It has already been a few days of speaking with conveyancers
and meetings for a house and flat sales/purchases. What is often interesting
when dealing with companies is gaining a wider helicopter view understanding of
the market.
The auctions have been tailing off from the summer (not
uncommon) with a few (Inc. myself) being out bid on most properties from March
to September. The achieved price is now significantly lower (near 11% lower
than the summer), and the number of interested parties appears to be well down.
Seasonally it’s not uncommon, but one factor cited is the affordability
elements of the mortgage applications even for clients porting their mortgages
to a new property. Positively it is limiting the competition so for the buyers
out there are some decent purchases to be had.
Examples being, there is a reduction in borrowing
capabilities of home owners or the more common situation occurring being
limitations of additional funds to up size. Yes, this is positive in cooling
the property market and reducing the risks of a boom albeit contradictory when
considering the Help to Buy (H2B) that is meant to assist people on to the
market. Historically, I'm from an era of 3.5 times main income plus 1 of the
income.
The lawyer's example of the couple had an income for Mr
& Mrs A of £45K & £11K, borrowing potential of £166K in the olden days.
It would appear the Government Bank differ on this and have approved them for a
paltry £104K of borrowings. Perhaps an extreme example of
miscalculations/assessment with no other liabilities (no loans nor student
loans etc.) one assumes they'd have been lent upwards of £130K.
The firms I'm
dealing with at the moment are finding most of their work is around £105-£250K
(North) and £285-£445K south with a large reduction in properties over £500k.
Implying the peek has come, with demand tailing off and supply stagnating. This
is with no surprise when you consider the recent London developers
announcements about cooling off and normalisation of sales.
It has however got me thinking that the housing market is
likely to have some form of coming. Whilst speaking with solicitors they note
that a lot of sales are being repriced lower (reductions on the offer) even for
current home-owners when the affordability terms applied, This is happening even
for those porting mortgages from one property to another. It could be construed
as the "housing cap" rather than blowing the bubble.
Its uncanny that today's interim
management statement by Persimmon Homes (PSN) with PSN stating, "As
expected we have experienced a return to a more traditional seasonal pattern to
customer activity this year with reservation rates picking up with the onset of
the autumn season after the slower summer weeks."
One does have to acknowledge that PSN has good forward visibility
on their reservation interest circa £696 million of forward sales reserved
beyond 2014, an increase of 12% on the same point last year (2013: £622
million). Perhaps one would be wise to call that the steam.
Its wise to keep my opinions to myself about timber framing
after seeing a property being totally rebuilt (bricks only) recently as a
result of being incorrectly tied in, could this be a problem for the future.
PSN's Space4 timber frame had an analogy recently by a brickie
to..."Space4 another home in a few years." One would be wise to
consider the significant of "a more traditional" seasonal pattern in
conjunction with affordability rules.
Glencore's
Interim Management Statement for the 3rd Quarter was positive in terms of underpinning copper (own
source) up 8%, Ferrochrome up 5% and own sourced coal up 7mt to 111.4Mt (7%
gain). GLEN's Zinc was just ahead of my expectations with the ramp up in the
Australian ops (McArthur River and Mount Isa) and Perkoa avoid some of the
consequences of closing the Perseverance and Brunswick mines.
Quite how GLEN will performing with the market outlook for
coal for the next 12-18 months is riskier for the long only fraternity. Expect
some small acquisitions to consolidate the super-cycle, watch out quality AIM
companies. (Easy to identify). As such, with the outlook for coal and the risks
to copper due to the control by certain parties, GLEN's a good intra-day trade
on the news. With Japan going in the opposite direction to the US, the markets
will go following the good news.
Limited time for AB
Foods (but they do miss the
managements own LFL sales improvements by 0.5%) and the drinks announcements
yesterday, post a telecon I may return to them. Surely I do not need to comment
on the sugar outlook we all know too well...just in purchasing it.
Could LGEN's
Q3 IMS bode well for the listed
annuity providers with LGEN breaking the trend? Some really good news for
HomeServe in the member agreement with AARP. One certainly to watch...
Atb Fraser
Fraser- Hi- After seeming to get the issues with FTML sorted, I had to pull the battery out of my PC at the end to log off!!-- not ideal really but I wont use Chrome or Firefox as my brother is employed mainly to fight against the hacks that they seem to encourage- scary stuff and it ties up with the increased speed these pieces of software offer. Good luck to all who use them and think they are secure.
ReplyDeleteRe AMI- yes, nice work from Dan at the FT there. I knew that $50m would have to rear its ugly head again and this seemed the opportune moment. I wouldn't really want to be a minority shareholder in AMI but as we know the simplest option would be to take them private, albeit your 23p is rosy against my ENRC type offer of a miserly 5p. Could his name be further tarnished if he went in low ball...and would be give two hoots... hmmmm.. :-))
Re IGAS- good news on a bad day for oil/gas. The major issue was always that the shale gas would be in completely different formations to the US (who are the experts in this field given their acreages) but the good news is that there are similarities with existing deposits, which will knock 2 years off the possible development pathway here. They will look at multiple drills in 2015, which will split up the eco warriors into v small groups, which is a v sensible tactic and the law is now v much behind developers. Perhaps these eco warriors will consider where the fuel they use to drive to sites and to heat their houses/caravans comes from and desist from using it from now on. Im long IGAS, but early in my tranches so I welcome the current weakness here.
Cheers. The Leggie
The Article: http://www.ft.com/cms/s/0/58163740-6123-11e4-b935-00144feabdc0.html Indeed Leggie, a fine piece by Dan, albeit some quite public already. The questions that really start to get interesting is if they get hold of the Marston Ownership structure and GIO shareholders.
ReplyDeleteI was too busy with ASC today to find time for Igas I still have to get back to covering http://www.investegate.co.uk/caledonia-mining-crp--cmcl-/rns/revised-investment-plan-and-production-projections/201411030700088965V/ Caledonia Mining Crp's Revised Investment Plan and Production Projections, with some items not as simple as they would first appear.
Its this time of year when it rains that I must look at a visit to the Congo as Semi-Meaty Pork Ribblets are all the rage...plus other items such as tractors!
Atb Fraser
Fraser- Pork, tractors, slum dwellings, diamond dredging plots, the Congo... have you ever considered the part of a Bond baddie... if you have a cat that can sit on your knee, Mr Blofeld perhaps :-))
ReplyDeleteHave a great evening.
Cheers. The Leggie
As an investor I suspect most people cover that! I just get a bit more involved and earlier nowadays. I don't own a cat nor want one:) Dogs all the way me! I have an animation that was made about Ian and I a few years back, I'll post it. 1st June 2012...if Ian's awake and reading this. TC F
DeleteLeggie - I think you missed 'slum wines' in your list of the great man's business interests - given Fraser's threat to send a sodastream with the Blue Nun.
Delete(Actually 'slum wines' and 'slum champagne' has a nice ring to it - perhaps it could be like the Wonka bar - one in a million bottles has a diamond in the bottle).
roddy
Roddy- haha- yes, a man of many talents, Blue Nun is perhaps the equivalent of the semi meaty pork riblets, which I gather have been easier to source since the badger cull has resumed. Hmmmm. Cheers. The Leggie
Delete