House prices

[Twiglets1]

Hi Guys, we got to the end of the last thread so need another one on this controversial topic!

And to respond to @CrashyTime I don't say "demand is strong" over and over again. In fact, I rarely comment on demand at all. My posts are more focussed on house prices and interest rates/mortgage rates.

And I don't deny economic "reality", I just don't exaggerate how bad the house price correction is likely to be. I have a running bet with @XVGN that property prices generally will fall about 5% in 2023 and another 5% in 2024 so I do believe prices are falling in most areas. Just nothing like the 30-35% crash predicted by some!

True. The ONS has recently admitted their concerns about their statistical methods and therefore accuracy of their figures due to small size. The Nationwide/ Halifax, who are in the business of providing credit for homes do not-no coincidence. These three all weight their stats and calculate the index in different ways.

Rightmove is an asking price index and is more a marketing tool than anything else.

Cash buyers, on average, pay less than mortgaged buyers @ibelieveinmirrorballs, around 3% less according to this which is from February 23. I can't imagine that things have changed much in the last 13 months as the market has fallen and the number of mortgaged buyers has fallen too and cash buyers represent a higher percentage of transactions than is usual: https://www.davidandrew.co.uk/blog/the-power-of-cash-buyers.html

I might have misread, but the article mentions paying 8% less than mortgage buyers overall. But, yes, that means that the Nationwide index will automatically be over-inflated.

I recognise the limitations of all the other indices and would not make a bold statement such as House Prices Are Rising based on any of them. That was the initial point.

@ibelieveinmirrorballs I think cash buyers often think they should be able to secure a great deal but in reality sellers don’t put that much store by cash buyers.

Sellers accept that being in a chain is normal and won’t mind as long as it isn’t a particularly long chain. Mainly they just want to achieve the best price they can for their property.

I knew someone would have a statistic! 😁 Thanks @rainingsnoring. (@XVGN the information is either very badly articulated or it’s too early and my brain can’t cope, as I don’t understand it at all. I initially read it as cash buyers 6% under asking and mortgaged 3% under. With the comparative difference between the two being 8% of the house’s value. But now think it means mortgaged 3% over asking. Neither of which means an 8% difference..?)

I had a cash offer and didn’t treat it any differently to the other offers other than a slight influence on my opinion as to the kind of buyer they were likely to be. And as they had been slightly annoying I went with a slightly higher offer!

It's probably not even as exciting as that. It's probably just that Cash buyers are just buying cheaper homes. Mortgage buyers are buying more expensive homes.

My current position isn’t that house prices are rising as you know. My position is that overall, the property market could currently best be described as stagnant or showing very small growth in some areas & falls in others.

Just because I post this article that doesn’t mean I am stating that house prices are rising just that I find it interesting and hope others will too. It’s trends that interest me not what one article says. If enough reputable sources suggest that prices are generally rising then I will start to believe it.

Evidence of modest house price recovery such as that provided by Nationwide does at least make me question my previous prediction of a 5% decline in property prices in 23 and the same in 24 however & raises the question of whether that should be revised downwards. I don’t just take a position and stick to it doggedly. Though equally I won’t change my position based on just one source, I will pay attention to all the reputable sources.

Why are you being so defensive? I did not challenge your re-posting of a news article. I challenged the poster before that who simply posted House Prices Are Rising. I asked them for evidence and you then coincidentally posted the Nationwide index report. Were you answering for them?

I didn’t feel I was being defensive I thought we were just having a conversation.

In case anyone thought I was saying house prices are rising as a bold statement, I was clarifying my position.

ONS data is the most reliable and representative to me, rightmove asking prices the least, lenders such as banks and building societies somewhere in the middle. All 3 should be considered though.
The ONS as most reliable data, only tells you where we were 6 months ago really. Which is pretty frustrating if your buying as things can change quite quickly - as they did after the kwasi budget. I don't know if its still the case but the ONS also used to be inflated as they excluded auction sale prices. So you could argue their measure is also not properly representative. Is that still the case ?

I had a cash offer and non cash offers @ibelieveinmirrorballs and went with a non cash offer like you.

The cash offer was very obviously from an investor and to my mind they attempted to cheat when it went to best & final offers. They offered “1k more than the next highest offer” - how sneaky!

We sold to FTBs who payed fairly in making their best offer.

I know your position. The other poster decided to ride on the back of your post to claim evidence of house prices rising over the last year. I argued that that was poor evidence. Let's not go around in circles. Let's just discuss the facts and our guesses.

I use the acadata as my main information on house prices. It’s not widely advertised but gives a decent idea of what’s going on where.

Fair enough @XVGN and I agree with you @DrySherry that the ONS data has been the most reliable and Rightmove the least with Nationwide & Halifax in the middle but all interesting as long as you can accept their limitations.

Peace breaks out.

If we can manage it why can’t everyone??

Caveat first: anecdotal data only. I like looking at the completed data from the LR as it gets loaded onto houseprices.io. January has just started to be added. You don't get loads of examples of people selling just a year or so after buying. They will typically be flippers where value has been added and the new price is much larger. But for some, it's just a case of wanting or needing to move on. Here is highly selective data potentially indicating the rollover in prices some of us have forecasted.

And just to prove how selective I was (although potentially a flipper)

Yes looks like the flipper ran into issues or ran out of money. Clearly an expensive mistake for them as you can see they had got well stuck in to doing the work. One pic is at the time of this sale. The other is how nice it was in 2009. Ignore what it says about number 2. Its definitely number 13 in both.

This is very true in my experience!

Cash doesn't hold much bargaining power, in the end it's about the £££.

Just checking in. Have we now explained why this almost certainly isn't the case, or would you like to discuss further?

Overall people are buying less homes, making a mockery of all the "Supply and Demand" nonsense that has been trotted out for years, many people will have made very bad debt decisions based on this long running MSM/VI lie.

Most of the stuff you post is from vested interests who sell mortgage debt, or by people with some financial incentive from mortgage debt sellers to write puff pieces that basically try to encourage people to keep borrowing, IMO large mortgage debt in this environment is going to lead to very bad things happening in your financial life, they are even talking about the U.S raising rates some more now!

What you call “vested interests” most people see as mainstream media & the organisations in the property market big enough to provide significant data from which to get an idea about trends 🤷🏼‍♀️

I agree that they appear to be a better index than many.
They appear to use Land Registry transaction data though so will have the approx 6month lag. Current month's data would therefore, presumably, reflect Summer 23.
http://www.acadata.co.uk/services/house-price-index/