Tuesday, 30 September 2008

Bank of England mortgage approvals September 2008.

New data out for August 2008 here.

The usual commentary really.

Mortgage approvals for house purchase were 32,000 for August 2007 compared to 108,000 in August 2008 down 70%.

These are the lowest ever mortgage approvals.

Just goes to show how reckless the lending was prior to the lenders adopting their old lending practices which include such crazy rules like-

checking incomes (barking mad)
capping borrowing at 4 times income (crazy tightness)
requiring a deposit (whatever next)
wanting to know how you intend repaying the mortgage (who thought that one up!)

If Gordon Brown wants lenders to lend again maybe he should mark all property down by another 20% and we can get on with sensible lending (see the 4 points above) on sensibly priced property.

If you are a first time buyer, your time is coming. Keep saving for your 5% deposit, because these deals will return in the later part of next year. House prices will be down another 15%, mortgage deals will be equivalent to rent and the housing market will start a steady climb from Q4 2009.

Good luck.

Monday, 29 September 2008

Gordon Brown's downfall - house price crash.

A short video I put together using the much used (probably overused) Downfall clip with subtitles.

2 versions now - the original 18 certificate and further down a U certificate.

18 certificate - f-ing and blinding.

U certificate

Friday, 26 September 2008

SKY get 'it' at last

I could not believe my ears, for the first time I have heard a SKY news reader say

"More bad news for homeowers....well it depends on your point of view.. house prices are falling then if you are looking to get on the ladder it's not a bad thing."

At last. It has taken a year.

look it is quite simple.

House prices rose too much because of banks lending up to 6 times earnings without checking those earnings.

People were priced out.

Yvette Cooper thought that was because the economy was successful and her solution was to allow those priced out to buy half a house.

Lenders realised their error after Northern Rock went pop and now lend sensibly (less).

House prices will now fall to affordable levels.

Those priced out can buy a whole house.

The End

Land registry monthly data - September 2008

Latest data out today here showing another monthly fall of 1.9% with an annual fall of 4.6% now.

To be honest this data is expected to show negative growth now as the data lags the Halifax and Nationwide data by between 3-6 months.

This data series will still be showing monthly falls 3 months or more after the Halifax starts publishing rising monthly prices again. that is not expected until Q4 2009.

1 year to go.

Thursday, 25 September 2008

It could have been so different - part 2

Part 2 – The Meeting November 2003

The Treasury – the best minds in the country have been assembled to discuss house prices and lending practices. In the meeting are politicians, bankers, celebrities, intellectuals, economists, industrialists, business men and Ed Balls.

Gordon Brown – “OK. I’m getting on with the job. Let’s go round the table. Introduce yourselves and tell us what you think is going on. Why is a house price bubble being created and are bad lending practices causing this.”

“Hi my name is Ed Balls and house prices have risen so much because of the successful....”

GB – “Nice try Blinky – off you run, I’ll have fries with my burger. Get lost.”

“Hi my name is Professor Stephen Nickell chair of the National Housing and Planning advice unit. I think house prices will continue to rise until they are 10 times annual earnings”

GB – “Why is that?”

SN – “Because if you draw a straight line from where they were to where they are and then to where they will be you end up at 10 times”

GB – “Oh for crying out loud what sort of half wit explanation is that? What are you? a professor in trigonometry? Clear off. NEXT”

“Hi my name is Adam Applecart and I am Chief Executive of Northern Rock. There is no problem with lending. We lend 6 times applicant’s salary up to a maximum of 125% of the property. Oh and if they have a 25% deposit we won’t check their incomes – Guaranteed”

GB – “WHAT!! What sort of crazy lending is that! Why are you doing that?”

AA – “Well house prices have risen so much we have to lend more so that people can buy them. People don’t earn enough to buy even at 6 times so we let them make up their salary”

GB – “Look you baldy tw@t maybe house prices have risen so much because you keep lending more”

AA – “Hmm. I hadn’t thought of it like that”

GB – “And anyway where do you get all the money from to lend so much?”

AA – “Oh that’s the great bit we borrow the money from the Americans and lend it out at a profit.”

GB – “So what happens if and when the money from the Yanks runs out?”

AA – “Hmm. I hadn’t thought of that. You could always nationalise us”

GB – “NATIONALISE. Are you fcking mad! I am New Labour. The unions would butt fck me all the way to Tolpuddle and back chanting CLAUSE 4 at me. Oh for Fcks sake. Look when I was younger we had to beg our bank manager to lend us money, but you muppets are giving it away like toilet paper. Now that I have abolished boom and bust...”

