CPI down from 0.9% to 0.7%
What Happens to House Prices during Recessions?
More Money for Houses
The government have decided to provide incentives to mortgage lenders to offer 95% mortgages for first-time buyers. There don't seem to be many details. I expect the incentive will be UK taxpayers underwriting a share of the loan and hence share of risk if the borrower defaults. at a time of significantly rising national debt, I find this policy questionable.
one in 10 owner-occupiers do not have enough savings to cover even a single month mortgage payments
About 770,000 homeowners are vulnerable to repossession during the pandemic if they have suffered a loss if income, a new report revealed, calling on more government support for those at risk of eviction. Meanwhile, renters may be struggling as well. Last week, a coalition of landlords, housing groups and charities has warned that the government needs to do more to support renters and avoid them "being scarred" by debts, otherwise more will lose their homes in the coming months, with the risk of an increase in homelessness.
But optimism aka greed prevails
'Sellers are pricing in expectation rather than reality': House sales fall as buyer interest wanes - but prices are still rising everywhere but London Sales, new listings and buyer queries all dropped off last month, says the Rics But prices everywhere in the country, apart from London, are still on the up Estate agent says homes are being priced 'in expectation rather than reality'
As expected, anything for the bubble
Annual house price growth slows for first time in six months as end of stamp duty holiday approaches
Understand the “Great” Reset to trade this market.
FOMO buying ??
What was true for your parents generation is not true for you. You have to pay for your accommodation and also their high property value. Not to forget the NHS, pensions that they need from your current salary. Lesson learnt quick and fast, saved you from a life time of misery to keep paying for the housing bubble.
NLA pl explain
Biggest tax rises have been in London (bigger mortgage interest bills reduced deductibility) but rents have plummeted. Rents have risen in suburban areas because people moving from city centres can afford to pay more. Another nail in the coffin for the passing costs on threat.
Low deposit rates are back again
Why not reduce their housing cost by Ã‚Â£50 per week?
Then people can buy food without any issues. Why does no one ask how much do you pay for rent/mortgage? Why should housing cost not be reduced that is eating up (pun intended) all the money you make? Then people can live their lives more meaningfully. If food comes before shelter in human need hierarchy then why does the final Ã‚Â£20 used for good not the first? This will make you ask the right question that needs solving and its not price of food, its the price of housing.
Would you vote higher tax on yourself?
Snippet from article Meanwhile more than a quarter of councillors - 19 out of 74 - did not vote after declaring an interest in the matter, according to the Local Democracy Reporting Service. That's 25% of councillors who have declared interest or benefit from housing within the area.
Car finance has been going through the sunroof in past few years.
In 2019, FLA members provided Ã‚Â£38 billion consumer car finance through point of sale. Add outstanding finance over the past few years the figure soon starts to add up. I take it there would be other lenders providing car finance too, If from Feb people are going to return their cars bought over the past few years because they can't afford or don't need them any more what happens then? It would be interesting to see how car industry handles this, as cars are generally the second biggest expense a family has. This could be a pre-cursor to what happens to housing loan in times to come. Hence posting this article here.
Missing out on buying a NEW first home: How many FTB’ers won’t make the HTB deadline
Its world over, young treated as fodder for asset price inflation
Dr Tsui added: "These young people are so used to e-commerce, but at the same time have little experience in the financial world. That's why they are the most vulnerable group for a situation like this." All over the world financialisation of every aspect of life has made life difficult for young and the poor who rely on hard work for their living. People who make a living on shares, housing inflation are just as merry as before if not better of
Will this make the price of a house rise to the point where it is 20 x 12 times the monthly rental price for a similar house in the area? And will the price then stabilise there? It seems that most people aren't bothered about the actual price they agree to pay for the house, but only their monthly outgoing.
As long as house prices rise
What about people who buy as business?
487.5 K to 900K in two months
Looking at this house on Zoopla the description says "Requires complete refurbishment". OK, that might be fine then I reached the bottom on the page which says price history. Last sold was 487,500 in Nov 2019. In less than two months the property was put on the market for Â£900,000 almost double the previous sold price. More story in comments
Complex, Costly and Restrictive
Got to look after the rich
Sure sign prices will rise, as they have done so far this year
Risks of home ownership at any cost?
Greed or FOMO?
Govt policy of "Shared ownership" gives you a small percentage of ownership and 100% of the bills. No wonder housing companies are loving this as they do not need to keep up with the repair. This is extremely important when people only compare mortgage and rents only. Home ownership also comes with repair bills
What happens when you turn interest rates to zero
Here we go again
Bank of England can create new money electronically and the Bank spends most of this money buying government bonds through a process known as quantitative easing (QE). QE is sometimes described as "printing money" but in fact, no new physical banknotes are created. Government bonds are a type of investment where you lend money to the government. In return, it promises to pay back a certain sum of money in the future, as well as interest in the meantime.
Best time to own a house, Its free
Anything for home price inflation. There is no chance of a forced seller, there is no chance of a price fall. So that creates a shortage in the market as sellers are stopped from coming in. So when you have few buyers with restricted supply prices could go up artificially. Not sure what will happen when in six months, the additional payments would need to be made and all the sellers are forced at one time. .
The worse economy gets, the higher the prices go
And here comes the avalanche
Highly Leveraged Commercial Real Estate Bets that UK Local Authorities Took to Meet Budget Shortfalls Begin to Unravel
For the last two years, KPMG has refused to sign off the accounts of Spelthorne borough council, a tiny local authority on the outskirts of London that has taken on huge amounts of debt to buy more than Â£1 billion of commercial and residential property, it has been revealed. The council has an annual budget of just Â£22 million, yet it has amassed more commercial property than just about any other local authority in the UK, all of it debt financed.
Despite Covid, at the macro level house prices still are rising pretty much everywhere.
John Stepek points out that even though we are in the midst of a pandemic, low interest rates and a general lack of material shocks (cushioned in no small part due to government action) has meant that first world house prices have remained surprisingly resilient.
Office for Budget Responsibility predicts 11% fall by the end of 2021
Prices in July 2020 are back at September 2019 levels
Average England and Wales house price has been falling since March. In Reading where I live prices are now down over 8% year on year. However, you wouldn't think so on a skim read of the report. The VIs behind the house price stats are laid bare by the headlines they choose. LSL Acadata series is based on LR data, like the ONS one. Ignore also the results from July, which are based on a pathetic 1,300 reported sales, things only become clear at 2-3 months distance, since that's when most of the data are in. Probably it will have ticked up when the dust has cleared due to stamp duty holiday, but that's a one-off.
I thought that’s how it works
Foreign buyer current discounts
"However, there are two other areas offering better value for foreign buyers at present. In the last year, house prices in the City of London have fallen by Ã‚Â£60,868. When combining this reduced cost of investing with the Ã‚Â£30,851 stamp duty saving made by buying now, foreign buyers are some Ã‚Â£91,720 better off investing in the London property market at present." This article doesn't mention the pound also down about 6% roughly against dollar etc compared with this time last year.
Overpaid to travel to work to London!
No job No income got a make money somehow
The old Government policy of providing money to people via asset appreciation. This has been going on for 20 years plus at least. The first thing I my stats teacher taught me was, if there is not enough transactions, the data is meaningless. So here as well is the transactions are half as usual and and coming from a point of closure. They do not matter. The housing index calculating companies will not tell you that, there is a bank behind them to run this as a business. There is a conflict of interest on the biggest purchase you make in your life and this should be separated.
Why dumb pricing happens
Jim Cramer explains why markets do funny things. With BP as example when the market was good and dividend up its stocks went up 5% pre-pandemic. Post pandemic, profits down, dividend cuts, moving business to non carbon. Stock up 7.5%. Back to housing, the market does not go up always because BoE printing press is on, Free money given to top 1% to buyout the poor. Govt giving helicopter money to keep peace. Its just the plain old stupid punter who over pays for their house (rent or buy). And that leads to others needing to pay more.
"Back then, we were so upset about inflation that we were willing to endure a recession to fight it. Now, we are so resistant to a recession that we are willing to endure much more inflation." and perhaps more pertinently "By the time the 1970s ended, financial assets were cheap, while real assets were expensive. Today, itÃ¢Â€Â™s just the opposite."
As long as the housing market is up
I just do not understand this (housing) or any market. And I did study Economics as my majors. I should take take all the Economics books, Keynes, demand, supply curve theories and throw them in the bin. Which is where it belongs, nothing is relevant to real world. Being knowledgeable and educated on the issue has hurt me. As I have seen the issues coming which never came, so I didn't take the plunge and buy my house or assets. No books tell you that the Gov't and Central Banks fiddle the system and equilibrium prices never comes.
The tune has changed rapidly, hasn’t it?
Negative interest rates becoming entrenched
Rates are now firmly at -0.1% in private bond markets for UK 2yr bonds. Despite the propaganda, the global bond market is bigger than the Bank of England, which follows and does not lead the bond market. Expect a rate cut to -0.1% maybe before October, with BOE being behind the curve. Rates will plummet when the market understands that many furloughed "workers" are laid off when the scheme ends and when the V shaped recovery fails to materialise because as Sociailst dictators discovered elsewhere you cannot turn off an economy and then instruct it to turn back on again. Simply the realisation by entrepreneurs that their investment is at risk from nationalisation or shut-down is enough for them to decide that investment in a tyrannical country is not worth the risk.
Money diverted from Mortgages
There has been a lot of speculation on how the Government will pay for all their recent expenditure. Now we know part of the answer. Great news for savers. Bad news if you are expecting to borrow money from a bank or building society. I would imagine money flowing out of them far faster than it goes in.
Front running the government
I think i said on some article i posted and i know people here are on this site for over a decade because of interest in economics, but actually, its true. The only thing you can do is front run the government because the whole thing, the entirety, is administered. House prices clearly looking squeaky, so government is intervening on pricing. Is this a market?
5,271,100,000 pounds of outstanding debt as of 31-Dec-2019
CMBS blowing up
If you though CDO, MBS securities were dead and part of 2008 crash. Think again. But not as they Commercial MBS are not paying as the rents are not being paid, Who is not getting paid? What I'm looking for what is the next debt fueled domino to fall? Who is the next one who took debt and bought these securities and now can't pay up
On a seasonally adjusted basis, house prices in June were 3.2% lower than in April.
Given the BBC misreporting on this, documented below, for balance here are the correct headline stats. House prices continue to fall, more than paying for my rent in the last two months assuming I eventually buy. No figures are provided for MOM by region so we don;t know NW's estimate how MOM has panned out in England, Scotland Wales and N Ireland separately.
House prices down for the first time in 8 years
Crazy measures of productivity
Not strictly about house prices but I put here because incredibly, on the output per hour worked, the most "productive" sector in the UK economy, and its an amazing 3x the next most productive, is real estate activity. The most productive part of the UK economy is selling properties amidst ourselves.
Less credit availability just is lower house prices
Inflation or not
House sales slump.
Interest in buying strong as, as Libertas has pointed out in a previous comment, need for garden and work from Home extra space has increased. On the other hand the medium-sized long term of the economic downturn could make it more difficult to put together a deposit and/or get a mortgage.
Here we go.
Insurance pins all the all the financial risks we take
You may think this is not relevant to housing but it is relevant to all aspects of our lives. You will see that even when sitting at home your car insurances will go up, and so will your housing insurance as insurers have to now pay up for the policies they have been writing. Even the mortgages that are given to people are then sold away to investors after they purchase an insurance policy on the Mortgage backed Securities. Now if the insurers have pay up, they would either need to raise more capital or shrink their underwriting book. This is more important than we all think. Remember AIG from 2008, it was very crucial for the US economy .
If you cant pay, the it should go on your credit file
Last throw of the dice
This effectively would be paying off peoples mortgages for free. I'm a bit surprised that there hasn't already been a revolt amongst savers. I have lost count of the number letters I have received saying my savings rates have been reduced to figures like 0.05%
Why bother give it for free
Most who lost jobs are at the lowest pay grade
38060 transactions in April
There is no information about the value at what these are traded. One thing I learn't in my stats class, if the numbers are not big enough and transactions are at margin the value / price is not valid. But that is something that the housing index providers will never tell you. Even if one house of sold at the high price they will quote all of them at high price. That is how they remain in business.
The bottom is now, with a tick mark shape recovery with 10% MOM growth
I do understand this is for US market, with over 30 million people loosing their jobs, I'm not sure who are buying this homes at an increasing prices? How these numbers can even be arrived at. Would people in difficulty not try to sell to whatever they can get and move on. During the 2008 crisis everything was so leveraged that when only few people started to fail the dominoes started to unravel very quickly. Now the debt level are even higher in the system, not sure how this is even possible?
Ability to pay has nothing to do with getting a loan
Remember NINJA loans, you don't need any income or assets to get a loan. 80% income is still too much as long as you want to buy at an inflated price to keep the house prices up, we got the money. When you can't pay then there can be forbearance and its the banks fault to lend to you rather than your greed. If all fails, others will bail out the banks for lending to you. And the economy continues.....
When making money in good times is hard, then how do you survive in lean times? Now the customers can't/won't pay ever pay rent, the landlord is in trouble. When enough landlords can't pay rent, the banks are in trouble. Dominoes keep failing. Where can we get similar figures for residential landlords?
How many people will have to downsize ?
Even before anyone had heard of Coronavirus, I thought Defined Contribution Pensions will end up being the new endowment mortgages. If so I wonder how many people will end up having to downsize when they get to retirement and find out how little their Pension is worth.
Let’s tuck in on LHA without offering any improvement in service
A perfect example of how Housing Benefit increases rents. LHA is meant to be the maximum that the taxpayer will hand out to landlords. Instead it's the really the minimum. If the government will pay up to Ã‚Â£x no questions asked, why would any landlord ask for less? And if LHA increases, how do you stop this sort of behaviour?
The relationship between house prices and unemployment levels has been discussed on this blog years ago. Historically, rising unemployment has been the harbinger for residential property prices falls. Unfortunately, the covid-19 pandemic lockdown appears to be subjecting the UK economy to what might be the most severe economic dislocation for a generation. Obviously, nobody should want this kind of HPC but we have to deal with reality. In one or two years, we will likely see a depresssed property market. I am planning my finances on the assumption that my own house may lose up to 50% resale value within two years. See comments by 'flashman' at https://www.housepricecrash.co.uk/newsblog/2009/07/blog-unemployment-trends-24453.php
The final outcome is anyone’s guess
The Government borrowing levels being talked about are completely unprecedented. So is the fact that the rest of the world is equally affected so might not want to lend out money. Will the BOE need to increase interest rates to stop the pound plummeting. I find it interesting that while all the building societies are slashing their savings rates, Government owned NS&I postponed a previously announced cut.
I don’t believe this any more
There is a valuation graph which tables about human psychology and how initial investors make money and then when public get in then comes a dead cat bounce and then drop. This graph comes again and again with asset classes, I think this chart is flawed, sadly the fall at the end does not happen due to financial and monetary policies that keep filling the bubble.
Where where the checks
The SO CALLED enhanced stringent checks on on giving housing LOAN also called mortgage introduced by banks over the last years are dead in the water within the first month. The idea you should have six months of living money if you lost your job what happened to that. This clearly shows that more people have been given mortgages they could not afford if they lost their job within the first month and not found another. And I want to now re-interview those people that come on BBC who say, I have collected money for deposit and the banks don't want to lend me more. and now ask them Why do you want a mortgage holiday ?
COVID-19 downgraded from HCID status, March 19th.
The housing market, construction industry and more, destroyed for COVID-19 despite it being downgraded from High Consequence Infectious Disease since March 19 due to "low deaths overall", spoiler alert, the computer models that justified lockdown were wrong. Ask, why are deaths and cases quoted without context from prior flu seasons? over 26,000 died in UK of flu during the 17-18 season. Could it be because that wouldn't fit the narrative of the global Marxist Cultural Revolution currently underway, led by a WHO chief from Ethiopia who "was" a revolutionary Marxist from a designated terror group in partnership with China, who know a thing or two about Marxist Cultural Revolutions? Time to have Brexit from the WHO. This is Mao worldwide and the answer to COVID-1984 is 1776
Estate Agents Want the Government to Get the Housing Market Back to “Normal”
Ã¢Â€ÂœThe legacy of Covid-19 could be such that any return to what might be described as normality in the economy will take time,Ã¢Â€Â said RICS Chief Economist Simon Rubinsohn. Ã¢Â€ÂœFurther government interventions both in the wider economy and more specifically in the housing market may be necessary to aid this process.Ã¢Â€Â Which way is normal? Is that where young people can afford to buy houses with just their own money?
Something is moving in the right direction
My desire for a house price correction has never gone away, not because I would directly benefit from it, but because it will promote social equality, opportunities and hopefully end the speculation. I don't rub my hand with glee at the terrible scenario that was to initiate the correction, but a house price crash could be one unintended positive consequence...
I certainly hope so. Homeowners lost MIRAS years ago
After the scales were tipped in favour of landlords years ago they are being tipped back again. I have no objection to a landlord owning property and renting it out but why should they have a mortgage on it when that mortgage could have gone to a first time buyer (like myself in 1986 when I was able to buy a two year old two bed house for 3x my junior engineers salary)
The loans were sold at a discount
Key take aways: New Residential, which has seen its stock sink more than 65% this year, has a market value of about $2.2 billion cut its quarterly dividend 90% to preserve liquidity. While the Federal Reserve is buying up mortgage debt, the effort is focused on securities consisting of so-called agency loans that were created with help from the federal government -- different from New ResidentialÃ¢Â€Â™s non-agency debt. Ã¢Â€ÂœConditions created by the Covid-19 pandemic have greatly impacted the mortgage REIT industry, The company said its book value has declined about 25% to 30% since the end of last year.
Even worse news for savers
Another article about how Coronavirus is affecting the Mortgage Market. Savers are just as badly affected. I have a YBS Regular savings account which matures in about a fortnight and can't see anything remotely interesting on their website. Surprisingly NS&I is actually better than most building societies at present.
Up to a 10% drop
Government last ditch attempt to stop house price crash – suspend the market
The government has asked that viewings cease apart from virtual ones. Interestingly the FT said this followed a plea by banks and the disappearance of new mortgage finance. On Rightmove I had noticed that the listings were generally either new or reduced in the last 2 months. In other words, HPC in process. Is this really a response to COVID-19 or the ultimate attempt to shore up prices, removing sellers so that they don't become the overpopulated side of the market. If virtual viewings continue, will prices nonetheless continue to slide? Legal processing of sales may also have stopped - in which case I guess both sides have been frozen?
Where to now?
Could house prices really plunge?
UK house prices could plunge dramatically as the coronavirus outbreak causes demand to dry up, Zoopla has warned. The spread of Covid-19 is already having a big effect on the market, causing a 40 per cent drop in demand for housing in the seven days to 22 March, according to data from property website Zoopla.
Anything to keep the bubble
0.1% interest rate, anything to keep the bubble going. 1991 Housing bubble leading to dot.Com bubble by late 90.s Leading to housing bubble II of early 00s That crashed and burned in 2007-08. No lessons learnt. Carry on with more bubble blowing in asset price inflation, stock market bubble, housing bubble, tech bubble, Crypto bubble of 2017 New technology 10's of billion dollar companies which loose money bubble. Now before anything comes to light, this frothy market and the bubble starts to deflate more bubble blowing. If only the previous bubbles would have done its cleanup we would have more companies that made real money for real work. They will be able to exists for a few months without handouts and also support the people and the customers who work there. Rant over.
How long can financial gearing prop up asset prices?
Average property cost Ã‚Â£518,000
Increasing economic strength + artificially low interest rates = ?
Nothing to see here
Misallocation of capital
BoE suggests that artificially low interest rates, typically associated with misallocations of capital culiminating in recessions as grand plans exceed real savings, points out that their artificially low interest rates -may- cause a baby boom in the UK! As couples may misunderstand how much capital is available for their additional child presumably and then no .. sell that empty mall mum! No mention sadly of couples forgoing additional children because they can't afford somewhere to live with them. Sensibly Torygraph kept the comments turned off.
