Wednesday, Oct 28, 2009

Annual change - down 5.6% ...

Land Registry: September 2009 House Price Index

... as compared to Down 16.3% in February. Spring bounce?

Posted by mark wadsworth @ 11:01 AM (2384 views)
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25 Comments

1. mark wadsworth said...

"The September data from Land Registry shows an annual movement of -5.6 per cent, which is a result of the positive monthly change of 0.9 per cent. This brings the average house price in England and Wales to £158,377. This is the fifth month in a row where the annual rate of decline has eased. The number of sales averaged 48,109 per month from April 2009 to July 2009. In the same time period the year before, transaction volumes averaged 59,677 per month."

Wednesday, October 28, 2009 11:09AM Report Comment
 

2. jack c said...

MW - the link isnt working however I can pick up the latest press release/info at www.landregistry.gov.uk/

Wednesday, October 28, 2009 11:23AM Report Comment
 

3. phdinbubbles said...

This might work.

Wednesday, October 28, 2009 11:27AM Report Comment
 

4. jack c said...

Thanks PHD

Wednesday, October 28, 2009 11:31AM Report Comment
 

5. mark wadsworth said...

PhD, sorry about that, thanks.

Wednesday, October 28, 2009 11:43AM Report Comment
 

6. will said...

I think most of us here accept that with the lowest interest rates in our history together with massive fiscal stimulas, prices were not going to be falling massively for the time being.

Wednesday, October 28, 2009 11:46AM Report Comment
 

7. crunchy said...

Loosen lending on the way up, tighten it on the way down.

Wednesday, October 28, 2009 12:04PM Report Comment
 

8. uncle tom said...

There seems to be a nervousness in The City at the moment - the expectation of a currency crisis is widespread.

Why - because the BoE wants to stop QE, which in turn means that the UK's massive budget deficit has to be met by borrowing.

Who has that sort of money to lend? - and at what price??

No-one seems remotely confident as to how this will pan out.

My own guess is that the supply of funds at modest IR's will quickly run dry, forcing the BoE to contemplate either a resumption of QE, or steep interest rate hikes; and with that will come a loss of confidence in Sterling.

The chances of interest rates being kept low seem very slim now, and when they rise, the coffee will be smelt on the property front..

Wednesday, October 28, 2009 12:06PM Report Comment
 

9. crunchy said...

8. uncle tom

But, but, but sterling is soaring. lol

I liked the coffee bit. Cappuccino con leche por favor? si pues!

Wednesday, October 28, 2009 12:30PM Report Comment
 

10. hpwatcher said...

nice post UT.

Wednesday, October 28, 2009 12:41PM Report Comment
 

11. hpwatcher said...

One point though UT:-

or steep interest rate hikes; and with that will come a loss of confidence in Sterling

How would increasing interest rates result with a loss of confidence in Sterling? Would it not be the other way around, Sterling tanks when BOE talks about QE.

Wednesday, October 28, 2009 12:44PM Report Comment
 

12. brownsters_billions said...

They can play this printing game until inflation catches up with them. Given the continued restriction (reduction) of lending and credit to 'real' people and businesses, can anyone see inflation rising before mid next year?

Wednesday, October 28, 2009 12:52PM Report Comment
 

13. fallingbuzzard said...

Which measure of inflation?

Wednesday, October 28, 2009 01:08PM Report Comment
 

14. uncle tom said...

hpwatcher,

You have to think how this would pan out in real time - a Gilt sale fails, so the markets want to know the solution - print or hike?

Unless the BoE reacted with exceptional speed, the uncertainty would weigh heavily; and even with rapid action by the BoE, serious doubts would remain about the viability of the currency.

I said a long time ago that stopping and then re-starting QE would be a recipe for loss of confidence.

My feeling is that the BoE is taking one of two views:

a) They are over confident in the nation's economic prospects.

or

b) They are happy to go along with the Govt's over confidence, so that the sh*t hits the fan before the election...

Merv and his team will want a good relationship with the next government, and they will be acutely aware that if there's a hung parliament, people like them are more likely to be used as a scapegoat for the resulting indecision..

..they will want a clear result from the election, and they would probably prefer the worst news to be on the old guard's watch.

