UK House prices: News & Views

[ziknik]

Some thought it was flawed by being "too optimistic".

...

Yes I agree. A negative RM index shows more than a positive one.

 

Just as an exercise, I compared RM's index (blue) with: 50%-Nationwide, 25%-Halifax & 25%-RM-Greater London

 

 

The composite was a rather good fix suggesting that RM simply has a heavier weighting towards London

 

Here's another comparison, which includes the H&N-Index (here, x 132% to make it comparable with Rightmove)

Are the Haliwide indexes time shifted on them charts?

[ziknik]

...

I guess you'd get a similar reaction if you told someone you think house prices could fall by 80% in the next couple of years. Maybe house prices wont fall by so much. But they could.

Yes, you would certainly get a dis-believing-type-reaction from me if you claimed houses would fall 80% in the next couple of years. BUT, I don't completely rule it out. It's not impossible I suppose. However, I think it is less likely than a 30% fall over the next 2/3 years

[ecoface]

Yes, you would certainly get a dis-believing-type-reaction from me if you claimed houses would fall 80% in the next couple of years. BUT, I don't completely rule it out. It's not impossible I suppose. However, I think it is less likely than a 30% fall over the next 2/3 years

 

I think sooner or later people will be thinking in terms of real (not nominal) falls.

 

In real terms with cpi at 5% and rpi at 3%, a nominal 0% is x?

 

(in the UK of course).

[ziknik]

I think sooner or later people will be thinking in terms of real (not nominal) falls.

I don't agree. Most people didn't work it out in the 70's. Why is it different this time?

 

In real terms with cpi at 5% and rpi at 3%, a nominal 0% is x?

...

'Real' can be calculated in many ways. C/RPI or gold or M4 or other money/credit supply measure.

 

I'll need the gold prices to work out the real value of 'x'

[drbubb]

Are the Haliwide indexes time shifted on them charts?

No, same time frame

When they are all moving in the same direction there is "harmony in the markets", and they move quickly

[Meralti]

Lloyds Banking Group, which provided 60 per cent of all buy-to-let mortgages last year, has annouces that it is to cut maximum lending to landlords to a fifth of what the bank was willing to advance in 2009

 

As report in the Telegraph

 

This is an interesting development, just as things really begin to turn downwards. Lloyds looks like being the first (and largest in this sector) lender to pull the plug on BTL.

 

No more selling through brokers as too much fraud.

No more than 3 properties in a portfolio, higher than this is too risky.

Will other lenders will follow there lead?

 

Lloyds BTL changes

[John Doe]

Halifax reports "suprise" rise in house prices.

 

Up 0.2%

[confounded]

Halifax reports "suprise" rise in house prices.

 

Up 0.2%

 

This is August's figure released a few weeks ago.

 

[ecoface]

 

Phase 2 of the HPC in US is gathering momentum. This is shocking TBH:

 

Re Sets on Mortgages

 

Concluded with:

 

Adding all of these together, we come up with a total of roughly 6.97 million residences that are almost certainly going to be thrown onto the resale market as distressed properties at some point in the not-too-distant future. This massive number of homes will put enormous downward pressure on sale prices. To believe that prices are firming now is to completely ignore this shadow inventory. Ignore it at your own risk.

[romans holiday]

Phase 2 of the HPC in US is gathering momentum. This is shocking TBH:

 

Re Sets on Mortgages

 

Concluded with:

 

Adding all of these together, we come up with a total of roughly 6.97 million residences that are almost certainly going to be thrown onto the resale market as distressed properties at some point in the not-too-distant future. This massive number of homes will put enormous downward pressure on sale prices. To believe that prices are firming now is to completely ignore this shadow inventory. Ignore it at your own risk.

The economists spun a web, and caught everyone in it. All were seduced by debt... and consumed the future.

[ecoface]

The economists spun a web, and caught everyone in it. All were seduced by debt... and consumed the future.

 

Good poetry - do you mind if I use that line?

