Thursday, July 10, 2008

Halifax say another 2% Fall

UK house prices 'fell 2% in June'

UK house prices fell by 2% in June, according to the UK's biggest mortgage lender, the Halifax.

Posted by sosoon @ 09:21 AM (2085 views)
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32 thoughts on “Halifax say another 2% Fall

  • tyrellcorporation says:

    ‘But it said that strong employment levels and low interest rates meant that the housing demand retained firm foundations despite price falls.’

    Comical Ali is alive and well and working at the Halifax!!!

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  • planning4acrash says:

    25% compounded over a year.

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  • Trotted out those Sound Fundamentals again, panic over ….

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  • David Smith Aged 17 And A Quarter. says:

    “The survey was released just three hours before the Bank of England’s Monetary Policy Committee (MPC) announces its latest interest rate decision.”

    I can assure all you avid readers of this site that this is not because they wanted to persuade any waverers of their cause to lower rates…

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  • holding out says:

    Halifax’s last 6 months are:-

    June -2.0
    May -2.4
    Apr -1.3
    Mar -2.5
    Feb -0.3
    Jan 0

    This does make it rather difficult for it to cling on to it’s annual prediction of 9% for the calendar year.

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  • Without their 3-month moving average comparison

    June 07 197,450
    June 08 180,344

    Percentage change -8.66%

    Fall from peak
    Aug 07 199,600

    Percentage change -9.65%

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  • But it said that strong employment levels and low interest rates meant that the housing demand retained firm foundations despite price falls.

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  • justwatching says:

    Synical timing or not?
    Please Merv, don’t raise rates.

    Is it time to question the following?
    ‘and the lack of availability of mortgages were behind the latest monthly fall’

    Shall we all apply for a mortgage, or maybe 10 each? (pulling out before the money changes hands)
    I might even pretend to be a first time buyer. 5% deposit. 4x salary. What do ya think?

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  • need-a-crash says:

    Brilliant news and a larger fall than many of us expected!

    Still unbelievable that Ellis /BBC can say things are still ok due to sound fundamentals and then at the bottom of the article say they actually expect unemployment to rise.

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  • About time! This was originally due out last week – it looks a bit odd that they have sat on it until the morning of an MPC decision, but I’m sure they have their reasons.

    Holding out – good point – they are virtually at 9% already with 6 months to go. 15%+ has to be the median expectation on this measure.

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  • justwatching says:

    • On an annual basis, house prices in June were 6.1% lower. UK average prices have returned to the level they were at in August 2006. The UK average price remains slightly higher (2%) than two years’ ago, more than 10% higher than in June 2005 and almost 40% above that in June 2003.

    Well fook me sideways. My pen*s is 4inches longer than it was when I was 2.

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  • Sept +0.4 Revised +0.3
    Nov -0.5 Revised -0.7
    Jan +1.3 Revised +1.4
    Mar -0.3 Revised -0.4
    May-1.3 Revised -1.5
    July -2.0 Revised -2.3???

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  • mark wadsworth says:

    Hogwash has it spot on.

    It’s 9.6% in ten months, annualise that and add on inflation, it’s a real fall of over 15%.

    The inflation adjusted fall between 1990 and 1995 was about 30%, so we will have achieved half that in the first year or so!

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  • Martin Ellis in January (right before house prices fell by 9% in six months):

    “The fact that we saw a rise in December gives us some hope we’re not at the start of a long and sustained period of decline. Sound economic fundamentals and lower interest rates will support house prices in 2008.”

    Martin Ellis today:

    “A strong labour market, low interest rates and a shortage of new houses underpin housing valuations… The average UK price remains slightly higher than two years ago and appreciably stronger than three or four years ago.”

    Well, that’s alright then.

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  • Well, they say all good things are worth waiting for.

    Now providing the MPC have a backbone …………………….

    Some are saying a fall in interest rates rates is predicted as the government has to borrow so much money.

    I hope the Bank leave it to Gordon Brown to sort out from his careful fiscal policy and leave him to give the economy a boost with targeted tax cuts rather than using interest rates to screw the whole economy and Pound even further, not to mention savings.

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  • Hilariously timed a few hours before the BoE rate decision, the Halifax have no shame! hahahahahahahahahahahaha

    They are bricking it!

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  • So the HPI figures now read:

    1yr -8.7%
    2yrs 1.8%
    3yrs 10.6%
    5yrs 38.1%

    In practice, this now means that anyone coming off a two year fix, having originally lumped arrangement fees and stamp duty onto the mortgage, will now be on a lower LTV than before.

    Try looking up the historic data from the last price slump – we never had falls this rapid then..

    http://www.hbosplc.com/economy/includes/05_06_08_historicdata.xls

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  • Charlie Brooker says:

    justwatching, yes you’re right, Comicalifax and the Sound Fundamentalists delayed the data for several days to time in for the MPC decision.

