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Minus 26 from Minus 31

Demand stabilises and new instructions edge up

  • Headline price balance improves but remains negative
  • New enquiries stabilise while new instructions rise
  • London bucks the trend; shows rising prices

The February 2011 RICS Housing Market Survey highlights four key points. First, the headline net price balance improves but remains negative. Second, new enquiries have stabilised after falling during the second half of 2010.

Third, activity levels have also stabilised, with newly agreed sales broadly unchanged during the month while sales per surveyor edged up. Lastly, there is a marked divergence in the regional picture, with London being the only region to record rising prices.

The headline net price balance showed prices falling in February although at a slower rate than the previous month, with 26% more surveyors showing prices falling rather than rising. However, the majority of respondents recording price falls did so in the 0-2% range and more than half of all surveyors reported unchanged prices.

Most of the activity level indicators were a little more encouraging in February, with new buyer enquiries (demand) remaining broadly unchanged after falling for six consecutive months. New instructions edged upwards, recording a rising level of stock coming onto the market, with a net balance of +5 (up from –3). Newly agreed sales followed a similar trend, recording no change in the month after declining for four months.

Edited by rantnrave

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Sales to Stock ratio of 21.3% is still very good news. IMO it's the best measure of supply v demand out there, and anything below 25 implies lower prices to come.

"improved", "best". I despair. Who writes this crap?

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http://www.bloomberg.com/news/2011-03-08/u-k-house-price-gauge-rises-for-fourth-month-as-property-demand-improves.html

U.K. Housing-Price
Gauge Increases for Fourth Month
, RICS Says
By Scott Hamilton - Mar 8, 2011 12:01 AM GMT
..../
The number of real-estate agents and
surveyors saying prices fell exceeded those seeing gains
by 26 percentage points, down from 31 percentage points in January, the London-based group said in an e-mailed report today.

If the guage "increased" how is it that more EAs are reporting price falls than increases? Prices falling at a slower rate is not an increase in prices.

Plain old spin or bad reporting?

Edited by Realistbear

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Minus 26 from Minus 31

Sales levels remain weak with fresh stock in short supply

  • Least negative reading in net price balance since last July
  • New enquiries and new instructions continue to fall
  • London bucks the trend in terms of price expectations

January 2011

(...)

I think that link is taking us to last month's survey: "January survey embargo date: February 8th"

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Minus 26 from Minus 31

Sales levels remain weak with fresh stock in short supply

  • Least negative reading in net price balance since last July
  • New enquiries and new instructions continue to fall
  • London bucks the trend in terms of price expectations

January 2011 RICS Housing Market Survey shows that more surveyors are continuing to report prices falling rather than rising. However, the headline net price balance has now improved for three months in succession and at -31 stands at its best level since July last year. Significantly, the non-seasonally adjusted breakdown indicates that a majority of respondents actually reported that prices were unchanged between December and January. Moreover, of those that did signal a shift in prices the vast majority suggested that the drop was very modest (0 to 2%). Most activity indicators were negative once again albeit a little less so than in the final month of last year. The new buyer enquiries net balance was -7 which compares with -12 in December while the respective results for new instructions were -3 and -14. Meanwhile, newly agreed sales continued to drop at a broadly similar pace to that seen over the past few months.

This weakness in the activity net balances is also being reflected in actual transactions levels. In the three months to January, average sales per surveyor slipped back to 14.6. This compares with a reading of 15.2 in December and is actually the lowest figure since June 2009. Stocks on surveyors books also slipped back during the month with the result that the sales to stock ratio was broadly unchanged at 21.3%.

Youve got the balance right but you have quoted the January survey. It's the Febuary survey that is released today. It will appear at that link later this morning.

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I wonder if it's the the 5% £1million stamp duty threshold coming in in April causing more sales to go through at this level?

Edit: it seems it is in london anyway, maybe these is dragging the balance up?

http://www.telegraph.co.uk/finance/economics/houseprices/8366465/House-prices-London-1m-houses-jump-rest-of-country-falls.html

Edited by Pent Up

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http://www.ft.com/cms/s/0/8dbb615a-48f8-11e0-af8c-00144feab49a.html#axzz1FzkMGFS8

Signs of improvement in the housing market are offset by evidence that hard-pressed shoppers are tightening their belts, with a closely watched retail survey reporting the weakest reading since May 2009.

The Royal Institution of Chartered Surveyors survey for February showed that, while house prices were still falling, they were doing so at a slower pace than in recent months and that house prices in London have actually turned the corner.

The balance of surveyors reporting that prices were falling rather than rising was 26 per cent, down from 31 per cent in January and in London a balance of 17 per cent more surveyors said prices were now rising rather than falling. The London effect has boosted the national average. Without the capital, a balance of 33 per cent more surveyors say prices are falling than rising.

