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Area: House prices
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Never knowingly beaten to a gloomy headline, Capital Economics chose Nationwide Index day to hammer home a bearish house price forecast with the assertion that we're to lose the equivalent of an average salary off the value of our homes between now and the end of next year. That's a 5% fall this year, and a 10% one in 2011... adding up to £23,000 on a property worth £163,500. Any increase in interest rates, combined with a tightening of credit conditions, will be enough - CE's Ed Stansfield argue - to throw us into an even worse house price crash. He points out, quite rightly, that the recent rebound in property prices lacked a firm foundation. More here.
Technorati Tags: property, real estate
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August showed a 0.9% fall in house prices, according to the Nationwide index, the second monthly fall in a row (and the only time there've been consecutive falls since February 2009). This leaves annual house price inflation down at 3.9%, a considerable easing off from the 10.5% it showed in April. Most interestingly, it brings the three-month average back to zero. Have house prices peaked, at least for the medium term? We believe so.
Technorati Tags: property, real estate
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In their latest survey, Hometrack reports a fall in house prices of 0.3%, following July's 0.1% drop. Annually, prices are still up 1.5%, but Hometrack analysts expect the current downward trend to continue for the next six to twelve months. More here.
Technorati Tags: property, real estate
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The Land Registry's July house price data shows a rise in the monthly index by 0.4%, leaving the annual inflation rate at 6.7%. In London, house prices are up 12.1% on the year, and there's significant geographical variation, from the London gain to an annual loss in the North East (-1.4%) and monthly losses in the North East, East, North West and Wales. Download your copy of the report here.
Technorati Tags: property, real estate
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The National Statistician (available for after dinner speeches, bar mitzvahs etc) has begun his investigation into the efficacy of our house price indices. He'll spend this year focussing on the two reports issued by the Government: the Land Registry index, and the index published by the Department for Communities and Local Government. After that, he'll look at the Halifax and Nationwide indices (formulated by examining loan data), the Rightmove index (formulated by examining asking prices) and the Royal Institution of Chartered Surveyors report (formulated by throwing tea leaves against a brick wall while chanting).
Technorati Tags: property, real estate |
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According to Savills, £850m of £5m+ homes were bought-and-sold in London between April and June, the second highest quarterly figure ever (after the same period, 2008). So far this year, the running total's at £1.6bn. But Savills' Lucian Cook doesn't expect the frenzy to last into the second half of the year, and predicts a sharp cooling off, leaving prime market house prices down slightly on the beginning of the year. More here.
Technorati Tags: property, real estate
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Buy-to-let lending in the second quarter reached its highest level since the end of 2008, rising 13% on the previous quarter, and 15% on the same period a year earlier. Buy-to-let mortgages accounted for 12% of all new mortgages... the highest proportion since records began. Data, courtesy of the Council of Mortgage Lenders. Meanwhile, Acadametrics shows house prices recovering June losses with a gain of 0.1% in July, leaving the index 8.1% up on the year. Accompanying comment points to a "flat" market through the rest of the year. Repossessions are down, for the third consecutive quarter. CML data shows a 4.1% fall in the second quarter of the year. The outlook, however, isn't great... with unemployment likely to rise, interest rates in danger of rising and the Government's plan to cut support for borrowers. Oh yeah... good morning.
Technorati Tags: property, real estate
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In the Telegraph, the thorny and endlessly entertaining issue of house prices. And we're right to care, without feeling guilty. I know, I know... as a society, lower house prices would be to our benefit, and it's not fair that there's a generation priced off the property ladder and forced to dance to the tune of the nation's landlords. But remember the honest, decent families, vulnerable at the moment to job losses, who have bought a property in the last few years, and whose lives could be ruined (no exaggeration, check this out) by falling house prices coinciding with mortgage arrears. There's little pleasure to be gained from their suffering. So - as I said - concern about falling house prices isn't necessarily something to be ashamed of. And yet... how do you square a sentence like this:
Henry Holland-Hibbert, of Strutt & Parker, said he had just had "the best June ever".
With one like this, from the Guardian?:
Homeless migrants from eastern Europe in London who are unable to get benefits have become so impoverished that they are eating rats and drinking lethal cocktails of alcoholic handwash, a homeless charity has warned.
