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Do Nationwide Know Something We Don't?

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This story was posted in the blog, but surpisingly no HPCers have commented on it.

http://business.timesonline.co.uk/article/...1876393,00.html

Can the nice people at Nationwide see something happening in their unreleased figures? They predict that house prices will fall next year, or at the best we can expect 0% growth. Seems a strange thing for a VI to do, unless they want to appear "responsible" lenders or something.

Why do you think that Nationwide have released this news?

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This story was posted in the blog, but surpisingly no HPCers have commented on it.

http://business.timesonline.co.uk/article/...1876393,00.html

Can the nice people at Nationwide see something happening in their unreleased figures? They predict that house prices will fall next year, or at the best we can expect 0% growth. Seems a strange thing for a VI to do, unless they want to appear "responsible" lenders or something.

Why do you think that Nationwide have released this news?

a good day to bury bad news or maybe they,ve been visiting us ??

:D (they probably do ! - hi fiona :P )

still spinning though, whichever way you look at it...

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Guest Riser

Nationwide include figures from Scotland and Northern Ireland in their survey, infact it has been the high HPI in these two areas that has supported the National HPI figure.

HOUSE prices in Glasgow have dropped by 12% on average over the last three months.

There is growing evidence that the Boom has now peaked in these areas so we should expect Nationwide to start reporting headline negative National HPI soon which will make the public take notice even though inflation adjusted HPI went negative a couple of months ago. There is also a political angle with Nationwide providing some justification for the MPC to cut rates in December in a last ditch unsustainable attempt to revive the economy.

Edited by Riser

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Presumably N/wide have a greater obligation to be candid when reporting to the markets than they do when spinning to the public.

All the same it is a bit of a mystery why they think prices will fall next year. Why? Inflation apparently falling. Market activity picking up. Strange.

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I suspect they are seeing what we know is happening in the market. My barber told me his property has lost k40 in the last year. Everyone you talk to has stories of people with property on the market for over a year, and most people now accept that prices will go down. Nationwide are expecting prices to start falling in the New Year, and this announcement is planned to remove any shock factor when they do. They have buried their usual VI crap in it by saying that the market will improve later in the year. They are very astute really, if they prepare people for falls, but say that they will only be short lived, then people might still be tempted to buy. However, there won't be enough buyers around to make a difference. The debt in this land is really going to squeeze hard next year and once the YOY goes -ve, which it will now if Nationwide are saying it will, then it will stay -ve over the long term for at least a couple of years.

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It might also be a case of now stating something so that, a year or so from now, they can point to this report and say "We did warn that house prices were going to fall', buyer beware and all that.

Certain economists are very good at this - hedging their bets and writing reports that state quite contradictory views on a given market. They can then be prooved always right. Personally, I prefer the ones who have said that if it looks like a bubble and acts like a bubble then it is a bubble!

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It might also be a case of now stating something so that, a year or so from now, they can point to this report and say "We did warn that house prices were going to fall', buyer beware and all that.

Certain economists are very good at this - hedging their bets and writing reports that state quite contradictory views on a given market. They can then be prooved always right. Personally, I prefer the ones who have said that if it looks like a bubble and acts like a bubble then it is a bubble!

Think you guys are perfectly right about why they are being so "honest". Realistically even the blindest of bulls has to be re-assessing their position. Of course when you hold a large mortgage book as Nationwide do the last thing you want is a real run on housing with the resultant crying nurses and firemen standing outside their recently auctioned properties nursing negative equity demands from their over-generous lender...

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well we saw it before didn't we?

...the adjustment from "soft landing" to "modest falls" is quite telling.

....nationwide are preparing the ground for some quite hefty drops,and joe public hasn't quite cottoned on yet.

the news reports from the '89 crash are starkly similar in tone,so this is a case of history repeating for sure.

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This story was posted in the blog, but surpisingly no HPCers have commented on it.

http://business.timesonline.co.uk/article/...1876393,00.html

Can the nice people at Nationwide see something happening in their unreleased figures? They predict that house prices will fall next year, or at the best we can expect 0% growth. Seems a strange thing for a VI to do, unless they want to appear "responsible" lenders or something.

Why do you think that Nationwide have released this news?

There was a thread on this (but a different article) - I think.

Very strange for Nationwide to publish this, I guess if there is a crash (or falls) everyone will blame them as they said it won't happen. At least now they have realised a report saying there 'may' be falls next year. But i'm sure it will get forgotton, but if falls are apparant NWide can bring it back up and say 'I told you so'.

The spin is rubbish tho. Making predictions over 6 months into the future is crap for an organisation who realises reports every week (almost). How many more reports will be made before we can see if they are correct predicting price rises towards the end of the year.

Funny how they stil say there won't be a crash - what's their definition of a crash?

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Hi,

Yes, I am sure that they are ahead of the market. I spent a few weeks recently corresponding with their economics and PR departments asking exactly how they calculate their indices. Exactly how. Methology and where a member of the public might view the figures they compile in making each survey and if they have their indices independently monitored. No, no and no were the responses. I am not saying they lie, I am saying that they only include a small sample figure of approvals (not even sales - if you are sitting in a chain,nothing has sold but they include it in the indice), at most 15-20%. They can vary their methods - and have, halifax during the middle of the year, vary weighting methods, vary seasonal adjustment calculation. Basically, it is in no way impartial, it cannot be rigoursly examined and, well, they sell loans for a living. Draw your own conclusions. Go and write to them yourself, you'll soon find out.

So, they will have a very good idea of what is really happening in the whole of their market, not just the select snippets they put together for the media and shareholders. My guess? They pulled out all the stops with upbeat news to rally the market at a busy period of the year to try and kick start things. It fell flat on its face. The economy is labouring, people are broke, no juice left in the engine to pull out of the nose dive. Now they will probably start being realistic about the state of the market so as not to completely lose all credibilty.

Boomer

Edited by boom_and_bust

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Hi,

Yes, I am sure that they are ahead of the market. I spent a few weeks recently corresponding with their economics and PR departments asking exactly how they calculate their indices. Exactly how. Methology and where a member of the public might view the figures they compile in making each survey and if they have their indices independently monitored. No, no and no were the responses. I am not saying they lie, I am saying that they only include a small sample figure of approvals (not even sales - if you are sitting in a chain,nothing has sold but they include it in the indice), at most 15-20%. They can vary their methods - and have, halifax during the middle of the year, vary weighting methods, vary seasonal adjustment calculation. Basically, it is in no way impartial, it cannot be rigoursly examined and, well, they sell loans for a living. Draw your own conclusions. Go and write to them yourself, you'll soon find out.

So, they will have a very good idea of what is really happening in the whole of their market, not just the select snippets they put together for the media and shareholders. My guess? They pulled out all the stops with upbeat news to rally the market at a busy period of the year to try and kick start things. It fell flat on its face. The economy is labouring, people are broke, no juice left in the engine to pull out of the nose dive. Now they will probably start being realistic about the state of the market so as not to completely lose all credibilty.

Boomer

Boomer, why don't you write to a newspaper with your Haliwide house price indices findings? I'm sure if you got an [indepedent] journalist on the case, it would make a very good read...

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Well for all their talk , if you take the trouble to look at there accounts ( cash flow , the only important bit ) the had a net decrease of £227m.

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  • 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%



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