Thursday, Jul 06, 2006

UK house prices go into reverse

BBC News: UK house prices go into reverse

One swallow and all that..... More significant is seeing Halifax report it and the BBC putting it up in lights.

Posted by George Mainwaring @ 08:31 AM (556 views)
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1. uncle tom said...

I can echo this - one of my local benchmarks is a fairly large estate of 70's 3 bed houses - all much the same, and some always on the market, so easy to keep tabs on.

For more than two years these have been almost invariably offered at 179,950, or a little more if they've been improved. But in this week's paper we have one at 175,000 and another at 177,950.

After a little activity earlier in the year, the sold signs have vanished again.

Too early to jump to big conclusions - but interesting!

Thursday, July 6, 2006 09:34AM Report Comment

2. denzil said...

And this is during the busiest period of the year when houses are flying off the shelves. Market is dead where I live. This type of news will send shock waves through the UK house buying public.
I always thought numbers would go into reverse late summer.
Somebody should ask Martin Ellis the Halifax chief economist that if the fundametals are so sound then why have prices dropped at the busiest time of the year?

Thursday, July 6, 2006 09:37AM Report Comment

3. Bfskinner said...

I dont know which is more interesting. the drop in prices or that the bbc reported in, i wonder how the daily express will spin this one into a good thing.

though i cant remember exactly how the halifax work it out, is it by asking price?

even though it will be interesting to see the next land registry figures for Q2 and again for Q3 later on to see what is really happening.
falling prices, increased oil prices and knock on inflationary pressures, interesting times ahead I think.


Thursday, July 6, 2006 09:39AM Report Comment

4. Bingo said...

First time poster here.. I have been watching the spin masters for about a year now, and interested how they use spin to control the economy and the sentiment of the borrowing masses. The timing of this 'news' article is amazing, the same day that the MPC meets to set interest rates. Talk about obvious..... Anyhoo, it is just a matter of time, keep your powder dry and wait 'till you see the whites of their eyes...

Thursday, July 6, 2006 09:53AM Report Comment

5. sebastian said...

Hi bingo,

I was thinking the same thing. The spin always seems to go into temporary reverse at this time of month. I notice a few of the other articles are "Market Stable" sort of reports too instead of the usual, "House Price Bounce: Return of of the first time buyer" type headlines.

Thursday, July 6, 2006 10:44AM Report Comment

6. Reubenh said...


An actual price drop - not an HPI drop as per norm - is the 3rd headline item of the world's #1 news site... maybe I'm just overexcited right now, but this seems like a *major* step on the road!!

Thursday, July 6, 2006 10:46AM Report Comment

7. Markd said...

Yes, interesting news indeed. This takes 2000 off the Halifax's average price-although overall prices as the article states are still up over the quarter, hopefully a situation that will soon be reversed as well. Particularly noteworthy is that the fall is occurring at this time of the year.

Once an overall dip becomes apparent, and this drop is "unexpected" according to the article so it's shock value will be significant, it will not take long for peole to realise that the enormous sum they have to fork out for stamp duty on a purchase will no longer be absorbed over the subsequent months by an increase in the paper value of the property.

Thursday, July 6, 2006 11:01AM Report Comment

8. inbreda said...

Although I think it's a bit far fetched, I have wondered in the past if the Halifax Price Index has been intentionally ramped up to wring the last few quid out fo the Goldman Sachs HPI put options (expiry this month I think) - although I cannot see why the Halifax would collude with GS.

More realistically, this news is coming out now, countered by Nationwide, conveniently before the MPC decision. At some point it will allow them to refer back to this month to show how brilliant things are. "15% higher than in june last year" kind of thing.

Thursday, July 6, 2006 11:29AM Report Comment

9. Kpjcomp said...

What suprises me, is that they say "unexpectedly", is it just me that thinks some of these people live on another planet.
I'm currently a Second Time Buyer, and I was wanting to move up the so called ladder, and was nearly going to, but then common sense hit me.
I'm currently renting at the moment so no rush to buy, especially because it's only costing 575 p.m. to rent, and the interest from selling my previous house is gaining 400 p.m.
So it's only really costing 175 p.m., the last time I paid that little per month I was living with my parents, plus the money I'm saving from not paying stupid mortgage fees I'm putting away to gain even more interest. So were on earth does the term "unexpectedly" come from?, house prices at the moment are just bonkers, plain and simple. So any Second Time Buyers out there, don't be pushed by people saying you'll miss the boat, as it obvious this boat is about to sink.

Thursday, July 6, 2006 11:31AM Report Comment

10. The Bald Man said...

What a surpise just before the interest rate decision. I have as much confidence in these statistics as I have in the inflation measures that the government is always changing!

Thursday, July 6, 2006 11:58AM Report Comment

11. tyrellcorporation said...

I hate whittering about conspiracies but this is all just too obvious - As other people have mentioned, why has this out-of-kilter report been produced just hours before the MPC meeting. We can all see the spin but can the MPC???

