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Capital Economics Getting Desperate?


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:lol::lol::lol:

What a comment! :

"Despite the resilience of the Halifax and Nationwide house price indices, we

still believe that the bigger picture of record valuations and deteriorating

affordability points to substantial falls in average house prices over the next

two to three years," said Stansfield.

http://www.iii.co.uk/news/?type=afxnews&ar...&action=article

LONDON (AFX) - Concerns that the UK housing market is poised to experience an

early 1990s-style crash diminished this morning after a closely-watched survey

pointed to a solid increase in prices in January.

The Halifax, the UK's biggest mortgage provider and part of the HBOS PLC banking

group, found house prices rose a seasonally adjusted 0.8 pct in January over

December.

Despite the monthly improvement, prices were up 13.7 pct on a year-on-year

basis, the lowest annual rate since December 2001.

"They were somewhat stronger than the recent monetary data would suggest but

market momentum continues to slow," said Adam Chester, analyst at HBOS.

The Bank of England's rate-setting Monetary Policy Committee has raised the cost

of borrowing a quarter point on five occasions since November 2003, taking its

key repo rate up to 4.75 pct, as it sought to stem inflationary pressures

arising from above-trend growth and rampant consumer demand.

But evidence of a general economic slowdown, alongside subdued inflation data

and concerns over the housing market outlook, have raised expectations that the

next interest rate move may actually be down.

"The (Halifax) report will be seized upon by those predicting a soft landing for

the housing market and will certainly reinforce growing expectations that an

early cut in interest rates is unlikely," said Ed Stansfield, property economist

at Capital Economics.

The MPC has kept interest rates unchanged since last August and analysts said

today's survey may ease any housing concerns on the nine-member panel especially

as it comes in the wake of a similar survey from the Nationwide, the UK's

largest building society.

Last week, the Nationwide found house prices rising by 0.4 pct in January.

Like the Halifax, the annual rate fell slightly to 12.6 pct - its lowest rate in

three years.

Capital Economics' Stansfield is a little bit more concerned than the Halifax

and the Nationwide, which dismiss suggestions of any slide in prices.

"Despite the resilience of the Halifax and Nationwide house price indices, we

still believe that the bigger picture of record valuations and deteriorating

affordability points to substantial falls in average house prices over the next

two to three years," said Stansfield.

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Halfax -0.4% non-SA, Nationwide -0.4% non-SA. Hometrack -0.4% non-SA.

There seems to be a consensus there!

Wait until the SA starts going negative. Better sell up now, TTR.. while the seasonal adjustments are still on your side!

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I think its brilliant. As long as Halifax et al continue to publish bull like this, the less chance of an IR cut. While in reality prices are falling, and deals are being agreed quite dramatically below asking prices, these figures make it appear everything is okay.

We are actually well into it here in Berkshire. The Estate Agents boards stretch in a perfect line to the horizon outside every block of flats.

But the media has its head up its @rse as always and the vested interests get all the column inches. Great, the crash gets deeper and deeper and, if anything IRs are likely to go up. Excellent news.

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TTRTR if you're so convinced there will not be a crash why do you spend so long posting goading messages on here? Surely the only reason is you like winding people up who are priced out of the housing market, to make you feel superior. It really is pathetic for a grown man.

This is an outlet for me. The law protects my tenants from me harrassing them so well, that I have to come here & harrass other people's tenants! :D

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TTRTR if you're so convinced there will not be a crash why do you spend so long posting goading messages on here? Surely the only reason is you enjoy winding people up who are priced out of the housing market. It really is pathetic for a grown man.

I think it might have something to do with the way you chaps go about your 'business' .

If this was a forum where people were constructively giving each other tips about house buying/renovating/what areas were still on low p/e's etc rather than simply scouring the net for negative news and trying oh so hard to talk the market down,then you wouldn't find people 'goading' as you put it. In fact you'd probably find a lot more people trying to help you.

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I think it might have something to do with the way you chaps go about your 'business' .

    If this was a forum where people were constructively giving each other tips about house buying/renovating/what areas were still on low p/e's etc rather than simply scouring the net for negative news and trying oh so hard to talk the market down,then you wouldn't find people 'goading' as you put it. In fact you'd probably find a lot more people trying to help you.

we are a house price crash site after all, we leave the above to C4 homes site and the singing pig brigade so maybe you are on the wrong site koc?

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:lol:  :lol:  :lol:

What a comment! :

Well, that's V.I. for you. :D

All I can go off is what I see with my own eyes: prices here in London are falling; lot's of property I pass each day on the way to work is still up for sale, some of it having been so for more than a year. Even those which have seen 5-10% hacked off their prices - as they are some on RightMove - still aren't shifting.

My sisters house in South Manchester still hasn't sold, despite being on the market for 6 months or more and having had 25k lopped off the price.

And remember, all the above 'valuations' where given by EA's, and it's clearly in their interest to sell properties, not have them sat in the Window for months...

