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Acadametrics August 2010

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http://www.acadametr...August%2010.pdf

Index 226.5

Average House Price £222,454

Monthly Change 0.2%

Annual Change 7.7%

MAIN POINTS

Sales in London pick up by 22% but remain virtually static in all other regions in England & Wales.

Average house prices registered a 0.2% increase in August but, over the last five months, have remained largely static.

Year on year house price growth slowed to 7.7%, and is expected to slow further as 2010 increases fail to match those of a year ago.

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Damn, blast and bother!

This is based on land registry data so is subject to the usual 3 month lag. Also the lastest figure is an estimate based on an 'index of indicies' which will be revised when the LR data comes in.

Google the hometrack survey. It's much more bearish :)

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This is based on land registry data so is subject to the usual 3 month lag. Also the lastest figure is an estimate based on an 'index of indicies' which will be revised when the LR data comes in.

(...)

This is correct.

However it should be noted that the last four months have all been revised upwards, with the last reported fall (reported in June), being revised to a positive. These figures don't point to a market topping out, but a market that is flattening out. Unless something changes, this means that this winter could be the last buying opportunity for anybody seeking a nominal trough.

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This is correct.

However it should be noted that the last four months have all been revised upwards, with the last reported fall (reported in June), being revised to a positive. These figures don't point to a market topping out, but a market that is flattening out. Unless something changes, this means that this winter could be the last buying opportunity for anybody seeking a nominal trough.

Yes, we will have inflation, masking part of the fall, perhaps even most of it, but nominal prices, in sterling, should fall too, IMHO.

We will have a 6% annual reduction of government spending over the next 4 years, starting on April 2011, totalling around 25% in 2014-15.If they really do that, or close to that, then nominal prices will fall too.

And then the budget will only be balanced. We will still have a huge national debt to service, and (perhaps, eventually) pay back.

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Looks like the fall is over and HPI is back on track, the lack of any action by the government shows nothing has really changed and Nulabour policies are still in place - including most of the support for home owners who cant pay their mortgage. They are still going to be paid the average morgage rate.

Seem like the best approach is to buy a property, get a massive mortgage (as much as you can) and if you cant pay then the government will pay.

Which means that half will be left short - that's hardly encouraging HPI is it?

For me there are 3 things that the Goverment could do which would be a clear indication they want HPI:

1. Extend stamp duty holiday to all buyers (not just FTBs)

2. Extend the SLS (or defer payment, something along those lines)

3. Give subsidies/tax breaks to buyers (like in the US)

If none of these occur then IMO the Government whilst not ostensibly encouraging a crash, are happy for prices to fall.

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This is correct.

However it should be noted that the last four months have all been revised upwards, with the last reported fall (reported in June), being revised to a positive. These figures don't point to a market topping out, but a market that is flattening out. Unless something changes, this means that this winter could be the last buying opportunity for anybody seeking a nominal trough.

The LR figures always lag a bit so lets wait another 2 months and see where they start heading, this may just be exposing a big divergence between mortgage and cash purchases too for example i.e why the nationwide is doing one thing and LR possible another even if the lag is taken into account?

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Anyone else spot this in the report?

Lenders and the government must perform a financial balancing act to ensure supply does not begin to pull away from demand.

Why?

Also thought there was supposed to be a lack of supply overall out there?

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This is correct.

However it should be noted that the last four months have all been revised upwards, with the last reported fall (reported in June), being revised to a positive. These figures don't point to a market topping out, but a market that is flattening out. Unless something changes, this means that this winter could be the last buying opportunity for anybody seeking a nominal trough.

We won't know whether it's flattening to fall, flattening to rise again or flattening to stay flat until after.

I waited through 09 as prices rose again becaused I believed the correction wasn't over. I'm not going to buy now that prices have stopped rising!

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Anyone else spot this in the report?

Lenders and the government must perform a financial balancing act to ensure supply does not begin to pull away from demand.

Why?

Also thought there was supposed to be a lack of supply overall out there?

Yes that annoyed me too! What a terrible situation where buyers have a good choice of properties and do have to rush or try and outbid each other!

No ****** the buyers! Especially FTBs it's not like they are real people!

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How will half be short? They average mortgage is 3.5% but the payment is 6.08%, sure some will be short but some will still be overpaid.

They dont need to do 1 2 or 3, prices are rising now according to the Academics index of indexes and the halifax. They already gave a tax break to BTL by not taxing it at 40% which would be the same as the higher rate for earned income.