Thursday, July 6, 2006 11:59AM Report Comment

12. bingo said...

with no disrespect to anyone reading this, the average brit in the street is about as thick as you can be when it comes to money and credit. The City is playing the general public like cheap violin. Not just anyone can read between the lines and see the obvious because most people are caught up in the game. I am wondering now how the Halifax will nullify today's statement with a conflicting statement in the next couple of days, that is going to be quite a trick. I have just noticed the MPC have chosen to keep rates unchanged this month, expect a statement from the Halifax soon....

Thursday, July 6, 2006 12:26PM Report Comment

13. Ohhyesitwill said...

While not a crash, I hope it send a few jitters through all the BTL's who just got on board, the average house price just went down 1,500 pounds... about 3 months rent. Enjoy.

I fully expect Mr.Ellis to produce some good news or rejigged figures for July though. "it was the world cup, it was the weather, the housing market has never been stronger"..etc.

How can June HPI vary so much between halifax and nationwide and nobody highlight this? All part of the head in the sand mentality.

Let's have that rate up MPC, .25 on these large LTV's.....many of whome have taken equity out.... this will 'the beautiful crash'

Thursday, July 6, 2006 12:31PM Report Comment

14. Gregzki said...

This headline has been picked up well across the media inc. Daily Mail, Telegraph, Times etc which is good news overall. I appreciate eveyones comments on the timing. Personally, I dont belive the Halifax when they report a rise so I also dont belive them when they report a fall. Im with UT in that rates will be held this month with a quater point rise in August. I also think this will be a reflectionof IR policy overseas more than ususal.

Thursday, July 6, 2006 12:33PM Report Comment

15. Indiablue19 said...

Maybe I'm getting sour but it's my observation that, since the Kelly debacle all remaining headlines are clearly written in Downing Street 9. And just as inexplicably, once the vote is secure, all "news" will swing in the opposite direction and we who aren't queuing for a house as a result of the super-hype will still be trying to crack the code: to understand not just how this bunch thinks, but whether they think at all except for their own political ends and retirement property portfolios.

Thursday, July 6, 2006 12:36PM Report Comment

16. So Soon said...

one years worth of 0.1 % increases

Thursday, July 6, 2006 12:42PM Report Comment

17. devil's advocate said...

I would imagine it has something to do with lower than average mortgage approvals. Halifax has always been a dodgy measure. e.g. Last year I was interested in finding out how much I could borrow and applied for a mortgage for the maximum they would let me which was astronomical at about 270,000. I never intended to get a mortgage for this amount or indeed by a house at the time but becuase I got a mortgage offer this will have been entered on their stats as I believe their index is based on mortgage offers not just those completed. How many other people do you imagine have done the same thing, especially seeing as its so easy to initiate online.

Having said all this house prices are going up just look at the OPDM and Land Registry figures. Be interesting to see what they both reflect in their second qtr figures.

Thursday, July 6, 2006 01:11PM Report Comment

18. Time To Raise Petrol Prices said...

Its a stinking pile of scat unless it's followed through by something more concrete - i.e. more consecutive falls.

Having said that, when just about all the bears have turned bull (as we see now, almost), the balance will no doubt tip.

Thursday, July 6, 2006 01:17PM Report Comment

19. inbreda said...

Yes it will need to be followed by more falls to be concrete - but So soon is very observant. It does equal 12 monthly +0.1%. And it probably will.

Immediately before the MPC decision they announce a fall. Immediately afterwards another measure will contradict it to steady the nerves. It will then be followed by numerous small increases to balance the books.

Thursday, July 6, 2006 02:08PM Report Comment

20. denzil said...

I don't buy the MPC rate setting conspiracy theory even though it does sound convenient. There's no way Halifax would falsely claim the drop because of the impact on the property owning public. The online press(including the BEEB) have already jumped on this story and no doubt the press will tomorrow. I think the pain would have been less had the MPC raised .25. FWIW I think the Halifax are the most irratic of the indices.

On a related matter. I have a few childhood friends who are EA's and I view properties that seem well-priced so I speak to other EA's who's opinion I would not completely trust. A common theme is emerging mortgage valuation surveys are coming back with surveyor sstating the property is over-valued. My contacts are based between South Gloucester and North Devon border. One had stated that they had three price rejections in the last 10 days. Comment from one of my friends was, "lenders are getting really cautious" and the amount of pricing problems has jumped significantly. On a sour note my friend in Gloucester stated that prices are starting to rise in his area due to a lack of supply after a boom in spring.

Thursday, July 6, 2006 02:24PM Report Comment

21. gruppenfuhrer said...

A colleague of mine, who owns a flat for rent, is back wityh her parents looking to buy a place here in Colchester with her partner.
Her chain collapsed, her mortgage (100 per cent 140,000 interest only -just about affordable at 4.5 per cent HA!!) was about to expire and she just started looking at other houses. Found one she liked yesterday at 145,000 that was obviously just out of her budget.
Don't know if it has anything to do with this announcement but she has just had a phone call and price on the new place has just dropped 5,000 just like that.
I think this might have an impact, I do.
As a former national journalist I doubt the conspiracy theory, it is possible to credit the media with too much forethought and planning. The story is a story, the timing of the release from the Halifax, likewise I think is just a timing. People see paterns where they don't always exist.

Thursday, July 6, 2006 03:21PM Report Comment

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