According to Rightmove figures, asking prices heading into March - traditionally a big month for the market - have risen just 0.1%, and in London they've actually fallen, by 2.5%. Vendors are up by more than a quarter, forcing some "correction" to prices boosted by a shortage of supply at the beginning of the year.

Technorati Tags: London, property, real estate

According to the National House and Planning Advice Unit, 90% of couples under 40 with children can't afford to own a home in London. In the south east as a whole, the figure is 76.2%... hardly cause for a cigar, either. Deposits as a percentage of income have risen from 16% in 2000 to 64%, and yet the London property market manages to sustain itself, even throughout a global property crisis. The fundamentals still point to a crash, we're told; but perhaps the measure of "conventional "affordability" no longer applies to property... because there simply isn't enough of it. More here.

Technorati Tags: London, property, real estate

Remember, it's been a truth pretty much universally acknowledged, that it's not been the number of renters with good fortunes but the lack of available properties that's been supporting the property market recovery in recent months. February - according to the Royal Institution of Chartered Surveyors - was the second consecutive month in which new properties coming onto the market outstripped new enquiries. More surveyors were still reporting house price rises than falls, but only 17% more, compared with 31% in January, and far fewer than predicted. How long will vendors be able to call the shots?

Technorati Tags: property, real estate

Somewhat bravely - we believe - Phil Spencer is advising homeowners to sell now, buy again later.

Clinch a sale at today’s prices, but buy after the election, when values might dip and you can get more for your money.

All the logic's in Phil's favour. Wages are about to be squeezed, taxes are about to go up, lending's about to be squeezed, the market's currently bubbling along on little more than blind faith. But he's still brave to say this. I've seen so many people get their bank balances burned trying this in the past, and I'm sure Phil's seen even more. And as his onscreen partner knows, this kind of thing can come back and haunt you.

Technorati Tags: property, real estate

According to Mouseprice.com, Belgravia's Chester Square remains on top if the UK house price league, with an average property value of £6.6m, proving a vision of a property-owning democracy worked out well for Margaret Thatcher.

Technorati Tags: London, property, real estate

Everywhere else you look, extraordinary, temporary measures look like becoming standards on which the house price recovery’s being built. A bank base rate of 0.5%? Fine. It would still be historically extremely low at, say 3.5%, but many believe it would cripple the property market. A banking sector functioning off the back of £185bn Special Liquidity Scheme, a £134bn Credit Guarantee Scheme, £200bn of quantitative easing, with lending targets written into law? Okay, but what happens when the banks return, cap-in-hand, warning of a 2011 mortgage famine? The different between 2010/2011 and 2008/2009 is that one is immediately after an election, rather than before. The will to save the property market at the cost of the country’s finances might not be there as we head into next year.

Our publisher looks at some fundamentals and winces, in his guest column for Citywire.

Technorati Tags: property, real estate

"It seems unlikely prices will dip again" this year, according to the Royal Institution of Chartered Surveyors, who point to limited supply and continuing low interest rates as reasons for faith in UK residential property prices. But - according to the Investors' Chronicle - RICS fails to take note of sterling's relationship with the dollar. In an interesting article, Chris Dillow points out the historical relationship between a strong pound and rising property prices. It's a puzzling relationship, counter-intuitive in many ways, but Dillow links house prices to economic expectations in a way that leads to this:

The message here is simple. If you think the pound will fall, you should also be pessimistic about house prices.

Technorati Tags: property, real estate

Against all the odds - and, some may say, all logic and common sense - the UK was one of just five European countries in which house prices rose last year. In the Royal Institution of Chartered Accountants' latest European Housing Review the UK comes fifth to Norway (up 12%), Finland (up 8%), Sweden (noticing a pattern here? up 7%) and Austria (which, along with Switzerland, never experienced a downturn). The worst performing country? Latvia, where house prices halved. It's interesting reading. Find the official summary (in pdf format), here.

Technorati Tags: property, real estate

It's a 2.1% rise in January, leaving prices 5.2% higher across the 12 months. Average transactions are up, too; from an unimpressive 42,523 a month August to November 2008, to a less-than-impressive 57,722 the same period 2009.

Technorati Tags: property, real estate

Primelocation's Prime Index shows increasing stock at the top end of the market... 4.5% on the month, 17% across the year. Interestingly, an accompanying survey claims almost half (47%) of vendors believe the market's going to recover fully in the next two years. The fact that more than half don't might suggest why top end sellers (perhaps with more than one property and so fearful of an imminent rise in Capital Gains Tax) might be unloading right now.

Technorati Tags: property, real estate

Quick off the mark, Hometrack are brandishing the February figures. It was a 0.3% rise, bringing the annual figure into the black (up 0.4%) for the first time in two years. Hometrack aren't shouting boom, like others they point to a lack of supply for artificially inflating the market.

Technorati Tags: property, real estate

Weather-related jitters, or the end of the recovery? Nationwide posts it's first monthly fall in house prices since last April, with the value of the average UK home down 1%. Year-on-year, the numbers are still up, by 9.2%; and the (arguably more meaningful) three-month average shows a gain of 1.6%.

Technorati Tags: property TV, real estate agents

RBS’s new product, which will work effectively like a tradable tracker with a closing date, will offer flexibility in terms of both the direction of the market and the length of exposure, and could prove popular among more ambitious investors, perhaps buy-to-let landlords whose future pensions currently consist of large property portfolios. Questions – however – are bound to be asked about RBS’s own influence on house prices, particularly at a time when credit conditions are likely to be shaping the market. Should the lender be selling risks on a volatile market that it, possibly to an increasing degree in the next 24 months, controls?

Our publisher looks at a new residential property derivative, to be launched by RBS shortly.

Technorati Tags: property, real estate

... with a house price survey. Apparently, house prices in Albert Square would have risen 436% since the show was launched, with the average AS property now worth £574,764 (compared to just over £122, 813 back in 1985). Impressive, but nothing compared to the 7369% rise in house values seen on Coronation Street. Incidentally, owner of the most valuable house in The Square? Former hooker Pat Evans. More of this nonsense, here.

Technorati Tags: London, property, real estate

According to Shelter, if food bills had followed property prices since 1971, we'd be trying to find £420 a week. We'd be faced with paying £2.43 for a pint of milk, £47.51 for a chicken and £20.22 for a jar of coffee. (In other words, we'd all be shopping in Waitrose.)

Shelter's director of policy and campaigns Kay Boycott said: "These calculations show just how out of line the cost of housing has become - yet we seem to have just accepted these inflated prices as normal in a way we wouldn't with anything else."

Technorati Tags: property, real estate

The Department for Communities & Local Government published their December 2009 house price index today, so now seems as good a time as any to call it on 2009. The new data shows a 0.8% rise November-to-December and a rise of 2.9% (UK figure) December 2008 to December 2009. Looking back to this... predictions made by experts at the end of 2008... we can call a winner. Except... we can't:

If you want some perspective on just how unexpected is the current so-called recovery, take a look at that illustration above. For the DCLG figures in full, go here.

Technorati Tags: property, real estate

Back in November, residential property derivatives were pointing to a 5.7% rise in house prices by December 2011. That's already dropped to 2.2%, with a slower-than-expected economic recovery, punitive post-election taxes and slow lending to blame. More here. Meanwhile - here - there's talk of a second crash. The This Is Money panel of experts warn of falling house prices by the end of 2010.

Peter Hargreaves, of Hargreaves Lansdown, compares our situation with the U.S. where some homes have fallen in value by 60%. He and investment expert Justin Urquhart Stewart suggest property prices will plunge 10% here.

The piece confirms stories I've been hearing on the grapevine... out of control gazumping in the bonus belts.

Technorati Tags: London, property, real estate

Lombard's Jamie Dannhauser predicts UK house prices will return to stagnation at best, with falls possible, in the second half of the year, dragged down by poor mortgage availability, particularly to first-time buyers.

“The ‘dead cat bounce’ seems to be reaching its end,” Dannhauser said. The ratio of completed sales to the stock of available property, which has a “lead relationship” for house prices, has declined during the past two months, he said.

Technorati Tags: property, real estate

The tenth consecutive month of gains in Knight Frank's Prime Central London posh property index leaves it a giant 11.5% higher than in January 2009. The monthly gain was just 1.1% (down from 2.1% in December 2009), and left average prices at the top end of the London market 15% above the bottom of the market, but still 12% of its peak. More here.

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“Son, make as many mistakes as you like…… just do not make the same mistake twice.”

The Hip-Consultant blog questions our compulsive need for an exciting residential property market, and recommends a few dull years... good for the soul, good for long term stability and prosperity. And good luck with that. After less than a century as a country of property owners, a football-pools-attititude to the Halifax House Price Index is already so ingrained, it's hard to imagine it going anywhere (indeed, it's the madness that inspired this blog). But Hip-Consultant might be a bit premature if the suggestion is that recent house price moves are a sign of the start of another bull market. Limited supply, demand and data, and freakish interest rates make the current market very hard to read. Let's see what happens when any one of those factors is removed.

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It's a rise of 0.1% in the value of the average English and Welsh home. But - unlike others - the Hometrack index is still in the red, year-on-year, down 0.8%. Accompanying commentary also urges caution, pointing to an extreme shortage of supply covering up what is still dampened demand, and suggesting that - with transactions still low - a relatively small number of deals at the top end of the market may be unduly affecting the index.

Technorati Tags: property, real estate

Increased mortgage availability and a faith in the continuation of low interest rates (until mid-2011, possibly beyond) has led CEBR to revise its house price predictions upward. They now expect a 6% rise in 2010, and a rise of 20% by the end of 2013.

Technorati Tags: property, real estate

Nationwide's January house price index report shows a 1.2% rise during the month, leaving the index 8.6% up on the year (compared with 5.9% December-to-December). Expect headlines-claiming double-digit house price growth when the index is revised next month, say Nationwide.

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Winkworth wants us to know that some neighbourhoods are back at pre-crash, 2007-peak levels, after gains of as much as 20% in the second half of 2009. The main driver appears to have been overseas buyers cashing in on a puny pound. More here.

Technorati Tags: London, property, real estate

Andrew Sentance, a Monetary Policy Committee member, no less, compares the 80s housing crash to the 90s housing crash, and points out that a shortage of property during the 80s crash, as opposed to a surplus ten years later, meant that prices bounced back and rose much quicker.

"In terms of the balance of demand and supply in residential property, most of the evidence suggests that the current position is closer to the early 1980s situation than the early 1990s."

He points out how quickly house builders cut back in the previous decade and suggests that - with continued low interest rates - the future may be one of house price growth.

Technorati Tags: property, real estate

The attention of the media has been captured by a longterm house price report by the Halifax research department. The headlines:

• house prices have risen, on average, 2.7% more than inflation each of the last fifty years.
• earnings have increased 2% per year.
• the biggest single increase was in the last decade... 62%.
• the average uk home has increased by 273% since 1959.
• in modern money, the average house would have cost £43,000 in 1959
• in 1959, one in seven homes had outside toilets.
• in 2009, one in 500 homes had outside toilets.
• interestingly, four distinct, but relatively short, house price booms have been responsible for the inflation-busting gains. Outside of these periods, the norm for house prices is stagnation or fall.

Technorati Tags: property, real estate

British vendors headed into the new year confident, according to Rightmove, raising asking prices by 0.4% in January, giving them a 4.1% lead on January 2008, and only 8.3% less confident about squeezing a buyer until their pips squeak than they were in May 2008 at the peak of the market. In a funny kind of way, though, it's a lack of confidence underlying the movement, according to the accompanying literature. Homeowners are so spooked by the economy and the looming election that they're not putting their homes on the market. Hence a scarcity of available property. Hence a sellers' market.

Technorati Tags: property, real estate

A survey by estate agents John D Wood of 4,000 houses and 5,500 flats in London's most expensive postcodes shows astonishing house price growth of 51% from last February's low, bringing them, on average, 3% above their summer 2007 peak. The reasons? Low interest rates presumably mean there's little point in holding cash, and the weak pound must be off-setting any talk of London being less attractive than it was to foreign buyers.

Technorati Tags: London, property, real estate

Let's start with the Communities and Local Government figures, because we can at least pretend they mean something without having to pull all sorts of strange facial expressions. The data relates to November, shows a monthly rise of 1.7%, pushes the price of "the average UK home" back above £200,000 and the annual house price inflation figure into the black (0.6%) for the first time since June 2008. Now to the Royal Institution of Chartered Surveyors. Want clarity? Close your browser now, then. In December, RICS reports that 30% more surveyors thought house prices were rising than thought they were falling. In November, the difference had been 35%. So, there you go. The housing market was 5% worse. Or something.

Technorati Tags: property, real estate

As far as the Rat and Mouse is concerned, the fat lady doesn't start singing on 2009 until the Government's completion figures are posted, but the last Halifax survey of 2009 certainly carries some influence. Here you go... prices rose 1% in December, leaving the annual rate officially 1.1%, just pushing into the black in December. That last figures compares the three-month average, the HBOS's preferred method of comparison. If you take a more simplistic December to December view (preferred - to HBOS's dismay - by the newspapers) it was up 5.6%. HBOS survey here. Newspaper reportage here.

Now wish me luck as I attempt to travel from north Yorkshire to south west England. Further updates depending on snow, ice, trains and 3G dongle.

Technorati Tags: property, real estate

Savills - yesterday - went against the grain with some headline-catching predictions about property prices looking forward into the decade. Expect a 40% hike in house prices by the end of 2019, they say. What? Just 40%? said Assetz.

"We would expect prices to increase by up to six per cent per annum over the next decade. “Continued and extreme housing shortages versus high demand give us confidence that growth will continue over the coming 10 years.”

Technorati Tags: property, real estate

It's 2010 house price prediction time. Now, remember, we don't officially call 2009 until the Government releases their own official (completion-based) figures. But just because it's interesting, here's what people were saying this time last year.

The only consensus... house prices were going to plummet in 2009. And yet... Nationwide - this morning - called a gain, for what it's worth.

This year, there's not even that amount of consensus. It looks like this:

Citi ↑5% to 10%
Assetz ↑5%
Zoopla ↑2% to 3%
The Rat and Mouse ↑2%
National Association of Estate Agents NO CHANGE
Halifax NO CHANGE
Nationwide NO CHANGE
Royal Institute of Chartered Surveyors ↓1% to 2%
Cluttons ↓3%
Savills ↓3%
Market Oracle ↓3.5%
Global Insight ↓5%
Ernst & Young ↓5%
Jones Lang LaSalle ↓7%
Capital Economics ↓10%
Armstrong Davis ↓10% to 15%

Council of Mortgage Lenders NO BETS

So... from a gain of 10% to a fall of 15%. Place your bets.

There's still the question of unknown unknowns in the economy. We've little money or appetite left for future bailouts, so anything approaching a crisis or emergency will surely be enough deliver a crunching knock-out blow to any residential property recovery. Counting that out, all eyes are on the unemployment figures. What we've seen of a property recovery has been thoroughly reliant on a shortage of stock. If unemployed leads to forced sales, the picture will look very different. Next year's also a general election and World Cup year. Don't expect much action in the first half of 2010... it will all happen from late summer onward. The Rat and Mouse was tempted to join Nationwide and Halifax with a NO CHANGE prediction, but we don't like to look boring. So - optimistic about unemployment - we've predicted a small gain, which we think will prove less than significant against general inflation. London - separately - may see something bigger... more like 8%.