Several surveyors said that demand for higher-end homes in the capital might be driven by an impending rise in stamp duty to 5 per cent on homes valued at more than £1m in April.

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I think that link is taking us to last month's survey: "January survey embargo date: February 8th"

Ta - now corrected (although the headline figure is still right). It was 3am...

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I would imagine being a surveyor putting a value on a house is an odd affair.

they use sales of surrounding houses to estimate a value....in a falling market, there has to be a certain optimism that the fall has halted, otherwise they would have to record a fall using a percentage calculated on previous months....this would mean that when the market turned, they would miss it again...

In todays market, where loans are harder to get, they should take local wages and lenders criteria into account...a very hard task.

it appears therefore that optimism is their stock in trade and in truth, the reaction of a lender to a current valuation is more of the litmus test than the valuation itself.

IE, the LTV on a current valuation is more important than the valuers estimate.

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I wonder if it's the the 5% £1million stamp duty threshold coming in in April causing more sales to go through at this level?

Edit: it seems it is in london anyway, maybe these is dragging the balance up?

http://www.telegraph.co.uk/finance/economics/houseprices/8366465/House-prices-London-1m-houses-jump-rest-of-country-falls.html

Not just London. Know of one personally that is being rushed through to beat the deadline.

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Some lovely comments in there:

As always many vendors remain in denial and continue to instruct (often based on defective advice) at hopelessly optimistic prices which then further depresses the market (Doncaster)

Houses are still unaffordable and agents are continuing to overvalue properties. (Skipton)

Media comment about projected falling prices is very negative. (Worcester) :)

Also liking the fall in price expectations from –26 to –28.

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I wonder if it's the the 5% £1million stamp duty threshold coming in in April causing more sales to go through at this level?

Edit: it seems it is in london anyway, maybe these is dragging the balance up?

http://www.telegraph.co.uk/finance/economics/houseprices/8366465/House-prices-London-1m-houses-jump-rest-of-country-falls.html

Absolutely spot on. Prices are certainly not rising in the sub-500k market in SW & W London.

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Not just London. Know of one personally that is being rushed through to beat the deadline.

Interesting addition to that:

Property lawyer predicts chaos for April's Stamp Duty rise

John Stephenson, senior partner and head of residential property team at city firm Bircham Dyson Bell LLP, is predicting that April’s Stamp Duty increase to 5% on properties over £1m will create chaos for buyers, sellers, solicitors and lenders alike.

Stephenson says: “There’s one very real difference this time around which few have realised at first pass; the relevant date for assessing the rate of Stamp Duty is at the point of completion, whereas in the past it has been at the point of exchange of contracts.”

He says there will be an almighty rush to get contracts completed before April 6, and he expects some will not realise yet that it’s the completion date that is relevant.

Source: http://www.mortgagestrategy.co.uk/economy/property-lawyer-predicts-chaos-for-aprils-stamp-duty-rise/1027235.article

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Regionally, London (price net balance of 14) bucked the trend

Well this is prime banker buying season

Price expectations remain negative, with the net balance slipping from –26 to –28.

At least a little bear nibble there, wonder if they are factoring in the rush before the high end stamp duty stamp rise

Wales (-58) and

Yorkshire and Humberside (-51) are the worst performing regions, while in Northern Ireland the price net balance fell from –28 to –46.

So the recently weaker regions have suddenly started heading south again. Wonder if this is the start of the public sector cuts beginning to bite.

Nama for any one in NI?

New instructions picked up in February, with the net balance rising from –3 to +5.

In line with the home.co.uk survey last week

Interesting the regions that it is happening in...

Expected sales increased in February, with the net balance increasing from 10 to 12.

Newly agreed sales remained broadly unchanged during the past month, with the net balance improving

from –16 to –1.

Lower price expectations being accepted by sellers...

Again interesting the regions that it is happening in...

Most of the London rising balance is due to reported increases of 0-2% in the last 3 months very little stronger than that

Toby Milbank MLE MRICS, Strutt & Parker, Harrogate, North Yorkshire, 01423 561274 - There is a strong market in Harrogate town for new, sensibly priced property. Not quite so strong in the country market but many more viewings and offers than in November and December 2010.

J W G Cameron FRICS, Stanton Mortimer Limited, Northallerton, North Yorkshire, 01609 773004 - Whilst agreed sales have increased, very little property seems to be coming onto the market. Public sector job cuts are impacting hugely in the area with potential vendors nervous of job losses. The net result is that those who would ordinarily have moved are now staying put.

John E Haigh BSc MRICS FAAV, Lister Haigh, Knaresborough, North Yorkshire, 01423 860 322 - The hint of an interest rate rise. Consumer confidence and constraints in mortgage lending are continuing to prevent buyers, particularly first time buyers, from entering the housing market.