An independent report has found
Generational property cascade runs into student debt
I wonder if this effect will be present in the UK, but you could also put this in the same box as those speculating that the global debt ponzi will fall in on itself because eventually we are all saturated with debt etc etc. House prices in the UK are different because they are ultimately always underpinned by housing benefit (unless we run out of claimants )
When it is locked, how do you en-cash it?
UK’s biggest commercial property fund
Fleecehold New we need to learn
Summary of prices for small areas in England and Wales.
What is the real price?
Retail CVAs starting to have a domino effect
Is there no money left in housing?
I reported this almost three months ago See https://www.housepricecrash.co.uk/newsblog/2019/08/blog-investment-losses-up-to-97-217356.php Promised 8% annual return ON capital. Forget that, now in worse case the article says you may get only 3% OF your capital back. Problems when you have too much of something, you don't spend it wisely. When there is too much UNEARNED money given to people to speculate, What do you think is going to happen?
Brexit MEP gets E1m pa from property fund and sits on committee of economic and monetary affairs
Article looks at side earnings of MEPs and finds that the largest are accruing to Brexit party and the Italian far right League party MEPs. Of particular concern to readers of this website is Benyamin Habib who receives around E80,000 per month from a "property fund" and sits on the committee on economic and monetary affairs, tasked to legislate on a whole range of policies. Surely nothing improper there?
Autumn Bear food
The median price paid for residential properties fell by 40.2 per cent in the year ending March 2019, according to the Office for National Statistics. A report published by the ONS shows that this figure has been steadily increasing since 2017, when it was 29 per cent, before it rose to 36 per cent in 2018. Looking at property type, flats and maisonettes fell in value by the largest amount, averaging a decline of 10.3 per cent on the previous year. In London, the housing market value fell by 9.5 per cent, which represents the largest decline in all regions in England and Wales, the data shows.
You can give money away, the only problem is you may not get it back
Snippets from the article 1) The FTSE 250 firm allows people with poor credit ratings to borrow by using a guarantor 2) Today Amigo, under new boss Hamish Patton, said its impairment rates are growing and its loan book isnÃ¢Â€Â™t Does it not sound like the same as 2008 crises? You can give money away for people to buy houses, holidays, cars etc. The problem comes when they can't pay you back. Looking at the signs, around the world, it feels like to coming to a head again.
An interesting look back at prices
I found this very interesting. The one thing they don't take into account is the prices of things to go in the house. In 1988 buyer a new TV was a big deal for me and when I got one in 1989 after changing jobs and moving house I paid Ã‚Â£440 for a 25" Toshiba. An older colleague once told me how in the 1960s he paid 10% of the price of his house on an automatic washing machine.
Investment Losses up to 97%
There is no shortage of property
But Mulheirn disagrees. He points to official data showing that since the 1996 nadir of house prices, the English housing stock has grown by 168,000 units per year on average, while growth in the number of households has averaged 147,000 per year. Even in London and the South East, the number of houses has grown faster than the household count. As a result, while there were 660,000 more dwellings than households in England in 1996, this 'surplus' has since grown to over 1.1 million by 2018. Similar trends are also apparent in Scotland and Wales, suggested Mulheirn.
The nequity begins: recent buyers with 5% deposits in London & SE now underwater
Brought a rabbit hutch with a 5% deposit + Help to Elect? Well don't worry because it's only money and anyway, you weren't going to move for a few years. And it's probably just a blip. Just overpay your mortgage, house prices always rise over time. Oh and look! This millennial mum brought her house aged 24 - and she has a son! So if you don't buy you're missing out!!
Brexit ‘s fault….Ben sur
Money has no value
Blowing bubbles down under
10-year fixed-rate mortgage with an interest rate of -0.5%.
Who picks up the tab?
Contrarian view investor. And I don't think he was wrong but ran out of runway (money) against the Central Banks/govt policy etc. If you have a view/opinion and the market keeps going against you, you have to sometime take stop and may get with the flow/ get in line. I think this also describes the housing market, everyone knows its over inflated, but how long can you wait for the game to playout? You just get in line which sadly adds for the game to keep going on
Help to Sell
The article discusses future prospects for building companies equity returns with an emphasis on the effects of the Help to Buy scheme. It's clear that Investors Chronicle consider that Help to Buy benefited builders and banks. In 2021, Help to buy will be restricted to first-time buyers only and for homes with a market value restricted to regional price caps. In 2023, the scheme is currently set to terminate. If you accept Investors Chronicle's conclusion that returns on housebuilder equities may be depressed by the withdrawal of help to Buy, it's hard to avoid the conclusion that the scheme was a benefit to banks at builders using public money.
Corruption at all levels?
In a previous article "Buy to let" article I starting thinking who made the money. I didn't think it was the banks themselves but its the employees see snippet below 3) Bank employee: The person who got the loan signed off. This is not the investment banker I mean, this is common lower level paper filler. This is another article showing how corruption and fraud is systemic and endemic and is also the local staff which often feel have no participation but also participate in it. Without them there the so called Mortgage back securities, NINJA loans would never see the light of day. Everyone has to be part of it for this to work. And all make money. Hence the reason for collective amnesia and to keep the party going.
I thought they were already zero
And the over night bank rates negative, leading to negative interest rate government bonds. What is happening here, I just do not understand. Time people will have to start keeping money under the mattress. How many times can you resuscitate a dying duck with more QE and lower interest rates. Do they not understand the status quo needs to change, we have reached the maximum extent of the current structures
Cry me a river
Greedy boomer buys three BTL properties in the early 2000s with little deposit on IO mortgages. Fails to pay off any of the capital. Lenders go bust. Boomer is stuck paying an "excessively high" 5.09 per cent interest rate because he doesn't have enough equity to remortgage elsewhere. Can't afford it and properties get repossessed. Goes bleating to the Torygraph. Comments are scathing.
Call me a cynic but isn't this a free way of introducing a motivation to delay people downsizing? I seem to remember another initiative which was to ease planning restrictions (in the future of course heaven forbid the present day) within 300m of train/tube stations by removing the height restrictions. This would of course have -massively- boosted their valuations and been well worth waiting for, and this would also have covered a truly massive amount of London housing. Selling delay was for nothing of course, didn't happen. HS2, Brexit, Garden Bridge, this is clearly (IMO) just manipulation. Also Johnson doesn't even seem to realise that shifting stamp duty from seller to buyer is IRRELEVANT
Rest of the country propping up prices
House buying problems in the early 70s
An interesting contrast to the house buying problems youngsters face today. Amazing to note that a dishwasher was well over twice the money needed for a house deposit. Of course when youngsters could buy a house at twenty they were far more likely to have children in the next couple of years to fill it with.
Old but interesting article
5.2% higher than in 2018
History doesn’t repeat it rhymes
BNP freezes $2.2 bln of funds over subprime https://www.reuters.com/article/us-bnpparibas-subprime-funds-idUSWEB612920070809 This was the precursor in Aug 2007 when BNP barred investors money due to illiquidity of the funds. Interesting how reading the two articles, how similar words have been used to explain the situation
Any day now the promised rent increases will come
For all the bleating from the landlord lobby, rents show no evidence of increased costs being passed on. I'm sure it'll come! Hopefully the gvmt will learn the lesson and increase taxes on owner occupied property as well and use the proceeds to reduce the damage done by taxing people in poverty.
Trying to avoid another Northern rock
Or maybe they were simply overpriced
“we have such a crackpot relationship with housing in this country
We should all be worried about a number of conversations regarding the property market that are going on in the corridors of power. These concern whether buy-to-let investments should be allowed in pensions, and whether savers should be allow to dip into their pensions to pay for a house deposit.
Average house prices increased by 0.6% in the year to February 2019
Does that mean you made a loss? Conservatively inflation is 2%, So you made a 1.4% loss as you would have for that in a savings account Loss of interest/ Opportunity cost of the money paid for mortgage Additional costs: You would need to pay for Home and content insurance: Ã‚Â£200 to Ã‚Â£1000 Repairs: Ã‚Â£1000 or so. Please add any additional home ownership costs that you may know. Like if you need a new mortgage or move deals etc. Summary: You kind off need 4-5% annual house price growth to keep you in the game, with this level you are looking at thousands of pounds of losses every year
House prices are soaring
Another nail in the coffin of Buy To Let
Private landlords will no longer be able to evict tenants at short notice without good reason under new government plans. The change is intended to protect renters from "unethical" landlords and give them more long-term security. Section 21 notices allow landlords to evict renters without a reason at the end of their fixed-term tenancy. The National Landlords Association said the move would create "chaos" and make fixed-term contracts "meaningless".
Buy to let lenders will have an eye on this
Can’t ever work
Brexit or the Start of HPC?
In other news, LSL Acadata based on LR figures goes YoY negative. Now Sports …
The spring splat
Was the any chance of a House Price Crash killed by QE?
An article marking the tenth anniversary of the start of Quantative Easing. Personally I feel that the Banking Crisis led to the recession that never happened. The recession in 90s was far more noticeable to me. I wonder if they will ever expect the Ã‚Â£435 Billion to be paid back ?
Fall in the price of flats in England.
The australian authorities seem to be letting the house collapse get underway, but it seems that there has been the same sub-prime liar loans, false documents, interest only etc, as the USA originally, so their banking system must be heavily exposed to losses and I guess australian mortgage backed securities are no longer sound. Australian central bank doing emergency rate cuts and keeping QE a policy option. There doesn't seem to be a large observable decline in the aus dollar against gbp though I wonder why. There has been a loss against us dollar. Its a bit weird to see a genuine new one emerge. In fact i worked with an australian guy about 3 or 4 years ago and said the collapse for australia was coming and he should read steve keen. Needless to say he bought last year "at the top"
The Big Freeze
Sentiment seems to be falling."UK house prices grew at the slowest annual rate for nearly six years in January, according to the Nationwide. The lender said price growth 'almost ground to a complete halt', with prices up by just 0.1% from a year earlier, down from a rate of 0.5% in December." There's a graph of prices changes over last decade from Halifax and Nationwide and a nice little wigdget to play with showing the different affordability rates across country.
Mainly the same figures as the BBC article I couldn’t post
50% of ex council houses in London are privately rented
Councillor Nesil Caliskan, the 30 year-old council leader of the glorious republic of Enfiled has called for Right to Buy to be axed. Far too feeble in my view - in order to reverse the policy they need to be bought back into public ownership (with a 60% discount. of course). Just imagine the effect this would have on house prices.
Any minute now dozy landlords will realise that their tenants have been able to afford much more!
Great to see further evidence of what nonsense the rents-rising-as-costs rise is. The Residential Landlords Association is sticking to its guns though! Any minute now rents will start picking up, even faster now to catch up the unexplained lost ground... Interesting to compare cost rises in food due to sterling devaluation. Profit margins on food are low as it is a competitive market, prices had to rise when input costs rose. Supermarkets would have empty shelves if they tried to pay their suppliers the same. The boot's on the other foot for landlords though, if they try to pass on their costs they'll have empty homes. And reduced costs, e.g. plummeting mortgage interest costs, certainly didn't feed through into lower rents.
Stress linked to renting
British exit hits homes
Have landlords forgotten to implement threatened rent rises?
Ã¢Â€ÂœMany landlords will have been looking to offset the governmentÃ¢Â€Â™s punitive tax regime by raising rents. However, the uncertainty surrounding Brexit has forced the vast majority to forfeit this to maintain a steady income.Ã¢Â€Â Time to look at ratcheting up recurring property taxes in general now that the grown-ups' predictions of no adverse effect on prices have come to pass? ARLA et al are strangely quiet on this one. Imagine if they do manage to get the tax rise overturned, will they immediately drop rents? Luckily there's no political will to do this for the foreseeable future, who are landlords going to vote for - Corbyn?
Wilsons threaten to sell up (again)
Houses actually cost money last year
Overall Annual Growth was 0.5%, so money in the bank might actually have outperformed houses. I like the way all the "experts" are predicting rises will start going up again. I wonder how many "experts" predicted that at the end of the great Japanese property bubble. Being an engineer I keep thinking of one simple principle https://en.wikipedia.org/wiki/Positive_feedback I like the way Wikipedia illustrates it with cattle stampeding
Another house raffle scam busted
The same old story. Greedy baby boomer couple who bought their home for sub-Ã‚Â£100k back in the day try and fail to flog it for Ã‚Â£550k. When it doesn't sell, rather than reducing the price they turn to a house lottery, aiming to sell 60,000 tickets at Ã‚Â£10 each for a chance to win the house. As always this got copious local media attention and free publicity despite being a well known scam. Gambling Commission have now shut them down. Entrants will be refunded (minus administrative costs of course)
Not many turkeys voting for Xmas, but there are a couple! Happy New Year
Prime Central London has been crashing for nearly FIVE years, but this HPC site has almost died
[...] prices in the area have been declining: in the past four years, prime prices have fallen 9.3 per cent, according to SavillsÃ¢Â€Â™ prime London index. In the year to June, they dropped 5 per cent. [...] Normally HPC site goes quite just before the market tops. All the bears capitulate. Not this time! They've been quiet through this slow-motion crash. Why...? Gone to Twitter??
Cantillon effect in action
It appears that prices for those fortunate enough to get the free money first are indeed rising 5.9% and as UK mega wealthy are presumably price tolerant there won't be a reduction in demand. Eventually peasants, this money will flow round everywhere including UK worker plebs, you just won't be able to buy so much.
Keep the Plates Spinning
So this is what happens when you reach the end of your IO loan with no payment vehicle. I suppose that renting from the bank is more secure than renting from an unknown stranger and you cut out the yield off the top too. Perhaps they weren't such a bad idea after all!
It’s only asking prices
Devaluation under Carney
Judith Wilson fined Ã‚Â£25,000 over lack of hot water for disabled tenant
Other side of the coin
BOE Predicts House Prices could fall by a third in the case of hard Brexit
I am getting fed up with the expression "No one voted for a worse economy" etc. If house prices dropped by 1/3 but wages only came down 15% then many people would benefit. Although I own my bungalow a price drop would make a bigger one that much cheaper. Obviously the over-indebted wouldn't benefit at all.
Not again for the pound
I like reading about Crispin Odey, because he shares my opinion (or more accurately I share his I suppose), and he is also entirely wrong about timing. This year however his trades are making money. He has, however, an -extremely- negative view of the pound and I wonder can it really be true. After so much devaluation of sterling, can we really be going in for another batch? Is there no end to devaluation for the uk its getting ridiculous.
More good news
Wilsons threaten to sell up (again)
The Wilsons failed to comply with a court order requiring them to fix a disabled tenant's boiler. Judith must now reveal her financial situation so that the court can impose a (potentially unlimited) fine. It is so Judge Barron can get a better picture of her wealth before sentencing Ã¢Â€Â“ including assets, banked money and joint accounts. The ruling will Ã¢Â€Âœaccelerate the rateÃ¢Â€Â tenants are evicted as the couple look to sell up their housing empire, Mr Wilson said. "It means we will be selling more properties," he said. "We were selling up anyway because of our age - I could drop dead tomorrow. Ã¢Â€ÂœWe wonÃ¢Â€Â™t put all the homes on the market at once because that would mean house prices will drop.Ã¢Â€Â
Is Stockman right?
For all the talk of a correction, you have to wonder if Stockman is right and there is a "doozy" of a yield shock on the way that is going to push rates up to 5%, inevitably the UK would have to follow to some extent. Carney seems to be boiling the frog devaluing the pound but can he ignore? Certainly interesting times particularly if you have been convinced it all ends in tears for a decade....Deutsche bank on the brink, Italian government IOUs seem to be the Italian banks entire capital base, foreign holdings of US treasuries going down. Do we find, in the end, that the banks have once more lost the lot.
LSL Acadata / Your Move misleading statistics only partly obscure falling prices in SE and London
Claims that in London prices are up 3.9% year on year. but this is driven by a handful of sales in the City. The median london borough is down 2.2% year on year, as they well know. They even publish a median series that you have to pay for. nonetheless, in their (average i.e. mean) time series the southeast is down -0.1% year on year.
I had been wondering what the figures are for a long time. It gives an idea of the cost of building a house once land has been obtained and planning permission given. Of course the rebuilding cost wouldn't include things like building a road in front of the house but might have extras like clearing the site.
Taxes on buy-to-let landlords have not pushed up rents, study says
"Warnings by landlords that taxes on buy-to-let would cripple the property market, driving down supply and pushing up rents, have turned out to be entirely hollow, according to research by campaign group Generation Rent." So satisfying to be proved right. Although of course the long threatened rent rises are always around the corner though! Hopefully this evidence will be noticed by TBTP and recurring taxes on property (second best to land only) can be considered as first choice for rasing much needed revenue
Back to the Dickensian era
News about drops when no one is posting
Hopefully this might improve standards
How to destroy confidence
1980s style Shared equity all over again ?
A couple of weeks ago a colleague was discussing Help to Buy with me and I commented that it sounds to be no different from the Shared Equity schemes builders offered in the late 1980s, which ended up badly when prices stopped going up year after year.
Rents down 0.3% over the year in London, outlook is further falls
Not sure what the Enfield statistic is though :-) Interestingly, the most highly leveraged landlords - those in London - are clearly not doing a good job at passing on their tax costs to tenants. The business model of a lot of London landlords is making no money or a loss on rent, but hitting the jackpot with a big capital gain. Let's see how this pans out if prices keep falling
The Crash word and a 40% drop
It was worth something, now it has become worthless
You can tell the worthless coins because they are the ones that stay on the floor. 2p, 5p. 10p (depending), 20ps still get picked up by adults. I suppose kids pick them all up. The BoE, clearly an insightful body, must have decided that the populace actually walking around on discarded coins of the realm might be a bit dispiriting to savers.
Prices now slightly less over inflated
- London house prices fall at the fastest annual rate since height of the financial crisis - London house prices fall in 5th month in row, worst falls since 2009 - London rents dropped at the fastest rate in eight years - ONS - Brexit, London property slump put brake on UK house price growth - Consumer spending declined in July as inflation increased
Corbyn or HPC ?
"Chief Secretary to the Treasury Liz Truss blasted Ã¢Â€Âœnimbys in BritainÃ¢Â€Â and called for a major overhaul of UK planning laws. But she was attacked by a Conservative colleague who said the party would face an electoral Ã¢Â€ÂœcatastropheÃ¢Â€Â if it fails to protect the greenbelt. Theresa May has vowed to fix the broken housing market." Good job we have a strong Prime Minister on the case then.
Lies, damned lies, and statistics
"Pryor dismisses some indices entirely, including one from the Royal Institution of Chartered Surveyors (Ã¢Â€Âœthe views of 250 people and what their guts tell themÃ¢Â€Â) and those produced by mortgage lenders Halifax and Nationwide (Ã¢Â€ÂœtheyÃ¢Â€Â™re just kindlingÃ¢Â€Â)."
Interest rate rise not tightening
I am pretty sure that the original plan was to retire QE first before raising rates, as otherwise it might appear that the BoE has printed money and to cover inflation raised borrowing costs for everybody else. That aside, usually for each debtor there is a creditor, in the case of QE (10 thousand apiece), there is no debtor. The money has been printed, any interest on gilts being a BoE profit is promptly remitted back to the UK government. So who is the payer of the additional interest on the fresh deposits created by QE? It seems nobody. So its hard to see how rates on savings can increase. So the wonderful BoE has increased borrowing costs but without increasing saving rates, the stick but not the carrot.
Warning of the risks of buy to let incorporation
Unusually excellent article from london standard. Points out that returns on stocks are 7% but for gilts slightly negative in real terms, but that pensions are forced to calculate on known returns. There are no guaranteed equity returns so they are forced into gilts. My view is that pension funds are forced to provide free loans to government. Anyway, -if- pensioners every manage to do anything about being fleeced (which they have known about for ages without doing anything, in fact legislation to force lending to gov. is worse) then borrowing costs would be going up, and a lot. What is also interesting is that you might think stocks have gone up a lot because of QE, but they would have gone even further with pension purchases.
