Jump to content
House Price Crash Forum
teddyboy

Lr Figures Will Show A Property Rising For A Long Time

Recommended Posts

I have spent a LONG time today going over the figures for the Land Registry to try and figure out why prices have rose? We all know that everything is selling for less and yet there is a 3% rise in the average house. WHY?

Well to be honest its a good use of figures. The KEY WORD here is AVERAGE.

I have looked at the number of sales and then the price ranges. For something that is 60-70K I have said that each sale is £65,000. I have gone for the middle figure. This is purely for percentages only.

The reason why the average prices have rose is HIGH ACTIVITY in the 150K plus markets. Please look through all the data and comment on anything that may be wrong. What I can see that is quite clear is this:

PERCENTAGE OF SALES

2003 2004 2005

0-£150,000 58.94 47.50 45.86

150,000-500,000 39.15 49.96 51.14

500,000-1million 1.61 2.24 2.56

1million + 0.30 0.30 0.44

The sales of properties SUB 150 have dwindled to a low of only 45.86% of sales. Does anyone know what a "HEALTHY" percentage of sales are FTB's? Even though sales have dropped 15.41%, everything over £150K has risen as a percentage of sales. Everything Below £150K has declined as a percentage of sales. With this imbalance the scales will NEVER tip to a drop in prices unless the >£150K move across to the <150K columns.

Even with 25% across the board taken off the market, unless you get the percentage of sales <150K higher than the >150K. Then mathematically it is impossible to drop! You then have to counter the £1million+ properties as well.

This method is deceiving. Its like going to a DAEWOO garage to buy a MATIZ, which sells for about £8K and the salesman saying, well there have been a lot of LEXUS and BMW's selling so this car is now worth £14,000. As this is the AVERAGE price of a motor car.

Look at these figures and see that the FTB market is getting MORE and MORE UNAFFORDABLE. I am officially calling the CRASH. It is about to POP. The scales of balance cannot be corrected.

Please comment on any anomilies. Whether you agree with me or any other data that you find interesting.

TB

ZIP file includes Excel and JPG

Share this post


Link to post
Share on other sites

Please comment on any anomilies. Whether you agree with me or any other data that you find interesting.

No a lot of properties below 150K as seen on the graph for Crawley RH10. Out of 2747 properties on sale last 12 months, only 214 properties were below 150K. BTW graph show price reduction for all properties from 900K (left) to 75K (right) for 15 years old one bedroom detached Park Home. Hey…75K for a park home! :lol:

reductions.gif

post-702-1131846336_thumb.jpg

Share this post


Link to post
Share on other sites

I have spent a LONG time today going over the figures for the Land Registry to try and figure out why prices have rose? We all know that everything is selling for less and yet there is a 3% rise in the average house. WHY?

All this is bloody confusing to people like me that don’t (or have faith) in the decimal point arguments.

I don’t doubt you teddyboy, something is screwy with the stats!

Whether it can be explained with maths or dismissed because of spin , I don’t know anymore.

DrBubb started a thread defining a crash. We need one defining 'yardsticks' and 'milestones'.

I’d start one myself but my threads sink faster then Southgate house prices! :P

Share this post


Link to post
Share on other sites

I think you cannot frankly say that house prices have fallen and LR cannot frankly say that house prices have risen.

The shift from low prices houses to high prices houses can be attributed to two factors: 1. HPI, 2. relativley increased activity at the high end

But which one stands true, you cant judge from this data.

From the data in the xls, the only thing is very clear: aggregated demand has fallen big time.

Share this post


Link to post
Share on other sites

I think it is clear that the LR stats are miss leading.

In some areas of the country the market is 'healthy' with prices still rising. These areas have high volume. Areas where prices are falling or static have low volume. This skews the LR data towards a rise.

There are fewer FTB so a higher proportion of 2nd/3rd/4th time buyers. These buyers tend to by more expensive properties than FTB so the LR data is skewed to the more expensive end of the market.

Share this post


Link to post
Share on other sites

I’d start one myself but my threads sink faster then Southgate house prices! :P

I agree – we need a section of the forum where an ‘in depth’ discussion of house prices is possible – the current situation is that posts generally sink (i.e. are swamped) from the top page into a kind of HPC oblivion within *hours* so that any kind of informed or continued discussion is next to impossible and the incentive to post anything in depth is just not there any more.

Share this post


Link to post
Share on other sites

I agree – we need a section of the forum where an ‘in depth’ discussion of house prices is possible – the current situation is that posts generally sink (i.e. are swamped) from the top page into a kind of HPC oblivion within *hours* so that any kind of informed or continued discussion is next to impossible and the incentive to post anything in depth is just not there any more.

