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Property Transactions Fall In September

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Seasonally adjusted residential property transactions as recorded by HMRC from Stamp Duty returns fell to the lowest level since January 2010 in September (and Jan 2010 was artificially low because of the removal of stamp duty relief, so in reality this is the lowest number since June 2009).

Only 66K transactions were made in September, down from 70K in August. However these numbers are provisional as always, and consequently are subject to revision.

Looking at the chart for transactions, the trend is still a small drift downwards:

hmrctrans0911.gif

http://www.hmrc.gov.uk/stats/survey_of_prop/menu.htm

This is in contrast to mortgage approvals, where the recent trend has been a steady rise. Plotting the two series together shows some convergence, and assuming the figures are reasonably accurate, this suggests that:

  • Not all mortgage approvals are reaching completion

Or

  • The number of cash buyers is dwindling

PropTransVsMortApps0911.gif

Whatever the explanation, the UK housing market is still looking pretty dead.

Edit: Added link to data

Edited by FreeTrader

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Cash eventually runs out.

Idiots probably run out too.

There can't be many people left ( except in london ) that think prices only ever go up.

Anecdote...an acquaintance in Northampton has finally sold the house he bought 7 years ago. He bought it for 112K...he sold it for £105K..he paid the mortgage ( say £600 per month for 7 years ) moving fees £5K. Might as well have rented. He is married and has a little baby now, he waited 2 years to get a buyer.

I would image, he and his circle of friends now realise that buying is not a one way ticket.

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Cash eventually runs out.

Idiots probably run out too.

There can't be many people left ( except in london ) that think prices only ever go up.

Anecdote...an acquaintance in Northampton has finally sold the house he bought 7 years ago. He bought it for 112K...he sold it for £105K..he paid the mortgage ( say £600 per month for 7 years ) moving fees £5K. Might as well have rented. He is married and has a little baby now, he waited 2 years to get a buyer.

I would image, he and his circle of friends now realise that buying is not a one way ticket.

How many people in his situation are quietly spreading the HPC messsge :lol:

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I keep a very close eye on the local market and so far this moth there appear to have been more sales (well under offer) than in any of the previous months this year....which is very disappointing, I am starting to lose the will!!! :(

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I noticed in my area that September was particularly slow to get going sales -wise after a particularly quiet August. I don't think October has been quite so terrible, be at levels still much below a normal market. I wouldn't be surprised if Haliwide at leasts holds the line this month or even makes a small advance. However, September was awful last year too, remember we had that Halifax MOM crash and then it bouced in October. We seem to be following an almost identical pattern this autumn, it's like Groudhog day with the market going nowhere.

Edited by crashmonitor

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Thinking about it though, I supposed the lack of completions in September would be the July/August deals coming to completion. And the market was wery quiet over the summer this year.

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I keep a very close eye on the local market and so far this moth there appear to have been more sales (well under offer) than in any of the previous months this year....which is very disappointing, I am starting to lose the will!!! :(

I wouldn't get too worried about the under offers. I would guess that the proportion failing to make it to completion will be rising.

Or you may discover that if sales are rising it's because prices are going down, as in Bury. The places where prices are supposedly holding up are the ones with few sales.

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Interesting stuff FreeTrader, thank you for taking the time to put this together.

The September Land Registry figures for September are due a week today, it will be interesting so see whether the figures are similar to Halifax/Nationwide

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Seasonally adjusted residential property transactions as recorded by HMRC from Stamp Duty returns fell to the lowest level since January 2010 in September (and Jan 2010 was artificially low because of the removal of stamp duty relief, so in reality this is the lowest number since June 2009).

[...snip...]

Whatever the explanation, the UK housing market is still looking pretty dead.

Edit: Added link to data

Thank you for the detailed post.

Edit: to remove extraneous quotation details.

Edited by Aidan Ap Word

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FT - I posted some of your other fantastic work, re the Halifax data showing that this crash is currently more severe than the last one, over at the EA Today site. Hope you don't mind...

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I wouldn't get too worried about the under offers. I would guess that the proportion failing to make it to completion will be rising.

Or you may discover that if sales are rising it's because prices are going down, as in Bury. The places where prices are supposedly holding up are the ones with few sales.

Drop out rate from July to end of september was about 25% (from my small sample of data).

Prices, apart from the odd house here and there, are somewhere around 2007 or above a bit.

