What do you think? How much attention should we give to the latest Halifax housing inflation index?
The increase in March was impressive - 2.2 percent compared to the previous months. Then again, prices fell by 0.4 percent in February. As the chart above illustrates, there have been many false dawns for the UK property market.
Nevertheless, our dear old central bank is doing its best to pump up the market. Policy rates are still at 0.5 percent.
With interest rates at an all time low, it has never been a better time to buy! Or is it a better time to sell? Maybe you should hold, things could get better in a year. Or perhaps things will be worse. Alternatively, renting could be the way to go.
Take the advice you want to hear, and I hope it works out.
9 comments:
This rise was not my experience a month later.
We live in a fairly prosperous area suffering no shop closures on our high street. Good schools etc.
- Put our house on the market at agent's valuation
- Told to drop 10k a week later
- Put in an offer on the other house 30k below asking price which was not rejected (not accepted either but I reckon 25k would have closed it)
We withdrew for various reasons. Mainly that the step-up is still too unaffordable.
Another house we looked at had already dropped by 40k and was recently put up for rental because there were no offers.
Still, the step-up is too unaffordable. There has to be a serious closure in differentials before we'd consider taking on substantial debt for that extra bit of space - otherwise we'd rather spend our money on living and helping the kid's education.
Similarly - we sold our house in Watford for 250k in 2004 and were told by old neighbours of how the value had rocketted to 375k since we left and how we'd 'dipped out' (nice people - see why we moved ?)
Yet the top sale price for that street which I can find is 275k.
There are still Govt cuts to come and most of the money around here derives from the public sector in some form or another.
I suppose the housing market has become ever more disconnected on a regional basis.
It's the long term graph of real house prices (adjusted for RPI) that shows the future. The Nationwide's chart "House prices adjusted for inflation" shows the story - join the line across the troughs to see the future. Already prices are dipping well below "trend" but they have much further to go, by a combination of modest falls and corrections ("bumping along the bottom") and inflation, which is the real killer. Nairb Reppac
It's the long term graph of real house prices (adjusted for RPI) that shows the future. The Nationwide's chart "House prices adjusted for inflation" shows the story - join the line across the troughs to see the future. Already prices are dipping well below "trend" but they have much further to go, by a combination of modest falls and corrections ("bumping along the bottom") and inflation, which is the real killer. Nairb Reppac
Nairb - Wages are being frozen/squeezed too. (Re inflation)
A 2.2% increase is very disappointing. But hey, 160K (average price) is no longer worth what it was.
Let's hope the following article comes true soon:
http://www.dailymail.co.uk/debate/article-2124941/UK-house-prices-Market-heading-crash.html?ito=feeds-newsxml
Real example. Just paid off mortgage this month after 25 years. It was the endowment form.
Bought the house in 1987 at £x with a 15% deposit - so took our an endowment worth £0.85x to pay it off.
This month, the policy paid out £0.6x so I would have been in serious negative equity had I not sold the house in 2007 at £6x.
So in my case, house prices outperformed the stock market by 10-fold.
Why put your money in stocks when there is such a discrepancy?
Regional variations: obviously, rising in London. But elsewhere: sanity prevails.
Yep, need (at least) two graphs: one London, one the rest.
Which houses, where, and how many? House price stats are fatally dodgy.
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