This is a really important thread. Many people are making the mistake of thinking that the LR, Nationwide or Halifax info represents "like-for-like" sales ie that every house in every street is going up by 3%. Even people on this site who should know better are questioning whether a crash is happening.

Unfortunately these figures are only average prices of houses which are sold, and take no account of the large numbers of unsold houses. A more legitimate way of estimating the value of all our houses (ie the total housing stock in the UK) would be to divide the total amount spent on housing in the last 12 months by the total number of dwellings in the UK. You have to estimate these numbers, but my results show falls of approx 15% across England and Wales since Summer 2004.

There are huge misunderstandings in the media about what the various housing statistics mean. As someone who works with statistics for a living, I say be very very careful!

Share this post


Link to post
Share on other sites

...and yet elsewhere people are moaning too much is pinned at the top...

Agreed, though, this is more important and needs a better discussion than say the next HPC meet in London. Refreshingly this forum is not swamped by southerners but has an equal balance across the country.

Share this post


Link to post
Share on other sites

This is a really important thread. Many people are making the mistake of thinking that the LR, Nationwide or Halifax info represents "like-for-like" sales ie that every house in every street is going up by 3%. Even people on this site who should know better are questioning whether a crash is happening.

Yes, this is the key point. Teddyboy's analysis is exactly what we need to do to begin to slice up the data to extract the real story. I've been thinking for a while that "average house price" was not very informative. Here we see the bottom end of the market has died away so the average has gone up. Sensible enough once you have looked inside the data, but you do need to delve a little.

Would it be possible for someone to produce a price distribution, showing how the pattern of sales versus selling price has changed? I don't have the facilities to do it. This should reveal clearly a dying of the base of the market. The very large transactions in the millions probably are not linked into housing chains the way lesser houses are.

I agree with Teddyboy that once the bottom of the market falls away then that's a strong sign the market is getting sick.

Edited by malco

Share this post


Link to post
Share on other sites
Guest consa

To add to this thread:

When the lower end sales pick up the falls will become apparent in the figures, the longer the "stagnation" the harsher the falls will be.

Not that I haven't said all this before on numerous occasions <_<

Share this post


Link to post
Share on other sites
Guest Alright Jack

I am officially calling the CRASH. It is about to POP.

Well, I hope you have more luck than DrBullsh!t.

At least you have made a tangible argument, a neat introduction, figures and put a coherent conclusion with a prediction.

I'll give you that much.

DrBollox just generates random numbers on a sheet and gets excell to draw a graph then makes a post sooooooooo dull that no one in their right mind could possibly read enough of to bother to find all the holes.

Then if we don't like it, poor ol' SP get it.

But I'm just a troll of course.

Share this post


Link to post
Share on other sites
Guest consa

Well, I hope you have more luck than DrBullsh!t.

At least you have made a tangible argument, a neat introduction, figures and put a coherent conclusion with a prediction.

I'll give you that much.

DrBollox just generates random numbers on a sheet and gets excell to draw a graph then makes a post sooooooooo dull that no one in their right mind could possibly read enough of to bother to find all the holes.

Then if we don't like it, poor ol' SP get it.

But I'm just a troll of course.

This is a sad post, either you are replying to someone or you are slagging someone off, which is it ?

Share this post


Link to post
Share on other sites

OK. Here is a visual representation of why the LR numbers are misleading. The three charts below relate to the distribution of the number of properties sold between the various available price bands. Each chart compares the distribution of property sales accross the bands allocated by the land registry from July to Septemeber in the years concerned.

Chart 1 compares July-September 2002 with the same period in 2003

2002_2003_Dist.JPG

Chart 2 compares July-September 2003 with the same period in 2004

2003_2004_Dist.JPG

Chart 3 compares July-September 2004 with the same period in 2005

2004_2005_Dist.JPG

Chart 1 and Chart 2 are there to show what it looks like when the market is genuinely rising. The distribution curve moves completely to the right meaning that prices at all parts of the spectrum have risen together.

Chart 3 shows what has happened in the last year. The 2005 curve has simply shrunk inside the 2004 curve with properties in the sub 200K category declining in sales more markedly than the more expensive ones. This skews the average even though the curve as a whole has not moved.

Regards Hubba.

post-1262-1131904334_thumb.jpg

post-1262-1131904364_thumb.jpg

post-1262-1131904396_thumb.jpg

Share this post


Link to post
Share on other sites
Guest Alright Jack

This is a sad post, either you are replying to someone or you are slagging someone off, which is it ?

Both (must we have either or ?)

I was responding to teddy boy.

And i was slagging of bub by association of his incorrect call for the 'top'.

