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Nationwide Index Aug '15: +0.3% Mom, +3.2% Yoy

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http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/Aug_2015.pdf

“UK house prices increased by 0.3% in August, though the annual pace of house price growth edged down to 3.2% from 3.5% in July. The annual rate of price growth was the weakest since June 2013; this partly reflects the high base for comparison, since prices increased at a particularly strong rate in August 2014. “This month’s data provides further evidence that annual house price growth may be stabilising close to the pace of earnings growth, which has historically been around 4%. “However, survey evidence cautions that this trend may not be maintained unless construction activity accelerates. Surveyors reported the lowest ever number of properties on their books in July (on data extending back to the late 1970s – see chart below) whilst new buyer enquiries picked up.

“UK house prices have proved remarkably resilient in recent years, certainly compared with many other developed economies, as the chart below demonstrates.

“UK house prices didn’t fall as far during the financial crisis, and even where they declined by a similar magnitude, UK prices generally recovered their pre-crisis levels more quickly. UK house prices are currently around 5% above their precrisis levels, while prices are still well below their pre-crisis peaks in Ireland (-38%), Spain (-36%) and the Netherlands (-18%).

Year-on-year growth rates continue to fall, although ~3.6% annualised growth is still pretty obscene when wages are rising at only a fraction of that rate.

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August was very much a low volume, high sell ratio month. Not really seen such a good August since 2003, used to the market falling off a cliff and going into slumber.

It remains to be seen whether this was the market's swan song or something to build on.

Don't know whether this is the case UK wide or may be Nottingham is just experiencing a dying ripple. In previous years there's been commentary south of here (and Cheshire)saying the market is hot, well it hasn't been here for at least 12 years.

Edited by crashmonitor

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The analysis in the section entitled "Why have UK house prices been more resilient?" is interesting. To summarise:

“UK house prices didn’t fall as far during the financial crisis, and even where they declined by a similar magnitude, UK prices generally recovered their pre-crisis levels more quickly. UK house prices are currently around 5% above their precrisis levels, while prices are still well below their pre-crisis peaks in Ireland (-38%), Spain (-36%) and the Netherlands (-18%).

Indeed, there is a strong correlation between employment and house price growth since the financial crisis across the major developed economies.

“Supply side developments also play an important role in explaining the divergence in house price performance. The UK experienced a much smaller increase in building activity in the run up to the financial crisis (see chart above). As a result, there was much less of an overhang of unsold properties to be worked off in recent years.

So it had nothing to do with £400 billion in QE, funding for lending, and ZIRP?

Personal anecdotal: I've just bought a house at 35% below the price paid in 2007 in real terms (18% nominal decline in 8 years). So this apparent recovery to peak is really either a southern phenomenon or just HPI propaganda.

Edited by crashtimus prime

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So this apparent recovery to peak is really either a southern phenomenon or just HPI propaganda

I'd agree with that. The further north you go, the more you see reality fo the UK market (as opposed to London bubble VI spin).

My parent's house in Scotland is still 25% below the price their neighbours sold an identical house for in 2008. And the price is moving down, not up....

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I'd agree with that. The further north you go, the more you see reality fo the UK market (as opposed to London bubble VI spin).

My parent's house in Scotland is still 25% below the price their neighbours sold an identical house for in 2008. And the price is moving down, not up....

Already mentioned on another thread that my cousin has had an offer of 61k accepted on a Q1 2008 Doncaster purchase of 80k so you don't need to go as far north as that. None of the indicies suggest we are at the peak in the north, the crash is being hidden by the south propping the stats.

Even 11 years of sideways movements is one big crash in my book after decades when a tripling each decade was taking for granted. We've had about 30% inflation since 2004/5

Edited by crashmonitor

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We're all going to be rich! Yeay for HPI!

That was the previous generation as far as assets were concerned. They got a seven fold increase in equities from 1983-1999 (excluding dividends) and a tripling of house prices every decade from 1964-2004.

These last ten years every asset class flat unless you took a punt on bonds and deflation. Government has tried to persuade us to borrow to buy assets, but household debt has been stuck at 1.5 trillion for a decade now. No debt increase , no asset inflation and subdued GDP. Public sector has had to take up the slack and borrowed to keep the show on the road. As the public sector is now maxed out, they really want us to start borrowing.

Edited by crashmonitor

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There is still a fundamental problem that outside London despite the crash and no growth in prices houses are unaffordable in most locations compared to the local populations income.

It's interesting Nationwide exclude the BTL business from the figures, but that's irrelevant if BTL is the market floor as the figures will simply reflect the prices that BTLers are compelling owner-occupiers to pay. As per their 2015 financial fully 18% of their lending is BTL. Today they are offering a 65% LTV deal with a tracker at BBR + 1.44%, (that's 1.94%).

If the BTLer ignores the hefty fee and assesses the investment prospect on the 2% mortgage rate it looks very attractive. But when these deals are withdrawn and fixes and trackers move closer to SVRs (which for Nationwide's captive BTL lender, The Mortgage Works is presently 5%), if these bonkers mortgages are what is pushing prices (and what else could it be post-MMR?) the prices rises will reverse and the BTLers are going to get crucified by the margin calls. It's daylight robbery. Still at least the robbed are an "investor market" who'll be expected by the Bank of England to take the hammering like grown-ups. Daft tw@ts.

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