It's a shocking piece. The cliché would be to say that it puts the former feature in perspective, but that's all it would be... a cliché. It doesn't... it lives alongside in a bleak commentary on our complex, sophisticated, failing front line between economics and society.
Technorati Tags: property, real estate
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RICS sees an overall fall in prices for the first time since July 2009, as buyers sit tight and vendors gather. On its own, the report isn't enough to have anyone reaching for the tin hat (believe it or not, RICS questioned just 242 member-estate agents), but the finding are in keeping with other indices. For the record, 28% more surveyors expected falls, over price rises, in the coming months.
Technorati Tags: property, real estate
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According to Rightmove, asking prices have dropped for the first time this year - a sign, they say, of more than 30,000 homes hitting the market each week, but with supply failing to be met by either demand or mortgage credit. Asking prices fell 0.6% in the month. According to Rightmove's Miles Shipside, it's a buyers' market, and more falls are likely through the second half of the year.
Technorati Tags: property, real estate
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The bears might be vindicated... it could still be a while before house prices regain their 2007 peak levels. On the verge of the second dip, here's Zoopla with data showing that after 16 months of gains, the average house is still £20,358 off its November 2007 peak. Even in London (which is surprising to me) the Zoopla data shows house prices 16.1% of their peak. More here.
Technorati Tags: property, real estate
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A rise in supply and a dip in new buyer registration has knocked RICS members' confidence in the market, leaving a balance of just +9% reporting prices rises in June (compared to +21% in May). Expectations for the rest of the year slipped into the negative. More here.
Technorati Tags: property, real estate
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Second viewing with the kids on a house in the country my clients are dying to buy. I am not hopeful. It came on eight weeks ago at £3m, has been dropped to £2.85m, but my clients' piggy bank "only" holds £2.5m. "So, how are you finding the market?" I ask the fairly mainstream estate agent, who I know quite well. "You doing many valuations? Is stuff coming on?" "Yes," she tells me, "loads of vals and stock levels are looking much better than they have been." "Great?" I say, but she's not looking at all upbeat. "Well it would be but buyers just don't want to make a decision. The buyers are sitting on their hands... Truth is," she tells me sotto voce, "we can't flaming sell anything." I shall start negotiations at £2.3m.
Tracy Kellett runs leading buying agents BDI Homefinders. Follow her on Twitter, here.
Technorati Tags: property, real estate
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HBOS data suggests the market cooling. June is showing house prices down 0.6% on the month, following a 0.5% fall in May, bringing the second quarter into the red, at -0.1%. Accompanying literature blames the increasing switchover from low supply, high demand to high supply, low demand. More here. |
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Well, up on the decade, by a factor of five (from 27,000 homes worth a million or more to 132,000) but down since the credit crunch (w/o the crunch, there be a further 43,000). Eighty per cent are in London. The SW postcode seems to have done best, multiplying its million-plus homes by 23 in the last ten years, and accounting for almost a third of the country's total. The research was by Santander.
Technorati Tags: property, real estate
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There's nothing like news that a Bank of England Monitory Policy Committee member has "laid awake a number of nights" worrying about the economy. It's a quote from Adam Posen, and what - specifically - he's lying awake worrying about is whether the UK economy is the verge of the mother of all double dips. I've been finding it tough, getting to sleep on these muggy nights, too. I recommend any of these. A recent Bank of England survey suggests tough times ahead for wannabe mortgage borrowers. Elsewhere, recent house price survey data feeds into double-dip fears.
Technorati Tags: , property, real estate
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It's a modest monthly rise of 0.1% in June, according to Nationwide, leaving the annual rate of house price inflation down at 8.7% in June (down from 9.8% a month ago). By itself, there's not enough science here to confidently talk of trends, but taking other recent data into account, it's probably not premature to at least talk about a slowing in house price growth. Recent gains have all come with the proviso that this still wasn't a healthy market, and it was a lack of supply, rather than a surplus of interest, propping up prices. That appears to be changing.
Technorati Tags: , property, real estate
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According to research by Zoopla... money. The average value of a property on a "Hill" is £341,446, compared to £184,546 for a "View". Full rundown below:
Most expensive:
- Hill £341,446
- Lane £328,378
- Mews £294,869
- Park £283,069
- Green £269,861
Least expensive:
- Street £155,515
- Terrace £156,387
- Crescent £176,942
- Court £178,488
- View £184,546
No mention, surprisingly, of "Villas" in that bottom list.
