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Sancho Panza

New house price index has UK house prices falling 4.7% Q4 2017

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I'm sure Acadata is used by LSL for their report.

Can't find the actual report.

@Patient London FTB found the relevant doc.

https://www.londoncentralportfolio.com/Hidden-Files/LCP/PR/LCPAca Resi Index (Feb 2018).pdf

Oct 2017 -1%

Nov 2017 -2.4%

Dec 2017 -1.4%

Property Industry Eye 7/3/18

'A new monthly report that claims to offer a more up-to-date, more accurate and more comprehensive view of the housing market in England and Wales than those provided by the likes of Nationwide, RICS and Rightmove has launched.

Residential property investment firm London Central Portfolio has teamed up with Acadata to address what it calls “a number of conspicuous issues” with existing industry data.

LCP’s chief executive Naomi Heaton said: “Samples offered by high-end estate agents tend to be small and non-representative.

“Nationwide’s house price index represents just 12% of the market, excludes cash purchases and is based on mortgage approvals, not actual sales.

“Rightmove use asking prices data only, while RICS’ residential market survey is largely qualitative.

“Land Registry’s own published full report is based on a restricted sample, excludes new builds and has a longer time lag.”

She added: “Looking to overcome these problems and provide a single reliable residential index, our new report, based on every single sale transacted through Land Registry, will provide a much more accurate and in-depth analysis on how the market as a whole, including the controversial luxury and new build sectors, have really fared in prime central London, Greater London, England and Wales.”

The new index revealed that house prices in England and Wales recorded their third successive monthly price fall (at -1.4%) in December last year, resulting in the largest quarterly price fall since February 2009 (at -4.7%).

According to its data, the average house price in England and Wales is £284,855.

Not including London, the average house price in England and Wales is £250,797.

Meanwhile, LCP estimates that annual transactions fell 2.3% last year to 902,100, which is 29% below that prior to the global financial crisis.

On a quarterly basis, transactions in the final quarter of 2017 were down 3.8% to 236,899, it calculates.

Heaton said: “With prices and transactions both beginning to fall, there is a serious need to address the affordability issues within the sector and support the building of more low-cost housing outside London.”

LCP’s data showed that the market in Greater London was slowing, with transactions continuing to decrease.

They were down 7% over the quarter to 23,200 and 10% over the year to 93,381.

Average prices in Greater London fell below £600,000 for the first time since 2016 (£598,558), following a fall of 3.8% in the final quarter of last year.

Meanwhile, prices in prime central London stabilised during the same period, according to LCP.

Nonetheless, transactions were “significantly” down (by 9.5%) across the year to 4,183, which is the lowest number of annual sales on record and a 34% drop since 2013.

The new-build sector shows subdued activity in prime central London, with transactions down 13.4% and quarterly prices down 5%.

In England and Wales, the most recent figures for new-builds, which date from June 2017 (unlike overall monthly, quarterly and annual results, for which there is a two-month time lag, new build results lag by two quarters), showed that the price differential between new and old stock has reached nearly 30%.

New-builds in England and Wales are now 65% more expensive on average (£345,118) than they were in December 2006, compared to 38% more for old stock.

Heaton said that foreign investors who have bought new build property in London, Manchester and Birmingham were in many cases struggling to let them out for the rental yields they needed to achieve, and laid part of the blame on agents.

She said: “I am staggered by the fibs that are told to these foreign investors.”

Citing the example of a recent development in London, she said that the reputable firm of agents selling the units were quoting estimated gross rental returns of 4.3%.

In reality, investors would be “doing really well” to achieve 3.5% she said, and that rental estimates quoted by agents to foreign investors on new build properties were often “unattainable”.'

Edited by Sancho Panza

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Going to EA today for clarity

https://www.estateagenttoday.co.uk/breaking-news/2018/3/latest-house-price-index-claims-superiority-over-rivals--even-the-land-registry?source=othernews

'The first edition of the LCPAca index, just released, shows trading volumes in Prime Central London as the lowest on record, although prices in that location grew 2.4 per cent in the final quarter of 2017, says Heaton.

