London is a joke (moan)

Cornucopia

Digsby wrote: »

... you'll see a different picture that which some people would seem to rather keep veiled.

Are you referring to posters here? No one is trying to "veil" the truth. The issue is (a) how accurate is your methodology (because it sounds quite selective) and (b) what does it actually mean?

The fundamental point remains that previous sale prices don't really mean that much in the grand scale of things.

The annual change in Streatham (Lambeth rather), is positive, yes, but it is decreasing, fast.

If you had bought in Lambeth in March, then you'd have paid, on average, 15.2% more than you would have in March 2014. Now that's a lot, I agree.

But if you had bought in February, then you'd have paid, on average, 19.6% more than you would have in February 2014. In January, it was 20.9%, in December it was 23.4%, in November it was 25.6%. In fact, you'd have to all the way back to November 2013 before the annual rise was as little as 15.2%.

Now there's been no point, in that time, when the annual % change was negative, so property in Lambeth is up every year. But the annual % change hasn't fallen between months since November 2013 (again), and that was only a fall of 0.5%.

It hasn't fallen as precipitously and for as long as it has for the last 8 months, since 2010, when the housing market was extremely fragile - I mean really, really on the brink.

But it isn't falling, is it? Haven't you just said that it is rising, but not as fast?

There were 300 sales in January in Lambeth (Feb/March figures are not complete yet). There hasn't been a single month where as few sales have been made since February 2013.

Yes, volume is an important consideration in terms of the dynamics of the market. I suspect that the uncertainty of the Election may well be suppressing demand, temporarily.

By the way, nothing is getting farther away from me as a buyer - my savings are increasing at a faster rate than house prices are increasing in my area.

Yes, but your savings are "real" money, hard-won at the coal-face of whatever it is that you do for a living. Property gains are something rather different.

Jhoney_2

Digsby wrote: »

I don't just analyse the monthly changes, I analyse all of the data. My point being, if you go look beyond the headlines, beyond the asking prices, you'll see a different picture that which some people would seem to rather keep veiled.

I'm sure plenty of the good people of Merthyr also had a chuckle this morning when they saw themselves in the top 10 best performing areas in the country. They'll know what's really happening. Sometimes the figures lie, if you don't interpret them properly.

The annual change in Streatham (Lambeth rather), is positive, yes, but it is decreasing, fast.

If you had bought in Lambeth in March, then you'd have paid, on average, 15.2% more than you would have in March 2014. Now that's a lot, I agree.

But if you had bought in February, then you'd have paid, on average, 19.6% more than you would have in February 2014. In January, it was 20.9%, in December it was 23.4%, in November it was 25.6%. In fact, you'd have to all the way back to November 2013 before the annual rise was as little as 15.2%.

Now there's been no point, in that time, when the annual % change was negative, so property in Lambeth is up every year. But the annual % change hasn't fallen between months since November 2013 (again), and that was only a fall of 0.5%.

It hasn't fallen as precipitously and for as long as it has for the last 8 months, since 2010, when the housing market was extremely fragile - I mean really, really on the brink.

There were 300 sales in January in Lambeth (Feb/March figures are not complete yet). There hasn't been a single month where as few sales have been made since February 2013. 300 out of how many for sale? How many didn't sell due to price? Whats the trend re Jan as opposed to e.g May in terms of demand? January is a slow buying/selling month in the housing market as far as I am aware.

So whilst you read the BBC headlines, and see nothing but up, up, up. I dig deeper and get to the truth of the matter - that the market all round the country, excepting perhaps the SE (though I haven't looked into it) is weakening, severely. Not good news for OP then..

It hasn't entered negative territory annually yet, but it has just entered monthly negative territory, and is on trend for negative annual figures within months. Unless something drastic changes, we're looking at a possible bust here. Months? I doubt the data if that's the conclusion to be drawn from it.

By the way, nothing is getting farther away from me as a buyer - my savings are increasing at a faster rate than house prices are increasing in my area.

I meant (you) the buyer, not you the poster.:)
I must say I only glanced at it, as it's not something that interests me personally. I will buy according to my criteria at the price I can afford - that a vendor will accept. That's what no amount of analysis will tell me and ultimately will determine a sale.

Digsby

Cornucopia wrote: »

Are you referring to posters here? No one is trying to "veil" the truth. The issue is (a) how accurate is your methodology (because it sounds quite selective) and (b) what does it actually mean?

