Andrew Oxlade, editor of This Is Money, and long-term bear on house prices, goes the way of Merryn Somerset Webb and jumps into the property market. Like Merryn, he still believes property is significantly overpriced in comparison to wages, but he has got tired of waiting for the promised crash, and is prepared to take the financial hit in return for a more settled lifestyle. Will the last bear to leave please turn out the lights.

Posted by little professor @ 11:15 PM 42 Comments

Why is there such a fuss about 5 pound notes coming out of cash machines? And then, suspiciously, I thought when you pay with 10 pounds you must get all the change in coins. And some people have a preference for paying with a note, so the coin demands must be considerable without the nice paper-ness of fivers. But at the same time the coins aren't made of any valuable metal at all, just the cost of minting. Then I thought oops, the cost of minting the smaller denominations must have exceeded their value...or perhaps even the 7grams of copper and 2.5 of zinc in each pound are starting to get a bit excessive. 2 dollars a kg for copper, so about 2 cents. I suppose it must mount up. Bit deflationary introducing smaller paper denominations...

Posted by stillthinking @ 07:35 PM 14 Comments

New figures released today show that anti-war protester Brian Haw has seen the value of the land he occupies in Westminster rise by a staggering 64% since January this year.

The World Cup and Wimbledon are to blame for house sales falling by 5.3% in June, according to Agency Express. In their Property Activity Index the estate agent found sales were down 7% on June 2009. Stephen Watson, managing director of Agency Express, says: “ The heightened interest in the World Cup and the number of games shown live seems to have drawn people’s attention away from closing the deal on their prospective properties.

Posted by jack c @ 02:53 PM 23 Comments

The ONS said: "Quality assurance revealed potential errors in some of the detailed figures in the National Accounts data set. To allow time to ensure the statistics fully meet National Statistics standards, ONS has decided reluctantly to postpone publication until 12 July."

Article reads: Investment and Business News is suffering from a nasty bout of déjà vu .The similarities with 2007 and early 2008, when the more respected economists were saying there would be no recession, are staring us in the face. Later on the piece says: Now the Bank of International Settlements (BIS) has [joined the OECD and] said central banks must up rates. The BIS has also called for governments to cut fiscal deficits decisively. This is an odd call. As all but those who are recently estranged from the planet Mars will know, fiscal austerity is precisely what most of the world’s governments are enforcing. So why call for governments to do what they are doing anyway? Is it possible the men and women from the BIS are indeed Martians?

Fall by 28%? and then some. Cowie comes up with this number as necessary to return first time buyers' price/earnings ratio to 3.3 which is the trend over the last 25 years. However, most models of bubbles say that the multiples must fall back to levels seen before the present bubble started. Clearly the last 25 years includes 1996 - 2007.

Posted by ontheotherhand @ 12:50 PM 14 Comments

Chancellor George Osborne's tough emergency budget will cost more than a million jobs across the UK, according to a leaked Treasury report.

Posted by mr g @ 10:24 AM 37 Comments

The figures show the price rises slowing - fact. I quote ... "Could this lead us into to a period of price consolidation and the return of realistic and achievable opportunities for first time buyers (FTB) to enter the market?" mmm Are you suggesting a sensible market place ! Nice to see we at HPC got a mention though.

It is absolutely outrageous: the government, experts and academics are working hard to keep taxpayers convinced that not only do they have to pick up the tab for the current crisis but keep on funding the financial system in perpetuity.

"Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:" “Provided the economy does not suffer a relapse into recession, the net impact of the Budget on the housing market and house prices should be relatively neutral. This is consistent with the relative stability seen in the housing market during the last major fiscal consolidation in the mid-1990s.” In your dreams mate.

Posted by phdinbubbles @ 07:09 AM 11 Comments

1.37.59 in Jonathan Davies can't sleep? Goes to : 1.50 then callers JD - still is greatly impassioned. The other guy talks about non financial stuff - and he keeps quite cool!

Posted by techieman @ 06:54 AM 20 Comments

A potentially lethal combination of stagnant living standards and declining mortgage approvals is threatening to send the housing market into a precipitous slump. In separate warnings yesterday, it emerged that British consumers face a four-year wait for an improvement in their living standards, while a "double dip" recession in the housing market is now "more likely than not", according to City economists. Bank of England data released yesterday suggests that the revival in property sales seen during the second half of last year has gone firmly into reverse, with every indication that prices will fall by next year, as lending remains so sluggish.

Posted by little professor @ 01:05 AM 19 Comments

Her opinion of the UK? Taxes are too high and the standard of living is just too low. “I know a couple living in the UK. The husband teaches at a university and the wife works in a school library. You would think they have a middle-class life, but their financial position was very awkward,” she said. “They live on the outskirts of London because they cannot afford to buy in the city. I guess they make around £5,000 a month between them, but they have to pay huge taxes. They only get £3,000 a month in total. Any middle class family in Shanghai earns more than that!" / "What I didn’t like was the rent – £450 a month for a shabby room – and pricey food. I never even considered staying in the UK after graduation, even though my boyfriend, a Singaporean, was still there.”

An hour-long phone-in discussion on renting vs buying, with two experts, Claer Barrett from Investors Chronicle, who talks lots of sense, and Michael Luger, of Manchester Business School, who reckons that government should maintain subsidy schemes to help FTB! Claer says that there is no one housing market, and that outside London, prices are collapsing. Many callers eruditely expose the problems within the UK, and one, a former chief rent officer (@24:24) explains that prices are directly related to the level of housing benefit allowance available, which soared when rent boards were abolished and valuations placed in the hands of a quango. The German system is also mentioned in some detail... all good stuff rarely heard on the mainstream media.

On Tuesday, we got an answer of sorts. Paul Fisher, the Bank's markets director, published remarks he made in Liverpool in a speech given on June 14. They appear to show a determination to raise rates "should it appear likely that inflationary pressure is sustained at a higher level into the medium term".

Global stock markets have fallen sharply on renewed concerns over the European banking sector. Investors are apprehensive ahead of a deadline this week for banks to repay loans taken out a year ago at low interest rates. As a result, leading European share indexes slumped about 3%, while US stocks fell more than 2% in morning trading.

Oh dear. If you track house prices and mortgage approvals figures since 1994 you see a very close correlation; as you’d expect, the one clearly driving the other in an instantly comprehensible way. But since last year the relationship has completely broken down, and last year’s mini-boom in prices went way ahead of what was happening in lending. It seems that the mini-boom may be over, though, because the special factors pushing prices higher last year – notably parental bungs to first time buyers, some foreign interest and a general shortage of “quality” stock – are wearing down now.

"MORTGAGE approvals fell unexpectedly in May, new figures from the Bank of England show. Last month 49,815 loans were approved – marginally down from April and well below the 51,000 forecast by economists. However, mortgage lending picked up more strongly than expected, rising to £1.184bn from £0.979bn in April – a figure that was sharply upwardly revised from an initial estimate of £0.490bn."

Homes with the word ‘hill’ in the address are typically worth more than twice as much as ones located on a Street.The average cost of a home on a Hill is £341,466, well up on the national average of £217,624 and the typical value of homes on a Street of £155,515, according to property website Zoopla.co.uk. Living on a Lane also appears to boost the value of a property, with the cost of homes on a Lane averaging £328,378, followed by houses on a Mews at £294,869. Homes which are located on a Park or a Green are also typically worth more than average at £283,069 and £269,861 respectively. Other names which appeared to have a positive impact on the value of a property included Mill, School and Green.

Posted by jack c @ 03:10 PM 8 Comments

"It is not looking good for the housing market," said Hetal Mehta, senior economic adviser to the Ernst & Young Item Club.

The European Central Bank is scrambling to reassure markets that Thursday's expiration of a €442 billion ($547.46 billion) bank-lending program won't destabilize the financial system, even as banks across the region remain wary of lending to one another.

The number of people saving enough for their retirement has fallen by 6% to 48%, according to a survey by Scottish Widows. The Edinburgh-based life and pensions provider said the figure was the lowest since 2006. The economic downturn was blamed by 41% of people in the UK for saving less.

HOME prices fell for the first time in more than a year in May, Land Registry data showed yesterday, sparking fears of a second downturn in Britain’s fragile housing market.

Posted by debtfree @ 08:06 AM 36 Comments

The Bank for International Settlements has warned authorities across the developed world that they cannot rely on ultra-low interest rates to cushion the blow of austerity measures.

Inflationary pressures have remained surprisingly strong right through the downturn, and there is little sign of a let-up. Nor are these pressures of the traditional sort, where there is an excess of domestic demand over supply with a consequent build up of wage pressures. There is hardly any danger of that right now. Rather they come either from external sources. This is "cost push inflation", rather than "demand pull", but no less damaging to disposable incomes and business confidence for it. Rising domestic demand from the big developing economies of Asia and Latin America mean these elevated levels of inflation are not just temporary. These countries now compete aggressively with the West for all forms of resource, from labour to energy and food. Living standards will thus suffer....

Posted by drewster @ 11:34 PM 10 Comments

...there is nothing yet to indicate that any the world leaders are aware that the very concept of perpetual growth is an unworkable fallacy. It’s obvious, hopefully to even the most casual of thinkers, that someday, sooner or later, whatever growth one is engaged in will have to stop. Nothing grows forever; everything has a limit.

Posted by greenmind @ 11:00 PM 7 Comments

The mass media is starting to get it.

"Neither the Long Depression of the 19th century nor the Great Depression of the 20th was an era of nonstop decline — on the contrary, both included periods when the economy grew. But these episodes of improvement were never enough to undo the damage from the initial slump, and were followed by relapses. We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression."

Shares in social housing firm Connaught have slumped another 30% after the company issued a profit warning at the end of last week. Connaught said on Friday that it had identified 31 contracts that had been deferred, following the mass spending cuts announced in the Budget.

I love the way they temper these with "despite the drop, ..<insert half truth>.. "

Governments must slash budget deficits decisively and central banks should not wait too long to raise borrowing costs

Index: 264.9 - Average price: £165,314 - Monthly change: -0.2% - Annual change: 8.2%

Posted by dill @ 12:08 PM 7 Comments

"It costs an average of £348 a month to rent a room in a shared property in the UK, 75% more than in Spain, where rents average just £199 a month, according to flatshare website Easyroommate.co.uk. France was the second most expensive country in which to rent a room, but at an average of £285 a month rents were still considerably cheaper than in the UK, while in Italy they averaged £282 a month." The explanation is drivel of course: "The group blamed the high cost of renting a room in the UK on the lack of mortgage finance currently available, which it said was forcing potential first-time buyers to continue renting, driving up demand." In the long run the cost of renting will be approx. same as cost of buying with a mortgage.

The heads of state and finance ministers at the Toronto G20 summit agreed that in future banks should keep enough capital on their balance sheet to have withstood the aftermath of Lehman Brothers' collapse in 2008. The ruling, endorsed by the Chancellor, George Osborne, is likely to have profound consequences for banks both in the UK and overseas.

Posted by mark @ 10:53 AM 6 Comments

A sensible commentary from Beeny on the economics of buy-to-let. 'The problem, she believes, is that many – she would say most – people who entered buy-to-let in the past five years were sold a dream rather than an investment, and some have found that the figures don't stack up. "Buy-to-let was invented by mortgage brokers who thought it would be a good way to shift more mortgages," she says. "It uses the same business model as the subprime mortgage market in the States." '

House price gains are dropping back, under pressure from economic uncertainty and a growing mismatch between supply and demand, property analyst Hometrack will say today. Prices rose by just 0.1 per cent in June, as new buyer registrations ground to a virtual standstill with a measly 0.1 per cent growth, while sales listings boomed by 2.9 per cent. The result is prices rising in a bare 11 per cent of the market. And in nearly 3 per cent of the market prices are falling.

