Figures due out tomorrow from Communities and Local Government are due to show an improvement in the housing market, according to a report in the Mail on Sunday.
Putting aside the question as to how yesterday’s MoS seems so certain – since house price surveys are guarded by press officers with their lives – one has to query whether house price rises are really good news, or even believable news.
Tomorrow’s CLG house price data is, according to the MoS, ‘official’.
In fact, it is as ‘official’ as the Land Registry survey.
So, isn’t it odd that none of the national papers (although to be fair, they might have been distracted by other things) have picked up on the enormous discrepancies between the two?
The Land Registry is currently quoting an average house price in England and Wales of £161,823 for May – that’s a monthly fall of 0.4%.
So it will be interesting to see what the Government’s other ‘official’ index comes up with, as it will also be reporting on May.
However, for April, CLG reported that the average UK house price was £204,439.
In other words, one ‘official’ Government survey puts average house prices at around £40,000 more than the other ‘official’ house price survey.
They can’t both be right. Indeed, perhaps neither of them is right.
Which is exactly why the Government announced last year that it was launching a review of its own conflicting house price surveys, possibly taking in other surveys as well, and would report by the end of 2010.
Six months later, not a word has been heard. No report. Nothing. And still those confusing monthly surveys, paid for by the taxpayer, keep coming.
Could it possibly be that it suits the Government to have one official survey that talks the market up, and another that talks it down?
Incidentally, the newer CLG house price survey was introduced because of concerns that the Land Registry survey was so old. And it remains the fact that the data refers to deals made some months ago.
Nevertheless, the Land Registry has already reported on May, whereas the CLG house price index won't report on May until tomorrow.
It's all very odd.
Comments
SBC - I haven't done too bad out of renting at all actually. I returned to the UK in early 2008, when my savings were less than a quarter of the mystical average UK house price. Three and a bit years later, my savings equal over half the average UK house price. The difference, had I bought back then instead of say now, would be a six figure sum against me - all saved at the expense of 15K in 'dead money' renting.
Okay Anna, but if it's meant as a barbed criticism it's backfired somewhat.
Given that homeownership has fallen (shock horror) in line with increasing housing costs; conversely, private renters have increased due to being priced-out (or, of their own volition). It's not rocket science.
Homeownership as a % of UK (if I recall) reached it's height - coincidentally - with the height of the housing bubble in 2007. Since then it's dwindled because the average Joe can't secure sufficient credit for our unsustainable prices.
Please do pay attention at the back.
OK Anna, you've got me thoroughly confused. You work for an industry with a business model that needs high turnover rather than high prices. Yet, most of your posts are critical of those who suggest lower house prices right now wouldn't actually be such a bad thing.
This makes me wonder what your own personal circumstances are, that you take a stance that is at odds to the state of the industry you currently work for.
I could put forward a lot of theories here, but I try to rise above the childish levels others descend to on this site. Perhaps you would care to let us know why you are seemingly such a passionate defender of high house prices? Then we could have a menaingful discussion. Who knows, I might learn a thing or two and perhaps you might too.
Sibley- That rantrave rents, pays someones else mortgage and therefor a jolly nice, if sill bloke!
School Playground
AoS,
Yes, that's a fair point.
Mine, of course, is that would be buyers are factoring-in further falls and seek to mitigate losses.
I guess both views are valid.
Anna, your point is what exactly, and how does that relate to the article?
Hands up those who think higher house prices are going to get the market moving again...
Is that your hand going up there Anna?
Hands up all those who bought a BTL, are now in ownership of an asset this is falling in nominal and real terms? Throw in maintenance, void periods and mortgage interest payments and hands up those who are getting less return than they could have by putting their money in a hassle free savings bond...
Rantrave- First hand up, thanks.
Hands up all those who bought a property in the last few years and are now unable to move elsewhere due to negative equity, or struggling to pay off an oversized mortgage...