Sniggers round the room

GB continues – “NOW THAT I HAVE ABOLISHED BOOM AND BUST I need you merchant bankers to start lending sensibly again”

Dennis Stevenson HBOS chairman “You can’t abolish boom and bust, any knobster knows that and anyway we have been lending sensibly”

Huge laughter in room

GB – “SENSIBLY! HBOS are the bunch of tools that started all of this with your poxy Birmingham Midshires self cert”

DS – “That was a few brokers only”

GB – “Few brokers only my ar$e. You guys can’t tell your ar$e from your elbow. You are all at it. You have been lending way too much money with too few checks to people who you have no idea if they can repay it. House prices have risen over 30% this last year and you bum boys have caused it all. Bloody Yvette Cooper wants to solve the housing crisis by letting people buy half a house. FFS have you ever heard anything so stupid. I want a ROLEX watch but I can’t afford it. Maybe I should buy half a ROLEX watch instead. GIVE ME STRENGTH”

Yvette Cooper – “House prices have risen so much because of the successful economy”

All –“FCK OFF”

It could have been so different

Picture the scene beginning of November 2003 - The Treasury

Gordon Brown on the phone to the FSA

"Hello it's Gordon Brown here. I'm just getting on with the job of running the economy, abolishing boom and bust and ensuring that regulation is working. I watched the Money programme on BBC a few days ago and those mortgage brokers were encouraging people to lie about their incomes - are you investigating this?"

FSA - "we don't regulate mortgage yet. You need the MCCB"

GB - "F&CK that - you get down there and speak to them. I want to know how many lenders do not check incomes on their mortgages"

FSA - "There are not many self cert mortgages going on"

GB - "Look plonker did I say self cert? NO. How many are not having the applicant's incomes checked. You know where the applicant lies - a LIAR LOAN"

A few days later

FSA - "It appears that a quite a large number of mortgages are going through with no income checks and they are also lending higher multiples than they used to"

GB - "Right. It is a good job I am a proactive chancellor and not a reactive one. I bet this is contributing to the 30% plus a year rise in house prices. That tw@t Ed Balls and his missus keep telling me it is because of the successful economy and all down to the fact I have abolished boom and bust, but that just sounds bollox"

FSA - "So what should we do? We don't normally get involved until after it has all gone wrong and then we order a review"

GB - "Order a review into lending practices now, I want a meeting with all the lenders. Especially that baldy from Northern Rock and anyone who claims to be in charge at Birmingham Midshires. If we are not careful we will have a mega housing boom followed by a mega housing bust that will destabilise our economy. I better give Greenspan a call because I bet the Yanks are doing it bigger and better than us and that Greenspan talks even more garbage than me"

It could have been so different.

Wednesday, 24 September 2008

Gordon Brown squirms again

Gordon Brown has just finished one of his lessons on how to lie (an interview) with Adam Bolton on SKY.

Watch the clip and see how he squirms from blame. In answer to the question ' are you to blame for the credit boom leading to our current predicament' Gordon blames the Tories.

I must admit that I am now starting to develop an unhealthy hatred of the man. I used to despise him, but my feelings have grown. I am now worried that if he is still the PM in May 2010 I may be clinically deranged and delusional - much like Brown is now.

Watch the clip here.

Guido reckons Marr should take a look at how to conduct an interview here

Gordon Brown lies again

If you managed to survive Gordon Brown's speech yesterday you may have been shocked as I was when I heard the 'PM' say that George Osbourne had said "That it’s a function of financial markets that people make loads of money out of the misery of others"

When I heard that my first thought was - what a stupid and nasty thing for George Osbourne to say.

Imagine my shock when I look at the FT today and what George Osbourne said was

“Well look, no one takes pleasure from people making money out of the misery of others, but that is a function of capitalist markets.”

Now that quote is meant in entirely a different context as the one Brown uses.

When will the public wake up to the fact that Brown is a liar and a bully?

Monday, 22 September 2008

Kitty Usher - we knew house prices were in a bubble

In a shocking admission here the government has admitted that they knew the housing market was in a bubble but did not act to correct the market.

Kitty defended the government by stating that the government should not interfere with rate setting. Not for the first time this misses the point. It is classic New Labour blame setting.

In this case she is blaming the BOE for keeping rates low and causing the bubble. As we all know Gordon Brown altered the BOE inflation target to a measure that excluded housing costs, therefore allowing the BOE to keep rates lower for longer

Maybe the government should have questioned the lending practices of many lenders which contributed to the bubble.

They cannot go on passing the blame buck forever.

Tuesday, 16 September 2008

Financial Planner tells it straight on SKY

Financial Planner from housepricecrash.co.uk interviewed by Eamonn Holmes on SKY news today.

