Tuesday, August 16, 2016

House Price Crash Cancelled

House price inflation accelerates to 8.7% in June

The annual rate of UK house price inflation accelerated to 8.7pct to June, according to official figures. According to the new House Price Index, the rise brought the cost of an average home to £213,927. The new "experimental" index comprises figures collated by the Office for National Statistics from data supplied by Land Registry, Registers of Scotland, Land and Property Services, Northern Ireland and the Valuation Office Agency. The figures do not fully reflect any impact of the result of the vote to leave the EU, which was declared on 24 June.

Posted by little professor @ 10:43 AM (6946 views)
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13 thoughts on “House Price Crash Cancelled

  • Enfield at 17.5%, Waltham Forest, Croydon and Newham blistering away at over 20%. I suspect that areas on the West Anglia Overground, i.e. Edmonton and Tottenham are at or above 20%.

    Night tube will have a large effect on prices the next 12 months. Tottenham, Enfield, Barnet, Waltham Forest and parts of Newham and Redbridge will be most affected.

    Look out for plummeting numbers of houses per surveyor on the next RICS survey as migrants front running border controls mop up all slack, which could cause hyperinflation, particularly in London suburbs if an increasing number of people are chasing literally no homes.

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  • Everything starts in London and spreads outwards. The Western isles are probably a couple of years behind London. One of my businesses is a removal company that covers a large section the South of London. Prices have been dropping since the beginning of the year, way before Brexit and it is a trend that has come out from Central London. The buying and selling part of the market is the worst since 2008/ 2009 and it has now spread to outer London, touching the M25.. Of course there are many ways to present statistics and the statistics do not take into account properties that are not shifting where people are holding out and confused that there property Is not selling.. The best properties on a like for like floor/ bedroom space will sell, but others will stick unless the price is reduced. This leads to a delayed reaction in a price drop and the indices don’t take into account a £100,000 renovation, just the house type and size.
    On a personal note, I can only dream of the way business was for the previous 5 years. You can believe all the official statistics you like, but people on the coal face, if they are being honest, will tell you a completely different story.

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  • Libby… what’s your view on the changes to tier 2 migrant qualifications?

    Any numbers of the EU front runners ?

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  • “Look out for plummeting numbers of houses per surveyor on the next RICS survey as migrants front running border controls mop up all slack”

    Libby, where are all these very wealthy migrants coming from who can afford to ‘mop up’ all the houses on the market as soon as they arrive in the UK? Houses that are priced out of the reach of most UK residents.

    And, if they are already so wealthy that they can afford to buy a UK house in today’s market, why would they want to give up the lifestyle in their own country that has made them already wealthy – in order to start over again here?

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  • And while we’re at it, why would the night tube push up prices?

    The average first time buyer is well into their thirties. How often do you think such people go out in Central London beyond midnight?

    How much extra do you think even somebody who doesn’t already have kids but plans to have them soon would spend to be near a night tube stop?

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  • Cornishman, they can stack a family in a room paying rent to a BTL monster.

    Purchasing need not be direct.

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  • Reticent, have you been in SOHO recently? Not seen that it is packed every day of the week by people of ALL ages, until late.

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  • Oh, and Reticent, as with Cornishman, you forget that renters pay for rooms that are purchased by BTL scoundrels. OF COURSE, when young folk with high disposable income move to a place forming HMOs with sometimes 4 couples in a 3 bed home, you bet house prices can soar.

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  • Libby as the self appointed expert on the effects of immigration on the UK housing market I find it odd that you have remained silent on my question relative to tier 2 changes.

    I’m wondering why … hmmm.

    As for more immigration I’m wondering if some immigrants come to the UK to live in HMOS and have a generally poor existence so they can send money home. If so then wouldn’t a fall in the value of the pound mean they send home less ? Wouldn’t there be implications for that in the numbers ?

    You are right the only way BTL is now sustainable is the yield for HMOs if that goes awry then added to the other recent BTL barriers put in place might that not lead to little new btl purchases?

    In the words of johnny Nash. .. there are more questions than answers ;).

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  • Yes, I can see that HMOs may make BTL viable – for now – and that could mean that houses for sale are all ‘mopped up’ in the short term. But, as techieman says, the planned changes to the tax regime should make BTL less attractive as an investment.

    Going on past experience, however, I wouldn’t be surprised to see the new government undoing some – or all – of Osborne’s recent changes in the autumn statement. Party on.

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  • Cornish.. .maybe .. maybe not.

    As generation rent becomes a higher political priority, then perhaps more will be done to regulate slum LLs. Perhaps BTL restriction us the tory’s 1st step.

    Remember, rightly or wrongly (or whether true or false) the argument is to swing the balance in favour of owner occupation rather than rent, on the perception that owner occupiers are more inclined to vote tory.

    In addition last time I looked HB is based on private rents and is a massive resource drain. So I doubt if they will modify Georgie boys reforms. But you are right … who knows ?

    Now … what about those migrants ?

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  • Techieman, about half the immigration is illegal, so at this point Tier 2 changes matter not, and in anycase, it is still a free for all from Europe for at least 2.5yrs.

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  • Thanks Libby. I don’t know if you have looked at the July MAC report but it makes interesting reading.

    For the 333k net migration you get 630k coming in. That includes workers and people studying and joining families. For non EU the majority is here to study, about double those that are here to work. For EU those here to work has risen quite significantly to about 180k. Interesting it dipped in 2009 and has really increased at the same time as A2.

    Tier 2 restrictions are relevant because they are likely to be the Base for Brexit requirements. Probably transitional.

    In 2015 you have 7% of the working age population from the EEA and 9% non EEA . Of course when 2nd generations are born in the UK they don’t count as immigrants. EU gross immigration is 270k and non EU 277k.OK so those are the facts.

    As for illegals, since this topic (and yhe “tens of thousands” promise is a political time bomb for the tories , although probably worse still for Labour, they need to address it.

    Although we have heard nothing of the immigration post Brexit I doubt there isn’t some possibly frenetic work going on behind the scenes.

    I think if the pound weakens … especially again the Lei/ Rom and the Lev. .. That number is likely to flatten out or decline. That may already have happened.

    Of course that … like yours… is just opinion. We will have to see the numbers going forward. I’ve been to both Sofia and Bucharest. Admittedly I went to Sofia a few years back but the infrastructure was woeful… Bucharest is much nicer but the capitals aren’t the country.

    Again I’d like to see an actual study of correlation between house prices and or rents and the influx of foreign workers. It may be a cause but how much of a cause – that’s the question.

    Of course if you have any facts rather than gut feeling I’d like to hear them. You might argue that prices have been correlated to increases in migration .But we all know correlation is not necessary causation.

    Since the gross number of 630k is offset by emigration to reduce to 333k, on your theory then what’s to stop uk citizens front running Art 50 + too ?

    If you actually speak to some of the immigrants alot of them weren’t enamoured with the UK prior to Brexit. Again it’s a shame there is no study (I can find) but many eastern European migrants in particular don’t see the UK as the land of milk and honey once they get here. Take away their rights to tax credits and HB and they might very well feel that coming here on the Easyjet to work is marginal … accepting that incomes here are generally much higher.

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