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Warwickshire Lad

Very Disappointed With Lr Figures

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I am going to make no secret of the fact that I'm disappointed with the Land Registry figures today, and I'm willing to bet that other FTBs and STRs who have seen the report feel the same way as I do.

It's now been a full year since the market officially "turned", after interest rates were raised to 4.75%. But what has happened ?

Look at the figures - prices are at this point still higher than what they were this time last year, and it's more or less across the board - that is what the Land Registry figures are saying. I say this with sadness because it is the LR figures I trust the most to accurately portray what is happening in the market.

As we're all aware, the rate of incrased in prices has slowed and yes, volumes are well down.

But there's hardly any signs of price falls whatsoever. Not when you look at the table of London boroughs which arguably reach their peak a few years before the rest of the country.

Not even when you look at a place like Swansea where there's supposed to have been big falls - in both cases I hardly see any nominal prices lower than at the "peak" this time last year, and I see the vast majority as higher.

In my area of Warks, semi-detached are now at £168,937 from £156,771 last year. They've not even dipped lower or stayed static. The only glimmer is that terraces have wavered a bit, but I can't make anything of it.

Some final thoughts.

1) Perhaps the EAs of Britain would rather go bust because of a 50% drop in business than actually make any concerted effort whatsoever to start slashing prices in any meaningful way. Obviously they still haven't woken up to this.

2) I do not think that the cut in IRs to 4.5% will help the market much, but it has pissed me off because I feel it is yet another attack on FTBs trying to save a deposit.

3) I am still NOT buying because I will NOT be ripped off - but for the market to crash like it did in 1989 needs a much more definite and tangible shock. Until we get that I think that nominal prices will just drift rather than fall sharply (but I'd like to be proved wrong).

Perhaps some bears on the forum could offer some thoughts on this (bulls not invited unless you're willing to be sensible). Are you disappointed with the LR figures too or did they show what you expected ?

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I say this with sadness because it is the LR figures I trust the most to accurately portray what is happening in the market.

I suppose people attach such importance to the LR figures because they show the final sale price. Two important problems though i) they aren't mix adjusted . ii)imo they are way out of date.

On this last point think about it. The price is agreed. Average time to completion 2-3 months. Then delays in getting the property registered can take up to a further 2-3 months.

I think the most important thing to come out of LR results will be transaction numbers. I haven't read the report. What does it say about this?

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it is the LR figures I trust the most to accurately portray what is happening in the market.

I think this trust is probably misplaced. The LR figures are not without flaws, just like any other set of figures.

http://www.odpm.gov.uk/stellent/groups/odp..._023922-03.hcsp

Dwelling Size

The Land Registry does not collect information on the size of each dwelling sold* (e.g. number of rooms, number of bedrooms or square footage), yet this is a very important explanatory variable in determining reliable, mix-adjusted average house prices. (* Note that whilst Land Registry requests information on dwelling size, conveyancers are not compelled to provide the data - so only five per cent of returns have this section completed)

http://www.nationwide.co.uk/hpi/historical...methodology.pdf

http://www.fool.co.uk/school/2003/sch030613.htm

http://www.find-a-property.com/story.aspx?storyid=6579

the Land Registry figures are questionable on three counts.

First, their figures are not adjusted to take account of statistical blips. If, for example, there is a large increase in the number of detached houses in a given sample the average price will be pushed up because detached houses are generally more expensive.

An increase in the number of flats sold, on the other hand, would result in the overall average price being dragged downwards because flats are usually cheaper than houses.

Second, the figures are based on averages from the total number of completions, which makes the data a bit behind the times - other reports measure prices at earlier stages of the house buying process: they use asking prices, mortgage approvals or sales agreed data.

Third, Land Registry figures are published on a quarterly basis, and about a month after the quarter in question, which really makes them part of the historical archive - an authoritative archive, no doubt, but definitely not an up-to-the -minute snapshot of the market

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I am going to make no secret of the fact that I'm disappointed with the Land Registry figures today, and I'm willing to bet that other FTBs and STRs who have seen the report feel the same way as I do.

It's now been a full year since the market officially "turned", after interest rates were raised to 4.75%.  But what has happened ? 

Look at the figures - prices are at this point still higher than what they were this time last year, and it's more or less across the board - that is what the Land Registry figures are saying.  I say this with sadness because it is the LR figures I trust the most to accurately portray what is happening in the market.

