Britain’S Property Boom Roars Back To Life, Powered By London

[TheCountOfNowhere]

Hopes prices levelling dashed as figures show renewed surge, largely driven by capital, where prices rose by £15,000 in July

http://www.theguardian.com/money/2014/aug/29/britain-property-boom-london-house-prices

Worth a read...just to see how facts and data can be twisted to suit the agenda.

Not one mention that there is a 3 month lag on the LR data.

Julys data will reflect the london mega bubble top....just before the inevitable collapse.

"Don’t be surprised to see prices ease next month.”"

....NSS

Edited August 31, 2014 by TheCountOfNowhere

[outdriveman]

When I first read this article, I thought here we go again, until I realised your point that this is referring to sold prices which as you say is a lag indicator. The lead indicator which is asking prices dropped like a stone last month.

[200p]

ROAR!

[The Knimbies who say No]

Sorry, I posted on the wrong thread.

Edited August 31, 2014 by Joan of The Tower

[Mrs Bear]

Hopes prices levelling dashed as figures show renewed surge, largely driven by capital, where prices rose by £15,000 in July[/size]

http://www.theguardian.com/money/2014/aug/29/britain-property-boom-london-house-prices

Worth a read...just to see how facts and data can be twisted to suit the agenda.

Not one mention that there is a 3 month lag on the LR data.

Julys data will reflect the london mega bubble top....just before the inevitable collapse.

"Don’t be surprised to see prices ease next month.”"

....NSS

The other thing they never mention is that LR prices, already a 'lag' will represent agreed prices from ( usually) 2-3 months previously. So that LR completion prices for June will probably be indicative of agreed prices in around April.

[billybong]

The other thing they never mention is that LR prices, already a 'lag' will represent agreed prices from ( usually) 2-3 months previously. So that LR completion prices for June will probably be indicative of agreed prices in around April.

So that would take things back to about the time that the sector's share prices started to fall.

[billybong]

MSM will just do the normal trick and ignore the monthly figures if they are not 'good' and go for the more 'indicative' 3 months figures and if they are not so 'good' to the annual figures and the 10-year HPI free-money tree. But if asking prices plummet for two or three months and then there is a small rise then the market has 'recovered'. Spin upon spin. .... and they can always 'seasonally' adjust and correct the previous months figure (down) to generate an increase for this months figures.

Indeed - unless there's evidence of a strong underlying overall trend that most people can't fail to see and the MSM are then obliged to recognise - such as the 2007 bank run in the UK etc.

During the 1980s/90s house price crash the entire sector came up with all statistical house price manipulations and propaganda but that still didn't stop prices going down when they did - unexpectedly of course.

Edited August 31, 2014 by billybong

[jasonpistol]

those muppets on MSE are celebrating like they won the lottery over this article.

[Venger]

those muppets on MSE are celebrating like they won the lottery over this article.

Remember they are victims, and 'half the people you meet are dumb', and brokers have certificates on the wall meaning it's safe to pay £500,000 for a flat... open viewings against other knowledgable people in London.... all agreeing London is No.1 and spelling out the reasons why it can't fall hard in value... almost impossible for it to fall 10%.

So sit back and congratulate them on their gains, and other buyers decisions to meet crazy asking price, tomorrow, next month, etc.

It's hpcers who are the problem, coming out with pathetic excuses, with house prices at insane levels. Rent forever you soft fools, and damn your own children and future generations.

[“Nasty Piece of work”]

Within a year it will have shot it's wad, but the poor MFer's will have 25 years to regret it.

[TheCountOfNowhere]

has everyone seen the nonsense they people who get to post on the front page are talking about this nonsense.

are they living on planet la la land?

[outdriveman]

has everyone seen the nonsense they people who get to post on the front page are talking about this nonsense.

are they living on planet la la land?