Hands up any poor unfortunate renting to pay off a landlord's "Buy to let" mortgage so he gets a valuble asset whilst you get...........er nothing.......and have to work till 70 to get a small pension and he can sell the proeprty, kick you out and live on the captial value?
and with OAP homes going bust, no welfare state, where are you going to live?
Q: Why is Government persisting with two 'official' house price surveys?
A; So Unhappy Chappy and friends can post rubbish comments on here.
ACE - but you did say get enough off to pay your agents fee to seel, 1.5% that is mate. Do you want to change your post as wrong thne or just continue to try to be right even when wrong?
have to agree with Ace and Sibleys
Offers are generally "nowwa days" 5% to 10% less to start off with, usually in my experience 10% less to start with the opening cheeky bid and working to 5% less by the final offer, those intent on not paying to much on any house then tend to max out at 5% lower than the asking price in my opinion and those who have fallen in love with the house and see it as the perfect home will go closer to the asking price if affordbale and need be.
But certainly 5% off is not rare for the final reduction off the asking price even when realsitic in asking price.
Hhmm. I think you have missed the point completely Anna.
I did think my post was quite straightforward.
A house is priced at £XXX - it doesn't matter if it is correctly or incorrectly priced. Buyers offer less than £XXX (whatever % that may be) to potentially save some cash. Agents fee when selling was an example of why people try to save.
Would you offer full whack on your opening move when negotiating to buy a property?
Hence Sibleys snipet - "Offers are frequently 5/10% below even reasonable asking prices."
Ace- Public smarter than EA think! so make an offer of the typical EA fee of 1.5% off the price you seem to suggest as that will pay your fees? Obvioulsy the public are smarter than certain posters........I just hope you are posting to show us how clever you is and not helping some one buy or sell.
Suggest you need an agent mate.
Not 'entirely' correct with the last thought, Sibleys.
Buyers will offer XXX less than the asking price, if it is correctly listed OR if it is over-priced.
It's shrewd to negotiate and the public are much more clever than agents on this site give them credit for.
A reduced offer does not necessarily mean the house is over-priced. The main thought in their head is "IF it gets accepted, I've saved enough for my agency fees to sell my own house".
Back to the OP, I don't necessarily subscribe to the theory that two govt indices are proof of 'meddling' but more likely plain incompetence.
I do agree that one or both should be scrapped. Of course I would argue that DCLG gets the heave-ho.
Cheers for the link RnR, some choice EA quotes in the RICS report:
"Purchasers are highly selective and very price conscious. Offers are frequently 5/10% below even
reasonable asking prices."
Yes, quite, why might that be I wonder...
lol, I noticed that! 2 weeks of tennis to blame.
Im not a convert btw Rant, I still dont see the crash.
(dont want anyone to think im going soft)
A year ago, the South East was seen as bulletproof. Six months ago, that shifted to London. Now that's changed to 'Prime Central London'.
Interesting to note in the report that after too much snow, too much sun, too many bank holidays etc, Andy Murray now seems to be getting the blame for the doldrums in the housing market...
Thanks for the link Rant.
I was most intrested in the south east 'agents comments' very telling. A few of my vendors are going to get this in their inboxes.
Pee Bee - that lender's just checking if they actually gave out any mortgages that month ; )
Here's a link to the RICS survey - I know you're one of the regulars here who actually looks at these surveys in a bit more depth:
http://www.headlinemoney.co.uk/Company//Media/RICS/rics_110711.pdf
Something to note from the DCLG report -
"Data for May 2011 was not provided to deadline by one lender, whose monthly mortgage completions typically account for around a fifth of records received by DCLG...
As usual, this month's release presents our best estimates from the available data, but these may be subject to more uncertainty and a greater degree of revision than normal at quarter end."
So - 20% of their normal sample missing... data more likely to be incorrect than usual.
Lies... damn lies... "OFFICIAL" statistics!
PeeBee - Take out London (yes, I know that has been discussed before), throw in some high inflation and across much of the UK, house prices in real terms are now showing double digit declines - and prices are still falling, as the sentiment expressed in today's RICS report echoes.
