Thursday, October 28, 2010

-0.7% MoM +1.4% MoM

October Index

Clutching at straws, Martin said: "“October saw a continuation of the modest downward trend in house prices that began at the start of the summer. The average price of a typical UK property edged down by a seasonally adjusted 0.7% month-onmonth in October. The three month on three month rate of change – a smoother indicator of the recent price trend – fell to -1.5% in October from -1.0 % in September. This is the largest decline over three months since April 2009, but is still well below the 5- 6% rates of decline on the three month measure seen during the second half of 2008."

Posted by phdinbubbles @ 07:13 AM (6046 views)
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46 thoughts on “-0.7% MoM +1.4% MoM

  • +1.4% YoY

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  • I’d like to know what the non-adjusted figure is.
    I love the press release. One paragraph on house prices and two pages pleading for more quantitatve easing. They don’t like it up ’em, as Corporal Jones would say.

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  • 2nd leg of lifecycle of a bubble has commenced!

    After all the critism the Conservatives gave Labour, could they really go for mass quantitive easing?.

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  • @tpbeta
    1.42% non-adjusted drop from September

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  • It’s good news, but I don’t think there will be big falls without the wider economy going down too. The issue is that the fate of house prices are now such a big part of the UK economy.

    If house prices do continue to fall, expect more QE to boost them.

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  • Hope you’re wrong hpw, afterall a decline in house prices to a sustainable level is what the government should want over the next 2 years. It can still all be blamed on lax lending etc at present.

    Pointless propping it up now only for them to start falling again in a run up to the election.

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  • little professor says:

    Consensus forecast was for a 0.3% drop.

    Looks like we are building up speed nicely. YoY negative by the end of the year.

    And we still haven’t even begun to see the effects of the savage ConDem cuts.

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  • Hope you’re wrong hpw,

    Me too.

    But QE will allow the Govt to keep interest rates low, for longer, thereby giving housing another ”boost”. The biggest threat to house prices is probably interest rates – and I don’t think BOE are going to raise them anytime soon.

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  • But what the condems don’t want are rising interest rates in 3 years time.

    Surely QE is likely to weaken sterling and hence increase the need to interest rate rise. Not that currency devaluation has bothered anyone so far.

    I don’t think condems want to be seen to cause a crash, ie by putting up interest rates too early, but if it’s an effect of clearing up Browns mess then that I feel would be acceptable to the electorate.

    The sooner we get 20-30%off the better it will be for their election chances in 4 1/2 years time.

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  • Surely QE is likely to weaken sterling and hence increase the need to interest rate rise.

    I think that could be part of the plan.

    The sooner we get 20-30%off the better it will be for their election chances in 4 1/2 years time.

    Yes. that would be nice.

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  • ‘Quantitative easing has the effect of lowering the cost of government borrowing’.

    Que? !! How does that work then?

    I’ve seldom seen such a blatant load of propaganda from any organisation, FEAR is the thing that comes through from this document.

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  • ‘Quantitative easing has the effect of lowering the cost of government borrowing’.

    It essentially creates an auction that has more bidders for the bonds; more bidders mean higher prices and so the yields can be lower.

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  • Amazing – nearly a page of desperate pleading for more money to be printed. Agree montesquieu – it reads like the person who wrote it was terrified.

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  • sibley's b'stard child says:

    Can we has money pleaze?

    For a moment there, I thought i’d be reading a report on the figures but they must have forgotten, strange.

    It’s only a matter of time before they resort to the ‘prices are still higher than 1896’ straw-clutching contests.

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  • sibley's b'stard child says:

    Actually, i’m pretty sure the Halifax used this platitude in their scrumptious, bear-licious, September report. Guess it helps them to be ‘on message’:

    “This is the largest decline over three months since April 2009, but is still well below the 5-6% rates of decline on the three month measure seen during the second half of 2008”.

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  • Lovely, a -1.04% (don’t you love Excel, eh?) in November would then take us back into -ve YoY territory (on SA and NSA measures)……… the 3 year would be approx -11.60%, and the 5 year would be +3.5%…….. interestingly the 3 YoY figure may actually become less negative in coming months as the base month this time around (Oct 07) was the peak of the market. However, this will be countered in coming months by the 5 YoY figure heading south (because of the spring 2006 mini-rally in prices)…….