As previously posted though it seems to be a bit of a split market and i do have a few examples of people that have actually lost money, not just cutting asking prices, but this could happen in any market if they overpaid, so I am not getting excited yet. As I say I am getting pretty fed up. Went to look round a house that needed a LOT of work doing, but is in a very good street. It was an open day, and even in the 10-15 mintues we were there there must have been 15 ish couples looking round, and it was perhaps 150-200k overpriced, even by 2007 prices!!!! Not under offer yet though......

:(:(

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Drop out rate from July to end of september was about 25% (from my small sample of data).

Prices, apart from the odd house here and there, are somewhere around 2007 or above a bit.

As previously posted though it seems to be a bit of a split market and i do have a few examples of people that have actually lost money, not just cutting asking prices, but this could happen in any market if they overpaid, so I am not getting excited yet. As I say I am getting pretty fed up. Went to look round a house that needed a LOT of work doing, but is in a very good street. It was an open day, and even in the 10-15 mintues we were there there must have been 15 ish couples looking round, and it was perhaps 150-200k overpriced, even by 2007 prices!!!! Not under offer yet though......

:(:(

And if it goes under offer, expect that to be courtesy of muppets who are trying to sell their own massively overvalued place.

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And if it goes under offer, expect that to be courtesy of muppets who are trying to sell their own massively overvalued place.

Maybe.......who knows....I wouldnt assume everyone is mortaged up to the hilt though...we were probably the youngest people there, so you end up competing with 50/60 year olds who probably paid a few grand for their house....or bankers, as it still in sensible commuting distance from london.....so us ordinary sensible people dont get a look in! Going to keep an eye on it and perhaps make a low offer if it doesnt go, but needed shed loads of work doing to it!

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Seasonally adjusted residential property transactions as recorded by HMRC from Stamp Duty returns fell to the lowest level since January 2010 in September (and Jan 2010 was artificially low because of the removal of stamp duty relief, so in reality this is the lowest number since June 2009).

Only 66K transactions were made in September, down from 70K in August. However these numbers are provisional as always, and consequently are subject to revision.

Looking at the chart for transactions, the trend is still a small drift downwards:

hmrctrans0911.gif

http://www.hmrc.gov.uk/stats/survey_of_prop/menu.htm

This is in contrast to mortgage approvals, where the recent trend has been a steady rise. Plotting the two series together shows some convergence, and assuming the figures are reasonably accurate, this suggests that:

  • Not all mortgage approvals are reaching completion

Or

  • The number of cash buyers is dwindling

PropTransVsMortApps0911.gif

Whatever the explanation, the UK housing market is still looking pretty dead.

Edit: Added link to data

Thanks FT, really interesting. I get a sense that the proportion of mortgage approvals failing to reach completion is increasing but would like to think cash buyers are finally running out, as they are pretty much propping up the market right now. Are there any figures for cash buyers vs mortgaged (I suppose average deposit paid could act as a proxy indicator?)?

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Judging from the number of members joining this site with a "Buy now before your cash is worthless" agenda, I would say yes.

Personally I've not seen anyone saying that. Seems an odd line to push given houses are losing more than cash, you can get 2%-6% intersest on cash, whilst -5% to -10% on housing depending on where you live.

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Personally I've not seen anyone saying that. Seems an odd line to push given houses are losing more than cash, you can get 2%-6% intersest on cash, whilst -5% to -10% on housing depending on where you live.

If you point that out to them they come back with something like this...

http://www.housepricecrash.co.uk/forum/index.php?showtopic=170486&view=findpost&p=3150232

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If you point that out to them they come back with something like this...

http://www.housepricecrash.co.uk/forum/index.php?showtopic=170486&view=findpost&p=3150232

Depends on your personal situation. If you are fortunate enough to be cash rich then interest can pay the rent whereas houses lose value so a renter is quids in.

Buying is dead money, you're just giving it all to the bank ;)

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Thanks FT, really interesting. I get a sense that the proportion of mortgage approvals failing to reach completion is increasing but would like to think cash buyers are finally running out, as they are pretty much propping up the market right now. Are there any figures for cash buyers vs mortgaged (I suppose average deposit paid could act as a proxy indicator?)?

As far as I'm aware there are no dedicated figures available on the number of cash buyers and they can only be inferred from other data. The CML performs a similar exercise using actual loans taken out rather than approvals, but they don't seem to publish the numbers other than in market commentary releases.

As you say, cash buyers have been propping up the market, and the BBC published this piece back in April based on CML findings:

Cash buyers drive the housing market

There has been a huge rise in the proportion of home buyers paying for their new homes in cash.

