UK House prices: News & Views

[BoldAsBrass]

The bubble was not as inflated back in 03-04, so the market and indeed the economy was not as geared and dependent on low rates as it become only a few years later.

 

Depends where you live. Where I lived at the time - in Berkshire - the housing market was well and truly inflated at the time. In fact I sold to rent in the end of 2003 because, to me, it seemed exactly like 1988 all over again. The market had been inflated by the post 9/11 low interest rates of 3.5%

 

Throughout 2004/2005 my local market slowed right down and prices started to slide. This, clearly, rattled the powers that be and, in August 2005 rates were cut by 0.25%. This, it seemed, was enough to convince people that the increases througout 2004/5 were at an end and, in January 2006, it was as if someone had taken the cork off a bottle of lemonade. The market went mad. Houses that had been on the market for 18 months sold overnight. The whole backlog of stock was moved within 3 months and prices went back up again.

 

The fact is - house prices in Berkshire and Surrey (where I now live) and most of the Home Counties and much of the rest of the South and the West Country are about the same now as they were in 2003.

 

While we were experiencing a slow down and falling prices in the bottom half of the country, in Wales and the top half of the country, the bubble continued to inflate as investors moved away from the over priced market in the South to find higher yields further North.

[BoldAsBrass]

MEMORIES ARE SHORT !

 

I read this in today's SCMP :

 

Rush for tax break boosts UK home index

 

A house-price index in Britain rose to a 21-month high last month as first-time buyers took advantage of an expiring two-year stamp-duty examption, the Royal Institution of Chartered Surveyors said. The guage rose three points from February to minus 10, the highest reading since June 2010... The tac break was available on first homes costing less than GBP 250,000.

 

(Indeed. That neatly explains last month's jump in the Halifax Index):

 

Mo.: Rt'mov : London : Rest of UK %chg/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

2012

J. : : 224,060 : 438,324 : 12X,xxx - X.xx% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% :

F. : : 233,252 : 449,252 : 12X,xxx - X.xx% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% :

M : : 236,939 : 455,159 : 12X,xxx - X.xx% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% :

A : : 2XX,xxx

======================================

mom:+1.58% : +1.31 % : -Est.DI : 145.0% / +0.38% = n/a = :+2.30% :+2.85% :+1.60%

 

 

I wonder how many here can recall what happened back in 1989, when there was an important change in the tax law. I think it was June 1989 when it was the last month that two unrelated persons could buy a property together, and still get a tax break on the interest paid on a mortgage.

 

Prices rose straight up, into a little surge, and then topped right with the tax change.

 

The more things change...

 

It was July 31st 1988 that the joint tax relief rules changed. The marked stopped on a sixpence as a result of Lawson flagging it up months ahead causing a stampede of youngsters trying to buy.

[BoldAsBrass]

Do I ever stop

 

yeah right. Prices had way more than doubled in the 7 years till 2003.

 

Where were you back in 2003 when The Economist and others (including a few names here and on HPC) were all warning about overpriced houses and bubbles??

 

http://www.economist.com/node/1812326

 

Then the EU and USA then dropped their rates through the floor, and even UK rates were are at essentially historic lows.

 

As for single issues, FFS, you are the one stating that the rise in rates (a single factor) precipitated the drop in prices. And I quote...

 

 

 

Wrong, wrong wrong!

 

By your reckoning, the drop in rates that occurred 2007-2008 should have produced a boom .

 

Guess what, it didn't because, as everyone else in the world knows, it was A full blown (and very rare) Credit Crunch!

 

Occam's razor.

 

In simple terms, it was the end of easy loans (including the 125% LTV etc) given to anyone with a pulse.

 

THAT is what that caused the crash, not a paltry 1 or 2% rate change.

 

Talk about "misunderstand or oversimplify"

 

If ever in history there was a single reason for a crash, the sudden massive restriction in the supply of credit, coming straight after the most easy credit in history was it!

 

Jees, FFS, this is basic, basic economics 101.

 

Check your facts before slinging mud Van, and then, perhaps, sling it where it belongs

 

When you say 'that is what caused the crash' - which crash are you referring to? Apart from some city centre over-developed new build flats in Northern cities that have gone down a lot, where else has there been a crash?

[Van]

Depends where you live. Where I lived at the time - in Berkshire - the housing market was well and truly inflated at the time. In fact I sold to rent in the end of 2003 because, to me, it seemed exactly like 1988 all over again. The market had been inflated by the post 9/11 low interest rates of 3.5%

 

Throughout 2004/2005 my local market slowed right down and prices started to slide. This, clearly, rattled the powers that be and, in August 2005 rates were cut by 0.25%. This, it seemed, was enough to convince people that the increases througout 2004/5 were at an end and, in January 2006, it was as if someone had taken the cork off a bottle of lemonade. The market went mad. Houses that had been on the market for 18 months sold overnight. The whole backlog of stock was moved within 3 months and prices went back up again.

