RM July -0.1% MoM

[TheCountOfNowhere]

After seeing this

 

https://www.housepricecrash.co.uk/forum/index.php?/topic/233142-rm-july-01-mom/

RM IAP index down -0.1  I revisted the figures for the PL CAP index.

On the good news front, sure enough I found an issue.

Some listings are Price on Asking, so you can't actually put a figure on them to count.

So I removed them from the calculation.

On the bad news front, overall prices were up EVEN MORE !!!!

Prices < 1M : Up 1.73 %

All prices : UP 3.02 %

Prices > 1M: Up 0.22 %

It makes no sense, are RM seasonally adjusting ?

[hurlerontheditch]

30 minutes ago, TheCountOfNowhere said:

After seeing this

 

https://www.housepricecrash.co.uk/forum/index.php?/topic/233142-rm-july-01-mom/

RM IAP index down -0.1  I revisted the figures for the PL CAP index.

On the good news front, sure enough I found an issue.

Some listings are Price on Asking, so you can't actually put a figure on them to count.

So I removed them from the calculation.

On the bad news front, overall prices were up EVEN MORE !!!!

Prices < 1M : Up 1.73 %

All prices : UP 3.02 %

Prices > 1M: Up 0.22 %

It makes no sense, are RM seasonally adjusting ?

its all pointless. no one needs to sell, and if they do they will just remortgage buy another place and rent the other out

[azal777]

House price collapses historically go hand in hand with job losses and the subsequent loss of confidence in the economy.

we aren’t nowhere near that, yet.

but a lot of quoted jobs are suspect at best, plus there are lots of what I call ‘ghost’ jibs where companies are employing ppl who have nothing to do, no wonder productivity is sluggish.

those ppl fry very quickly when sentiment changes.

house reductions come after all this unemployment filters through, brexit could stoke this loss of confidence, we all know though that the economy is very fragile, despite best arguments to the contrary.

the elements are in place but we aren’t there yet, predicting a slide isn’t difficult in my view, when is another issue entirely.

im encouraging my eldest 21 yo to save save save and wait for the fruit to hang much lower, fortunately she’s in no hurry.

[“Nasty Piece of work”]

SA is a way to further enable indexes to blur the real numbers.

[hotblack42]

1 hour ago, hurlerontheditch said:

its all pointless. no one needs to sell, and if they do they will just remortgage buy another place and rent the other out

We are trying to sell as mentioned above but its not happening so we are looking into other possibilities. Rents in the area appear to be holding up, plus the house is in the catchment for 2 good senior schools.  No proceedable offer yet and as the price we will realise declines the potential yield increases.  Roughly it would be 3.1% gross allowing for 2 full months void pa.
The possibility is there to be really naughty and serially rent to parents who wish to guarantee a place at one of the schools (we would insist that they actually lived there though).

I know its not the HPC way and not something I would feel proud of being a tenant for work, as well as a homeowner (1% LTV), but the likelihood of the 2 of us buying a 2nd house, instead of changing, is looking increasingly likely.  We have the means (PCLS) and it does offer the fallback being able to serve notice on the tenants and return to Glos. if the South Coast does not work out (forthcoming legislation may cut that avenue off though).

I don't know what to think, the game seems rigged for people with more than their fair share of land and property and the desire for more.

[spyguy]

1 hour ago, azal777 said:

House price collapses historically go hand in hand with job losses and the subsequent loss of confidence in the economy.

we aren’t nowhere near that, yet.

but a lot of quoted jobs are suspect at best, plus there are lots of what I call ‘ghost’ jibs where companies are employing ppl who have nothing to do, no wonder productivity is sluggish.

those ppl fry very quickly when sentiment changes.

house reductions come after all this unemployment filters through, brexit could stoke this loss of confidence, we all know though that the economy is very fragile, despite best arguments to the contrary.

the elements are in place but we aren’t there yet, predicting a slide isn’t difficult in my view, when is another issue entirely.

im encouraging my eldest 21 yo to save save save and wait for the fruit to hang much lower, fortunately she’s in no hurry.

You mean Northern LAs?

 

[spyguy]

26 minutes ago, hotblack42 said:

We are trying to sell as mentioned above but its not happening so we are looking into other possibilities. Rents in the area appear to be holding up, plus the house is in the catchment for 2 good senior schools.  No proceedable offer yet and as the price we will realise declines the potential yield increases.  Roughly it would be 3.1% gross allowing for 2 full months void pa.
The possibility is there to be really naughty and serially rent to parents who wish to guarantee a place at one of the schools (we would insist that they actually lived there though).

