Friday, May 27, 2011

Prices in the UK rose marginally, taking the average to £167,208

House prices up by 0.3% in May

UK house prices rose very slightly by 0.3% in May, reversing the previous month's fall, according to the UK's biggest building society. The figures, which still cover the month even though they have come out a few days before the end of May, took house prices to an average of £167,208, compared with £165,609 in April, but they remain 1.2% down over the year. Robert Gardner, Nationwide's chief economist, pointed out that the three-month measure of house prices, up 0.6%, was very similar to the 0.7% measured last month, and added: "Overall, the modest pace of house price growth in May suggests that the property market is continuing to mirror the lacklustre trends evident in the wider economy."

Posted by khards @ 07:16 AM (4455 views)
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28 thoughts on “Prices in the UK rose marginally, taking the average to £167,208

  • As predicted last night

    “Around 50% of properties on right-move have a 5% discount so averaging that against reasonably prices entrants I go for

    Flat to -0.1%

    HOWEVER, since the little people (those without 100’s k in the bank) just can’t afford to move I would not be surprised if we see a an up-tick of around 1% due to the statistics being skewed in favor of the 400k+ properties. “

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  • And oh yes non senaonal adjusted was -1.2%

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  • phdinbubbles says:

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  • If you wish to seasonally adjust your own figures you can find the same software here

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  • The graph is beginning to look less & less like dead cat bounce – rather worringly:-

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  • little professor says:

    khards (2)- Non-seasonally adjusted I make that +0.96% MoM.
    The -1.2% figure you are referring to is the year on year figure, I think.

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  • sibley's b'stard child says:

    Cue Daily Express rampathon at some juncture today.

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  • mark wadsworth says:

    @ HPW, the second leg down has been interrupted over the last three months, but only on the back of wafer thin turnover.

    On Radio 4 this morning they said that sales are half what they were at the peak (I thought it was even less than that).

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  • I guess that if only 1 house sells at £183,929 next month then average house prices would have gone up 10%, it doesn’t really mean much.

    The most important thing is expectation management.

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  • How many mortgages are Nationwide writing at the moment? Do they have enough data to make a monthly calculation that is accurate to within +/- 1%

    – I rather doubt it..

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  • Unemployment is lower than it was during most periods of major house price falls and interest rates are also lower. I don’t know why people torture themselves over these monthly announcements. It’ll be back an inch and forward an inch until unemployment and/or interest rates pick up

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  • So if my calculations are correct this cancels out all price falls since last August then? So much for the house price crash. House prices are up 3.7% since January according to Nationwide!!!!

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  • mark wadsworth says:

    To put things in perspective, here’s a chart showing the average monthly change in house prices according to the Nationwide average house price post 1991:As you can see, the April change was above average and the other changes were either lower than or the same as usual.

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  • mark wadsworth says:

    @ Uncle Tom, yes they do have enough data.

    One rule of thumb of statistics is that your sample only needs to be thirty or so* to be reasonably accurate, so even if volume is half what it was at the peak, they still have data on thousands of mortgages/purchases every month.

    * i.e. if there are 100,000 spectators at a football match and you want to work out their average height, the perfect answer is to measure everybody, but if you take a random sample of 30, you’ll be within a couple of milimetres of the true answer. I happen to know this from experience.

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  • Where I live, the only properties that are selling are the ones around 2003-2004 price. Yes, there are 2 bed ex-council flats asking for 2007 price +10%, but let’s ignore them.

    Very little is moving. I also noticed the first mass repo auction from my area in about a decade. Most of redundancies were made before April, so people are seriously starting running out of money.

    I also noticed some of my colleagues have become more open about their financial strains recently. The end of month “I really really need getting paid, because I am REALLY REALLY running dry” converssation is becoming louder and louder. A lot of these people are coming off their pre-2008 track mortgage and obviously they don’t have any where near 25% equity (most of them bought with less than 10%) they will need to pay 4%+ mortgage rate.