Technorati Tags: , property, real estate
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The second report of the day, this one comes courtesy of the Land Registry and so carries some scientific weight and it shows prices falling by 0.2% from April into May, clawing back previous gains in the annual house price inflation rate, from 8.5% to 8.2%. In London, however, that figure's at 14.2%. In fact, there's considerable regional variation, with prices up 0.9% on the month in the South East, but dropping back 3.6% in the East Midlands.
Technorati Tags: , property, real estate
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Property research and data company Hometrack reports a small, 0.1% rise in June, following an equally small rise in buyer registrations across England and Wales, but falls in demand in six out of ten regions. Homes coming to the market, on the other hand, rose by 2.9%. And that's the issue: that long-discussed shortage of property - the thing that many believe has been propping up prices - is quickly coming to an end. Interestingly, though, sales agreed were 2.8% higher. Average time on the market: 8.4 weeks; average proportion of asking price achieved: 94.3%.
Technorati Tags: , property, real estate
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According to Rightmove, asking prices were up 0.3% in May, and up 5% on the year. In the accompanying comment, Rightmove's Miles Shipside wastes no time in pointing out that the movements are unsustainable in the mid-term, and hinted that new listings suggested expectations were becoming more modest.
Market report - Government pegs house price inflation at 10% [June 16, 2010]
Technorati Tags: property, real estate
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Land Registry data, analysed, by Savills, shows west and central London bouncing back considerably faster than the east from the house price slump, outstripping their previous 2007 peak while the east and south-east are still 13% off previous peaks. More here.
Technorati Tags: property, real estate, London
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That's the Department for Local Government and Communities data, based on completions in April. Annual inflation... 10.1%, the highest since October 2007; and a 0.4% increase on the month.
Market report - surveyors upbeat [June 15, 2010]
Technorati Tags: property, real estate
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Our agents and surveyors aren't going to let a falling HBOS index spoil the party... wherever they look, prices are rising, according to the latest RICS poll. The difference between those reporting a house price rise and those reporting a house price fall rose to +22, the highest figure since January. Maybe it's the sunshine. Or maybe it's all the cheap supermarket World Cup booze. At least some people are happy.
Market report - [June 10, 2010]
Market report - Halifax and Nationwide in rift [June 4, 2010]
Technorati Tags: property, real estate |
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For a while, now, I've been of the belief that current house price indices, stock shortages, Capital Gains Tax increases, HIPs abolition were all worthy of comment, but would be rendered insignificant when compared to the effects of public sector cuts in the next few years. Graham Norwood appears to agree, and tests the theory in a great Observer piece, combining public sector with interest rate increases into something like a perfect storm.
Technorati Tags: property, real estate |
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... based on the third successive fall in the Acadametrics index (based on completion prices following transactions in England and Wales). Prices - according to Acadametrics - fell 0.2% in May (prices even fell in London, by 0.1%). Transactions were down on the month too. Interestingly, though, despite the index's highly conservative recent monthly changes, its annual rate of inflation remains at a bunker-busting 9.7%. More here.
Technorati Tags: London, property online, real estate |
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Land Registry figures show a 0.2% rise in April, leaving the annual rate of inflation at 8.5%, the highest that number's been since September 2007. In London the monthly figure's 1.6%, and annual inflation's at 14.8%.... not the kind of number we expected to see a year ago. Turnover? Sales were 26% higher across the first four months of the year compared to the same period in 2009, but to put this in perspective they're still around half of what we were seeing in the years preceding the credit crunch.
Technorati Tags: London, property, real estate |
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Today HBOS index for May comes hot on the heels of yesterday's Nationwide report, but paints a very different picture... prices falling 0.4%, leaving annual house price inflation still in the black, but by a more modest 6.9% compared to Nationwide's 9.8%. Interestingly, both indices are formulated the same way, from their own mortgage approvals data. The fall in May, reported by HBOS, follows an April fall, of 0.1%. The message: exactly what it seems... a genuine lack of clarity, with recent political uncertainty combining with relatively small datasets.
Technorati Tags: property, real estate |
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Against all the odds, house prices continue to rise, according to the latest Nationwide report, with a 0.5% rise in May, leaving the annual inflation figure at 9.8%, a whisker off last month's 10.5%. The accompanying comment uses low transaction rates and a scarcity of available property to explain the rises. More here.