Blamed on surge in sellers
1995 all over again ?
Actually I have just spotted a massive error in their title. The sale price is determined at completion. Any figures before then are just indicative. The comments are interesting many mirroring what many people hear have been saying for years. On a personal note I am guessing this is what happened to me in 1995 when my "Buyers" who had offered Ã‚Â£52K couldn't get a big enough mortgage. That was for a house that I had paid Ã‚Â£65K for in 1989 (but with only a Ã‚Â£40K mortgage).
Extraordinary, councils asking landowners to pay for services!
A buy-to-let register by the back door? Councils are introducing landlord licence schemes costing up to Ã‚Â£1,000
If a tenant doesn't pay their council tax, the rubbish still gets collected, the roads still get maintained and lit, courts and police will enforce the landlord's property rights, etc. The landlord gets all of this for free, it's only fair that councils attempt to get some revenue from landlords. Much simpler solution is to just make council tax payable by the LL. Viola - bad debt eliminated, collection departments can go down to a fraction of their size as there won't be nearly as many changes on the account payer, etc. And the ridiculous 25% reward for living alone could be scrapped.
Stalemate or Crash?
Properties in the UK are taking longer to sell than a year ago owing to the "uninspiring" housing market, according to surveyors. Last spring it typically took 16 weeks between a home being listed and being sold, the Royal Institution of Chartered Surveyors (RICS) said.
Flipping housing ministers
BoE peddles the lie that house prices can be removed from inflation indices despite being -the- most inflationary price of all, coming mainly from new as opposed to pre-existing credit expansion, has decided to step in on equity release. Equity release, is credit expansion without even bothering with the courtesy of a signatory to the obligation. Housing is different from apple production, you have to double production of apples, houses you just need double the amount of willing sellers and et voila (effective) supply is doubled. Equity release not only removes a house from the sale pool (only) delaying an increase in supply, but also by insinuation set valuations without any real input from the real marketplace. The classic disconnect.It must be on the increase and becoming significant
Many dreams can come true it can happen to you if ….
Take advantage of the price crash and save money on other areas too (Buzzmove!)
With house prices dropping at the fastest rate in nine years (according to a recent Guardian story: https://www.theguardian.com/business/2018/apr/12/london-house-prices- falling-fastest-rate-nine-years-halifax), it seems like the time is ripe for would- be first time buyers to take advantage of this plummet and hop on the property ladder. However, should first time buyers be looking beyond just house pricing drops when searching for money saving opportunities? It seems that the answer to that is yes, given that forward-thinking companies like buzzmove are making waves in the removals comparison market and helping movers save on another essential aspect of relocation. Every little helps, after all!
Tinkering with the time series …
LSL Acadata report that the whole UK shows >0 yoy house price growth (nominal). However, they have changed the series (based on LR data) to include a forecasting element based on the quantity of newbuilds coming to market in an area. They project the past price performance of the newbuilds forwards to do this. I guess this is OK if nothing changes, but I wonder what error this introduces when prices dip? And what would the time series look like without this "fix"?Monthly change 0% notwithstanding.
A market with compulasory participation for many is not really a market…
Event on Weds 13 June from 18:45 to kick off campaign to end Section 21 evictions. Would help a bit to remove some uncertainty but the market would still remain hugely uncompetitive. Most people people renting privately have no other choice. You have to live somewhere but you're not allowed to build a home yourself or live in a tent. The non-profit option - council housing - has been dwindling when it should have been growing to avoid handing over Ã‚Â£10bn unnecessarily to private landlords in housing benefit. And buying a homer is impossible for most renters, given the cost of land.
Does this title sound bad?
But will it be a crash
Glut of expensive London newbuilds
Gold and house prices
London housing boom is over.
Ã¢Â€ÂœThe party is over for the London housing market and the hangover is just beginning,Ã¢Â€Â said Neal Hudson, founder of research firm Residential Analysts. Ã¢Â€ÂœLower demand due to Brexit or interest-rate rises could put further pressure on some home-owners and investors to sell.Ã¢Â€Â
Henry”’s latest analy6
Red warning signs aplenty
House prices see biggest monthly fall since 2010, Halifax says
If interest only mortgages without repayment plans are so widespread, then the government is going to end up with a -huge- housing benefit bill for all the oldies. Its hard to see them carefully marshalling any valuation gains if to do so only stops them getting benefits.
Given current prices it isn’t surprising
Same story as millions of renters?
Interest-only mortgage crisis: Retired couple Len and Val never missed a mortgage payment - but now they face losing their home
"For three years, the couple tried to negotiate with the bank, arguing that they were still able to pay the Ã‚Â£770-a-month mortgage bill from their Ã‚Â£1,300 joint income and Ã‚Â£200 of mortgage interest support from the Government." FFS, private renters have to move the whole time without reason. Council tenants get their housing benefit cut if they have a spare room even if there's nowhere with the prescribed number of rooms available. Why on earth should people in poverty stump up cash for this couple to keep their home? At least Support for Mortgage Interest is a loan now instead of a handout, but it is at a very low interest rate and is junior to the bank's lien so the taxpayer could lose the lot. Big moral hazard.
Top 10 Finance Ltd says New Approach to Planning Could Help Solve UK Housing Shortage
New Approach to Planning Could Help Solve UK Housing Shortage, Say Experts at Top 10 Finance Ltd. Smaller property developers face continued planning issues One of the UKÃ¢Â€Â™s leading brokers for small-to-medium-sized property developers have reported a spike in finance applications, despite otherwise slowing house prices. Top 10 Finance Ltd. have experience handling projects from Ã‚Â£300k-Ã‚Â£5m, and with over 12,000 developers comparing loans with the company, they understand the challenges that these developers can face, better than most.
Landowners queueing up to tuck into Amazon’s wealth creation
"Winning the contest could mean a steeper increase in local housing costs over the next decade, a study finds. Nashville is already contemplating the impact." At least the residents of these various US towns will get some of the land value uplift via higher property tax receipts - tens or even hundreds of thousands of dollars a year on the very best digs. Compare and contrast to Big Tech over here where the billions of pounds pouring in have gone almost entirely untouched into mortgages and rents...
Borrowing costs look as though they are rising. The USA has fixed rate mortgages over 30 year periods, UK has variable rate mortgages so should that be the case then some UK borrowers presumably will be asked to remortgage at unaffordable levels. For the UK though it seems like the original 2007/8 BoE choices have never gone away.
Will a Mexican stand off stand or deliver ?
Couple buy house !
The Power of Rising House Prices
...Once the markets realise this, theyÃ¢Â€Â™ll react very badly to any signs of housing price drops in Australia. And those signs just hit the news reels, with the major cities seeing house prices drop. The world is about to discover who has been swimming naked in the Australian housing market. And it could unleash panic that goes global.
@Ã‚Â£125 a square foot!
Average UK home of a (embarrassing) 993.5 sq feet is therefore going to be under Ã‚Â£125k. What justification is there for anyone to have to pay many, many times that when a plot of agricultural land can be acquired for a few grand? What would at least make things a little more competitive is if the land seller and builder were decoupled. So Mr Rentier could provide standard sized plots for sale for Ã‚Â£lots and then the buyer could choose from a panel of say 5 manufacturers. Then Mr local government could say to Mr Rentier that'll be Ã‚Â£ to provide all the infrastructure that the value of your plot is derived from.
2K per worker
Lloyds, RBS, Nationwide and VirginMoney have borrowed around 60bn under the BoE Funding for Lending (a scheme to lower the costs of capital). There are about 30 million workers in the UK, so this is about 2K across each and every worker. Scheme is closing so this is more effective tightening which again, like mandatory saving auto enrollment bypasses interest rates.
Rate rise doubts as property demand falls, says RICS
Deflation from housing
USA opinion piece with UK as case study. Until 1982 mortgages were supplied by building societies. Building societies were -not- granted the same privilege to create credit/money so finance availability was limited. After 1982 the banks, capable of creating loans ex nihilo got into the market, valuations became circular on lending, and the only limit to price increases was(is) how much debt can be sustained leading to 2008, debts can't grow, process goes into reverse ->massive government intervention.
Bank of England must tread softly to stop housing slowdown turning into a crash
The times … they are a changing
Effectively interest rate rises
The point has been made often enough that the BoE can influence credit expansion through different ways than just interest rates. So " end of the scheme is expected to prompt a rise in borrowing costs" and elsewhere reported by the FT (subscription only i don*t have one but headline is enough), that UK banks are selling asset backed securities (mortgage backed etc) at the fastest rate in years. But there can't be any buyer willing to accept practically zero return as the BoE has done.
Professor Steve Keen suggests a solution to the housing crisis
The demand side of the housing market has one main factor: new mortgages created by the banks... this means house prices - and the resulting housing crises - are driven by mortgage lending. So how should our politicians and policymakers respond? Professor Steve Keen suggests a solution.
The biggest washest machine in the world?
UK housing crisis: Influx of foreign cash boosted average property prices by a quarter, research finds
Billions of pounds flowing into the UK property market through foreign companies has pumped up house price growth by more than a quarter, according to new research ... London Mayor Sadiq Khan commissioned research into the effect of foreign money on the housing market. It found that overseas buyers snapped up 3,600 of LondonÃ¢Â€Â™s 28,000 newly built homes between 2016 and 2016. Half of those were supposedly priced for first-time buyers at between Ã‚Â£200,000 and Ã‚Â£500,000.
Refusal to increase building
Berkeley don't think they can increase profits by increasing housebuilding, and point out a number of government related factors. Costs of moving homes, planning difficulties, mortgage limits, btl tax relief changes and economic uncertainty. I do have some sympathy for house builders in fact, because if you potentially facing ongoing falls in the underlying valuation of the land with planning permission, then popping flats or houses on top won't save you from a loss, because its not what people are buying. As construction costs haven't changed. So now May, who is useless, is either going to be forced into government action a la Corbyn or do nothing (
Pass the Vaseline
I just love how 'price declines' are given the politically correct term 'volatility' or 'uncertainty'. It's like how what's unfolded since 2008 has never been labelled a 'depression'. Call it like it is. House prices are going down, led by a much-needed crunch in London. I wouldn't want to be an offshore owner of all those newbuild "LUXURY DEVELOPMENTS" now!!! You don't vote, you don't pay tax, you don't live here, you can't sell because nobody onshore will pay them -- and we don't care!
What are the conservatives now?
If you look at the political system in the UK you are supposed to have a choice between left and right. The Conservatives are meant to champion the free market and lower government spending. Yet, not only is the level of tax the same under the Conservatives as New Labour, we have a situation where property prices are 5x or 7x times cost of building. Market failure. University fees are all at the max. Market failure. No market based reform has been attempted in the NHS i.e. the reality that doctors do a job same as everybody and need to compete on price and quality is ignored. Schools exactly the same. Now I read this, that Hammond is sounding out 5p increases on income tax....wtf is the platform the Conservatives are going to campaign on???
The problem with a property price slowdown
The UKÃ¢Â€Â™s property boom is sputtering and stuttering. You should be very worried about what happens next. House prices fell nationally in the last three months reported Halifax. The Royal Institution of Chartered Surveyors (RICS) house price index hit zero in February. It was a bigger drop than forecast by any economist polled by Reuters and the lowest since March 2013.
Brexit not insane prices blamed
Can’t believe how quiet you lot have been about this
Their share price has been dropping ever since 2014 yet this blog almost went silent during much of that time. Seems to be waking up a bit now. Where's everyone been??? Are there better places to go? "Profits at Foxtons have slumped nearly two-thirds as the London-focused estate agency grapples with a slowdown that has pushed sales activity in the capitalÃ¢Â€Â™s property market to Ã¢Â€Âœnear historic lowsÃ¢Â€Â"
Says alot about the Mail readership
As commented before the BTL gravy train is being turned off. The Daily Wail obviously think that they have more BTL landlords than potential FTBs in their readership. ARLA continuing the myth that houses mysteriously disappear when withdrawn from the rental market. That certainly didn't happen in 1982 when friends, landlord was trying to sell him a house near Stapleton Road railway station Bristol for Ã‚Â£15K as he wasn't making any money from it !!!
Repeat until its fact
It is -so- often repeated that low unemployment, over-heating, causes inflation. Clearly though this is rubbish, no company can pay more in real terms than the real output of the worker without going bust. What low unemployment shows up is too much lending (i.e. new money credit expansion) when there aren't enough workers. As in, wage inflation is a monetary phenomenon, too much money, and -not- a low unemployment phenomenon. Wage inflation is the revelation of a balls up by the central banks with too loose monetary conditions and takes 4 years too put the toothpaste back in.
A generation enjoying a better life than their parents. Not.
The extent to which young people are locked out of the British housing market has been revealed in new figures from economists. The biggest decline in home ownership in the last 20 years has been among middle-income 25 to 34-year-olds, the Institute for Fiscal Studies said. In 1995-96, 65% of this group owned a home, but just 27% do in 2015-16, with the biggest drop in south-east England. Middle earners are defined as having take-home pay of Ã‚Â£22,200 to Ã‚Â£30,600. This can be either as an individual or as a couple. A third of them are university graduates, while 30% left school at 16. Three-quarters of them live with a partner, and around 60% have children.
England & Wales -0.4%, London -4.3% YoY
Estate agents, housebuilders and the outlook for UK house prices
A true class divide
SMI being withdrawn and replaced with a loan
On the forums I would be flamed for "pitying the homeowner". I get the moral hazard associated with supporting mortgage interest payments with benefits, on the other hand this is going to affect vulnerable groups. Good for house price deflation, but, many cases of cruelty...? Looking at benefits blogs https://community.scope.org.uk/discussion/38559/smi-support-for-mortgage-interest-ending many people selling up and then claiming HBI which is more expensive! So I guess councils will also reduce hbi?
Gravy train starting to dry up ?
The number of landlords who are seriously behind with their mortgage payments has jumped by 20%, according to UK Finance. There were 1,200 buy-to-let mortgages in "significant arrears" in the last quarter of 2017, a fifth higher than in the same quarter in 2016 In contrast the number of homeowners with arrears of more than 2.5% fell by 7% (which isn't hugely surprising given low interest rates).
Halifax: Jan -0.6% MoM …
The bizarre process of life support being withdrawn from the economy is beginning
I appreciate that interest rates are inversely related to stock prices, but total salaries are a measure of GDP. The continual cycle of good economic news leads to fears of tightening, leads to markets crashing, leads to further tightening trundles on. However, Trump's hawkish pronouncements on IRs, the Fed, his attacks on Yellen during the campaign, coupled with the new chairman of the fed, not to mention the nature of the news this time (ie consumers are finally benefiting from the recovery) tells me the deadlock is going to break and US (and consequently global) IRs are finally rising.
Article is a good summary of the inequity and absurdity of planning permission valuations trumping all else. I would say though, that people in general are wise to the idea of "forward guidance" whether central bank or otherwise i.e. you can reduce current prices by setting expectations that future purchases will be compulsory and at lower valuations. Clearly getting planning permission on agricultural land that you own is more akin to a lottery win than anything else. However, I think the Tories are out of time now, even a 4 year phasing in which started 6 years ago too little too late. The next election is 4 years away, it is too late for the incumbent government to fix housing and they will be generationally wiped out imo.
Smart or Stupid – I can’t decide
The FCA are warning about the number of interest only mortgages which will reach the end of their term in the future. Interesting to read the comments with many people saying an IO mortgage is cheaper than renting and with rising prices their equity has been increasing in some cases by enough to buy a cheap property when they downsize. Of course timing is everything. A interest only mortgage in the early 1990s would have been a disaster. Since then it could have been a smart move.
Off message for the dinner party classes
They were built as gambling chips for rich overseas investors, but they are no longer interested…
Despite 50% non-sales, still more posh towers are being planned complete with empty private cinemas and swimming pools. What happened to supply and demand?! The article says that "affordable" homes are needed instead costing ... Ã‚Â£500,000 (!!!) In which planet is a slave box for half a million quid affordable? People who work in property must be serially deluded.
Falling Appetite For Over-Extension
London house prices down
Nothing new in this article. However, what I found interesting is the comments. Try sorting them by Highest Rated. About the top five are saying price rises are a bad thing and berating the Journalist for using the word "Shine" Personally I always think of the contrast there would be if they were talking about another consumer durable - cars. p.s. One day on I had difficulty finding the article as all the news was about a different price increase - the price of oil. I'm sure there must be a connection. Back in the 1980s a colleague said he thought that as normal goods went down in price houses would go up. The old "Waterbed" theory.
Worlds run out of QE
Halifax looking increasingly reliable: UK -0.6% MoM (Dec)
Prices of upmarket family homes are collapsing as hefty property taxes and uncertainty over the economy force sellers to make Ã¢Â€Âœeye-wateringÃ¢Â€Â reductions, according to research for The Times. Almost half of the homes on sale for between Ã‚Â£1 million and Ã‚Â£2 million in London have had their prices cut, with average reductions of Ã‚Â£142,000, rising to nearly Ã‚Â£900,000 in extreme cases. Across Britain one in three sellers reduced their asking price last year, the highest proportion since the double-dip recession of 2012.
Millenials set for comfortable retirement
I think this guy is absolutely dead on. Corbyn is going to win the next election and housing is going to to be a big part of this. The whole point of the Tories is the individual and capitalism, which allows an unfettered market to be guided by supply and demand. Yet when there is a shortage of workers in the UK, wages don't go up, immigration does. When there is a shortage of housing, production does not increase because its all throttled by planning permission. This is all government interference in market economics, the -whole- purpose of the Tories existence. I think, also, that the only way to get to a Conservative party that isn't a continuation of New Labour is to go through a term of Corbyn.
Seems that giving money to an uncompetitive industry raises prices AND reduces quality?
"Karen bought the property from housebuilder Bovis for Ã‚Â£325,000 in December 2016, under the government's Help to Buy scheme. After numerous complaints to the company, she eventually hired an independent surveyor to assess the house - who uncovered major structural issues." Why on earth the government is giving this industry a penny of taxpayers' money is a mystery. Judging by the sums that the management and shareholders are trousering, these companies' investments in elections have paid off handsomely though!
London -3.7% MoM
People are broke because of housing costs
There's a massive problem here. It's not that people are having their benefits frozen. It's not that housing costs have risen so high. This tells me that housing costs are unnaturally high. We see state subsidy of housing in two ways: Help To Buy helps people afford otherwise unaffordable purchases - and of course, prices will rise by exactly the amount of this subsidy. On the rental side, we see that benefits help(ed) people afford otherwise unaffordable rents. In short, this means that government money is going directly into the pockets of property development investors (who buy early stage off-plan and sell to the end-buyer) and landlords. And we just sit there and watches as our money gets siphoned offshore, tax-free and hear this is a triumph of the "free market". BS, I say.
Will lack of pensions cause the next crisis
This blog is quiet again – tells me the bears are slumbering
I trust he has sold his central London house then! "Tony Blair is backing one of the most controversial measures raised in LabourÃ¢Â€Â™s last manifesto, by supporting a new Ã¢Â€Âœland value taxÃ¢Â€Â designed to help solve the housing crisis. The former prime minister said the new tax, which sees the value of underlying land taxed rather than property, should replace council tax and business rates to create a Ã¢Â€Âœfairer and more rational system of property taxationÃ¢Â€Â."
Empty Homes spike in London commuter belt
And here we have the evidence just a few hours after the budget FFS
Yesterday we got the conformation we expected that the UK establishment cannot stop itself from meddling in the housing market with the intention of pushing house prices up. The various readings that the house price was turning highlighted by actual falls in the London area was always going to focus their minds.
