August 2010 Archive

Monday, August 30, 2010

40 somethings relying on boomers for their pensions

Save our Savers: Why save when you can inherit?

No doubt there will be a tirade of abuse, from one regular in particular, but this article proves the hypocrisy of many 30 and 40 year olds: Blame the boomer generation for home ownerism and everything else that's wrong yet I still have a right to an inheritance.

Posted by mr g @ 10:16 PM 31 Comments

Or they could just build more

Telegraph: Locals to be given priority in queue for council housing

Local people may receive priority over immigrants when seeking council housing, under plans for new "localism" laws to be announced by the Coalition in the autumn. Councils will be able to introduce new criteria, such as how long a person or family has lived in the local area, when deciding who is granted sought-after council houses. Housing minister Grant Shapps said the move should help boost community cohesion. In some areas, tensions have emerged after immigrants were accused of receiving council housing before local people. However, the effectiveness of the new scheme will be undermined as councils will still have to offer priority housing to the homeless, those with families and other particularly needy groups. Until now, social-housing allocation has been based entirely on need.

Posted by drewster @ 07:59 PM 3 Comments

Things Britain could do

Reuters: Singapore ramps up measures to cool property market

Singapore on Monday announced restrictions on people buying second homes as part of new measures to cool the residential property market. Other measures include decreasing the amount of loans a person can take to buy a second property to 70 percent of the property value, down from 80 percent currently. The government will also impose a stamp duty on homes that are bought and sold within three years, increasing the holding period from the current one year. The government will build 22,000 new public homes next year, up from 16,000 this year, in a bid to ensure housing remains affordable. "We've acted twice to cool the market -- once last year and once in February this year -- but prices are still rising, Prime Minister Lee Hsien Loong said. "We need to do more."

Posted by drewster @ 07:55 PM 2 Comments

No more house market booms?

Blog: Suggestions For A Sensible Housing Market

6 suggestions to the government to make the housing market more sustainable. Mortgage caps, affordability checks and more.

Posted by neil @ 01:26 PM 0 Comments

Government shake up of house price indices

The Inside Edge: Government shake up of house price indices

The UK Government has just announced that it has asked the Office of National Statistics to investigate the coherence and comparability of house price indices. Tax payers are currently funding two indices, produced by the Department of Communities and Local Government (DCLG) and the Land Registry. Add in the indices produced by the RICS, major estate agents, property portals and building societies and you can begin to see why the general public gets confused as to the state of the market.

Posted by james @ 10:26 AM 0 Comments

Slow death of HPI? - props gradually being kicked away...

Telegraph: Bank plans to cap risky mortgages

Mortgage lending would be “capped” to stop borrowers taking out risky loans under radical Bank of England plans to prevent a repeat of the credit crisis, a senior official has disclosed.

Posted by tyrellcorporation @ 10:06 AM 37 Comments

Larry Elliot

The Guardian: House prices have nowhere to go but down

Only a mug bets against rising house prices in Britain. This is a small island that has a rising population, tight planning controls and a tax system that favours property. Demand tends to run well ahead of supply, and that means bricks and mortar always seems a good investment.

Posted by cass @ 08:42 AM 0 Comments

Past "Return to Normal", now moving to "Fear"

Bloomberg: U.K. House Prices Drop the Most in 16 Months, Hometrack Says

U.K. home values dropped in August by the most in 16 months as the housing market endured a “modest re-pricing” that is likely to last as long as a year, Hometrack Ltd. said.

Posted by estrader @ 08:10 AM 8 Comments

Top-end UK house prices falling fastest

ArabianMoney: Top-end UK house prices start to crash

Far from being immune to recession it is the top-end UK houses that are suffering most as the second wave of the UK house price downturn begins.Estate agents report that high street banks are cutting valuations on one-million-pound-plus properties by up to 25 per cent. This is known in the real estate trade as the curse of downward valuations.

Posted by peter cooper @ 07:58 AM 0 Comments

'Sharp fall' in first time buyers

BBC news: 'Sharp fall' in first time buyers

The number of people trying to purchase their first home has fallen sharply in the past year, a report suggests.

Posted by grazinho @ 12:52 AM 9 Comments

Sunday, August 29, 2010

Not sounding good!

Uk column: Surviving the perfect storm

Let's make no bones about it, we are in a deep, deep hole. Once further Quantitative Easing (money printing) is brought into the equation (as it already has been in the USA), and the imminent European banking collapse, one has to wonder how we will ever get ourselves out of this mess? I think it is no exaggeration to say upfront that people are going to die as the effects of the strategy of austerity and debt upon debt begin to bite.

Posted by happy mondays @ 03:20 PM 20 Comments

Time to leave the country

Guardian: Young adults may have to wait until middle age to buy their first home

Today's young adults will have to wait until middle age to buy their first home if they stay single, according to new research that makes depressing reading for anyone not yet on the housing ladder. A survey for the National Housing Federation which represents England's housing associations, predicts that in some regions the average 21-year-old will not buy their first home until they are in their 50s. The survey, conducted by consultancy firm Oxford Economics, highlights the scale of the housing crisis. It suggests that the average, single young adult may only be given the keys to their own place when they hit 43 – providing that they have had no children and have saved a lot of money over the previous two decades. For those wanting to buy in London, the average age rises to 52.

Posted by drewster @ 03:17 PM 17 Comments

Hindenburg Omen for stocks also bad for house prices

ArabianMoney: Third Hindenburg Omen

House prices look set to dive as global stock markets revisit the crash of 2008 this autumn, The Hindenburg Omen first sighted in the charts on August 12th has just been confirmed for a third time.

Posted by peter cooper @ 07:19 AM 4 Comments

Saturday, August 28, 2010

The Blairs buy their ninth home. Does anyone still wonder why Labour did nothing to stop the bubble?

Telegraph: Blair home number nine: £1m house for student daughter

The former prime minister and his wife have paid £975,000 in cash for a maisonette in west London for their 22-year-old daughter Kathryn, bringing the family property portfolio to nine homes.

Posted by neil p @ 07:57 PM 2 Comments

Interesting article on house prices

Daily Telegraph: House Prices: Has high-speed rail hijacked your home?

An article on the effects of the High Speed 2 train link passing through the Chilterns.

Posted by cp @ 03:32 PM 0 Comments

Nimby heaven

Citywire: House building and the disastrous impact of 'Big Society'

This week, SmartNewHomes – which lists 85% of all new builds – took the opportunity to point out that the number of new homes added to the database has, for the second consecutive month, reached a record low, and to point the finger at Communities and Local Government Secretary Eric Pickles and his Government’s proposed changes to planning law. The Coalition’s policy on housebuilding is – certainly – not only ambiguous, it’s also, for the time being, missing. While the cost of development land is rising (up 20% on the year, according to Knight Frank), developers face radical changes in the system that risk making building on the plots much more difficult.

Posted by quiet guy @ 03:06 PM 8 Comments

UK Monetary policy options

Reuters: How the BoE could loosen monetary policy

The Bank of England considered easing monetary policy at its last two rate-setting meetings, but with interest rates already at 0.5 percent its standard option for reducing borrowing costs is of limited use. While most economists polled by Reuters believe the BoE's next move will be a rise in interest rates rather than policy loosening, a growing number are considering the options open to the central bank if the economic outlook darkens.

Posted by quiet guy @ 02:58 PM 5 Comments

Paint your property platinum

FT: Prime property prices fell in August

Prime platinum properties. Bet you've never heard that expression before. Where would we be without the EAs creativity? Still in the base metal ages? Let's hope the housing alchemists have had their day.

Posted by letthemfall @ 10:16 AM 6 Comments

VIs complain about accurate house valuations

Scotsman: Experts call for reform of home reports after house prices tumble

Bleating article moaning about the fact that most mortgage lenders in Scotland are no longer accepting the seller's valuation at face value, and are instead insisting on an independent valuation, which surprise surprise tends to be lower. Author tries to construe this as a bad thing, as not accepting fraudulent valuations is causing house prices to tumble. Such backwards logic.

Posted by little professor @ 01:18 AM 0 Comments

Friday, August 27, 2010

Buckets of rose tinted memories and luke warm wishes

NY Times: Housing Fades as a Means to Build Wealth, Analysts Say

Many real estate experts now believe that home ownership will never again yield rewards like those enjoyed in the second half of the 20th century, when houses not only provided shelter but also a plump nest egg. Wealth generated by housing in those decades, particularly on the coasts, assured the owners a comfortable retirement, powered the economy, paid for childrens education, kept cruise ships and golf courses full and the restaurants humming. Now many economists are saying that housing values will only keep up with inflation and although a home will return the money an owner puts in each month it will not multiply the investment.

Posted by enuii @ 09:31 PM 2 Comments

I wonder what “unconventional” steps are?

FT: Fed stands by to boost US growth

'Ben Bernanke, Federal Reserve chairman, said on Friday that weaker-than-expected consumer spending growth and a “depressed” housing market had slowed the pace of the US recovery and promised that the central bank was ready to take “unconventional” steps to stimulate the economy if needed. In a speech at a gathering of central bankers in Jackson Hole, Wyoming, Mr Bernanke acknowledged that the pace of economic growth had been “less vigorous” than the Fed was expecting and that the pace of the labour market’s recovery had been “painfully” slow.'

Posted by hpwatcher @ 05:55 PM 8 Comments

The case against homeownership CNN: From across the pond

Homeownership has let us down. For generations, Americans believed that owning a home was an axiomatic good. Our political leaders hammered home the point. Franklin Roosevelt held that a country of homeowners was "unconquerable." Homeownership could even, in the words of George H.W. Bush's Secretary of Housing and Urban Development (HUD), Jack Kemp, "save babies, save children, save families and save America."

Posted by debtfree @ 05:34 PM 5 Comments

Commercial property Ponzi scheme unwinding

Real Estate: Blackstone investors claw back real estate fees

Private-equity firm returns $3 million in performance fees and may pay back nearly $16 million more amid the commercial property slump... Blackstone's property buyout funds recorded performance fees totaling $1.74 billion, some of which was allocated to the firm's partners, as the market for office towers, hotels and apartments soared from 2004 to 2007. Prices have slumped about 39% since then, leaving New York-based Blackstone and its rivals in a position similar to that of venture capital firms about a decade ago, when the collapse of technology stocks forced them to return profits earned on Internet companies during the 1990s. “The acute situation for clawbacks is when you have had a very successful period of gains and then the remaining deals don't do well,” said Michael Harrell.

Posted by mark wadsworth @ 04:17 PM 0 Comments

Are these the ones that are gonna lose there jobs next year!

Guardian: Average house price in England and Wales rises to £166,798

"Thousands of would-be buyers are waiting for the finance to grasp the first rung on the property ladder, and unlocking this demand is crucial to the market's recovery,"

Posted by jonboy @ 02:10 PM 1 Comments

More for sale boards going up

FT: Monthly house sales finally increase, Agency Express

Monthly house sales in August increased 0.9 per cent compared to the previous month, reversing the previous two months trend of declining house sales. Monthly house sales were up 6.2 per cent compared to August 2009 and by 50.7 per cent against August 2008, data from the latest monthly Agency Express property activity index has shown. The number of properties being put up for sale increased slightly in August by 0.5 per cent and by 47.5 per cent compared to August 2009.

Posted by jack c @ 02:04 PM 0 Comments

Interesting list of cutbacks

Yahoo / reuters: Signs of the times: Austerity bites across the UK

Britain's new coalition government has vowed to slash spending in a bid to drive down its deficit. a summary of other developments from around the country showing how the cuts are being felt and dealt with:

Posted by mark @ 02:03 PM 2 Comments

Bounce engineered by Gordon Brown did not arrive in time to put him back in no. 10

Telegraph: UK economy grows at fastest pace in nine years

''The Office for National Statistics (ONS) on Friday said gross domestic product grew at 1.2pc between April and June, unexpectedly upgrading its previous estimate of 1.1pc. ''

Posted by hpwatcher @ 01:04 PM 2 Comments

Yes easing = falling

BBC News: House price inflation easing off, Land Registry shows

At least they have more of a bear slant to this article, most of the MSN will try and spin this!

Posted by darren @ 01:02 PM 0 Comments

This Is Money Analyses House Prices

This Is Money: House prices: What next?

I've seen this posted before but it appears to get updated quite regularly so it's like a running commentary of the last few years. Very informative for anyone thinking of buying, with lots of lovely bear food such as: "Property remains overvalued and until it slips back into more affordable territory, the economy will remain hamstrung by the property market and buying a house will continue to be a gamble." and "The property market is precariously balanced. On a fundamental level prices should not be rising with the problems that remain in the economy. Buyers tempted to break the bank should bear this in mind and ensure they can take the hit of future interest rate rises." ....if only this was mainstream media!

Posted by hash browne @ 12:44 PM 6 Comments

Summer of '06 all over again for house prices in England and Wales

Upmystreet: House prices return to 2006 levels

Apparently HPI is cancelled, the sun is shining and it's free money for all - on planet upmystreet anyway. Sorry if it's been posted already I got the link in junk mail this morning. WTF?

Posted by montesquieu @ 12:37 PM 0 Comments

As the BEEB would say: House Price Inflation 'Easing'

Land Registry - July 2010 HPI: Monthly Change 0.4%, Annual Change 6.7%

I really believe London should have its own HPI. Looking at these stats, the huge prices paid in the capital clearly skew the figures massively. Anyway, looks like the falls are starting in the North of England first, perhaps where there are more public sector workers??

Posted by hash browne @ 12:16 PM 13 Comments

Some bear food.

The Independent: Autumn of discontent: The selling season has arrived but will anyone be buying?

Top Tips For Sellers: Ensure you have twigs in a vase.

Posted by dazza @ 11:46 AM 0 Comments

U.S. Home Sales Forecast 2010 to 2020

The Market Oracle: U.S. New Home Sales Housing Market Forecast 2010 to 2020

A bubble is like if you have a flat pond, and you throw a pebble in. First there is an “up” wave; that you can ride (if you are smart or lucky); then there is a “down” wave, and the size and the shape of the down that follows the up is predicated by the size and the shape of the preceding up.

Posted by nadeem walayat @ 11:45 AM 0 Comments

Time to raise Interest Rates?

Sky: Economic Growth Stronger Than Thought

The UK economy grew by 1.2% between April and June, slightly more than previously estimated, official figures show.

Posted by alan @ 11:13 AM 1 Comments

Fewer buyers, more renters

FT Adviser: Lack of mortgage finance means buoyant rentals

Increased tenant demand and a shortage of properties pushed rents higher in the April to June quarter, according to the Royal Institution of Chartered Surveyors (Rics). Continued difficulty in securing mortgage finance, worries over a double dip in housing and large deposits required by lenders led to higher numbers renting rather than buying, according to Rics' quarterly residential lettings survey. For the second consecutive quarter, lettings demand rose at a pace above the long-run average. Some 26% more chartered surveyors reported a rise in demand for property rather than a fall. Although tenant demand increased across all regions, it was strongest in London and the East of England.

Posted by drewster @ 11:01 AM 0 Comments

More people looking, fewer buying

Daily Mail: Property website Rightmove reports surge in homebuyer interest

The UK housing market may be showing fresh signs of growth after an online property website recorded a huge increase in interest over the last six months. Rightmove, the UK’s largest property website, has reported a surge in interest from homebuyers in the first half of 2010. The website, which allows people to search for properties and house value information on its free service, saw a 22 per cent increase in traffic in the last six months. However, there is concern that actual transactions are remaining subdued, with lending figures earlier this week showing the number of home loans approved for house purchase dropping for the second month in a row in July.

Posted by drewster @ 10:59 AM 3 Comments

If you work in the public sector dont bother applying

Bloomberg: House prices face cameron chopping block

“It was going to be hard enough to save the money for a deposit,” he said. “But now, if you go to the bank to ask about a mortgage and you tell them you’re in the public sector, they make you understand that it just isn’t worth it.”

Posted by jonboy @ 08:52 AM 12 Comments

UK rental yields far to low to justify valuations

ArabianMoney: European and UK housing rental yields absurdly low

Who would be a landlord in the UK or continental Europe? Rental yields are absurdly low and not enough to cover long-term maintenance and property taxes, let alone a mortgage.

Posted by peter cooper @ 08:04 AM 1 Comments

Deflation Delusion Continues as Economies Trend Towards High Inflation

The Market Oracle: Deflation Delusion Continues as Economies Trend Towards High Inflation

Delusional deflationist right from the Bank of England MPC, to the mainstream press for well over a year have pushed the mantra of ongoing debt deleveraging deflation everywhere, everywhere that is than appears in where it counts i.e. the actual INFLATION indices, where inflation is on the rise right across the world as illustrated in the UK by the persistent failure of the Bank of England to control UK inflation that remains above the banks CPI 3% upper limit. Even Greece that really is in an depression is experiencing inflation at above 3%, whilst the US CPI continues to inflate at a more modest 1.2%.

Posted by nadeem walayat @ 03:25 AM 1 Comments

Homeownerism: the force is still strong

Guardian: Property props up UK spending

"There is one common thread that runs through these crippled economies, and it relates to property. While the UK suffered the after-effects of a massive house price bubble, it avoided the triple whammy the US, Ireland and Spain went through. Not only did they allow house prices to rip, but also fostered a massive building boom and widespread fraudulent buying and lending. Now they are left with hundreds of thousands of empty homes that depress prices and rob consumers of the springboard for spending – property wealth. There are obvious long-term benefits with lower house prices, especially for the young, but in the short term the situation only adds to economic woes."

Posted by quiet guy @ 12:05 AM 10 Comments

Thursday, August 26, 2010

The way of the Great Recovereh!

Insolvency News: 140 debtors apply for IVAs every day

Official figures show that 140 people applied for an individual voluntary arrangement (IVA) every day during the second quarter of 2010, as struggling borrowers took action over their debts. Statistics from the Insolvency Service show that the number of IVAs agreed in the second quarter was up around 10 per cent on the same period in 2009, and a slight increase from the previous quarter. Steven Law, president of insolvency trade body R3, said: "Unfortunately, the personal insolvency figures are just the tip of the debt iceberg. The true size of the UK’s debt problem remains hidden as insolvency industry estimates there are an additional 500,000 people currently in informal debt management plans and close to a million people are struggling with their debts and have not yet sought help."

Posted by novice pete @ 11:56 PM 0 Comments

Guess how many new homes sold in the US this July at >$750k

Do the rating agencies have too much trust & influence?

