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2buyornot2buy
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The 9% rise in sales to 2,600 (a third from peak) is flagged up in the NewsLletter article I reproduced above. I'm not surprised it captures more sales - it is a comprehensive report, not an extrapolated EA sample and does include auctions as stated. Lets see if it lasts. If it drives prices down, of course I welcome it. It will give EAs and buyers plenty more "comparables" and that won't be a bad thing for the next few years.

It is not just auctions where people are buying repossessed properties. A guy at work has just bought a house. He registered with a holding company through an estate agent and bought a repo. Also, he told me about someone else trying to buy the same way. They went to arrange a mortgage with their bank to buy a repo. The bank refused. They said they would only give him a mortgage to buy one of their many repossessed properties.

This new housing report should include all 3 methods of buying repossessed property - auctions, holding companies and direct from banks. No wonder sales volumes are going up and prices are going down. Though that hardly represents a healty housing market recovery as some would have us believe.

Edited by Belfast Boy
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The other issue for me is how the UU records co-ownership sales. Are they recorded at full price or share value? With co-ownership making up nearly 10% of the market I can see how if these are recorded as full price sales they could affect the averages of the UU report. Stamp duty would only be paid on the share value so can see the new report recording the "actual" price of the sold percentage. It's only right; the purchaser hasn't, after all bought the whole house only a percentage and rents the rest of the housing association. 10% is a big enough chunk of the market to mess with the numbers, especially with a co-ownership cap at £175,000.

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This is really weird - I printed out the page from the BBC above showing the Jan - March 2012 figures of average 161,429.

I looked that page up again today and it's showing a different set of figures now 137K although it is not shown as updated.

Did anyone else look up my earlier link and see the 161K?

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/regions/html/region11.stm?d#table

comparing the 2 printouts the region is the same both --say they are from the UUj report October to December 2011-- but the annual change on the old link is -20% and the new link -8.4%. I am glad I printed it out - I would be doubting my sanity.

I also pointed to this on 16 May. You are not going mad (well not over this, anyway!)

http://www.housepricecrash.co.uk/forum/index.php?showtopic=105924&st=3420 post 3434

the small print stated Oct to Dec but the headline stated last quarter - the small print still states Oct to Dec 2011. I doubt the £161k figure was probably a year out of date never mind the previous quarter. Very lax and unprofessional.

The scary thing is that this figure, before it was fixed, would carry the BBC 'reputation' for accuracy in most casual readers minds. Even the current £137k, we now see , is b*lls. This, and the crude little calculators on home and property pal and other search sites showing average price in your area and average price for a detached or similar property or whatever are dangerous and misleading.

The naive type this search in or see this and think their semi is worth £185k and detacheds are selling at £285k a pop. Perhaps it is just to massage the casual viewers ego. It certainly has nothing to do with current market prices and fundamentals.

I have to say I am disappointed, but not surprised, at the lack of publicity the new report has received. (it got a quarter page in the Irish news - a press release cut and paste - and the News letter had a bit more detail. I don't think the Tele touched it at all.

However sellers and EAs can't live in fantasy land forever. Like the Wizard of Oz, the curtain has been pulled back on the NI housing market and, to use another allegory, it has no clothes.

If only the banks would lend eh.

Now, how's my Spanish bank shares and property investment doing.

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The 9% rise in sales to 2,600 (a third from peak) is flagged up in the NewsLletter article I reproduced above. I'm not surprised it captures more sales - it is a comprehensive report, not an extrapolated EA sample and does include auctions as stated. Lets see if it lasts (the increase in sales). If the increase drives prices down faster, of course I welcome it. It will give EAs and buyers plenty more "comparables" and that won't be a bad thing for the next few years.

As with the frenzy on the way up, at what stage do sellers panic and get real. Are we nearly there yet?

I note you call up the Nationwide again - I thought we agreed their sample size (and niche lower level market) left their stats questionable - certainly in terms of representing the whole market or indeed in any worthwhile terms?