Simple logical. If ya don't like it, shove it. I don't care.

I'm just a troll of course.

Share this post


Link to post
Share on other sites
Guest consa

Simple logical. If ya don't like it, shove it. I don't care.

I'm just a troll of course.

So you are :lol::lol:

Share this post


Link to post
Share on other sites

Would it be possible for someone to produce a price distribution, showing how the pattern of sales versus selling price has changed? I don't have the facilities to do it.

The LR transaction distribution and changes between 2003 to 2004 were posted on this thread [8th Nov] including details of the methodology and proper definitions of the transaction density :)

http://www.housepricecrash.co.uk/forum/ind...ndpost&p=229977

However, they appear to differ somewhat from those posted above (divide out by bin size?).

Edited by spline

Share this post


Link to post
Share on other sites

OK. Here is a visual representation of why the LR numbers are misleading. The three charts below relate to the distribution of the number of properties sold between the various available price bands. Each chart compares the distribution of property sales accross the bands allocated by the land registry from July to Septemeber in the years concerned.

Chart 1 compares July-September 2002 with the same period in 2003

2002_2003_Dist.JPG

Chart 2 compares July-September 2003 with the same period in 2004

2003_2004_Dist.JPG

Chart 3 compares July-September 2004 with the same period in 2005

2004_2005_Dist.JPG

Chart 1 and Chart 2 are there to show what it looks like when the market is genuinely rising. The distribution curve moves completely to the right meaning that prices at all parts of the spectrum have risen together.

Chart 3 shows what has happened in the last year. The 2005 curve has simply shrunk inside the 2004 curve with properties in the sub 200K category declining in sales more markedly than the more expensive ones. This skews the average even though the curve as a whole has not moved.

Regards Hubba.

You're confusing changes in prices and changes in transaction volumes. Try again, plotting percentages of total transactions in each price band, instead of absolute number of transactions.

Share this post


Link to post
Share on other sites
Guest consa

Just an update!!!!

looked back at the data from 1999 onwards. I think we have reached an interesting point!

Percent_sales_99_05.jpg

Comments please

TB

Now this is evidence of the shifting pattern, the point where the lines cross is the point the figures are definately skewed, hence why we can have rising property prices in a falling market.

The topic spline links to has a clear interpolation of the figures

http://www.housepricecrash.co.uk/forum/ind...77entry229977

Edited by consa

Share this post


Link to post
Share on other sites

Traditionally, FTBers account for around 50% of all residential property transactions, is my understanding.

I've never been able to understand this 50% figure (which I have seen quoted elsewhere by the way).

The rest of the market, excluding FTBs, move house about every 7 years which would tend to suggest 50% is way too high.

Edit - At the moment NAEA agents reported that first time buyer sales accounted for 11.0% of total sales in September, compared with 7.7% the previous month, and 7.8% in July.

I'd have thought 10 to 20% would seem a reasonable number of FTBers myself.

Edited by ILikeBigBoobs

Share this post


Link to post
Share on other sites

I've never been able to understand this 50% figure (which I have seen quoted elsewhere by the way).

The rest of the market, excluding FTBs, move house about every 7 years which would tend to suggest 50% is way too high.

Edit - At the moment NAEA agents reported that first time buyer sales accounted for 11.0% of total sales in September, compared with 7.7% the previous month, and 7.8% in July.

I'd have thought 10 to 20% would seem a reasonable number of FTBers myself.

I agree! The problem nowadays is the bottom rung of the ladder has been taken away. I would say the bottom 2 tbh. I know from my circumstance that I could buy a basic terrace in a crap part of Liverpool for say 80K but in 5 years time I would not be able to sell it and would be lucky to get my money back. We have the Capital of Culture or as I call it The Capital of Vultures. We have lots of 'outsiders' buying property and this WILL stop after 2008. They are paying silly money for areas which we "the locals" know are drug dens and bad areas. We would NOT pay the prices for the areas that the outsiders are paying.

I have to go the next step up - directly to the semi, with garden. Why? Because it will be cheaper in the long run.

The figures that I am showing are pointing towards FTB's - I find it difficult to believe that many 2nd time buyers can get an upgrade house for less than 150K - so the figure of 47% now would show that at least imho 30% of these are first time buyers.

I am using common sense here on this thread. I am just reading between the lines of the figures and I strongly believe that things are looking GOOD for a massive correction in the FTB market.

TB

Share this post


Link to post
Share on other sites

Does this thread not simply show that the percentage of properties in the 150,000plus bracket is rising because house prices are rising and houses which might, previously, have been sold for sub-150,000 are now being sold in excess of that price? And therefore that property prices are still rising, despite our anecdotal evidence to the contrary?

CS

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.