The market has changed in the last 6 months, but it doesn't suprise me the V.I. figures/comments haven't. And remember, I've no intention of buying property, even though I can easily afford it. I'll use my cash elsewhere. It just annoys me that this V.I. stuff is so easily digested by the media without question - that's my beef.

Nomadd

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I think it might have something to do with the way you chaps go about your 'business' .

    If this was a forum where people were constructively giving each other tips about house buying/renovating/what areas were still on low p/e's etc rather than simply scouring the net for negative news and trying oh so hard to talk the market down,then you wouldn't find people 'goading' as you put it. In fact you'd probably find a lot more people trying to help you.

Theres also a valid point to this site......in it gives an alternative view to buying renovating and trying to sell into a falling market which would result in a no sale due to NE.

I am a house owner and let a property but I could not envisage this scenario (over inflated HM) 7 or so years ago could you? You tell me where theres a low P/E in the UK (maybe Northern Ireland) and I would be interested? Failing that I,ll bang the rest of my cash abroad where I won,t be subject to this crazy goverments slack immigration laws, taxes (when will BTL,s be stung for having more than one home ?) and blind following of the piriah the other side of the atlantic.

This site though I agree is biased does give younger buyers who visit an inkling of the sort of devestation a recession could cause to their 150k mortgage instead of poncy TV programmes telling us how rosy everything is in the garden.

You must partially enjoy the site (maybe for the argument) and the people on it or why do you frequent it?

Rgds

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I think it might have something to do with the way you chaps go about your 'business' .

    If this was a forum where people were constructively giving each other tips about house buying/renovating/what areas were still on low p/e's etc rather than simply scouring the net for negative news and trying oh so hard to talk the market down,then you wouldn't find people 'goading' as you put it. In fact you'd probably find a lot more people trying to help you.

you must understand ..this website attracts negative people

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Halfax -0.4% non-SA, Nationwide -0.4% non-SA. Hometrack -0.4% non-SA.

There seems to be a consensus there!

Wait until the SA starts going negative. Better sell up now, TTR.. while the seasonal adjustments are still on your side!

Does anyone have the detail of how season adjustment works. Both Halifax and Nationwide are quite cagey about it but it I suspect that "seasonal" may be a bit of a misnomer. It doesn't look like they add a bit on for january for it being a quiet month and knock a bit off in June for it being a traditionally busy month. Some references on its web site suggest that it more a method of flattening out the line on some sort of moving average basis. If this is the case then it is the big jumps of the past couple of years that are still keeping it positive.

Can anyone cast some light on this?

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I add my comments to news stories that's all, but you goaders seem to just poke fun all day long at anyone who thinks houses are overpriced. I don't mind people commenting on boom stories, it's just the general ridiculing tone, most of your messages are followed by laughing faces like it's great fun that you're rubbing people noses in it.

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you must understand ..this website attracts negative people

Or positive, if you think prices falling is a good thing. On a different note, if house prices are still rising, why has the estate agents I've just walked past in Colchester High Street got big "January Sales" stickers all over the window. Wouldn't their vendors object to their houses being discounted in a rising market? Ha! Betcha can't answer that one sensibly!

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Does anyone have the detail of how season adjustment works. Both Halifax and Nationwide are quite cagey about it

Understandably. As far as I can see it does seem to be a case of "we will do whatever is required to distort HPI into positive territory". Here's the actual adjustment, FWIW:

http://boards.fool.co.uk/Message.asp?mid=9077118

I'll see if I can find the methodology behind it.

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This site though I agree is biased does give younger buyers who visit an inkling of the sort of devestation a recession could cause to their 150k mortgage instead of poncy TV programmes telling us how rosy everything is in the garden.

You must partially enjoy the site (maybe for the argument)  and the people on it or why do you frequent it?

Exactly there is a very serious point to be made here. Already it is likely that there are 1000's of people now in negative equity. They can't now sell their home unless they pay the difference to the bank (unlikely) and they can't switch mortgages when their fixed term exprires so they'll be on bank SVRs (almot double). Anyone who bought houses with 95% - 100% LTV mortgages in the last year is most likely already in negative equity. Asking prices are no longer reflecting sale prices.

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Understandably. As far as I can see it does seem to be a case of "we will do whatever is required to distort HPI into positive territory". Here's the actual adjustment, FWIW:

http://boards.fool.co.uk/Message.asp?mid=9077118

I'll see if I can find the methodology behind it.

This is how I work out seasonal adjustment (warning: maths involved):

1. For each individual month, get the house prices for 6 months before and after, then calculate the smoothed trend figure for that month as follows:

Say you're in month 7.

Month 7 smoothed = (Month 1 + Month 13 + 2 x (Months 2 to 12) ) / 24

2. Work out the ratio between smoothed and actual: i.e. Month 7 Smoothed / Month 7

3. Do this for every month in the historical series

4. Calculate the average ratio for each month. These ratios are the seasonal adjustments.

Doing this, and turning them into %ages, I get the following using Nationwide's series:

Jan 1.54%

Feb 1.05%

Mar 0.01%

Apr -0.43%

May -0.32%

Jun -0.62%

Jul -0.87%

Aug -0.40%

Sep -0.03%

Oct 0.16%

Nov 0.59%

Dec 0.68%

Which isn't too far out from the actual Nationwide adjustments.