As we're all aware, the rate of incrased in prices has slowed and yes, volumes are well down. 

But there's hardly any signs of price falls whatsoever.  Not when you look at the table of London boroughs which arguably reach their peak a few years before the rest of the country.

Not even when you look at a place like Swansea where there's supposed to have been big falls - in both cases I hardly see any nominal prices lower than at the "peak" this time last year, and I see the vast majority as higher.

In my area of Warks, semi-detached are now at £168,937 from £156,771 last year.  They've not even dipped lower or stayed static.  The only glimmer is that terraces have wavered a bit, but I can't make anything of it.

Some final thoughts.

1) Perhaps the EAs of Britain would rather go bust because of a 50% drop in business than actually make any concerted effort whatsoever to start slashing prices in any meaningful way.  Obviously they still haven't woken up to this.

2) I do not think that the cut in IRs to 4.5% will help the market much, but it has pissed me off because I feel it is yet another attack on FTBs trying to save a deposit.

3) I am still NOT buying because I will NOT be ripped off - but for the market to crash like it did in 1989 needs a much more definite and tangible shock.  Until we get that I think that nominal prices will just drift rather than fall sharply (but I'd like to be proved wrong).

Perhaps some bears on the forum could offer some thoughts on this (bulls not invited unless you're willing to be sensible).  Are you disappointed with the LR figures too or did they show what you expected ?

From Q1 to Q2 14% fall or £40.000 off the average home in Oxford :lol::lol::lol:

That’s a lot more then even I was expecting

http://www.landregistry.co.uk/propertypric...e/ppr_ualbs.asp

Disappointed - No

Shocked - Yes

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I will honest, they are a dissapointment.

But it won't change the fact that prices are still way to high for average salaries, and that transaction numbers have fallen dramatically.

Large ships take a long time to slow down and to turn round, but equally, they have a lot of momentum once they have turned.

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I think the most important thing to come out of LR results will be transaction numbers.  I haven't read the report.  What does it say about this?

England & wales transactions Q2 2004: 299,986

England & wales transactions Q2 2005: 216,890

Greater london Q2 2004: 36,643

Greater london Q2 2005: 26,249

Looking around, there seems to be between a 25% and 35% drop in transactions for almost every area and almost every property type.

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From Q1 to Q2 14% fall or £40.000 off the average home in Oxford :lol:  :lol:  :lol:

That’s a lot more then even I was expecting

http://www.landregistry.co.uk/propertypric...e/ppr_ualbs.asp

Disappointed - No

Shocked - Yes

Blimey yes, Oxford looks like it's plummeting. Interestingly too, volumes seem to have risen. End of denial perhaps?

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Looking in my area of bristol @ city center Flats

£198,581 Oct-Dec 04

£181,197 jan-Mar 05

£168,233 Apr-Jun 05

From Dec 04 to Jun 05 they have lost about 15%

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THE PROBLEM IS.. the LR figures are too slow a form of feedback...

Example: The house I was lodging in in Basingstoke was on for 200K Sept 2004. Dropped to 189K by around end Oct. Finally sold just after Christmas for 182K. That's nearly a 20% drop - the listing only appeared on nethouseprices.com a couple of weeks ago. That's 7 month old news of a circa 20% drop, from a house that's taken 10 months to get from original advertisement to the new owners moving in...

The LR prices are way too slow a feedback mechanism to precipitate a crash.

PW

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Guest Riser

I tend to agree the delay in registering sales and reporting these frigres means thay are typically 3 - 6 months behind the market.

Just received an email notification from

Debt Fact and Figures - Compiled 5th August 2005

"The number of first-time buyers in the housing market during May shrunk by more than half that of the previous month, reports the National Association of Estate Agents (NAEA) and stood at 10.9% of all buyers."

If that figure is accurate then a 50% reduction of FTB in just one month means the market is stuffed B)

Edited by Riser

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Blimey yes, Oxford looks like it's plummeting. Interestingly too, volumes seem to have risen. End of denial perhaps?

I also noticed the increase in sales?

So another three months and thats that, the crash could be over for Oxford ;)

Edited by smarty

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I am going to make no secret of the fact that I'm disappointed with the Land Registry figures today, and I'm willing to bet that other FTBs and STRs who have seen the report feel the same way as I do.

It's now been a full year since the market officially "turned", after interest rates were raised to 4.75%. But what has happened ?

