Sunday, Oct 04, 2009

A can of bull food (warning: check ingredients before consuming)

Sunday Express: HOUSE PRICES SURGE

I wouldn't normally bother with the Express but this is so over the top that I had to post it.
Stuart Law, of property investment firm Assetz, said: “This latest data represents a significant milestone in the recovery process – the first time that any of the major indices have failed to record annual house price falls since the second quarter of 2008. “All indices are now recording regular monthly price rises and we are firmly on course to see strong positive growth for 2009.”
David Brown, of LSL Property Services, said: “This is good news for the housing market and good news for the wider economy. With borrowing rising and house prices on the up, there is a growing sense of optimism in the market. Home owners and landlords alike have reason to celebrate.”

Posted by quiet guy @ 12:34 PM (2934 views)
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42 Comments

1. mystie010 said...

"Home owners and landlords alike have reason to celebrate" - yes that just about sums it up! No joy there for me then!

Sunday, October 4, 2009 12:36PM Report Comment
 

2. quiet guy said...

Oh, don't worry mystie010. Remember this is "This is good news for the housing market and good news for the wider economy."

Sunday, October 4, 2009 12:39PM Report Comment
 

3. sparky300 said...

Don't worry chaps , remember the life cycle of a bubble chart , you don't have to be an expert to realise what lies ahead for house prices ... Down down down for a long time

Sunday, October 4, 2009 01:10PM Report Comment
 

4. mrflibble said...

For a brief moment we had hope, now we are looking at house prices being unaffordable all over again, and this is something to celebrate, why exactly? The UK is full of masochists.

Sunday, October 4, 2009 02:04PM Report Comment
 

5. nopensionnohouse said...

masochists? Erm, is that the right word?

Sunday, October 4, 2009 02:18PM Report Comment
 

6. britishblue said...

1991 deja vu

Sunday, October 4, 2009 02:38PM Report Comment
 

7. crunchy said...

Surge,purge, surge, purge.

Do you really think that Mr Law unto himself would keep coming back to prod a blazing gas fuelled BBQ.

The Steaming Property Pot still simmers on Slow Stu.

Sunday, October 4, 2009 02:47PM Report Comment
 

8. krustyatemyhamster said...

@sparky300
"@ Britishblue , what do you mean by 1991 ? What happened ?"

House prices kept going down despite the numerous headlines in the press proclaiming the end of the slump.

Or it could be a typo. He might have meant 1931.

Sunday, October 4, 2009 02:59PM Report Comment
 

9. sparky300 said...

@ Britishblue , what do you mean by 1991 ? What happened ?

Sunday, October 4, 2009 03:00PM Report Comment
 

10. mark wadsworth said...

Home-Owner-Ism at its finest!

The only thing that matters is that house prices go up, month on month, year on year. It does not matter what the economic cost is. The cost to the taxpayer does not matter, the fact that we are living in ridiculously small houses (relative to our overall wealth levels) does not matter. Unemployment, government and trade deficits, currency crises do not matter. Nothing else matters.

The vision of the future is that in a few years, houses will sell for ten times earnings, and in a decade they will sell for fifteen times earnings and by the time we retire, we'll be able to sell for twenty times earnings and so on.

But like all other -isms (socialism, fascism, national socialism, communism, corporatism) there is this nasty thing called "economics" that will prevent the Home-Owner-Ist vision from ever becoming reality.

Sunday, October 4, 2009 03:16PM Report Comment
 

11. crunchy said...

8. sparky300

My twopence worth from a different angle. The 91 Thingy only really effected the South. Why? Because mortgages were dirt cheap and

rightfully so elsewhere. Working folk could afford the mortgage increase via Normans interest rates. This time it is a whole different story,

a story of that same loose Southern and this time overseas money inflating the whole of the UK.

Welcome to the banks brainchild BTL and the governments hand in it's implementation through uncontrolled immirgration and cooking the

books. Need I go on!

Ooppps I said it. Naughty me! They named this decade the naughty decade, but now I know they meant the noughty decade.

Sunday, October 4, 2009 03:20PM Report Comment
 

12. will said...

Why do they never talk of the millions who can't afford to buy?

Sunday, October 4, 2009 03:20PM Report Comment
 

13. crunchy said...

12. will

Because "they" and the banks are more concerned with those that can't afford to sell.