Life copies satire copies life
THE price of homes for first-time buyers has gone up by exactly what they are set to save after yesterdayÃ¢Â€Â™s cut in stamp duty. Prospective first-time buyers of a Ã‚Â£280,000 London flat, set to save Ã‚Â£4,000 in stamp duty, will now find that the flat costs Ã‚Â£284,000. Estate agent Carolyn Ryan said: Ã¢Â€ÂœIÃ¢Â€Â™ve just finished changing all the prices in the windows. Ã¢Â€ÂœIt took two hours actually, so unfortunately we will have to pass that on to buyers as an extra Ã‚Â£200 admin fee.Ã¢Â€Â
Put your life on hold for a mere five years and you too could be stuck in a studio!
Does estate agency's claim that millennials could save Ã‚Â£33k in five years 'by quitting coffee and takeways' add up?
The maths is so wrong it's just dishonest - suggesting that food is free if it isn't takeaway, etc. But the real problem is if every renter cut their spending to the bone to save to sacrifice to the housing gods, the economy would absolutely crash. When the money saved does hit the housing market after 5/10/20 years, it will simply push up prices. No meaningful economic activity occurs when the price of a home goes up (without this being the result of repairs or capital investment)
Latest Rics housing figures report
Demand backdrop continues to deteriorate. Ã¢Â€Â¢ National price indicator turns fat with sentiment still downbeat in London and the South East Ã¢Â€Â¢ Subdued sales trends now being reported across most regions Ã¢Â€Â¢ 70% of respondents report sales prices are coming in below asking prices for homes valued at Ã‚Â£1m+
“Stuttering Housing Market”
House prices are now falling in four areas of the country, according to the latest report from chartered surveyors.The Royal Institution of Chartered Surveyors (RICS) has said that prices are declining in London, the South East, East Anglia and north-east England.The RICS report on the housing market is gloomy overall, citing fewer buyers and sellers, as well as falling sales.The surveyors thought the short-term outlook for prices was even more negative.When asked what they thought would happen to house prices over the next three months, a majority reported falling values in London, the South East, East Anglia, the South West, the North East and the West Midlands. RICS said that last week's rise in base rates was one factor behind the "stuttering" market.
Forget rates rise, expect another crash
The Fed knows that raising rates will boost the $ and threaten US offshore profits, the US construction sector and debt-based consumer spending. So any rise will be token and insignificant. Capital incomes are protected monetarily and fiscally by the state in the US, Europe and Japan It comes to an end when Trump's tax cuts (part of the reason for global growth) play out and when China - the engine of global growth - reins in its own bubbles. Expect another financial crash in late 2018 or 2019.
“fear of a falling market”
Brokers are being hit by a wave of downvaluations on residential and rental properties that have led to borrowers missing out on mortgage deals.According to mortgage advisers surveyors are making significant mark-downs on the value of properties compared to the agentsÃ¢Â€Â™ prices,
Mortgage deals wrecked by spike in down-valuations
Cornered and out of ammo
Bank of England: As a first interest-rate hike in more than a decade looms, here's what experts expect
For the first time in more than a decade, the Bank of England is widely expected to raise interest rates on Thursday. But whatever decision the Monetary Policy Committee makes, itÃ¢Â€Â™s unlikely to be an easy one. Wage growth is stagnating, household budgets are tight and Brexit negotiations are casting a shadow over economic growth prospects.
Buy-to-let as an alternative income in retirement
Friday 20 Bear Food
House prices in more than half of neighbourhoods in England and Wales are still lower in real terms than a decade ago, BBC analysis has revealed. In 58% of wards, residential properties are selling for less now, after accounting for inflation, than they were in 2007.
Some interesting charts of houses v Stocks over the long-term
Friday 13 Bear food
Mortgage broker One 77 Mortgages has issued a Ã¢Â€Âœbubble alertÃ¢Â€Â on 19 mainly northern UK towns and cities, where house prices are rising but mortgage lending is falling.The research confirmed the Ã¢Â€ÂœgapÃ¢Â€Â is a measure of affordability by comparing the percentage difference between annual drop in lending against annual house price changes. With this metric, Cleveland was most at risk, with property values rising 11% between Mar 2016 and Mar 2017, while lending fell 0.9%. Following Cleveland was Blackburn, with a gap of 6.8%, and Blackpool, at 6.2%.
Ã‚Â£1.7m Georgian manor with 9-hole golf course and a helipad could be yours for Ã‚Â£25... if you can complete this crossword
These scams always work the same way. Publicise in the local paper (or DM if you have connections); collect the money; then low and behold not enough tickets sold [this one will need 150,000 tickets) and the raffle gets cancelled, with the owner keeping 20% of proceeds "to cover administrative costs"..... A breathtaking Ã‚Â£1.7 million six-bedroom Georgian mansion boasting a nine-hole golf course and helicopter landing pad is being offered as a competition prize. Donna Pirie, 54, is hoping to raise Ã‚Â£1 million for charity by raffling off her stunning home for just Ã‚Â£25 a ticket
Thousands of feckless borrowers set to lose state subsidy
BoE is limited
"The cost of taking out a fixed-rate mortgage has started to rise, even though the Bank of England has kept base rates at a record low." Exactly! Interest on savings comes from the opposing debt, BoE has issued QE which is mainly interest free hence the UK banks have more in deposits than they do in debts i.e. the interest paid by the debtors cannot cover the interest earned by the savers because they don't match up anymore. Going forward the BoE can tighten by increasing capital requirements, any regulation that reduces credit expansion, but they can't meaning fully increase interest rates because no way rates can rise for savers unless QE is withdrawn. So more QE for deflation, micro-management of credit availability for inflation.
No supply side reforms
May has come out with additional funding basically the same as Osbourne, so I think that clearly there is no intention from the Tories for supply side reform on housing. I also don't feel that a majority of the electorate is after cheaper housing. Corbyn I feel sure off the idea of compelling councils to purchase property, grant planning permission, and then sell onwards to capture the value, because it would kill two birds with one stone. Increase availability of housing, and also fund his election promises. It seems to me that 100,000 properties a year with planning permission values a conservative estimate of 50K = 5 billion to blow and thats per year. I wonder how the youngsters will vote they seem to be kingmaker.
Your home their land; you keep paying
What nonsense | HPC saw it coming
Its not Carney you should consider..
Carney has bluffed to get the market to anticipate rate hikes thereby tightening for him, and has done so many times successfully as the article explains. As the BoE are truthfully in charge of setting the rate then if the market doesn't tighten on his behalf and he is forced to raise, they are wrong-footed, and if they do tighten in anticipation then the BoE does nothing. Its like being a successful blackmailer. Where this cunning plan breaks down though is if inflation starts breaking out outside of the financial markets i.e. wage inflation. I have often wondered for all the CPI, RPI talk, the only thing they ever consider is wage inflation, because all of the data on wage inflation is to hand direct from inland revenue, and if wages aren't going up then neither are prices.
Halifax trumpets below inflation price increase
... on the back of tiny volumes (see the time chart of homes for sale) as signs of "buoyancy". The 0.1% Quarterly increase equates to an average Ã‚Â£200 increase over 3 months. Do they really have such a precise survey or is this just noise? Not sure how this, especially the +1.1% MOM figure, squares with the current reports of widespread reductions in asking prices. Is it a case of high variance in survey data because of low transactions volume? Or are asking prices so loony that a reduction in them is consistent with an increase in sale prices?
Is buy-to-let lending about to get tougher?
Andrew Turner, chief executive of Commercial Trust, reveals what is happening behind the scenes which could have an impact on buy-to-let. The future for buy-to-let mortgage landlord applicants could get a lot tougher in the coming weeks, as new Prudential Regulation Authority (PRA) rules around lending money come into effect.
We can afford banks bailouts, HS2, F-35 and Restoring the Houses of Parliment but not social housing
Billions of pounds of taxpayers' money is being given to rogue landlords who are renting out homes that don't meet basic health and safety standards, new analysis of Government data has revealed. Over the next five years, they will receive more than Ã‚Â£12bn in housing benefits Ã¢Â€Â“ enough money to have helped build more than half a million new homes.
People questioning monetary policy
Net migration is falling, soon negative?
A sustainable trend?
"Moving onto the conclusion that housing is a better investment than equities then there are plenty of caveats around the data and the assumptions used. What may surprise some is the fact that equities did not win clearly as after all we are told this so often. If your grandmother told you to buy property then it seems she was onto something! As to my home country the UK it seems that the Chinese think the prospects for property are bright." As noted in the comments, regional variations, taxation, liquidity and the bailout of exposed banks in 2007 are factors in this complicated discussion.
Fewer houses for sale
I thought house prices were dropping…
Auto enrollment torpedo incoming
Grand old duke of York v. Bulls and bears
The market for LondonÃ¢Â€Â™s fanciest properties looks weak and overall price growth has slowed, but BritainÃ¢Â€Â™s housing market hardly appears to be in freefall. Poke beneath the surface, however, and it looks as if trouble is brewing. Britons are buying and selling houses less frequently than they once did. Official data suggest that the rate of residential transactions this year is set to be the lowest since 2013. The number of sales in parts of London is approaching an all-time low as home-buyers become more cautious about their personal finances.
Buyers market round the corner
Apparently much of the newbuild stock of houses has leasehold arrangments, with clauses such that the ground rent doubles every 10 years! So a guaranteed return to a spiv or offshore entity (ultimately the same) of 7% p.a. I won't bore you with the anecdote about the chessboard and the exponential function, but by 2060 many houses would have groundrent charges of over Ã‚Â£10,000 p.a. And so by 2090 Ã‚Â£80,000 p.a. In related articles, a figure is given of 42% of new houses with leasehold, and it is pointed out that England is one of the few places in the world where leasehold remains, it being formerly spread through the Empire. Christ...
QE, source of asset-price inflation and rising inequality
QE has inflated the prices of property and other assets and in other ways enabled the wealthy to steal the wages of workers, in addition to causing havoc in 'emerging markets'. But what's do be done now? If the Fed, BoE and ECB unwind QE, sell govt securities into the market and raise IRs that's a lot of taxation to be raised to pay off the interest on the national debt. The Fed, e.g., is planning to do these things, with fed funds rate going up to 3.5%. Eventually US taxpayers would be paying bondholders over $800bn a year in interest alone. Is Japan on the right track? It creates lots of money for the BoJ to buy back the govt debt and to pay the interest to the govt - an interest-free debt rolled over each year - effectively a debt cancellation.
Warning of the impending BTL bubble burst
Property Market In State of Lethargy
There is no Missteeq … this really is Scandalous
Start of a panic….??
Halifax down 1% in June
Tightening comes in many forms
Carney takes the option of micro-managing the banks over decisions presumably they are running calculations on themselves to avoid raising rates. Tacitly stating that without his guidance the banks would still inevitably run themselves into serious defaults (which is probably true). From where are these counter cyclical reserves sourced? Could they be sourced from the addional liquidity that Carney has himself printed into existence? There is about 200 billion of unsecured debt held by uk households. So tapering, would be when QE went into reverse i.e. the printed money would head back to the central bank and the +x,-x cancel out. i continue in a comment..
Whats the truth about the market?
From the same rag that’s been promising rising rents…
Any minute now, rents will rise, promise!!
Just goes to show the intellectual bankruptcy of neoclassical economics. Leases being signed now are subject to much higher taxation for the duration - why are landlords not passing this on as threatened, and are instead accepting lower rents than before? And why are rents lower in the US, where the average ad velorem property tax bill paid by the landlord is $6000 vs Ã‚Â£0 in the UK?
40% of a lot is a lot of money
somebody on this site said in response to my view that housing will never be allowed to go down, that only when the last bear has capitulated is when things are going to turn. it would seem that with the collapse in the savings rate, the real squeeze on disposable real incomes, that the uk is possibly going to go into a recession and it would also seem that people are betting big that this is the case.
Bear necessities: Brexit chaos fuels fall in living standards
Fairly simple mechanism folks. The falling pound means more expensive imports, and wages are not keeping pace with inflation. Only one way this can impact on ability to service rent or mortgage. And can you really see it getting better as the Brexit chaos continues?
Increasing the supply of homes for foreign investors
First time buyers are missing out as homes are bought investors from Hong Kong and Singapore at inflated prices. The mayor of London said: Ã¢Â€Âœinternational investment plays a vital role in providing developers with the certainty and finance they need to increase the supply of homes and infrastructure for LondonersÃ¢Â€Â
There is such a thing as HPC after all
Video showing a big crowd rushing into an estate agent's office in China to buy real estate after house prices crash. It must have been a very sudden crash for people to fall over each other like this. Central and local governments have been curbing house price growth all year - by restricting the buying of second homes, increasing deposits and reducing property developers' borrowing to buy land. (I posted this video on Thursday but it didn't appear - maybe I didn't use my admin password, so apologies if it turns up again later.)
Food for the Bears on Election day !
The property market in England and Wales has been "shattered" since the government introduced its stamp duty reforms, according to Nested analysis. The research, which used data from Land Registry and Zoopla, found that transactions across the country fell annually by almost a fifth - 19% - across England and Wales and by as much as 33% in London, as the governmentÃ¢Â€Â™s 3% stamp duty surcharge on second homes saw investors exit the property market.
And in the same breath let us tell you they are rising!
Halifax data say prices rose in May. Curiously the Graun does not refer to its own article a few days back reporting Nationwide data saying they fell. NW data were seasonally adjusted. Are the Halifax data? Are they both mix adjusted? Is it just sampling error on the back of low transactions volume? where is the signal in the noise?
House price = capitalised value of rental income
HPC gets a name check in the Grauniad
… But but but… Enfield still looking good ??
Here’s what sends US rents through the roof.
In 2008 the problem stemmed largely from liar loans for buying houses. Not so now. 10 years ago US rents tended downwards because new owner-occupiers were desperate to have renters to help with the mortgage. So, house prices rose while rents fell. After 2008 a large % of the 10m foreclosures were bought for cash by hedge funds (HFs). With ZIRP the HFs decided that it was more profitable to buy foreclosed properties and let them out at high rents than it was to write mortgages or flip the properties. Mortgages are hard to get and HFs have monopolised the rental market in many areas - so renting is also hard. So the banks are looking for more NINJAs to whom they can lend. Answer - government guaranteed student loans, which create spiv universities.
How much bear food do all you silent bears need?
[...] he flowers are on the reception desk. The easy chairs are neatly arranged. Five hundred bike racks are waiting for cycles. One Creechurch Place, in the heart of the City of London, is ready to go. There is only one problem: the 17-storey development, which was completed last year, is empty. It has 272,000 sq ft of office space but, so far, no tenants. The EC3 postcode area in LondonÃ¢Â€Â™s financial district is known for two things Ã¢Â€Â” the insurance industry and skyscrapers Ã¢Â€Â” but just as new towers are going up, demand for office space from insurers is on the way down. [...]
Same boom/bust cycle as always. Only this one began before we even paid for the last bust.
[...] A report by Deloitte this week showed the highest level of construction for 13 years of London offices but less than half the space has been let. There is a looming oversupply of commercial space in the city. British Land acknowledged as much, saying it would ease back on developing and warning that it was already giving away more to attract tenants with incentives and free periods. In the RICS survey, agents predicted that office and retail rents would decline. [...]
It was too quiet here on HPC … TOO QUIET!
One suspects that the era of property selling at "offshore prices" is over... As for "onshore prices" - they're probably about 50% lower than what those lovely offshore buyers thought was sensible to pay. But they neglected that (a) London is not land-locked like Hong Kong (b) new supply is possible (c) as a democracy, we can elect politicians who don't give a monkey's about offshore owners ... BECAUSE THEY DON'T VOTE. Game over London Super-bubble -- and this is just the first chapter. My key indicator was how quiet this perma-bearish site had become.... even the bears had capitulated.
The Trend is Your Friend Until it Ends
"The London property market south of the River Thames is beginning to suffer as large numbers of the planned 22,000 units between Battersea and Nine Elms have come to market, and are typically purchased by foreign buyers as rental investments. Data analysed by London Central Portfolio found a significant annual increase in available rental properties in this area of about 28.1 per cent."
Offshore investors experiencing offshore drilling
So they both properly at the top. Then oil crashed, Russia got sanctions and a load of taxes came in to target offshore owners who, we, don't vote in the U.K. And finally Brexit. Not only are prices falling but Sterling collapsed. And now rents are dropping. Offshore drilling in progress!
A million homes by the end of 2020
London suffers the fastest fall in house prices of anywhere in the UK
RTB-er milking the system
Woman raffling her London home for Ã‚Â£3.75m bought it three years ago through right-to-buy Ã¢Â€Â“ for just Ã‚Â£360k
A homeowner who tried to raise Ã‚Â£3.75m by raffling her home online bought the property three years ago using the controversial right-to-buy scheme, and paid just Ã‚Â£360,000. The owner, who is believed to have lived there since 2002, bought the property under the GovernmentÃ¢Â€Â™s right-to-buy scheme three years ago, according to documents lodged with the Land Registry. It is understood that at the time it was valued at Ã‚Â£460,000. Land Registry records confirm, however, that the price paid was Ã‚Â£360,000, indicating the buyers benefited from a Ã‚Â£100,000 right-to-buy discount. The raffle was halted for breaking gambling laws , but he five-bedroom flat is still on the market, listed Rightmove for Ã‚Â£1.25m.
Trend or Blip?
Literally taking bundles of Ã‚Â£50 notes and burning them
"Councils have spent millions buying back homes they sold at a discount under Right-to-Buy laws to meet housing shortages. Islington council spent more than Ã‚Â£6.2m buying back homes it sold to people for less than Ã‚Â£1.3m, a Freedom of Information request reveals." Can hardly be called privatisation if *Assets sold at huge discount *Continuing public subsidies in perpetuity. E.g. Housing Benefit for RtB BtL operators. Central government funding for local services not covered by council tax.
What’s the common denominator?
Dodgy government accounting results in disasters like this
"In 1996, the Ministry of Defence decided to sell off its housing stock. The financier Guy Hands bought it up in a deal that would make his investors billions Ã¢Â€Â“ and have catastrophic consequences for both the military and the taxpayer" The government secured a 'good' deal, but only for 25 years. It sold homes for Ã‚Â£1.67bn that are now worth Ã‚Â£6.7bn and it has to start paying whatever rent Guy Hands can get away with rather than the much smaller amount that it would cost to run the estate. Similar to the Right to Buy fiasco - fire sale, made worse by paying over the odds for the same service that the asset originally rendered under state ownership
Parents now fund more than a quarter of house purchases as young people and first-time buyers struggle increasingly to get on the housing ladder. The Bank of Mum and Dad has become the equivalent of the ninth-biggest mortgage lender in the UK, up from 10th place last year, making it bigger than Clydesdale Bank in the mortgage market.
Does Two Months Indicate a Trend?
Supply & Demand ?
What price can Generation Rent afford, though? 50% lower I guess.
"With people increasingly wary of rate rises, remortgage levels also remain high. Inflationary pressure to come means the first rate rise in a long time may no longer be too far off. Brexit-related uncertainty continues to see many would-be movers sit on their hands, and the General Election could see even more conservatism in the months ahead. Dire supply levels are also damaging demand. There's very little on the market and people aren't in a hurry to buy homes they sense are languishing rather than electrifying. At the high end of the market there has been an influx of cash buyers over the past nine months given the weakness of the Pound. But with Sterling seemingly in bounce-back mode, we may see this trend tail off."
Must be that Brexit thing again!
The CML says that if the March trend continues Ã¢Â€Âœwe can expect to have seen around 70,000 buy-to-let house purchases in the last year. This compares with 142,000 in the 12 months leading up to the stamp duty change. ThatÃ¢Â€Â™s 42% lower year-on-yearÃ¢Â€Â. Ã¢Â€ÂœIt is too early to predict long-term effects of these measures on the balance of tenure. But we may be beginning to see the reversal of a long period of expansion of the private rented sector.Ã¢Â€Â
What else can they throw at it?
UK not as bad as Oz but that’s setting the bar low
Transparency International has released a new report, entitled Doors Wide Open: Corruption and Real Estate in Four Key Markets, which has identified Australia, Canada, the UK and the USA as the top four spots targeted by corrupt officials or criminals for real estate crime.
