Friday, Feb 26, 2010
It's the snow, stupid!
Nationwide February House Prices: House prices slip in the winter snow during February
House prices slip in the winter snow during February
• House prices fell by 1.0% month-on-month in February
• Price decline may be explained by snowy weather and expiry of stamp duty holiday
• Too early to say whether February’s drop is start of a new trend
Posted by mark wadsworth @ 07:43 AM (2725 views) Add Comment
32 Comments
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1. phdinbubbles said...
Damn it Wadsworth, you beat me to the good news :-)
Houses always slip on snow don't you know - treacherous stuff.
2. wally said...
Good to see the economic fundamentals getting a mention. Also the note that fast rising prices are not good for ftb. Reading between the lines it may be that Nationwide are feeling that prices are heading for a reality check.
3. mrflibble said...
After 9 straight months of rises it is nice to see a fall, but only time will tell if it is a trend changer. The British people love to pay over the odds for housing.
4. estrader said...
BBC: "Little increase in household incomes and relatively high unemployment could also have put the brakes on house prices."
No, definitely not. Income and unemployment have nothing to do with house prices, it was the snow.
5. brickormortis said...
Chart 3 is very worrying indeed. Looks like the sheeple of britain have taken to gambling but probably through choice of last resort, unable to survive without take the reduced rates on offer for variable deals. The point is, if there is a run on the pound (and frankly, it is taking a pounding this week) then rates will have to be hiked and then the shit will hit the fan big time!
It also suggests that the market has been kept buoyant through homebuyers availing themselves of the low interest rates which, lets face it, cannot lost much beyond the next 6 months.
6. brickormortis said...
I mean tracker not variable. I mean, I do mean variable but the variableness of the tracker.
7. quiet guy said...
"Too early to say whether February’s drop is start of a new trend"
That seems pretty fair. I'd like to see three consecutive months of drops before I declare a new trend.
8. estrader said...
@7, Me too. Not because I want to buy a 'cheap' house, but because I want to see how creative they get with headlines.
-'House prices sink in the rainy weather as Brits stay indoors and update their Facebook pages'
-'House prices burn down in warm weather as Brits go to the beach instead of buying houses'
-'House prices blow away in windy weather as Brits prefer to fly kites instead'
9. ontheotherhand said...
They had better adjust their 'seasonal adjustment' secret sauce from now on to give them leeway to factor for the temperature, cloud cover, and who wins Strictly Come Dancing.
10. Xelon said...
Snow! I can tell you that if my wife fancied viewing a new property, I don't think that even a colcanic storm would put her off viewing a property, on the plus side first bit of negative news from the nationwide for a little while, even if it is with the usual vested interst spin.
11. taffee said...
how about 'house prices rise 9 in the last year'
12. wally said...
Blimey. Have the economic fundamentals changed that much since I studied economics 30 years ago?
13. happy mondays said...
How about house price falls due to, Post cyclonic gloom with some high pressure pushing in from the west & a cold wind from the east.
I do hope feb is the start of a new trend, i am fed up with EMO's..Maybe it is the Emo's causing the slight fall ?
14. sceneclub68 said...
Liking the 3 month on 3 month graph on page 3...
15. tenant super said...
What will happen to house prices if there is another steep sterling devaluation? If this doesn't feed through to wage inflation (and it certainly doesn't look like it will in the private or third sector) it would lead to inflation and decrease in disposable income which would add more downward pressure to prices? It could also precipitate an interest rate hike which would cripple borrowers. Individual foreign investors might buy prime London property in Kensington and Mayfair but I can't see there being any foreign appetite for a standard three-bedroom semi in home-county suburbia (which is what we'd be looking to buy if we change our minds about emigrating).
Therefore the biggest threat as I see it, is the mass purchase of residential property by large and medium sized landlords tempted in to BTL by tax relief/ subsidies as per the recent "supporting the private rental sector" paper.
16. tyrellcorporation said...
Um YES Wally, apparently we have a new paradigm where house prices go UP even during the worst recession in 70 years and where people are losing their jobs at record rates - and this is before the public sector cull gets under way.
'Brownomics - it's a miracle!' (.tm)
17. mark wadsworth said...
Continuing Estrader's list:
Run up to football world championships blow whistle on housing market.
Housing market under a dark cloud as bad weather deters homebuyers.
