Thursday, May 21, 2009

UK mortgage approvals down again

The entire UK real estate industry is waiting, desperately hoping for the first signs of a pick up in housing activity. Once the first positive number comes through, we will be smothered in an avalanche of hype.

"The crash is over", they will declare. The UK will be back to normal. Property, and how fast it is appreciating, will again become the main topic of conversation.

However, the mortgage approvals data isn't being terribly obliging. April data was rather disappointing. Maybe next month, we will see some improvement.


  1. So, another good month....

  2. If mortgage approvals pick up, the ship is going down.
    Where is the ability to lend?

  3. A chart on housing bubbles around the world .
    Rise and slide.
    Source Case Shiller.
    Price -rent ratios 1997 = 100
    At peak.
    Ireland 2.58

    Spain 1.92
    USA 1.76
    Germany about 1?
    “The chart illustrates price-rent ratios for some of the most notorious housing bubbles - Ireland, Spain, the UK, and the US - indexed to 1997. The price-rent ratio can be compared to a price-earnings, or even better a price-dividend, ratio in finance. It measures the relative value of the asset: the price of the asset (purchase price of a home) divided by its flow of fundamental value (rental income earned or the value of having a roof over your head). As the price-rent ratio grows, the market value moves away from its fundamental value.

    The bubbles have been extreme, and there is probably still some downward price momentum left in the pipeline for many of these markets. Ireland's housing market, while having experienced the biggest relative bubble, has seen its price-rent ratio rise since Q3 2008. Crashing economic fundamentals have driven down rents (the denominator), and likewise the relative value of owning a home.

    I included the German price-rent ratio to show that housing bubbles are not uniformly the root cause of economic decline.”

    For me ,the other la la land house bubble in Oz isn’t shown . This oz Bubble is still fully inflated .
    But I suspect still floating somewhere between Ireland and Iceland.

    i would like to see some sort of double graph showing av. incomes/price as well as rents.