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rantnrave

Halifax Index Up T W O Per Cent In A Month

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Annual change +8.5%

Quarterly change +1.9%

Monthly change +2.0%

Average Price £193,130

Commenting, Martin Ellis, housing economist, said:

"House prices in the three months to January were 1.9% higher than in the preceding three months. This was the first increase in the quarterly rate of increase for six months. Annual price growth also picked up, to 8.5% from 7.8% in December, but remained significantly below last July’s peak of 10.2%.

This bounce-back in house price growth in January coincides with reports of the first rise in mortgage approvals for six months in December. These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market. It is, however, too early to draw any firm conclusions. The monthly figures in January can be particularly volatile due to the lower volumes of activity at this time of year and there have been unusually large rises on occasion in the past, such as in 2007 (2.3%) and 2009 (2.4%).

House prices grew by 2.0% between December and January. This is the biggest January monthly increase since 2009 (2.4%).

• House prices in the latest three months (November-January) were 1.9% higher than in the previous three months (August-October). The quarterly rate of change increased for the first time since July 2014, but remained below the rates recorded between June and September last year.

• Prices in the three months to January were 8.5% higher than in the same three months a year earlier. This was an increase from 7.8% in December. This measure of annual house price growth was at its highest since October 2014 (8.8%), but remains significantly below the peak of 10.2% in July 2014.

• Home sales increased by 15% in 2014. Sales last year were 15% higher than in 2013, at 1.23 million; the highest annual total since 2007 (1.62 million). Despite this annual rise, sales peaked in the first quarter before steadily declining during the course of the year with sales in the final quarter 5% lower than in the first quarter and 1% lower than in the third quarter. (Source: HMRC, seasonally-adjusted figures)

• Mortgage approvals rise. The volume of mortgage approvals for house purchases – a leading indicator of completed house sales – increased by 2% between November and December, to 60,275. This rise in approvals followed five successive monthly falls, possibly suggesting that the recent downward trend may be coming to an end. (Source: Bank of England, seasonally-adjusted figures.)

• Supply remains tight. Agreed sales were broadly stable in December following four successive monthly falls, according to the latest data from the Royal Institution of Chartered Surveyors’ (RICS) monthly report. Whilst demand generally has weakened in recent months supply remains very tight with new instructions falling for the fifth consecutive month in December.

• Overall, we expect a moderation in house price growth during 2015. House prices nationally are predicted to increase in a range of 3-5% in 2015 compared with 8% in 2014. "Housing demand should continue to be supported by an expanding economy, continuing low mortgage rates and a boost to households spending power resulting from lower consumer price inflation and reduced fuel bills. Nonetheless, we expect the overall downward trend in house price growth seen since last summer to continue over the coming months. Nationally, house prices are predicted to increase in a range of 3 to 5% in 2015 compared with 8% last year."

Edited by rantnrave

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Is this the famous Hamish...only the rich will be buying. Lower volumes but the index goes higher because they are lending only to the rich?

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Surely it hasn't escaped people's notice that there is no stock, nothing for sale. I don't think the Market is in anyway healthy and I'm guessing it would be hard to sell a property at the moment, no buyers, no sellers.

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they continue to expect every spare penny in the household to be spent on the mortgage:

"Housing demand should continue to be supported by an expanding economy, continuing low mortgage rates and a boost to households spending power resulting from lower consumer price inflation and reduced fuel bills."

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Is this the famous Hamish...only the rich will be buying. Lower volumes but the index goes higher because they are lending only to the rich?

