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Bland Unsight

Land Registry House Price Index June 2014 Mom 0.0%

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What's the collective opinion on the 'recorded monthly sales' charts on page 12? These really seem to have fallen off a cliff over the last few months. I know sales volumes have been quite low for the last few years but the recent HPI mania, especially in London, doesn't seem to be reflected in actual sales volumes?

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What's the collective opinion on the 'recorded monthly sales' charts on page 12? These really seem to have fallen off a cliff over the last few months. I know sales volumes have been quite low for the last few years but the recent HPI mania, especially in London, doesn't seem to be reflected in actual sales volumes?

Go to the Land Registry Custom Search facility and search for the Greater London transaction volumes from 1995 to today.

Too early to tell as the most current sales volume figures in the Land Registry data are the April 2014 numbers. Before 2008 you have quite a stable trend in the non-seasonally adjusted volume figures, having a low in January and a peak in July/August. Post-2008 you have a big dip in the numbers, (during the boom years a July peak would be about 15,000-16,000 for Greater London), the biggest post 2008 number was 11,255 in November 2013. Mainstream reporting only reports one number at a time so the rapid rise in prices has been reported but the failure of volumes to recover has not.

For a while my supposition has been that that prices are unaffordable (in the sense that you literally cannot raise the money to pay them, and setting aside issues of value - i.e. whether or not you should pay them!) unless you have masses of equity, an absolutely stonking income or access to interest only borrowing, (or a combination of the three). Basically people who can afford to pay more have paid more (hence prices rise) but the number of people who can play is small (hence volumes are static). The fact that the Help to Buy schemes and bonkers low mortgage rates of sub 2% hasn't produced a decent spike in volumes speaks volumes (sorry, couldn't help myself).

What would be interesting would be to have a handle on the volume of inward speculative investment in Greater London during the same period. If it was 1,000 a month it would be nearly 10% of the market...

Edited by bland unsight

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Land reg: June 2014 Avg. price £172,011

Land Reg: May 2014: Abg Price: £172,035

Woohooo...prices actually fell during peak selling time. Prices down 0.001 % :P

In fact they shoudl be advertising -0.0%

Edited by TheCountOfNowhere

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“I think London buyers in particular have reached a point where enough is enough. Silly season couldn’t go on forever.”
Edited by winkie

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Interesting that repo volumes have taken such a dip yoy.

The repossessions trend is strikingly robust - quite a thorough briefing paper on the how and why of it House of Commons Library - Mortgage Arrears and Repossessions

This quote is taken from the report's evaluation section, (emphasis added).

As stated in the introduction to this note, the Council of Mortgage Lenders has attributed lower than forecast repossession levels by first-charge mortgage lenders to historically low interest rates, increased lender tolerance (forbearance) and Government rescue schemes. There is a correlation between rising unemployment and repossession rates but this appears to have been “cushioned” by low interest rates.

There is a view that lessons learned during the recession of the early 1990s have been applied and that lender forbearance has been crucial; there is little point in lenders pursuing repossessions and releasing a number of properties onto an already depressed housing market.

The longer historical picture is illuminating

_45496381_mortgage_poss_466gr.gif

As the graph shows repossessions in the previous bust peaked at almost 80,000 a year. Presently we are running at about 12,000 a year. Basically the banks don't repossess. A November 2013 CML press release states that in the owner occupier sector repossession rates are 0.06%, though there's quite an amusing nod to the higher rates in the BTL sector, (emphasis added).

The CML figures cover both home-owner and buy-to-let arrears and repossessions. Arrears in the buy-to-let market are lower than in the home-owner market. While buy-to-let mortgages represent over 13% of the total number of mortgages in the UK, the sector accounts for only 9% of the total number of mortgages in arrears. However, the repossession rate is a little higher on buy-to-let than on home-owner mortgages (0.10% on buy-to-let compared with 0.06% on home-owner-mortgages). Of the 7,200 total repossessions, 1,500 were buy-to-let.

"A little higher" :lol: - that is the BTL repo rate is twice the owner-occupier rate. I wonder if the CML goon who wrote the report would like to play Russian roulette with a number of bullets in his gun that was a "little higher" compared to the number of bullets in his opponent's gun - maybe 2 out of 6 not 1 out of 6, after all two is only a little higher than one.

Edited by bland unsight

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