Tuesday, September 29, 2009

Dead cat plateau

Mortgage approvals dip in August

The number of new mortgages approved, but not yet lent, has fallen for the first time in 10 months, according to figures from the Bank of England. In August there were 52,317 approvals, down slightly from 52,404 in July. The data adds to growing evidence that the recent revival in the property market may have reached a plateau.

Posted by jack c @ 09:58 AM (2998 views)
Please complete the required fields.



16 thoughts on “Dead cat plateau

  • Rejoice!

    A house near where I live was advertised for sale six months ago for £799k (which is, at a pinch, what they might have sold it for in summer 2007. It’s a nice enough house on a very nice street but that’s still an outrageous sum of money), which was then dropped to £750k and then £699k. I got my monthly email update from Mouseprice this morning – it actually sold a couple of weeks ago for £653k (that’s 18% less than the original asking). But still an outrageous sum of money.

    Admittedly, at this rate we’ll have to wait for another two or three years until houses round my are anywhere sensibly priced, but hey, I can wait.

    Reply
    Please complete the required fields.



  • Dead Cat Cusp is where I believe we are.

    Reply
    Please complete the required fields.



  • We seem to be getting a general down tick on the data now, however, as August is a bit of a maverick month for stats, we shouldn’t pop the bubbly just yet.

    If the mood is bullish, then the data for September should be very strong, but I’m personally getting a different message at the moment.

    Bullish sentiment on the economy appears in different ways, and two indicators are looking very subdued..

    ..traffic gets much heavier when people are confident, and the months before Xmas are usually the worst; yet I’ve been sailing round the M25 (despite the roadworks) with little delay

    ..people eat out more when they are confident; and so far, the pubs and restaurants in my area have seemed pretty recession proof; but this month they’ve been empty – really empty..

    Of course these observations are personal, local and subjective – what are others seeing?

    Reply
    Please complete the required fields.



  • This just in from todays FT (note the info on savings)

    Mortgage lending by building societies falls by £1.5m

    Gross mortgage lending by building societies remained subdued in August, falling by more than £1m to £1,494m compared with £2,660m a year earlier, as balances held in savings accounts fell by more than £200m during the month.

    Elsewhere, approvals for mortgages from the 52 UK building societies also dropped, totalling £1.3m in August, compared with £2,880m a year earlier.

    Meanwhile, according to the latest figures from the Building Societies Association (BSA), savings balances held by building societies decreased by £202m in August this year, compared with an increase of £995m in 2008.

    Adrian Coles, director general at the BSA, said: “Gross lending was subdued in August, but appears to be at broadly similar levels to recent months after seasonal factors are adjusted for.

    “However, the market remains very depressed compared to previous years.

    “Despite signs of a modest improvement in market conditions in recent months, activity will not return to normal levels until funds for mortgage lending are more widely available to building societies and other lenders.”

    The savings market was not much better with balances falling £202m for the month and, excluding any interest credited to accounts, building societies experienced a net withdrawal of £473m.

    Mr Coles said: “Balances held at building societies fell in August, which signals that savers are continuing to withdraw more money than they save.

    “This is not surprising given the very low bank rate and the difficulties faced by many households, with job losses rising and income growth remaining subdued. These factors are affecting all deposit-takers in the UK.”

    Reply
    Please complete the required fields.



  • tyrellcorporation says:

    All Exeter restaurants are offering 241 deals and places like Wagamama are 2/3 to 1/2 full on Saturday nights (big change from having queues 12 months ago). Having said that Carluccio’s has just opened and my guess is they’ve done their research and realise it’s a prime target for downsizing Londoners in search of their rural idyll.

    As a very broad observation generally the high-street here is under severe pressure with a few exceptions such as cafes (people always have a couple of quid for a coffee and for an hour or so they can feel like nothing’s changed).

    Reply
    Please complete the required fields.



  • “Mr Coles said: “Balances held at building societies fell in August, which signals that savers are continuing to withdraw more money than they save.

    “This is not surprising given the very low bank rate and the difficulties faced by many households, with job losses rising and income growth remaining subdued. These factors are affecting all deposit-takers in the UK.”

    Also small investors are being sucked into the bull run on stocks.

    Reply
    Please complete the required fields.



  • tyrellcorporation says:

    Also people/savers are being sucked into a diseased housing market/uber asset bubble.

    Reply
    Please complete the required fields.



  • @ 3 Uncle Tom

    Regards the M25 – Monday mornings still nasty but maybe 10 mins less on journey time – rest of the week, apart from normal friday afternoon hell, as you say is sailing…. So perhaps an indicator but a coleague mentioned that the Dinkies (double income no kids) are back to work soon after their post summer hols cheap breaks.

    Reply
    Please complete the required fields.



  • Uncle Tom

    Having been posting on here all year that the market had gone crazy down here in South Hampshire, it was beginning to feel like I was living on a different planet, never mind a different part of the country to the rest of you.

    It’s nearly the end of September now, I was expecting a flood of houses to come to market this month (and sell) for all those trying to get a move in before Christmas.

    It hasn’t really happened looking at Rightmove.

    Yes there have been some sales and yes a few more houses have come onto the market, but I’d say the party is sobering up.

    I’d say once you’re into October, it’s getting too late to be in before Christmas, particularly if there’s any sort of chain.

    I’ll be very surprised if we see any increases in prices (or volume) between now and February.

    If all appears to be rosy with the economy early into the New Year I imagine it could be a busy spring. But any bad news or stock market collapses and then we could see the next leg down.

    Reply
    Please complete the required fields.



  • str 2007,

    There’s around half a million people who have had their homes up for sale since the start of the year without result, hoping that the market would recover so they could secure their asking price.

    If the news indicates flat lining or a dip in the market, I would expect that many would lose patience and drop their expectations.

    Many more may simply abandon plans to move. I suspect that many homes are unrealistically priced because the vendor would not be left with sufficient equity to get a mortgage on the place they want to move to.

    – the negative equity lockdown extending to those with low levels of equity as well..

    Reply
    Please complete the required fields.



  • Uncle Tom

    It’s difficult to judge exactly, but I’d say that there is more rental choice now than 6-8 months ago, which would equate to STR’s buying through the Spring and Summer.

    Rental prices haven’t really dropped yet, but they’re certainly not up.

    Reply
    Please complete the required fields.



  • str,

    There’s more than a few equity rich homeowners who have bought a new house before selling their old one – sometimes thinking that they would rent the old place until the market picked up.

    When the market heads south again, there will be some panicking vendors..

    Reply
    Please complete the required fields.



  • Uncle Tom

    If they can’t rent the 2nd out then yes.

    I think though it is firmly entrentched that houses prices do recover, so as we’ve seen the majority won’t sell unless literally forced to.

    Reply
    Please complete the required fields.



  • str,

    There appears to be an excess of rental property (certainly round here..) and of three houses I know of where the owner has moved before selling, two are empty, and one is currently occupied by the son of the couple who moved out, who is not (I think) earning enough to pay a normal rent.

    Reply
    Please complete the required fields.



  • mark wadsworth @8.

    Thanks for the graph. Certainly does seem to be following the trend of the previous crash, that is until the current quarters’ increase, which is broadly in-line with the unprecedented levels of govt stimuli. As there was no financial meltdown in the 90’s and as the Tories were in power, they allowed the market to play out much more than Labour have done this time.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>