Monday, Jun 15, 2015

Rentiers tighten their grip

Telegraph: Rush to buy after Conservative victory pushes house prices to record

House prices have shot up to record highs after the Conservative election victory triggered a rush to buy in an overcrowded market. Average asking prices increased by 3pc between May and June as buyers and sellers reacted to the previous month’s vote, with properties going on the market at an average £294,351 according to Rightmove. This contrasts with the 0.1pc decline in house prices in May, when buyers balked at the prospect of Labour’s proposed mansion tax and the instability of a potential coalition with the SNP. “The unexpected election outcome has caused a strong rebound, prompting an upturn in buyer demand and helping new seller asking prices to hit their highest ever levels,” said Rightmove’s Miles Shipside.

Posted by quiet guy @ 01:51 AM (7756 views)
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22 Comments

1. Aletts said...

Is this from the same Telegraph that published this article last week .
Old people to blame

Telegraph: Housing market grinds to a halt as sales hit lowest level since 1978

Monday, June 15, 2015 01:35PM Report Comment
 

2. libertas said...

Anecdotally, houses between White Hart Lane and Edmonton Green (on the new Overground link I warned you about), houses previously selling for £280k have asking prices over £400k. In 3 to 6 months time we shall see if these prices get realised, but that remains low for this zone on the Underground map.

Monday, June 15, 2015 03:02PM Report Comment
 

3. libertas said...

I have to say, that these price rises are probably more to do with Greece than the Tory election. Incidentally, the Green / Turkish populations in north east London are HUGE. I expect a flood of expats once Greece exits the Euro, with many failing to act until the last minute, alongside others fleeing the falling knife that is the Euro as it heads towards $0.60, probably then rebounding and settling at between $0.8 to $1.

The problem is not Greece, but the issue is the other countries that have guaranteed Greek debt.

In effect, Greece has outsourced its prior tendency towards Drachma devaluations, amplifying their anti-austerity behavior to create a cascading and potentially destabalising Eurozone devaluation. Without Grexit, this will happen again and again.

Problem for the Greeks is that their strength is shipping, and yet sinking the Eurozone will further monkey hammer international trade, causing further collapse to the Baltic Dry Index that a large proportion of the Greek economy once relied upon. Meanwhile, Europe has been playing this game to get control of the ports and shipping companies. So they are just as bad as each other.

It is economic warfare that I hope does not descend into real warfare. I did notice that Europe has called upon Greece to cut military spending by €300m. No kidding, it does not want UN and EU troops staring at the barrel of a gun when they quietly rape the Greek economy.

Monday, June 15, 2015 03:13PM Report Comment
 

4. libertas said...

Incidentally, a Euro collapse alongside there being ZERO import controls from the Eurozone means that UK deflation could plunge below 10% until the Eurozone stabalises if it collapses to the magnitude I have predicted. Britain will either take a sudden Brexit to regain control and impose tariffs or, most likely, with the Europhile, backboneless PM we have, will devalue Sterling the only way he can, via punatively negative interest rates. Preparation for which was the Mortgage Market Review.

But MMR will do nothing to stop house prices soaring in that context, because the weight of demand will be international capital flows from the Eurozone to Sterling that will precipitate capital from all over the world jumping on the band wagon.

The Danes will be forced into capital controls or breaking of their peg. Same with the Zloty and Czech Krona.

But dwarfing that trend will be the Dollar regaining its place as the global safe haven and currency of choice. Given that the US Dollar Index is heavily weighted towards the Euro, I see it testing and possibly breaching for a short time its prior high of 165 that occurred as recently as the 1980's. This will be a cascading event whereby capital follows the trend, flooding out of emerging markets into US Dollar, with the Dow probably peaking up at over 30,000.

This will be a slow grind until a reversal that may occur around 2026.

Monday, June 15, 2015 03:22PM Report Comment
 

5. mister ed said...

@1

Read: "Anecdotally, I'm better off than people who don't have rich parents and taxpayer-funded jobs."

Monday, June 15, 2015 03:49PM Report Comment
 

6. cornishman said...

taxpayer-funded jobs...

- that allows them to spend more than 20 minutes blogging on a Monday afternoon.

Monday, June 15, 2015 06:12PM Report Comment
 

7. icarus said...

The Greek problem can be solved non-apocalyptically:

http://www.paecon.net/PAEReview/issue71/AndresenParenteau71.pdf

Monday, June 15, 2015 07:23PM Report Comment
 

8. libertas said...

Of course, if there is a Greek deal, and the Eurozone supports its new Brother in Law, the Euro will do fine and a couple of Goose stepping Germans will be peeved.

