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I smell mortgage defaults! AKA UK "subprime"

UK house prices 'fell 2% in June'

Prices are 6.1% lower than a year ago, says the Halifax

UK house prices fell by 2% in June, according to the UK's biggest mortgage lender, the Halifax.

The drop meant that prices were 6.1% lower than a year ago, with the average home costing £180,344.

The lender said that average house prices were now at the same level as in August 2006.

But it said that strong employment levels and low interest rates meant that housing values retained firm foundations despite recent price falls.

A squeeze on spending power, rapid house price growth in recent years and the lack of availability of mortgages were behind the latest monthly fall, said Halifax chief economist Martin Ellis.

"These factors have curbed housing demand. There has been a slight fall in 'real' earnings over the past year," he added.

More falls?

The Halifax recently forecast that UK house prices are set to fall by 9% this year - having revised its views from February that the market would be "flat" in 2008.

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The latest survey from rival the Nationwide said that house prices fell by 0.9% on average last month, with the average home costing 6.3% less than a year ago.

The Halifax's figures came as house builder Barratt confirmed more job cuts in the sector. Barratt said it was cutting 1,200 jobs owing to the housing slump and the squeeze on mortgage lending.

The survey was released on the same day that the Bank of England's Monetary Policy Committee (MPC) announced its decision to keep interest rates on hold at 5%.

"We expect the UK economy to slow further in 2008, with a further rise in unemployment and low interest rates, accepting that inflationary pressures will restrict the MPC's ability to reduce base rates below current levels," said Mr Ellis.

Mortgage squeeze

The annual rate at which house prices fell was at its greatest level since March 1993, the Halifax said.

House price graph

But Mr Ellis stressed that average UK house prices remained 2% higher than two years ago, more than 10% higher than in June 2005 and almost 40% above that in June 2003.

"A strong labour market, low interest rates and a shortage of new houses underpin housing valuations," he said.

But some analysts were gloomy about the data.

"[These are] grim numbers and do little to suggest things will get better any time soon. In fact we expect to be in negative double-digit territory from next month," said Alan Clarke, UK economist at BNP Paribas.

Howard Archer, chief UK and European Economist at Global Insight, said: "The latest data on the housing market continue to be very worrying, and there appears to be no let up in the current downward spiral."

The Halifax said that in 2007, before the full force of the credit crunch cut the availability of mortgages, buyers were putting down larger deposits.

Some 56% of new borrowers put down a deposit of more than 10% in 1989 and 1990. But that figure had risen to 82% of all new borrowers during the final quarter of 2007.

The Halifax estimated that 300,000 first-time buyers entered the market in 2007, the lowest number since 1980.

The choice for those only able to offer a small deposit has plunged in the last month, according to financial information service Moneyfacts.

It said there were now 80 different home loans available for people with a 5% deposit, down from 134 at the beginning of June and more than 1,000 in July last year.

Some borrowers would have been hoping that the Bank of England cut interest rates following its latest meeting, especially those who have come off fixed-rate deals and are currently paying at the standard variable rate (SVR).

But Moneyfacts said 15 lenders failed to cut their SVR since April's reduction in the base rate, and 38 lenders did not pass on the full quarter percentage point cut.

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11-Jul-2008 11:38

Straits Times Index / STI to cross 3000 boosted by long-term investors

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Iran tested more missiles!... Oil up markets down..

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11-Jul-2008 11:13

SGX / SGX

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just accumulate this bugger and wait for it to shoot to $16 again..

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11-Jul-2008 11:12

Straits Times Index / STI to cross 3000 boosted by long-term investors

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STI formed head n shoulders pattern on intraday chart

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11-Jul-2008 09:20

Straits Times Index / STI to cross 3000 boosted by long-term investors

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Euro was down >2%..

more lao sai coming..

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10-Jul-2008 14:33

Straits Times Index / STI to cross 3000 boosted by long-term investors

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Aussie rules!

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10-Jul-2008 13:54

Straits Times Index / STI to cross 3000 boosted by long-term investors

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s'pore GDP slows...DJ down 2%... and ASIAN markets are up...????????????

ridiculous...

SHORT THE MARKET!

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10-Jul-2008 13:51

Straits Times Index / STI to cross 3000 boosted by long-term investors

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markets recovering... prob expecting a bounce after DJ 2% drop yesterday

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10-Jul-2008 11:34

Straits Times Index / STI to cross 3000 boosted by long-term investors

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its all a ploy i tell u.. the dough maketh the man evil!

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10-Jul-2008 11:06

Straits Times Index / STI to cross 3000 boosted by long-term investors

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x 0

somebody call Iran to test more missiles..

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10-Jul-2008 08:53

Straits Times Index / STI to cross 3000 boosted by long-term investors

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yeah baby US DOWN BIG TIME!...