Government meddling has made housing less affordable for first time buyers
Just over half of the people who have received taxpayers' money to help them buy a home under a government scheme did not need it, according to research. About 4,000 households in England earning more than Ã‚Â£100,000 annually are in the Help to Buy Equity Loan scheme. Official figures to December 2016 show more than 20,000 households who are not first-time buyers have been helped. The initiative, which started in April 2013, aims to make buying a home more affordable. But research conducted for the government found 57% of those who signed up to it said they could have afforded to buy without access to the scheme.
Just a blip?
BTL League of Gentlemen
One of Britain's biggest buy-to-let landlords, Fergus Wilson, has banned 'coloured' people from renting his properties because, he says, they leave them smelling of curry. When contacted by The Sun Mr Wilson defended his comments, saying : "To be honest, weÃ¢Â€Â™re getting overloaded with coloured people. It is a problem with certain types of coloured people Ã¢Â€Â” those who consume curry Ã¢Â€Â” it sticks to the carpet.
It’s all Brexit’s fault, surely?
In recent years, mainland Chinese corporations and cash-rich individuals have been the worldÃ¢Â€Â™s largest buyers of real estate but this global property binge may subside soon. Since late November, the worldÃ¢Â€Â™s second largest economy has been scrutinising the deals and projects of its home grown companies abroad and fund repatriation by individuals, particularly towards mega property investments, doubtful mergers and acquisitions (M&A).
QE, asset-price inflation and wages
First chart shows the 'stellar' gains in world asset prices since 2008 and the sluggish growth in the economy. Ã¢Â€ÂœWe donÃ¢Â€Â™t know how effective QE has been (i.e. for the real economy) because we donÃ¢Â€Â™t know what would have happened without it,Ã¢Â€Â said Peter Oppenheimer, chief global equity strategist at Goldman in London. Falling interest rates supported most financial assets, while for the economy Ã¢Â€ÂœQE has been effective to prevent downside risk,Ã¢Â€Â he said. Any suggestions for a translation of this quote? Third chart shows how ballooning central bank balance sheets have ballooned equity prices. Will the Fed rein back QE and raise Treasury yields and mortgage securities?
Damn that pesky Brexit
If the downturn in London property is because of Brexit .... then why is it happening everywhere? Manhattan, Los Angeles, Vancouver, Hong Kong, you name it.... The answer is it's nothing to do with Brexit! It's because of capital flight controls in China and all the other factors we know well: rising US Dollar interest rates, Russia sanctions, oil crash etc etc But no doubt what's happening in London will be myopically attributed to Brexit. I read elsewhere that Nine Elms bee builds are being offered "cheap" but in reality even down 30% they are still expensive. Who are the buyers if offshore buyers can't cough up any more? The answer is onshore buyers, but only at prices they can afford and they are much lower... the market will clear but not up here.
Buy to let a dying tax dodge
This article is a reminder of just how hard the high loan to value Buy to Letters are going to be hit in the next few years. From April 6th they will be taxed on 25% of their mortgage interest leading to 100% by 2021. This will put many under water based on current low interest rates. Add in a small rise in interest rates and changes in NI and much off this sector will unravel. Already we have seen a massive decline in people buying Buy to Let. The next stage will be people selling. A lot of landlords are crying that this will create a housing shortage and put up rents. This is nonsense as houses get recycled not demolished. so a house taken out of the buy to let sector becomes an owned house and one less renter.
Better than the prospects for renters :(
UK economic growth has been amazingly steady but the issue will come in the latter half of the year when we are hit by higher inflation levels. These days what was previously regarded as relatively low inflation ( 3%+ on CPI and 4%+ on RPI) has a larger impact because so far on the credit crunch wage growth has not risen with it so we saw a sharp fall in real wages around 2011 for example. It is not impossible that the Bank of England could cut Bank Rate again or produce other house price and bank friendly measures but even they may balk at that with inflation above target. Thus house price growth looks set to fade and the price falls will spread out from Central London. How far across the country they will go depends on the mix between economic growth that 2017 and 18 deliver to us.
Corrupt money is thought to be pouring into LondonÃ¢Â€Â™s housing market and exacerbating the capitalÃ¢Â€Â™s housing crisis, with more than Ã‚Â£4.2bn worth of property bought using suspicious wealth.The acquisition of luxury property by corrupt individuals is causing a ripple effect, driving up prices in the rest of the capital and pushing many Londoners out of the city, according to a report by Berlin-based anti-corruption NGO Transparency International.
Look to the land
What is this guy up to?
Councils borrowing for commercial properties
Gotta Keep It Going
BTL snowball gains momentum
Blip or change of trend ?
Anyone still want to blame Stanp Duty?
Stanp duty hikes were a symptom of the bubble blown by capital flight from BRICS and the Gulf. Russia is under sanctions. Oil has crashed. OECD is cracking down on illicit money flows a Tax havens are opening up. China is quelling capital outflows. Anyone still want to blame Stamp Duty for the turning of the tide?
There’s a lot of
Landlord confidence weakened in the last quarter of 2016, with the number of landlords wanting to buy properties dropping to record lows,16 per cent of landlords wanted to expand their portfolio in Q4 2016, compared to 23 per cent in Q3 2016 and 17 per cent in Q4 2015.BM Solutions says the figure is the lowest since it started the survey. The proportion of landlords looking to expand their portfolio has fallen to an all-time low.
… you’d better shake up…
Bemoaning the SDLT from the VI gang on the basis that it hits workers : One of London ChamberÃ¢Â€Â™s primary concerns is that ordinary Londoners can afford to live and work in the capital, helping businesses attract and retain the best talent.Ã‚Â In the words of Ace Ventura.... oh reaaaallllyyy?
Will the global House of Cards tumble….
Does not resolve the fundamental issue
With free movement of people, you could build 100 new towns and it would just cause more people to come, particularly with the Eurozone having porous borders to the middle east and Africa, bringing in unvetted people, many of whom are illiterate and incapable of supporting themselves and their families. Of course, few of them will be able to afford any of these new houses. Fine, have lots coming in, but at least work out how many homes we have and can build and be in a position to plan for not only homes but schools, hospitals, jobs, etc!!
All of the mainstream political parties are complicit
Thousands of renters each month are being deemed officially homeless by local councils after being evicted by private landlords and struggling to pay rents that have risen across the country by more 20 per cent since 2010. The figures show a huge rise in people becoming homeless at the end of assured short hold tenancies (ASTs) 'the most common agreement used by private landlords' since 2010
Feeding frenzy to extract profit hits homeless
Official figures overstate the level of home ownership
Official figures do not count the number of people who own their own homes but the proportion of properties owned by an occupier of a property. This means if a person bought a house and took in three lodgers, the property would then be counted as owner-occupied and the three people renting Ã¢Â€Âœdrop out of the pictureÃ¢Â€Â. Similarly, if five unrelated people share a house this would be counted as one rented household. The same principle also applies to an adult returning home to live with his or her parents.
Meanwhile, cuts in social care for the elderly are causing soaring deaths.
Just 34,000 migrants out of 1.2million to arrive in Germany in the last two years have found work, government reveals
Of course, if we did not finance radical Islam to replace dictators like Gaddafi, Assad and an elected Egyptian President, to replace it with something even worse and allowing ISIS to take Iraq after taking out Saddam, we could instead use foreign aid to encourage secular education and literacy in these countries so that the huge number of illiterate individuals being radicalised can instead have the ability to think for themselves and maybe lead normal lives and be prosperous in their homelands, building a middle class that can construct the civil society that can be the only replacement for dictatorship, that is simply a virus that fills the void? Meanwhile, Europe has a major housing crisis cause by mass migration whilst social welfare is shifted from our most vulnerable citizens.
Remember this next time you watch a property investor TV show
A good analysis of market drivers…
Keeping the Ponzi Going
Our leaders can’t even remember what N.I. was for…
Ã¢Â€ÂœIf we are looking at some form of insurance model it needs to be some form of social insurance model or mandatory long term care coverage, because I think you get market failure in private insurance markets for long-term care,Ã¢Â€Â he told the committee.
Prime Property Leading the Way
Summary of the articles in the broadsheets
Scratches head and pulls out a splinter or two
High house prices are a measure of poverty
The JRF study suggested that in-work poverty was driven by housing costs, especially in the private rented sector, where the numbers living in poverty had doubled to 4.5 million in a decade. This was the key factor behind London recording the highest poverty rate at 27% - 6% above the UK average, according to the study.
Another facility making way for flats
Fountain studios in Wembley where ITV programs have been made since 1955 is being demolished to build "Luxury Flats". I thought one of the appeals of London was supposed to be all the culture and entertainment facilities. I guess they are less important than a quick profit. . This seems to be a recurring theme - Docklands Arena (which I visited quite a few times), BBC Television Centre, and in the future perhaps Earls Court.
They all need homes
Latest ONS immigration figures reveal a record number of EU migrants came to live in Britain in 2016
As I have said ad-infinutum, this pause between EU and Brexit will result in countless people front-running border controls. Almost 600k immigrants the past year, with net migration at over 335k, with illegal or undocumented or undeclared immigration likely being double the 600k level at maybe 1.2m. Many heading to London. This is why affordability in London in particular will plummet and prices will likely start moving into a hyperinflation level if action is not taken soon. When you compare it with annual house building starts to June of just 144,280, I think we start to see the problem coming into focus. This growth simply is not being planned for and if you knew the cost of satisfying demand for homes and infrastructure, you would be protesting on the streets.
Government creates the rigged housing market
UK property to fall 50%?
Imagine if the profit from the uplift in value of land from granting planning permission was spent on building council housing - Job done better still tax all land value away. But currently the profits are obscene and this is the real force of monopoly stopping new houses being built.
Autumn Budget Statement
By committing a few billion pounds towards house building, the chancellor has implicitly acknowledged that we have a problem. IMO the targets of 100,000 new homes in expensive areas and 40,000 cheaper homes will not be enough to correct our housing market mess but at least it's a move in the right direction.
Watching FOXT and CWD shares take a hammering with glee
Mass immigration front-running border controls hoovering up property
Call to rescue young buyers as homes for sale fall to 40-year low: Brexit, stamp duty and buy-to-let tax hike agent's books
I have called this for a while. Anybody from the EU who planned to move to Britain in the next decade who can now is moving, so as to front-run hard Brexit and future border controls. There is a literal feeding frenzy right now. Because these are new entrants to the market, new homes cannot keep up and so logically, the number of homes for sale is plummeting. This is also being multiplied by folk from USA, Canada, etc. racing in, front-running future trade deals and benefiting from a falling Sterling to get a foot-hold. Factors cited by the Mail are exacerbating this, but are not the main factors. The end result could be explosive house price inflation, driven also by the fall. Tracking prices it seems that the post Brexit "correction" was a phase transition to more than 10% growth.
What would housebuilders say?
Old article but worth another look. It suggests: Set up a national land bank which acquires land cheaply (without planning permission, but with potential for development) and holds it for future release for housing and commercial development. The taxpayer benefits from the difference between the value of land without and with planning permission. Then, instead of concentrating on government debt the Chancellor could focus on debt minus assets, and the latter, consisting of saleable land and public infrastructure, would be huge under this scheme. The benefits flowing from these and suggested ancillary schemes would provide much more land for housing and bring down its cost.
Usual nonsense from the Residential Landlords Association
I actually submitted evidence about this to a Government paper on the Private Rental Sector a few years ago. Some of the other evidence was very similar to this article - Kids having to move every six months at the whim of the Landlords. The Residential Landlords Association nonsense that I refer to is that if life is made more difficult for them there will be a shortage of Rental Properties. If there is a shortage of anything it is of affordable properties to buy. My first house, bought in 1986 was an almost new two bedroom "Starter House" in a road of about 30 similar houses. They were all owner occupied. Nowadays, most have probably been bought by Landlords.
London prices cut by barratt
Drop the price?
Halifax = North; Nationwide = South
House prices rose 1.4pc in October, the biggest monthly rise since March, according to Halifax. Halifax's closely watched index reported monthly falls in July and August, and a slight rise in September of just 0.3pc. The jump in October contrasts with Nationwide's index, which last week reported that house prices were flat month on month, although both indices can be volatile.
Cut housing benefits and rents will fall. Or not. Or maybe in the
Yet more Debt
Has Brexit burst the British housing bubble?
So what happened to the magic-money-tree? In short the pound fell in value and it has been continuing to fall ever since the UK voted to leave the EU. There was always going to be Ã¢Â€Âœthe eventÃ¢Â€Â that triggered the end of speculation and it is looking more and more likely as if Brexit was that event. Once the pound begins to fall in value then any overseas investor knows that if they buy property in the UK, even if its value in pounds does not fall, it will be worth less to them in future.
Transport, housing and desperate articles
Onwards and downwards
The UK has tax free gains for housing, has recently transferred 20-30% in real terms from savers to debtors without any government oversight i.e. the transfer has also been to foreign sterling debtors... has no way to rebalance because housing costs in the UK are higher than even the total manufacturing wages of other countries.... and some idea that reversing Brexit will make everything OK even though Brexit is a trigger not a cause. What happens now? Basically it involves amongst other stuff listening to somebody tell you how much their house went up in value....
No way out….
There was no recovery. We're still in the 2008 collapse with no way out unless there are massive debt write-downs. Reason is that debts now total $150 trillion, and the more debts grow the more they shrink the economy and the ability to pay them off because servicing them means people don't have the means to buy all the goods and services they produce. Most banks try to stay afloat, with all bad debts on their books, by lending to speculators to bet on derivatives. But look at Deutsche Bank - lending to speculators, who turn round and short that bank's shares!! "To save the banks you'd have to turn the entire Eurozone into another Greece". How much longer can they keep the plates spinning?
No doubt the landlords will pass the costs of this frivilous lawsuit on?
Stimulating the right end of the market
Britain's government will buy unsold homes built by developers using a 2 billion pound fund announced earlier this week, a move designed to get construction firms to commit to bigger projects, a trade journal reported on Thursday. With HTB ending and BTL tax changes, who knows what might happen?
RICS: We need more social parasites, especially corporate ones
BTL cheerleader RICS: We need more corporations & wealthy people renting out homes. Oh, and we should reduce stamp duty, continue to treat mortgage interest payments as tax-deductible and should offer tax breaks "to fund large scale rental properties".
As big a problem as subprime mortgages
Americans with lower credit scores are falling behind on auto payments at an alarming pace. The rate of seriously delinquent subprime car loans soared above 5% in February, according to Fitch Ratings. That's worse than during the Great Recession and the highest level since 1996. It's a surprising development given the relative health of the overall economy. Fitch blames it on a dramatic rise in loans with lax borrowing standards that have helped fuel the recent boom in auto sales. More Americans bought new cars last year than ever before and the amount of auto loans soared beyond $1 trillion.
The unlucky generation? Certainly with respect to wealth
And so it begins
With German banks on the rocks, there is now a dollar shortage and you can see capital flowing into Sterling with rates on 1yr bonds crashing to 0.084% and 2yr bonds down to 0.068%. They are clearly about to plunge into negative territory noting that a lot of money will flow in the property funds that recently shook off weaker hands with the Brexit vote. And so after Brexit, the panic about Britain has morphed into Britain being a safe haven. It will become very clear, very soon, that it is the EU that is broken, since when Germany is screwed up, nobody can assist the periphery and we are one disaster away from the fall of the European velvet curtain.
Anothe brcik removed in the housing ponzi scheme
One by one the props that make the UK the second most overvalued housing market in the world are coming to an end. This year we have now had a massive amount of benefits taken away from Buy to let Landlords and now Help to Buy is going from another area of the housing market. Not quite a free market yet but a step in the right direction
Record numbers left homeless
Record numbers of families are becoming homeless after being evicted by private landlords and finding themselves unable to afford a suitable alternative place to live, government figures show. The end of an assured shorthold tenancy (AST) was cited by nearly a third of the 15,170 households in England who were classed as homeless in the three months to June Ã¢Â€Â“ a number that was up 10% on the same period last year.
Thanks for nothing…
London attraction fading
Chomsky heart attack
Repeated so often that it seems true, is the mantra that lower sterling helps exports, even though the manufacturers in the UK are free to set their own prices... I looked at gbp yen today and its 130, i have never seen it so low, and I just wonder what is the point of transferring all the purchasing power for uk assets to foreign currency holders abroad? how can it possibly help? the UK from previous (and ongoing) asset sales now has a persistent current account deficit but the boe keeps on going..and they will -keep on- going until they are forced to respond to a wage spiral but because their cr*ppy policies don't work we won't get one. i have given up on sterling its the most useless currency in the world.
A complex market
"Property owners have also developed a hyper-sensitivity to the socio-political climate. ItÃ¢Â€Â™s a dangerous mindset in a market powered by shifts in sentiment rather than economic reality. Article 50 has not been activated to exit the European Union and yet housing chains started to collapse in the aftermath of the vote."
Buyer enquiries and sales instructions continue to slip
Housing market picking up again….
Falling mortgage rates – No better time to buy….
Eliminate bankers, transaction costs, speculation and bank runs
Central banking in the Cloud, one clearing house, one lender and all of the above. And the BoE is moving towards part of this new banking world, where it would be more difficult to get loans for speculation since leveraging of credit through re- hypothecation of credit in the repo market (where several parties apparently own the same asset at the same time when in reality only one of them holds it) would be eliminated. Link in article succinctly explains repo market.
Maybe not inflation
Article suggests that the sudden growth of the money supply will result in inflation, and that the BoE rely on consequences of Brexit instead of rate rises. However, imo, " But they suddenly engaged in a reverse ferret, increasing their holdings of cash by an annualised 70pc over the past three month" the dash to cash by fund managers, or this kind of static creation of cash from financial instruments, could also mean that people are getting ready for an across the board drop in prices and want to be ready. As has been reported generally, the BoE is running out of easing measures. Anyway I don't know but it looks like whichever one we end up with of the two alternatives is coming up soonish.
Surely banks have ventured here before
'This reflects lenders' growing concern that the housing market could falter in the wake of the EU referendum, brokers say. High loan-to-value mortgages (where the loan represents a high proportion of the price paid) are risky, as they expose the lender and property owner to potential negative equity if prices fall.'
Assets, debt and Ponzi
This is about US corporations and stock markets. But the mechanisms apply to any asset market including of course housing. Despite poor earnings US corporations are loading up on debt, using their (current, temporary) creditworthiness / collateral, to pay out dividends and buy back shares to boost their price. But households and consumers are not borrowing enough to boost demand, and corporations aren't investing productively. The Titans of 'industry' are devouring their own children to enrich themselves and impoverish everyone else. The Titan Cronus devoured his own children so that none would dethrone him - but in the end they did.
Will May or Boris rise to the Churchillian Standard?
"During his tenure as President of the Board of Trade, Winston Churchill wrote a book called The PeopleÂ’s Rights. In it he confronted the issue of landowners benefiting financially from the productive work of others. As the demand for housing and business properties increased, the rewards of rising land values flowed to the landowners at the expense of taxpayers. Crucially he noted this also resulted in a loss of competitiveness to the nation. Not that much has changed since Churchill wrote this back in 1909, except that this latter problem has become ever more acute."
Nationwide HPI +0.6% m/m
Slowing down. Still a waiting game
Working/Saving is for losers says BoE Chief economist
Haldane believes that property is a better bet for retirement planning than a pension. "It ought to be pension but it's almost certainly property," he said "As long as we continue not to build anything like as many houses in this country as we need to ... we will see what we've had for the better part of a generation, which is house prices relentlessly heading north." Ros Altmann, the former pensions minister, said his comments were "divorced from reality" and it was "irresponsible" to suggest people should rely on property rather than pensions.
HaHaHa The Specials were right but not for the reason they envisaged
Oh dear me, the price of property, rising rents, neighbours who like quiet and the greed of speculators and property developers. 'Destroying cultural hot spots in favour of empty blocks of luxury flats is the worst thing that we can do to this city.' London gets what it deserves now it doesn't belong to Londoners anymore.
