Friday, April 29, 2016
Slowing down
House prices fall almost everywhere as property market takes on 'uncomfortable' feel
"The infection from luxury to mainstream is much more transferable than anyone imagines, and these are the reasons why I am troubled by the Land Registry figures," A troubled Henry Pryor The Land Registry data also revealed a fall in the number of completed house sales in England and Wales in January fell by 5pc to 54,254 compared with 56,937 in January 2015. This dispels reports that there was a rush to buy a second home or a buy-to-property ahead of April - when the Chancellor introduced a 3pc increase in stamp duty on these two buyer tribes.
Posted by tom101 @ 11:46 AM (5346 views)
7 thoughts on “Slowing down”
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britishblue says:
One of my business is directly related to the housing market at point of sale. It is based in London in the south west. We are 40% down on last year. I have spoken to competitors and suppliers and everyone is in the same boat. If you read most of the press or speak to estate agents you will hear a different story, but on the ground properties are not shifting. some estate agents will claim it is a lack of quality properties. Buf these are the same ones that are quite happy to package up a shi** hole as unique with potential. Normally march is a peak time, but that has come and gone and so has April.
libertas says:
Some parts of London are still raging ahead.
A tale of two markets?
Lewisham: 19.9%
Hounslow: 18.9%
Hillingdon: 18.9%
Waltham Forest: 17.7%
Havering: 17.3%
Barking & Dagenham: 16.9%
Newham: 16.9%
Croydon: 16.2%
Enfield: 15.8%
libertas says:
These are from the same land registry figures:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/520083/HPIReport20160429.pdf
techieman says:
More accurately WERE raging ahead.
The article states that London and the East were the exception. Jesh wouldn’t it make sense for people to read the articles before they comment on them ?
It shows that 10% falls at the top end are negated by rises for the peeps below. I DO think it’s likely this is because of the “get in now before the 3% rise in SD” by that I mean in London as that seems to explain the differentiation. I’m not sure where the 10% fall number comes from – like libby it strikes me that the monthly numbers and annual numbers seem to have been confused.
It’s a nonsense to hang your hat on a prior ANNUAL hpi and extrapolate that into the future. In the same way it doesn’t make sense to use one month’s set of figures to prove the bear. On that one the jury is out until more evidence arrives. (even though spring is almost always a seasonal bull period) I’d like to see 6 month volumes and median sale prices. As for Libby’s annual rate used, to give some credibility the number should be 1.5% for his beloved – Overground to Liv Street- Enfield.
British blue when you say 40% down what do you mean … can you say when this turned for example ?
britishblue says:
Hi Teichman I will come clean. I own a number of businesses. One of them is a removal business. Most of the business is from Mid London outwards to the M25 and for properties in the 0.5 mill to 3 million mark. The market is made of people buying and selling, people renting, office moves , office moves due to change of use to residential and smaller developers who buy a house, knock it down and build three in its place.. January is normally the quietest month of the year, but March, April May and June are boom months. I don’t service all of the market and cannot comment on the rich Chinese, Russians and Arabs who buy to leave . What you do see is that the housing market acts like a wave. If prices go up in Central London, the boom then flows out to the suburbs finally to the less desirable areas. ( like many that Libby has listed above). So I don’t disagree with Libby, but what I am experiencing is another wave has started from central that is reversing this. Removal companies are laying off people, which is why my phone is ringing every day from people asking for jobs. Who knows, the government might bring out some more schemes, interest rate could go negative, we could Brexit or Remain and this may change the whole cycle. However, just from my experience and it is hitting me hard in the pocket, the market has changed quite dramatically since the beginning of the year. December was a better month, than any month this year.
techieman says:
British Blue thanks for your candour.
To me your experience dovetails into the initial dynamic of a market fall. I.e. the first thing that happens is that volumes contract as people refuse to sell for less than what their property is “worth”. Whether this is a blip or a trend change remains to be seen, if it is a trend change people that have to move will move, and if this is a trend change they will “hit the bids”.
The 1.5% I referred to is the increase in Enfield in one month. So in that way if that 1.5% was extrapolated, it would be more than the 15.8% quoted by Libby. If it was 1.5% compound, then obviously it would be considerably more.
So how can this rise fit in with your experience? Well it does support the BTL demand, as BTLrs buy often without using removal firms at all to “furnish” their properties – or could there be another reason? If buying from an existing BTLr the place will likely already be furnished and they will literally just be taking things over in situ. If a single btl they have nothing to remove so would possibly move some furniture in themselves, if let unfurnished then a lot of the stock will be flats where the items to be moved would probably be limited.
Of course I have no monopoly on wisdom so open to other points of view. Perhaps there is a blip, but as HP says :
“This is not just a London story. What happens in the Capital ripples out. You may not yet feel it outside the M25 but it’s likely that you will soon. It may take ten months to reach Shropshire but it usually makes it out across the country in the end. So, be warned. Whilst few experts can say it I think that the market may well be on the turn. Would I buy now? Only if I wanted something to live in. I’d recommend that anyone thinking about investing pauses for a moment just to see if you too can feel the wind in your face, gravity tugging at your soul and the impression that the ground may be rushing up to meet you!”
libertas says:
1.5% to the power of 12 is just shy of 30% rise. But the monthly is very volatile so it is not the best idea to extrapolate it.
“This is not just a London story. What happens in the Capital ripples out” In that case, expect soon that Shropshire villages will have hoards of Bulgarian men sleeping rough and ten to a room, hanging around on street corners looking for building work. They will dream of BREXIT but it will be too late.
“I think that the market may well be on the turn.” Possibly, on the way up, with the news that Europe is agreeing visa free travel to almost 130 million more, with Turkey, Georgia, Ukraine and Kosovo, all of which have porous borders with neighbouring countries. As we know with previous waves, they proceed the actual legal start gun, front running it. Expect a few million from this. Basically, London is going to become like New York, where you need a CV and interviews to get a rental, and forget buying anything without 5% shared ownership. It is going to go insane.
Think about it, prices are not yet much higher than 1998 and we have a few million more people, with hardly any more housing stock.
Furthermore, we have not built many new schools or hospitals and general taxation does not provide for the necessary capital investment.