Transactions in PCL are significantly down, 9.5 per cent across the past year, representing the lowest number of annual sales on record and a 34 per cent drop since 2013. PCL’s new build sector shows subdued activity; annual transactions fell 13.4 per cent.

England & Wales sees biggest quarterly price fall since Global Financial Crisis - down 1.4 per cent in the final three months of 2017.  '

Edited by Sancho Panza

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10 minutes ago, TonyJ said:

If this new index is more genuine, won't it just be conveniently sidelined or ignored by those with a vested interest in maintaining opacity?

it will be buried by fake news.... Rocket Man pt deux etc.....

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32 minutes ago, Patient London FTB said:

Thanks for that.I've updated the tiopic header.

I'm interest in page 5 ...England and Wales.

Market peak Sept 17 at £298,930

Dec 17 at £284,855

Impressive.


Be intersting to know the views of our more learned statisticians @rantnrave, @Neverwhere, or anyone else who can shed some light.

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Interesting. There might be a good market for a properly unbiased index. Not sure this is it

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I'd say my terraced hovel (Wokingham) has probably dropped about 10% over the last 18 months. Can't remember the last time a similar house to mine was bought by a private buyer in my street. Perhaps the BTL tax changes are taking effect. Not sure though if it's impacting the semi's and detached houses yet.

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22 minutes ago, TonyJ said:

What's your reasoning behind your assessment?

My "not sure" meant exactly that. I need to look into the data gathering behind it to see if it does what it says. If so, this "may" be it.  

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58 minutes ago, stuckmojo said:

Interesting. There might be a good market for a properly unbiased index. Not sure this is it

Quite.

What is the VI here? Ssomeone is paying for this work to be done and wants a housing market on the brink of freefall to be portrayed.

About five years ago, LSL/Acadametrics put out a much ignored house price index. It was mostly scorned on this site for somehow managing to always be positive. Democorruptcy did some great digging and revealed that the clients Acadametrics was serving included a whole range of money lenders from our fine and upstanding banking sector. The report touted itself as the most comprehensive data out there, which IIRC none other than the legend that is FreeTrader (sorely missed on this forum) concurred with.

Edit to add: Looks like same clients -

http://www.acadata.co.uk/ourClients.php

Edited by rantnrave

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Acadata - Our People

Dr Peter Williams

Dr Peter Williams is our Chairman and is also Director, Cambridge Centre for Housing and Planning Research and Executive Director of the Intermediary Mortgage Lenders' Association. He was for ten years Deputy Director General of the Council of Mortgage Lenders. As past Professor of Housing Management at the University of Wales, Peter is a strong advocate for research and brings this enthusiasm and his own academic background to Acadata. He is a senior industry figure, well known in government, academia and in the lending industry, with very wide experience across the whole housing sector. He served on the Board of The Housing Corporation from 1995 to 2002.    

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11 hours ago, Sancho Panza said:

Heaton said that foreign investors who have bought new build property in London, Manchester and Birmingham were in many cases struggling to let them out for the rental yields they needed to achieve, and laid part of the blame on agents.

She said: “I am staggered by the fibs that are told to these foreign investors.”

Citing the example of a recent development in London, she said that the reputable firm of agents selling the units were quoting estimated gross rental returns of 4.3%.

In reality, investors would be “doing really well” to achieve 3.5% she said, and that rental estimates quoted by agents to foreign investors on new build properties were often “unattainable”.'

Why would anyone be staggered by anything coming from an estate agent? 

I remember these investors queuing up to buy flats in London not so long ago at any price, more fool them if they can't do their own basic research on the going rate for rents in an area.

Drops look good,  personally I can cope with the Land Registry 3 month lag, clearly somebody who is wanting to get out of the market needs to know sooner.

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4 hours ago, rantnrave said:

Quite.

What is the VI here? Ssomeone is paying for this work to be done and wants a housing market on the brink of freefall to be portrayed.

About five years ago, LSL/Acadametrics put out a much ignored house price index. It was mostly scorned on this site for somehow managing to always be positive. Democorruptcy did some great digging and revealed that the clients Acadametrics was serving included a whole range of money lenders from our fine and upstanding banking sector. The report touted itself as the most comprehensive data out there, which IIRC none other than the legend that is FreeTrader (sorely missed on this forum) concurred with.