DCLG is also a lagging index. Oh, and the latest home.co.uk report suggests London asking prices have peaked and are dropping too:
http://www.home.co.uk/asking_price_index/HAPIndex_JULY11.pdf
And this is a market coming out of what is supposedly the peak selling season! Looking more like a crash to me every day...
rantnrave: So it seems. Haven't had a proper read through yet.
One thing stirkes me though, mate. 1.6% drop over a year ain't exactly a Crash, is it? Assuming THIS rate of descent continues, when do you feel likely you, or any other HPCer who cares to answer, will be joining the ranks of 'Homeowner'??
Yours, PeeBee - non-Agent; non-HPCer; 100% nutter ;o)
Well the Mail on Sunday clearly haven't been hacking enough phones.
DCLG YoY has fallen further to minus 1.6%.
Brian - Alas I've not come across an internet discussion forum that doesn't have a lunatic fringe...
Out of interest, is it the style or message of HPC posters that you object to?
Rantrave- Of course some EA are nutters , nutters can be found everywhere, its just HPC posts seem to show most/majority of them are nutters and on the wrong web page.
Chris
Talk to a solicitor and he has to wait for HMRC to approve the papers (so I understand) prior to being able to send the info to Land Registry.
We all know, except the CLG that is, that Land Registry figures are hopelessly out of date, by recording actual completions for the previous quarter. They can be in effect 4-6 months "old" if used for forecasting trends. In that sense they cannot hope to be guide as to what is happening on the ground. Only Estate Agents can do that and regrettably we are very reluctant to be honest unless the market is booming. That goes from CEO's downwards, who feel it their duty to put a shine on whatever crosses their desk. (Ok a little cynical but mostly true).
In respect of the headline there SHOULD be two house price indices. One for London and it's environs and one for the rest of the country. The politicians/ decision makers are mostly based in London (or at least used to have their "second homes" there), so cannot avoid being influenced by a market that might as well be on a different planet given the Chinese, Russians etc. who bump up the figures.
Chris Wood's suggestion is a good one but perhaps Exchange of Contracts ought to be the trigger date for reporting by Solicitors just to bring even more up to date.
OOPS! Cue the embarrassed silence as I re-read the article and note that the time-lag IS mentioned in the second last paragraph!!
Ho-hum... :o|
At the risk of being shot down for pointing out the obvious, the LandReg figures are REGISTRATIONS in May. Therefore they refer to sales agreed from April (if you're lucky...), March, February, de dah de dah... and for all we know some of these could go back to 2010 if chains broke down & needed rebuilding.
For May's sales - check LR figures fro August onwards.
What IS disappointing, is that NONE of this is explained in any of the stories we see - therefore adding fuel to the fire.
But, then, maybe that's what they want...
Let's see what tomorrow brings, shall we?
Here's a good summary (if a little long) of what the different indices have reported in the recent past and what their tea leaves are currently predicting for the market. It's ever so slightly out of date, in that last Friday's Acadametrics report showed a big monthly fall and several downward revisions of earlier growth that now leaves a negative YoY figure. Overall, a balanced piece and worth a read in my opinion:
http://www.thisismoney.co.uk/money/mortgageshome/article-1671748/Property-prices-What-expect--news-predictions.html
I've still yet to receive an explanation why solicitors aren't required to register completions within 24 hours of the event and to do so electronically. The LR could then have as close to a 'real-time' house selling price survey as it is possible to get.
Answers on a postcard please...
Makes you wonder whether you should really only judge the market on your own house.....
so when you come to sell, you market your property, a buyer will buy and set the price and then you can calculate what happened to your price over the amount of years between you buying and selling.
Which after all is really the only thing most home owners and buyers are interested in "themselves" and rightly so!
Brain (Brian): Did you read the article above carefully? From paragraph two:
'one has to query whether house price rises are really good news'.
Seems that you might be calling the odd fellow EA a nutter too ; )
To give the HPC nutters somthing to do perhaps?