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How significant is the 'upturn'? Acadata says 3.4% versus Halifax >7%


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Is this current madness the uptick that was a predictable one-off adjustment as a result of Rishi's stamp duty largesse or something more? http://www.acadata.co.uk/services/house-price-index/ says it's 3.4% yoy in September, not Halifax's 7.3%. Not the first time Halifax has issued incredible-looking upward numbers. There seems to be a sense of panic on the forum, but don't people think the end of furlough and Brexit just 2.5 months away will be more significant. Luckily Reading where I live still seems to be down >8% YoY and falling MoM. No London to leafy migration here...

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Is this current madness the uptick that was a predictable one-off adjustment as a result of Rishi's stamp duty largesse or something more? http://www.acadata.co.uk/services/house-price-index/ says it's 3.4% yoy in September, not Halifax's 7.3%. Not the first time Halifax has issued incredible-looking upward numbers. There seems to be a sense of panic on the forum, but don't people think the end of furlough and Brexit just 2.5 months away will be more significant. Luckily Reading where I live still seems to be down >8% YoY and falling MoM. No London to leafy migration here...

Really appreciate this info.  I'm not sure I've seen this index previously.  The London data is fascinating and reflects what I am seeing in Lambeth borough but not so much in Wandsworth.  I'm waiting for the LR stuff but this will probably take 3-6 months to establish any trend.

 

I was also interested in the info. below.  Unfortunately, the report doesn't seem to be scheduled for publication until December.

 

The Housing Market

As we highlight, the Chancellor’s stamp duty holiday has helped to sustain the momentum in the housing market - a move out to help out scheme by another name - and this will be sustained for a few months longer. Although the November Budget may be delayed, a spending review has been launched to allow the government to take stock and finalise its spending (and revenue raising?) plans. Clearly, with so much in flux this will be challenging. The evidence on incomes and employment/unemployment is complicated, though it does seem very clear that younger households are seeing falls in average incomes and in employment.

Little wonder then that the Prime Minister has floated the notion of giving more help to younger households - not least by securing a steady stream of higher LTV mortgages, potentially via government backing - and to a rethink of the mortgage stress tests which have rightly in some senses tightened access to the mortgage market. The Bank of England has to date resisted any attempts to adjust the tests, and it will be interesting to see if the Financial Policy Committee statement due on Thursday 8th October makes any reference to this new development.

All eyes are still focussed on the medium term for the market when the direction of the economy may perhaps be clearer post the Stamp Duty holiday, the original Help to Buy scheme and Brexit, alongside any new policy interventions. The continuing short-term “fire sales”, being held by mortgage lenders when they release limited numbers of higher LTV mortgages, gives a real sense of both the pent up demand from those with limited deposits as well as the pressure on lenders to manage down

 

Furlough, unemployment, Brexit, whatever. None of them makes any difference. People need to understand that house prices are not related to any factor whatsoever. It's not what people want to hear, but it's the truth, and often the truth hurts.

It may be an idea to read acadata's report.

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Furlough, unemployment, Brexit, whatever. None of them makes any difference. People need to understand that house prices are not related to any factor whatsoever. It's not what people want to hear, but it's the truth, and often the truth hurts.

Well they have to be related to something otherwise there would literally be no explanation as to why they rise and fall, or are the same (ish) from day to day. I could wake up tomorrow and a small terraced would be £10m and the next day a castle worth 50p.

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Furlough, unemployment, Brexit, whatever. None of them makes any difference. People need to understand that house prices are not related to any factor whatsoever. It's not what people want to hear, but it's the truth, and often the truth hurts.

They are related to two factors.

Interest rates and government props. So long as the first remains on the floor and the second does everything in its power to intervene, nothing will change.

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They are related to two factors.

Interest rates and government props. So long as the first remains on the floor and the second does everything in its power to intervene, nothing will change.

The latter forces the former down.  With props, there is no risk premium required via the IR

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They are related to two factors.

Interest rates and government props. So long as the first remains on the floor and the second does everything in its power to intervene, nothing will change.

Well they are not preventing unemployment from rising and they are not preventing the exchange rate crashing with a soft Brexit. So they are not even, apparently, doing everything in their power.

I get that people look at the outgoings rather than the risk of interest rates rising, but if people are losing jobs and face a decline in the purchasing power of the pound, there are people at the margin who will need to sell. As soon as this results in a relative surplus of sellers I'd expect generalised falls again.

