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Guardian - Are We On The Verge Of A Crash In House Prices

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Apologies if this has already been posted:

https://www.theguardian.com/commentisfree/2016/aug/25/brexit-crash-house-prices-referendum

Unusually it seems to be written by someone who's actually made the effort to try and analyse the available data as opposed to most articles which are just re-hashing press releases from VIs.

Whether his analysis is correct or not I can't say - but he sounds bearish so please let him be right!

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Good spot - this particular bit is a good summary of where the London market is:

Transactions fall when sellers refuse to drop the price they will accept because they want to believe that the economic effect of Brexit has been overplayed. They also fall when first-time buyers and landlords decide to wait to see if these small falls are a sign of more to come. It is a battle of collective wills: a standoff.

By the way the author is a mega-bear on UK house prices, so he's easy for VIs to dismiss because he's been wrong before. But every little helps.

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They'll blame Brexit, but Brexit has sweet FA to do with it. London has been crashing for six months right under our noses and it's only the start. As I posted yesty in the somewhat de-railed thread 'Is London Crashing':

- - - -

Not sure if this has been covered yet -- I did a forum search, honest!

LonRes Q2 2016 is out and it's nothing short of a HOUSING MARKET BUST in central London.

<£1m property transactions -37% Q2 yoy. £2-7m property transactions -48% Q2 yoy.

Change in cost of buying in central London yoy in foreign currencies ALL down, mostly in the -16-18% range (Australian, Malaysian, Russian, Singaporean, Hong Kong, European and US currencies).

Buyers, when they did bother to buy, received an average -9.1% cut to the (already plummeting) asking prices. Yoy this compares to -6.4% Q2 2015 and -3% Q2 2014.

Our favourite graph shows dramatic plunges in 'new instructions', 'demand', 'overseas applications', 'transactions' and 'ASKING PRICES' with dramatic boosts in 'time to sell', 'fall-thrus' 'price reductions' and 'withdrawals' figures.

Despite all that, 75% of EAs felt that sellers were being unrealistic about their asking prices.

The editorial oscillates between blaming Stamp Duty and Brexit. But this report covers Q2 until end of June, a period of time when 'Remain' was overwhelmingly presumed, at least in London, to be the upcoming referendum result. Until it wasn't, just a few days before the end of this quarter.

http://www.lonres.co...iew-summer-2016

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They'll blame Brexit, but Brexit has sweet FA to do with it. London has been crashing for six months right under our noses and it's only the start. As I posted yesty in the somewhat de-railed thread 'Is London Crashing':

- - - -

Not sure if this has been covered yet -- I did a forum search, honest!

LonRes Q2 2016 is out and it's nothing short of a HOUSING MARKET BUST in central London.

<£1m property transactions -37% Q2 yoy. £2-7m property transactions -48% Q2 yoy.

Change in cost of buying in central London yoy in foreign currencies ALL down, mostly in the -16-18% range (Australian, Malaysian, Russian, Singaporean, Hong Kong, European and US currencies).

Buyers, when they did bother to buy, received an average -9.1% cut to the (already plummeting) asking prices. Yoy this compares to -6.4% Q2 2015 and -3% Q2 2014.

Our favourite graph shows dramatic plunges in 'new instructions', 'demand', 'overseas applications', 'transactions' and 'ASKING PRICES' with dramatic boosts in 'time to sell', 'fall-thrus' 'price reductions' and 'withdrawals' figures.

Despite all that, 75% of EAs felt that sellers were being unrealistic about their asking prices.

The editorial oscillates between blaming Stamp Duty and Brexit. But this report covers Q2 until end of June, a period of time when 'Remain' was overwhelmingly presumed, at least in London, to be the upcoming referendum result. Until it wasn't, just a few days before the end of this quarter.

http://www.lonres.co...iew-summer-2016

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One grauniad commenter nails it:

Sarah Drumm 2h ago

The premise of this article is completely wrong. The data the writer has looked at is the average sold prices, which are supplied to Zoopla by the Land Registry.

