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Nationwide House Price Index


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I use the Nationwide inflation-adjusted house price index as the “reference index” for UK house prices.

We probably all know the historical graph by now, and after two “flat” (i.e. zero growth) quarters, I really expected some sort of fall for Q2 2005, and was quite surprised to see a £5k rise.

The only explanation I can think of is that the majority of sellers are “sitting tight” and are not willing to accept offers lower than the asking price; the Q2 figures are therefore based on a low volume of sales consisting of over-inflated prices.

Even so, I would have expected some sort of fall for Q2. The 2 flat quarters now look like some sort of kink in the ever-upward trend

Comments, anyone ?

http://www.nationwide.co.uk/hpi/historical.htm

Nationwide_Inflation_Adjusted__post_Q2_2005_.JPG

post-951-1120222249_thumb.jpg

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I really expected some sort of fall for Q2 2005, and was quite surprised to see a £5k rise.

===============================

Mr Wriglesworth from Hometrack has said that the "average"

house price (sales) figure is now distorted since there are much fewer

purchases of FTB (lower priced) property.

Similarly, I think nothing can be inferred from the average asking

price on EA boards, as the majority of these properties are not

selling.

Until we get the Land Reg figures in Mid-August, we will not know

what is actually happening out there.

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For all we know Natiowide's new mortgage book may be stuffed with loans on new builds. What price goes in the index - the one taking account of the mortgage paid for a year or two or the one that includes such deductions? Obviously same goes for the Halifax. This is another factor that could create large distortions between the Hometrack index and the lender's figs.

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Nico,

I've been using the HBOS data in a similar way. Their data also shows a rise, but it is no way close to £5k! Two things to remember with the banks. One their data refers to the mortgage, not the house price (heance Mr Wriggleworth's trantum yesterday!) and secondly that the mortgage does not just pay for the house!

Anyone, out there with a big debt who is buying a house can roll their debt into the mortgage and clear their credit cards etc. It makes sense because the mortgage rate is lower than the standard credit / loan rates by a significant amount.

The £5k rise could be the last few people onto the market rolling up their outstanding debts into their mortgage. With a fixed rate deal, and there are some good ones out there at the moment, could put them in the best position to survive what is coming!

Because the market is flat / falling slowly the measures are very sensitive to secondary effects such as taking out a bit extra to pay for past overspending. Unfortunately, it only works if people tighten their belts, hence the slow down on the high street.

It could be another sign of the hatches being battened down. We'll know soon enough, me thinks.

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The £5k rise could be the last few people onto the market rolling up their outstanding debts into their mortgage. With a fixed rate deal, and there are some good ones out there at the moment, could put them in the best position to survive what is coming!

Although I do not have the knowledge of the entire methodology to really know - what you're saying here sounds entirely feasible to me.

This is not just a house price bubble, it's a credit card bubble as well is it not ?

People know that these 0% credit card deals are coming to end so the next best thing is to put it on the mortgage !

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Even so, I would have expected some sort of fall for Q2. The 2 flat quarters now look like some sort of kink in the ever-upward trend

There doesn't seem to be any kink in the YOY HPI trend B)

Nationwide June HPI

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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