No - it was an expression of a paranoid feeling I get sometimes, hearing and reading press releases from people who's best interests would be served by that. I wasn't referring to anybody in particular, not posters here in particular - remember I'm an HPCer... it's a novelty for me to have somebody disagree with me on this topic in such a fundamental way! I haven't had enough experience of that (not that it hasn't happened, just not much or for a while now), or the posters here to form an opinion like that about them.

b) The tool collates information easily to hand that would otherwise take time to gather, and presents (some of) that information that suggests a certain interpretation, but does not prescribe it. How the users interpret that information is up to them really. Some of it is just on a practical level - the address and the postcode; the constituency, the parish etc; the council tax band; whether there is an improvement indicator on the property - and more to come.

a) I'm not entirely sure how you mean that. In terms of matching a listing to previously sold prices, it's as accurate as Rightmove (or Zoopla) itself. There is the occasional mistake - most often in flats where a ground floor might be mixed up with a 1st floor which can obviously be very misleading.

That the site itself sometimes presents misleading information, is partly helped and improved by the tool. Remember that 1st RM property I pointed you to that was previously sold as leasehold and was now shared freehold? The "Market Info" tab on RM doesn't tell you either the tenure of the previous sale, or the property type: sometimes the price is for the whole house which has since been converted into flats. It's not easy to distinguish between these without the help of the tool.

There is a note on the tool recommending that the user verifies that the match is kosher, and a link to the matching property for verification. One planned feature is to allow you to select from a list of nearby sales, with the match selected by default - so that in these instances, if an actual match can be made by other means, or its obvious that this is the ground floor flat not the first floor flat, you can match it yourself.

If you're asking about the scope of the areas covered by the LR data - you're likely to have an idea if you've ever read an HPI report. London boroughs, metropolitan districts, and councils. The sample size has to be a certain size to be able to extract any meaningful information from it (extrapolating trends from sale prices is a big subject owing to the complex nature of the housing market - I wouldn't recommend reading up on it unless you're *really* interested!).

If you're asking how accurate the suggested current value of the house is - well that's an open question isn't it since it's not known until it has sold. In terms of predicting how much it will sell for, I don't have enough data yet to be able to tell, bearing in mind it takes months for the sale price of a listing to appear in the LR records - but the tool does allow you to revisit a listing after it has been removed from the market (if you've bookmarked it, or saved it via RM), and if the sale price is in the registry, then it will show you.

I feel I have been fairly successful in identifying properties that are likely to reduce their prices but not been scientific about that. I do have a user who said that he had figured a certain property was worth 20% under the asking price but wasn't confident in offering that - then installed my tool and it came up with the same number, so he was off to offer it. I haven't heard anything back.

However, as I've said before, it's not meant to (and couldn't) be an accurate valuation. It's a suggestion, implied by the data, and the tool goes to lengths to remind you of that.

Cornucopia wrote: »

But it isn't falling, is it? Haven't you just said that it is rising, but not as fast?

It's fluctuating. I didn't say that it is rising, I said prices in March were 15.2% higher than a year ago, That doesn't indicate that they are rising because it's not a velocity, it's a measure. Prices have been broadly flat since October 2014, sometimes it's up 1%, sometimes it's down 1% - it's a very stagnant market.

Basically it has been getting cheaper in real terms for the past 18 months, though as RPI has fallen, that has become less true.

Cornucopia wrote: »

Yes, but your savings are "real" money, hard-won at the coal-face of whatever it is that you do for a living. Property gains are something rather different.

I know the difference, ta. I see now though that Jhoney's statement wasn't directed at me personally anyway!

Jhoney_2

Have you given any thought to discussing this and/or you tool on the Debate Houses and the Economy board? I think it will assist and find support, potential users and put your tool through the riggers that may enhance your tool or aid their search.

Just a thought - i'm quite enjoying this little thread actually.

PurplePow

AubreyMac wrote: »

From what I hear (through friends from out of London), there's just more opportunities & available jobs here.

One of my friends is from a remote part near Newcastle, her parents are farmers and live quite remotely (nearest neighbour 5 miles away). She came to London to study & stayed when she got a simple admin job after. Even a admin job is hard to get where she's from especially given the fact she can't drive (for medical reasons) and transport there is pretty much non existent.

Of course not everyone out of London is from such a different culture to her though.

She could have just moved into Newcastle

Pixie5740

AubreyMac wrote: »

From what I hear (through friends from out of London), there's just more opportunities & available jobs here.

One of my friends is from a remote part near Newcastle, her parents are farmers and live quite remotely (nearest neighbour 5 miles away). She came to London to study & stayed when she got a simple admin job after. Even a admin job is hard to get where she's from especially given the fact she can't drive (for medical reasons) and transport there is pretty much non existent.

Of course not everyone out of London is from such a different culture to her though.

PurplePow wrote: »

She could have just moved into Newcastle

That's what I was thinking. There are lots of admin jobs in every city in the UK, not just London so why choose the most expensive city to live in.

I understand that w**nking bankers and other jobs connected to banking are in London but what other profession is there that isn't in other cities. Sure jobs in other cities might not pay as well but the cost of living would be lower.

