Tuesday, January 8, 2008

House prices up 1.3% in December

House prices up 1.3% in December

"UK house prices rose for the first time in four months during December, according to the UK's biggest mortgage lender, the Halifax". A dead cat bounce maybe?

Posted by becky @ 07:50 AM (2871 views)
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56 thoughts on “House prices up 1.3% in December

  • it_is_going_with_a_bang says:

    They posted a 1.3% gain on 8th Feb 07, then they called it a blip and “reading too much into the monthly index would be premature”.

    No doubt they have a different take on their own figures this time.
    Having said that I see no evidence of it here whatsoever.
    Houses are not selling and the number of For Sale signs is slowly increasing.

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  • japanese uncle says:

    Congratulations on British Bulls–t and C-ap having reached its culmination. Seriously BBC should be banned from collecting our money. They should become a plc as a mouth piece of big financiers. In any case I am no longer seeing any of their programmes these days, as they are eigher boring rubbish or sheer propaganda.

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  • I am waiting for the annual rate of change to become negative before I start celebrating the start of a HPC.

    I actually believe that the HPC may not occur in the way we expect (falling prices). We will have to continually adjust the data for inflation to see it. In fact if you use the RPI – we are probably already in a HPC and have been for about a year.

    I believe that we are in for some serious inflation – as the Govt print their way out of the debts that the banks have got us into – by keeping interest rates low ….. as raising them would damage industry (affecting unemployment and tax revenues) and lose votes (people see the numerical “value” of their main financial asset being lost).

    If they go for the inflation option they will need to deal with rising costs for public services (something they are directly responsible for) and hence wages there will fall – while the rest of the country will demand (and probably get) higher and higher wages in private industry ….. not a good time to be working in the Forces, Civil Service or Health Service methinks.

    If they let inflation race away (while they are concentrating on the Credit Crunch) then cash savings may be vulnerable.

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  • If the govt can lie about inflation until its blue in the face then why should we expect Haliwide to tell the truth about HPI?

    What it comes down to is this: the official mouth pieces will resort to any and all progandist techniques at their disposal to protect their vested interests and confound popularly held sentiment.

    We all know the cost of living is rocketing, we all know house prices are falling. End of story.

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  • I have to say I find this a little hard to believe. Sales volumes have plummeted and mortgages have become more expensive and difficult to come by and there has been a huge negative press around the housing market, yet they report that buyers were paying more for houses in Dec than they were in November? I guess those are the stats, but like I say, it is rather unlikely.

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  • They can’t fudge the theft of inflation for long. lenders (ie savers) will get their wealth back some how. I don’t understand why the media aren’t talking about the policy of punishing savers. The government has specifically stated that it desires imprudence for many many years by attempting to have positive inflation each year.

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  • “not a good time to be working in the Forces, Civil Service or Health Service methinks”

    True especialy if you just been told that the Govmnt is trying to alter pay negotiations to occur over 3 year periods, let me think why would would they want to do that?

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  • http://www.hbosplc.com/economy/housingresearch.asp

    The data for December hasn’t been published on their site yet (as of 08:56 GMT, 8 Jan 08). I presume they give a press release earlier than they publish the actual figures. Keep an eye on that URL to see when the data is published.

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  • “In its latest monthly survey, prices were up 1.3% in December compared with the previous month.” As they fell by 1.1% in November would that mean a increase of 0.2% or an annual increase of a good 2% below RPI or 4% below a typical savings rate.

    Desperation

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  • Dead cat bounce? asks becky.
    In my view Yes, definetively.
    As HPC has not started in earnest, some people are trying to sell at the top of the market. Myself included: I put my house up for sale, for the best price I can get, and the HIPS people are coming round today.
    Wish me luck,I’m a bit scared to sell to rent, but I’m convinced that this is the right time.

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  • I really don’t see how this can be called BBC propaganda. Monthly figures are largely pointless, open to huge variations due to methodology or season.

