Monday, Nov 26, 2007
Hometrack Research
Bloomberg: U.K. House Prices Fall for a Second Month
"The average cost of a home in England and Wales fell 0.2 percent from October to 175,700 pounds ($361,000) following a 0.1 percent drop the previous month, the London-based research group said today. From a year earlier, prices increased 3.6 percent, the least since July 2006". The Hometrack link on the HPC home page gives the report.
Posted by alan @ 06:58 AM (1027 views) Add Comment
13 Comments
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1. Ihopeitgoeswithabang said...
I look forward to the predictions from all the 'experts' taking a dive into negative territory.
At the moment tey still 'emphasize' the annual rate so that they can use positive numbers in their statements.
"Sellers shouldn't hesitate to lower the asking price because a more protracted slowdown is on the way"
Should read:
'Sellers will have to lower their asking prices or they won't sell their property'
2. inbreda said...
I find it quite significant that the bog standard 0.1% fall has actually become 0.2% fall. I think they're having trouble papering over the falls by using other months positives. It's a strategy that could come back to bite them.
3. confused76 said...
I can see the "expert" forecasts are deteriorating at the speed of light:
"A housing shortage may limit a decline in values." -- of course there is no housing shortage! however the pundits have been repeating that shortage means prices trebling in the next 10 years (Professor Nickell, professor of French cuisine, said average house price multiple of the salary will be 20x by 2020)
``But the underlying market conditions remain weak with new buyer registrations down by 26 percent over the last five months.'' Buyers 26% down and new mortgages 37.4% down vs a year ago are non negotiable signs of A CRASH
"London's financial district, will invest only 2 billion pounds in homes next year, compared with 5.5 billion pounds in 2007, real estate agents Savills Plc said Nov. 5." Savills used to say (just 2 months ago) that the amount of city money into the housing market in 2008 will be 20% down vs 2007. Now 2 bn over 5.5 sounds more 36% to me. What a JUMP!!
4. Sds said...
c76:the decrease is in fact: 3.5/5.5 = 64% !!
ie .amount of money is 64% down, not the 20% Savills said!
5. confused76 said...
read below
it is just too funny
then tell me if people can find comfort from the ongoing housing recession by the fact that "house prices have risen spectacularly" Yeah so what? I will be able to brag about with Guinness-drinking friends at the pub, but I am losing shatloads of pounds today!
The last paragraph of the article is another masterpiece "Yeah but The average price of a house in Northern Ireland is £221,004, 11 per cent above the UK average of £198,898." AH AH what a great place Ulster, aha ahah, dont you think that prices will have to fall more?!!! Or are there more robust fundamentals than in the rest of teh UK. Maybe more immigrants, more students, more divorces??
http://www.newsletter.co.uk/news/Confusion-over-house-prices.3521185.jp
Confusion over house prices
SEEMINGLY contradictory reports on the state of the Ulster housing market have led to confusion as to whether house prices in the Province are rising or falling.
Year-on-year figures from the Halifax House Price Index indicating that prices have risen by 29.1 per cent in the last 12 months have been interpreted by some as proof the market continues to soar.
However, a closer examination of quarter by quarter figures tells a different tale. In the last three months prices have actually fallen by 3.2 per cent.
In other words, the most recent move in prices is downwards, but prices remain much higher than a year ago.
“The fall in Northern Ireland simply partly offset some of the 8.2 per cent increase in the previous quarter and must be set against the background of a spectacular 47 per cent rise in house prices in the year to 2007 Quarter 2,” explained a Halifax spokesman.
Despite the recent downturn the relative value of Ulster homes is much higher compared to last year.
The average price of a house in Northern Ireland is £221,004, 11 per cent above the UK average of £198,898.
6. Icarus said...
I don't believe these 0.1% and 0.2% falls. Sound anecdotal evidence says the fall is much bigger. Apart from anecdotal evidence, just think of the mindset of the average buyer in June/July and compare that with the mindset in November. If you were buying a £300,000 house in June/July you'd be thinking, 'Got to have it, it'll be worth another 30 grand or more this time next year, the nice man is giving me a mortgage I can afford, I'll offer £310,000 if necessary'. Today you're thinking, 'There's no rush, prices are going to fall, I'll wait and see, or the guy may be desperate to sell so I'll offer £270,000 (assuming you can afford the new deposit/mortgage), if he doesn't take it I'll look at other houses in that price bracket and try my luck again at £270,000'. The house either doesn't sell or it goes for £270,000.
7. little professor said...
Ulster's rise really is beyond me. I mean, London and the South East I can understand because of the high demand, but who'd want to live in Northern Ireland?
8. confused76 said...
Litte
It comes down to speculation, greed and irrationality
but that is true for many postcodes of london as well
Take Bucks and towns like Gerrards Cross. Average house price of £1m. Is that sustainable?
9. the reaper said...
It always intrigues me how VI's will still use the annual figures when the rest of the financial community is watching monthly figures.I wonder how they will cope when the annual price actually falls.
10. confused76 said...
Read this other article
http://news.bbc.co.uk/1/hi/business/7109614.stm
"More insolvencies ahead for 2008
More debt may build up on credit cards warns PWC
The number of people going bust could rise next year, says the accountancy firm PricewaterhouseCoopers (PWC). "
Look: this is what happens when the "MyHomeBank" cash machine stops working. MEWs and "debt consolidation" falls out of fashion if mortge rates skyrocket and I fill up all the secured debt capacity of my cash-cow asset (my house)
AH AHHHHH AHHAHHAHAHHAHH
AHHHA HAHHHA HAH HAHHHAH
AHAHA A UAMAMAIOAKKAK AOAO UUAUAUUAU
11. planning4acrash said...
Debt would be piling up on credit cards, but IR's and restrictions on these are tightening and fees are going up.
12. jack c said...
A lot of people seem to be going for one last big “blow out” this Christmas on the credit cards – take a trip to Europes largest shopping complex “The Metro Centre” in the North East of England (if you can be bothered with the 5 mile queue on the A1) for evidence of this.
A high proportion of consumers have been undetered in their appetite for debt safe in the knowledge that they could swap the credit card debt (once the cards are maxed out) onto an unsecured personal loan (Northern rock the obvious choice with comparitviley low interest rate and no early repayment cahrge). The spending on the cards builds back up and reaches a point where they then decide it would be better to consolidate their debts and role everything in as part of the mortgage. All is well because property prices have risen in value and the individual having spent £20K+ via cards and loans still feels “wealthy” because he/she still has the same level of equity in the property. This strategy is much riskier going forward because of falling property prices – the lenders faced with higher LTV’s (loan to value ratio) a tightening of lending criteria and reduced liquidity will not be in a position to be as generous (or irresponsible in many peoples view) as they have been in the past.
My guess is March/April 2008 when the music will really stop.
13. planning4acrash said...
Only thing is, that this isn't a real game of musical chair's, no rules, each player makes their own rules. I cheated and am already sat down on a chair!! All those running round the chairs are complete mugs coz there ain't many chairs to sit on when the music stops!!!
Taxi?!