understanding of what this country needs". Clearly Denham has the skill of butt-licking! Meanwhile..."A group of ex-Labour ministers are to set out their own policy agenda to fill what they see as a "vacuum" at the heart of government".

Posted by alan @ 10:46 PM 3 Comments

Millions of people are worse off than a year ago due to the global credit crunch.

BBC: Credit crunch a year on: the losers

Those feeling the pain range from anxious homeowners on both sides of the Atlantic to harried stock market investors and worried employees of companies caught in the headlights of a slowing economy. The effects have not just been felt in people's pockets. For bank bosses, regulators and politicians, the damage inflicted has been to their reputation for competence rather than financial security. So who has lost most from the worst financial crisis in a generation?

Posted by stevie dee @ 08:01 PM 8 Comments

Over 200,000 reduced properties!!

propertysnake.co.uk: Welcome to propertysnake

"Welcome to propertysnake.co.uk, your source for reduced house prices across the UK. Updated daily, our database currently contains 201,868 reduced prices, at reductions of up to 50.01%." - Wow, I remember watching it slowly rise from 40,000 up towards 100,000. This is champagne popping news! I linked to Camden purely because the homepage has been posted before.

Posted by planning4acrash @ 05:53 PM 17 Comments

What can Gordon Brown do?

Telegraph: James Crosby's plan to stabilise house prices could tempt Gordon Brown

What is the one thing that could save Gordon Brown? A grovelling apology from David Miliband? Cocaine in Cameron's glovebox? A surprise recount in Glasgow East? Given the Prime Minister's recent luck, it seems that even if all that happened before breakfast it wouldn't be enough. There is, however, one thing that might. What if Brown appeared to engineer a sudden recovery in the economy? Pull a rabbit from the one hat we used to think was his crowning glory? Impossible, you might say. Brown himself has repeatedly stressed how we are being buffeted by events beyond our control - indeed, the first anniversary of the beginning of the credit crunch falls this week, a reminder that we face a banking crisis made on Wall Street.

Posted by jason @ 04:54 PM 15 Comments

another one bites the dust

CNN: Florida bank closed by FDIC

Federal regulators closed Florida's First Priority Bank on Friday, marking the eighth bank failure of the year.

Posted by mark @ 04:27 PM 0 Comments

Things might really get nasty from now on!

The Times: Royal Bank of Scotland poised for biggest loss in UK banking history

THE Royal Bank of Scotland is poised to unveil the biggest loss in UK banking history after taking a hit of almost 6 billion from the credit crisis. The loss would be roughly five times higher than the deficit racked up by Barclays in 1992 at the height of the last recession.

Posted by cheekie charlie @ 12:51 PM 13 Comments

Truly running on empty

Independant: Distress in manufacturing points to recession

More of the same. Was it here that someone gave the analogy of the Wile Coyote character motionless after running off the cliff. I cannot see that this is over after 5 years, given that a year has passed just for a warmup. I think events are going to start moving faster soon (although still at a glacially slow pace). The long term consequences, because of a completely unbalanced economy, are going to resonate for thirty years.. Consider that the government currently confiscates housing to pay for long-term care for the elderly. As a nation, we have just introduced generations possibly spanning 20 years that do not use houses as a store of wealth. That is what this crash is, the end of housing as a store of wealth.

Posted by stillthinking @ 12:17 PM 1 Comments

Cunning devaluation gives boost to manufacturing

Guardian: Economy: Sharp decline in manufacturing activity points to UK recession

"sharp contraction in activity" I think the focus on house price falling, although admittedly the purpose of the site, misses the point. We are all going to get much poorer, sterling is going to fall further against other currencies, and the only thing left to mask deflation will be a collapse in incomes.

Posted by stillthinking @ 12:03 PM 4 Comments

I Told You So!