    The important statistic is the annual rate of growth. Both Nationwide and Halifax have around 5% growth last year, even with the apparent rise in December. The fact that journalists don’t understand statistics or how to report data is not malicious, it is just the way innumerate individuals create excitement in their lives.

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  • To really understand what’s going on one would have to look at the figures…there may be a one or two transactions that have skewed/distorted the results.

    With regards to the increase, I’m not really surprised by this….I mean so many folks have been holding back, waiting for house prices to go down. I just hope they think they have got a good deal. Personally, I think much greater falls are on the way.

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  • I can’t believe it. It certainly is at odds with what’s happening on the street.

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  • george monsoon says:

    Sir Google, I think you are correct in that the government are trying to inflate themselves out of a house price crash, but as far as these statistics go, I don’t see any evidence locally. Houses in my area simply are not selling. I regularly check the estate agents for signs in either direction, but for the moment at least, the majority of their portfolio are stagnant. The only properties that are selling are the top end 300k+ houses, which are few and far between in the North of England.

    My take on this is that the crash is here, and it is beginning to bite very hard. My only explanation for the published increase is either a skewed average by those few existing areas where property is still lucrative, i.e. London and South East,

    or the VI’s have made a desperate attempt to pump some wind into a failing market by manipulating some vague statistics to their favour.

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  • Good luck magnifico. I think it is the right thing to do at the moment. My only worry is that you may have to wait a while to find a house that you really like as there is little on the market in the way of decent family houses. But I am talking about SW london so not sure where you are.

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  • magnifico. I hope all goes well for you, I really do.

    I don’t suppose your house is in Scotland and you’d like to offer a decent discount to a nice wee Scottish family…No? Oh, well. I just thought I’d ask. 😉

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  • Apparently prices round here grew by 38% in 2007 (one of those cities touted in the press over the last 2 weeks as property hotspots in 2007)

    Reality on the ground in somewhat different. We’ve been monitoring all the agents, properties and sold prices for almost 2 years, and apart from the odd hopeful souls asking for a 20% premium for large city centre development sell ons, and the odd period property getting a little extra (perhaps 10-15%) over the year, most have hung on the market all year with asking prices falling slowly, and staying in line with previous years and +5% may even be generous for the year…

    The only way we got 38% average house price growth is with (on average) more expensive and larger houses in the mix – many selling out at top to get best return – I’d guess the Hafilax is similarly skewed

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  • This increase may also have been – in part – stimulated by the rate cut, and the promises of more cuts to come……

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  • This increase may also have been stimulated by the rate cut, and the promise of more rate cuts to come…..

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  • Figures to suit the betting industry, perhaps?

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  • Sold My Soul To The Never Never Never says:

    Look on the bright side – wiith this data perhaps we won’t get an interest rate cut this month!

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  • The really funny aspect is the effect on the MPC meeting on Thursday.

    The pound has risen over a cent against the Dollar this morning on the back of this.

    David Smith (Times) will be upset.

    No rate cut this time then!

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  • They’ve changed the headline of the article!

    Waheey, the BBC’s selective history policy strikes again!

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  • good, so no need for a rate cut in January!

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  • little professor says:

    Oh Noes! HPC postponed?

    I really had my hopes up after the last few months.

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  • Such a small change could be due to regional factors as George Monsoon says. If houses in cheaper areas of the country are selling less well, this might distort the statistics a little?
    Does anyone have any inside knowledge of how they compile these statistics? It is quite possible that downward movements are slow to appear in the figures if the crash begins to happen in cheaper areas first.

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  • I’m quite sure the figures are taken as a percentage of overall sales.

    Therefore, a 3% drop on a £2m house in Chelsea is offset by a 5% rise on a £100k home in East Lothian (so this shows as a net 2% rise in house prices). Misleading, incorrect and divisive yes, but the BBC is under strict instructions from the flagging government ! …

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  • Oh no I can’t believe they’ve re-spun the headline already!!
    That must be the shortest dead cat bounce in history.

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  • If they used a statistic on the median this would be much more meaningful.

