Wednesday, April 27, 2005

Repossessions Up, Sales Down In The UK

The UK is ahead of the US in the housing cycle, so the experiences there may be replayed in other overbought markets. ThisIsLondon reports, "According to statistics from the Department for Constitutional Affairs, banks and building societies applied to the courts for 25,869 repossessions in the first quarter of the year, up more than a third."

"At the same time, Britain's biggest estate agency chain revealed it was selling up to 30 per cent fewer homes than last year and warned the stock market that it made a loss in the first three months of 2005."

"Rising property repossessions normally spell bad news for the property market as the houses and flats are sold at a knockdown price by lenders, dragging down average values."

6 Comments:

At 7:44 AM, Anonymous Anonymous said...

Ben,

You mentioned that the UK market is ahead of the US market. Can you elaborate on this and provide some insight as to how far ahead and maybe offer some illustrations of the linkage? Thanks for all you do and for such an OUTSTANDING blog!!

Greg

 
At 7:50 AM, Anonymous Anonymous said...

A 50% jump in foreclosures (from 17K per qtr to 25K per qtr) is significant. Lets see what happens to the US bubble when Greedspam brings the US rates up to the current UK rates...

But wait, he plans to retire before the current "measured" (cover you a**) approach brings the interest rates up to 4.75%.

 
At 7:52 AM, Anonymous Anonymous said...

A 50% jump in foreclosures (from 17K per qtr to 25K per qtr) is significant. Lets see what happens to the US bubble when Greedspam brings the US rates up to the current UK rates...

But wait, he plans to retire before the current "measured" (cover you a**) approach brings the interest rates up to 4.75%.

 
At 7:57 AM, Anonymous Loren said...

One linkage would be to look at their central back lending rates. They have tightened quite a bit more. I don't have a link to post, but they are around 4.75% for their equivalent of the Fed funds rate.

Also, if you've been watching their news on housing it would "appear" to a casual observer that they have been leading the US for the last couple of years.

Of course, it's also like following a car in a snow storm. If you see the one ahead of you skid off the road you can slow down and laugh at them as you go by, or you can keep on speeding onto the ice patch and join them. It's not a given that those "behind" will "follow", but it's a good idea to keep an eye out.

 
At 8:11 AM, Blogger Sunny said...

"Rising property repossessions normally spell bad news for the property market as the houses and flats are sold at a knockdown price by lenders, dragging down average values."

Somebody needs to tell that to the vultures at the courthouse foreclosure sales.

 
At 1:42 PM, Blogger Ben Jones said...

Greg,
Actually, the UK and parts of Australia had more of a boom than the US. The UK market has been hovering for months now and seems ready to head down. Prices in Sydney, Aust. also hung in the air, then fell hard.

What I noticed was that sales fell even as prices continued up, near the top. We see that in the US now.
Thanks for commenting and if you have some knowledge of the market in the UK, please post it.

 

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