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UK House prices: News & Views

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that may be your mission ,its certainly not mine .

I'll tell you how it works

We have an elite that control the rest of us

they have the politicians to make the laws,the armies and police

to subjugate the people and the MSM to BS us down whatever road

they wish us to walk .They dangle carrots to encourage us to work harder and longer

then they whip the carrots away once we are of no more use to them .

They create boom and busts ,they profit on the way up and they profit on the way down

The housing boom was a get into debt boom - education education education was an

enslavement project to keep the young off the dole and issue them with worthless degrees

while indebting them for years to come .

 

We used to have elderly hospitals that the people paid for through NI and Income tax

what do we have now ? private care homes that you are forced to pay for (again)

by having your home stolen from you to pay for that care .

The bottom line is the people create the wealth (private and public sector)

and the elite steal it back

Its the longest running Ponzi scheme in history

I am an American , and think the UK social net is too big, and benefits too easily handed out.

If the country is going to get back on track it needs a stronger middle class employed in the private sector.

I suppose you could say the same thing for the US

Of course, those who benefit - those on the red line - are not eager to give up their advantages:

 

awe-pvp-jan2012.png

 

But I reckon it is inevitable.

 

In the US, we have sensible people like Gary Johnson talking about cutbacks in all areas,

sharing the pain. I'd like to hear more of that in the UK, but the habit of "buying votes"

is deeply ingrained.

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I am an American , and think the UK social net is too big, and benefits too easily handed out.

If the country is going to get back on track it needs a stronger middle class employed in the private sector.

I suppose you could say the same thing for the US

Of course, those who benefit - those on the red line - are not eager to give up their advantages:

 

awe-pvp-jan2012.png

 

But I reckon it is inevitable.

 

In the US, we have sensible people like Gary Johnson talking about cutbacks in all areas,

sharing the pain. I'd like to hear more of that in the UK, but the habit of "buying votes"

is deeply ingrained.

 

Have you not been hearing about all the cuts in the UK?

 

Oh, of course people say "but there haven't been any cuts blah blah blah..."

 

Thing is, although they've been talked about for some time, they've only really just started, and over 80% of them are coming in the next year or two.

 

The public sector has shed ~500,000 jobs already BTW. (About 500,000 to go, to get us back to when Labour swelled the ranks).

 

That red line is seriously suspicious considering all the wage freezes.

 

In addition to the inclusion of RBS and Lloyds workers on the public payroll statistics, I'm guessing they also include the 500,000 redundancy payments that have had to be paid out as well.

 

It will be very interesting to see how that red line looks when those figures drop out in the next 6 to 12 months.

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Small business is getting hammered.

Big business is well-protected by the state

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Talking of parasites, theres a lovely thread on HPC started by FaFa (one of their best posters)....

 

Here's part of a posted quotation...

 

If there is a parasite class, its made up of people who "own capital" and "manage" and "earn" profits from the people who do real, hard, sweaty, nasty, monotonous work every day, and then after counting the profits they've reaped from the work of all those other people have the gall to complain about how hard they have it.

.

http://www.housepric...ost&p=909180032

 

The thread goes on with some great insights into some of the things we've been "discussing :rolleyes:" here recently on several threads.

 

 

PS the fonts all gone funny?

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There could be some sharp falls, now that the seasonal influence is waning

 

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 : 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 : 152,815 : +0.63% / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% :149.8% :

M : : 243,759 : 469,314 : 152,803 : - 0.01% / 166,022 = n/a = 160,941 161,785 : £163,904 : +0.77% :148.7% :

J. : : 246,235 : 477,440 : 153,332 : +0.35% / 165,738 = n/a = 162,417 163,240 : £164,489 : +0.36% :149.7% :

Jl : : 242,097 : 460,304 : 151,633 : - 1.11% / 164,389 = n/a = 161,094 162,619 : £163,504 : - 0.60% :148.1% :

A : : 236,260 : 454,875 : 150,173 : - 0.96% / 164,729 = n/a = 160,256 160,200 : £162,465 : - 0.64% : 145.4% :

S : : 234,858 : 456,237 : 149,719 : - 0.30% / 163,964 = n/a = 159,486 160,437 : £162,201 : - 0.16% : 144.8% :

O : : 243,168 : 478,071 : 151,123 : +0.94% / 164,153 = n/a = 158,426 159,818 : £161,986 : - 0.13% : 150.1% :

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

mom:+3.54% : +4.79 % : Est. DI : : 150.1% / +0.11% = n/a = :- 0.66% : +0.15% : - 0.13% :.

