House prices appeared to pick up a surprise 0.4% in October, Nationwide has reported, bringing them 0.8% higher than they were a year go, to average £165,650.
The claim of a slight rise was wrapped around in the usual smoke and mirror mysteries of 'seasonal adjustment'. The nature of the rise was challenged by those who spotted that in fact Nationwide appeared to be reporting a house dip in average prices, from £166,256 for September. (See one of our sharp-eyed bloggers, Rantrave, below.)
So, was it a 0.4% fall or a 0.4% rise? A spokeswoman for Nationwide said this morning: "The monthly index is seasonally adjusted, however the average price isn’t and this accounts for the differing figures." Nope, we don't understand that either.
However, for those with degrees in advanced mathematics, speciality in statistical analysis, all is explained (?) here:
https://www.nationwide.co.uk/
Nationwide also said that house prices were very patchy, with the more affluent areas around the country performing better than more hard-pressed areas, where transactions have fallen.
The uncertainty seems to manifest itself in the deeply polarised views on the housing market shown in another new report.
This finds that people are almost evenly split as to whether property prices will go up or down, or stay the same.
However, just over half (53%) of consumers consider that it is currently a buyer’s market and 80% of owner-occupiers think the next 12 months would be a bad time to sell.
According to the new ‘confidence’ tracker report published by Halifax, 30% think house prices will go down over the next year, 28% believe they will go up, and 27% think they will be unchanged in 12 months’ time.
Those who do expect a house price rise expect it to be modest, at up to 5%. Similarly, those expecting a fall expect it to be a drop of 5%.
The most positive people about house prices are, not surprisingly, in London and southern England, while those in Scotland are the most pessimistic.
The survey also shows that 66% of adults believe that private rents will rise over the next 12 months. Only 3% think they will fall.
The Halifax report is based on surveys of nearly 2,000 adults undertaken by Ipsos Mori between October 7 and 13.
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Comments
For clarity - I was using the Nationwide calculator you linked to before.
I've put in Nationwide's own real and nominal numbers into that calculator. As I expected, it doesn't take RPI inflation into account.
If you want to factor RPI into house prices, then Nationwide do put out a Real House Price chart. Not sure if you can bring yourself to access the HPC site, but you'll find that data summarised here:
http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php
As mentioned below, house prices as measured by the Nationwide are currently 20% below their peak price in real terms.
I agree with you that rents are rising faster than in recent years. I'm more puzzled as to why that has taken so long - rental yields have been very poor relative to the prices of houses for a while. Even then, many yields that landlords are getting today are still below the current rate of inflation, especially when maintenance, insurance and voids are factored in.
I forgot to say that people with mortgages are actually saving money because most mortgage rates are below the 5.5% inflation rate, so while the cost of everything is rising including rents, their mortgage repayments are not! :-)
@ Rant
"You really do seem to believe that someone who sells a house for £1 more than they bought it ten years ago has made a profit."
Rant these calculators already factor in the inflation. Go and look at a property that was say bought in 2003 and sold again in 2006. Run the calculations and the calculator should indicate that the sale price was about right. I use these calculators every day and when I find a calculation that is way out, I do some more digging and discover that it had either been extended & worth more or repossessed and given away.
As everything is relative, as long as the person selling his house for £1 more than he paid for it is able to pay off his mortgage and buy another property, he has not lost out because the other property has not changed price either. Meanwhile the person in rented accommodation is not clearing down a mortgage over those same ten years and is actually paying off someone else's mortgage! Who is in the better position?
Currently rents are rising faster than property prices are falling and even if you factor in the 5.5% inflation, which only felt by the tenants as it is not a problem to the home owner unless he sells as it is only a paper loss.
"Chris, you've managed to completely misrepresent what I said. For what must be the umpteenth time"
and for the umpteenth time no one is interested you fool!
You people must have so much more time on your hands.
Same 'debate' week in week out, different title.
Oh dear FBA school boy - titter titter,
You lived up to expectations
I should bloddy well hope so!
Zoopla turned down the opportunity to sponsor it...
Rant,
Out of morbid curiosity I did my own house in the south east. The calculator reckons 7.26 %. Just about spot on really I’m ashamed to say.
Once again Chris, you've managed to completely misrepresent what I said. For what must be the umpteenth time, the Halifax numbers are down 30% in REAL terms from the peak. Nationwide's numbers are down 20% in REAL terms since the peak. You really do seem to believe that someone who sells a house for £1 more than they bought it ten years ago has made a profit. There's no point getting fired up about facts or numbers that prove a decline has taken place in UK house prices - when you put all your eggs into the housing market, you took that risk.
