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Entries in December 2010
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It's come around quickly, the annual post in which I gather together what the (so-called) experts think property prices will do in the next 12 months. As is the custom, I don't like to call time on the 2010 predictions until the official Government figures (which use proper completion data, rather than extrapolations from house prices or mortgage lending); although, with transaction levels so low, even completions-derived data comes with limitations right now.
Just for your interest, this is what the chart looked like last year.
From a predicted rise in prices of 10% to a predicted fall of 15%, there wasn't much in the way of consensus. This year, it's like this:
CEBR ↑2.2%
John Charcol ↑2%
Halifax NO CHANGE
Nationwide NO CHANGE
Cluttons ↓0.1%
RICS ↓2%
Hometrack ↓2%
The Rat and Mouse ↓3%
Savills ↓3%
Hamptons ↓4%
Carter Jonas ↓5%
Acadametrics/LSL Property Services ↓5%
Rightmove ↓5%
Knight Frank ↓6%
IHS Global Insight ↓7%
Capital Economics ↓10%
Armstrong Davis ↓10%
Council of Mortgage Lenders "Flat or a small fall"
Generally... a sense of gloom, if not disaster. It's hard to imagine prices not sliding a little, if the Coalition's economic policies hit employment and repossessions start to rise. And yet... as long as the MPC continues to read current inflation as a temporary blip and doesn't respond by pushing interest rates too hard... it's likely to remain volume, rather than property prices, that will really suffer. On that basis, I've predicted a small dip.
Now, it just remains for me and my co-Rat and Mouser, Henry, to wish all our readers a Happy New Year. Thanks for sticking with us. It's genuinely appreciated. And don't forget to write in with ideas, arguments, suggestions, tips... there's nothing we'd like more than to see the Rat and Mouse become something more like a community next year. But we can't do that without your help.
Happy 2011. x
Technorati Tags: property, real estate
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At the beginning of last year, 1000wattConsulting - a new media consultancy with a specialist interest in the real estate sector - launched the 1000wattIndex, a useful compendium of companies working in the space where the US real estate meets technology. A year later, they're going global. Introducing the Global Real Estate Index, now including Europe, Canada and Asia Pacific. Click the "Submit a Company" button if you'd like to be listed.
Technorati Tags: property, real estate
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Citywire's Lorna Bourke takes a closer look at the prospects for buy-to-let in 2011. Voids: likely to shorten. Rents: could increase, fuelled by competition from frustrated first-time buyers. Property prices: could slide, providing buying opportunities for investors. But... the picture's decidedly regional, with rents static or falling in some areas of the country, and - even in and around London - prices hardly low enough to provide mega-yields:
Average rents for a two bedroom apartment within commuting distance of London where most rental properties are situated are around £1,000 a month or £12,000 a year. A gross yield of 5% would imply a property value of around £240,000 – and you could struggle to find a two bedroom flat for that price anywhere within half a hour’s travelling time of London.
Technorati Tags: property, real estate
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More in this Category - Linkage
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Hope your Christmas weekend was wonderful. After a couple of slow news days on the property front, there's not much about... except this interesting Mail on Sunday feature about Roman Abramovich's flat-by-flat takeover of a couple of buildings in Knightsbridge's Lowndes Square. The plans are to turn it into an eight-bedroom mansion (worth something like £150m), and the Mail has created an interesting mock-up, from plans submitted to the council. See it here. In the meantime, what do you do in a "drawing room" you don't do in a "sitting room"? (Not a set-up from one of the weekend's cracker jokes... a genuine question.)
Technorati Tags: property, real estate
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That's it until December 27. Hope you all have a peaceful and fun holiday, and (as always) thanks for reading. - B x
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Nobody's getting loans... November saw a 20-month approvals low, according to the British Bankers' Association. However, nobody told the Co-operative Bank and Government HomeBuy agent EMHomeBuy, who have teamed up to offer a 100% loan to first-time buyers and key workers. The Co-op offer a 70% loan, the remaining 30% is a bridging loan, for which repayments are due after five years (when interest rates will be much higher).