What do you think?

That's it from us until 2010. Happy New Year to all our readers, and thanks so much for coming back again and again and making 2009 such a busy year. Thanks to all our advertisers, too... for keeping the blog alive. And remember - if you like what we do - be kind and nominate us here. We could nominate ourselves, but we haven't... and we'd like to think somebody else might.

Now go pop some champagne.

Technorati Tags: London, property, real estate, theRatandMouse

It was a 0.4% rise in December, the eighth consecutive monthly gain according to the Nationwide index, and - although the Rat and Mouse doesn't like to call it on the year for a few week, until the Government's own figures are published - they're saying it makes 2009 a year of residential property gains (5.9% to be exact), and the Noughties a decade of gains (117%, no less). The index is, however, still 12.2% off its October 2007 peak.

Technorati Tags: property, real estate

According to a Halifax survey, they're headed by Kensington's Wycombe Square, with an average property value of £5.4m. In fact, seven of them are in the Kensington & Chelsea borough. But at number two it's Hampstead's Ingram Avenue (average property price: £4.9m). The research used Land Registry data covering the last five years.

Technorati Tags: London, property, real estate

The KF Prime Central Index is up 2.1% in December, giving a 13.8% lift since March, but still a way off, in fact 13.4% off, their March 2008 high. Interestingly, the three-month average is at its highest (5.5%) since the recovery. Chelsea, Kensington and Knightsbridge show the largest gains.

Technorati Tags: London, property, real estate

Traditionally, what happens in the auction houses is seen as an indicator for what's likely to happen to the major house price indices... which might be worrying to somebody who's recently bought, because the auction discount is currently getting bigger, not smaller. In November, the discount - according to Fathom Consulting and Zoopla - is 22%, up from 18% in October. Although it's significantly smaller than it was during the great panic of 2008, it's still way above the long-term average. Go here for a cool graph.

Technorati Tags: property, real estate

Today's Rightmove survey of asking prices is in broad agreement with FindaProperty's on Friday. Prices fell 2.2% this month nationally, and by 1.2% in London (led by Hounslow, with a 6.2% fall, and - wait for it - Kensington & Chelsea, where vendors were discounting by 5%... which means almost £100,000 in that neighbourhood). Rightmove warns of weakening prices in 2010.

Technorati Tags: London, property, real estate

According to a buying agent - quoted here - bankers are ready to plough what's left of their bonuses into London property early in the New Year, before there's any chance of house prices starting to rise significantly. That's despite widespread warning of a dead market next year as everyone obsesses over the election and the World Cup, or even a double dip. What this suggests to the Rat and Mouse is the prospect of even more of a split UK property market... London heading one way... most of the rest of the country the other.

Technorati Tags: London, property, real estate

Asking prices have fallen for a second month, according to FindaProperty.com, down 0.4%, following a 0.5% fall last month. Across the year, there's a fall of 0.8%. The numbers are consistent with Rightmove's... and we find ourselves in the odd situation in which the asking prices indices, calculated by the portals, are more pessimistic that the official completion figures. The answer is almost certainly seasonal (sellers pricing to sell in a slow market), and perhaps the difference between asking price and exchange price has been reduced toward the end of the year. We won't know for a while. FindaProperty's London-specific figures show 0.6% fall on the month, but that's in the context of a rise of 7.1% annually.

Technorati Tags: London, property, real estate

Expensive houses have apparently got 10-12% more expensive since March, with a lack of supply the main driver. The Buying Solution also report that private rented accommodation is way down... firming up rents for landlords. More here.

Technorati Tags: property, real estate

The fifth consecutive house price rise shows the average property up 1.4% in November, leaving the index up 4.2% on the year... higher, I'd suggest, than most of us considered back in January. According to the accompanying literature, we can look to a shortage of property for supporting prices in 2009. Expect - they say - to see that change in the new year, when a new tide of sellers come onto the market. There's even talk of a double dip.

Technorati Tags: property, real estate

It's Fitch, with the warning that poor employment prospects and a continuation of tough lending conditions could see house prices suffering once again in the coming years, by as much as a third off their 2007 peak. More here.

Technorati Tags: property, real estate

Adam Posen of the Bank of England's MPC has suggested an extra tax - a bubble tax - aimed at reigning in a future runaway property price index. A little bit here added to Stamp Duty, perhaps a little Capital Gains Tax added to first homes there (even - wait for this - retrospectively to existing homes, so as to avoid weighting the market against new purchasers)... were the thrust of his conference speech yesterday. It certainly makes a change from the collective lie that the MPC either can or (technically) should control house prices with interest rates... but screwing with millions of homeowners' downsizing/retirement plans because some suits do/don't/do/don't believe in a free market? Come on... More here.

Technorati Tags: property, real estate

Surely that's it, before we all bed down for a quiet Christmas/New Year? Nationwide reports the seventh consecutive rise in house prices, up 0.5% in November, and leaving the annual house price movement in the black, up 2.7%. Unsurprisingly (why? seasonal reasons, and the ultimate unsustainability of this autumns house price fight back) the three-month to three-month gain is slowing (from 3.5% in October to 2.8% in November).

Technorati Tags: property, real estate

The fifth consecutive monthly rise according to the Land Registry leaves prices 0.6% up on the month and now just 3.4% down on the year. Interestingly, the north-west of England led the charge, with a 1.9% uplift.

Technorati Tags: property, real estate

Homes in catchment areas for good schools sell at a premium, we all know that. The Nationwide's the latest to put a number on it, and - interestingly - they've factored in the performance of the pupils.

The lender found that for every 10% increase in the Sats pass rate the average price of a nearby house rose by 3.3%. Across England as a whole this meant an extra £5,860 on the average house price of £176,611.

Another reason to call the cops if you catch them skiving off school. That's, of course, if you buy the freakonomics.

Technorati Tags: property, real estate

Mortgage rates up in second crash fears [Sunday Times]
End of Stamp Duty holiday unlikely to affect overall market [This Is Money]
House prices expected to rise 5% in 2010 [Net-Lettings.co.uk]
Nationwide: house price recovery about to end [Independent]
Safe as houses [Guardian]

The Rat and Mouse - it's about your house

Technorati Tags: property, real estate

At a conference on the outskirts of Mayfair, a journalist from the Standard heard some interesting statistics.

The fact that nearly 30% of all new homes in London are sold in places like Hong Kong and Singapore did not surprise the audience of 70 builders and estate agents. Those in the market seem to know perfectly well that teams from agents like King Sturge spend half their lives in humid hotels in Asia.

So? The charge is that the London new-build market is being artificially supported and is dependent on overseas money. Londoners want new-builds, but they can't afford them at prices governed by Asian investment money. It's an interesting read.

Technorati Tags: London, property, real estate

HSBC knows, and they're telling. Among the trivia (43,000 new property millionaires in the last 15 years etc):

61% of £1million plus properties sold over the last 15 years were in Greater London. Kensington and Chelsea (18% of sales) and the City of Westminster (12% of sales) accounted for nearly half of all of London's £1million plus sales.

And:

The average house price across England and Wales has risen 213% over the past 15 years from £64,836 in 1995 to £202,813 in 2009 Q2.

Oooh, this has such a 2007 feel to it.

Technorati Tags: London, property, real estate

Rightmove's index shows a fall in asking prices in the four weeks to November 7. Don't worry, says Miles Shipside, it's seasonal... as homeowners shift their attention to Christmas trees and Amazon, rather than offers and mortgages. In Rightmove world, incidentally, house prices are, in annual terms, back in the black... at 1.6%, the highest number since May 2008.

Technorati Tags: property, real estate

Why "official"? Aren't Halifax or Nationwide figures "official"? Not as official... these figures courtesy of the Department of Communities and Local Government count completion prices, so they're about as official as they get. They're also - by their nature - late. So, for September, it's a 1.2% rise in the price of the average UK home (you know, this one), leaving prices at November 2008 levels, and narrowing the annual difference to -4.1%, it's lowest level for 13 months.

Technorati Tags: property, real estate

The Royal Institution of Chartered Surveyors' monthly report is all about gazumping, and a runaway market in London like nothing seen since December 1996. Here comes da boom. Now for the other side of the coin. Sales are down at levels 50% lower than in the pre-correction era; a lack of supply is unbalancing the market; the whole RICS survey methodology, which in effect measures what estate agents feel they can get away with, is highly suspect. More here.

Technorati Tags: London, property, real estate

We've been skeptical, recently, about the recent recovery in house prices... pointing out the micro-geographical nature of any increasing prices, the dangers associated with increasing unemployment, increasing interest rates and increasing supply. According to a survey of the property derivatives sector, the recovery will slow from what looks like a 5.5% increase in 2009, to somewhere around half that for the next few years. More here.

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The Times runs a nice overview of Savills's short term predictions for some of London's neighbourhoods, and takes a closer look at how they've been doing very recently. It's a good read, here.

Technorati Tags: London, property, real estate

Taylor Wimpey are all sold out, they say, and are planning on raising prices on new homes in the New Year. Redrow report reservations are up almost 50% on last year, and also predict prices rises in 2010.

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According to data from Zoopla.co.uk, there are 35% fewer property millionaires now than there were in November 2007. Which, in many ways, is hardly surprising. But it gets interesting in the detail. In the North East of the country, there are 83% fewer homes worth a million or more. Eighty per cent of homes in the million plus bracket are still to be found in the South East. More of this nonsense, here.

Technorati Tags: property, real estate

And a rise of 1.2% in October, leaving the annual change at -4.7%. There's certainly a consistency at the moment, in the world of the property price index.

Market report - Hometrack [November 2, 2009]

Technorati Tags: property, real estate

Haart's London Property Index is showing a 22% rise since January, the average price of a London property rocketing from £152,207 to £194, 052. Hotspots? Blackheath Village, Southgate and Willesden Green. More here.

Technorati Tags: London, property, real estate

A third monthly rise - 0.2% in October - leaving house prices down 4.2% on October 2008. Accompanying editorial isn't too upbeat, however, warning that the "pent-up demand" is beginning to thin.

Technorati Tags: property, real estate

It's Nationwide, reporting a 0.4% rise in October, leaving house prices 2% above their October 2008 level, and in the black (on an annual basis) for the first time since March 2008. So what's going on? With unemployment - a trailing indicator - still rising, credit hard to come by and interest rates capable of heading in one direction only... the Nationwide index has risen 4.6% so far this year. Well, October's 0.4% rise did what it needed to get headlines, but it was a moderate rise, still based on a small data sample, and flattered by appalling conditions a year ago. Don't count any chickens.

Technorati Tags: property, real estate

Nationally, it's a 0.9% increase in September, slowing the annual rate of decline to 5.6%. London led the charge with a monthly increase of 1.3%, reducing the annual change to -3.2%.

Technorati Tags: London, property, real estate

Normally, the Rat and Mouse doesn't get into all this until much later in the year, but 4Homes has been pulling a few predictions out of the hat from agents and think-tanks. Our old friends Capital Economics are the most bearish, with a prediction of -10%. The most bullish? Savills. And a -3% prediction. Read it, including some interesting and - we predict - controversial commentary, here.

It's New Year's Eve, which means... property price prediction time [December 31, 2008]

Technorati Tags: property, real estate

There's a David Cameron bounce, too.

A strong “Cameron bounce” is driving up property prices in central London as wealthy foreign buyers bank on a Conservative victory in next year's general election.

Technorati Tags: London, property, real estate

Property asking prices in London have broken through the record high set in November 2007 as the drought of homes for sale around the country continues to distort the market.

In the four weeks to October 10, average asking price: £461, 157. In November 2007: £412, 731.

Technorati Tags: London, property, real estate

If you believe predictions by upmarket agents Knight Frank, expect to see London prices 38% up on current levels by 2014 (against national rises of 19%). But KN, you sound so confident. Why?

“The key reasons for our confidence with regard to this market are: uniquely in the UK — London will benefit from the global economic recovery, which is likely to considerably outpace that seen in the UK; sterling is set to remain relatively weak into the medium-term, encouraging international demand; the economic prospects in central London are brightening more rapidly than elsewhere in the UK.”

Okay. No specific mention of improved credit conditions, but I suppose that comes with the recovery. And if the picture of UK prices will be heavily influenced by larger London gains; within London, we should read into this the expectation that prime property will lead the London market.

Technorati Tags: London, property, real estate

The vendor drought. It's what's keeping UK house prices on the up, according to the latest report by the Royal Institute of Chartered Surveyors. The September document's out, and shows cockiness among its members (the number reporting prices rises over falls) at its highest level since May 2007. Cockiness is at its peak in the south (there are areas of the north where members are glum), but nobody's fooled that this isn't really about a shortage of supply.

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Fitch Ratings warns UK property prices will fall a further 17% after tight loan conditions and soaring unemployment perform a double whammy next year.

'A 30% fall from the peak of October 2007 would bring this ratio back in line with the long term average.' Given that prices are currently down 13% from peak, Fitch is therefore expecting a further fall of 17%.

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Over here, it doesn't look as if Times readers, at least, are buying the current crop of positive property price indices. Either that, or it's just that the bears are more politicised, more motivated to get out and vote. Either way... here's how it's looking right now:

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What polarisation? The polarisation taking place between those who think the worst is over, and those who think that this little, illogical, upspring in prices - caused largely regionally by desperation and a shortage of property - we're tottering on the brink of a second, big house price collapse. This won't help... Halifax reports the biggest three-month price rise since the peak of the market, at 2.8%, and a monthly rise of 1.6% in September. Annually, prices are down 7.4% (remember, they were 17.7% down, just in April).

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Another one... this time, a 0.2% rise in September, but heavily weighted toward the south. In fact, only 15% of postcodes saw any kind of a rise, and prices remained unchanged in 84% of areas. According to Hometrack, the average house in England and Wales is just 5.6% off where it was a year ago. But

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The first fall recorded in four months by the Land Registry... a 0.1% drop in August. Annually, we're now just 9.4% down (from 16.3%)... and the gap continues to narrow.

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In a survey of 1,100 MSN (Microsoft Network) users more than three quarters said they expected house prices to either remain stagnant or fall in the coming 12 months, with almost a half expecting a fall. Only 23% believed in the current (according to many indices) revival. More, here.

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A shortage of property and competition from foreign buyers is apparently pushing the best London property to just 5% off it's 2007 peak. Competitive bidding, gazumping, it's all back, according to Savills and Knight Frank. More, here.

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An interesting piece in the Standard points to estate agent nervousness about the failure of September to bring its traditional slew of vendors and new properties to the market. Prices in the capital have apparently - in some areas - topped their 2007 highs, unrealistically slanting national indices and putting the London market in a highly precarious position. More here.

