The following graph is taken from this weeks MoneyWeek, the source is the BofE.

I think this is the best evidence at the moment that we are on the edge of a cliff and about to fall off it. Mortgage approvals have fallen much quicker than they did initially in the last HPC and look at what the house prices did then.

Click to view attachment

very interesting indeed. I'll be interested to see the next figures to ascertain if this trend will continue or if it is an aberration.

I think this is the best data to rely on, its from a non VI source.
It also makes me wonder if the volumes we were talking about yesterday are actually correct, the charts have a similar (ok diving) look to them.

http://www.housepricecrash.co.uk/forum/ind...?showtopic=4263

Look at mortgage approvals!!

Look at the start of the graph, 1986-1989ish

Now look at 2002-2004

Looks scarily very similar to me!

Yes, munimula. I believe this is like watching sentiment changing.

This graph will put the skids under any bull theory.

We are about to go over the cliff. At long last!

The rest is just academic.

The bears felt this vibe 6-8 months ago. Now the facts are filtering in.

Another 6 months and the public will be feasting on the headlines...

...like a dog chained to its vomit.

Blair better get a move on with the election...

This is from the Guardian.

Mortgage lending at lowest for 10 years

Ashley Seager
Wednesday January 5, 2005
The Guardian

Mortgage lending fell to its lowest level in almost a decade in November and is dropping faster than during the housing market crash of the early 90s, official figures showed yesterday, pointing to further house price falls this year.
The Bank of England reported that only 77,000 new mortgages were approved in November, down from 85,000 in October and the lowest since September 1995. That represented a 43% drop from November 2003's figure of 134,000 - worse than any fall seen in the early-90s.

The 77,000 figure was only slightly above the monthly average of 73,000 new loans made during the worst year of the early-90s slump.

"The number of mortgage approvals continues to head south at an alarming rate," said Simon Rubinsohn, an economist at Gerrard Ltd.

"Typically, mortgage approvals have been a fairly reliable lead indicator of house price inflation," he said. "Property prices are likely to continue to soften in the first quarter of the year."

He says soften, but he means FALL. Reading that has made me feel a lot more optimistic.

The crash is ON.

But most sellers still won't drop. The good times are too fresh in their memories.

Some of them have been sitting there for 6 months already.

Don't drop, then, Sit and Rot.

If you look carefully at the blue line see how it falls sharply in around 1988/9 and watch the red line follow it around 6-8 months after. I attribute this fall to a loss of confidence and affordibilty due to steeply rising interest rates. There was no way back for some time.
Now Look at the blue line at our present time, this has been described as a worse drop .I can attribute this to the loss of the BTL investor as they have pulled out due to the fact that even the biggest money lender is forecasting the market to decline over the next 12 months. The question remains now will the red line follow and if so how far behind. If it does follow I think it may happen a lot quicker due to the speed at which information is exchanged nowadays.

As an example of inormation exchange look at Halifax's 1.1 increase published today. If this was published in 1988 in a newspaper we would have accepted it without question for weeks and months, instead today we are able to see within minutes of its publication that if Northen Ireland was not included the figure would have been around 4.5% down!

So considering the red line has virtually tracked the blue line will the red line follow again?

IMO, at this stage it's all about volumes because you'll not get any sense out of the monthly HPI stats. As it's been pointed out, the price trend lags slightly behind the volume trend (if I remember right), but look how dramatic its been compared to the last slump!

Pudniw,

Absolutely agree. Statistics can be manipulated and twisted to say anything. A friend of mine owns a music management company .She personally concentrates on A and R within her own company.The way that they value an act is not by fudged record sales or biased radio play but by the number of tickets an act would sell for a live gig. This they say is the acid test because it actually involves they public and requires them to make an effort and actively spend time and money supporting the act.
Going back to these lendings figures it shows a sure sign of the public voting with their feet.
The public are no longer prepared to support the market or participate in the ridiculous ponzi scheme.

Wow! Excellent graph! This really does show house house prices lag approvals and it looks like house prices are going to be heading south soon!!!

I have been a naughty girl and emailed the graph over to a number of estate agents in my area!!

I'm assuming the red line is year-on-year growth. If so, it's not telling us the growth in a particular month. To do that it needs to be backdated around 6 months. (e.g. Halfax says Decemeber's y-o-y is 15% - that doesn't tell us what happened in december, but what was happening in early summer). After doing that you get a direct correspondence with the monthly approvals data.

Nothing wrong in that BB. Like yourself I'm in and around NW and North London (Finchley and Hendon, Golders Green) and we know the agents are holding their heads in their hands.If you had sent any of these local agents that chart you'd be doing them a favour. You'd simply be giving them the "heads up" and perhaps they could get their careers sorted out.

This is a top thread. Hats off to munimula for that graph.

I think it should be at the top of the HPC page. The more you gaze at it the more you can see the writing on the wall for the market.

