Thursday, November 29, 2007

UK House Prices Largest Decline since 1995

Crunch, crunch, pop, pop........ No wonder the Bank of England Extends Lending to Relieve `Tight' Money Market . The numbers of loans approved for house purchase are also showing signs of "strss".....For more insight visit the label or the excellent blog from Alice The UK Housing Bubble .

Crunch, crunch, pop pop......Kein Wunder das die Bank of England ernuet "creativ" werden muß Die Anzahl der genehmighten Hypotheken befindet sich wenig überraschend im freien Fall Für mehr zum Thema UK bitte das Label durchforsten oder dem wunderbaren Blog von Alice The UK Housing Bubble einen Besuch abstatten

FT More dismal news for UK homeowners. House prices fell 0.8 per cent in November, according to Nationwide - reining in the annual rate of growth to 6.9 per cent.

That drop is the first since February 2006 - and is the largest decline logged since the summer of 1995.

The figures reverse the unexpectedly strong performance in October - when prices rose 1.1 per cent - but which was widely seen as an aberration in what is a markedly weakening trend for house price data. That’s born out in the three-monthly growth numbers that in the latest period fell back to 1.5 per cent, from 1.8 per cent the month before.

The figures come on the back of dark predictions made through the medium of new derivatives contracts, through which the City is betting on house prices falling 7 per cent next year. The deterioration in outlook reflected in derivs trading, which showed expectations shifting from a 2 per cent fall to a 7 per cent decline in the space of one month, demonstrates how quickly sentiment can shift.

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Anonymous traderboy said...

Here in London you can practically FEEL it falling off the cliff...the amazing thing is that EVERYONE is leveraged up. Practically ALL the folk I work with bought a property this year, and despite all being overpaid investment bankers, not a single one of them seemed to be buying a small place that they could pay off quickly or even buy outright with previous years bonuses...they were all reaching out for bigger and more expensive property, and the folk who were making the largest bonuses were leveraging up as much as anyone else with even bigger mortgages.

The pain is going to be very widespread, I can't wait for all the resets to the vast majority in the UK take out 25 year mortgages but only fix the interest rate for the first 2 years.

5:32 AM  
Blogger jmf said...

Moin Traderboy,

they deserve no mercy.

I really find it amazing that even guys out of the financial sector didn´t get it.

Living here in Germany the mentality that has effected the entire planet is almost surreal...

9:04 AM  
Anonymous Anonymous said...

Certainly in London und Umgebung the mania has been extreme. It would be nice to see some data on the 'subprime-ness' of mortgage issuance in the UK, the amount of securitization, etc. Also to exchange ideas on how one might profit from this as it unfolds (if it does), other than shorting the currency and maybe UK banks (names?) and other financial companies (") - you have to think the rot goes wider and deeper than just Northern Rock.


11:24 AM  
Anonymous Anonymous said...

When is one of the boys going to wear the "I'm short your bonus" t-shirt to the trading room?

1:20 PM  
Anonymous philip said...

Surreal is right. I wonder if there will be research showing that computer tansactions make people more brave, after all it is just bits in the ether. Either way, it is creepy talking to friends who you know are in for it in the coming year talking about how they are going to buy a new car. I am just hoping they don't lose their homes. It is like knowing someone has a terminal illness when they don't know it yet.

6:34 PM  

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