Thursday, Oct 11, 2007
More media acknowledgement of the start of the crash
Guardian: House prices fall across UK
House prices across the UK tumbled last month at the fastest rate for two years, a leading industry survey shows today, while demand from first-time buyers plummeted sharply, adding to widespread evidence that the housing boom could be over.
Posted by autopilotengage @ 08:09 AM (3422 views) Add Comment
25 Comments
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1. autopilotengage said...
The Royal Institution of Chartered Surveyors said house prices declined in September for the second month in a row with 14.6% more surveyors reporting a fall in prices rather than a rise. This was an increase on the 3.3% more surveyors that reported a fall over a price rise in August.
Two months now from RICS.
2. Realist said...
It is quite interesting to watch the industry cheerleaders gradually shifting their positions from "business as usual 10% a year increases" through "slowdown in places but London and SE robust, supply and demand, blah blah" and finally, now that the market has ground to a halt and is creaking into reverse "yes prices are falling but there is no chance of a market meltdown because the fundamentals of the economy are so sound".
I await the next shift of emphasis with interest.
3. paul said...
In Lahndan, I've noticed that whenever the broadsheets (espcially those heavily dependent on property advertising revenue such as the Evening Standard) talk about house price declines, they generalize and describe, and give irrelevant statistics such as these instead of quantifying the decline in real terms.
Q. Why not spell out how much house prices have declined?
A. Because then streteched homeowners would be able to work out how much they've lost over the last month on their pokey new-build flats
4. soldinjune said...
I think we will be seeing reports such as this for many months to come..
I am also of the opinion that as No Bottle Brown has only a couple of years to deal with the inevitable crash/recession etc that we will see the government and BoE helping it along... They need the economy/property markets to bottom out quickly so that they can start to nurture that "feel good" effect in time for the next election.
5. Kpjcomp said...
From the BBC.
http://news.bbc.co.uk/1/hi/business/7037962.stm
6. sovietuk said...
"They need the economy/property markets to bottom out quickly so that they can start to nurture that "feel good" effect in time for the next election."
Sorry governments are only elected for a maximum of five years at a time. "Feel good" will be replaced with a good decade or two of "feel bad" for the vast majority of the British electorate after this caper has run its course.
7. taffee said...
whats a shame is that like the last crash,families will be ruined,people will kill themselves.....all over greed and money
I still believe family breakdown started in 1990.
8. little professor said...
Yikes:
"The worst-affected areas were:
* East Anglia (-87.0%)
* West Midlands (-82.0%) "
9. little professor said...
The above figures (i.e. down 87% in East Anglia) refer to the percentage of estate agents reporting a fall in new instructions. The average drop across the country was -65%. Even London was down 17%.
I don't know where the Guardian is getting its figures from - it's much worse than they make out.
Oh, and HIPS has nothing to do with it - the number of new instructions for houses requiring a HIP actually fell by less than the overall average.
The official figures (word document):
http://www.rics.org/NR/rdonlyres/333A81AB-82FA-42F0-8E90-D348EDBBAE33/0/pr111HIPs3Bed.doc
10. little professor said...
OK, having re-read the official RICS figures I feel like I'm getting increasingly confused. There seem to be two figures given - one for the percentage of estate agents reporting a fall in new instructions, and one for the actual amount of the fall. Neither of these come anywhere near the Guardian's figures. Can anyone explain this to a simpleton like me?
11. Optimistconservative said...
Correct me if I am wrong. From my old economics day, with prices of any product , its a question of supply and demand. With supply down, and demand down too by what seems the same extent, my feeling is house prices will stay the same for a while.
12. Depaulo said...
I was happily reading this article when an estate agent rudely interrupted me with news that a house has been reduced by 50k (10%) and would i like to take a look. Happy days! (This was in Upper Norwood, South London btw).
13. Cstanhope707 said...
But this is all the fault of HIPS less properties on the Market means falling Prices that is the BS that was being stated on the BEEB this morning......
14. crash bandicoot said...
I can barely believe the advert that I saw on that page. It was for a Nat West mortgage shrinker mortgage. While making overpayments to reduce your term is a laudable idea. With the current prices you can't even afford the payments on a normal mortgage. I suppose it shows the direction that Nat West expects house prices to go (answer: down very quickly).
