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Sancho Panza

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

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4 minutes ago, TonyJ said:

Is that building hideous, or what?

Hideous, the whole development is being marketed as "investment opportunity", they just missed the word bad off the front.

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I just had a look at Zoopla's data. 

I wonder if anyone has noticed that today the pricing graphs for previous years have been uniformly adjusted down and the last year's data adjusted up - this has been an overnight change that has pushed all areas (even London) that I have looked at into positive territory for 3/6/12mo respectively.

I actually saved the pricing graph from a couple of weeks back and overlaid with today the net effect of reducing historical valuations and increasing 2018 valuations has been to show a house price rise in almost all areas I've looked at (eg. London) which had shown a major net decline.

I presume it is a change in methodology but it would certainly give a user browsing today a far more bullish appraisal than would have been the case just yesterday. I don't think London rising year-on-year is remotely credible.

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5 hours ago, Patient London FTB said:

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. 

This is pretty amusing  to my mind:

Quote

Our investment philosophy

LCP specialises in maximising investor returns in Prime Central London (PCL) where price growth has averaged over 10% p.a. over the last 20 years.

This is due to high demand, underpinned by many factors such as the strength of the City of London, the rule of law and London’s importance as a centre for work, education, retail and leisure. Coupled with a lack of supply, with less than 5,000 properties changing hands each year, this creates upward pressure on prices. 

As an international market, PCL shows a far more consistent long-term performance than the rest of London and the UK. These domestic markets are more sensitive to changes in the local economy, employment and mortgage availability.

Prime Central London (PCL) vs the rest of the country

The UK

65.4m people, 23m residential units.

Vulnerable to price suppression due to domestic issues such as local economy, employment and mortgage availability.

Greater London

33 boroughs; 8.2m people, 12.5% of UK population.

Vulnerable to price suppression due to domestic issues such as local economy, employment and mortgage availability.

Inner London

9 inner boroughs; around 80,000 new units in the planning pipeline.

Vulnerable to price suppression due to oversupply of new build units as well as issues such as local economy, employment and mortgage availability.

Prime Central London

2 boroughs; The Royal Borough of Kensington & Chelsea and the City of Westminster.

Just 6 square miles around Hyde Park, under 5,000 sales per annum.

Highly restricted land development potential with almost no new build stock brought to market.

Prices underpinned by lack of supply to meet global demand.

Globally desirable

PCL - a go-to destination; centre of finance, education & culture.

English speaking and governed by the Rule of Law.

Safe haven asset class vs global political & economic instability.

Consistent performer vs volatility of other investment classes.

Building blocks for successful investment

LCP focuses on the ‘mainstream’ rental market in PCL, made up of small apartments which appeal most to international tenants. This sector demonstrates a powerful combination of capital growth (averaging 10% p.a.) and gross rental yields (around 3.5% p.a.), with low volatility and little correlation to the performance of equities.

We look for period properties which typify the area and are unique and highly demanded, with the potential to add value. This contrasts with other parts of London that have been adversely affected by an oversupply of expensive new units for purchase and rental.

Quote

LCPAca Residential Index (Feb 2018)

Since 2014, successive tax changes have fragmented the PCL market, impacting highly priced luxury property more significantly than the mainstream sector. It is therefore important to examine these sectors separately to get a more robust picture of price movements.

Whilst data is only available to Q3 2017, due to a time-lag in reporting, analysis of deciles demonstrates that both the mainstream market, representing the bottom 70% of sales by value, and the premium sector, representing the top 30% of sales by value, showed a weak performance.

The premium sector saw a 5.9% quarterly fall in prices and a 6.4% fall over the previous annual quarter. At just over £3.5m, average prices for this sector now stand 9% below the height of the market at the end of 2014.

Despite having been largely unaffected by tax changes impacting the top end of the market, negative sentiment now appears to be filtering through to the rest of market. The mainstream sector saw its largest quarterly price fall since records were published in 1995 at 13.8%. Nevertheless, the mainstream sector has generally held up better than the premium sector over the last few years, with prices at the same level as they were at the end of 2014.

(Emphasis added.)

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7 hours ago, Sancho Panza said:

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?

I think you might be thinking of this post?

 

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41 minutes ago, Neverwhere said:

This is pretty amusing  to my mind:

(Emphasis added.)

Indeed! It's kind of hard to see why LCP want this data out there isn't it? Maybe they decided they had better find out a bit more about the performance of the market, so they went to Acadata, and Acadata said ok we'll do you a special index but on condition we get some PR out of it. 

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6 minutes ago, Patient London FTB said:

Indeed! It's kind of hard to see why LCP want this data out there isn't it? Maybe they decided they had better find out a bit more about the performance of the market, so they went to Acadata, and Acadata said ok we'll do you a special index but on condition we get some PR out of it. 

Once you've paid for an index you've got to publish it? ;)

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6 hours ago, guest_northshore said:

Seems to be LSL/Acadata + prime central london + new build.1fc069e7-141e-48e8-b766-2e03a084b8e0.jpg

https://mailchi.mp/bdba34db6271/launch-of-lcpaca-residential-index?e=a433598639

It does appear at first glance as being quite comprehensive doesn't it?