Monday, June 15, 2015 08:44PM Report Comment
 

9. libertas said...

Cornishman, I had a paid leave, day off. Do you not get statutory leave?

Monday, June 15, 2015 08:45PM Report Comment
 

10. libertas said...

Cornishman, I had a paid leave, day off. Do you not get statutory leave?

Monday, June 15, 2015 08:45PM Report Comment
 

11. mister ed said...

@8 + 9 (Repetition for effect, no doubt)

Well, judging by the volume of posts, Libby must get a lot of days off, eh. :-)

Monday, June 15, 2015 08:54PM Report Comment
 

12. cornishman said...

OK libby, fair enough.

Monday, June 15, 2015 09:43PM Report Comment
 

13. reticent said...

Keeping things on topic (would it not be simpler if we just ignored all his posts? That's what I used to do until about a year ago when tons of people left and he started to be responsible for 60% of total posts.), this article is the pits. The Guardian and the Telegraph become so much more partisan around election time, but this is just a more sophisticated example of Daily Express property-ramping, baby-boomer-pandering, Tory-championing (I know the DE has changed to the purple team but the point still remains).

Tuesday, June 16, 2015 11:15AM Report Comment
 

14. libertas said...

People left, not because of me, but because it became clear that the house price collapse completed around 2013, with now a new secular bull market likely to continue until, oo, about 2026, but with parts of London affected by Crossrail 2 not experiencing any collapse in prices.

I think you give me far too much credit.

I started posting these warnings almost as a penance following leading myself to financial ruin following the doom mongers into renting far longer than I should have done.

Tuesday, June 16, 2015 07:35PM Report Comment
 

15. Captblack said...

"Rush to buy - pushes up house prices"

Err...so this is from Rightmove (sell side) - so sellers have decided to increase asking prices - which is not related to the actual sale (which won't be known for sometime). No where in the index is a quantitative analysis of the cause except it coincides to post election.

Actual real data on sale prices from Natiowide, Land Registry, and ONS show the market slowing. Based on my own observation of Rightmove in my area (greater London), I'm starting to notice an increased number of re-listings (presumably sales which have fallen thru) and price reductions.

I would say the headline is an example of hope (asking prices) vs reality (actual sales prices)

Tuesday, June 16, 2015 08:15PM Report Comment
 

16. reticent said...

You're the only one giving yourself any credit. I never said people left because of you. People left because of a house price mini-boom that led them to believe that a crash was no longer imminent and that they should buy.

Once they left, your posts made up 60% of the blog. Back then, you posted about inflation holding down HPs non-stop. Late to the game, you finally turned bull, started prattling on about negative rates and deflation and eventually bought a house after the boom had largely fizzled out, at the end of last summer.

That you think your opinion on when the next crash will come, and which areas it will affect is worth sharing, let alone announcing as fact or suggesting that your views are shared by anyone who no longer posts here, is just another example of you giving yourself too much credit.

They left because they saw the stagnation that followed the crash ended in a boom, rather than a further crash, as they had thought it would. They bought in and left the site. End of. They almost certainly did not presume to foresee the macroeconomic situation 12-13 years ahead.

Very few people do.

Tuesday, June 16, 2015 11:08PM Report Comment
 

17. Anned said...

Real Estate Business Cycle: There is a crisis unfolding in the bond markets right now. There are no bids for bonds and liquidity is vanishing rapidly. When the crack materializes, this is going to be so bad it is scary. This is BIG BANG in spades. Cash is rushing into the short-end. The long-end is starting to falter. This should be the same for most real estate markets. The 26-year high in real estate finished 2007. Real estate is on a downward trajectory until 2033, give or take a few customary spikes, aka 2015.

Wednesday, June 17, 2015 06:58AM Report Comment
 

18. mombers said...

A sad departure was Mark Wadsworth who was banned without justification in my opinion...

Wednesday, June 17, 2015 09:29AM Report Comment
 

19. cyril said...

All this guff about secular bull markets until 2026. Britain's been running on empty for years. If you print more money you get inflation and that's what's happened. For some peculiar reason most people in the UK think that's a good thing.

Wednesday, June 17, 2015 10:48AM Report Comment
 

20. pete green said...

Yes MW was a great loss, he was always ready to put his spreadsheet where his mouth was - I also miss the Titanic Captain who was great fun.

My view is the standard /land market cycle is not going to hold true due to over leveraging, but this is just a gut feeling due to inability to service that debts.

Thursday, June 18, 2015 03:24PM Report Comment
 

21. phils said...

Greece is too small to bring down the Euro. They just don't want to let it go on principle.

Friday, June 19, 2015 01:57PM Report Comment
 

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

 

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