Tuesday, Dec 30, 2008
Monthly -1.9%, annual -12.2%
Land Registry: November 2008 Results
The data for November shows an annual house price change of -12.2 per cent and a monthly change of -1.9 per cent. This is the teenth month in a row where annual price change has decreased.
This month's data continues the strong downward trend in house prices. The average house price in England and Wales now stands at £161,883, similar to February 2006 levels.
Sales volumes have continued to decrease, with the number of sales averaging 48,599 per month in the months June to September 2008.
Posted by nopensionnohouse @ 11:22 AM (1382 views) Add Comment
17 Comments
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1. nopensionnohouse said...
teenth = fifteenth of course!
2. paul said...
It should be remembered that all sorts of sales are 'edited' from this data set - house sales due to divorce, forced sales due to redundancy, bankruptcy, repossessions.
In fact, this is by far the most carefully pruned and clipped data there is. The real state of the market must be appalling.
3. maddison said...
Err that is not strictly true about taking all bad data out. Repossessions are excluded and rightly so as they are not a free market transaction... Normal sales due to divorce are included if both partners move out. A property transfer from one spouse to the other is also not a free market transaction. We need to be clear about exactly what the housing market is.
In my view I would say it is how much I would get for my house if I wanted to sell it to move... Yes it is down about 15% how much it is worth if I had to sell via auction forced sale or whaterver would be about 40% I reckon. but even in the boom years a forced sale still attracted a discount of 10-20% How do you suppose many of the professional BTlers still have equity as they didnt get carried away like so many amateurs and they actually bought at discounts...
When I sold my flat I had an investor interested and right at the last minute he pulled out saying the price was too high. ie he wasnt getting a discount - abortive costs of at £1000 at least on both sides. Couple of weeks later got £10k more from a single guy working in the movie business.... Straight after I sold the property I joined this site waiting for the crash to justify my decision to sell........ took another year though. What is going to be interesting is when I sell my late mothers house early in 2009. As soon as it is on the market I will start a topic thread if I can figure out how, as it doesnt work on firefox on a mac.
4. greytornado said...
What Paul says is correct. The data therefore must be viewed with extreme suspicion. I read an article in the Mail a couple of weeks ago pointing out that many sales have been excluded obviously for political reasons. Land Registry says that repos sold by auction etc., are not a true reflection of the market. This is an outright lie and a blatant attempt by HMG to try and disguise a market that is really in free fall. I feel so annoyed by this political interference, that I think I shall write to my MP. (Fat lot of good that will do, but at least it will bring the matter to his attention. I live in a Tory constituency).
5. greytornado said...
Maddison added his article whilst I was still .typing. I don't like taking individual issue, but an auction is a free market transaction. They are advertised and anyone is free to attend and bid.
6. mark wadsworth said...
@ Greytornado, they have to exclude repo's as they use 'repeat sales regression' - they look at relative changes in price where a house is sold and sold again a few years later. Comparing a "normal" sale in 2005 with a repo/auction in 2008 is not really a fair comparison. Thus excluding repo's understates falls on the way down, that is true, but if they were included it would either overstate or understate rises on the way up. It would be unfair to compare a repo/auction in 2000 with a "normal" sale of the same property a year later, for example, or to compare a "normal" sale in 2005 with a repo/auction a year later.
As I have said before, we can safely assume that HMLR November figures are the same as Nationwide September figures i.e. m-o-m minus 1.7%, y-o-y minus 12.4%. So it is quite possible that Nationwide don't include repo's and auctions either - possibly because they don't lend on them (?).
To cut a long story short, the HMLR figures are of absolutely no interest, really.
7. paul said...
Maddison, if off-plan purchases can be included in the data (they are), then "off-plan" repossessions should be too.
The current registry data are formed from a politically-motivated pastiche - cherry picking some sales data but excluding others. From their own site:
The following are excluded from our figures
1. All commercial transactions
2. Before Jan 2000 - All sales below £10,000 and over £1million .
(On line data for Jan 2000 onwards includes details of these sales).
3. Transfer, conveyances, assignments or leases at a premium with nominal rent which are:
* ‘Right to buy’ sales at a discount
* subject to a lease
* subject to an existing mortgage
* to effect the sale of a share in a property
* by way of a gift
* by way of exchange
* under a Compulsory Purchase order
* under a court order
* to Trustees
* Vesting Deeds
* Transmissions or Assents
* of more than one property
* Leases for 21 years or less
That's actually quite a huge chunk of price-depressing sales data ripped out from the statistics. What is the housing market if not the market in its entirety?
8. maddison said...
OK I take your point about auctions but the sellers are rarely actually willing ie they are mostly distressed sellers... or properties that are not mainstream
PS I wouldn't believe everything you read in the papers especially the Daily Mail.....
9. Northern Bear said...
What a staggering list of things to exclude - and all of them likely to influence prices towards the downside. Reminds me pretty much of the CPI, which excludes everything which is likely to reflect the true rate of inflation. Why as a nation have we allowed ourselves to be treated is such a disgraceful way by such low calibre politicians?
10. monty032 said...
It's interesting that the heaviest regional fall was in the South-East at -3.2%. That's a fall in one month of £6,538 for the average house, or £211 a day.
11. maddison said...
I am predicting Gordon will have to nationalize the UK banks to get credit flowing. When that happens the market will pick up again.
12. techieman said...
maddison ... i predit a riot :-).
13. ontheotherhand said...
If commercial transactions are excluded, does this mean buy-to-let done through a holding company is excluded? If so I would think this makes up a significant portion of the small sales volume at the moment since these are likely to be distressed/forced sellers, or even to be generous - rational sellers i.e. they will take an offer but an emotional private seller of their home just sulks in denial and repaints the kitchen instead.
Also since it excludes new build, all the stuff being dumped by the developers is excluded. I would suggest that buy-to-let plus new build together are a large share of the market these days and we might expect a large difference between Land Registry and other numbers for this reason
14. nopensionnohouse said...
I wonder if there is the same information available for commercial property? Anyone?
15. maddison said...
Funnily enough commercial property is in trouble to IPD index is the thing to watch.
16. luckyjim said...
It's easy to pick holes with all of the indexes. 'Average' figures with various methodologies are of limited real use. They are a no more than broad indicator that the market is falling.
The market is complicated and the way the market is changing is as imteresting as the overall fall.
17. justwatching said...
Which index includes auction prices then??