Another great Matt Cartoon

Matt cartoon

Thursday, 4 September 2008

Time to buy index for August 2008

In August the index stands at 286 unadjusted(U) and 356 adjusted(A)

This gives a guide that house prices are around 28% over valued and that market sentiment pushes that to 35% over valued. DO NOT BUY

That is not to say that house prices will fall by either, but it gives an idea of the direction.

House prices and mortgage rates have fallen this month which has reduced the index this month. The biggest contributor to the index fall this month was the falls in fixed rate deals for buy to let mortgages.

The unadjusted index is now down from it's peak of 645 in July 2007

The adjusted index has also dropped last month as swap rates are now seen as falling further. This currently suggests that mortgage rates will be lower in the future.


House prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009.

In my opinion mortgage lending has pretty much returned to normal even though lenders are still lending above average multipliers and mortgage rates have again returned to a longer term normal level. This has meant that buy to let as one of the key drivers of house prices still does not makes economic sense at current rates.

A vague explanation here

Halifax data out for August 2008

month on month house prices are down 1.8%. The Halifax report house prices down 10.9% annually, but they calculate this using this quarter against the quarter a year ago.

The true yearly drop is 12.7% on a seasonally adjusted basis. August 2007 average house price was £199,600 against £174,178 for August 2008.

The last 12 months has seen the biggest falls ever from the Halifax. The previous biggest 12 month fall was in October 1992 of -8.5%

House prices have fallen 12.7% from the peak in August 2007 12 months ago. It took from May 1989 to February 1993 for house price to fall 12.97% that is 45 months.

The last time house prices were at this level was March 2006 at £174,814

Crown prediction is still house prices to continue falling with the Halifax index bottoming at £140,000 in Q4 2009. A fall of 30% or £59,600 from the peak in August 2007. That would be house prices returning to levels last seen in Q4 2003.

Tuesday, 2 September 2008

UK to face recession

The OECD has warned that the UK is the only major economy likely to suffer a recession here.

Now I thought Gordon Brown had said that our economy was well placed to ride out the 'Global' situation.

It would appear that Gordon has spun us another line and that in fact we are the worst placed to ride out the storm.

Another nail in Gordon's heavily nailed coffin

Another great Matt Cartoon

link to Matt

Financial Planner tells it straight on SKY

Financial Planner from housepricecrash appeared today on SKY news and as always tells it straight.

My only addition to the interview would be in answer to KB's question on if a stamp duty holiday would be a good idea when house prices had returned to normal.

I would have thought that when house prices are back to normal then there would be no need for false stimulus like a temporary stamp duty fix.

Dermot Murnaghan skewers NHF Mystic Meg

At last we are getting some proper probing questioning.

Here Dermot questions Mystic Meg from the National Housing Federation.

I swear Dermot is now a property bear or maybe a realist is a better description.

Housing rescue package launched 2nd September 2008


So Gordon Brown's housing package designed to kick start the housing market is finally here.

It consists of

1 - Stamp duty holiday for 1 year for properties valued at under £175,000

2 - A shared equity scheme for first time buyers to get in the ladder

3 - General help for those facing repossession.

Concentrating on points 1 and 2

Point 1 Stamp Duty - Welcome help for those looking to buy under £175,000. Does not help a housing chain complete as all others in the chain going up will still be paying full stamp duty. Does not help those first time buyers that understand house prices are falling and they will be saving more than the 1% stamp duty cut if they delay purchasing.

Point 2 - An interest free loan of up to 30% for a first time buyer to buy a NEW-BUILD property. The loan will be split equally between a house builder and the government and repayments will start to be made after 5 years. Aiming to help 10,000 people get on the housing ladder. What is unclear is why a first time buyer would want to buy a house that is falling in value with a 70% mortgage and a 30% loan. Sounds like negative equity.

It is also unclear if the government will take a second charge behind the lender's first charge. If house prices fall by a further 20% and the home is repossessed does the tax payer lose money?

Will the lender take the interest payments after 5 years into their affordability calculations.

And does the government really think that helping 10,000 people buy a new-build house will solve the housing crisis?

Monday, 1 September 2008

Bank of England confirm lowest mortgage approvals ever.

The Bank of England have just released their monthly data on the number of mortgages approved for home purchase.

BOE data

These stand at 33,000 in July 2008 compared to 114,000 in July 2007. A drop of 70%. The lowest number of mortgages approved for home purchase ever.

Watch this now feed into significantly lower house prices for the rest of this year and into 2009.

Gordon Brown really has brought us a crash of mega proportion and has finally decided to launch some sort of rescue package this week sometime. I bet it does nothing at all.