The Sunday Times: Bank failed to heed the alarm bells on inflation

A leap in the growth of money supply from mid-2004 was a sign something was wrong. Anyone who says I told you so is liable to make himself or herself unpopular, but it would require the humility of a saint to keep quiet when a bold forecast proves to have been largely correct. In evidence to the House of Commons in February last year I warned that by the spring of 2008 the Bank of England would be in quite serious trouble by the standards of the Nice (non-inflationary, consistently expansionary) years from the early 1990s. I said an inflation rate of 4%-5% in 2008 or 2009 would not be a surprising sequel to policy mistakes since mid-2004. I suggested that interest rates might have to be raised to 6%-6.5% to bring inflation back

Posted by bufferbear @ 11:53 AM 4 Comments

Desperate property ramping

The Times: Is now the time for canny buyers to move?

"if you want to make a clever call on the bottom of the market, you had best pay attention not in 2010, 2011 or even 2017 (the various years in which house price recovery has been tipped) but now. Liam Bailey, Knight Frank's head of research, suggested this week that, just as cash-strapped homeowners are most inclined to avert their eyes, the biggest bargains may be emerging."

Posted by quiet guy @ 11:50 AM 3 Comments

Property Market: Word on the Street

Telegraph: Property Market: Word on the Street

Nice little summary from yesterday touching on the dynamics of the bubble and attitudes to the change.

Posted by wally @ 11:41 AM 2 Comments

London house prices drop by 1.6% in July the third consecutive drop over one percent

Firstrung: London house prices drop by 1.6% in July the third consecutive drop over one percent

Prices for prime central London residential property have fell by 1.6% in July, the third consecutive month of price falls, according to the Knight Frank Prime Central London Index. Annual growth has fallen sharply, but is still positive - properties are now worth just 1.8% more than at the same point last year..Super-prime properties, worth more than 10m, continue to defy this trend - prices rose by 1% during July and annual growth for this segment is now 16.7%. The northern area of prime central London - from Mayfair to St John's Wood - is also showing slightly positive growth of 0.6% over the last month.

Posted by converted lurker @ 11:15 AM 0 Comments

The party is so over

Firstrung: Brits facing hardship as 'financial reality' begins to dawn on overspent consumers

Alliance Trust Research Centre's Financial Reality Index reveals that the financial well-being of UK households has hit its worst ever level during its 11 year study. The latest report that reveals families' financial reality in the second quarter of this year warns that household consumption will have to continue to slow over the remainder of 2008 in order to remain in line with the financial reality facing UK households

Posted by converted lurker @ 11:13 AM 0 Comments

Short Term bank borrowing reaches record highs.

Reuters: Stressed banks borrow record amount from Fed

NEW YORK (Reuters) - Banks borrowed a record amount of funds from the Federal Reserve in the latest week as the year old credit crisis took a persistent toll, while the commercial paper market continued to contract, signaling tough conditions for short term borrowers. Banks' primary credit borrowings averaged $17.45 billion per day in the latest week, the second straight week this had hit a record and up from $16.38 billion the previous week, Fed data showed on Thursday. Clearly, the credit fiasco is far from over. Infact, it is still accellerating. At the moment, we are seeing increased borrowing, leading to inflation. Eventually, banks will refuse loans or be refused them. There could be a plateaux, but, after that point, we enter deflation and a currency death spiral.

Posted by planning4acrash @ 10:29 AM 5 Comments

Economists discover more keys

Observer: House building grinds to a halt - and sows seeds of next boom

Three uses of the word "key" here in response to more Wise Men theorising (employed by the CEBR) - always a sign of underlying bullsh!t. Apparently prices will bounce back in a couple of years because of, yes, a housing shortage due to slow building. Never mind high prices or that prices didn't bounce back that soon in the 90s, despite a similar fall in building. I suppose if prices do collapse in two years it could just happen, but I doubt it. Aren't economists wonderful?

Posted by letthemfall @ 10:11 AM 5 Comments

Let common sense prevail!