15. C'mon Correction said...
Soviet - I agree entirely, our economy can't be given a quick fix by taking a hit on house prices etc for two years and then magically everything will begin to look positive again. We have £1.5 trillion debt, most of which since Nu Labour came to power over the last ten years, it will affect our economy for decades to come. In ten years or so expect our population to decline again as the Polish etc leave to work in Germany for example, a lot of jobs will begin to dry up in Britain.
Sadly, the long slow downturn will affect the whole nation.
16. Neither Here Nor There said...
I believe the Guardian figures refer to the balance of agents reporting falling prices whereas the RICS press release relates to volume of new instructions, not prices.
17. su said...
Little Prof.
I'm even more of a simpleton than you, but I'm wondering if the document you refer to is definitely the one which the Guardian refers to. The official figures shown only list the 4+ bed homes for sale in Aug, and 3+ bed homes in Sept. I'm wondering if the Guardian somehow got hold of figures for ALL homes for sale not just those requiring Hips. Just a thought...
18. little professor said...
Yeah, I get it now. The Guardian figures do indeed refer to the percentage of surveyors reporting price drops, while the figures I found in the RICS press release were the percentage of surveyors reporting a decrease in new properties coming on to the market.
The full pdf report is available here and should make things clearer.
http://www.rics.org/NR/rdonlyres/FE208DE8-B9FF-44F5-936A-AF9A4F66AE27/0/HousingMarketSurveySeptember2007.pdf
It's still the start of the crash, whichever way you look at it.
19. dbnazz1 said...
There are many VI's that have been putting a positive spin on house prices, etc, but I have looked at a lot of statements made by the RICS over quite a period of time, and they appear to given what I feel pretty unbiased comments about house prices. It is to there credit that they have issued the above statement when you consider that the RICS has probably one of the biggest VI all.
20. Gumbo said...
But the housing boom can't be over..........Brown told us that our economy is built on solid foundations.
" No more boom and bust...no more boom and bust "!
Is it really possible?????? Besides my estate agent said that if I took out a mortgage 11 times my salary, the equity would help me make my repayments for years to come...or alternatively I could swap the equity for all the gold I could eat.
And as everyone knows estate agents only care about their clients, and never lie, just like those nice politicians who use their expenses to pay for their mortgage repayments.
21. Urine Trouble said...
I put up for sale signs for a living, am I going to hit boom time soon or am I going to go bust? - very quiet at the moment. Yes I am a VI but which way do I go? Still living with parents so need house prices to fall, but if they fall will my income dry up? or is this the calm before the storm?
22. stillthinking said...
@optimistconservative.
I think so too. Supply is down as many people have now calculated that waiting until April for the tax break for property flipping is in their interest i.e. they gain more on the tax break than they lose from falling prices. Demand is down as many people believe prices are going to fall. So if Brown got it right (until April that is) then enough people will delay selling until April to maintain the current price. Artificially restricting the liquidity of the housing market.
However, in April there will be an artificially high supply of houses and the ongoing crash will be apparent to all. So in April all hell will break loose.
Personally I don't believe that Brown will do what he says, and that the people who are waiting for the tax break will be disappointed.
23. stillthinking said...
Perhaps too many people have held houses and would substantially benefit from selling now, so this sick little plot won't even work. Some need to rush to sell, and others to delay. What is the ratio between them? I have no clue.
24. The Gecko said...
Expectation drives the wheels of commerce - be careful what you wish for folks it may just come true :-)
25. Just Watching said...
What really gets my goat is the positive spin that the BEEB puts on it.
In July;
What the surveyors said;
increase 20% No Change 64% decrease 16%
these figures translated to a headline of "25% more surveyors treported a price rise than a fall"
True, 4 more than 16 is a 25% increase.
Now on to August, which was reported as "slightly more surveyors reported a price fall"
increase 10% No Change 70% decrease 19%
If the BEEB are to follow their example set in July(their manipulation of statistics that is), the headline should read 90% MORE SURVEYORS REPORT A PRICE FALL. (9 more than 10 that is) SLIGHTLY MORE
Ah ha! Now onto september, reported as "more surveyors report a price fall in their area"
increase 8% no Change 61% deacrease 31%
SPIN, SPIN, SPIN OR SHOULD IT BE LIES, DAMN LIES AND STATISTICS
in terms of July's reporting, this months headline should read 287.5 % more surveyors report prices are going down, than say prices are going up.
Rant over, I'm off to count my deposit.