Monday, April 28, 2008

Hometrack: -0.6% MoM, -0.9% YoY

House prices fall for seventh month

House prices fell for the seventh month in a row during April to leave homes costing less than they did a year ago, figures showed. The average value of a home in England and Wales fell by 0.6% during the month to stand at £173,100, with price drops recorded in 51% of postcodes, according to house-price information group Hometrack. The latest falls helped tip the annual rate of growth into negative territory, with homes now costing an average of 0.9% less than they did in April 2007. At the same time there was a fall in both the number of new buyers registering with estate agents and the number of sales agreed.

Posted by little professor @ 12:13 AM (2651 views)
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19 thoughts on “Hometrack: -0.6% MoM, -0.9% YoY

  • little professor says:

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  • Told you last month that it would be negative YoY this month.

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  • Yes prof – this is a bit of a milestone – the first time an index has gone negative, YoY, since this site was founded (I think!)

    Richard Donnell’s hopes that rate cuts will reverse the situation look desperate in the extreme…!

    Anyway, I’ve just dragged a bottle out of the cellar that I havn’t tried before – a ’95 Ch. Marquis de Calon (St Estephe)

    Didn’t expect much. and even dumped a small slug in the cooking before pouring a glass – but wow, is this good! – a fair match for many a classed growth.

    Why do I get such a good buzz when the little guys beat the big boys?

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  • “But he stressed that the factors affecting the market were very different to those that caused the 1990s house price crash, when people were forced to put their homes up for sale because they could no longer afford their mortgages.”

    ….but surely this is exactly the reason it is exactly the same as the 1990’s. Punters leveraged up the the hilt, through 125 ‘together’ mortgages, liar loans or mewing and the lenders refusing to lower rates with the BoE and infact raising their rates to deter new customers and repair their balance sheets. No new ‘cheap’ mortgages = expensive deterent mortgages = inability to pay = exactly the same as the 1990’s. Are these people really that stupid or can we sue them for mis-representation, leading to country wide fraudulent ramping and indebtedness of the great unwashed?

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  • Overall affordability is the problem. True inflation and tax hikes also play their very significant part.

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  • mark wadsworth says:

    Today is going to be one of those days, isn’t it? Like when the Halifax index went down 2.5% MoM?

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  • Saw the GMTV paper review this morning and John Stapleton passed over the Telegraph front page in a second. Blink and you would have missed it. Just very funny how the panic is spreading across all sections…

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  • little professor says:

    “Yes prof – this is a bit of a milestone – the first time an index has gone negative, YoY, since this site was founded (I think!)”

    Not quite – Hometrack went YoY negative in 2005, the only one of the major indices to do so. It’ll be bigger news when Nationwide and Halifax go negative.

    Predictions are the Nationwide figures (out on Wednesday) will show YoY growth at 0%.

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  • @ Uncle Tom Anyway, I’ve just dragged a bottle out of the cellar that I havn’t tried before – a ’95 Ch. Marquis de Calon (St Estephe)

    Any chance of a glass to celebrate?

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  • > Predictions are the Nationwide figures (out on Wednesday) will show YoY growth at 0%.

    They’ll have to see MoM Growth for that to happen. Anything else and its negative YoY.

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  • “Any chance of a glass to celebrate?”

    Certainly – I’ll even drink it for you.. 😉

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  • YEESSSSSSSSSSSSSSSSSSSSSSSSSSSSS!!!!!

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  • Ah, Prince Harry senza Nazi uniform – how refreshing.

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  • Prof,

    Given that Nationwide’s April ’07 figure was higher than March ’08, it would be a bit of a surprise to see a 0% YoY this week – do you have inside info?

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  • it_is_going_with_a_bang says:

    “He said a single interest rate cut in August 2005 was enough to turn around confidence in the market then.”

    More begging to the BOE through the press.
    But … Rates have come down and so have prices.

    So just as he may distance himself from the 90’s on this one, it is just as true to say it is not like 2005 either.

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  • I agree UT, even a very small increase this month (which would be plain wrong) would show YoY as negative.

    Who’s going to be 1st to post the figures on Wednesday?

    Unless they’ve devised some bizarre calculation like Halifax to show a lower figure this year for the same month last year as a price rise.

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  • BTW,

    I re-visited my long term forecast calculations over the weekend, and concluded that my prediction that prices would eventually settle at 40% below peak was fairly bullish.

    It is quite difficult to estimate the extent to which the credit boom has unsustainably fuelled incomes, the extent to which earnings will be depressed by the correction of trade imbalances (and no-one seems quite sure how much oil will eventually be wrung out of the North Sea..) and the extent to which increasing single person occupancy will depress affordability.

    However, I’m now of the view that a fall of 40% (in real terms) is the least sustainable correction – it is more likely that prices will eventually stabilise at a slightly lower level.

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  • new user 2007 says:

    Would that be the same 2004-05 that 1) saw the government use all of its resources to sustain the boom 2) the world economy was doing ok 3) interest rates/ effective mortgages were much cheaper by any measure 4) income multiples were still rising 4) required deposits were still falling 5) debt levels were MUCH lower and 6) confidence resumed because inflation risk was low and the BoE cut rates (sill move on many levels).

    Other than these unimportant factors, conditions are the same as 2004-05:)

    p.s. The Halifax index actually fell year on year in March, for the first time since January 1996.

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  • new user 2007 says:

    p.s. The Halifax Index figure I refer to is one month year on year. The annual figure is based on the average for 12 months on a rolling basis and that is why the media did not kick up a storm about the year on year fall last month…

    The one month year on year fall is symbolic, but the annual year on year fall is important as now buyers can say they will not pay a penny more than they would have in April 2007…Asking prices rocketed post-April 2007, so a good start.

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