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Tired of Waiting

London Prime Down 2.4%. Primelocation, September

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.............It is frothier at the top! (As I've said before. B) )

From Primelocation, September, http://www.primelocation.com/house-price-index/

London Prime Down 2.4%

London "Prime Platinum" down 2.8%

AND! With the new cap on benefits (£500/week including Housing Benefits), prime London will fall even faster - THIS WINTER !!!

regional-prime-property-values.gif

Edited by Tired of Waiting

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Just wondering - do you know what kind of methodology Primelocation use to work out what is and what isn't 'Prime' property?

If it is based purely on the price bracket for that given location, could it be the case that, once a house falls substantially in price it could fall out of the Prime bracket entirely, meaning that it is no longer counted in their index?

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Just wondering - do you know what kind of methodology Primelocation use to work out what is and what isn't 'Prime' property?

If it is based purely on the price bracket for that given location, could it be the case that, once a house falls substantially in price it could fall out of the Prime bracket entirely, meaning that it is no longer counted in their index?

Indeed. Clever eh? There's is no ceiling, but there is a floor for "prime".

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Indeed. Clever eh? There's is no ceiling, but there is a floor for "prime".

FTSE 100 does this too. every 3 months IIRC.

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Just wondering - do you know what kind of methodology Primelocation use to work out what is and what isn't 'Prime' property?

If it is based purely on the price bracket for that given location, could it be the case that, once a house falls substantially in price it could fall out of the Prime bracket entirely, meaning that it is no longer counted in their index?

# Prime – incorporating the top 25% of all UK property by value

# Prime Platinum – incorporating the top 10% of all UK property by value

Here: http://www.primelocation.com/house-price-index/#ixzz11afCPMw5

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There's no subprime in London.

There's only; Platinum, Premium, Great, Good, and Up&Coming.

Edited by Money Spinner

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Are these asking prices?

Apparently so:

Prices at the top end tail off

Following the first dip in asking prices for Prime and Prime Platinum prices for several months during August, prices have continued to fall throughout September.

The UK’s Prime property prices fell by 0.7% to £453,879, while Prime Platinum UK properties fell by 0.6% to £634,622. It is not uncommon for the property market to go into a lull over the summer months as would-be buyers take holidays which can, in turn, lead sellers to reduce prices.

However, of potentially greater significance is that Prime prices in September are 1.5% lower when compared to the same month in September 2009. On an annual basis, Prime Platinum properties continue to stand firm, increasing by 0.4% between September 2009 and September 2010.

Here: http://www.primelocation.com/house-price-index/#ixzz11afpKIe6

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Most portals track asking prices and therefore give an indication of the future direction of the market. It will be interesting to read the RICS survey. Our own research as mentioned on another thread uses actual prices achieved on the date of exchange from all leading agents and shows record prices achieved in the third quarter (many of the properties have not completed). However, many agents are reporting falling applicant numbers and a rise in supply, which would account for asking prices dropping off. With negative real interest rates there is very little pressure on owners many of whom probably do not have a mortgage.

http://www.johndwood.co.uk/surveyors/research-publications

James Wyatt FRICS

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Most portals track asking prices and therefore give an indication of the future direction of the market. It will be interesting to read the RICS survey. Our own research as mentioned on another thread uses actual prices achieved on the date of exchange from all leading agents and shows record prices achieved in the third quarter (many of the properties have not completed). However, many agents are reporting falling applicant numbers and a rise in supply, which would account for asking prices dropping off. With negative real interest rates there is very little pressure on owners many of whom probably do not have a mortgage.

http://www.johndwood.co.uk/surveyors/research-publications

James Wyatt FRICS

I think you should post on here more often. It would be interesting to hear an (honest?) agents view on things.