[romans holiday]

Good poetry - do you mind if I use that line?

Not at all.

 

It was paraphrasing Nietzsche: "Kant spun a web and caught everyone in it".

 

Along these lines, I think the root of the problem is what was assumed to be "knowledge"... in the human "science" of economics.

[drbubb]

Watch Barratt - BDEV-chart

 

At the moment, it is having trouble holding its head up.

If/when it goes into freefall (w/ big voluem), then the next wave of sentiment-busting falls should be clearly underway

[drbubb]

So on the basis that Barratt ( if I read your theory correctly) has not fallen hard and fast you would as we sit here today say that a correction is not likely anytime soon ?... if not what exactly would you be able to glean from Barratts now.. anything ?

(Please do not put words in my mouth.)

 

Barratt's fall over the last several months, anticipated the falls that we have already seen in Rightmove.

 

If Rightmove-London is going to bounce from here, we will probably see it in BDEV first. And if it is going to dive - likewise BDEV may tell us.

 

Presently, BDEV is in a holding pattern, but I do not expect it to stay there for much longer.

[John Doe]

This is August's figure released a few weeks ago.

You're right, wonder why it was on Yahoo Finance earlier today?

Strange.

[drbubb]

That OLD INFLATION nonsense, once again...

 

From Timm's thread: A Question for Bears

 

China is suffering high inflation at the moment. India too. If they carried on inflating at 8% when we (theoretically) are inflating at 2%, they'll start catching us up - in terms of wages and house prices - pretty quickly. Just for a laugh I looked at house prices in India the other day - when someone suggested UK IT people should go and work in India. Wow, big shock. High house prices in the cities - comparable with Western prices.

Wages are rising in China, and the Rmb will probably strengthen too.

 

That means higher prices for imports from China. And that will probably put upwards pressure on CPI.

 

But how does rising CPI help home prices? If UK incomes are "flat to down", and CPI rises because imports from China and India cost more, this will squeeze UK wage earners, and may even force them to cut the amount they spend on housing. (Think: stagflation.)

 

There is a rather strange idea that you still hear coming up of the mouths of rather stupid EA's:

"Bet on inflation, it will inflate away your housing debts."

 

It did work in the 1970's, when wages were rising fast, and so the income in people's hands was going up faster than their debts, and this rise in incomes underpinned house price inflation.

 

It should be clear that we are in a different sort of world now. Incomes are barely rising, as inflation is being seen in some areas, but not in house prices (since the spring peak.)

 

I expect infllation to be bad for homeowners in two ways:

 

+ It will tend to force interest rates back up, from recent hostorically low levels

+ If inflation is of the 'cost-push" variety, and incomes do not rise to keep pace, there will be less income for housing related expenditures

 

The squeeze is on.

 

Beware the stupidity contained in the statements escaping from lips of Estate agents !

[ziknik]

I love the way RightMove is seen as a flawed survey on the way UP and gospel on the way DOWN.

Rightmove UP 3% today, London UP 5%.

 

 

[chazza]

Rightmove UP 3% today, London UP 5%.

 

What a load of rubbish, can't trust Rightmove

 

 

 

 

 

 

[drbubb]

Rightmove UP 3% today, London UP 5%.

It's not meaningful !

Analysis: from my Property Diary : http://tinyurl.com/Gpc-Diary

 

A 5% Shocker, or just a normal seasonal "cheeky trying it out"?

 

For some odd reason, Rightmove doesn't refer to prior year JUMPS in October asking prices, which have always been huge:

Comparison:

Mon.: Rt'move : London : Hometrack / Na'wide H.old.SA Hali.SA Hali.nsa: H&Nindex : mom :DelusIdx

2009

S : : 223,996 : 390,768 : 156,118 +0.2% / 161,816 163,533 163,487 164,854 : £163,335 :+1.40% :137.1%

O : : 230,184 : 416,157 : 156,430 +0.2% / 162,038 165,528 165,349 165,430 : £163,734 :+2.44% :140.6% : RM '09 Hi

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

chg: + 6,188 : + 25,389 (+6.50%)

2010

S. : : 229,767 : 399,019 : 157,600* -0.4% / 166,757 = n/a = 162,096 163,639 : £165,198 :- 1.49% :139.1%

O : : 236,849 : 418,778 : est.DI: 143.4%

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

chg: + 7,089 : + 19,759 (+4.95%)

mom:+3.08% :+4.95%

 

This year's 4.95% jump in Great London asking prices seems a shocker, until you see that last year's rise was 6.5%.

