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rantnrave

Nationwide Jan '17 - Up 0.2%

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Headline figure is dull, but there's some very long-term analysis in the report which may be of interest to folk here.

http://www.nationwide.co.uk/~/media/MainSite/documents/about/house-price-index/2017/Jan_2017.pdf

Despite the supposed monthly rise, it's actually a minor fall. Looks like this index has topped out too. Peak figure was in August and it has remained static around that £204k - £205k since May last year. Today's figures also represent the lowest quarterly and annual figures since 2015.

Having said all that, this index normally has a heck of a Spring Bounce, so we'll see how this year goes.

 

 

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13 minutes ago, allornothing said:

One chart that stood out for me. No decade has ever seen a nominal fall. Will we see a nominal fall over the decade by 2020?

Not without a recession. Too much loose credit. Too many props.

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20 minutes ago, allornothing said:

One chart that stood out for me. No decade has ever seen a nominal fall. Will we see a nominal fall over the decade by 2020? 

Outside of calendar decades, is there any ten year period showing nominal falls - mid 80s to mid 90s?

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30 minutes ago, zugzwang said:

Not without a recession. Too much loose credit. Too many props.

Unless buyers stop buying.  This happened in 2007.  people were at breaking point.  hence why the sub-prime bubble collapsed.

 

they can print as much money as they like but when prices reach untenable levels...

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@AskNationwide pushed up house prices another 0.2% last month on top of already insane prices

 

@HousePriceMania @AskNationwide makes a mockery somewhat of their sickening adverts about helping people.

 

@HousePriceMania @AskNationwide All IMHO of course. Peoples taxed incomes/savings being robbed via inflation to keep this madness going.


They've stopped replying to me I think

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6 minutes ago, TheCountOfNowhere said:

Unless buyers stop buying.  This happened in 2007.  people were at breaking point.  hence why the sub-prime bubble collapsed.

 

they can print as much money as they like but when prices reach untenable levels...

I'd change that from prices to mortgage repayments. When mortgage repayments reach untenable levels.....

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1 hour ago, rantnrave said:

Outside of calendar decades, is there any ten year period showing nominal falls - mid 80s to mid 90s?

You've forgotten about the April 88-March 89 boom whence property prices increased 60% in areas of the Midlands, the highest in recorded history.

The smallest decade increase I can find on Nationwide is from Q3 1989-Q3 1999....15.4%, 124.1 to 143.2.

It is a very close run thing with any period 2004-2006 to 2014 to 2016. For example, Q4 2006 to Q4 2016 (the last data available) prices have increased 19.7%, 344.3 to 412.0.  Meanwhile we equate one of the lowest decade increases in history as a boom. Leaving out London and the Home Counties, of course, prices have collapsed in real terms provincially since 2006. Some area like County Durham and Lancashire, ball crunchingly so.

The boom  was Gordon Brown's cataclysmic tripling in a decade from 1997-2007.

Low inflation, of course, means that 19.7% is still a lot higher than the 89-99 event in real terms. It also suggest that ten years on from the previous peak prices were not allowed to correct as they were after the 1989 boom because of Central Bank meddling.

 

 

 

Edited by crashmonitor

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Change of tone from Aunty Beeb!

Growth in UK house prices weakens, Nationwide says

Annual UK house price inflation fell to its weakest level since November 2015 in January, according to mortgage lender Nationwide.

The 0.2% rise in house prices last month was down from a 0.8% rise in December, although that left prices 4.3% higher than at this time in 2016.

"The outlook for the housing market remains clouded," said Nationwide economist Robert Gardner.

The average price of a house in the UK dropped slightly to £205,240.

Mr Gardner said that so far there had not been a negative impact on the economy following the vote to leave the EU.

"The economy has remained far stronger than expected in the wake of the Brexit vote.

"Recent data indicates that the economy didn't slow in the second half of 2016 and the unemployment rate remained stable at an 11-year-low in the three months to November."

However, he added: "There are tentative signs that conditions may be about to soften.

"Employment growth has moderated and while wage growth has edged up in recent months, in real terms, earnings growth has already slowed."

Even though the Nationwide reckons that house price inflation was 4.3% in January, it still believes the average figure for 2017 will end up at 2%. That implies a fairly dramatic dip in inflation during the months ahead.

In fact it looks like house prices could soon be rising at a slower rate than the cost of living as a whole.

In the smartest parts of London, prices have already fallen by up to 12% in the last year, according to some analysis.

But Nationwide's gloomy outlook for the economy and house prices may be good news for house-hunters.

http://www.bbc.co.uk/news/business-38825150

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7 hours ago, TheCountOfNowhere said:

Unless buyers stop buying.  This happened in 2007.  people were at breaking point.  hence why the sub-prime bubble collapsed.

 

they can print as much money as they like but when prices reach untenable levels...

 

The US subprime collapse was triggered by an acute (dollar) liquidity shortage in the shadow banking system in 2006. The global derivatives tower had grown to the point where it could no longer be held upright.

