House prices fall for first time


S

sam1967

House prices fall for first time
Helen Loveless, This Is Money
26 July 2004

HOUSE prices have fallen for the first time this year, yet more
evidence that the property bubble has finally burst.

Figures published by property information specialist Hometrack, in its
monthly survey of the housing market, revealed house prices fell by
0.1% nationwide in July, and by up to 2% in some areas of the country.
The average national house price now stands at £152,300.

Overall the tide seems to have turned for sellers, with the number of
new buyers down 4% in July, compared to a fall of 0.6% the previous
month. Not surprisingly this has had a knock-on effect on the sales
price as a percentage of the asking price, which fell from 96.2% in
June to 95.5% in July.

The average time it takes to sell property has also risen, from 4.2
weeks in June to 4.8% in July.

The largest fall recorded this month was in Brighton where house
prices dipped by 1.9%. Reading and Exeter saw house prices fall by
1.2%. In Central London and the City house prices dropped 0.8% on
average; and Northumberland and East Sussex prices fell by 0.7%.

However, homeowners in North Wales should be smiling, with prices
going up by nearly 2% in July. The average home now costs £111,900.
House prices also increased in Coventry and Durham, by 0.4%, and by
0.3% in Blackpool, Cambridge and Norwich.

But even this could be set to change in the near future. John
Wriglesworth, housing economist at Hometrack, said rising interest
rates and 'speculative' fears of a housing market crash had led to
house prices falling in many areas of the country.

'We anticipate that a ripple of negative price changes will spread out
over wider regions of the UK, as the full effect of the most recent
interest rate rises have not yet fed through to the market,' he said.

'We still do not anticipate a housing market crash, expecting zero
house price inflation for 2005.'

However, not everyone agrees. Last week investment bank Durlacher
warned thousands of buy-to-let landlords were on the verge of selling
up, in a move which could seriously threaten the stability of the
housing market and even precipitate a crash.

It also stuck by earlier predictions that house prices were set to
fall by a hefty 30% to 45% in the near future.
 
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R

Richard Faulkner

In message said:
Figures published by property information specialist Hometrack, in its
monthly survey of the housing market, revealed house prices fell by
0.1% nationwide in July, and by up to 2% in some areas of the country.
The average national house price now stands at £152,300.

Overall the tide seems to have turned for sellers, with the number of
new buyers down 4% in July, compared to a fall of 0.6% the previous
month. Not surprisingly this has had a knock-on effect on the sales
price as a percentage of the asking price, which fell from 96.2% in
June to 95.5% in July.

The average time it takes to sell property has also risen, from 4.2
weeks in June to 4.8% in July.

The largest fall recorded this month was in Brighton where house prices
dipped by 1.9%. Reading and Exeter saw house prices fall by 1.2%. In
Central London and the City house prices dropped 0.8% on average; and
Northumberland and East Sussex prices fell by 0.7%.
MMM!

Firstly, how can an article written on 26 July comment on house price
statistics for July??

Secondly, IT'S JULY!! - people dont buy houses in July and August. For
17 years My office sat twiddling its thumbs in July and August, and we
always used to think that any property bubble had burst - then September
and October came!

Thirdly, whilst it is part of a trend, how can anyone form an opinion
based on 0.1% of £150K (£150.00).
 
J

John-Smith

Richard Faulkner said:
Thirdly, whilst it is part of a trend, how can anyone form an opinion
based on 0.1% of £150K (£150.00).
The Daily Mail can :)
 
T

Timothy Lee

Richard Faulkner said:
Firstly, how can an article written on 26 July comment on house price
statistics for July??

Secondly, IT'S JULY!! - people dont buy houses in July and August. For
17 years My office sat twiddling its thumbs in July and August, and we
always used to think that any property bubble had burst - then
September and October came!
When hometrack phone us up each month they phone at the beginning of the
month to ask about the previous month and how it compared to the month
before, so at the start of July they asked us how June compared to May.
 
T

Tim

HOUSE prices have fallen for the first time this year, ...

So they also fell last year;
... yet more evidence that the property bubble has finally burst.
How can that be "evidence that the property bubble has finally burst" *this*
year, but not "evidence that the property bubble ha[d] finally burst" *last*
year??
 