 

The fact is - house prices in Berkshire and Surrey (where I now live) and most of the Home Counties and much of the rest of the South and the West Country are about the same now as they were in 2003.

 

While we were experiencing a slow down and falling prices in the bottom half of the country, in Wales and the top half of the country, the bubble continued to inflate as investors moved away from the over priced market in the South to find higher yields further North.

 

Er, well yes.. unless I misunderstand, all you're saying is that the market in Berks was already inflated in 2003-05 and then went even higher up to '07.

 

 

What we see now is a market where the dross and the less salubrious areas have fallen considerably, but where the large houses and "desireable" areas have held up pretty well. That's a sign that there is still plenty of air left in the bubble. Current policy is just about a best-case scenario for most homeowners as ZIRP has kept their biggest cost of living down.

[drbubb]

It was July 31st 1988 that the joint tax relief rules changed. The marked stopped on a sixpence as a result of Lawson flagging it up months ahead causing a stampede of youngsters trying to buy.

You must be right.

And clearly, it is MY OWN memory which is short.

[John Doe]

When you say 'that is what caused the crash' - which crash are you referring to? Apart from some city centre over-developed new build flats in Northern cities that have gone down a lot, where else has there been a crash?

 

The 2007 to 2009 crash, even witnessed in London and Berks so I believe BaB.

 

A few nice places in really sought after areas have risen a bit since then, indeed some back to peak levels.

 

However, it's clear from all the surveys that the rest of the country (including the north, the midlands, the south west, wales, scotland, N. Ireland, etc etc, you know, everywhere except the south east hasn't.

 

It seems from your comments that your little pocket of the world appears to be one of the areas that has returned to peak.

 

PS in real terms even these are down >10% on the fiddled CPI, and even more so if real inflation figures are used

[halight]

The North-South mortgage divide: Negative equity map of UK shows clear disparity

Rise of 2% between 2010 and end of 2011 in number of homeowners with negative equity mortgages

12% of homeowners in the North have negative equity, 6% higher than national average

 

 

Read more: http://www.dailymail.co.uk/news/article-2128825/The-North-South-mortgage-divide-Negative-equity-map-UK-shows-clear-schism.html#ixzz1rqinkKe4

[drbubb]

The North-South mortgage divide: Negative equity map of UK shows clear disparity

Rise of 2% between 2010 and end of 2011 in number of homeowners with negative equity mortgages

12% of homeowners in the North have negative equity, 6% higher than national average

 

Read more: http://www.dailymail.co.uk/news/article-2128825/The-North-South-mortgage-divide-Negative-equity-map-UK-shows-clear-schism.html#ixzz1rqinkKe4

Something like North/South, is the London versus Rest-of-UK Divide:

Close-up :

---------------- H&N Index (average of Halifax & Nationwide) ..........

.

 

/ Rightmove's Greater London Offer prices

 

The Rest of the UK (H&N Index, with Gr.London prices extracted)*

*(I assume that Greater London has 12% of UK's homes- see post #108)

 

A break of GBP 145,000* for Rest-of-UK may signal something really nasty is ahead

 

=== ===

 

*I will be redoing this chart, and my data method, since I do not like how this charts

[borassic]

Better get my skates on - I am executor for an estate with a property to sell in Marlow . 3 bed dormer style, 2 bath, garage, off street parking, south facing.

 

Very wide valuations so far indicative of a thin market with very few transactions.

 

EA fees from 1% to 1.5%.

[drbubb]

Better get my skates on - I am executor for an estate with a property to sell in Marlow . 3 bed dormer style, 2 bath, garage, off street parking, south facing.

Very wide valuations so far indicative of a thin market with very few transactions.

EA fees from 1% to 1.5%.

Confidence in London may hold up into the Olympics.

I wonder if prices will start crumbling before that elsewhere, now that the FTBers Stamp tax holiday is over

[stunlee]

Rightmove asking prices make a new record high. Deluded or not, when there are almost no repossessions, it is the sellers who set the price in a deliberately limited supply market.

 

http://www.forexlive.com/blog/2012/04/12/uk-data-rightmove-apr-house-asking-prices-2-9/

 

"House asking prices rose 2.9% on the month in April, 0.5% above the previous record of stg242,410 posted back in May 2008,"

 

Here is the real killer though.

 

http://www.herald.ie/news/imf-backs-scheme-to-let-homeowners-write-off-their-debt-3077647.html

 

"THE IMF's proposal for Great Depression-style debt relief for struggling homeowners has received support."

 

What an idiot I was for only spending what I could afford.

