Monday, March 16, 2009

Wrongmove’s Latest Index Report

March house asking prices down 9 pct year on year

Asking prices for houses in England and Wales were 9.0 percent lower than a year ago this month, slightly less than February's record 9.1 percent annual drop, property website Rightmove said on Monday. Average asking prices rose by 0.9 percent in March, less than the usual increase for the time of year, and new listings were 57 percent lower than last year at 79,000, Rightmove said. "Traditional spring impetus (is) limited as ... lending remains restricted as banks are only now facing up to declaration of toxic debt," the survey said. Rightmove said there seemed to be buyer interest in properties priced at around 25 percent below peak levels, and that sellers who initially overpriced their homes risked heavier losses later. *** Report not yet available at ightmo

Posted by 51ck-6-51x @ 07:53 AM (2233 views)
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23 thoughts on “Wrongmove’s Latest Index Report

  • little professor says:

    Asking prices rose by 0.9%? What’s going on – when are the clueless sellers going to get the message that the market will remain frozen unless they reduce their prices to realistic levels.

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  • “less than the usual increase for the time of year,”

    it’s all relative lp

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  • little professor says:

    February’s index was up 1.2%, so at least we can say the rate of increase is decreasing… ahem…

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  • More evidence that many prospective house sellers are living in cuckoo land. There are still plenty of people who seem to be convinced that there is a housing shortage, the only problem is mortgage availability, and that house prices will soon be soaring again.

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  • I hate to say it, but I think I’m actually witnessing a buying ‘frenzy’ in South Hampshire. I guess nothing more than the dead cat bounce we’ve talked about here. But without doubt people are out taking advantage of the low interest rates. I’m seeing houses sell that have been on less than a week.

    So we have super low interest rates set up for fuelling the housing market, that needed to correct not be re-inflated.

    Bought a new set of tyres for the motorbike at the weekend. Up 25% on 2 years ago. (No doubt thanks to the devalued pound).

    The track day I was going to do tomorrow (yes I know a luxury that could easily be cut back on) – fully booked.

    Beginning wondering if they haven’t seriously overdone the rate cutting and started QE far too early.

    I smell an election before it all goes t*ts up again.

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  • 5. str 2007

    The next wave of idiots that will be winging in three years time. Bailout for the bailoutees.
    Suckers rally!

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  • mountain goat says:

    I also heard this week of relatives being able to sell houses that have been sitting on the market for months. I guess those tracker mortgages are starting to look tasty.

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  • Funny. Seems asking price is going up, as the actual price goes down. Maybe, Savills is right. There must be millions of cash rich Arabs and Russians fighting over themselves to buy a 2 beds ex council estate here. Yea, that will eventually get us out from this mess.

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  • It is quite possible that the fall in prices may slow up a little as the spring advances, leading to claims that the market is ‘bottoming out’.

    That may in turn draw out a few FTB’s who have been getting impatient, causing a little rally in the market.

    However, that will be a false dawn.

    I am increasingly convinced that the Americans are not going to devalue the Greenback on anything like the same scale that Sterling is being devalued, and that US Treasuries will be increasingly seen as a much safer bet than Gilts or eurozone sovereign debt.

    This will push the UK govt into a very tight corner, forcing them to either slash govt spending dramatically, or indulge increasing amounts of the Zimbabwe solution.

    I can’t see Mr Blameless Brown throwing his beloved public servants out on the dole before the election, so my guess is that he will devalue and devalue, hoping that inflation doesn’t take off before next spring.

    But as soon as the markets realise what the game is, the pound will collapse and interest rates will rocket; killing off any green shoots in the housing market..

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  • There is a house up for sale 2 doors away from where I sold in April 2007, that also happened to sell the next month. They are asking just 1.2% less than what they bought it for in May 2007. It has been on the market for a long time now, and rather than dropping the price, they are increasing the number of agents (3 at the moment).