    Interesting time.

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  • gone-to-colombia says:

    I flatly refuse to believe.

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  • Screwsnutsandbolts says:

    @ 13 mark wadsworth said…

    Not entirely sure about that. It may well be true for normally distirbuted data (with smallish standard deviations) such as height, but for very heavily positive skewed log normal data like house prices it will not work (think the average height in cm is simlar to the average house price in kGBP, I can find plenty of houses at 50k and 1000k, but not many people at 50cm and 10 metres).

    Even if you could estimate the true average height with an error within +/-5mm, that still represents around +/-0.3% of an average height of 180cm. I think the monthly figures are very prone to error when transaction volumes are low (especially as the current mix of transaction types probably doesn’t match the typical mix).

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  • MW – I’d really like to hear of your experience measuring 30 random football spectators…

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  • MW,

    I take your point, but the subject matter has to be divided into regions and classes of property type, which in a depressed market creates some very small data samples for a single lender.

    There is also the issue of the constantly fluctuating pool of mortgage products on offer – if Nationwide becomes slightly more competitive for those seeking to borrow larger amounts, either as a result them offering a better deal, or the competition backing away; then that will skew the results – there has always been a huge gulf between the Nationwide price and the Halifax one for that reason.

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  • @10 ut

    From the Nationwide’s Results For The Year Ended 4 April 2011:-

    “We remain committed to helping First Time Buyers and existing homeowners. Our gross residential lending was £12.8 billion, representing a 9.5% market share. 23% of new borrowers during the year were First Time Buyers.”

    and…

    “Over the year we provided mortgages that allowed over 17,200 people to buy their first property, representing a market share of 9.1% of this crucial part of the housing market.”

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  • mark wadsworth says:

    @ Cornish, well not football spectators obviosuly, but when you work in audit and accounts you have to take averages and samples and it all depends on each other and then you look for variations or unusual patterns etc on a not very scientific basis

    I’ve found if you average out all the invoice totals on page one it might come to £1,000 average, and if you average page 2 it comes to £1,050 and if you average the first ten pages it comes to £980 and if you do all hundred pages it then ends up at £1,020 or something. So you might as well just average the first page.

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  • letthemfall says:

    mark w: “One rule of thumb of statistics is that your sample only needs to be thirty or so* to be reasonably accurate, so even if volume is half what it was at the peak, they still have data on thousands of mortgages/purchases every month.”

    Not a rule of thumb I’ve heard. It would depend on the distribution of the data and what you wanted to know. How much faith one can put in these house figures is uncertain, especially as the data is not public. But I don’t suppose the figures themselves are worth picking apart. NW will always polish and puff them.

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  • cornishman says:

    MW – I had such a lovely mental image of you approaching random people at a football match, armed with a tape measure and notebook! Never mind.

    I take do your point about the averages though.

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  • Krustyatemyhamster says:

    The standard error decreases with the sample size and is a function of the probability density function. However, the standard error is the average of the expected error of the sample size – one mean value (of the sample size) could still be way out. What you really need is confidence intervals.

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  • unless you measure all the spectators at the football match, how do you know your were within a couple of milimetres?

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  • 11. flashman said…Unemployment is lower than it was during most periods of major house price falls and interest rates are also lower. I don’t know why people torture themselves over these monthly announcements. It’ll be back an inch and forward an inch until unemployment and/or interest rates pick up

    ~ So true. Where would HPC be without chewing on the juicy fat.

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  • [email protected] “The graph is beginning to look less & less like dead cat bounce”

    My thoughts too. Maybe we are suffering from collective dellusion on this site, and house prices arent going to crash at all. Where is Smugdog to make the point?

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  • Fear not, the crash will probably happen when people least expect it or have given up hoping for a crash. If you buy at asking price now then you are sure to have bought at near peak price and have been ripped off.

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