I also read somewhere (so could be dodgy but seems reasonable) that on average (oh yes) the second income of a two income family is about £8k - which chimes with women,many with children, in low paid part time catering, retail, public sector type jobs. I won't stand over this but I think, even if joint income is £40k its not just about buying the house now - it's the inflationary environment, childcare and job security, sentiment and emergency interest rates that weigh on purchasers minds, and especially seeing others get fried. Surely most dual incomes will have, or expect to have sprogs?

Finally - who was the audience for the UUJ report? Govt policy makers or estate agents (or the public)? If it was govt policy makers, why did they feel the need to do their own. And why would UUJ keep producing what they did based on a sample of unregulated EAs, now we have this?

It will be interesting to see if the UUJ report continues. They always claimed it was a sample and we know it excludes auction an fire sales as all other reports (as far as I am aware ) also did. There was always a good argument for that. But, if fire sales now represent 30% (I heard) of all sales I believe they can no longer be ignored as they are a major part of the market.

2,600 per quarter (if sustained) is over 10,000 pa. Are you saying this is 1/3 of peak or 2/3 of peak?

I agree the Nationwide report is of little use in recent years because of their falling share. But, prior to that and back to 1983 they had a substantial share and their figures over that time frame ,which is what I drew upon, are acceptable.

We get caught up over dual incomes. Whilst banks didn't take account of outgoings during the boom years they did before and they certainly do now. Income on its own is not the only thing as we all know people who perhaps spend more than they earn. The bank needs to, and are looking at the outgoings (including child care travel expenses etc) as well as income.

So if a household has income of £40k the out goings of that household need to be deducted to see what the disposable income is.

Dual income households do not have exclusivity on childbirth. Far from it if you look at some of the statistics.

I don't care if that the £40k household income is brought in by one earner or by two on £20k each or £30k/£10k. The out goings may be higher if both are working because of child care and travel expenses. Or it may be higher if there is only one earner as there may be a Chelsea tractor, gym membership etc to pay for. Either way the bank takes a view at both the total income and the total outgoings. For example a bank may be prepared to advance more money to a household earning £35k that to a household earning £45k.

What they won't do is ignore the second income.

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The other issue for me is how the UU records co-ownership sales. Are they recorded at full price or share value? With co-ownership making up nearly 10% of the market I can see how if these are recorded as full price sales they could affect the averages of the UU report. Stamp duty would only be paid on the share value so can see the new report recording the "actual" price of the sold percentage. It's only right; the purchaser hasn't, after all bought the whole house only a percentage and rents the rest of the housing association. 10% is a big enough chunk of the market to mess with the numbers, especially with a co-ownership cap at £175,000.

Co-ow's average purchase is, or was £125k

If you are selling your house to a purchaser who is using Co-Ownership you get the full agreed sale amount. It is irrelevant to you that the purchaser is buying half and Co-ownership is buying the other half. Similarly if it is a traditional sale it is irrelevant to you that the purchaser is buying 20% and the bank is effectively buying the other 80%.

Under Co-ownership, if the sale price is over £125k STAMP is payable on the hole amount as the whole house has been purchased, albeit by two parties.

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Co-ow's average purchase is, or was £125k

If you are selling your house to a purchaser who is using Co-Ownership you get the full agreed sale amount. It is irrelevant to you that the purchaser is buying half and Co-ownership is buying the other half. Similarly if it is a traditional sale it is irrelevant to you that the purchaser is buying 20% and the bank is effectively buying the other 80%.

Under Co-ownership, if the sale price is over £125k STAMP is payable on the hole amount as the whole house has been purchased, albeit by two parties.

It is actually elective, you choose if you want to pay stamp duty on the initial "market value" amount or if you want to pay after you reach 80% share.

I don't know how the indices record this based on the fact above.

