Latest: House Price Crash News
Tuesday, Sep 28 2021 Add a News Blog Article
Latest Land Registry House Price Data [Huge M.o.M Drop]
UK House Price Index
"UK house prices increased by 8.0% in the year to July 2021, down from 13.1% in June 2021. On a non-seasonally adjusted basis, average house prices in the UK decreased by 3.7% between June and July 2021, compared with an increase of 0.8% during the same period a year earlier (June and July 2020). House price growth was strongest in the North East where prices increased by 10.8% in the year to July 2021. The lowest annual growth was in London, where prices increased by 2.2% in the year to July 2021."
Why could house prices not have a 75% Haircut?
Evergrande Haircut of 75% Is Now a Base Case for Bond Analysts
Is there does not seem any difference in the leverage based property investment firm and a general household? A common new mortgage probably has lower capital than the companies who finds itself unable to pay its debt and interest.
Record Highs BUT Annual Rate Continues to Slow
Latest: Halifax House Price Data [August]
Russell Galley, Managing Director, Halifax, said: “Average house prices climbed again in August, with the cost of a property increasing by 0.7% or £1,789. Back-to-back monthly price gains have now pushed the cost of a typical home to a record of £262,954, topping the previous high (£261,642) recorded in May this year. “We believe structural factors have driven record levels of buyer activity – such as the demand for more space amid greater home working. These trends look set to persist and the price gains made since the start of the pandemic are unlikely to be reversed once the remaining tax break comes to an end later this month.
Lest we forget (‘Q.E Revisited’)
Quantitative Easing Explained
Interest rate rise by 50%
South Korea becomes first major Asian economy to raise interest rates
A click bait title with a serious message. the rates have gone from 0.5% to .75%. The high mortgages have been taken out due to negligible interest rates to keep the total outgoings low. What happens when those outgoing go up by 50%? If Covid situation improves in a year or two, and rates rise by 0.5% to 1.0% would these people be able to re-finance at the same net outgoings I think we should stop looking at rates which are artificially low, but look at net outgoing (household cashflow) which I can see becoming distressed with the increase level of debt been taken or forced by govt policies.
Latest House Prices Data
HM Land Registry
UK house prices increased by 13.2% in the year to June 2021, up from 9.8% in May 2021. On a non-seasonally adjusted basis, average house prices in the UK increased by 4.5% between May and June 2021, compared with an increase of 1.4% during the same period a year earlier (May and June 2020). House price growth was strongest in the North West where prices increased by 18.6% in the year to June 2021. The lowest annual growth was in London, where prices increased by 6.3% in the year to June 2021.
Can the Nationwide HPI accurately predict the L.R data?
Nationwide Building Soc HPI 'vs' Land Registry HPI
I've taken both the monthly and the annual % change in house prices for both Nationwide and the Land Registry to see if they are the same or whether there is a difference when directly compared. Can the Nationwide data predict the L.R data released 2 months later? Thought I'd post as could be of interest...
Real House Prices
Reviews: Stop Getting Ripped Off
UK House Prices Graph
The UK average house price is now £255,535.
- As of July 2021 the UK Average House Price is £255,535.
- The House Price Index [HPI] now currently stands at 134.
- Property prices have risen by 8.00% when compared to the same month last year and have fallen 3.7% when compared to the previous month.
Source: Land Registry
UK House Price Index
| Source website | Period covered | Average house price | Monthly change (%) | Annual change (%) | Official releases |
|---|---|---|---|---|---|
| LSL Property Services & Acadametrics (England and Wales) | Apr 21 | £341,462 |  0.70 |
11.7 |
April 2021 (PDF) |
| Halifax House Price Index | Aug 21 | £262,954 | 0.70 |
7.10 |
Aug 2021 |
| Office for National Statistics [O.N.S] | July 21 | £256,000 |  3.70 |
8.00 |
July 2021 |
| Zoopla / Hometrack – Monthly National Survey | June 21 | £230,600 | 0.20 |
5.40 |
April 2021 |
| HM Land Registry UK HPI | July 21 | £255,535 | 3.70 |
8.00 |
July 2021 |
| Nationwide House Price Index | Aug 21 | £248,857 | 2.10 |
11.0 |
Aug 2021 (PDF) |
| Rightmove ‘Asking’ Price Index | Aug 21 | £337,371 | 0.30 |
5.60 |
Aug 2021 |
House Price Index - Greater London
| Source website | Period covered | Average house price |
Monthly change (%) |
Quarterly change (%) |
Annual change (%) |
Archive /Graph | Peak average house price |
Change since peak (%) |
Official releases |
|---|---|---|---|---|---|---|---|---|---|
| HM Land Registry UK HPI | July 21 | £494,673 | 2.00 |
N/A | 2.20 |
 |
£530,409 (Jan 16) |
6.70 |
July 2021 |
| Nationwide House Price Index | Q1 21 | £482,576 | N/A | 4.8 |
6.20 |
 |
Current Quarter (Q1 2021) | March 21 | |
| Rightmove ‘Asking’ Price Index | June 21 | £645,268 | 0.80 |
N/A | 0.50 |
|
July 2021 |
House Price Predictions
If you have discovered other or revised predictions that you’d like added to this list then send an email to us with all the information for each column and also a link to a website that contains the information so that we can verify the data.
