House prices down 0.9% Nationwide report out

Graham_Devon

Exocet wrote: »

Bit puzzled by the Nationwide drop. Apparently as more people enter the country we need more accomodation, therefore supply and demand will ensure property always goes up. Oh wait, I think I understand. July and August are peak holiday periods, lots of Brits going abroad for hols meant less people in the country for a while, therefore prices dropped.

Thank goodness it didn't snow. That would have thrown the figures right out.

There was a good episode of coronation street in August and the X-Factor started, which probably explains the fall in all honesty.

Got a bit on the nippy side one Tuesday too.

Pimperne1

michaels wrote: »

Hopefully the evidence now paints a fairly clear picture that the increases that started March 2009 and lasted for about a year on the back of tight supply have now ground to a halt as signs of life in the market, stronger prices and the abolition of HIPS brought sellers back in to the market.

Hats of to Hamish for calling the year almost perfectly, I was slightly too bullish the post election downturn has been slightly sharper and slightly sooner than I expected - with hindsight I should have seen that the uncertainty would have kicked in at the start of the campaign rather than after the election (which I also thought might have been delayed until the start of June.

IMHO the debate now moves on to one between the 'bulls' who are predicting stagnation and the 'bears' who see a further correction.

1) The bulls reasoning centres around the argument that supply will be self limiting, vendors will simply not accept big price reductions and given that forced sellers are a small part of the market as long as the economy remains strongish and the govt continues to protect those who lose their jobs from repossession (and indeed the banks continue to shy from the write downs that reposession implies) prices are likely to stagnate in nominal terms.

2) The bears reason that the economy remains weak, there will be more forced sellers and that it is the price of those properties that actually that drive the house price indicies (falling volumes means the forced sales are a big proportion of all sales). Continuing credit restrictions especially given that falling prices mean that lending risk increases will also restrict demand from new entrants to the market.

I think the arrangements are fairly finely balanced but tend to agree with the bears especially as I think price expectations are a huge driver of the market, if falling prices enter the public zeitgeist then they become self reinforcing - no one wants to buy now when it will be cheaper to buy in a years time. This arguement suggests prices will tend to move in cycles rather than stagnate.

Of course during the previous downturn the Govt produced a deus ex machina with massive QE and a huge fiscal deficit and maybe they have something else up their sleeves - may be negative interest rates?

On another website its a bit of a stigma to be congratulated by me but that is an excellent post.

Pimperne1

Exocet wrote: »

Bit puzzled by the Nationwide drop. Apparently as more people enter the country we need more accomodation, therefore supply and demand will ensure property always goes up. Oh wait, I think I understand. July and August are peak holiday periods, lots of Brits going abroad for hols meant less people in the country for a while, therefore prices dropped.

Thank goodness it didn't snow. That would have thrown the figures right out.

To be fair you must be at least a little puzzled as to why Halifax says a 0.6% rise whilst Nationwide announces a 0.9% fall. Or does good news just cancel out previous bad news?

Exocet

Pimperne1 wrote: »

To be fair you must be at least a little puzzled as to why Halifax says a 0.6% rise whilst Nationwide announces a 0.9% fall. Or does good news just cancel out previous bad news?

I assumed they were different because whoever types them into their spreadsheets does a typo or something. It's easy to do when putting a load of figures into a spreadsheet. Maybe one of them uses an iPad, or did it on the train.

Pimperne1

Exocet wrote: »

I assumed they were different because whoever types them into their spreadsheets does a typo or something. It's easy to do when putting a load of figures into a spreadsheet. Maybe one of them uses an iPad, or did it on the train.

Actually, that would be sufficient evidence for the Bears on HPC (but shurely not on here).:rotfl:

poppycod

sarkin1 wrote: »

Mate house prices are falling and you are wrong FACT

Put him on ignore.

He seems to be doing his best to appear as either a wind-up merchant or a stooge for someone with vested interests.

nembot

To be fair, small rises or falls over a period of a couple of months from either perspective is little more than noise. Unified results between data sources is the catalyst in which real trends are defined. At the moment with opposing numbers nobody, even the biggest players don't know what the next twelve or even six months will bring.

Sibley

I think the newspapers are on a drive to make the banks lend.
Happy days when they do.

I think house prices will actually rise again in September. Even if prices dropped it won't make any difference as homeowners will either wait until banks start lending again and prices rise or stick to their guns for top money. Whatever happens give it 5 years and average prices will be over £175k.

Everyone knows this and it's boring waching these weekly battles over 1% here and there.

I can't understand why the bears are getting all happy over 0.9%. Whats that on a £200k house? £2000????

Big deal. I just bought a sofa for more than that.

Like I've said before. Your house only drops if you have it on the market for sale. If you live in it or have it rented and your getting a good return just sit it out. The UK is overcrowded. Council lists are long and banks and finance workers make good money lending over the odds. Greed will win in the end. They will start lending again for sure.

dopester

michaels wrote: »

Of course during the previous downturn the Govt produced a deus ex machina with massive QE and a huge fiscal deficit and maybe they have something else up their sleeves - may be negative interest rates?

The Labour party are no longer the government.

Maybe property owners will just have to swallow losses in value of their properties.

dopester

Graham_Devon wrote: »

Interesting, no idea if it's anything to do with today's figures, but a girl is in tears at work here, as her buyers have just pulled out unless she can take 7k less.

One of those situations you walk into an office and find a women in tears...time to run back out.

I do feel for her, as shes now saying she will have to pull out of the place she has found. However, she could easily reduce by 7k, as the house was given to her by an uncle. However, seems from what I have heard, she won't.

Makes you wonder if this kind of news does actually effect things to this extent, as that's at least 2 sales now not going ahead because the buyer wants 7k off.

Case of again, buyers able to bargain, sellers wanting to absolute max they can get, and no one moving.

Wrong Devon. Some sellers did sell at lower prices, as evidenced by Nationwide's figures. And people moved. The sellers transacted with buyers at lower prices for similar property than in previous months caused the falls in value reported by Nationwide.

Values didn't fall in all those areas for just the properties which actually transacted that month... but impacted on the implied market values of all other houses in the areas. Including those not actually on the market, or where sellers are holding out for higher prices. Their holding out for higher prices doesn't stop the market.

That is how markets work. What sellers are selling at, and what buyers are buying at = the actual market doing its market value discovery setting. It's true for when house prices go up, and when they go down.

Maybe your girl might get lucky and some one will come along offering her £7K extra... but also maybe other sellers will continue to agree to sell at ever lower prices... impacting on the value of her own property... until her asking price looks crazy against other houses on the market from active sellers who are pricing to get offers from the market.