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Ft: Regions Slip Behind In Bleak Housing Market

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FT: Regions slip behind in bleak housing market

Alarm bells were set ringing by news that UK house prices suffered their biggest one-month drop ever in September, as measured by a closely watched index, even though recent indicators of activity had already shown signs of softening demand.

A closer look at house prices round the nation shows that much of the strong growth late in 2009 and earlier this year reflects what has gone on in London. In many parts of the country, house prices are barely keeping pace with inflation.

According to the Halifax House Price Index, a monthly survey conducted since 1983, the average house price fell 3.6 per cent in September. Current prices stand 2.6 per cent above levels of a year earlier compared with the latest reading for the Retail Price Index of 4.7 per cent.

But a look at regional data from Halifax – which were last updated at the end of the second quarter in June – shows just how patchy the fuller picture is. For example, average house prices in north-west England have fallen quarter on quarter in every single quarter, bar one, since the first three months of 2008. The buyer of an average home there in 2007, purchased with a typical 10 per cent downpayment, still owes more than their property is worth.

Prices in Yorkshire and Humberside began falling in the last three months of 2007 and fell in all but two of the following 10 quarters. There, too, a buyer of an average home in 2007, with a 10 per cent deposit, remains under water.

It is not just the Halifax Index which tells this story. The LSL Property Services/Acadametrics House Price Index – which uses less immediate data from the UK Land Registry – clearly demonstrates the London effect; while the average of prices in Greater London in the June to August quarter of 2010 is 16 per cent above the comparable period in 2009, overall, prices are only up 3 per cent. Take London out of the equation and prices nationwide are only up by 1.0 per cent.

Similarly, the Nationwide Index, which showed a marginal 0.1 per cent average price rise in September, found prices falling in the third quarter in nine of 13 regions.Regional house prices

Some housing experts say that the sharp downward move in the latest Halifax Index may have to do with increasing pessimism among valuers; the last survey from the Royal Institution of Chartered Surveyors showed that expectations of falling prices are now widespread. If independent valuers reflect that pessimism in estimates of values they assign to properties borrowers wish to buy, it will turn up in the lenders’ house price indices.

Richard Donnell, head of research at Hometrack, said there are some parallels with the recession of the early 1990s. Prime London property prices peaked in 1987, long before the rest of the country, and Greater London prices peaked in the second quarter of 1989. “But there was a big lag in other regions stretching into the early 1990s,” Mr Donnell said.

Moreover, he said, prices did not recover quickly, even after they stopped falling in London. Prices did not revive in London until 1997 – eight to 10 years after the peak – and in some regions, did not see strong gains until the early part of this decade.

Simon Rubinsohn, chief economist at Rics, said much of the rise in average prices nationwide had been in London, where signs are that demand is now slipping. A good leading indicator within the monthly survey is the balance of those reporting that buyer inquiries and new instructions are rising rather than falling. “In London, both are negative now,” he said.

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Prices in Yorkshire and Humberside began falling in the last three months of 2007 and fell in all but two of the following 10 quarters. There, too, a buyer of an average home in 2007, with a 10 per cent deposit, remains under water.

Why is this noteworthy?

Buyer in part of country with lower supply restrictions, with minimal deposit, buys at the top of the market, is in negative equity.

If thats considered noteworthy we really are mugs for supporting so few with so much.

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Prices in Yorkshire and Humberside began falling in the last three months of 2007 and fell in all but two of the following 10 quarters. There, too, a buyer of an average home in 2007, with a 10 per cent deposit, remains under water.

Why is this noteworthy?

Buyer in part of country with lower supply restrictions, with minimal deposit, buys at the top of the market, is in negative equity.

If thats considered noteworthy we really are mugs for supporting so few with so much.

Some areas on the other hand:  

Edited by Mikhail Liebenstein

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Prices in Yorkshire and Humberside began falling in the last three months of 2007 and fell in all but two of the following 10 quarters. There, too, a buyer of an average home in 2007, with a 10 per cent deposit, remains under water.

Why is this noteworthy?

....../

It all makes me think of this:

09.1S943-D1.jpg

Christ driving out the moneylenders from the temple.

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Slip behind what exactly? Other regions? :blink:

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The article implies that London has been making the figures look rosier. And also, that London too seems to be be about to start going back down again.

I read somewhere that London has quite a lot of government jobs and government workers. Especially the South of London( not sure whether that is government workers tend to reside in the cheaper south more or not). Therefore, London will feel it's fair share of pain in the coming round of cuts?

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The article implies that London has been making the figures look rosier. And also, that London too seems to be be about to start going back down again.

I read somewhere that London has quite a lot of government jobs and government workers.

Sounds reasonable to me, since the Government is in London! ;)

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  • 140 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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