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Is this current madness the uptick that was a predictable one-off adjustment as a result of Rishi's stamp duty largesse or something more? http://www.acadata.co.uk/services/house-price-index/ says it's 3.4% yoy in September, not Halifax's 7.3%. Not the first time Halifax has issued incredible-looking upward numbers. There seems to be a sense of panic on the forum, but don't people think the end of furlough and Brexit just 2.5 months away will be more significant. Luckily Reading where I live still seems to be down >8% YoY and falling MoM. No London to leafy migration here...

IIRC Halifax said that some of the 7.3% rise was down to figures being in a dip 12 months ago. 

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IIRC Halifax said that some of the 7.3% rise was down to figures being in a dip 12 months ago. 

I don't recall Halifax's index showing much of a dip at the time. Do they revise it subsequently, as more data comes in?

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oh dear lord, just when you thought it couldn't get any more mental

They are only talking about a negative central bank base rate. I guess it would drive reckless lending by the banks, less money kept on account with the central bank per £ of loan issue.

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They are only talking about a negative central bank base rate. I guess it would drive reckless lending by the banks, less money kept on account with the central bank per £ of loan issue.

I cant see it filtering down to negative levels for the savers/current accounts but they will certainly be at 0%. Maybe even with a small negative rate for larger amounts?

 

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I cant see it filtering down to negative levels for the savers/current accounts but they will certainly be at 0%. Maybe even with a small negative rate for larger amounts?

 

Charge by month for savers with "free" phone insurance thrown in...

Borrowers, they had a negative mortgage in Denmark not sure in Switzerland yet

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Charge by month for savers with "free" phone insurance thrown in...

Borrowers, they had a negative mortgage in Denmark not sure in Switzerland yet

Probably!

Not sure what I will do with my funds. Probably buy a shit load of gold and wait for the inevitable destruction of sterling.

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I think this really is dependent on the area.

Some part of London are seeing drops especially flats/apartments. I have been keeping a tab on this as I'm looking to buy and have noticed gradual reductions in some areas. 

See below 2 bed flat in Chadwell Heath in decent condition and close to the station. Dropped from 290k to 250k

https://www.zoopla.co.uk/for-sale/details/54418228?search_identifier=5d844d71ea185d9447bde5f7f02f7e7e

All is not what it seems.

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I think this really is dependent on the area.

Some part of London are seeing drops especially flats/apartments. I have been keeping a tab on this as I'm looking to buy and have noticed gradual reductions in some areas. 

See below 2 bed flat in Chadwell Heath in decent condition and close to the station. Dropped from 290k to 250k

https://www.zoopla.co.uk/for-sale/details/54418228?search_identifier=5d844d71ea185d9447bde5f7f02f7e7e

All is not what it seems.

They should check the mumsnet thread to get the right dried flowers in and wack the price to 310K

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Furlough, unemployment, Brexit, whatever. None of them makes any difference. People need to understand that house prices are not related to any factor whatsoever. It's not what people want to hear, but it's the truth, and often the truth hurts.

Thats not what I get from the info.

Seems pretty clear houses are a proxy for currency debasement and what news is bad for the economy is good for house prices.

The volumes are low and the amount of money lent out is lower despite the headline price inflation.

Less people buying more expensive houses with the ability to transact dependant on lower rates and tax incentives.

The market is on a string at the moment but the government will find it hard to get more people into houses and at the same time keep those price rising conditions intact.

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They are related to two factors.

Interest rates and government props. So long as the first remains on the floor and the second does everything in its power to intervene, nothing will change.

You are taking scarcity and competive bidding as a given?

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Really appreciate this info.  I'm not sure I've seen this index previously.  The London data is fascinating and reflects what I am seeing in Lambeth borough but not so much in Wandsworth.  I'm waiting for the LR stuff but this will probably take 3-6 months to establish any trend.

 

That's the claim to fame of the Acadata series, but its also rather opaque in its own way. It uses the available LR data for the last month, but combines this with forecasting until the data is in. This means that at a distance of 3 months, it's only LR data going into the series, at 2 months there is a bit of forecasting +LR, at 1 month (the Sept fig) there is quite a bit of forecasting going on based on the LR data to hand.

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That's the claim to fame of the Acadata series, but its also rather opaque in its own way. It uses the available LR data for the last month, but combines this with forecasting until the data is in. This means that at a distance of 3 months, it's only LR data going into the series, at 2 months there is a bit of forecasting +LR, at 1 month (the Sept fig) there is quite a bit of forecasting going on based on the LR data to hand.

Thanks, I was wondering how legitimate the methodology being used was.

Edited by Buffer Bear
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  • 433 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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