Sunday, September 30, 2007
Can Southwark & Lambeth explain the rising London prices, or somebody is cheating here
August house prices
Everybody seem to be in the business of painting a rosier picture of this moribund housing market. The press and the Land Registry itself have tried to redress an appalling 0.2% monthly price increase in August (after the 0.1% of July!!) by saying "but London prices rise like rockets". But is it actually true or is it a cheat? See the report for yourself. How is in the world possible that Greater London grows at 1.5% monthly when all but 2 boroughs (Southwark and Lambeth... not the poshest, eh!) are either declining or growing well below the average????
Posted by confused76 @ 01:33 PM (1376 views)
10 thoughts on “Can Southwark & Lambeth explain the rising London prices, or somebody is cheating here”
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planning4acrash says:
The biggest news for London is the number sold, considering that more are coming onto the market. Note that sales change has been more pronounced in the Capital than for the rest of the country (see below):
June 2006 June 2007 Change
London 15,436 12,742 -17%
Country 124,102 105,312 -15%
Re, the odd stats for London, the majority of sales were for properties between 150 and 250k, the only explanation for 1.5% change in prices is that the majority of sales were around this price in places like Lambeth and Wandsworth and a couple of other places, so you have the majority of sales in places that rose by 1.4%, lots of sales in Lambeth and the few sales in places with price drops of inflation lower than 1.3%. Most other places, with meagre price drops will have sold very little at all (if the stats are right) and are at a logjam junction where prices must and will go down to stimulate the market in those areas. It looks like there’s no market in high value or low value places, with middle of the road boroughs taking the majority of the gain. I’d like to see the figures plotted against sale volumes. That will come with the land registry quarterly data on the BBC for the third quarter soon enough.
paul says:
“PRICE REDUCED”
Coming to an estate agency window near you soon.
Drewster says:
An estate agency that I walk past every day has had “PRICE REDUCED” signs pasted over the properties in the windows for at least four months now. This is in northwest England.
happyrenter says:
Barratt Homes ad in Saturday’s Indie says they’re offering to subsidise mortgages for the first two years to the equivalent of 3% fixed rate if you buy a new house.
While they make clear in the ad that they are not offering mortgages, are they so afraid to be just offering this as what it really is – a discounted price?
Of course it keeps the average plot prices looking stronger than they really are too (got to keep a positive spin for the remaining shareholders)
Ben says:
I don’t think there is any conspiracy here. It’s the ripple effect of people who are priced the richer boroughs are moving out. For example Kensington and Chelsea +0.2% whereas grotty Hammersmith & Fulham +1.3%. As for Southwark just take a drive around the around and see all the posh new flats the BTL’ers have been buying up.
However I don’t believe they will be able to get the rental returns from these areas to subsidise the price paid for the property. And I don’t think the Chelsea tractors will last too long parked in the streets of Hammersmith and Fulham 😉
planning4acrash says:
Will Barratt have to comply with FSA requirements? Will they be considered mortgage providers? Are the opening themselves to litigation? Is this mis-selling a balance sheet fraud that could leave them exposed?
Ian says:
I wonder what September’s figures will show.. By then most of the impact (but not all) of the Norhern Rock fall out will be known – this only started on the 13 September. Get ready for some more bad monthly figures which will then drag down the annual figure!
Davidpompey says:
I have been reading this web site for some time as I am inetrested what will happen with property prices,
like Paul said… PRICES REDUCED it’s happening here now!
in our local estate windows reduced prices are being stuck over the prev price!
Davidpompey says:
Like Paul said……
Reduced prices are being stuck on the old price now!
in our local estste windows.
Ttimgg says:
It is possible for the prie of EVERY house to go DOWN,hose houses sell and yet the average to go UP!
This seems an impossible paradox but it is true. It is possible because house prices vary enormously.
eg
year 1: 9 houses sell for 100,000. 1 sells for 1000,000. Average: = 2000,000/10 = 200,000
year 2. 4 of those houses sell for 50,000, and the 1 sells for 800,005. Average =1000,000/5 = 200,001!
Conclusion: to be meaningful, house price stats must be WEIGHTED according to the number sold at each price.