Rather amusing. I like the compound interest calculation that have been made on 1 months growth on sold prices. I don't understand why this is a shock to anyone who follows the market as closely as those on this site. We have all seen the headlines about London prices for the first half of the year and therefore we should all be aware that deals negotiated in May- June would come out through the wash to higher sold prices. The lead indicator (asking prices) dropped by 5 odd % last month

[TheCountOfNowhere]

Rather amusing. I like the compound interest calculation that have been made on 1 months growth on sold prices. I don't understand why this is a shock to anyone who follows the market as closely as those on this site. We have all seen the headlines about London prices for the first half of the year and therefore we should all be aware that deals negotiated in May- June would come out through the wash to higher sold prices. The lead indicator (asking prices) dropped by 5 odd % last month

Yeah, it's like some school kids have just started posting.

I looked at some of the asking prices listed for Clapham today.

Imagine, if you would, a high earning couple with around £200k income between them, I;m sure no one would argue this would put them in the top 1% of earners in the country, all they can buy with any sensible mortgage would be a 2 bed crappy flat in Clapham, first time buyer stuff...not top 1% stuff, not even top 50% stuff.

When you just stand back and look at it there is no doubt in my mind, the London mega bubble will collapse hard.

The london mega bubble is destroying the country, it's creating a massive imbalance a massive unfairness in society the sooner it collapses and people see the bankers and the self serving politicians for what they are the better for us all.

[outdriveman]

Count, I can not agree with you enough. Once we get a drop of 20% (the equity most btl keep in property) that's when the btl brigade will start running for the hills. Sometimes I think I am the mad one when I say I am a property bear, the bulls are strong in numbers and unfortunately for the last 16 years they have been right. I just did not realise the levels the boe and government would stoop too.

[mmt]

Hopes prices levelling dashed as figures show renewed surge, largely driven by capital, where prices rose by £15,000 in July

http://www.theguardian.com/money/2014/aug/29/britain-property-boom-london-house-prices

Worth a read...just to see how facts and data can be twisted to suit the agenda.

Not one mention that there is a 3 month lag on the LR data.

Julys data will reflect the london mega bubble top....just before the inevitable collapse.

"Don’t be surprised to see prices ease next month.”"

....NSS

Guardian has gone into full delusion mode. This is the paper that gave us: "House prices won't collapse yet: not with so many frustrated buyers waiting"

A buyer that cannot buy is not really a buyer, now is it?

[Wurzel Of Highbridge]

I post on the main page as khards, could do with more quality posters on there since most of the regulars gave in and bought.

you just need to email webmaster@housepricecrash.co.uk and ask for a blog login.

Btw, Libertas has just been suckerd into the London Mega Bubble so is desperate to justify his purchse debt every couple of days.

Edited August 31, 2014 by Wurzel Of Highbridge

[billybong]

The fresh acceleration in house prices comes despite a clutch of reports from estate agents and surveyors in recent weeks suggesting the heat has come out of the property market since the start of the summer as more homes have come onto the market and buyers have become less willing, or able, to stretch themselves.

It seems rather crooked to claim a fresh acceleration in house prices when for sure the guardian will be fully aware that the acceleration they're referring to is based on figures for house prices maybe 5 or 6 months old and when there seems to be truly fresh evidence that house prices could be weakening especially in mega bubble London.

They could easily have offered a factual explanation for the seemingly contradictory news.

If they aren't aware of the reasons for the contradictions then they have no business publishing articles under the "Money" section of the guardian.

Edited August 31, 2014 by billybong

[Mrs Bear]

MSM will just do the normal trick and ignore the monthly figures if they are not 'good' and go for the more 'indicative' 3 months figures and if they are not so 'good' to the annual figures and the 10-year HPI free-money tree. But if asking prices plummet for two or three months and then there is a small rise then the market has 'recovered'. Spin upon spin. .... and they can always 'seasonally' adjust and correct the previous months figure (down) to generate an increase for this months figures.

I have asked this before on here, but nobody seemed to know. What exactly does 'seasonal adjusting' consist of? Up or down according to 10 year averages for a particular month, or what? And why is it thought necessary? What is wrong with the raw data?

Maybe I'm just thick, but if anyone could enlighten me...

[Blod]

The ripples from the London market were greeted by all, little do they realize the first signs of a tsunami. The liquidity in the market will evaporate like the sea as sentiment takes a pounding.

[Damik]

Perhaps they have not seen this:

[jasonpistol]

Perhaps they have not seen this:

pretty much every london postcode produces a chart like this.

