Some facts for a change, instead of speculation......

HAMISH_MCTAVISH

Some rather interesting facts.....

The Supply of new properties was down 18% on the same month last year and at 105,000 is well down on the six year average of 168,000. This undersupply is what is propping up prices. New instructions are coming onto the market at 3,505 a day.

The number of homes selling however is up a third at 2,700 a day up on last year. In September 2006 there were 5,000 selling every day.

Estate agents claim that there aren’t enough homes to sell and indeed the total number of individual properties on the market across the UK is over 20% down on last year and at 692,000 about 40% below the long term average of over 1m.

Asking prices are unchanged on September last year at £230,184 but sale prices were down 6% at £163,533 (Halifax) and £158,377 (Land Registry). The gap between average asking prices and average sale prices is still over £66,000 against a six year average of £39,000.

The length of time it would take to sell the current stock of homes for sale at the rate they are currently selling (Inventory) is a whopping 42% down at 256 days on September last year, and again below the long term average of 308 days. As we have seen, the rate at which this stock is being replaced is also down which will all help underpin prices in the short term.

http://web.me.com/henry.pryor/Housing_Expert/Comment/Entries/2009/11/2_How_was_September_for_you.html

Now, looking at the above, the hard fundamentals of supply and demand, how on earth does any sane person expect to see significant price falls in the near future?

Graham_Devon

HAMISH_MCTAVISH wrote: »

Now, looking at the above, the hard fundamentals of supply and demand, how on earth does any sane person expect to see significant price falls in the near future?

Because any "sane" person can see when the stimulus is cut, there aint the money....hence the very need for the stimulus.

julieq

The money comes from future earnings at reasonable salary multiples by historical standards.

Graham_Devon

julieq wrote: »

The money comes from future earnings at reasonable salary multiples by historical standards.

Can you explain that a bit further please.

Say I want to buy a house now.

How does my future earnings help please.

The bank will only take into account what I earn now.....not what I may or may not earn in the future. And as you have said this before, I know you are talking 20 years in the future.

I was also talking about stimulus in terms of tax rises, interest rate rises etc.

Cleaver

I give in, I give in, I give in, I give in. I agree. With everything. You're right. 100 times over, you're right. Everything is wonderful. Please, now, stop.

It's like going back to the days when Brit used to post about a dozen articles a day about BTL landlords and how awful they were. After a week or so you just get ground down and glaze over at each one.

This is how the Nazi party probably convinced everyone that their policies were okay: they just ground them down. BTW, I'm not comparing you to a Nazi Hamish, I just think you may share the same PR department.

nollag2006

Mmmm... the bears are now so despairing that they are dismissing the waves of evidence before them that house prices are strengthening as "boring" and throwing remarks about Nazi's about.

How nice.

Do say hello to the Himmler for me

nembot

I'll take those facts with a pinch of salt, the low sodium variety.

Spiv_2

Fears of homes shortage

The housing shortage will return with a vengeance in the next decade, as building levels remain stagnant while demand soars.
New research suggests the number of homes built by 2012 will fall to less than half the level required as cuts in public spending could further undermine the nascent recovery in the private sector.
Private sector development will not compensate for a forecast tail-off in the building of council and other affordable homes, according to research given to the Financial Times by Savills, the property consultancy .
Housebuilding has been curtailed over the past two years owing to the credit crisis and a slump in demand, undermining government targets for 240,000 homes to be built every year.
Savills’ research suggests mounting demand is likely to be sustained for some years, with a cumulative deficit of over 1m homes between 2008 and 2020.
Despite a recent resurgence in housing starts, completions of homes are forecast to sink to about 108,000 units in 2011. Demand is set to increase significantly, leading to a shortfall of as many as 95,000 in 2011.
But the shortage of new homes is set to soar in 2012, as demand outstrips the level of housing completions. Savills expects the recent rise in housing starts will filter through to completions by 2012, but this will lead to just a marginal increase every year to 2016.
A revival in private sector building work is expected to be depressed by the withdrawal of grant money to build social and council homes in the UK, according to Savills.
Yolande Barnes, head of research at Savills, said that higher levels of affordable housing grant had been part of the reason for increased activity in the past few months. However, higher grant levels would start to fall away in 2010 because funding had been brought forward from the last year of the three-year programme.
In addition, grant levels were also “certain to fall away significantly in 2011, as public sector austerity measures take hold after next year’s election”.

