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Hometrack: House Price Deflation Worsens In Nov

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http://www.forexlive.com/149683/all/uk-data-hometrack-house-price-deflation-worsens-in

House price deflation intensified in November, with prices dropping 1.1%

on a year-on-year basis after having turned negative in October,

according to Hometrack’s Monthly National Housing Survey. House prices

also fell for the fifth consecutive month in November, but at a less

steep rate than in October, Hometrack said. House asking prices fell

0.8% on the month in November, having dropped 0.9% on the month in

October and by 0.4% on the month in September.

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This story was reported on the 05:30 BBC Radio 2 news this morning.

The news reader didn't mention a percentage price drop at all, either M-on-M or Y-on-Y.

All he quoted was the '4 per cent drop in housing demand and a continued drop in confidence'.

All good, though.

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Oi tink we may be becoming a bit inoculated against bad news for house prices as other news is far more dramatic and devastating. No adrenalin rush with a 1% yoy data release.

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http://www.bloomberg.com/news/2010-11-29/u-k-home-prices-decline-as-property-demand-drops-most-in-almost-two-years.html

U.K. Home Prices Decline as Property Demand Drops Most in Almost Two Years

U.K. house prices fell for a fifth month in November as demand for property dropped the most in almost two years, Hometrack Ltd. said.

The average cost of a home fell 0.8 percent from October to 155,000 pounds ($242,900), the London-based property researcher said in an e-mailed statement today. Demand for homes, measured by the change in new buyers registering with real-estate agents, fell 4.3 percent, the biggest decline since January 2009.

The report adds to evidence of a weakening property market after Rightmove Plc said on Nov. 15 that home sellers cut asking prices by the most since 2007 this month and U.K. banks approved the smallest number of mortgage since 2009 in October. The government has announced the biggest budget squeeze since World War II and officials have warned the cuts may harm the recovery.

“Concerns over the economic outlook on the back of recent spending cuts, together with widespread expectations that house prices are set for a period of retrenchment, are driving the continued weakness in demand,” Richard Donnell, Hometrack’s director of research, said in the statement. “In the near term we expect demand to remain weak and this will continue to put downward pressure on prices.”

Price declines were led by London, Wales, as well as England’s south east, West Midlands and north east regions, which all posted a fall of 0.9 percent, Hometrack said. Values in southern England, which posted the strongest recovery after the recession, are under the greatest pressure, it said.

The average time a property stays on the market before being sold climbed to 9.8 weeks in November, the longest since May 2009. Sellers in Wales and England’s East Midlands and north west regions have to wait more than three months.

Lending Restrictions

The housing market has weakened as banks tightened lending criteria, causing the level of home loans to drop below half of that seen at the peak of the property boom in 2007. Mortgage approvals fell to 30,766 in October, the fewest since March 2009, the British Bankers’ Association said on Nov. 23.

While an increase in the supply of homes for sale in the past six months has helped push values down, Hometrack said the pace of properties being put on the market is expected to slow. That trend will help limit the fall in the average house price to 2 percent in 2011, it said.

While the U.K. economy posted its strongest two consecutive quarters of growth in a decade, Bank of England Governor Mervyn King said this month that the pace of expansion will slow. The country’s Office for Budget Responsibility is due to publish updated economic forecasts at 1 p.m. in London.

The budget squeeze is also restraining consumer spending. A separate report today showed that sales at consumer-services companies such as hotels and bars unexpectedly fell in the past three months. The number of firms saying sales volumes fell in the quarter exceeded those seeing gains by 18 percentage points, according to a survey by the Confederation of British Industry.

Looks like we could be in for a bearish week.

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Nice use of the word plummet in the Guardian headline

House prices slide for fifth month running as demand plummets

Average house value dropped 0.8% in November, reports Hometrack, as seasonal slowdown starts a month early

Housing Market Demand for housing declined by 4.3% this month, the biggest fall since January 2009. Photograph: Matt Cardy/Getty Images

Britain's housing market continues to weaken, with prices falling for the fifth month in a row in November, according to property information group Hometrack.

The average value of a house dropped by 0.8% month-on-month to £155,000. The new decline came after falls of 0.9% in October and 0.4% in September.

"The seasonal slowdown in the housing market has kicked in a month early, with demand for housing falling at the fastest rate for 20 months," said Richard Donnell, director of research at Hometrack.

"Concerns over the economic outlook on the back of recent spending cuts, together with widespread expectations that house prices are set for a period of retrenchment, are driving the continued weakness in demand. It is inevitable that this trend will continue as we move into the new year from both a seasonal and sentiment perspective."