The Guardian: We shouldn't give ratings agencies too much respect

Forget mistresses or dodgy donors: the prospect that really strikes a chill into the heart of European political leaders is a downgrade of their country's credit rating.

Posted by rental john @ 03:35 PM 0 Comments

Article from May, but relevant to Irish downgrade

Euractiv: Barnier to pin credit rating agencies under EU thumb

EU Internal Market Commissioner Michel Barnier has told EU finance ministers today (18 May) how he plans to put credit rating agencies under the thumb of an EU agency, blaming the uncertainty in financial markets on the downgraded ratings of Greek and Portuguese debt.

Posted by rental john @ 03:19 PM 0 Comments

And the answer is...

City AM: Why are the Irish banks still in such a mess?

The article is well worth a read and concludes thusly: "What is most startling in Honohan’s report is his refusal to blame the international financial crisis for Ireland’s problems. It would have happened anyway, the straight-talking central banker says, and the collapse of Lehman Brothers in autumn 2008 only exacerbated the Irish banks’ funding problems. The end of Honohon’s report sums up this chapter in Ireland’s history: “The Celtic Tiger period represented a solid convergence of Ireland to the frontier. But it ended in 2000, to be succeeded by an old-fashioned property bubble.” At least its central bank governor is under no delusion of what caused the crisis. It took a decade to grow, it may take a decade to unwind."

Posted by mark wadsworth @ 10:47 AM 5 Comments

Honest we don't have any bad debts trust me I am a bank

Telegraph: UK bank accounting rules 'fatally flawed', warns influential watchdog

The City veteran has argued that applied to banks, the standards “produced false profits and overstated capital” which have “misled creditors, misled shareholders, the Bank of England, FSA and others”. In a devastating assessment, Mr Bush alleges the regulations, and specifically the way they have been implemented in the UK and Ireland, have led to “mistakes [being made] of such severity that it is difficult to overstate”.

Posted by mark @ 10:40 AM 2 Comments

NOT related to HPC but good news I am sure

Telegraph: Councils told to remove 'street clutter'

Mr Pickles said: ''Our streets are losing their English character. We are being overrun by scruffy signs, bossy bollards, patchwork paving and railed off roads - wasting taxpayers' money that could be better spent on fixing potholes or keeping council tax down. We need to 'cut the clutter'. In 2006 a survey by the Hampshire section of the CPRE of a seven-mile section of the B3006 in the South Downs National Park revealed an average of 45 signs per mile.

Posted by mark @ 10:37 AM 11 Comments

But experts warn that the bubble could burst all too easily

Guardian: How long will gold remain the golden goose for investors?

Predicting the price of gold can trick even governments into making mistakes. Gordon Brown famously lost out by selling large chunks of the UK's gold reserve between 1999 and 2002, getting a lowly price of between $250 and $300 an ounce – making his decision to sell a costly one. But investors with the Midas touch have made a fortune in recent years. "Currently you can drive a bus through where experts believe inflation will be, but there are enough in the deflationary camp at this point of time, which will impact on the value of gold as the price will fall if we have deflation."

Posted by mark @ 10:34 AM 32 Comments

Wednesday, August 25, 2010

Irish Credit Rating Downgraded

Daily Mail: Irish fury at 'flawed' credit rating blow

S&P downgrades Irelands credit rating as it estimates that they may have to shell out up to Euro50bn (£41bn) to shore up a banking system that came close to collapse in 2008. The sum is equivalent to half of the Republic's annual economic output.

Posted by enuii @ 10:34 PM 8 Comments


Fortune: Debt crisis just beginning, Morgan Stanley says

This spring's bond market tussle in Europe was just a warm-up, Morgan Stanley says. The investment bank warns in a report Wednesday that the sovereign debt crisis is far from over -- and won't end till deeply indebted rich country governments give holders of their bonds a good soaking.

Posted by mark @ 07:38 PM 2 Comments

More bear food from across the pond

Bloomberg: Sales of U.S. New Homes Dropped to Record Low in July

Sales of U.S. new homes unexpectedly dropped in July to the lowest level on record, signaling that even with cheaper prices and reduced borrowing costs the housing market is retreating. Purchases fell 12 percent from June to an annual pace of 276,000, the weakest since data began in 1963, figures from the Commerce Department showed today in Washington. The median price of $204,000 was the lowest since late 2003.

Posted by jack c @ 05:47 PM 1 Comments

Buyer of 230 properties describes Ze atonomy of a bubble chart

BBC 5 Live: 2 hrs of house price discussions

this is one part (part 5) of a seven parter. the first couple of parts are a "discussion" between jd an peter bolton estate agent. all the parts are at : this part is where dave - explains to stephen nolan that rather than being told what to do you should have used that thing between your ears. 1.45in. i listened to the whole thing - lots of people telling stories of how well they did during the dcb. dave explains the dcb. will post the embedded you tube below. btw saw this on the forum. aired aug 10th.

Posted by techieman @ 04:42 PM 16 Comments

UK first-time-buyers flock to Australia (in their dreams)

FT: UK first-time-buyers flock to Australia

One in four UK first-time-buyers are considering buying property overseas and 70 per cent have abandoned plans to buy UK property due to high prices. Australia topped the list of most popular destinations for first-time-buyers, data from Moneycorp’s third biennial report has shown. Some 86 per cent of buyers expected to get more for their money overseas, according to Moneycorp. Moneycorp said with a strong currency and prosperous economy, alongside good value for money, Australia proves to be the best investment opportunity for first-time buyers.

Posted by jack c @ 03:28 PM 27 Comments

Won't somebody think of the children!

Guardian: This government is rapidly demolishing the housing industry

Eric Pickles MP has scrapped regional house-building targets. Result? Hundreds of house-building projects delayed or scrapped, with tens of thousands of planned homes shelved. The consequences for construction workers, 4.5 million people on town hall waiting lists for social housing, and young couples anxious to get on the housing ladder, don't bear thinking about.

Posted by drewster @ 03:08 PM 40 Comments

Councils vote in favour of squashing people into tiny shoeboxes

BBC News: Impact of scrapped housing scheme for Somerset

Labour's old "regional spatial strategy", was particularly controversial in the Somerset area. It looked at the region's growing population and predicted how many new homes would need to be built. But local councils in the area argued that they did not need to build so many homes. So they welcomed the decision by Eric Pickles, the Secretary of State for Communities and Local Government, to scrap the targets. He said planning decisions should be made at a local level and handed the responsibility back to local councillors - elected people who know their neighbourhoods. The charity Shelter is very concerned that there isn't currently enough affordable housing here in the south west, and think the situation can only get worse, unless people put pressure on their councils to build more homes.

Posted by drewster @ 03:04 PM 2 Comments

The USA: even more insanely Home-Owner-Ist than the UK...

IFA Online: Gross warns mortgage privatisation could 'cripple' US recovery

Pimco’s Bill Gross says there will be no housing-led recovery in the US without Government support... "Ninety-five percent of existing mortgage creation over the past 12 months were government-guaranteed. The private market was nowhere to be found because they charged too much," he says. "Having grown accustomed to a housing market aided and abetted by Uncle Sam, the habit cannot be broken by going cold turkey into the camp of private lending. The cost would be enormous in terms of yields - 300-400bp higher than currently offered, crippling any hopes of a housing-led revival to the economy." Instead, Gross proposes the Government remains involved in mortgage provisions, by combing all housing agencies into one body. "Taxpayers would be protected through tight regulation [etc]"

Posted by mark wadsworth @ 11:11 AM 11 Comments

Ireland suffers ratings downgrade

BBC News: Ireland suffers ratings downgrade

The Irish Republic has had its credit rating downgraded by a leading ratings agency, Standard and Poor's (S&P). S&P fears that the growing cost of propping up the country's banks will further weaken the government's finances. It now thinks that the Irish government will spend 90bn euros ($101bn; £74bn) helping the banks, 10bn euros higher than previous estimates. The country's own debt agency described the analysis as "flawed".

Posted by cat and canary @ 08:53 AM 25 Comments

More spin than Alastair Campbell playing cricket

Evening Standard: Increase in central London properties for sale ‘healthy’ for housing market

The number of properties for sale in central London has increased by 28% over the last six months. While there is still a shortage of property on the market, the number of buyers to properties decreased from 14 people per property in March to 11 this month. Marsh & Parsons estate agents, which researched the trend, welcomed the “healthy development”, saying: “Last year, we saw galloping house prices in the capital, underpinned by a severe shortage of properties. “Buyer demand is still as strong, but there is now a greater balance between supply and demand. This will encourage more activity market and see prices rise at a more sustainable pace.”

Posted by drewster @ 01:07 AM 4 Comments

Tuesday, August 24, 2010

A dangerous spiral?

Money Hospital: Payday loans: helpful tool, or hopeless financial trap?

According to research by Consumer Focus, the national consumer rights watchdog, there are now four times as many payday loans being taken out today than there were in 2006.

Posted by mr g @ 06:11 PM 7 Comments

Dow dips below 10,000

Guardian: US home sales in record July slump

The Dow Jones industrial average fell through the psychologically important 10,000 level and the FTSE 100 was also down sharply as global markets were rattled by news that sales of previously owned US homes dropped by a record 27.2% last month.

Posted by mken @ 06:09 PM 4 Comments

Ground Control to Uncle Tom

Pragmatic Capitalist: Myth of the great bond bubble

UT apologies for the weak Bowie pun but you recently described the attached artivel as "Tripe" when I led it as supporting the proposition that bond yields signal deflation and not a bubble. UT if you pick up on this could you make some specific arguments re the article. As general observation I have yet to see a convincing explaination as to how infl will happen, beyond the vaguest of references to QE. There seem to be 2 major obstacles to inflation (1) however we look to devalue our currency everyone is at so it must becomes nil sum - inflation is, if nothing else, a relative phenomenon (2) how would a surfiet of £/$ get into the system, usually this would be via wage spiral as in the 1970's but that is not happening. People are just glad to stay emp and suck it up.

Posted by bellwether @ 05:02 PM 7 Comments

Government steps in to reduce mortgage affordability?

Telegraph: Northern Rock admits 'systems error'

I've been watching from the shadows for about a year now but thought I should get more involved. Particularly as I sense a real shift in public sentiment and am struggling to keep a broadening smile off my face.

Posted by o'really @ 04:04 PM 0 Comments

Bear now on fourth helping

Telegraph: Mortgage approvals fall again

Mortgage lending remained subdued during July as the housing market failed to pick up, new figures show. Net lending by the major banks fell to £2bn in July, its second lowest level since February 2001, according to the British Bankers' Association...The market also showed little sign of picking up, with the number of mortgages approved for house purchase dropping for the second month in a row. A total of 33,698 loans were in the pipeline for people moving home, 2.5pc fewer than in June, and well down on the recent high of 45,415 reached in December. Ed Stansfield of Capital Economics said... "It is hard to see what might give a boost to mortgage lending in the near term."

Posted by mark wadsworth @ 03:31 PM 4 Comments

More Bear food (this time from across the Pond)

Bloomberg: Sales of U.S. Existing Homes Fell in July to 3.83 Million Rate

Sales of U.S. previously owned homes slumped more than forecast in July and the number of unsold houses swelled, evidence the market is depressed by foreclosures and limited job growth. Purchases of existing homes plunged 27.2 percent to a 3.83 million annual rate, figures from the National Association of Realtors showed today in Washington. The pace compares with the median forecast of a 4.65 million rate, according to a Bloomberg News survey.

Posted by jack c @ 03:21 PM 11 Comments

What does Radical Britain mean for house prices

ArabianMoney: What does Radical Britain mean for investors

The West’s most daring government is how The Economist describes Britain under Prime Minister David Cameron. There is a radical agenda to address the debt and public spending deficit, arguably the most vigorous dose of classical economics about to be given to any major economy. But what will this mean for asset prices? It is not good news.

Posted by peter cooper @ 02:57 PM 0 Comments

Another serving of bear food

Evening Standard: House price hopes dashed by mortgage approval slide

Another rehash of that press release "Hopes of a sustained recovery in house prices faded today after another slide in mortgage lending. UK banks approved 33,698 mortgages in July, down from 34,575 in June, the British Bankers' Association said. It was the second consecutive monthly fall and went some way to explaining why house prices have stagnated during the summer. A flood of properties coming onto the market at a time of weak demand has also taken its toll. George Buckley, chief UK economist at Deutsche Bank, said: “The housing market is moving sideways at the moment. Unless there is a pick up in mortgage lending, there will be no pick up in house prices. You need to see some rise in lending in order to produce a recovery in house prices and that is not forthcoming at the moment.”

Posted by mark wadsworth @ 01:26 PM 20 Comments

Out of touch with reality

Telegraph: 'I know plenty of people who get by on £25,000'

The following statement really gets up my nose: "At the same time I started looking for a second home so that eventually I can let my house in Primrose Hill for a rental income. Right now it would bring in about £60,000-£70,000 a year and that will do me just fine – I know plenty of people getting by on £25,000 a year." Pompous tw*t.

Posted by mr g @ 01:10 PM 15 Comments

VI "Quarterly landlord sentiment survey"

FT: CGT rise drives landlords from BTL market

Just 42 per cent of landlords think now is a good time to invest, dropping from 48 per cent three months ago, data from the quarterly landlord sentiment survey by LSL Property Services has shown. The introduction of a higher capital gains tax (CGT) is a driving factor behind this, LSL claimed.

Posted by jack c @ 10:47 AM 15 Comments

Bear food

BBC: Subdued mortgage market continues say banks

The mortgage market continued its summer slide with a fall in the number of new home loans approved by High Street banks. There were 33,698 mortgages approved for house purchases in July, down by 877 from the previous month, the British Bankers' Association said. This was the second monthly fall in a row, and compared with the high of 45,415 home loan approvals in December.

Posted by mark wadsworth @ 10:20 AM 4 Comments

During BoE private moments, the theme is inflation and interest rate supression

FT AV / BoE: The BoE behind closed doors – surprisingly philosophical (summarised in the FT AV article). Also posted here for discussion:

Posted by easybetman @ 10:19 AM 2 Comments

Bear trap or bull trap?

Independent: Housebuilders could yet be stock market stars

Outlook: Ursine investors might be missing a trick. The shares of nearly every housebuilder trade at sharp discounts to their net asset values at the moment. Yesterday the market marked down shares in Bovis Homes, despite the company's return to profit, resumption of dividend payments and the way it has been able to run around adding to its land bank at some very attractive prices. Sentiment is all, in the current market, and sentiment towards housebuilders is rotten. But it is worth noting that Britain continues to suffer from a housing shortage, particularly in the South East. At current levels, housebuilders' shares could prove to be extraordinarily cheap.

Posted by drewster @ 09:52 AM 0 Comments

Andy Burnham wants LVT


The Shadow Health Secretary, one of five candidates to succeed Gordon Brown as Labour leader, proposed new levies on land values and family assets to raise more cash to repay the Treasury’s debts.

Posted by micasasucasa @ 07:22 AM 25 Comments

Going down...

Scotsman: Housing market revival grinds to a halt

A REVIVAL in the Scottish housing market has ground to a halt according to new figures released today, fuelling fears that Scotland could be sliding back into recession. The quarterly Lloyds TSB Scottish House Price Monitor shows that the average house dropped in price by almost 3 per cent in the three months to 31 July.

Posted by little professor @ 12:30 AM 6 Comments

Monday, August 23, 2010

From the horse's mouth

Evening Standard: Bovis back in the black but warns recovery is fragile

Bovis Homes returned to profit today but warned that government austerity measures have left the housing market in a “fragile” state. It said it will reinstate its dividend at the end of the year so long as the market does not go back into reverse, having last made a payment in 2007. It said first-time buyers in particular are struggling to get mortgages. Last month Bovis struck a deal with Barclays to provide 90% loan-to-value mortgages to its buyers. Bovis bought 1,874 plots of land with planning permission for £107 million in the first half in a bid to boost future profits even if the market remains subdued. “We're not suggesting that house prices will rise, we're suggesting there is an opportunity to buy land today at current prices and make strong returns.”

Posted by drewster @ 09:37 PM 0 Comments

Don't worry, rising house prices will inflate away the debt

Daily Fail: Super-long mortgages have sting in the tail

They are billed as a painless new way to spread the cost of buying a home. But experts warn the introduction of 40-year mortgage terms may end up almost doubling your debts - and leave you struggling to pay the bills well into your 70s. A host of lenders have ditched the old rule that mortgage terms are set for a standard 25 years and must be cleared by the normal retirement age. Now, Halifax, HSBC, First Direct and ING Direct all let borrowers keep their mortgages running for another decade and a half. Taking a typical £125,000 repayment mortgage for 25 years will cost £695 a month at a decent 4.5 per cent interest rate, for example. But you have to find just £562 if you extend the mortgage term to 40 years. The saving is likely to be attractive to younger, first-time buyers.

Posted by drewster @ 09:27 PM 7 Comments

More hoops than you would want to jump through (the first being a plot of land)

Shropshire Council: Affordable homes - Single Plot Exception

An article in my local community monthly booklet highlighted the Single Plot Exception rules, and procedures to follow. So looked up the information on local council website. After reading it I was no more enlightened....please can any one help explain? I can't get over the fact (not mentioned by the way) that you would need to find (and I guess purchase) a plot of land that in the beginning will not have planning permission, then you have to jump through a lot of hoops to be able to build your 100sqm or less 'affordable' home....with a -% peg on future price.....erm, am I the only one to be puzzled?

Posted by rental john @ 07:51 PM 0 Comments

Mortgage rates may climb to 14 per cent within two years, financial experts have warned

Telegraph: Mortgage rates may hit 14pc within two years

It would be the first time that mortgage rates have reached this level since the recession of the 1990s.

Posted by mark @ 07:32 PM 13 Comments

Original title is just fine

Real Clear Politics: The Homeownership Fetish

So this article is about the US but a lot of the points still apply. "We let a sensible goal become a foolish fetish. Not everyone can become a homeowner. Some are too young and footloose; some are too old and dependent; some are too poor or irresponsible. Some don't want a home. Even with these gaps, homeownership is virtually universal among the middle-aged middle class: almost three-quarters of Americans aged 45 to 54 and four-fifths aged 55 to 64."

Posted by mnorman @ 11:24 AM 16 Comments


This is Money: Interest rates may reach 8% by 2012

Leading economic think-tank believes interest rates will need to rise to 8% by 2012 to curb runaway inflation. Average mortgage payments will rise by £900 a month.