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It's a strange headline, though, on Yahoo:

House prices actually rose in July, and by a not inconsiderable 1.4%. However, they were down 8.3% year-on-year... which doesn't a headline make. See it, unless they change it, here.

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During the three months to September, more agents reported feeling swell than not feeling swell, according to the Royal Institute of Chartered Surveyors. That's the first positive result in two years, driven by a shortage of homes, particularly in London and the south east. The RICS report is a vague confirmation of something we're seeing in more scientific market reports, but... all eyes on the lagging indicator that is employment, the future of interest rates, and pent-up vendor demand... there lies the future of house prices.

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The Ernst & Young Item Club predicts falling house prices in the first half of 2010 followed by two years of stagnation. More here.

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A monthly rise of 0.8% for August, the second in a row. The all-important three month average shows house prices 10.1% lower than they were the same period 2008. Demand's rising, supply remains low.

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Citigroup’s ever-interesting Michael Saunders has crunched all the numbers. He calculates that – assuming a 100 per cent mortgage, a product which is not exactly easy to find these days – the payments to buy an average house have halved to £6,700 per year (18.4 per cent of average full time male earnings) from £11,800 (34.3 per cent) in late 2007. This is well below the long-term average of 30 per cent and the lowest since 2002.

Until interest rates rise again, of course.

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There are good reasons to expect a second dip in the market later this year or early in 2010.

Such as rising interest rates, tighter lending criteria, the Brits a nutters. What? Here it is...

For reasons that a psychologist could better explain, the British are attacking the financial-services industry, even though it is the biggest branch of the economy. The chairman of the U.K.’s Financial Services Authority, Adair Turner, even proposed a tax on financial transactions to help limit the size of the industry. He described parts of banking as “socially useless.” With that sort of attitude, it won’t be surprising if many foreign bankers go elsewhere, withdrawing their support from the housing market.

Right, and right again. Punishing the financial institutions - in which we all hold a stake, no matter how indirectly - is a giant cutting off of noses.

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We had a hunch about this... based on the way our own traffic has increased during the recession. Now, there's confirmation from house price snoop facilitators Zoopla, who insist that Brits are still obsessed with how much their homes are worth and - more to the point - how much their neighbours' homes are worth. Obviously, increased use of the website isn't definitive proof of increased interest, but the way the traffic breaks down is interesting. London and the south-east contains the nosiest homeowners, the north-east the least. The nosiest street in the UK is Grand Avenue, in Camberley, Surrey. The wealthy are the most nosy. After neighbours, you're most likely to be snooped on by work colleagues, and then family members.

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Hometrack reports its first monthly rise in more than a year, 0.1% in August. The figure, however, was skewed toward the south... only 11% of the country showed a positive figure. In London, the rise was 0.3%, but - like everywhere - was fueled by a shortage of stock. More here.

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According to Walls & Futures, yes:

According to the Land Registry, over the past 20 months the average house price in London has fallen from £355,934 to £306,934. There is a fantastic opportunity for investors to re-enter the market.

The group is launching a central London residential fund, buying in the west (between K&C, Hammersmith and Merton), and aimed at grabbing a bit of recovery action. They're looking for a 10% yield, with a minimum buy-in of £25,000.

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Land Registry data for July shows a monthly rise of 1.7%, the largest single monthly hike since July 2004. Every region of England and Wales was invited to the party, bringing the annual house price fall down from 13.8% to 11.7%.

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For £90,000 you could be living above a sandwich shop in Wakefield. Or you could rent. Full article here.

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The fourth monthly rise in house prices, according to the Nationwide index, weighs in at 1.6%, bringing the three month average up 3.3%, the highest rate of growth since February 2007. The annual rate of deflation is - as a result - shrinking fast, down to 2.7% from 6.2%. The Nationwide index peaked in October 2007, 14.4% higher than its current level. Accompanying commentary points to abnormally low interest rates and a shortage of available property to explain the rapid increases. Both of these circumstances could change. And don't forget this.

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Forget the indices... they're (literally) history. Anybody with an interest in the future of house prices, these are the figures to watch.

More than one in six UK homes which house at least one person of working age does not have anyone in employment, official statistics show.

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Even the most pessimistic of pundits can no longer ignore the fact that a housing market recovery, of some sort, is underway.

Confidence, up. Prices, up. Sales, up. Stock... what stock? The talk is of gazumping and sealed bids. But what, we wonder, will happen when all those vendors do come blinking into the sunlight, once again?

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According to the Primelocation index for July, Prime London property saw asking prices turn positive, year-on-year, up 1.31% on the month and 0.33% annually. More here.

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Asking prices fell 2.2% in August, according to Rightmove, with a particularly large dose of reality taken in London, where they fell 3.8%. A sign we're about to enter another period of rapidly falling house prices? Not according to Rightmove, who point to August 2008's 2.3% decline, and make the claim that August sellers price more competitively to attract attention amongst a smaller pool of buyers.

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The Guardian harks back to...

... the halcyon days two years ago when the job of a valuation surveyor was little more than establishing the "comparables". A tough task indeed: dropping in for a chat at a local estate agency, and finding out what similar properties have gone for.

Actually, I have no memory of that. I do remember this, though.

The piece turns the spotlight on current valuation practices... confused, bewildered and frightened surveyors unsure where to turn for a price guide when market activity is so low and after so many have disgraced themselves so badly by turning into yes-men for apartment block developers. It's time - argues Patrick Collinson - for the RICS to take a good hard look at its members.

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The headlines... in the Prime London market, there was a probably insignificant increase (0.33%) in asking prices, but a significant reduction in stock levels, down 1.43% in June, or -2.53% in the Central London area. So where've the vendors gone? Prime London lettings stock increased, leaving them an astonishing 96% higher than a year ago, resulting in a 15th successive fall in average rent.

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And it's not Capital Economics! It's the National Institute of Economic and Social Research, and it's entirely unimpressed by the recent little flurry of market activity and firming of asking prices. Mortgage approvals, they say, will continue to until the final quarter of the year, while house price growth won't return until 2012.

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It's not the most valuable house price indicator of the bunch, but it is an indicator, and it's telling us asking prices rebounded by 0.6% in July (after a 0.4 fall in June), leaving them just 3.1% down on the year (from -5.5% in June). The website is reporting unseasonably strong traffic, including a 20% rise in new seller numbers. Click this for the actual report (pdf).

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The Government's house price index - always trailing but based on actual completion figures - appeared to little comment yesterday. It showed a fall for the average house price in May, down 0.1% in the month, down 0.4% in the quarter to the end of May and leaving the index down 12.5% on the year (from 13% in April and a peak of 13.6% in March). Download the actual report by clicking this.

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A new study by the accountants predicts further falls in 2010 and then a flat market, leaving 2015 prices (relative to inflation) still below 2008 levels, with a 30% chance of this remaining the case in 2020. Average property prices will - of course - rise in cash terms, but inflation will render those rises meaningless. More here.

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According to Savills...

At the estate agency's branch in Oxford, one in 10 properties is selling above the asking price while at its Truro branch, buyers have been queuing at the door before it has even been opened.

is that kind of urgency really rational? I'd say no... but we'll know more in autumn, when we'll have either reached and recovered from the bottom, or we'll look back on this as one of those little spikes common before either a continuing fall or, more likely, a long period of stagnation.

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According to the National Association of Estate Agents, the difference between what vendors want and what they get was down to just 1.9% in June, down from 6.3% in May. Agents are still selling, on average, just ten homes a month... but it seems a lack of supply is supporting prices. However, what this suggests is that with unemployment still likely to rise and mortgages scarce, all it will take is a increase in homes for sale for prices to topple once again.

Technorati Tags: estate agents, property, real estate, real estate agents

The all-important Halifax index is a timely reminder that we're still witnessing an unpredictable market. Property prices, it says, dropped by half a per cent in June, after May's headline-grabbing 2.6% rise. The annual rate of decline, however, continues to ease, from 16.3% to 15%. The quarterly movement - a decline of 1.9% - was the lowest since the beginning of 2008. Official press release, here.

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He's been looking at the difference between the Nationwide's raw and seasonally adjusted figures, and concludes they're being too conservative.

I now think that house prices will show a small rise in 2009, rather than the 5pc fall I predicted at the end of last year.

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In Friday's Times... Allsop auctioneer Gary Murphy talks of "urgency" among bidders, with some auctions, according to EIG data, shifting as much as 85% of listings. Savills are apparently selling 96% of their auction property above guide price, usually around 20% above.

Christopher Coleman-Smith, head of auctions at Savills, says: “Sentiment in the auction room has turned since October, November and December. A lack of supply is underpinning prices, with some lots seriously outperforming expectations.”

And now, here's ThisIsMoney, telling us the sealed bid is apparently back, and even using "the b-word".

Although the market has supposedly crashed, here in Middle England a housing bubble is making it impossible for us to buy a property at anything like a reasonable price.

What the....?

In Stratford, at least, the property-market plunge seems greatly exaggerated, with prices not far off those of 2007. We are now considering continuing to rent until the bubble bursts in the cold, short days of autumn.

Yes, indeed. All eyes on autumn.

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Hard to believe? Well that's the figure according to Hometrack. Asking prices are down 8.7% annually, after slowing for three consecutive months, with agreed sales rising, new stock falling.

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The May report shows house prices falling 0.2%, leaving the annual rate of decline at 15.9%, a light steadying on the 16.2% annual drop showed in April and March. Four English regions (including the south east) showed slight gains on the month, however transactions over the first quarter were still less than half where they'd been the year before... begging the question whether that upturn in enquiries reported by many agents in the new year has been translating into sales. Watch this space.

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... another big crash prediction from MoneyWeek.

House prices could fall another 40% from here.

The argument is both compelling and an old-chestnut. It's about affordability.

Today, the ratio, based on an assumed average household income of £31,200 and an average HBOS house price of £160,869 is still a very high 5.16 times. To give you an idea of just how high that is, it's still above the 1989 peak ratio of 5.02 times.

Remember, though, that homeownership is a relatively recent trend... comparatively rare until the post-war period. There's no reason to assume our current view of affordability - taken by averaging this limited data - will prove to be the long-term one. It's a good read, though, and recommended.

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Owning a house is not a prerequisite for economic maturity: many Germans never buy a property. And the idea that an Englishman's home is his castle has everything to do with his legal rights and nothing to do with owning the blasted place.

Edmund Conway has an entertaining rant in the Telegraph about the unsustainability of the British home-buying culture. The conclusions? 1) The Bank of England should control maximum loan-to-value ratios when it comes to mortgage lending. (But wouldn't that place more power into the hands of the cash-rich landlord class?) 2) Harsher home taxation, either in the form of a land tax, or by imposing capital gains tax to first homes. (What's the difference between Council Tax and a land tax? When would CG be payable? How wouldn't it stop people moving... and so damage the economy?) 3) Remove the stigma associated with renting. (Absolutely.)

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Madonna plans Wiltshire mansion duplicate in NY... yeah, that'll work [The London News]
The PM's Top Ten Financial Blunders [Times]
Up-and-coming... Dalston [Independent]
Thank God, it's business as usual in Prime London [Forbes]

The Rat and Mouse - it's about your house

Technorati Tags: London, property, real estate

One in five threatened by negative equity [ITN News]
Buy the Stig's house... maybe [Daily Mail]
Victorian Society v Lewisham Borough Council [Culture 24]
Bargain hunting or profiteering? [UPAD blog]

The Rat and Mouse - London's property blog, since 2005

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Rightmove's June snapshot of asking prices shows a drop of 0.4%, with accompanying comment blaming an unhelpful mortgage market for failing to support a property recovery. There's also evidence of a very polarised market, driven by the equity rich, hunting well-located homes that are short in supply, at one end, properties requiring a lot of work at the other. There's evidence of some regional polarisation, too, with prices in the north west (England) rising by 4.5%.

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Property prices will rise by an average of 1.4% over the next year according to respondents to the BSA's Property Tracker survey, as cautious optimism returns to the housing market.

Hmm. A lot has happened since March, clearly, when the same people forecast a 6.1% fall. Accompanying comment correctly pinpoints job security as the most likely issue to pop this bubble.

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Nestoria's Ed Freyfogle chats to Renthusiast on third b'day (Nestoria's, not Freyfogle's, or Renthusiast's) [Renthusiast]
Disappointing lending figures [BBC]
Yorkshire Tea box cottage for sale [Telegraph]
Exclusion in the housing market [Times]
Job done on London architecture, Prince turns to rural house prices [Google]
Loving garages [Daily Mail]

The Rat and Mouse - London's property blog since 2005

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Sienna Miller's painful price-drop [ContactMusic]
Prince Charles' blow against creative architecture [Guardian]
Buy-to-let and the cannabis farmer tenants [Guardian]
House prices and the north/south divide [Times]
London flats on a (£175,000) shoestring [Telegraph]
Vendors feel they have the whip hand [Times]
The best ftb mortgages [Citywire]

The Rat and Mouse - it's about your house

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To 1.1m homes, according to the Bank of England, and between 7% and 11% of UK homeowners. The Bank's research is based on a 20% fall from the peak of the market, leaving average prices at mid-1990s levels... so if you took out a proportionately large mortgage in the years since then, it might mean you. More here.

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The Department of Communities and Local Government house prices figures come out late, but represent completion figures, so they mean something. And they're showing a 1.1% monthly rise in April, bringing the annual rate of house price decline down 0.6% to 13%. Following the RICS figures, the recent Nationwide survey and reports by agents of increased enquiry levels, there's little doubt there's been some kind of bump in market activity in recent months. However, during most market downturns there are occasional months that buck the trend. Furthermore lending's still too tight to mention, and a shortage of supply is helping to prop up prices. If too many potential vendors respond by chucking their homes on the market, all this could change.

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Royal Institution of Chartered Surveyors data shows new buyer enquiries growing by their fastest rate since 1999, and up for the seventh consecutive month in May. The number of new vendors, however continues to fall... increasing demand, falling supply, possibly stabilising prices. More here.

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A rise of 2.6% in May, leaving the annual rate of decline at 16.3%. The three month average - a more reliable manner of reading the figures - shows a big cut in the rate of decline, from 6%-ish to 3.1%. Following a host of other positive data releases in recent weeks, the report's bound to be read as a sign of stabilisation in the market. We say, watch unemployment figures closely.

Positive data crunching continues [June 3, 2009]

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In six of the ten areas of England and Wales average house prices during April increased, with London prices climbing by about £4,200 during the month to £302,411.

That's according to this week's Land Registry data, based on actual completions. Furthermore:

The Knight Frank Prime Central London Index recorded positive growth for £1m+ house prices for the second month running in May.

Remember, though, how dramatically this index has fallen, down 22.3% from its peak. Mayfair, however, led May's charge, with a monthly increase of 2.9%. The sub-£1m sector has led the "recovery", the more expensive the properties, the less well they've been faring.

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Before you get carried away with all the sunshine and birdsong and rumours of a house price recovery... here's the Land Registry, with its monthly glance at actual, factual completions. April showed a fall, of 0.3%, leaving the annual rate of decline at 16.2%, exactly the same as where it stood a month ago. Yes... that's possibly part of a decline in the rate of fall, but it's neither recovery, nor cigar.