    You can see this bunch perform their latest number in their TV ads:”We are sinking, we are sinking”

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  • “A strong labour market, low interest rates and a shortage of new houses underpin housing valuations… The average UK price remains slightly higher than two years ago and appreciably stronger than three or four years ago.”

    Absolute balls….

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  • letthemfall says:

    The surest sign that a professional does not know what he’s talking about is the regular repetition of old mantras – “sound fundamentals”. Is Ellis a stupid man?

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  • “Is Ellis a stupid man?”

    Probably not, but he clearly has a brief to present a positive angle. Not a very happy chappy right now, I suspect.

    The use of the phrase ‘sound fundamentals’ is becoming quite funny now; reminds me of Norman Lamont’s ‘green shoots of recovery’ just as the wheels were coming off the economy last time.

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  • “sound fundamentals”. Is Ellis a stupid man?

    He is just repeating it because it’s a safe thing to say. If he is wrong, then he can say ”well, everybody else was saying it”.

    It’s dishonest.

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  • Having read the report posted above it is starting to sound desperate, keep refering to how much higher prices are than 2003 now. I’m sure they were talking about higher than 2004 last month.

    Anyone with a brain looks at the figures and says to themselves – yeah they really are overpriced now aren’t they.

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  • letthemfall says:

    If Mr Ellis has a grasp of the situation then Halifax must be a grim employer. He along with many others kept pedalling the nonsense that prices only ever rise. Any economist should realise the absurdity of that – not only dishonest but corrupt.

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  • Read the article. Then read the accurate figures from hogwash @ 5.
    I suggest these should be attached to the article and then posted around the whole UK.

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  • How many more in nequity now? If the figure was 360000 of those who took out mortgages since the start of 2007, so how many now with another 2% drop?

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  • In relation to what the MPC will decide to do with interest rates….

    …just a thought, but we all know the BoE is independent from glubberment about as much as two things which are not at all independent. Brown definitely influences policy. And as str2007 @15 says, higher rates will hurt Brown thanks to his “careful” spend spend spend, borrow some more and spend again economy.

    However, there will come a point when the labour party, after the drubbing they’re about to get in Scotland, will see Brown as a liability. This means there will be a period when everyone has their knives out for Brown, and the MPC – when they realise that Brown aint gonna be round much longer – can happily raise rates (before the next scumbag gets into power and starts asserting their influence.

    So there may be no change this month, but after the by election I think things will change ever more rapidly.

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  • Crashhorizon says:

    Looking at UncleTom’s link for historical HPI data you can see that the peak of the market in the 80s was in May 1989. If you equate the peak of the market this time to August 2007 and get an average of the monthly falls over 10 months you get the following astonishing data…

    June 1989 – March 1990. Average monthly fall = -0.17%

    Sept 2007 – June 2008. Average monthly fall = -1.00%

    That’s an average monthly fall now of more than FIVE times the equivalent of the same stage of the last crash!

    Wonder why Halifax don’t draw attention to this!!

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  • Each month I add in Halifax’s new figure to the main series I got from Datastream, which goes back monthly to 1983. This month’s index figure is down 8.65% on the year, and down 9.64% from the high recorded in August 2007. It is between the August/September 2006 index values.

    This fall is far more severe than what we saw in 1989. Then, the worst fall from the high was 12.97%, from May 1989 to February 1993. We are likely to beat that cumulative fall in two months’ time. However, the index didn’t go back above its May 1989 figure until January 1998, 8.5 years later. This time the fall is so severe that is clearly going to take longer. People who think that we will be back at summer 2007’s prices in a couple of years are very badly wrong.

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  • Thanks for that data monty032

    Makes interesting reading, if you post those figures as an early entry on what looks like it will be a popular thread the Journos may well pick it up and start publishing it in their articles.

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  • When you think how long this bubble was allowed to inflate and how large it was allowed to grow you just knew when it popped it would be VERY loudly. All that talk of a slow deflation was just wishful thinking, as is the talk of a short, sharp recession.

    If you look at the Nationwide graph on the homepage of this site you can see a pattern in that each peak is followed by an increasingly steep downturn and an increasingly shallow and long lasting ‘bottom’. I see no reason why this time won’t be any different – a very steep downward curve and a very shallow and long lasting ‘bottom’ which will bottom out very near to the previous bottoms.

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  • In a bizarre way Ellis has a point.

    These drops have been achieved against a backdrop of sound fundamentals.

    We do not have many forced property sales yet.

    So Mr Ellis, what will happen when unemployment, repossession and insolvency all increase massively over the coming months?

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