Posted by will @ 11:06 AM 34 Comments

This is how councils waste money, hire someone to fire others!

Yahoo / telegraph: Row over council's £110,000 director

A row has broken out at a county council after its chief executive hired an "improvement director" on a £110,000 annual salary just days after announcing 3,000 job cuts. Nottinghamshire County Council opposition leader Alan Rhodes is at loggerheads with chief executive Mick Burrows after he appointed Greg Michael, a former managing director of DHL in Denmark, to the newly created role. Cllr Rhodes said he failed to see why the appointment designed to oversee the jobs cuts

Posted by mark @ 10:49 AM 7 Comments

Forever blowing bubbles

Cnn: 5 investing bubbles

Even after multiple crashes, investors still tend to pile into overheated sectors. Where are the biggest risks today?

Posted by mark @ 10:24 AM 8 Comments

Waking up and smelling the coffee

Telegraph: Confidence takes an austerity knock

Confidence in the economy is waning among businesses and households, suggesting the economy will slow in the second half of the year as the Coalition's austerity measures begin to bite. Some 86pc of respondents to the Markit/YouGov Household Finance Index expect the cost of living to rise in the next 12 months, a record high. At the same time, there has been the sharpest drop in confidence in job security in the private sector for 13 months, "suggesting the impact of Government spending cuts has reverberated beyond the public sector", the report said. Respondents also estimated that the value of their properties fell in August, as the research scored its lowest reading for 13 months.

Posted by wanderinman @ 10:09 AM 0 Comments

And this is news because..?

BBC: Household finances under strain

"Household finances came under pressure on all fronts in August, according to market researchers Markit and YouGov. Their survey of 2,000 households showed people were increasingly worried about losing their jobs and higher costs of living. The Household Finance Index suggests individuals are feeling few benefits from the growing economy. Some 30% of polled households said their finances had worsened, compared to 6% who said they had improved." Isn't this the whole point of Home-Owner-Ism, to get people to load up with huge debts that they can barely repay?

Posted by mark wadsworth @ 10:06 AM 2 Comments

Groundhog day

Telegraph: New 'debt boom' fears as banks offer 'more generous credit card deals'

Despite warnings of a potential double dip recession, banks are presenting struggling customers with offers of cheaper debt than they made available before the 2007 economic crash. Experts warned that Britain could face a new “credit card boom” leaving families heavily in debt as they borrow to make ends meet and struggle to pay off the money.

Posted by flintster1994 @ 07:58 AM 29 Comments

Bearish news from Diana's paper


I know it this story has been posted before, but its on the front page of this property ramping rag!

Posted by darren @ 12:59 AM 1 Comments

Sunday, August 22, 2010

Well, he looked after our money OK didn't he?

Daily Mail: Blair setsup Mayfair 'bank' to act as dealmaker for the super-rich

Article covers his new bank for the rich mates he met while doing business as UK PM. Also goes into his new autobiog in which he writes about the Iraq adventure and speaks glowingly about Mad King George's strength (sic) courage (sic) and conviction and says he sees George as a highly intelligent (sic) and visionary friend (sick). I

Posted by icarus @ 07:09 PM 4 Comments

Smith Java Star

Mortgage Lenders: Mortgage Lenders

What the broker didn’t explain, Kerrie Russo says, is that this was a “negative amortization” loan — an expanding debt that buried the couple deeper in hock even as they thought they were paying down their mortgage balance. Like many borrowers who were sold mortgages they couldn’t afford, Russo says that when she called the broker to complain, she was told that because she failed to read the fine print, the responsibility for getting in too deep was hers.

Posted by cystophersam @ 05:18 PM 0 Comments

Squatting on the rise

Independent: Young, urban professional seeks home – vacant premises will do

As the recession bites, squatting is soaring, and those doing it are often not what you might expect. The number of people living in squats in England and Wales has risen by 25 per cent in the last seven years, according to new figures. But contrary to popular belief, greater numbers of squatters are now professional, middle class and upwardly mobile. Squatting is lawful in England and Wales (but not Scotland) if entry to an empty property is not forced resulting in criminal damage. Owners of the squatted building are forced to take civil action through the courts to remove the unwanted occupants. Experts say the new generation of squatters have a greater understanding of the law and how it can protect them, helped in part by sophisticated legal advice available on the internet.

Posted by drewster @ 11:00 AM 17 Comments

Those beastly bankers again

Telegraph: Banks undervaluing our property, say small firms seeking loans

The Forum of Private Business (FPB) said that banks are taking pessimistic valuations of properties when considering them as security for bank debt, forcing business owners to either accept "unfairly" high interest rates on credit or forgo loans completely. Business owners are citing increased security demands as one of the reasons they are failing to secure finance. The FPB said that low valuations were exacerbating the problem. In one example, Gordon Hazelton, of Glasgow-based Gordon Hazelton Wheels and Tyres, believes the Bank of Scotland undervalued his property by up to £100,000 when negotiating credit. Banks rely on independent valuers – who must act within guidelines specified in the Royal Institution of Chartered Surveyors' Red Book – to price property.

Posted by drewster @ 10:55 AM 3 Comments

Irish investors who claim they were misinformed may sue journalists

Independent: The false estate: Did property journalists mislead investors?

If the British property market resembles a shrivelling party balloon, in Ireland it looks more like the aftermath of the Hindenburg disaster. The bubble that started growing in the 1990s and accelerated out of control after 2002, when Ireland joined the euro, eventually burst spectacularly in 2008, and has yet to show any signs of recovery. Since the crash, those who lost a fortune or who have been left with unsellable property have been looking for someone to blame. Now a hate figure has emerged in the form of the property journalist. Although a case has yet to be lodged, a number of aggrieved investors are said to be consulting Dublin lawyers about launching a case against certain journalists.....

Posted by drewster @ 10:53 AM 3 Comments

The Baby Boomer entitlement culture

Guardian: The baby boomers and the price of personal freedom

Don't look away now baby-boomers - this is your legacy!

Posted by paul @ 08:03 AM 13 Comments

Mass defaults on their way

Telegraph: Interest rates 'may hit 8pc' in two years

Andrew Lilico, chief economist at the influential Policy Exchange think tank, has warned of an interest rate environment not seen since the 1990s. He said the rise could happen as the recovery beds in and Government measures to stave off a recession lead to an explosion in the money supply. Mr Lilico also warned of a return to "boom and bust", as ballooning inflation threatens to tip the economy back in to recession in 2013 or 2014.

Posted by crash n burn @ 12:13 AM 10 Comments

Saturday, August 21, 2010

Isn't it ironic, don't you think?

BBC news: John Prescott warns Labour Party faces bankruptcy

Labour former deputy prime minister John Prescott has warned his party faces bankruptcy if it cannot tackle its £20m of debt. Perhaps they should do a bit of buy-to-let?

Posted by moi @ 09:39 PM 0 Comments

Erm, try lowering the price?

Daily Mail: Plight of the 1.1million stuck in homes they can't sell

Around 1.1million have tried to move in the last year but have been unable to attract buyers. The study by banking giant Santander found the number of 'failed sellers' was nearly double the number who did succeed in getting a buyer. When asked why they had not been able to sell their home, the most common reason was a failure to find 'a suitable buyer' or 'an acceptable offer'.

Posted by cat and canary @ 02:31 PM 23 Comments

Boris introduces minimum space standards for housing

London Development Agency: London Housing Design Guide

"In recent years London has been providing some of the smallest homes in the developed world and too many developments of a low quality." The new standards require a minimum of 50m² GIA (Gross Internal Area) for a 1bedroom/2person single-storey home (i.e. a flat). The minimum is 83m² for a two-storey 2bedroom/4person home. Hallways to have a minimum width of 900mm (750mm at pinch points e.g. radiators). Single bedrooms should be at least 8m². Double bedrooms 12m². Outdoor space minimum of 5m² for two people, plus 1m² for each additional person. Balconies at least 1500mm wide. Living room windows should be no more than 850mm above the floor to people to see out while seated. Soviet tractor production must use wheels no smaller than 1200mm in diameter.

Posted by drewster @ 12:35 PM 6 Comments

What happens when the money's gone?

BBC News: Savings raided to cover income shortfalls

Almost a third of adults in the UK have raided their savings over the past year to cover shortfalls in their income, according to new research. The survey, by investment firm Schroders, estimates that savers have taken out a total of £60bn. They have withdrawn an average of £4,600 each. With interest rates at a 300-year low and the better saving deals pulled from the market, there seems to be more incentive to spend rather than save. Those retired or approaching retirement were most likely to have dipped into their reserves to make up a shortfall in income. "The amount of capital being drawn down suggests that it is not just rainy-day funds that are being drained, but a significant proportion of individuals' long-term savings," says Robin Stoakley of Schroders.

Posted by drewster @ 11:42 AM 11 Comments

Wait & see.....

Telegraph: PwC warns of 'slowth' decade for house prices

NIESR is more pessimistic, forecasting that house prices will fall 8pc in the next five years once inflation is taken into account. Capital Economics has been gloomier still, predicting a crash of over 20pc in the next two years as house prices re-establish their traditional link with earnings.

Posted by happy mondays @ 09:51 AM 4 Comments

Britain: rating downgrade

Greg Pytel: Irish lesson - post scriptum

It looks that Britain's rating will soon be downgraded. The cuts and savings made by the government will go to the banks. That's what they were all about in the first place: to make more money available by the government to keep subsidising that financial industry.

Posted by ant @ 09:00 AM 1 Comments

Friday, August 20, 2010

Taxpayers to the rescue. Again.

MSN Money: Rail compensation scheme launched

Compensation for householders affected by the High Speed Rail link between London and Birmingham has been launched. The Government will buy homes blighted by their proximity to the proposed route between London and Birmingham. Under the Exceptional Hardship Scheme, an independent panel has been set up which will look at applications on a case-by-case basis. Applicants must show that the property has been on the market for three months or more and attracted no offers above 85% of its value before the route was announced in March. So all I have to do is get my property valued and put it on the market for 18% above its "true" value, whatever that really means. If I don't hit the jackpot within three months, the taxpayer will pick up the tab. I can't lose! Thanks, taxpayer!

Posted by arthur kinnell @ 10:55 PM 0 Comments

Your Country Needs You - Join the Housing Pyramid Scheme Now!

Daily Mail: Mortgage repayments halved for first-time buyers

Mortgage repayments for first-time buyers have nearly halved during the past three years due to record low interest rates and house price falls. A typical first-time buyer now spends just 28 per cent of their pay on monthly mortgage repayments, down from a peak of 50 per cent in June 2007, according to high street bank Halifax

Posted by need-a-crash @ 02:11 PM 11 Comments

Average rents up to £676 a month; still below peak

This Is Money: Property rental prices rise for sixth month

Landlords increased their rents for the sixth consecutive month during July as the availability of properties to let remained tight. The average cost of letting a home rose by 0.5% during the month to £676, 2.3% higher than a year ago, according to lettings agent network LSL Property Services. The group said average rents were now just £12 a month cheaper than when they hit their peak two years ago, before the market was flooded by "reluctant landlords". Thousands of frustrated first-time buyers are being forced to rent for longer than they want to, as getting on the first rung of the property ladder is becoming increasingly hard, with high deposits and poor mortgage rates. However these tenants' finances were often in a better state and they were able to meet the increases in rents.

Posted by drewster @ 01:59 PM 4 Comments

Plummeting bond yields mean we are already in a liquidity trap Why the Global Economy Is In a Liquidity Trap

Summary - Government interest rates have hit new lows in the U.S. and Germany recently. UK gilts are barely above their Credit Crisis lows and Japanese 10-years have fallen as low as 0.90%. This is taking place because central bank liquidity is not finding its way into the real economy. This is known as a liquidity trap.

Posted by mountain goat @ 12:58 PM 14 Comments

Europe's Dangerous Bonds

Index Universe: Europe's Dangerous Bonds

Bond market strains are approaching the levels seen earlier this year. The effect of the May/June bailouts is wearing off: are we heading for a stormy autumn?

Posted by paul amery @ 11:02 AM 0 Comments

And who'll be left holding the tab?

Web of Debt: Could 62 million homes be foreclosure-proof?

MERS in the US is in crisis. It's a shortcut set up by banks to allow properties to change hands a few times without recording each transfer (in order to facilitate shuffling, packaging, securitisation etc.). 62 million residences are involved and courts are saying this shortcut makes it impossible for banks to establish their ownership of property titles. Last year this seemed like a mere procedural defect, but now it's become a substantive failure, making foreclusure impossible. On top of this there's a triple whammy (1) lawyers are working to obtain full title to their homes for mortgagors (2) suits are alleging criminal activity by MERS (false docs etc.) and (3) local govts are suing for billions in foregone recording fees and having to deal with false docs. Oh dear. Hoist...petard?

Posted by icarus @ 10:36 AM 5 Comments

Government preparing for the next round of bailouts

Telegraph: UK borrowing falls as country slides deeper into debt

UK Government borrowing fell sharply in July, although the country continued to sink further into debt.

Posted by khards @ 08:43 AM 22 Comments

Thursday, August 19, 2010

Housing Minister and other insignificant mortals winge about banks

Telegraph: Home owners pay £1,700 a year more for fixed-rate mortgage deals

Home owners are paying £1,700 a year more for fixed-rate mortgages as banks enjoy record profit margins. Then again fixed rates are not much use to banks if interest rates go up! Full of cringeworthy quotes.

Posted by enuii @ 09:57 PM 13 Comments

UK banks, sucking on the blood of depositors

FT AlphaVile: UK banks, sucking on the blood of depositors

UK banks sucking on the blood of depositors

Posted by easybetman @ 06:33 PM 1 Comments

Where did it all go wrong?

The worms are turning

Yahoo / reuters: Bank gets benefit of doubt on inflation -- for now

Once lost, credibility can be hard to recover and spiralling inflation is hard to reverse, as Britain found to its cost in the 1970s and 80s. "The market is vulnerable to a continuation of the trend of upside inflation surprises, so it's strange that there is no risk priced in of an earlier move," said Sam Hill, a fixed income strategist at RBC (RBCI.PK - news) . "If I were on the MPC (A050540.KQ - news) and had accepted responsibility for hitting a 2 percent inflation target, I would be getting increasingly uncomfortable."

Posted by mark @ 02:22 PM 0 Comments

The bust in the housing market that began nearly three years ago has hit them like a

Reuters: For local governments housing crisis keeps hitting

The bust in the housing market that began nearly three years ago has hit them like a slow-moving avalanche, first striking with abandoned properties and rising homelessness. Some also saw drops in sales tax revenue as people, feeling poorer after the slide in home values, pared back on shopping trips. Now, property taxes are falling. The housing slump pushed down property values but that has only recently affected property tax collections, as there can be as much as a three-year lag in assessing properties.

Posted by mark @ 01:43 PM 3 Comments

Jones Lang LaSalle's (JLL) latest residential market forecast

FT: Annual property prices start to slide

Average UK house prices have started to slide with annual growth at 6.6 per cent in August, data from Jones Lang LaSalle's (JLL) latest residential market forecast has shown. Annual growth is down from the peak recorded by JLL in April of 10.5 per cent. In July, the price of a property was £169,347. The figures are based on the index compiled by Oxford Economic Forecasts. During the remainder of 2010, JLL expects a decline of 3.9 per cent on current price levels, reducing the value of the average UK property by £6,500. Looking ahead to 2011, Jones Lang LaSalle expects increased supply and spending cutbacks to mean that price growth for the year will be flat, as the effect of public spending cuts and concerns around employment prospects pushes out the recovery timescale.

Posted by jack c @ 12:02 PM 0 Comments

Balanced article on the benefits of low cost or funded housing

Telegraph: What George Osborne and IDS can learn from socialist paradises

How many people know that around half of Hong Kong’s population live in subsidised cheap council housing? Studies have shown that this has been a major factor in Hong Kong’s growth and social mobility. Labour is attracted to Hong Kong from the mainland by jobs and cheap housing, which itself keeps wage rises down in the private sector, boosting profitability.

Posted by andrew @ 11:02 AM 11 Comments

A country struggles to pay its 'reparations' - how did that end last time?

Der Spiegel: Tensions Rise in Greece as Austerity Measures Backfire

The austerity measures that were supposed to fix Greece's problems are dragging down the country's economy. Stores are closing, tax revenues are falling and unemployment has hit an unbelievable 70% in some places. Frustrated workers are threatening to strike back. A mixture of fear, hopelessness and anger is brewing in Greek society. Kostas, the man who ran the pastry shop, can no longer afford the rent. No one wants to rent the store. Neither are there any takers for an empty butcher's shop a few meters further on. Fully a quarter of the store windows [in central Athens] are for rent. "Things are starting to simmer here," he says. "And at some point they're going to explode."

Posted by drewster @ 10:57 AM 11 Comments

Mortgage approvals hit their lowest in more than a year in July

Reuters: Lending to UK firms falls, mortgage approvals slip

Mortgage approvals for house purchase made by Britain's six biggest lenders -- Santander, Barclays, HSBC, Lloyds, Nationwide and RBS -- dropped to 47,000 in July from 48,000 in June, its lowest since May 2009.

Posted by chd @ 10:23 AM 0 Comments

Compare articles

Yahoo: July gross mortgage lending down

The telegraph one - ******UK mortgage lending hits year high**********

Posted by mark @ 10:08 AM 2 Comments

The return to easy money with ZIRP. Will we see 99% mortgages soon?

FTAdviser: Window of opportunity opens for FTBs as mortgage rates fall

“We have more 10 per cent deposit deals, there is more flexibility on gifted deposits and the rates have come down. I think it will continue. The main problem now is not the mortgages but first-time buyers finding deposits, especially with the jobs market being the way it is.”

Posted by khards @ 08:50 AM 16 Comments

Three reasons not to buy a house in the UK

ArabianMoney: Why now is not the time to buy a house in the UK

Author's niece is about to buy her first house and he provides the main reasons why this is likely to be a disaster.

Posted by peter cooper @ 06:44 AM 0 Comments

Wednesday, August 18, 2010

If folks can't MEW, folks can't save and inflation is up yet wages for most are stationary or down t

BBC: General Motors unveils plans for a massive share sale

And tho begins the second largest share sale in US history as GM, 60%-owned by the US government officially files its proposals with the Securities and Exchange Commission to sell shares which analysts believe will raise between $12bn and $16bn (£7.7-10.2bn).

