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Bruce Banner

Rightmove - There Is No Bubble

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Article on PropertyIndustryEye


MOST SALES GO THROUGH AT UNDER ASKING PRICE

Only 7% of buyers are paying more than the asking price with the huge majority paying less, Rightmove said today.

Meanwhile, Hometrack this morning reported that house price rises are stagnating.

It said that while house price growth has continued this month, it is at half the rate three months ago.

Average prices rose by just 0.3% in June, while there was no rise at all in demand, measured by the number of new applicants.

Although time on the market has gone down, to 5.9 weeks, the percentage of asking price being achieved has slipped to 96.6% – lower than the last four months.

Hometrack said that it is a sign that agents are finding it harder to sustain price rises.

Richard Donnell, director of research at Hometrack, said: “Pent-up demand has been feeding into the market over the last 18 months, creating upward pressure on house prices.

“This trend now appears to be running out of steam, with no change in demand over the month.”

Hometrack now expects the rate of house price growth to slow down further – partly due to the Mortgage Market Review (MMR), and partly due to talk of interest rate rises.

Separately, Rightmove said that most people are paying under the asking price, despite talk of an over-heated market – and despite sellers jacking up their prices by nearly 8% in the last year.

Rightmove said it believes most buyers will continue to negotiate under the asking price, because of the MMR making it more difficult to get loans.

However, unlike Hometrack, Rightmove did say that the gap between asking price and selling price is narrowing.

The portal made its remarks after the NAEA claimed that in May, 19% of properties were sold at over the asking price.

The NAEA said that buyers who could not increase their offers risked being priced out of the market – although it did add the warning that the MMR could slow down sales.

But Rightmove has made it clear that its own findings and figures look as though the market in general is a very long way from over-heating.

It said that 72% of buyers in England and Wales paid under the asking price in the past 12 months. Even in London, 53% of buyers paid less.

Nationally, says Rightmove one in five (21%) paid exactly the asking price and 7% paid over.

The portal has based its figures on a poll of over 6,000 people who bought a property in the last year.

Miles Shipside, Rightmove director, said: “Talk of a national housing bubble is unfounded.

“Even in London, over half of buyers paid under the asking price.

“Although people are putting in offers under asking price and are still doing so in the current market, from our data we know that the discount from asking to sold price has narrowed.

“In 2012 properties achieved around 95% of the asking price, and in 2013 this average figure increased to around 97%.

“The Mortgage Market Review’s more stringent criteria makes it likely that people will continue to offer less than the asking price, especially if the new rules mean they are offered a lower mortgage than they were expecting.”

In a third report, there were 41,757 mortgages lent last month for house purchase by the big high street banks.

While this was steady compared with April, it was down from the 48,412 approvals in January.

The figures are reported by the British Bankers Association.

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Well that's a new one. In the last week I've heard all these explanations in the media for why it's not a bubble:

1) Transaction levels are lower than peak (or just pre-peak)

2) Transactions are still going through, even in London (completely contradicting the previous explanation)

3) Prices in some northern areas aren't massivley above the 2007 peak

4) Prices in some northern areas are only inflating at 5% or so

5) people are paying under asking price (regardless of what the asking price is)

It's return-to-normal, or boiling frog syndrome. The water's simmering but it doesn't feel hotter than the rolling boil of 2007 so it can't be too hot for a bath, right?

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Yeah, £500k for a 2 bed maisonette in an average street in N2. These were going for around £150k in 2002.

They are right.

It's not a bubble.

It's a bubble on top of a bubble.

VI Muppets.

It's mega bubble mania

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"No bubbles here in the North East" said the BBCs Simon Gompertz, "where the average price is barely more than a year ago and many home owners have seen their assets become a liability".

That's what happens when you buy a house during a house price bubble...... Labour's house price bubble, which the present government are having less success at keeping inflated is some areas.

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"No bubbles here in the North East" said the BBCs Simon Gompertz, "where the average price is barely more than a year ago and many home owners have seen their assets become a liability".

Priceless.

That's exactly what a house is, an expense, a liability. Why anyone thinks they should be gifted massive tax free unearned money just for owning one is beyond me. The only thing I can think is that the friends of the powers that be all own property and like the easy money. Our government seems devoid of ideas to generate real jobs/wealth/technology etc. It would follow that perhaps we are being governed by the wrong people.

Edited by TheCountOfNowhere

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Priceless.

That's exactly what a house is, an expense, a liability. Why anyone thinks they should be gifted massive tax free unearned money just for owning one is beyond me. The only thing I can think is that the friends of the powers that be all own property and like the easy money. Our government seems devoid of ideas to generate real jobs/wealth/technology etc. It would follow that perhaps we are being governed by the wrong people.

Indeed we are, and I voted for them :(.

Note to Conservative Party. There are many life long Conservative voters who will not be voting Conservative again until the present leadership of career politicians are an unhappy memory.

Edited by Bruce Banner

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