MSE News: Nationwide: House prices remain flat

Former_MSE_Helen

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

"House prices inched higher in July, but have changed very little so far in 2011, state new Nationwide figures ..."

Read the full story:
Nationwide: House prices remain flat

Caveat_Mortgagor

Breaking news.... Utility companies* say price of gas* is about right!

* Please interchange the type of company according to the product they have a vested interest in.

HAMISH_MCTAVISH

Actually, they've risen by 4% since Dec 2010.

Random_User_Name

HAMISH_MCTAVISH wrote: »

Actually, they've risen by 4% since Dec 2010.

I have to put up my hand & say I don't follow their table.

The figures are:

Month Av. House Price % Change
Dec10 - £162 249 : 0.3
Jan11 - £161 211 : 0
Feb11 - £161 183 : 0.6
Mar11 - £164 751 : 0.3
Apr11 - £165 609 : -0.2
May11 - £167 208 : 0.3
Jun11 - £168 205 : 0
Jul11 - £168 731 : 0.2

I follow the “up 4% since Dec” – as it is clear that the “Av. House Price” that they are using has increased from £162 249 to £168 731 – a rise of £6482 (or “up 4% since Dec”!).

What I’m lost on is the monthly changes. They are “Seasonally adjusted” – yet they don’t seem to have any impact on the “Av House Price”? An increase of 0.3% in Dec saw the average price fall by £1083? Does that make the monthly changes figures pointless? The annual ones are not much better – since it quite clear that whatever they are using as the “average house price” has increased – despite what they are saying with the % changes.

I feel like I’ve turned over two pages in a book looking at their table. Guess I was never meant to be a banker! What am I missing then!?

abankerbutnotafatcat

Random_User_Name wrote: »

Guess I was never meant to be a banker! What am I missing then!?

The primary basis of banking is the same as for most trading businesses - you sell for more than you bought for. The main complication for banking is that there is usually a delay in receiving payment.

This housing prices malarky falls within the realm of the statistician (sp). I now of course feel obliged to quote "lies, damned lies and statistics".

brit1234

The last couple of months figures are the delayed noise of the spring bounce. Prices will continue to fall from here on in with the exception of possibly the land registry next month as they are a further month behind with lag.

A.L.D.A

The number of mortgages approved have dropped year on year, and house prices have not dropped? Number of houses being built is well below what is needed in many regions. Percentage of the population who are house owners is therefore falling, and there is an increase in the number renting. There is also an increase in the number of houses accommodating two households. (Children unable to find independent accommodation etc.) Social housing budgets are also under pressure. In the medium term this can only end in grief!

In many regions the problem is no longer affordability, indeed for many renting is proving increasingly expensive as availability is limited.

The problem in the housing market is lack of liquidity and with supply end restricted, this will lead to future inflationary pressure. If this problem is not addressed the average house will not be what the average person can afford, but what the average of the top 60% can afford. The rest will rent assuming there are places to rent.