'As recovery starts to stall in the US and Europe with echoes of mid-1931, bond experts are once again dusting off a speech by Ben Bernanke given eight years ago as a freshman governor at the Federal Reserve. The speech is best known for its irreverent one-liner: "The US government has a technology, called a printing press, that allows it to produce as many US dollars as it wishes at essentially no cost."'

Posted by hpwatcher @ 07:55 AM 53 Comments

Agricultural Bank of China (AgBank) began the pre-marketing of its mega-listing last week for what could become the world's largest IPO. To land the top IPO spot, AgBank would need to surpass the $22 billion that Industrial & Commercial Bank of China (ICBC) raised in 2006. Although Chinese banks have a history of bad lending practices, investors were keen to buy shares of ICBC and Bank of China four years ago, based on the expectation that government support would limit the risks while allowing them to tap into China's economic growth.

Can't have hard working borrowers in bother can we?

Posted by chrisch @ 04:48 PM 8 Comments

And they say crime doesn't pay. No wonder all the asylum seekers want to come here.

Posted by tenyearstogetmymoneyback @ 03:31 PM 6 Comments

Iain Duncan Smith disclosed that ministers were drawing up plans to encourage jobless people living in council houses to move out of unemployment black spots to homes in other areas, perhaps hundreds of miles away. The former Conservative Party leader said millions of people were “trapped in estates where there is no work” and could not move because they would lose their accommodation. “Often they are trapped in estates where there is no work near there and – because they have a lifetime tenure of that house – to go to work from east London to west London is too much of a risk because if you up sticks and go you will have lost your right to your house." [ - If only there was a transport network which linked east London to west London...]

Posted by drewster @ 10:22 AM 8 Comments

The truth is out there.

Posted by chrisch @ 09:25 AM 11 Comments

Yolande Barnes, head of residential research at Savills, said a "SECOND SLIP" in prime values is now "INEVITABLE". The prime central London property market has shown a dramatic slowdown during the past three months, sparking fears it could be heading for a summer slump, says a study.

Only 17% of properties are selling and redroof estate agent advice dropping prices.

Posted by easybetman @ 09:23 PM 6 Comments

Summing up the different camp here and who they are - the keynesian, inflationaist, deficit hawks etc

"In fact, I believe that our heroic policymakers depend on periodic bouts of deflationary fears to boost the implied confidence that they need to continue — you got it — inflating; or at least trying to inflate. I have little doubt the game will end very badly one day soon, and it is open for debate as to whether the resulting depression will be deflationary or inflationary. so is this it, the final deflation? If so, a world of assets is going to decline hard and opportunity is going to be present for the “D Boys” to finally buy all those assets from all those frightened and naive inflation believers. Or are policy heroes preparing a mother of an inflation yet to come..."

Posted by techieman @ 08:30 AM 26 Comments

It seem that 26-30 somethings are now going through their own version of a mid life crisis. But rather than frustration about perhaps a life where perhaps some ambitions weren't achieved, this is more about a life where they see np ambitions can't be achieved before they even get started.

"Berkeley is aiming to grow its earnings per share and land bank by 10pc over the next year. Its land bank stands at 28,099 plots after the acquisition of 2,200 plots across 20 new sites in areas such as Belgravia, Battersea, and Wimbledon over the previous year. Berkeley's visitor numbers and cancellation rates suffered a "blip" in the run-up to the election but this trend has since been "reversed". Rob Perrins, managing director, said there was a "will to buy", even if mortgage availability remains tight." The comments (so far) are somewhat different in tone.

Posted by quiet guy @ 12:17 AM 7 Comments

Rob Johnson: discusses some deep issues about Austerity or stimulus an that the real cause of massive debt was caused by finance sector, not people's social programs

Repost of yesterday's article. To respond to Pdeh. Apologies for duplicating.

Posted by alan_540 @ 06:59 PM 20 Comments

Question: In which version of mathematics does a change from 637 to 711 equal a 25% drop? Answer: The type practised by the UK’s new Chancellor of the Exchequer, George Osborne. Only in the weird and wonderful world of government finances can a 12% increase be described as a 25% cut. The Daily Mail, for example, seemed a little uncomfortable admitting in the body of its article that spending is due to rise over the next five years, despite its “slash and burn” headline.

Posted by paul amery @ 02:41 PM 6 Comments

The US Congress has all but finalised the biggest reform of US financial regulation since the Great Depression. President Obama said the reforms would "hold Wall Street to account".

"Unfortunately, 99% of the inflationistas have a very poor understanding of reserve accounting so their arguments have not only been wrong for a very long time, but they never really carried any weight to begin with (as one reader eloquently put it – “at some point being right has to count for something” – the inflationistas have been horribly wrong throughout this downturn). So what is really happening when the government auctions off bonds? Let’s take a look."

I can't see how this helps. Surely the more old people forced to hang onto their job to pay taxes, the more young people unable to find work and contribute to the tax take.

New rules to protect struggling mortgage holders have been outlined by the Financial Services Authority (FSA). The rules seek to help people who have fallen behind on their mortgage payments, with the FSA saying they must be treated fairly by lenders. The FSA also wants to ensure all mortgage advisers have been approved as "fit and propoer" persons... Under the new rules for treatment of borrowers in arrears, the FSA is insisting that: firms must not apply a monthly charge where a repayment agreement for arrears is already in place; any payments made by customers must be first allocated to clearing the missed monthly payments, rather than to arrears charges which can be repaid later; repossessions should always be the last resort...

Posted by mark wadsworth @ 01:18 PM 23 Comments

Families are drowning in debt after a decade-long binge on credit cards. The Bank of England today warns lenders are writing off record quantities of credit card borrowings as thousands of individuals spiral into insolvency. Lenders are responding by pushing up interest rates even higher, putting more families in financial trouble, the Bank said in its Financial Stability Report.

Things are going from bad to worse in the American housing market. Despite a 30% fall in prices, builders still can't shift houses. And as more borrowers default on their loans, bad debts at US banks will rise. That's bad news for the rest of us.

"The big mortgage financing company, which owns or guarantees millions of mortgages, announced on Wednesday that it would sue homeowners who have the capacity to pay but default anyway ... It also said it would prevent these strategic defaulters from getting a new Fannie Mae-backed loan for seven years, which could potentially shut millions of buyers out of the market."

Plans by global regulators to compel banks to set aside billions of dollars in extra capital to cope with future crises are to be pared back after intense lobbying by the industry. After wrangling over the details of a regulatory overhaul published six months ago, a consensus on the Basel committee is suggesting that its proposals be thinned down. A draft of the latest thinking of the committee, set up to oversee global financial regulation, is to be presented at this weekend’s G20 summit in Toronto. The most significant change to the proposed reforms concerns the committee’s recommendations on the volume of liquid funds that banks should hold to protect them against another financial crisis.

When IR go up we're all screwed. (Thanks Merv - like we didn't know that)

Amongst all the tabloid rubbish, a cool analysis. (Search title in google to read)

Families are saving more money than they are borrowing for the first time in more than 20 years, a Bank of England report shows. Households last year put £24 billion into deposit accounts and took out £20 billion in new loans. It is the first time since 1988, when the current records began, that savings exceeded new borrowing. The statistics reflect a culture of austerity that has also dominated public finance policy.

Posted by little professor @ 12:07 AM 22 Comments

"The best and the brightest young Europeans may emigrate to countries without such burdens; and if the economy stagnates, those that remain may eventually decide either to default on their debts, or to cut benefits to the elderly." Tough luck granny, I'm off.

Posted by chrisch @ 10:14 PM 12 Comments

Now is the time all you crash freaks. Never been a better time to buy. Pound at over a Euro twenty too. Escape the rain and the dreary life of drudgery in the tired old UK with its crazy new government. Best get in quick before retirement age rises to 106.

William White, chair of the OECD Economic and Development Review Committee, warned of the crisis in 2003. So why did no one listen?

And I'm not attacking the public sector when I say it's time to stop the pensions apartheid.

Posted by mr g @ 09:08 PM 10 Comments

Last year the UK had lots of Greek/Italian investors taking advantage of the weak pound.. even with house prices static, they can sell up and clear a nice profit. The pound has hit a 19-month high as debt concerns weigh down on the euro. It touched 1.2222 euros on Thursday, its highest since the immediate aftermath of the financial crisis in November 2008, before dropping back. Markets continue to worry about the European debt crisis, with the perceived risk of a default by Greece hitting an all-time high. Leading shares across Europe lost ground, with the UK's FTSE and Germany's Dax indexes down about 1.5%.

George Osborne revealed in Tuesday’s emergency budget that Support for Mortgage Interest payments will now be set at the level equal to the Bank of England’s published average mortgage rate. From 2010 the standard rate used to calculate mortgage interest payments will change. The rate at which support for mortgage interest is paid is currently set at 1.58% above the Bank of England rate. It has been frozen at 6.08% since late 2008, although interest rates have fallen significantly.

The Government’s decision to reduce the amount of housing benefit has been strongly criticised by housing associations and charities. The Chancellor, George Osborne, will cut housing benefit by £1.8 billion a year by 2014/15 claiming that the housing benefit system was in “dire need of reform.”

Best bit at 05:00 where the chap said that "we get into a bit of debt during christmas so our children can have the brand name and we spend £2000 on it".

Posted by easybetman @ 04:31 PM 29 Comments

Could you solve the debt crisis? Take a look at each pair of nations below, and click on the one you think has more debt.

Either central banks keep eating toxic debt, poisoning us (not the wealthy) in the meantime; or credit gets more expensive and harder to get. Infinite house prices anybody? (Search title in google to read.)

Posted by letthemfall @ 12:20 PM 6 Comments

"the government is signalling that it wants banks to reduce their dependence on such wholesale funding. Which may seem like a good thing. Except that our biggest banks have for some years provided many tens of billions of pounds of loans - especially mortgages - on the back of such wholesale finance. So if they were to reduce their dependence on wholesale finance, there is a reasonable probability that they would cut back on the useful credit they provide to households and businesses"

at 15:00 minutes, the public sector lecturer (Further Education college) said his collegue taking up 30-40 mortgage and expect that they will get the pension to service the pension when they retire.

Citizens Bank, meanwhile, is also growing its mortgage operations. The Providence, R.I.-based bank, which operates in a dozen states, increased its lending by 167% in 2009, compared to the year before. Owned by the Royal Bank of Scotland, Citizens ranked as the 24th largest lender in the first quarter of this year

''...He bought the five-bedroom Queen Anne property at the height of the housing boom in March 2008 for £7.25million. In October last year.....it was put on the market for £6.5million...yesterday the asking price had been reduced to just £5.875million...''

Posted by hpwatcher @ 08:37 AM 7 Comments

The government is to confirm plans to raise the state pension age for men to 66 from 2016. Ministers will also raise the possibility of extending it further, perhaps to 70 and beyond in the following decades. Plans to scrap the default retirement age will also be announced. [This means a 26 year old could take out a 40-year mortgage. More FTBs could enter the market. House prices will be saved. Hallelujah!]

Posted by drewster @ 12:59 AM 10 Comments

Patricia Radcliffe is a single mother of five who is struggling to make ends meet. The rent on her North London house is £690 a week. She's behind with her rent, even though most of it is paid by the state. The cap on housing benefit in yesterday's budget would, she says, have catastrophic consequences for her family. "They want to see me and my family on the street!". Confronted with such a prospect, the widescreen TV is a questionable extravagance, as is the wisdom of renting from a private landlord in Islington, one of London's most exclusive boroughs. "I would love to find somewhere cheaper, but not far too far because of my kids, like, going to school, and they have their friends around here."

Posted by drewster @ 12:35 AM 38 Comments

A few factual error though - (a) They are not social landlord, more like shark? (b) Landlord don't rent at rates below the market rate should perhaps should read landlord was lucky to be able to let properties up at above market rate. Nice piece of spin.