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Days after the Nationwide index's modest rise, Hometrack's stops declining for the first time in 20 months, showing zero change for May. On the year, prices are down 9.6%. Also like the Nationwide's report, the accompanying commentary isn't as positive as the raw data, and warns against ruling out further falls. All eyes in the Rat and Mouse office - from here on in - on employment data.

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Fears of a renewed house price spiral were growing today after figures from Nationwide building society showed an alarming 1.2% rise in the cost of the average British home. The increase, the worst in 19 months, provoked warnings that the Bank of England will be forced to raise interest rates, choking off an early recovery in the economy.

A different approach, by Patrick Collinson, in the Guardian, and definitely the Rat and Mouse's choice of property piece of the week.

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It's the second house price rise in three months, 1.2% in May, leaving the average house price 11.3% lower than this time 12 months ago, after a 15% gap in April. Nationwide's chief economist is - however, cautious... pointing to similar small bounces during the early 90s and daring to hope - at most - that the data might translate into a moderation of the rate of fall. More here.

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And it's all down to property, according to research by the Centre for Economics and Business Research. In 2007, CEBR estimated there were 489,000 people living in the UK with assets of £1m or more. But much of those assets were in the form of bricks-and-mortar... now, the figure's more like 242,000... yep, half. CEBR expect the number of millionaires to start rising again in 2011.

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More data by National Association of Estate Agents property portal PropertyLive... this time showing that almost seven in ten wannabe first-time buyers have given up hope about being able to afford to step onto the property ladder. Eagle-eyed readers (and sub-editors) will have spotted that if they've given up hope, they can't be wannabe ftbs... but we know what they mean. NAEA-sponsored... the data appears to be directed toward the Government... a disguised call for help in loosening lending criteria.

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A 30% fall from peak to trough, and a recovery that should start by the end of 2009, says the Royal Institution of Chartered Surveyors, driven by a shortage of supply and an improvement in general economic conditions.

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Knight Frank's London residential report is out, download it here. Few surprises... an upturn in enquiries at the start of the year, a bit more sales action, lack of supply supporting prices after the big falls of 2008. The most eye-catching illustration?

Properties - a the bottom end of Prime - are showing, according to KF, modest price rises over the last three months.

Technorati Tags: London, property, real estate

Results of a survey commissioned by PropertyLive (the property search portal launched, with much fanfare, by trade bodies, including the National Association of Estate Agents) shows 70% of British property surf online without any intention of buying, but just because they're property-prurient. Twelve per cent are still valuing their friends' and neighbours' homes. In London, the figure's unsurprisingly higher, at 16%. More surprisingly, the most obsessed age group was 25-34. Remember, the average first-time buyer is now 34-years-old.

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It's the fourth consecutive monthly rise in asking prices, by 2.4%... the largest monthly rise May has ever seen. It leaves asking prices 6.2% down on the year, the smallest amount since October. So what's going on? The lowest number of newly listed properties any May since 2003 might be a part of the story.

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Fathom Financial Consulting and Zoopla have compared auction data with Land Registry sale data to show that residential property sold at auction over the last few weeks is, on average, shifting for 25% less than estate agency-sold homes. According to the FT:

The 25 per cent auction discount and the sluggish market give a strong signal that prices have further to fall. But the recent uptick in the auction market also shows the gap is narrowing.

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The headlines shriek Surge In Homebuyer Interest, but - as usual - the RICS figures are a tortuous and confusing read. Forty-one per cent of surveyors reported a rise, rather than a fall, in new buyer enquiries, from 32% in March. That's more surveyors. But less than 300 were surveyed, and less than half of those apparently didn't report a rise. So exactly what kind of a surge is that? In London, things are more positive (70%, from 63% last month). But, hey, it's spring... and we're talking about movements from an unprecedentedly low base. Don't want to be the voice of doom... but let's think independently about this.

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Homes in Kensington & Chelsea - according to the FT house price index - have lost 25% of their value (taken over a three month average) in 12 months, putting the average price of a home their down below the £1m mark, to £873,331. Nationally, April - the 14th consecutive month of falling prices - saw 1.1% knocked off values, leaving house prices at January 2006 levels.

Technorati Tags: London, property, real estate

The Halifax House Price Index shows a 1.7% fall in April, leaving the price of the average home 17.7% down on the same time, 2008. It leaves the index at 2004 levels. Comparing first quarter averages, London is showing a 20.9% slide, more than the UK average of -17.5%, and the biggest fall on the UK mainland.

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March's completion figures... a 0.4% fall in the average residential property price in March, leaving the annual figure down 16.2%. Within those figures, though, there's a wide regional spread, from a 1.8% gain in the North East to a 2% fall in the West Midlands. London? A 0.6% rise, leaving prices down 15.4%.

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Following last month's unsettling 0.9% house price rise, the Nationwide index returns to its comforting downward trajectory... a non-confusing 0.4% fall in April, leaving prices down 15% annually. Click this for a pdf of the report. And check out the following graph, which - in an entirely non-scientific way, and without accounting for recessions or pandemics - looks like value about to be achieved.

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Hometrack shows a 0.3% fall in April, the smallest red number in 12 months. Just 32% of postcodes showed a call, from 59% in February.

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If you believe the National Association of Estate Agents, allowing house prices to dip can trigger (or worsen) a recession, because people spend if they feel wealthy, and they feel wealthy when they're homes are rising in value. We've always been of the opinion that the feel-rich, spend-more theory is overstated. What matters are jobs. The unemployed feel poor. They are poor. They lose their homes. Property values drop. MoneyWeek appears to be of that school of thought too. It's employment that will kill or cure the residential property market, not the other way around.

Technorati Tags: property, real estate, recession

Asking prices are up 1.8% in April, according to Rightmove data. It's the third consecutive monthly rise, and brings the annual change down to -7.3% from -9%. Miles Shipside's accompanying comment suggests this is something more than the traditional "spring bounce", but there are plenty of causes for caution... mortgages approvals still historically very low and - perhaps most interestingly - a rising number of vendors coming to the market, pitching high, and then lowering their asking prices after a few months. The one big blip on the map, however, is London... which, contrary to national trends, shows a big fall of 3.2%. Breaking that figure down further, there are rises in Brent, Greenwich and Kingston-upon-Thames... more than compensated for by falls of 7.8% (Ealing), 7.2% (Hillingdon) and 5.7% (Croydon). Annually, if you live in Kensington & Chelsea, you're looking at a 32.3% increase in asking prices. In Newham, they're down 18.5%. For the full report in pdf format, click this.

Technorati Tags: London, property, real estate

Like numbers? You're in the right place. First off, it's the all-important Department of Communities and Local Government index... late, but accurate, since it's based on completions. The January-to-February numbers are in and they leave the average house price down a record 12.3% on the year, 2.7% on the month. It's the 16th consecutive fall revealed by DCLG data. Royal Institution of Chartered Surveyors research, meanwhile (which specialises in a tortuous estate agent hearsay method of running an index), shows that 31% more members report increased buyer enquiries than decreased. That's up from 21% last month. The average number of sales per member across the last three months rose... but insignificantly, from a record low of 9.6 to 9.7. Green shoots? Not yet. Finally, Primelocation.com has published its snapshot of prime property asking prices listed on the portal. March saw a slight weakening in the prime London market... with asking prices down half a per cent. Looked at annually, they're down a record 3.44%.

Technorati Tags: London, property, real estate

Mr Spencer said it was quite possible that two million people would want to move when confidence came back, especially if interest rates stayed at their present low level. "Things are going to get very busy," he said.

He's quoted in Kent Online, talking at the Kent Design Awards launch, and predicting "an almighty bounce" caused by a recession-induced shortage of property.

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It'll be over by Christmas, according to Lombard Street Research. Their affordability index shows homes at an affordability level not seen for over five years. The methodology, however, is less clear than the more conventional comparison between earnings and house prices, and appears to place a great deal of emphasis on interest rates. With unemployment - a trailing indicator - almost sure to rise... it's hard to share their confidence.

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House prices may have less than 10 per cent to fall, sasy Cebr [Telegraph]
House prices will fall ANOTHER 10% before the market reaches rock bottom [Daily Mail]

It's a Centre for Economics and Business Research prediction... lower interest rates, lower prices and increased lending leading to a pick up in the housing market, with approvals and transactions accelerating through the summer months. In January, mortgage approvals were at 32,000. If - according to CEBR - they can reach 50,000 a month by late summer, we're looking at being 8% to 10% off the bottom of the market (in terms of prices). You can see, from that, why such a prediction could lead to wildly different responses.

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Kudos to eagle-eyed Credit Crisis Diary in the Independent, for spotting something of a u-turn in the Standard.

In early editions of the paper yesterday, a long piece on the housing market was headlined "Now is not the time to buy – London house prices look set to fall further". By the final edition, exactly the same article was headlined a little differently – "Spring's here, the housing market is stirring, so is it time to buy?".

But give them a break. The London market follows its own rules. And - anyway - what's a journalist to do at a time like this?

Technorati Tags: London, property, real estate

Research by consumer website Unbiased.co.uk suggests that most of us aren't expecting an upturn in house prices until 2010. The buyers are there... 28% of the population are apparently "interested in buying a property". But a quarter of them - that's more than three million people - are holding off waiting for further price drops. That's despite 50% of the population believing they can expect to knock more than 15% off asking price. Read the report here.

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Looks like the Nationwide figure earlier this week was something of a blip. It's business as usual with the Halifax House Price Index, down 1.9% in March, leaving the index 17.5% down annually. Accompanying comment, however, does highlight a few rays of light... including a house price to earnings ratio that's hit 4.34... not too far from the long term average of 4.0.

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Hold onto something heavy, the Nationwide index, which has been in free-fall since October 2007 and is one of the bears' preferred measures (last month it showed house prices down 17.6% on the year), shows a rise in average house prices in March. It's a rise of 0.9%, and it leaves the annual house price index down 15.7%. So how's this happened? Reasons to be cheerful (if you believe it's sensible to be cheerful about stabilising house prices) include recent news of mortgage approvals picking up and a consensus that buyer interest is on the rise. Reasons to conclude this may turn out to be a blip include the fact that we're probably still in the early stages of an unemployment cycle... and nothing screws the property market like high unemployment. All eyes on the Halifax index, due to report soon.

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Of course, they're both right. According to Hometrack, the annual fall is 10.3%, a record for the Hometrack survey, which launched in 2000. On a monthly basis, however, March's 0.6% was the slowest drop-off since May 2008. Other headlines: vendors achieved 88.8% of their asking price (slightly higher than in February, and the first time this figure has improved in a year); and London showed the month's biggest fall... 0.8%.

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It's a 2% fall in February, leaving house prices down 16.5% on the year... back at September 2004 levels. It's the 18th consecutive monthly fall, following 21 monthly gains, starting in December 2005. London saw a 1.9% monthly fall and is down 15.6% on the year. For a PDF of the actual report, click here.

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Figures from Primelocation.com show Prime London asking prices up a whisker off a per cent in February, the fourth successive monthly rise. In west/south west London, the figure was an extraordinarily bullish 2.84%. Remarkable, in central London, there's still positive annual growth (3.24%). Obviously, there are asking prices and their are achieved prices, and they're two different things. But the accompanying comment is clearly written from the perspective that one is a reflection of the other, and looks to low interest rates and the (connected) weak pound to suggest foreign money is helping prop up the specialist London market. Things look quite different in the lettings sector, with an eleventh monthly fall in rental rates in prime London, leaving rates 13.72% down on this time last year. Read the report here.

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What does it take to convince a vendor that not everything's hunky-dory? It seems not even a silent phone, a skinny estate agent with holes in his soles and six months on the market without a sniff of a viewing can dent a vendor's confidence. Asking prices were up in March, according Rightmove, by 0.9%. Okay... that's not as much of a rise as is usual while Spring is sprung, but it's still a rise. Annually, they're down by 9%, considerable less than actual sale prices.

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Over at Money Week, home to bear pits too deep even for HousePriceCrash, there are some interesting charts. Dominic Frisby looks at historic house price data, the shape of a bear trap and what it would cost to buy houses with silver. It's interesting... and scary. It's here. Meanwhile, over at the BBC, they asking homeowners - Are you scared? - and plotting responses on a map. It's a fascinating snapshop... but don't visit it using Safari (there's some kind of JavaScript issue); choose Firefox.

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According to Primelocation figures - hold on to your hats - central London vendors have increased asking prices in February (by just less than a per cent), leaving asking prices up 3.24% on the year. More here.

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It's a 2.3% fall in February - a big monthly movement - leaving the annual figure down 17.8%, and 19.7% off their 2007 peak. Remember, though, that this time last month, we were looking at a rise of 2%. Interestingly, the average-price-to-income ratio is down to 4.4... not too far off the long term average of 4.

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It's a fall of 0.8% in February, leaving house prices 10% down on the year, Hometrack's biggest annual fall since 2000. Sales agreed... 60% down on a year ago.

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The problem is that nobody knows what the bottom of the market’s going to look like. By the time we do, it will be too late; and that’s beginning to make potential homebuyers jumpy.

Our publisher, on jumpy potential homebuyers, in his guest column for Citywire.

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It's Nationwide, with the February numbers... a 1.8% fall, leaving the year-on-year figure down 17.6%.

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It's an excellent time to buy.

It's a brave broadsheet journalist who, these days, will point out what - to professional investors - is the obvious: if you wait until you have proof that the market has reached it's lowest point, you've missed it. Yes, you can wait, and buy at the same point on the way up. But time isn't on your side, you'll end up having to move quicker, and pass some of the bargaining power over to the vendor. How far the market has yet to all, of course, nobody knows. The only certainty is that the piece will no doubt be followed by reader comments accusing the writer of self-interest.

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Londoners are confident, according to Rightmove, and if they could only get the loans, they'd be setting out on another crazy bricks-and-mortar buying spree.

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... Morgan Stanley, for their almost-exactly-on-the-money prediction of a 10% fall in house prices in 2008. Government figures - our own preferred measure - based on completions data and released today show a 10.2% fall.

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The Times's Anne Ashworth and Rebecca O'Connor talk to a number of agents on the subject of bargains, cash-buyers and the (far from discredited) theory that catching a falling market within 10% of the bottom is a decent deal (the nature of a recovery is that investors who wait for firm evidence of a recovery miss the boat). Inevitably, the readers don't like it:

A lot of talk and "Talk is cheap" but the market hasnt bottomed out by along way and most people reading this article will just think most of these people commenting are wishful thinkers and holding on to there jobs for dear life.

And more of the same. Yes, agents want the market to pick up, but it's in their best interests to sell lots of houses cheap, rather than a few expensive ones. Furthermore, if the market has dropped by around 20%, and it's possible to knock a further few thousand off with a confident cash offer, then is it really so naive to wonder whether that's a decent deal? It shouldn't need pointing out, but at some point we will reach the bottom of the market.

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The third month of growing enquiries hasn't stopped a sense of falling prices... the number of surveyors reporting falls compared to those reporting rises increased, the average number of properties sold by an agent in the month slipped to 9.9.

