Land Reg Figures September

[evictee]

I would be willing to bet good money there will not be LR YoY falls this year

Wales will be YoY negative this Year, or January at the latest.

[HPCbeliever]

Encouraging. I was a bit disappointed because the Rightmove asking price figures showed much greater drops. However I suppose this is for deals decided in May or June and finalised in August.

[bobthe~]

Encouraging. I was a bit disappointed because the Rightmove asking price figures showed much greater drops. However I suppose this is for deals decided in May or June and finalised in August.

Round our way in Esher (pronounced Eeeshaah), May and June were insane with any old cr@p house going on for a "Guide" price and then having an open day with frenzied sealed bids.

Still keeping an eye on the market, we are seeing chains collapse and houses going back on the market for lower values, 50k lower for one house in Thames Ditton, although it was 900k to start with.

Houses are definitely sticking, very few have sold in the last few weeks, and even Mrs Bob, who was worried sick that we shouldn't STR is now firmly on board.

TBH, although I care about whether the figures show a crash, as that will make people realise that it has happened, what I am really interested in is getting the house we want a lot cheaper.

We can already do this regardless of official figures, but now we want to get it with a small mortgage.

And maybe add a couple of BTL flats, and a villa in Florida.

[Guest ceewbee]

This proves the point I have been making for sometime. IN a falling market fewer, more expensive homes, will sell skewing the avereages. In crashes the bottom end seizes up first but the rich keep on doing their thang. A few EAs in the US admit this phenomena as the YoY stats kept positive for too long after the market had collapsed.

Agreed - bang on. The 'crash' is happening right now in the btl vs ftb segment (sub £250k). I've seen the child-like scrawlings on the walls of the repossessed houses being sold at a significant loss vs purchase prices.

[A.steve]

Yes. In fact, I meant to say sub-250k (was looking at the line above when typing).

I couldn't really care less if the > £2,000,000 category quadruples every year (except insofar as it screws the stats in the media). I don't care much about the price inflation of Ferrari's, LearJets or meals at Ramsay's either. But I think it is significant that at the prices which affect the majority of people sales volumes fell so hard.

This is an interesting point, and I think it is worth making a nod to how the ONS deals with this well known fact when defining the relative weightings in the basket of products for CPI and RPI(X).

(From memory) the spending patterns of the most affluent 4% of the population are entirely excluded... because they do not follow predictable trends. The anecdotal justification for this is that one year they may all buy Farraris, but - in another - private jets... (as fashion dictates) - which would cause wild lurches from one commodity type to another which do not reflect the vast majority of transactions in the market.

Can anyone find clear documentation about exactly how the indices are calculated? Maybe we could define a more robust metric (taking our lead from RPI/CPI) to track a more representative and reactive notion of the average house price? Can we get raw Land Registry data from anywhere? Maybe we could publish our index on a website alongside warnings about inaccuracies (such as from fraudulent reporting of transaction prices to the Land Registry in the context of undeclared cash back?)

Edited September 27, 2007 by A.steve

[Methinkshe]

Round our way in Esher (pronounced Eeeshaah), May and June were insane with any old cr@p house going on for a "Guide" price and then having an open day with frenzied sealed bids.

Still keeping an eye on the market, we are seeing chains collapse and houses going back on the market for lower values, 50k lower for one house in Thames Ditton, although it was 900k to start with.

Houses are definitely sticking, very few have sold in the last few weeks, and even Mrs Bob, who was worried sick that we shouldn't STR is now firmly on board.

TBH, although I care about whether the figures show a crash, as that will make people realise that it has happened, what I am really interested in is getting the house we want a lot cheaper.

We can already do this regardless of official figures, but now we want to get it with a small mortgage.

And maybe add a couple of BTL flats, and a villa in Florida.

Ah, Esher! I was born in Farncombe, nr Godalming, moved to Cranleigh and thence to Worthing via Bognor and all before the age of 12 yrs. I wonder what has happened to the two houses my father built in the 1940s - one for his aged parents and one for himself and his new wife - my mother. Nursery Road, Farncombe. My father's father was mayor of Godalming and then got caught up in the great depression - lost all his money - they had a timber mill - Gridley and Spring or something like that. Which is why my father ended up building (or causing to be built) a house for his elederly parents. He died in 2001 age 92. The memory of the 1929 crash still lives on in my family history.

[Matt Bear]

Wales will be YoY negative this Year, or January at the latest.

Reckon it might be February when Wales turns YoY negative.

These are the "Average Price" figures for Wales - haven't really moved all year.

01/07 £135641

02/07 £139017

03/07 £133531

04/07 £141767

05/07 £140808

06/07 £142552

07/07 £138790

08/07 £138738

09/07 £140611

[jpjh]

Ouch at volumes...

First estate agent to go under? Whose been expanding recklessly with some flimsy business model but everyone in the City loves to bits as the shares only ever go up?

Lower Volumes is a sure sign of the credit crunch kicking in....

but higher prices if we look at Nationwide. Hmm could be the effect of top end going through more (fools and their money) but NW use mix adjusted so that should balance out. The only thing I can directly think of is that the NW index is not showing recent weeks hurtful activity. Will be interesting to see what it does next month.

One thing that did make sense was rightmove price taking a tumble. This has always been considered a leading indicator. A very large shift in Rightmove index next month and its full steam ahead. Could take 2-3 months before those falls show at Halifax and Nationwide though so be prepared for a final attempt by those in need to keep the bubble going just a bit more.