Second home owners will continue to enjoy generous tax breaks on furnished holiday lets after the Chancellor reinstated the rules.

President Obama wants to slow Europe's headlong rush to austerity. But right now he looks like little more than a speed bump for the cutback crowd. Obama has sought to use the upcoming meeting of the Group of 20 global finance ministers in Canada this weekend as a rallying cry for more fiscal stimulus. He argues that cutting government spending now risks undermining a fragile recovery in debt-soaked Western economies.

Grainger Plc. is Britain's largest stockmarket-listed residential property landlord. Grainger's business is primarily to buy homes worth around £190,000 and let them at levels below market value. It then aims to sell the property on for a higher value once the tenant moves out, or dies, or the asset has been refurbished. This model offers exposure to house price inflation and a market where the supply of homes struggles to meet demand. In addition, it offers this without the heavy capital demands and fragility of building new houses.

The lesson is, if your letting agent enters (or tries to enter) your rented property unannounced, call the police.

"The durability of Europe's recovery looked more doubtful on Wednesday after key business surveys showed dimming confidence about the prospects of economies that are pressing ahead with austerity measures."

"Sales collapsed a record 33 percent to an annual pace of 300,000 last month from April, less than the median estimate of economists surveyed by Bloomberg News and the fewest in data going back to 1963"

Everything in the good ol' U.S. of A is bigger and better..including their housing crash. "Sales of previously owned homes unexpectedly fell 2.2 percent in May" "the worst collapse since the Great Depression." "The end of the tax credit in April is putting a strain on a market still hurting from the worst collapse since the Great Depression. Foreclosures may reach 1.9 million this year after a record 2 million in 2009" 3.9 Million foreclosures in 2 years...we're lagging behind and should really get a move on :lol:

Thousands of people could be thrown out of their homes after housing benefit was slashed by up to four-fifths in the emergency Budget. Senior aides to David Cameron are bracing themselves for a major damage limitation exercise next year when families who can no longer afford to pay their rent start to be evicted. The cuts which take effect from next April will cut the maximum housing benefit which can be claimed from £103,000 to £20,800 a year, or £400 a week. Experts said it was likely thousands of people renting from private landlords would have to find alternative accommodation. Department for Work and Pensions figures show that 5,170 people currently receive more than £400 a week in housing benefit to help pay rent to private landlords.

Posted by mark @ 02:33 PM 30 Comments

On paper, the Budget sounds good. Cutting spending, rather than raising taxes, is the way to go. And for the average person, it wasn't too bad. But this is just a start. The really hard choices have yet to be made. And when they are, it's going to hurt all of us. John Stepek explains.

"We still expect another £50bn or so of quantitative easing to be announced later this year or early in 2011." Vicky Redwood, senior UK economist, Capital Economics

Sorry not directly related to houseprices... "... The second thing that will cause screaming is the joint lowering of the corporation tax rate and the raise in the VAT rate. The general consensus here, at least on the left side in this country, is that companies should pay lots and lots of tax while VAT is regressive and thus should be as low as possible. Well, yes, but this slightly fails the basic tests of a desirable taxation system. We do know that all and any taxes (yes, I'm sure there will be a land taxer among you - LVT does this the least which is why it is the most desirable of all taxes) create distortions. Distortions can reduce the future growth rate. ..."

33. The Governor invited the Committee to vote on the proposition that: Bank Rate should be maintained at 0.5%; The Bank of England should maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion. Seven members of the Committee (the Governor, Charles Bean, Paul Tucker, Spencer Dale, Paul Fisher, David Miles and Adam Posen) voted in favour of the proposition. Andrew Sentance voted against, preferring an increase in Bank Rate of 25 basis points.

Posted by dill @ 10:27 AM 7 Comments

German's budget savings policy risks destroying the European project and a collapse of the euro cannot be ruled out, billionaire investor George Soros said in a newspaper interview released on Wednesday.

When inflation gets to the point that the general public can no longer afford to buy a house or anything else they need to survive, then the housing prices start to come down. As inflation affects lives and people need to sell their homes, they will be forced to sell for less than it was previously worth. As more homes are put on the market, the competition for the buyer goes up and the prices are reduced. Since there are not as many buyers who can afford to buy a reduced-price house during an inflationary period, the housing market slows down quite a bit. As inflation increases and forces the prices of real estate down, even investors are hesitant to buy. This is because it takes too long to sell the homes.

Posted by simon68 @ 09:52 AM 12 Comments

June 23 (Bloomberg) -- Asia-Pacific’s number of millionaires equaled Europe’s for the first time last year as the region powered the global economy’s recovery, according to a report by Capgemini SA and Merrill Lynch & Co. Portfolio allocations to real estate stayed the same at 18 percent as residential real estate assets’ increase balanced out commercial real estate holdings’ decrease. Millionaire investors “warily returned to markets in cautious pursuit of returns,” LaMothe said. Equity holdings worldwide rose to 29 percent from 25 percent and fixed-income investments increased to 31 percent from 29 percent as cash and deposits dipped to 17 percent from 21 percent.

Posted by simon68 @ 06:21 AM 7 Comments

Contrary to the impression given by the Chancellor, many owners of second homes and buy to let landlords who pay basic rate income tax will be caught by the new higher rate of 28 per cent capital gains tax (CGT).

Posted by becky @ 10:20 PM 23 Comments

Come on comrades, don't give up the fight. It was never gonna that straight forward Keep your chins up... The crash is a coming. THINGS ALWAYS START IN USA

The VAT hike risks further weakening house-buyer confidence and putting pressure on residential property prices, the Council of Mortgage Lenders’ has warned. ‘In the short term pain is likely, as the effect of tax rises on household finances dampens the already fragile recovery in house-buyers' confidence, house-building is affected, and support for housing costs across all tenures is curtailed,’ Director General Michael Coogan said.

Are we saving to help the bankers?

Property investors have welcomed the emergency Budget's rise in Capital Gains Tax to just 28%, from 18%. There had been fears that CGT would rise to 40 or even 50%. The immediate nature of the rise was also praised, given fears that property investors would unload their portfolios onto the market if the rise was delayed. Jonathan Thompson of KPMG said “This is about as good as it could have been." But Liz Pearce of the British Property Federation, stated "Buy-to-let investors, who have propped up the housing market over the last 20 years, will suffer and this could hit the future supply of rented housing.”

Posted by little professor @ 03:32 PM 54 Comments

Following the emergency budget today, the centre for economics and business research predicts that interest rates will remain stable at 0.5% until the end of 2012. Douglas McWIlliams, chief executive of cebr, says: “The chancellor noted Mervyn King’s remark at the Mansion House dinner last week that if growth was slower interest rates would be lower. “We agree and – with our lower growth forecast we now think that base rates will be stable at 0.5% until the end of 2012 and the 10 year bond yield will fall to 3%. With base rates lower for longer, we also expect mortgage rates to fall from around 4% at present to 3% by early next year.”

Posted by jack c @ 03:20 PM 6 Comments

CNBC Video. Bank analyst MW with a very clear take on things as usual. US States and local governments also starting austerity programs, job cuts. Consumers not paying their mortgages and bank earnings are falling so double dip expected.

Maximum limits on housing benefits have been announced by chancellor George Osborne during his first Budget speech. Housing benefit will be limited to £400 a week for a four bedroom house and £280 a week for a one bedroom house. [That's £1730pcm and £1210pcm respectively!] Mr Osborne said the move would save £1.8 billion by the end of the parliament. He said spending on housing benefit, which increased by £7 billion over the last four years, was ‘completely out of control’ and the system in ‘dire need of reform’.

Posted by drewster @ 02:48 PM 23 Comments

The UK government today announced their 2010 emergency budget to the house of commons and it makes significant changes to the taxation concerning income and capital gains from property. The Headlines: - Income tax threshold raised by £1000 to £7475 - UK Economy growth forecasts reduced to 1.2 percent this year and 2.3% in 2011 - Capital Gains tax raised from 18% to 28% for higher rate income tax payers from midnight tonight - Capital Gains Tax remains at 18% for low and middle-income savers - Council Tax frozen for 12 months from April 2011 - Corporation tax to be cut progressively over the next few years - VAT to rise from 17.5% to 20% in Aprril 2011

The number of outstanding mortgage loans during the first three months of 2010 remained unchanged from the previous quarter, according to Financial Services Authority's (FSA's) lending data. The FSA, which published its quarterly mortgage lending data today (22 June) also said new advances and new commitments had dropped as had the number of accounts in arrears. The total value of outstanding loans stood at £1,206b, virtually unchanged from last quarter.

...if it were needed.

Posted by sceneclub68 @ 10:31 AM 6 Comments

Britons expect the economy to deteriorate over the next year but are optimistic that the coalition government's policies will pay off eventually, a poll showed on Monday.

Posted by mr g @ 04:33 PM 28 Comments

Surprisingly thoughtful and progressive?

Posted by another alan @ 01:36 PM 22 Comments

This film includes a brilliant car chase in which they demolish loads of new looking houses. The aerial shots suggest that this is one of those half-finished and now abandoned new developments that are scattered across the USA (and Ireland or China, for that matter). From Fannie Mae's point of view, they are better off selling them to a film producer for scrap value than knocking them down again.

"Two years ago, Spanish banks prevented waves of mortgage defaults by swapping homeowners debt for assets -- homes. This averted huge write-downs on debt, but loaded up Spanish banks with houses as assets instead of loans. Spain's housing market has only gotten worse, and now the bill is coming due as the banks labor under the weight of an estimated €59.7 billion ($73.8 billion) in real-estate assets on their books. Under pressure to make further markdowns on the assets by their main regulator, the Bank of Spain, many banks are now scrambling to unload the properties as quickly as possible."

Posted by mountain goat @ 12:20 PM 14 Comments

Albert Edwards from Societe Generale (Paris: FR0000130809 - news) says the Atlantic region is one accident away from outright deflation - that 9th Circle of Hell, "abandon all hope, ye who enter" . Such an accident may be coming. The ECRI leading indicator for the US economy has fallen at the most precipitous rate for half a century, dropping to a 45-week low. The latest reading is -5.70, the level it reached in late-2007 just as Wall Street began to roll over and then crash

This will please some people here!

Economists are more nervous about the chances of another recession. And one of biggest fears is that the Federal Reserve may have run out of bullets to fight another downturn.

Miles Shipside, commercial director of Rightmove, comments: “They say that troubles come in threes. The continuing mortgage famine has now been joined by a surge in sellers following the abolition of HIPs and investor reticence driven by rumours of CGT increases. Together, these factors are likely to put an end to this year’s recovery in house prices. It is an unfortunate concatenation of events that disrupts what was sort of passing as normal service, where investor appetite provided an uneasy balance to the first-time-buyer-starved market. A surge of HIP-free properties has come to the market, and mortgage-reliant buyers and wary investors are failing to match the increased supply.

Posted by dill @ 09:41 AM 6 Comments

... people might be prevented from taking out a home loan for more than, say, 75% of the property's value.

Rightmove figures show asking prices rose in June for the sixth month in a row, but at a lower pace than in May. London home sellers raised asking prices to a record as they sought to tap the housing-market recovery and benefit from the scrapping of costly disclosure rules. “There is a bit a post-HIP party atmosphere, with estate agents glad to restock their shelves and new sellers willing to give moving a go with fewer cost commitments,” Miles Shipside, Rightmove’s commercial director

20-something personal finance journalist Victoria Bischoff is 'not even close to getting the tip of my big toe on the property ladder. In fact, unless I win the lottery (which is unlikely as I don’t play), it is inconceivable that I will be able to afford a house worth a couple of hundred grand for a good few years – if not decades.' The fact is young, first time buyers are completely locked out of the property market. And I just don’t see how we are going to change that.

