Day 5: 12 Days of Xmas (It's Grim Up North)

kabayiri

£128,500.

Surely, by now, we can accept humour and insults in this part of the forums?

For me, people calling property as cheap in my part of NW is fair game.

I do my part to rebuff this, by suggesting that many London "des-res'es" are now little more than a shed with central heating

Generali

[FONT=&quot]The answer is £100,393, up 2.9% for the year.[/FONT]

michaels

Gen. I am thinking that for most a family home is a the major financial commitment so it would seem obvious that there should be demand for financial alternatives that would allow people to track house prices, for example those saving for a deposit would want their savings to track house prices or those thinking of downsizing might want to lock in their gains much as pension funds switch from shares to bonds.

Are their such instruments available? If not why not?

Generali

michaels wrote: »

Gen. I am thinking that for most a family home is a the major financial commitment so it would seem obvious that there should be demand for financial alternatives that would allow people to track house prices, for example those saving for a deposit would want their savings to track house prices or those thinking of downsizing might want to lock in their gains much as pension funds switch from shares to bonds.

Are their such instruments available? If not why not?

I remember that someone (Barclays?) had a future based on the Halifax HPI.

The problem is, if you are making a market in that sort of thing you can't have much of a net exposure as the bank wouldn't like it and the regulators don't allow it. So what do you use as an offsetting hedge? Houses themselves are rubbish because they are illiquid, not fungible and you can't go short if there's a net open short on the books to cover.

Also, what means will you use to let people take this long position and prices fall? If you sell an option then that's a one way bet as you can only lose the premium. If you sell a future then you'll bankrupt your clients and not see your money back.

Finally there are very strict rules about selling derivatives to naive investors. You can't go selling options to FTBs and rightly so.

I don't see an upside to this for a bank.

cells

Generali wrote: »

I remember that someone (Barclays?) had a future based on the Halifax HPI.

The problem is, if you are making a market in that sort of thing you can't have much of a net exposure as the bank wouldn't like it and the regulators don't allow it. So what do you use as an offsetting hedge? Houses themselves are rubbish because they are illiquid, not fungible and you can't go short if there's a net open short on the books to cover.

Also, what means will you use to let people take this long position and prices fall? If you sell an option then that's a one way bet as you can only lose the premium. If you sell a future then you'll bankrupt your clients and not see your money back.

Finally there are very strict rules about selling derivatives to naive investors. You can't go selling options to FTBs and rightly so.

I don't see an upside to this for a bank.

would not shares in a non geared residential reit basically track HPI (or try to track its curve out a few months)

I think England is in need of a dozen big residential only reits. Hopefully one for each region maybe a few for London also maybe geared 60-70%

cells

michaels wrote: »

If not why not?

it would be used as an indirect way to invest in the housing market and the financial product would have no other option than to buy homes.

effectively it would become a reit. or rather what you are describing would be the shares of a reit.

and yes it would be a good invention, the uk does not really have big resi only reits. Unlike Germany where the biggest owns 300,000 properties

vivatifosi

I've found the council tax data I was looking for. In the North East, there are 1,201,030 dwellings, of which 658,400 are council tax band A (c55%). This compares to England as a whole: 23,560,440 dwellings, of which 5,798,020 are in band A (c25%).

This is the only region in the country where the majority of houses are in the lowest price band. The next closest are the North West and Yorkshire/Humber where the figures are c41-44%.

If you are interested in the figures or how they stack up for where you live, you can view here:

https://www.gov.uk/government/statistics/council-tax-stock-of-properties-2015

See table CTSOP4.

ETA: I should add that by "country" above, I mean England, due to different calcs elsewhere.

westv

The ONS website has council tax data down to Ward level.