Look at the figures - prices are at this point still higher than what they were this time last year, and it's more or less across the board - that is what the Land Registry figures are saying. I say this with sadness because it is the LR figures I trust the most to accurately portray what is happening in the market.

As we're all aware, the rate of incrased in prices has slowed and yes, volumes are well down.

But there's hardly any signs of price falls whatsoever. Not when you look at the table of London boroughs which arguably reach their peak a few years before the rest of the country.

Not even when you look at a place like Swansea where there's supposed to have been big falls - in both cases I hardly see any nominal prices lower than at the "peak" this time last year, and I see the vast majority as higher.

In my area of Warks, semi-detached are now at £168,937 from £156,771 last year. They've not even dipped lower or stayed static. The only glimmer is that terraces have wavered a bit, but I can't make anything of it.

[unquote]

I know what you mean, looking at the figures for Sussex areas, prices appear to be a bit higher than this time last year. Not much consolation for those of us that are getting a bit jaded with the whole sham of a mockery.

I know it's early days yet, but a drop in transactions still does not mean the market is crashing just because that is what happened last time. I could also mean we are having the dreaded soft landing (i expect i'll get flamed for uttering such a profanity). Until i see ASKING prices dropping (Nationally) then i still won't believe it. At best it seems to be localised.

To put it into perspective, a decent 2 bed house in my area costs around £190K - £200K. Even a 50% crash is still not enough to make it affordable to Mr or Mrs average over the long term of a mortgage.

Edited by Tentpeg

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For my postcode area in London...

Average terrace Apr-Jun 1999 - £115,762, number sold 16.

Average terrace Apr-Jun 2000 - £152,493, number sold 24. (+31.7%)

Average terrace Apr-Jun 2001 - £179,138, number sold 31. (+17.5%)

Average terrace Apr-Jun 2002 - £185,042, number sold 19. (+3.3%)

Average terrace Apr-Jun 2003 - £226,181, number sold 22. (+22.2%)

Average terrace Apr-Jun 2004 - £226,496, number sold 27. (+0.1%)

Average terrace Apr-Jun 2005 - £227,772, number sold 11. (+0.6%)

To me this shows the boom may finally be over, with no real increase in 2 years. Infact, taking inflation and wage inflation into account there has already been a sizable drop since 2003.

If we're still hovering around zero % next year it could signify a plateau or 'soft landing', but with the general public waking-up to the prospect of a bubble I can't see that happening.

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Oxford volumes might be higher than they were last quarter but they are a lot lower than the 2nd quarter of 2004. This quarter is 423 sales, that was 698. I know that there are lots of late returns but there's have to be 275, or 65% of the current total, to match last year's sales.

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I am going to make no secret of the fact that I'm disappointed with the Land Registry figures today, and I'm willing to bet that other FTBs and STRs who have seen the report feel the same way as I do.

I think you have been expecting too much from these figures. The property market is like a supertanker and it takes a long time to turn.

Also, as has been pointed out, the LR figures are not mix adjusted. This means that, for example, if there were more sales of expensive properties than there were sales of cheap properties, then this will skew the LR figures to show an increase. I think this partially explains the rise. The transactions first dried out at the bottom end of the ladder. FTBs stopped entering the market. Further up the chain, people are still trading, so that leads to a larger number of sales in more expensive properties, which will skew up the LR average price, as it is not mix adjusted.

Secondly, we are not going to see significant falls in the LR figures until the denial phase is over. The LR data show significant drops in transaction volumes. The "missing" transactions are all those vendors that have had their properties on the market for months on end and are refusing to lower their price. Of course, some mugs somewhere are still buying at today's inflated prices, and it is those transactions that enter the figures and give the illusion that prices are still stable or slightly rising. It is only when the denial phase is over, the vendors start slashing their asking prices to get a sale and these transactions enter the figures, that we will see marked drops.

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Sorry if someone else brought up this point but the key thing is that these price rises only represent places which have sold....

When the drop of in volume comes (as it has obviously has) the price figures become increasingly inaccurate since they are now measuring a subset of the market of properties for sale. Inevitably the places that do sell are the better houses, in more desirable areas, which the remaining subset of ill-informed and prepared to pay buyers snap up.

Don't lose heart, where the volumes lead the prices will follow.

As we can see the LR data has been trending several months behind the Hali-wide-track "Approvals" data which is still heading southwards.