Figures compiled by the Council of Mortgage Lenders (CML) show that in January 2011, nearly 40% of buyers did not need a loan to buy their home.

This means the proportion of cash buyers has more than doubled since 2005, when the records began.

This in turn suggests the market is increasingly the domain of the cash-rich, with many other buyers shut out.

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Seasonally adjusted residential property transactions as recorded by HMRC from Stamp Duty returns fell to the lowest level since January 2010 in September (and Jan 2010 was artificially low because of the removal of stamp duty relief, so in reality this is the lowest number since June 2009).

Only 66K transactions were made in September, down from 70K in August. However these numbers are provisional as always, and consequently are subject to revision.

Looking at the chart for transactions, the trend is still a small drift downwards:

This is in contrast to mortgage approvals, where the recent trend has been a steady rise. Plotting the two series together shows some convergence, and assuming the figures are reasonably accurate, this suggests that:

  • Not all mortgage approvals are reaching completion

Or

  • The number of cash buyers is dwindling

Whatever the explanation, the UK housing market is still looking pretty dead.

Edit: Added link to data

They couldn't find a pulse on the housing market so they got the crash cart out and applied the QE paddles?

Will they find a pulse again or is it going to be "tIme of death........"?

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They couldn't find a pulse on the housing market so they got the crash cart out and applied the QE paddles?

Will they find a pulse again or is it going to be "tIme of death........"?

Well, the general consensus here seems to be that the latest round of QE won't support the housing market, but nevertheless the BoE is buying gilts in the secondary market at a much faster rate than the DMO is auctioning new debt.

In the short term at least therefore, this is going to leave sellers of the gilts sitting on a pile of cash and it's not inconceivable that some of this is going to find its way into UK residential housing.

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Well, the general consensus here seems to be that the latest round of QE won't support the housing market, but nevertheless the BoE is buying gilts in the secondary market at a much faster rate than the DMO is auctioning new debt.

In the short term at least therefore, this is going to leave sellers of the gilts sitting on a pile of cash and it's not inconceivable that some of this is going to find its way into UK residential housing.

Under the guise of helping SMEs (really BTLs)

http://www.smeweb.com/index.php?option=com_content&view=article&id=3076:new-british-bank-shawbrook-lloyds-barclays&catid=53:news&Itemid=89

I think some of the cash will finish up at councils for them to do mortgage lending (very bad), buy houses (bad) and build houses (good)

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http://www.guardian.co.uk/money/2011/oct/28/house-sales-plummet?newsfeed=true

The number of homes sold in England and Wales plummeted by 11% between July 2010 and July 2011, according to the latest figures from the Land Registry. House prices fell by 0.3% in September 2011 following August's drop of 0.1%, taking the annual price fall to 2.6%.

The September figures, based on official records of property transactions, take the average price of a home to £162,109, down 2.7% or £4,534 from the peak of £166,643 seen in August 2010.

The only region in England and Wales to experience an increase in its average property value over the past year is London, where prices rose by 2.7%. The north-east experienced the greatest annual price fall with a decrease of 8.2%.

On a monthly basis, the north-west experienced the greatest monthly rise with an increase of 1%, while the north-east experienced the most significant monthly price fall with a drop of 3.9%.

The most up-to-date figures available show that during July 2011, the number of completed house sales in England and Wales decreased by 11% to 59,919, from 67,475 in July 2010. At the peak of the housing market, there were more than 150,000 homes being sold a month in the UK.

The number of £1m properties sold in England and Wales decreased by 24%, from 932 to 707, between July last year and this year.

Derek Richardson, managing director of Squarefoot Estate Agents, said: "Although prices dipped slightly in September, the reason they are not dipping further is twofold: low supply and the seemingly unending low interest rate environment. Transactions levels are understandably down because confidence is understandably low.

"Inquiries have fallen off a cliff. Nearly a third of sales agreed are falling through due to problems securing mortgage finance at the business end of the transaction.

"While the overall market remains on the back foot, certain properties and certain areas are bucking the trend and are proving far more robust price-wise. Looking forward, we do not expect any significant uptick in the property market until at least February."

Analysis from the Land reg'.

Falling prices, and falling transaction volumes spell disaster for EA's. Slow to falling through sales will seriously impact on EA's cashflow's.

Return to 'normal' seems further out, and as per the EA anecdotal 'Inquiries have fallen off a cliff.' future sales seem more uncertain.

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  • 285 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% +
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      • Even
      • up 2.5%
      • up 5%



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