Sunday, October 4, 2009 03:40PM Report Comment
 

14. taffee said...

please take the time to read this link to headlines in 1991

http://www.housepricecrash.co.uk/FAQ-1991-what-the-papers-said.php

Sunday, October 4, 2009 03:41PM Report Comment
 

15. crunchy said...

Does rather make one wonder!

Oh silly me. There I go again. D'oh!

Sunday, October 4, 2009 03:45PM Report Comment
 

16. crunchy said...

14. taffee

I love this one...MON 30 DEC 1991 - The TimesHouse prices stuck 'till 1993'
THE housing market should begin to recover in the spring, but house prices are unlikely to show real gains until 1993, the Halifax Building Society says in its annual review published today. The review, prepared before the announcement of a rescue pa...

No fukin kidding Sherlock! Some rescue package.

Sunday, October 4, 2009 03:53PM Report Comment
 

17. crunchy said...

Time stamps playing up again.

Sunday, October 4, 2009 03:57PM Report Comment
 

18. mark wadsworth said...

As I posted elsewhere just now ...

If I had to update George Orwell's "1984" to a modern context, I'd suggest that we are run by a philosophy called "Home-owner-ism", which, like in 1984, restricts the economy to well below its optimum, whereby wealth would be redistributed according to effort/ability.

The aim of this is to preserve a heirarchical society, so that the 'insiders' (Inner Party members, aka landowners) have a huge advantage against 'acolytes' (Outer Party members aka home-owners in a 3-bed house), who in turn have a modest advantage compared to 'outsiders' (proles, aka tenants).

The fact that we could easily all afford to live in 4-bed houses (assuming we wanted to) is irrelevant, because that way Outer Party members would not be at a visible material advantage compared to outsiders.

Thus the outsiders commit half their life time earnings to becoming home-owners, who in turn wage an eternal battle against a wider spread of home-ownership (aka NIMBYism).

Instead of excess production capacity being diverted into permanent warfare (like in 1984), the fruits of excess capacity and economic progress are constantly swallowed up by the land market.

Sunday, October 4, 2009 04:52PM Report Comment
 

19. crunchy said...

18. mark wadsworth

That has made my day Mark. : )

Life's too short, too miss the point!

Sunday, October 4, 2009 05:06PM Report Comment
 

20. crunchy said...

Life's too short to miss the point!

For the anals.

Sunday, October 4, 2009 05:10PM Report Comment
 

21. uncle tom said...

OK Guys and Gals, time for a little reminder as to what we are actually seeing here..

The indices produced by Nationwide and Halifax relate to the value of properties that have been mortgaged through them; the Land Registry records sales data.

These data sources only reflect the average price paid for properties that have actually been sold. There is an important distinction to be drawn between that figure and the average value of all property.

All the indices work on the basis of broad postcode areas, and the type of property - flats - terraced, semi or detached. There is no counting of bedrooms, and the two bed semi on Dump St gets lumped together with the four bed semi on Posh St., if they happen to be in the same postcode area.

What we are seeing at the moment is a market led by the better off, trading the nicer properties. Try looking up houseprices.co.uk for your local postcode area, and see how many houses are changing hands in the less desirable estates in your area, compared to more attractive developments.

Near where I live is a 1970's development by Fairview of 140 three bed rabbit hutches. In the last year, just one has changed hands. Elsewhere in the area, I have calculated that the mean turnover rate of property in the last 12 months has been just under 2% - almost three times faster than on the Fairview estate.

This trend has been skewing the averages, and giving a false impression of rising prices - but it can't last.

Those living in less attractive areas appear to be in general lockdown - if they are not in negative equity, then they have too little equity to move; or are have previously MEWed and are now suffering the cold turkey.

Even if the lockdown continues however, the skew on the indices will work its way out of the system.

It is worth noting that when, eventually, a more balanced mix of properties changes hands, we will get a compensating negative skew of the HPI's when the market is actually beginning to turn for real.

Sunday, October 4, 2009 05:15PM Report Comment
 

22. crunchy said...

If Brits wanted to buy a house in their Motherland people should have got out of Sterling long ago.

Who said life was fair?

Sunday, October 4, 2009 05:18PM Report Comment
 

23. crunchy said...

