House Prices

[LGBirmingham]

House prices still seem to be rising? Does anyone else think this?

I know, I know. These are sales completing in August but originally offered typically around 6 months ago, i.e. the state of play in Feb 2023.

https://www.msn.com/en-gb/money/other/how-working-from-home-will-depress-house-prices-for-good/ar-AA1c4kjr?rc=1&ocid=winp1taskbar&cvid=aea301658c774dda80c3c0547294276c&ei=9

Average UK house prices in August were “little changed” from a year earlier, according to the Office for National Statistics (ONS).
UK house prices increased by 0.2% on average in the 12 months to August 2023.

Rents however are rising and show no sign of falling.

https://www.independent.co.uk/money/uk-house-prices-little-changed-from-a-year-ago-but-rents-show-record-rise-b2431656.html

mm
wait and see.
what I know from figures plus experience of squashing onto tubes is that London Transport is approaching pre covid levels of passengers.

And a quote from that piece:

In its latest assessment in March, the OBR said house prices would fall by 10pc from their peak in the fourth quarter of 2022 before rebounding in the second quarter of 2024.

By the end of 2025 they are forecast to rise by 2.8pc year-on-year, with uplifts of 3.6pc in 2026 and another 3.6pc in 2027.

The OBR has faced criticism about the accuracy of its central forecasts, with Mr Miles previously conceding that they were “almost guaranteed to be wrong

that's quite a guarantee

I agree, the forecasts change with the weather, it is the end of cheap debt that will bring down the housing market, not people refusing to buy overpriced sky-boxes in London (although that will obviously help as well)

I live in the South East, and there really appears to be very little being listed at the moment for 2-3 bed properties, namely houses. There are barely any new builds either.

I recently saw Alex Groundwater's graphs identifying the factors most correlated with house prices. The most correlated was real wage growth. Prices rise when real wages rise and fall when real wages fall. Interest rates only act as an accelerant or decelerant. I wanted to find any corroborating evidence for this and, of course, the government had already found that before.

https://assets.publishing.service.gov.uk/media/5ad0a75ee5274a76be66c25c/OFF_SEN_Ad_Hoc_SFR_House_prices_v_PDF.pdf

So the real question becomes whether or not real wages are going to rise, and what further happens if there is a recession.

I find it hard to believe that anyone has the answers, everything is mired in confusion, world events, and conflicting opinions.
The one thing I would say however, is I would only take into consideration, the views of people that can communicate effectively. That is people that can use their keyboard properly, using the same font, and not swapping the shift button like a teenager. Would I ask a young person for any type financial advice? Categorically not. Would I pay any attention to an entity that thinks it doesn’t matter? Same answer!

'So the real question becomes whether or not real wages are going to rise, and what further happens if there is a recession.'

It isn't a question of if there is a recession but when. Governments increasing deficits (looking at the US) doesn't lead to real growth, nor does fiddling with GDP calculations. Still, even current GDP calculations will show falls at some point, probably next year.
There are lots of problems bubbling under the surface which haven't manifested themselves yet but they will, perhaps all at the same time!

Yeah, I guess the other observation here is that even if mortgage rates reduce, and I don't think they will significantly if at all, it will have a minimal impact on house prices. It'll just ease mortgage payments but won't stop prices falling if real wages decline.

Yes, even if mortgage rates fall significantly AND permanently, say to 3.5-4% (and that's a big if, which I think has a v low chance of happening), people seem to forget that these rates are still higher than the 1-2% that were available previously AND that they take a year or two to work themselves through the system.
A lot of people on here seem to be viewing house prices in isolation without thinking about other incredibly shaky financial systems and coming recession and higher unemployment, not to speak of wars, political tensions, de-globalisation, etc. It would be great if things were positive but, unfortunately, they are not!

Two points of note. The below stats were taken from conveyancing forms. So, last minute bargaining and gazundering aside, are the closest we can get to land registry prices without waiting til the end of time to see sold prices.

Secondly, I spent a fair bit of time looking at comments to various articles on that website last night. I found them enlightening. Because they are made by actual estate agents, not speculators or economists.

https://propertyindustryeye.com/sharp-fall-in-house-prices-predicted-for-q4-2023/

Sharp fall in house prices predicted for Q4 2023
OCTOBER 27, 2023 | JEROME SMAIL

House prices in England and Wales will fall by 4% over the final quarter of 2023, according to research by Reallymoving.

Analysis of over 221,000 property sale prices agreed between buyers and sellers found that the average property price will fall from £336,999 in Q3 of this year to £323,594 in Q4.

The researchers cited stubbornly high inflation, the cost of living crisis and higher mortgage rates putting the brakes on the housing market.

Reallymoving’s Quarterly House Price Forecast uses average house price data collected from conveyancing quote forms. Because registrations for conveyancing quotes typically occur immediately after a sale/purchase is agreed and approximately 12 weeks before the transaction completes, Reallymoving claims its data represents a “unique forecast” of Land Registry data in three months’ time.

What makes you think that people are forgetting that rates of 3- 4% are higher than the 1-2% rates we had for a while?

I mean I’m in my 50s but even my memory isn’t THAT short. Would be surprised if anyone else’s was either.

@KievLoverTwo -that is interesting as the industry have been entirely ignoring all the warnings and just printing over optimistic nonsense until v recently. The agent's comments at the bottom are interesting. I do wonder if more will try to 'go it alone' with their falling revenues and RM hiking their prices.

'What makes you think that people are forgetting that rates of 3- 4% are higher than the 1-2% rates we had for a while?

I mean I’m in my 50s but even my memory isn’t THAT short. Would be surprised if anyone else’s was either.'

Forgetting about the implications plus the implications of all the other things I mentioned.
It's the multiple comments (not just on here) that I have see about house prices rising again once IRs stabilise.

People thinking that house prices will start to rise once Buyers feel confident that interest rates have stabilised does not mean anyone has forgotten that interest rates were recently 1-2%

You are just making my point for me Twigs.

No one has forgotten that interest rates were recently 1-2% rainingsnoring, that’s just made up.

That`s right, and people now know what happens when the next bout of inflation turns up, so they will be ultra cautious about silly borrowing now, sellers are going to have to get used to cutting those prices if the market has any chance of functioning.

I think to some people it is just all about THEIR house price, they are not clued into the bigger picture at all?

Worth putting this here. Encouraging for those who are hoping for prices to increase. Statistical noise for those expecting prices to continue falling.

https://www.bbc.co.uk/news/business-67282657

thanks for that @XVGN
curiously it says
"The 0.9% rise in prices was most likely due to there not being enough properties to meet demand, it said."

I had the idea that with all the talk of falls there had been a rush of properties to market - maybe by folks hoping to get a good price before falls.
Had that idea from my patch of london from all the alerts I keep getting about new properties available.
I stress that am not pushing a particular line - just a bit puzzled/intrigued/looking for insights.

I think that it's NW spin/noise. The weekly UK Property Market Stats show on YT shows that the number of new listings per week is running at almost identical levels to 2017/8/9, so this excuse doesn't wash. It also shows fewer SSTC and more drop outs, so the volume available is increasing. Like most NW/Halifix stats, they will be revised over the coming weeks and those revisions won't be generally reported.

why won't the revisions be reported?
I thought Halifax and NW press released their take on things, albeit only monthly?

The data is there, but it doesn't have the click-bait appeal to the news outlets, so you'll never see a BBC headline announcing, today, that last month's figure was revised.