Digsby

Jhoney wrote: »

Have you given any thought to discussing this and/or you tool on the Debate Houses and the Economy board? I think it will assist and find support, potential users and put your tool through the riggers that may enhance your tool or aid their search.

Just a thought - i'm quite enjoying this little thread actually.

Thank you. I haven't dipped my toes in yet, but I am interested in what they think over there. I'm enjoying this thread, and I don't like to have too many conversations on the go at once otherwise I loose track and get all paranoid I'm ignoring someone! So no need to break it up just yet, especially since you're enjoying it too.

Jhoney wrote: »

300 out of how many for sale?

A good question, one I've tried to figure out how to answer before - it's not easy. I can tell you how many properties were being marketed in (all of the postcodes in) Lambeth on Rightmove at the start of January, and how many were added over the course of January. But there are caveats:

1) Not every property is marketed on Rightmove of course. I imagine it covers a good 90% of the market but that's a guess. Every sale is recorded by the Land Registry, so although the figures are definitely not accurate, they can only be inaccurate in one way (that there were *more* houses for sale than it indicates).

2) Note I say "all of the postcodes in". The 300 figure is for "Lambeth". But my source for the number marketed, Rightmove's "Market Trends", only lets me get the data for a postcode outcode, one at a time. So I can't get the figures for Lambeth, I can only get the figures for all of the outcodes (e.g. SW16) in Lambeth, which isn't the same thing because some outcodes span different boroughs. Among all of those outcodes, there were 436 transactions, so if we're to compare apples to apples, which should be using that figure of 436, not the 300.

3) Bear in mind that there were 436 completions in January, not sales, as in, at the point of sale agreed. So comparing it to how many properties were on the market in January doesn't entirely make sense - but since we don't know how long those completions took and therefore when the sales were agreed, plus they wouldn't have all been agreed at the same time and houses come on and off the market all the time of course - it's impossible to know the precise answer, and so this is near enough to give an indication.

4) Some properties are listed multiple times on Rightmove. I have no idea whether the numbers they give us are de-duped or not. I *do* do some de-duping somewhere else in my research. and although I haven't analysed it, I know it to not be significant to be too worried about. Also properties are sometimes removed and re-added so they look like they are newly added but are not. I don't know the extent of that.

So, accepting all of that, at the start of January, 6185 properties were being marketed, and over the course of January 1464 were added to that. So we can say that there were 436 sales out of *roughly* that many.

I bet you're surprised by that. I was when I discovered it (for some other area), given how much the media tells us the market is under supplied.

If we take the figure as a percentage, it's 7%. If we then compare that percentage to pervious months, you have to go all the way back to 2010/2011 before it's that small - a time when prices were dropping like a brick.

Jhoney wrote: »

How many didn't sell due to price?

Every house that doesn't sell, doesn't sell because of price. In other words everything has it's price. There might be the rare exception to this rule, but if somebody can't sell their house, it's for one reason - the price is too high.

Jhoney wrote: »

Whats the trend re Jan as opposed to e.g May in terms of demand? January is a slow buying/selling month in the housing market as far as I am aware.

I think I've already answered the first question. As far as January goes, if you compare that 7% with previous January's - last year it was 18%, the year before 14%.

Cornucopia

I'm slightly confused by some of that. I understood that you had the capability to follow each individual property. This is clearly different to following trends by Postcode or Borough.

In terms of volumes of properties being marketed versus sales, I too find that surprising, though because property sales take so long, you probably need to be following this over a period of 6 months-a year to see the true picture.

It's certainly not my personal experience. I've withdrawn properties from sale twice, and sold from initial marketing maybe 10 times over the past 20 years.

If we take the figures at face value, it suggests that the pent-up demand we are also told exists is not being satisfied because of high prices, not because of under-supply (though it would be interesting to know how that works in London).

I've already described a mechanism for this, which is that sellers (particularly sellers-in-residence) will not or cannot sell for a significantly lower price, and suffer little or no financial impact whilst the property is on the market for an extended period.

I also wonder about the impact of price-related commission on the part of Estate Agents.

Jhoney_2

Digsby wrote: »

A good question, one I've tried to figure out how to answer before - it's not easy. I can tell you how many properties were being marketed in (all of the postcodes in) Lambeth on Rightmove at the start of January, and how many were added over the course of January. But there are caveats:

1) Not every property is marketed on Rightmove of course. I imagine it covers a good 90% of the market but that's a guess. Every sale is recorded by the Land Registry, so although the figures are definitely not accurate, they can only be inaccurate in one way (that there were *more* houses for sale than it indicates).