No connection to HPC at first glance but this Ponzi scheme impacts heavily on the economy and therefore by implication on the housing market. And yes, it's another right wing paper and no doubt there will be the usual hate posts from certain contributors, against the Telegraph, Gilligan and myself but I thought HPC'ers disliked Ponzi schemes?

Posted by mr g @ 10:47 AM 39 Comments

Barack Obama's grandfather 'tortured by British' Barack Obama’s grandfather was imprisoned and tortured by the British during the violent struggle for Kenyan independence, the Kenyan family of the US President-elect has claimed. He said they would sometimes squeeze his testicles with parallel metallic rods. They also pierced his nails and buttocks with a sharp pin, with his hands and legs tied together with his head facing down,” she told the paper.

Posted by simon68 @ 09:20 AM 11 Comments

I wonder when we will see this kind of article in the UK press? (French newspaper in English)

Posted by chrisch @ 10:18 PM 7 Comments

Beggars belief! Another NuLab legacy. Houses so wildly unaffordable that young people are even turning to living on houseboats to put a roof over their heads!! ""The housing market was such a nightmare last year we didn't want to get involved - the length of time it takes to get anything done, the cost and the way it ties you down. So we went for a boat," says Matt. The average house price is £207,000, according to the Department for Communities and Local Government, putting conventional property ownership out of the reach of millions. A residential boat is a far cheaper outlay." Says it all really...

Economic warfare part deux, the consequences will be many and varied. the chinese say this is because of the global recovery!

Posted by enuii @ 03:59 PM 6 Comments

The National Association of Estate Agents is calling for tax incentives for first-time buyers to be introduced in next week’s Budget. As part of three key methods of boosting the housing market the NAEA is also calling for a long term review of Stamp Duty. “The majority of the housing industry recognises the dampening effect that stamp duty has on the market.” Peter Bolton King says that without condoning irresponsible lending there are huge swathes of the country who could afford a mortgage but can’t because of “draconian lending criteria”. He wants to see criteria relaxed and lending opened up to more people.

This article explores the theory that house prices forecasts tends to have a bullish slant to them and we should actually expect further falls this year. More interestingly, Ray Boulger has posted a detailed comment which proposes that house prices will be maintained at current levels due to interest rates being held down for many more years.

When the Bank of England cut interest rates to 0.5 per cent more than a year ago, it was thought the move would allow home owners to use the spare cash from lower mortgage payments to make overpayments on their loans. But a report from Capital Economics suggested lower rates have failed to help households to reduce their loans by as much as expected.

"Labour leadership frontrunner David Miliband today called for an annual “mansion tax” on all homes worth more than £2 million. In what appeared to be a lurch to the Left, the former foreign secretary said a one per cent levy should be imposed to raise up to £1.7 billion a year." While this is a tiny step towards LVT, this would be starting at the wrong end, what they should do is scrap Inheritance Tax and impose a mansion tax (i.e. higher council tax bands) on ALL homes worth more than whatever the IHT nil rate band used to be.

The UK looks as it is the subject of on-going rating scam. Its purpose is to force the government to hand, again, hundreds of billions of pounds to the banks (saved with public spending cuts). "Desperate times call for well-thought through measures."

Britain is the worst place in Europe to live despite offering the biggest salaries, a study revealed today. High incomes in the UK are cancelled out by long working hours, poor annual leave, rising food and fuel bills and a lack of sunshine. Researchers weighed up official data for ten European countries, including France, Spain, Germany, Italy, Sweden and Poland. I am baffled if migrants really pick UK as the first resettlement choice.

Posted by simon68 @ 06:42 PM 27 Comments

If you think UK public pension is good, see NY version...

Bank demands thumbprint from armless man----Bird-brained bank agent-----They didn't even say 'Thanks'

OK, it's not related directly to HPC. However, as has been argued before on HPC, the public sector does get a better deal than the private nowadays and although it is a typical Mail article, the facts cannot continue to be denied.

Posted by mr g @ 02:11 PM 32 Comments

(6) Assets prices (housing) are not as overvalued as they were prior to historical deflationary events (e.g. Japan in the early 1990s)

Home owners are failing to repay large amounts off their mortgage despite historically low interest rates, a new study has suggested. When the Bank of England cut interest rates to 0.5 per cent more than a year ago, it was thought the move would allow home owners to use the spare cash from lower mortgage payments to make overpayments on their loans. But a report from Capital Economics suggested lower rates have failed to help households to reduce their loans by as much as expected.

Posted by mark @ 11:59 AM 21 Comments

"UK mortgage lending remains subdued, according to the Council of Mortgage Lenders (CML). Its comments came as it said the amount lent in new home loans rose by 7% in May from the previous month to £11.3bn. Although that was up 10% from a year ago, the level of new lending this year has been low by historical standards."

Official data show that the number of non-EU economic migrants employed in the UK is falling - down 76,000 last year compared with the year before. Some sectors of the economy are already complaining that they cannot fill key vacancies. At the moment, the only non-EU economic migrants admitted into the UK are those with enormous wealth, enormous brains or with specific skills in areas where Britain has an identified shortage.

Posted by simon68 @ 10:02 AM 22 Comments

The housing shortage myth is about to get a new lease of life maybe? Will Dave change his mind and actually tell the public the truth? Are the UK public ready for the truth yet? You'll not see this story in the Mail.

With our government trying to get to grips with the public finances, the housing market faces an uncertain future. So far this year it has fared pretty well other than a blip at the start of the year which was mainly down to climatic reasons rather than anything more sinister.Most estate agents I have spoken to have reported that 2010 has continued as 2009 left off and that transaction levels remain strong.

I know the surge in properties is old news but it was interesting to see their commercial director predicting price falls: " the lack of buyers able to obtain a mortgage and proceed in these uncertain times appears to be starting to tell with property staying on the market for longer and the annual rate of price increase dropping" " Sellers are starting to reduce their pricing expectations to court the fewer buyers who are able to proceed" " there are signs that this year’s sellers are now toning down their bullish spring price expectations"

"The Treasury minister said on Thursday that government projects worth 11.5 billion pounds would be cancelled or suspended, accusing the previous Labour government of taking irresponsible spending decisions".

Posted by alan @ 03:28 PM 13 Comments

Making money, be it in property or in the wider economy, should require effort. The results will be painful for some who will shriek like a child whose dummy has been removed but I expect that society as a whole will be better off as a result.

Professor Gary Becker, a Nobel prize-winning economist, will argue on Thursday that immigrants should pay for the right to settle in Britain and the United States. Professor Gary Becker will say that it would be up to individual governments to set a price, adding that a charge of $50,000 (£34,000) per immigrant could generate $50bn a year in the US. The same sum could generate about £17bn a year in Britain, based on Office for National Statistics data which showed 503,000 immigrants arrived between October 2008 and September 2009 ********while they are at it, why don't they legalise prostitutes, a huge tax earner*********

Posted by mark @ 11:07 AM 30 Comments

Sales have only risen 0.6% in May because they've downgraded last months 0.3% rise down to a big fat 0% UK retail sales rose by 0.6% in May, official figures show, up 2.2% on the same time last year. The bigger-than-expected rise was helped by a 1.7% jump in household goods sales and a 1% increase in food sales, the Office for National Statistics (ONS) said. Analysts said sales of televisions and food ahead of the World Cup had boosted the figures. But the ONS revised down its sales growth figure for April. It said retail sales failed to grow in April compared with the previous month, down from the 0.3% growth initially reported

"I never thought there was a realistic chance of a 75% cap. After investigation the cap idea has already been rejected by the FSA," he said. "Even if the new Consumer Protection agency ends up taking this on, there has never been any real evidence of major problems in this area although the budget on the 22 June will be the next opportunity to clarify the issue," he added. "No evidence of major problems in this area?!!" Are you bloody mad or stupid Mr Boulgar! Reckless lending and the blind eye mentality to liar loans and high LTV advances, is exactly why we had a bubble dipsey!!

Posted by magnaman @ 10:30 AM 8 Comments

Don’t be surprised to find developers testing the Coalition’s new vision planning policy to the full, and – if necessary – in the courts

In this new two-part series for ITV1 we see that, for some Britons, life in Spain is a dream come true, while for others the dream has become a nightmare. In episode one the series shows how the property crash in Spain has been a financial and personal disaster for some, including Wally Tynan, who says: “I wish to God I'd never heard of Spain,” and the Segal family who have lost their dream family home.

As many as 40pc of home buyers could be shut out of the housing market if the Bank of England introduces mortgage caps. Up to four in 10 people searching for mortgage prices online don't have a 25pc deposit, according to a leading price comparison website.

Posted by mark @ 09:33 AM 16 Comments

Agree or disagree he's always good value!

"Mervyn King said officials will probably raise interest rates before selling bonds when they decide to remove stimulus in the economy, which is still struggling to shake off the effects of the recession". The Monetary Policy Committee “will not hesitate to begin to withdraw the current degree of stimulus when we judge that is necessary,” King said yesterday in London. “That is most likely to be through a rise in bank rate with asset sales being conducted later in an orderly program over a period of time, leaving bank rate as the active instrument.”

"The Bank of England is to be handed sweeping new powers over Britain's financial system, including responsibility to avoid another housing bubble. As part of a major shakeup of financial regulation in the UK, George Osborne will announce tonight that the Bank of England is to be given a new "toolkit" to help it manage risk in the UK economy. This will include the power to restrict bank lending, potentially allowing the Bank to block consumers from borrowing too much. The chancellor of the exchequer, in his first Mansion House speech, is expected to argue that this will help avoid another unsustainable housing boom." :D

Posted by quiet guy @ 01:04 AM 10 Comments

"European debt markets remain under high stress on persistent reports that Spain is in secret talks with EU officials and the International Monetary Fund for a support package of up to €250bn (£208bn), the largest rescue in history". "El Economista said officials from the EU, the IMF, and the US Treasury had been discussing a credit line of €200bn to €250bn, dwarfing the €110bn package for Greece. Dominique Strauss-Kahn, the IMF's managing director, reportedly called a secret meeting of the IMF's Board of Directors to tackle the crisis".

"Britain's financial regulator will be scrapped and the Bank of England given sweeping new powers as part of a major shake-up of the system".

Google, the world’s biggest search engine, today added residential property listings to its Google Maps service. It claims the new feature already covers “hundreds of thousands” of homes for sale and rent. The move to break into property follows months of speculation and allows estate agents and online portals alike to upload their listings directly to Google Maps at no cost. Private sellers will also be allowed to list their properties. Google has reached deals with Zoopla, Vebra, SmartNewHomes, PropertyLive and others to add their listings to the service.

Posted by little professor @ 05:35 PM 9 Comments

Two mortgage fraudsters who stole millions of pounds at the height of the property boom were jailed yesterday amid criticism of banks which "poured money into the pockets of borrowers".

"The former boss of the now bankrupt US lender Taylor, Bean & Whitaker (TBW) has been charged with 16 counts of fraud, worth more than $1.9bn (£1.3bn). Lee Farkas, who was chief executive and then chairman of TBW, was accused of trying to misappropriate money from banks and federal institutions. The indictment in Virginia also accused Mr Farkas and other unnamed conspirators of trying to obtain money from the Troubled Asset Relief Program. TBW ceased operating in August 2009. Mr Farkas is charged with conspiracy, bank fraud, wire fraud and securities fraud..."

I am wondering if the same article could apoply here in 2 years time? Graph at the bottom shows 28% of properties sold in April 2010 were sold for a loss.

There has been much talk recently of the rise in the number of mortgage products available to those with small deposits. But the existence of these products is beginning to look rather more theoretical than actual.

One for Mark Wadsworth. The new Times site is still free for the moment but you have to register. Land tax seems very reasonable, as long as it replaces current taxes on work rather than being in addition to them, but it's hard to imagine the blue wing of the homeowners' party seeing much in it.

