Friday, Mar 27, 2009
Still not enough......
Reuters: House prices fall 16.5 percent
LONDON (Reuters) - House prices in England and Wales fell 16.5 percent on the year in February, the Land Registry said on Friday.
Posted by mark @ 11:31 AM (1544 views) Add Comment
19 Comments
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1. Gooders said...
Ok lets se e this talked up by the EA's and VI's oh and Sibley hahaha
2. Foa4 said...
Think we have another 8% to go this year before prices stabilise and possibly go up by 5% next year.
However, should stamp duty be abolished in the budget on 22nd April until November 2009, I beleive that there things will stabilise as they are before the government try to buy themselves the next election and by putting the next generation (or two) in debt.
The hope would be that the pent up demand (there still is a huge shortgage of houses and the great British obession to own their own home) will keep prices high. Devaluing the pound will keep this mirage going with the hope that the Amerian recovery begins early in 2010 and that sweeps across the world (which is what normally happens).
Gordon is living dangerously !
3. mark wadsworth said...
As ever, they are just lagging The Nationwide by two months, Nationwide's December 2008 y-o-y fall was 15.9%.
http://www.nationwide.co.uk/hpi/historical/Dec_2008.pdf
4. 51ck-6-51x said...
mark wadsworth -
Yes, although not quite, since Nationwide only consider lending data, so cash purchases don't hit it. Nationwide do a sample mix-adjustment too.
Looking at the two together may help indicate a point just after the market bottom (i.e. cash purchases increase into the bottom, and demand greater discounts then mortgage purchases then start to pick up as the lending market realises the bottom has past) - just a thought, what do you reckon?
5. mark wadsworth said...
666 I have been tracking this since early last year - HMLR figures always lag NW's by two months, give or take 0.5% or so. Quite why and how this arises I do not know. Your theory is pretty cunning, but what relative changes would you expect to see - that HMLR then changes ahead of NW, or that NW changes ahead of HMLR? If the latter, then how is that different to now?
6. 51ck-6-51x said...
mark wadsworth -
I would expect to see a deviation emerge between the two (which we should have already started to see as credit dried up and prices started to fall, disuading all but the hardiest) - as you say 'give or take 0.5%, so worth looking at the history of this difference - and then a convergence once the lending market starts to take off again.
7. 51ck-6-51x said...
mark wadworth - of course if one had enough capital (or leverage ;p) one could make a market neutral play on this expected behaviour (and maybe some hedge fund somewhere is doing just that? - e.g. Renaissance Technologies.)
8. need-a-crash said...
"House price decline accelerates" - Nice headline from the BBC for once!
9. mark wadsworth said...
666 both indices are pretty rough and ready, and, if previous troughs are anything to go by, the troughs in both indices will be long and flat for a couple of years, in which time they will both show very small y-o-y pluses and minuses, i.e. noise.
10. uncle tom said...
Interesting idea - trying to balance cash sales against loans to call the bottom of the market; but i think if you put your faith in that alone, you might well catch a false dawn.
Better to wait until homes have become genuinely affordable, but are still perceived to be falling in value. We're a long way from that still.
~~~
Incidentally, 666 in the book of Revelations is a classic mis-translation. The earliest Bibles, correctly translated, give the number of The Beast as 616, which in turn is thought to be a coded reference to the Roman emperor Caligula.
Greek letters are associated with numbers, add together the numbers of Caligula's name in Greek and you get 616. Curiously, Nero's name adds to 666.
- Now, I bet you didn't know that! :)
11. uncle tom said...
Whoops, Hebrew, not Greek - silly me..
12. george monsoon said...
This report is all well and good, but when are we going to see this reflected in asking prices....
I know an estate agent and they refer to some database for thier asking prices (apparently a national database. but Im not sure which one) and the prices are still reflecting those of 2007!! does anyone have any info on this database and who updates it and how frequently?
As long as Estate agents fix the asking prices for sellers, this will continue, and yes I understand that the seller will get little or no interest in their property if it is on the market for this much, but doesn't this mean that the seller is misguided into wanting more than they should, and therfore not budging much on the asking price ??
All very confusing, and a little bit annoying.
13. Wonderwomand said...
No. 10 - Yes, I agree, Estate Agents are in denial - big time. They are still insisting on advertising properties for 2007 prices even though they are worth 16% less (according to these recent HMLR figures).... why oh why don't they just get a grip and stop being greedy and be grateful for a commission on something - surely anything is better than nothing?! It is indeed frustrating when you are househunting and come across obstinate EA's who refuse to actual advertise their properties at lower prices. It seems they haven't twigged yet, that if they do, they might actually sell something! Arrgh! lol.
14. 51ck-6-51x said...
uncle tom -
Sure 616 or 666, who cares ;p
By the way it is not translations of the earliest bibles, it was the discovery of a single fragment of papyrus, so that could easily have been incorrect.
I have read much on the bogus subject of numerology, but can't see anything in it. Pi is a good film though!
15. 51ck-6-51x said...
george monsoon -
Regardless of the advice of the agent if someone wants to sell their house and can only get offers of 20% or more below the suggested asking price they will take it, it just may take a while. If they are part of a chain they may well realise that they should gazunder on their purchase. It is a market after all.
16. house said...
As I have said previously, my last experience of the crash was that it took 3 years to bottom out and it probably then stay at the bottom for a long while. It would appear that this time around I understand that there are many cash buyers who had been waiting to purchase a property but thought they would wait until the price starts to drop but are panicked by so many conflicting comments means that they out there creating an artificial demand which has meant that the EA's are reluctant at present to encourage thier sellers to reduce their price as they are selling some properties at the near asking price. Once the cash purchasers demand has been satisfied which cannot last much longer, then more and more properties will stay on the market then perhaps reality check will set in. Be patient. Our time will come eventually.
Does anybody agree or disagree with my analysis ?
17. peter rocker said...
Mark - there is a bit of a discussion about the different indices that you might find interesting, here:
http://www.acadametrics.co.uk/ftHousePrices.php
The FT introduced their own index a few years ago due to the problems they saw with the existing ones.
18. quiet guy said...
@house
Just one comment. Talk of 'cash buyers' seems to come from VIs and housing bull in the media; I'm not convinced that there are many more cash buyers compared to the aftermath of the last crash. EAs would doubtless like FTBs to panic into buying now 'while they can' before everything is snapped up by the legions or rich investors.
19. Sybil13 said...
So Land Registry figures confirm 23 % from peak is that correct?
As I keep saying however, property prices in real terms are down 50% if you look at average loan to income ratios.
As you all know the FSA sent a loud message to lenders 2 weeks ago when Lord Turner said that he would cap loan to income ratios at 3xs' income or less to stop prices inflating if lenders started to lend irresponsibly all over again. (ie. over 4x's income / 125% LTV etc).
The Council of Mortgage lenders recently confirmed that the average FTB's mortgage is now 3x's income, and HBOS / Halifax figures confirm the average at peak was just under 6x's income, so lending levels have dropped 50% . So if sellers want to sell (OK there will always be the odd cash buyer that is happy to lose 50% on a property it would seem), but if sellers on the whole want to sell they are pretty soon going to have to drop prices 50% before the market will start to function again at anything like normal levels, and that does not mean at 2007 levels. With property prices down historically prices have risen 1 - 2% on top of inflation, so about 14 years minimum before they return to 2007 prices and only then in line with incomes. It is not a question of lending levels going back up to those that broke the banks but a question now of property prices falling in line with lending ratios.