People like Merv don't get to the top without a few sly tactics..!

Wednesday, October 28, 2009 01:17PM Report Comment
 

15. Enough Already said...

Thank God my daughter and elder son bought in March this year. One in greater London and the other in W. Sussex. They are in their late 20's and early 30's respectively and thought they would never have a chance to buy because of the greed of the BTLets (boomers mainly) pricing them (the BTLives) out of the market. However, they scraped a deposit together (with a little help from myself) and I am now absolutely delighted for them. They could not afford the houses they have just bought if they'd waited, as similar properties have risen dramatically during the last couple of months.

I still maintain property is grossly overpriced, but the 'market correction' will not happen so long as this government is prepared to do anything and everything in its power to artificially buoy the market.

Wednesday, October 28, 2009 01:31PM Report Comment
 

16. brownsters_billions said...

@13

Take your pick, they're both insanely massaged. Question really is, how much do you think the average wage will be in ten years, versus the average price of a house?

Real rises in one and nominal stagnation (i.e. reduction) in the other?

Wednesday, October 28, 2009 01:38PM Report Comment
 

17. fallingbuzzard said...

@14: I think a gilt sale can't fail because there are four friendly investment banks running the book so they can gauge demand. They underwrite any shortfall but critically can also buy gilts as long as the chinese walls aren't too thick. What we don't know is if they are already buying and if so, how much of each.

Wednesday, October 28, 2009 01:56PM Report Comment
 

18. jack c said...

@uncle tom - thanks for your input - picking up on your point (Wednesday, October 28, 2009 12:06PM)
- "The chances of interest rates being kept low seem very slim now, and when they rise, the coffee will be smelt on the property front.."

Norway has just raised it's key interest rate by 0.25% and signalled more rises to come - Autralia (Up) Israel (Up) with others such as India signalling that the next move is up (as are the Fed).

Wednesday, October 28, 2009 02:07PM Report Comment
 

19. 51ck-6-51x said...

Yes, this isle cannot afford to fight the international markets for very long.

Wednesday, October 28, 2009 02:13PM Report Comment
 

20. uncle tom said...

Jack,

A quarter point hike here and there is an interesting development, but it's really small beer - look at what happened to UK interest rates in the spring of '88 (long before we entered the ERM)

- The rate was sometimes hiked by 1.5% in a single month..

http://www.bankofengland.co.uk/statistics/rates/baserate.pdf

..it can happen again..!

Wednesday, October 28, 2009 02:21PM Report Comment
 

21. 51ck-6-51x said...

UT
- When rates go from 0.5% to 0.75% it's a far bigger step ( i.e. bigger economic impact ) than going from 8.25% to 10.75%, even though the change in rate is smaller ( 0.25 vs 1.5 ), no?

Wednesday, October 28, 2009 02:37PM Report Comment
 

22. 51ck-6-51x said...

^^ ...& of course a raise of 1.5% now would be HUGE.

Wednesday, October 28, 2009 02:38PM Report Comment
 

23. jack c said...

uncle tom - agreed rate hikes of say 2% can happen - I remember my mortgage jumping significantly back in 92 (having held the mortgage from 84 onwards). Whilst a small increase in Oz, Israel and N'way isnt going to shake the economic foundations of the planet it would appear that the prospect of extremely low rates (Japan style) lasting for a prolonged period are very slim. I suspect this will come as a shock to many - believe it or not I have potential clients whinging like mad having come off a tracker rate to move onto Halifax's SVR of 3.5% - they really wont cope if rates move up steadily by say 2%. These people simply could not comprehend paying 12-15% as I did during the miners strike (albeit we did get MIRAS at that time)

IMO 2010 is going to be a really tough year for those who havent planned their finances correctly.

Wednesday, October 28, 2009 02:43PM Report Comment
 

24. uncle tom said...

Jack,

One should not forget that not only do many people have much higher income multiples on their mortgages than 21 years ago, a very large proportion are now on interest only, with no repayment vehicle; which heightens the impact of rate changes..

And then you have those who have followed the fashion of this summer, and bought a new home without selling their old one.

..and of course, our old friends, the BTL wallies..

- They are likely to come very badly unstuck..

Wednesday, October 28, 2009 03:11PM Report Comment
 

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