[evictee]

Reckon it might be February when Wales turns YoY negative.

These are the "Average Price" figures for Wales - haven't really moved all year.

01/07 £135641

02/07 £139017

03/07 £133531

04/07 £141767

05/07 £140808

06/07 £142552

07/07 £138790

08/07 £138738

09/07 £140611

Welsh prices will have to start rising again if YoY negative is to be delayed until February.

[thedebtisreal]

Careful about the volumes.... they are always plummeting over time. This is because of the slow rate at which the land registry compiles the figures.

[DataMonkey]

Can I just straighten out a couple of points about the Land Registry report?

Firstly, it is only the index which is calculated using repeat sales. So that's the big 222.4 on the front page and nothing else. Not the average prices by area. They're calculated in the normal manner by averaging the sales in each period and just scaling them so they fit in with the index over time.

Secondly, that -15% volume was June - June (3 month lag for the data to filter in from the solicitors) so if it was that bad in June, what on earth is it like now?

Thirdly, if you look on page 14 of the LR report, you'll see there is a lot of smoothing going on to get the averages: for the monthly ones it's a moving average over 4 months, so that is the average for June-Sept we are seeing. This will mean that any sharp movements will be hidden.

Finally: I posted this yesterday but it fits far more relevently in this thread. There are a large number of specific exceptions to what can feed into this report. These include properties over £1m and repossesions.

http://www.landregistry.gov.uk/property_info/exclusions/

DM

[evictee]

Thirdly, if you look on page 14 of the LR report, you'll see there is a lot of smoothing going on to get the averages: for the monthly ones it's a moving average over 4 months, so that is the average for June-Sept we are seeing. This will mean that any sharp movements will be hidden.

Only at the county level. The regional and national monthly change is not a moving average.

[Guest d23]

Can I just straighten out a couple of points about the Land Registry report?

Firstly, it is only the index which is calculated using repeat sales. So that's the big 222.4 on the front page and nothing else. Not the average prices by area. They're calculated in the normal manner by averaging the sales in each period and just scaling them so they fit in with the index over time

not sure thats correct but I'm sure Spline can confirm

[bearbullfence]

Sales volumes slide in sub-200k is huge!

That's because there are less sub-200k houses this year than last!

[CHD]

On the whole, there is a fair amount of agreement between the different house price indices.

The FT index - which is calculated on actual sale prices, as with the LR figures - has been showing the East Mids as the weakest region for the past couple of months. The confirmed LR figure of -1.1% month-on-month is actually a steeper fall than has been shown by the FT model.

The monthly falls in 5 of the 10 regions shown by LR also in broad terms echo what the FT has been showing over the past couple of months.

When you boil it all down, the broad picture for the past two or three months has been a practically flat market - averaged out nationally, house prices have hardly changed.

The latest NW figures are slightly more optimistic than FT and LR, but not much. I understand that NW figures are based on agreed sale prices, not completion prices, which can introduce a discrepancy against LR stats. Also, NW figs are based on the mortgage deals that pass through NW's hands and, of course, exclude cash transactions.

As others have noted, the LR figures are being calculated on a 15% lower volume of sales.

A reasonable interpretation of all these stats is that the market has peaked. There have been actual price falls in some regions for the past two or three months.

I cannot see the events of the past month having led to a rise in sales volumes or a resurgence in prices in the weaker regions.

[margesimpson]

The VIs regularly trumpet how house prices have broken the 200k barrier - and the Beeb and other media outlets report this as fact. And yet none are based on actual sales.

The LR - which is based on sales - says average price is 182k.

So what is presumably happening out there is that Mr Average is asking for more than 200k, but getting 182k.

[Ash4781]

Careful about the volumes.... they are always plummeting over time. This is because of the slow rate at which the land registry compiles the figures.

[Kurt Barlow]

An interesting way I monitor volumes is to do a daily or weekly rightmove check using exactly the same parameters. What I can say is that in Cambridge, Enfield and Kings Lynn the quantity of property in my specified ranges is going up, up and up! This is good indicator of softening markets as BTLS dump property and FTB's dry up.

[Shamus]

Did anyone realistically expect to see any dramatic figures on this report?

If the news of NR and credit crunch is going to have any impact on the housing market, it will take a lot longer than a few weeks to show up on reports such the LR figs.

If there is to be a fall in house prices, I doubt you will see any clear evidence until the early part of the new year

Yes it will take sometime for the reports to show up reduced prices. However take a look at your local property paper. The Bournemouth area has turned this week, with lot's of properties, reduced and reavailable. It's like 2005 again, let's hope it will play out longer!

[ReggiePerrin]

Using the back of a laptop and some very iffy maths. If you compare the sales volumes for June 2006 with June 2007 (England and Wales) there is approx a £2.2bn decrease in the total value of all property sold. My calculation suggest that £26.4bn worth of house sales took place in June 2006 against £22.4bn in June 2007

This is approx a drop of 8-9% YoY (The LR published a -11% drop in the volume of sales but I've tried to factor in the increase in avg house price) and this is in June, before the big freeze in the credit markets. I wonder what drop we'll see when the land registry release the sales volumes for September in a few months?

I know for the majority of people here the cost of the house is important, and I include myself in that statement, but if the housing market is considered as such then any business that suffers that level of drop in turnover YoY has to be heading for trouble. The only way I can think of to increase turnover is to drop the price, give people easier access to credit (like that's going to happen , handout massive payrises ...