ABC Nightline - Cowles Foundation for Reasearch in Economcs: Prophet of Housing Prices; Robert Shiller

"The idea that homes are a great investment is just wrong. Stocks have historically been a phenomenally better investment. They've gone up historically for the last couple centuries at 7% real a year. Do you know what homes have done? It's just about zilch. They, they do not go up. This is one of the biggest misconceptions. It's just wrong. And people I don't know how the story got started that homes are such a great investment. It's just not true." Professor Robert Shiller 26th March 2006

Posted by stevie dee @ 09:09 AM 0 Comments

Interactive map of BTL and sub-prime sewage

FT: UK Housing: areas to watch

Yes, this link displays an interactive map that enables you to see how your area is 'exposed' to BTL and sub-prime. Two revealing things here: firstly that the FT considers BTL to be in the same category as sub-prime; secondly just how much BTL and sub-prime there is around the country. Oh My God. PS: you'll need to register to see it.

Posted by othello @ 09:00 AM 2 Comments

2005: Robert Shiller - Herengracht, Amsterdam 300 years Ago

The New York Times: Be Warned: Mr. Bubble's Worried Again

Interesting article about how he used historical house price data from 300 years ago in Herengracht, Amsterdam. Professor Shiller was of the belief that house prices may "drop sharply" back in August 2005.

Posted by stevie dee @ 08:58 AM 0 Comments

Sunday Matinee - Fred Harrison - Ricardo's Law

Youtube: Ricardo's Law ~ The Great Tax Clawback Scam

Great little movie - We the people have a collective responsibility to make a difference. Great quote "The only war that Winston Churchill lost was the war with the landlords".

Posted by stevie dee @ 08:23 AM 0 Comments

Sunday Matinee - Fred Harrison Part 2

Youtube: Property Bust after 14 year Boom- Fred Harrison, part 2

Really interesting and educational video. Not to long and straight forward (9min 29 sec). +18 Rating

Posted by stevie dee @ 08:06 AM 0 Comments

Sunday Matinee - Fred Harrison Part 1

Youtube: Property Bust after 14 year Boom- Fred Harrison, part 1

Really interesting and educational video. Not to long and straight forward (9min 29 sec). +18 Rating

Posted by stevie dee @ 08:05 AM 0 Comments

Halifax figures leaked

Independent: House prices slump by 10&

The housing market is falling at more than 10 per cent year on year, the most dramatic collapse in the sector's recorded history, the Halifax mortgage bank will reveal this week. Even in the 1990s, Britain did not face double-digit annual falls in house values. The average UK price has fallen to under 180,000, back to summer 2006 levels and almost 20,000 below their peak in August last year. Halifax prepares its statistics amid great secrecy and regards them as so stock-market sensitive it will not even confirm when they will be announced to the City. It has consistently underestimated the rate of fall by comparing quarterly figures. July's headline rate will be suppressed byusing this method, but the actual fall will be over 10% for the first time.

Posted by little professor @ 01:49 AM 10 Comments

More confirmation (if needed) for EA's

The Guardian: It's true-houses just aren't moving

House sales have all but shuddered to a halt across England and Wales according to an analysis of figures from the Land Registry, which suggests that the number of transactions has tumbled by as much as 80% over the past year.

Posted by aje @ 12:12 AM 0 Comments

Saturday, August 2, 2008

Would be a conservative estimate

Telegraph: Northern Rock: 20pc of its customers face negative equity

Northern Rock, the state-owned bank, will reveal this week that roughly one in five of its mortgage customers faces negative equity next year as it unveils a heavy loss for the six months to June.

Posted by quokka @ 11:52 PM 0 Comments

Denial: They have been saying this for years!!!!

FT: High yields attract the fresher landlords

Parents about to wave children off to university could guarantee a roof over their offsprings head, while achieving a decent return on their money. Rental yields on student housing are rising, strengthening the case for parents to invest in buy-to-let property. I would never have imagined the FT to come out with such garbage. Must be paying peanuts these days.

Posted by stevie dee @ 06:54 PM 7 Comments

Good article and graphs by IC on "crash history"

Investors Chronicle: Houses down, shares up

An Englishman's home is his castle. But, having seemed impregnable just a year ago, that castle has now developed a very nasty case of subsidence. Since last July, the Nationwide UK housing index, adjusted for inflation, has dropped 11 per cent in value. Another deep, lengthy slump in UK residential property now seems almost inevitable.