Edit to add: Looks like same clients -

http://www.acadata.co.uk/ourClients.php

What's your view on this index? I was wondering about the VI because that statement of -4.7% in Q4 is a rather large opening effort in your index

I'm sure I remember FT saying he preferred the LSL/Aca index or am I misremembering things? Is the land reg the one we should be looking at for a defintive guide,or is it a case of taking them all together?

Edited by Sancho Panza

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13 hours ago, Bear Hug said:

Almost 5% per quarter fall?! Is this finally happening?

The index is supposedly based on sales data from across the country,may even include cash buys at auction etc.

4 hours ago, stuckmojo said:

My "not sure" meant exactly that. I need to look into the data gathering behind it to see if it does what it says. If so, this "may" be it.  

That's why when I came across it before leaping for joy,I thought the methodology needs examining by someone with a bit of knowledge,I'm relatively clueless compared to many on here.

4 hours ago, TonyJ said:

Surely, even if it was just less biased than the others, that would be an improvement. Anything would be better than Rightmove visitor numbers.

I've jsut had a flick at LE2 market trends data on Rightmove which is based on land reg sales which shows a peak in Aug 2017 and then a 23k (10%) drop into Nov 17.

Obviously very small sample.

Edited by Sancho Panza

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4 hours ago, Slimline said:

I’m seeing places in Hampshire now close to 2014 levels when you factor in inflation.

Up here in Leicester prices were flat from Dec2004 to Dec 2014 on the sales data ublished by RM.

Last three years have seen first significant uptick

http://www.rightmove.co.uk/house-prices-in-my-area/marketTrendsTotalPropertiesSoldAndAveragePrice.html?searchLocation=le2&sellersPriceGuide=Start+Search

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If I may say - I would avoid assuming conspiracy and plotting behind indices - the industry actually needs accurate data - that includes investors, developers and all sorts of other participants.

 There will be contradictory indicators and outliers as may be expected in the current economic climate and it is the plurality of data and how that pertains to pricing momentum that is important.

I do wonder if anyone knows of a data source that tracks supply by area month-on-month - I may be incorrect but supply appears to be creeping up markedly which may suggest more rapid price movement is to follow.

At any rate, given present conditions, leading indicators and stated policy, it is now reasonable to tentatively assume that in many cases throughout the UK prices have peaked for the foreseeable future.

 

 

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5 hours ago, rantnrave said:

Quite.

What is the VI here? Ssomeone is paying for this work to be done and wants a housing market on the brink of freefall to be portrayed.

About five years ago, LSL/Acadametrics put out a much ignored house price index. It was mostly scorned on this site for somehow managing to always be positive. Democorruptcy did some great digging and revealed that the clients Acadametrics was serving included a whole range of money lenders from our fine and upstanding banking sector. The report touted itself as the most comprehensive data out there, which IIRC none other than the legend that is FreeTrader (sorely missed on this forum) concurred with.

Edit to add: Looks like same clients -

http://www.acadata.co.uk/ourClients.php

As far as I can see London Central Portfolio’s VI is in telling their investors how well the portfolios of traditional Prime Central London rental stock they have assembled for them are holding up in price and rents (whether this index bears that out I don’t have time to check right now). LCP have been very keen in the past (and I imagine still are) to slate the performance of newbuild developments, with which they’re competing for investment dollars. 

Edited by Patient London FTB

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6 hours ago, Slimline said:

I’m seeing places in Hampshire now close to 2014 levels when you factor in inflation.

Wage inflation? If not it’s meaningless 

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I want to believe this new index. Sounds like it was created just for us with these sorts of numbers. It just all sounds too good to be true.

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18 hours ago, Sancho Panza said:

Heaton said that foreign investors who have bought new build property in London, Manchester and Birmingham were in many cases struggling to let them out for the rental yields they needed to achieve, and laid part of the blame on agents.

She said: “I am staggered by the fibs that are told to these foreign investors.”

:lol: 

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