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Old habits die hard, and it's even harder to wean the British public off their property addiction. I'd heard, anecdotally, from a number of estate agents that January had been something of a good month, but I'd just assumed they were drunk or high or something. But here's the Halifax House Price Index telling us that January prices rose, yes that's rose, on the month, by a matter of 1.9%. A blip? Very possibly... people in the industry are only convinced of a change of direction once the three-month average moves from red to black or vice versa. But now here's the Guardian getting the same story I've been getting... not only that, but gazumping too.

Charles Peerless, manager of the West End and City branches of Winkworths estate agency, said: "We've had gazumping on two lower priced properties - around the £360,000 mark - in January. "We had abuse from the buyers because they think the market is dreadful and they couldn't believe they had been outbid."

Technorati Tags: estate agents, London, property, real estate, real estate agents

Why? That's the day to exchange on a house, according to the Telegraph.

A Daily Telegraph survey of property experts showed their estimates of when UK house prices will be at their lowest ranged from last Thursday to May 2010. The mid-point is in seven-and-a-half months time.

Who said "last Thursday". We demand to know.

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Knight Frank's posh London property index has just suffered its second-biggest monthly decline, dropping 3.7% in January, knocking prices 21% on the year. City jobs-losses are presumably a prime culprit, and this is a figure that presumably factors in the advantage London's most sought-after postcodes enjoy when the pound is low. It comes - however - after several years of double-digit growth.

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This one's interesting... a look at completions recorded in December. It shows prices down 13.5% on the year (-2% in the month).

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According to Nationwide, January saw a 1.3% fall in house prices, leaving them down 16.6% on the year. The three months to January figure dropped by 4% on the same time period year. The equivalent in the last Nationwide report was 4.2%. Interestingly, this particular figure - which is often used within the industry - has been improving for four consecutive months, providing some evidence that the rate of fall might be slowing.

Technorati Tags: London, property, real estate

It's based on a survey of estate agents, and it shows a 1% fall in January, leaving the index 9.4% down on the year, and 10.2% of its August 2007 peak. Those figures appear overly mild to me. It now takes an average of 12.3 weeks to shift a property, and most properties can expect to achieve 88.3% of asking price.

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A 0.55% rise in December, the Primelocation Index's second monthly rise, leaving London asking prices 3.8% up on December 2007. Strong neighbourhoods included west and south west London; there were small falls in Islington, the City and Docklands. Here's Primelocation's Head of Insight, Andrew Smith:

"Over the past couple of months prime agents have reported a modest upturn in activity (albeit from a very low base), a trend which can be attributed to the impact of falling prices, lower interest rates and a rise in demand from overseas buyers attracted by the dip in the value of Sterling."

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"We are having the busiest January in five years, with more than a 100 per cent increase in enquiries since the beginning of the year and several sales agreed in the last two weeks alone. Buyers perceive that even if prices drop a bit further they won't get a better opportunity to borrow at these record affordable rates."

That's Cluttons' James Hyman, talking, primarily, about posh neighbourhoods (the piece name checks Clapham and Chelsea). His argument? If you've got cash, neither the banks nor the brokers know what to do with it, buying's cheaper than renting right now, so the clever people are shoving it back into property if they can find the right deal.

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After their long ‘lone voice’ period, research consultancy Capital Economics, the big bears of the residential property market, attempt to capitalise on a good year by leaving all their chips on red, and predicting there’s 20% of slack still to be wound in.

Our publisher examines the predictions, in his guest column for Citywire.

Technorati Tags: property, real estate, theRatandMouse

The DCLG house price index is possibly the only thing I like about the Government. Based on completions, it's more meaningful than many of the other indices. In fact, I'll admit, I'm perversely excited about December's 12-month figure, due out in about four weeks. I know... I'll get help. For now, it's all about November, which shows a 1.9% fall in the month, a 4.4% fall in the four months to the end of November, and an 8.6% drop over the year... suggesting that the Government's completion price-based data is going to show a significantly smaller drop on the year than figures published by Halifax and Nationwide. Interestingly, first-time buyers are getting the best of it. Annual average house prices for ftbs in November were 11.8% lower than a year ago. Download the actual report here.

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Royal Institution of Chartered Surveyors figures show house sales continuing to fall, to 10.1 per agent in the three months to December (from 10.6 the previous month), once again breaking the RICS record. Confidence among estate agents (the number not expecting continuing house price falls), meanwhile, has improved very slightly, and new buyer inquiries are up for the second consecutive month, suggesting there might be a growing pool of interest either looking for bargains are preparing to enter the market once the worst of sliding prices is over.

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It's coming, according to London Development Agency boss Peter Rogers, unless we start building again. He cites pent-up demand and poor supply , but didn't - interestingly - predict when the explosion is due. More here.

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And - according to Knight Frank - it might be worth 20% less than it was this time last year.

Andrew Shirley, head of rural property research at Knight Frank, said: "Many of those working in the banking and finance sectors, which have been hard hit by the credit crunch, live in the Home Counties. So it comes as no surprise that this is where values have been hit hardest - by over 20 per cent in some areas.

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It might not get the coverage the Halifax index got a few days ago (there are only so many ways of saying the same thing) but the Nationwide index closes the year nasty. A 15.9% drop on the year is the biggest since Nationwide began keeping records, and it follows a December drop of 2.5% (after a modest 0.4% drop in November had us all wondering whether things were leveling out).

Technorati Tags: property, real estate

First off... a quick refresher. Here's what they were saying last year.

It's been that kind of a year... a year that made Capital Economics look bullish, and left the Rat and Mouse with egg on its whiskers. 2009's set of predictions look very different. It's a clean sweep for negative numbers. There are some notable names missing altogether (Halifax isn't playing, because it doesn't feel it's appropriate to publish independent research when the company's on the verge of losing its independence; Nationwide won't play because of a fear of current volatility; the Council of Mortgage Lenders because it's all too depressing; the National Association of Estate Agents because it has too much sense.) Some things never change, however. Notice, at the top... the estate agents; at the bottom... Capital Economics. Here goes:

Hamptons ↓5%
KFH ↓5%
Assetz ↓5%
Winkworth ↓5% to ↓10%
Hometrack ↓10%
RICS ↓10%
The Rat and Mouse ↓10%
Legal & General ↓10% to ↓15%
Barclays ↓10% to ↓15%
Propertyfinder ↓12%
Knight Frank ↓15%
Capital Economics ↓20%

Halifax NO BETS
Nationwide NO BETS
Council of Mortgage Lenders NO BETS
National Association of Estate Agents NO BETS

There are specific and special problems with making predictions for 2009. For instance, none of us really knows where house prices are right now. Transaction levels are low enough to be statistically unreliable. According to Halifax - the place we traditionally look at this time of year - prices are currently down 18% from their summer 2007 peak. The general economic crisis provides a further layer of uncertainty. Arguably more important than interest rates or the willingness/ability of the lenders to lend, is employment. If 2009's job-losses turn into the catastrophe some predict, they'll count out any kind of house price recovery, and may well add impetus to a downward spiral. Nor will the market act as a whole. New builds are likely to suffer, as developers decide they'd prefer a kicking to a fatal lack of cash. Internationally desirable locations and properties, on the other hand, could profit from a weak pound.

In other words, it will be complicated.

Happy New Year to you. The Rat and Mouse will be back on Monday.

Technorati Tags: property, real estate

Accurate-ish, because based on completions. Lagging reality, because they represent deals often done six or eight weeks earlier. Whatever, the Land Registry November report is showing an annual decline in prices of 12.2%, which is about what most people were expecting. It's the 15th consecutive monthly drop. More here.

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Of course, we've still our 2009 predictions post to come... we'll do that nearer New Year's Eve. But right now... the 2008 facts are coming in thick-and-fast. Like... London's been hit hardest by the house price downturn. A Hometrack survey shows London's down 10.1% on the year, compared with an 8.7% national average. Those numbers sound conservative to me. We'll know something like the truth after the Government reveals its December completions figures in a month or two. Meanwhile, Globrix claim that - in the UK's most stagnant market, Rochdale's - one in four homes remain on the market after 12 months. Elsewhere - and this is slightly counter-intuitive given the dramatic recent cuts in interest rates - homeowners paid off a record £5.7b of mortgage debt in the third quarter of 2008. Presumably, this is about falling house prices and tricky loan-to-value demands from the lenders. Still... kind of mature, isn't it? More facts and figures as the year draws to an end. And hold on - of course - for those all-important 2009 predictions.

Technorati Tags: London, property, real estate

We all know that. And yet there's something about hearing somebody like John Varley, Barclays' Chief Executive, actually say it that focuses the mind. Here you go:

"Our view was that from the top to the bottom, you would see a fall of something like 25 to 30%. I suspect we're about halfway through that at the moment. I mean that slowdown, the negative house price inflation started in 2007, it's accelerated in 2008. We're probably about halfway through that period, so in other words we've got another 10 to 15% to fall between now and the end of next year."

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Optimists dared to ask whether the first glimmer of sunshine had appeared on the horizon yesterday, after figures showed a modest increase in loans given to first-time buyers and some estate agents reporting possible sightings of "green shoots" in the market.

We Brits never give up, do we? This is Council of Mortgage Lenders data, showing a 15% increase in the number of loans to first-time buyers between October and November. The excitement is about seeing a figure that's black, but calling the end of the property crash would surely be premature. There simply comes a point beyond which volume just can't fall any further. It won't be enough to support prices, and it's unlikely to be followed by steadily increasing volume. Not yet, anyway.

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It's a Royal Institution of Chartered Surveyors survey, showing confidence among agents slightly improved, but completed sales down to their lowest level, to 10.6 each over the last three months (from 10.9) and 55% down on the year.

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A spokeswoman for the CML said: "There is questionable value in making a prediction on prices. Whatever we say will be very high profile and, unless we can do it credibly and with confidence, it is questionable whether it makes sense to do it at all.”

The argument is that with transactions at such a low level, we've no idea where prices are now, never mind where they'll be this time next year. Makes sense to me... although I know some estate agents who tell me they've a very accurate idea about where prices are.

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It's a 2.6% fall in November, according to the influential Halifax House Price Index, leaving the annual change -14.9%. It's likely that Halifax will further revise its predictions for 2009 in the coming weeks.

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"92 per cent of sales done by our Knightsbridge office so far this year were to foreign nationals," says Phil Tennant from Hamptons International.

Desperate vendors. A slow market. A cheap pound. It's not a bad time for wealthy foreign bargain hunters, according to the Telegraph. Hold on tight for the next interest rate cut.

Technorati Tags: London, property, real estate

Knight Frank's index of posh London home prices fell 3.6% in November, the second largest fall since the record began (it was beaten only by last month's, of 3.9%). The annual index is now down by 14.1%, with 9.3% of that falling out in the last three months. Interestingly, family houses - previously pretty immune - fell more than flats (4.1% to 3.2%).

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Land Registry house price data is being accused of misleading buyers, since it doesn't reflect repossessions or auctions. This year, repos are likely to represent 6% of residential property transactions, and so the argument goes that they need to be included in any representative data. But a market isn't simply about supply and demand. It's about time, too. As any gazunderer knows, time constraints on the part of a vendor can have an unusual effect on prices. Repos and auctions bring a particular urgency to the deal... are they really a good way of measuring house prices on the open market?

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House prices are down 1.1% in November (less of a drop than October's 1.3%), leaving them 8.1% down on the year, and about where they were in January 2006... which was, if I remember, expensive. In London, specifically, the annual index has dropped 9.5%. Interestingly, there's (kind of) evidence that volume might have bottomed out. The time it takes to shift a house is now 11.8 weeks, compared to the previous report's 11.9 weeks; and vendors are accepting 88.9% of asking price, compared to 89.2%. Is there enough volume for such small variations to be meaningful? That's arguable.

Technorati Tags: property, real estate, London

It's a 1.5% fall in October, leaving the October-to-October figure down 10.1%... or at summer 2006 levels. London's fall is more moderate, at 8.6%.

That's the way some commentators are reading it. It's the Nationwide survey - which has shown some dramatic falls in recent months - and a 0.4% drop in house prices for November (after 1.3% in October). It brings the annual rate down to -13.9%, from -14.6%. Our reading? Most likely a blip. There's nothing - the economy, lending, number of trades - that points to a sudden change in the wind for house prices.

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Forbes has a look at London's property winners and losers, ranking boroughs for resilience to the market downturn. The most resilient? Westminster and Hackney share top honours (each with a year-on-year rise of 2.7%), followed by Kensington & Chelsea (up 1.7%). Topping the most ravaged by the bust list are Waltham Forest (an annual fall of 5.8%), leafy Ealing (down 3.6%) and Lambeth (down 3.5%). Read the feature, here.

Technorati Tags: London, property, real estate

London's estate agents are selling just two properties each month, according to the latest report from the Royal Institution of Chartered Surveyors, and nationally volume's at its lowest level since the organisation began keeping records back in 1979. The Telegraph talks to an agent in Norwich:

"We have had no sales in October at all! The market can't get much worse can it?"

Actually, the second sentence is as relevant as the first, because the survey actually showed a slight improvement in the agents' and surveyors' confidence about things getting better, reaching the highest level since March 2007. Some people need to move. There comes a point below which volume just can't drop. There's also a sense that the slow market is creating a lot of pent-up demand. When buyers feel the market's close to the bottom, they may well return in force.

Technorati Tags: London, property, real estate

There's a big bear in the house over at property market derivatives broker TFS. Gamblers Traders there expect the Halifax House Price Index to drop more than 40% of its peak by October 2011.

[via Brickonomics]

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The Halifax House Price Index shows a 2.2% fall in October, leaving the index 14.9% down on the year... the biggest annual fall since the index began in 1983. It puts prices 15.7% off their peak.

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Their posh London property index is showing a 3.9% fall in October, the fastest decline since they began keeping these figures. Here's Knight Frank's Liam Bailey, via PropertyWeek.com:

A 4% fall in price in a month is suddenly very noticeable – equating to £160,000 on a £4m house (or more than £5,000 a day).

Technorati Tags: London, property, real estate

The first spasms of a market in recovery? Or just a property market Braxton Hicks? Who knows? But it’s probably fair to say that the US property market might have moved into a new phase.

Our publisher looks to the States for the first signs of property market recovery, in his weekly column for Citywire.

Technorati Tags: property, real estate, theRatandMouse

Seventy-four lots, 100 attendees... err... three bids, and no sales. Welsh estate agents Peter Alan have been blamed for overpricing the properties, but reports suggest that apartments that had at one time seen valuations of £200,000 were offered at £30,000; yet, still no takers.

The auctioneer was despondent throughout and said, ‘Look, have you got any bids at all?’

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It's a 1.4% fall in October, leaving house prices 14.6% lower on the year. Completions are at their lowest level since 1974.

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The Land Registry's completions data shows house prices in September 8% down on the year, and volume in the second quarter (compared with the same period a year ago) down 48%. Regional variation? You betcha. Welsh house prices are down 10.7% on the year. In Hartlepool, they're up - yes, that's up - 4.7%. London prices are down 1.5% in September, and 6.1% across the year.

