Monday, Apr 19, 2010
Rightmove: +2.6% MoM
Express: HOUSE PRICES ROCKET AS FIRST-TIME BUYERS RETURN TO THE MARKET
The housing market has shown more signs of revival as asking prices rose by 2.6 per cent over the past month, according to figures released today by Rightmove. The ditching of stamp duty for first-time buyers of properties under £250,000, announced in last month’s budget, is believed to have boosted the traditional spring housing market price rise.
Property economists are hoping that the price rises coupled with the Bank of England’s decision to leave interest rates at a record low of 0.5% for the 14th month running, means the housing market could be entering a period of sustained growth. But Rightmove warned that over-supply could force prices down later in the year.
Posted by little professor @ 12:31 AM (3410 views) Add Comment
30 Comments
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1. montesquieu said...
More muppet headline writing from that formely grand institution ...
... where 2.6% asking price rise = house prices rocketing
... where first time buyers are reported as returning to the market with no evidence whatsoever being presented
beyond a joke really.
2. gone-to-colombia said...
Bull$hit
3. little professor said...
If you follow the Express's login, then the stamp duty cut, which was intended to help first time buyers, has actually done the opposite by forcing house prices even higher.
4. mrflibble said...
Headline should read:-
Property: UK continues to push all its chips in hoping like hell nobody calls its bluff.
5. paul said...
Daily Express Delivery: Hot and fresh on your doorstep!
6. paul said...
The BBC website will pounce on this like flies on ... a daily express delivery!
7. alan said...
Yesterday's Express had a Diana story on the front page. I think the Express seems to appeal to people who haven't caught up with the majority of the population.
It may be comforting to elderly homeowners to think everyone's home is "worth more", but I can't see anybody available to pay silly prices! Most of the folk I know didn't get a pay rise to keep up with inflation this year!
Asking the earth and getting what you asked for are two different things, in my opinion.
8. 51ck-6-51x said...
************************
Rightmove HPI April 2010
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9. estrader said...
Funny...I suppose if the Government announced it would provide a £10,752.67 grant for FTB, next months data would show that asking prices rocketed by £10,752.67. That is why politicians are politicians.
10. Matilda said...
What's going on, why should house prices go up, what's the point, people just want to live don't they. Why can't Estate Agents stop geing so greedy. If you are in a house why do you wan't so much for it when you sell it, all you need do is move from one to another, are you a bank! If so you will go under! Estate Agents are the curse of the housing market making people greedy. It's mad, prices from the 70's went up in small amounts as they should do and everyone could save and buy a home, now the wages are low and deposits too high, where will all this madness end. Only in the UK we have this crazy idea of owning a house to make money. A house is a house for goodness sake.
11. estrader said...
"which was intended to help first time buyers, has actually done the opposite by forcing house prices even higher."
Exactly LP. If FTB’s want any hope of getting on the property ladder they should be demanding that the Government stops ‘helping’ FTB’s!! Unfortunately, FTB’s, like politicians, do not understand, but what is worse is that they do not understand that they do not understand.
12. mystie010 said...
Round my area, I noticed that prices were becoming even more silly than usual. However not a lot is moving and those properties that have been on for a while are slowly starting to reduce their asking prices. They seem to want to 'try it on' and then reality seems to kick in and they will knock five grand off. The bottom line is that how many people who bought before 2000 could now afford to go back and buy that self same house again if they had to? Not many I suspect. This is why I'm hoping it all calms down soon. High prices means less sales I guess, but in this market it is anybody's guess.
13. doomwatch said...
Ahhh the spring dumb drums have started. Perhaps the ONS should adopt the RM AP Index as a measure of "national delusion" as opposed to any other real or useful measure.
Clearly the EAs are punting up Asking Prices again to:
a. secure client business
b. there are greedy fookers
c. they are deluded uneducated cretins
14. 51ck-6-51x said...
"Spring sellers ignore pre-election concerns and increase average asking prices by 2.6% (£5,898)"
New marketeers get greedy while they think they can get away with it
"Choice increases as property supply shows some indications of outstripping buyer demand"
...and there are loads of them
"Tentative recovery threatened by the prospect of a hung parliament"
...but they do actually want to sell up.
Hey, Rightmove, where is your index of the spread between asking and sold prices? That would also be a useful measure to make given your huge data set.
Anyone got their methodology? I think one must email or call for it (!)
From the notes it looks like they use last one month of "new instructions":
"This month’s index measures the asking prices of 129,898 properties that estate agents have put on the market, meaning the weekly average has now been over 25,000 [per week] for the last two months."
It also seems they throw away some outliers:
"This month 13,965 properties have been excluded due to being anomalies."
I doubt their anomalies include those priced way above fair value / mortgage valuation - how could they without spending loads on such valuations? These must be those coming in at £125 rather than £125,000 or with no price or missing, necessary meta data. It seems quite a lot though.
Anyway, it would seem to follow that the vast majority of periods during which there is an influx of new sellers will show an increase since there is no effect on the index from price reductions since they are only looking at new instructions. They give us an earlier indication that the likes of Nationwide & Halifax (and certainly earlier than the Land Registry) but we have to wait to see if the level was actually justified - I think we need to analyse the correlation with time shifted registry data and asking spread over sold. Any volunteers?