Posted by monty032 @ 01:35 PM 25 Comments

Good job we still have the FSA

House price rises but dont the figures suggest a double dip underway or soon to start?

The number of people unemployed in the UK increased by 23,000 to 2.47 million during the three months to April, official figures have shown. However, the number of people claiming jobseekers allowance fell in May by 30,900 to 1.48 million, the Office for National Statistics said. It added that average earnings in April were 0.1% lower than March. Some economists have warned that the government's planned spending cuts will further increase unemployment.

"Europe faces almost inevitable recession next year and years of stagnation as policymakers' response to the euro zone crisis causes a downward spiral"

No one had an answer. Uhlmeyer spent a sleepless night in a frigid Anoka County holding cell, her hands tucked under her armpits for warmth. Then, handcuffed in a squad car, she was taken to downtown Minneapolis for booking. Finally, after 16 hours in limbo, jail officials fingerprinted Uhlmeyer and explained her offense -- missing a court hearing over an unpaid debt. "They have no right to do this to me," said the 57-year-old patient care advocate, her voice as soft as a whisper. "Not for a stupid credit card."

But the sovereign debt crisis in Europe, along with lingering concerns that the American economy may slip back into recession, seems to have curbed investors’ appetite for speculative-grade debt, or junk bonds, for quite some time. American companies currently have more than $1.7 trillion in S.&P.-rated bonds and loans maturing from 2011 to 2014.

Bring it on. 75% max LTV talked about as well as all the other changes. There is going to be a big long drought of houses that people can't afford to sell concurrent with a load of people who can only pay £x for a house. Answer - drop price or keep house.

Posted by growler @ 10:13 PM 42 Comments

Recovery could prove short-lived due to a series of worrying economic factors.

If there's a shortage of paper clips, stationery companies can easily supply more to meet the demands of people who've suddenly had an urge to sort out all their paperwork. It's not so simple with housing, which is why supply and demand is commonly assumed to be the reason house prices have grown so fast from the mid-90s onwards.

It's a VI story, but the title wording is interesting

Posted by growler @ 03:29 PM 7 Comments

... the fact that there are more IVF twins in Britain today actually turns out to have something to do with housing. The charity Shelter has released a fascinating piece of research this week that reveals that higher housing costs are forcing couples to delay starting a family. Britain's acute housing shortage means that the average age of a first-time buyer without financial help from family or friends is now 37 years old, up from 33 in 2005 and just 29 in 1997. And this postponement of settling down is having a knock-on effect in delaying the point at which women, on average, are trying to start a family.

Posted by mark wadsworth @ 01:44 PM 13 Comments

Rathore is one of 25 million Indians who have taken so- called microfinance loans, often without adequate documentation or collateral *******does this sound familiar?********

June 15 (Bloomberg) -- BP Plc’s credit rating was cut to two levels above “junk” at Fitch Ratings on concern over the potential cost of cleaning up the Gulf of Mexico oil spill and meeting future liabilities. BP’s long-term issuer default and senior unsecured ratings were lowered six levels to BBB from AA, Fitch said in a statement in London today. That follows a cut from AA+ on June 3. The rating watch was changed to “Evolving” from “Negative.”

First-time buyers made up the lowest proportion of house purchase loans since September 2007, according to figures released today by the Council of Mortgage Lenders.They accounted for 35% of all house purchase mortgages, down from 39% in March and 38% in April 2009. The low share of the market shows that getting a mortgage remains problematic for first-time buyers who tend not to have a substantial deposit.

Posted by jack c @ 10:53 AM 6 Comments

Tell me, fellow HPCers - but I already know the answers (I think)

Posted by growler @ 10:45 AM 15 Comments

I was ... the portfolio manager of a London-based bond fund that had so far refused to buy in to the $1trn market for sub-prime securities. The American executives I was seeing at the conference were trying to change my mind.

CPI falls to 3.4% from 3.7% last month. RPI falls to 5.1% from 5.4% last month. The Office of National Statistics said the drop was helped by lower food prices, as well as slower rises in the price of petrol, alcohol and tobacco.

Posted by little professor @ 10:33 AM 6 Comments

Tesco also blamed comparisons with particularly high food inflation a year earlier

The new government seems keen on a quick U turn here and there. The ONS figures show we need more immigration to increase the tax base. No doubt the right sort of newcomer will help prop up house prices too. Its only a matter of time - at least the new Immigration targets (minimum 1 million a year) will give the Mail plenty to moan about!!

Bank of Japan to offer US$33 billion loan scheme To address this, the bank announced a temporary low-interest lending scheme, the total amount of which would not exceed 3 trillion yen (US$33 billion.) The Bank of Japan will make low interest funds available to private banks to lend to companies, a move it hopes will in turn encourage firms to make longer-term business investments in a bid strengthen the economy. The loan scheme will target 18 sectors including healthcare, environment and energy, tourism, science and technology as well as agriculture, forestry, and fisheries, the bank said.

Posted by simon68 @ 08:50 AM 9 Comments

''...House prices continued to edge up in May as the number of homes on the market soared following the Government's decision to abolish home information packs, research shows. Around 22% more surveyors reported a rise in the cost of property than those who saw a fall during the month, up from 17% in April, according to the Royal Institution of Chartered Surveyors...''

Oh, for a little inflation! I don’t mean barrow loads full as in 1930s Germany or recently in Zimbabwe, but 4 or 5 percent a year for a few years would work just fine and would really help us to get out of this mess. Inflation does redistribute wealth from savers to borrowers, but right now that would be a pretty good thing. Many borrowers are in big trouble and need help. Inflation would reduce the real value of public and private debt. And importantly it would help to push many of those homeowners who are in negative equity back into positive territory. There is no evidence from any developed country that inflation ever turns into anything catastrophic. Hyperinflation is not on the cards

Posted by little professor @ 01:51 AM 18 Comments

More homes are being put up for sale in England and Wales because of the abolition of Home Information Packs (Hips), surveyors say. The latest survey from the Royal Institution of Chartered Surveyors (Rics) found a "sharp increase" in new instructions from would-be sellers.

An interesting take on the political climate of the fallout of the American housing market

"The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history". (yes, that's big - so how long before gold goes up again?)

You have to make your own forecast. Concern about how markets will react trumps honest forecasting by the government or the "independent" Office for Budget Responsibility (which is also thinking about market reaction).. "Let's not make the forecast very low lest the markets punish sterling and gilts." Rule of thumb - whatever they say, knock off a point or two. (Any link problem just google the FT title.)

"Moody's Investors Service lowered Greece's sovereign debt rating to 'BA1, which is junk-grade status, from an investment-grade level of A3, citing concerns about risks associated with euro zone's IMF support package".

Posted by alan @ 06:45 PM 7 Comments

EU leaders are meeting this week to thrash out a rescue package for Spain as its economy teeters on the brink. News of the behind-the-scenes scramble in Brussels spells bad news for the British economy as many of our major banks have loaned Spain vast sums of money in recent years. (Is it time to buy the Euro yet - speculatively?).

Peter should be an HPC'er - rather a daft lot in this neck of the woods! Could I invite you all to help wake up the locals with some realism too please? Grateful thanks Simon

By Mark Field MP (Con): "Similarly, [Vince Cable] seems not to have taken into account the disproportionate impact higher [CGT] rates on property will have on Londoners and those in the Home Counties. Many people who buy a second home outside the capital as an addition to a small London base do so not because they are enormously wealthy but precisely because they are not. It is virtually impossible even for many of those earning multiples of the average national wage to trade up the property ladder in the capital. For those with growing families, the only option is often to buy a house with garden outside London."

Posted by mark wadsworth @ 03:29 PM 11 Comments

houseprices will shoot up in Afghanistan after this, better buy now before the rush of first time buyers move from the UK..

Posted by mark @ 01:03 PM 10 Comments

A leading economist has warned the Government's proposed spending cuts risk plunging the UK back into recession.

Posted by mr g @ 11:18 AM 26 Comments

Missed this yesterday. Not "news" to HPC readers but good all the same.

Britain faces 'decades of debt' unless it acts to cut public spending now, Nick Clegg will warn today. Oh and our debt obligation is £78K each

Posted by sosoon @ 07:00 AM 6 Comments

RAISING capital gains tax on homes will devastate the “entire housing ­market”, the boss of Britain’s largest estate agency warned yesterday. Prices will dive as landlords flood the market with properties, and the private rented sector will collapse if the government presses ahead with plans to raise CGT, according to Simon Embley, chief executive of Your Move.

Posted by little professor @ 12:41 AM 12 Comments

This is why the housing bubble is being maintained, interest rates are so low there's no incentive to save. The UK's savings system needs to be reformed in order to encourage people to save more money, a report says. The Centre for Policy Studies think-tank says the current system is too complicated and puts people off saving the money they need in retirement. It proposes combining the pension and Individual Savings Account (Isa) regimes, with an overall contribution limit of £45,000. It also suggests letting people access their pensions before they retire. Specifically, they should be able to draw down up to 25% of their fund prior to retirement. They should also be allowed to pass on any unused savings to their heirs, tax-free, the report says

Housebuilders could be hit by a massive drop in the number of new homes built in the UK, a new report suggests. The National Housing Federation (NHF) said the number of new affordable homes built this year could slump by 65%. Funding cuts and changes to the planning system could see as few as 20,390 homes built, the group said.

Posted by jack c @ 06:02 PM 10 Comments

Commentary on the state of the property market from a variety of sources. Overall, the article is a bit short on substance but I suspect that this is a sign that worries about the property market are beginning to return. Not surprisingly, Financial Planner gives the most bearish prediction: 'Jonathan Davis, chartered financial planner and spokesperson for Housepricecrash.co.uk, describes the upturn this spring as "the peak of the biggest suckers' rally in history" and forecasts that house prices will plummet by up to another 10 per cent by the end of this year.'

Posted by quiet guy @ 05:36 PM 6 Comments

It is staggering how naiive the newspaper editors are (or perhaps how naiive they think the public are). This monthly charade of highlighting rising inflation two weeks before (after) an interest rate decision and then completely forgetting about it two weeks later must have been going on for oooh about ... seven years now?

Posted by paul @ 12:03 PM 7 Comments

The report of the Future of Banking Commission maybe seen as worrying or offering hope. A way forward or yet another establishment stitch-up. Do politicians want to have a cake and eat it?

"The cost of unwinding interest rate swaps – which are set at a fixed rate for a period of time - was preventing banks releasing a flood of property onto the market," . There are a few articles about this around. I think (but stand to be corrected) that this is the bank version of; a mortgage holder on a fixed rate(about 6% say) back in 2009 being unable to refinance to take advantage of lower rates because locked in or early redemption fee. Or, bank funding was locked in before Mervyn dropped the rate

Lest we forget....

Go to 4 Mins and 30 seconds into Friday's show for a debate on the new Bovis/Woolwich mortgage deal and then wait for Melanie B to explain why this tie up and mortgage package has come about.

Posted by jack c @ 03:17 PM 14 Comments

''...Despite an upturn in the spring, economists warn that things will get tougher with a double-dip in the housing market on the cards. Homeowners are being warned to prepare for a double dip in house prices, as a lack of mortgage funding, the expected rise in capital gains tax (CGT) and a looming interest rate increase send prices falling....'

Posted by hpwatcher @ 09:58 AM 27 Comments

Good ole bankers - let's crucify the next generation.

Posted by chrisch @ 09:03 AM 25 Comments

The Government is planning an overhaul of the council tax to fund the building of new homes for first-time buyers and families. In future, Nimbys who object to new developments will pay the price of their opposition in higher council tax bills. Grant Shapps, the Housing Minister, has told The Times that he will reward local authorities that give planning approval to housing developments by matching the council tax revenue collected from these homes. The money will continue for six years, with extra provided for affordable homes for first-time buyers.

