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Jason

Nationwide - June - +0.3% Mom, +5% Yoy

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They've put a rent-mortgage comparison in there.

<_<

Yes, and look how it is based on a "90% mortgage". Typical spin.

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The price of a typical house is now £165,730, around £8,000 more than this time last year and equivalent to a rise of almost £22 per day.

It amuses me the way they put HPI in daily £ terms. The subtext they want to convey is that the average homeowner is 'earning' £22 a day through the magic of HPI, that HPI can only be good (since it puts £s in your pocket for doing nothing) and you should feel free to MEW and spend all that nice free money.

Go ahead, muppets. The party will last forever. :lol:

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These people are not totally stupid and don't believe all of their own spin:

However, she said the deterioration in affordability and its likely impact cannot be ignored. She noted that mortgage payments for someone on average earnings now take up around 42 pct of take home pay compared with around 32 pct three years ago.
'While earnings growth remains lower than house price growth the ability to pay constraint will continue to bite,' said Earley
.

According to NW, further HPI is hindered by:

1. People can't afford to pay anymore

2. They can't afford today's prices given that more than 40% of take home goes on the mortgage

3. Earnings growth is not there to support HPI

They forgot to add in a few more factors that make HPC more likely:

1. Deteriorating employment picture

2. Despite Gordon's head in the sand, IR are going up

3. Growing reposession rate--up 300% in London according to artcile posted on HPC yesterday

Bottom line, the "asking prices" may well have gone up a fraction of a percent and the World Cup may be preventing homes from selling but the reality is that all bad things come to an end.

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These new figures from Nationwide are almost exactly inline with what the other indices (Halifax, ODPM-MA, FTHPI-MA, Rightmove) are telling us about HPI this year. And the BoE mortgage approval figures published today also support this view, despite worries over affordability: May 138k NSA and 117k SA, i.e. well above the 80-90k level for neutral HPI

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Ok, here we go again, now we remark on the figures like we do every month and every year. We say things like "it will not last forever", and "these muppets will find out soon enough".

BUT THE FACTS ARE PRICES KEEP RISING AND RISING AND RISING

and what does June show, YES ANOTHER RISE

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It amuses me the way they put HPI in daily £ terms. The subtext they want to convey is that the average homeowner is 'earning' £22 a day through the magic of HPI, that HPI can only be good (since it puts £s in your pocket for doing nothing) and you should feel free to MEW and spend all that nice free money.

quote]

Wow - £22 a day! - thats about 8 extra Starbucks coffees!!

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I think there is something key to focus on the Nationwide press release with the June figures. If you look at the 3 month vs annual change chart they provide it seems that a flattening and then decrease in the three month figure is followed by a decline in the annual change figure.

We look to be at a key point - the 3 month curve is about to hit the annual curve. I think what happens next (ie July/Aug/Sept Nationwide data) will determine this.

If the Jul/Aug 3 month numbers were -ve (even of the order of ~0.1 to 0.3%) I think this could indicate a return to where things may have headed before last year's Aug rate cut. Of course, they could swing further up which would undoubtedly lead to further annual rises later if the lag holds good.

Until the annual figure goes -ve we will not see the mainstream accept the position. If one accepts that the recent spike was due largely to the Aug rate cut then the liklihood of a rate rise in the late summer this year could support an argument that prices will start to fall at the end of this year (pressaged first by a decrease in rate of increase). The recent surge in mortgage lending figures is also relevant to this - that is often (but not always) a sign of future price increases. Could it be that people are rushing to buy now before rates go up? However, the bottom line is that affordability is so stretched that prices have little room on the upside for big increases. For those reasons an upturn in the annual figure seems difficult to accept but as we are in a bubble not impossible!

I don't think we will have anything really meaningful on the way things are going until Sept. I think autumn/winter this year could be the tipping point. Lots of potential domestic and international economic decisions will have been taken by then (particularly on the rate front) and we will see where the predicted liquidity squeeze comes out.

Edited by Tempest

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plotting this on top of the Q1 2006 data, you get a graph showing prices nationally breaking through the 2 year ceiling.

Nationwide.JPG

post-552-1151938900.jpg

Edited by moosetea

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plotting this on top of the Q1 2006 data, you get a graph showing prices nationally breaking through the 2 year ceiling.

nice graph

very odd behaviour

if it carries on like this it is certainly different this time

I think somethings got to happen, either it goes up on the next leg of the bull run (unlikely), or it goes down (we ll find out nearer christmas time)

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nice graph

very odd behaviour

if it carries on like this it is certainly different this time

I think somethings got to happen, either it goes up on the next leg of the bull run (unlikely), or it goes down (we ll find out nearer christmas time)

Don't forget all indices are showing sustained drops over a good chunk of the country..

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The regional breakdown for Nationwide Q2 06 will be out sometime on Thursday!!

House prices do keep rising but that doesn't make us £22 a day better off does it. Just means the amount we have to borrow is getting silly.

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They've put a rent-mortgage comparison in there.

<_<

Very interesting.

As Jason points out, this is at 90% LTV. Add in the extra 10% of equity to get the true total asset value. Then take off one void month in 12. Then take off the agent's fee. Then take off maintenance, insurance, and, for flats, pesky ground rents and leasehold fees.

And what do you get?

(can't be bothered at this time of night to do the sums, but they ain't that attractive)

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House prices do keep rising but that doesn't make us £22 a day better off does it. Just means the amount we have to borrow is getting silly.

are you sure... they are in some areas.. but the charts show them dropping in many others..

(okay.. Devon ... gloating.... but.. we did go up to that largest disparity between prices and wages other then cornwall... unless you believe the halifax which says that the average salary is now close to £30,000..

In devon..

ahem

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  • 301 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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