15. jack c said...
Perhaps the Express should headline this extract from the article:-
"Experts have warned that a rush by property owners to sell up ahead of an expected hung parliament – which could spark a run on the pound and plunge Britain into more economic turmoil – may foreshadow another housing crash"
16. mark wadsworth said...
What estrader says. And that is exactly what they did in Australia and I think the USA.
Politicians being politicians, this might just work (for a while). Let's assume quarter of a million FTBs a year, "give" them £10,000 each, that's a nominal cost of £2.5 billion (i.e. chickenfeed as far as this government is concerned) and hey presto, prices up across the board by £10,000 - they have magically created 20 million x £10,000 in entirely illusory "wealth" = £200 billion.
People then borrow and spend a large chunk of that £200 billion, even if they only borrow and spend five per cent of it, at an average tax rate of about fifty per cent, that's an extra £5 billion in tax revenues for a £2.5 billion outlay.
What's not to like? Until it all goes horribly wrong, of course.
17. icarus said...
"intended to help first-time-buyers, has actually done the opposite by forcing house prices even higher".
"Ah, you've sussed it. Welcome to the game".
18. alan_540 said...
All very well upping the asking price but next months figures should be interesting as to how many houses sell this month.
19. mander said...
The headline should have been ""House prices rocket as deluded sellers return to the market"
If anyone thinks that the banking system has been fixed and CDOs will make a come back must be naive. It has just started with the lawsuit against Goldman and simillar action will come from EU after this election. It is only the taxpayer left to finace this rise in house prices.
.
20. Property Babe said...
I guess I'm just a deluded, naive, dumb blonde. I'll think about that while I'm counting the 140k I've made over the past 12 months.
21. Notyethomeless said...
The Rightmove asking-price index for the last couple of months has been leading the Haliwide indices - up one month while the others are down, then down the next month while the others are up.
Last month, Rightmove was flat (0.1%) so perhaps the Haliwide indices will show flat / negative sale prices.
The market is all on sentiment, so if we get election uncertainty, no rises in sale prices, and negative macroeconomics (and who knows, people stuck at home with no flights with supermarkets running out of strawberries and kiwi fruits) you might have a complete reversal of sentiment, and the next horrendous leg down of the crash. But that could just be wishful thinking.
22. smugdog said...
"Very much rattlementy" on HPC today as the great philosopher Stanley Unwin would say.
"Once a polly tighto............”
“Oh deep joy"
23. ontheotherhand said...
MW @ 15. Keep a copy of your post since I think they will do something just like that unfortunately. It's actually worse/better than you think. £10,000 to first time buyers would push all properties above it on the ladder up by the same percent, not just by £10,000. e.g. if first time buyers were paying 140 and the gift of 10 pushed it in short order to 150, that is 7%, so a place costing 280 half way up the generational chain will go up to 300, an increase of 20K.
24. Harre said...
Haha, I think it's funny to read the perma-bear reactions. I turned to this site when it was a fresh breeze and finger in the eye of the eternal optimists who blindfolded refused to accept that the market can go both ways, even the property market. However, now HPC is about as stubborn in its refusal to accept that the market can recover after a drop and that property is a popular "pension scheme" on this island. Get over it lads and realise that the recession is over. No, it's not going to be a return to the old days but if you're still betting on a 20% drop from here why don't you put your money where your mouth is and wager enough cash to retire once the "second dip" arrives. No takers? I didn't think so. A lot of mouth but no action.
25. Neil B said...
The reason that prices have risen is because EA have pushed the properties up nearer to the stamp duty threshold. There still isnt any sales though as no-one qualifies for a mortgage
26. holyroller said...
There have been properties here on the market for 2 years+ and they have put the price up a few times since putting them on the market. They aren't too worried about it not selling though, because they see the higher asking price as meaning it is worth more than it was 2 years ago and if it doesn't sell now, they will just be able to sell it for more later lol.
27. tenyearstogetmymoneyback said...
Alan - None of the people I work with got a pay rise last year. Howver, they did increase what we have to pay into our pensions by 1% of salary and announce 20% redundancies.
As for all the comments about asking prices going up people could be trying what was done successfully down the road from me -
Increase the price by £15K so that accepting an offer £35K below the asking price looks more generous.
28. it_is_going_with_a_bang said...
It doesn't suprise me. Still plenty of people out there who think the current prices will increase by 20% over the next 2 to 3 years.
Also many peoples fixed rates have reverted to 2.5% variable rate as many lenders pre- 2007 had a 2% above Base Rate cap on their variable rates - Lloyds being a good example.
So in fact many people will pay less now when their fixed rate ends. Obviously not the case for everyone.
My guess is nothing much will change until interest rates are pushed somewhat higher than they are now. But I fear the interests of those with existing borrowing or lets face it just "home owners" with an asset they wish to protect will always be far more important than those of the minority that "don't have a property they own".
29. Callaways Estate Agents Brighton said...
It's not surprising that Rightmove are releasing the figures, they do seem to be the ruler of the property industry. Regarding the figures, surely they cant be connected to the current government stimulates.
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