Edited by 2buyornot2buy
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It will be interesting to see if the UUJ report continues. They always claimed it was a sample and we know it excludes auction an fire sales as all other reports (as far as I am aware ) also did. There was always a good argument for that. But, if fire sales now represent 30% (I heard) of all sales I believe they can no longer be ignored as they are a major part of the market.

2,600 per quarter (if sustained) is over 10,000 pa. Are you saying this is 1/3 of peak or 2/3 of peak?

From page 6 of the report - for the avoidance of any doubt:

The quarterly number of verified residential property sales rose sharply during 2005 and 2006 to reach a peak of 11,087 in 2006 Quarter 4. The annual number of sales stood at just over 42,000 in 2006. Since 2009 the annual number has stood at around 11-12,000, thus giving a 75% reduction in transactions since 2006.

I wouldn't get too excited over an extra 200 odd sales in the first quarter before stamp duty changes (if it mattered here at all given the majority of sale prices)

http://www.dfpni.gov.uk/lps/statistics-report-quarter-1-2012-published-23rd-may-2012-617kb.pdf

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First-time buyers seize largest share of market in Northern Ireland since 2001

http://www.cml.org.uk/cml/media/press/3218

60% of the house purchase loans taken out in Northern Ireland in the first quarter of 2012 were to first-time buyers, according to new data released today from the Council of Mortgage Lenders in Northern Ireland. This was up from 58% in the final quarter of last year and the highest proportion since 2001.

Despite the increase in first-time buyers' share of the market, there is little evidence that the stamp duty concession boosted their numbers in Northern Ireland. The majority (75% in the first quarter of 2012) of first-time buyers in Northern Ireland purchase property under £125,000 - the lower threshold for the stamp duty concession to take effect.

First-time buyers in Northern Ireland borrowed on average £73,350 in the first quarter of the year, down 9% (£80,495) from a year earlier and down 40% (£122,000) from the peak in the third quarter of 2007. They typically borrowed 83% of their property's value in the first quarter, down from 84% in the last quarter but up compared to an average of 81% a year previous.

Overall in the quarter, 2,000 house purchase loans were taken out in Northern Ireland, down from 2,400 in the last quarter of 2011, but up from 1,700 in the three months to March last year.

Remortgage lending fell in the first quarter in Northern Ireland, compared to both the previous quarter and this time last year. £140 million was advanced for remortgage in the first quarter, down from £150 million in the same period last year, and £160 million in the last three months of 2011.

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It is actually elective, you choose if you want to pay stamp duty on the initial "market value" amount or if you want to pay after you reach 80% share.

I don't know how the indices record this based on the fact above.

Didn't know that. However the sale will be recorded at the transaction value. It would be the same as the houses that are sold in the STAMP exempt areas they are still recorded at the transaction amount.

Also houses transferred between husband and wife will also be registered at 'Open Market Value' even though no money has changed hands and no STAMP is payable.

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Didn't know that. However the sale will be recorded at the transaction value. It would be the same as the houses that are sold in the STAMP exempt areas they are still recorded at the transaction amount.

Also houses transferred between husband and wife will also be registered at 'Open Market Value' even though no money has changed hands and no STAMP is payable.

That's a leap vi. Is there anything in the report to suggest the new index recorded this type of transaction?

Edited by 2buyornot2buy
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Didn't know that. However the sale will be recorded at the transaction value. It would be the same as the houses that are sold in the STAMP exempt areas they are still recorded at the transaction amount.

Also houses transferred between husband and wife will also be registered at 'Open Market Value' even though no money has changed hands and no STAMP is payable.

Not sure if you have that right p18

The Commissioner of Valuation for Northern Ireland has access to returns, typically by solicitors, to HM Revenue & Customs (HMRC) of the details of land and property sales in Northern Ireland. This includes all domestic property sales as well as non-domestic property sales, land sales and property rentals in Northern Ireland.

However, there are a small number of property sales which do not require notification to HMRC, these include:

 transactions where no money changes hands;

 property that's left in a will; and

transfers of property in a divorce or when a civil partnership is dissolved.