As an aside, since you seem very keen on online calculators, here's one This Is Money have put together called the House Price Crash Calculator, which tells you how much property bought at a certain time has gone down in value:
http://www.thisismoney.co.uk/money/mortgageshome/article-1633401/House-price-crash-calculator.html
Jonnie,
I haven't been cherry-picking the data, i'm more than happy to accept the NW's YoY of +0.8%.
I don't particularly like it but I have always maintained the indices of choice are NW, LR & Halifax.
Of course, i'm hoping for a doomster double digit fall for tomorrow's Halifax report.
In any event, you shouldn't be complaining about that witless Essex drivel, it certainly buys me an hour of peace most nights (not to mention the back-to-back soaps).
@Rant
"Someone needs to send Nationwide a calculator:"
"Just stating the facts..."
That's so funny Rant. Only last week were you quoting Halifax and that prices have fallen 30% when I pointed out the Nationwide Calculator and their claim that it had only fallen by 9.52% since the 3rd quarter of 2007 (The accepted peak), yet now when it suits you, you use the Nationwide Calculator to illustrate your point!!
Okay, we'll stick with your point that according to the Nationwide it has fallen by 0.4% and then you should accept that property prices are only 9.52% lower since the peak. (Not factoring in the inflation, like you normally do)
Now for anyone familiar with the Nationwide Calculator, you will notice that it doesn't run monthly, but quarterly and the latest calculation point is the end of quarter 3, which is the end of September, so how can the Nationwide Calculator state that prices fell by 0.4% last month when it doesn't work monthly and we haven't reached the end of quarter 4 yet to calculate October!!!
Furthermore, if you run the calculator from the end of quarter 2 to the end of quarter 3 (July, August & September) nationally, it will tell you that prices only fell by 0.1%.
Remember what you told me, you are in rented and are saving to buy a house, so you have a vested interest in talking the market down!! As I have said to you before and many others have said this to you too, "Please go back to Housepricecrash.co.uk where you belong"
The rules have been rewritten Jonnie. There's now the incentive of getting your name mentioned in the article...
; )
Still gutted about the 'n' though.
Right then,
………………….for the love of god what do women like about this witless cobblers on telly about the bunch of thick chicks from Essex? – anyway Mrs Jonnie is glued to it, its not for chaps so to the world wide web it is and here I am coming to see you lot ( all 12 of us ) at EA today – damn porn filters, seem like a good idea at the time, different story phoning Virgin Media to have it switched off.
Any to the point; Sibley’s and Rant – we have done this lads, and you (I think I recall) have promised not to pick and choose the stats / numbers………………….
Come on, we have been meeting on here for a while and I know you two well enough. If the Nationwide numbers had said – 0.8% you buggers would have been all up for it and doing some pretty clever sums and so on. – In particular you Rant.
You can’t do this ‘picky choosy’ malarkey – you stand by the numbers or you don’t, you cant cherry pick what you like and bin off what you don’t boys, and you bloomin know it! Shame on you, stick to the (un official and largely un spoken) rules please.
Jonnie
P. s – For a laugh, lets assume this ( Nationwide report) is accepted by all……………….it means zip all have happened or dropped or gone up in a year. Nice.
to the anon poster below.
A link you may enjoy
.http://en.wikipedia.org/wiki/Irony
Morpheus, a chap who goes to sleep with a stiff problem but wakes up with a solution in hand.
Please give us more wisdom oh wise one.
Dick head.
Meaningless post
I
I
I
I
v
Sorry to disappoint Paul, But I think I'm going to concern myself with house prices in the area where I work rather than take any notice of these pointless national averages.
'0.4% fall or a 0.4%'
'‘confidence’ tracker report published by Halifax,'
'bringing them 0.8% higher than they were a year go,'
All of the above and most of what’s written below is becoming very, very tedious.
No, No, No RAB, no wonder they hang up on you, it should be:
" Hello its RAB, Sorry to have to admit that when I valued your property 6 months ago I intentionally overvalued it at £250k so we would get the work.
However, my conscience is now keeping me awake at night and I can't think of any more excuses as to why you are not getting any viewings other than the price is too high.
Therefore I really do urge you to recognise the true market value of your property £200k, or you will be locked in to a miserable existence as you chase the market down and it will be all my fault" sob
@rantnrave
Please note the word 'eventually'
How much support did the lack of supply give to prices during '08 - '09? Not a fat lot.
An alternative thought...
In the Times today - page 54.
Consultants DTZ said ....."there would be a shortfall of 70,000 new homes from the 230,000 that are needed"
(approx. 1/3rd)
What will this eventually do to the supply & demand situation and therefor selling prices?
If you do not HAVE to sell don't panic - sit tight!
Discuss?
Well I for one am happy with the NW index. It'll give the property bulls some cheer for a change.
Let 'em have a run around in the garden, get the air about 'em.