Technorati Tags: property, real estate
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Remember Christopher Farrell, the ex-Marine and Cheshire mortgage broker fired by Sir Alan for lacking a ruthless streak? He's just pleaded guilty to mortgage fraud - doctoring documents to make hefty mortgage applications and pocket the commission - at Plymouth Magistrates' court. He'll be sentenced on January 28. More here.
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More in this Category - SE1
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Justice done, following yesterday's announcement of changes to the high-speed rail route. Remember the Primrose Hill campaign against vibration? Now, Dame Joan Bakewell, Adam Ant and Robert Plant can sleep easily on their silk sheets. However, it's not looking so good for the (soon to be ex-) council tenants in the Regents Park Estate. Nor has everybody in Primrose Hill escaped the risk of vibration. Expect more trouble. And - if you think you might be affected - have a look at the maps here.
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Interest rates will have to go up in the New Year to help curb inflation, warns the Confederation of British Industry. The Daily Mail accompanies the story with a gloomy image of a homeowner with his head in hands, an abandoned calculator and a bit of loose change. The CBI predicts interest rates "as high as" (yes, I know) 2.75% by the end of 2012. That would add £202 a month to a mortgage of £150,000. Meanwhile, Shelter warn of a repo-induced homelessness problem next year. In the Guardian, Shelter's chief executive describes a 78% increase in the number of people struggling to pay their mortgages this year.
... highlighting just how many people are hanging on to their homes by the skin of their teeth.
Meanwhile, some MPC members sound reassuring on interest rates, with the message that current inflation figures don't reflect the reality of the situation, nor will they in 2011 when extra VAT will contribute to the false reading. The only certainties... the Bank may be independent, but it's never showed a willingness before to act in a way that jeopardises property prices, interest rates can't stay at 0.5% forever, 2.75% is still, historically, very low.
Technorati Tags: property, real estate
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The Monetary Policy Committee shouldn't be panicked into raising interest rates by inflation's recent six-month high. MPC member Posen is quoted in the Telegraph arguing that next year's VAT increase will mean that inflation will continue to be above target, but any knee-jerk increase in interest rates, to demonstrate they're doing their job, could have detrimental long-term effects on the economic recovery.
"The workers of the United Kingdom did not wake up one morning ... and find that their left arms had fallen off and half of their offices had disappeared," he explained.
And by "explained", you mean...?
Technorati Tags: property, real estate
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The average cost of renting a home in the UK reached £692 in November, according to LSL. However, as with the house price indices, the figure masks significant regional variation and a general slowing in the rate of growth. Recently, the market's been driven by London (rents up 1.8% in the month, compared with 0.1% nationally), and there were some significant falls around the country.
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As you might have noticed, in the last few days Apprentice candidate Jamie Lester (fired last night) has been getting a bit of flack in the UK press for so-called "dodgy deals" involving disputed land in Cyprus. It's a complicated issue. It was only January that a British appeal court agreed a highly controversial decision to effectively ignore local Cypriot laws and force a British property owner to hand back land (and pay back-dated rent) to the pre-74 partition owner in the Turkish north of the island. (Read more about the issue here.) Now, the controversy's reached the Cypriot press, and they're not mincing their words.
A CONTESTANT in the hit UK reality TV show ‘The Apprentice’ was revealed yesterday as an investor in stolen properties in the occupied areas.
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It was a little before our time (2002/3), but there's an interesting story - resurrected here - suggesting Wayne Rooney and Alan Stubbs were ejected from a Chelsea KFH (that's KFH, not KFC) by staff who mistook them for a couple of yobs up casing London properties. If you think you were there and might have "witnessed" the incident, please come forward...
Technorati Tags: property, real estate
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... asks Merryn Somerset Webb, for Money Week.
If we take as a base view that it would be a good thing for house prices to remain relatively stable in real terms (to make sure that speculative money flowed into more productive investment) it surely makes sense to tax gains on houses rather than, as we do now, the transaction costs of buying and selling them.
