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House Prices Fell In May

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House prices fell in May - official data

UK house prices fell 0.8% in May, according to the government’s data on sales, contrary to the rises recorded by building societies.

UK house prices were 12.5% lower than in May 2008, having been 13% lower in the year to April - reflecting the fact that house prices were already falling this time last year.

The 0.8% fall in prices recorded by the Department of Communities and Local Government (DCLG) compared with the rises recorded by Halifax and Nationwide and Rightmove for the same month. It is also a sharper fall than that recorded by the Land Registry.

The DCLG said that the annual average house price paid by first time buyers in May 2009 was 14.8% lower than a year ago. By comparison average house prices paid by former owner occupiers were 11.6% lower.

The DCLG said the small fall in UK prices between April and May 2009 reflects falling prices for detached houses (1.5%) and semi-detached houses (1%) which was partly offset by rises in the average price of bungalows, terraced houses and flats.

Annual average house prices fell most in Northern Ireland (down 23.2%) and were only down 6.9% in Scotland.

Howard Archer, chief UK and European Economist at IHS Global Insight, said the latest data on house prices have been somewhat volatile.

He thinks the pick up in house sales will be gradual for some time to come given ongoing tight credit conditions and still relatively poor economic fundamentals. Archer still expects house prices to fall another 10%.

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maybe i'm getting confused in my old age but i don't seem to remember hearing much about DCLG? is their data mix adjusted and so on?

my own inclination, rightly or wrongly, is to focus on the halifax data only, just because they do the best publicly available spreadsheet.

these things are only an indication in any case. they're not much use when you're negotiating with some blinkered fool who's been trying to sell for 18 months and who has being mentally adding a grand or two per month to their idea of 'fair value' in the meantime given that HPAGU.

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maybe i'm getting confused in my old age but i don't seem to remember hearing much about DCLG? is their data mix adjusted and so on?

my own inclination, rightly or wrongly, is to focus on the halifax data only, just because they do the best publicly available spreadsheet.

these things are only an indication in any case. they're not much use when you're negotiating with some blinkered fool who's been trying to sell for 18 months and who has being mentally adding a grand or two per month to their idea of 'fair value' in the meantime given that HPAGU.

Assuming this is the same as the CLG?

DCLG provides lagging evidence on house prices as the office calculates its index at the time when mortgages are completed.

The majority of the indices in the UK are published at the end of every month or shortly after. As a result, they are not based on a full-month's worth of property transactions but a sample of that data.

For example, based on 2007 data, the CLG index is made-up of 50% of transactions made in the previous month, LR on 36%, Halifax 15%, Nationwide an estimated 7% and Rightmove 40%. As the number of transactions have fallen since 2007, lowering the samples used across the board, this raises questions about the accuracy of indices' predictions given the fact they are working on only a small sample of data.

The one exception is the FTHPI, which is based on 100% of LR transactions.

(FTHPI

Pros: It is the only index to constantly update itself so that it doesn't need to rely on sampling. All of the nation's house price transactions are taken into account, although this takes time.

Cons: It relies on 'forecasting' for its initial, immediate results released every month, which may affect its accuracy. )

CLG

Pros: this is prepared by the Office of National Statistics and aims to be the 'definitive' house price index using a rigorous methodology based on the Survey of Mortgage Lenders (SML) data

Cons: There are delays to receiving the SML data, information on cash purchases is not used and CLG only samples 50% of mortgages. This all affects its reliability.

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Right.

So literally the huge Halifax 2.4% increase for May could have been wrong... :blink:

It seems to me that all of these indices are probably very deeply flawed and that results for an individual month are probably useless. But there has been something of a bounce, well perhaps not a 'bounce' more of a stumble following a period of freefall, but it does seem that this summer's prices are no lower than this spring's prices, e.g. halifax has june down as the same as march, i do kind of believe that... all of the -1.8% for April, +2.6% for May, and -0.5% for June are almost certainly a nonsense individually but added up together they probably do mean something.

It looks to me as if there's a good chance that we'll finish the year in the high £140-something-k range, and if you'd offered that to me in january when we were on £164k i'd certainly have taken it.

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"Looks like I was wrong after all. I'd like to apologise to anyone who made a bad decision based upon my poor advice.

HAMISH_MCTAVISH, Aberdeen, Scotland"

:lol::lol::lol::lol::lol::lol::lol::lol::lol:

Hats off to whoever posted that comment on the Times blog...brilliant :P

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