Wavering homebuyers await outcome of general election
Tenant, I can't even bear to read that BTL tax break paper, but they will surely, sooner or later, run out of ammo. The money to buy and subsidise these things has to come from somewhere, and money 'invested' in buying up the same old houses at ever inflated prices won't be invested in productive economy; taxes taken from the productive economy to subsidise house prices damage the productive economy and so on.
This can only lead to a Home-Owner-Ist death spiral (which, given the way our tax system has developed over the centuries, a development that has accelerated over the past few decades, is more or less inevitable). It's a bl**dy pyramid scheme, nothing more, nothing less, and the losses will always outweigh the gains (because there are winners from all of this, i.e. the smug sell-to-renters like me).
18. timmy t said...
Where is smugdog to tell us why the graphs on page 3 are in no way similar to our favourite lifecycle of a bubble graph?
19. jack c said...
Smugdog is very quiet these days - he must be snowed in
20. 51ck-6-51x said...
Martin Gahbauer said, "It is not yet clear what has driven the steady increase in preference for variable rate deals ... As long as the yield curve remains steep, the proportion of homebuyers preferring variable rate deals may stay relatively high, even though the next move in the base rate is much more likely to be up rather than down."
- A steep yield curve will encourage certain people into tracker land, you say it yourself.
He also said, "there is currently a 1.58 percentage point gap between fixed and variable rate deals"
- What about the current spread over base for the trackers? That is even higher (~2.25%), looks like there are some people who may get hurt pretty badly.
21. ontheotherhand said...
And more
Pound recovery deters foreign buyers (probably from 1.25 to 1.40 to USD by then)
Conservative win deters sellers as they wait for HIP to be cancelled
46% income tax dries up demand in South East in summer
22. mark wadsworth said...
OTOH, those aren't proper headlines :(
They should read:
"Housing market takes a pounding as sterling strength deters foreign buyers" (see also "Housing market takes a pounding as sterling weakens")
"Anxious wait for Torys' HIP operation"
"Taxing times for the housing market"
"Housing market dries up during summer drought"
23. mark wadsworth said...
"Anxious wait for Tories' HIP operation", obviously.
24. jack c said...
Nationwide and Halifax admit that house price falls could snowball
25. timmy t said...
Pound pounding as falling houses turn to rouble
26. ontheotherhand said...
MW You're a wordsmith. Did you write 'Gotcha' and 'Up Yours Delors' back in the day?
OK some more.
How about blaming it on foreigners as EU crisis hits - "Greek tragedy hits homeowners"
or migrant workers return "Polish Parish Vanish" story hooked on newly emptied school, church and housing
or after a positive month as Spain's ex-pats return desparate "Costa Losta Fortune"
Any better?
27. mark wadsworth said...
OTOH, that's more like it :)
But as to your last one, how about "Spanish property prices head south"?
28. mark wadsworth said...
Jack C, follow that one up with "House price gains melt away in Spring thaw"
29. brickormortis said...
Poundland takes a battering (The shop that is when we all run out of money!)
30. ana lytics said...
For the record, the seasonally adjusted Feb figure is -0.96% (rounded to -1.0%)............... however, the Non-Seasonally Adjusted figure is -1.32%............. (there's usually a +ve adjustment factor in Nationwide Feb data, so no suprise that the NSA figure is lower than SA.)
Over 3 months, the NSA figure is -0.89% (negative) and the SA figure is +0.88% (+ve)..........
The SA factor usually swings from +ve to -ve in March, so next month may also have misleading numbers (in the other direction, in our favour) .......there's usually a negative 90-100bp Adj factor in March (the highest Adj factor of all months)..... Hence, if the March NSA figure is less than +0.9%, then the published headline grabbing SA figure will probably be negative........... it's gonna be a close call....... Feb and March are normally the months with the largest +ve NSA rises (not this year though eh - all that snow!!!) - the average NSA March figure over the last 19 years is 1.29%.................
Conclusion - for me, an even bet on whether March SA figure will be +ve or -ve (but let's hope it's -ve eh?). 1 month could be interpreted by the sheeple as a blip, 2 months is much more convincing............... I'm cautiously optimistic, but worried that a lot of people will be trying to buy a place before the election - and march would be the month............
31. titaniccaptain said...
"House price gains melt away in Spring thaw".........................consider that headline nicked and stored for the Spring!!!!!
32. mander said...
Mark,
Again I think you place the most consistent and competent comments on this blog. I was expecting prices to fall soon and I think if house prices do not crush the pound will.