Thursday, March 5, 2009

-2.3% Halifax February

House Price Index - February

Commenting, Martin Ellis, housing economist, said: "The average UK house price declined by 2.3% in February. This monthly decrease more than offset January's 2.0% increase. Prices in the three months to February compared to the previous quarter, which provides a better indicator of the underlying trend, were 3.6% lower. Whilst market activity remains at very low levels, there are some tentative signs that activity may be beginning to stabilise. The house price to earnings ratio – a key measure of housing affordability – has fallen to its lowest level for six years."

Posted by phdinbubbles @ 09:12 AM (2581 views)
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27 thoughts on “-2.3% Halifax February

  • and for those without Microsoft Word here is the pdf

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  • phdinbubbles says:

    and here’s the BBC story

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  • I seem to remember the Express ran the January survey results as their main front page story, under the headline “AT LAST HOUSE PRICES ARE UP”. Will be interesting to see if they do the same again in the interests of fair-minded and unbiases reporting of the facts….. oh who am I kidding.

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  • pelethar –
    They will probably concentrate on the recovery in the quarterly change:

    Free Image Hosting by FreeImageHosting.net

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  • I am becoming increasingly convinced that the majority of the public are starting to realise exactly what is happening now.

    The spin is losing momentum and will soon grind to a halt revealing the true stark picture of reality.

    The panic of 2009. The summer of discontent. I hear that Ireland is a nice place to visit when the weather picks up!

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  • 2.3% annualized is a whopping TWENTY SEVEN POINT SIX PER CENT!!

    The 60% fall in lending between Dec and Jan is yet to feed through. That will take 3-12months IMHO.

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  • ^^ got my dates wrong though. This one is better (and should be bigger on this post too):

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  • Almost back to June 2004 price level.

    It’s a pity those currently selling are ignoring this news.

    And things IMO were over priced then. Also back then the outlook was fairly rosy, now we’re facing the mother of all depressions.

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  • mark wadsworth says:

    @ 5ick. Those charts on monthly, quarterly or annual changes really mess with your mind. The time to by is NOT when the quarterly falls are highest, but when they go back to plus/minus nothing.

    Even making the wild assumption that there is a smooth progression, the quarterly fall has reduced from 6% p.a. in mid-2008 to 4% in early 2009, so it will take another year and a half for the quarterly falls to ease off.

    If and when LP posts the BBC chart showing annual changes, we’ll see that the annual change is starting to flatten out at minus 15% to 20%; if you stick a ruler on that, in theory house prices will never recover.

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  • I don’t think anyone seriously thought that house prices went up in January anyway – and if they did and they bought as a result then they deserve everything they get! If the average value of loans a bank makes for second hand car purchases goes up from one month to the next, does it mean that second hand cars are appreciating? Of course not – it means more expensive cars are changed hands that month.

    And when you look at the house price/earnings ratio, don’t forget that this is the average earnings of people earning. If there was only 1 person in the country working and they earned £200K would that push house prices up because “affordability” was improving – hell no! More people are losing their jobs every day. This crash is less than half way through.

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  • Regarding the papers not making a big deal about the decline, what amazes me is that they will publicise house prices giong up thinking that expensive houses is a good thing! I think the people who see it as a good thing are the ones who have got accustom to being rich off owning a house, people stop need to looking at houses as bundles of cash their only worth what people will pay

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  • mark wadsworth says:

    str2007, according to Halifax historical house price data, we’re back to May 2004 prices, non-inflation adjusted, so all the bets must be on April 2009 for the month in which house prices go five year negative (using Halifax or Nationwide data).

    How are we going to commemorate this?

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  • Incidentally

    Does anyone have any experience of how surveyors are currently valuing properties.

    I would have thought they’d go to nethouseprices etc. and see what the prices were in 2004 and maybe take another 5% off for good measure.

    The reason I ask is that I’ve seen quite a few sales happen in the last couple of weeks and the asking prices were essentially 2007 level. I doubt anyone got a 25% discount so hence wonder what will happen when the surveyor visits.

    I guess they’re not so worried if there’s a 40% deposit. But if a 25% deposit is in place and people are still buying at 2006/7 levels, due to low interest rates, then that IMO leaves lenders pretty vulnerable,

    Maybe Jack C has some anecdotal as to how the surveyors are signing off Estate Agents valuations ?

