Monday, Jul 28, 2008
House prices now back to October 2006 levels
Firstrung: UK house prices now 4% lower than July 2007 as London prices begin to crash - Hometrack
House prices in England and Wales have fallen for the 10th consecutive month during July, losing a further 1.2% of their value, figures released by Hometrack today have shown.The latest annual rate is the lowest since the survey began in 2001 and sets a new record for the most months showing consecutive house price falls. Hometrack also reported that the falls were heaviest in southern England, particularly London...
Posted by converted lurker @ 09:27 AM (1127 views) Add Comment
12 Comments
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1. paul said...
Bbbut the Daily Express promised ...
2. beartil2010 said...
Come on, we all know the crash won't affect London
What were all the reasons again, I can't remember?
3. mark wadsworth said...
I like the October 2006 comparison.
According to Halifax figures, we're back to early 2006, and if prices fall at the same speed for the next six months (i.e. another nine per cent or so) then we're back to early 2005.
4. growler said...
@Mark Wadsworth: What would a -35% inflation adjusted bring us back to? Perhaps we should start a countdown... I can't see the confidence return for a long time - which means 2003 values?
5. beartil2010 said...
Another thread/article said US house prices are recovering now - how can this be true when inventory is down and banks aren't lending, does anyone know?
Prices are down there about 20% aren;t they? I would expect some drops before any recovery?
6. renting2 said...
beartil2010 @ 5 - try this site:
http://patrick.net/housing/crash.html
7. mark wadsworth said...
Growler, spot on, a 35% fall from August 2007 peak would get us back to May 2003 prices (£130k average), which were still more than twice as high as in 1995 £60k average (that's all time low in terms of prices-to-earnings ratio).
8. jack c said...
FROM FT ADVISER
House prices drop again in July
Story by: Gemma Westacott Magazine: FTAdviser Published Monday , July 28, 2008
House prices have dropped a further 1.2 per cent this month (July), making it the tenth consecutive monthly drop in prices.
According to the latest market analysis from Hometrack published today (25 July), prices have now fallen 4.4 per cent over the last 12 months.
Hometrack said this is the lowest annual rate of growth since the survey began in 2001 and has caused average house prices fall back to a level comparable with those last seen in October 2006.
The 1.2 per cent fall in July followed a 1 per cent fall in June and 0.5 per cent drop in May.
However, the National Housing Association claims that the UK property market will rebound from its current slump by 2010 and, in fact, prices will rise about 25 per cent by 2013. (See story.)
On current market conditions, Hometrack director of research Richard Donnell said: "Indicators of market activity across the housing market remain weak with the survey highlighting a 20 per cent drop in demand over the last three months.
"Transaction volumes have been the greatest casualty of the decline in demand over the last 12 months - the vast majority of homeowners simply do not need to move. This is also reflected in the fact there has been no major expansion in the supply of homes for sale over the last quarter."
The increased downward pressure on prices has also caused the proportion of the asking price being achieved to slip from 91.6 per cent to 90.9 per cent over the last month. This is the lowest level since the survey began in 2001.
Pricing is weakest in London and the South West, where the proportion of the asking price achieved is just 90.2 per cent. The highest is 92.4 per cent in Yorkshire and Humberside.
Donnell added: "The majority of recent price falls have been concentrated in southern England where prices have declined off a relatively high base after the strong growth through 2006 and the first half of 2007.
"With no immediate end in sight to the current uncertainty, activity levels are likely to remain suppressed with prices remaining under pressure into the autumn."
The time taken to sell a property has also increased. This now stands at an average of 11 weeks, up from 6.5 weeks in June last year.
9. beartil2010 said...
'Asking the NAR about housing is like walking into a used car dealership and asking the salesman if today would be a good day to buy a car'
I'm starting to feel better
10. growler said...
@:Mark: Thanks - it was a guess. Copied that link as well - very useful. How do you see inflation in this? Obviously the Halifax data includes inflation as it's market prices at time of lending. If it's 35% actual over a 2.5 year period (say flatlines Oct 2009 to May 2010) I see the impact of inflation making the fall around 25% for this HPC versus a more flattering fall in the 1990s
11. converted lurker said...
IMHO September/October 2005 prices are the first 'support level' to be breached, iirc that's the point at which the BoE reduced interest rates to "protect the housing market" when it was so obviously beginning to reach its peak. Everything there-on was simply hot air. I reckon the 2003 price sugested is a reasonable assumption, brings us back in line with that long term graph versus affordability issue so many of us have pinned our reps on..
12. mark wadsworth said...
Growler, Nationwide do inflation adjusted prices
http://www.nationwide.co.uk/hpi/downloads/UK_house_prices_adjusted_for_inflation.xls