A Britain increasingly of two halves emerges in this morning’s Hometrack report, which paints a picture of house price rises in the South, and of widespread falls throughout the East Midlands, Wales and North.
During March, prices fell in few parts of London, the South-West and East Anglia. There were higher percentages of falls in the South-East and West Midlands, while in Yorkshire and Humber, about half the region had house price falls.
But in the East Midlands, North-West and Wales, house price falls were prevalent, and in the North they were universal right across the region.
With such widespread variations, the Hometrack survey shows national prices as a whole barely shifting – up just 0.2% from February. There was a rise in applicants of 4.4% from February, showing a downward trend.
Time taken to sell also varies widely across the country, from 11.6 weeks in the Midlands and North to under six weeks in London.
Richard Donnell, director of research at Hometrack, said: “The housing market is not firing on all cylinders nationally. The divergence in the relative strength in northern and southern England is set to remain.
“We expect prices to track sideways in the short term, with the outlook for the second half of the year hinging on households’ expectations for the economy and their incomes.”
The Hometrack report never gives house prices, but said that in March, London prices rose 0.5% over the month – the highest monthly increase since April 2010.
However, those London hikes will mostly have been recorded pre-Budget, when Stamp Duty on £2m-plus properties shot up for private purchasers from 5% to 7%, and for properties bought by entities such as partnerships, collective investment funds and companies, to 15%.
With London agents still hammering out post-Budget deals at around the £2m-£2.5m mark, there is nothing yet to confirm, or deny, speculation that prices lower down the scale will have suffered any knock-on effect.
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
Comments
In no particular order:
- The Japanese govt's debt is mostly funded by the Japanese themselves. To use the football analogy, Japan's fate is in their own hands. The UK's however is not. People here don't save anywhere near as much as the Japanese do, thus we are reliant on convincing others to bankroll our debt.
- Linked to the above, the Japanese welfare system is minimal compared to ours. Even secondary education has to be paid for.
- Japanese culture is far less tolerant of immigrant workers, which is compounding the dire demographic situation.
- The way Japanese people regard and 'consume' property is totally different from the UK. Discounts are available for houses that are over 20 years old (!), at least in the cities. The pace at which properties are redeveloped from scratch is blistering.
- Linked to the above, Japanese people do not entertain others in their homes, thus they need smaller places. Instead, people meet friends and family at a restaurant, where there is no pressure to eat up and leave.
- Japanese landlords make our 'savvy BTLers' look like saints. Someone renting a place out there has to stump up as much as six months rent in fees and a gift to the property owner. It is unheard of for deposits to be fully returned, and it is normal for tenants to pay a gift of one month's rent to the landlord every two years they remain in the property.
I'm sure there's more that can be added to this list...
To rantnrave ... yes, it would be interesting to consider the cultrural differences too.
We turned our society upside down in the 1960s - whereas Japan's society with their emphasis on conformity and salary men is, surely, very different.
@Rant
...............go on then, I'm all ears
Jonnie
The priced-out generation in Japan became disillusioned with blindly following their parents' life choices. As a result Japan leads the way in NEETs (those Not in Education, Employment or Training). Essentially, many younger folk just gave up on the idea of careers. It didn't seem worth it.
This trend has given rise to the concept of the "parasite-single", younger people who perpetually live with their parents. Those that do have jobs fritter away their cash on needless purchases, with no intention of becoming independent and leaving the nest. This is actually the one group of spenders that is preventing an economic collapse there.
The extent of their house price boom also put many couples off starting families or having a second child. They simply couldn't afford a bigger place to have a growing family. 20 years on, Japan now has an appalling demographic situation (there are more university places than students of that age group to fill them). The pension and healthcare burden of this is immense, leaving Japan as by far and away the most indebted nation.
Although the UK seems set to follow this path, there are a number of cultural and economic reasons why I think our experience cannot be identical. If anyone's bothered, I'll post those too.
A question for the experts on Japan - or those who regularly cite Japan as an example.
What has happened to the priced out generation over the last 20 years?
Just look on zoopla.co.uk house prices are falling off a cliff in the last week !
Classic case of the right arm and left arm not knowing what they're doing / saying in this report:
"Looking ahead to the rest of the year all the evidence points to a continued firming in prices in the next few months as demand increases and supply remains suppressed."
------
“The balance between supply and demand leads underlying house price changes by 3 months. The improved balance over the first half of 2011 led an improvement in the underlying rate of growth. The balance is now in negative territory suggesting further price falls in the months ahead.”
Japan all over again.
Whilst this Hometrack report gives us house price rises in March I am grateful to the economist Shaun Richards who pointed out this on his blog.
"If we go back to only last Thursday we saw this from the Nationwide Building Society.
The price of a typical UK home fell by 1% in March, pushing the year on year rate of house price growth into negative territory for the first time in six months. House prices were 0.9% lower than March 2011.
This came with a convenient narrative as the report went on to explain that the dip had been caused by the end of the stamp duty holiday for first time buyers."
Now we are told that they rose by Hometrack! Although I note that looking at both reports Shaun Richards concludes.
"So I think that we can see that for the majority of the UK there is in fact no difference between the two reports and that prices are now falling. If we look at likely economic prospects it is quite possible that these falls will continue through the spring and summer."
Seems about right to me.
It's clear the only way is down now albeit slowly over the coming few years. Only vendors willing to be realistic will find a buyer.
I suspect that we now have a situation where the outlying towns in Northern areas that have relied on families moving out of the suburbs of northern cities for a better lifestyle, and then mum and dad commuting in, are suffering on price due to the cost of commuting.
This is certainly the case in our area, we are not getting enquiries from people in the bigger cities of Leeds, Manchester and Sheffield anymore, therefore, leaving local buyers on lower local average earnings.
With less buying power prices have only one way to go for now, if only slowly downwards.