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  • mw

    Maybe we will be due for anither HPC London meet up by then.

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  • THE ARTICLE SAYS “HOUSE PRICE TO EARNINGS RATIO HAS FALLEN TO ITS LOWEST POINT IN 6 YEARS.” What they do not say is just how much further IT HAS TO FALL so that people can afford houses with sensible lending ratios. As I have said time and time again and I assume will carry on saying until finally eveyone is saying it is, the median is 3.25, and there was a discussion on multiples of income yesterday. Recessions see us return to the median, depressions brought about my an inflated house market will see income to loan ratios return around this level. So earning to house price might be at its lowest in 6 years but do your sums, there is a way to go yet with average earning at £25000. (Discussion on this yesterday too with a link to earning ratios).

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  • Why str07….do you chaps meet up at times… It would mean that I would have to leave North Wales for a while, but hey, these are extraordinary times and call for extraordinary actions… I will prepare a rucksack in readiness.

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  • mrr19121970 says:

    It says average house price 160k, and then refers to a house price to average earnings ratio of 4.42. that over 36k in my opinion.

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  • need-a-crash says:

    @11. str 2007

    Very good question, I look forward to other responses on this. I was talking to two friends of mine who bought in late 2006 & 2007 in SW London and they had valuations done before Christmas for re-mortgaging purposes and both were told prices had fallen 20%.

    So it would appear that surveyors for re-mortgaging are deducting 20% but the same surveyors when it comes to selling a property are, as you say, deducting 0-10% at best? Someone please explain??

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  • EAs are legally permitted to lie about valuation, so they always do. But surveyors are getting toasted by the banks. Some of them are being sued for overvaluing during the boom years. Even if they don’t get sued, if the banks have the slightest suspision that a surveyor is “overvaluation prone”, he/she would be struck off the list, which is the major income for most of the surveyors. If the sellers and EAs are inflat the asking price, they will just get two fingers from the surveyor.

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  • 11. str 2007
    Just put the house on the market after biding my time for last few years.
    According to Nationwide calculator (extrapolates price from price last time house sold and HP trend since) house should be 206k !
    EA recommended we put it on at 183k, although we eventually agreed to 189k (based on logic buyers tend to work in 10k bands)
    Next day we had first visit and offer for 180k ! Some kind of conspiracy here ?

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  • Agree with previous comments – I too have seen a few properties sell in my area of SW London for mabye 5-10% off the peak. I can only imagine they are heavy cash buyers. What I have noticed is that these were dilapidated properties in prime areas, which would two years ago have been snapped up by builders – the fact that’s not now the case tells you that there isn’t a profit in the renovation at the price they sold at.

    People are going back into the market, no question. Not in big enough numbers to stop the fall in prices – largely because the banks won’t lend at only 5-10% lower than the peak so you have to have a lot of cash – but it’s happening. So in my opinion we will see the pace of falls slow through the year, perhaps ending at 10% for 2009.

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  • @mark wadsworth –
    I was suggesting what the Express would be using. I do not advocate the method at all!

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  • @mrr19121970 –
    yes – 160,327 with an estimated* multiplier of 4.42 gives an average wage of 36.3

    They report the multiplier as “Ratio of the Halifax standardised average price to national average earnings for full-time male employees. Price Earnings ratios revised** to reflect new data in the Annual Survey of Hours and Earnings (ASHE).”

    * but it does not say what they estimate, maybe someone else has an idea.
    ** when?

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  • speaking to a mortgage broker the other day who has just lost his job said bank surveyors are down valuing by 20-25% he said… What do we think this means? another 20-25% drop in prices probably… banks are not that stupid to downvalue and lose business unless they are protecting themselves from more bad assets

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  • hash browne says:

    mark –

    20-25% from what? 2007 levels or the latest HPI?

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  • mark wadsworth says:

    @ 5ick 22, I was not for one minute suggesting that you were doing anything else than illustrating typical Mail or Express numptiness.

    @ shoebox, that seems fair enough – extrapolate current price and knock of ten per cent or so.

    @ Mark, yes, go on, down from peak or from current?

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  • mark wadsworth – Oh, OK – got the wrong end of the stick then 🙂 just thought I’d be clear that I was not.

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