This table is now sorted by the date that the prediction was made.
| Source website | Analyst | Photo | Date prediction made | Amount predicted | Region | Time Period | Evidence | Notes |
|---|---|---|---|---|---|---|---|---|
| www.cebr.com | C.E.B.R |  |
2020 | 13.8% |
UK | 2021 | |
”CEBR predicts that average house prices will be 13.8% lower in 2021 than in 2020.”
|
The outlook at the start of 2021 in terms of restrictions imposed by Covid-19, seems similar to that of March and April of 2020. After further easing of restrictions in 2021 we could therefore see what was experienced after the March lockdown ended in 2020 i.e. a surge in house prices. This was caused primarily by buyers scrambling for more space, both house and garden.
Flats and maisonettes could stand to make the smallest gains in 2021 whilst larger, detached properties with bigger gardens could again stand to see the most gain.
The data also shows that for 10 years average house prices in the UK were above the long term trend line but to date have spent a further 10+ years below it.
The data shown in the graph after Q4 2020 has been ‘forecast’ by continuing long term trends and further price rises. It shows UK average property prices could reach £275,000 by the end of 2022, nearly a 15% rise.
UK House Prices to Earnings Ratio
This is calculated by dividing the house price for a region by its earnings. That ratio then serves as an indicator of relative affordability.
A higher ratio indicates on average that it is less affordable for people to purchase a house in their region. On the flip side a lower ratio indicates higher affordability in that region.
Whether something is ‘expensive’ can be very subjective and affordability then plays a key part. Bear in mind, ‘expensive’ to one person might not be expensive to another, so that’s why it’s important to break the earnings ratio down by geographical region. It also highlights regional purchasing power.
The chart shows the average multiple of a person’s non taxed pay that’s required to purchase a property, in that particular region. For instance earning £25,000 per annum where a property costs £150,000 would give an earnings ratio of 6. The UK average is 6.2 as shown on the far right.
London has the highest multiple at 10.6 and the lowest region is the North of England at 4.2 closely followed by Scotland at 4.4.
By comparison over 20 years, from Q4 2000, this ratio has increased dramatically. This means house prices have risen faster than wages have increased, making property across the UK on average more expensive, relative to what people earn.
Have High UK House Prices Put Buyers Off?
The number of sold properties is down on previous years as shown in the chart but this could be a direct cause of the pandemic. However with interest rates being so low, [the Bank of England base rate is just 0.10%], this means that the cost of servicing a mortgage has actually been downtrending over recent years and is now about bang on the historical average.
Are First Time Buyers Priced Out?
Of course for first time buyers there is the issue of saving for a deposit. This however isn’t always saved from earnings. Bank of Mum and Dad plays a huge part as 40% of people in 2018-19 received help with a deposit.
This should actually come as no surprise, being that a 20% deposit is 104% of a first time buyers annual income.
First time buyers have a below average ‘earnings to property prices ratio’ of 5.2 and purchase less expensive properties than former owner occupiers. [data for England only]
In short, property has become more expensive relative to earnings over the last 20 years making it harder for people, who need to save for a deposit, to get on the property ladder. Once on the ladder though, the costs of a mortgage are at the historical average mark, meaning property ownership isn’t any more expensive than in previous years.
This could be taken as a clear indicator that the property market is not overheated.
Home ownership rates are at a 3 year high but still down on 2003 highs of 70.3% meaning there could be room for movement.
Prices increased 7.3% last year but are still down on 2007 highs meaning further growth could be possible plus property prices still remain well below the long term trend.
Interest rates are at a historic low meaning the cost of servicing a mortgage is ‘cheap’ and mortgage approvals are up, which is a good indicator of forward-looking demand.
Give us your thoughts? Can you see further house price growth this year or is a looming house price crash on the horizon?