Technorati Tags: property, real estate |
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Excuse the slow day yesterday... I was dealing with computer issues. The one that went missing was - of couse - the Land Registry figures for April, which showed a further 0.2% monthly rise and left the annual rate of house price inflation at 8.5%, its highest since September 2007. In London, the figures are more startling... up 1.6% on the month, and 14.8% annually. We'll see, next, whether more stock coming to the market, due to the abolition of HIPs and the threat of Capital Gains Tax on second homes, affects the balance, and thus the index, in coming months.
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And - according to Knight Frank - it's thanks to the Russians. The Knight Frank Prime London index has just seen its 14th consecutive monthly rise, up 1.4% in May, pushing it 23% above it's March 2009 low, and just 6.4% below its March 2008 peak. Interest is apparently being driven by a strong rouble. More here.
Technorati Tags: London, property, real estate |
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Robert Peston points out the irony of a Tory rebellion over a move to end a tax policy introduced two years ago by Alastair Darling and return to Lawson-era tax rues. It's good reading. He also suggests that current uncertainty of Capital Gains Tax changes could have a negative effect on property prices. If they just did it, the market might take a temporary hit.
But if the uncertainty persists about when the new higher rate will be introduced, the negative effect on house prices could be much greater. Because for those sitting on significant capital gains above the tax free rate of £10,100, it becomes rational to flog properties pronto - to take advantage of the 18% rate and avoid a tax rate that looks set for most property investors to rise to more than double that. In a housing market that is still weak, a wave of panicky sales could push down prices in a significant way. Perhaps that doesn't matter. Certainly, if you are yet to buy your first home and feel priced out of the market, you'll say hooray if prices fall.
Presumably he's talking about investors with large portfolios? Individual investors selling larger properties aren't going to help out first-time buyers. Those with smaller, first-time buyer-level properties have less to gain by selling now, and might want to hang around to enjoy rising yields. The big question is whether investors with large portfolios will be affected at all, or whether they'll be able to shelter the properties in a company or take advantage of the promised loopholes for entrepreneurs. Back to uncertainty.
Technorati Tags: property, real estate |
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What?! It's (guess who) Money Week, with a creative and interesting piece, looking at the value of UK property from a gold standard position. Relevant? Meaningful? Should UK property be priced up as if it's an international commodity? Debatable. But - like I said - interesting:
House prices are now at levels last seen in the early 1990s, at the bottom of the last bear market. The average house price is currently 25% below its average of the last 40 years.
Technorati Tags: property, real estate |
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The surveyors' role in the credit crisis has been raked over often enough... from naive running with the herd to cynical serving of the mortgage machine. Caught with their pants down, then; they're pulling their belts so tight, now, their eyes are bulging. This, from the Daily Mail:
A typical example is a reader from South London who paid £176,000 for a house four years ago. After spending £24,000 on improvements and getting three estate agents round, the house was valued at between £200,000 and £216,000 in February. But when the owners tried to remortgage last month, their bank's surveyor put a maximum price of just £160,000 on it.
I don't know how "typical" those figures are, but the problem is one I've encoutered in conversation with brokers. But who would be a surveyor?
Technorati Tags: property, real estate |
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Zoopla's revealed the UK's most expensive postcodes, and it's topped - less than surprisingly - with W8, where average property prices are in excess of £1.5m. The most expensive street? Kensington Palace Gardens... at £18m a house, on average. Other £1m+ postcodes are SW7, SW3, W11 and SW10. Virginia Water, alone, represents the rest of the country in the top ten list.
Technorati Tags: London, property, real estate |
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Asking prices rose 0.7% in May - according to Rightmove - after a 2.6% increase in April, leaving the annual rate of increase at 4.3%, down from 6%. In London, asking prices actually dropped in the month - despite all that chat about Euro- and Dollar-rich foreign buyers plundering the London market - by 0.4% in May, leaving the annual change at 5.7%. In accompanying comment, the suggestion is that a rush of vendors hasn't been met by a rush of buyers able to proceed.
Technorati Tags: London, property, real estate |
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The Department for Communities figures - based on completions and so more meaningful than others - show a 0.75% rise month-to-month into March, the 12th consecutive monthly rise, leaving annual inflation up 9.7%, the highest it's been since November 2007. In London, prices have risen an amazing 15.7% in a year. Sustainable? How can it be?
