Brickonomics

The latest Rightmove figures providing information on what sellers are asking for their homes suggest there has been a swift downward turn in the London market, with more than £20,000 cut from average asking prices between July and August. This adds another hint to hints we picked up in the recent RICS figures that London may be set for a rather swifter correction in house prices having held up rather better to date than other parts of the country.

For both consumers and construction firms inflation is becoming a real factor once again and maybe it is time to give much more consideration to how to deal with it. I was brought up with inflation. I recall being told time and again by my parents how few pennies things cost in times past compared with today. We gasped at how cheap things had been, naturally ignoring the fact that relatively people were paid a pittance. That was the seventies….

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The broad message coming out of the latest housing market survey from the surveyors’ body RICS is that transactions may be stabilising but prices still are falling and have a way to fall yet. The interview with RICS chief economist Simon Rubinsohn on Radio 4’s Today programme suggested that sellers are more accepting of much lower prices, which is helping to get sales moving, which in turn is a good thing. The net result being prices fall further and transactions…

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One set of bad orders figures provides no real cause for concern. This data series can bounce around like a drunken kangaroo. It is a feature of the lumpiness of construction projects. But a second consecutive set of duff figures does start to set a few alarm bells ringing. So the fact that the last two months have seen the seasonally adjusted figure for orders for new construction work more than 20% down on last year’s monthly average is cause…

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So house prices dropped a further 1.7% in July according to Halifax (HBOS). For those concerned about the depth of any correction in the housing market that will be worrying. Added to the other eight monthly falls there have been over the past 12 months that means on the Halifax “smoothed” measure that the average house price has fallen 8.8% on a year ago. That makes the figure more worrying still. I hasten to add at this point that for…

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I read this Money Week article on how British firms are running out of money and thought it may be of interest in the light of estimates I made on the money owed by and to construction firms. It’s a bit on the scary side, but no less interesting for that.

There have always been paradoxes in the housing market. For instance, while people want the price of all other essentials items to fall homeowners want the value of their home – and by implication all homes – to rise, even if it would be to their disadvantage in cash terms should they wish to trade up. But let’s not get bogged down here other than to say part of the explanation may be that houses are increasingly seen more as…

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So there it is, construction output slumped sharply in the second quarter of this year, according to the first take by the national statisticians of economic activity. The statisticians put the 0.7% drop in construction activity down to the sharp drop in house building work. The 0.7% drop in construction output compares with a 0.4% rise in the first quarter and does support the view that construction is heading for recession this year.