Wednesday, Oct 11, 2006

Comparison of indices

In The News: How much?

We take a look at the most recent property price indicators to let you know the current state of the British housing market. The market is continuing to accelerate as high demand overpowers the dampening effect of August\'s interest rate rise

Posted by bufferbear @ 12:44 PM (491 views)
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11 Comments

1. paul said...

So the current strategy for mortgage lenders seems to be:

1. Whinge about rising IRs and IHT reigning in buyers.
2. Whoop on about the (fictitious) shortage of supply
3. Talk about "easing" house price growth, but not easing house price levels
4. Studiously ignore what's happening to the US market

Wednesday, October 11, 2006 01:19PM Report Comment
 

2. bidin'matime said...

Rien n'a chang!

Wednesday, October 11, 2006 01:28PM Report Comment
 

3. kpjcomp said...

Do you think the figures some of these Estate Agents and such, are just as fake as the CPI?.
Were we live, NE. I've not seen any rises, and in fact seen falls.
I use Rightmove's favorites to track properties, and one has fallen today from 350,00 to 327,500.

Wednesday, October 11, 2006 02:45PM Report Comment
 

4. magnifico said...

Bidin, something has changed.Maybe not in the reporting but in its substance. Look at the house price graph on HPC homepage, the small drop at the beginnig of last year followed by a plateau, now turning decisively upward again. It is odd, it doesn't fit and therefore all our suppositions based on past economics models struggle to understand the situation. I think we're in unchartered territory here.

Wednesday, October 11, 2006 02:47PM Report Comment
 

5. sold 2 rent 1 said...

Magnifico,

I don't see anything unusual at the moment.

We are at the start of a mini boom in house prices. Most UK house price booms start off in central London and work their way outwards over a period of time. Quite often by the time the boom reaches the north of Scotland, London is cooling off.

I had the estate agent round today. Bashed him down to 0.7% commission from 1.5%
His explanation of why there are so many more buyers that sellers is that many of the buyers are from London and Reading is commutable and an affordable alternative option.

You will see this trend of HPI over the next 6-8 months spread to The Midlands and The West

If the MPC increase rates in November and February then this process will be slowed down

As I said yesterday, I reckon this boom will continue at least until the middle of next year. After that it is all about how fast the US is slowing and how high interest rates have gone.

Wednesday, October 11, 2006 03:54PM Report Comment
 

6. Renter said...

I look at that price graph occasionally and wonder whether I've made a huge mistake by selling my house 6 months ago and waiting for the market to cool.The bullish psycology out there seems relentless but the contrarian in me tells me to sit it out. I actually get some perverse satisfaction and comfort from my wife's rants that I've ruined her life when she comes back from seeing her friends who can't believe what I've done. The problem is that the shoeshine boys/housewife indicator is extending somewhat on the upside - another venture into unchartered territory

Wednesday, October 11, 2006 03:57PM Report Comment
 

7. Renter said...

sold 2 rent 1

The only problem I've got with using the US as an indicator is that for the past 50 yrears they have followed us. The cycle is Aussie, UK then US. As unlikely as it would seem, that suggests that the US is just correcting rather than completely blowing up, before they follow our lead with a recovery. Hope the cycle is out of kilter this time...

Wednesday, October 11, 2006 04:03PM Report Comment
 

8. magnifico said...

s2r1, don't get me wrong, I know the basics for price increases are just not there, all I'm saying is that trend seem to defy both logic and past history. I hope you're right, though...

Wednesday, October 11, 2006 09:44PM Report Comment
 

9. paul said...

Either someone's counting differently (which is the case for Halifax), or the figures aren't what they seem. Or both.

Remember, if an estate agent sells two 400k houses at a 5% reduction and one 80k house at a 20% increase, he reports a 10% increase in prices. It's not right, but it's the way they report it, in order to feed it back through the system. So the boom keeps going, on the back of one offs.

I'm quite sure that when buyers really dry up, they'll start counting differently yet again.

There's an awful lot of money behind maintaining the illusion. This is also why none of what you read in the papers about HPI hasn't seemed to tally with anyone's personal experience for quite some time.

Wednesday, October 11, 2006 11:03PM Report Comment
 

10. Devil's Advocate said...

I have to disagree, how prices are definately rising in London. I know lots of houses that have sold for significantly more than similar properties were on the market for last year (and never sold). You can moan about dodgy stats but prices are rising

Wednesday, October 11, 2006 11:21PM Report Comment
 

11. inbreda said...

paul - "There's an awful lot of money behind maintaining the illusion"

If this is the case then I'd worry that the profit is not made by maintaining high house prices so much as it is getting out before an engineered slump.

DA - if prices are genuinely increasing, it still doesn't change the fact that houses are overpriced. The higher they go the harder they fall. The longer it takes the more you save by renting. Patience I'm sure will be rewarded.

Thursday, October 12, 2006 10:41AM Report Comment
 

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