MSE News: Nationwide: House prices creep up 0.7% in March

Percy1983

JonnyBravo wrote: »

Do BTLers get a different price to the "expensive housing" currently available?
Either it's cheap for all or expensive for all. Make your mind up.

My point is (in local observation) the BTL'ers buy up the cheap housing which causes more competition for the cheap houses which pushes the prices of cheap housing up.

Due to them pushing prices up with them greedily buying everything with the free money generated from the house they bought for nothing 20 years ago it forces prices up which forces people out of the market who then have to rent off the said greedy bulls.

Basically I want house prices to come down to make it more affordable for more people, the bulls want prices to go up out of sheer greed... I do believe I have moral high ground on this one if nothing else.

JonnyBravo

Percy1983 wrote: »

My point is (in local observation) the BTL'ers buy up the cheap housing which causes more competition for the cheap houses which pushes the prices of cheap housing up.

Due to them pushing prices up with them greedily buying everything with the free money generated from the house they bought for nothing 20 years ago it forces prices up which forces people out of the market who then have to rent off the said greedy bulls.

Basically I want house prices to come down to make it more affordable for more people, the bulls want prices to go up out of sheer greed... I do believe I have moral high ground on this one if nothing else.

Sounds to me like I could spin the story thus:

Lots of first time buyers are greedily trying to buy up all the low priced housing stock forcing up prices and reducing yields for BTLers. Grrrrrrr.

Either the housing stock is cheap for all or expensive for all. You still haven't answered the question, which is it??

jim83

IveSeenTheLight wrote: »

It is an average and your right it is expnential. YoY inflation is compounded resulting in an exponential trend line.
To explain, if you have £100 in the bank at 5% interest (inflation) then after year one you gain £5.
the second year you gain £5.25
The third you gain £5.51 and so on.

Trend that gains and you get an exponential line.

You are right that it is not reality to follow the average trend line, but surely you understand that this is a very good indicator of where prices should be.

If you subscribe to the prices falling below the line (thats what makes it an average, although certainly not permanently as you describe) then you are subscribing to a bust period.

Where there's a bust theres a boom and you therefore wish there to be a boom and bust cycle. This is obviously and demonstrably verified historicaly as the realistic outcome.
Following the trend line would however be ideal for stability and a move away from boom times

Sorry, but that is simply not an average. It is a trend line in RPI adjusted prices - an exponential growth on top of exponential growth. The average would be a horizontal line.

The line drawn shows growth at 2.84% over RPI. If we extrapolate that, in 100 years the average house would cost £2.8m in today's money; In 562 years the average price of a house would be the same as current UK GDP in today's money.

Prices MUST permanently fall below that line and the gap between that line and actual prices will trend towards infinity over time.

This exponential trend is not a good indicator of where prices should be. The RPI adjusted average price would be a better indicator, which on the Nationwide graph would currently be a horizontal line running at £103,526.

ukcarper

Percy1983 wrote: »

Due to them pushing prices up with them greedily buying everything with the free money generated from the house they bought for nothing 20 years ago it forces prices up which forces people out of the market who then have to rent off the said greedy bulls.

.

I don’t think that statement is true as most people on here will tell you that unless you sell your house you do not have access to the money if you borrow against it you get that famous bear statement dept is not wealth. Do you know what percentage of these cheap properties are sold to BTLers also do you know how many of these BTLers buy theses houses with money from houses they bought 20 years ago I though most of them got a BTL mortgage to pay for them.

When_is_the_reset?

nollag2006 wrote: »

Shame that we didn't get into double digit growth YOY yet.

Still, with the drop in stamp duty for FTBs kicking in, along with the usual pick up in Spring activity - we hopefully should get it over the line for 10% YOY next month.

Someone here does not understand the YoY figures and charts.

Makes the above comments look a little silly.

Really2

When_is_the_reset? wrote: »

Someone here does not understand the YoY figures and charts.

Makes the above comments look a little silly.

Nationwide March 09 was +0.9% this month it was 0.7% that is why it fell .2%

April 09 was -0.3% so a rise of 0.7% again next month would make +10% YOY.

So in reality it could happen.

IveSeenTheLight

jim83 wrote: »

Sorry, but that is simply not an average. It is a trend line in RPI adjusted prices - an exponential growth on top of exponential growth. The average would be a horizontal line.

How can a year on year average house prices result in a horizontal line?
In real terms this would result in deflation

jim83 wrote: »

which on the Nationwide graph would currently be a horizontal line running at £103,526

House prices were circa £186k on average at peak and you believe they should be £103k.
If they were ever to get to that level again, I'll buy another couple :rotfl:

I'm not a gamboling man, but I would believe it would be extremely high odds to see an average house price for the UK at £103,526 or below

Talking seriously again, if you want house prices to lower to the level you desire, then the supply / demand ratio needs to be resolved.

Demand for property through increased owner occupancy (BTL only partially picked up the slack of social housing sell off) combined with the ease of access to funds contributed to house price rises.

Curb the desire / demand for property or increase the supply. Those are your options. Simply stating that prices must fall without rectifying any of those criteria is doomed to failure.

jim83

IveSeenTheLight wrote: »

How can a year on year average house prices result in a horizontal line?
In real terms this would result in deflation

%&^*$("££$%!!!1

No, the chart is adjusted for inflation. a horizontal line means house prices moving in line with inflation; An upward sloping line means prices moving at a rate higher than inflation; A downward sloping line means prices moving at a rate lower than inflation.

When_is_the_reset?

Really2 wrote: »

Nationwide March 09 was +0.9% this month it was 0.7% that is why it fell .2%

April 09 was -0.3% so a rise of 0.7% again next month would make +10% YOY.

So in reality it could happen.

I stand corrected - I did not realise there was a dip last april.

It is difficult to imagine this carrying on for the remainder of the year though.

Graham_Devon

jim83 wrote: »

%&^*$("££$%!!!1

No, the chart is adjusted for inflation. a horizontal line means house prices moving in line with inflation; An upward sloping line means prices moving at a rate higher than inflation; A downward sloping line means prices moving at a rate lower than inflation.

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