I know its not the HPC way and not something I would feel proud of being a tenant for work, as well as a homeowner (1% LTV), but the likelihood of the 2 of us buying a 2nd house, instead of changing, is looking increasingly likely.  We have the means (PCLS) and it does offer the fallback being able to serve notice on the tenants and return to Glos. if the South Coast does not work out (forthcoming legislation may cut that avenue off though).

I don't know what to think, the game seems rigged for people with more than their fair share of land and property and the desire for more.

The yield is too low. Youd not be able to sell to a BTLer for that.

IO BTL is basically dead, gone.

The in demand schools are wise to people trying to pull the rental ploy. They'll typically ask for a previous address and how long youve been in the current one. They do check with LAs on how long a person has been present.

The game is not rigged for people who want to buy more property. If you want to buy >1 house then the extra houses have to be bought with large wads of cash now. Again, IO BTL and high leverage is dead as a dodo.

Just reduce the price now and be the cheapest i nthe area. That advice will save you 10ks i nthe future.

 

[hotblack42]

1 minute ago, spyguy said:

The yield is too low. Youd not be able to sell to a BTLer for that.
It doesn't need to be profitable, we don't need to raise finance on it.  We would own it outright and aim for capital preservation, avoidance of selling costs and the ability to revert to it, otherwise re-use the house, or sell later in the cycle, while the tenants paid upkeep and offset  medium term house price declines.  One of use would need to move back in for a while if we sold it to avoid CGT which might be a nuisance.  I don't like thinking this way but the 3 bed house, 4 doors away literally just exchanged for 98% of peak price and its a bitter pill to swallow that our 4 bed with a knockout conservatory might eventually go for a lower price.  Maybe when confidence crumbles people feel more confident buying middle of the road 3 bed houses?

IO BTL is basically dead, gone.  You are right, but see above.

The in demand schools are wise to people trying to pull the rental ploy. They'll typically ask for a previous address and how long youve been in the current one. They do check with LAs on how long a person has been present.  Correct, we would research this and ensure they were installed with the required lead time.

The game is not rigged for people who want to buy more property. If you want to buy >1 house then the extra houses have to be bought with large wads of cash now. Again, IO BTL and high leverage is dead as a dodo.  We can afford 2 houses outright if that's the best option due to Pension Commencement Lump Sump that will be released by a DB pension transfer out in Sep.

Just reduce the price now and be the cheapest i nthe area. That advice will save you 10ks i nthe future.  That is one of our options, agreed.  There's a lot to be said for a clean break.

Responses embedded

[janch]

On 16/07/2018 at 07:10, Queasing said:

Anecdotally I am also seeing highest levels of stock available in my local area since I started monitoring in March 2017. Still a lot of fantasy pricing out there though.

Same here in Wilts...........word must be getting out at last and everyone wants to join in before their lovely house drops even more?  0.1% of the average say 200K house is still a lot of money in the real world beyond real estate.

[janch]

hotblack42 ..............consider how you will feel if we are at the start of a proper HPC.  The cash you could get now and put in the bank even at no interest and even for less than you think it may be "worth" could be a lot more than if you hang on to the house and watch the money draining out of it as prices fall...........just a thought (sorry to be all doom and gloom).

[hotblack42]

2 hours ago, janch said:

hotblack42 ..............consider how you will feel if we are at the start of a proper HPC.  The cash you could get now and put in the bank even at no interest and even for less than you think it may be "worth" could be a lot more than if you hang on to the house and watch the money draining out of it as prices fall...........just a thought (sorry to be all doom and gloom).

Absolutely.  Fully understood.  There's a lot of possible combinations.  We might rent it out and rent on the South Coast,  watch both the house we have kept and the target market go down, take the Gloucester drop on the chin but nick a coastal bargain after capitulation.  Or we might sell to rent and wait until there's blood on the street before buying back in.
My wife would struggle with not buying a really attractive, well built, well located and reasonably priced place though, just because I insisted that the market hadn't bottomed.  The fact that I had the last word in the previous 2 places and they turned out to be very astute purchases (even if we have to cut the price of the current one hard) seems to have been forgotten :-)

Not worried, just regret that we didn't just cut and run in the Spring rather than fannying around with too high prices.  To be fair we didn't linger at peak price long and it would have been very brave to discount heavily before the prices turned.   I don't think many expected the local market to go into reverse quite so suddenly..  

[Lavalas]

Great news that it has though, pleased to hear it.

[stop_the_craziness]

I'm not at all surprised that asking prices are up.  Round here (Bedfordshire) there are a lot of new instructions of 2-bed houses that were bought relatively recently (2012 onwards) that have "no onward chain".   Looking at the asking prices I can see that each one of them is looking to make somewhere between 50K and 100K in mad gainz compared with their 2012 purchase price.