2007 was actually a bumper year for UK house sales, only slightly down on the record set in 2006. Prices and transactions didn't start falling until 2008, by then the UK was already in recession.

Note also the utter insignificance of BTL in the grand scheme of things. ;)

 

uk-house-purchase-completion-rates-june0

_87427249_uk_house_price_624-01-01.png

_86348121_e3cf57f2-47ce-497e-ba13-327725

 

 

Edited by zugzwang

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Where's the BTL completions for 2016 ?

How many of the FTB mortgages are actually BTL now ?

I've see n at least one FTB buy, move back home, then rent it out.

More near-it than innit.

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12 minutes ago, zugzwang said:

 

The US subprime collapse was triggered by an acute (dollar) liquidity shortage in the shadow banking system in 2006. The global derivatives tower had grown to the point where it could no longer be held upright.

2007 was actually a bumper year for UK house sales, only slightly down on the record set in 2006. Prices and transactions didn't start falling until 2008, by then the UK was already in recession.

Note also the utter insignificance of BTL in the grand scheme of things. ;)

 

uk-house-purchase-completion-rates-june0

_87427249_uk_house_price_624-01-01.png

_86348121_e3cf57f2-47ce-497e-ba13-327725

 

 

You dont think the prices are at a level whene no one can afford them ?

have  a friend in Kent who was saying they want to move house, they paid £750K for a 4 bed house in 2014, now it's worth approx £750K and the houses a step up from them are £1.2M.

Their mortgage would need to double for them to buy a bigger home.  I doubt there are many, willing or able to support their 750K house price never mind help them get nearer the £1.2M.

Many are learning the hardware that higher house prices = being stuck where they are the for rest of their lives.

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18 minutes ago, TheCountOfNowhere said:

Where's the BTL completions for 2016 ?

How many of the FTB mortgages are actually BTL now ?

I've see n at least one FTB buy, move back home, then rent it out.

More near-it than innit.

x2.

Loads of 2005/6/7 Northern Rock slave boxes bought on IO mortgages.

I know a few.Tragic stuff.

I even know one guy who thought he had a repayment mortgage only to find out he'd borrowed 115% LTV on IO.

Still rented out.Just about washes it's face.

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1 hour ago, zugzwang said:

 

The US subprime collapse was triggered by an acute (dollar) liquidity shortage in the shadow banking system in 2006. The global derivatives tower had grown to the point where it could no longer be held upright.

2007 was actually a bumper year for UK house sales, only slightly down on the record set in 2006. Prices and transactions didn't start falling until 2008, by then the UK was already in recession.

Note also the utter insignificance of BTL in the grand scheme of things. ;)

 

uk-house-purchase-completion-rates-june0

_87427249_uk_house_price_624-01-01.png

_86348121_e3cf57f2-47ce-497e-ba13-327725

 

 

You can't measure market impact by transaction number.  

In general, for every buyer there is a seller, so volume doesn't tell you anything about price (perhaps statistically, but it's not a causal relationship).  Volume isn't demand.

Despite the relative transaction count, homeownership is decreasing and the number of landlords is increasing, so landlord  transactions are cumulative, whereas homeowner transactions are not.  Homeowners mostly sell to homeowners, landlords don't sell. There is a permanently reduced supply of houses due to landlord demand, but the same isn't true of homeowner demand.

Moreover, the mere existence of landlords puts a floor under prices.  You can rent for X/month, and buy with a mortgage for Y/month, and there's an amoral army ready to jump in any time X gets much larger than Y.

Ultimately this data doesn't really tell us anything about the impact of landlording.

Edited by BuyToLeech

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7 hours ago, TheCountOfNowhere said:

 

if I were a HPCer, i'd be sending this link to everyone I know

C3lDdx4WcAAc375.jpg

 

Im pretty sure they fiddle these numbers to get a slight growth figure. How far into price falls does the number have to be before they release a negative number?

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Daily Mail-quality reporting from the BBC.  Did prices rise or did they fall?!  Corrected below.

9 hours ago, rantnrave said:

The 0.2% seasonally adjusted rise in house prices last month was down from a 0.8% rise in December, although that left prices 4.3% higher than at this time in 2016.

....

The average price of a house in the UK dropped slightly to £205,240.

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27 minutes ago, zugzwang said:

Note also the utter insignificance of BTL in the grand scheme of things. ;)

You say that, but look at the percentages. On a visual basis, I'd say BTL made up 15% of purchases in August 2007 and 20% in April 2008, suggesting that they propped prices up to an extent.

Which is what they do, as evidenced by the huge increase in sales we saw in March 2016 and in the Nationwide index, a corresponding 0.7% rise in prices that month.

On the NW report in general, the index is based on approvals rather than completions, right? So we're seeing sales agreed in January not October or November, right?

In that case it's disappointing. With HTB2 ending, and the PRA supervisory statement coming into force, one would expect more than a couple of hundred pounds drop in prices agreed in January.

