Buyer drops offer by £27k

Cranston_2

chucky wrote: »

well i do work in the derivs market and know for a fact that no investment bank trades them as an instrument.

From the Guardian, Monday 9th June

The residential property futures market is based on the Halifax monthly house price index, published by the bank. It is an-over-the-counter market designed for banks, pension funds, insurance companies and housebuilders to trade on the future values of property. Tradition Property, a City-based property broker, operates a derivatives futures index based on the Halifax figures...................

(on predicting prices) By the end of this year prices will be down by 10% and by a further 10.5% in 2009, according to the index. Prices will keep dropping through 2010 and cut values by 23.5% when they hit rock bottom in 2011. House prices will then begin a slow climb back to current market values over a period of about six years.

Californication

In case anyone is still interested, the FT had an article on Thursday that says that 7.2 billion pounds worth of property (residential or commercial) derivatives traded in the UK last year. I assume that this is the notional on the contracts, so it's not a big market, but not negligible either.