Therefore I am concluding that what I am seeing is ex-BTL properties coming on the market for the first time in 6 years because people have got wind of their S24 implications and have decided it's time to "cash out".  In their minds property only ever goes to the moon so they haven't kept their eye on the changing sentiment/ability to pay of current buyers.

Result:  a huge proportion of massively over-priced 2 bed houses pushing up the asking prices of all the other new 2-beds that are being listed.  None of them are selling, but that's not the point of an asking price index.

As a "delusion index" I think this summer's asking prices reflect that it is currently "peak delusion" in ex-BTL sales in Bedfordshire.  I an intrigued to see what happens next.  The deciding factor in what happens to those asking prices will be when the NEED to sell becomes more urgent because the tax situation is crippling them.  If that doesn't come to pass then I can only presume the delusion-index of ever-increasing asking prices will continue.

We live in interesting times.

[Lavalas]

Land Reg data out at 9:30. Find it’s more palatable to prepare for the worst. Forecast +3.8% y/y down from +3.9%.

[Lavalas]

Actual +3.0% y/y and it looks like last month has been revised down to +3.5% from 3.9.

-0.1% m/m

[Lavalas]

Sorry, +0.1 m/m

 

https://www.gov.uk/government/news/uk-house-price-index-for-may-2018?utm_medium=Twitter&utm_source=social&utm_campaign=Open_data&utm_image=Image_infographic&utm_content=UK_HPI

[rantnrave]

19 minutes ago, Lavalas said:

Actual +3.0% y/y and it looks like last month has been revised down to +3.5% from 3.9.

-0.1% m/m

Got time to post a link?

[Lavalas]

5 minutes ago, rantnrave said:

Got time to post a link?

See above, should have just started a thread really but what’s done is done.

[rantnrave]

Sales volume taking an absolute battering, according to the full report:

https://www.gov.uk/government/publications/uk-house-price-index-england-may-2018/uk-house-price-index-england-may-2018

[Kosmin]

On ‎17‎/‎07‎/‎2018 at 09:26, azal777 said:

House price collapses historically go hand in hand with job losses and the subsequent loss of confidence in the economy.

we aren’t nowhere near that, yet.

If large numbers of landlords and IO junkies are forced to sell, or choose to sell because they realise holding is not viable given the tax changes, prices can move significantly without a recession. I don't know what constitutes a large number in the context. But I think prices can fall without recession or interest rate increases.

[“Nasty Piece of work”]

2 minutes ago, Kosmin said:

But I think prices can fall without recession or interest rate increases.

Being Strong and Stable I don’t think we will have the opportunity to find out.

 

[Kosmin]

1 minute ago, Freezer? Best place for it said:

Being Strong and Stable I don’t think we will have the opportunity to find out.

 

Do you reckon there'll be a recession or interest rate increases or both?

[jiltedjen]

problem with stagnation is that sellers are not forced, prices just very gradually bleed lower, say 5% a year, from 2008 to 2013 things were going well, prices were sticky but the weight of gravity helped.

Unless we get a big interest rate rise, or masses of forced sellers (such as BTL) then its just a long slow bleed of 5% onwards.

 

[azal777]

22 minutes ago, Kosmin said:

If large numbers of landlords and IO junkies are forced to sell, or choose to sell because they realise holding is not viable given the tax changes, prices can move significantly without a recession. I don't know what constitutes a large number in the context. But I think prices can fall without recession or interest rate increases.

For sure this is quite possible and I think, probable since an awful lot of stock has been off the grid for a few years to find even 20% of that finding its way onto the market will at least rebalance the supply/demand arguments and fix prices lower.

if we do end up in a recession whether brexit led or not plus factor in this scenario which will,likely unfold first and that will definitely send prices further south.

both my mates boy and my daughter, same ages are saving saving saving and waiting waiting waiting, fortunately under no pressure unlike perhaps some posters here who have families and just want a damn roof over their heads at a sensible price.

it will happen but none of us can predict when since the government can and might interfere when said Armageddon looks like becoming reality and that’s the problem, economics in general in the UK has been far removed from reality for far too long.

[Maynardgravy]

32 minutes ago, jiltedjen said:

problem with stagnation is that sellers are not forced, prices just very gradually bleed lower, say 5% a year, from 2008 to 2013 things were going well, prices were sticky but the weight of gravity helped.

Unless we get a big interest rate rise, or masses of forced sellers (such as BTL) then its just a long slow bleed of 5% onwards.

 

I don't know - just looking at Brent you have yoy -4.5% and sales volumes down 35%. I smell blood and so do plenty of others. This thing has spread out from central London.

Edited July 18, 2018 by Maynardgravy
Correction