[drbubb]

Here is the real killer though.

http://www.herald.ie/news/imf-backs-scheme-to-let-homeowners-write-off-their-debt-3077647.html

"THE IMF's proposal for Great Depression-style debt relief for struggling homeowners has received support."

What an idiot I was for only spending what I could afford.

I know how you feel.

But do you think that the UK government itself can afford to bail out all those who cannot afford what they bought?

 

That JUMP in Rightmove-April may be a knock-on effect to the jump in Halifax.

Will the buyers monetize their fantasies? I really doubt it.

 

But you need a "high print" to form a top.

 

F. : : 233,252 : 449,252 : 149,658 +1.83% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% :

M : : 236,939 : 455,159 : 151,853 +1.47% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% :

A : : 243,800?

======================================

mom:+2.9?% : +1.31 % : -Est.DI : 145.0% / +0.38% = n/a = :+2.30% :+2.85% :+1.60%

[John Doe]

Just in case anyone missed this...

 

UK on brink of lasting recovery, OECD finds

 

http://www.telegraph.co.uk/finance/financialcrisis/9195387/UK-on-brink-of-lasting-recovery-OECD-finds.html

 

Told you there had been a marked increase in sentiment this year (from the total doom everyone felt last Autumn/Winter).

 

However, to be honest, with the SHTF again in EU land, I'm not sure if it will last.

[John Doe]

Rightmove FFS.

 

UK Home Asking Prices Now At All-Time High

 

Still using them for your "crash cruise speed" marker Dr B?

 

Rightmove are the most way out of all the indexes. However, at least they acknowledge some of their failings.

 

"The richest seams of housing market activity are concentrated around those with access to cash and finance, with a strong bias to the South and London in particular."

 

The survey warns that the counter-effect of inflation has eroded real term values.

 

It said: "If prices had kept pace with inflation (as measured by the retail prices index) since May 2008 then they would now stand at £270,459, so they have fallen by 9.9% in real terms.

 

Also they note

 

The number of properties for sale increased by 8.1% outside of London but overall supply is still down 30% compared with April 2007.

 

With demand (i.e. those that can get a mortgage) down about 40%, or even 50% judging by actual transaction numbers, this figure would suggests flat or very slowly falling prices (as there was way more demand than supply up until late 2007).

[stunlee]

I know how you feel.

But do you think that the UK government itself can afford to bail out all those who cannot afford what they bought?

 

Whether they can afford to or not, they will continue. The UK government is run by utter fools.

[drbubb]

Rightmove FFS.

Still using them for your "crash cruise speed" marker Dr B?

Nope.

Rightmove is an "Asking Price" index and it bounces around too much.

 

I have always used Haliwide, Non-seasonally adjusted, and that has been rangebound for many months.

 

I think if it breaks to the downside, it may signal an important move down.

But I doubt that will happen until AFTER the Olympics

=== ===

 

Mo.: Rt'mov : London : Rest of UK %chg/ Nt'wide H-oldSA Halif.SA Hal.NSA: HNindex : mom : DelusIdx

2011

M : : 231,790 : 424,307 : 153,331 +0.95% / 164,751 = n/a = 162,712 162,151 : £163,451 :+ 1.25% :141.8% :

A : : 235,822 : 431,013 : 155,218 +1.23% / 165,609 = n/a = 160,393 162,303 : £163,956 :+ 0.31% :143.8% :

2012

J. : : 224,060 : 438,324 : 146,967 - 0.28% / 162,228 = n/a = 160,907 158,879 : £160,554 : - 0.16% :139.6% :

F. : : 233,252 : 449,252 : 149,658 +1.83% / 162,712 = n/a = 160,118 158,897 : £160,805 :+ 0.16% :145.1% :

M : : 236,939 : 455,159 : 151,853 +1.47% / 163,327 = n/a = 163,803 163,419 : £163,373 :+ 1.60% :145.0% :

A : : 243,737 : 464,944 : = n/a = : = n/a = /

======================================

mom:+2.87% : +2.15 % : -Est.DI : 149.5% / +0.38% = n/a = :+2.30% :+2.85% :+1.60%

===

I regard Rightmove's data as reflecting extreme Delusion on the part of sellers ("electric H@rshite maybe"). As of end-April, the UK-wide RMV figures are pitched 3.36% above 2011, and London asking prices were 7.87% above 2011. Meanwhile, HaliWide at end of March 2012 was BELOW end March and ena April 2011. Good luck to those very aggressive sellers in finding someone foolish enough to pay their very delusional asking prices. They must be smoking something with strong psychotropic effects - especially in London.

 

If the aggressive buying does not emerge, there may be a long hard fall in the seller's expectations.