Posted by wanderinman @ 10:17 PM 14 Comments

''...With the repudiation of Gordon Brown's locust years by his erstwhile henchmen gathering pace, it can be only a matter of time before one of the candidates to replace him calls for a truth and reconciliation commission. This is what happens when tyranny crumbles. ...Having cloaked themselves in the theatrical robes of Keynesianism, Mr Brown's little helpers must endure the humiliation of being stripped naked by events. As any serious student of Keynes will tell you, the great man believed that governments could help smooth the peaks and troughs of cyclical capitalism. He did not advocate management by profligacy or the indulgence of budget deficits at the peak of a boom....''

Posted by hpwatcher @ 09:34 PM 21 Comments

The average cost of a home in England and Wales fell 0.2 percent to 220,352 pounds ($323,000) from April, the research group said in an estimate released by e-mail today. Previously reported house-price gains for March and April were revised to declines as more transaction data became available.

Posted by alan @ 06:40 PM 9 Comments

Same old same old.... but here because "Politicians assume there is some "magical" interest rate at which lending will resume. But just like the misguided policies to support real estate values (which will only recover when prices have declined enough to represent a reasonable multiple of average income, rather than the fantasy valuations created by low interest rates and a lax lending regulations), supporting overleveraged banks or creating new debt to support the old debt won't solve Europe's credit crunch."

UK industrial output fell unexpectedly in April, but economists have said the figures should not be a cause for concern. Output fell by 0.4% compared with March, the Office for National Statistics (ONS) said, whereas a rise of 0.4% had been forecast. It was the first fall in monthly production since January. Experts said the drop should be seen as a correction after a particularly strong jump in output in March of 2%. Over the year, output is still rising, as levels were 2.1% higher than in April 2009.

"US politicians have repeated threats to impose trade sanctions on China if it continues to refuse to revalue its currency, the yuan". Buying yuan at this point must be almost a one-way bet ;) 40% profit anyone?

Posted by doom&gloom @ 02:46 PM 27 Comments

Cash-poor New York state might have to pay its bills with IOUs next week to avoid the "anarchy in the streets" that could result from a government shutdown, Governor David Paterson said on Thursday.

Linden Lab, creator of the 3D virtual world Second Life, has announced plans to cut its workforce by 30% as a result of a restructuring process. *****I am not sure how many staff they employ, however judging by the size and the fact it has bases in many countries including the UK I can only assume it is quite a lot of people********

For a long time I've been wondering how long it would be before Japan came out of denial over its finances. With deflation, the yields on Japanese debt have been extremely low, yet they have still failed to achieve a balanced budget. Without deflation, their debt servicing costs will rocket, making a balanced budget even harder. The problem is that even if the budget is balanced, deflation makes the debt mountain continue to grow, relative to GDP. After WWII the Japanese came together as one to rebuild their economy. Can that spirit of unity be re-kindled to defeat their chronic debt problems? With an aging, shrinking population, I'm doubtful. We could be looking at the biggest debt default in history..

Posted by uncle tom @ 10:49 AM 23 Comments

So if BP is liable for environment polution and the drilling moratorium, is Goldman, AIG et all liable to all the financial pollution and the associated economic and job losses ?

Previously reported house-price gains for March and April were revised to declines as more transaction data became available.

Posted by mken @ 09:07 AM 24 Comments

Starting November 5 - George Papandreou's new socialist government says the 2009 budget deficit will be 12.7 percent of GDP -- more than double the previously published figure -- and pledges to save Greece from bankruptcy.

The total property wealth of retired homeowners has jumped by almost £2 billion in the last three months after house prices continued to edge ahead, according to new research. A report by equity release firm Key Retirement Solutions said people aged 65 and over in Great Britain had collective equity of £767 billion at the end of last month, £1.88 billion up on January's figure. Some older people, however, experienced a loss after house prices continued to fall in their region - Scotland was the biggest loser with an equity drop of 7.8%, or £12,249 per household. Humberside, the South East, Wales, the West Midlands and Yorkshire also saw decreases. Retired homeowners in the North East were the biggest winners as their equity levels grew by 4.6%, or about £5,000 per household...

Posted by mark wadsworth @ 09:32 PM 8 Comments

''...The UK’s fourth largest lender is to offer competitive new loans worth up to 90 per cent of a property’s value, but only to those who are willing to purchase a Bovis new-build house or flat. ...''

"...persuading lenders to approve the sale of homes for less than the balance owed -- known as a short sale -- without disclosing that there were better offers. They then flipped the houses for a profit..."

Yawn.

Posted by doomwatch @ 02:00 PM 21 Comments

Actually, there are two articles here. One on China and the yuan the other on the danger that we may be heading for depression. But they have a common theme, and the second articles follows the first. This is the key paragraph: ‘Economic growth needs workers to be paid more. In times of innovation, or globalisation, there is this tendency for the fruits of growth to top up company coffers and bypass the workers. This in turn can lead to asset and commodity bubbles, and starve the economy of the aggregate demand it needs. Or alternatively we can see corporate savings sloshing around the banking system and promote consumer demand via debt.’

A speech like Grant Shapps’ only perpetuates a pointless social stigma around renting that’s entirely unhelpful for everyone… lenders, landlords and, most of all, people looking for a home.

Posted by smithers @ 10:48 AM 8 Comments

"The reason why we cannot seem to build the infrastructure which the UK needs is because it would be political suicide. The unemployed and low-paid workers who would benefit from the prospects offered by more development are outnumbered at the ballot box (especially in marginal constituencies) by NIMBY ‘homeownerists’ hell-bent on keeping the prices of their own houses high, no matter how much damage this does to the country as a whole. Both Thatcher and Blair pandered to the homeownerists at the expense of the real economy. Any political strategy to solve Britain’s bad infrastructure will have to break the power of the homeownerists – any suggestions? George Carty, UK" (and yes, I have plenty of suggestions).

Posted by mark wadsworth @ 10:34 AM 18 Comments

Bank repossessions hit a record monthly high in May, according to RealtyTrac, the online marketer of foreclosed properties. Lenders took back 93,777 properties, up 1% from the previous month's record and 44% from the same period a year earlier.

Chief economic adviser John Philpott said he had now revised up his forecast, saying unemployment would climb to 2.95m in the second half of 2012, and remain close to that level until 2015. About 500,000 public sector jobs would go in that period, Mr Philpott predicted. Unemployment is currently 2.51m, according to the latest official figures.

Posted by rumble @ 01:05 AM 12 Comments

Risks to the global economic outlook have “risen significantly” and policy makers have limited room to provide support to growth

Only 23 percent say they expect the region’s almost $1 trillion rescue package to both keep the European monetary union together and prevent a debt default by a government. Meanwhile, the worsening BP situation will do no favours.

For all their problems, at least China, Russia and Brazil know where they're heading. Not so Europe.

Check out Fred's new pad, looks like he's being quite prudent considering he has a £700K pa pension as guaranteed income!

Bovis Homes has agreed to guarantee mortgages taken out by its customers, highlighting just how difficult it is to persuade the banks to lend to homebuyers. The housebuilder has teamed up with Barclays to offer 90% loan-to-value mortgages in a bid to kickstart demand for new homes. But instead of Barclays taking on the financial risk, Bovis has agreed to ringfence some of the cash it makes from the sale to compensate Barclays if it has to repossess the home and suffers any loss on the loan.

Just what us hungry bears need... great charts and analysis that put some frightening similarities between 2010 and 1930.

The U.S. debt will top $13.6 trillion this year and climb to an estimated $19.6 trillion by 2015, according to a Treasury Department report to Congress.

And how the US has no creditors, and cannot go bankrupt unless it wants to

Posted by bellwether @ 06:42 PM 29 Comments

His view on why the recent rebound in GDP does not equal a rebound in the economy. "GDP largely measures spending, and spending is not growth". A warning on government printing and spending, and praise for the newly announced Con-Dem spending cuts. Posted in Estrader in a previous thread.

Strategic housing policy objectives 9. The Government’s key housing policy goal is to ensure that everyone has the opportunity of living in a decent home, which they can afford, in a community where they want to live. To achieve this, the Government is seeking: – To achieve a wide choice of high quality homes, both affordable and market housing, to address the requirements of the community. – To widen opportunities for home ownership and ensure high quality housing for those who cannot afford market housing, in particular those who are vulnerable or in need. – To improve affordability across the housing market, including by increasing the supply of housing. – To create sustainable, inclusive, mixed communities in all areas, both urban and rural.

Posted by dill @ 03:50 PM 7 Comments

"GDP largely measures spending, and spending is not growth". Peter Schiff's recent take on why rebounding GDP does not equal economic recovery. A warning against government printing and spending, and some praise for the Con-Dems recent spending cuts. Originally linked by Estrader in previous post....

"And that being said, we have just received the signal to an end to global stimulus measures — one that puts a nail in the coffin of the debate on whether or not Britain would “print” her way out of the debt crisis. That would have virtually guaranteed an eventual hyperinflation that would have spread to all Western nations, destroying the U.S. dollar as the world’s reserve currency in the process and ending several hundred years of Western economic dominance."

Posted by techieman @ 01:42 PM 6 Comments

Some good opinions on moving forward, for example - "Second, governments should explain, and the public should learn, that there is little that economic policy can do to create high-quality jobs in the short term. Good jobs result from good education, cutting-edge technology, reliable infrastructure and adequate outlays of private capital, and thus are the outcome of years of sustained public and private investments. Governments need actively to promote post-secondary education."

Posted by mountain goat @ 12:56 PM 14 Comments

Apparently the trade gap is due to the bad weather, presumably planes flying out couldn't land but those flying in could.. You just couldn't make it up. The UK's trade deficit widened slightly in April, with both imports and exports affected by the volcanic eruption in Iceland that grounded flights in and out of the UK for about six days. The trade deficit in goods and services was £3.3bn in April, marking an increase on the previous month after March's figure was revised to £3.2bn.

"Finland's economy slipped back into recession during the first three months of 2010, official figures have shown. During the January to March quarter its economy contracted by a seasonally-adjusted 0.4%, after a decline of 0.2% in October to December of last year... A report last year by the World Economic Forum said Finland had the world's sixth most competitive economy." Not enough people buying bags of peanuts or phoning in to 'Britain's Got Talent' is enough to plunge is back in recession too (not to mention them there cuts a comin').

I listened to this this morning, A good tussle between Zac and Prescott, both playing the populist cards to there own constituents... I think we can determine the duplicity of Prescott and the even worse kowtowing to the nibbys by zac. More window dressing, but I doubt we are going to see any more houses being built. There was some good discussion from other commentators this morning but I could not find it on the BBC website that painted a more complec nature of housing and the need to develop some greenfield sites and farmers fields.

See if we are going to get CPI inflation and asset deflation with this one whcih reverses the asset price inflation and the CPI disinflation we got for the last 15 years.

A three point comment that present concisely how we, the taxpayers, are being shafted and risk being shafted even more. And a pretty good, reasonable, suggestion what the Chancellor should do. It does not take much of scratching the surface to realise how bad it is.

Posted by ant @ 10:12 AM 14 Comments

Nah - lets get on with protecting our own. This will reduce the new 'supply' side by 25%.....adios HPC.

Posted by braindeed @ 07:56 AM 42 Comments

"Talk of “once in a generation” spending cuts to curb Britain’s budget deficit pushed sterling lower again today, prompting currency exchangers to point out how much worse off holidaymakers overseas will be this summer.Some predict the pound will fall further and say prepaid currency cards to lock into current exchange rates should be considered". "Football fans attending the World Cup in South Africa will find the spending power of each pound has fallen by a fifth compared to what it bought during the last World Cup in 2006".