1 hour ago, Neverwhere said:

I think you might be thinking of this post?

 

That's exactly the post Neverwhere.Thank you.

1 hour ago, Patient London FTB said:

Indeed! It's kind of hard to see why LCP want this data out there isn't it? Maybe they decided they had better find out a bit more about the performance of the market, so they went to Acadata, and Acadata said ok we'll do you a special index but on condition we get some PR out of it. 

As someone said previously,it would work to steer investors that are left to steer away from new builds toward their offering.

There's some kudos with having the most comprehensive dataset out there.

Edited by Sancho Panza

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On 16/10/2017 at 3:16 PM, FreeTrader said:

The Indy article uses data from the LSL/Acadata England & Wales House Price Index for September 2017, which was released today. This is an index that has never received much attention on this board, although it's one that I have often referenced in the past as it uses Land Reg data and is more timely than the ONS index (although it is still somewhat laggy on a regional basis).

http://www.acadata.co.uk/LSL Acadata E&W HPI News Release September 17.pdf

With this index, house prices in England & Wales fell 0.1% in September and they have now fallen for six months in a row, with the annual rate just +1.3%. This is the lowest annual figure since April 2012 and there's a distinct possibility that the annual growth figure will turn negative next month.

LSL_Acad_161017a.jpg

Meanwhile Greater London is showing an annual fall in the year to August 2017 of -0.7%, the first negative print on the LSL/Acad index since June 2011. The regional figures only go up to August because volume data are currently too low to draw any firm conclusions beyond this date, but LSL/Acad say that transactions submitted thus far are indicative of a further 2.7% fall in Greater London during September.

LSL_Acad_161017b.jpg

Looking at the Greater London table, the average price peaked at £628,394 in March 2017 and stood at £584,467 in August. If the indicated 2.7% fall in Sept 2017 verifies, this will take the London average down to £568,686, which will be 9.5% below peak.

 

Note that LSL/Acad's index is showing a greater fall in London than the official ONS index. This is because ONS uses geometric averaging, which will give more weight to lower-priced properties. LSL/Acad uses arithmetic averaging, which means that falls in higher-priced properties will pull the average down more than a geometrically weighted series.

 

Worth seeing FT's assessment in full

Also worth noting that on the January LSL Acadata there are revisions to their index for last year where some negtives have turned positive.

http://www.acadata.co.uk/LSL Acadata E&W HPI News Release January 18.pdf

http://www.acadata.co.uk/LSL Acadata E&W HPI News Release September 17.pdf

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Whomever it is who e-mails the BBC when they fail to report price falls should demand an explanation as to why they are not using this far more comprehensive data set. And should question their motives. LOL.

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http://www.acadata.co.uk/LSL Acadata E&W HPI News Release January 18.pdf

I paraphrase

'yoy negative for first time in Jan 18 at £301,477

London down 4.3% yoy biggest fall since August 09

Top 11 out of 33 London Boroughs down the most K&C down 12.9%

75% of unitary authority's in England & Wales recoridng growth in 2017.

Now more outright owners than mortgage holders

Owner occupiers aged 25-34 is down from 57% to 37% 2006 to 2017

Owner occupiers aged 35-44 down 72% to 52%'

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46 minutes ago, Sancho Panza said:

Owner occupiers aged 25-34 is down from 57% to 37% 2006 to 2017

Owner occupiers aged 35-44 down 72% to 52%'

That's some depressing statistics.  I assume those aged 25-34 in 2007 became aged 35-44 in 2017.  How is it that they were 57% owner occupiers in 2007 (when on average aged 30) but in another 10 years became 52% owner occupiers in 2017?! 

Sold to rent?  Repossessed?  Dodgy stats? 

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1 hour ago, Sancho Panza said:

http://www.acadata.co.uk/LSL Acadata E&W HPI News Release January 18.pdf

I paraphrase

'yoy negative for first time in Jan 18 at £301,477

London down 4.3% yoy biggest fall since August 09

Top 11 out of 33 London Boroughs down the most K&C down 12.9%

75% of unitary authority's in England & Wales recoridng growth in 2017.

Now more outright owners than mortgage holders

Owner occupiers aged 25-34 is down from 57% to 37% 2006 to 2017

Owner occupiers aged 35-44 down 72% to 52%'

I find this one the most interesting , in my neck of the woods we have planning permission being given for endless amounts of 1 bed flats. Historically these would be what the young person would buy to get on the 'ladder'' but here's the thing these young don't have the money as individual to buy so 2 things happen 1) they are buying older and 2) buying as a couple which means they are skipping the first step and going for at min 2 bed flats..

So now add in BTL running for the hills and who exactly is going to buy the literally 1000's of one beds granted planning permission in a 1 mile radius  .... 

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14 hours ago, Option5 said:

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

Meanwhile, in Manchester:

http://www.rightmove.co.uk/new-homes-for-sale/property-63485047.html

Near the Piccadilly regeneration zone.  Piccadilly gardens is disgusting, it’s full of homeless people zonked on spice.  It’s actually quite a scary place to walk through, even during the day.