Technorati Tags: London, property, real estate

Hometrack's figures now suggest a 7.3% fall on the year to October, leaving prices at March 2006 levels. In October itself, prices slid back 1.3% (compared to a 1% in fall in September). Properties took an average of 11.9 weeks to sell, and people are paying an average of 89% of asking prices.

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On October 13, it was all about under-supply propping up house prices and saving the UK from ultimate housing market catastrophe.

Britain's housing market should recover quicker than those in other countries because too few properties have been built recently, the prime minister has said. Speaking to a City audience earlier today, Gordon Brown said that not enough UK property had been built in recent years - unlike in the US and Spain, who had "overbuilt" during the property boom.

A week later...

Brown is planning a 1930s-style programme of public works, spending billions on new schools, homes and transport projects. He has urged senior colleagues to increase expenditure on big capital projects – despite forecasts that tax revenues are about to collapse.

Technorati Tags: property, real estate

You've heard the stories of those US ghost-towns, hardest hit by the sub-prime crisis. But what about London? Welcome to Hill House, Thamesmead, a riverside new-build apartment block where all but two of its 84 flats have been repossessed, and where - according to reports - the crackheads and vandals are moving in. Just two years ago, these were sell-out prospects. Now, they're bargain bucket. Take Flat 54. According to Land Registry data, it achieved £274,995. Now, it's about to be picked up for £88,000.

Technorati Tags: London, property, real estate

How does this happen? House prices rise 1% on the month. The answer is... it's a seasonal thing, there's a traditional bounce at this time of year but it's normally much greater, which is why Rightmove's annual asking price inflation figure has dropped further into the red, at -4.9%.

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Mouseprice's ten fastest falling residential streets in the UK include a couple of London roads. Erebus Drive, in SE26, close to the river in Greenwich, is heavy on new-build apartments, but Russell Road in Barnet (NW9) looks like a fairly average residential road. You can see the full top ten on Mouseprice's actual report by clicking here.

Technorati Tags: London, property, real estate

Cass business school professor Andrew Clare is painting a picture of a highly and long-term depressed UK housing market.

Using futures contracts based on the Halifax house price index, he has calculated that, in 2010, house prices will be 40% lower than their peak of £199,600 in August last year. "Worse still, according to these prices, the Halifax index will not recover to its August 2007 level until 2023," he said.

Technorati Tags: property, real estate

August? Yes... the figures are based on completions, and so take a while to filter through. What's more, completions are up to two months after exchange, so - really - this is a snapshot of the June/July market. It was a 2.7% monthly fall, leaving the annual inflation figure at -3.4%. More here.

Technorati Tags: property, real estate

The Halifax index is at January 2006 levels, and posts the eighth consecutive monthly fall (in the 1990s slump, the run ended after seven months). The September fall was 1.3%, leaving the three-month on three-month annual rate down 12.4%. Interestingly, much of the media offers a 13.4% figure as an alternative annual decline, derived from a straight September-to-September comparison, despite having their knuckles wrapped for this last month. For HBOS's actual release, in PDF format, click this.

Technorati Tags: London, property, real estate

Just because the stock market's dropping faster than a Geordie consonant and the future of the entire financial system is in doubt, it doesn't mean there isn't time for another aspirational mega-property piece from Forbes. Because that's what makes London great. Today... the UK's most expensive postcodes in exciting reverse order. I won't spoil your fun. Actually, I will. The top ten are all in the capital, and the top five are SW3 (Chelsea), SW1W (Belgravia), W1K (Mayfair), W8 (Kensington) and SW1X (Knightsbridge), where the average house price is £1,870, 354.

So what's it like up there? Top Ten super-expensive London sales so far this year [October 6, 2008]

Technorati Tags: London, property, real estate

Down here, it's a bit quiet. But what about up there, where the super-rich pay £10m and up for their London properties? According to our friend Henry Pryor, it's not bad at all, thank you.

"Looking at sales so far this year we can see that there is still a market for properties over £10m with more than twenty six sales in London alone so far in 2008. Last year we counted just thirty eight in the whole year."

I can feel a Top Ten coming on.

1 14/03/2008 £16,800,000 Gainsborough House, Winnington Road, Barnet, N2 0TS

2 8/07/2008 £15,000,000 10, Chester Square, City Of Westminster, SW1W 9HH

3 25/04/2008 £13,500,000 34, Hans Place, Kensington And Chelsea, SW1X 0JZ

4 30/05/2008 £12,500,000 Walpole House, Chiswick Mall, Hounslow, W4 2PS

5 04/04/2008 £12,250,000 6, Chester Square, City Of Westminster, SW1W 9HH

6 27/05/2008 £11,990,000 14, Upper Phillimore Gardens, Kensington And Chelsea, W8 7HA

7 06/03/2008 £11,500,000 18, South End, Kensington And Chelsea, W8 5BU

8 03/06/2008 £11,500,000 199, 801 Apartment, Knightsbridge, City Of Westminster, SW7 1RH

9 24/06/2008 £10,324,725 21, Flat 2, Chesham Place, Kensington And Chelsea, SW1X 8HG

10 03/06/2008 £10,000,000 26, Phillimore Gardens, Kensington And Chelsea, W8 7QE

More from Mr Pryor:

"In March, Gainsborough House in Barnet sold for £16.8m and in May Thames-side Walpole House in leafy Chiswick for £12.5m. In both cases, agents say they would expect these mega homes to sell for similar sums if they went on the market today. To be honest, people with this kind of money tend to be rich because they understand the markets not despite them. As such, I'm not sure that this would be the case and I see no reason why these homes would not have lost up to 15% of their value as have many others in west London since the peak of the market 12 months ago."

Technorati Tags: London, property, real estate

Later than we expected, Nationwide have published their house price figures for September. It's another 1.7% fall in the month, leaving the annual figure down 12.4%... a number that's getting a bit of press this morning since it's the biggest annual fall figure since 1991. Meanwhile, accompanying literature from Nationwide's Fionnuala Earley points out that the rate of fall is beginning to stabilise, and draws on the company's 50 years of house price measurement to suggest that these boom and bust cycles might mean alot at the time - if you're in a hurry to sell, or you've borrowed at the top on a demanding loan-to-value ration - but what they say about the long-term house price trend is negligible.

Recent trends are interesting, too.

These graphs are important, if we're to put current trends in perspective. But with volume at such a dramatic low, who really knows what a house is worth? If you want to read the Nationwide report yourself, click this for a pdf.

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... propped up by oil and commodity prices, according to Reuters, and a scarcity of London homes in the £10m-and-over band. Above £20m, according to Savills, deals were up 200% in the first six months of the year.

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Where's September's report gone? Last year, the report was ready for 7am, September 27 publication; the year before the embargo date was September 28. Seriously, I can't think of a time when it's been this late in the month.

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House prices fell 1% in September, according to Hometrack, leaving the average property worth 6.2% less across the year. Interestingly, London is showing a greater-than-average fall... down 7.1% annually.

CML admits prediction needs updating, but won't be drawn on nummbers [September 24, 2008]
Market report - Rightmove [September 22, 2008]
Market report - DCLG, and shock July house price rise [September 16, 2008]

Technorati Tags: London, property, real estate

Why is Reuters doing this today, when they did this on Monday?

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Twenty reasons why they're a good thing... apparently... including "survival of the nicest estate agents" and "fewer advertisements by Polaris World".

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"Futile"... that's how the Council of Mortgage Lenders' Bernard Clarke has described the house price prediction game during the current financial climate, and the Rat and Mouse tends to agree. He does, however, admit that the CML's current prediction of a 7% fall on the year now looks "wide of the mark".

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According to Knight Frank, Monaco's overtaken London and become home to the world's costliest real estate. Square footage in the chicest London postcodes rose 1.8% (in the second quarter, from the same period last year) to £3,291; but in Monaco they rose 30% to £3,762. More here.

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Asking prices are down in September by 1%, leaving them down 3.3% on the year... which seems less of a fall than casual, unscientific observations would suggest.

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They're the Government figures, based on actual completions in July, and so - arguably - representing deals struck mainly in the April-May-June. The July-to-July annual inflation figure is -0.3%; in the quarter, they're down 0.5%. Interestingly - not, necessarily, significantly - prices within the month rose by 1%, something of a shock, but probably representing the long delay between exchanges and DCLG figures.

Technorati Tags: London, property, real estate

And it's a fall in August, of 1.3%... the sixth consecutive move in a downward direction and the biggest single drop since October 1992. It leaves the annual inflation figure at -2.2%. Demonstrating the geographical nature of current house price trends, London remains in the black, Windsor and Maidenhead are still 19.2% up on the year.

Technorati Tags: London, property, real estate

This is a bit of a regular item, with owners of relevant data (property portals, search engines, Land Registry subscribers) extrapolating figures purporting to reveal the catchment area premium paid by desperate London parents. Why's this one different? This one's a YouGov poll, targeting London parents, and it comes at a time of falling house prices and rising private education costs. According to the results, 19% would pay between a premium of between £5,000 and £100,000 for access to a good state school. Two per cent would consider paying more than £100,000.

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The headlines:

• a 1.3% fall in August (the fourth consecutive monthly drop)
• annual "growth" now -1.6%, pushing the figure into the red for the first time since 2003
• the cheaper properties are worst hit... with sub-£1m homes down 9.2% on the year
• properties priced between £5m and £10m are still 1.3% up on the year
• everything's fine in Mayfair, where properties are up 10.3% on the year

Technorati Tags: London, property, real estate

The RICS have spoken, and it's bad. Nationally, estate agents made an average of 12.7 sales each in the three months to August. In London, the figure was worse... 9.4 transactions per agent or less than one a week. On the positive side, it's being reported that estate agents are getting really good at sudoku, and totally dominating a number of Nintendo DS titles. Perhaps cheered by this success, they've become (only) slightly less bearish in house price estimations... 81% more Chartered Surveyors reported a fall in house prices, but that's down from 83.1% in July, and it's the fourth consecutive move in the same direction. If you want to download the actual RICS report (in pdf format) click this.

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He takes a timeout from merger chat to tell the BBC's Robert Peston that...

... he doesn't expect the housing market to show signs of recovery till 2010. And he also forecasts the peak-to-trough fall in prices will reach 25%.

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Yesterday, a number of news sources reported that the Halifax House Price Index showed an annual fall of 12.7% to August. The figure was convenient, since it allowed the media to claim it signaled the worst annual fall in a quarter of a century. Today, they're getting their knuckles wrapped by the Halifax, who in fact published a less exciting (although still hardly impressive) figure of 10.9%. Halifax work out their annual figure by compared a 2007 three-month average with the equivalent 2008 three-month average. The 12.7% figure was created by simply compared August with August... a system which - although logical - results in erratic monthly results. More here.

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What's this? Madness? Inebriation? No, it's a press release. According to London estate agents Alex Neil, improving lending conditions are the first sign of the boom returning. While other offices are closing, AN continues to expand, "to meet high demand". What's more visits to the AN website are apparently up 218% in the last three months. They predict a 15% rise in London house prices. Which begs the question... what's everybody else doing wrong?

Meanwhile, according to the Halifax, university towns in southern England continue to do (comparatively) well. with properties selling at a premium of as much as 20%. More here.

Technorati Tags: estate agents, London, property, real estate, real estate agents

This morning's figures from Hometrack show the index's 11th consecutive monthly fall... 0.9% for August, leaving the annual figure 5.3% down. Achieved asking prices are at 90.7%, which sounds - in the current situation - high, but is historically low. It's taking almost three months to sell a property.

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Knight Frank report that the average price of homes in London's nine most expensive neighbourhoods fell 1.6% between August 2007 and August 2008. However, there are distinctions to be made within the data, with the lower end (homes worth £1m or less) being most affected. "Super-prime" territory (properties worth more than £10m) gained in value in July, by 2.9%, leaving them an astonishing 19% up on the year. Profiting from high fuel prices, Russian and Middle Eastern buyers don't know the meaning of credit, never mind crunch.

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According to Nationwide, prices are down 10.5% on the 12 months, the biggest annual fall since the final quarter of 1990. And it's not over yet... the rate of the slide rose a little, too, with a 1.9% drop in August, after monthly falls of 1.5% in July and 0.9% in June.

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The market for flats might be flat, but it's marvelous in mews-land. The Rat and Mouse hears on the grapevine that mews-specialists Lurot Brand are breaking records faster than Phelps, securing £1,220 a square foot in Hyde Park Garden Mews (previous record: £1,112) and £1,256 a square foot in Leinster Mews (previous record: £1,000). While the National Anthem's played and Team LB receive their medals, we can inform you that the properties in questions sold for £2.2m and £1.44m.

Technorati Tags: estate agents, London, property, real estate, real estate agents

According to Rightmove, asking prices are down 2.3% nationally in August, leaving them 4.8% year-on-year. In London, the August figure was 5.3%, with Wandsworth being hit particularly hard, asking prices falling 7.9%. Annually, the London figure's down 3.8%. Rightmove's Miles Shipside, in his accompanying comment, blames the scarcity of mortgages, and suggests buying in the Olympic areas as the best hedge against falling house prices. More here.

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That's according to the Telegraph, that illustrates a piece about current property market jargon with some optimistic views of where we are in the downturn. James Greenwood, from Stacks, claims "the bottom is now visible" (insert obvious gag here), after a swifter and more sudden drop than commentators were expecting. Hamptons's Phil Tennant claims the clue's in the loans, with rising loan-to-value ratios pointing to renewed lender confidence in house prices.

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It's the RICS's monthly swellness index, and it's a little ambiguous. Few agents were feeling bad and reporting falling prices in July than in June, and there have been increased buyer enquiries for the third month running. Swell. Except actual sales per agency dropped to their lowest since records began in 1978... each office is currently shifting less than five properties a month. Of course, the question is... what effect Stamp Duty uncertainty? More here and here.

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Last month, theRatandMouse reported a 1.7% fall in house prices on London's most princely streets. Today, figures released by Knight Frank show that July wasn't much better for the fabulously wealthy either. Annual growth is still (just about) positive, but the average 'prime central London' property lost 1.6% in value during July, the third consecutive monthly fall.

By guest blogger, Poppy Dinsey

That's according to a new report which you can read up on over at the BBC. Apparently, we should expect to see prices falling 4.4% in 2008, 2.1% lower in 2009, recovering by 2010 and rising at over 9% in 2012 and 2013. Oh, and the report has been written by the National Housing Federation, whose members rely on us having confidence in the housing market. Hmmmm.

By guest blogger, Poppy Dinsey.

Depending on what figures you subscribe to, it’s possible that, in the time it takes to research, write and submit this column, I’m losing more from the value of my home than I’m earning at the keyboard. Should I be bothered?

Our publisher, getting poorer, in his guest column for Citywire.