[julieannboo]

From Moneyweek:

The historic data still looks good for London…

If you just look at the headline figures, it seems hard to deny that the London property bubble is still going on. For example, the Land Registry reckons that prices rose by a whopping 3.3% in July.

However, it may not be the best measure of house prices in this fast-moving market. The big problem is that the Land Registry figures measure prices at the time the sale finally goes through and is recorded.

Given the amount of time that passes between an offer being made on a house and the paperwork being signed, this means the Land Registry data is several months out of date, catching the last of the late spring boom.

In any case, it isn't even that useful as an out-of-date snapshot of the London market. Since it includes cash sales, it is skewed towards high-end properties. Indeed, if you dig deep into the borough-wide data, then excluding the City of London, the median monthly price change is a much more modest 1.5%.

Of course, data from Nationwide also suggested that prices are still rising. And this data is much more timely – Nationwide's index takes a snapshot of the market at the time the mortgage is approved.

However, the note that followed the data was much more bearish. Robert Gardener of Nationwide thinks that "the outlook for the housing market remains highly uncertain". He notes the number of falling mortgage approvals and the fact that "new buyer enquiries have moderated somewhat in recent months".

He also warns that "the prospect of interest rate increases together with subdued wage growth may temper demand in the quarters ahead".

But the more up-to-date news is grim

Meanwhile, a very different picture is given by property website Hometrack. Its survey suggests that UK-wide prices went up by only
0.1%, while those in London stayed completely flat. This suggests that the capital is starting to fall behind the rest of the UK.

Delving into the data, only 11% of London postcodes saw a rise in prices. This contrasts with nearly 90% earlier in the year. The time spent on the market has also risen – from 2.7 weeks to more than a month. And the percentage of the asking price achieved has dropped from 98.8% to 96.4%.

The director of research at Hometrack argues that there is "clear evidence of a slowdown, particularly in the London market". What's more, "important lead indicators in this survey are turning and pointing to a loss of momentum in house price growth".

That's pretty bearish. You could argue that this is just one property website against a big lender like Nationwide and the Land Registry. But Hometrack does have one big advantage in terms of timeliness, in that it measures prices when an offer is made and accepted.

This enables it to capture trends at an earlier point than other indices. And it backs up another early indicator – the Rightmove asking prices survey – which also suggests that the market has turned.

I can only speak for a small part of southeast London. But judging from my own efforts to buy a flat at a half-reasonable price, I'd suggest that the reality is closer to what Hometrack (and Rightmove) are observing, rather than the figures from Nationwide and the Land Registry.

Up until about six weeks ago, things were crazy. Prices were rising so quickly that the asking price was seen as a floor, not a ceiling. In some cases, properties were being listed on Friday and being sold come the following Monday.

However, recently owners are more willing to make concessions, estate agents have more time to show people around, and flats are lingering on the market. Meanwhile, the asking price has moved from being a floor back to its more normal place as ceiling.

I've also seen a few cases of a property marked as "under offer" suddenly appearing back on the market again at a lower price. This isn't an isolated phenomenon – according to The Times, 40% of deals in the capital are falling through.

And a recent warning from estate agent Foxtons backs this up. Last week, the company saw its share price left reeling as it warned that "initiatives introduced in 2014 aimed at controlling mortgage lending, together with the expectation of increases in interest rates, are now having an impact on short-term demand among buyers".

As my fellow Money Morning writer Dominic Frisby noted recently, Foxtons' share price is something of an indicator as regards the health of the London market.

In short, it feels like we've reached a turning point in the housing market. And once that happens, past experience suggests that prices won't just plateau – they will start to fall. Put it this way – I wouldn't see the recent drop in the Foxtons share price as a buying opportunity yet.

Got a comment on this article? Leave a comment on the MoneyWeek website, here.

Until tomorrow,

Matthew Partridge
Senior Writer, MoneyWeek

[Limon]

Hometrack does have one big advantage in terms of timeliness, in that it measures prices when an offer is made and accepted.

How on earth do they get that information? Surely at that point the details of the (potential) transaction should only be available to the buyer, the seller, and their agents.