I challenge any Bull to bring up their new paradigm la la land ideology and fend off this sort of ocular proof that the only way is down, down, down.

Mortgage Lending - Seasonally Adjusted - Figures from BOE

Originally posted by 3rdChimpanzee on TMF

A slight problem here is that the latest mortgage slow down could be a lot to do with new regulations on mortgage lending. Having said that the volumes should still have an effect on prices, but we should be aware that the numbers could be artificially a bit low.

The best sign yet?

Not if this article's anything to go by. The government is intervening directly using taxpayers money to prevent a HPC.


http://www.timesonline.co.uk/newspaper/0,,...1430976,00.html

This comes up regularly, if not very often. Property SIPPs will not support the market - in fact I welcome them as I think they will help precipitate a crash and ensure a healthy supply of rental property continues when the crash does come. Ask yourself this - if the government wanted to use this to prevent a crash, why wait until April 2006 to introduce it? Why not introduce it this April?

I've posted before regarding why this is not a big deal, but today another poster (Bubblepricker) made the exact same points I would make, but more eloquently than I could. I suggest you read his post, as it will clarify why this will not prevent a crash.

http://www.housepricecrash.co.uk/forum/ind...?showtopic=4365

Good chart!

shows that buyers have lost interest, and are resisting high prices.

Low mortgage approvals means FEW transactions.
Estate Agents are starving for business, and then there are certain sellers
who MUST sell. The low transaction volume means that they are hurting,

Buyers will not suddenly come back and pay higher prices. They have figured
out that prices are too high, and coming down. So they will wait for the sellers
to face reality and CUT their prices.

THIS IS A BUYERS MARKET,
so the participants must face the facts, and SELL ON THE BID,
not hope for their dreams of a good market coming back- it wont happen!

This is absolutely NOT a buyers market. AT LEAST NOT YET!! Asking prices are still way too high and sellers won't come down by more than 5-10% at this stage.

Wait until prices have come down at least 30% or so. This could well take another year or two.

Remember also that markets typically overreact both up and down so that when the crash bottoms out there will be a REAL buyers market.

I wouldn't actually be surprised to see a rise in this stat as post-regulation the
f*%kers I mean mortgage brokers would have got their act together. However, a wonderful fall and definitely pointing in the right direction.
60,000 p.m. by December?

I forget, what happened in mid-1995 i.e. the low-point on the 1st graph?

House prices fell from 1989 to 1995. The minimum in 1995 is when the market picked up.

Too true, but few will have the courage to buy at this point as they will be overwhelmed by bearish psychology! It is just human nature I guess....

"buyer's market" simply means that most transactions
take place on the "bid" side of the market.

In this market, a buyer would be nuts to pay the offer

Looking at the graph.. mortgage approvals down to late 1995 values... surely that is going to hurt

Anyone interested in this thread should take a look at this thread-

Charting the UK market, started by Dr Bubb. It's in the investment section, confusingly under "Oversees Property".

Go to the last post and scroll back. You won't be disappointed.

Jake.

http://www.reuters.com/financeNewsArticle....storyID=7308487

The US mortage market is drying up also. The best sign yet that the international irrational exuberance is grinding to an uncomfortably fast stop.

Some of the best quotes from the US article:

"A further drop in the purchasing index will likely prompt additional concern about the strength of the housing market.

"If there is another week of weak data, (this) combined with recent (housing) starts and home sales data will raise many questions about whether the housing boom has ended," said Drew Matus, senior financial economist at Lehman Brothers.

U.S. housing starts plummeted 13.1 percent in November, the biggest dive in nearly 11 years, as groundbreaking fell sharply across the nation, according to the Commerce Department. The number for December will be released Jan. 19.

What's that hissing sound that I keep hearing?

Another lending graph.

Oops ignore - same as Benjamin's post!

http://213.225.136.206/mfsd/current/li/lendind.pdf

Thanks for all the data.....looks like the Sunday Times was correct...........we appear to be in the 'lag phase' at the moment. Just hang on in thier and, as is often said.......................HISTORY REPEATS ITSELF or HINDSIGHT IS A WONDERFUL THING

Cheers

I can't recall the guy's name, but this one chap predicted that when mortgage approvals collapsed, or when the amount of money being lent decreased, that was the sign of DOOM.

Apparently he predicted the last crash as well, I think.

I think you're thinking of Professor Gordon Pepper:

http://www.telegraph.co.uk/property/main.j.../17/prosy17.xml

Well done zzg, as ever you've proved that you're the man to watch on hpc.co.uk...

Drop in turnover, drop in mortgage lending. Simple as that.

Love the avatar.

Mortgage approvals are way down, yet my close freind who is sales manager for a large E/A chain in London reports booming sales and viewings. I believe him because he was all bearish in the second halve of 2004 and often told me they were way under targets.

Lot of strange stuff going on out there.

Cheers brother bear <<< >>>

Dogbox has got more friends than a lottery winner

Professor Pepper, so misunderstood...