From what I'm seeing, it's the *low* end of the market that's moving, not the top. These figures don't bode well. Sorry for the formatting but here are the LR mean prices for Sept-Nov versus Dec-Feb, 2001-2013, so not quite diced the same way, but near enough to be worried - 2008 was the only other year prices were higher in winter, as we headed towards re-inflation:

Year Autumn Winter
2001 £120,126.09 £115,392.80
2002 £144,785.69 £131,955.43
2003 £161,670.40 £154,388.08
2004 £184,723.19 £171,123.27
2005 £191,702.47 £186,966.93
2006 £207,853.89 £198,915.59
2007 £224,112.09 £212,438.88
2008 £210,513.32 £213,154.96
2009 £223,021.90 £207,391.02
2010 £236,003.93 £234,136.61
2011 £231,801.39 £228,948.51
2012 £240,492.63 £231,751.19
2013 £250,273.53 £243,241.20
Edited by Digsby

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Did anyone look at the house price to earnings ratio on their website?

http://www.lloydsbankinggroup.com/media/economic-insight/halifax-house-price-index/

Quite shocking!

Greater London 2007 Q4: 5.92

Greater London 2014 Q4: 7.32

That is the highest ever for Greater London. Northern Ireland got to 8.13 before crashing and is currently 3.92.

Look at the "mortgage repayment as a percentage of income" chart, it's the tab marked "Mortgage-Earnings" on the data set that you linked to. That shows how ultra low interest rates are what's really keeping the whole crazy edifice propped up. For the UK as a whole mortgage repayments are currently 29.6% of income, below the 35.7% average for 1983 to date. Even London, at an eye watering 44.6%, is only slightly above its 43.2% average.

The key thing needed to bring house prices down is an increase in base rates. I doubt we'll see that increase this year or even next. But in time it's a racing certainty that interest rates will trend up, which is why anyone buying a house today in the hope and expectation of capital gains will be sorely disappointed.

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Look at the "mortgage repayment as a percentage of income" chart, it's the tab marked "Mortgage-Earnings" on the data set that you linked to. That shows how ultra low interest rates are what's really keeping the whole crazy edifice propped up. For the UK as a whole mortgage repayments are currently 29.6% of income, below the 35.7% average for 1983 to date. Even London, at an eye watering 44.6%, is only slightly above its 43.2% average.

The key thing needed to bring house prices down is an increase in base rates. I doubt we'll see that increase this year or even next. But in time it's a racing certainty that interest rates will trend up, which is why anyone buying a house today in the hope and expectation of capital gains will be sorely disappointed.

They really ought to adjust for inflation when coming up with the cost of borrowing.

If you borrow at 3% and we have deflation at -0.5% then the cost of borrowing is 3.5%. If you borrow at 4% and CPI is 5% then the cost of borrowing is -1.0%.

Borrowers don't get that yet, but hey we are in Aquarius, the dawning of the age of deflation, so they might soon.

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They really ought to adjust for inflation when coming up with the cost of borrowing.

If you borrow at 3% and we have deflation at -0.5% then the cost of borrowing is 3.5%. If you borrow at 4% and CPI is 5% then the cost of borrowing is -1.0%.

Borrowers don't get that yet, but hey we are in Aquarius, the dawning of the age of deflation, so they might soon.

Interesting point, but if deflation drives down incomes then the chart would automatically take that into account.

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Breakdown mom NSA is FTB: +3.2%, Former Owner Occupier: +0.5% (existing homes +1.6%). There was quite a bit of Q4 regional variation (SA) from west midlands +7.6% to east anglia -4% (Gr. London +0.2%), but they haven't yet provided regional data for 2015 so not possible to know local trends for Jan.

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blx to houses, I'm booking another holiday with what would have been some of my mortgage fund ;)

Know the feeling. Three years ago, I reckon I could pull together 70% of the finance needed to buy a bog standard three-bed semi round my way. Prices looked ripe for a further correction, so I held off. Today, after three years of ferocious scrimping and saving, thanks to the bubble reflation, I am still at that 70%. Thanks Dave.

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What are is pre-election state owned money lenders saying now ?

Quarterly change +1.9%
Monthly change +2.0%

How does that work ?

:P :P :P :P

This thing is insane.

I say, make it 50% increases yoy watch the whole thing collapse. The sooner the better.

