Households paying mortgages with credit cards

Really2

oldMcDonald wrote: »

Do the LR figs include cash purchases and auction sales?

There HPI report does not but they are included on the LR database.

Cash and auctions are seen as extremes and are not representative of the"standard" market

Thrugelmir

julieq wrote: »

It's pretty clear that there's a diminishing problem in the "middle class" which I suppose is determined by income, where more people would be expected to be owner occupiers. So we can cautiously conclude that people with higher incomes are progressively less likely to use credit cards to pay housing costs.

If you have a stable income then you are more likely to have access to a mortgage or credit card.

When you lose your stable income then you have a lot further to fall.

Money breeds complancy. Life is unpredictable.

As a Nation we have enormous consumer debt. So there will be problems somewhere.

tomterm8

stueyhants wrote: »

I must confess I don't know how the LR figures are produced, but presumably to come up with a headline figure they have to do some averaging based on a mix adjustment ?

With the halifax measurement, their approach is basically what you say - you have to get some kind of notional average house, adjust for seasonal variations, etc. The halifax version use multivariate regression analysis to decompose houses according to room numbers, region, garden size etc, in order to find some kind of 'average house'. All this is to try to stop froth in sales on a month byt month basis messing up the comparable figures. The data also excludes a lot of non-private sales.

Halifax has merged, and changed its mortgage profile significantly over the years; the data is based on only house prices when the mortgage is approved, and the actual price paid can vary.

At the end of the day, it's like most statistics, you've got to take it with a lot of salt. Similar things go on with the nationwide data.

The land registry data has a huge sample size, of pretty much anything thats been sold in the UK over the last 15 years, and contains details of all residential propertys sold in the month. The index is calculated using a Repeat Sales Regression method, where inflation is calculated from the difference in property prices since the last time a house is sold. The resultant index is an aggregate of price movements in all houses sold. Since the data includes every house sold in the UK, it is as close as practicable to the perfect theoretical measure of inflation. The problems are, essentially, to do with the fact houses are not commodities and so are changed (i.e. regurbished, extensions built etc) between sales..

julieq

stueyhants wrote: »

I'm not trying to argue the data is correct or what it mean to future house prices.
I was hoping to highlight some inconsistencies in which certain data sets get discredited and others are beyond reproach.

This isn't a dataset, it's a set of conclusions. They're not letting us see the underlying data and they're not publishing their methodology. Their conclusion is based (apparently) on the worst case.

I think the technical statistical term is "bag of cack".

nembot

tomterm8 wrote: »

In terms of metrics theory, you can drive a truck through both the Halifax and nationwide averages, but until you get land registry data it is the best data we have on the subject.

I was under the impression that the land registry data albeit more accurate that Nationlies and Haliblag, is based on like for like properties.

e.g. Average price for the area 150k

Average house bought and renovated, increasing value, then sells for 175k

Land Registry says prices have risen, although only the improvement's made were responsible for the higher price as the average property in the area would only sell for 150k.

Doesn't really seem right to me.

julieq

Thrugelmir wrote: »

If you have a stable income then you are more likely to have access to a mortgage or credit card.

When you lose your stable income then you have a lot further to fall.

Money breeds complancy. Life is unpredictable.

As a Nation we have enormous consumer debt. So there will be problems somewhere.

well then it's lucky 96% of the middle classes haven't EVER put accomodation onto a credit card isn't it?

Thrugelmir

tomterm8 wrote: »

With the halifax measurement, their approach is basically what you say - you have to get some kind of notional average house, adjust for seasonal variations, etc. The halifax version use multivariate regression analysis to decompose houses according to room numbers, region, garden size etc, in order to find some kind of 'average house'. All this is to try to stop froth in sales on a month byt month basis messing up the comparable figures. The data also excludes a lot of non-private sales.

Halifax has merged, and changed its mortgage profile significantly over the years; the data is based on only house prices when the mortgage is approved, and the actual price paid can vary.

At the end of the day, it's like most statistics, you've got to take it with a lot of salt. Similar things go on with the nationwide data.

The land registry data has a huge sample size, of pretty much anything thats been sold in the UK over the last 15 years, and contains details of all residential propertys sold in the month. The index is calculated using a Repeat Sales Regression method, where inflation is calculated from the difference in property prices since the last time a house is sold. The resultant index is an aggregate of price movements in all houses sold. Since the data includes every house sold in the UK, it is as close as practicable to the perfect theoretical measure of inflation. The problems are, essentially, to do with the fact houses are not commodities and so are changed (i.e. regurbished, extensions built etc) between sales..

The problem is people are looking for something that doesn't actually exist. There is no definative guide to house prices. Houses are similar but different. The indexes reflect trends.

One thing that intrigues me is how extensions and improvemnts are factored in. Many houses are substantially improved over the past 30 years. Extensions, conservatories, better quality kitchens and bathrooms, lighting, heating and even decor. So yes house prices have increased.

But what has been the net investment into improving property in £ ?

May explain the high increase over the past decade as property renovation programmes became a fad!

misskool

I'd like to pay my mortgage on my credit card 1% cashback on £77.77 a month.

Thrugelmir

julieq wrote: »

well then it's lucky 96% of the middle classes haven't EVER put accomodation onto a credit card isn't it?

Middle class is a wide definition.

Often the richer you think you are the more lavish the lifestyle.

Over extending oneself is so so easy.

Few admit to having problems. Read my second sig. The tide is high at the moment but at some point will turn.

julieq

Just wait until rates ROCKET misskool, you could be paying over £150 a month soon :O

Out of interest, what's the mortgage and what's it on?