The Land Registry currently has a 3 month delay in reporting - so the data shown here is from BEFORE Brexit.

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Hope so.

Brexit might even give prices a nudge over the cliff top.

However the big question is how determined is the government in wanting to stop an HPC?

Of course they are...the question is CAN THEY

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Economic bad news is a permissible exception to Betteridge's law.

Once the contradiction between reality and narrative becomes too obvious, the former can be added to the latter as a questionable possibility.

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Hope so.

Brexit might even give prices a nudge over the cliff top.

However the big question is how determined is the government in wanting to stop an HPC?

I'm pretty sure htb was one of the initiatives that got Osborne the sack. One nation conservatism dictates that the current govt are not permitted to enact policies to stop a hpc

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One grauniad commenter nails it:

False, stupid, overplayed urban myth.

It's true that it takes up to 3 months for a transaction to be registered (if it's even registered in the first place; there are certain exceptions documented on the LR website).

BUT. You can see how many transactions are recorded each month. Even though the data is incomplete, it was incomplete 2 months ago, 3 months ago etc. When the "preliminary" data for April had 100 sales in a postcode, the preliminary data for May had 80 and the preliminary data for June had 30 (completely random figures), when you start getting calls from agents for properties previously marked as "sold", you can see the trend and you can see what's happening.

The "3 months" bullsh!t is just that...bs.

Besides, people can (possibly) deny the May/June/July figures based on that. You can't ignore the April figures (more than 3 months ago) and soon you won't be able to ignore May either. The media is 4 months behind the news on this one...and I'm not convinced that it's due to incompetence.

Also, Brexit HAS had an effect, regardless of whether people are willing to admit it or not. A HUGE number of sales "fell through" after the results were in. Many, MANY buyers pulled out and decided to "wait and see". Too risky to do anything else.

Edited by flb

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If everybody hasn't read this article I would recommend doing so. Very readable, to the point, light on data and numbers, just argues that it is impossible for price growth to go on in her neck of the woods (London). An academic (Dorling) writing in The Guardian is one thing, but it's common-sense articles like this, in the Mail no less, that will burst the bubble.

The only thing keeping prices high in London at the moment is the low number of properties on the market.

Edited by Patient London FTB

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Apologies if this has already been posted:

https://www.theguardian.com/commentisfree/2016/aug/25/brexit-crash-house-prices-referendum

Unusually it seems to be written by someone who's actually made the effort to try and analyse the available data as opposed to most articles which are just re-hashing press releases from VIs.

Whether his analysis is correct or not I can't say - but he sounds bearish so please let him be right!

...nothing to do with Brexit ...but everything to do with Osborne raising the stamp duty on BTLs in April 2016 and the current Government (as every Government should do) is going after the money launderers investing in housing in the London market...including the owning (mainly London) of property through Trusts in 'exotic' places and elsewhere... :rolleyes: (posted similar on Guardian site)

.

Edited by South Lorne

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False, stupid, overplayed urban myth.

It's true that it takes up to 3 months for a transaction to be registered (if it's even registered in the first place; there are certain exceptions documented on the LR website).

BUT. You can see how many transactions are recorded each month. Even though the data is incomplete, it was incomplete 2 months ago, 3 months ago etc. When the "preliminary" data for April had 100 sales in a postcode, the preliminary data for May had 80 and the preliminary data for June had 30 (completely random figures), when you start getting calls from agents for properties previously marked as "sold", you can see the trend and you can see what's happening.

The "3 months" bullsh!t is just that...bs.

Besides, people can (possibly) deny the May/June/July figures based on that. You can't ignore the April figures (more than 3 months ago) and soon you won't be able to ignore May either. The media is 4 months behind the news on this one...and I'm not convinced that it's due to incompetence.

Also, Brexit HAS had an effect, regardless of whether people are willing to admit it or not. A HUGE number of sales "fell through" after the results were in. Many, MANY buyers pulled out and decided to "wait and see". Too risky to do anything else.

Agreed. Spot on.

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