    Be nice if they hold off on the QE, then Q4 growth figures released in Q1 are +ve, hence inducing a small rise in rates in Feb, hence snuffing out the spring housing market before it starts….. meanwhile, house prices posting small -ve MoM falls over the winter,,,,,,,,,, I can dream eh?

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  • Agree montesquieu – it reads like the person who wrote it was terrified.

    The UK economy depends too much on house prices – it never used to be like this. The days of the good old house price crash, that we have been looking/hoping for, could sadly be over.

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  • BBC have added this to their report on the Nationwide figures

    First-time buyers

    The drop in prices would generally be good news for those trying to get on the property ladder. But first-time buyers still face the demand for high deposits from lenders, who are keen not to hand out mortgages to those who may be at higher risk of defaulting. A separate report by the Home Builders Federation claimed that the average first-time buyer would need to save all their earnings for more than two years to get on the property ladder. The group said a typical first-time buyer needed to save a deposit of just over £37,000 to buy an average priced starter home of £155,000. The average age of a first-time buyer, unassisted by their parents or other family, was 37 years old, the report said. “First-time buyers – the life-blood of the housing market – are almost entirely shut out,” said Stewart Baseley, executive chairman of the federation. “We desperately need an increase in lending and a properly functioning and sustainable mortgage market.”

    SOURCE http://www.bbc.co.uk/news/business-11638433

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  • sibley's b'stard child says:

    “We desperately need an increase in lending and a properly functioning and sustainable mortgage market.”

    Yes, Stewart, i’m sure you do.

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  • Strange how quantitative easing is now thoroughly accepted as a means of the government creating money rather than borrowing it. (A few months ago people were arguing whether the basic mechanism of creating money with unbacked government cheques was even feasible .) But why does n’t the Guv use the same mechanism to pay for public services (like Lincoln did with the Union army)? Its more logical:QE money going to banks puts up house prices as the Nationwide quite baldly states.

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  • HPW has a point, I reckon, because in the UK economy around 60% of the money (credit) supply is created as mortgage debt. So if house prices nosedive, there is a lot less money around. Ergo, we won’t all be able to take advantage of the lower house prices, because if you lose your job your income falls a lot faster. That’s why to really fix this, and many other things as well, we’d need serious monetary reform. Possibly along the lines of this, http://www.bankofenglandact.co.uk/, but many other proposals have been put forward going back at least 100 years. The one thing that is certain is that the current system acts against the interests of the population and in the interests of the bloated financial sector and especially the people near the top of it.
    Nick

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  • I see also last months figures were revised down from +0.1% to 0%

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  • off topic, I have a question about gold

    i will give you an example

    If Dave bought 1 oz of gold at $1000 assuming the $-£ exchange rate at time was £1=$1 he spent £1000, if the price of the gold went up to $1500 and dave thought he would sell and bank the profit, however the £1 = $2 he would lose £250 bearing this in mind the value of the gold would have to go up at the same rate the dollar in order just to break even.. I also assume the gold buyer being in the UK will only want to pay in £

    can someone explain how one can make money if the dollar becomes a basket case and gold does not go up in value at the same rate the dollar became a basket case?

    this is why investing in gold to me makes no sense

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  • Mark,
    Spot on, you are off topic.
    N

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  • If Dave bought 1 oz of gold at $1000 assuming the $-£ exchange rate at time was £1=$1 he spent £1000, if the price of the gold went up to $1500 and dave thought he would sell and bank the profit, however the £1 = $2 he would lose £250 bearing this in mind the value of the gold would have to go up at the same rate the dollar in order just to break even.. I also assume the gold buyer being in the UK will only want to pay in £

    Currency fluctuations are an issue. But you can also make money too, if you sell when the pound is weak against the US.

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  • HPW

    thanks, however i notice people are buying gold for the reason the dollar might become a basket case, this is the part I can’t figure out unless gold rises significantly, you may as well play the currency game?

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  • @20 “because in the UK economy around 60% of the money (credit) supply is created as mortgage debt. So if house prices nosedive, there is a lot less money around.”

    The latest available figures show mortgage debt dropping but in the same period (had to adjust for equivalents) M4 money supply increased. The money supply percentile change reached 0.4 versus 0.1 = 3.1. Fortunately there is a proven correlation between mortgage approvals and house prices, so we can definitely expect lower house prices in the near future but the money supply correlation isn’t really there.

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  • mark wadsworth says:

    What British Blue says.

    Or as Gerri Halliwell said: “Scream if you wanna go faster!”

