House prices fall for first time

In message , snipped-for-privacy@hetnet.nl writes

MMM!

Firstly, how can an article written on 26 July comment on house price statistics for July??

Secondly, IT'S JULY!! - people dont buy houses in July and August. For

Thirdly, whilst it is part of a trend, how can anyone form an opinion based on 0.1% of £150K (£150.00).

The Daily Mail can :)

This is deja vu. I heard the same thing a year ago. It's typically a seasonal thing. I'd be looking more seriously at the prices changes in September.

But the Daily Mail IS always right.

So they also fell last year;

How can that be "evidence that the property bubble has finally burst" *this* year, but not "evidence that the property bubble ha[d] finally burst" *last* year??

One minute they are falling, the next they are soaring. Who's right?

----

Thursday July 29, 08:43 AM

House prices soaring again

By Ross Finley

LONDON (Reuters) - House prices have come back to the boil in July, marking their biggest year-on-year gains since May 2003, reinforcing expectations for an interest rate hike next week.

The Nationwide Building Society said on Thursday house prices soared

The figures, which defied expectations of a slowdown, are sure to be of concern to the BoE, which is keen to cool house price inflation gradually with interest rate rises given the potential damage that a crash could do to the economy.

The data are likely to cement even further already solid expectations for a quarter-point hike in the base rate to 4.75 percent next week after four such rises since November.

"This is a big increase," said Ross Walker, an economist at RBS Financial Markets. "It's a signal that we are going to need more rate rises and the next one is going to come next week."

Short sterling interest rate futures fell sharply across the strip while the pound gained as much as a third of a cent against the dollar to trade near $1.8265 on expectations of higher rates.

The sudden gains in July followed a month of slower -- but still strong -- growth in June and some tentative evidence from other surveys that the housing market may have finally begun responding to higher interest rates.

But Nationwide flatly said that was not the case.

"Whilst recent anecdotal and survey evidence have suggested the housing market might be starting to slow, our own house price data accords with the recent strength of retail sales and mortgage lending," Nationwide economist Alex Bannister said.

Mortgage lending hit a record last month since comparable records began in 1997, according to data published this week from the British Bankers' Association.

Figures from the BoE later on Thursday are expected to show that Britons have piled up over 1 trillion pounds in debt -- partly due to ever-larger mortgages to finance soaring house prices.

TOO MUCH LEVERAGE?

On Thursday BoE chief economist Charlie Bean warned that house prices in Britain are overvalued and there could be a sharp correction but said that equally prices could just stagnate for a while.

In the meantime, the re-acceleration in house price inflation in July brought the average price of a home in Britain to 154,299 pounds in July compared with 151,524 pounds in June.

That compares with an average salary of about 26,000 pounds. Nationwide said it had become increasingly difficult for first-time buyers to get onto the property market without putting down huge deposits or taking out very large mortgages.

The number of first-time buyers has fallen sharply, the report said, with 18- to 30-year-olds now making up only 20 percent of first-time buyers. One quarter of those are putting down more than 30,000 pounds as a deposit when they buy property.

"The rapid rise in deposit size supports the anecdotal evidence that many first-time buyers are now only able to get onto the property ladder with financial help from their families. In many cases this is likely to involve parents withdrawing equity on their own property," said Bannister.

Nationwide said it would probably put its full-year forecast for 15 percent house price inflation under review over the next couple of months given that prices are already up 12 percent on the year.

Regional house price inflation trends remain intact, with the biggest gains in Scotland, the North and Wales. Prices in the South and in Greater London have seen a modest reacceleration in price gains, the report said.

The Land Registry.

But 3-6 months out of date IIRC

So there will always be those who use less accurate data to assess the situation. I wonder how statistically correct some of them might be.

E.g. some use asking prices - probably garbage, but nevertheless a guide to the perceptions of agents and sellers.

Some use prices agreed at offer stage - these usually change before completion, and some dont reach completion.

Lenders use mortgages, (not sure if they are completed or agreed)

etc.

The Hometrack ones use agents answers to a series of questions monthly. I used to participate but found it a pain in the ass, and sometimes resorted to guesstimates if I was very busy. They were very persistent in chasing the info. Stopped contributing after a few months.

Yeah I've heard of others doing the same.

Daytona

Err no, they have fallen before on many, many occasions.