If you build a house price bubble, crashes will come.

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Guest wrongmove
It's now been a full year since the market officially "turned", after interest rates were raised to 4.75%.  But what has happened ? 

Remember the LR figures are for completions. So Q3 2004 figures include property sales that were arranged last Spring, Q2, when the market was very frothy, but not completed until the summer, Q3. These sales will not be drop out of the figures until the Q3 data is published in November.

To summarise, it has been a year since the market "turned", but only 7-8 months, in "LR time" (2-3 months between arrangement and completion, the another couple of months to collate and publish all the data.)

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To summarise, it has been a year since the market "turned", but only 7-8 months, in "LR time" (2-3 months between arrangement and completion, the another couple of months to collate and publish all the data.)

Thanks wrongmove for this reply and for others'. Playing the waiting game is a tough business.

I've been largely patient so far, but whenever figures like this come out it sends my temperature upwards !

Hopefully the November figures will show negative YoY. At this time I'm now looking towards the winter as the next time where me might see some more serious price-cutting "action" coming from EAs. I wouldn't rule out some sort of energy/oil crisis happening during the winter as well. Seasonal weather is surely bound to put even more pressure on oil prices.

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Sorry to be so 'I told you so' - but I've been saying for a few months now - prices aren't dropping.

The bears can twist and turn all they want but prices aren't dropping. You only have to go and look in the EAs windows, prices are not dropping.

So you will all have to be patient - about 10 years at this rate.

The rate cut (and more to come ?) is going to slow the thing down even further as it puts the day of reckoning off.

IRs have to go up, probably 1% to get the desired House Price Crash or alternatively a rapid and dramatic rise in unemplyment to create a lot of forced sellers. Neither are on the immediate horizon.

Crash postponed, soft landing continues.

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Sorry to be so 'I told you so' - but I've been saying for a few months now - prices aren't dropping.

The bears can twist and turn all they want but prices aren't dropping. You only have to go and look in the EAs windows, prices are not dropping.

So you will all have to be patient - about 10 years at this rate.

The rate cut (and more to come ?) is going to slow the thing down even further as it puts the day of reckoning off.

IRs have to go up, probably 1% to get the desired House Price Crash or alternatively a rapid and dramatic rise in unemplyment to create a lot of forced sellers. Neither are on the immediate horizon.

Crash postponed, soft landing continues.

I looked in the local estate agent's window. They have 3 displays each of 16 properties, 48 in all. Of these 18 had the price shown as a sticker covering the original price.

Of course, they could all be increases, but somehow I doubt it!

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IRs have to go up, probably 1% to get the desired House Price Crash or alternatively a rapid and dramatic rise in unemplyment to create a lot of forced sellers. Neither are on the immediate horizon.

Crash postponed, soft landing continues.

Oh? How did they get crashes in Japan and Holland with 0-2% interest rates and good employment? Maybe it was during the Autumn when all the leaves had already fallen off the money trees. That's it, seasonal factors. Still, little comfort would be gained by flying off to escape the autumn to, say, I don't know, err, Autralia maybe? They had a nice soft landing with low interest rates and good employment. Oh hold on, that's right, they went into a crash shortly after, must be somewhere else I was thinking of.

You should wrap up dear! It's getting chilly, there's some dark clouds in the sky today, autumn is approaching.

Later muffin ;)

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IRs have to go up, probably 1% to get the desired House Price Crash or alternatively a rapid and dramatic rise in unemplyment to create a lot of forced sellers. Neither are on the immediate horizon.

=

Sorry but having seen input figures today I suggest that the next move in IRs is most likely to be up. Additionally, the theory that oil will drop back down inprice isn't coming to fruition either so no bail-out clause there

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IRs have to go up, probably 1% to get the desired House Price Crash or alternatively a rapid and dramatic rise in unemplyment to create a lot of forced sellers. Neither are on the immediate horizon.

But are you a believer that the chickens will come home to roost ? I am.

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I am going to make no secret of the fact that I'm disappointed with the Land Registry figures today, and I'm willing to bet that other FTBs and STRs who have seen the report feel the same way as I do.

Warwickshire Lad - what were you expecting (serious question)? These figures are for April-June, so we already had a pretty good indication of what they'd be from the Halifax and Nationwide reports for the same three months.

It's possible (likely?) that the next quarter's figures will be YOY negative.

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