Friday, August 30, 2013

August 2013 (pdf)

House Price Index

Monthly Index* 337.8 Monthly Change* 0.6% Annual Change 3.5% Average Price (not seasonally adjusted) £170,514 *Seasonally adjusted figure

Posted by dill @ 09:30 AM (3613 views)
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33 thoughts on “August 2013 (pdf)

  • Joy for homeowners who are going to sell and live in a tent or downsize!! Misery for everyone else. Yay!

    UK!!! UK!!! UK!!!

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  • MOAR DEBT!!!!

    Debt saturation point nearly reached [again].

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  • I have a cunning plan to circumvent debt saturation, here it is.

    1, Start building lots of new houses, whilst doing so issue lots of new debt to builders at low, low low interest rates.
    2, Flog all the cheap new builds to anyone with a pulse.

    Should buy a few more years until the whole rotten heap collapse in an Ireland like fashion.

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  • Non seasonally adjusted a 0.2% drop then..

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  • mark wadsworth says:

    This is all rather depressing. In a sane world, prices would have gone down again by now.

    Cue Homeys: “Ah yes, but Britain is a crowded island, London is a world city etc”

    For sure, the former happens to be untrue, but either way, you could have said that twenty years ago.

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  • [email protected]
    I disagree, it is only joy for certain home owners now!

    I run a removal business in London. For anyone under the age of 40 who is a home owner and wants to move up the ladder i.e. from a cramped flat ( which is no good if your family has just increased from 2 to 3 and one of you is working part time because you have a child), you have to move 5 miles out or double your mortgage. I am meeting young couples who are shocked and deflated. They are on the housing ladder, but realise they have no chance of moving up it from their starter flat or cramped two bed house. Some are then renting their existing property out and taking out a rented property to get more space. This cancer of rocketing house prices is now effecting home owners as well at different stages of the ladder. I cant remember the time I moved someone further into London. It’s all about moving them out and then the foreign buyers snap up the properties. For the first time I am having conversations with existing home owners who say they wish prices would crash so they could move up the ladder and their kids could go to school in the area they were born. I am also meeting buy to letters who are bitter about the high prices, because they cant extend their portfolios ( bo hoo!). I think the problems which are being faced now are far greater and splitting society much more in London than the housing boom of the eightees. In the eightees if you were on the ladder you could move up and feel that you were better off. Now you cant.

    Somebody in politics has to cotton on to the fact that it is not a good thing for foreigners to buy housing as an investment. The London market is totally underpinned by this. If money can be confiscated in Cyprus the surely we can introduce taxes that absolutely screw these foreigners and put the money back into the UK economy and non flaky investment such as road, schools and hospitals..

    Here are a few examples:
    a. 20% sales tax for people who are not resident here for more than 100 days a year
    b. Increase stamp duty for foreign buyers
    c. Super land tax for residential properties worth over a million, where exemptions are provided for British Nationals or people who have residence for over 100 days a year.

    If I sell my property abroad I have to pay a 20% tax, but there are exemptions if is sell to family etc.

    Surely its time for some politicians to wisen up that society is being screwed by what is happening and start developing some policies around this.

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  • …They are on the housing ladder, but realise they have no chance of moving up it from their starter flat or cramped two bed house.

    Oxymoron in action.

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  • Que Mr Wadsworth…

    There is certainly a change in sediment from 2007 era when everyone looked at building is bad and rising property prices are good. The under 40’s as you pointed out are swelling in numbers, not only that they have family who feel their pain and would like to see lower house prices.

    I must admit I am more positive about property to wage prices being somewhat lower over the next decade. Between now and then prices are at the whim of the bond markets.

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  • 3 houses near me repos boarded up for over a year not for sale

    just 6% of land built on

    1 million empty properties

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  • mark wadsworth says:

    Khards, I hope so.

    BB, excellent summary, but don’t make the whole tax thing so complicated. Let’s go back to Domestic Rates or LVT or whatever you want to call it. All this stamp duty and capital gains tax is just a right old faff.

    And of course resident Brits would get an exemption – it’s called personal allowance or homestead allowance or Citizen’s Income or whatever. The clever bit about this is empty homes and homes owned by foreigners wouldn’t get a personal allowance, so would pay more tax.

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  • taffee @8

    Simple hoarding designed to produce artificial scarcity. As with the construction industry, ‘use it or lose it’ needs to apply for future socio-economic benefit. I can’t see how the prevailing behaviour can be considered expedient anymore.

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  • …I should perhaps add the caveat that withholding repos from sale, in the short term, is beneficial for the banks (and UKAR) in achieving their current strategy for offloading.

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  • I hate Osborne and Cameron.

    They could spend cash build some useful social housing but instead want to throw tomahawk missiles and drones at Damascus. Hardly an investment when you consider the £billions we would be lumbered with patching up Syria afterwards (via Serco, Group4 etc).

    Brilliant voting result last night BTW
    🙂

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  • This is all rather depressing. In a sane world, prices would have gone down again by now.

    Hmm a lot of economic cycles have been suspended. Makes the possibility of a soft landing far less probable.

    World economies just entering a limbo. The only growth will be related to any debt that is made available.

    Free market will eventually reassert itself, when the burden of maintaining the status quo becomes too high.

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  • Affordability of property is much better than 2007.

    It is also roughly consistent with long term trends, IF one assumes interest rates (and interest rates as relative to saving rates) can remain as they are on a long term basis.

    That of course is a big assumption, but it’s the assumption made by people who decide to buy – insofar as they make assumptions at all. Who knows they might end up being right!

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  • @ bellwether

    You can have what it takes,and be lucky. You will be successful.