    Or perhaps an average on the distribution with outliers (expensive houses) removed.

    Or a moving average (perhaps 6 months ?)

    They should let school kids complile the stats for us – then there would be no spin – and we might even be told the sample size, 95% confidence limits and whether the change we are being told about is statistically significant or not.

    This stuff is not very difficult – however the media is staffed with Art Students who can’t even add up.

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  • 5 minutes ago house prices were up…..and now they are down

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  • 5 minutes ago house prices were up…..and now they are down

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  • From the article in the Times, also posted separately…

    “The better than expected figures will ease mounting pressure on the Bank of England to deliver a further quarter-point cut in interest rates on Thursday, on the heels of last month’s reduction, amid fears that the sliding property market will undercut consumer spending and broader economic growth.”

    well done… keep on rising!

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  • Ring up the Halifax and ask “which house was this then that went up by 1.3% ” . Please let me know the answer. I suspect most of the posters on this site are under 40. You all give up so easy . I just hope we never have another war because we would be fooked.

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  • Reading the comments before the article (something I’ve got into the habit of recently as most articles seem to be spouting the same old pessimism of late!) I thought it would be much more propagandaish than it actually is.

    “This mixed pattern of monthly price rises and falls is a typical characteristic of a subdued market,”

    Isn’t exactly propaganda is it?

    It’s all the game of chess analogy though – the killer move was made on August 9th 2007… regardless of any fluctuations thereafter.

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  • Lukeskywalker says:

    You must remember that stats can do funny things. If volumes are well down, then different kinds of properties can be being sold with different price dynamics. The sales during Christmas may have been from certain types of buying and certain properties. Has anyone read the report to see?

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  • Rollonapril2008 says:

    Come on guys, this is the inevitable blip in the stats: remember that there are lies, dam lies and statistics!

    I am saddened by the conspiracy theories on some of the responses to this post: the figures are what they are – it’s why they are what they are that is important. Blaming the government and the VI’s doesn’t change the numbers.

    The reason IMHO for this rise in ‘average’ house prices is that FTB’ers have been priced out of the market. FTB’ers are also some of the first people to stop buying houses when they see a potential HPC happening: the sit and wait approach! Further, FTB’ers generally buy the lower value properties. So when FTB’ers stop buying, the average (mean) house price for completions (rather than asking prices) will rise as a result of the fact that a greater proportion of houses sold will be to the very wealthy who can still afford to buy.

    Don’t be fooled by statistical anomolies: the HPC is still on track!

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  • Little Prof’s right, the article itself hs been changed, not just the headline. (See Little Prof’s second link)

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  • There are 5 different versions of the same article!

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  • voiceofreason says:
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  • stillthinking says:

    Panic selling at the top of the market would push the average price up, even with the top end houses losing value. So basically while the average is going up, the median is going down. Truly, averages are the wrong measurement for housing, or journey times etc

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  • Rollonapril2008 says:

    Come on guys, this is the inevitable blip in the stats: remember that there are lies, dam lies and statistics!

    I am saddened by the conspiracy theories on some of the responses to this post: the figures are what they are – it’s why they are what they are that is important. Blaming the government and the VI’s doesn’t change the numbers.

    The reason IMHO for this rise in ‘average’ house prices is that FTB’ers have been priced out of the market. FTB’ers are also some of the first people to stop buying houses when they see a potential HPC happening: the sit and wait approach! Further, FTB’ers generally buy the lower value properties. So when FTB’ers stop buying, the average (mean) house price for completions (rather than asking prices) will rise as a result of the fact that a greater proportion of houses sold will be to the very wealthy who can still afford to buy.

    Don’t be fooled by statistical anomolies: the HPC is still on track!

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  • Rollonapril2008 says:

    Come on voiceofreason – “Also, how to they get 5.2% annual rate of change? If I add up all the percentages over the last 10 months, they come to +2.5% change.”

    The reason is compounded increases!

