MSE News: House prices edged up in 2010

Former_MSE_Guy · 31 December 2010 at 11:06AM

This is the discussion thread for the following MSE News Story:

"House prices edged higher in 2010 but are still expected to drop in the first half of next year, mortgage lender Nationwide said today ..."

Read the full story:
House prices edged up in 2010

A similar thread has been started in another board but that is closed to anyone not signed up to the forum.

Joe_Bloggs · 31 December 2010 at 2:20PM

For once we can see the original report upon which the Press Association article was based.
http://www.nationwide.co.uk/hpi/historical/Dec_2010.pdf

I suggest that one missing fact is the actual size of the seasonal adjustment that Nationwide used in determining their headline figure.

In darkest winter when sales are down they add on a number to compensate for poor demand. In spring they knock a percent or two off to compensate for a heated market.

Since their headline figure was so close to zero then their calculated seasonal adjustment must dominate the overall result.
J_B.

brit1234 · 2 January 2011 at 11:16AM

Which such low transactions the seasonal adjustment will have a bigger effect but what is certain is prices are going to continue falling.

yakimov85 · 7 January 2011 at 11:19PM

as a first time buyer, I have been holding of renting and carried on living with parents whilst starting a new job, Im looking to save over the next year and buy around february time (before free valuation tax offer runs out). I guess my concern is whether or not to buy earlier?

poppy10_2 · 8 January 2011 at 1:09AM

yakimov85 wrote: »

as a first time buyer, I have been holding of renting and carried on living with parents whilst starting a new job, Im looking to save over the next year and buy around february time (before free valuation tax offer runs out)

What free valuation tax offer?

GMS · 8 January 2011 at 2:17AM

This may well be seen as a biased view but personally I think people are getting carried away with house prices. They may well fall slightly but if a mortgage is cheaper than rent (which in many cases it is) then why not buy?

Over a longer term property is likely to be worth more than it cost. People who are waiting for the price drop continue to pay rent in many cases which is looked upon as 'dead money'

Until we as a society stop looking at houses as investments and look at them as a home there will always be an obsession with prices.

Joe_Bloggs · 8 January 2011 at 9:34AM

Some thoughts.

House price indices may rise and fall. If a property is judged by a lender to have fallen into negative equity then re-mortgaging is unlikely or impossible. If the existing borrower can no longer claim sufficient LTV for the best deals, then servicing the mortgage debt becomes more expensive on re-mortgaging. This extra expense makes it harder to afford to pay down the capital part of the mortgage, further hindering likely future LTV.

So individual house price is important as it reflects the value of the secured asset. A borrower may think that the own their house but they just own the debt secured upon it. Interest on the mortgage is the cost of renting money. Being in a position to get the lowest interest rate for it, is one aspect of moneysaving.

J_B.
Glossary:
LTV is Loan to value.
Mortgage £90,000. property value £100,000 then LTV is 90%
Mortgage £90,000.property value £80,000 then LTV is 112.5%
being over 100% is termed negative equity.

MSE News: House prices edged up in 2010

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