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Fthpi - House Prices In May Fell By 0.7%

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FTHPI NEWS RELEASE 09:30 FRIDAY 12TH JUNE 2009

England and Wales house price trends from Acadametrics

• House prices in May fell by 0.7%

The average price of all property transactions completed in England & Wales in May 2009 was 0.7% lower than in April. This is the fifteenth consecutive month in which prices have fallen, but it is also the fifth month in succession where the rate of decline has been below 1.0%.

• Prices are now 14.1% lower than a year ago

On an annual basis, the average price of all completed transactions in England and Wales is now 14.1% lower than a year ago. All ten regions in England and Wales are showing prices falling on an annual and monthly basis.

• London has fallen into line

London's prices have been falling rapidly in recent months and the annual fall in May is only exceeded by the South West, East Anglia and the South East.

Dr Peter Williams Chairman of Acadametrics said

“The average house price has fallen well below the £200,000 mark and at £197,145 is now back to where it was in December 2005, that is more than 3 years ago.

“However at -0.7% the rate of decline is a third of the peak monthly fall recorded some six months ago, at -2.2% in November 2008, and the data do suggest that the sharpest falls are behind us and that the rate of decline has now slowed.â€

http://www.acadametrics.co.uk/FTHPI%20News...%20May%2009.pdf

Dr Peter Williams, Chairman of Acadametrics, comments,

“The average price of a home in England & Wales is now £197,145, ie, down £35,000 (£34,684) since its peak in February 2008 at £231,829.

“On a three month rolling basis, where we take the average figures over a three month period, the monthly fall over the last three months has consistently been showing -0.8% on a completions basis.

“The evidence from the FTHPI is in line with other indices taking into account the different bases used and the point in the process where price is measured. The FT house price index is based on the point where the actual sales price is recorded by the Land Registry at the date of completion. Estate agent indices are based on the asking price of the seller, at the time the property is first put on the market, and thus are more a reflection of the seller’s aspirations than the price achieved, with many a seller subsequently lowering the price to find a buyer. The lenders’ indices are based on property valuations at the time a loan is granted to the borrower, and again may not reflect the final figure agreed between buyer and seller.

“Overall the evidence suggests that the market is moving closer to ‘bottoming out’ but this could still take some months and the potential for relapses remains. It does begin to suggest that some of the more dire predictions for the market have been unduly gloomy. There is currently more positive news regarding the economy as a whole, and since housing tends to lead the recovery this does provide grounds for limited optimism. Transactions are up, and though mortgage supply remains an issue even here there are some indications of improvement (mortgage approvals are up and there has been some easing in terms of product availability along with increasing consumer confidence).

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Guest KingCharles1st

So we are nearly back to the Autumn '05 interest rate drop.

Factor in NO HP inflation (say5%p.a.) ans deduct your interest on the loan

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At least someone is still saying things are going our way!

Yes, but in fairness even the Nationwide and Halifax have been at pains to point out that regardless of the latest figures, things are still going our way.

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At least someone is still saying things are going our way!

Perhaps. Certainly the methodology seems to smooth out the noise from the various indexes. These figures do get revised though, as the LR data comes in, and they have been revised in a less crashy direction every month so far this year.

http://www.acadametrics.co.uk/FTHPI%20Deve...%20May%2009.xls

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I think the FT figures are billed as the most accurate index but I also think that the smoothing they apply also leads to it being the most lagging index. In the article it says the peak was Feb 2008 which supports this view.

I think the FT index will turn positive in a couple of months (unfortunately).

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At least someone is still saying things are going our way!

Yeah and I think they'll continue to fall for a while still despite all the ramping.

I have to thank this site for saving my ass twice now, being weeks away from exchanging in November 2007 on a 300k "project" (the £2k lost in legal fees valuation etc was the cheapest lesson I have ever had!!) and again at the end of 2008....just a bit too busy at work to thank all you guys but love reading!

I have also recently made it my business to befriend a couple of estate agents around me and from what they have been telling me over 80% of recent transactions are cash buyers who are happy to pay up after selling 12-18 months ago. They admit to still pricing properties 10% above what they think they should be marketed at as they expect buyers to offer at least 10% off the price!

EA's have helped get us into this mess in the past however the decent ones are now praying for prices to drop further...YES REALLY!. They know they are quickly going out of business due to the lack of supply, and "rising prices" are not helping them at all....vendors are "waiting" for a return to "normality" (2007 prices) however the sooner the media stop ramping like hell the sooner homeowners will face up to reality and get out while they can meaning more houses will flood the market, EA's can go about their normal business with the ultimate hope that anyone under the age of 35 can actually buy a house to live in without signing away their lives to debt!

It is just a waiting game now but one I am happy to play!

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pleasing but there seems to be so many squillion of these indexes and indicators [including some that are obviously meaningless such as those that are not mix adjusted and/or seasonally adjusted or that are based on asking prices] that, rightly or wrongly, i only really pay attention to haliwide, and to be honest only really halifax, mostly because they put together a nicer spreadsheet.

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From the May results pdf :

"House prices in May fell by 0.7% / The FT house price index is based on the point where the actual sales price is recorded by the Land Registry at the date of completion."

I wonder how they get the LR May'09 completion figures when they haven't been published yet by LR , or am I missing something very simple ?

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