Rightmove October +2.8%, London records biggest ever indice rise at 6.5%

StiflersMom

the_ash_and_the_oak wrote: »

Sounds like transaction figures are going through the roof!

I don't know if they are going through the roof just yet, but they are certainly picking up speed according to HMRC:
http://news.bbc.co.uk/2/hi/business/8317929.stm

the_ash_and_the_oak

I meant where you are, it sounds like they are flying off the shelves

dopester

StiflersMom wrote: »

I don't know if they are going through the roof just yet, but they are certainly picking up speed according to HMRC:
http://news.bbc.co.uk/2/hi/business/8317929.stm

I'd been waiting for HMRC's latest stats, and see they've now been updated (property with value £40K and above).



PDF file link
http://www.hmrc.gov.uk/stats/survey_of_prop/val-40000-or-above.pdf

Generali

dopester wrote: »

I'd been waiting for HMRC's latest stats, and see they've now been updated (property with value £40K and above).



PDF file link
http://www.hmrc.gov.uk/stats/survey_of_prop/val-40000-or-above.pdf

So Q3 up about 5% YoY but still about 50% down on pre-crunch.

All sorts of economic metrics seem to be saying similar things right now - a little off the lows but way down from 'normal'.

IveSeenTheLight

Generali wrote: »

So Q3 up about 5% YoY but still about 50% down on pre-crunch.

All sorts of economic metrics seem to be saying similar things right now - a little off the lows but way down from 'normal'.

What is your definition of normality in the housing market?
Will things only be 'normal' if they return to 2007 levels?
If this was not normaility, then maybe there is a different level to compare against

Generali

IveSeenTheLight wrote: »

What is your definition of normality in the housing market?
Will things only be 'normal' if they return to 2007 levels?
If this was not normaility, then maybe there is a different level to compare against

I was discussing transaction numbers so a return to 2007 levels would seem reasonable to me. That's not the same thing as predicting house prices will return to 2007 levels soon, in fact it implies the reverse as unless mortgage lending picks up, current amounts of borrowed cash would have to be spread between more purchases.

chucky

Generali wrote: »

I was discussing transaction numbers so a return to 2007 levels would seem reasonable to me. That's not the same thing as predicting house prices will return to 2007 levels soon, in fact it implies the reverse as unless mortgage lending picks up, current amounts of borrowed cash would have to be spread between more purchases.

not to pick you up on this point Generali but more to question you on something that you keep on saying regarding this that i don't really agree with or maybe even don't understand.

if transaction levels are to go back to 2007 levels that would imply mortgage approvals would get to 2007 levels too - which in turn means HPI. sales transactions and mortgage approvals are different things but their is correlation.

on the other hand are you saying that mortgage approvals will be at 2007 levels too but with smaller amounts being lent so larger deposits?

Generali

chucky wrote: »

not to pick you up on this point Generali but more to question you on something that you keep on saying regarding this that i don't really agree with or maybe even don't understand.

if transaction levels are to go back to 2007 levels that would imply mortgage approvals would get to 2007 levels too - which in turn means HPI. sales transactions and mortgage approvals are different things but their is correlation.

on the other hand are you saying that mortgage approvals will be at 2007 levels too but with smaller amounts being lent so larger deposits?

As I see it there is a fintite amount of money banks can lend in mortgages and that amount of money has fallen as investors have become more reluctant to buy packaged up mortgages of various sorts.

If less money is available to be lent, one of two things can happen: fewer mortgages can be written of similar amounts to before or more mortgages for less can be written.

So far, we have largely seen the former happen as can be seen by LR volumes collapsing. My belief is that 'pent up supply' (people moving jobs/probate/repos/expanding families/'my house is my pension) will result in volumes starting to move back to what they were before. If there is no more money available for purchasers and sellers are motivated to sell then prices will have to fall as mortgage money won't be available to support 'normal' volumes and current prices.

Of course I might be wrong with my 'pent up supply' theory. I've been wrong before and I'll be wrong again*.

Does that make sense? I guess I'm saying if you have ten pounds you can buy five things for £2 or 2 things for £5 but not 5 things for £5.






*If a man says something in the woods and his wife isn't there to hear him, is he still wrong?

purch

*If a man says something in the woods and his wife isn't there to hear him, is he still wrong?

My wife can hear me 'think'................so the answer is yes !!!!

IveSeenTheLight

Generali wrote: »

I was discussing transaction numbers so a return to 2007 levels would seem reasonable to me. That's not the same thing as predicting house prices will return to 2007 levels soon, in fact it implies the reverse as unless mortgage lending picks up, current amounts of borrowed cash would have to be spread between more purchases.

I didn't mention house prices, it was obvious that transaction levels were the topic.

Generali wrote: »

As I see it there is a fintite amount of money banks can lend in mortgages and that amount of money has fallen as investors have become more reluctant to buy packaged up mortgages of various sorts.

If less money is available to be lent, one of two things can happen: fewer mortgages can be written of similar amounts to before or more mortgages for less can be written.

So far, we have largely seen the former happen as can be seen by LR volumes collapsing.

So there is a different set of criteria from 2007.
In your words less money available to be lent.
As we have seen so far, there is lower demand and lower supply, meaning less transaction levels.
If there is a different criteria, then it stands to reason there is a different 'normal' level of transactions.

Your argument that normailty will only return when transaction levels return, combined with your belief that there is a limited money supply for mortgages, would seem to suggest that house prices would need to more than half given transaction levels are less than half of 2007.
I somehow doubt that is going to happen

I do not concur that there is pent up supply, else we would likely have seen that supply come back on to the market in the last 6 months.

Unless that pent up supply you refer to is waiting for higher prices.