I don't think this kills the argument that these changes will pit downwards pressure on prices. BTL activity is down and FTB activity is up. The latter seems likely to be caused by the former, but does that mean prices should immediately drop?

Consider the following:

1. If FTB activity is up as much as BTL activity is down,  then competition remains the same. While FTBers may have previously been bidding against more BTLers and loosing, yet now winning because of greater caution among BTLers, they still have other FTBers to compete with and the remaining BTLers will still be setting a floor on prices.

2. If FTBers have been outbid by BTLers over the past x months, then FTBers will have been saving to increase their purchasing power during that time. Each £1k saved means they can pay £10k more. So there could be a big backlog of these people with extra spending power that will take time to work through. 

3. The demand from an FTBer only needs sating once. Once they buy their home, they will never again add to aggregate demand since for every property they buy, they will sell one. A BTLers demand is insatiable. Each property they buy increases the chance they will buy another. Naturally there is a rate at which both types of buyers become able to buy, but if 50k properties were sold in December and 40k of those were to FTBers, then demand was sated for that 40k. If 50k properties were sold in January and 45k were to FTBers, 45k worth of demand was sated. Of course there is a rate at which potential FTBer demand becomes effective and that of the BTLers. The difference between those rates and the rate of FTBer demand station will affect prices. 

4. There is a question of opportunity cost. A renter looses 100% of their rent while a landlord gains maybe 50% (I'm including capital gains). Can't be bothered to think this through and any help would be appreciated. I'm wondering, in a rising or falling market, who's opportunity cost is the greatest?

All in all, I think these dynamics mean that even if 2017 turns out to be a bumper HPC year, we could be waiting some months yet.

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1 hour ago, TheCountOfNowhere said:

You dont think the prices are at a level whene no one can afford them ?

have  a friend in Kent who was saying they want to move house, they paid £750K for a 4 bed house in 2014, now it's worth approx £750K and the houses a step up from them are £1.2M.

Their mortgage would need to double for them to buy a bigger home.  I doubt there are many, willing or able to support their 750K house price never mind help them get nearer the £1.2M.

Many are learning the hardware that higher house prices = being stuck where they are the for rest of their lives.

Affordability constraints matter but for them to bite outside of London we need mortgage rates to rise. Carney's Term Funding Scheme all but guarantees that won't happen, regardless of the Bank rate.

The Nationwide's affordability index (for ftb's) is still stuck around 33% for the country as a whole, more or less where it's been since 2010. High by historic standards but nowhere near the ~50% of 2007-8.

Transaction volumes have picked up again after the referendum. Consumer credit is off the chain. :wacko:

Maybe Venger's right and S24 will finally tip the ponzi over. Something has to... but how much longer do we have to wait? A stagflationary recession remains my greatest hope.

 

 

 

 

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53 minutes ago, BuyToLeech said:

You can't measure market impact by transaction number.  

In general, for every buyer there is a seller, so volume doesn't tell you anything about price (perhaps statistically, but it's not a causal relationship).  Volume isn't demand.

Despite the relative transaction count, homeownership is decreasing and the number of landlords is increasing, so landlord  transactions are cumulative, whereas homeowner transactions are not.  Homeowners mostly sell to homeowners, landlords don't sell. There is a permanently reduced supply of houses due to landlord demand, but the same isn't true of homeowner demand.

Moreover, the mere existence of landlords puts a floor under prices.  You can rent for X/month, and buy with a mortgage for Y/month, and there's an amoral army ready to jump in any time X gets much larger than Y.

Ultimately this data doesn't really tell us anything about the impact of landlording.

Absolutely, summed up in my post above that I was writing at the time: "BTLers are insatiable".

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35 minutes ago, zugzwang said:

Affordability constraints matter but for them to bite outside of London we need mortgage rates to rise. Carney's Term Funding Scheme all but guarantees that won't happen, regardless of the Bank rate.

The Nationwide's affordability index (for ftb's) is still stuck around 33% for the country as a whole, more or less where it's been since 2010. High by historic standards but nowhere near the ~50% of 2007-8.

Transaction volumes have picked up again after the referendum. Consumer credit is off the chain. :wacko:

Maybe Venger's right and S24 will finally tip the ponzi over. Something has to... but how much longer do we have to wait? A stagflationary recession remains my greatest hope.

 

 

 

 

Stagflationary recession seems quite likely.

On the wider issues,transaction levels are good outside London.

People will believe in the Ponzi till they don't.

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57 minutes ago, mrtickle said:

I can't get that pdf to work.

 

please can someone post the raw figures?

 

Try opening in Mozilla Firefox. Chrome failed for me but Firefox worked

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House price growth falls to 14-month low

UK house annual price growth fell to 4.3 per cent in January, down from a year-on-year growth of 4.5 per cent in December. As compared to the month before, house price growth edged up 0.2 per cent, but it is thought that overall this year the housing market will be cooler than it was in 2016, and some experts have predicted growth could slow to three per cent. CityAM

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