When will the correction come to house prices?

Jason74

Bubble_and_Squeak wrote: »

how do we know this for certain?
i'd agree that the majority would take around 3 months but 95% sounds a bit optimistic on your part

That's about right to be fair, certainly once a chain is in place, it shouldn't take much longer than that. A chain free freehold purchase can be done easily in six weeks, even allowing for arranging a mortgage. Leasehold probably 8 to 10 in most cases to allow for enquiries. A few weeks to complete a chain means that 3 Months (4 at the outside) should cover the vast majority of purchases. I suspect Andy is in a better position than most to know exactly how long these things would take, so I don't think he's being optimistic.

danothy

Jason74 wrote: »

Of course, nobody's going to argue with that (or at least I'd hope not!). It just needs to be acknowledged that in a fast changing market, the LR data can show a very different picture to what is happening on the ground, as it's effectively three Months out of date. That's certainly been the case in London in the past year or so. Initially, LR data didn't show just how fast prices were rising, as it was effectively three Months behind that particular curve. And likewise now, when there has been a dramatic slowdown in much of London, the LR data is behind that curve now, showing rapidly rising prices when that is certainly not the reality in many parts of the city.

I think that rather than being three months behind, it's more that it's not available for the most recent transactions. I'm not saying it's current, but it is a record of what happened and when it happened in absolute terms. The only offer that actually counts is the one on the contract at the time of exchange, which is typically quite close to the completion date, so I think it's fair to say each sale is probably a good single point of time snapshot of the value of a property.

In my view it's not so much that it doesn't show what is happening rather that it shows what happened recently and doesn't claim to be current. But then again nothing really does. It can tell us whether or not predictions were right several months after the event though, such as whether or not "the" peak occurred in April.

Bubble_and_Squeak wrote: »

how do we know this for certain?
i'd agree that the majority would take around 3 months but 95% sounds a bit optimistic on your part

Two different things here. The Land Registry, based on the latest month's file (July 2014), had just under 5% of the total sales for April recorded as additions in it. This implies that about 95% of the completed sales for a month get recorded within about three months.

Typical time between initial offer and exchange and completion is more variable. Time between an initial offer and exchange can be huge, as can the time between exchange and completion and the total time from finding a property to owning it, but the Housing board here on MSE suggests to me that exchange to completion typically takes about a week. Since nothing is binding before exchange, the real 'offer' is made then in many ways.

Bubble_and_Squeak

a footnote on the LR figures.
a bloke from moneyweek claimed that the figures for london are skewed by high value cash purchases. when these are taken out the july figures are more like a 1.5% increase.
don't know how right he is or what it means for previous increases (june may well be negative) but thought it was worth a mention.

danothy

Bubble_and_Squeak wrote: »

a footnote on the LR figures.
a bloke from moneyweek claimed that the figures for london are skewed by high value cash purchases. when these are taken out the july figures are more like a 1.5% increase.
don't know how right he is or what it means for previous increases (june may well be negative) but thought it was worth a mention.

Couldn't say. The data available from the gov.uk site doesn't include whether or not it was a cash purchase. Not sure why cash purchases or high value purchases (or high value cash purchases) shouldn't count though ... they still reflect the value of the property in that the sale has been agreed by the buyer and seller at that price.

***

Again, an interesting aside (or possibly not), the LR data does exclude, amongst other things, "buy to let (where they can be identified by a mortgage deed)". I think that's worth mentioning too.

Bubble_and_Squeak

danothy wrote: »

Couldn't say. The data available from the gov.uk site doesn't include whether or not it was a cash purchase. Not sure why cash purchases or high value purchases (or high value cash purchases) shouldn't count though ... they still reflect the value of the property in that the sale has been agreed by the buyer and seller at that price.

***

Again, an interesting aside (or possibly not), the LR data does exclude, amongst other things, "buy to let (where they can be identified by a mortgage deed)". I think that's worth mentioning too.

didn't know that
this may explain why a house that sold on me ol' dears street at the height of the last bubble has never appeared on the LR.
that one sold for £270k (which seemed so much at the time!). a new record of £370k has just completed after being STC since around march.

The-Joker

Bubble_and_Squeak wrote: »

a footnote on the LR figures.
a bloke from moneyweek claimed that the figures for london are skewed by high value cash purchases. when these are taken out the july figures are more like a 1.5% increase.
don't know how right he is or what it means for previous increases (june may well be negative) but thought it was worth a mention.

I think all figures need to be taken with a big pinch of salt. They all have an agenda and even if they dont they are not always acurate.

Talking to agents can give you an idea about demand and how many are accepting lower offers. But again they have an agenda, ie talking up the market.

ukcarper

The-Joker wrote: »

I think all figures need to be taken with a big pinch of salt. They all have an agenda and even if they dont they are not always acurate.

Talking to agents can give you an idea about demand and how many are accepting lower offers. But again they have an agenda, ie talking up the market.

What is the Land Registry's agenda.

chucknorris

ukcarper wrote: »

What is the Land Registry's agenda.

I was in a secret land registry meeting last week which was held on the dark side of the moon to ensure secrecy, during the meeting they said that their main objective was to encourage bears to pay too much for houses. But they are very despondent that bears are somehow onto what they are attempting to do.

danothy

chucknorris wrote: »

I was in a secret land registry meeting last week which was held on the dark side of the moon to ensure secrecy, during the meeting they said that their main objective was to encourage bears to pay too much for houses. But they are very despondent that bears are somehow onto what they are attempting to do.

I think their main tactic to achieve this must be to mis-record the actual sale prices of the houses then, either intentionally or through incompetence or probably both.

chucknorris

danothy wrote: »

I think their main tactic to achieve this must be to mis-record the actual sale prices of the houses then, either intentionally or through incompetence or probably both.

Ahh! So you were also at the meeting.