    My first reaction is ‘What fools! Why don’t they just drop the price?’. On reflection, I realise they may have purchased with a very high LTV in 2007 and it may be that they just cannot afford to sell at a lower price. I was in that same situation in the early 90s and I was really trapped – unable to either to sell up or to move anywhere else. As soon as you sell up, that negative equity becomes an unsecured loan, with corresponding rates. I suspect this might be why asking prices don’t go down as fast as actual selling prices.

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  • mark wadsworth says:

    @ STR2007, I hope this is just a DCB, nothing is moving round our way.

    And we knew there was a risk that the government would try and inflate away the bubble, like it did after the 1973 bubble burst (wage adjusted house prices went down forty per cent, nominal house prices were flattish).

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  • 3 houses been put on the market this year in Surbiton and all went within a few weeks. Not sure what the price was but there is activity. People still buy in a falling market though in anticipation that it will eventually recover

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  • Evidence of small price drops in W. Essex, like 2%.

    My commuter town is close to M25.

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  • As far as I am concerned we have a choice here, it’s our economy or house prices. DAMN!!!!! what a mess we have gotten into.

    Looks like both are going down the drain pipe.

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  • @11

    Agreed. It will be forced sales that bring prices to the correct level. And it takes a while for the recession to create a sufficiently high level of unemployment. Then the individuals use up their savings, get benefits, default, and then several months later get repo’d before the property actually sells. It will take a long time to work through to the sale stats let alone peoples consciousness and subsequently asking prices.

    I agree – a lot of people who now want to sell cannot because of the negative equity. This survey will probably be the last to turn

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  • ………..put an offer in on a flat in a nice part of London at 30% less than 2007 and it was accepted, (not a repo and not at auction). So there are some realistic vendors out there.

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  • need-a-crash says:

    @16. bystander

    So are you taking the plunge then and buying?

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  • letthemfall says:

    People have got so much money tied up in their houses (probably just about everything they’ve got) and have for so long been inculcated with the belief that prices only ever rise, that it will take a long time before they accept the inevitable. In the meantime short periods of activity will occur as FTBs, still believing the same, will buy something if they can get a mortgage. But it can hardly last, given our current situation – either deflation and economic shrinkage, or inflation and very high interest rates. One thing that can’t happen is suddenly going back to normal.

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  • nubbers makes a very good point. There may be some stubbornness out there due to delusion, but most will have an underlying reasoning such as “if we can sell for x we will crystallise that loss, otherwise we’ll just stay put”. This could lead to big problems as more people lose their income.

    Also, asking prices may look like they are increasing because higher value homes are being forced onto the market
    – look at Westminster and Kensington & Chelsea [up 26.2 & 12.7% YoY resp.], where there are proportionally more of these properties.

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  • @17 need-a-crash – I was thinking about it, but if the FSA go ahead and restrict lending to ‘sensible ‘ levels then I probably won’t as it means the property is way out , even at this reduced price. Just anecdotal, but when my parents bought their family home in the 70’s, my dad was on about 1500 GBP/annum and the mortgage was 15000GBP, so that equates to 10x single income, and I did a little checking and the average salary in the early 70’s was between 1000 and 1500GBP/annum and the average house cost about 11000GBP, so where does this 3x salary as the long term norm come from?? Just a question for those of you who are better versed in these turbulent economic times.

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  • from talking to my parents (and my inlaws) both bought in early 70s on the Bournemouth area – 3 bed starter homes were about 5K and incomes were approx 1.5K so they did fall into the 3x income + a 10% deposit.

    Going to all depend on regions and earnings (much like it does now)

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  • letthemfall:

    “either deflation and economic shrinkage, or inflation and very high interest rates. One thing that can’t happen is suddenly going back to normal”.

    Maybe I’m being obtuse, but if you think that we could end up with deflation or inflation, then surely you are predicting neither (the average of your possible outcomes is price stagnation). Most professional economists are making similar statements to yours and it always strikes me the same way. If we/you/they think that there is a roughly even chance of inflation or deflation, then surely we should base our assumptions on nether?

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