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Guest wrongmove
I think it might have something to do with the way you chaps go about your 'business' .

    If this was a forum where people were constructively giving each other tips about house buying/renovating/what areas were still on low p/e's etc rather than simply scouring the net for negative news and trying oh so hard to talk the market down,then you wouldn't find people 'goading' as you put it. In fact you'd probably find a lot more people trying to help you.

I think everyone is just picking on KotC. He clearly has our best interests at heart. I'm feeling you Kingy ! I welcome your concern for my welfare ! :P

This is an outlet for me. The law protects my tenants from me harrassing them so well, that I have to come here & harrass other people's tenants!  :D

But as for Titty ! :rolleyes: He hasn't made a contructive comment in months ! He is just trying to play on people's paranoia (sp?) He's beginning to get right on my TTRTRs, to be quite honest with you ! :lol::lol::lol:

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This is how I work out seasonal adjustment (warning: maths involved):

1. For each individual month, get the house prices for 6 months before and after, then calculate the smoothed trend figure for that month as follows:

Say you're in month 7.

Month 7 smoothed = (Month 1 + Month 13 + 2 x (Months 2 to 12) ) / 24

2. Work out the ratio between smoothed and actual: i.e. Month 7 Smoothed / Month 7

3. Do this for every month in the historical series

4. Calculate the average ratio for each month. These ratios are the seasonal adjustments.

Doing this, and turning them into %ages, I get the following using Nationwide's series:

Jan 1.54%

Feb 1.05%

Mar 0.01%

Apr -0.43%

May -0.32%

Jun -0.62%

Jul -0.87%

Aug -0.40%

Sep -0.03%

Oct 0.16%

Nov 0.59%

Dec 0.68%

Which isn't too far out from the actual Nationwide adjustments.

Excellent post, quanting. Looks like we are slap-bang in the middle of creative-accounting season!

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This is how I work out seasonal adjustment (warning: maths involved):

1. For each individual month, get the house prices for 6 months before and after, then calculate the smoothed trend figure for that month as follows:

Say you're in month 7.

Month 7 smoothed = (Month 1 + Month 13 + 2 x (Months 2 to 12) ) / 24

2. Work out the ratio between smoothed and actual: i.e. Month 7 Smoothed / Month 7

3. Do this for every month in the historical series

4. Calculate the average ratio for each month. These ratios are the seasonal adjustments.

Doing this, and turning them into %ages, I get the following using Nationwide's series:

Jan 1.54%

Feb 1.05%

Mar 0.01%

Apr -0.43%

May -0.32%

Jun -0.62%

Jul -0.87%

Aug -0.40%

Sep -0.03%

Oct 0.16%

Nov 0.59%

Dec 0.68%

Which isn't too far out from the actual Nationwide adjustments.

Thanks quanting - I think this is exactly what Halifax have done. The January adjustments back to 84 look like this:

1984 0.98%

1985 1.12%

1986 1.51%

1987 1.59%

1988 2.00%

1989 2.05%

1990 1.74%

1991 1.18%

1992 0.87%

1993 0.82%

1994 0.59%

1995 0.51%

1996 0.92%

1997 0.89%

1998 0.88%

1999 0.84%

2000 0.64%

2001 0.83%

2002 1.16%

2003 1.40%

2004 1.60%

2005 1.15%

The average adjustment from 84-04 is 1.15% which is what they have applied in 05.

Intuitively it strikes me that applying seasonality factors derived from a long term trend in one direction should be misleading if the underlying trend has turned. What's your opinion?

Also, would you have a go at deriving the seasonality factors for the mortgage approval numbers? The time series are on the BoE web site I think. I'd like to know what we should be expecting for the next release..

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Or positive, if you think prices falling is a good thing. On a different note, if house prices are still rising, why has the estate agents I've just walked past in Colchester High Street got big "January Sales" stickers all over the window. Wouldn't their vendors object to their houses being discounted in a rising market? Ha! Betcha can't answer that one sensibly!

I knew the bulls wouldn't have an answer! Laurejon, TTRTR, that new bloke who's become obsessed with the site, what's his name... King of the bouncy castle. Where are you...

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Exactly there is a very serious point to be made here. Already it is likely that there are 1000's of people now in negative equity. They can't now sell their home unless they pay the difference to the bank (unlikely) and they can't switch mortgages when their fixed term exprires so they'll be on bank SVRs (almot double). Anyone who bought houses with 95% - 100% LTV mortgages in the last year is most likely already in negative equity. Asking prices are no longer reflecting sale prices.

The real pain will start to be felt when people come off their fixed rate

mortgages and even with no tie ins will be unable to re mortgage as value

of property has fallen below the mortgage outstanding.

Wonder what 'advice' Kirsty and Phil will be able to give them?

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  • 440 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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