Posted by jack c @ 04:01 PM 3 Comments

More agents getting themselves in trouble - OR 'Home packs add to price crash acceleration

BBC News: Agents 'breaking home pack law'

Some estate agents in England and Wales are breaking the law by marketing properties without ordering a Home Information Pack, the BBC has learned.

Posted by beartil2010 @ 02:32 PM 15 Comments

Glut forces cuts in London rentals

FT: Glut forces cuts in London rentals

.... as i've always said there are plently of places to rent thanks to all those loverly BLT'ers ...

Posted by mmeg @ 12:51 PM 3 Comments

Always wise AFTER the event.

The Independent: House Rules - Truth About Today's Property Market

Seems that the so called supply-and-demand mantra preached for years is finally being ditched.

Posted by aje @ 11:22 AM 8 Comments

7/29/2008 Ron Paul Interview with Glenn Beck where the Congressman warns that something big is about to happen, economically speaking.

TruthNews: Ron Paul Warns Glenn Beck Something Big Is About to Happen with Economy

Some have questioned whether we are going into depression or collapse, thinking that a recession is all at hand. There are thousands of trillions of derivatives in the financial sector, worth many thousands times more than all of the value of the entire world. When, not if, investors realise the reality, when they try to withdraw, there will be a run on the world economy. Not a run on a bank. A run on the world economy. Your currency will be worth nothing, and nobody will be able to fund the food distribution and supermarket system.

Posted by planning4acrash @ 11:21 AM 46 Comments

Rental market follows house prices down

FT: Glut forces cuts in London rentals

Oddly enough, those housing bulls that acknowledged rental yields were unsustainable but thought that rents would rise to justify higher house prices have been proven wrong on both house prices and rents...

Posted by b0yc0tt @ 11:15 AM 0 Comments

Sugar...you're a lightweight...you're fired!

The Sun: Gordon...You're STILL Hired

"So when I speak to you Sun readers I ask you to consider that what I say comes from someone whose only interest is the prosperity of the people and the good of the country we live in." ...and my pay packet from Gordon for being his business adviser. Bye bye Alan. How's your property portfolio?

Posted by blister soul @ 10:52 AM 14 Comments

Can't sell: must let (at a loss)

FT: Stalled house sales prompt rash of to let signs

"Property owners unable to sell their homes are being pushed into the lettings market, but many are finding rents insufficient to meet their mortgage repayments."

Posted by letthemfall @ 09:39 AM 16 Comments

Ha Ha, Pwned!

Daily Mail: 200,000 BTL investors to lose upto 90% of their cash

Around 200,000 buy-to-let investors have lost up to 90 per cent of the cash they put into their properties, new research shows. There are around 1million BTL loans in the UK, but worryingly a fifth of them where taken out at the peak of the boom. A 200,000 home bought in September with a ten per cent deposit, has lost 9 per cent of its value since October and it is now worth 182,000. The unfortunate buyer has lost 18,000 of his or her 20,000 deposit - a 90 per cent loss. Around one in five buy-to-let investors could be in negative equity within a year, according to Standard & Poor's.

Posted by little professor @ 08:48 AM 41 Comments

Friday, August 1, 2008

The capital was already destroyed

RGE Monitor: Fisher's Debt-Deflation Theory of Great Depressions and a possible revision

"The credit crunch today is not destroying capital but recognising that capital was destroyed by misallocation in the years of irrational exuberance." Seems a good point to me. Apparently we have years of debt deflation to come, who would have thought that !

Posted by stillthinking @ 11:04 PM 2 Comments

Rents down! Yeah!

Ft.com: Glut forces cuts in London rentals

Rents across London have started to fall by as much as 20 per cent as a glut of supply forces landlords to cut prices.

Posted by zandrew2000 @ 10:48 PM 2 Comments

Some straight talking from the fool

fool.co.uk: I Want A House Price Crash!

Everybody talks as if falling house prices are a bad thing, nay, a national disaster. Rising house prices, the logic runs, are therefore a good thing. But the reverse is true.