Technorati Tags: property, real estate, theRatandMouse

Mervyn King's position is unenviable. On the one hand... runaway inflation; on the other... falling house prices. What he could really use is some stability, some confidence returning to the property market, so that he could concentrate properly on inflation (his job, after all) and at least dare think about higher interest rates. Enter fellow MPC-member Blanchflower:

House prices could fall a further 30 per cent, the biggest crash ever witnessed in Britain, a key member of the Bank of England has warned. David Blanchflower, a member of the Bank's interest rate-setting committee, said there is a threat they could fall this far.

Blanchflower is apparently continuing to lobby for rate cuts.

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Hey, look, the world's stopped turning:

"Middle Britons" will lose more, in percentage terms, from the value of their homes, according to research by AXA and the Centre for Economics and Business Research, quoted in the Middle Britons' bible. Why? It's not exactly clear. The suggestion, though, is that they're less "resilient" to the credit crunch/falling market, because their homes have been gaining in value long after the rot set in elsewhere in the market:

John Ward, managing economist at the CEBR, said: 'Middle Britain will experience a sharper fall in house prices compared to the rest of the country because its resilience to the credit crunch is finally buckling. Whereas the country as a whole has been experiencing a slowdown for some time now, Middle Britain's house prices have remained steady until recently. This means the effects will be felt more starkly as prices decrease more rapidly.'

So, in other words, they won't be hardest hit. They've just been given a little longer to come to terms with what's about to happen. And - according to Ward - their homes will be the first to pick up in value after the bust (should there be a full-scale bust), because most of them live in south of England, which is better placed to weather the economic storm. Business as usual.

Technorati Tags: property, real estate

Agents shifted just 15.3 homes per agency April-to-June, the lowest number since RICS records began 30 years ago, and 87% of agents/surveyors reported falling house prices. There's also talk of predatory buyers, as the cash-rich take advantage of desperate vendors.

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The Halifax House Price Index - a benchmark in many ways - is posting a 2% fall for June, leaving the annual change at -6.1% and the average house price at August 2006 levels. In the report, Halifax's Martin Ellis tries to paint this as a "moderation in the recent rate of decline", following May's 2.5% drop, but it's still a rate that will cause potential problems should it continue for too much longer. You can download the actual factual report by clicking here, or read some commentary here.

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According to 61% of the estate agents surveyed, the slowdown will be over with in a year. Only 28% thought it would take more than a year, 7% more than three years. More here.

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The Department of Communities and Local Government house price data reaches us last, because it's based on completions, but it's accurate, because - er - it's based on completions. April's figures, which arrived in early June, stood out from the crowd by showing a slight rise. May's figures, out now, don't. It seems the DCLG index has finally "caught up with the slowdown". May's index falls 0.3%, leaving the annual inflation figure still in black, but only at 3.7%. Remember, too, that these completion figures reflect exchanges made weeks, sometimes months, before. More here.

Technorati Tags: property, real estate

If you're, well, not from 'round here... Evan Davis is the BBC's ex-economics editor, now Today presenter. And, yesterday, he was wondering aloud exactly how big a part the media played in building the boom into a bust...

Davis, who was interviewed by his BBC colleague Jeremy Vine in Glasgow, said the media may also have helped inflate the market by reporting on every new house price survey – even when several of them were coming out in the same week. "There was a period when online – not just online and not just the BBC – when house price stories were very interesting," he added. "If you report the same thing five times then it sounds like they are going up even more. We in the end drive these things up just as the media did in the dotcom boom," Davis said.

Right. And right. And, er, right. Hmm. Seeing a new pattern?

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According to Knight Frank figures, the crunch is hitting prime central London, with the average price in London's most expensive streets falling 1.7% in June, cutting the annual inflation figure to 7.5%. I know what you're thinking. They're rich. And they're still 7.5% up. Absolutely, but bear in mind that annual house price inflation in these same areas was at 38% last August. Sales in the sector are also down, by an astonishing 60%.

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The eighth monthly fall for the Nationwide index is a 0.9% drop for June, leaving annual property price deflation at 6.3% and the index down 6.4% since January 1. More here.

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It's a ninth consecutive fall according to Hometrack, of 1%, leaving house prices 3.2% down on the year, and 2.5% since the start of the year. Weeks spent showing houses before an offer... 10.3 weeks (last June, the figure was 6), new buyer registrations... down 5.7%, and now less than 50% of August 2007 levels.

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The figures are for May, and they show no change nationally, but a 0.8% rise in London. That leaves the annual growth at just 1.8% nationally, 6.9% in London. Remember, these are based on completion figures (so, on the one hand, they're accurate; on the other, they represent deals done weeks earlier), so we're either looking at the very early stages of a significant house price crash, or something more like the house-price-stagnation-combined-with-general-inflation model that might, in the long run, be the healthiest thing for the housing market.

Oh, and here's Reuters, showing how not to report house price indices (lucky they're not tradable stocks)

Technorati Tags: London, property, real estate

They dropped by 1.2% in June (1.4% in London). Miles Shipside:

For most sellers that will mean whatever they thought of asking for their property at the peak of the boom, they need to take at least 10% off. Otherwise their property will stagnate.

More here.

Technorati Tags: London, property, real estate

Mervyn King's comments at yesterday's Mansion House dinner make interest rate rises sooner or later almost inevitable. Inflation is clearly the Bank's foremost concern (as, technically, it should be), and King seemed to ready to take on the property sector with the warning that out-of-control inflation would be as bad for house prices as higher interest rates. In other words... how do you take your coffee? Without cream? Or without cream? More here.

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That's the question being asked by recent first-time buyers who've seen the value of their new assets fall, recently. The economists' answer - according to a survey by the Society of Business Economists for ITV's Tonight - is that it could take until 2012 for prices to regain 2007 levels. According to 44%, we won't reach the bottom of the slide until 2009. More here. The Tonight show is scheduled for - er - tonight, at 7pm on ITV1. This, from the ITV website:

Technorati Tags: property, property TV, real estate

According to the FT house price index, out today, London's three-monthly average is up 8.5% on the same time last year. Across England and Wales, the figure's up 3.9%. More here.

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It's the Communities and Local Government data - so it's based on completions and therefore accurate - and it shows a slight rise (0.7%) in the average house price in April. But don't get too excited. Annual house price growth continues to fall, down to 4.9% for the year. Interestingly, this Government data is one of the rare places you'll find annual house price change still in the black.

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According to the Association of Residential Letting Agents (ARLA), 39% of agents are reporting tenant demand outstripping supply, and 77% of landlords are holding property with the intention of neither buying nor selling in the immediate future. A surplus of new-build two-bedroom flats is keeping rents stable in that particular area. In general, continuing demand looks likely, while it remains difficult to get a loan. More here. On the subject of loans, it's more difficult than it was to get one from Egg, the online bank owned by Citi, which - according to this - is pulling out of the mortgage market. It's also more expensive to get one from Busted & Broken, which is hiking rates across its offerings by as much as 0.55%. No doubt partly as a result, nobody's buying. According to figures from the Royal Institution of Chartered Surveyors (RICS) estate agents sold an average of 17.4 properties each in the three months to May. That's the lowest since records began in 1978. And they might be right to be wary. Data from the Council of Mortgage Lenders (CML) points to 23,000 potential negative equity cases in homeowners who took out 100% mortgages in the year to March 31. More on both those stories here. Finally, the other piece in the jigsaw, also supplied by the RICS, might surprise you. Sentiment - the estate agent/surveyor swellness quotient - improved marginally in May on less bad than expected sales figures. So, technically, what the figures reveal is marginally less rates of unswellness. More here.

Technorati Tags: estate agents, property, real estate, real estate agents

A big fall of 2.4% in May, almost twice the fall predicted by analysts. It leaves the three-months-to-May figure 3.8% down on the same period a year ago.

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There's interesting research by a York University professor (for Hometrack) that shows that at current levels 28% of young people are unable to buy anything locally. A 10% drop in house prices will help out a fifth of those, leaving the figure at 22.5%. But as house prices fall, the cost of buying (arranging and servicing a mortgage) continues to rise, and is currently higher than in 1990 (the peak of the previous boom), up 12% on this time last year. More here.

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It's a monthly fall of 0.2% and of course it's significant because it's based on completion prices. It brings annual inflation to just 2.7%. In London, the monthly fall was 0.5%.

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A monthly fall of 2.5% for May, the biggest drop Nationwide have ever recorded, leaves the average house £5,000 cheaper more of a bargain. This leaves annual house price inflation at -4.4%.

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It's been done before, but it's almost always interesting reading... this time Business Week takes $1.5m on the road to see what it will be in bricks and mortar. Not much - in the world's best cities - even during a credit crunch. The exception is, of course, Miami.

For Europeans, Miami's declining condo prices are "like Americans handing them the gift of the century," says [real estate agent David] Michonski. "The sun has not stopped shining. The beaches aren't any less white, and the whole thing costs them 30% or 40% less."

Head over to read the piece; there's a slideshow too.

Technorati Tags: London, property, real estate

And now expects a fall in prices of about 7% this year, and a fall in volume of 35%. That's a revision from a -1% forecast made last October, and comes after new figures reveal a 16% drop in new loans and remortgaging March/April 2007 to March/April 2008.

Technorati Tags: property, real estate

In an extraordinary development, asking prices rose in May - according to Rightmove - by 1.2%. What's more, the figure masks a significant amount of regional variation... the majority of regions showed reduced expectations, but in the house price happy south east, homeowners have been asking 6% more for their homes. Optimism? An attempt to factor the inevitable negotiation into the asking price? Whatever... it's unlikely to help. More here.

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The Royal Institution of Chartered Surveyors paint a gloomy picture this morning... the lowest number of transactions since records began in 1978. Eighty-two per cent of surveyed agents report falling prices between February and April, and the downturn is spreading everywhere, including Scotland (which - oddly - had been continuing to show price rises while the rest of the UK was stultifying). According to agents, unreasonably tight lending conditions have a lot to answer for, and it's interesting to note that other figures this morning reveal that average interest rates are up 0.4% despite recent cuts.

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The BBC is trailing interesting research from its new series of The Truth About Property that suggests that not only are more people "crash-proof" than in the early 1990s (it would take a house price drop of 56% to put the average borrower into negative equity), but that a house price crash would be far from entirely unwelcome, even among the property-owning class. People, apparently, are seeing a fall in values as an opportunity to trade up for less. The last series of this show was excellent, the Rat and Mouse has high hopes for series two, starting tonight, at 8pm, on BBC 2.

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According to Hamptons estate agents, properties in the £1m region have been hit the hardest by the slump, with prices falling by as much as 15% since September 2007. Only the super-prime sector - propped up by overseas buyers - continues to thrive. More here.

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It's the one the spread-betters and other gamblers go by, and it's reporting a 1.3% fall in April, knocking 4.2% off the value of the average home since the beginning of the year. Significantly, it's the latest in a series of indices that put the annual inflation figure in the red. According to Halifax, it's a 0.9% fall April-to-April. Read the actual release (in pdf) here.

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Nationwide report a six monthly fall (1.1% in April), leaving their annual inflation figure in the red for the first time to the tune of 1%.

Market report 2 - Land Registry [April 28, 2008]
Market report - Hometrack [April 28, 2008]

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... where they're warning of a 25% house price crash, between now and the beginning of 2010. Savills' Yolande Barnes is, however, also pointing out that it's in the power of the lenders to turn this into a 6% dip, by lending money once again. If you're shopping in the £5m+ bracket (see below) you don't need to worry too much.

Technorati Tags: estate agents, real estate agents

And another fall. This time... 0.4% in March, and - remember - this one's based on completions. And there's significant variation within the figure. In Wales, it was a 2.2% fall; in the north east, a 2.4% rise. Prices rose in London, too, by 0.6%. Transactions - year-on-year - were down by a quarter. The annual rate of inflation dropped to 3.6%.

Technorati Tags: London, property, real estate

April's not over, but Hometrack's figures are out, and they show a 0.6% fall in the month. But that's not as important as the annual figure, which slips into the red at -0.9%.

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Talking to Empire magazine:

"The natives of England are sort of being left behind because the big money came in and if it wanted something it bought it and made a bigger fortune doing so. And as anyone who has tried to buy a house in central London knows, it's almost impossible to do so unless you have 10 million quid."

I know... I know... tell me about it... less than ten million quid and it's a bloody Transit van and a matress. But what can you do? It's those Russian oligarchs and American pop stars. More here.

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You've got to hand it to Capital Economics, they really grasp the principle that if you predict something for long enough it's bound to happen. It's probably little comfort to anybody who took their predictions at face value during the last five years and put their own money in the position of CE's mouth... that could have turned out an expensive spread bet. Few would argue, though, that now's the time of the bear, and CE continue to ensure there's no bigger bear than them. They've cut there 2008/2009 forecasts... and are now expecting a fall in house prices of 8% in 2008 and 10% in 2009. More here.

Technorati Tags: property, real estate

The Evening Standard reports on falling asking prices here and there across the capital, including many of the top postcodes. According to Rightmove figures:

Average asking prices in Kensington and Chelsea have fallen £33,000 to £1,458,558 - down more than 2.2 per cent between March and April.

Oddly, though, asking prices rose (by 3.8%) in Hackney.

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According to figures by Shelter, the average price paid for a home by a first-time buyer was £52,674 in 1997. In 2007, it was £159,494. The average weekly income of a UK family over the same period, up 53%. More here.

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He's quoted here predicting that current falls in the London market - not helped, he says, be a non-dom exodus - have already triggered 15% falls which won't be apparent for a few months... until the DCLG index, which reflects completion prices, shows up.

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It's a big one - 1.6% - and you can't argue with it, because the DCLG figure is based on completions. It leaves annual house price inflation at 6.7%. Interestingly - although not without precedent - flats led the falls (-2.9%), bungalows were least affected (-0.6%). Inevitably there was regional variation, too. In London, the annual inflation rate is up at 9.5%. Something scary's definitely happening in Northern Ireland's recently over-heated market, with the annual inflation figure falling from 8.4% in December to just 3.7%.

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The BBC are headlining the radio news with the RICS survey showing that members (qualified estate agents) are more bearish on house prices than ever. Seventy-eight and a half per cent reported a fall in house prices March, that's up from 65.7% in February, and it's the worst figure since RICS began the (dubious, in my opinion) index in 1978. In an accompanying statement, the RICS thank low supply for saving the market from an all-out crash.

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According to this, using spread betting on London house prices as an indicator, Cantor Spreadfair is predicting an 18% drop in London house prices by the end of 2010. The piece suggests (I think) Spreadfair's launching a new spread-betting opportunity based around punter confidence, and how it turns out compared to the Halifax index... betting on the betting. Can't find any mention of this over at their website, though.

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It's a 2.5% routing, to be precise... the biggest monthly fall since September 1992, leaving the annual inflation rate at 1.1%, the lowest in 12 years, and Q1 2008 levels down 1% on 2007 Q4. The Halifax analysts aren't, however, talking about readjusting their 2008 predictions of a "low single digit" fall. Chief economist Martin Ellis is quoted, thus:

Sound economic fundamentals are supporting house prices. A strong labour market, low interest rates and a shortage of new houses underpin housing valuations.

He doesn't mention the scarcity of loans or decent deals.

