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!

Prices continue to roll over - just not as fast as I predicted. There is no obvious end in sight and so a peak to trough calculation is not possible yet.

Some interesting breakdowns on home type and towns of growth and decline.

https://otta.property/may_2024_raw_data_analysis

What's to let prices start going down?
Demand is high.
Migration (Legal and otherwise) puts enormous pressure on housing, as well as many single parent households. Student numbers are taking accommodation out of the general rent market and creating really strange markets where there are high densities of students.

We have many pressures on housing locally - and prices are going up second only to Dartford!

Yes, some areas are seeing house price rises, but these are more than offset by the ones seeing declines.

The "demand" element has two components - the want to buy and the ability to buy. High prices impact the ability to buy. They need to come down significantly and/or supply needs to increase significantly. The latter is less likely so price falls will continue.

Office for National Statistics: Private rent and house prices, UK: July 2024

Main points

• Average UK private rents increased by 8.6% in the 12 months to June 2024 (provisional estimate), down from 8.7% in the 12 months to May 2024.
• Average rents increased to £1,310 (8.6%) in England, £743 (8.2%) in Wales, and £959 (8.4%) in Scotland, in the 12 months to June 2024.
• In Northern Ireland, average rents increased by 10.3% in the 12 months to April 2024.
• In England, rents inflation was highest in London (9.7%) and lowest in the North East (5.9%), in the 12 months to June 2024.
• Average UK house prices increased by 2.2%, to £285,000 in the 12 months to May 2024 (provisional estimate), up from 1.3% (revised estimate) in the 12 months to April 2024.
• Average house prices increased in England to £302,000 (2.2%), in Wales to £216,000 (2.4%), and in Scotland to £191,000 (2.5%), in the 12 months to May 2024.

www.ons.gov.uk/economy/inflationandpriceindices/bulletins/privaterentandhousepricesuk/july2024#main-points

As ever, regional variations are important.

Yorkshire and the Humber was the English region with the highest house price inflation in the 12 months to May 2024, at 3.9%, up from 1.2% in the 12 months to April 2024.

Annual house price inflation was lowest in London, an increase of 0.2% in the 12 months to May 2024. This was up from a decrease of 3.6% in the 12 months to April 2024, and the first positive annual growth in London since May 2023.

So bottom line is that house prices have risen over last 12 months. Savilles have aid to expect 20% increase over next 5 years.

You never replied about your postal area, so we cannot comment what your house prices are doing. They are almost certainly down.

I think it’s only new builds that are up in price and that just benefits the house builders.

Even then, what are the sweeteners they offer? They cannot be trusted either.

You don’t believe the data from the Office for National Statistics then?

I have looked up my area online and it’s up in price. Not that it overly concerns me to much as I don’t plan on selling.

That poster comes on here every few weeks, stating the same things every time about house prices rising, quoting Saville as their source, and always refuses to clarify or engage. Perhaps they are anxious and just trying to persuade themselves that they are not losing money. Who knows!

I think it's clear that house prices are not rising in the great majority of areas. There are so many people struggling to sell and so many reductions on RM. That obviously wouldn't happen in a rising market.
This website uses data direct from the LR and paints a very different picture with their exact data. He thinks that the ONS use of hedonic regression stats is distorting the picture significantly at present. To be honest, there has been a lot of gaslighting by the recent government in the UK and US, an no doubt elsewhere telling people that everything is going well when it is clear that this is untrue to many.
tps://otta.property/may_2024_raw_data_analysis

The data form the Office of National Statistics published is a first take on prices. As more data is added for the month is question, the prices are being downgraded but this never hits the headlines.

Asking prices might have risen but that means nothing.A lot are coming on at over inflated prices and then being reduced a month or so later.

From what you have said most of her previous posts are all claiming house prices will only rise, and as you say refuses to clarify or engage.
There is a touch of desperation as well as being wrong.

People aren't necessarily desperate just because they hold a different view to yourselves and time will tell if they are wrong or right in their view that house prices will rise. I don't think you can assume they are "wrong" without waiting to see how things pan out over the next few years.

As for refusing to engage with direct questioning, I don't want to speak for anyone else but I can certainly understand why they might not want to answer questions about what their postcode is. I think we are all entitled to only share such information as we feel comfortable sharing and to be fair, no one else is sharing details about their postcode either.

The Office for National Statistics does include the revised prices once they have them, there is no attempt to hide anything and prices aren't necessarily being downgraded.

For example, from the link I provided earlier:

• Average UK house prices increased by 2.2%, to £285,000 in the 12 months to May 2024 (provisional estimate), up from 1.3% (revised estimate) in the 12 months to April 2024.

So the data for April has changed to 1.3% increase in house prices whereas the provisional estimate for April was 1.1% increase in house prices.

www.ons.gov.uk/economy/inflationandpriceindices/bulletins/privaterentandhousepricesuk/june2024

It’s not so much a case of holding a different view but the insistence that what they say is correct even without any substance to what they are saying.Have a look for yourself at the previous posts by the poster and you will see constant wild claims with nothing to back it up.It would be exactly the same if someone came on and wrote 20 posts saying house prices are going to crash 30%. Without any actual information regarding that they would be called out too.

I guess a difference between you and me is that I don't see the idea that house prices will rise as "wild" but rather a perfectly valid opinion shared by many others. @Lm1981 has quoted Savills research - an estate agency yes, but a reputable one who are transparent about the source of their data which is Oxford Economics and the Nationwide.

Savills revised forecast expects house prices in the second hand market (excluding new builds) to grow 2.5% in 2024 which is not a dramatic prediction compared to the house price crash of 30% you mention. And fairly similar to the sort of data being suggested by the Office for National Statistics.

www.savills.co.uk/insight-and-opinion/savills-news/359581-0/savills-upgrades-five-year-forecast-for-uk-house-price-growth 

I’m not so sure that the view that house prices will rise is shared by many others.
As this picture shows someone else queried how valid their one and only source of rising prices of Savills was, seeing as they business is not looking too healthy.
2.5 forecast is neither here nor there and not what the poster was alluring to with regards to house prices.
Again I say the constant repetition by the other poster of only higher prices when all other indicators are falling is as ridiculous as those posters who claim a 30% drop is likely.

I think we're going to have to agree to disagree at this point. There are lots of sources suggesting house prices could rise, though not dramatically. I won't dispute that there are also lots of sources suggesting they will fall so I guess it ultimately comes down to personal opinion.

My personal opinion is more towards a small rise or further stagnation in the housing market generally. Of course small house prices could effectively still be stagnation if you take inflation into account.

At least we can agree on the 30% drop in house prices being ridiculous

I like the agree to disagree stance very much.
I also think what you have written seems entirely possible.
Its just when people push one idea or another as per the poster and the crashy one that I pick up on it.

Yeah ... no one has asked them what their post code is. That's just nonsense. I asked their postal region so we could take a look at the data on otta.

By "your postal area" I assumed you meant postcode which is a reasonable assumption. And even if that isn't what you meant, it is still the case that not everyone would feel comfortable disclosing the area in which they live especially if they live outside of a city.

There's a saying about assumptions Twiggers.

I had referred to Otta data at the time and anyone who looked would have seen the data broken out into regions such as BN for the Brighton region (which covers vast area outside of Brighton). The first 2 chars of a postcode aren't really outing in any way.