Posted by webmaster @ 10:38 PM 11 Comments

It's not all bad news!!

Daily Telegraph: Toilet Block Sells For 35,000

Where there's muck there's brass.Buying your own toilet proved a good investment for this punter.

Posted by aje @ 09:37 PM 0 Comments

which banks in the UK mirror this one??????

CNN: NY to file fraud charges against Citigroup

New York State Attorney General notifies banking giant of intent to file charges over sale of troubled auction-rate securities and claims Citi destroyed documents.

Posted by mark @ 09:21 PM 4 Comments

Forthright predictions from a veteran

Alex Jones Show Today: Alex talks with activist Red Beckman

Alex talks with activist Red Beckman, father of the Fully Informed Jury Association and co-author of The Law That Never Was: The Fraud of the 16th Amendment and Personal Income Tax. Alex also discusses the issues of the day and takes calls. There are a few more 10min clips after this one. He says that economic collapse could happen in a year, a few months or even a few weeks. That it is just a question of when it is triggered. He explains how the Fed has been buying gold at next to nothing prices for decades. That, if/when the economy melts down, that the elite will bring in a global gold standard to formalise world government. That the food distribution system will be taken down, chaos within 5days. Our urban housing stock would make it worse. Whole show on prisonplanet.com

Posted by planning4acrash @ 06:55 PM 6 Comments

Stable bolts & horses.....probably too late but about fcukin time

BBC News: Tougher rules for rating agencies

Credit rating agencies could be banned or prosecuted under a draft European Union law aimed at making them more accountable for the advice they give.

Posted by whostolemyendowment @ 04:56 PM 1 Comments

More entertaining rubbish from the Times

Times: Bargain hunters pounce on holiday homes as owners feel pinch

This typical Times hogwash is not really worth reading, but I commend the final paragraph to you as an ineffable example of a dumb EA at his dumbest.

Posted by letthemfall @ 04:34 PM 9 Comments

Check out the names involved in Carlyle on Wiki

Times Online: Carlyle forced to liquidate only hedge fund

Carlyle, the US private equity giant, has suffered a setback after it was forced to liquidate its $600 million first and only hedge fund because it had failed to achieve "critical mass". ***Not directly HPC related, but there again it is all to do with ripples.....http://en.wikipedia.org/wiki/Carlyle_Group

Posted by whostolemyendowment @ 04:33 PM 1 Comments

More doom and gloom (lovely!)

The Times: Where are all the property bargain-hunters?

The faster house prices fall, the better. That's what some agents, currently drumming their fingers on desktops in empty offices, are telling themselves at least. But if the first sign of a recovery is the emergence of savvy bargain hunters, there is little sign yet in auction rooms of potential buyers being willing to buy even at today's low prices.

Posted by mark wadsworth @ 04:12 PM 13 Comments

They just might recoup some of losses by then

Peterborough Today: House prices 'to rocket over next five years'

THE average house price in Peterborough is predicted to rise by nearly 30 per cent over the next five years, the National Housing Federation has claimed. Published on Monday, a report researched by independent economists Oxford Economics forecasts that house prices will fall in 2009, but start to recover in 2010, and rapidly increase from 2011. http://www.oef.com http://www.housing.org.uk/default.aspx?tabid=212&mid=828&ctl=Details&ArticleID=1301

Posted by whostolemyendowment @ 03:34 PM 6 Comments

Good job we have sound fundamentals and are well placed to weather any economic slowdown having eliminated boom and bust

Citywire: British manufacturing shrinks by most in a decade

British manufactures have suffered the worst falls in activity in a decade, dragged down by record cost inflation in July coupled with the ongoing housing market turmoil and a lack of consumer spending. The level of new work placed with UK manufacturers contracted at the fastest rate in nearly 10 years in July, according to the Chartered Institute of Purchasing and Supply which compiled the figures.

Posted by jack c @ 03:15 PM 0 Comments

General Motors stunning $15.5BIllion 2Q loss.