Will the huge surge to the right in Europe inpact house prices
Europe is a tinder box ready to explode. Southern Mediterranean countries with 50% youth unemployment are full of angry young men. it has now spread to the North. The FAVOURITE for the Dutch elections has launched a manifesto where he will ban mosques, send immigrants home and not allow Jews or Muslims, none pork options in schools. Marine le Penn is becoming mainstream in France. In Germany the far right have been accelerating faster than any time in the last 70 years. Both Hungary and Poland elected right wing governments and are refusing refugees. in Austria after election fraud nulled the last election, it is almost sure that the far right wing candidate will get in. Europe is likely to implode before we finally leave the EU in two years. What will happen to our ponzi housing market?
“sales have slowed and prices fallen since the vote”
This week, exactly two months after the vote for Brexit, I spent an hour on the property site Zoopla looking at the latest housing sale data available. Anyone can do this at the click of a button. Unlike the rise in stamp duty in April, which was well anticipated, the vote to leave the EU was not. And all markets react most strongly to the unanticipated.
Its all on sentiment now
"Transactions fall when sellers refuse to drop the price they will accept because they want to believe that the economic effect of Brexit has been overplayed. They also fall when first-time buyers and landlords decide to wait to see if these small falls are a sign of more to come. It is a battle of collective wills: a standoff." One thing i would add is the current uncertainty in the workplace. Employers certainly havent missed the opportunity to beat their staff with the Brexit stick!
The suggestion is that as (company) pension funds are underfunded, then instead of paying dividends the money should go to make up any shortfall in the fund. Ignoring any other side effects from stopping dividends, you would have to ask yourself how many independent pension funds are based on receiving dividends... This is not directly connected to housing but considering the whole point of BoE policy since 2008 has been to ward off deflation through any means possible, money is disappearing anyway like whack-a-mole. Which makes me wonder if even nirp and the other extreme measures are doing no more than -delaying- deflation because in the end these missing pension funds are -not- going to be spent.
How low can they go?
RBS becomes the first bank to set negative interest rates: It's charging large firms to hold cash - so could families be next?
Will homeowners be paid to take out mortgages? It could be profitable for banks to lend out at, say, -0.01 if money they do not lend out that they have to park in the central bank is charged -0.4% interest rates. Remember, 0% is an arbitrary number because banking profit is about arbitration and opportunity cost. They receive cash at whatever cost the market delivers and add a mark-up, pocketing the difference.
Equivalent to Hinkley Point C every two years
Private landlords in the UK received twice as much in housing benefit last year - Â£9.3bn - as they did a decade ago, a report says. The National Housing Federation (NHF) study said the increase was due to a big rise in the number of private tenants claiming housing benefit. The NHF said this particular group of people had grown by 42% since 2008. In 2006, some Â£4.6bn in housing benefit was paid to private landlords, a figure which had more than doubled by 2015. NHF chief executive David Orr said: "It is madness to spend Â£9bn of taxpayers' money lining the pockets of private landlords rather than investing in affordable homes."
Unhealthy debt-to-property ratio for UK plc.
House Price Crash Cancelled
The annual rate of UK house price inflation accelerated to 8.7pct to June, according to official figures. According to the new House Price Index, the rise brought the cost of an average home to Â£213,927. The new "experimental" index comprises figures collated by the Office for National Statistics from data supplied by Land Registry, Registers of Scotland, Land and Property Services, Northern Ireland and the Valuation Office Agency. The figures do not fully reflect any impact of the result of the vote to leave the EU, which was declared on 24 June.
Tax land not labour
General uncertainty – Waiting for signs in the stars
1/3 of sellers reducing asking prices…. and the rest
Average London house price down by Â£30,000 in July, says Haart
Libby prediction about to come true. Low rates to lead to massive tax cuts
"Darren Bustin, head of derivatives at Royal London Asset Management, said that the government may need to look at fiscal policies such as cutting VAT to prop up the economy if monetary stimulus fails." As I have said ad-infinitum, low interest rates will fail to stimulate the economy, forcing governments into tax cuts that will snowball. A lot of the deflation we have right now is due to tax rates rising beyond their sustainable level.
Home buyers using Brexit to demand hefty price discounts
3 million ‘working’ families one paycheck away from losing their homes…
Property market looking shaky after Brexit
The government has gambled hundreds of millions on house price rises Â– it’s time to stop the meddlin
Implications of the rate cut for Nationwide customers
Customers on Tracker mortgages get the full 0.25% decrease, Standard Variable Rate reduces from 3.99% to 3.74% and Base Mortgage Rate customers see a cut from 2.50% to 2.25%. Suckers defrauded by Carney's prior rate rise carnival get Jack diddly squat. For those seeking new mortgages or equity release, the Â£500 or so savings per year on, say, a Â£200k mortgage should let you leverage an extra Â£2500k in borrowing power. To be sucked up into house prices very fast.
Yes but that can’t happen here…..
Enhanced affordability will increase prices
Forget all the other issues, when rates fall, as I've said for a long time is just as likely as the now forgotten rise, banks will start to factor that in, increasing the amount that borrowers can afford when borrowing to buy a house or carry out mortgage equity release. This money will be used to bid up house prices. If house prices rise faster than construction costs, more homes will be built, but with a migration surge front-running border controls, they simply cannot build enough. Prices are about to go through the roof. Wider issue is, if rates fall, is this, following years of plateaux, the beginning of a downward trend towards negative? With oil prices back below the $40 handle this week deflation may be a wider trend due to technology & movement of labour via migration & IT.
Staggering drop in home ownership in last decade
Some very interesting figures showing the decline in Home Ownership which is down from an average of the low 70% in its peak to the low 60% today. This is a massive social change and will only increase as older people die off or pay for nursing care. In Central London home ownership is down to 34%. At some point in the next 20 years the difference between the haves (got on the housing ladder in the late 90's/ early 2000s) and the have nots ( cant afford a house and all the money is taken in rent) is going to feed into main stream politics and will effect who gets elected. It would also be interesting to see the standard of home ownership for people getting on the ladder. A young doctor in London 20 years ago could afford a nice two to three bedroom house. Now a starter hovel.
Keeping the tenants warm
"A rate cut is a certainty, according to most experts." The unemployment rate has dropped to an 11 year low and our currency has lost significant purchasing power against the dollar. The BoE monetary policy committee is allegedly preparing to lower interest rates down from the seven year 'emergency' rate of 0.5%. I'm wondering what it will take to get interest rates rising now.
The surge is well under way.
Insulting your intelligence they claim the surge is hypothetical, it is happening right now and possibly explains why French border control has been taken unawares. I would not be surprised if net migration does no hit a million people this year, as folk front-run border controls. Housing shortages could be so acute that houses per surveyor go below double digits whilst house prices could just mushroom beyond all belief.
Estate agent fails to predict price rise
5-10% … to start?
"The report predicts that businesses will remain wary of committing to property until the outcome of negotiations with the EU are clearer, with the risk of losing financial passporting rights a particular risk for City office space." I fully expect nine-figure apartments to drop by much more than 5-10%. Could be 90%. But since they were bought with laundered offshore cash and not onshore mortages, perhaps this "decapitation" move will have limited spill-over.
A good gamble
They are not Tourists, morons, they are MIGRANTS
Brexit BONANZA: Tourists are pouring into Britain Â— and it's the time for homeowners to cash in by r
There is literally a race right now to flood into Britain and front-run border controls. It is being reported as a tourist rush, but how many will go home? Many will stay until they get indefinite leave to remain. This is a total disaster. We should repeal the European Communities Act IMMEDIATELY. Then replace freedom of movement with a freedom to work. Visa free access, but no right to reside unless you have a job and, no benefits or NHS until a Citizen and you have to have private healthcare between times. Simple, and if the EU threaten us with tariffs, we would make money from them because they export way more to us than we do to them!! House prices in Britain are literally going to go to the moon because of this.
Rachmanism part 2
The shrinking stock of social housing is pushing more vulnerable people into an increasingly over-priced private rental market.Slums may be re-emerging in the UK, with growing concern about the number of private renters living in hazardous or squalid conditions.A dramatic increase in the number of renters and poor regulation in the private sector, are being exploited by rogue landlords, according to local authorities and housing campaigners.
THERE IS NO BUBBLE – House prices have FALLEN in most parts of the UK since 2005
What is luxury in London?
I'm struggling with the term "Luxury" in the context of London flats and housing. Â£2m gets you what exactly in London? "A simplistic Â‘back of the envelopeÂ’ computation shows there were 3,140 real estate transactions registered above Â£2m in London in 2015 (and 920 in 2016 leading up to Brexit)." So that would be a normal house in a less than favourable area or a one bedroom in a nice area?
Brexit impact seeping through
Sorry, but this brazen confidence is bullish, long term
RE-POSTED: Even this article is out of date, with more skyscrapers granted since. If the City can suck in enough companies to fill these towers, they will all need places to live. Look on the London Overground routes from Liverpool Street and along the Crossrail route to see where workers will live. Remember, BOE will cut interest rates if these towers, being constructed a few mins walk from Threadneedle St, halt work.
Help for housing on it’s way (This is for libby)
The Bank of England could make the first cut to UK interest rates in more than seven years on Thursday. Mark Carney, the Bank governor, has indicated that the Monetary Policy Committee (MPC) would vote to cut rates in July or August. The probable reduction from 0.5% to 0.25% is intended to boost the UK economy in the wake of the Brexit vote.
Don’t blame on the sunshine , moonlight, good times., blame it on…..
"Buyer enquiries fall for third consecutive month - lowest reading since mid-2008Agreed sales fall sharply with further drop expected in the short term12 month price expectations turn negative in London and East Â– but longer term forecasts remain positive" I commented before.. purple bricks ... easy estate agencies etc. The inverse indicator as companies come to market expecting the continuation of a prior trend.
Barratt are planning for Housing Correction
Barratt Chief Executive David Thomas said the market was now more likely to slow. "We would look at future land commitments, our current commitments, we would also look at our build programmes and the extent to which we should slow down our build programmes," he told Reuters. "The principle focus of our reassessment will be about where we have approved land but we have not yet submitted for planning or alternatively where land is coming to the market that we could bid on and we are looking at whether we will or we won't," he said.
To be launched in 2018, Crossrail is now not only an obsession for planners, engineers and architects, but is also being sold as a potential catalyst for much-needed housing investment and regeneration. Will the capital's biggest infrastructure project, funded mainly by the public purse, help address its housing problems? The evidence suggests that, despite the praise, it may make them worse. London, according to a recent study by PricewaterhouseCoopers, will be a majority-renting city (60%) by 2025. This majority is paying for Crossrail (recently unveiled as the Elizabeth Line) through their taxes and, soon, their fares. They will be rewarded with higher rents and house prices.
Terms of Endearment?
"The Bank of England is poised to slash interest rates to close to zero this week as fears mount over a Brexit-induced recession. Economists believe the Monetary Policy Committee (MPC) will cut rates to a new low of just 0.25pc on Thursday, while markets have priced in a 75pc chance of more easing." It's a funny old world. Could have sworn Carney was muttering about rate rises if we voted for Brexit.
Brexit not fully factored in, but will a weak pound attract more buyers?
Property hits levels of unaffordability not seen since before the financial crisis as house prices rise by almost 3k in June
UK house prices continued to rise in June, adding almost 3,000 GBP in a month, stretching affordability to levels not seen since the run-up to the financial crisis in 2007, a new survey suggests. Halifax said it was too early to say how the referendum that sanctioned the UK's decision to leave the EU will impact the housing market, but added there were signs the pace of growth is easing. The price of the average home in the UK rose by 1.3 per cent between May and June, or by 2,708 GBP to hit 216,823 GBP, up from 0.6 per cent the previous month, according to the latest index by the mortgage lender.
To make the assumption that property is suddenly worth 5% less because of BREXIT is sheer madness.
The currency has dropped about 13% so far. Add the 5% write-off because they ASSUMED they lost money and you are at nearly a 30% drop. Property in London is declining, not because of BREXIT, but because of the crazy changes in laws and hikes in taxation. However, to make the assumption that property is suddenly worth 5% less because of BREXIT is sheer madness.
Are UK House Owners About To Be Punished For Voting Brexit
Hang on – what’s happened to the safe-haven asset of choice?
One estate agent sounds near-suicidal: "ThereÂ’s no end to how far prices could fall". Unnamed "foreigners" have stopped bidding on London property because they're afraid of mounting xenophobia and racism. London has the highest ratio of bedrooms to residents in the city's 2,000+ year history, and half the bedrooms in the southeast are empty on any given night. The "demand" for London property isn't driven by the density of people seeking to live there, it's driven by the hordes who want to treat shelter as a tradeable asset class. Oh and don't forget Â“London is now globally recognised as such a desirable city that its property is treated effectively as another asset class. A safe investment in a turbulent worldÂ” -- Boris Johnson, October 2012
Post Brexit strategies
Summer tipped for rate cut by Governor as he pledges he won’t “walk away” from the job
He may end up getting kicked out. So, my long predicted rate cut is about to come to pass. Expectations are that it will be a 25bp cut to 0.25%. However, 2yr Gilts are being bid up bigly, to quote the next President of the USA, with rates collapsing on those to 0.105% I am expecting these to fall into negative territory forcing the BOE, which reacts to and competes with the market and is not in control, to cut to 0%, followed by negative rates to come as Britain becomes a safe haven whilst the EU becomes the focus of short positions and disintegration concerns. House prices are about to soar as this combines with FOREX house price discounts to foreigners who will flood in to front run border controls.
Bad news for London Property Buyers
Maybe this will finally get rid of this appalling, dishonest practice
This summer, CaseHub is launching the once-in-a-generation fight back against extortionate letting agent practices. If you have a gripe with your past or current letting agent, this case is a must-watch. As the niceties of the class action are still being sorted, we invite you to sign up to our mailing list beforehand: join us on and be one of the first people in the movement to help the fight back.
Good news for London house buyers
"Samuel Tombs, the chief UK economist at Pantheon Macroeconomics, said: Â“Following the referendum, demand likely will weaken as unemployment begins to edge up and confidence falls. Meanwhile, banks soon will reflect the recent increase in funding costs in their mortgage rates. Prices in London look particularly vulnerable, given that job insecurity has increased in the City and banks will be thinking twice about high loan-to-income lending.Â” Foxtons, the London-focused estate agent, issued a profit warning this week. It believes that the vote to leave the EU will limit property sales in the capital for the rest of the year."
A flood of foreign money will pour into LondonÂ’s post-Brexit housing market
Foreign investors are apparently seeing huge savings after the value of the pound plummeted following the leave vote. Luxury estate agent John Taylor said since referendum, they have received higher offers on property than all other offers made since the start of the year. John Taylor managing director David Adams said: Â“I was inundated with more calls from the Middle East on Friday than any other day of my career."
The Fergus saga continues…..
Stagnation and Decline (House Prices)
House prices to fall 5pc nationwide and tumble even further in London as worried home buyers back out
House prices and transaction levels will be hit by a "short, sharp shock for a quarter", as buyers pull out of chains amid the uncertainty that the vote to leave the European Union has created. Property experts warned that chains could collapse as worried buyers pull out of transactions or invoke "Brexit clauses", which allow them to back out if they don't like the outcome of the referendum.
EU edit expected to end UK house price boom
Could this trigger the big one ?
This is making 2008 seem like a minor hiccup. I remember 1992 when interest rates hit 14%. Of course Libertas might e right and next year your house might be worth Â£1000000000 or was that Zimbabwe dollars ? Is this the final punishment of the boomers against generation rent ? A lot of the boomers won't be happy when they see the price of their next BMW. Wait for the cries of "BoJo didn't tell us this would happen"
Linked - probably - to the 2016 Act, UCL students have decided to go on Strike, The strike was reported on in March - but they have got a rebate recently : .http://www.theguardian.com/education/2015/jun/11/university-college-london-students-withhold-rent-over-building-works Keeno relates this phenomena to the rest of the economy. Shows when we started the debt inflation ..... I wonder who started down that road?
Brexit is now the most bullish thing conceivable, something we first hinted a month ago…
According to a Reuters report, the European Central Bank would publicly pledge to backstop financial markets in tandem with the Bank of England should Britain vote to leave the European Union. Rate cuts and QE will be the most bullish thing ever. Markets will soar, house prices could go ballistic. The only risk is that governments will over-reach in their abject fear and pump too much money into the system thus, the greatest risk is not BREXIT but government knee jerk reaction to it. However, with deflation on the horizon, it may be the prod needed to bring us back to 2% inflation targets. For Britain, with reduced migration eventually, stagnant wages could reverse gear and start heading into the stratosphere as we play catch up with the wages of other non-EU countries like Norway & Swiss
If boomers’ home equity is hard earned, how come today’s higher earning workers never earn enough?
Â“The result is that the younger generation is now expected to pay a much bigger multiple of its earnings to buy a home than their parents did Â– something that never happened previously.Â” Boomers had to hand over 3 or 4 times annual earnings, now expect double that for exactly the same house. Sellers of shares in a company can very reasonably expect more than they paid for them if the company has created lots of value and made the pie bigger. But trousering a decade of someone's earned income for a sh1tty home is just taking a bigger slice of the pie without creating anything...
Creepy data mining
"Landlords and letting agents are paying for 'personality reports' of potential tenants based on details obtained by trawling Facebook, LinkedIn, Twitter and other sites. Tenant Assured creates a report, with the tenants' permission, which is used to verify basic information as well as unearth other details such as applicants' credit-worthiness or whether they own pets." I wanted to post this: http://boingboing.net/2016/06/09/uk-startup-offers-landlords-co.html and this https://www.washingtonpost.com/news/the-intersect/wp/2016/06/09/creepy-startup-will-help-landlords-employers-and-online-dates-strip-mine-intimate-data-from-your-facebook-page/ but the blog doesn't seem to cope with their web addresses.
Short term dip?
House prices are set to drop for the first time since 2012, as demand for property falls at its fastest rate in eight years. A "short-term" dip in house prices over the next few months will come at the same time as rents continue to rise, according to the Royal Institution of Chartered Surveyors (Rics).
The most important vote ever
The House Price, Mortgage Cost Hokey Cokey
In Out, In Out, Shake it all about and Remain again suggests that Treasury analysis suggested that voting to leave the EU could add Â£920 to the annual cost of the average mortgage. Mortgage rates could rise by 0.7% costing the 'average' mortgage holder of a Â£292000 property the equivalent of less than Â£20 per week. On the other hand if you are looking to buy it won't make any difference at all unless you have a bigger deposit tucked away. How cheap is your vote?
Peak Mortgage Zombies
All the jabbering about Brexit is clouding one fact about the UK housing market. ItÂ’s currently slowing down. I suspect itÂ’s less to do with Brexit or buy-to-let, and more to do with the fact that house prices in the UK are wildly expensive. House prices are too damn high compared to wages.
Peak rental supply
Martin Armstrong exposes rampant BREXIT propaganda
Despite the propaganda, Britain's economic growth peaked prior to joining the Common Market and has fallen ever since. Is it a co-oincident that our major heavy industries collapsed after that date, leading to the winter of discontent, 3 day weeks? Our heavy industry, fishing, mining, etc. continues to be gutted, and our service industry takes in in-spite of rather due to the EU, who would strip mine it to resolve problems in Greece, France, Eastern Europe, etc. before they would give us a hand. Next to go is the NHS and our welfare system. That is the horrible truth.
this cheap borrowing had been the biggest driver for demand for homes. Â“Since 2013, the demand for housing has been turbocharged by chancellor [George] OsborneÂ’s help-to-buy policy and the search for yield Â– which has resulted in the accumulation of housing wealth as an investment alternative for low-yielding financial assets,Â” it said. Â“As a consequence, house prices are now close to an all-time high of more than six times disposable income.Â” The firm said couples buying together were increasingly taking on large loans relative to their income. Before the crisis fewer than 30% of joint mortgages were taken at more than 2.75 times income , but now that proportion has risen to more than a third.