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Most portals track asking prices and therefore give an indication of the future direction of the market. It will be interesting to read the RICS survey. Our own research as mentioned on another thread uses actual prices achieved on the date of exchange from all leading agents and shows record prices achieved in the third quarter (many of the properties have not completed). However, many agents are reporting falling applicant numbers and a rise in supply, which would account for asking prices dropping off. With negative real interest rates there is very little pressure on owners many of whom probably do not have a mortgage.

http://www.johndwood.co.uk/surveyors/research-publications

James Wyatt FRICS

That is interesting. Thanks for posting.

Buit your chart for Prime Central London shows a drop of more than 30% in HP in less than 1 year!? From around Mar 2008 to Jan 2009!? (Index 180 / 260 = 0.692307692)

Did central London houses really fell 30% in less than 1 year?!

Edit to add: http://supadu.com/images/ckfinder/54/pdfs/Prime%20Central%20London%20Property%20Graph%20and%20Index%20October%202010.pdf

______________

Or a fall of almost 40% in Notting Hill ? !

150 / 285 = 0.526315789

http://supadu.com/images/ckfinder/54/pdfs/Notting%20Hilll%20House%20Graph%20and%20Index%20October%202010.pdf

Edited by Tired of Waiting

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I never saw any evidence of 30% reductions, but I think in Spring '09 there was a big disparity between asking prices and the prices of places that actually sold.

I think the main problem was that no one was willing to sell at 30% off, although to achieve a sale people had to chop massive amounts off previous prices, which explains the almost total lack of sales back then.

Edited by WageslaveX14

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I never saw any evidence of 30% reductions, but I think in Spring '09 there was a big disparity between asking prices and the prices of places that actually sold.

I think the main problem was that no one was willing to sell at 30% off, although to achieve a sale people had to chop massive amounts off previous prices, which explains the almost total lack of sales back then.

But a fall of 30%-40% would surely show up in the Land Register data.

Those charts are very strange.

Let's see if James Wyatt replies to my post to him.

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Just to clarify my pretty badly written post, I meant that in order to sell, people may have had to drop their prices by 30% (this is an EA survey you're referring to, yeah?), but because very few people were willing to do this, very few sales took place.

Re: showing up on the land registry; if the 30% drops were only in the 'prime' bracket, the land registry doesn't split out this bracket from other prices, and so if price reductions at the lower end of the spectrum were less dramatic, this would give a lower percentage drop on LR figures overall (There's a lot of speculation involved in that there explanation, mind). The average drop on the LR bottomed out at around -15% in March 09, although I'm hoping that the real trough will be in 2012.

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Just to clarify my pretty badly written post, I meant that in order to sell, people may have had to drop their prices by 30% (this is an EA survey you're referring to, yeah?), but because very few people were willing to do this, very few sales took place.

Re: showing up on the land registry; if the 30% drops were only in the 'prime' bracket, the land registry doesn't split out this bracket from other prices, and so if price reductions at the lower end of the spectrum were less dramatic, this would give a lower percentage drop on LR figures overall (There's a lot of speculation involved in that there explanation, mind). The average drop on the LR bottomed out at around -15% in March 09, although I'm hoping that the real trough will be in 2012.

Yes, it could be that. But they don't say "prime" Notting Hill.

Still waiting for his reply though.

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I think you should post on here more often. It would be interesting to hear an (honest?) agents view on things.

Let's see if he answers my questions, in post 14 above. Those drops were too deep.

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Most agents will tell you the market is far more volatile than almost all indices show as they are normally heavily "smoothed". One month can be quiet and the next everything is going to sealed bids and for 10-15% more than the guide (typically around bonus time). In central London many properties are held in companies and the companies are transacted thereby not showing up on Land Registry. Property portal indices show agents opinions and are therefore forward looking, our index uses the date of exchange when the deposit is paid and Land Registry uses completion, which can be several months later.

