Monday, Jun 16, 2008
FT Index shows 3 month consecutive falls for first time since 1995
Firstrung: UK house prices fall for the third consecutive month- FT Index
UK house prices fall for the third consecutive month- FT Index Dr Peter Williams, Chairman of Acadametrics, comments, "House prices in England and Wales fell by 0.6% in May making this the third consecutive month of nominal price falls recorded by the FT index - the first time this has happened since April 1995. The average house price has fallen by £2,715 from a peak of £231,539 in February to £228,824 in May; back to where we were in August and September 2007."
Posted by converted lurker @ 10:14 AM (500 views) Add Comment
6 Comments
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1. mark wadsworth said...
Bizarre. We know that HM Land Registry figures lag about 2 months behind Nationwide/Halifax, but these guys are about six months behind the curve. Either prices are 5-plus % lower than last Aug/September, or they are about the same. Weird. This looks just as suspect as those recent DCLG figures.
2. converted lurker said...
they lag and shadow land reg. This is their tipping point IMHO. These falls should remain consistent from now on in though....not sure they are as 'suspect' as DCLG, but who knows, Caroline Flint could be whipping land reg into shape as we speak...
3. str 2007 said...
If you read the whole article it comments on how it's figures are reached.
Essentially this index is supported by property sales - mainly in London - that don't require mortgages. IE mainly very expensive ones bought with huge bonuses and by foreign investors.
The surveys that are of more relevance to the 'man in the street' are the haliwide ones which represent the larger proportion of properties and their likely value.
4. icarus said...
str 2007 - he says it's based on "all property transactions in England and Wales (i.e. cash sales and mortgage-backed transactions)" and on "final transaction prices". There has to be something wrong here. Prices peaked as late as February and dropped by no more than 1.1% by May?
5. str 2007 said...
Icarus
I know it seems strange that people were paying record prices after Sept2007 but I suspect that the numbers reflect people selling a £3m pad in London then moving out and buying a £1.5m pad in the country. Whilst they may have downsized, the 1.5m sale still may have been a record for that area and may represent the sale of 5 average houses in that area.
If average sales in that area were down then the 1.5m sale would skew the figures further than in a more bouyant market when more 300k sales were taking place.
With the collapse of the pound London property got 20% cheaper for foreign investors over the space of a few months.
And I believe there was quite alot of bonus money still looking for a home in the second half of last year.
Don't worry these surveys will have to catch up with others soon.
Sorry my last statement in 3 should have read 'represents the larger proportion of properties in the relevant price band and their likely value'.
6. icarus said...
str 2007 - Since the number of transactions has fallen substantially it's unlikely that the mix has remained the same, so there's every likelihood that no index is comparing like with like over the last several months - there's an implication in what you say that this is the case. Even so, prices peaking as late as February looks plain wrong, even if there is a 'London cash-buyer' effect that changes the mortgage-backed index of the building societies. Rich foreigners with a currency benefit still won't have paid above the odds in what has been a sliding market since last Sept-Oct.
The only ways I can reconcile this FT index with what I know is (a) small number of transactions, so possibly a different mix of properties transacted and (b) hidden sweeteners in transactions which give a false price reading.