Oh no not more Japanese and overseas buyers. When will it stop.

That was not much of a Sterling effort was it. Watch out below!

Yes UT it's all a sick joke.

Sunday, October 4, 2009 05:23PM Report Comment
 

24. crunchy said...

One day Sterling will rocket back up again.

No harm done Old boys!

Sunday, October 4, 2009 05:36PM Report Comment
 

25. A Solovine said...

Even assuming that average property prices measured in GBP were today at the SAME level as they were two years ago (near the average property price peak), in that period, they have fallen:

21% when measured vs the Euro
21% when measured vs the US dollar
38% when measured vs the JP Yen

If you'd sold in October 2007 and invested in JPY, you'd have a 165% return.

How does that compare with UK housing as an investment?

Sunday, October 4, 2009 05:40PM Report Comment
 

26. crunchy said...

Get on the Right Track Baby
Get on the Right Track Ba - by
Get on the Right Track Baby, yeah
Come on home and treat me wrong again

Get on the Right Track Baby
Get on the Right Track Ba - by
Get on the Right Track Baby, yeah
Come on home and treat me wrong again

Yeah, I’ve been so blue and lonely
I’ve tried both night and day
But I’m begging you just one more time
Come back if you don’t stay


Get on the Right Track Baby
Get on the Right Track Ba - by
Get on the Right Track Baby, yeah
Come on home and treat me wrong again

Yeah, I know you know I love you
but yet you broke my heart in two
But it’s because I love you
That I don’t care what you do

Get on the Right Track Baby
You better come home now
Get on the Right Track Baby, yeah
Come on home and treat me wrong again

solo sax by Blind (Blowing) Brown

Well, I’m begging you one more time, baby
Down on bended knees
Please, please come back home
And give my poor heart ease


Get on the Right Track Baby
Get on the Right Track Ba - by
Get on the Right Track Baby, yeah
Come on home and treat me wrong again
That’s what I say know

THE ONE & ONLY Ray Charles. 1954.

Sunday, October 4, 2009 05:52PM Report Comment
 

27. mrflibble said...

5. nopensionnohouse said...

masochists? Erm, is that the right word?

It is indeed, a masochist is someone who obtains pleasure from receiving punishment. Since we have a country of numpties who want to pay over six times their wage for some of the smallest houses in the developed world then I assume ownership is the pleasure and the crippling 25 year mortgage is the pain. Whatever way you look at it this is a sick and twisted game for a mere roof over ones head.

Strictly speaking I'd associate the UK housing market more with sadism than masochism given the housing stock we have available. Most of the slave boxes on offer are complete junk.

Sunday, October 4, 2009 06:07PM Report Comment
 

28. crunchy said...

26. mrflibble

So was much of P. Picasso's output.

Hey, It did not and does not matter. It is an investment vehicle plain and simple. Don't get all sentimental.

sadism and masochism? You can't have one without the other.

Sunday, October 4, 2009 06:23PM Report Comment
 

29. sneaker said...

As the saying goes, an average hides a multitude of sins.
Yes, the averages are being skewed by volume being concentrated in the wealthier end of the market.
Those who have run out of money are selling. 70% of high-end sales in London are to wealthy foreigners taking advantage of a weaker Pound.
The Brits are selling to foreigners basically.
Not sure that counts as a recovery.
More like the Brits are fleeing.
And the remaining wealthy from overseas are going to get hit by
(i) end of banking secrecy and tax havens
(ii) the non-dom taxation issue
(iii) 50% higher-rate tax
(iv) no more banking bonuses

They are mainly buying here for lifestyle reasons and to hide from despots or their own economic problems. It's a sort of negative vote in where they're fleeing from more than a positive vote for the UK. The UK Is merely "less bad" -- for the time being.

Sunday, October 4, 2009 06:32PM Report Comment
 

30. crunchy said...

28. sneaker

Let's just say for some STRANGE reason the pound takes another real hammering, then would property not be a great investment when

the pound goes for some STRANGE reason from strength to strength in the future. Also as well a shifting the banks dead stock the banks

stand to lose nothing when the pound regains strength. Now I am not suggesting insider trading but if the banks were to buy a currently

strong currency with all this and other capital funds in the meantime, they surely would be quids in at the end of the day.

Now I am not saying this is a hard and fast cure and inflation is going to take care of the rest, but I am just trying to see things objectively.