The peace and quiet of contemlation during Purdah
Starting on Friday, Purdah will prevented civil servants from helping the Government's referendum campaign. The incessant slew of panicked briefing papers telling us the sky would fall and why toddler Britain couldn't survive on its two feet should come to an end. In light of all that propaganda barely lifting BREMAIN above 50%, we could see BREXIT soar and take over during the next month, as Cameron looses his paid thugs in Whitehall. Final question is whether postal vote fraud will see ballot boxes stuffed like in Austria.
Bank of mum and dad not enough
Why we need property taxes
"This is the incredible staircase of a Â£3m '"forgotten" Georgian mansion which has gone on the market in the heart of London's East End. Built between July 1741 and October 1742, the spooky four-storey Malplaquet House has not been lived in since 1895 but has been restored by its current owners." On top of it, squatting has been criminalised now. This could have provided housing for lots of people for 120 years and the owner would still have made out like a bandit even if they burnt it to the ground.
Property prices in Britain may be surging due to a horrendous imbalance of supply and demand Â— but the market is poised to implode. Why? Because Britons are not earning enough money to either get on the housing ladder or are spending such a large portion of their wages on mortgages that may not be sustainable.
Desperate times call for desperate measures
Underlying weakness in British economy may necessitate Â‘additional monetary stimulusÂ’,
Its not BREXIT, its a global deflationary slump, stupid. Of course, BREXIT would help encourage wage inflation and help lift the UK economy from its present malaise, but the globalists in charge will not tell you that, because it does not support their corporatist objectives..
Peter Schiff – Buying a house as an investment
Funniest Brexit article I’ve seen yet
But David Cox, the head of Arla, said tenants should not get too excited about rent falls, as buy-to-let landlords may quit the market en masse following a vote in favour of Brexit. "The fact that rent costs would face downward pressure is both a blessing and a curse. While renters should face fair and reasonable prices, landlords need to be able to at least break even on any outgoings they have, such as a mortgage. If demand eases to such an extent that landlords cannot recuperate costs, we'll likely see a mass exit from the market, which would then just have the opposite effect on demand as supply falls Â– and we'd be back to square one." -- How could we possibly get by without all those landlords to help?
Pie + Sky
Future plans of Londoners
The BTL disease spreading quickly into Europe
‘Dire’ outcomes of a Brexit vote
House prices could crash by 25pc and the pound drop by a third if the UK leaves the EU, according to Fitch, which warned that social tensions risked boiling over even if Britain stays in the bloc. and then right at the end "Economists at ING also calculated that a Brexit would deal an economic blow to the eurozone."
ARLA pretend not to understand
Buy-to-let landlords should to be made to "squeal" under George Osborne's crackdown to help people to buy homes, a Treasury minister has suggested. The Residential Landlords Association said it was "shocked" by the response of the minister, during a private meeting earlier this month as it tried to raise concerns about a crackdown.
Could this be the best time to buy?
IMF’s turn to stoke the ashes of fear
The calm before the storm….
More reverse psychology from the Remain camp to vote Brexit
Plan to crash the wealthy home owners in London
"Foreigners suspected of using London's property market to launder ill-gotten gains will be forced to declare where they got their money from, Under new government proposals to fight global corruption. The measures, known as "unexplained wealth orders", will form part of the agenda on Thursday as David Cameron hosts an international anti-corruption summit in London." If this gains any traction at all it will destroy the London 'safe deposit housing market' The artice suggest that between 7.3% and 9.3% of the money is dirty. However, there are different shades of grey and it will send a massive warning signal tthat if you buy in London you could be exposed.
43% on income on rent/mortgage/bills….
"Renting is cheaper than buying for first-time buyers in only six towns in the UK, according to a cost of living study." "The number of people renting is also going up. The English Housing Survey estimated between 2013 and 2014 there were nine million tenants."
Treading water? until …….?
Who knows maybe Zoopla has finally called it?
The housing bubble has burst, analysts have said, after sellers started slashing money off their asking prices and accepting offers up to 10 per cent less than the property was listed. The average discount on the original price of a property across Britain is now more than Â£25,000, up Â£4,000 compared to the discount in January, according to Zoopla, an online property portal.
Osborne getting the blame/credit for Halifax numbers
Middle class renting nightmare might be getting a little better?
"Investing in buy-to-let property is on the verge of becoming unaffordable for middle-class savers" Saving is spending less than you earn, BTL is an investment, not saving. In addition, it's a pretty socially useless investment where it's speculation on house price rises in large parts of the country where yields are too low to make a decent income. Result is very poor quality as even the nicest landlords often can't afford to do proper maintenance. No new wealth being created here, if there was, housing would have improved vastly over the years like technology has. "limit it to an elite club of wealthy investors only." Who would ever want a landlord who isn't wealthy? Would anyone want to enter into a long term contract with a counterparty in a precarious position?
A recent run of bad news on the economy may have chipped away at Mark Carney and other policymakersÂ’
You heard it first here whilst everybody took the preverbal, but now it looks increasingly possible. Discussions will focus on this because in the case of BREXIT, despite Osbourne's lies, rates will be CUT. In the case of staying in the EU, there may be bad news being hidden until that date to keep the proles quiet.
Osborne says vote Brexit for House correction…;o)
If you are under 55 and would like to improve your chances of ever affording a home then you should seriously consider voting Brexit This opportunity to vote for a Brexit really does take the issue, for a moment in time anyway, away from the politicians. It is a real shame that our politicians continue to value corporations above its own people. If the establishment is for a particular policy its usually because it will benefit influential businesses Its almost worth bringing down this whole shambolic system just to be able to say "Now we are in it together"
The Political Topology is changing….
The scam goes on
Here we go again? (part 2)
LENDING giant Halifax has upped the top age limit on its mortgages to 80-YEARS-OLD, as Britons continue to live and work longer. Under the change, borrowers will be able to take out home loans where the term lasts up until their 80th birthday - up from the previous limit of 75.
Here we go again?
Bubble, bursting, tumble, fear, crash and thats just the title
I need help with my mortgage. Where’s their nearest branch?
Parents will lend over Â£5 billion this year, providing deposits for over 300,000 mortgages and purchasing homes worth Â£77 billion The research shows that three-quarters of family-funded house purchases are funding by parents, with family friends and grandparents also making up the difference. Get your begging bowls out.
What do you mean, ‘next’?
15pc of all mortgages now go to BTL landlords, compared to 8.5pc in 2007, before the last crash. BTL loans account for almost all the current growth in the mortgage market, with lenders planning to expand their BTL lending by 20pc per annum over the next two years. Lending standards are slipping. British banks have over Â£215bn of BTL loans on their books, compared to Â£146bn in 2009.
The analysis HP referenced… Sauce for Bears??
This is the 10% which the Tgraph was referring to. Is not a 10% fall but actually the report refers to what percentage of properties have had their asking prices REDUCED by 10%+. "Analysis of quarterly sales in prime central London shows almost half (49%) of properties sold in Q1 2016 had their asking price reduced before a sale was agreed. This is higher than the 40% of properties sold in Q1 2015 and 27% two years ago in Q1 2014. The lettings market has also seen an increase in price reductions, from 32% a year ago to 45% in Q1 2016." But aren't ALL rents increasing?? "and a fall in the number of overseas buyers are all impacting the prime central London market." Eh? A But the number of overseas b uyers are increasing .... surely? Q: Where the smart money goes does the rest follow?
“London has fallen”? – sorry Mr. Butler
99% of what you read in the papers about the housing market, .... is put out by people with something to sell. Estate agents, [lenders] Â– all know about the market because they are selling houses,.... mortgages or financial services but they must be optimistic or they lose business. No one will instruct a depressed estate agent...so these commentators MUST have a glass that is half full. As you can see from the graphs below, what we can see is that half of all homes sold in the first quarter of 2016 sold in London went for more than 10% below the guide price. Not just in some parts but across central London and across price bands! 60% of the property that did sell in Knightsbridge and Belgravia had itÂ’s guide price reduced prior to selling. The market is on the turn. Aha - the 10%!!
Angry tenants across London have been taking to social media to share their renting horror stories
"The infection from luxury to mainstream is much more transferable than anyone imagines, and these are the reasons why I am troubled by the Land Registry figures," A troubled Henry Pryor The Land Registry data also revealed a fall in the number of completed house sales in England and Wales in January fell by 5pc to 54,254 compared with 56,937 in January 2015. This dispels reports that there was a rush to buy a second home or a buy-to-property ahead of April - when the Chancellor introduced a 3pc increase in stamp duty on these two buyer tribes.
Housing lunacy cont….
New figures show house price rises are slowing in London, and rising faster in surrounding regions
NIRP is the new normal
Keeping an eye on the Blairs
Value or ponzi?
Anyone that believes that the London market is down to short supply and immigration and will go on forever on an upward trajectory should read what is happening in Vancouver. Bubbles are fine if you can get in and out on the way up. If the Chinese are doing this in Vancouver, what have they done to stoke the London market and what is going to be the impact when this reverses?
Property prices up, economy down
Competition is never a good idea if you want to make money
Fines or prison for conspiring estate agents deliberately cutting off business for Rightmove or Zoopla
The Competition and Markets Authority (CMA) has warned estate agents against colluding to join the On The Market property portal, deliberately cutting off business from either Rightmove or Zoopla. Things must be getting bad. I guess everyone is sitting tight until Independence day.
I wonder if there is any scope under UK law for similar actions?
"So Ms. Trauss is taking her campaign to the courts. In December she sued the city of Lafayette, Calif., an East Bay bedroom community, after it took a parcel that had been set aside for higher-density apartments and office buildings and rezoned it for single-family homes instead." I'd say that Competition and Markets Authority would have a very strong case against anyone involved in restricting the supply of housing - you simply don't get such a ridiculous spread between cost of production and prices unless there are serious impediments to competition. Maybe councils that fail to produce enough housing under their Regional Development Plans or whatever they are now could be taken to court?
Poor rich people
LondonÂ’s super-rich are increasingly turning to renting in order to avoid paying stamp duty on expensive purchases, a new report shows. Henry Pryor, a buying agent, told the Financial Times that the Panama Papers has highlighted that Â‘no one can buy quietlyÂ’ anymore.
First time buyers trading up to BTL lords
How to predict the impossible with a straight face
NHS and public services will face billions in cuts if Britain votes to leave EU, George Osborne to warn
George Osborne is warning that public services will face cuts if Britain votes to leave the EU The NHS, schools and defence will face billions of pounds worth of cuts and householders will be Â£4,300 poorer a year if Britain votes to leave the European Union because of the economic impact of a Brexit, George Osborne will warn. I'm guessing one key assumption is that the rest of the EU will continue as it is. In wonderful harmony......
George reckons brexit will make your mortgage dearer
ONS oops again
House price index Â‘updateÂ’ blamed for revised data, which suggests average price in February was Â£27,000 lower than figure declared in January "...prompting the Guardian to report that London house prices Â“rose almost Â£500 a day in JanuaryÂ”, and that the capital was Â“powering aheadÂ”. Well they could always compare with other sources and check their data before they go to press once in a while!
You will be lucky
Housing crisis: First time buyers will need a Â£64,000 salary to afford the average home by 2020, Shelter warns
In reality though, is this really a crisis? Â£64,000 divided by two is Â£32k each for a couple for the average house. Of course, most first time buyers do not buy an average house and we would have collapse level economics for that to be the case. Furthermore, single people will generally buy studio flats.
Enfield showing “startling” growth
Commuter-belt builder Countryside is selling homes for more than half a million pounds each on average as Londoners are priced out of the centre of the capital, chief executive Ian Sutcliffe said today. Areas such as Acton in the west, Enfield to the north and the A13 corridor heading east were in the strongest demand as average selling prices for private homes jumped a startling 47% to Â£508,000.
It’s all looking a bit grim down South
House prices continued to motor ahead in the year to February 2016, fuelled by strong growth in the south of England and a supply shortage across the country Supply shortage or too few people/companies owning too many properties? They've always been a couple of policies away from sorting this home/housing/property mess out. Plenty of good policies to copy in Europe.
George Osborne’s rental yield
Why younger people canÂ’t afford a house: money became too cheap
Ukrainian invasion of EU / UK commences
If the flood of immigrants from the Middle East were not enough to sink our Socialist ways, dry up our housing supply and result in breaches of peace as legitimate refugees are mixed in with Jihadis and fighting age single males who have raped and pillaged their own countries, this could tip the balance. Ukraine is collapsing now and has over 45 million people and has a porous border with Russia, with 144 million people. But not only, it also has a porous border to practically the old Soviet Union, which had over 240 million people. Just as Turkey and Greece have now porous borders to the whole of the Middle East. Has the US / NATO sponsored Ukrainian Coup De Ta resulted in the EU biting off more than it can chew? IF YOU DON'T HAVE A HOUSE NOW, FORGET IT #BREXIT
Sterling weakness translating into minor inflation
Inflation accelerated to 0.5% in March - but an interest rate rise is still a year away, say economists
Well, this was unexpected. Could BREXIT clouds result in further Sterling drops, resulting in inflation that would precipitate need for an interest rate rise earlier than thought, or, in light of us having been below the 2% target for so long, surely there would be no panic at 3% inflation rates for a period? That could help resolve the national debt! Or will this be short lived and will deflation return?
Deflation and negative rates
"During a leisurely stroll around Germany, one may encounter many strange sights but nothing would stranger than the following ad (courtesy of Peter Barkow) which promises negative 1% interest rates for consumer loans up to 24 months." This is discounting serious consumer price deflation over the next 2yrs, with loans like this attempting to stop customers from putting off purchases in the hope that prices will be cheaper in 2yrs time. Essentially, it is the market attempting to counter deflation expectations to shift people's time preference for purchase from the future to the present. And thus negative rates come not only from the central bank, no, they also come from market forces in a deflationary environment, to some extent.
CPI vs real inflation
Britain any time soon?
Next crash, 2026.
Barely a few weeks on from when Britain's housing market bears were starting to reappear on the scene in the mainstream press with perma doomsday headlines that followed Februarys 1.5% plunge and on the back of news of a fast slowing UK economy. Now out pops the Halifax with its latest data that show average UK house prices have once more accelerated to above 10% per annum! By galloping ahead by a whopping 2.6% for March near double Februarys 1.5% drop, and despite Februarys drop are up by 2.9% so far this year which converts into an annual inflation rate of 11.6%. The bottom line is that whilst the BULL MARKET currently remains on track to run for several more years, nevertheless don't forget that at the end of every bull market lies a BEAR MARKET.
Something contagious is in the air
Money’s too tight (to mention)
More than half of London's private tenants are struggling to pay their rent, housing charity Shelter has said.The research by Shelter and YouGov also found almost half of families have had to borrow money to cover the costs.One in three tenants have fallen into debt in the last year in an effort to meet monthly payments, Shelter found. IMO this ties in nicely with techieman's "something for the weekend" post and particular his reference to Steve Keen and private debt on Thursday, April 7, 2016 @ 01:21PM
Back to the future?
A few folks here - myself included - have likened the current BTL tax changes to the loss of Miras in 1988, I thought id look up an old article so that we can see what people were talking about. For those youngsters on here this might be an eye-opener. But ofc THIS time its different ;)
More than Â£170bn of UK property is now held overseas. Much of that is in London, where unprecedented house price inflation has transformed homes into highly profitable investments for asset speculators. Nearly one in 10 of the 31,000 tax haven companies that own British property are linked to Mossack Fonseca.
Start of something bigger?
Something for the weekend ?
A nice collection of stories from the world’s worst value rental market
"The Dodgy Lettings website shows renting at its worst. Thankfully, most of it isnÂ’t like this Â– the English Housing Survey shows most tenants are satisfied with their accommodation." ALL tenants should be DELIGHTED with their accommodation with the prices they are forced to pay...
Man tries to find if being a Police Comissioner is as easy as being a parasitic Landlord
Assets and income
With a title like that, this simply *has* to be on the blog. Owning the roof over your head is a reasonable and sensible goal for retirement but you need an income as well. High house prices are making life harder for young people and distorting financial planning for pensioners.
Hubble bubble toil and TROUBLE ?
Â "highly likely" the FPC would be given the powers over the buy-to-let mortgage market "later this year". The number of mortgage approvals in February was also 26% higher than a year ago. The BBA's chief economist Richard Woolhouse said: "It appears that borrowers are continuing to try to get ahead of the increases in stamp duty for buy-to-let and second home buyers scheduled to come into effect next month." Saw this first on the forum... so shout out to those boys. One for Jack methinks.
BTL is the national hobby – Fergus Wilson
I missed this at the time but it goes some way to answering my question from yesterday about whether BTL was investing or a hobby. Â“Owning BTL became a hobby for Fergus Wilson that simply got out of control. He says BTL is the national hobby and is followed by millions."
Raise rents or sell?
The repayment mortgage is an ‘expense’ and other nonsense
Landlords dodge stamp duty
Where there's a will ... Buy-to-let mortgage lending is booming ahead of the ChancellorÂ’s tax hike Â– with a soaring number of landlords reportedly using companies to flout the crackdown. Landlord loans rocketed by 22 per cent in January compared with the same month in 2015, as buyers rush to beat the forthcoming tax changes. At the same time property firms are reporting a huge rise in the numbers buying through companies in a bid to flout the new rules.
Young families priced out of rental markets in two-thirds of the UK
One for libertas
"How could low or negative interest rates make mortgages more expensive? One answer, according to banking analysts, is that when rates fall to very low levels banks start to bear costs relating to the money they hold on deposit. In a negative rate environment, deposits present actual costs. It is difficult to pass these costs onto depositors. In fact very few banks, even in countries like Switzerland where negative rates have prevailed for some time, pass any cost directly to savers. Instead to protect their profits, banks have to increase the charges they levy upon borrowers."
Help to buy is riddled with loopholes that the privileged can easily exploit
"And rather than address the root causes of the housing crisis Â– speculation, a lack of supply, a stilted economy and the collapse of the social rented sector Â– politicians opt to prop up an unsustainable housing market with state cash, to mollify homeowners who are understandably nervous of negative equity. "
Money printing just got turbo charged
The European Central Bank has cut its main interest rate from 0.05% to 0% as part of a package of measures intended to revive the eurozone economy. The bank will also expand its quantitative easing programme from Â€60bn to Â€80bn a month. The ECB also decided to further cut its bank deposit rate, from minus 0.3% to minus 0.4%.
Fragility at the high end
Battersea panic stations: Investors flee luxury scheme as up to Â£2m is knocked off some asking prices
"More than 50 luxury flats on sale at LondonÂ’s iconic Battersea Power Station have had their prices slashed since January, with some seeing discounts as large as 38 per cent in a sign that wealthy foreign investors are scrambling to desert the scheme. The news adds to fears that demand for prime homes in the capital is waning as the chancellorÂ’s reforms to stamp duty and capital gains tax, coupled with the collapse in oil prices and falling Asian currencies, are leaving overseas buyers out of pocket." This is an extreme case not representative of the big picture but it's also a reminder that nothing is a sure bet.
Mortgage lenders show UK house prices heading in opposite directions
Hansen Lu, a property economist at Capital Economics, said the monthly figures from both lenders suggested that the increased activity in the market Â“may, at least so far, be having only little impact on pricesÂ”. He said this could be because prices were already so high that buyers were unable or reluctant to keep bidding up prices. Â“Other buyers, especially those purchasing for the first time, may be delaying until competition in the market cools after the April stamp duty deadline Â– helping to keep a lid on price growth,Â” he added.
The National Landlords Association forecasts that half a million buy-to-let flats will hit the marke
Bearing Up … or should that be down?
House prices down 1.4% last month. More falls to come?
Totally screwed up
BritainÂ’s developers have been accused of increasing their profits from the UKÂ’s housing crisis by restricting the supply of new houses to keep prices artificially high. Latest figures reveal that nearly half a million homes in England now have planning permission granted but have yet to be built. The length of time it takes for developers to complete a house has jumped from 24 months to 32. It reignites a long-running row between policymakers and the housebuilding sector over who is to blame for the current housing shortage.
