Friday, Jan 16, 2009
20% landmark fall in London, says Halifax
Halixax: Regional Q4 2008 figures
Halifax quartertly figs have quietly slipped out, with London's fall from peak figure breaching the 20% mark (20.91%). First time HPC will be able to post a fall in the twenties on its homepage. Roll on the thirties...
Posted by guoul at the train wreck @ 10:40 AM (20841 views) Add Comment
19 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. paul said...
Hurrah!
Market Forces - improving affordability for first time buyers better than any half-baked government scheme ever could!
2. My Final Offer said...
Great news! I'll leave it to someone else to have the glory of completing the sentence:
And a 20% fall wipes out a ___ % rise...
because I can't remember! Could someone please post a conversion table to work these %changes out?
3. Papabear said...
I am still a bit sceptical about the average salary figures. Is the avg. salary really 51K in *greater* London and 35K in the resto of the UK? Seems a bit high to me. Or is this amongst FTBs? Can anyone elaborate?
4. paul said...
The average salary in the UK is nothing like £35k.
The average salary is extremely selectively sampled - the figures are used as a flag of convenience to imply better affordability than reality.
The actual average salary, when all of the economically inactive are taken into account has actually plummeted in recent years to around £16k from a high of around £19k according to Will Hutton.
5. inbreda said...
@2 - I think the answer you are looking for is 25%.
Example, if a house is worth 80,000 and increases by 25% (i.e. 20,000) it is worth 100,000.
If it then falls by 20% (20% of 100,000 is 20,000) it is back to where it was, 80,000.
So it has annihilated 25% gains.
Mwaha.
6. Kelvin Newman said...
Yeah a lot of people basing their retirement on property gains are really going to struggle
7. mark wadsworth said...
This is my favourite bit ...
Over the last 5 years, house price growth in the capital is 9%
At some stage in the next six months we will be five-year-on-five-year negative!!!
Fionulala's going to be busy with her time machine
8. phdinbubbles said...
@My Final Offer
9. My Final Offer said...
@7 - Perfect, thank you!
I have a feeling I'll be enjoying using this graph over the next few months
10. Rentslave said...
But...
If prices rise over 10 years from 100k to 200k, then fall back in one year by 20% (to 160k), then that has wiped out 40% of the GAINS.
Isn't this what My Final Offer means??
(I accept the maths - it would require a 25% increase from 160k to get back to 200k)
11. paul said...
Not quite rentslave - this is only comparing two numbers, not relative to a historical number on the opposite side of a peak.
It's all good though, but you'll rarely hear the sentence "The 20% price fall has wiped out 25% price gains", because that's just rubbing it in for the people who like to talk about their portfolios at dinner parties.
12. phdinbubbles said...
@Rentslave
For the case of a rise from 100k to 200k it's simple to replot on the graph above for the percentage of the gains lost - it would be a straight line from 0,0 to 50,100 (bottom-left to top-right).
As inbreda says, a 20% fall annihilates a 25% gain, but to work out how much of a specific gain has been annihilated depends on where you start measuring the gain from - so you would need a seperate plot or table for each instance of percentage gain (or a three-dimensional plot) as far as I can see, unless I'm confused.
13. 51ck-6-51x said...
%_wiped_out = 100 * ((%fall / 100) / (1 - (%fall / 100)))
However, I much prefer to think in ratios, so instead of a 20% fall I would think of a multiplication by 0.8 then the formula is easier *much* to read:
wiped_out = 1 / fall - 1
i.e. fall = 0.2, so wiped_out = 1 / 0.2 - 1 = 1.25 - 1 = 0.25
That's 25% as per the above posts.
RentSlave - If you start to bring time into the equation you'll need to work out the risk-free rate and discount the cashflow, however this can only apply to realised gains, not to paper profits! (hence the word cashflow).
14. Tqo31 said...
All these figures are fascinating. I have just been emailed details from an agent about a suite of new-build terraced houses in Surrey originally marked up (in Summer 2008) at £625k, £599k and £649k respectively (when viewing the terrace left to right, so to speak).
They are now: £535k, £515k and £560k respectively - 'plot 3' is still clearly being position as 'the daddy'. However, these only represent respective price adjustments of 14.4%, 14% and 13.7%.
Does anyone have any insight into what it actually costs to build houses per square ft, and therefore what might be considered a sensible offer, cogniscent of further price falls to come, of course?
Anecdotally, I had heard a figure of £125 per ft2, but I am not in the building trade, so have no idea if that's a 'trade' or 'retail' guide...?
Whatever, if they're still for sale then they're still obviously too f*****g dear!
15. crashpad4me said...
I'm just rephrasing existing posts, but in accounting terms a quarter (say) on net equals a fifth off gross, and so on.
16. Orcusmaximus said...
Comparing house prices from different times is a bit silly unless you factor in inflation.
Taking house price figures from nationwide, and median wage figures from http://www.statistics.gov.uk,
we have:
2008 Q4 house price/2008 median wage = 156,828 / 20,801 = 7.5
2003 Q4 house price/2003 median wage = 133,903 / 17,508 = 7.6
Woo hoo! Houses are now cheaper than in 2003! It's still way off 3.5 though, unless you assume two earners per household.
17. dohousescrashinthewoods said...
By our own definition, set over a year ago now, (here: http://www.housepricecrash.co.uk/wiki/HPC_Definition) London has just crossed over from a "decline" to a "crash".
It's official folks.
How improbable that seemed back then and yet it we stuck by the writing on the wall.
18. Shelley said...
Hello, I have been following this website for over a year now. Its good to get another opinion from the bias news!!
If Halifax think the average salary is c.30000 plus either they are living in Gordon Browns new hypinflation or just totally crap stats!!
19. Shelley said...
I for one can not wait until the stats show 30%+ I do not wish people bad times, but I think the idea that you can make money from a living space must be the creation of a failed society!!! (We dispose of our grandparents, treat children like dirt but spoil them at the same and end up living on our own!!)