 

And if you review last year's jump on: http://tinyurl.com/UKtrap , you will see that most of those higher offering prices did not hold. Within two months, Pds.17,731 of the Oct.2009 rise melted away.

 

Rightmove's own press release prepared sellers for disappointment:

 

Market fundamentals remain poor as property per branch rises from 69 in October last year to 78 now and mortgage availability continues to deteriorate

However, 105,769 new October sellers asked £7,082 more for their homes than last month’s sellers

Why would new sellers test the market at asking prices 3.1% higher than a month ago?...

- Bullish pricing is a normal characteristic of the autumn selling season with average asking prices increasing in every October for the past decade

- Vendors struggle to react to the increasing stock as most are unwilling or unable to adjust to new market conditions

- Post-HIP speculative sellers can now test the market at minimal cost

 

Disappointment is the likely outcome for many sellers as evidence shows high launch price damages chances of securing a later sale

/see: http://www.rightmove.co.uk/news/house-pric...ex/october-2010

[ziknik]

It's not meaningful !

Analysis: from my Property Diary : http://tinyurl.com/Gpc-Diary

Yes, I agree. I say the Right Move survey is not meaningful every time I comment on it.

 

I do accept it as a useful indicator of sentiment (more so on the way down), but nothing more than that.

 

I’m aware that September/October is a usually an UP month, but we are also seeing YoY gains from 2009 to 2010. This YoY has grown in October when compare to September.

 

As you know, YoY takes out all the normal seasonality so it’s not enough to use seasonals as an excuse to knock down the indicated sentiment.

 

From your table:

 

Sep 2009 £223,996

Sep 2010 £ 229,767

=2.6% YoY

 

Oct 2009 £ 230,184

Oct 2010 £236,849

=2.9% YoY

 

 

 

[drbubb]

From your table:

Sep 2009 £223,996 - 137.1%

Sep 2010 £ 229,767 - 140.6%

=2.6% YoY

 

Oct 2009 £ 230,184 - 139.1%

Oct 2010 £236,849 - 143.4%est

=2.9% YoY

Fair point. But this may be measuring "delusional" pricing ideas of vendors, who haven't woken up yet..

I have added the delusion index above.

 

And here's Greater London:

Sep 2009 £390,768 / 164,854 - 237.0%

Sep 2010 £399,019 / 165,430 - 241.2%

=2.1% YoY

 

Oct 2009 £416,157 / 163,639 - 254.3%

Oct 2010 £418,778 / 163,639e- 255.9%est

=0.6% YoY

 

Greater London looks set to turn Negative YoY !

[G0ldfinger]

Waaahhhh, my thread has been moved forcefully!

[drbubb]

Waaahhhh, my thread has been moved forcefully!

Do you want it back on Main?

 

No problem - you can move it.

 

But can you run it here for a day or two first?

[Van]

Clearly alot of delusion is out there. Sellers think that if they increase the asking price then buyers think they'll get a bargain when they negotiate a "discount".

That's why new mortgage lending is at record lows. Transactions have fallen through the floor.

When the public sector cuts start to come in and a lot of these sellers lose their income, we'll see forced selling. Give it a year and we'll have moved on from this 2nd stage of denial to outright panic.

[drbubb]

Clearly alot of delusion is out there. Sellers think that if they increase the asking price then buyers think they'll get a bargain when they negotiate a "discount".

Yes, 143% is the highest on the board since Spring 2009 : http://tinyurl.com/UKtrap