Propping up a market is expensive
The governmentÂ’s starter homes initiative could deliver a taxpayer-backed windfall of Â£141,000 each to 200,000 lucky first-time buyers, but 2 million more aspiring homeowners will be stuck renting, campaigners say. The scheme, which allows developers to replace shared ownership and affordable rented homes with properties sold at a 20% discount, has been widely criticised since it was first announced in December 2014. One of the key concerns for housing campaigners is that the homes can be sold on at the open-market rate after five years.
Expect Enfield to hit top spot by July
The latest Land Registry figures report price growth across the capital, with the most affordable areas having the highest rises.
Hillingdon, in west London, is the top performing borough, rising 15.5 per cent to Â£383,960. This is largely due to the Crossrail effect. ENFIELD, in north London, and in travel Zone 5, is second on the list, with 15.2 per cent growth and average prices of Â£372,869 (Edmonton is soaring much faster & look out for when it gets FIVE Crossrail 2 stations). Enfield's annual rate will also have gone stellar by July because it will have then had a whole year of London Overground plus Crossrail 2 will be granted this summer. Bexley, now overtaken by Barking & Dagenham to be London's cheapest Borough is set up for stellar price increases come 2019, when Abbey Wood Crossrail puts it firmly on the Central London Tube Map.
Why you will never own a home … New app explains
Reasonable summary of factors
All looking very precarious now.... from overindebted brits to evaporation of "funny money" and taxation treatment of BTL. If we were to leave the EU then I think the pound is gonna struggle - and of course liquidating a portfolio or even an individual property is going to be challenging. Interesting cocktail.
Londoners need 266% pay rise to buy home in the city, National Housing Federation claims
Propaganda piece of the day
Major banks have provided more evidence of a burst of activity in the UK mortgage market by landlords keen to avoid a stamp duty rise. But Samuel Tombs, chief UK economist for Pantheon Macroeconomics, said that demand will continue to exceed supply in the property market, pushing up house prices as a result. "Looking ahead, we expect approvals to remain on an upward trend. Consumer confidence is high, real income gains remain strong and mortgage rates are set to fall again in response to the decline in wholesale funding costs," he said.
The trouble is Help to Buy just isnÂ’t helping
"State loans and mortgage guarantees are, in the end, policies that support housing demand at a time when the GovernmentÂ’s focus ought to be trained, laser-like, on increasing housing supply. At best, they are a distraction. And the overwhelming likelihood remains that this policy has made the UKÂ’s housing crisis worse. Help to Buy has not helped."
Interest rates are paid by people who borrow money, this is kind of a crucial point in our financial system. If you just print money, then the banks books go from -100:+100 to -100:+1000 and there are not enough borrowers to pay the interest. This is, if, for example, you felt interest rates would be a good way to control inflation. Or at the very least, you can capture zero interest rates, as the UK government has done by repatriating the interest paid to the BoE while pushing rising interest rates into the general population, but basically the same thing stands. This is imo the problem with helicopter money and why ultimately the central banks are bluffing, because they cannot drop helicopter money without losing pretty much the only rein they have on runaway inflation.
But even if you do pay Landlords will throw you out.
Watched a couple of episodes of this Saturday afternoon. Misleading title - Should have been "Makes no difference if you pay because you will still get evicted". Worst case was three evictions of families with no real notice from the same road. All were up to date with the rent and while aware that court proceedings had started weren't expecting the Bailiffs around. The rumoured reason for the evictions - The landlord had decided they could get more money renting the properties as emergency housing so was throwing out the existing long term tenants !!!! Noticeable that in none of the programs did we actually get to see a landlord. I'm sure Mrs T didn't intend "Right to Buy" to end up like this.
No money? Not a problem, just keep on borrowing…
Like many former students, Aaron Sharpe and his fiancÃ©e, Rachel Smith, have a lot of debt to pay off. But theyÂ’re also trying to organise a wedding Â– and Mr Sharpe is about to get a new job that will leave him Â£10,000 a year worse off. Together they owe almost Â£80,000 in student debt.
Anti money laundering checks finally coming to a despot near you…
ATED - Annual Tax on Enveloped Dwellings - was brought in as an attempt to get anonymous landowners to 'fess up. Not surprisingly, many chose to pay Â£200k+ per year to hide their identity. Will it come to pass that folk can no longer hide their ill gotten gains in broad (if intermittent and watery) daylight?
16 years of supply hitting the market all at once, at prices nobody left standing can afford
So how will this market be cleared? "LonRes, the data analysis firm, reckons 54,000 homes are planned or under construction in the smartest areas of the capital, with most of them priced at Â£1 million or more. This is even though only 3900 homes were sold at more than Â£1 million in the whole of 2014 in these districts."
Asking prices are *not* selling prices; Cheap FLS cash continues to prop up housing
UK property asking prices have hit an all-time record high of almost Â£300,000, new data suggests. House sellers so far this month have been seeking an average of Â£299,287 across England and Wales, according to property website Rightmove. The figure is an increase of Â£8,324 or 2.9 per cent from the average asking price in January, and is Â£2,738 above the previous all-time high set in October 2015.
“Something Needs to be Done” Â– A Glimpse of the Future
In reality, negative rates will only be a realistic proposition with those who have good loan to deposit ratios, but at the present trend rates in the UK are about to slam into negative mode. On the bright side, maybe government will start investing in more infrastructure? For those not yet on the housing ladder, watch out, because you may get negative rates but boy oh boy, once house prices start to rip higher, you will need an eye watering deposit to get the privilege of being paid to borrow as the average London house price sky rockets towards Â£1m in a very short period of time because this NIRP experiment will co-incide with the greatest immigrant boom we have ever seen (teaser, the immigration we've had to date is just a taste of the millions about to come over when France, etc. fall)
Top Ten Causes of Wealth INequality
People farming, UK style
Nine out of 10 Britons on modest incomes under the age of 35 will be frozen out of home ownership within a decade, according to a study from a leading thinktank that lays bare the impact of surging property prices on the young ... The thinktank, chaired by the former Conservative cabinet minister David Willetts, said that in 1998 more than half of people aged 16-34 living in households with incomes between 10% and 50% of the national average were buying their own homes. The percentage had dropped to 25% in 2013-14 and was on course to be 10% across the UK as a whole by 2025. In London it is forecast to be just 5%
The Riksbank elected to cut its policy rate from minus 0.35pc to minus 0.5pc on Thursday.
So, Sweden is actually working hard to keep consumer prices high. Who again do they work for?! Maybe countries with strong currencies should attempt to build stuff for local people and sell it to them if they are allowed to become more wealthy with a stronger currency? Regardless, this is a #longtermdeflationarytrend - and no amount of monetary policy will change it, so just deal with stronger currency, which has pro's and cons and is not all bad.
‘Mouldy Old Dough’ (one for techieman)
An Essex flat, has been sold for Â£22,000 over its asking price, despite it being described as "mouldy" and "full of rubbish". The candid ad showed pictures full of junk and mould and also admitted there could be "fleas to keep you company." Rather than deterring buyers the two bed property was actually sold for Â£147,500.
DEFLATION is the game, Carney is a fraudster
Financial markets now believe there is a 50pc chance the Bank of England will cut rates this year. Will I get an apology for those who attacked me on this blog for stating the bleeding obvious that yes, rates cannot stay at 0.5% forever, because the only consistency in this world is change, but that shift can be down as well as up and negative is just as likely as positive at this point of time. Will you act accordingly, facing reality, or make inane statements about the relative morality of these statements? Furthermore, will you accept that Carney has DEFRAUDED millions of home owners into fixed term mortgage rates that now look exorbitantly expensive in possibly one of the largest mis-selling, rackateering scams in history to which nobody gains compensation & all receive tax hikes?
JP Morgue predicts MINUS 2.69% rates for UK
Hold onto your seats. No wonder Osbourne is attempting to regulate the housing market. At a rate like this, banks will be paying folk to take out a mortgage, but with that amount of deflation, money will gain value just sitting under a mattress, but he will not be able to stem hot money from the continent that from less than 4% rates there. As said, the US Dollar can still rise if Federal rates go negative, so long as it is not as negative as others. #longtermtrend
Edmonton in Enfield is London’s hottest market
As I have been explaining for a while, Edmonton in Enfield, North London will be one of the hottest markets because of it suddenly coming onto London Overground, with Crossrail 2 about to run through it with no previous reason to buy there, resulting in a massive turnaround. Well, Quck Move Now have looked at the average time to sell a property and Edmonton is the only London ward in the top ten at number seven. The next great opportunity will be the next raft of stations to be taken over by TFL's London Overground, placing them too on the Central London Tube Map. My prediction is that houses in Edmonton will soon match prices in similar south London Overground zones such as Sydenham and Forest Hill where three bed houses exchange for more than Â£600k.
Tory answer to mansion tax? Collect less tax from the most valuable homes!
"Stamp duty changes made by the chancellor George Osborne have led to a 12.1pc decline in revenue during the first ten months of last year, according to new research. An over reliance on stamp duty from London and a decline in property transactions there has created a Â£620m deficit between January and October 2015, compared with the same period the year before, according to estate agency Knight Frank." This was obviously going to happen - transaction taxes tend to decrease transactions. If he'd instead gotten rid of the 0% rate for the imaginary council tax bands I-Z, revenue would have been raised. Local democracies could have even decided to raise extra for flood defences or care homes and not have to deal with the terrible consequences of unilateral Whitehall cuts
You never know!
Turn again Whittington
Top hedge funds have placed multi-million-pound bets that the London luxury housing market will tank. Odey Asset Management, BlueMountain Capital Management and Anchorage Capital are reported to have shorted the stock of Berkeley Group, the London-focused housebuilder, according to the Financial Times last night.Fears of global economic meltdown, emerging markets currency falls and the Brexit referendum have led some investors to bet the demand for the top end of the housing market in London will collapse.
Is the property market as rigged as LIBOR?
ThereÂ’s a lot of flapping and clucking in the UK Â‘luxury apartmentÂ’ market as the chickens come home to roost
"I was told this week by an industry insider that Â“85 per cent soldÂ” really means Â“Â£2,000 deposits paid on 85 per centÂ”. And because they face an economic slowdown at home, Chinese investors in particular are saying: Â“Keep the Â£2,000 Â– and if you donÂ’t like it come after us in the Chinese courts.Â” They are defaulting, in other words, with no consequences. And the result is that some developers are left holding a huge supply of apartments that few onshore buyers can afford. Prepare, said my nark, for 50 per cent-plus price drops."
Buy to rot!
Over the pond in Vancouver Chinese investors ( sorry money launderers) have bought multi million pound properties and left them to rot. Exactly the same has happened in London, except that high rise apartments don't rot.But the impact of pricing locals out, having zero positive effect on ongoing GDP are exactly the same. Australia has taken action against this, The Chinese governement is supposedly coming down heavy on it and it looks like Canada will follow suit. How long will it be before this becomes an international issue like immigration and the UK takes action as well. I can see the possibility of a number of black swans colliding mid air when government policy on buy to let, non doms, and eventually foreign ownerships collides with economic reality.
‘experts’ dont know why?
Britain’s version of the Beverley Hills tour
Absolute disaster, please respond with anger
In this backwards proposal, married couples are treated as individuals and so will pay additional tax if they buy a new home and cannot sell their existing residence on time, with potential for a refund, but where will they find cash for the new tax? Also taxing those who need a second home for work or those who own a property overseas, maybe for family reasons. Meanwhile, the big corporate buy to let companies are EXEMPT from the tax, and unmarried couples can have two principle homes!! They are incentivising big landlords and also making moving house a total chore and creating a massive tax reason to get divorced or not get married. These people are clinically insane. Please let your MP know how angry you are.
I thought there was a massive lack of supply
Tulips in Central London
Articles describes how major portals are awash with top end resales of luxury flats in developments in London. This end of the market has been a casino for some time: People buying property but not living in it. Many of these concrete blocks with glass facades are soulless and not luxury living.These buyers are not immune from world events. The housing market oftne starts in Central London and snowballs out, if there is a crash in the central London apartment ponzi it will be interesting to see how this effects sentiment in the wider market
And BTL folk wonder why they have no mates?
No shame at all - and no doubt a fair whack of the rent on these comes from Housing Benefit. And then this kicker: "He charges a weekly rent of Â£755, which equates to Â£39,260 p.a. His current gross yield is 6.3pc, but a new tube line opening nearby means he expects this to increase to 8.4pc by 2020." So nice to see where my taxes are going...
Out-going tide revealing trash
No bear food here
So, leading the pack are: Reading 17.1%, Barking & Dagenham 15.3%, Hillingdon 15.2%, Luton 14.7%, Slough 14.1%, ENFIELD 13.4%, Thurrock 12.5%, Greater London 12.4%. Overall monthly growth of 1.2%, annual 6.4% for the UK with a clear ripple effect gentrifying previously marginal spots as existing hot spots become maxed out for starter homes. Will Luton be the new Shoreditch?! (It is after all just 24mins from from London).
UK home buyers go full 35 year house boom retard
The rise of the 35-year mortgage: First-time buyers extend their home loans, but is better cash flow now really worth the Â£9,000 in extra interest?
What next, 50 year loans for 25yr olds? The big elephant in the room is in immigration led population boom that could see an extra 4 million residents of London by 2050. That is a 50% freaking rise on an already jam packed metropolis. Will there even be room on the pavement? Crossrail 2 and 3 are now looking like a under reaction.
And the government is all in, full house boom retard
I thought I'd post this to pre-empt you-know-who. Countries are using QE/ZIRP/NIRP to devalue their currencies to maintain their share of a diminishing export pie and to support asset prices - the Yen fell and shares rose after the NIRP announcement. As for business investment, well it will take some time (decades?) for NIRP to feed through into that.
Fewer than one in 10 invested it in property
Ship it in before April 1st and then ? Tumbleweed ? MIRAS 2?
He said Â“heightened scrutinyÂ” of the market had begun in response to the expansion of loans to landlords. Answering questions from MPs about potential risks to the economy, Mr Carney Â said: Â“We think developments in the buy-to-let market have warranted heightened scrutiny and have done so for some time.
Self Certification Mortgages make a highly popular return !
Controversial new lender selfcert.co.uk has suspended lending for three months, citing a Â“severe backlogÂ” of consumer interest.The lender launched on Monday, though its website crashed on Tuesday and has only relaunched today.The new website says: Â“We have ceased taking new applications until further notice, this will be at least 3 months.Â“We are currently working through a severe backlog of people that have registered an interest in these products.Â“Although we started on Monday the 18th of January. People have been contacting us since reports of the products returning first appeared in Novermber 2015.Â”The start-up is backed by private equity investors and is based in the Czech Republic.
Market forces destroy Socialist plan for one parent families
A wet dream of our Socialist rulers from the Fabian Socialists of wreaking the family unit so that mothers become dependent on the state with children being raised by the state is being destroyed by a total failure of said Socialists to build enough rabbit hutch flats for the total destruction of the family unit in Britain caused by taxing parents to the point where they cannot sustain a family unit and subsidising single parents to the point where marriage is disincentivised. Meanwhile, they abolish child benefit because it discriminates against same sex marriages. These morons have no bounds and so it is no surprise that single parent families and single households are getting priced out. Hopefully these market forces reverse this awful trend, pushing families back together.
One for Libby
2008 coming back to the future part V
5 different views by 5 different economic experts
This is what I said negative rates will do
the Swiss canton of Zug is asking its citizens to delay paying their taxes for as long as possible. Why? Negative interest rates. The cantonal government doesnÂ’t want to take in a pile of cash, only to end up paying the bank interest on all the tax revenue. Interest rates in Switzerland are among the lowest in the world; the official policy rate set by the Swiss National Bank is MINUS 0.75%. The same will happen here soon as banks capitulate and realise rates must fall into this technologically driven deflationary period we are just entering. But the flip side of this is that folk will have more cash and yet in places like London, no more space to build a house.
Predicting the unpredictable
The real BTL agenda laid bare
Buy-to-let mortgage applications from limited companies more than double as landlords strive to beat tax hikes
And so it came to pass, Osbourne's "crack down" on BTL was simply a rouse to shift BTL investment from sole trader to Ltd. where normal tax breaks exist and funding for lending is available. Expect new business starts to soar. In the end, it is about forcing BTL into having to submit full accounts to HMRC. Hence, Osbourne's main concern was not housing, but tax evasion. The next boom? A boom in accountancy.
Something about to hit the fan!
Tiny fall in number of FTB in 2015
Halifax estimated that around 310,000 FTBs in 2015, edging down by 0.5% from the 311,700 people who did so in 2014. The decline is partly due to the lack of supply of homes for buyers to choose from, the report suggested, i.e. people can't afford a house. London average deposit now Â£90k, but rest of the UK more like Â£20k according to pretty picture in the news article.
There may be trouble ahead
Blood on the streets ? Not quite?
Number of buyers registered at estate agents up 20 per cent
The property buying scrum is back! House hunters battle it out with 10 buyers for every property for sale as New Year frenzy begins
House hunters must be prepared to battle it out as latest figures show there are 10 buyers for each property for sale. The gap between the number of buyers and the number of properties for sale is growing and is fuelling the housing crisis, according to the National Association of Estate Agents. It comes just days after it warned house prices will soar 50 per cent to an average of Â£420,000 within 10 years.
Tied to the EU, will we follow them down and rather than the Federal Reserve’s rate rise?
Nationwide will cut rates on its 95 per cent LTV fixed rate mortgages by up to 40 basis points from tomorrow. Rates for the lenderÂ’s two-year fixes will be cut by 35 basis points. From tomorrow it will offer a 3.89 per cent product with a Â£999 fee and a 4.29 per cent product with no fee. Three-year 95 per cent LTV fixed rates will be reduced by 40 basis points to 4.39 per cent with a Â£999 fee and 4.69 per cent with no fee. NationwideÂ’s five-year fixed rates will be cut by 30 basis points to 4.69 per cent with a Â£999 fee and 4.89 per cent with no fee. Nationwide head of mortgages Henry Jordan says: Â“As part of NationwideÂ’s range of measures to help first time buyers on to the housing ladder, we are reducing rates for those with smaller deposits looking for competitive mortgage deals"
Nudge nudge wink wink, say no more!
State of London housing. Apparently Tower Hamlets has been the only borough benefiting from additional construction. One of the reasons mentioned for the urgency of building is because of a " there is a mass exodus of 30-somethings in London that needs to be stemmed" due to spending half of their income in rent.
What happens when plunging Brent Crude sends rates negative?
The year of 2015 will been seen by many as the year of the mortgage: competition increased until it reached boiling point, with all sectors of the market becoming embroiled in a fight for borrowers. As a result, rates plummeted until they eventually reached new all-time lows. Indeed, calculations from Moneyfacts.co.uk based on the average two-year fixed rate mortgage show that a new borrower would now be Â£805.44* a year better off than they were a year ago.
FLS money (8.5bn in 2014 alone) continues to distort UK housing
Low borrowing costs and a shortage of supply will drive U.K. house prices up 6 percent next year, according to the Royal Institution of Chartered Surveyors. Demand for housing remains strong, driven by record-low interest rates and a resilient economy, and values grew an annual 7 percent in October, according to the most recent data from the statistics office. Chancellor of the Exchequer George Osborne is attempting to boost supply and announced additional spending on housing last month.
Alarm bells are ringing
A subject that will become more politically important
Middle class families are giving up their dreams of home ownership as soaring costs and a lack of supply price millions out of the property market, according to Bank of England research. The Bank's annual survey of household finances revealed that just under half of all families who don't already own their own home believe they will never get on the housing ladder. This represents around 4.5m households and compares with 32pc who said they were confident of buying. The figures, which were buried in the depths of the Bank's survey, showed many middle class families also believe home ownership is out of reach, highlighting the depths of Britain's housing crisis.