Tuesday, Feb 12, 2008

Down 1.7% in Jan

Home.co.uk [pdf]: House prices fall in all regions

The home.co.uk asking price for properties in England and Wales dropped sharply this month by 1.5%, equivalent to an average reduction of £3,870.

The year on year figure has fallen to just 3.7%.

After six months of hopeful stagnation, it is evident that asking prices are now being cut by increasingly desperate sellers. Moreover, market sentiment continues to deteriorate
as buyers play a waiting game in the knowledge that prices are falling.

A nightmarish scenario for sellers: Waiting for an elusive buyer as £000s of pounds are wiped off the value of the property for sale every month. This is the psychology of a house price crash.

Posted by little professor @ 08:30 AM (885 views) Add Comment

11 Comments

1. little professor said...

Please note the above text did not come from me but straight from the report. It's the most bearish VI report I've seen yet.

They even dismiss the hope that future rate cuts will save the market.


"A Further 0.25% Cut in Interest Rates
Whilst it may be tempting to suggest that the further cut from the Bank of England
this month may re-ignite interest from buyers, the mortgage finance markets have
now changed beyond recognition compared to recent years.

Economist Ludwig von Mises a long time ago warned that “imprudent granting of credit is bound to prove
just as ruinous to a bank as to any other merchant” and so it is a lesson now being
re-learned by mortgage lenders in the wake if the sub-prime crisis. The
reassessment of default risk on mortgage loans means that minimum LTV
requirements will inevitably fall and adverse premiums rise as banks and building
societies seek to minimize their potential losses in a falling market.

In other words, the availability of mortgage credit, the key driver for the UK housing market, looks
set to worsen as house prices fall.


When Will the Market Stabilise?
The short answer to this question is ‘When homes become affordable again.’
Currently they are not affordable for sufficient numbers of buyers to maintain prices
as they are. Hence a correction is taking place in the housing market the length and
depth of which will depend on both future interest rates and the health of the wider
economy.

More rate cuts are expected in 2008, although the onset of increasing
inflation due to soaring commodity prices may throw this trend into reverse in 2009.
It is worth remembering that house prices took six years to stabilise following the
disastrous crash in late 1989.



__________

The Home.co.uk Asking Price Index is produced in association with Calnea Analytics:
the statistical consultancy responsible for the production of the official Land Registry
House Price Index. It is calculated using a weighting system
based on the DCLG Survey of English Housing Stock


The HAPI is based on asking price data for 600,000+homes, which means the index can provide insights
into price movements around 5 months ahead of mortgage completion and actual
sales data - thus making it the most forward looking of all house price indices."


Tuesday, February 12, 2008 08:38AM Report Comment
 

2. Andyh said...

LOL I wonder whether the Express will post this result on its front page. This really is a big move down, more to come methinks - but the note of reality creeping into the commentary is the most interesting thing.......

Tuesday, February 12, 2008 09:00AM Report Comment
 

3. Davros said...

I'm sure the other surveys will follow, no matter how much they massage the figures. Then things will get interesting.

Tuesday, February 12, 2008 09:19AM Report Comment
 

4. geed said...

Weird the survey includes a figure for Scotland (-5.4% in 6 months!!!) but does not give any comment. I dont think Edinburgh has seen such falls. These are just asking prices, in Wales and England you will definitely trim a 000's of the asking prices and I hear that some fixed prices in Scotland are now going for under the asking prices (according to Su)....

Tuesday, February 12, 2008 09:22AM Report Comment
 

5. doomwatch said...

The home figures don't get the publicity they deserve in the press (wonder why). The only thing I find annoying about them in recent months is
their continual changing of time buckets to represent the drops.

On thing is for sure now. The spring bounce bunny has just recieved a head shot. Rabbit pie for Anne, David & Kirsty ?

Tuesday, February 12, 2008 09:32AM Report Comment
 

6. su said...

@geed

According to ESPC 13 September 2007, 14 Avon Drive Linlithgow was advertised at FP £105,000. Nethouseprices.com. lists 14 Avon Drive as being sold for £91,000.

This is probably one of the larger drops, but any price drops are encouraging.

If anyone has any back copies of property papers it's easy to check for price falls in your area.

Tuesday, February 12, 2008 09:47AM Report Comment
 

7. inbreda said...

"Rabbit pie for Anne, David & Kirsty ?"

Dunno. Does it taste good with hat?

Tuesday, February 12, 2008 10:02AM Report Comment
 

8. converted lurker said...

I likes Home.co.uk, a highly credible organisation proving that you can be truthful and ethical in this market place, take a contrarian stance and still build a respected business. Their data is highly respected, their methodology completely sound IMHO.

Tuesday, February 12, 2008 10:15AM Report Comment
 

9. Chris B said...

I'm waiting for the March and April figures as spring is the best time for the housing market !! .

Tuesday, February 12, 2008 11:32AM Report Comment
 

10. crash bandicoot said...

Yowsers that looks like the sort of stuff that I write! How did that slip into the public domain? I always suggested that there will come a point (probably when growth tuns negative YOY) that all of the usual suspects will have to start talking sense if they want to retain credibility. Nationwide and Halifax are hanging on to their 0% growth dream for the moment, but you can tell from Fionnaulla's face that she does not believe it. Better to tell it like it is than to lose your credibility.

Tuesday, February 12, 2008 01:25PM Report Comment
 

11. techieman said...

I cant believe they quote old Ludwig!!! Must have been reading this site!

Tuesday, February 12, 2008 01:44PM Report Comment
 

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