Broken down, London saw a price rise of 1.6%, the East Midlands a rise of 2.2%. West Midlands was battered -5%, Wales -4.7%. One statistical surprise, perhaps:

The average deposit put down by a first-time buyer (FTB) in 2007 (£34,381) represented 20% of the purchaser price compared with 12% in 1989. Only 5% of FTBs took out a loan of 100% or more of the purchase price in 2007 compared with 35% in 1990.

Read the actual report (in pdf), here.

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It's all about February's Land Registry figures, which show a fall in London house prices of 0.4%... the biggest drop since March 2005's -1.2%. Kensington & Chelsea, one of the biggest winners over the last two years, got the worst of it, with a 0.7% fall. More here.

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This time, it's Hometrack, reporting a 0.2% fall for March, leaving the annual rate of house price inflation, March-to-March, at just 0.4%. More here.

Market report - Nationwide, tide continues to turn [March 28, 2008]

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House prices made it onto the agenda-setting Today programme this morning, after the Nationwide published its March figures. It's a fall - honest - of 0.6%, leaving annual house price inflation at just 1.1%, it's lowest since March 1996. The most dramatic figure, though, comes by looking at the last five months... over that period, Nationwide is seeing a 2.9% fall. Read the actual report in pdf here, but be patient, as the press appear to be hitting the server right now.

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When the National Association of Estate Agents put out a press release yesterday informing us that softening house prices signaled a more favourable market for buyers, I thought the only striking thing about it was that anyone thought it needed saying in the first place. But the comments, at the bottom of this, did better... picking up on the idea of a "buyers' market", and pointing out how far we've come, and in what a strange direction, when average prices around the £200,000 are a playground for buyers:

Its not a buyers market at the moment, its no-ones market.

How on earth can anybody call this a buyer's market? The only people who can afford to buy are those who have already done very well out of rising prices and have the cash. First time buyers have been frozen out completely because of inability to secure a mortgage.

A Buyers market?
First time buyers are holding out for a price drop, or cant afford the current price levels.
Home movers have to sell existing house..
So who are the buyers who can afford this market?

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Numbers of unsold properties on estate agents' books are apparently at their highest level since Rightmove records begin... back in the Web1.0, Elvis in the charts (not kidding) days of 2002; and yet asking prices have risen by 0.8% in March. Rightmove estimates that prices have fallen 10% from their 2007 peak, and recommends vendors mix themselves a reality Martini, and chuck in a couple of green olives. (Just make sure you don't get those ones with anchovies in them by mistake... done that, not nice... )

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How do I know? Because an insurance company is about to launch a product which will pay out if your mortgage repayments rise as a result of base rate hikes. It's called MarketGuard, it's the first product of its kind, and it's due to launch in a couple of months. On the subject of hedging, MarketGuard gets a mention in this very interesting Guardian piece about Government plans to offer some kind of crazy hedge against house price falls. Not general house price falls. Just the kind that affect your house. Read this:

In the Housing Finance Review, a 93-page document issued with the Budget, the Treasury says it intends to investigate the possible development of insurance based on house price movements, which would be hedged against detailed house price indices. Such insurance would pay out if the value of a home declined by more than the value of equivalent property in the indices.

What the hell does that mean? And how the hell will that be possible, given that national indices reflect broad movements, not "equivalent" properties? Are there "equivalent" properties? How many "detailed house price indices" would you need? One for every street? And who needs such a product and why? I'm confused.

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RICS gloom levels reached record levels in February, equalled only by the great sigh of June 1990. There's more unsold stock in estate agents' windows than there's been for a decade. 64.1% more surveyors reported a fall than a rise in February, up from 54.7% in January, and the greatest percentage since June 1990, when the figure reached 64.5%. More here.

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Halifax is reporting a 0.3% fall in UK house prices in February, leaving the annual inflation figure at 4.2% (from 4.5% last month). Stay tuned for this afternoon's interest rate decision.

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According to Knight Frank, the index on London homes costing £2m+ rose 0.6% in February, leaving the annual rate of posh house price inflation way down at a disappointing 24% (I know!), its lowest level since September 2006. More here.

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It's a fourth monthly fall, according to Nationwide figures... this time, 0.5% for February, bringing the annual rate of inflation down to 2.7%. The last time Nationwide reported four months of falls was 2000. More here.

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The plan was to bring you one of those little jpeg representations of the front page that the Rat and Mouse is so fond of, but the front page repeatedly crashed my capture client. So I saved it as a pdf... a 60 page pdf. It's now clear that I'm not going to be able to bring you an image of the House Prices Will Never Crash front page, because it's just too big and too mad... but what follows are a few highlights.

It's a truly extraordinary creation. It includes dinner party dialogue in screenplay format celebrating house price hikes, predictions of stratospheric rises in property values pegged to the Olympics and lots of pictures of rockets. Most of all, it's about the sell-to-renters. It doesn't like them.

In fact, the website's so crazy...

... that it's tempting to wonder whether it's the work of a HousePriceCrash agent out to discredit the bulls.

But... there are videos, too... 140 in the last three weeks, none of which I feel like embedding in the Rat and Mouse, and some of which are entirely unacceptable. What's going on? I'm scared. Who's Bruno?

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Good morning, and welcome to a new week. House prices have fallen again. This time... it's a February fall of 0.2%, according to Hometrack, leaving annual inflation at just 1.4%. The worst news is for vendors in a hurry... the average time taken to shift a property is up at 8.5 weeks, the longest since Hometrack began asking. More here.

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According to figures from Mouseprice, Kensington & Chelsea's glory days are over, and it's Courtenay Avenue, a road running parallel to The Bishop's Avenue, in Highgate that's now paved in the thickest gold and lined with the bushiest money trees. The average property price necessary to achieve this? Just £6.8m. Last year, the winner was Kensington Square, with an average price a whole 23% less than this year's... an example of what's happening in the prime-and-above market. Go here for some interesting analysis from Bloomberg.

Tumbleweed blowing down Millionaires' Row [February 18, 2008]

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House prices are up 3.2% in February, according to Rightmove, following a reported fall of 0.8% in January. A recovery? Not necessarily, says Miles Shipside. More, courtesy of Citywire, here.

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Reports of the return of sell-to-rent began to appear toward the end of 2007, and over the weekend they made front page property news in the Observer. According to Rightmove research, the practice - selling, hopefully, at the top, renting for a while while prices drop, and then either buying back in further up the ladder or taking a profit - is picking up pace. The Rat and Mouse can only applaud bubble-sitters' courage. Few financial decisions are as risky, or real-world calculations as tricky... taking in the cost of storage, rents (which can go up and down), the costs of selling and buying, the value of time, inconvenience and risk, all multiplied by however long it might take for prices to start to drop and then assuming it's possible to buy in just before everybody else does. The chances of getting all this right are low, and the Rat and Mouse has seen shrewd people brought down by this tactic. Exciting, though. Best of luck.

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Reports of the return of sell-to-rent began to appear toward the end of 2007, and over the weekend they made front page property news in the Observer. According to Rightmove Findaproperty (apologies, see comments below) research, the practice - selling, hopefully, at the top, renting for a while while prices drop, and then either buying back in further up the ladder or taking a profit - is picking up pace. The Rat and Mouse can only applaud bubble-sitters' courage. Few financial decisions are as risky, or real-world calculations as tricky... taking in the cost of storage, rents (which can go up and down), the costs of selling and buying, the value of time, inconvenience and risk, all multiplied by however long it might take for prices to start to drop and then assuming it's possible to buy in just before everybody else does. The chances of getting all this right are low, and the Rat and Mouse has seen shrewd people brought down by this tactic. Exciting, though. Best of luck.

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Despite the scare stories circulating at the back end of last year, of residential auction houses deserted but for a couple of spectators and a handful of derelicts who've come in out the cold, the auctioneers kicking the tumbleweed... day one of the Allsop Residential Auction sounded like the old days. We've a report of a thousand people on the day, including first-time buyers, an 86% sale rate, and properties going for way above what must surely have been some conservative guide prices. Big sales included Flat 6, 21 De Vere Gardens (Kensington) which made £1.925m (guide price: £1.25m-£1.5m). Day two... February 18, Cumberland Hotel.

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That was Mervyn King talking at a press conference for the Inflation Report, yesterday. He pointed to what is surely any intelligent person's preferred option... static house prices gently shifting price to earnings ratios over the next five years. Interestingly, he also tackled the decoupling of lenders' rates and base rates, suggesting surprise only at people's surprise. Naturally, he said, lenders will want to rebuild margins. More here.

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An interesting Merryn newsletter, on developer scams, buy-to-let gullibility, the Batoum Gardens house (tasty) heading to auction and what a central London agent let drop recently:

One agent caught off his guard told me a few weeks ago that going on his experience prices are already off 10-15% in some areas.

It's an interesting read. Catch it here.

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The number of surveyors/agents reporting a fall beat the number reporting a rise by 54.7% You'd need to go back to 1992 to equal that. More here.

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It's tempting to apply screenwriter William Goldman's first rule of the film industry - "Nobody knows anything" - to the property market. In the red corner... HousePriceCrash and HousingPANIC accusing the mainstream media of talking up the market in order to service vested interests. In the blue corner... this morning's heroes, Assetz, now accusing the FT and the BBC of talking the very same market down. (In the middle, in a freshly starched white shirt, the Rat and Mouse... when I say break, then break...)

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What's all the excitement about? It's the Government's official completion figures for December... the figures that are based on somebody showing somebody else the money, rather than what a vendor dreams about getting or a number pulled out of an estate agent's watch pocket. And December's particularly interesting because - as far as the Rat and Mouse is concerned - it gives us that true 2008 house price inflation figures, which was... 9.1%. (We got there, by the way, after a December rise of 0.4%.) That 9.1% figure is down from a July peak of 12.3% and represent a year low; and the three-month figures (10%, from 10.5% in November) also suggest a softening market. Now, back to the 2007 predictions. The looked something like this:

Which just goes to show what an almost unimagined peak prices are currently teetering on. A couple of Decembers ago, the Rat and Mouse called the above list "a big bunch of bulls", and yet only the very, er, bullishest came close. Well done, Assetz, the entire Rat and Mouse staff will be raising a toast to you tonight, on expenses, at one of London's swankiest champagne bars. (To see what Assetz have predicted for 2008, go here.)

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According to new research by the National Housing and Planning Advice Unit buy-to-let investment has had only a 7% effect on house prices in the last five years, throwing into doubt the assumption that the availability of buy-to-let mortgages has been an important factor in first-time buyer misery. The major causes of rising house prices and unaffordability have, the report suggests, been rising interest rates and higher numbers of households. The research follows similar finding by Capital Economics. Furthermore, both CE and NHPAU (NUPOW!!) believe that buy-to-let has had a positive effect on the quality and quantity of available rented accommodation. You might not like it, but that's what they're saying. More here.

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London's £2.5m plus property sector has clearly been too busy test driving Astons and lighting Cohibas to hear the news about the housing slowdown. According to Knight Frank, it saw a rise of 1.1% in January, with the market being led from the top... at £10m or more. Read more, here.

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No shift at all in January, according to the Halifax, leaving the annual rate of house price inflation at 4.5%. More here.

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It's a fall of 0.1% in January, the Nationwide index's third consecutive monthly fall, bringing annual inflation to 4.2% (from 4.8% in December)... the lowest figure since December 2005. This brings the all important three month figure into the red... a 0.3% fall. An interest rate cut next week? Here's a link to the actual, factual report from Nationwide (pdf). Scroll down the graphs. The Average UK House Price graph, plotted over ten years, shows just how serious a crash would be necessary to put a dent in the (theoretical) "profits" of anybody who's held property for five years or more. The Annual % Change in House Prices graph below it is fascinating because it shows how much volatility the market can take before producing annual losses. Note how, in September 05, the annual percentage figure dropped well below the current one... a year later it was at 8%. But the 3 Month on Previous 3 Month % Change graph is the news grabber... dropping below the horizontal for the first time in over three years.

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Hometrack recorded the fourth consecutive monthly fall in January, of 0.3%, leaving annual inflation at 2.3%, the lowest rate of growth since June 2006. It could have been much worse, but a lack of supply is apparently supporting prices. Meanwhile, the Centre for Economics and Business Research is predicting a 5.5% fall in 2008, followed by a rise of 3% in 2009, and increasing rates of profit in 2010, 2011 and 2012. Place your bets.

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It's a fall of 0.8% in asking prices in the five weeks to January 12, leaving annual house price inflation at 3.4%, its lowest since December 2005.

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In cased you missed them...

Kensington & Chelsea
Wandsworth & Battersea
Borough/Soutwark
Hammersmith, Chiswick & White City
King's Cross
Elephant & Castle
Docklands
Greenwich Peninsula
Lea Valley Olympic Park
Stratford

Not many surprises, there. A mixture of old favourites, where limited stock and high-intensity foreign interest tends to keep prices up, and well-telegraphed regeneration areas. The Rat and Mouse was a little surprised not to see more from the south-east, where the Dulwich spread continues but it's still possible to find family-sized homes for (a little) less than zillionaire prices. Read the full piece here.

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The Royal Institution of Chartered Surveyors' house price balance fell to -49.1 (in English, 49.1% more surveyors reported a fall than a rise) in December, its most negative position since November 1992. Unsold stock has jumped by a further 7.1% (after a rise of 9.1% in November and 10.3% in October). The RICS continues to urge interest rate cuts.

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Thanks Tom... you're right, I do. You have to take the Department for Communities and Local Government seriously in one (and only one) respect... their house price index is based on completions. They've just dropped the November data, and it's a fall of 0.8%, leaving the annual growth at 9.5%, the lowest it's been in a year, but still higher than it's likely to be in a few months. More here.

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The average house price has risen by an inflation-adjusted 160 per cent over 12 years, according to Nationwide. Owners of London properties have done even better, with a 193 per cent increase. Such inadvertent financial coups confer bragging rights at dinner parties from Barnet to Bromley. Yet the tiramisu-scoffing asset allocators could only realise their swollen capital if they relocated permanently to Barnsley.

The FT's Jonathan Guthrie tells it like it is in a fabulous column, here. It's brave and provocative - given the FT's core readership - while avoiding the apocalyptic suicide-pact attitude found elsewhere.

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According to figures by Knight Frank, London homes costing £2.5m and more rose by 1% in December, leaving them up 29% on the year. Price increases are said to have been fueled largely by foreign buyers. More here.

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Tonight's, er, Tonight With Trevor McDonald, is all about the nuclear winter that could follow a housing crash... negative equity, repos, genetic mutation...

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An interesting piece by Merryn Somerset-Webb, from the Standard, points out why London property is particularly susceptible to a falling pound.

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Halifax confounds and confuses this morning with news that its house price index shows a 1.3% rise for December, wiping out November's fall, and much of October's. The new figure leaves annual inflation at 5.2%, from November's 6.3%. Does this point to a rally? No more than a fall of 1.3% means a crash. Expect the indices to leap about a little during a period of uncertainty. But it remains to be seen whether the figure will have any bearing on the Bank of England when it meets on Thursday to decide interest rates.

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