Those close to the Homes and Communities Agency, the government housing quango, have also privately acknowledged that government could rein in spending. The HCA is exploring routes that do not use money, such as providing the land for development.
The government said it had made housing a priority, investing a further £1.5bn in social and affordable housing over the next two years and bringing total investment in housing to £7.5bn over this year and next.
“Despite the downturn we remain committed to building the homes we need, which is why we have put in place a range of programmes to ensure that this continues,” it said.
However, other housing experts also see mounting problems for public sector building. EC Harris, the property consultancy, said there was a need for 275,000 new homes every year, of which 30 per cent needed to be government-subsidised.
Projecting this to 2020, EC Harris sees a shortfall in government funding of £23.9bn on a like-for-like basis if household growth is to be accommodated.
Stuart Law, chief executive of Assetz, the residential investment group, said: “It looks difficult for housebuilders to just turn on the tap.”

‘Major error’ over house building

Official data suggesting a large recovery in the numbers of homes being built in England have been drastically cut after an error, writes Daniel Thomas.
Quarterly property starts have been revised down from more than 30,000 to just 22,000, while housing completions have been slashed from almost 40,000 to barely 30,000 – only a slight increase on the previous quarter.
The revised figures show a far more gradual recovery than previously hoped. The numbers were originally published in August.
Housing experts described this as a “major error”, saying that housebuilders were responding to increased demand but not at anything like the rate that the earlier figures suggested.
The Department of Communities and Local Government said it was important that the starts were still up 18 per cent on the previous quarter, even after the revisions.
There is concern within the government among its statisticians about errors in the data, leading to the risk of misguided policy. The housing numbers are particularly sensitive given the large shortage expected between levels of current construction and the government’s target to provide 240,000 new homes a year.

FT Weekend
http://www.ft.com/cms/s/0/677163dc-c57d-11de-9b3b-00144feab49a.html?nclick_check=1

Cleaver

nollag2006 wrote: »

Mmmm... the bears are now so despairing that they are dismissing the waves of evidence before them that house prices are strengthening as "boring" and throwing remarks about Nazi's about.

I'm not a bear. As Harry pointed out a couple of days ago, you can either be bullish or bearish about a market, constantly defining yourself as one or the other is stupid as it means you don't change your opinion based on the facts in front of you.

I'm quite bullish about house prices at the moment. But cautiously bullish as I think these rises are quite fragile, based on low and weird volumes and not backed by a lot. I think these fragile rises are enough though, and that we'll see rises or stagnation over the next 12 months, which is different from the more bearish predictions I had 8 or 9 months ago. I know, someone who changes their opinion based on what's going on around them. Shocking, isn't it?

I like Hamish, I didn't dismiss his evidence and a lot of the stuff he posts is backed up with links, stats and facts. But I stand by the point I made that he comes across as some weird, mass-posting positive machine. And, just like lots of 'bear' posters, the wave after wave of smiliar articles and posts makes you start to glaze over and they all blend in to one. I didn't call him a Nazi, it was a lightheated remark comparing the method Hamish gets across his 'message' with the propaganda machine of the Nazi party. But then I think Hamish would get the joke.

Nollag: you're a simpleton.

abaxas

The issue is, I could write a blog saying anything I want to. It doesnt make it right.

What gets me is this...

"New instructions are coming onto the market at 3,505 a day."
"The number of homes selling however is up a third at 2,700"

So supply far exceeds demand, and magically about 1/2 of houses are sold without a mortgage. Miracle I say.

Really2

Cleaver wrote: »

But then I think Hamish would get the joke.

To be fair I don't think many people are looking for jokes at the moment (or are just not getting them).
I think even you thought I was having a go at graham last night by saying I use non-migratory animals when "bartering" (got it right this time)

I was going to say I use a swallow (African not European). But then knowing this forum I knew a "swallow" could also be portrayed has a service.