CNN: GM Swings To $15.5 Billion 2Q Loss, Hurt By N. American Weakness

General Motors Corp. (GM) posted a stunning $15.5 billion second-quarter net loss, as the auto maker piled up $9.1 billion in charges and write-downs and suffered a deep drop in North American sales. The company had warned in mid-July that it would post "a significant second quarter loss." But the actual numbers were far worse than analysts had expected, and point to the enormous challenges facing GM as buyers turn away en masse from its most profitable offerings.

Posted by sold out @ 03:08 PM 15 Comments

Power of bad publicity.

The Daily Mail: Couple shame Bovis internet list dozens faults new 700,000 home

Family with a list of defects on a new build ending up having to use name-and-shame tactics to try and get Bovis to correct problems that shouldn't have been there in the first place.

Posted by aje @ 12:50 PM 12 Comments

Dum dum DUM ...Another Bites The Dust....

Or a reason for the next boom and bust

Telegraph: A recipe for a recovery in UK house prices

An apposite article for the moment. I'm not sure whether this journalist really understands the impact of securitisation of mortgages (not sure whether I do come to that). She seems to suggest that CDOs, etc improved the efficiency of lending, until it went too far and ended in the crunch. What in effect she is saying is that more regulation is needed for mortgage security markets, so allowing greater lending without the disaster of recent years. However, the problem has been the funnelling of huge sums into a single asset, which securitisation allowed. I'd be surprised if a bubble didn't reform eventually.

Posted by letthemfall @ 12:11 PM 4 Comments

When The Good Times Rolled

From The Sindie: Mortgage-sharks-and-home-loan-hustlers

Mortgage brokers + Grubby tactics = Customer Pain

Posted by aje @ 10:45 AM 1 Comments

Dont be fooled the bad news isnt priced in yet

MoneyWeek: Dont be fooled the bad news isnt priced in yet

"...at some point, the authorities will no longer be able to hide the fact that the people who are on the hook for the big banking bail-out are the general public. The fireworks that erupt at that point will make the past years events look positively idyllic by comparison..."

Posted by damien @ 10:40 AM 14 Comments

3 series BMW is like the Cortina of cars - when BMW struggles you know something is wrong!!!!

Yahoo: European open: Carmakers drop

BMW said it will not reach its targets due to deteriorating business conditions. The group's second quarter profits fell to 507m from 753m last time.

Posted by mark @ 10:08 AM 23 Comments

Another bucket of ice-cold water on the restaurant sector - expect massive lay-offs very soon as costs rocket.

BBC: Restaurant tipping law to change

Employers are to be banned from using tips and service charges to "top up" staff pay to meet the minimum wage, under government plans. The changes, set to come into force next year, will benefit those working in industries such as restaurants, where tipping is commonplace.

Posted by tyrellcorporation @ 08:52 AM 18 Comments

House prices falling fastest for 17 years, says Nationwide

telegraph.co.uk: House prices falling fastest for 17 years, says Nationwide

Howard Archer, chief UK and European economist of Global Insight, said: "House prices will continue to head south rapidly, Buyer interest is weak, it is taking longer to sell a house and sellers are achieving a falling percentage of their asking price."

Posted by housebear @ 08:34 AM 14 Comments

How long before this hits UK Plc?

BBC Business: Thousands laid off in California

Governor Arnold Schwarzenegger of California has moved to end a budget crisis by sacking 22,000 state workers and ordering pay cuts for 200,000. The most populous state in the US faces a budget deficit of more than $15bn (7.6bn), and legislators are struggling to agree a spending plan. The cuts, which will save $100m a month, are designed to put pressure on politicians to end the budget crisis. But a leading official in the state challenged the decision to cut pay. California has one of the largest economies in the world and it has no way to pay contractors for many of the services it provides.

Posted by jack c @ 08:34 AM 13 Comments

99% drop

ITN: Alliance & Leicester profits wiped out

Alliance & Leicester has posted first-half pre-tax profits of just 2 million, a 99 per cent fall on a year ago amid the credit crunch. The result for Britain's seventh-biggest listed bank is in line with analysts' expectations.

Posted by gardeniadotnet @ 08:03 AM 23 Comments

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