Nationwide: +1% MoM +10.5% YoY

HAMISH_MCTAVISH

“The price of a typical UK property rose by a
seasonally adjusted 1.0% month-on-month (m/m) in
April, leaving house prices 10.5% higher than a year
earlier.

:beer:

Hmmmm, now, remind me again, who was it that was so very wrong about HPI not reaching double digits this year????

Anyone?

Over the lifetime of the last Parliament (May
2005 to April 2010), house prices have risen by 6.7%.
This compares to a 13.5% increase in the consumer
price index, the official target measure of inflation.1

Great news for homeowners.

Inflation has eroded the value of your mortgage, as you'll have had pay rises along the way too.:beer:

For procrastinators, not so much..... Now house prices are more expensive, AND everything else is more expensive too.

“April’s figures show the first double-digit annual
growth in UK house prices since June 2007. The
year-on-year rate in this month’s figures, however,
received an additional boost from the fact that April
2009 was one of the weaker months last year. Given
the very strong performance of house prices from
May 2009 onwards, it will take monthly increases in
1 Based on CPI figures through March 2010.
excess of 1% for the annual rate of inflation to be
maintained in double digits going forward. The
smoother three month on three month rate of
inflation edged down further from 1.5% in March to
1.1% in April, which primarily reflects the impact of
February’s 1.0% decline in house prices. April’s
figures leave UK house prices exactly 10% below the
October 2007 peak.

Hmmm, most of last years growth was from May onwards. We are due a post election bounce from May onwards this year.

The slowdown in growth this year so far is primarily down to the Feb figures being low. And we all know that was the Snowmageddon problem skewing them.

So much for the housing bears triumphalism.....

Still, those cash buyers must run out soon, right?

What role are cash transactions playing?
“The strong rebound in house prices over the last
year has taken place within the context of a subdued
mortgage market, with the number of mortgage
advances across the industry still well down on precrisis
‘norms.’ A natural question which therefore
arises is whether cash buyers have helped to boost
the market and bid up prices?

“Over the course of 2008 – when the credit crunch
was at its most severe – there was indeed an increase
in the estimated proportion of total housing
transactions completed in cash. Cash transactions
(i.e. non-mortgaged purchases) are estimated to have
averaged 43% of the total in 2008 against 37% in
2007. This suggests that cash buyers did make some
contribution to clearing the excess stock of housing
on the market during the period in which mortgage
finance was least available.

“However, since the beginning of 2009 the
proportion of cash transactions has declined to a level
only slightly higher than the average for 2007. Even
in absolute terms, there was a decline in the number
of cash buyers between 2008 and 2009. As such,
the importance of cash buyers in the market started
to decline at exactly the same time as house prices
began the strong rebound that has lasted up until the
present day. It is in fact the recovery in mortgaged
transactions that has played a greater role in
boosting total market activity since the early 2009
trough.

Oh dear....... ANOTHER bear meme utterly discredited.

It was the increase in mortgage lending which has driven the recovery, not cash rich buyers.

Ah well, surely there is a pent up supply of soon to be forced sellers building, right?

“Rather than a surge in cash buyers, the more
important driver of rising house prices has been the
low level of stock for sale, as many homeowners and
buy-to-let landlords continue to wait for prices to
recover to peak 2007 levels before deciding to sell up
or move. The very low level of interest rates has been
supportive of this wait-and-see approach, particularly
in the buy-to-let sector. Many landlords have seen
their mortgages revert to base rate trackers and are
now earning significantly higher net rental income
than a few years ago. As a result, most can easily
afford to wait for prices to recover further before
selling.

Ahhhh...... So there probably won't be a big increase in supply of "motivated sellers" after all.

So will we be seeing big price falls from the limited increased supply coming through?

“Nonetheless, there has recently been evidence of a
slight shift in the supply-demand balance. While the
recovery in new buyer enquiries at estate agent
offices appears to have petered out, the last few
months have seen an increase in the level of new
instructions from sellers. All else equal, this should
lead to a gradual flattening out of the recent upward
price momentum, and this is indeed what the 3
month trend in April’s figures shows.”

No falls then..... Just a decrease in the rate of growth.

System

Batchy wrote: »

If anyone actually thinks we will return to double digit house inflation, then they are living in cloud cuckoo land.

Welcome to cloud cuckoo land!

HAMISH_MCTAVISH

Joeskeppi wrote: »

Welcome to cloud cuckoo land!

:rotfl:

I think carolt was another one of those comedians......:D

And we must be getting close to the first of nearlynews "100% guaranteed" months.....:rotfl:

So do you think the bear cubs that got suckered by that 100% guarantee can send him a bill for the difference?:D

zappahey

HAMISH_MCTAVISH wrote: »

Over the lifetime of the last Parliament (May
2005 to April 2010), house prices have risen by 6.7%.
This compares to a 13.5% increase in the consumer
price index, the official target measure of inflation.1

Inflation has eroded the value of your mortgage, as you'll have had pay rises along the way too

Not wishing to be a pedant but, reading your quote, does the above not also mean that inflation has eroded the value of your house?

chucky

funny that none of the usual posters have mentioned that it looks like it's the next leg down....

it looks like it's the next leg up from here...

Jonbvn

Here's the link for the report.

http://www.nationwide.co.uk/hpi/historical/Apr_2010.pdf

abaxas

Great news. The quicker get back to state and financial system failure the better.

System

zappahey wrote: »

Not wishing to be a pedant but, reading your quote, does the above not also mean that inflation has eroded the value of your house?

... The price of the house is included in inflation.

Turnbull2000

Double digit HPI is here like I said. This headline news will only lead to more panicked buyers and more sellers determined to achieve a 2007 price. Still on course for peak prices restored by Q3 2010 IMO.

MissMoneypenny

Inflation again. Are we taking bets yet on when the base rate is going to have to go up...and up?

Turnbull2000

MissMoneypenny wrote: »

Inflation again. Are we taking bets yet on when the base rate is going to have to go up...and up?

Base rates won't budge on upward price movement, only down. And saying as they can't really go lower, base rates won't be moving.