Tuesday, September 18, 2007

London’s Falling!

Rightmove stats show major price fall

Rightmove, the largest advertiser of property for sale in England and Wales, has published figures showing the largest monthly fall in asking prices since the survey began. The surprising news is that London is no longer immune to the slowdown, average prices across London fell by 2.5%.

Posted by yoyo1 @ 09:25 AM (1199 views)
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17 thoughts on “London’s Falling!

  • And so the “lost decade” comes to an end…

    I’ve been a bi-daily reader of this website since I found it back in 2003/4. As a wanabe FTB that chose not to take the plunge and wait, I’d like to thank you all for the hope and guidance you’ve offered through this damaging period in economic history.

    I’ll be opening a sealed letter I wrote to myself approximately 2 years ago in front of some friends I had a little bet with – I predicted 3rd quater 2007 as crunch time. I think im a week or two off but hey, you cant win em all.

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  • You may have heard the phrase ‘apart from London’ recently, well when the agents can no longer fiddle the figures it’s time to RUN.

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  • with a 41% fall in detached house instructions (due to hips) you’d expect a fall in average asking prices ?

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  • Don’t panic London, the Bank of England is on its way to support your illusion yet further!

    Anybody still think that the Bank of England is ‘Independent’ now?

    Faith in the BOE can, surely now, not ever be greater than faith in New Liebour.

    Now the BOE has become the ‘sub-prime mortgage lender of last resort’, can they ever raise rates again?

    P.S. What do you tell unemployed ex-Rover workers etc. etc. about the folly of meddling with your cherished Market forces now ?

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  • It seems to me the Rightmove figures based on 13 months not 12. Also why can Rightmove not add up? Their figures are incorrectly added.
    I attach the figures from the September report below. It was the same last month. I make it a 9.2% increase for the past 12 months not 9.6%. Even if you include both September 2006 and September 2007 as they appear to do it still only makes 9.4% by my calculations. Not so significant this month but if they do the same next month they will overstate annual inflation by 2%. I have emailed them about this but no response.

    % Change Avg. Price
    September 2006 +0.2%
    October 2006 +2.0%
    November 2006 +1.5%
    December 2006 -0.3%
    January 2007 +0.5%
    February 2007 +0.9%
    March 2007 +1.5%
    April 2007 +3.6%
    May 2007 +0.4%
    June 2007 +0.8%
    July 2007 +0.3%
    August 2007 +0.6%
    September 2007 -2.6%
    Annual Change +9.6%

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  • perhaps the govt will step in and guarantee a sale price for your house and make up the difference???

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  • Good one waitingfor 🙂 It wouldn’t surprise me!

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  • Very good ‘Waiting for hpc said..” Not wishing to sound gleeful but the financial products favourite statement “Your investments can go up as well as down” is about to become a painful reality….

    Of course not wishing ill upon my friends and other non-BTLer’ the current situation will hopefully scare people enough so that I no longer have to listen to endless self-congratulatory dinner party conversations centred around “how cleaver we were to have borrow money from the bank to ‘own’ our house, and how it has doubled/trebled in value”.

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  • those rightmove numbers are percentages – so they need to be multiplied not added to give annual rate. I make it 9.47% from oct to sep.

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  • Tulipmania – you can not add up the %, you need to multiply them
    Oct 06 – 1.02 * 1.015 * 99.7 *1.005*1.009*1.015*1.036*1.004*1.008*1.003*1.006*97.4 = 1.0969 ie 9.7%
    This does not match the 9.6% but one can guess that they used figures to more decimal points and it is therefore just a rounding error.

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  • OK Tulipmania, you want the maths you got the maths…

    Average price September 2007 as stated by Rightmove: £235,176
    Avg price Sept 2006: £214,566.
    % increase equals 235176 divide 214,566, minus 1, times 100 = 9.605436%

    What YOU’ve done is add up all the monthly percentages which are only to 1 decimal place and so have all been rounded – not precise enough. e.g. % increase September 2006 to October 2006 is actually 2.045% – if you just put 2.0 in your calculator, you have missed nearly half (0.45) of a percent of the total for starters. Multiply that sort of error 12 times and you have your 0.4% points difference. Always go back to the base numbers!

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  • Sorry, got ahead of myself there, you’ve missed 0.045 in the first month, not 0.45, but you get the point.

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  • Tulipmania – remember that these increases compound, so you should not sum the % increase, but rather multiply them. Doing the calculation this way with the figures you gave, I got an annual increase of 9.69%. Obviously this could easily be 9.6% as I’m assuming that the %s you quoted are precise.

    To get the annual increase from month on month increases as a percentage you should do it thus:

    ((1.002*1.02*1.015*…*1.006*.974)-1)*100=9.68929…..%

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  • Ah, noticed that you included 13 months – if I use the last 12 then I get 9.5% – this could easily be upped by a few roundings here and there.

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  • I see – thank you dugmug and d’oh for explaining that one. Apologies for my stupidity.

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  • very good ‘Waiting for hpc said..” Not wanting to sound gleeful but the financial products favourite statement “Your investments can go up as well as down” is about to become a painful reality….

    Of course not wishing ill upon my friends and other non-BTLer’ the current situation will hopefully scare people enough so that I no longer have to listen to endless self-congratulatory dinner party conversations centred around “how cleaver we were to have borrow money from the bank to ‘own’ our house, and how it has doubled/trebled in value”.

    Reply
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  • Whilst running the risk of being renamed Johnny Ball from Think of a Number…whether you add the monthly figures or multiply the monthly figures you are still working with 12 lots of rounded data and so will only get the correct overall answer by luck (i.e. if all the bits of numbers that have been rounded up just happen to cancel out all the bits that have been rounded down). You have to use the base numbers here, i.e. what’s that starting point and what’s the end point, to get an accurate result. And anyway – it’s easier/quicker just to get a percentage from two numbers than adding or multiplying 12 times over! 🙂

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