MSE News: Nationwide: House prices fell in March

poppy10_2

Wait... the stamp duty holiday ended on March 24th. All the reports were that there would be a last-minute rush of people wanting to buy before the end of the holiday, thus pushing up prices, and that house prices would fall the following month.

How can they argue that the end of the stamp duty holiday at the end of March caused March house prices to fall?

Pincher

People think of foreigners as illegal immigrants,
but forget there are plenty with loads of money,
who like a bit of peace and quiet from all the protesting
everywhere.

Embezzlers, ex-dictators, Greek civil servants, EU commssioners, expect to see them round the street corner any day now.

carslet

poppy10 wrote: »

Wait... the stamp duty holiday ended on March 24th. All the reports were that there would be a last-minute rush of people wanting to buy before the end of the holiday, thus pushing up prices, and that house prices would fall the following month.

How can they argue that the end of the stamp duty holiday at the end of March caused March house prices to fall?

they try anything to make it look like house prices are still up , or falling by very little,

the truth is house prices are 20% or more lower than the peak, and are going to continue to fall for a number of years yet, you only have to look on these boards about how many are in NE,

but really this country needs a massive correction in house prices, and it is happening now,

i still think if you can get a house over 30% off the peak now, it is good buy, if you plan on living in it.

i got 32% off mine this january, very very happy,

zappahey

brit1234 wrote: »

I don't get what you means. I'm talking about effective demand rather than demand ie demand with the money or access to money behind it. Everyone can want a house (demand) but it won't effect the supply unless it is effective demand. People can ask what ever they want however lending criteria is getting tougher, so if they try to be greedy they won't sell.

No, want is no more than want or desire or ambition. Without the ability to pay, want has no relationship to demand.

Demand is the desire to buy plus the ability to pay. That's it, it's no more complex than that. There is no such thing as effective demand.

leitmotif

Exactly, 'demand' in the phrase 'supply & demand' is not a synonym for willingness. If you want a house but don't have the means (either your own or borrowed, or a combination), then you're not part of the demand. If that's not clear, think of it from the opposite side of the equation: merely wanting to sell a house won't fuel supply; you have to actually have a house and put it on the market.

NEO72

HAMISH_MCTAVISH wrote: »

Nationwide average house price Feb - £162,712. Nationwide average house price March - £163,327

In reality prices didn't fall at all.... they did however rise by less than would be expected in March. Because they already rose by more than expected in Jan and Feb due to the stamp duty holiday bringing forward demand.

Well you're right in that the end of the stamp duty holiday has brought demand forward.

Checking the Nationwide data it seems that the previous figures were February (+0.4%), January (-0.3%) and December (-0.3%). Pretty poor even considering the additional demand.

Also, I make that 3 falls in 4 months - the last time this was the case was during the 2008-09 crash.

Also, didn't mortgage aprovals fall by around 15% last month?

Got to say, not looking good is it?

Of course you could always revert to the 'seasonally adjusted' arguments...but as you've never questioned SA when the figures are +ve, I'm sure you've got more self respect than to do that.

NEO72

poppy10 wrote: »

Wait... the stamp duty holiday ended on March 24th. All the reports were that there would be a last-minute rush of people wanting to buy before the end of the holiday, thus pushing up prices, and that house prices would fall the following month.

How can they argue that the end of the stamp duty holiday at the end of March caused March house prices to fall?

Because these figures are based on mortgage approvals - most of these would have gone through prior to when these figures were collected.

I would imagine though that these figures have been flattered by a few stragglers paying over the odds on the off chance they can complete on time and save a little on SD, or those realising they won't complete on time but deciding to complete anyway.

God knows what the figures will be when the effects of removing the stamp duty prop can be seen in their entirety...

leitmotif

The most you'll save in stamp duty on a property between £125K and £250K is (at 1%) £2,500. 'Stamp duty holidays' create extra demand (less outlay at outset of the purchase, perceived saving, etc.). The resultant increase in property prices due to this additional demand does not need to be particularly high to wipe out the couple of grand one might be saving on stamp duty. Other than the reduced initial outlay scenario, I'm baffled as to why right-minded people would rush out and pay £5,000 or £10,000 more simply to save a couple of grand in stamp duty.

MiserlyMartin

leitmotif wrote: »

The most you'll save in stamp duty on a property between £125K and £250K is (at 1%) £2,500. 'Stamp duty holidays' create extra demand (less outlay at outset of the purchase, perceived saving, etc.). The resultant increase in property prices due to this additional demand does not need to be particularly high to wipe out the couple of grand one might be saving on stamp duty. Other than the reduced initial outlay scenario, I'm baffled as to why right-minded people would rush out and pay £5,000 or £10,000 more simply to save a couple of grand in stamp duty.

This is all very true. Goodness knows what will happen to the Nationwide HPI next month, but what I do know is that it is overvalued compared to Halifax/Lloyds and needs to be corrected as they are starting to look a bit stupid. I see Nationwide had yet another house price 'chief economist' on the TV commenting. How many of those have they had in the last 10 years now? This one looked not long out of uni and didn't inspire me with his ramblings.

HAMISH_MCTAVISH

MiserlyMartin wrote: »

what I do know is that it is overvalued compared to Halifax/Lloyds and needs to be corrected as they are starting to look a bit stupid.

Eh?

Halifax, Nationwide and Land Registry are all around the low 160K range.

They've mostly tracked within a few grand of each other for the last 3 years.

The only real difference between the indices is that Halifax showed a significantly higher peak price than Nationwide.