Whatever you think about the idea of taxing capital gains on first homes, Merryn's overall point that the property market has a special "political expediency" rules protecting it from sensible economics has a lot going for it. And we wonder whether the MPC's reluctance to raise interest rates, despite sustained pressure from inflation, is another example.
Technorati Tags: property, real estate
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Kudos to Londonist for their nice map of Eric Pickles' council cuts and how they'll hit Londoners. As you'll see, it's a mixed message, with cuts ranging from just 0.61% (Richmond) to 8.9% (Hackney, Tower Hamlets, Newham). Hmm. You thinking what I'm thinking? So is East Ham MP Stephen Timm:
"Why is it looking through the list of the London borough graph changes that the biggest losses in absolute terms and in percentage terms are in local authorities where the levels of disadvantage are the greatest?"
Perhaps - as Londonist suggests - it's because "these poorer boroughs already received higher sums from the Treasury than their more affluent neighbours". The argument will become more interesting in the coming weeks, when we start to get a clearer sense of how the cuts will affect day-to-day living.
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Because - according to the Guardian - they're being forced out of Belgravia, bonus conditions are so tough, and having to consider Fulham, Clapham and Wimbledon. So, does that mean a crisis in high-end property values in Belgravia and Mayfair. No, it just means more Russian and Middle Eastern accents.
Technorati Tags: property, real estate
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Data from Rightmove show the average asking price down 3% over the last month, and up just 0.4% on the year. One would expect a fall at this time of year (Rightmove's figures aren't seasonally adjusted), and the dataset is low in the current sluggish market, but the move is inline with other reports from Halifax and the Land Registry, suggesting the house prices entering a nervous period.
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There's a piece about estate agents' tricks of the trade every few months in one broadsheet or another, but this is a good one. Skip over the euphemisms bit and head straight for the discussion of technology, to read about the magic of Photoshop (double yellow lines removed and panoramas stitched from views out of several windows). Interestingly, too, there's advice for buyers on how to use technology to their own advantage (Google StreetView is your friend). Read it here.
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An interesting analysis of prospects for buy-to-let over at Investors' Chronicle warns over falling house prices and rising costs, but concludes the long-term advantages for someone with cash and nowhere to put it remain. Read it here.
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The slide continues, with house prices down 0.1% in November, and - annually - the market now in the red, down 0.7%. The three-month on three-month figure, generally taken more seriously, shows a dramatic decline of 2.1%.
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... remain at a record low of 0.5%, for the 20th consecutive month.
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MoneyWeek claims to have had more reader comments on the subject of the relative values of precious metals and property than any other. Here they go again...
Did you know that if you had sold your average British house in late 2004 and bought silver – just regular bars of silver – you could now sell that silver and buy 5.5 average British houses?
MoneyWeek continues bullish on metal, bearish on property.
Technorati Tags: property, real estate
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It's 12ft by 23ft, it's located in Knightsbridge and it's securely managed by Harrods Asset Management. You'll have to pay a £710 annual service charge, and it's available to local residents only. Mind you, only local residents could afford it. More here.
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Property Hawk appears to have uncovered evidence to suggest that the Government is keen to make direct payments to landlords possible. More here.
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The Land Registry's collated its October data and reveals a 0.8% slip in prices in October. It's pretty much what analysts expected. It's also highly regional. In London, prices actually rose, by 0.3%. Annually, it leaves the average English and Welsh home worth 3.4% more, or 7.6% more in London.
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The Black Eyed Peas star has turned WILL.I.LEND with his i.am.home Mortgage Relief Program, aimed at helping people at risk of foreclosure stay in their homes. Details as to whether this is a fund, fronted by W.I.A, and reaching out to significant numbers, or a personal scheme in which the rapper reaches out to a handful of people he can help, is as yet unclear. But this might be a clue. More here.
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More in this Category - Linkage
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It's not scientific... it's a poll of 1.721 people (by the MyVoucherCodes website) between the ages of 16 and 21, but 58% said they'd never own their own home. Most of those weren't happy with the idea, and considered renting "dead money". More here.