Posted by enuii @ 11:41 PM 5 Comments

Agent's Diary turns its attention to the RICS report

Agent's Diary: Hot Off The Press - Wednesday

"‘So what do you think?’ Asks the surveyor, handing me the details of a house he’s valuing, one being sold by a rival firm. I begin to subtly undermine the price achieved but he’s already decided on that one. His question is more general. ‘I think price are unsustainable if I’m honest.’ He whispers. I’ve thought that for years, I think privately, but it’s not in my best interests to admit it. ‘There’s a glut of properties coming to the market and a dearth of buyers from what I can see.’ Continues the man, reading my mind unnervingly, before adding. ‘I’m beginning to feel nostalgic about Home Information Packs.’"

Posted by tpbeta @ 09:13 PM 0 Comments

Enormous monetary and fiscal stimulus seen as temporary fix

FT: House price figures spark concern

Fund managers have expressed concerns about a continuing weakening of UK economic data following the latest publication of house price figures from the Royal Instititution of Chartered Surveyors (Rics). Mike Riddell, fixed income manager at M&G Investments, warned concerns still persisted that monetary and fiscal stimulus measures had only served to halt the decline in house prices, adding a further fall could place a strain on the banking sector.....Mr Riddell said while this did not suggest the housing market was "about to fall off a cliff", there was still reason to be worried given that the economic slowdown in the US in recent months no longer appeared to be contained to the US alone.

Posted by jack c @ 07:53 PM 6 Comments

UK Residential House price indices under review

Mortgagestrategy: House price indices under review

The National Statistician is conducting a review of house price indices to see of there any gaps in consumer information. The review, expected to be completed by November, will consult with users of house price indices to find out if there are any gaps in information. The Office of National Statistic refused to be drawn on the outcome of the review and what action it may take but ruled out influencing private indices.

Posted by jack c @ 06:05 PM 3 Comments

Staycations = higher holiday home prices?

Assetz News: Second home owners 'at record high'

The number of second homes in Britain rose 2.6% to reach a record level of 245,384 in 2009, due to low returns on traditional investments and a growing trend for holidaying at home, research has shown. According to estate agent Knight Frank, there could be a further 2% rise in the number of people who own a new-build second property by the end of this year. Good quality holiday lets typically offer between 5% and 7% of gross rental yields a year, often higher than the returns on a buy-to-let property, prompting buyers to look up on second homes as an investment rather than a luxury. Record low interest rates have reduced the cost of buying a holiday property, enabling wealthy investors with large amounts of equity to take advantage of low financing costs.

Posted by drewster @ 05:10 PM 1 Comments

"Reflecting the view that prime property is a safe haven"

Evening Standard (London): Super-rich boost property market with swoop on London's £5m homes

"Trophy" homes are selling at a near-record rate, heralding a wider recovery in London's property market, estate agents claimed today. The total value of £5 million-plus houses sold in the capital between April and June this year was the second-highest quarterly figure ever recorded. Savills said the top-end London market had been the first to show price growth after the downturn of 2008: “In central London, prime property prices have increased by 17.5% since the bottom of the market, with transaction levels rebounding much more strongly than in the mainstream. That has reflected both a rebuilding of wealth among overseas buyers and the view that prime property is a safe haven among affluent domestic buyers.”

Posted by drewster @ 05:09 PM 4 Comments

Balance of power shifts away from landowners

BBC News: Wheel clampers face private land ban

"Wheel clampers are to be banned from operating on private land in England and Wales, the government has said. The legislation, to be introduced in November, will introduce penalties for anyone clamping a vehicle or towing it away on private land." [Not directly relevant to HPC, but perhaps indicative of this government's future approach to land issues?]

Posted by drewster @ 05:01 PM 3 Comments

Are low interest rates making things worse?

Index Universe: The Low Rates Paradox

Conventional wisdom holds that slashing interest rates has been necessary to try and kick-start the economy. But are near-zero rates actually making things worse?

Posted by paul amery @ 01:33 PM 13 Comments

Renting is so depressing you see

BBC: Can the British ever learn to love renting?

Usual claptrap. Kirstie quoted of course. Just look at the pros and cons inset for the bias. They say you'll never own your own home and that you are paying off the landlords mortgage when renting, and that it's more expensive than buying, but this is based on Zoopla nonsense comparison using interest only mortgages. I fail to see how you own your own home when you are only paying interest, and forget about adding repairs and maintenance to the comparison. "But could a national consciousness forged in the eras of Right To Buy and Sarah Beeny ever truly be reconciled to paying off a landlord's mortgage rather than one's own?" Again, what evidence is there that any landlord in the last 20 years has paid off their mortgage from the rent and not capital gains?

Posted by ontheotherhand @ 01:19 PM 11 Comments

Why the ruling class needs big government

Joe Bageant: Understanding America's Class System

Entertaining, bourbon-fuelled, Hunter S Thompsonesque look at the ruling and political classes - and what the rest of us see from the cheap seats. Is he thinking about Clinton/Blair? - "Washington's political class is richer than the working class by the same orders of magnitude as the ruling class is richer than the political class. This gives the political class something to aim for. They have adopted the ruling elite's behaviors, tastes and lifestyles with an eye on becoming members. The political class adopts the ruling class's social canon and presumptions, especially the one that says that the public has the collective intelligence of a chicken". Not off-topic - he gets to the financial crash, the housing bubble and upward transfer of wealth.

Posted by icarus @ 01:02 PM 8 Comments

Homeless numbers in greater Las Vegas have topped 13,000, with the recession leaving people jobless

Las vegas sun: Las Vegas shortchanged in federal funding for homeless

It’s happening all around the country, but the human toll here could be compounded because federal formulas lead to uneven homeless funding, giving cities such as Pittsburgh more than $10,000 to serve each homeless person while the Las Vegas area receives about $500 per individual. Southern Nevada has 2 percent of the country’s homeless.

Posted by mark @ 12:57 PM 0 Comments

Time to buy shelters

Yahoo: Time is running out for the West

The Great Recession has dramatically shrunk the time left for the big AAA states to prevent a full-blown sovereign debt crisis as their demographic time-bomb threatens, US rating agency Moody's has warned.

Posted by mark @ 12:02 PM 0 Comments

How about nine in ten dropping their asking prices?

This Is Lincolnshire: One in ten homeowners may drop their asking price

Andy Hey, Lincolnshire spokesman for the Royal Institution of Chartered Surveyors, says there appears to be a large amount of homes on the market at the moment and believes that one in ten will end up dropping their price to be the one that sells. However, Michael Noonan of Horncastle-based Remax, believes that Mr Hey is "a brave man to make such statements... There has definitely been downward pressure over the last two months, whether or not prices are actually falling or just stabilising, I wouldn't like to say. If house prices were to fall, this would be a benefit to buyers – if they could get mortgages in the first place, banks are definitely cherry-picking their clients at the moment.Getting a deposit is not easy, you only have to look at what banks are asking."

Posted by mark wadsworth @ 11:02 AM 4 Comments

What was that about a Hindenburg wotsit?

Telegraph: George Soros slashes exposure to US equities

''George Soros has slashed the amount of money he is willing to gamble on the fortunes of the US stock market in the second quarter as market volatility increased. The legendary investor's Soros Fund Management – which has approximately $25bn (£16bn) under management – reduced its equity investments by 42pc to $5.1bn by the end of June, down from $8.8bn at the end of March.''

Posted by hpwatcher @ 10:15 AM 3 Comments

Are asking prices a reliable lead indicator?

Mortgage Introducer: Are asking prices a reliable lead indicator?

“The fall in asking prices reported by Rightmove was noticeably stronger than the traditional dip normally observed in August."

Posted by greenbay @ 09:18 AM 1 Comments

Greenbays comeback Geithner: US Govt will continue to back mortgages

Just thought I would say hello. I was also wondering if all those people on here now appreciate what I was saying a few years back about government intervention and how they would ensure the housing market stabilises. Unfortunately may of the posts here were either straight from college studying economics or just a bit naive. I guess an apology is out of the question....?

Posted by greenbay @ 09:14 AM 3 Comments

Tuesday, August 17, 2010

Paying for a scam

Greg Pytel: We are getting poorer

As it is we are paying for the financial industry: the scammers who engineered the current financial crisis. This is a communism for the rich.

Posted by ant @ 10:38 PM 16 Comments

I'd forgotten about this! Haven't listened to the program yet, but it does a sound little familiar...

BBC Radio 4: History of the UK 90's Ostrich farming bubble...

In the mid 1990s investment companies sprung up offering huge returns on ostrich farming. The promise was that you could get 70 per cent or more and never get your feet muddy, or even have to see your ostriches. The birds would lay and endless supply of valuable eggs and the companies offered to buy them back. Ostrich fever took hold, and birds changed hands at 10 times their true market value. It seemed too good to be true - and it was. The Department of Trade moved in and closed down the companies on the grounds that that they were running pyramid schemes. In this programme, Jolyon Jenkins tries to discover why so many apparently intelligent people fell for the ostrich scams.

Posted by roy @ 10:22 PM 0 Comments

US preparing a housing-finance overhaul

Bloomberg: Pimco's Gross Urges `Full Nationalization' of Housing Finance

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said the U.S. should consider “full nationalization” of the mortgage- finance system as the Obama administration plots the revival of a market that was at the center of the 2008 credit crisis. “To suggest that there’s a large place for private financing in the future of housing finance is unrealistic,”

Posted by jack c @ 09:32 PM 6 Comments

Worrying indeed

Telegraph: West is running out of time

Pretty much sums up the current debt issues.

Posted by yoss @ 08:38 PM 0 Comments

2 days old but good headline

Manchester evening news: Fears of house price meltdown

House prices have fallen for a second month as the market was hit by over-supply and subdued demand. North west prices fell 1.8 per cent from July to August, with an average price of £165,878.

Posted by mark @ 04:08 PM 15 Comments

Shooting down the argument that house price : earnings ratio should be based on two salaries now More women giving up jobs to raise children

Women surveyed throughout the late eighties thought full time careers were more important than they are today, when more women think that the career is less important than raising the children.

Posted by analysis @ 01:54 PM 0 Comments

''Of course the Governor is "surprised" by the inflation. It's because he hasn't got a clue''

Telegraph: Bank of England Governor warns that Britons face higher inflation for longer

''British consumers should prepare for lingering higher inflation, the Bank of England Governor has warned, as latest figures show a sharp jump in food prices. Figures from the Office for National Statistics showed a 3.4pc increase in the cost of food over the last year, with fruit being 10pc more expensive. The last year also saw a sharp rise in the cost of travel, which climbed an average 7.8pc.''

Posted by hpwatcher @ 01:35 PM 12 Comments

We only want to hear about prices 8 different ways when they are going UP!

The Daily Telegraph: House price indexes come under the spotlight

The UK Statistics Authority said the first stage of its review would focus on how satisfied users were with the two house price indexes published by the Government, and whether they understood the differences between them.

Posted by ontheotherhand @ 12:15 PM 1 Comments

But councils may end up paying the £17.45m annual cost of renting the buildings when PCTs are abolis

Liverpool daily post: Merseyside councils could foot the bill for a £166m spending spree on new health centres

More than 4,500 NHS staff across the Merseyside area will lose their jobs when PCTs are abolished.

Posted by mark @ 09:45 AM 1 Comments

Still over the 2% target...

BBC: UK inflation rate slows again in July

UK inflation eased to 3.1% in July from 3.2% in June, the third month in a row that prices have risen more slowly.

Posted by hpwatcher @ 09:45 AM 27 Comments

Will they never learn? The real effect of low interest rates...

Telegraph: Number of second homes reaches record high

''The latest second homes statistics from estate agent Knight Frank said numbers rose to 245,384 in 2009, up 2.6 per cent on the previous year. Numbers dropped 0.4 per cent in 2008. Knight Frank said rental holiday properties enticed buyers because their rents offered a 7 to 8 per cent return.''

Posted by hpwatcher @ 09:41 AM 10 Comments

Close them down I say

Fortune: The Fannie-Freddie turkey shoot

So what to do? Fannie (FNMA) and Freddie (FMCC) "are quite profoundly broken," says Raj Date of the Cambridge Winter Center. "But no one wants to disrupt the only thing that's working right now in the mortgage market."

Posted by mark @ 09:31 AM 1 Comments

Why it is important to abolish right-to-buy

Guardian: Can David Cameron match Harold Macmillan's achievement in house-building?

Right-to-buy and buy-to-let have created an urgent need for social housing – which the Labour government did not deliver This is the most selfish generation of homeowners in British history. Until we confront our own selfishness, there will continue to be huge housing shortages, especially for young and less-affluent citizens.

Posted by khards @ 08:52 AM 27 Comments

Monday, August 16, 2010

One rule for Americans and another everywhere else

New York Times: Debts Rise, and Go Unpaid, as Bust Erodes Home Equity

“When houses were doubling in value, mom and pop making $80,000 a year were taking out $300,000 home equity loans for new cars and boats,” said Christopher A. Combs, a real estate lawyer. “Anything over $15,000 to $20,000 is not collectible,” Mr. Terry of Utah Loan Servicing debt collectors said. “Americans seem to believe that anything they can get away with is O.K.”

Posted by enuii @ 06:36 PM 14 Comments

Latest data from

Money Avenue: UK House Prices Fall by 1.7%

The latest research carried out by online property portal, Rightmove, suggests that property asking prices in Great Britain have declined by 1.7% in August, marking the second consecutive month of decreases. At the moment, an average price of a UK property stands at £232,241, which is £4,091 less than in July 2010.

Posted by evansgazz @ 03:09 PM 3 Comments

Price of food up by 59% since 2007

MySupermarket Survey: Price of food up by 59% since 2007

Price of food up by 59% since 2007

Posted by easybetman @ 02:38 PM 23 Comments

MR King get raising rates before you have riots

BBC: Spending cuts spark fears of 8% rise in rail fares

Rail fares may rise by up to 8% next year if the Department for Transport (DfT) is hit hard in the government's spending review, sources have said. While many rail fare rises are currently capped at inflation plus 1%, this could rise to 2% or 3% if the department faces tough cuts. Increases are based on July's RPI measure, expected to be 5%, which could mean increases of up to 8%.

Posted by mark @ 01:16 PM 11 Comments

Cheaper way to live in London - camp

Guardian: London property prices forcing commuters to live under canvas

London's campsites are teeming with commuters who have shunned bricks and mortar to make ends meet

Posted by sof @ 12:48 PM 7 Comments

The Chartered Institute for Housing (CIH) latest report

FT: CIH says "golden age" of home ownership at an end

The Chartered Institute for Housing (CIH) has called for an urgent focus on rented housing as what it dubbed the "golden age" of home ownership comes to an end. In a new report, widening the rental housing market, released on Sunday, the CIH said millions of young people faced a lifetime of renting. The report asked whether the current provision of social and private rented homes could be improved to meet changing trends.

Posted by jack c @ 12:38 PM 7 Comments

A Tale of Two Nations

Mail: North-South dividing line slips southwards as recession widens economic gap

The traditional North/ South divide is creeping further south as the impact of the recession widens the economic gap in Britain, an academic claims. Analysis of average incomes, house prices, life expectancy and levels of education shows that the gap between the two regions has grown wider in the recession.

Posted by sovietuk @ 11:36 AM 1 Comments

RICS survey shows UK house prices heading down

MoneyWeek: RICS survey shows UK house prices heading down

The RICS housing market survey is arguably the best forward indictor of the country's residential property market. And today it showed that Britain's house prices are dropping for the first time since July 2009.

Posted by damien @ 11:35 AM 0 Comments

Re what Uncle Tom said on Rightmove thread

BBC: Voting on new home schemes 'could tear villages apart'

Uncle Tom: "I do hope Grant Shapps recognises the imperative of cutting through the environmental red tape; in pursuit of getting more homes built.". Fat chance: "Government plans to hold local referendums on new housing schemes in England could tear village communities apart, rural campaigners have said. They say plans to require 80-90% of local people to approve new building schemes in villages would create conflict and bring projects to a halt..."

Posted by mark wadsworth @ 10:37 AM 15 Comments

A new wave of foreclosures?

CNN: The wasted 4.44% mortgage rate

In the short-term, this could free up household incomes and inject much-needed money into a slow-growing economy. But opponents argue it would only add to the hundreds of billions of dollars it will take to prop up troubled Fannie and Freddie. The U.S. Treasury Department says it doesn't plan to ease refinancing rules.

Posted by mark @ 10:33 AM 0 Comments


Bloomberg: London House Prices Fall 4.1% MoM

London home sellers cut 17,000 pounds ($26,500) off their asking prices on average in August, wiping out gains recorded in the first half of the year, Rightmove Plc said. Asking prices in the capital fell 4.1 percent on the month to an average 405,058 pounds, the operator of the nation’s biggest property website said in a report today. The drop is the biggest in two years and returns values to levels seen in January. Prices across England and Wales fell 1.7 percent.

Posted by rooster @ 10:23 AM 0 Comments

A spending review is under way and results will be announced on October 20

Reuters: Spending cuts risk turning into demolition job

The government may find it hard to stick to a coherent strategy as ministries scramble to cut spending by up to 40 percent on Treasury orders. Prime Minister David Cameron, who took office in May, says shrinking the record peacetime deficit from 11 percent of GDP to almost nothing within five years is the most urgent task for his Conservative-Liberal Democrat coalition government.

Posted by mark @ 10:00 AM 5 Comments

Areas where the state is a big local employer are likely to see the largest falls in property values

Guardian: Public sector job cuts to hit house prices

Analysis by research group Hometrack for the Guardian shows those areas of the country with the highest proportion of public sector employees are already seeing homes sell significantly further below their asking price than elsewhere. Hometrack says the findings are an early indicator of stagnating and even falling prices in areas such as Aberystwyth, Rhyl and Morpeth in Northumberland. The Chartered Institute of Personnel and Development thinktank estimates the spending cuts will make 750,000 public sector workers unemployed and push the national jobless total close to 3 million for the first time since the early 1990s.

Posted by mark @ 08:51 AM 30 Comments

Global house price trends in the long term

ArabianMoney: Supertrends in global real estate still favor Dubai

This article is an analysis of the real estate chapter in the recently published book ‘Supertrends’ by Danish futurologist and entrepreneur Lars Tvede. He is looking beyond the short term fluctuations of the economy, or the real estate cycle itself, and a decade or more into the future.