Because when the SMI rate drops to 3.5% it will be close to the average interest payment - therefore, roughly half those claiming will face a shortfall each month.

They did increase CGT tax though did they not? Again, if they wanted to encourage HPI don't think they'd have done that (and they probably would have increased it more if it wasn't for pressure from the VI media).

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Not accurate as it includes things like Rightmove who are just asking prices, not sale prices. Sellers are delusional at the moment and asking stupid prices, especially in London which inflates these statistics. For example:

http://www.rightmove.co.uk/property-for-sale/property-27570208.html (this person is delusional)

This property is 1km away, and has been on the market for over a year, which would you prefer:

http://www.rightmove.co.uk/property-for-sale/property-14670575.html

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Some comedy analysis in there...

David Brown, commercial director of LSL Property Services comments:

“The pickup in house sales since the start of the year dropped off in August. The exception is London where high demand for prized property from cash-rich buyers has seen housing market activity increase. Some buyers will be wary of imminent public sector cuts and the knock-on consequences for the economy.

In the short term we expect small fluctuations but no significant dip in the wider market. Regional differences may be quite stark as some areas of the country feel the effect of cuts more than others. Active first-time buyers are the key to a healthy housing market and most are waiting for more attractive products from lenders before they make a move.

“Lending has been broadly flat and house price growth has slowed, with neither likely to pick up again until positive economic news helps to ease lending conditions. Lenders and the government must perform a financial balancing act to ensure supply does not begin to pull away from demand.

Constable, HPC member comments:

"Housing activity looks like it's about to fall off a cliff. London looks to be experiencing the final blow-off before capitulation.

"It looks the market is rolling over and with the props being steadily removed we can expect significant falls from here on in.

"Lenders know the score, that's why they are not lending, and the government should stay out of it and allow the market to correct."

Edited by Constable

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Some comedy analysis in there...

David Brown, commercial director of LSL Property Services comments:

The pickup in house sales since the start of the year dropped off in August. The exception is London where high demand for prized property from cash-rich buyers has seen housing market activity increase. Some buyers will be wary of imminent public sector cuts and the knock-on consequences for the economy.

In the short term we expect small fluctuations but no significant dip in the wider market. Regional differences may be quite stark as some areas of the country feel the effect of cuts more than others. Active first-time buyers are the key to a healthy housing market and most are waiting for more attractive products from lenders before they make a move.

Lending has been broadly flat and house price growth has slowed, with neither likely to pick up again until positive economic news helps to ease lending conditions. Lenders and the government must perform a financial balancing act to ensure supply does not begin to pull away from demand.

Constable, HPC member comments:

"Housing activity looks like it's about to fall off a cliff. London looks to be experiencing the final blow-off before capitulation.

"It looks the market is rolling over and with the props being steadily removed we can expect significant falls from here on in.

"Lenders know the score, that's why they are not lending, and the government should stay out of it and allow the market to correct."

Has there ever been another industry where those within it know so little about the business they are in?

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Looking at those charts you have to be pretty delusional to see a downwards trend. Almost everything is up. Including two of the most recent figures.

Do you understand the meaning of the word 'trend'?

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Has there ever been another industry where those within it know so little about the business they are in?

Just classic denial.

I had an email conversation with an ex-colleague the other day and he gave me the benefits of his wisdom...

"As for the property market, bricks and mortar will always be great investment in the long term. Quite simply there is'nt enough land and property around to satisfy demand. In the short-term prices will remain static or lazy".

You'd never have guessed that he has a large mortgage and BTL would you?!!

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This is based on land registry data so is subject to the usual 3 month lag. Also the lastest figure is an estimate based on an 'index of indicies' which will be revised when the LR data comes in.

Google the hometrack survey. It's much more bearish :)

Phew! I was a bit down about the Halifax figure and was hoping that Acadametrics might cheer me up. I did my own little survey today and found out that while numbers of properties within my search criteria (which are pretty broad - see below) have doubled since April the number going STC have returned to the same level (2 - it was 10 in June). There was a new surge of properties onto the market in the last week and many were extending open invitations to their 'Get Moving' property event. (If they offer free wine I might go).

Search: Rightmove, Search Truro + 10 miles, any property, 3+bedrooms, £140 - £250k.

Incidentally - 49 price reductions within these search criteria so far in September (out of a total of 1112 properties - that's just September remember!)

Edited by Reluctant Heretic

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  • 239 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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