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He's Dixit Shah, a busy man who had time to set up over 200 companies, including "Hilton Properties" of Harrow, which he used to help with fraudulent applications to buy-to-let lenders. He's said to have conned companies and people out of £20m, and "invested" the proceeds in his longed-for Bollywood film career. You couldn't make this up. He's been jailed for five-and-a-half years (more than enough time to work on the book and sell the rights for the movie). His accomplice is still on the run. Read the full story here.
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The perfect gift for Christmas.
It's being marketed as estate agency software ("brand-new, unused, unopened and undamaged item"), with the ability to feed your properties to the major portals, but a closer look reveals it's actually "cloud based", in other words an online service. Ninety-nine pence (unless you're dumb enough to get into a bidding war) pays for the first three-months of hosting, after that it's £10 a month. It's called EAS (which I assume stands for "estate agency software"), and I think it's here. Unorthodox ebay listing here.
[via Pete Fenwick]
Technorati Tags: property, real estate
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More likely than you might think, according to an interesting piece in MoneyWeek by Merryn Somerset Webb. House prices and mortgage lending need supporting, she argues (somewhat unusually for her, we'd say), but not for the sake of middle-aged, middle-class speculators but for the sake of the banks, who rely on property values for collateral. And - ultimately - for the sake of the economy, if the banks are going to feel secure enough to lend. Read it here.
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And support Homeless charity Broadway and its Homes For Phones campaign (which raises money by recycling electronic equipment). The competition is photographic in nature. Take a photograph of the thing that most reminds you of home, upload it to the special Facebook page. The lucky winner will enjoy dinner-for-two, with Channel 4 4homes property show heart-throb and Middle England pin-up Phil Spencer. More here.
Technorati Tags: property, real estate
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Good God... a prominent gay man celebrated by the Daily Mail? He must have done something exceptional. Ah yes, he's made lots of money from residential property. He bought a house in Clerkenwell for £1.2m 18 months ago, and has just sold it for £5.065m. (He also like chasing foxes and hates modern art, which helps.) The property story is quite remarkable, though... a daring refurb, dinner parties with politicians and Joan Collins, a prison door to a bedroom. It also shows the apparent randomness of the estate agent's valuation, which it pertains to an expensive and unique property. His Currell agent told him to take an offer of £3.5m back in the summer. More here.
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Some rare good news for estate agents... Kate Winslett and Sam Mendes are said to be considering a move to London for Mendes' forthcoming Bond shoot. More here.
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The former Labour MP's the first to receive a conviction, after pleading guilty to three charges of false accounting this morning. Right up to the end, however, Chaytor, along with two others, was trying to use parliamentary privilege to stop the proceedings. The Bury North MP claimed rent on a house he owned, and another that was owned by his mother. In both cases, he backed up his claim with fake tenancy agreements. More here.
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A Spanish woman has registered the sun as her property, and apparently believes she can charge people for profiting from its energy.
Duran was issued with a document that declares she is "the owner of the Sun, a star of spectral type G2, located in the centre of the solar system, at an averaged distance from Earth of around 149,600,000 kilometres".
How did she come to own it? She was simply the first to be crazy enough to put in a claim. Actually, only part of her motive (10%, to be precise) is driven by acquisitive delusionality. The rest is driven by charitable delusionality. The rest of the "money" will be given to Government funds, world charity and research. She intends to levy a fee on industrial pholtovoltaic plants.
American strategists redefine wishful thinking [December 17, 2007]
Technorati Tags: property, real estate
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The B of A's chief economist, Spencer Dale, was talking to Kent Business School. On the subject of inflation, he insisted that the Bank hadn't turned soft on keeping inflation within the target (despite it overshooting for most of the last four years), but that it was extraordinary influences that were giving the inflation rate a false reading. This - he suggested - would continue into 2011, as VAT increases to 20%. The hint - if there was one - seemed to be... don't expect a rise in interest rates any time soon. Read the actual quotes here.
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Today's Nationwide report reveals the index down 0.3% October to November, pulling prices back to February levels, with the annual rate of inflation dropping to just 0.4%, the lowest that figure's been since September 2009. Accompanying literature points to greater supply as the main reason for the gently sliding market.
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