Monday, Mar 30, 2009
Lagging but relatively complete HP index down 2% for Feb; 16.5% YoY
Land Registry: House Price Index February 2009
The February data shows a continued decline in annual house price change, with a movement of -16.5 per cent. This is now the eighteenth month in a row in which the annual rate of house price change has fallen. The data shows a monthly change of -2.0 per cent, bringing the average property price in England and Wales down to £153,862. These price levels were last seen in September 2004. Sales volumes in England and Wales remain low in comparison to last year's levels. The average number of recorded property transactions per month was 38,830 between September and December 2008. In the same period the year before, sales volumes averaged 95,679.
Posted by 51ck-6-51x @ 10:42 AM (1115 views) Add Comment
11 Comments
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1. mark wadsworth said...
Nationwide is on course to go five-year-on-five-year negative in April 2009, so as HMLR lags by two months, that will go five-year-negative in June sometime (house prices were rising very fast in 2005).
2. str 2007 said...
Looking forward to seeing this survey at -25% from peak.
Surprisingly they are only about 17.5% down from Land Registry Peak so far.
3. growler said...
@2: IIRC most indices were at abour 16% at the end of the year - so Land Registry is about right for now. But with more falls to come, it will be bad news for months in the middle of aspirant agents' claims of optimism. Once we're at June, it's the end of the EA year really - plus also much more unemployment. Only one way to go
4. str 2007 said...
growler
Just hope the HPC falls are faster than my savings vanish !
5. mark wadsworth said...
STR2007, let's just ignore inflation for now (there is nothing we can do about it) and ask yourself, is your rent (minus modest interest on savings) a bigger cash expense than the nominal amount by which houses are falling in value?
Surely, the answer is no, it is better to pay 4% nominal rent than take a 15% capital loss on the chin.Taking the extreme case, the 1973-75 price crash, house prices were nominally flat, but interest rates were quite high, so you would have got one-third more house for your money in 1976 than in 1973 by renting in the interim.
This time nominal house prices are falling like a stone. Sure, there will be inflation in food, power, but this all reduces the amount that people have left to spend on housing, so will speed up the house price crash.
That's my theory anyway, unless somebody has a better way of looking at it.
6. little professor said...
Yes, but if str2007 has his str pot invested in the stock market rather than sitting in cash, he may have seen almost half of it disappear.
7. george monsoon said...
All well and good, but why are houses still being valued and put on the market at 2007 prices?
Why are they not being valued at 17.5% down?
I can't see the evidence, so I remain a sceptic.
8. str 2007 said...
mw & lp
mw
You're quite right in monetary terms I would in that case be better off. (see George Monsoons point @ 2.30pm)
lp
Fortunately I wasn't in the stock market to any great extent and cashed an under performing Barclays endownment when the market was up at about 6300 so did the right thing there.
Unfortunately I'm caught slightly between the Devil and the Deep Blue Sea in the respect that right now I can borrow a nice chunk of money as I've had 2 good years since starting my business.
However if this proves to be a very poor year which is quite likely, then even though next year may be the time to buy, I may not be able to borrow enough to do that.
I gave it alot of though over Christmas and in the end decided to keep renting for the time being on the basis there should still be quite a way for the market to fall, given it's still falling with interest rates as low as they can go.
Also I really don't see any pain out there yet, nothing like as bad as the 90's anyway and I think this recession will be worse not better than the 90's.
So I'm now in it for the long haul and who knows I may end with my house mortgage free (although we'd need to see 50% peak to trough actual falls to achieve that).
A big fall given Land Reg is at 17% off and sellers haven't even got their heads around this yet.
9. Sybil13 said...
That is 23% down from peak only another 28% to catch up with lending levels. HBOS / Halifax confirm average loan to income ratios at peak were just under 6x's. Council of Mortgage lenders confirm current average is now 3x's, 50% less how can this NOT translate into property prices? The FSA warned lenders that they would cap mortgages at 3x's or less to stop prices inflating if lenders started to lend irresponsibly again. Even Margaret Beckett "green shoots " queen earlier this year was quoted in the paper saying:
Housing Minister Margaret Beckett yesterday sparked fears of new property price falls when she said it was mad to say the market had reached the bottom.
She said there were signs new buyers were expressing interest.
But the senior minister warned: "Any politician who said we have hit the bottom of the market would be insane. Everybody is saying things are very difficult."
10. Bleakhouse said...
Just so Little Professor, but then had he followed the gold bugs and invested his STR pot in dollar denominated yellow stuff, he would have almost doubled his his money. (Gold price around USD650 in 2007 versus USD900 today and exchange rate £1/USD2 then and £1/USD1.40 today.
11. str 2007 said...
Yardy Yardy Yardy
What superb financial analysts you all are with hindsight.
if str had done this .......
what am I, a piece of meat