By Sinead Cruise
LONDON, Aug 11 (Reuters) - Talk of an upturn in Britain's property market has prompted derivatives traders to reverse bets on UK house price falls, with values expected to rise by 0.6 percent by end-2010 versus an 11 percent fall seen in June, indicative data shows.
Participants in Britain's real estate derivatives market are backing a steady recovery in the housing market as competition hots up among homebuyers, and as encouraging financial results from key banks raise hopes of a spurt in mortgage lending.
Average UK house prices are expected to fall by a further 1 percent by the end of this year, the data shows, compared to late June projections of a 7.5 percent drop.
'In January, the expectation was that house prices had a further 34 percent to fall, in addition to the 21 percent fall already seen since the market peaked in August 2007,' said Michel Heller, a trader at derivatives brokerage GFI CBRE.
'The property futures market is expecting a much less pronounced fall in the short-term than was previously expected, and the recovery to current levels and growth thereafter will come sooner than previously expected,' Heller said.
On Monday, Britain's Centre for Economics and Business Research said UK house prices were likely to fall just 3 percent more over the remainder of 2009, before rising by 2 percent in 2010.
However, the RICS has cautioned the housing market will still face significant challenges next year, as a lack of supply threatened housing affordability in the longer term.
Average UK house prices, as measured by the non-seasonally adjusted Halifax House price index, now stand at 160,686 pounds in July from a peak of 201,081 pounds in August 2007.
Below are expected annualised percentage changes in UK house prices based on non-seasonally adjusted Halifax House Price Index derivatives.
The young market provides investors with an opportunity to adjust or hedge exposure to the UK housing market synthetically -- in a cheaper and more efficient way than buying or selling bricks and mortar.
The table is based on indicative HPI swaps mid-price data provided by interbank brokers Tradition Property, CB Richard Ellis-GFI and Tullett Prebon and is made up of simple averages.
Date 1YR 2YR 5YR 10YR 20YR
10/06/09
1 0.3 1.8 2.1 3.43
30/06/09 -7.5 -5.5
1.37 0.9 2.63
18/05/09 -11.5 -9.3
2.7 0.4 2.3
2/04/09 -18.7 -13.5 -4.3
0.4 1.9
17/02/09 -20.3 -14.2 -5.1
0.05 2
06/01/09 -19.7 -14.7
5.5 0.15 2
11/09/08 -16.2 -11.2
3.1 1.1 3
11/08/08 -15.5 -9.8
3.0 1.0 2.9
11/07/08 -15.8 -10.5
3.2 0.8 3.0
06/06/08 -13.2 -9.8
3.0 0.1 2.2
06/05/08 -13.8 -9.1
3.1 0.3 2.3
04/04/08 -8.3 -5.8
2.0 0.5 2.4
14/02/08 -8.2 -5.7
1.8 0.5 2.3
08/01/08 -9.0 -4.9
1.7 0.4 2.6
18/12/07 -9.0 -4.8
1.7 0.4 2.7
5/12/07 -9.7 -5.1
1.4 0.5 2.7
29/11/07 -7.0 -3.8
1.2 0.6 2.7
06/11/07 -2.5 -1.3
0.9 0.8 2.8
20/9/07 -2.5
1.0 0.2 1.2 2.5
1/9/07
1.0 0.0 0.8 1.3 2.6
1/8/07 2.3 2.0 1.6 1.7 2.8
1/1/07 4.3 2.7 2.7 2.5 2.7
(Reporting by Sinead Cruise; editing by Simon Jessop)
(See www.reutersrealestate.com for the global service for real estate professionals from Reuters) Keywords: BRITAIN HOUSINGDERIVATIVES/ (sinead.cruise@thomsonreuters.com; +44 (0)207 542 5154; Reuters Messaging: sinead.cruise.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
LONDON, Aug 11 (Reuters) - Talk of an upturn in Britain's property market has prompted derivatives traders to reverse bets on UK house price falls, with values expected to rise by 0.6 percent by end-2010 versus an 11 percent fall seen in June, indicative data shows.
Participants in Britain's real estate derivatives market are backing a steady recovery in the housing market as competition hots up among homebuyers, and as encouraging financial results from key banks raise hopes of a spurt in mortgage lending.
Average UK house prices are expected to fall by a further 1 percent by the end of this year, the data shows, compared to late June projections of a 7.5 percent drop.
'In January, the expectation was that house prices had a further 34 percent to fall, in addition to the 21 percent fall already seen since the market peaked in August 2007,' said Michel Heller, a trader at derivatives brokerage GFI CBRE.
'The property futures market is expecting a much less pronounced fall in the short-term than was previously expected, and the recovery to current levels and growth thereafter will come sooner than previously expected,' Heller said.
On Monday, Britain's Centre for Economics and Business Research said UK house prices were likely to fall just 3 percent more over the remainder of 2009, before rising by 2 percent in 2010.
However, the RICS has cautioned the housing market will still face significant challenges next year, as a lack of supply threatened housing affordability in the longer term.
Average UK house prices, as measured by the non-seasonally adjusted Halifax House price index, now stand at 160,686 pounds in July from a peak of 201,081 pounds in August 2007.
Below are expected annualised percentage changes in UK house prices based on non-seasonally adjusted Halifax House Price Index derivatives.
The young market provides investors with an opportunity to adjust or hedge exposure to the UK housing market synthetically -- in a cheaper and more efficient way than buying or selling bricks and mortar.
The table is based on indicative HPI swaps mid-price data provided by interbank brokers Tradition Property, CB Richard Ellis-GFI and Tullett Prebon and is made up of simple averages.
Date 1YR 2YR 5YR 10YR 20YR
10/06/09
1 0.3 1.8 2.1 3.43
30/06/09 -7.5 -5.5
1.37 0.9 2.63
18/05/09 -11.5 -9.3
2.7 0.4 2.3
2/04/09 -18.7 -13.5 -4.3
0.4 1.9
17/02/09 -20.3 -14.2 -5.1
0.05 2
06/01/09 -19.7 -14.7
5.5 0.15 2
11/09/08 -16.2 -11.2
3.1 1.1 3
11/08/08 -15.5 -9.8
3.0 1.0 2.9
11/07/08 -15.8 -10.5
3.2 0.8 3.0
06/06/08 -13.2 -9.8
3.0 0.1 2.2
06/05/08 -13.8 -9.1
3.1 0.3 2.3
04/04/08 -8.3 -5.8
2.0 0.5 2.4
14/02/08 -8.2 -5.7
1.8 0.5 2.3
08/01/08 -9.0 -4.9
1.7 0.4 2.6
18/12/07 -9.0 -4.8
1.7 0.4 2.7
5/12/07 -9.7 -5.1
1.4 0.5 2.7
29/11/07 -7.0 -3.8
1.2 0.6 2.7
06/11/07 -2.5 -1.3
0.9 0.8 2.8
20/9/07 -2.5
1.0 0.2 1.2 2.5
1/9/07
1.0 0.0 0.8 1.3 2.6
1/8/07 2.3 2.0 1.6 1.7 2.8
1/1/07 4.3 2.7 2.7 2.5 2.7
(Reporting by Sinead Cruise; editing by Simon Jessop)
(See www.reutersrealestate.com for the global service for real estate professionals from Reuters) Keywords: BRITAIN HOUSINGDERIVATIVES/ (sinead.cruise@thomsonreuters.com; +44 (0)207 542 5154; Reuters Messaging: sinead.cruise.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.