Posted by peter cooper @ 08:14 AM 0 Comments

Slightly edited text below

Telegraph: Property asking prices fall again

Property website Rightmove found sellers slashed prices by 1.7pc during the month to 7th August, sending the average asking price down by £4,091 to £232,241. Soaring numbers of sellers outnumbered buyers, with the imbalance in supply and demand compounded as many house-hunters took summer holidays. Rightmove found available stock per agent rose to its highest August level for three years, up 41.3pc on a year earlier to 29,220 a week. In more good news, they said that market conditions "bear some similarities" to the fabulous second half of 2008 when the credit crunch left prices more affordable by 7.1pc. The news will add to hopes of lower prices in the housing market, coming after the RICS recently said its members reported better value homes for the first time in a year last month.

Posted by drewster @ 01:50 AM 16 Comments


YouTube Peter Schiff Blog: Unemployment compensation-- the new early retirement & 3rd rail of American politics

Fast forward to 05:15. Freed from his efforts at taking the Republican US Senate nomination in Connecticut, Schiff has now returned to pure, non-political economic commentary. Apparently, America is considering a new benefits program for unemployed people who are not meeting their mortgage payments: The relevance to UK HPC is limited but this is another great example of how politicians like interfering with the property market.

Posted by quiet guy @ 12:53 AM 0 Comments

Prices down 1.7%

Rightmove: Summer prices melt by £4k in second consecutive fall

Great bear food, summary in PDF is: Newly marketed property down by over £4,091 (1.7%) as over-supply coincides with holidaying buyers — but search activity on Rightmove sets a new daily record · Available stock per agent rises for sixth consecutive month; the highest August for fresh property for three years — 29,220 a week compared with 20,675 last year (+41.3%) · Falling prices are good news for the 6 out of 10 renters who would like to buy but state they cannot afford to · Anticipated interest rate rises could lead to more repossessions - though this would improve buyer affordability by exerting further downward price pressure

Posted by pauly_bou @ 12:44 AM 0 Comments

Sunday, August 15, 2010

Interesting idea

Guardian: Deficit crisis: let's really be in it together

The total personal wealth in the UK is £9,000bn, a sum that dwarfs the national debt. It is mostly concentrated at the top, so the richest 10% own £4,000bn, with an average per household of £4m. The bottom half of our society own just 9%. The wealthiest hold the bulk of their money in property or pensions. A one-off tax of just 20% on the wealth of this group would pay the national debt and dramatically reduce the deficit, since interest payments on the debt are a large part of government spending. So that is what should be done. This tax of 20%, graduated so the very richest paid the most, would raise £800bn.

Posted by drewster @ 11:44 PM 9 Comments

"My children have no chance of ever getting on the housing ladder"

Guardian: Angry and insecure – the renting Britons with no hope of buying a home

Campaigners and experts point to government figures that show 44% of all privately rented homes are classified as "non-decent" – a far higher level than for owner-occupied houses (32%) and social rented homes (26%). They also highlight the plight of the "in-betweens" – low-paid workers unlikely to be offered council housing but with little chance of buying a home. Terry works as a printer at an architect's company and rents with his wife Teresa and 21-year-old son Joshua in north London. "The culture in this country has been bent on home ownership – if you fail to get there you are seen as 'outside the box'. My children have no chance of ever getting on the housing ladder," he says angrily. He warns of "social unrest" if the government does not urgently tackle the issue.

Posted by drewster @ 11:35 PM 2 Comments

People are starting to take notice

Guardian: Housing organisation declares 'golden age' of home ownership over

Britain's "golden age of home ownership" is coming to an end, and millions of young people face a lifetime of renting instead, the Chartered Institute of Housing warns today. It is calling on the government to turn its attention urgently to the needs of more than three million households in the private rental sector. Figures reveal that in the most expensive parts of the country first-time buyers need to amass deposits of more than £40,000, almost double the average income, to have any chance of buying a home. In London a single person would need to earn more than £50,000 a year to obtain a mortgage for a two-bedroom flat at the bottom end of the market. The "in-betweens" do everything the government asks - working and generally not claiming benefits - but not getting anything in return.

Posted by drewster @ 11:29 PM 1 Comments

MP3 podcast: Alvin Hall's Generations of Money: (with Fergus Wilson

BBC podcast radio four: Alvin Hall's Generations of Money

Alvin Hall meets two young families facing difficulties with property and pensions. And he investigates the effect of the baby-boomers on house prices. He visits Ashford and talks with Fergus Wilson who apparently still has nearly 900 houses and is still deluded into thinking that house prices double every seven years. It is somewhat disappointing that Alvin Hall thinks he's something of a hero.

Posted by jimj @ 03:00 PM 0 Comments

Our central bank is losing it

Telegraph: The Bank must reassure Britain it has not lost its grip on policy

So the only way they will reestablish their grip on policy is to address inflation with an interest rate rise. But that will send the housing market into a tailspin and the housing market is central to the MPC's wealth creation model. If Tuesday's inflation figures show a rise, this is going to get really ugly for the MPC and Bank of England.

Posted by paul @ 11:21 AM 26 Comments

More from Nadeem

Market oracle: Central Bankers Stoking the Inflation Fires, Whilst Academic Economists Worry about Deflation

'[There] IS NO DEFLATION, the deflation mantra will continue right up to the point where the wage price spiral kicks in as it slowly dawns on the academic economists / perma crowd that their theories are just as bankrupt as most of the western economies actually are'

Posted by hpwatcher @ 09:50 AM 10 Comments

Stuart Law is God! Look At His Disciples!

Ass etz: AssetzPlc

Whilst the current news cycle is negative re house prices we shouldn't forget that last years positive growth was in far worse conditions. 1:51 AM Aug 12th via Twittelator My student private hall of residence investments have seen their rents rise 20% in 2 years ! Still the best thing I and our clients bought ! 2:45 AM Jul 18th via Twittelator My whole portfolio is on an upward rental trajectory - tenants are finding it hard to reject rent rises and many are up 10% year on year. I'm running out of pages in my little black book.

Posted by novice pete @ 01:14 AM 1 Comments

Saturday, August 14, 2010

..."where have all the cuts gone"

Greg Pytel: Irish lesson

The Irish made all the savings and cuts in the public spending. Austerity measures it's all there. And... Moody downgraded their rating. What does it mean for the UK? We should learn the lesson.

Posted by ant @ 01:05 PM 17 Comments

Why the banks are bust

New York Times: Borrowers Refuse to Pay Billions in Home Equity Loans

Struggling borrowers are unable or unwilling to pay back their loans. The default rate on home equity loans is higher than all other types of consumer loans, including car loans and credit cards. The result is one of the paradoxes of the recession: the more money you borrowed, the less likely you will have to pay up. Even when a lender forces a borrower to settle through legal action, it can rarely extract more than 10 cents on the dollar. "People got 90 cents for free. It rewards immorality, to some extent." "I am not going to be a slave to the bank." "I was taught in real estate that you use your leverage to grow. I never dreamed the properties would go from $265,000 to $65,000." The amount of bad home equity loan business during the boom is incalculable and in retrospect inexplicable.

Posted by drewster @ 11:40 AM 2 Comments

''the Bank of England is NOT actually making forecasts but pumping out economic propaganda'' The Real Reason for Bank of England's Worthless CPI Inflation Forecasts

''...the Bank of England DOES NOT actually forecast where the economy or inflation will be in the future. What the Bank of England is actually doing is to state where the BOE would like the Economy and Inflation to be in the future and then slaps the forecast label on the top...the Bank of England is NOT actually making forecasts but pumping out economic propaganda with the primary aim of reassuring the public that a. the BOE is in control of inflation when it is not, and b. that a strong UK economy is the default norm regardless of what is actually transpiring'' MERVYN KING MUST GO NOW!!!!!

Posted by hpwatcher @ 10:39 AM 11 Comments

Oh the irony!


MILLIONS of savers are seeing their accounts rendered obsolete because of low interest rates and rising inflation. With historically low interest rates, which have been held at 0.5pc for 17 months, and inflation now at 3.2pc, savers are already struggling to get a decent income. Darren Cook, of personal finance website Moneyfacts, said: “Interest rates are not high at the moment. But the last thing you want is for savers to go out and change banks or put their money into a riskier investment during this economic uncertainly."

Posted by drewster @ 10:36 AM 6 Comments

Another "when interest rates rise" story...

Telegraph: Interest only mortgages for the chop

... but this time with the angle that many lenders are withdrawing interest only mortgages. So those without a "repayment vehicle" in place are going to see huge rises in their payments.

Posted by neil @ 07:49 AM 0 Comments

Friday, August 13, 2010

Slump will wipe £20,000 off price of average London home

Evening Standard: Slump will wipe £20,000 off price of average London home

The average price of a house in London will drop by £20,000 by the end of the year, a leading estate agent warned today. Savills said the slump at the top end of the market will be even greater with a £1 million home forecast to lose £100,000 in value. The firm said the housing market was at “tipping point” and a double-dip was inevitable following a “sucker's rally”.

Posted by steve m @ 10:07 PM 0 Comments

How it all started

BBC: Mortgage Madness (2003)

I have said about this program dozens of times and now its on Youtube. See the information the Labour Government completely ignored. Personally I sold my Halifax shares the day after this program.

Posted by tenyearstogetmymoneyback @ 06:32 PM 9 Comments

Welcome to bankrupt britain

Yahoo/telegraph: Savings accounts will become "obsolete"

Savings accounts will become totally obsolete if inflation rises next week, experts have warned. Latest figures suggested that not a single saver in Briton would make a real return on their cash if the cost of living continues to rise.

Posted by mark @ 01:50 PM 44 Comments

When America sneezes etc...

Bloomberg: Foreclosure Crisis Spreads Across U.S.; Idaho Defaults Mount

Nan Holmes, a senior escrow officer at a title insurer, says her insider’s view of the local market gave her the confidence three years ago to pay $370,000 for a new home in Boise, Idaho. She got a price she liked from the builder and 100 percent bank financing. That was before the bottom fell out of the housing market in California, Nevada and Florida as borrowers with bad credit began defaulting in record numbers, setting off a recession........ She stopped paying the mortgage in April and has put the house on the market for $145,000 less than she owes the bank.

Posted by jack c @ 12:25 PM 0 Comments


Manchester evening news: Halliwells crash means end of the property party

Financial services will help lead Manchester’s commercial property recovery. But a senior surveyor is warning that the property party is over for the city’s professionals. Research by King Sturge, based on data from the Manchester Office Agents Society, suggests that the financial services sector will account for a mighty 40 to 45 per cent of all office space let in the city centre this year. But professionals – once the mainstays of the city centre property scene – will account for just 20 per cent.

Posted by mark @ 12:14 PM 0 Comments

Are US, UK and Europe set to follow Japan?

Investment & Business News: Europe booms while US stutters – it’s the great illusion

Things are upside down. This morning’s data shows that Europe has shaken off Greek woe and is booming, while a growing chorus of voices are saying the US is technically bust. Meanwhile, the yield on US, UK and German government bonds crashes. Yet the spread between ten-year and 30-year US bonds is at an all-time high, suggesting markets expect deflation in the medium term and inflation in the longer term. But not enough is made of demographics. Surely the real cause of Japan’s economic malaise was the ageing of its population, which led to surging savings. And if you think the demographic challenge facing the US and the UK is bad, this is nothing compared to the challenge facing Europe.

Posted by jac nixon @ 12:07 PM 0 Comments

Props cannot bear asset weight for ever

FT: Fannie and Freddie’s bond market upheaval

This strikes me as a very important article, and goes along with what many of us sense here. The support accorded to bonds has depended as much on who owns them than anything else - the Chinese, European banks, etc. In short, asset values have been widely supported, ignoring fundamental value. We have seen this in UK housing. This cannot continue indefinitely. Therefore expect to see another financial maelstrom. (Search title in google to view.)

Posted by letthemfall @ 11:38 AM 4 Comments

Oooh dear I can hear the bleating already

Yahoo: Interest only mortgages for the chop

It is estimated that more than one million people took out these loans between 2005 and 2009, as house prices boomed. David Hollingworth, of London & Country said: "As the name suggests, the monthly mortgage repayments are only covering the interest on these loans. Borrowers are not paying back the money they've borrowed to buy the house."

Posted by mark @ 11:02 AM 12 Comments

100 quid for picking up a phone.. waste waste

Dailymail: Police chiefs to axe 'double bubble' overtime in bid to cut £500m bill

The overhaul of pay and conditions leaked to Police Review has stunned the Police Federation which has warned that it will drive experienced officers out of the force. The union says many officers already struggling financially face losing their homes if such severe cuts are put into action.

Posted by mark @ 10:12 AM 21 Comments

Another source pointing to downwards pressure

Acadametrics: U.K. House Prices Little Changed, Will Struggle to Gain, Acadametrics Says

Prices in England and Wales rose 0.1 percent from June, when they fell by the same amount, the research group said in a statement in London today. Values are up 8.1 percent from a year earlier to an average 220,685 pounds ($344,000). Home buying may be restrained by weakening consumer confidence as the government prepares the biggest spending squeeze since World War II to tackle the record deficit. Bank of England policy makers maintained emergency stimulus for the economy this month, and Governor Mervyn King said the U.K. faces a “choppy” recovery.

Posted by s. @ 09:25 AM 0 Comments

Support for Mortgage Interest reduced from 6.08% to 3.75%

The Daily Telegraph: Repossession threat as Government reduces home owner support

This support is paid at a fixed rate, meaning that more than 90% of recipients currently not only get their mortgage interest paid but extra money in their pockets. Charities warn that many home owners will be left with a significant shortfall in their income from my taxes.

Posted by monty032 @ 08:55 AM 60 Comments

Bet the taxpayer ends up footing the bill, though

Daily Mail: Fraud Squad Cop Jailed Over Mortgage Fraud

A crooked fraud squad officer who masterminded a multi-million pound mortgage sting was jailed for nearly six years today. Det Sgt Charles Overend, 47, a specialist fraud investigator with the Metropolitan Police, built up a buy-to-let empire during the property boom years. Overend inflated the price of each house he bought, and was granted massive loans by mortgage lenders. The fraud totalled £4.5million, but Overend only accepted responsibility for £3.7million, relating to 23 properties.

Posted by little professor @ 08:50 AM 3 Comments

UK inflation not rising fast enough to counter house price falls

ArabianMoney.Net: Can the UK inflate fast enough to support house prices?

Devaluing the pound earlier this year was a good start but the UK is going to have to seriously inflate general price levels if the economy is going to avoid the agony of falling house prices with their impact on consumer spending, bank balance sheets and the illusion of wealth.

Posted by arabianmoney @ 03:10 AM 3 Comments

Thursday, August 12, 2010

The Decline of the West

Counterpunch: Wordless masses

Globalisation has western workers competing with Chinese slaves in overcrowded living spaces working 15-hour shifts. Hence crumbling factories, weak unions and low-paid workers bagging foreign goods or serving trans-fatty fast food in the cities in old industrial regions in the west, where public infrastructure and services decline or get axed. The rich get richer and live well away from the misery while the poor, "dazed, overweight and tatooed", show their defiance by "mutilating themselves and dropping their trousers a few inches" or "hurling racists slurs" at Obama.

Posted by icarus @ 10:13 PM 6 Comments

Can we have HPC without high repossessions?

BBC News: Home repossessions fall further in UK

Lenders seized 9,400 properties in April, May and June, 400 fewer than in the first quarter of 2010, according to the Council of Mortgage Lenders (CML). Repossessions have now fallen for three quarters in a row since they reached a peak of 12,100 last September. The number of mortgages in arrears also fell, dropping 5% during the quarter to stand at 178,200 at the end of June. However, the CML's director general, Michael Coogan, said the situation was "far from a healthy all-clear".

Posted by quiet guy @ 07:18 PM 0 Comments

Music to my ears!!!

RICS: House prices in the South East fall significantly

"More surveyors reported a fall rather than a rise in South East house prices as supply continues to outstrip demand and more properties come on to the market. This is according to the latest RICS UK Housing Market Survey. In July 15% more surveyors reported a fall rather than a rise in house prices, a steep fall of 30% from June, when 15% more surveyors were optimistic that prices would rise. Demand for property in the South East, measured by the net balance of new buyer enquiries, fell slightly for the second month in a row, from negative 22 to negative 24. Difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential homebuyers though the excess of supply over demand is central to the market."

Posted by mark wadsworth @ 02:33 PM 31 Comments

PM losing it

Sky News: PM: More Chinese Tourists 'Will Create Jobs'

Cameron continues to show his naivety. "High-profile events such as the Champions' League final, the Rugby League World Cup and the Commonwealth Games will all tempt holidaymakers to the UK, he added." Whilst I personally follow both codes of Rugby, I don't think either has much of a following in China!

Posted by mr g @ 02:02 PM 11 Comments


Yahoo: Repossession threat as Government reduces home owner support

The latest repossession statistics showed numbers dropping after the Government introduced several measures for home owners who lost their jobs amid the economic downturn. But some of this support is now being reduced. It includes Support for Mortgage Interest Support, which is paid to those on income-related benefits - such as Job Seekers Allowance - at a rate of 6.08 per cent. The rate is paid regardless of how much a borrower actually pays to their lender so it could mean that a home owner potentially ends up with a surplus of Government cash after paying out a lower mortgage rate to their bank. This has prompted the Government to announce that it is cutting the rate to just 3.75 per cent from October 1

Posted by mark @ 01:56 PM 10 Comments

No comment

Press Association: Labour attitude 'culture of excess'

No doubt there will be plenty of abuse from the usual suspects, sorry, certain HPC regulars.

Posted by mr g @ 01:55 PM 1 Comments

Does QE mean in fact Quick Exit

BBC News: Japan 'monitoring yen progress'

As I commented the other day, lots of talk about QE will unsettle the currency markets. Let's hope we all don't end up with the bathwater, and not the baby.

Posted by growler @ 12:11 PM 0 Comments

Not sure he is even able to predict even this...

Yahoo: Bank of England boss Mervyn King says it's no more Mr 'NICE' Guy

Recent criticism of the Bank of England's forecasting failures has clearly stung the policymakers on Threadneedle Street. The Bank's credibility is not supposed to be called into question, which is perhaps why Mervyn King, the Governor, felt it was necessary to bat away the attacks as firmly as he did at Wednesday's Inflation Report .

Posted by mark @ 11:07 AM 8 Comments

In the second half of the year cargo volume growth is slowing

Guardian: Rotterdam sees cargo volume growth slowing in H2

"Total cargo volumes are now just about at the level of 2008," said Hans Smits, the port authority's chief executive. "In the second half of the year cargo volume growth is slowing," he said, adding volumes would rise by about 10 percent in the full year. The outlook for the global economy has turned gloomier following recent slowing economic data from the United States, the world's biggest economy, and China.