Technorati Tags: London, property, real estate |
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I almost didn't bother posting this, but here it is... do with it what you will. It's the latest Royal Institution of Chartered Surveyors highly scientific report into the mood of the market. Expect a post-election bounce, they say; especially in London, where 55% more agents reckon prices are rising than falling, up from 32% in March. Surely, you can provide a highly scientific report that's subtle to understand. Or a subjective, unscientific report that comes in an easily digestible headline. But as long as RICS insists on bringing subjective, unscientific reports that are tortuous to explain, we'd say, take them lightly.
Technorati Tags: property, real estate |
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Clarity is the goal. Events are moving by the hour, and there’s a real possibility that by the time you’re reading this a political deal, cutting the thread on Britain’s hung parliament, will have been done, and the situation will be a little clearer. If, however, like the nation of estate agents, it’s a clear view of the short-term future of the residential property market you’re seeking, it’s probably safe to say there’s time to leave the room and make a cup of tea.
Our publisher looks at the effect of the current political crisis on the property market, in his guest column for Citywire.
Technorati Tags: property, real estate |
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According to the Land Registry, house prices celebrated the thaw and marked the spring bounce by... falling in March. They dropped 0.6% month-to-month, although they still settled 7.5% higher than March 2009. London - by the way - did manage a rise, of 1.6%. The slack was more than compensated for in the east midlands, where prices fell 2.1%.
Technorati Tags: London, property, real estate |
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It's a single per cent increase on the month, leading to 10.5% growth over the year, pushing the Nationwide index into annual double digit growth for the first time since June 2007.
Technorati Tags: property, real estate |
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It's Hometrack, calling April over, and reporting an index that's 1.8% up on the year, but just 0.2% up on the month. The survey is consists of what agents and surveyors consider realistic market values, so it's not entirely scientific... but then, with actual data sets so low, what is? The mainstream media's receiving the Hometrack index in one of two ways. "The annual growth figure is at its highest since January 2008." "The monthly rate of growth is slowing." Take your pick.
Technorati Tags: property, real estate |
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Sometimes we don't want what's good for us. As a society, we could do with lower house prices. As individuals, we quite like the idea of making tax-free profits on the single biggest investment of our lives. A Government's job is to look after society. It's voted in by individuals. Hmmm.
Technorati Tags: property, real estate |
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The headlines: asking prices of newly listed properties are 2.6% up on the month to an average of £229,614. Perhaps related to this is the fact that unsold stock is at its highest since October. And - according to the Economist - you just can't keep house prices down. They've a fascinating survey of global prices demonstrating that it's not just in the UK that an overvalued property market appears destined to continue experiencing house price inflation.
British house prices had risen by nearly 10% in the year to the end of the first quarter of 2010, but the country’s price-to-rent ratio still outstrips its long-term average by nearly a third. This pattern—of prices rising in markets where houses still look overvalued—is also seen in Hong Kong, Singapore, Australia, Sweden and Canada.
Technorati Tags: London, property, real estate |
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A bit of fun courtesy of Zoopla! (I'm not actually that excited. The exclamation mark comes with the name of the website. Like Yahoo! Doh, did it again...) As you might expect, Tory voters have bigger houses. The average property value in a Tory constituency is £257,518 compared to £168,112 in a Labour constituency. I do find the scale of the difference somewhat surprising. However, property wealth is ultimately spread fairly evenly between the parties, since there are more properties in Labour-held wards. Interestingly, Gordon Brown's own constituency has seen the bigger house price rises, than either David Cameron's or Nick Clegg's. More nonsense, here.
Technorati Tags: London, property, real estate |
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And in contrast to the last one, this one means something. Based on completion data, house prices, in February, were 7.4% up on the year, and 0.1% lower on the month. Interestingly, at the first-time buyer end of the market, prices were up 9.3% on the year, suggesting those Stamp Duty changes couldn't have come too soon. Grab the actual, factual report by clicking this.
