Monday, Jun 01, 2009
Yet another vested ramper clutching straws?
Telegraph.co.uk: House prices are up 4.2pc in real terms over the past three months
Says Ray Boulger at John Charcol..."Five months into 2009 it is becoming clear that just as most forecasts for house prices in 2008, including mine, were not pessimistic enough, nearly every forecast for 2009 is going to be too pessimistic. My forecast made six months ago for 2009 was for a fall of 8pc by mid year, followed by a modest recovery leaving the market a net 5pc down on the year. Despite the fact that my forecast was one of the least pessimistic I now think it is beginning to look too pessimistic." Hmmmm, let's see what happens next...
Posted by jvm @ 12:48 PM (1537 views) Add Comment
15 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...
As yet, no word from the Bank of England on whether interest rates will need to rise at the next meeting.
(Oh silly me, that would mean a return of Sensible Fiscal Policy)
2. bidin'matime said...
Instability, instability, instabilty...
3. Alan said...
Actually, all these positive signs are quite helpful. I guess it means our correction is basically over, and yet we can do this:
1) Without lenders loosening their lending criteria
2) Margins on products staying at Rate + 2% or higher.
3) No non-conforming (read: subprime) market
4) No BTL lending
5) No Self-cert lending
6) No High LTV products
7) and of course no capital markets (securitisation/RMBS) to provide cash supplies for lending
That's great news!
For the avoidance of doubt: I'm being sarcastic.
4. bystander said...
Is this asking or sold prices?
5. shipbuilder said...
I look forward to the next quarterly house price indexes. Last quarter, for the UK, from Nationwide, the drop was 4.2%. Could this really turn into a quarterly rise?
6. icarus said...
....and if it's sold prices, how many sales were there, and can we be sure that, given few sales, the figures are properly mix-adjusted, and whose inflation figures are being used to calculate 'real' prices etc.
7. 51ck-6-51x said...
Nationwide is based on sold prices from the data of mortgages Nationwide provided, so some of the effect could be their own book targeting (unless they mix adjust very well), and more is because this is not taking cash buyers into consideration at all.
8. Alan said...
Actually, Nationwide's figures are not sales at all, but down to a post-check mortgage approval. The actually sales have not yet been completed.
9. icarus said...
re mix-adjusted - people who can come up with the required large deposit will presumably be buying somewhat better houses. Given that the govt understates inflation you have to query the 'real rise' bit too. And of course those cash buyers - able to obtain lower prices - are very significant.
10. brickormortis said...
We really need to be careful about using averages and this is the whole point.
If first time buyers are priced out of the market due to high prices and low loan to value ratios then less cheap houses will be changing hands.
If first time buyers are excluded then the proportion of houses at the lower end of the market (ie cheaper houses) will be reduced and thus the average mortgage issued will be higher up the chain and thus this weighting leads to higher mortgage prices against higher priced houses but since THE SAMPLE IS NOT REPRESENTATIVE OF THE POPULATION OF ALL HOUSES then their will be a massive disparity. It is what any 13 year old maths pupil knows as biased sampling.
A simple solution would be to stratify the sample according to the proportion of properties in each strata of house prices. That way, we would not have a weighted, biased sample skewing reality.
Just a thought.
11. Greenshootsandleaves said...
Does he really believe his own propaganda? I suspect he does not. Not to worry! Just light the blue touch paper (the headline), stand back (couch it all in the vaguest of terms, enough to leave even seasoned HPCers guessing as to which precise figures are being used) and hope that the average reader's genetically inbuilt interest in, and yearning to profit from, property will take over. Like that, if things go pear shaped you can always point out that the actual forecast was in fact quite a cautious one.
We'll all doff our hats (we can always make one out of a copy of the DT) if he turns out to be right, but let's wait and see.
In much the same vein, it's a good idea to keep a copy of Mystic Meg's New Year predictions (I find the ones the newspaper chooses NOT to recall within the subsequent twelve months particularly entertaining).
12. Hiphater said...
I work in conveyancing and speak to some of the local estate agents regularly. The old hands who got through the last recession tend to tell it like it is. One told me that there aren't many new instructions around. That makes sense. It will also explain why prices are holding firm. Fewer properties on the market= higher prices. Supply and demand. Volumes are low so that will influence the stats as well.
13. Wake Up said...
The only people I know of buying houses at the moment are people who already have their own and maybe a few BTL on the go. Looks like the high rates on the high LTV mortgages is keeping FTBs out, while letting anyone with a bit of equity snap up the currently cheap properties while only paying half the rate. Very unfair.
14. Mmeg said...
So is that it : the last 18 months of falling house-prices just a statisical illusion of inflation adjusted figures. So, when CPI drops to zero, as the BOE claim, then will all the indices show house price have actually been rising.
Does the CPI take into account wages freezes or dropped. If not what are we to make of the current cpi figures.
With house price still as unaffordable and the market about to turn what will the BOE do? Keep interest rates low so that second-home owner and buy-to-let investor can hang on until the prices rise.
Low interest rates has done nothing to increase lender and the essential problem is the banks dont have the cash to lend. lets face it the press will talk up the market becasue most of the reporter are home owners.
15. new user 2007 said...
Note that he is using real terms..inflation has fallen over the same period, thus flattering his numbers.