We all have to admit that they have been bloody cunning up till now.

Sunday, October 4, 2009 07:17PM Report Comment
 

31. greenshootsandleaves said...

Can the foreign buyer component be quantified in any way? My guess is that it tends to consist of a handful of cash-rich cherry pickers who will, if anything, focus on a few London boroughs. Nice one for vested interests to have up their sleeve, though (poised to buy just about everything, we're told, including that faltering BTL empire in Ashford).

Sunday, October 4, 2009 08:05PM Report Comment
 

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33. uncle tom said...

Can the foreign buyer component be quantified in any way?

Not really, but I would tend to concur that their influence is only really substantial in West London, especially the higher value property there.

Notions that market generally is being heavily driven by foreign cash, can be safely dismissed.

Monday, October 5, 2009 09:10AM Report Comment
 

34. smugdog said...

In order to fully appreciate, please substitute the parrot with HPC.


Owner: Oh yes, the, uh, the Norwegian Blue...What's,uh...What's wrong with it?

Mr. Praline: I'll tell you what's wrong with it, my lad. 'E's dead, that's what's wrong with it!

Owner: No, no, 'e's uh,...he's resting.

Mr. Praline: Look, matey, I know a dead parrot when I see one, and I'm looking at one right now.

Owner: No no he's not dead, he's, he's restin'! Remarkable bird, the Norwegian Blue, idn'it, ay? Beautiful plumage!

Mr. Praline: The plumage don't enter into it. It's stone dead.

THE END!

Monday, October 5, 2009 09:34AM Report Comment
 

35. nomad said...

Great stuff smuggy . . . stick around!

Monday, October 5, 2009 09:49AM Report Comment
 

36. mystie010 said...

Nah I think substitute the parrot with HPI not HPC. The HPC is alive and well me thinks as for HPI that is the true wishful thinking :-)

Monday, October 5, 2009 10:35AM Report Comment
 

37. james stephenson said...

This is just so much crap. We are on the verge of the second leg of a W shaped recession. The second dip will be much worse. The government - oops I mean 'Lender of Last Resort', has run out of money to disguise what has happened to this economy. They have not yet acted to reduce the bloated public sector and it's outrageous overspend. Interest rates have saved the housing market from complete collapse. This cannot be sustained. I know many people who are happily on the variable rate, but are in nequity and will not be able to remortgage when IRs go up.

Things are going to get much, much worse. Taxes will have to rise further - don't believe the BS that they are pedalling about being able to reduce government debt by cutting non-essential public services. It is way too big for that.

Let the stupid VIs entice suckers back into the housing market - just don't be stupid enough to get caught out yourself.

The standard bubble crash model still applies, but it has been 'dot com bubble' to 'housing/credit card bubble' to 'government stimulus/bail out bubble'. When the government stimulus (IR rates - Cash for Clunkers etc.) pops, the real pain will begin.

Monday, October 5, 2009 11:19AM Report Comment
 

38. mystie010 said...

james stephenson - well said!

Monday, October 5, 2009 11:22AM Report Comment
 

39. krustyatemyhamster said...

@smugdog
Yes and we all know what follows boom

Monday, October 5, 2009 11:39AM Report Comment
 

40. This comment has been removed as it was found to be in breach of our Blog Policies.

 

41. James Stephenson said...

uncle Tom@21

Luckily for me, my girlfriend's parents have come into a couple of million due to an American relative passing on. They have decided to buy a bumgalow and they are giving us their very nice, four bedroom house as soon as probate is finished with.

So we are selling our house. It is very nice in a nice area and we have undercut the market in a big way to ensure we sell it (its a shame that I could not convince my girlfriend to sell in 2005 when I first saw this coming). Anyway, we have had little interest in the last six months and not one offer. In fact no one has sold a house in our street for the last year or more although many are trying.

By contrast, I sold a house in 2003 at what I considered to be an outrageously inflated price for what it was - and it only took 3 days to get an offer we could accept.

You are right about it being the top end of the market that is seeing all the action. All the rest is pipe dreams and EAs trying to spin what they can.

Monday, October 5, 2009 11:43AM Report Comment
 

42. mystie010 said...

Go Krusty!

Monday, October 5, 2009 12:20PM Report Comment
 

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