Technorati Tags: property, real estate |
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It's Royal Institution of Chartered Surveyors report time, so if it's clarity you want, move along, nothing to see here. The headlines: properties coming onto the market outnumbered new buyers in March (said 21% more surveyors than, er, disagreed); and 9% more surveyors saw price rises than, er, didn't (down from 18% in February and 30% in March). Completed sales fell from 18 per surveyor in February, to 17. A caveat... the picture's very regional, and London continues to "perform well". Have a look at the press release here, and then see how bewildered broadsheet journalists lift whole paragraphs.
Technorati Tags: property, real estate |
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After February's surprise (to some) 1.6% fall, the Halifax index is climbing again, up 1.1% in March, and up 5.2% on the year. Averaged across Q1 of 2010, prices are up 0.6% on Q4 of 2009. That's a significantly lower rise than the 3.6% rise between Q3 and Q4, but it's to be expected (seasonal factors, what was to believed to be the end of the Stamp Duty holiday).
Technorati Tags: property, real estate |
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Writing for Wharf.co.uk, he's sick of it. House price chat is making him sick. And it's back with a vengeance, he says. On the DLR:
Two calls in every three are: "I don't know if it's too far a walk from the station for you, I haven't seen it yet but the area's really going to be up and coming thanks to the new station and now's a perfect time to buy."
I don't want to accuse him of imagining things - because that might suggest he's crazy - but really?!! Fun piece, though... and, of course, when he says it does us not good, he's right.
Technorati Tags: London, property, real estate |
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Nationwide reveals a house price index up 0.7% in March, leaving the annual rate of inflation at 9%, down marginally from 9.2% February-to-February. The three-month-against-three-month annual inflation rate was down, too, from 1.8% to 1.6%. The index was led - and in a big way - by the London market, up 15.7% on the year.
What?! says Jonathan Prynn on his Evening Standard blog.
Real incomes are falling, mortgage deals are still in short supply except for those with at least a 25 per cent deposit and unemployment is still close to its cyclical peak.
So how can this make any sense? It's a market, he argues, twisted out of shape by low interest rates and a tiny data set, and we'd agree. He dubs this the "phoney war - post-crisis and pre-austerity". It's an interesting piece.
Technorati Tags: London, property, real estate |
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Average house prices are down 0.3% in February, but up 7% on the same time last year, according to the latest Land Registry report. Importantly, the difference between 2009 and 2010 is growing, up from 5.2% in January. London's leading the "resurgence", with an annual increase of 11.9%. The North East is yet to go into the black.
Technorati Tags: London, property, real estate |
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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 |
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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 |
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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 |
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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 |
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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 |
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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 |
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"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.
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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.
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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.
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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.
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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.
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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%.
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... 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.
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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."
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.”
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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).
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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]
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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.
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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.
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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.
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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%.
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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]
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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.
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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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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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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.
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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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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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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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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.
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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.
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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.
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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.
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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%.
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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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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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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."
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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.
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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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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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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).
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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.
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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.
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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.
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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.
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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%.
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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.
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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.
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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).
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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.
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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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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.
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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.
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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.
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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.
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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]
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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."
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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]
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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.
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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.
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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.
Technorati Tags: London, property, real estate |
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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 |
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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.
Technorati Tags: estate agents, property, real estate, real estate agents |
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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.
Technorati Tags: property, real estate |
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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 |
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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.
Technorati Tags: property, real estate |
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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.
Technorati Tags: London, property, real estate |
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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.
Technorati Tags: property, real estate |
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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 |
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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.
Technorati Tags: London, property, real estate |
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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.
Technorati Tags: property, real estate |
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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.
Technorati Tags: property, real estate |
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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 |
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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. |
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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.
Technorati Tags: property, real estate |
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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 |
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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.
Technorati Tags: property, real estate |
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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.
Technorati Tags: property, real estate |
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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.
Technorati Tags: estate agents, real estate agents |
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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 |
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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?
Technorati Tags: property, real estate |
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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%.
Technorati Tags: London, property, real estate |
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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.
Technorati Tags: property, real estate |
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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.
Technorati Tags: property, real estate |
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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 |
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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 |
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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.
Technorati Tags: property, real estate |
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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 |
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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.
Technorati Tags: London, property, real estate |
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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.
Technorati Tags: property, real estate |
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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 |
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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.
Technorati Tags: property, real estate |
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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.
Technorati Tags: property, real estate |
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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%.
Technorati Tags: London, property, real estate |
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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%.
Technorati Tags: property, real estate |
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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.
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