 

At 150%, The Delusion Index is sky-high !

Look for some falls in those Rightmove figures in the next few days

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Talking of parasites, theres a lovely thread on HPC started by FaFa (one of their best posters)....

Here's part of a posted quotation...

http://www.housepric...ost&p=909180032

The thread goes on with some great insights into some of the things we've been "discussing :rolleyes:" here recently on several threads.

PS the fonts all gone funny?

You're too intense (haha)

 

Invite him over (on my behalf?) - to explain his ideas

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You're too intense (haha)

 

Invite him over (on my behalf?) - to explain his ideas

 

:D I would, but I don't go "there" nowadays (not for many years :rolleyes: )

 

Perhaps someone who still does could though?

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:D I would, but I don't go "there" nowadays (not for many years :rolleyes: )

Perhaps someone who still does could though?

 

Okay.

Maybe they would welcome a return visit, or even just a short PM from someone

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There could be some sharp falls, now that the seasonal influence is waning

 

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 : 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 : 152,815 : +0.63% / 164,134 = n/a = 159,883 161,180 : £162,657 : - 0.44% :149.8% :

M : : 243,759 : 469,314 : 152,803 : - 0.01% / 166,022 = n/a = 160,941 161,785 : £163,904 : +0.77% :148.7% :

J. : : 246,235 : 477,440 : 153,332 : +0.35% / 165,738 = n/a = 162,417 163,240 : £164,489 : +0.36% :149.7% :

Jl : : 242,097 : 460,304 : 151,633 : - 1.11% / 164,389 = n/a = 161,094 162,619 : £163,504 : - 0.60% :148.1% :

A : : 236,260 : 454,875 : 150,173 : - 0.96% / 164,729 = n/a = 160,256 160,200 : £162,465 : - 0.64% : 145.4% :

S : : 234,858 : 456,237 : 149,719 : - 0.30% / 163,964 = n/a = 159,486 160,437 : £162,201 : - 0.16% : 144.8% :

O : : 243,168 : 478,071 : 151,123 : +0.94% / 164,153 = n/a = 158,426 159,818 : £161,986 : - 0.13% : 150.1% :

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

mom:+3.54% : +4.79 % : Est. DI : : 150.1% / +0.11% = n/a = :- 0.66% : +0.15% : - 0.13% :.

 

At 150%, The Delusion Index is sky-high !

Look for some falls in those Rightmove figures in the next few days

 

Hi DrB

 

Could I suggest that you might want to stop talking about the Delusion Index. This is because dividing Rightmove by the HaliWide actually has no meaning as the indices measure completely different animals.

 

The Rightmove is asking prices as we know but importantly is calculated by taking a simple arithmetic mean as properties come onto the market. This means the average price will be affected by price changes but also house mix changes and regional mix changes. In contrast the HaliWide doesn't measure any sort of mean or average. Instead it is simply calculating the price of a "Standard" house. Therefore I don't see how you can ratio the two. Note: Admittedly I originally made the same error.

 

If you'd like to read more on the topic then this could be a good starting place.

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Here you go.

 

Bank of England hands QE income to Treasury

 

The Bank of England has said it will give the Treasury the interest it earns on certain government debts it holds.

 

As of last March, the Bank held £24bn in cash received from government interest payments, a figure expected to rise to £35bn by next March.

 

http://www.bbc.co.uk...siness-20268679

 

:lol: As I've always said, never underestimate the lengths that the PTB will go to, in order to preserve "the system". <_<

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Hi DrB

 

Could I suggest that you might want to stop talking about the Delusion Index. This is because dividing Rightmove by the HaliWide actually has no meaning as the indices measure completely different animals.

 

The Rightmove is asking prices as we know but importantly is calculated by taking a simple arithmetic mean as properties come onto the market. This means the average price will be affected by price changes but also house mix changes and regional mix changes. In contrast the HaliWide doesn't measure any sort of mean or average. Instead it is simply calculating the price of a "Standard" house. Therefore I don't see how you can ratio the two. Note: Admittedly I originally made the same error.

 

If you'd like to read more on the topic then this could be a good starting place.

 

I get your point: by calling it a "Delusion Index", it suggests it has more meaning that it really does.

With the index now at 150%, it does not mean that Seller's are now offering properties at a 50% premium

to where the deals get done.

 

Instead, this is a sort of ratio between Green Apples and Red Apples (they are not exactly the same thing)

but they are similar things.