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  • Lukeskywalker says:

    Look on the bright side, the MPC may see this as news to hold rates (okay, I doubt that).

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  • 31. sid public said…

    I agree with Sid. Additionally, I would suggest that the figures are in line with what we should all be expecting. Comments above refer to a stagnant market. Nothing moving. Well obviously some houses have been bought and sold, and I would suggest that few of these have been to FTBs. I would imagine the proportions are heavily bias towards NTBs. A family perhaps relocating – moving from one family home to another. No new money in the market. Still doomed, but figures weighted towards bigger houses. I still beleive this is teh start of the crash real.

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  • Little Prof: Nice link there to the “revised” versions. Yet another reason not to trust BBC News.

    VoiceOfReason: Yes you’re probably right, this looks like HIPS-related distortion. Let’s not forget these are month-to-month figures, they are very noisy. The three month average is still down.

    SirGoogle: By the time the annual figures have turned negative, it will be clear to everyone that we’re in a downturn. We’re trying to be ahead of everyone else here 😉

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  • little professor says:

    There are 5 different versions of the same article!

    That’s not uncommon, most articles will have several versions in the first couple of hours as they update the story and make corrections.

    To be honest, the BBC’s reporting of these figures seems pretty bearish.
    1.3% rise is a big leap in today’s climate, and they could have been cheerleading the return of HPI, but instead they concentrate on the quarterly rate whch “dropped sharply.” They also talk about affordability constraints and the CML’s figures showing mortgage approvals dropping month after month.

    I’m all for criticizing the BBC when it asks as the government’s PR company, but let’s cut them some slack when they are actually doing their job properly.

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  • @ maddison. Thanks for the wishes. I am in west london, and will sit tight into rented accomodation for as long as it takes. The interests on the equity and the savings on the mortgage will take care of the rent. Contractual power for those not on the ladder is gonna be good… that’s my theory.

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  • george monsoon says:

    Lets look at the facts.

    house prices ARE crashing, lets hang on a year or two and then we should be in a position to buy a home to live in and bring up our families.

    End of…..

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  • I would read from this that the sellers are still picking their prices. That’s why the prices are a little higher, but transaction volume is way down. The estate agents will want to see the number of transactions go up, so they’ll be instrumental in getting prices to come down…

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  • Thanks Su, just read your post.

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  • scary as it may seem – am in the process of buying a bigger place.
    Of course i am concerned about the crash- but i dont feel there is any certainty about how much and
    how this will take place- stagflation?- likely – outright crash?- it will certainly happen in certain areas.

    I would prefer to stick the money in the bank – but my other 1/2 wont hear of that – so here we go….

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  • The BBC one o’clock news played down the 1-3% rise and played up the economic and hpc woes. Not surprising really as there are only a couple of days to go before IR decision. Looks like they are going to repeat last months performance of helping hi-jack the decision.
    BBC is obviously biased which makes me wonder who the VI’s behind the BBC really are.

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  • new user 2007 says:

    I am sure there is some technical reason for the increase e.g. the sample was skewed by certain types of houses dominating etc. Indeed, they are partly right as what we are seeing so far is a fall in ASKING prices. Too many people get excited about a fall in asking prices and buy…if a house was worth 300k at the beginning of the year and the estate agent tries to sell it for 400k a year later but then reduces the asking price to 350k, only a mug thinks he is getting a bargain (sadly there are too many like this), as he has still gotten it at 17% more than it was 6 months ago. The REAL price falls will follow next year.

    Also, the monthly figures can work in both ways i.e. they will always be up and down, so it is the trend that counts.

    BUT it does not change the fact that they are playing the same old word games. When prices fall the text talks about why the market will be stable. When prices rise they need to keep the BoE on side (i.e. want rate cuts), so the text is gloomy mixed with a bit less of the stable.

    This pattern is so clear over the last two years that it is ridiculous that the BoE does not see it as being manipulated (and it certainly does read such reports when making its decisions).

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  • new user 2007 says:

    whoops..that 6 months should have read 12 months.

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