    You can not have what it takes, but be lucky. You may well still be successful.

    You can have what it takes, but not be lucky. You will fail.

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  • @ dill said…

    You make your own luck in this world!

    I do like reading this website and have been following since 2008. I purchased my house in 2009 despite still believing that property prices should really have a lot further to fall. The reason I bought is that I realised that when the system wants something (in this case higher property prices) they usually get it. It is very simple, if you can afford to purchase somewhere and you want stability then purchase a house. Dont hold off waiting for prices to be lower, because my guess is they wont (at least on the 3-5 year view). If you want flexibility or cant afford to buy then rent. When you buy you will be amazed how agnostic you are about house price movements. If prices go up, then you are glad you purchased. If they go down, then it makes the next house cheaper if you have ambitions to upscale at some point. Also, when UK property prices are viewed on a natural log scale (which any price index should be) over the long term, then it really doesn’t look like a bubble.

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  • i remember the 90`s says:

    Its time for posters on here just to put their hands up and say we got it wrong ,and can the last person please turn off the light and go buy a house .

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  • Affordability of property is much better than 2007.

    ONLY with interest rates kept artificially low, lowest in 300 years.

    It is also roughly consistent with long term trends, IF one assumes interest rates (and interest rates as relative to saving rates) can remain as they are on a long term basis.

    ONLY if debt growth continues to support the highest house prices EVER.

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  • @ i remember the 90’s

    You might well buy this market, but I couldn’t possibly comment.

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  • Its time for posters on here just to put their hands up and say we got it wrong ,and can the last person please turn off the light and go buy a house .

    You go ahead if you want to.

    If you do own a house – you probably have a massive mortgage – I pity you when interest rates FINALLY rise, as you are going to get absolutely destroyed, as are ALL those who bought at the top of the market.

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  • > Hmm a lot of economic cycles have been suspended. Makes the possibility of a soft landing far less probable.
    My thoughts too.

    > Free market will eventually reassert itself, when the burden of maintaining the status quo becomes too high.
    Looks more likely as interest rates are already zero.

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  • “Its time for posters on here just to put their hands up and say we got it wrong ,and can the last person please turn off the light and go buy a house”

    I would not buy a house until:
    a) Wadsworth buys one
    b) Interest rates have risen or 25 year fixed mortgages become available.

    Buying a house may not be a good investment anymore even if prices do not fall. If cost inflation persists above wage inflation you may find maintenance costs outpacing the benefit of owning. Stragely enough we were looking at a bungalow built 1979 which I would think had never had so much as a coat of paint. the roof needed replacing, there were large cracks, new windows were needed, centeral heating, insulation, flooring, complete redecoration, doors , bathroom, kitchen… Basically everything but the structure which comes to about 50% of the build cost of the house. I can to the conclusion that as a minimum you need to essentially replace a house and roof every 30 years. Now your average worker in Indina, Chian could not afford to and in 30 years the average UK worker might be at that relative level of earnings, not to add – how are people going to afford home maintenance in their 70’s if many of them are not putting away a pension.

    /rant off

    In reality the government have created a short squeeze position whilst neglecting the fact that 0% interest rates are overheating the major cities. 2 bedroom flats in London for 1/2 million are not sustainable.

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  • mark wadsworth says:

    Khards, brilliant plan, only I’m not going to buy a house until you buy one either (in the UK, snapping up a bargain on a Tiger Estate doesn’t count).

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  • @22 a bargain on a Tiger Estate would be a fine thing if there were a few coming to market. I am hoping the repos kick in soon so I can snap up something decent otherwise I will head back over and buy a smallholding (5/6 acres) and rent.

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  • As an asset class, I dislike housing intensely. Simply put, it’s been attracting the ‘dumb’ money for years. The smart money is into other things, commodities, oil etc.

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  • agreed

    people forget that property is illiquid and when things turn it gets really illiquid

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  • Taffee @27. Illiquid, unless you are a wealthy foreign investor. Then you can off load your stock at auctions and be out in a couple of weeks. I really do wonder when the bubble bursts whether we will see a mass exodus of foreign investors in London. At the moment they believe they can’t lose, but of the tide turns and other investments become attractive will they leave London. Once the Euro zone finally gets sorted out, many of the countries there will be ‘safe’ again and property in some of the countries is looking remarkably cheap.

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  • sibley's b'stard child says:

    How depressingly predictable. Even if HtB v2 is thrown out it will be the best part of 2014 before I see any reversal of this trend.

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  • Hear hear Alan @13

    Nationwide only gives a single figure. London and the SE is where the BTLers are falling over themselves buying the asset that never goes down and the rest look forlornly on. Meanwhile elsewhere prices are more or less static/slipping. Rising rates will surely put the kibosh on all this, but the Govt/Bank have really got the zero interest rate bit between their teeth. Despite all the waffle about 7% unemployment rates, I suspect the change will come from market behaviour, something like gilts falling steeply, a big drop in the pound, or something similarly dramatic. When/whether this might happen is anyone’s guess.

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  • @ britishblue

    Repatriation. We’re not there yet.

    @sbc.

    Please try and widen your horizons. You’ll suffer less.

    @ ltf

    Men of conscience are working everyday to deflate the Westminster bubble.

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  • How depressingly predictable. Even if HtB v2 is thrown out it will be the best part of 2014 before I see any reversal of this trend.

    The gains in the past 6 months could be wiped out in a week. After 2015 election UK government are planning MASSIVE cuts, right across the board. NHS could well beat housing in the finance stakes…but I see both being completely on the floor.

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  • @ Ma99me

    “dill said…

    You make your own luck in this world!”

    Actually, he didn’t. But feel free to take what you will from it.

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