 

I think the Ratio IS MEANINGFUL, since it shows how the Rightmove figures are behaving in relation to Hali-Wide.

A fat premium tends to get whittled down over time, and there is a tendency for ratio to revert to Moving Averages.

 

ukdelusion.png

 

BTW, why do you think Rightmove's index is now at such a fat premium to other indicies?

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I get your point: by calling it a "Delusion Index", it suggests it has more meaning that it really does.

With the index now at 150%, it does not mean that Seller's are now offering properties at a 50% premium

to where the deals get done.

 

Instead, this is a sort of ratio between Green Apples and Red Apples (they are not exactly the same thing)

but they are similar things.

 

I think the Ratio IS MEANINGFUL, since it shows how the Rightmove figures are behaving in relation to Hali-Wide.

A fat premium tends to get whittled down over time, and there is a tendency for ratio to revert to Moving Averages.

 

(I plan to post a chart later)

 

BTW, why do you think Rightmove's index is now at such a fat premium to other indicies?

 

The problem with Rightmove is that it is meaningless data as far as understanding what is happening to house prices. I feel it's just a way for Rightmove to get free advertising.

 

For the Rightmove Index to increase all that would need to happen would be an increase in "Boomers" (they have the more expensive housing stock on average as they've had more time to accumulate and now have empty rooms as the kids have left home) trying (they don't have to sell just have to place on the market) to sell their properties compared to the overall population and you'll see index increases.

 

Similarly, more houses in the South East go on the market and the index goes up. Again, doesn't have to sell.

 

My point is it's not measuring what's happening to house prices it's just measuring the Average of all houses placed on the market in that month. If you read the article I linked to above (particularly the second chart) you'll see that if you do exactly the same thing with the Land Registry data and time shift to allow for the lag between the two indices you will see that your "Delusion Index" is actually closer to 1. Ie there is no fat premium. It's simply about how the indices are constructed.

 

It's all about lies, damned lies and statistics...

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BTW, why do you think Rightmove's index is now at such a fat premium to other indicies?

 

Rightmove tracks initial asking prices only (when a property is first put on the market). It uses a simple arithmetic mean and takes no account of subsequent reductions in prices. The other track either actual sold prices or mortgage agreements (so take account of any reduction in price needed to make a deal) and some (cannot remember which) use a geometric mean that take more account of the long right hand tail of house price distribution - so tend to be lower.

 

The difference between rightmove and halliwide/LR gives a reasonable indication of the reduction from initial asking needed to sell the property. However, because of the different statistical methods used by rightmove it probably isn't that actuate but is indicative.

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Rightmove tracks initial asking prices only (when a property is first put on the market). It uses a simple arithmetic mean and takes no account of subsequent reductions in prices. The other track either actual sold prices or mortgage agreements (so take account of any reduction in price needed to make a deal) and some (cannot remember which) use a geometric mean that take more account of the long right hand tail of house price distribution - so tend to be lower.

 

The difference between rightmove and halliwide/LR gives a reasonable indication of the reduction from initial asking needed to sell the property. However, because of the different statistical methods used by rightmove it probably isn't that actuate but is indicative.

 

It does chart well

 

ukdelusion.png

 

And it may be "top heavy" at 150% - highest reading yet.

If the "high asks" don't pull prices up, then the much "lower bids" may drag prices down

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Rightmove tracks initial asking prices only (when a property is first put on the market). It uses a simple arithmetic mean and takes no account of subsequent reductions in prices. The other track either actual sold prices or mortgage agreements (so take account of any reduction in price needed to make a deal) and some (cannot remember which) use a geometric mean that take more account of the long right hand tail of house price distribution - so tend to be lower.

 

The difference between rightmove and halliwide/LR gives a reasonable indication of the reduction from initial asking needed to sell the property. However, because of the different statistical methods used by rightmove it probably isn't that actuate but is indicative.

 

Hi Meralti

 

Please read my initial link as it gives a summary of all the indices. The Geometric Mean is the Land Registry which then bolts repeat sales regression on top.

The difference between Rightmove and Haliwide/LR does not give a reasonable indication. For example, add a big sale to the dataset and the Arithmetic Mean will move quite a bit where the Geometric Mean will hardly move. That destroys the link between Rightmove and Land Registry. Another example, the HaliWide measures a standard house which has nothing to do with Averages which destroys the link between HaliWide and Land Registry.

 

If you read the link you'll see I've calculated the Arithmetic Mean for sold properties (dat from land Registry). While not perfect that's far closer to the Rightmove calculation. Comparing Rightmove Average Asking prices with my calcuated Average Sold prices shows they are close to each other. (Look at the second chart).

