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The Masked Tulip

London House Prices Record First Drop This Year

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May 17 (Bloomberg) -- London home sellers lowered asking prices for the first time this year in May as more properties were put on the market and tighter lending conditions restrained buying, Rightmove said.

The average house price in the U.K. capital fell 0.4 percent from April to 420,203 pounds ($614,504), the U.K.’s biggest property website said in an e-mailed statement today. In the year, prices rose 5.7 percent. In England and Wales, they rose 0.7 percent in the month to 237,134 pounds.

“Sellers are starting to reduce their pricing expectations to court the fewer buyers who are able to proceed,” Miles Shipside, commercial director of Rightmove, said in the statement. “The rising levels of unsold stock indicate that buyers are not as willing or able to act upon their pent-up moving desires.”

Prime Minister David Cameron, who took office last week, said Britain faces its biggest economic challenges in 40 years as he seeks to reduce the budget deficit while sustaining the economic recovery. While a lack of supply helped home values recover last year after a slump, banks are still only granting half the mortgages they approved at the peak of the housing boom.

http://www.businessweek.com/news/2010-05-16/london-house-prices-record-first-drop-this-year-rightmove-says.html

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Key points

Modest May increase in new sellers’ average asking prices, up by 0.7% (£1,622)

Surge of new sellers just before the election – the highest weekly figure since June 2008

Sharp rise in unsold stock as ‘broken’ housing market is unable to perform at required volumes – another issue for the new Con-Lib Government

Annual rate of increase drops to 4.3% as increased stock level begins to exert downward price pressure

Looks pretty good to me. Very bearish analysis.

http://www.rightmove.co.uk/news/house-price-index/may-2010

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The angel is in the details:

QUOTE from article

House-price declines in London were led by Newham, in the east of the capital, with a drop of 6.1 percent, and the central district of Kensington and Chelsea, with a decline of 4.3 percent. In Westminster, prices fell 4.2 percent. Islington recorded the biggest gain in values, up 3.3 percent. The number of properties being put up for sale almost doubled from a year ago, Rightmove said.
Across England and Wales, prices in the North recorded the biggest decline, dropping 1.5 percent on the month, followed by the East Midlands where values fell 1.1 percent. Home values in Yorkshire and Humberside gained 3.5 percent.

Quite large drops. At least 20% down by Crimbo (Yoy) IMO.

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The angel is in the details:

QUOTE from article

House-price declines in London were led by Newham, in the east of the capital, with a drop of 6.1 percent, and the central district of Kensington and Chelsea, with a decline of 4.3 percent. In Westminster, prices fell 4.2 percent. Islington recorded the biggest gain in values, up 3.3 percent. The number of properties being put up for sale almost doubled from a year ago, Rightmove said.
Across England and Wales, prices in the North recorded the biggest decline, dropping 1.5 percent on the month, followed by the East Midlands where values fell 1.1 percent. Home values in Yorkshire and Humberside gained 3.5 percent.

Quite large drops. At least 20% down by Crimbo (Yoy) IMO.

The chart of stock per agent says it all (p5 of Rightmove's report) - it is now at the level of April 2009, the trough of the last crash. It has been rising dramatically this year.

This can only lead to price falls. If you seasonally adjust this month's figures from Rightmove using their own data (1.5% average in May) you get a drop of -0.8%.

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Picture the scene: A tranquil and sunny day down by the pond.

A gentle breeze stirs a rustle in the leaves overhead.

A large flock of HPCers mill about on the surface of the water (the occasional quack can be heard).

Then someone throws in a scrap of bread....

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The chart of stock per agent says it all (p5 of Rightmove's report) - it is now at the level of April 2009, the trough of the last crash. It has been rising dramatically this year.

This can only lead to price falls. If you seasonally adjust this month's figures from Rightmove using their own data (1.5% average in May) you get a drop of -0.8%.

Are they already seasonally adjusted then? That would make an already bearish report almost crash like!

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Interesting to see but Rightmove means next to nothing, it'll take movement in the HaliWide indices to provide evidence of the next leg down starting.

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Picture the scene: A tranquil and sunny day down by the pond.

A gentle breeze stirs a rustle in the leaves overhead.

A large flock of HPCers mill about on the surface of the water (the occasional quack can be heard).

Then someone throws in a scrap of bread....

I like that picture. For a moment, I was there... then you mentioned the bread and I remembered my caveman diet... wheat is your enemy...

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Don't all get too excited.

Remember that when Rightmove say 'prices are up', we all roll our eyes and say 'Rightmove measures asking prices which are meaningless anyway'.

We can't suddenly decide that asking prices are important after all, just because they're going our way.

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Don't all get too excited.

Remember that when Rightmove say 'prices are up', we all roll our eyes and say 'Rightmove measures asking prices which are meaningless anyway'.

We can't suddenly decide that asking prices are important after all, just because they're going our way.

This is true.

Still fun though, especially when taken with the home.co.uk report.

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Interesting to see but Rightmove means next to nothing, it'll take movement in the HaliWide indices to provide evidence of the next leg down starting.

True, asking prices don't mean much. It does show agents are starting to realise that if they value to high they just won't sell.

It would be interesting to find out if the index takes reductions onto account. I assume not.

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Don't all get too excited.

Remember that when Rightmove say 'prices are up', we all roll our eyes and say 'Rightmove measures asking prices which are meaningless anyway'.

We can't suddenly decide that asking prices are important after all, just because they're going our way.

Yeah, but, no, but...

Seriously though, I'd say there's a different psychology regarding the two directions. Sentiment and false hopes can drive asking prices up, but only reality can bring them down...

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The angel is in the details:

QUOTE from article

House-price declines in London were led by Newham, in the east of the capital, with a drop of 6.1 percent, and the central district of Kensington and Chelsea, with a decline of 4.3 percent. In Westminster, prices fell 4.2 percent. Islington recorded the biggest gain in values, up 3.3 percent. The number of properties being put up for sale almost doubled from a year ago, Rightmove said.
Across England and Wales, prices in the North recorded the biggest decline, dropping 1.5 percent on the month, followed by the East Midlands where values fell 1.1 percent. Home values in Yorkshire and Humberside gained 3.5 percent.

Quite large drops. At least 20% down by Crimbo (Yoy) IMO.

Then again of course when Rightmove produces some stats to say prices up everyone screams vested interest... go figure.... for my money those holding out for another 90's style crash are just whistling in the wind... the correcttion will come but overtime so anyone waiting will have a long, long wait I suspect before theres any worthwhile change to a house you actually want to buy... particularly in the south east and london.

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my source at rightmove has informed me that the index is compiled using properties as they come on to the market and does not include price reductions.

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my source at rightmove has informed me that the index is compiled using properties as they come on to the market and does not include price reductions.

Might be worth suggesting to your source that the figure be re-calculated each week as in Berkshire/Oxfordshire i have noticed that more and more properties are having prices reduced within the first month of being listed.

Another thing, do you happen to know if a property which is being advertised by several EA's, does it get counted just the once regardless?

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  • 259 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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