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Know the feeling. Three years ago, I reckon I could pull together 70% of the finance needed to buy a bog standard three-bed semi round my way. Prices looked ripe for a further correction, so I held off. Today, after three years of ferocious scrimping and saving, thanks to the bubble reflation, I am still at that 70%. Thanks Dave.

3 years ago, house prices were at 2004 levels round here, no one could afford them.

Now house prices are at 2006 level and no one can afford them.

Asking prices round here are at 2007 + 30%

Selling prices are at 2007 -8%

Will someone please tell me what the **** is going on ?

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Know the feeling. Three years ago, I reckon I could pull together 70% of the finance needed to buy a bog standard three-bed semi round my way. Prices looked ripe for a further correction, so I held off. Today, after three years of ferocious scrimping and saving, thanks to the bubble reflation, I am still at that 70%. Thanks Dave.

Indeed. The perennial question raises it's head - which is going to give first, my expectation that I am going to be able to raise a family in a decent (owned outright) home in a decent area, or everybody else's expectation that the whole ponzi will keep running and they will end up at the top one day. The answer seems to increasingly depend on whether I win the lottery or not.

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I have this image of the UK housing market as a very high and unstable jenga tower.

It's wobbling, but with care you can get another brick on top.

I'm just waiting for the push that brings the whole lot tumbling down. What that push will be, or when it will arrive, I don't know.

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Indeed. The perennial question raises it's head - which is going to give first, my expectation that I am going to be able to raise a family in a decent (owned outright) home in a decent area, or everybody else's expectation that the whole ponzi will keep running and they will end up at the top one day. The answer seems to increasingly depend on whether I win the lottery or not.

How many ponzi's or pyramid schemes do you know that never collapse ?

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They really ought to adjust for inflation when coming up with the cost of borrowing.

If you borrow at 3% and we have deflation at -0.5% then the cost of borrowing is 3.5%. If you borrow at 4% and CPI is 5% then the cost of borrowing is -1.0%.

Borrowers don't get that yet, but hey we are in Aquarius, the dawning of the age of deflation, so they might soon.

Exactly, there's a difference between servicing cashflows and affordability. I think people increasingly understand this which is why it's more about leverage props (HTB etc) than low rates. Quite a good summary: https://grandemotte.wordpress.com/modern-myths-2-interest-rates-are-lower-so-buying-an-expensive-house-is-cheap/

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How many ponzi's or pyramid schemes do you know that never collapse ?

I never said I believe them, only that they expect it, and that is what is keeping it all together. If I were 10 years younger I'd feel more optimistic, and I did, but I can't wait another 10. Boo.

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Exactly, there's a difference between servicing cashflows and affordability. I think people increasingly understand this which is why it's more about leverage props (HTB etc) than low rates. Quite a good summary: https://grandemotte.wordpress.com/modern-myths-2-interest-rates-are-lower-so-buying-an-expensive-house-is-cheap/

You boys talk sense. I vote for you to be chancellor. :D

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3 years ago, house prices were at 2004 levels round here, no one could afford them.

Now house prices are at 2006 level and no one can afford them.

Asking prices round here are at 2007 + 30%

Selling prices are at 2007 -8%

Will someone please tell me what the **** is going on ?

Government intervention, to boost house prices pre election, coupled with media ramping of house price expectations, continues to underpin sentiment.

Of course it can't last but I think I'll stick the money I keep on instant access, (in case something comes onto the market at a sensible price), into a one year fixed rate bond, get another 0.5% on it and reassess the situation early next year. Hopefully, by then this disgraceful government will be history.

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Government intervention, to boost house prices pre election, coupled with media ramping of house price expectations, continues to underpin sentiment.

Of course it can't last but I think I'll stick the money I keep on instant access, (in case something comes onto the market at a sensible price), into a one year fixed rate bond, get another 0.5% on it and reassess the situation early next year. Hopefully, by then this disgraceful government will be history.

I can't believe this can go on much longer, it is 2007 all over again.

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