Demand for housing declined by 4.3% this month, the biggest monthly decline since January 2009. However, the number of homes on the market is also set to fall in coming months as vendors reduce asking prices or withdraw property from the market. Hometrack expects this to shore up prices in the second part of next year.

Other surveys also point to a cooling market. On Friday, the Land Registry reported that prices fell by 0.8% in October from September, the largest monthly drop since February last year. Mortgage approvals have hit a 19-month low as a result of weak consumer confidence, low wage increases and tough conditions imposed by mortgage lenders.

Meanwhile, credit conditions for companies have begun to ease, according to the manufacturers' organisation, EEF – the first improvement in 12 months. Its findings brought hope that industry may be over the worst as far as access to finance is concerned. "However, we are not out of the woods yet," said Lee Hopley, EEF's chief economist. "Banks, industry and government need to push ahead with efforts to bring down the cost of borrowing and get credit flowing more freely to those companies that need it."

At the same time, businesses are preparing for another round of cost-cutting next year, research from Allianz Insurance has found. While more than a third of firms are more positive about next year, two-thirds are planning to make further cutbacks. Some 77% of companies have slashed costs since the start of the recession.

http://www.guardian.co.uk/business/2010/nov/28/house-prices-fall-demand-plummets

Edited by Caveat Mortgagor

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At the same time, businesses are preparing for another round of cost-cutting next year, research from Allianz Insurance has found. While more than a third of firms are more positive about next year, two-thirds are planning to make further cutbacks. Some 77% of companies have slashed costs since the start of the recession

High rents, high rates, high costs, high commercial propoerty prices and staff needing high salaries to pay for bubble housing.

Offshore, outsource, shutdown and downscale.

Service sector gets the bashing this time round. Automated pumps at petrol stations and automated checkouts are the supermarkets are just the start of what will happen to the retail sector.

Edited by OnlyMe

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Same story over at moneyfacts:

http://moneyfacts.co.uk/news/mortgages/early-start-to-festive-property-market-slowdown/

It's now a festive slowdown. Something to celebrate with glass of mulled wine in your hand, etc, etc. Where's my Santa hat?

Early start to festive property market slowdown

Category: Mortgages

Date: 29/11/2010

The seasonal slowdown in the property market has kicked in a month earlier than usual, new research has revealed.

Demand for housing fell at its fastest rate for 20 months in November, according to Hometrack, keeping house prices under downward pressure.

A sizeable dip in demand was attributed to faltering consumer confidence, while an early start to the traditional festive market slowdown also played its part.

Demand for housing dropped by 4.3% in November, the fifth monthly fall in a row and the largest single monthly decline since January 2009.

Meanwhile, the number of properties for sale fell by 0.4%, the first drop recorded in nine months.

The property research firm predicts that prices will remain under downward pressure in the near term, and has forecast a 2% drop in property values by the end of 2011.

The weakening market conditions have resulted in the average time a property spends on the market rising to 9.8 weeks, the highest level seen for 17 months.

In addition, the proportion of the asking price being achieved by sellers has dropped to 92.4%, the lowest level reported since September 2009.

"Concerns over the economic outlook on the back of recent spending cuts together with widespread expectations that house prices are set for a period of re-trenchment, are driving the continued weakness in demand," said Richard Donnell, director of research at Hometrack.

"It is inevitable that this trend will continue as we move into the New Year from both a seasonal and sentiment perspective."

However, despite the decline in demand over recent months, Mr Donnell said house prices had not fallen to the same degree as they did in 2008 and 2009, when prices had been falling off a higher base.

"The rising supply of homes for sale over the last six months has played its part in pushing price growth into negative territory," he added.

"While it is early days, the supply/demand balance looks set to change in the coming months as we see the number of homes for sale begin to fall.

"Over the coming months, estate agents will be turning their attention to the supply of homes on their books anxious to adjust stock levels to realistic prices more closely aligned to demand.

"The reality is that in the months ahead vendors will either need to reduce prices or withdraw property from the market."

Edited by AvidFan

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Yep. Some very good charts there. :)

And a very nice table too:

Summary

Topic.......................................Sept-10 / Oct-10 / Nov-10

Monthly price change (%)........-0.4 -0.9 -0.8

% change in new buyers registering with agents.........-2.9 -2.0 -4.3

% change in volume of property listings........1.2 1.9 -0.4

% change in sales agreed..........-0.1 3.8 0.1

Average time on the market (weeks).........9.3 9.6 9.8

% of the asking price being achieved.........93.2 92.7 92.4

% postcode districts with price increase over month.........2.3 0.1 0.1

% postcode districts with price decrease over month.........34.0 56.0 54.0

Average time on the market increasing.

And average deals 7.6% below asking price.

Edited by Tired of Waiting

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  • 152 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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