Friday, April 8, 2011

“housing market is becoming a tale of two halves, with gains in London and the South East offset”

House prices in London offset falls elsewhere

The LSL house price index showed that prices across the UK have fallen by 0.1pc in March, and annual growth for the year is 0pc. However, properties in Greater London have risen in value by 3.7pc in the last three months, and those in the South East have risen by 0.1pc. In contrast, Wales has seen prices fall by 2.9pc, and the Humber has seen the biggest fall, of 3.4pc. The counties of Blaenau Gwent and Monmouthshire, in Wales were the biggest losers, with houses losing 11.5pc and 11.8pc of their value respectively

Posted by jack c @ 10:01 AM (1859 views)
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14 thoughts on ““housing market is becoming a tale of two halves, with gains in London and the South East offset”

  • There we go again, 0.1%, a stunningly low move based upon tens of millions of houses across the country, amazing, but 300% up in ten years is normal and affordable. Utterly transparent control by the banks/RICS/estate agents VI spin.

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  • london did very very badly in the last recession because ultimately it can be a dreadful place to live

    the birth of the internet means being in london is unnecessary and its just become fashionable because….actually i have no idea why its become fashionable!

    its a hotbed of crime,drugs,prostitution and incredibly rude people and I have no hesitation in saying prices there will plummet

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  • general congreve says:

    This is a classic example of what I am going to call wave/tide theory. When the boom started it started in London and spread out across the country. The last places it reached were Wales and the North, which saw the quickest appreciation in price at the end of the boom. To clarify, my first property, which was in the south east, rose in price most rapidly between the end of 2001 and 2002, after that the gains slowed pace until the reversal in 2007 (luckily I timed it right and sold in August 2007).

    Bearing this in mind, we should expect those last places to be covered by the wave of HPI, to be the first to fall in price as the wave withdraws whence to where it came. As we are witnessing the biggest falls are in the north and Wales right now, this is holding true.

    So do not fret, like a silent Tsunami, violent house price falls for the South-east and London are on the horizon (somewhere around Dudley at this point I expect) and gathering strength. *Evil laugh – fades into distance*

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  • GC @3

    I live in Devon, where prices had risen ferociously, also Cornwall. We have seen very little distress so far, only properties listed for several years at peak prices. So far we are witnessing utter denial.

    I spoke to an agent this week and I mentioned that Nationwide had stopped interest only mortgages and asked for his views on how this may affect house prices. He said he knew nothing of the changes, but didn’t feel it would make much difference anyway. I wonder if the agents really are clueless as to what caused the epic rises over the past 15 years.

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  • that’s a great way of putting it general…I think london and south east have a big shock coming because they have the biggest mortgages!

    for example,I have a friend in fleet who has a £340,000 mortgage but earns £50,000….he got a liar loan…he’s been okay and able to refinance etc ‘cos his house was worth £500,000.

    recently its been valued at £420,000 so its perfectly possible for him to fall into negative equity or no equity.

    At that point he can do nothing and if interest rates went to 5% base(7-9% variable),he would be unable to pay the mortgage which would be higher than his salary

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  • will…I keep up to date with exmoor area and note many properties on there have been up for sale on or off for years unsold.

    agents down in the west country are in for a big shock,particularly if they have a portfolio of buy to lets…..the standard of agency staff is very very low….falling over the last 10 years

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  • phdinbubbles says:

    I agree with GC.

    From the data I’ve looked at previously, prices remained flat in the North until around 1999, whereas they started rising steadily in the SE from 1995 onwards. Prices went really mental in the area of the North I was in around 2002/3/4 – it was very obviously unsustainable. There are areas I know where prices went up 100% in 18 months. Increases of 180% to 250% over the period 2000 to 2007 are typical for many areas I know. I’ve also lived in areas of the South and looked at historical prices there and been amazed at the slower pace of increase over the same period (although when combined with the increases in the late 90s they amount to the same thing).

    The argument that the North is currently being/about to be hammered because of the reliance on the public sector doesn’t stand up to inspection, given that it’s the private sector that has borne the brunt of the economic downturn so far. If the argument was true, then the biggest price falls so far should have been in those areas of the Country more dependent on the private sector – i.e. the SE. It’s nothing more than the ‘house prices only crash in other people’s streets’ fallacy.

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  • my neighbour bought a 2 bed buy to let in sunderland around 2003/2004 without even seeing it for £220,000 through inside track

    perhaps this was part of it

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  • I know of several people who made a significant sum of money (roughly 2002-2006) by regularly visiting London/SE and persuading people to release money from their property and “re-invest” up North (Newcastle/Gateshead/Sunderland/Durham) and because of the lag in property price rises everyone was pretty much a winner to begin with – all easy money when prices rise month on month/YOY. The sh*t started to hit the fan a few years back when the prospect of capital growth disappeared (falling NE/SR/DH postcode prices) and rental voids increased. IMO this always was a deck of cards waiting to fall and I dont think London/SE will remain immune.

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  • [email protected]: “I think london and south east have a big shock coming because they have the biggest mortgages!”

    You could be right but get more that 100 miles from London and more than 50% of the population are on the public payroll.

    As always there is an arm wrestling match between a collection of individually rational fundamental influences – though which side will dominate during any time period …. is hard to tell. I for one would not have believed that 30 months after the October 2008 crash …. house prices would be where they are. It is surely humbling.

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  • Living in the so called “golden triangle” of essex, I don’t see a significant fall in the area compared to other parts of the country.

    And the same goes for London….it’s all very well for Taffee to say its a carzi, with crime, prostitues and rude people, but with all due respect that cobblers.

    It’s also the got infinite things to do, the best jobs, the best shopping, the best restaurents, the best nightlife, and is the only destination for rich foreigners to sample a high end lifestyle in this country.

    London is an amazing place, and as long as you avoid the pitfulls that accompany ANY major city in the world, it will continue to be an amazing place.

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  • in wales,…….77% of people are employed by the public sector which is ridiculous

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  • unless they are talking about INITIAL asking prices in london, i find this difficult to reconcile with what i’m seeing daily for greater london with property bee, ie loads of significant reductions, 20-30k. having said that, there are many deluded hysterical asking prices on first entry to market, well in excess of 2007 levels

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  • greenshootsandleaves says:

    [email protected]
    I could not agree more, having commented in similar fashion on an article on the same subject in the guardian on 2 April (I remember trying very hard to avoid using the word ‘tsunami’).
    Whether you’re a politician, a newspaper proprietor, an EA (or even an army general ??), there’s nothing quite like an ‘Us and them’ message, but how long can this North v South property variant survive? The great divide has certainly shifted since those heady days when it seemed set to separate the property owners from those who, in essence, didn’t watch much daytime television!

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