 

There is not Delusion. People are paying what is being asked give or take a few %.

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Detlev on London Property, and BOE monetary policy

 

RussiaToday.png

 

Bizarrely, the central bankers seem to believe they are doing all of us a great favour. “Look,” they seem to say, “five years into the crisis and prices are not falling! Hooray, no deflation!” – Yes, and that is precisely the problem.

 

A personal example

We have lived in London for 16 years and for quite some time I felt that we could do with a larger apartment or house, given the size of our family. For years we have been potential buyers of real estate in London. During the tail end of the recent cheap-money-fuelled housing boom, we remained on the sidelines. After the bubble burst you might think that this was now a good opportunity to get into the market. But thanks to zero-interest rates from the Bank of England, various bank bailouts, quantitative easing, and other ‘stimulus’ measures, prices have not been falling in many parts of London, or not by much. Fact is, these policies have kept house prices in many parts of the country at artificially high levels in my view. In any case, these policies have certainly not ‘stimulated’ me into putting my own money to work. Lower prices might have done so – as might have any perception that the bubble had clearly dissolved, that the market had been allowed to liquidate what was unsustainable, and that present prices were now ‘real’ uninhibited market prices. Of course, none of this is the case due to highly interventionist policies. In the meantime, all the advocates of aggressive monetary stimulus are high-fiving themselves for having (so far at least) avoided deflation, having protected the housing market (which means protecting those who borrowed recklessly in the boom), and saved the banks.

. . .

... I am supposed to go home to my wife and say, “The crisis is evidently over. Home prices are going up! Come think of it, those London home prices will never fall. They can only ever go up! Let’s take our savings, take out a mortgage and buy now before the Bank of England makes them even more expensive!”

====

/more: http://detlevschlich...ut-real-prices/

 

Save the banks, spoil the economy

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Hi Meralti

 

Please read my initial link as it gives a summary of all the indices. The Geometric Mean is the Land Registry which then bolts repeat sales regression on top.

The difference between Rightmove and Haliwide/LR does not give a reasonable indication. For example, add a big sale to the dataset and the Arithmetic Mean will move quite a bit where the Geometric Mean will hardly move. That destroys the link between Rightmove and Land Registry. Another example, the HaliWide measures a standard house which has nothing to do with Averages which destroys the link between HaliWide and Land Registry.

 

If you read the link you'll see I've calculated the Arithmetic Mean for sold properties (dat from land Registry). While not perfect that's far closer to the Rightmove calculation. Comparing Rightmove Average Asking prices with my calcuated Average Sold prices shows they are close to each other. (Look at the second chart).

 

There is not Delusion. People are paying what is being asked give or take a few %.

 

But I see asking prices falling. Rightmove takes no account of that.

 

For example, add a big sale to the dataset and the Arithmetic Mean will move quite a bit where the Geometric Mean will hardly move.

 

Thats why it's a poor index. It's also why it is higher. A relatively few very highly priced properties skews the index upwards, which doesn't reflect the behaviour of the majority. The geometric mean was invented to get round this problem.

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Well, let's consider what might drive the Rightmove index down faster than HaliWide:

 

+ A collapse in demand for high end properties, and a panic by sellers, so they reduce asking prices

 

+ More low end properties coming on the market

 

Both are possible, even likely, if sentiment changes

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Hi Meralti

 

Please read my initial link as it gives a summary of all the indices. The Geometric Mean is the Land Registry which then bolts repeat sales regression on top.

The difference between Rightmove and Haliwide/LR does not give a reasonable indication. For example, add a big sale to the dataset and the Arithmetic Mean will move quite a bit where the Geometric Mean will hardly move. That destroys the link between Rightmove and Land Registry. Another example, the HaliWide measures a standard house which has nothing to do with Averages which destroys the link between HaliWide and Land Registry.

 

If you read the link you'll see I've calculated the Arithmetic Mean for sold properties (dat from land Registry). While not perfect that's far closer to the Rightmove calculation. Comparing Rightmove Average Asking prices with my calcuated Average Sold prices shows they are close to each other. (Look at the second chart).

 

There is not Delusion. People are paying what is being asked give or take a few %.

 

Nice post GK (very nice).

 

I haven't checked the data myself, but from your post it looks like a great example of the AM-GM inequality. (i.e. AM always bigger than, or equal to, the GM).

 

lies, damn lies and statistics...

 

Aint that the truth :lol: .

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