Posted by alan @ 08:11 PM 8 Comments

Subsidy junkies the National Landlords Association hit back: "House prices are still beyond the reach of most people. Across the UK, house prices ballooned by 121% over the last decade. Although 1.4 million people want to buy their own home, 75 per cent cannot afford a mortgage with an 80 per cent loan-to-value. •We are not building enough houses. Back in 2004, the Government was given the unenviable news that 120,000 new houses would be needed each year by economist Kate Barker. We currently face a shortfall of 150,000 homes built. •People need mortgages but there aren’t many available unless you have an average of £30,000 for a deposit. Even then a rise in interest rates could spell disaster when it comes to keeping up with mortgage payments."

Posted by mark wadsworth @ 05:11 PM 13 Comments

Grant Shapps Housing Minister says cash for affordable housing (shared ownership etc.) has run out so it is down to the Private sector to find new innovative ways to suck naive youngsters into a life of debt servitude.

Posted by tenant super @ 04:46 PM 12 Comments

The Government has been issued with a veiled warning that Britains AAA credit rating is still at risk because of its distinctly weak deficit cutting targets. In a blow to George Osborne, the ratings agency Fitch said there was a real danger the Coalition would not do enough over the medium term to sufficiently reduce the £156bn deficit. Giving a clear signal that it wants to see a detailed plan for deeper cuts in the emergency Budget on June 22

Posted by mark @ 01:13 PM 13 Comments

Goldman Sachs has been accused of “deliberately and disruptively” refusing to work with the Financial Crisis Inquiry Commission (FCIC) after employing delaying tactics and attempting to inundate the panel with millions of pages of documents. The investment bank, which has now been subpoenaed to appear before the FCIC as a result of its alleged actions, has also been accused of “mischief-making” with regards to its conduct towards the commission after sending it 20m separate documents. The FCIC has a staff of 50.

Footballers, or maybe bankers, epitomise the phenomenon of ever-spiralling wages that are dislocated from economic worth. Well, life is a game of two halves and economic reality now has the ball. Footballers wages will gradually come down and they will no longer have the whip hand in negotiations. I see this article as symbolic of the fate of the less glamorously occupied British worker, who has completely lost his wage bargaining power. If the British worker is not cost competitive with his foreign counterpart, then he will ultimately lose his job. It is amazing that it wasn’t always thus but the last decade or so of endless liquidity and credit has allowed us to fantasise that we had some sort of economic free pass.

Posted by flashman @ 10:31 AM 12 Comments

It is very likely that the government proposed budget cuts will not help the public finances but ultimately end up in the bankers' pockets.

Posted by ant @ 10:13 AM 23 Comments

Distressed sales are a “thunderous cloud” hanging over the property market according to the Royal Institution of Chartered Surveyors (RICS), with a sharp increase in the number of surveyors expecting a rise in distressed sales.

There are already plenty of reasons to expect prices to fall again, but now, everyone is talking about two new events apparently about to whack the market.First, there's last month's scrapping of Home Information Packs (Hips). Then there's the likely big rise in capital gains tax (CGT).

Posted by little professor @ 11:24 PM 12 Comments

I have a cracking idea - lets pretend all old people are rich and have loads of assets to sell. Now lets pretend they are poor and need those assets to pay for their care. Now lets pretend the government will not pay for that care and will make them live their last days in a bus shelter in Salford eating leftover McDonalds.....

Posted by chrisch @ 10:15 PM 9 Comments

astroturf - August 9, 2006 Urban Word of the Day. Creating the impression of public support by paying people in the public to pretend to be supportive. The false support can take the form of letters to the editor, postings on message boards in response to criticism, and writing to politicians in support of the cause. Astroturfing is the opposite of "grassroots", genuine public support of an issue. EXAMPLE: "Microsoft didn't have grassroots support, so they created astroturf support."

Posted by paul @ 06:43 PM 25 Comments

Nice article as the Lloyds spongers try to grub up £14Bn of tax money to line their nests. I wonder if the bankers are Dave's "everyone" that its going to be tough on?

"Forecasters predict the U.S. debt will grow to surpass gross domestic product in 2012, based on data from the International Monetary Fund". If anyone says now is the time to buy property; I'll scream and scream until I am sick!

Demographic expert say Chinas vast pool of labour which has allowed it to grow at double-digit rates over the past two decades, with low-inflation, is starting to dry up, and will start to contract from 2015 as the working-age population feels the impact of the one-child policy. The [Foxconn] pay raise will put pressure on other companies that are currently cashing in on the cheap labour of China. The era of cheap Chinese labour is over

Posted by mark @ 03:20 PM 11 Comments

The number of men contacting a debt charity for help has soared by 51pc during the past three years. The Consumer Credit Counselling Service (CCCS) blamed the trend on a combination of rising unemployment, slow pay growth and higher household cost. The group said despite men typically having lower debt levels than in previous years and earning more than women, they were generally less able to repay what they owed than women, while many struggled just to meet their basic living costs.

Like all sensible people, I hope that David Cameron and George Osborne know what they are doing when they set out to chill our collective spine as they do in all the newspapers this morning about the scale of the coming cuts to public expenditure. It was a warm-up for the PM's big "everyone's life is going to change" speech today. But like many sensible people I have my doubts about the wisdom of this carefully choreographed exercise ahead of the chancellor's 22 June budget. If they do what they say – I am still hoping that they don't meant it – the cure could be a bit like applying leeches to 18th century patients: worse than the disease.

This story is a microcosm of what I have been saying, here, for over a year. Western debt levels are very bad but the effects are somewhat mitigated by a growing world economy. The aggregate word economy never stopped growing during the ‘recession’ and going forward it has a propensity to grow at records rates due to the billion or so world inhabitants who now aspire to join the consuming middle classes. Jaguar Land Rover is once again profitable and sales in China and India are growing rapidly. The clues were there a year ago but now we see some evidence. As soon as the recovery gains traction, house prices will fall in earnest (see first comment).

Posted by flashman @ 10:15 AM 73 Comments

Britain's economy [apparently] relies on the property market. A capital gains tax increase could send it into tailspin. With a population of fewer than 1,000, according to the 2001 census, it is not a particularly large village, but supports 40 or 50 businesses. Daily life could be maintained (at some cost) without ever going to Tesco; there is even a chemist. You could also purchase a wedding hat, clothe yourself and your children several times over, stock up on books (from either the new or secondhand bookshop) and buy any number of art works. As the lady in the post office puts it, when I go in for a newspaper: "If it wasn't for the visitors, we wouldn't have jobs." ' So there!

Posted by montesquieu @ 09:44 AM 11 Comments

So, the new government has saved 9Bn - well done people. Let's wipe that out and some more before the oiks get any benefit.

''Mr Brown in Budget after Budget and Pre-Budget Report after Pre-Budget Report regaled his unfortunate audiences with his judgment that all past economic woes were the fault of Tory governments. And he, he alone, the anointed one, had banished economic fluctuations for ever. The future was golden; the Tory past was dross.''

''Inflation is a greater risk to the British economy than deflation, a majority of economists polled by The Daily Telegraph have said. Mervyn King, Governor of the Bank of England, has repeatedly said he expects the spike in inflation ? to 3.7pc in April ? to be temporary. They fear policymakers will try to inflate their way out of the debt crisis. Their concerns are not expected to be reflected in the Bank of England's decision this week on interest rates, with the Monetary Policy Committee expected to leave the rate at 0.5pc.''

"George Osborne is planning to eradicate Britain's budget deficit by emulating Canada, where borrowing was brought under control within just three years by spending cuts of 20 per cent". But wait.... "Anyone who thinks the spending review is just about saving money is missing the point. This is a once-in-a-generation opportunity to transform the way that government works."

'Greece will certainly default on its debts, and it is an open question whether Greece will experience some form of revolution or coup and I would put the likelihood of that over the next five years as one in four.'

(Scroll down to 3rd paragraph) Welcome, too, are the Coalition plans to reverse Labour's classification of gardens as "brown field sites". The purpose of that ruling was to make more space available for housing development, which duly happened: the policy has left a rash of unsightly concrete bunkers in urban gardens, as homeowners sold them off to developers. The new houses have done little to ease the chronic shortage of affordable housing and have simply disfigured what used to be precious green spaces. The Coalition will also announce its intention to repeal the law that makes the provision of a set number of affordable homes a condition of developers being granted planning permission for upmarket housing.

Posted by drewster @ 11:53 PM 7 Comments

"The Department for Transport (DfT) and rail link owner London & Continental Railways (LCR) plans to distribute a sales document to potential bidders ahead of the emergency budget on June 22."

Some property bulls are starting to realise their goose may be cooked...

US fights to maintain dollar hegemony at expense of their own economy

Posted by the number cruncher @ 02:37 PM 7 Comments

Another indispensable financial value-creator arises from the grave to suck our blood. Pass the wooden stake someone.

Posted by letthemfall @ 01:14 PM 12 Comments

"The G20’s final communiqué introduced a surprise change of tone from the document produced by G20 finance ministers just six weeks ago .... The April 23 G20 communiqué supported the idea that governments should continue to support growth with stimulus until the recovery is driven by the private sector. Today’s document, though, backed the sort of immediate fiscal consolidation being planned by Mr Osborne." Looking beyond the political point scoring it seems to me that the government debt bond markets have said BOO! and G20 governments have taken fright.

Posted by mountain goat @ 12:53 PM 6 Comments

I know this has been posted before as an article so I post this for entertainment value because it is video footage of Buffett talking about housing being 'the grandaddy of all bubbles' while testifying to a financial commission. "Rising prices are like a narcotic..."

However, the good news [sic] is that the longer-term picture is rosy given Britain’s long-standing shortage of properties.

Posted by monty032 @ 10:09 AM 6 Comments

This should be dedicated to all those folk who still not get it how they are being fleeced. To a bare skin. "The largest heist in history" continues

Posted by ant @ 10:00 AM 8 Comments

The euro will have broken up before the end of this Parliamentary term, according to the bulk of economists taking part in a wide-ranging economic survey for The Sunday Telegraph.

Posted by dill @ 10:00 AM 9 Comments

Nick Clegg has staked his political reputation on a pledge that under the coalition government there will be no return to the savage cuts of the 1980s. In an interview with the Observer, he launched a withering attack on the economic policies of Margaret Thatcher and promised instead to look to the examples of Sweden, Canada and the US to deliver "progressive" cuts.

As well as his home in Belsize Park, James owns a two-bedroom flat overlooking the harbour in Bristol, which he bought in 2000 for £113,000 and lets for £850 a month, and a one-bedroom flat in Holloway, North London, which he bought in 2006 for £250,000 and lets for £1,100 a month. Three years later his marriage failed and the couple split. As part of the divorce settlement James sold his flat in Tower Hill for £730,000, and his house in Portishead for £640,000, just as property values began to slide in 2007.

"The prime minister insisted the figures that the coalition had inherited were wildly over-optimistic. “There were two levels of optimism in what the [Labour] government was forecasting,” Cameron said. “One was trampoline growth of 3% and above, and the second theory was that interest rates would always stay low". “It is going to be huge. We will be spending more on debt interest than we do on educating our children and defending our country. It is totally irresponsible what we are left with.” Cameron said. “I did not come into politics to punish people who want to do the right thing and save.” Mmmm...IRs to rise, then?

Posted by alan @ 11:33 PM 12 Comments

How many of us have had this conversation with their other half! Appalling that the House Doctor offers only quack remedies! Take a bet on interest rates, basically. If you can afford a long term fixed rate and have no need to move, then the downside risks are lessened.

"There are calls for the law on leasehold properties to be simplified to prevent home owners paying over the odds when they have to renew their lease".

It looks as though the IMF may well be planning further expansion. However only last year Gordon Brown announced a considerable expansion of it. How can this continual expansion keep going and who is liable if someone like Greece ends up not repaying the money?