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10 hours ago, TonyJ said:

But the MSM is ignoring it. Presumably, Rightmove visitor numbers are seen as a more accurate gauge.

I've never heard of RM visitor numbers being used as a gauge in the media - more often RM's dodgy house price index. But if you believe otherwise, I would be keen to hear why.

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16 minutes ago, TonyJ said:

Providing links to coverage of a Rightmove press release is hardly evidence that page views shows the health of the property market. Saying that RM traffic was good in Jan and Feb 2018 tells us next to nothing about house prices.

If they were to release usage stats going back 5 years which we could correlate against house prices, they might be useful, but the claiming that the odd press release is a useful guide to anything is just laughable.

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9 hours ago, Bear Hug said:

That's some depressing statistics.  I assume those aged 25-34 in 2007 became aged 35-44 in 2017.  How is it that they were 57% owner occupiers in 2007 (when on average aged 30) but in another 10 years became 52% owner occupiers in 2017?! 

Sold to rent?  Repossessed?  Dodgy stats? 

They aren't static groups of people.Between 25-44 is the period of life most people are mobile workwise so STR but also immigration would affect those groups as recent immigrants less likely to have equity to buy.

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20 hours ago, Option5 said:

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

Meanwhile, in Manchester:

http://www.rightmove.co.uk/new-homes-for-sale/property-63485047.html

A 2-bed flat with a target yield of 7% or £1750 pm. In Manchester! 

It's not even very spacious - about 750 Sq ft from the looks of it.

That's about £400 per Sq ft.

A more realistic 5% yield would only get £1250 p/m - much lower. And almost certainly wiping out any net yield. 

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7 minutes ago, Ah-so said:

A 2-bed flat with a target yield of 7% or £1750 pm. In Manchester! 

It's not even very spacious - about 750 Sq ft from the looks of it.

That's about £400 per Sq ft.

A more realistic 5% yield would only get £1250 p/m - much lower. And almost certainly wiping out any net yield. 

I rent in Manchester and think that would get about £950 per month.

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4 hours ago, TonyJ said:

Agreed. But proper RM visitor stats and correlation would be far too transparent to use to try to bluff buyers.

It would be good to see the real stats.  Of course it is collected by the likes of Alexa but they do not show the details.

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Just now, Mancunian284 said:

I rent in Manchester and think that would get about £950 per month.

Thanks for the clarification. Do you know what the yield is on your property? 

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Just now, Ah-so said:

Thanks for the clarification. Do you know what the yield is on your property? 

The owner bought it for £185k in 2012.  The flat opposite (identical flat) sold for £255k in September 2017 (land registry actual sold figs).  If that helps.

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2 minutes ago, Mancunian284 said:

The owner bought it for £185k in 2012.  The flat opposite (identical flat) sold for £255k in September 2017 (land registry actual sold figs).  If that helps.

The 7% yield must be due to a lack of apartments and nothing for the BTL brigade to buy in that area, oh hang on, what's this?

http://www.rightmove.co.uk/developer/branch/Alliance-Investments/Oxygen-160442.html/svr/3101;jsessionid=2B929C496B5AC35F48C81A0B511573BC#pId=63485047

All marked "Attention Investors" :D:D

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4 minutes ago, Mancunian284 said:

The owner bought it for £185k in 2012.  The flat opposite (identical flat) sold for £255k in September 2017 (land registry actual sold figs).  If that helps.

Yes it does - that's a yield of 4.5%.

But you estimate for that flat is 3.8% - which suggests a huge overvaluation.

If we went with 4.5% yield, the rent would be £1125. Or £625 short of the marketed rent.

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25 minutes ago, Ah-so said:

Thanks for the clarification. Do you know what the yield is on your property? 

Beetham Tower would be a good one to compare it with as it has the 5 star leisure facilities.  I don’t know what flats sell/rent for in there. Beetham Tower is in a much better (safer) part of central Manchester too.  The Oxygen Development is in an area that I wouldn’t be too happy about walking around outside at night in.

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13 hours ago, Nabby81 said:

I find this one the most interesting , in my neck of the woods we have planning permission being given for endless amounts of 1 bed flats. Historically these would be what the young person would buy to get on the 'ladder'' but here's the thing these young don't have the money as individual to buy so 2 things happen 1) they are buying older and 2) buying as a couple which means they are skipping the first step and going for at min 2 bed flats..

So now add in BTL running for the hills and who exactly is going to buy the literally 1000's of one beds granted planning permission in a 1 mile radius  .... 

Noone.Well,until they get a lot cheaper.

48 minutes ago, Mancunian284 said:

I rent in Manchester and think that would get about £950 per month.

Always great when someone with local knowledge can claify the position.

 

42 minutes ago, TonyJ said:

I think RM trumpets visitor numbers whenever it wants to cover up less healthy statistics elsewhere. Industry journalists take their cue from RM's press release and run with it

RM is truggling for houses to advertise from what I can see but then I only look at Leicester for reference.may be different elsewhere.

 

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