Monday, July 21, 2008

Full report [pdf]

House Prices down 1.8% MoM, 2% YoY

Average asking price down over £4,000 in the past month. following a £3,000 drop the previous month. Unsold stock reaches record level. Rightmove index goes YoY negative for the first time ever. Mortgage famine wipes out 'spring bounce'. Average time spent on the market jumps to 87 days. This is getting tasty!.

Posted by little professor @ 10:00 AM (4359 views)
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18 thoughts on “Full report [pdf]

  • All those sound fundamentals and all that prudence! The whole UK economy, led by the housing market looks to be going into deep freeze.

    (As an aside, does anyone know what the Boss tab and resulting pie chart at the top left of the HPC homepage refers to?)

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  • Renting – the idea of the boss tab is that if you are surfing hpc.co.uk at work (perish the thought) and want to look busy – say if your boss comes up behind you – you click on the “boss” tab and it looks like you’re doing something. You get this on a lot of websites and games.

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  • The Boss tab is the admin interface – does nothing for us lot, only shows a picture of an excel spreadsheet if you’re not authenticated properly, according to whatever rules the admin has set up.

    Ignore it.

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  • pelethar – really?

    Haha – I was guessing. That’s funny. Me likey.

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  • No wonder I never get a pay rise!! Also need a ‘game’ tab so that when my workmates come along I can pretend I’m not working.

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  • Presumably this figure is not adjusted inflation, so add in the current rate of RPI inflation (4.6%), and we’re already seeing a 6.6% p.a reduction in the real price of housing.

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  • I think it’s a lot more than that ricky. Rightmove is notoriously a positive metric due partly to the way it’s calculated (purely on initial asking prices, ignores not only actual selling prices but also price reductions – a massive distorting effect given what’s going on at the moment).

    There has also been strong anecdotal evidence that it’s frankly bent (£10m+ properties being “accidentally” listed dozens of times to skew the average price upwards).

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  • I think we need a Daily Express tab, so that when workmates look over we can pretend house prices are still going up.

    The Rightmove figures show that sellers are starting to be realistic. Acceptance of reality is seeping into the market. Note that it’s in Rightmove’s interest to promote lower prices because they make money on turnover, not on sale value. Same applies to estate agents – they’re pushing for lower prices just so they can make a sale!

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  • Same report says that percentage of asking price achieved has dropped from 95ish to 91ish doesn’t it? So with inflation, you’re already talking about over 10% actual house price drop. To put it another way, that means that the vast majority that bought in the last 6 months at least have just lost 100% of their “investment”.

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  • little professor says:

    That’s the joys of leverage for you.

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  • mark wadsworth says:

    Ricky B, Inbreda, the annualised fall so far with inflation is 16% (and rising!).

    I explained this on my blog.

    Would anybody be at all surprised if the year to October is over 20%?

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  • @ Mark.

    Absolutely. With RM swinging from +0.1 to -2.0 in a month on the back of a mom of -1.8, then the trendline over the last months must statistically fall off the cliff. I’m guess a number of -15% (Halifax/NW) by the end of the year without inflation. I think asking prices will follow with maybe a 4-5% lag. Adding inflation should see 20%.

    I come back to a thought many months ago. The interenet is definately bringing the crash on faster. Left to print media (most of it BTL invested), we’d be on a Fleet Street diet of “it’s not all bad”.

    With sites such as this and others: nowhere to hide.

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  • some interesting thoughts here. I guess my thoughts are

    what abut calculating the annualised fall for this year i.e. exclude oct, nov, dec. this would be projecting for the whole year and things only really got going in the last 3 months.

    also i wonder how long we can keep getting consecutive falls in the Hfx/NW indexes. the falls at the moment are pretty unprecedented. I guess at some point they have to stop and then after the first month of rises we can expect all the ‘crash over’ headlnes.

    wrt to the idea of the internet speeding things up that seems quite likely to me. I wonder if it means that things will bottom out sooner than expected before the majority really start believing in the crash and lose the imbedded belief that property just goes up. I guess that depends on the secondary recession effect kicking in and how strong they are in causing a further drop in prices.

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  • Mr Smith – it also depends on the continued lack of credit and the fact that lenders are going through a fundamental change in their assessment of risk. I’m sure there are lots of idiots out there who think the market has bottomed out already and if they could get a 125% interest-only mortgate for 6x their income, they would pile back in, but those days have gone.

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  • Yerhavingalaugh says:

    How reliable are the figures published by these agencies? On the BBC website it states that house prices in my area INCREASED last quarter by over 9% based on sales of 328 properties. The yearly increase is still stated to be more than 12%. This is fantasy! Who do you bloggers think publishes the most accurate figures?

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  • Ten Years To Get My Money Back says:

    In response to comments 13 and 14 the problem is that the whole market has positive feedback.
    If prices drop for six months people will notice the trend and they will continue to drop.

    IMHO the real trigger which will stop prices falling is when it becomes cheaper to buy than to rent.
    Take out capital appreciation and I can’t see any reason why renting should be cheaper than an interest only
    mortgage. It wouldn’t surprise me if a lot of tennants end up buying out their landlords.

    :- Duncan

    Bought 1989 £65500, sold 1999 £70500

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  • mark wadsworth says:

    Growler – on the subject of Haliwide, we’ll have their July figures in ten days or so. Surely they’ll be down 10% y-o-y!

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  • Mark, I’m prepared to bet they will both show small monthly increases and take the edge off the annual declines. Just a gut feeling.

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