A little off-beat, but those who control the volume of money..., and all that. It's been obvious for sometime that government needs to control this beast (Financial institutions). Let hope Vince is our knight in shining armour, or at least has more balls than Mandy will ever have.

Posted by markj69 str05 @ 07:20 PM 15 Comments

"Of particular concern to markets is the fact that so many homeowners in Hungary took out mortgages denominated in Swiss francs, because of the low interest rate in that currency. This means that Hungarians have to pay a lot more on their mortgages if the forint loses value against the Swiss franc. And unfortunately the Hungarian currency has fallen in recent weeks back towards the extreme levels against the Swiss franc reached during the financial crisis. This leaves markets and economists fearful that Hungarians will default on their home loans, sparking a banking crisis in the country."

House prices are faltering again, according to the latest survey from Halifax. Prices fell for the second month in a row during May as the property market continued to show signs of slowing down.

'Charles Bean raised the spectre of hyperinflation, saying it is "severely misguided" to hope that a rise in prices would help Britain out of its current predicament.'

Posted by hpwatcher @ 12:49 PM 7 Comments

Hoenig warned in April that the Fed risks inflating new asset bubbles and causing other economic distortions by keeping short-term rates at their current range of 0 to 0.25%. The Fed cut the fed funds target to its current level in December 2008 as the economy went into free fall following the collapse of Lehman Brothers. Now, after 18 months of free money and several months of economic recovery, Hoenig says the time has come for the Fed to act. He sees a two-stage process in which the Fed would first eliminate its commitment to maintain "exceptionally low levels" of the fed funds rate for an extensive period.

As manias go, this one is different. Your neighbors aren't coming up to you at cocktail parties bragging about making a killing in bonds. No one is flipping fixed income for quick profit. And no talk-radio guru is shouting that bonds will be the only investment left standing after the next financial Armageddon

Feeble attempt - via a selection of bullish estate agents - to provide a neutral summary of UK housing. Some interesting comments at the bottom on the page:- [The government] are trying to fight the natural forces of a normal market correction but history shows that government price fixing always fails. Housing transactions will not increase until prices fall and people can afford to buy them. It is up to this new government to make the decision that they will continue with the manipulation of the market or let the market heal itself through a correction. The longer they leave it the more likely people will forget it was Gordon Brown that created this mess, tick tock the clock is ticking.

If one looked at what BoE, ECB are doing, it is kind of funny to watch.

By Charles Bean, Deputy Governor of the Bank of England. Inflation figures are due out 15th June. BoE will probably have indicators on those figures when they first meet on the 9th. The decision/comments on the 10th could be interesting.

MoM = -0.4% YoY = =6.9% Average Price = £167,570

Posted by dill @ 09:16 AM 8 Comments

The average UK house price is now 9.5pc below the peak reached in October 2007, according to the latest monthly report from Nationwide Building Society, which showed that prices edged 0.5pc higher last month. Despite Britain's worst recession since the 1930s, the record low level of interest rates and a relative lack of properties for sale has fuelled a 12.2pc rebound in prices from the trough they reached in February last year. Nationwide said that the current lack of homes for sale is "still consistent with relatively stable to modestly upward trending prices."

SHOULD you fret more about inflation or deflation? Few questions matter more for investors and policymakers, yet few seem so uncertain. Financial markets are sending mixed signals. Falling yields on Treasury bonds suggest that many investors worry about economic stagnation and deflation; the soaring price of gold points to fears of runaway inflation.

He stressed that the government was no longer in a position to boost the economy through fiscal stimulus. Instead, growth would have to come from the business sector and trade. Cable said that in many cases, the most useful thing the government could do was to "get out of the way" of business.

Posted by mark @ 03:30 PM 7 Comments

"The entire American public was caught up in a belief that housing prices could not fall dramatically," said Mr Buffett "Rising property prices were a narcotic that blinded investors in all walks of life".

Posted by doomwatch @ 11:37 AM 10 Comments

Politicians should be less fixated on selling the stakes for more than the price they were bought at, according to the report, which says a quick sale could help steady the UK's finances. JP Morgan Cazenove analysts estimate the cost of funding the state's holdings in Lloyds and RBS at £3.2bn a year, and recommend the Government stave off a ratings downgrade by selling the stakes quickly.

Read the comments. Homeowners who spent their equity every year by refinancing now complain that it was the banks fault. "We were also duped into believing our properties would continue to increase in value."

At 54:00 minutes, warren buffet said rising house prices were narcotic and people thought that if buying a house you can afford is a good investment, then buying one you can't was still a good investment. If buying 1 was a good investment, people thought buying 3 were still good investment,

"I would think we are coming to a time where we could move forward with the implementation of exit strategies," Canadian Finance Minister Jim Flaherty said in Beijing on the way to Busan. French Finance Minister Christine Lagarde brushed off concern in some G20 capitals that Germany is preparing fresh belt-tightening even though its deficit, while above 5 percent of GDP, is modest by European standards.

House prices increased by 0.5% month-on-month in May, according to a report released today by the Nationwide.

"During the fastest three-year period of world economic growth for a generation, monetary policy around the world may have simply been too accommodative,'' Mervyn King, Speech to Edinburgh business Leaders, June 2006.

"Prices went up by another 0.5% in May, pushing the price of the average UK home up to £169,162 which was £15,000 more than a year ago. Annual house price inflation fell slightly last month though, from 10.5% to 9.8%. But the Nationwide said prices might keep on rising modestly as few properties were being put up for sale...."

Posted by mark wadsworth @ 07:44 AM 39 Comments

Still amazes me how people talk of a "spectre" of price falls. It's that homeowner-ism thing Mark. Boy, do we have a major issue to make people see this differently. But hey, at least the reality is spreading - and I think we'll all soon be seeing significant price falls again.

Our monetary policy targets deflation, our economy experiences inflation. Anyone else see where our esteemed central bank may have dropped the ball on this?

"Worst-hit are landlords in the commuter belt of London's suburbs." So the London-is-booming BS is finally over then?

Merryn Somerset Webb looks at what that might trigger a fall in UK house prices, and reflects on what could well be the worst financial decision she has ever made.

How much did the bank bailouts cost? Some say the taxpayer even stands to benefit when the banks are sold off. Time will tell. Add this to the balance sheet - it will cost approx £3.2bn for each year our government holds onto its stakes in the banks. There is also the risk of being exposed to the debt on banks books, not trivial given that future economic health should never be taken for granted.

Its figures for May, picked up a 20per cent increase on both cauliflowers and cucumbers. There was a 26per cent rise on a pack of mixed peppers.

Posted by mark @ 01:02 PM 7 Comments

Inflation is well above target - and well above where the Bank of England and others expected it to be not very long ago. That much we know. The big question is: should we worry? Interest rates advice being given to the BOE to raise to 3.5% by end of 2011

Second part of Martin Wolf's 6-legged analysis of the world economy

The group merged its three struggling property companies — Dubai Properties, Sama Dubai and Tatweer Dubai — in an effort to mitigate a 50 per cent fall in prices in the past 18 months.

Now, 65 years later, the corresponding retirement revolution is about to shake up our society, economy and political institutions.

Posted by matt_the_hat @ 10:33 AM 31 Comments

"Mortgage lending crept up in April compared to the previous month, according to the Bank of England. The number of mortgages approved for house purchases increased from 49,008 in March to 49,871 the following month, a rise of 2%. Meanwhile, UK consumers paid back more than they borrowed in April, with the net level of unsecured credit falling by £136m. This was the first time it had fallen since November."

More than 50 executives at housing associations – which provide council houses at taxpayers’ expense – earn more than the Prime Minister. Based on figures from last year, the highest paid executive at a housing association was John Belcher, at £391,000. He was chief executive of Anchor, which provides affordable homes for the elderly. David Cowans, at Places for People, earned £297,000.

Posted by mark @ 08:47 AM 14 Comments

This means homebuyers with a £150,000 25-year repayment mortgage will pay £790.93 a month instead of £672.93 - £118 more a month.

The housing market could suffer “small dips” in prices before the end of the year, with growth likely to slow over the coming months, according to a leading credit rating agency.

The Prince of Wales has called on housing developers to consider whether they would live in their own sites. At one housing development in Somerset he said a "mini Berlin wall" was being built between the housing areas because of problems associated with the lower-cost scheme. He said: "There are just one or two basic rules of thumb worth remembering. "First of all is: would I live in or next to the development? I keep saying to house-builders and developers, where do you live? Would you live next to, or in view of, the places you build? "Not a bad test at the end of the day." Suggest he has a go at them for extortionate prices next...

26% of landlords said they were thinking about selling their properties before CGT is increased. 71% of investment landlords said a rise in the tax would make them reconsider making future investments in property.

The Bank of Canada raised its overnight rate by a quarter-point Tuesday to 0.5%. It has become the first central bank in the Group of Seven rich industrial countries to tighten policy since the financial meltdown of 2008-2009.

.....I rarely read anyone (in here) volunteer to chip in....not Savers, not the 'investors' certainly not Boomers...(admittedly, they invented hard work and saw off Adolf and Benito and the Martians?....or was that a film) Maybe it was always this grubby – but I think we’ve really lost our way.

Posted by braindeed @ 07:54 PM 6 Comments

An excellent summary of the situation.

Posted by chrisch @ 05:26 PM 6 Comments

My view on house prices is controversial to say the least. Most people don't agree with me. In fact one kind soul went as far as to call me an idiot. But being in the minority is something I'm perfectly comfortable with. And now it's not just me who's saying house prices are about to resume their down-trend, the markets are saying so too.

Uber bear MSW's head finally loses battle with head [sense].

Posted by doomwatch @ 03:03 PM 9 Comments

From banks' liquidity crisis to sovereign crisis to currencies collapse. Are we going for a big one? "The Great Depression that started in October 1929 reached its grand finale in 1939 with the World War Two. Whether the end of the current crisis will be as dramatic time will tell. But there is very little to feel optimistic since politicians live in a state of denial and do not tackle the root cause of the current situation. Well, they are unlikely to have a clue about it."

"House prices in England and Wales are continuing to rise strongly, according to the latest figures issued by the Land Registry. Prices in April rose by another 0.2%, pushing up the annual rate of increase to 8.5%. This was the fastest rate of growth since September 2007. Meanwhile, the number of mortgage deals on offer has risen again to more than 2,000 as lenders continue the modest relaxation of their lending criteria

Posted by mark wadsworth @ 11:49 AM 30 Comments

The results, which were worse than expected, and the evidence that services firms are in no mood to expand investment plans will cast doubt on hopes that the private sector is capable of taking up the slack from the public sector as the Government starts to implement spending cuts.

Think Greece and Spain are drowning in debt? Look a little closer to home. Seven U.S. cities recently had their municipal bonds downgraded below investment grade. Their debt is now, junk, considered more worthless than that of the so-called PIIGS.

The number of job vacancies across the UK rose slightly last month, but the pay on offer fell, a report has said. Employment agency Reed said 1% more jobs were offered by firms through its service in May compared with April. At the same time, it said the average wage available declined by 3% to £31,800 in May, from £33,200. Job demand rose most in the charity and voluntary sectors, followed by marketing, public relations, legal and secretarial. Reed said about 90,000 jobs were offered though it in total last month.

One reason the house is worth so much less than the debt is because of the real estate crash. But the couple also refinanced at the height of the market, taking out cash to buy a truck they used as a contest prize for their hired animal trappers. “I stopped paying in August 2008,” said Mr. Tsiogas, who is in foreclosure on his house and two rental properties. “I told the lady at the bank, ‘I can’t afford $2,500. I can only afford $1,300.’ ”

This guy has been so wrong, so why should anyone listen to him? ''Yet the need for a long period of near-zero interest rates, if the world is to have any chance of pulling out of recession and restoring fiscal solvency, is a point many policymakers still refuse to acknowledge''

Posted by hpwatcher @ 09:12 AM 22 Comments