[John Doe]

I regard Rightmove's data as reflecting extreme Delusion on the part of sellers ("electric H@rshite maybe"). As of end-April, the UK-wide RMV figures are pitched 3.36% above 2011, and London asking prices were 7.87% above 2011. Meanwhile, HaliWide at end of March 2012 was BELOW end March and ena April 2011. Good luck to those very aggressive sellers in finding someone foolish enough to pay their very delusional asking prices. They must be smoking something with strong psychotropic effects - especially in London.

 

 

Ain’t that the truth

 

For those not aware, here is a rough guide to the indexes and how they collate them.

 

http://www.bbc.co.uk/news/business-12076365

 

(Out of all of them, I still think Home.co.uk actually give one of the most accurate and realistic reports)

[BoldAsBrass]

The 2007 to 2009 crash, even witnessed in London and Berks so I believe BaB.

 

A few nice places in really sought after areas have risen a bit since then, indeed some back to peak levels.

 

However, it's clear from all the surveys that the rest of the country (including the north, the midlands, the south west, wales, scotland, N. Ireland, etc etc, you know, everywhere except the south east hasn't.

 

It seems from your comments that your little pocket of the world appears to be one of the areas that has returned to peak.

 

PS in real terms even these are down >10% on the fiddled CPI, and even more so if real inflation figures are used

 

I would say that Norfolk, Suffolk, Essex, Cambridgeshire, Herts, Kent, London, Buckinghamshire, Sussex, Surrey, Berkshire, Hampshire, Wiltshire, Dorset, Devon, Cornwall, Gloucestershire, some of Worcestershire, Avon have seen no crash in prices.

 

A crash in transaction numbers - yes. But prices have held up even in the grotty areas within those areas.

 

And what percentage of the UK population live in those areas combined? 60%? More? And you can throw in other areas too - parts of Yorkshire, Cheshire, the Lakes, Northumberland.

 

Here is a link to a town in Northumberland It's pretty much a straight line over the last 7 years or so.

 

I posted links in a post a while ago to a number of home.co.uk's price graphs showing prices since 2000 at various locations around the country - by no means just the South East. They all tell the same story. On the whole, prices are either roughly the same as they have been over the last 5 to 8 years, or a bit higher.

 

I believe the only thing that has crashed is the number of transactions.

[John Doe]

I would say that Norfolk, Suffolk, Essex, Cambridgeshire, Herts, Kent, London, Buckinghamshire, Sussex, Surrey, Berkshire, Hampshire, Wiltshire, Dorset, Devon, Cornwall, Gloucestershire, some of Worcestershire, Avon have seen no crash in prices.

 

A crash in transaction numbers - yes. But prices have held up even in the grotty areas within those areas.

 

And what percentage of the UK population live in those areas combined? 60%? More? And you can throw in other areas too - parts of Yorkshire, Cheshire, the Lakes, Northumberland.

 

Here is a link to a town in Northumberland It's pretty much a straight line over the last 7 years or so.

 

I posted links in a post a while ago to a number of home.co.uk's price graphs showing prices since 2000 at various locations around the country - by no means just the South East. They all tell the same story. On the whole, prices are either roughly the same as they have been over the last 5 to 8 years, or a bit higher.

 

I believe the only thing that has crashed is the number of transactions.

 

I take your point, but even these areas had a big fall 2007-2009 that could have been classed a crash (albeit with some recovery since).

 

Take into account real prices too and they're still down 10% from peak at least, although, with the crazy prices you guys pay for rent down there, that's probably not that comforting.

[TrueNorth]

snip

 

I believe the only thing that has crashed is the number of transactions.

 

Interesting, reading this what came to mind was Jonathan Davis saying, paraphrased, "Whence goes volume, so goes price".

 

I cannot understand how prices have held up. I can only conclude that the only transactions taking place are between motivated buyers and slightly delusional sellers.

 

We are moving house and have offered to rent a new-build that simply has not, and likely will not, sell at its current price. Why they haven't lowered the asking price is beyond me.

[drbubb]

They are delusional.

 

Believing that prices will (ney, must) move higher because other sellers are asking more

[Van]

Because there are very few "motivated sellers" thanks to ZIRP. This has led to a pattern of sellers kite-flying in the hope they can bag top dollar, and if they can't sell then they just withdraw from the market and try again 6 months later.

 

Also from what I am seeing rents are still grinding upwards in most London areas - probably 3-5% higher than 12 months ago.

[Chartered Surveyor]

When I get time I will do a little report for GEI readers as to what is happening in the market. Are valuations meeting puchase prices, and are houses actually selling. For now the market is very thin and not in good shape.

[Mabon]

When I get time I will do a little report for GEI readers as to what is happening in the market. Are valuations meeting puchase prices, and are houses actually selling. For now the market is very thin and not in good shape.

 

I for one - and probably a lot of other folk here - would definitely like to see your take on the housing market.

[TrueNorth]

hear hear!