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Indicator Digest

Housing Prices
Prices of homes are important to understanding how the housing sector is doing.

Main Indicator: Rightmove House Price Index

Most Recent Release

June
21st, 2009
Actual Forecast Previous Revised Form
-0.4% 2.4% N/A

Monthly Change for June
Provided by: Rightmove
Official Release: PDF

HPI y/y: -5.5%, pr.  -6.2% (Apr), -7.3% (Mar), -9.1% (Feb),
-7.3% (Jan), -6.3% (Dec), -7.1% (Nov), -4.9% (Oct), -3.3% (Sep)

From the Release: "Average asking prices of properties new to the market fell for the first time in 5 months, suffering a slight decrease of 0.4%. In spite of this hesitation from new sellers, this year’s price recovery still sees asking prices up 6.0% since January, fuelled by a shortage of saleable property and the equity-rich calling the bottom of the market.

Miles Shipside, commercial director of Rightmove comments: “For the equity-rich, 2009 has turned out to be the year of the property deal. Those with a good deposit and a stable job are now finding they can afford a better property than two years ago. This puts them in pole position to snap up the short supply of saleable property in the most popular areas. The south appears to be leading the way in terms of increased activity as it has a higher concentration of the mortgageable equity-rich, which conversely means property coming onto the market is in shorter supply as there are fewer forced sellers.”

Table of Past Data

9/2110/1911/1612/141/182/153/154/195/176/21
Actual-1.0%1.0%-2.9%-2.3%-1.9%1.2%0.9%1.8%2.4%-0.4%
Forecast
Previous-2.3%-1.0%1.0%-2.9%-2.3%-1.9%1.2%0.9%1.7%2.4%
Revised FromN/AN/AN/AN/AN/AN/AN/AN/A1.8%N/A

Secondary Indicator: RICS House Price Balance

Most Recent Release

June
8th, 2009
Actual Forecast Previous Revised Form
-44.1% -52.0% -58.7% -59.9%

For May
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: HTML PDF

From the Release: "The seasonally adjusted net balance of surveyors reporting falling rather than rising prices narrowed again in May. Although it remains well in negative territory, the latest reading of -44.1 represents the best result since November 2007. The May survey provides more evidence that activity in the housing market is continuing to pick up, albeit from historic lows.

New buyer enquiries have now increased for seven months in a row; the net balance of surveyors seeing an increase rather than a decrease in buyer interest (compared with the preceding month) climbed in May to its best level since August 1999. The survey also contains more definitive signs that the rebound in enquiries is now feeding thorough into increased transactions. Newly agreed sales, measured on a net balance basis, remained comfortably in positive territory for the third consecutive month and there was a further rise in the average number of sales per surveyor."

 

Table of Past Data

9/810/1311/1012/81/122/93/94/145/116/8
Actual-81.0%-84.2%-82.0%-76.5%-73.5%-76.3%-78.3%-73.1%-59.9%-44.1%
Forecast-85.0%-85.0%-86.0%-83.0%-74.0%-74.2%-75.8%-77.2%-70.2%-52.0%
Previous-83.1%-81.0%-84.2%-81.0%-75.8%-73.9%-76.6%-78.1%-72.1%-58.7%
Revised From-83.9%N/AN/A-81.8%-76.5%-73.5%-76.6%-78.3%-73.1%-59.9%

Past Releases

Rightmove House Price Index
May
17th, 2009
Actual Forecast Previous Revised Form
2.4% 1.7% 1.8%

Monthly Change for May
Provided by: Rightmove
Official Release: PDF

HPI y/y: -6.2%, pr. -7.3% (Mar), -9.1% (Feb), -7.3% (Jan), -6.3% (Dec),
-7.1% (Nov), -4.9% (Oct), -3.3% (Sep)

From the Release: "This month sees a jump in new sellers’ average asking prices more reminiscent of a boom market. This is the largest May rise Rightmove has measured since 2003, when property was seeing annual rises in excess of 15%. However, sellers may be pricing at this level because they fear that their equity could be eroded to danger levels where they can’t find an affordable mortgage deal on their new purchase due to lenders’ stricter loan-to-value ratios. Even more disturbing for a recovery in volumes is that with just 61,000 new sellers this month compared to 135,000 in May last year, a substantial proportion are not willing or able to come to market at all. This is the lowest number of new properties coming to market that we have seen in May since 2003, when Rightmove advertised around 35% of homes rather than the 90% we advertise today. Many prospective sellers have become effectively immobile due to insufficient equity to fund their move."

