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The Three Little Pigs

Let's Build Our Own Index

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Many people agree that London prices lead the rest of the UK. Trends that start in London, over time, roll out across the country. But as London is such a big place there must be a part of London that leads London as a whole. If we could find an accurate leading borough or postcode then we could watch as the crash develops through the rest of London and then the country. Theoretically we’d be first to know when the bottom had been reached too.

Also on this board we have the vexed issue of the various house price indices. Each has its faults and is criticised for them. The one thing common to all is they are published to cover a period - the shortest being one month – and we therefore have to wait for them .An index that reported daily movement would be more comparable to other markets.

So in attempt to combine these two thoughts I have been recording data from www.londonpropertywatch.co.uk. The site does a daily scrape of EA’s sites and then presents averages by property size and area. What they don’t do is any kind of trend analysis, hence this. For some single areas and property types the samples are too small to be useful but several provide a reasonable sample.

After a ponder I settled on keeping an eye on 2 bed flats in SW6. ( I know I could have taken a broader sample of traditional bellwether areas and more property types but it’s all work – more on this later.)

I chose to watch SW6 2 bed properties; first, because they are regularly the most numerous sub-set, second because SW6 has its fair share of new build but not dominated by it, third because its not a market that is deeply effected by international buyers such as Kensington and Chelsea and lastly because I know the area. But perhaps most importantly was that in August 04, following the round of interest rate rises, asking prices in Hammersmith and Fulham, of which SW6 is a part, fell by 9.9% in one month according to Rightmove – that responsiveness alone made it seem worth a look.

The chart shows what has been happening over the last three months to asking prices. The trend line is a 10 point moving average.

Admittedly from a HPC viewpoint the data has not been all favourable. The average price moved from £378,500 to £382,600 from 27 Sept to 19th December. But behind this is the story of average prices peaking at £389,000 on 21 Nov and then steadily declining for the last month. (Another £6K drop over the coming month will see average asking prices back below the starting figure.)

And isn’t that the story that has been playing out in the November mainstream reports – an unseasonal bounce? But according to ‘SW6 2 beds’ the bounce finished a month ago and we’ve been steadily heading south for four weeks.

It is only too easy to criticise the choice of type/area: ‘who cares what a few yuppies are doing’, ‘it’s the first City bonus being spent’ and ‘its mummy and daddy’s deposit’ being a few for starters. But hopefully the idea comes across. Only time will tell whether 2 beds in SW6 prove to be the correct choice.

But if others keep records of different leading areas with healthy sample sizes there could be comparisons… even a consolidated version - The HPC House Price Index - the only daily indicator.

Daily_Asking.gif

post-2082-1135175421_thumb.jpg

Edited by The Three Little Pigs

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Many people agree that London prices lead the rest of the UK. Trends that start in London, over time, roll out across the country. But as London is such a big place there must be a part of London that leads London as a whole. If we could find an accurate leading borough or postcode then we could watch as the crash develops through the rest of London and then the country. Theoretically we’d be first to know when the bottom had been reached too.

Also on this board we have the vexed issue of the various house price indices. Each has its faults and is criticised for them. The one thing common to all is they are published to cover a period - the shortest being one month – and we therefore have to wait for them .An index that reported daily movement would be more comparable to other markets.

So in attempt to combine these two thoughts I have been recording data from www.londonpropertywatch.co.uk. The site does a daily scrape of EA’s sites and then presents averages by property size and area. What they don’t do is any kind of trend analysis, hence this. For some single areas and property types the samples are too small to be useful but several provide a reasonable sample.

After a ponder I settled on keeping an eye on 2 bed flats in SW6. ( I know I could have taken a broader sample of traditional bellwether areas and more property types but it’s all work – more on this later.)

I chose to watch SW6 2 bed properties; first, because they are regularly the most numerous sub-set, second because SW6 has its fair share of new build but not dominated by it, third because its not a market that is deeply effected by international buyers such as Kensington and Chelsea and lastly because I know the area. But perhaps most importantly was that in August 04, following the round of interest rate rises, asking prices in Hammersmith and Fulham, of which SW6 is a part, fell by 9.9% in one month according to Rightmove – that responsiveness alone made it seem worth a look.

The chart shows what has been happening over the last three months to asking prices. The trend line is a 10 point moving average.

Admittedly from a HPC viewpoint the data has not been all favourable. The average price moved from £378,500 to £382,600 from 27 Sept to 19th December. But behind this is the story of average prices peaking at £389,000 on 21 Nov and then steadily declining for the last month. (Another £6K drop over the coming month will see average asking prices back below the starting figure.)

And isn’t that the story that has been playing out in the November mainstream reports – an unseasonal bounce? But according to ‘SW6 2 beds’ the bounce finished a month ago and we’ve been steadily heading south for four weeks.

It is only too easy to criticise the choice of type/area: ‘who cares what a few yuppies are doing’, ‘it’s the first City bonus being spent’ and ‘its mummy and daddy’s deposit’ being a few for starters. But hopefully the idea comes across. Only time will tell whether 2 beds in SW6 prove to be the correct choice.

But if others keep records of different leading areas with healthy sample sizes there could be comparisons… even a consolidated version - The HPC House Price Index - the only daily indicator.

Interesting idea - however I'm not convinced that London will lead the crash. Particularly a decent area like SW6.

I think this time around it's going to go tits up in places like Stoke much much earlier. I hypothesise that this crash will not have a ripple effect at all.

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Moving average down to £382,300 today. So they're losing £150 a day at the mo - more than the average gross pay for the area

You need to be longer term, with alot more historic data, is this using rightmove data?

Edited by moosetea

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Moosetea

Charts below are Land Reg figures going back to '99 and Hometrack/Rightmove data for the last few months.

Fulham_house_prices_10310_image001.gifFulham_house_prices_12685_image001.gif

No it doesn't use Rightmove data - I'm not sure you can get the data behind their reports. The only way to record things quickly on a daily basis, that I've found, is to use londonpropertywatch

post-2082-1135180065_thumb.jpg

post-2082-1135180092_thumb.jpg

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Angus

Fulham has got that reputatation, but in reality it's more mixed. And even so I'm not sure an area has to be a mirror of society as a whole to be the best leading indicator. Perhaps somewhere that was in all ways average would just record average results.

But whether it is 2 beds in SW6 who knows - perhaps 3 beds in N1, plus 1 beds in E14, plus 4 beds in SW15 would prove to be the best leading indicator. Keeping an eye on just one type/area is easier though.

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TLP - your hard work in gleaning stats is the only way to sort out the wood from the tree's

It does though show prices rising through the year and now the seasonal slowdown - overall prices are up very slightly since March.

Be careful displaying material like this - its akin to showing porn in a convent on HPC. The bears are going to be terribly upset and may not talk to you.

I expect your thread to be largely ignored because its not the picture they will accept, which is sad because your hard work and honesty in presenting the facts is to be applauded. Keep up the good work.

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  • 336 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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