Posted by mark @ 10:59 AM 2 Comments

Big news in

Liverpool daily post: Northern Trust announces two lettings in Widnes

You really have to see the funny side of this a newspaper reporting two lettings in the northwest, have things really got this bad?

Posted by mark @ 09:55 AM 42 Comments

Fear takes hold

Citywire: Landlords are scared as the future is on a startling downwards trajectory

When the dowturn hits, I look forward shaudenfraude for these exploitative landlord gits who profit off the back of a profound human right. Years ago there was a joke on the telly about Margaret Thatcher starting an Oxygen Tax. Perhaps that's the future. Perhaps people should try buying up all the air and water so as to enforce extreme "free market" (ahem!) rationing. "Buyers, fearful of buying (or unable to borrow), hasten the property price drops they fear. Instead, they rent. But – fearful of job losses and tax rises – they’re demanding break clauses, adding to the jitters experienced by landlords already nervous about third- and fourth-quarter rent arrears."

Posted by mick rupert @ 09:53 AM 32 Comments

Is this 2008 all over again?

The Independent: The Gathering Storm: Britain's Faltering Economy

There was a thread on the main forum last night as to this article; shamelessly replicating it here to post my first link. As per title really, nice to see it making the front-page. The only downside is that King and Brown get off quite lightly in the 'who's culpable roll-call'.

Posted by sibley's love child @ 09:22 AM 1 Comments

Hyperventilating hyperinflationists

The tragic side of a HPC

Daily Mail: 'In despair over debt': Couple found dead as their young sons played had lost their jobs and their home

''A couple found dead as their two young sons played nearby were plagued with money worries and had lost their family home after being made redundant. Barry Harrison, 47, is believed to have strangled wife Amanda, 34, before hanging himself at their seaside flat. It has emerged that the devastated couple had lost their £100,000 property after losing their jobs from a recession-hit car manufacturing plant.''

Posted by hpwatcher @ 07:58 AM 25 Comments

Hindenberg Omen predicts market crash

ArabianMoney.Net: Hindenburg Omen confirmed as equities slump, buy short ETFs

The complex chart indicator known as a Hindenburg Omen occurred yesterday for the first time since the market lows of March 2009. This is a major chart indicator suggesting a market crash is imminent.

Posted by arabianmoney @ 05:25 AM 0 Comments

Wednesday, August 11, 2010

The year 2000 interview with Paul Volker

PBS: Interview with Paul Volker

Quotes: [what happens then [is] you get a little bit of inflation, and then you need a little more because it props up the economy. People get used to it, and it loses its effectiveness. Like an antibiotic, you need a new one; ] [You begin expecting it, and you get it, because wage earners will want more wages, and businessmen will put the prices up because they think they can sustain it, ] [The issue of money is a governmental responsibility predominantly, and to use that authority in a way that leads to inflation is a system that fools a lot of people, and to keep fooling them you have to do it more and more; [that] is a moral issue. I put myself in that camp.]

Posted by easybetman @ 10:13 PM 3 Comments


Fortune: Is this finally the economic collapse?

Now that the US can't cut interest rates any lower, the only option left on the table is what the Fed just announced it would start doing -- buying Treasury debt. And that could lead the country to the brink of collapse: According to economists Carmen Reinhart & Ken Rogoff, whose views we share, crossing the 90% debt/GDP threshold is the equivalent of crossing the proverbial Rubicon of economic growth. It's a point from which it's almost impossible to return.

Posted by mark @ 08:11 PM 14 Comments

What to do when your home country is too expensive

Telegraph: One in four first-time buyers seek property abroad

34pc of first-time buyers have been put off buying property in the UK due to the volatility of the housing market, according to a new survey. 24pc are instead considering moving overseas, with Australia listed as the number one destination, closely followed by France and Spain. “Despite turbulent economic times our report shows that a staggering one in four first-time buyers are considering investing in overseas property at the moment,“ said the company which commissioned the research. “This is due in part to the high costs of UK housing, which has recovered over 12 per cent since the lows seen in 2008, making it far harder to get onto the UK property ladder.” He added: “A lot of people now are interested not just in holidaying or retiring abroad, but having a career abroad.

Posted by drewster @ 05:45 PM 14 Comments

From £155m five years ago to £172m today - commercial property rebound?

Telegraph: Dubai World sells West End office in one of London's largest property deals

The building, at One Trafalgar Square, was sold to an unnamed Russian investor for £172m and is one of the largest investment deals in London's West End to be carried out. The property was constructed in the 1870s and is understood to have been purchased for about £155m five years ago. It is thought to be the Russian's first purchase in the UK market. London properties are likely to be near the top of any list of assets to be sold by Dubai World, which ran into difficulties last year. It has asked for a "stand-still" agreement on large chunks of its $60bn debt pile.

Posted by drewster @ 05:42 PM 2 Comments

Is the Bank of England going soft on infalation?

Investment & Business News: We have not gone soft on inflation says King

Mervyn King gives a downbeat assessment of where the economy.

Posted by jac nixon @ 03:08 PM 2 Comments

A bargain for all

Dailymail: LOW price housing hits the market

we’re talking weird and wonderful bespoke creations that cost anything up to £30,000

Posted by mark @ 01:56 PM 10 Comments

Should be allowed to use hard force like USA

ITV: Forced out by squatter

A charity worker and her 4-year-old son have been forced to live in a tent after a squatter took over their house in Brighton. Susan Butler rented out her home while she was working abroad helping homeless people. But when she got back her tenant refused to leave the house or pay any more rent. ~******Just to note I would have dragged them out , changed locks and made sure they were out, not called police**********

Posted by mark @ 01:33 PM 21 Comments

No dear the ATM is closed

Yahoo: Home owners have no equity to remortgage

Home owners have so little equity left in the homes after the credit crisis that they are struggling to remortgage, experts warned. The latest lending statistics suggested the number of people who remortgaged their homes in June was just 27,000, down 20 per cent on a year earlier. Ed Stansfield, chief property economist at Capital Economics, said: There is a sense that people have too little equity in their homes to be able to switch their mortgage, and even if they do have enough, there is little incentive to do so.

Posted by mark @ 11:54 AM 4 Comments

To buy or not to buy

The Motley Fool: The Commercial Property Conundrum

Quote: "Personally, I think this looks like the best opportunity to invest in commercial property shares for years. Despite butterflies over growth and the austerity measures to come, virtually all economists from the Government to the IMF expect the UK economy to keep expanding through into 2012 and beyond. The commercial property shares mentioned in this article have the bulk of their assets in London, too, which is likeliest to withstand savage public sector spending cuts. Meanwhile interest rates look set to remain low for years to come -- and property is about as good as any asset to own if we see a lot of unexpected inflation sparked up as a result. Many listed property companies are still trading at 70% or more off their value of three years ago."

Posted by drewster @ 11:52 AM 3 Comments

More bear food - every little helps.

City AM: Rise in house prices grinds to sharp halt

"THERE was further proof that the property market is cooling down yesterday, after government figures showed house prices were flat on the month in June... That cut the annual rate of increase to 9.9 per cent, compared to 10.6 per cent in May... The downbeat numbers chimed with pessimistic data from the Royal Institute of Chartered Surveyors (RICS), which yesterday reported the first fall in house prices for a year. RICS said the balance of surveyors reporting a rise in house prices retreated sharply to -8 per cent in July, compared to +8 per cent in June and +21 per cent in May ".... with 28 per cent more surveyors expecting prices to fall over to fall over the coming months,” RICS said".

Posted by mark wadsworth @ 10:20 AM 26 Comments

..."you've been warned"

Greg Pytel: Heading towards global Zimbabwe?

Interesting commentary to Newsnight report on the US financial crisis. In a nutshell: QE is a ridiculous idea. It is a borrowing money by a government under a different name. We will pay it back with high inflation in the future.

Posted by ant @ 10:16 AM 44 Comments

What is the point of forecsts?

Guardian: Bank of England expected to cut UK growth forecasts

Tell me this. What is the point of forecasts for the economy, particularly those 6, 12, 18 months into the future or maybe more, if they are going to be constantly updated, changed, tweeked, cut, extended etc.? I remember less than a week ago the media were wetting their pants with joy as the CEBR were telling us that we all had it wrong and underestimated the supply demand imbalance effect! Prices were rising circa 4% p.a. in the coming few years I believe! Maybe it's the CEBRs "unrivalled ability to communicate the impacts of the wider economy" or maybe its just their VI or just guessing. I suspect it is a load of people congratulating themselves for being evenmore intelligent thatn teyalready thought they were. Whenever they are proven wrong, I am sure it will be the snow etc.

Posted by brickormortis @ 09:07 AM 26 Comments

Why is this so hard for our politicians and central bank to grasp?

FT: House priced out

This article makes a good case for allowing councils to support the lowering of prices at a local level, but fails to acknowledge the role that central government and the central bank has had in stoking the housing boom and then getting the taxpayer to bail out the most reckless during the aftermath.

Posted by paul @ 08:17 AM 1 Comments

Paradigm shift....

The Telegraph: It's good news that house prices are falling

Oh dear, oh dear – house prices are falling again. According to a survey of chartered surveyors, the housing market weakened in July for the first time in a year, and Lloyds HBOS now expects prices to be flat this year.

Posted by dr pineapples @ 07:05 AM 4 Comments

Tuesday, August 10, 2010

So what's it like in the rest of the UK?

Yorkshire Post: £100m bill as Yorkshire hit by mortgage fraud surge

MORTGAGE lenders in Yorkshire were hit by a fourfold increase in fraud in the first half of this year, with losses hitting almost £100m, figures compiled by financial experts reveal today.

Posted by mr g @ 11:20 PM 3 Comments

I'm sorry? Did nobody learn anything yet??

MoneySavingExpert: The (Slow) Return of the Sub Prime Mortgage

Borrowers with patchy credit records now stand a greater chance of getting a mortgage as lenders quietly introduce more 'sub-prime' deals.

Posted by the bull trap @ 11:20 PM 0 Comments

Interesting Prescident

BBC News: Benefit fraud: Cameron defends use of credit rate firms

Once the govenment has sorted out benefit fraud by using credit rating agencies will they turn to BTL tax returns?

Posted by crash bandicoot @ 11:03 PM 0 Comments

Well further as in not paying it back for longer... not further as in more of it in total

CNBC: Fed Signals Further Easing Amid Slowing US Economy

"To help support the economic recovery in a context of price stability, the Committee will keep constant the Federal Reserve's holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities. The Committee will continue to roll over the Federal Reserve's holdings of Treasury securities as they mature." Voting against the policy was Thomas M. Hoenig" So basically 10 to 1 in favour. And thats for maintaining the Status quo in terms of the quantity.

Posted by techieman @ 07:44 PM 43 Comments

House Price Discussion with Stephen Nolan

BBC News: Victoria Derbyshire Tues 10th Aug

This is an absolute superb phone in. People were phoning in from all over the country, one of their biggest responses ever to a phone in. JD is on there throughout, keep an ear for 1 hour and 11 mins into the show, an intelligent guy phones in and describes the bubble cycle superbly, even Stephen Nolan is kept quiet as this guy patiently and clearly describes how the bubble is created and finally bursts. This made my day..... loads of good stuff throughout the whole show, recommended!

Posted by loneranger @ 07:00 PM 2 Comments

UK housing market flashing amber

Bond Vigiliantes: UK housing market flashing amber

UK housing market flashing amber

Posted by easybetman @ 05:07 PM 1 Comments

House prices tumble across the UK

MSN New: House prices fall as demand weakens

MSN used to be one of the biggest property price rampers...times are a-changing.

Posted by thecountofnowhere @ 04:48 PM 0 Comments

It is feared that the typical price of a pint could rise to as much as £4

Yahoo: Beer prices to surge

The cost of living is already expected to rise significantly amid warnings that bread, gas bills and insurance are all becoming substantially more expensive. The price of a loaf of bread is set to increase by 10p to 129p, which would be a record, after Russia suffers from its hottest summer in a century, wiping out much of the worlds wheat harvest. There are also fears that rising prices on the wholesale energy market will push up gas prices for households, after a small supplier put up its prices by 23 per cent last week. Petrol prices are likely to carry on rising later this year and into 2011 because of higher taxes.

Posted by mark @ 04:02 PM 15 Comments

VIs v Reality

Guardian: Falling house prices? Blame the media

The Guardian picks up on surveyor and EA comments and throws them back in their face. It's not the media stopping price rises - it's economic factors. Would have been nice to see this kind of comment years ago. "With few signs that the banks are loosening the purse strings it is difficult to imagine how prices can advance much further. And "a bit of positive talk" will make not one jot of difference."

Posted by catmandu @ 02:49 PM 1 Comments

QE2 DDay?

BBC Newsnight: Newsnight looks at the reasons for and against QE2

15:36 in .... and who said blondes are dumb?

Posted by techieman @ 02:07 PM 2 Comments

RICS fall: Writing was on the wall, and it’s got a lot bolder since

Investment & Business News: Second housing crash begins

House prices have started to drop again. Should we be surprised? The information provided suggests not. The index tracking instructions has been greater than the index tracking enquiries every month this year. But in recent months the gap between the two indices has been growing. RICS is not owning up to this, but surely the fact that the headline index has only just turned negative is a reflection of what these underlying indices were saying several months ago, and the recent developments are unlikely to show up in the headline index for a little while yet.

Posted by jac nixon @ 12:11 PM 0 Comments

The true inflation rate is closer to 10 per cent than five, and may even be higher says Martin Vande

Yahoo: The real cost of inflation

Id guess the true middle-class inflation rate is closer to 10 per cent than five, and may even be higher. If you dont believe me, start with the basics and scrutinise your grocery bills. I nearly fainted in the deli when I was told that the £13.40 sticker on a kilo bag of Yorkshire Dales Granola was not an error. Nearby, a small jar of local honey cost a startling £6 possibly due to a global bee crisis, but also because thats the way prices are heading for all food items that are a cut above the two-for-one value-pack supermarket ranges. Even staple items are vulnerable to sudden hikes: a surge in wholesale wheat prices, no doubt encouraged by hedge-fund speculators, is about to add 10 pence to your basic loaf of bread.

Posted by mark @ 11:25 AM 25 Comments

Wonder is the same can be said for high houseprices

Yahoo: Linking pensions to CPI 'breaches human rights'

Plans to link private pension increases to the Consumer Prices Index (CPI (NYSE: CPY - news) ) are a nightmare which could breach human rights, a group of experts have said.

Posted by mark @ 10:05 AM 8 Comments

'Errors' has to be the understatement of the decade

Telegraph: Bank of England overhauls forecast model after errors

Will their model allow them to curtail inflationary asset booms? No probably not because then it would tell them the wrong thing completely. It is also worth being very skeptical whenever the Bank of England says its going to change the way it calculates something - the last time they did this they created the housing boom by excluding housing from their central inflation target. Bright sparks these folks, see. That's why they are so good at what they do.

Posted by paul @ 08:30 AM 5 Comments

Velocity Lag

Telegraph: Mini property boom is over amid concerns about double dip recession

The mini property boom that deluded home owners have enjoyed during the past year has ended as the latest housing survey shows buyers retreating over concerns about the economy.

Posted by fuzzy @ 07:30 AM 0 Comments

Stocks pause for thought on low volumes

ArabianMoney.Net: Stock trading hits a year low, is this an inflection point?

US stocks managed meagre gains on Monday but the important thing to note was that the lowest volume of shares changed hands in a year. That hardly indicated much confidence ahead of the Fed meeting today.

Posted by arabianmoney @ 06:04 AM 0 Comments

The price of excessive credit

Guardian: House prices fall as spending cuts see economy stall

Government austerity measures are already plunging the British economy into reverse according to figures published today which reveal sagging high street sales and renewed falls in house prices. Expectations of widespread job cuts in the public sector have begun to discourage households from moving home or buying "big ticket" items such as furniture and carpets, with spending going on essential items and replacements only, said the British Retail Consortium.

Posted by quiet guy @ 02:41 AM 25 Comments

Not big news but maybe another trend indicator

BBC News: House prices starting to fall, say surveyors

House prices are starting to fall, the latest survey by the Royal Institution of Chartered Surveyors (Rics) has said. It is the first time since July last year that its monthly survey has detected a downturn in prices. Rics said this was because more homes were being put up for sale, while enquiries from potential new buyers had fallen for the second month in a row. Buyers are still finding it hard to get a mortgage, while fear of unemployment is putting off others, Rics added.

Posted by quiet guy @ 02:29 AM 0 Comments

RICS balance -8

Daily Mail: House price fall fuels fear of double-dip recession

Fears of a double dip recession rose yesterday after the majority of estate agents reported price falls for the first time in a year. RICS said eight per cent more estate agents are reporting a fall in house prices than the combined total of those reporting stable or rising prices. This is the first time there has been a majority reporting falls since July last year. Looking ahead, a majority of agents believe prices will fall over the coming months.

Posted by little professor @ 01:21 AM 6 Comments

Monday, August 9, 2010

More debt to keep prices up !

Moneyweek: A shocking statistic from the property market

How many tenants do you think can't afford to pay their rent? 5% ? 10% ? 15% ? More? I mean, there's been a recession, but we're not in a depression... right? How bad can it be? Well get this... in the first quarter of this year, according to the National Landlords Association, nearly a quarter of tenancies were in arrears. That's right – a quarter!

Posted by ferux @ 11:04 PM 0 Comments

Europe recovery stronger than US

Investment & Business News: Can the be true? Europe takes up the baton

Where as the US appears to be about to suffer another property crisis Europe seems to be showing signs of the green shoots of recovery.

Posted by jac nixon @ 05:32 PM 0 Comments

They have pumped in nearly 1 trillion into economy & it is still tanking

Yahoo: Freddie Mac suffers $6bn quarterly loss

Freddie Mac (NYSE: FRE - news) , the troubled US mortgage lender, reported a second quarter net loss of $6bn (£3.8bn) and sought another $1.8bn from the Treasury to contain the red ink.

Posted by mark @ 04:06 PM 13 Comments

Dedicated to young mr HPW!

RICK ACKERMAN: Time to Re-think Milton Friedman?