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Just to recap on this report:

In the first quarter of this year, prices are falling at over 2% per month (and another 2 months has passed since then)

Prices are now 7% lower than in the first quarter of 2005 (when RV came in)

Transactions are down 75% from 2006 levels, and have been for the past 3 years

Auctions are included as they are deemed such a significant component of the current market

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Sorry you read my post wrong, or perhaps to be honest I presented it wrong. Going by the CML the average household income of a purchaser is over £40k and going by this report the average house is now £98k. Therefore, even if they were to get 100% loans, which they don't they are borrowing ad 2.2 or there abouts.

I said I cant claim that ratio for our sales as the average price of our houses is above the £98k and above the price you have stated.

If prices have fallen 50% and incomes (somehow) have remained the same (or increased if you accept other government reports)then the ratio has halved from what it has. Is this now a healthy market? we all will differ on that one and the absence of a healthy mortgage market plays into the conclusion of that discussion. However what I think we all can agree on is the halving of the ratio from what it once was is a dramatically healthier market from what we once had.

The Nationwide look at the income ratio for FTB'ers as this is all that really counts. They have looked at it in NI from 1983 and have an average of 3.1 over that period.

There may be a subtle point here which is where we are crossing wires. CML states, from what they've been told, the average salary of a 'purchaser' is over £40k (joint or otherwise). Now this 'homepurchaser average' will be different from the whole population average. Is the CML figure UK or NI? Given they say 60% of sales in NI are to FTBs, its hard to imagine this cohort - the majority - all earning £40k plus (individually or jointly).

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Govts view on other NI house price guesstimates - from stats report narrative.

Talking the talk yes, but, based on the outcome, very much walking the walk. And the reason why they dit it themselves? Reliability and thoroughness - translated that means a lack of confidence (and no doubt independence) in respect of other reports, their creators, data source and methodology.

I don't think another EA sponsored, BOI funded, UUJ property investment led report will ever see the light of day.

The National Statistician’s review of House Price Statistics which was published in December 2010 recommended the production of a reliable mix-adjusted House Price Index for Northern Ireland based on actual sale prices. There is currently no other reliable HPI based on actual sales evidence available within the province

Exploratory discussions took place with University of Ulster, Northern Ireland Housing Executive (NIHE) and Propertynews.com to advise of LPS intention to produce what LPS term as “the definitive house price index” for Northern Ireland. LPS Statisticians researched the technicalities involved, examined the methodology employed in existing HPIs and confirmed their capability to produce ground

breaking local analysis.

EAs, builders, banks, individual sellers (and buyers) will all, I'm sure, welcome and utilise this new reliable and robust data.

What's not to like?

http://www.dfpni.gov.uk/lps/lps-nisra-residential-property-price-index-methodology-report-may-2012-126kb.pdf

Edited by Shotoflight
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I can find no mention of the new NI PI in the Belfast Telegraph online -- propertynews - propertypal. Has anyone else found it?

If not shame on them for ignoring such an important development.

The Tele appear to have censored it - conspicuous in their splendid isolation. BBCNI, UTV, Irish News, News Letter, Bel Tel

Pressure from advertisers? Conflict of interest - self interest? Amateur, sloppy unprofessionalism? Something to hide? Shame? Big advertising house sale promo in the pipeline?

Who knows. But the info is now out there and, slowly but surely, any researcher and Journo worth their salt will be using this comprehensive, quality assured data as their baseline and default snapshot of what passes for a "housing market" here currently.

New housing index shows prices fall

The property market in Northern Ireland is not getting any busier despite industry claims, according to the new house prices index.

http://www.u.tv/News/New-housing-index-shows-prices-fall/83350c6a-936f-4d57-846f-cb569b6df34c

Embedded video report worth a watch. Michael Young local Estate agent claims it "will improve confidence"

"On a quarterly basis, we have seen more sales this quarter than a year ago," government statistician Dr David Marshall explained.