PUT PUT PUT PUT...........

ozone2002 ( Date: 09-Jul-2008 08:48) Posted:

another chance for the markets to move up for shorting @ highs :)

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09-Jul-2008 15:24

Straits Times Index / STI to cross 3000 boosted by long-term investors

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WAR is good for GOLD! those who invested in gold will reap the rewards :)

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09-Jul-2008 14:13

Straits Times Index / STI to cross 3000 boosted by long-term investors

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x 1

RAW is WAR!

put warrant battle! keke

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09-Jul-2008 13:46

Straits Times Index / STI to cross 3000 boosted by long-term investors

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i'm waiting for europe side to drop the bomb on the markets..

New credit crisis fears haunt European, Asian stock markets

European and Asian stocks dropped sharply Tuesday as concern about the credit crunch again spooked investors, but US markets showed some resilience to the prevailing mood of fear.

In London, the FTSE 100 index lost 1.31 percent to end at 5,440.50 points, in Paris the CAC 40 was down 1.54 percent to 4,275.61 points while in Frankfurt the Dax lost 1.43 percent to finish at 6,304.41.

Dealers said concerns about the US banks in particular unsettled investors, setting up Asia and Europe for a bad day that left most exchanges down 20 percent or more from their highs in 2007 -- the definition of a "bear market."

"Today's fall (in the FTSE) marks a full entry into bear market territory, even though most investors will have been feeling that this has been here already for some months," said Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers.

He added: "At this precise moment, it is difficult to identify from where a positive catalyst might emerge."

Also commenting on the decline of the London market on Tuesday, Jonathan Loynes, chief European economist at the Capital Economics consultancy, said the FTSE had further to fall.

"The steep falls in equity prices seen over recent weeks have brought the UK stockmarket back into line with consensus expectations for the economy," he said.

"But with those expectations very likely to weaken further over the coming months, equities' adjustment may have further to go."

In Asia, Japanese shares closed 2.45 percent lower on Tuesday after briefly falling below 13,000 for the first time in nearly three months. Hong Kong lost 3.16 percent and Sydney fell 1.4 percent.

In the US, stocks drifted in a narrow range as investors remained cautious, but the falls were smaller than elsewhere.

The Dow Jones Industrial Average drifted down 0.10 percent to 11,220.80 at 1500 GMT as the main indexes wobbled in and out of positive territory.

The Nasdaq tech-dominated composite index shed 0.08 percent to 2,241.51 and the Standard & Poor's 500 index was off 0.33 percent at 1,248.12.

Falls in Europe and Asia were sparked by negative comment on the banking and home loan sector from US investment bank Lehman Brothers.

Lehman warned that the big US mortgage re-financing groups, Freddie Mac and Fannie Mae, could have to raise a combined 75 billion dollars (48 billion euros) in fresh cash to meet their commitments.

French banking shares were under heavy pressure, with declines of 2.01 percent at Societe Generale, 1.84 percent at BNP Paribas and 2.65 percent at Credit Agricole.

"Everyone is reassessing the widely-held view that the worst of the credit crisis would be over by now and coming to the same conclusion -- the worst may not be over and it might last well into 2009," said Ed Yardeni of Yardeni Research.

On other financial markets Tuesday, oil prices fell sharply to trade at about 136 dollars a barrel after hitting highs near 147 last week.

This benefited travel companies and airlines such as London-listed British Airways, which rose 5.45 percent to 217.25 pence, and easyJet which gained 7.28 percent to 272.75 pence.

Meanwhile, eight of the world's most powerful leaders called Tuesday for efforts to cool sizzling commodity prices, warning that soaring fuel and food costs were a threat to world economic growth.

The Group of Eight rich nations said it was ready to take action to cushion global growth from runaway commodity costs.

But they stopped short of announcing concrete steps in a joint statement on the economy released on the second day of a summit in northern Japan.

G8 powers -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- said they remained positive about the long-term resilience of their economies, noting that emerging economies were still growing strongly.

At the same time, the world economy was "facing uncertainty" and risks to growth remained.

They expressed "strong concern" about oil and food prices, which they said "pose a serious challenge to stable growth worldwide, have serious implications for the most vulnerable and increase global inflationary pressure."

The statement made no mention of the weakness of the US currency, although US President George W. Bush told fellow G8 leaders that he was committed to "a strong dollar."

In foreign exchange market activity, the dollar fell slightly against the euro on Tuesday.

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09-Jul-2008 11:37

SIA / A380 A Great Way to Fly

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oil down..good news for this bugger..

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09-Jul-2008 10:54

SGX / SGX

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if u look at the 10 yr chart for SGX..it shows a head n shoulders pattern...

looks like the overall trend is down..

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09-Jul-2008 09:14

SPC / SPC

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oil is dropping!!! like the sky is falling...

SPC <$6? :)

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09-Jul-2008 08:48

Straits Times Index / STI to cross 3000 boosted by long-term investors

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x 0

another chance for the markets to move up for shorting @ highs :)

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