.... and i wasnt even going to post it... aw well i must have got all emotional to do it. Whether in/de is correct balance is always good... IMHO. The in/deflation discussion still very much alive and nothing kicked in the gutter or anywhere else for that matter. "Most persistent and pernicious of the inflationists’ delusions is that the Federal Reserve can and will do “whatever it takes” to avoid deflation. But to believe that easing has not worked so far because the Fed has not eased enough is to imply that some further quantity of easing will do the trick. This kind of thinking, most notably by New York Times columnist Paul Krugman, is beyond dumb, but when it infects those on the left side of the Congressional aisle it can be downright dangerous. Tea Partiers to the rescue? "

Posted by techieman @ 03:59 PM 3 Comments

Summer time ... and the living's not easy

Guardian: High cost of borrowing may be the legacy of the credit crunch

Nor is the money, unless you borrowed a lot at the right time. Two-tier Britain. Will this mean that gradually the support for house prices dwindles, or will it mean that the housing stock gradually moves into the hands of an asset-rich elite?

Posted by letthemfall @ 02:59 PM 3 Comments

Gold prices set to surge this autumn

ArabianMoney.Net: Autumn seasonal uplift for gold prices a clear trend

This article is hardly going to thrill gold bugs with new information but the old timers are going to have to get used to new gold investors wanting to learn the ropes. The idea that gold always rises in the autumn is not new and pretty much established in the data of the past decade.

Posted by arabianmoney @ 02:25 PM 0 Comments

Dr Marc Faber quashed the deflationists in his Abu Dhabi lecture

Arabian Money: Marc Faber lectures Abu Dhabi on asset allocation and tips gold

''Dr Faber explains why extreme deflation scenarios are extremely unlikely under the Bernanke Fed... with the US so deep in debt the Fed thinks it cannot allow asset prices to drop below a certain point because that would devastate the balance sheets of the banks with debt deflation''

Posted by hpwatcher @ 11:15 AM 65 Comments

More than 20% of the nation's mortgage borrowers owe more than their homes are worth

Cnn: 20% of mortgages are underwater

This so-called negative equity is a hotly watched statistic because it is a prime predictor of foreclosure -- second only to loss of income.

Posted by mark @ 10:17 AM 10 Comments

Average student rent tops £65 a week with annual 4.3% rise more than double that of past two years

Guardian: Students hit with record rent increases

Students heading for university next month will be faced with record high rents, according to research by Accommodation For Students. The average weekly student rent now stands at £65.30, a 4.3% increase on last year, according to the website, more than double the increase over the previous two years. The index, which has been running for 10 years, is based on more than 21,000 properties nationwide. Website founder Simon Thomson says: "Landlords are having to pay higher fees and interest rates for buy-to-let mortgages and the providers of privately-run halls of residence are charging higher prices, pushing up prices of other student accommodation."

Posted by mark @ 10:08 AM 1 Comments

Nimbies Face a Loosing Battle

Telegraph: Councils to get bonuses for approving new homes

Town halls which approve new homes will qualify for cash bonuses from central Government. At last it looks as though something is being done to address the shortage of housing being built. Lets remember that each new house built is a REAL injectoion of cash into that local economy. Particularly when Small Developers and Self Builders have a look in.

Posted by str 2007 @ 09:55 AM 16 Comments

Step in the right direction for council housing

BBC News: Councils offered new homes bonus

Councils in England are to be offered extra money for every newly-built home, as part of a government programme aimed at easing housing shortages.

Posted by keith @ 08:30 AM 0 Comments

Why are Britons so obsessed with property?

Telegraph: UK property market's long-term prospects remain strong

''Britiain's property market - both residential and commercial - may be in for a bumpy few years but the long-term prospects are positive.''

Posted by hpwatcher @ 08:25 AM 4 Comments

Now there's a surprise - they got it wrong again...

Telegraph: Gloomy outlook expected from Bank of England

''The Bank of England is expected to give a gloomy assessment of Britain's short-term prospects this week, forecasting weak growth and high inflation.'' Typical public sector, get it wrong as many times as you like and still get to keep your job.

Posted by hpwatcher @ 08:14 AM 6 Comments

No sign of tighter lending standards

Independent: Mortgage fraud cases soar to a 22-year high

Mortgage fraud has nearly quadrupled in the first six months of 2010, KPMG's "fraud barometer" has found, with incidents of deception involving home loans reaching a 22-year high. And the company has warned that the picture is set to deteriorate over the coming months as the aftermath of the house-price boom, followed by the credit crunch, results in more incidents being unearthed. The Financial Services Authority is aware of the problem, and cited the potential for fraudulent applications as one of the reasons for its decision to ban "self-certification" home loans, where applicants don't have to prove their income to obtain a mortgage.

Posted by drewster @ 12:41 AM 7 Comments

Sunday, August 8, 2010

BoE Inflation Failure

Bloomberg: Bank of England May Forecast Slower Growth, Inflation Jump, Times Reports

Don't moan, don't gripe; just take your money out of the bank and keep it in a safe, stocks and shares, fine wines, new computers, cars... Enjoy your life because there is little point saving money as cash...

Posted by dr.pressman @ 08:55 PM 1 Comments

How to avoid sovereign debt

Web of Debt: What a government can do with its own bank

Debt forces governments to relinquish their sovereignty to their creditors, which are private banks that create nearly all the money supply as loans. Here's another example of a government that didn't issue sovereign debt – bonds indebting the nation to pay private banks at interest on money created by those banks. – but instead issued sovereign credit, or loans backed up by the credit of the nation. This is a short history of the Commonwealth Bank of Australia, which financed Oz's contribution to WWI at under 1% instead of the 6% the government would have paid to private banks. Lots of other good things besides.

Posted by icarus @ 07:06 PM 10 Comments

And apparently it's good for the economy as well

The Herald: Rising property sales and prices are good news for homeowners

Lies, damned lies and statistics is the epithet that best sums up the average mortal’s response to a news item based on several sheets crammed with columns of figures. However, the latest official statistics from the Registers of Scotland (RoS) tell the story exactly how it is. That is because, while other house price reports cover only properties included in the mortgage market, these figures cover every home in Scotland valued between £20,000 and £1m to find a buyer in the past 12 months. For homeowners, these figures should kindle cautious optimism ... The Scottish economy needs the trajectory of those RoS figures to continue tracking upwards because, for better or for worse, it isn’t only an Englishman’s house that is his castle.

Posted by quiet guy @ 03:00 PM 2 Comments

Not a thing.

Guardian: * Business * Financial crisis Credit crunch consequences: three years after the crisis, what's changed?

I can't wait any longer - in the light of all of this I am buying myself a pad in Oxford. Do I believe there will be a crash? Well I was there in 2003 telling everyone it was f**king crazy and they told me I was. In 2005 I should have been proved correct but the BoE bottled it. In 2007 the credit crunchhit and I just waited and saw half of what I thought. Now I forsee the steady erosion of my savings against inflation and no sign of base rate rises and rising value of sterling. For the first time ever, I believe that the government can not let houes prices fall more than 10% and in many areas less. rather, they would let them stagnate and no doubt extend mortgages to 40 year terms to make the problems of the day go away. If the market falls, I will trade up. :@?

Posted by brickormortis @ 10:02 AM 43 Comments

Affordability easiest since 2001

Telegraph: First-home buyers missing 'deal of a lifetime'

Lombard Steeet Research say that affordability is the easiest since 2001 due to low interest rates (but not since 1997 when house prices started rising). Lower down the article admits that LSR expect house prices to be flat or falling over the next twelve months.

Posted by monty032 @ 10:01 AM 10 Comments

+£15,000 on a new home

The Independent: All new homes to run on green power by 2016

I'm sure both red and blue wings of the homeowners' party can agree heartily with this one, regardless of their views on sustainable energy. Stopping house prices falling is the overriding economic imperative, and making new houses 10% more expensive so that fewer get built is a good start.

Posted by monty032 @ 09:46 AM 6 Comments

They kept this quite

Nationwide: Nationwide newsletter

House prices fall back in July as buyer demand remains weak.

Posted by jonboy @ 08:15 AM 0 Comments

Saturday, August 7, 2010

Rumours of a big US mortgage bailout circulating.

Reuters: An August Surprise from Obama?

Main Street may be about to get its own gigantic bailout. Rumours are running wild from Washington to Wall Street that the Obama administration is about to order government-controlled lenders Fannie Mae and Freddie Mac to forgive a portion of the mortgage debt of millions of Americans who owe more than what their homes are worth. The move, if it happens, would be a stunning political and economic bombshell less than 100 days before a midterm election in which Democrats are currently expected to suffer massive, if not historic losses. The key date to watch is August 17 when the Treasury Department holds a much-hyped meeting on the future of Fannie and Freddie.

Posted by wanderinman @ 10:41 PM 7 Comments

2 Telegraph journalists make poor stab at explaining the property market. Lots of VI quotes.

Telegraph: UK property: 50 years of going in cycles

Britain has long been in love with property. Whether it is that exciting step on the property ladder as a first-time buyer being handed keys to a ground-floor maisonette or the topping-out ceremony on a soaring glass and steel tower that reflects a magnate's corporate ego, property has always been vital to the British psyche – not to mention our economy. The figures can sound impressive over the long term. Including inflation, commercial property has grown by more than 4pc a year over the past 50 years, while residential property has gained 117pc in the past decade, even with the recent economic downturn.

Posted by siskin @ 10:37 PM 0 Comments

Everyone knows its a bubble in the UK !

Virgin Media: First-time buyers give up on UK, look abroad

Almost three-quarters of potential first-time home buyers in the UK have given up on ever owning their home, a survey has found – and a significant percentage are prepared to go abroad if that's what it takes to get onto the housing ladder. Here we look at why this is the case, and which locations are favoured by pragmatic Brits.

Posted by ferux @ 05:35 PM 0 Comments

Does Iraq have better prospects than Britain?

The Times: Wake up, you Brits. Make a fortune in Iraq.

Today Baghdad is a boom town, rather than a bomb site. If I were a young man, looking to make my fortune, I would be off to Iraq like a shot. Plenty of other young men are there already - Russians, French, Germans, Swedes, Chinese of course, even Turks and Lebanese. As one local politician remarked, when the Lebanese arrive you know there is money to be made. Nowhere is that more true than in the northern region of Kurdistan. The city of Erbil looks like Dubai 15 or 20 years ago. While thousands of foreigners were setting up companies all over Iraq, the British were noticeable by their absence. Adventurous entrepreneurs should realise that there is an opportunity in Iraq that rivals the gold rush.

Posted by drewster @ 12:58 AM 21 Comments

Friday, August 6, 2010

More institutionalised cr*p, sorry, theft

Welcome to the UK pensions saving casino: Save our Savers

Picture a shabby casino whose lights are grubby and dim, making it tricky to get a clear view of what’s going on. There’s a sordid air about it, a palpable sense of despair at repeatedly handing over piles of cash only to end up empty-handed. A weary resignation pervades that, in reality, only the House ever wins.

Posted by mr g @ 08:02 PM 19 Comments

Institutionalised theft

Save our Savers: Savers, cash cows for the banks and the government to milk at will

The drastic action taken by Gordon Brown to fix the banking crisis now seems to be paying off for the sector and the new Government alike.

Posted by mr g @ 07:59 PM 2 Comments

How the once-mighty dollar has fallen -- again.

Fortune: Dollar near bear market territory

The dollar tumbled against the yen and euro Friday morning after July's U.S. job report brought more bad news. Private sector employers added just 71,000 jobs last month, and total nonfarm payrolls contracted more than expected. "Overall, unquestionably a disappointing report," economists at Capital Economics in Toronto wrote.

Posted by mark @ 04:02 PM 22 Comments

Fascinating social commentary

FT: The crisis of middle-class America

(I think we lag the US, in some ways, by about 18 months.) It only takes about 30 seconds to tour Mark’s 700sq ft home in north-west Minneapolis. Cluttered with chintzy memorabilia, it was bought with a $50,000 mortgage in 1989. It is now worth $73,000. “At one stage we had it valued at $105,000 – and we thought we had entered nirvana,” says Mark. “People from the banks kept calling, sometimes four or five times an evening, offering equity lines, and home improvement loans. They were like drug pushers.”

Posted by another alan @ 03:24 PM 15 Comments

Double Dip here we come!

Daily Telegraph: Western shoppers stay on the shelf

For people searching for signs of life in the stagnant economies of Europe and the US, results from the world's consumer goods giants Procter & Gamble and Unilever won't have made happy reading.

Posted by need-a-crash @ 02:14 PM 0 Comments

Lets rev up those 'copter engines...

Bloomberg: Company Payrolls Rose by 71,000 in July; U.S. Jobless Rate 9.5%

Nobel Prize-winning economist Joseph E. Stiglitz said the U.S. still faces an “anemic recovery,” requiring another round of “better designed” stimulus measures from the government. “The recovery is so weak that it is not strong enough to generate new jobs for the new entrants in the labor force, let alone to find jobs for the 15 million Americans who would like a job and can’t get one.” Stiglitz told Bloomberg Television in an interview in Sydney yesterday. The jobs report may help determine whether the Fed takes any new measures aimed at boosting growth or sticks to its outlook that the “extended period” of interest rates close to zero and a near-record $2.3 trillion balance sheet will eventually bring down unemployment. i see "Eventually"!!

Posted by techieman @ 01:57 PM 4 Comments

Ooo errrrr

Yahoo: UK commercial property market slows in July

Britain's flagging commercial property recovery lost more ground in July, with average price growth falling for a fourth straight month, as fears for the health of the economy persist, data showed on Friday.

Posted by mark @ 01:03 PM 1 Comments

Things can only get worse!

Yahoo: Number of people being declared insolvent rises on credit crisis anniversary

The number of people declared insolvent has risen as the credit crisis marks its third anniversary. A total of 34,743 people were declared insolvent during the three months to the end of June, 5 per cent more than during the same period a year earlier, according to the Insolvency Service. The figures are lowered than the previous quarter, but experts suggested worse is to come as public spending cuts come into effect.

Posted by mark @ 11:35 AM 4 Comments

The reason does not stack up.. is this a sign of how bad things are?

Cnn: Romer resigns as chief of Obama's economic council

will step down and return to her teaching post at the University of California, White House officials said on Thursday Obama said in a statement. "While Christy's family commitments require that she return home *****Two different reasons!*******

Posted by mark @ 11:01 AM 2 Comments

Filth, hope and charity.

Guardian: The rich want a better world? Try paying fair wages and tax

I maintain that the real economic problems we face have their cause in inequality, so this article is not wholly off-topic. An interesting accompaniment to the discussions on interest rates. My view is that the extreme rich, with their inordinate power, seek to maintain low rates: it maintains the price of their many assets, and allows the continued transfer of wealth from the least well off to them. Philanthropy is another opportunity to exercise economic power as they see fit.

Posted by letthemfall @ 10:52 AM 14 Comments

How to spot a bubble

An American Perspective from China (blog): China’s Real Estate Riddle

There’s an old story reported by an American journalist in Shanghai after the end of World War II. Ravaged by hyperinflation, locals had turned to using tins of sardines as an alternative currency. One recent arrival opened his “proceeds” from a sale only to find the sardines inside were spoiled. He complained to the other trader, who cried, “You opened them? My God, man! Those sardines aren’t for eating, they’re for buying and selling.” Apartments in China aren’t for living in, they’re for investing. That is the real source of demand.

Posted by drewster @ 01:08 AM 6 Comments

Thursday, August 5, 2010

Deal or no deal

Reuters: Osborne says no deal on rates with Bank

The government has not stitched up any deal with the Bank of England to keep interest rates low but thinks the best way to stimulate the economy is through monetary policy, Chancellor George Osborne told Reuters. Some analysts have speculated that King has done a deal with the new coalition government, which came into power in May, to cushion the economy while it gets on with cutting the record budget deficit. "There is no tacit agreement at all. He is absolutely independent, as is his (Monetary Policy) Committee," Osborne said. "I have always believed that the greatest stimulating effect you can have in the economy is a monetary one not a fiscal one and the way to keep rates for by making sure fiscal policy is supporting and in this case means dealing with the budget deficit."

Posted by wanderinman @ 09:27 PM 10 Comments

Fed fiddles while economy burns

Counterpunch: An Avoidable Depression

Bernanke said the printing press was the technology to fight delation. So he increased the money supply (no good - the money had circulatory probles and M3 is negative) and stuffed the banks with reserves (no good - at least for the real economy - since lending and consumer credit are shrinking). Now they're talking of more QE (to fan inflation expectations to get people to spend before their money loses its value). But consumer spending can't be constantly regenerated by lowering IRs or fanning inflation expectations. As people are laid off or have to take pay cuts no amount of monetary policy will work. Fiscal, not monetary, stimulus is needed.

Posted by icarus @ 05:47 PM 21 Comments

The Next Leg of the Banking Crisis

Index Universe: Still On Life Support

Hedge fund manager explains in an interview why, far from being over, the banking crisis is about to enter another leg down.

Posted by paul amery @ 05:34 PM 0 Comments

Ageing baby-boomers sell property, prices deflate rapidly

Financial Times Alphaville: Geriatric Asset Prices

BIS analyst Előd Takáts is worried about ageing. In a caveat-heavy but very interesting Bank for International Settlements working paper, the economist seeks to investigate how ageing populations will impact asset prices — specifically, housing. this [baby boomer] generation retires and start selling off their homes, Takáts reckons US house prices will fall by around 30 per cent over the next 40 years. In continental Europe, where populations have been ageing for some time, demographics have already pushed prices down and it looks like they’ll keep doing so.

Posted by notyethomeless @ 04:09 PM 0 Comments

Don't count on russian wheat this year!

Yahoo: Putin bans Russia grain exports due to drought

Is this the start of look after your own, something we should be doing? like allowing houses to drop in prices, yet we continue to suffer at the hands of the world will bread go up in price? will animal feed go up in price? will china stop selling wheat to us? will the USA stop too? then what? meat prices will rocket.. soon Kings hand will be forced to put rates up

Posted by mark @ 01:56 PM 9 Comments

UK Base rate remains at record low

BBC: Interest rates kept on hold at 0.5%

The Bank of England has voted to keep interest rates on hold at 0.5% amid concerns over the strength of the economic recovery. The decision by the bank's Monetary Policy Committee (MPC) means rates will stay at their current record low for an 18th month. Inflation remains well above the bank's target rate of 2% on the Consumer Prices Index (CPI) measure, at 3.2%. Meanwhile recent economic data has cast doubt over the strength of UK economy.