Ken Bird MRICS, Renton & Parr, Wetherby, West Yorkshire, 01937 582731 - Bright start to the new year with buyer activity at a much higher level than we have seen for 6 months. Low offers being taken and more vendors being prepared to consider 5 to 10% reductions to tie up a sale.

Mark John Hunter MRICS, Grice and Hunter, Doncaster, South Yorkshire, 01302 360141 - There has been only very selective activity but the past week has been somewhat more constructive. As always many vendors remain in denial and continue to instruct (often

based on defective advice) at hopelessly optimistic prices which then further depresses the market.

Arwel Griffith FRICS, Robert Sterling, Walthamstow, London Borough of Waltham Forest, 0845 838 0930 - Differing signals from market commentators such as Nationwide and Halifax are confusing the buyers. Concerns about limited lending availability for first time buyers still a significant barrier to recovery.

Benson Beard MRICS, Bective Leslie Marsh, London, 020 7589 6677 - Still a very tight market with buyers chasing few opportunities. Prices at the top end (£lm plus) still rising. Impending stamp duty rise above £1m to 5% could result in a small rush to sell before end of March and may have a short lived effect on guide prices afterwards.

Justin Knight MRICS, Bective Leslie Marsh, London, Brook Green, 0207 603 5181 - After a sharp increase in the turnover of £1m+ houses and the prices achieved, the market has levelled. The pending stamp duty rise to 5% from 5th April is most definitely the main driver here, together with a continued lack of stock. Flats started much more slowly, but week on week interest shown and offers tended have increased. Banks mortgage rate rises coupled with a pending Bank of England base rate rise will temper market growth through the spring months.

Jeremy Leaf BSc FRICS, Jeremy Leaf & Co., Finchley, Barnet, 020 8446 4295 - We recorded a little more activity in February compared to January with more buyers and listings but only a marginal increase in mortgage availability - not for first time buyers!

However, until vendors are more willing - or able - to negotiate at realistic prices, transaction numbers are likely to remain subdued. Demand for brand new property continued quite strongly.

Virtually all of the London replies are form Central London or nicer areas further out very few responses from more realistic areas

Edited by koala_bear

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Absolutely spot on. Prices are certainly not rising in the sub-500k market in SW & W London.

Really? Prices in Clapham, Wandsworth, and Balham seem to be rising. Decent properties going under offer in 1-2 weeks. Pretty much asking price being achieved - and each new property coming on the market on the same street being priced at £5k more and still finding a buyer.

As a comparison, we saw two properties on the same (small) street come up one after another. The first sold for £370k. The second, while a bit smaller and slightly less high spec, sold for £378k. It did have a 160 year lease vs 105 year lease, but I don't that was the only thing that caused it to go so quickly.

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I do concur that not so nice areas of London are not seeing increase in prices.

Areas like Brockley, Honour Oak, and Hither Green in South East London seem to have stagnated prices, although not very good stock either, which could be the problem.

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... newly agreed sales broadly unchanged during the month while sales per surveyor edged up...

Does that mean that EA's are laying off staff?

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Not just London. Know of one personally that is being rushed through to beat the deadline.

Wasn't a known financial deadline the trigger for the '88 crash? i.e. it pushed demand (and prices) up, which then fell of a cliff once the deadline passed.

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Sales to Stock ratio of 21.3% is still very good news. IMO it's the best measure of supply v demand out there, and anything below 25 implies lower prices to come.

Yes, it is the best forecasting tool for the short to medium term, say 2 to 6 months ahead.

It has been surprisingly stable in the last 4 months, virtually frozen.

" Ratio of sales to unsold stocks on surveyors’ books February 2011."

" The sales to stock ratio increased during the month, rising from 21.3% to 21.9%."

Yes, below 25 is good, it indicates falls, but not a full crash. Perhaps 10% falls in 2011?

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Yes, it is the best forecasting tool for the short to medium term, say 2 to 6 months ahead.

It has been surprisingly stable in the last 4 months, virtually frozen.

<b>

" Ratio of sales to unsold stocks on surveyors' books February 2011."
" The sales to stock ratio increased during the month, rising from 21.3% to 21.9%."

</b>

Yes, below 25 is good, it indicates falls, but not a full crash. Perhaps 10% falls in 2011?

doesnt indicate much...supply and demand in this market is down to lending.

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doesnt indicate much...supply and demand in this market is down to lending.

Of course. If there is a change in lending conditions/policies/regulations then prices will be affected. The banks+government+regulators still hold the key in this market.

The questions are: What are their intentions/plans? And do they have the financial power to execute them?

Or: Do they really want Shapps feather-soft lending? 2%/year for 20 years? And if so, do they have the finances to keep funding the market at/near this level for so many years?

I don't know.

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  • 312 Brexit, House prices and Summer 2020

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      • down 5% +
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