The methodology developed by by Dr Gibbons of the LSE and Professor Muellbauer of Nuffield College, Oxford, was designed to capture the volatility and uses an asymmetrically locally weighted regression. Rather than use hedonic, such as Halifax and Nationwide, we use pounds per square foot to allow for size as hedonic can be very subjective and needs a huge sample size. There are currently over 5,900 transactions in the flat series for PCL and over 4,300 in the house series (the regression for these laregr series is over the last 250 transactions). Flats must have a minimum lease of 80 years to avoid complications over marriage value and houses must be freehold.

There are numerous examples within our data of substantial falls and rebounds eg Wilton Crescent achieiving £2,594 per square foot unmodernised in July 2008 and in April 2009 another unmmodernised house a couple fo doors along achieved £1,692. The market moves very quickly and research by Dr Gibbons shows the standard deviation, which is a measure of volatility, for Prime Central London houses is just slightly less than equities and greater than gilts.

James Wyatt FRICS

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Most agents will tell you the market is far more volatile than almost all indices show as they are normally heavily "smoothed". One month can be quiet and the next everything is going to sealed bids and for 10-15% more than the guide (typically around bonus time). In central London many properties are held in companies and the companies are transacted thereby not showing up on Land Registry. Property portal indices show agents opinions and are therefore forward looking, our index uses the date of exchange when the deposit is paid and Land Registry uses completion, which can be several months later.

The methodology developed by by Dr Gibbons of the LSE and Professor Muellbauer of Nuffield College, Oxford, was designed to capture the volatility and uses an asymmetrically locally weighted regression. Rather than use hedonic, such as Halifax and Nationwide, we use pounds per square foot to allow for size as hedonic can be very subjective and needs a huge sample size. There are currently over 5,900 transactions in the flat series for PCL and over 4,300 in the house series (the regression for these laregr series is over the last 250 transactions). Flats must have a minimum lease of 80 years to avoid complications over marriage value and houses must be freehold.

There are numerous examples within our data of substantial falls and rebounds eg Wilton Crescent achieiving £2,594 per square foot unmodernised in July 2008 and in April 2009 another unmmodernised house a couple fo doors along achieved £1,692. The market moves very quickly and research by Dr Gibbons shows the standard deviation, which is a measure of volatility, for Prime Central London houses is just slightly less than equities and greater than gilts.

James Wyatt FRICS

Thanks for that.

But my point in post 14 was not related to "monthly" drops, but over a period of around a year. Your reply doesn't explain that huge disparity - between your data and all the other we've seen to date.

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Thanks for that.

But my point in post 14 was not related to "monthly" drops, but over a period of around a year. Your reply doesn't explain that huge disparity - between your data and all the other we've seen to date.

Same applies, presumably. One year's Feb can be markedly different from next year's.

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Same applies, presumably. One year's Feb can be markedly different from next year's.

Not only one month TDoH. He posted links to charts. Take a look there. They are very different from all other data source.

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Not only one month TDoH. He posted links to charts. Take a look there. They are very different from all other data source.

This link appears to show a chart broadly similar to the main indices:

http://supadu.com/images/ckfinder/54/pdfs/Prime%20Central%20London%20Property%20Graph%20and%20Index%20October%202010.pdf

Can you be more specific?

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This link appears to show a chart broadly similar to the main indices:

http://supadu.com/images/ckfinder/54/pdfs/Prime%20Central%20London%20Property%20Graph%20and%20Index%20October%202010.pdf

Can you be more specific?

I was very specific in post 14. I'll paste it here again:

The chart for Prime Central London shows a drop in houses' prices of more than 30% in less than 1 year.

From around Mar 2008 to Jan 2009!? (Index 180 / 260 = 0.692307692)

Did central London houses really fell 30% in less than 1 year?!

http://supadu.com/images/ckfinder/54/pdfs/Prime%20Central%20London%20Property%20Graph%20and%20Index%20October%202010.pdf

Or a fall of almost 40% (!) in Notting Hill, from the end of 2007 to the mid of 2009. 150 / 285 = 0.526315789

http://supadu.com/images/ckfinder/54/pdfs/Notting%20Hill%20July%202010.pdf

.

Edited by Tired of Waiting

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