Of course, it'll soon change with next Halifax report so make the most of it.
Never trust the figures, they may be skewed by activity you are unaware of. See example below.
A man calls his stockbroker all anxious and out of breath with this urgency in his voice. He says, "Sell it all, sell everything fast, right away."
The stockbroker tries to explain that the market is cyclical in nature and that for long term outlook stocks still remain the place to be.
The man says, "Let me tell you a secret. You know I've been married for 6 years now and I've been your client for 5 years."
"Yes, go on," the stockbroker says.
"Well. My wife has this thing about the market. Her grandparents lost it all in the great crash and ever since then her family found investing in the market akin to original sin. When we got married I promised her that I would follow in her parents footsteps and never venture in the stock market and always leave all our money under the mattress."
"Wow, I didn't know that. I guess you want the money because the market is going down, in case she asks for it."
"No, I want the money because she ordered a new mattress and it is being delivered in two days."
This looks like another set of figures plucked out of the air but it makes for some fun replies.
We can rely on RnR Wardy and Pee Bee for some rewarding comments.
Keep up the good work lads.
Started ringing the vendoers first thing, explaining that due to Nationwide survey and endorsed by the now famous Rantnrave they need to reduce price by 0.4%.
1st call: You are for sale at £250k, you need to reduce to £249,000 to be in line with the market. Was told to "take a run and jump". They hung up on me.
2nd call: Your flat is up for £169,950, you need to £169,280 or you wont get sold. Was told "eff off". They hung up too.
3rd call was to John McEnroe: Told him his mansion for sale at £2.5m was overpriced by £10k and needed to be reduced to £2,490,000 Hes asked if I was serious, I said I was coz Rantnrave had endorsed this, he said "who the eff is he?" I told him he is a famous blogger. He said "you can't be serious" and slammed the phone down on me.
I gave up after that.
Any advise from HPCers on how we can get Vendors to take this seriously please.
In a nutshell it is all "rubbish" being written and spoken about house prices at the moment
Outside of the South East we are in the worst property recession in living memory - no amount of talking it up or head in the sand will get a seller a magical price when there is so much comparable data on line nowadays
Get real with the prices, be honest with vendors, and buyers who can buy will buy
Realising Reality: You state "Maybe the NAEA should be made to send Government a letter, if the level of sales falls below a certain percentage of the houses currently available for sale?"
I wouldn't DARE risk your wrath by suggesting that you had, finally, "lost it" big style. OR that your 'Reality' is a very, very far off place for the rest of the population. After all, your lawyers will be watching - won't they?
Thankfully, you have saved me the bother with the words above...
I am delighted for you, Sir. Acceptance is a HUGE step forward, you know! ;o)
The data is based on neither asking nor sold prices. From Nationwide's website:
"House price information is derived from Nationwide lending data for properties at the post survey approval stage"
So if the chain breaks down and the transaction doesn't occur, is that data still incorporated into the figures?
-------------------
Was getting ahead of myself there Wardy - getting a mention in an EAT article has clearly gone straight to my head (even if my middle initial was dropped).
sorry rant, was refering to Realising Reality
Am i reading the article right? Does it say "house prices" with no mention as to whether thats asking or selling prices? I know that, since it is a building society they are talking about, you'd think selling prices, but they are being rather vague, Bad reporting, or just an excuse to fudge figures and make a story?
Not sure if I've fully understood what you're asking...?
Are you talking about sales to FTBs or the equity rich?
RR,
By what measure exactly will you work out the percentage that sales will need to fall by? Shall we use the sales figures from my office or the sales figures from your website?
Maths aside (glad r n r is paying attention) are house prices rising, really?
I would say that this is the usual back to school autumn bounce, wouldn't you?
But it is very muted, compared to normal and is already over.
Every single agent in my area has just gone on a massive price reduction spree.
£10k off here, £20k of there...
The market in Surrey appears to be dying on its a*se.
......................anyway did I ever tell that there used to be this television programme on called Jackanory..............
Just stating the facts...
@rantnrave
Looks as if you will have one of your 'good' days today!
(But it will be hard work) ;>)
Cor rantpratt is smarter than the Nationwide! I doubt that. He will be joined shortly, at play time, by other idiots like Slapper etc.
Now listen everyone they are right right right, they post enough to prove it! Well that what their mums tell them.
Maybe the NAEA should be made to send Government a letter, if the level of sales falls below a certain percentage of the houses currently available for sale?
Surely, if that happens it does indicate that agents are getting something wrong. It's just a thought for a discussion.
Someone needs to send Nationwide a calculator:
Last month they said the average UK house cost £166,256.
This month they say the average UK house costs £165,650.
I make that a FALL of around 0.4%, not a rise.
one day up one day down, how confusing hardly surprising the bankers/lenders cant get things right