"But on an annual basis the number of sales has been fairly constant over the past three years."

The quarterly index is produced by the Land & Property Services.

Officials won't criticise other house price indices. However they point out that their survey covers pretty much all sales including those at auction.

"We felt that NI needed to have a comprehensive index of property and to show how the market is behaving," said Alan Bronte of the Land & Property Services.

"That is why we have done that. There are some 115,000 sales in the basket at the minute and that is what we are releasing this morning."

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<2005 levels would reflect most of our personal experiences looking at individual properties and comparing them to DCV. It does not change anything for me really from that point of view, but more accurate statistics are always welcome.

I always thought the average sale value of £160K was rather high. Going by the types of posts we have had on here from buyers, there where lot of cash buyers going in at the bottom end of the market, and so distorting the average mortgage value (well its a guess anyway).

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I'm going to pin this one at the top of the page to be found easily. It is the only index we need now since it is based on actual sales.

+1

I know this is from 4 years ago, but it is relevant to why the new index is going to be so important...

http://www.housepricecrash.co.uk/forum/index.php?showtopic=37941&st=6990

It is a quote from someone who was living in America at the beginning of 2008 ...

I wanted to add my experience of the market here in USA, as to maybe help people to be a little patient so they can buy a cheaper house over there in next couple of years.

It took quite a while for the Sellers to realise they couldn't get what they wanted for their properties in 2006, and tons of people still buying at silly prices. It took most of that year for prices to drop but didn't drop substantially at that time, but it soon picked up speed into the 2nd year and this year being the 3rd, the price drops are now crazy because of all of the foreclosures and short sales here, which also has a big factor in the prices lowering as the sellers now have to compete with bank owned properties.

"sellers now have to compete with bank owned properties."

This index is the only one that includes sales of "bank owned properties."

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Theoretically, has this new index fast forwarded where abouts in the crash we are by a few years?

...we wake up today and find it is actually 4.5 times the average wage- with the long term average something like 3.6 times the average wage.

Are we nearing the bottom after all?!

The RPPI is just a better representation of the actual market.

I think if we were near the bottom then there would not have been a 7% fall in the last quarter :huh:

I wonder what factors would have caused such a drop at this stage of the bubble collapse? The RPPI would have included repos in it's previous quarters. Though maybe the repos are just starting to effect the market now. I know a repo that happened 2 years ago that only sold recently.

If the long term average is 3.6 times the average wage, then that means at some point house prices will likely fall below the long term level i.e. an overshoot.

Edited by Belfast Boy
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  • 2 weeks later...

It is not just auctions where people are buying repossessed properties. A guy at work has just bought a house. He registered with a holding company through an estate agent and bought a repo. Also, he told me about someone else trying to buy the same way. They went to arrange a mortgage with their bank to buy a repo. The bank refused. They said they would only give him a mortgage to buy one of their many repossessed properties.

Do you know which bank ? I' d not mind going through their repo list to see if i can find anything interesing...

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NIHE continue to promote and be involved in the UUJ EA BOI troika sample survey.

Surely, when comprehensive, accurate, official figures are freely available at no cost to the end user, this indulgence constitutes a waste of scarce public resources, never mind lending credence to an unreliable and plainly erroneous report and its figures which are often all over the place - as admitted by the report itself - due not least to small sample sizes, and dubious primary sources, for its 'data' (Estate Agents to you and me).

Indeed, are they, as a public sector organisation, guilty of willfully misleading the public by ignoring the governments own data on a very important issue both to taxpayer funded policy makers and institutions, and indeed the public at large.

This is a much more important willful neglect of the RPPI than the (to be expected) fingers in ear attitude of the Bel Tel rag.

This report should, at the very least be accompanied by a 'public health warning' on both its validity and reliability should NIHE wish to continue involvement. Reasons for ignoring the IPPR would also be useful for many taxpayers who pay for both the IPPR and NIHE.

http://www.nihe.gov.uk/news-house-price-index-indicates-continued-slide

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