Posted by jack c @ 12:05 PM 34 Comments

Need more articles like this in the tabloids

Herald Scotland: Watching the housing bubble with ever increasing interest

Sorry, but I just can’t share in the enthusiasm for the rebound in Scottish house prices or the return of bumper bank profits which underpin it. Is it sensible for a city such as Edinburgh, so dependent on public services and bank subsidies, to be growing its very own housing bubble on the eve of the biggest cuts in public spending in British history? Cuts that will lead to many thousands of job losses.

Posted by debtfree @ 12:03 PM 2 Comments

Signs of a looming double dip

Yahoo: New car registrations down - SMMT

New car registrations in Britain fell for the first time in a year in July, by 13.2 percent compared with a year ago, the Society of Motor Manufacturers and Traders said on Thursday.

Posted by mark @ 10:00 AM 4 Comments

Wednesday, August 4, 2010

Commercial property double-dips

Guardian: Property price rises slowing, British Land warns

Recovery in property prices has tailed off, while shortage of City office space ensures ever higher rent. British Land has warned that the recovery in property prices has slowed in recent months, although an acute shortage of office space in London is continuing to drive rents higher. The property developer, the biggest office landlord in the City, said today that while demand for prime office and shop space remains strong, the growth in values tailed off between April and June following the sharp recovery of the previous six months.

Posted by drewster @ 08:10 PM 4 Comments

A much more realistic stress test !

Bloomberg: China Tells Banks to Stress Test for 60% Home-Price Drop

China’s banking regulator told lenders last month to conduct a new round of stress tests to gauge the impact of residential property prices falling as much as 60 percent in the hardest-hit markets, a person with knowledge of the matter said.

Posted by ferux @ 03:34 PM 3 Comments

You can feel deflated

Money Marketing: Is America ready to fight deflation?

Nomura chief global economist Paul Sheard says the Federal Open Market Committee, the US version of the Monetary Policy Committee, will have to begin increasing rates “or at least to stop the passive contraction of its balance sheet”, which are two of the three tools it has at its disposal.

Posted by fuzzy @ 02:11 PM 0 Comments

Sorry guys had to post this - last one for today

Dailymail: The 100,000 under-24s living on state benefits because they claim they're too ill to work

Although many IB claimants of all ages are genuinely entitled to the cash through sickness, many have far less claim to the money. Some are on it because they are too fat, get headaches, suffer from indigestion, or because they are prone to blisters.

Posted by mark @ 01:31 PM 18 Comments

Things are looking bad

Yahoo: UK services grow at slowest rate in over a year

"Behind the weaker growth profile for the service sector is a failure of confidence to rebound from the record fall seen in the aftermath of the emergency budget," said Paul Smith, a senior Markit economist. "Expectations about prospects for the coming year appear to have down-shifted ... with reports of cancelled contracts and reduced enquiries adding to the sense that tough times lie ahead."

Posted by mark @ 12:00 PM 1 Comments

And how about a fix for inflation King

Yahoo: Next warning of 'cooling demand' hits retail shares

Looking ahead the retail said higher cotton prices and the January VAT rise will push up the cost of clothing next spring, possibly by up to 8pc.

Posted by mark @ 10:15 AM 7 Comments

This is sure to push up houseprices

Reuters: Job creation slows to nine-month low

Employment growth slowed to its weakest rate in nine months in July, with the healthcare sector particularly hard hit as public spending cuts began to bite, a survey showed on Wednesday.

Posted by mark @ 09:48 AM 7 Comments

Vast new housing estates fan out from the original town center, most of them uninhabited.

Reuters: China bets future on inland cities

Though legally barred from borrowing, provinces and cities have found ways around the restrictions, often through government-backed investment firms. These financing vehicles have borrowed a total of 7.7 trillion yuan ($1.1 trillion) from banks, according to the China Banking Regulatory Commission. That alone would about double the national debt

Posted by mark @ 09:45 AM 2 Comments

House Price Crash Cancelled

BBC: UK house prices post surprise rise - Halifax

House prices rose 0.6% month on month in July, according to Halifax. Economists had predicted a 0.3% drop. Compared to a year ago, prices are up 4.9%. Halifax said that the mixed pattern of prices rises and falls so far this year was "consistent with a slowing market" and reiterated its view that prices would be "broadly unchanged" over 2010 as a whole.

Posted by little professor @ 08:32 AM 24 Comments

The new bankrupts!

Dailymail: Big homes, nice cars, luxury holidays... what their friends don’t know is that they’re Britain's new

And borrow they did. Over time and on credit, the Risbridgers acquired all the trimmings of success: a five-bedroom house in Buckinghamshire, with an Aga, bespoke kitchen and wet room, surrounded by 15 acres with stables and 14 horses. Saving face: Charlotte says she still eats at restaurants with friends, but prays they don't ask her to go Dutch A top-of-the-range Audi as well as a Range Rover sat on the drive. Their two children were privately educated and they holidayed in the Caribbean and Dubai. By 2006 their incomes had dropped, but their outgoings hadn’t.

Posted by mark @ 08:31 AM 14 Comments

The view from outside

Arabianmoney: Housing an obvious investment bubble in the UK and Australia

US analyst tells the truth about the UK and Australia.

Posted by tenyearstogetmymoneyback @ 08:14 AM 5 Comments

Now that would put the cat amongst the pigeons

Daily Telegraph: Interest rates will go up quicker than anyone expects, ex-Bank of England officials warn

Sit back, open popcorn and watch. The smart money has to be on "wait and see"

Posted by growler @ 07:20 AM 8 Comments

Commentary from an estate agent

YouTube: Red Roof Estates: UK Housing Market update August 2010

Matt Holmes from Red Roof Estate Agents talks about the recent doom and gloom in the news about the UK property market. I was surprised by the amount of emphasis he placed on media reporting affecting property seller's sentiment.

Posted by quiet guy @ 01:08 AM 0 Comments

Tuesday, August 3, 2010

Confessions of a slum landlord

Investors Choronicle: Confessions of a slum landlord

Another article on LHA landlords and LHA changes. The IC magazine interviewed real landlords for the article.

Posted by easybetman @ 10:02 PM 0 Comments

More financial sector parasites.

Telegraph: Savers lose out as advisers cash in

An “insidious relationship” between financial advisers, investment funds and stockbrokers is costing savers billions of pounds in lost income, it has been alleged.

Posted by mr g @ 09:21 PM 7 Comments

No comment

Telegraph: Public sector workers need to pay more towards pensions, experts warn

More than £6 billion a year is being lost by allowing public sector workers to pay lower national insurance contributions even though they enjoy full pension benefits in retirement.

Posted by mr g @ 09:14 PM 3 Comments

Short(ish)hold tenancies in the council sector?

BBC News: Council homes for life could go, says Cameron

Council houses should be allocated on fixed-term deals rather than being granted automatically "for life", David Cameron has said. The prime minister added that it was important tenants had the opportunity to move to find work, requiring more flexibility in the system. "But there is a question mark about whether, in future, should we be asking, actually, when you are given a council home, is it for a fixed period, because maybe in five or 10 years you will be doing a different job and be better paid and you won't need that home, you will be able to go into the private sector" Any changes would apply to future, rather than current, tenants, Mr Cameron said.

Posted by wanderinman @ 06:32 PM 8 Comments

Reduce, Cool? - it's only going one way - down!

Money Marketing: Plight of the self-cert prisoners

Many mortgage commentators are suggesting that house price inflation will cool or even reduce over the remainder of 2010. Do you agree? "...That is the trend. The estate agents I know and talk to say that is the case. There is only one way the market is going and that is down. When you see newspapers advertising a new price - that is code for reduced. And that is what I have been seeing for some weeks.. . "

Posted by bill @ 05:14 PM 0 Comments

Government meddling cannot stop the inevitable...

Bloomberg: Pending Sales of Existing U.S. Homes Decrease 2.6%

The index of pending home resales dropped 2.6 percent from the prior month, figures from the National Association of Realtors showed today in Washington. Economists projected a 4 percent gain, according to the median forecast in a Bloomberg News survey. The expiration of a government tax credit on April 30 caused the gauge to slump 30 percent in May, the most since data began in 2001.

Posted by rob @ 03:43 PM 0 Comments

Following on from Yesterday's EXPRESS Headline...


....I thought it was about time we had a little giggle at the previous track record of CEBR and the Express. This was only 6 months before the first crash. I particularly enjoyed this bit "The Centre for Economics and Business Research said that, despite three interest rate rises, the property boom will continue in 2007 – and for the next three years. They are estimating that the average price of a house will go up from £187,000 today to £225,000 in 2010." So the doom-mongers are wrong now are they? Is it 'different this time'? We'll see...

Posted by hash browne @ 02:58 PM 4 Comments

Hidden deep in the telegraph

Telegraph: A third of properties for sale see price reduction

A third of all properties for sale have seen their prices reduced amid an uncertain outlook for the housing market, a new survey suggests.

Posted by mark @ 01:51 PM 1 Comments

Great recovery!

Yahoo: German car sales plunge by 30% in July

The slowdown has been seen across Europe, with new car sales off in July by 26 percent in Italy, 24 percent in Spain and 13 percent in France.

Posted by mark @ 01:00 PM 3 Comments

Inequality kills the health of economies?

Guardian: What the £35,000 cocktail taught us

Interesting in its own right, and suggests why housing has both become a cause and consequence of inequality. Article also acknowledges that mortgages, for many people, are huge/ridiculous.

Posted by another alan @ 11:39 AM 2 Comments

UK manufacturing hit by export slowdown

Guardian: UK manufacturing hit by export slowdown

Can't be arsed to comment.

Posted by brickormortis @ 11:11 AM 3 Comments

Meanwhile, in a parallel universe...

Financial Advice: Are UK banks controlling the UK property sector?

"Amid signs that the demand for UK property is bubbling below the surface, there is growing concern that UK banks are holding back the UK property sector... As we touched on in one of our earlier articles, 58% of mortgage arrangements available today demand a minimum deposit of 25%... There is no doubt that until we see a significant increase in liquidity, and a reduction in deposit requirements, the UK mortgage market has limited scope for growth in the short term."

Posted by mark wadsworth @ 10:59 AM 3 Comments

The good is bad and the bad is good or something like that!

Guardian: Northern Rock savings fall after government withdraws guarantee

I like the comment about how the bad bank made a proft. Well, look at the bse rate. You'd have to be really in the shtuck to default. It is all about what happens to the banks when rates rise.

Posted by brickormortis @ 09:53 AM 5 Comments

London House Price's Drop

FT: Prime London house prices fall 0.5 per cent

Prices of prime central London property fell in July by 0.5 per cent, the first monthly decline since March 2009, as demand for high-end property declines. According to the Knight Frank Prime Central London Index, prime central London prices are now 6.1 per cent below the peak of the market in March 2008.

Posted by cp @ 09:48 AM 0 Comments

A series of short positions against some of Europe's largest financial institutions.

Yahoo: Banking system on verge of new crisis, hedge fund Noster Capital warns

London-based fund Noster Capital is betting against five major European banks, including Barclays (LSE: BARC.L - news) in the UK, Spain's BBVA (Madrid: BBVA.MC - news) , and Switzerland's UBS (Virt-X: UBSN.VX - news) .

Posted by mark @ 08:08 AM 22 Comments

Pinning the moves on the news

Telegraph: Pound strengthens to an 11-month high on output growth

So how did that happen? Pound is finished init? Now personally i dont mind people saying that but the strange thing is there is always on this site some posting of the pound being bashed but when it strengthens its tumbleweed time........ GOOd news in time for a trip to the costas!

Posted by techieman @ 07:53 AM 7 Comments

Carry on Easing...

Telegraph: Federal Reserve to start the deflation fight next week, expert claims

''The Federal Reserve is set to kick-start a new phase of monetary easing, a leading Wall Street economist claims. Paul Sheard, Nomura's chief global economist, argues that the current conditions are ripe for the American central bank to take affirmative action to put the US recovery back on track. ''

Posted by hpwatcher @ 05:53 AM 5 Comments

Monday, August 2, 2010

Window tax, American style

C is for Candy: Form Follows Tax Laws

It’s all thanks to New Orleans’ tax laws and people trying to get Best Value. The government taxed property based on lot frontage; so people made their houses as narrow as possible. The government taxed two-story houses more; so people added second floors to the rear, where it didn’t count. The government taxed houses based on the number of rooms; so people didn’t make closets or hallways, which counted as rooms. And presto, the Best Value House looks like this: [lots of amusing pictures in the article]

Posted by drewster @ 11:43 PM 4 Comments

A Japanese economist said Japan is facing deflation because shop keeping seller cheap stuffs!

Japan Times: Fast fashion is not what's ailing Japan's economy

Not sure if will be the future of Britain. But blaming shop for selling cheap things and cause deflation is definitely a novel theory to me.

Posted by easybetman @ 09:15 PM 6 Comments

Here's why the government don't want the HPC

Guardian: UK value falls by £94Bn

Property is 61% of the UK's "wealth".

Posted by chrisch @ 05:52 PM 4 Comments

From boom to gloom to rooms

This is Money: Buy-to-let guru reveals his latest forecast

This is from a 'rare interview' with Andreas Panayiotou, who called the top (and sold property worth £1bn) and the bottom of the market (remember him on that BBC house prices programme last year). He's suggesting further rises over the next decade - but very small increases. Although he seems to be investing in hotels instead.

Posted by tom d @ 01:43 PM 3 Comments

Down, stalling and lack of confidence

Mortgage Soultions: House price growth comes to a halt

The housing market appears to have stalled as it enters the second half of 2010, with several indexes showing the market may have hit a plateau.

Posted by debtfree @ 12:58 PM 0 Comments

Homes up for sale in affluent Prestbury

Metro: England defender Wes Brown puts £4.5million pad up for sale for a farm

I post this not only for it's tabloid value. I happened to drive through Prestbury, Macclesfield, yesterday where the average home costs several £million and couldn't help noticing the staggering number of homes for sale. Every second mansion on the A538 seemed to be up for sale. Any ideas why this may be the case? Why the top end of the market is up for sale in the North West?

Posted by mountain goat @ 12:29 PM 4 Comments

Right-to-one way bet

Scotsman: Right-to-buy homes being sold back to councils

"CASH-STRAPPED Scots are selling their former council homes back to local authorities because they can no longer afford the mortgage payments. An increasing number of homes purchased under the right-to-buy are being bought back by councils and social landlords. Scottish Government figures show 303 Scots sold their house to social landlords in the last financial year using the Mortgage to Rent (MTR) scheme. This represents a rise of 25 per cent on the 223 homes purchased the previous year and is almost double the amount sold between 2007 and 2008" All of this representing a massive loss for the taxpayer, of course.

Posted by mark wadsworth @ 12:14 PM 4 Comments

Cheap real esate, you would have to be dead to live there

Oodle: Space in downtown Las Vegas

Todays bargain...

Posted by mark @ 12:06 PM 1 Comments

...or why banks are not lending

Greg Pytel: "Hier leigt der Hund begraben"

Recently both Vince Cable and George Osborne made it clear that they expect banks to start lending. These are impossible expectations. Are they silly, or they have another game in mind? Make up your mind up: "the ends justify the means".

Posted by ant @ 09:42 AM 3 Comments

Oh dear - pear shaped Monday...

City Wire: Should IO loans be switched to repayment?

The fire sale will be spectacular.

Posted by chrisch @ 09:30 AM 7 Comments

More good news to push up houseprices

Guardian: Manufacturing led recovery would be hard to sustain, economists warn

But economists are warning this is probably going to be as good as it gets and key industry reports published today paint the same picture. The storm clouds may be gathering. For all the talk of rising exports and profitability, manufacturers in the UK remain decidedly nervous about the outlook for a variety of reasons. Public sector spending cuts spell trouble for those companies reliant on government projects, tax rises risk hitting demand

Posted by mark @ 09:18 AM 0 Comments

Yes the market will boom...ha ha ha

Guardian: Mortgage lender refuses remortgage application because the road's busy and there's a restaurant next door

Mortgage lenders are becoming so strict with their criteria that they are denying loans to customers despite having previously agreed loans on their properties. In one case, a couple were denied a mortgage on their London home even though they had been granted a loan on it from the same lender four years earlier.

Posted by mark @ 09:16 AM 2 Comments



''HOUSE prices are set to soar by almost 20 per cent in the next four years, according to experts. This will lift thousands of households out of negative equity, with the average family home gaining more than £30,000 in value. The forecast defies doom-mongers who ­predicted Britain would face a double-dip ­housing recession. Martin Gahbauer, chief economist at the Nationwide building society, said: “It’s not a double dip and it’s not a massive boom, which would not be good for the market.''

Posted by hpwatcher @ 08:40 AM 30 Comments

High house prices = 'recovery'

Guardian: MPC likely to keep interest rates steady as global recovery slows

Inflation targetting appears to have beean abandoned, according to the Guardian: "Predictions of a second monthly rise in US unemployment coupled with reports of slower growth in the eurozone, China and Japan are likely to persuade the Bank of England's monetary policy committee to keep interest rates at 0.5% when it meets on Thursday. Weaker than expected UK house prices and exports, especially to the eurozone, are also expected to overcome doubts about the committee's policy of maintaining historically low rates." I will leave to the reader to count the number of times housing is mentioned in the article compared with the word 'inflation'.

Posted by quiet guy @ 08:13 AM 8 Comments

Sunday, August 1, 2010

Why house price rises are forcing all of us into servitude

Liberty Revival: Taking Aim at the Austrian School of Socialism

I was fascinated by the depth and clarity of the argument against socialism and mainstream right-wing views in this article and its relation to why we are in the state we are in with house-prices and the economy

Posted by the number cruncher @ 08:00 PM 18 Comments

More predictions from CEBR

CEBR: £1.6bn boost to the UK economy arising from the World Cup

England will reach the semi finals...

Posted by cyril @ 12:20 PM 0 Comments

A bold prediction for no double dip and more price increases

Mail: House prices are heading up, not down, say experts

''Doom-mongers who are predicting a 'double dip' in house prices have got it wrong, experts said today. The Centre For Economics And Business Research (CEBR) said prices will increase 4 per cent this year and continue rising until 2014, mainly due to a shortage of homes in the UK and low interest rates.'' ''....many commentators are purporting that the minor correction in house prices over recent months is a prelude to an even steeper decline that will engulf the housing market over the coming years......Those forecasters projecting a double dip have got it wrong.''

Posted by hpwatcher @ 06:23 AM 34 Comments

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