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  • mark wadsworth says:

    Furthermore, if you look at NW’s inflation adjusted series, we are back to Q1 2004.

    Bricks and mortar are a long term investment.

    A long term investment is a short term investment gone wrong. Unless you’re Warren Buffett.

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  • warren isnt doing so great at moment he lost a lot last week

    Warren takes many risks some pay off some don’t, one very clever company he owns is a furnishing company who specialise in renting furniture to furnish a whole house, once it has been rented, it gets rented out again at a slightly lower price until eventually they sell it as used goods for more than they bought it for , brilliant business model especially during a recession when people cannot afford to buy furniture when they move into a rental after losing a house.

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  • Can I just remind everyone of the previous thread…………….

    http://www.housepricecrash.co.uk/newsblog/2010/09/blog-catalyst-for-higher-prices-as-sterling-is-weakened-to-give-the-false-impression-of-hpi-30430.php

    jack c said…I think there is more money to be made from my new handbag stall than gold or silver or stocks for that matter – the daily standoff with handbags at 20 paces should see me through rather nicely! – who’s going to first to re-order there battered old handbag? (LOL)

    Monday, September 27, 2010 12:00PM

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  • jack

    whats the biggest handbag you sell? I want a decent one I can whack at least 3 people with lol

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  • Mark,
    All I did was to repeat your own observation! So if it was not intelligent, this must reflect on your original remark.
    I am sorry that you resort to using personal insults in your posts, it does nothing to enhance your image.
    Nick

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  • Mark, this is the most popular and comes with a free instruction video http://www.youtube.com/watch?v=VpWo15Jc2JQ

    Animal Print Tote – 2115 – Black
    Carry your things in style with this beautiful tote with a sophisticated texture and soft, smooth look.

    * Faux leather
    * Patent trim
    * Dual handles
    * Silver hardware with padlock detail
    * Quilted animal print body
    * Handbag charms included
    * Zip top closure
    * Zipped inner wall pocket
    * Open inner wall pockets incl. mobile phone pocket
    * Flat base
    * Feet protectors
    * Dust protector bag

    Measures: Width 31cm x Height 27cm x Depth 12cm

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  • you may as well play the currency game?

    You have to, but as long as it’s going up.

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  • Nick

    there is a big difference between banter and an immediate attack, you posted an immediate attack against my posting today and against the dailymail posting yesterday.

    Get a life nick.

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  • thx watchman

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  • sibley's b'stard child says:

    Well….I make it Pimms o’clock.

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  • mark, (and friends?)
    All I did in my “attack” is question the relevance of your postings to the topic of HPC. Clearly this has caused you to fly into some kind of rage.
    Please point out the relevance of the posts in question.
    Who is making personal attacks here? I can see some but they are not posted by me.
    N

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  • Nick come Mark posted something off topic, which he announed was off topic, and your subsequent post was an attempt to ridicule him

    Why behave like that?

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  • Meant to say *Nick come on, Mark …”

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  • Mark
    *yawn*
    observations are distinct from insults mon cher. The person spattering insults over these pages is you (and watchman at 41).
    N

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  • sorry that should say ‘(and watchman at 37)’.
    N

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  • In terms of housing development, turning battered old wrecks into shiny new stylish abodes, arent house prices all relative? Even if prices drop in the time it takes me to turn around a property I bought for x amount, by the time i sell, even if its for the same x amount (after spending 20k on improvements), then I could still buy a better property then I did when I started. If this was kept up for a further ten years things would right themselves soon enough surely? We live on an island….land is always going to be at a premium. Any thoughts?

    BP

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  • greenshootsandleaves says:

    ana lytics @ 16

    I must commend you on your insight but, in the coming months, it’s bound to take away some of the enjoyment that comes from discovering how ‘they’ have decided to dress up the latest house price falls.

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  • tenyearstogetmymoneyback says:

    hpwatcher said

    But QE will allow the Govt to keep interest rates low, for longer, thereby giving housing another ”boost”. The biggest threat to house prices is probably interest rates – and I don’t think BOE are going to raise them anytime soon.

    I’m not sure if there is such a close correlation. There used to be, but due to a shortage of money in the banks and building societies
    there isn’t much money to lend irrespective of what interest rates are. I’m about to try and google it, but does anyone know what deposits were needed historically. Back in 1986 I only needed about 7%. I suspect they were probably more closely linked to House Price – 3 x salary which was about 7%.

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