Agreed

2) Note I say "all of the postcodes in". The 300 figure is for "Lambeth". But my source for the number marketed, Rightmove's "Market Trends", only lets me get the data for a postcode outcode, one at a time. So I can't get the figures for Lambeth, I can only get the figures for all of the outcodes (e.g. SW16) in Lambeth, which isn't the same thing because some outcodes span different boroughs. Among all of those outcodes, there were 436 transactions, so if we're to compare apples to apples, which should be using that figure of 436, not the 300.

3) Bear in mind that there were 436 completions in January, not sales, as in, at the point of sale agreed. So comparing it to how many properties were on the market in January doesn't entirely make sense - but since we don't know how long those completions took and therefore when the sales were agreed, plus they wouldn't have all been agreed at the same time and houses come on and off the market all the time of course - it's impossible to know the precise answer, and so this is near enough to give an indication.

4) Some properties are listed multiple times on Rightmove. I have no idea whether the numbers they give us are de-duped or not. I *do* do some de-duping somewhere else in my research. and although I haven't analysed it, I know it to not be significant to be too worried about. Also properties are sometimes removed and re-added so they look like they are newly added but are not. I don't know the extent of that.

This is worthy of some investigation as it can kick in where there is e.g price reduction of a property listed and i suspect the multiple listing are all counted too.

So, accepting all of that, at the start of January, 6185 properties were being marketed, and over the course of January 1464 were added to that. So we can say that there were 436 sales out of *roughly* that many.


I bet you're surprised by that. I was when I discovered it (for some other area), given how much the media tells us the market is under supplied.

If we take the figure as a percentage, it's 7%. If we then compare that percentage to pervious months, you have to go all the way back to 2010/2011 before it's that small - a time when prices were dropping like a brick.



Every house that doesn't sell, doesn't sell because of price. In other words everything has it's price. There might be the rare exception to this rule, but if somebody can't sell their house, it's for one reason - the price is too high.

Consider the newbuild market, big investment and regeneration projects - it is very normal for these to be marketed before completion of the building! That could account for a lot of the unsolds imo, not that that is necessarily relevant in the SW16 area per se but an anomaly worth factoring in.

I think I've already answered the first question. As far as January goes, if you compare that 7% with previous January's - last year it was 18%, the year before 14%.

Both pre MMR... the tightening mortgage rules. Not exactly comparing apples and apples, imv.

There was also pressure put on Lenders (especially Gvt backed ones) to lend more during this period if memory serves.

Chains breakdown, buyer stays put until something similar becomes available etc etc.

London (central in particular) is over subsubscribed, They are simply not affordable at the price buyers are willing to pay due to e.g stagnant wages, zero contracts, contract employment, and tighter lending policy - or within the location/criteria the buyer wants or expects to be able to buy at a price that suits them- see OP posts.

So while perfectly good homes linger across the UK and perhaps e.g SW16, demand in other London areas are being fought for tooth and nail. It's the same with the rental market tbh.

If the price isn't right for the vendor, as Cornucopia said already, they just ride it out and the buyer moves on with their search. Simples.

Digsby

So many trains of thought! I'm trying to keep on top of them, but I don't want to spend my whole bank holiday chatting on this forum (pleasant as it is).

Jhoney wrote: »

Months? I doubt the data if that's the conclusion to be drawn from it.

Yes months. The annual % change in Lambeth will be negative in September or October if the trend continues. Personally, if I found myself quoting data when I thought it supported my view, and doubting it when it didn't, I'd suspect I'm falling foul of confirmation bias, and I try to avoid that particularly unfortunate aspect of he human psyche if possible.

Jhoney wrote: »

Consider the newbuild market, big investment and regeneration projects - it is very normal for these to be marketed before completion of the building! That could account for a lot of the unsolds imo, not that that is necessarily relevant in the SW16 area per se but an anomaly worth factoring in.

It wouldn't take too much effort to find out the % of the market is new builds right at the moment, which would at least give some idea of that factor.

But still, c'mon, admit that when you asked me "300 out of how many", if you were expecting an answer, you were expecting maybe 400 or 500, weren't you? Certainly nothing like 6k. Even if new build, re-listings, duplicates and whatnot meant the figure was 3k, it's nowhere near what you'd expect. I was shocked myself.

Jhoney wrote: »

Both pre MMR... the tightening mortgage rules. Not exactly comparing apples and apples, imv.

I agree, but you mentioned January being a quiet month, and I can't think of a better way of testing that as an explanation than comparing with the last few previous January's.

When you look at a graph of volumes over the past 5 years, there is a dip every winter as we all know - this year looks unseasonably deep.

This LR report we're talking about is saying that overall in London, sales were 26% down in March compared to a year ago - all sales in March are not logged yet and won't be for a couple of months, but they can extrapolate the sales they have so far and predict the eventual number pretty accurately.