House Builders weep
Trumpo has just been sent a frightening set of statistics from a super-successful builder.
Please see below the council of Mortgage Lenders predictions for 2008 and the scary turnaround since ‘04.
| 2004 |
2005 |
2006 |
2007 |
2008 |
|
| House price growth, Q4, year on year % change |
15 |
5 |
10 |
5 |
-7 |
| Property sales, |
1.20 |
1.03 |
1.28 |
1.22 |
0.77 |
| Gross advances, £bn |
291 |
288 |
346 |
363 |
285 |
| Net advances, £bn |
101 |
91 |
110 |
108 |
55 |
| Arrears over 3 months, number at end period |
104,400 |
122,900 |
119,500 |
129,800 |
170,000 |
| Arrears over 3 months, % of all mortgages at end period |
0.88 |
1.06 |
1.02 |
1.10 |
1.45 |
| Possessions, number in period |
8,200 |
14,600 |
22,400 |
27,100 |
45,000 |
| Possessions in period, % of all mortgages |
0.07 |
0.13 |
0.19 |
0.23 |
0.38 |
| GDP% |
3.3 |
1.8 |
2.9 |
3.0 |
1.75 |
| Base rate, end year, % |
4.75 |
4.5 |
5.0 |
5.5 |
4.75 |
If the 2008 predictions become true, it’s going to be a very bumpy second half and a bloody ‘09.
Now where’s my life insurance policy….
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June 13th, 2008 at 10:22 am
The builders have had it so good for so long, fixing the prices on their new builds, which are very much over priced. I beleive that they are partly to blame for the restriction in lending.
June 13th, 2008 at 10:33 am
I’m feeling gratefull I sold my B2Ls when all the brokers I know thought me mad, afterall “properdeeeee only goes up in’it”
Just bought a big block of flats in Germany with a 20% yield and low capital outlay. My mortgage business is 50% down - and I dont believe the rare broker that claims he’s busy - I recall such people in the last crash that made the same claim, and then sure enough went bust! Those that admitted it was quiet seemed on the whole to get through.
June 13th, 2008 at 10:58 am
Interesting to note r bu is extolling the virtues of the German property market which is probably the most regulated on the planet with tenancy rights gold plated at the expense of the landlord to the point where owners can’t readily increase rents to offset i.e. higher interest rates & heaven help the landlord if he wants to evict the tenant for non paying.
June 13th, 2008 at 11:52 am
Hmmm so the CML are predicting a market of £285bn with net advances of £55bn! The ratio between the two is 19% which appears at odds with the historic ratio of around 30% !! Who would bet against a gross market of £180bn - £200bn ? Especially if their predictions for a base rate of 4.75% by the end of 2008 is wrong, and the BoE maintain their independence and raise rates to 5.25% to withstand inflationary pressures ?
I take it that you were looking for the life policy to rebroke it and save some premiums, rather than make a claim ???!!!
June 13th, 2008 at 12:48 pm
Grotgame
I think the stress will trigger my critical illness claim!
June 13th, 2008 at 2:12 pm
Trumpo,
Investment needs to be released into the market. Can the Government not consider freeing up pension fund cash, currently not allowed to buy property into the market??
June 13th, 2008 at 2:45 pm
jimbo
We unfortunately have a bigger run on commerical property at the moment than the domestic market. The pension funds are already massively tied up in the commercial property market and the pension fund managers are selling up their property holdings at the earliest opportunities and at 20/30% discount. Many substantial blue chip pension funds have put a feeze on cashing or moving pension units held in “property Funds” and for some up to 12 months.
Property is not a place for pension money…..
Trumpo social fund would provide better returns!
June 13th, 2008 at 3:09 pm
Trumpo,
Where are the pension funds putting the money when they have sold?
Social fund sounds great!!
June 13th, 2008 at 6:09 pm
well trumpo, your eliquent bloggers are certainly speaking the truth, i have one hope, and that is that common sense will prevail.
The mortgage advisers have been treated with utter contempt, maybe we should form a union go on strike and then maybe the FSA and Labour would listen.
June 13th, 2008 at 6:38 pm
Jimbo
The majority of money will be going in to the emerging Asian economies.
The distinguished and Trumpo favourite Alan Greenspan,who served as Chairman of the USA Fed reserve through Black Wednesday and the Dot Com Bubble 1987 to 2006, quite controversialy but realistically stated that in the last 50 years the western world have had a great easy lifetyle, now it’s the turn of China and India!
June 17th, 2008 at 11:19 am
So inflation has hit 3.3% - take any other measure than the old lady of Threadneedle St use, and you could be forgiven for thinking they (and the government) are on a different planet. The facts are diesel is £1.30 + a litre, fixed rates are at their highest for 10 years and soaring food and energy prices! 3.3% pah ! Its closer to double digit methinks for the average family. On top of this we have the CBI telling us growth will be less than 2% this year so unemployment figures are bound to follow with even more bad news.
Stagflation = general election and the sooner the better
June 22nd, 2008 at 11:19 am
Interesting stuff. Of course the true rate of inflation is in double digits. Trace that through and you see that the current pressures on disposable incomes are immense. This economic environment is far worse than the tame media dare admit. Hell, they even cling to the view that the BOE is vaguely competent! Look for the government to publish more bogus stats to make us all believe the economy is still growing!
So, folks, the banks are insolvent, inflation is rampant (food inflation soaring for the firt time in a generation), disposable incomes are collapsing, public finances are on the brink of imploding and the BOE are set on a course of major policy error. But, hey, it isn’t really happening…..