MSE News: House prices edged up in 2010

This is the discussion thread for the following MSE News Story:

"House prices edged higher in 2010 but are still expected to drop in the first half of next year, mortgage lender Nationwide said today ..."
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House prices edged up in 2010


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Comments

  • Joe_Bloggs
    Joe_Bloggs Posts: 4,535 Forumite
    For once we can see the original report upon which the Press Association article was based.
    http://www.nationwide.co.uk/hpi/historical/Dec_2010.pdf

    I suggest that one missing fact is the actual size of the seasonal adjustment that Nationwide used in determining their headline figure.

    In darkest winter when sales are down they add on a number to compensate for poor demand. In spring they knock a percent or two off to compensate for a heated market.

    Since their headline figure was so close to zero then their calculated seasonal adjustment must dominate the overall result.
    J_B.
  • brit1234
    brit1234 Posts: 5,385 Forumite
    Which such low transactions the seasonal adjustment will have a bigger effect but what is certain is prices are going to continue falling.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • as a first time buyer, I have been holding of renting and carried on living with parents whilst starting a new job, Im looking to save over the next year and buy around february time (before free valuation tax offer runs out). I guess my concern is whether or not to buy earlier?
  • poppy10_2
    poppy10_2 Posts: 6,575 Forumite
    Name Dropper First Post First Anniversary
    yakimov85 wrote: »
    as a first time buyer, I have been holding of renting and carried on living with parents whilst starting a new job, Im looking to save over the next year and buy around february time (before free valuation tax offer runs out)
    What free valuation tax offer?
    poppy10
  • GMS
    GMS Posts: 5,388 Forumite
    First Post First Anniversary Combo Breaker
    This may well be seen as a biased view but personally I think people are getting carried away with house prices. They may well fall slightly but if a mortgage is cheaper than rent (which in many cases it is) then why not buy?

    Over a longer term property is likely to be worth more than it cost. People who are waiting for the price drop continue to pay rent in many cases which is looked upon as 'dead money'

    Until we as a society stop looking at houses as investments and look at them as a home there will always be an obsession with prices.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Joe_Bloggs
    Joe_Bloggs Posts: 4,535 Forumite
    Some thoughts.

    House price indices may rise and fall. If a property is judged by a lender to have fallen into negative equity then re-mortgaging is unlikely or impossible. If the existing borrower can no longer claim sufficient LTV for the best deals, then servicing the mortgage debt becomes more expensive on re-mortgaging. This extra expense makes it harder to afford to pay down the capital part of the mortgage, further hindering likely future LTV.

    So individual house price is important as it reflects the value of the secured asset. A borrower may think that the own their house but they just own the debt secured upon it. Interest on the mortgage is the cost of renting money. Being in a position to get the lowest interest rate for it, is one aspect of moneysaving.

    J_B.
    Glossary:
    LTV is Loan to value.
    Mortgage £90,000. property value £100,000 then LTV is 90%
    Mortgage £90,000.property value £80,000 then LTV is 112.5%
    being over 100% is termed negative equity.
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