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A

aris

One minute they are falling, the next they are soaring. Who's right?

----

Thursday July 29, 08:43 AM


House prices soaring again

By Ross Finley

LONDON (Reuters) - House prices have come back to the boil in July,
marking their biggest year-on-year gains since May 2003, reinforcing
expectations for an interest rate hike next week.

The Nationwide Building Society said on Thursday house prices soared
2.1 percent in July, the biggest monthly gain since February, and were
up a hefty 20.3 percent compared with a year earlier.

The figures, which defied expectations of a slowdown, are sure to be
of concern to the BoE, which is keen to cool house price inflation
gradually with interest rate rises given the potential damage that a
crash could do to the economy.

The data are likely to cement even further already solid expectations
for a quarter-point hike in the base rate to 4.75 percent next week
after four such rises since November.

"This is a big increase," said Ross Walker, an economist at RBS
Financial Markets. "It's a signal that we are going to need more rate
rises and the next one is going to come next week."

Short sterling interest rate futures fell sharply across the strip
while the pound gained as much as a third of a cent against the dollar
to trade near $1.8265 on expectations of higher rates.

The sudden gains in July followed a month of slower -- but still
strong -- growth in June and some tentative evidence from other
surveys that the housing market may have finally begun responding to
higher interest rates.

But Nationwide flatly said that was not the case.

"Whilst recent anecdotal and survey evidence have suggested the
housing market might be starting to slow, our own house price data
accords with the recent strength of retail sales and mortgage
lending," Nationwide economist Alex Bannister said.

Mortgage lending hit a record last month since comparable records
began in 1997, according to data published this week from the British
Bankers' Association.

Figures from the BoE later on Thursday are expected to show that
Britons have piled up over 1 trillion pounds in debt -- partly due to
ever-larger mortgages to finance soaring house prices.

TOO MUCH LEVERAGE?

On Thursday BoE chief economist Charlie Bean warned that house prices
in Britain are overvalued and there could be a sharp correction but
said that equally prices could just stagnate for a while.

In the meantime, the re-acceleration in house price inflation in July
brought the average price of a home in Britain to 154,299 pounds in
July compared with 151,524 pounds in June.

That compares with an average salary of about 26,000 pounds.
Nationwide said it had become increasingly difficult for first-time
buyers to get onto the property market without putting down huge
deposits or taking out very large mortgages.

The number of first-time buyers has fallen sharply, the report said,
with 18- to 30-year-olds now making up only 20 percent of first-time
buyers. One quarter of those are putting down more than 30,000 pounds
as a deposit when they buy property.

"The rapid rise in deposit size supports the anecdotal evidence that
many first-time buyers are now only able to get onto the property
ladder with financial help from their families. In many cases this is
likely to involve parents withdrawing equity on their own property,"
said Bannister.

Nationwide said it would probably put its full-year forecast for 15
percent house price inflation under review over the next couple of
months given that prices are already up 12 percent on the year.

Regional house price inflation trends remain intact, with the biggest
gains in Scotland, the North and Wales. Prices in the South and in
Greater London have seen a modest reacceleration in price gains, the
report said.
 
R

Richard Faulkner

Daytona said:
The Land Registry.
But 3-6 months out of date IIRC

So there will always be those who use less accurate data to assess the
situation. I wonder how statistically correct some of them might be.

E.g. some use asking prices - probably garbage, but nevertheless a guide
to the perceptions of agents and sellers.

Some use prices agreed at offer stage - these usually change before
completion, and some dont reach completion.

Lenders use mortgages, (not sure if they are completed or agreed)

etc.

The Hometrack ones use agents answers to a series of questions monthly.
I used to participate but found it a pain in the ass, and sometimes
resorted to guesstimates if I was very busy. They were very persistent
in chasing the info. Stopped contributing after a few months.
 
D

Daytona

Richard Faulkner said:
The Hometrack ones use agents answers to a series of questions monthly.
I used to participate but found it a pain in the ass, and sometimes
resorted to guesstimates if I was very busy.
Yeah I've heard of others doing the same.

Daytona
 
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