RICS House Price Balance
May
11th, 2009
Actual Forecast Previous Revised Form
-59.9% -70.2% -72.1% -73.1%

For April
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: HTML PDF

From the Release: "The seasonally adjusted net balance of surveyors reporting falling rather than rising prices posted a marked improvement in April. At 59.9, the series remains deeply in negative territory but this still represents the best reading since January 2008. Significantly, the tentative signs of a pick-up in activity have become more broadly based over the past month. New buyer enquiries have now increased for six months in a row with the positive net balance in April climbing to its best level since August 1999. There is also more evidence that the higher level of buyer interest is feeding through into actual sales."

Rightmove House Price Index
April
19th, 2009
Actual Forecast Previous Revised Form
1.8% 0.9% N/A

Monthly Change for April
Provided by: Rightmove
Previous Release: PDF

HPI y/y: -7.3%, pr. -9.1% (Feb), -7.3% (Jan), -6.3% (Dec), -7.1% (Nov),
-4.9% (Oct), -3.3% (Sep)

The UK Rightmove house price index increased 1.8% for the April period, the highest monthly increase since February 2008. The decline in the annual rate slowed from 9.1% in March to show a less severe 7.3%. The data is a good sign for the UK economy, as housing has been one of the major drags during this recession. 

RICS House Price Balance
April
14th, 2009
Actual Forecast Previous Revised Form
-73.1% -77.2% -78.1% -78.3%

For March
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: HTML PDF

From the Release: " The seasonally adjusted net balance of surveyors reporting falling rather than rising prices recorded a modest improvement in March but at 73.1, it remains deeply in negative territory. The latest reading was, however, the best outcome since February 2008.

Significantly, the tentative signs of a pick-up in activity have become more broadly based over New buyer enquiries have now increased for five consecutive months with the positive net balance in March climbing to its best level since September 2003.

More importantly, there is now clear evidence that the higher level of buyer interest is feeding through into actual sales. Newly agreed sales, measured on a net balance basis, rose over the month as did the average sales per surveyor series (for the first time since the tail end of 2007)."

Rightmove House Price Index
March
15th, 2009
Actual Forecast Previous Revised Form
0.9% 1.2% N/A

Monthly Change for February
Provided by: Rightmove
Official Release: PDF

HPI y/y: -9.0%, pr. -9.1% (Feb), -7.3% (Jan), -6.3% (Dec), -7.1% (Nov),
-4.9% (Oct), -3.3% (Sep)

From the Release: "Unsurprisingly, the majority of prospective spring sellers are being deterred by the conditions attached to doing a deal in the current market. There is evidence of buyer appetite at around 25% below peak prices and this level of discount is likely to be a major factor preventing many aspiring sellers from coming to market. Numbers are down a dramatic 57%, with only 78,901 new sellers this month compared to 181,840 in the same month last year. In addition, those sellers who have marketed in the last 4 weeks are showing resistance to the new reality by starting at prices £1,918 (0.9%) higher than the previous month. This small increase in asking prices may also reflect estate agents having to compete for the limited numbers of good quality homes coming to the market. To win new instructions, agents are agreeing to vendors’ demands and marketing properties at what seem like unrealistically high prices for a short period of time. They then have to persuade vendors to reduce the price to the point at which buyer interest is going to be found. This not only wastes the valuable early period of marketing, but is also likely to lead to a lower eventual price, as buyers scent a price reduction and offer even less.

Disappointingly too, the minority of buyers and sellers who are adjusting to the new market reality are finding that mortgage funding from the banking sector remains scarce, decreasing the odds of a speedier market recovery."

RICS House Price Balance
March
9th, 2009
Actual Forecast Previous Revised Form
-78.3% -75.8% -76.6% -76.6%

For February
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: HTML PDF

From the Release: "New buyer enquiries increase at the fastest pace since August 2006, but newly agreed sales and sales per surveyor continue to fall. 

Key points:

  • New instructions and the stock of unsold properties both fall
  • Sales expectations and price expectations both improve, but the latter measure is still extremely negative

The seasonally adjusted balance of surveyors reporting falling rather than rising prices deteriorated again slightly from 76.6 in January to 78.3 in February. On the demand side, new buyer enquiries increased for the fourth consecutive month and at the fastest pace since August 2006.

However, newly agreed sales and completed sales per surveyors both fell back marginally. Although underlying activity remains weak, the turnaround in enquiries indicates that some level of buyer interest is returning to the market. This can be explained by the sharp cuts in interest rates as well as the decline in house prices; both of these factors have improved affordability."

 

Rightmove House Price Index
February
15th, 2009
Actual Forecast Previous Revised Form
1.2% -1.9% N/A

Monthly Change for February
Provided by: Rightmove
Official Release: PDF

HPI y/y: -9.1%, pr. -7.3% (Jan), -6.3% (Dec), -7.1% (Nov), -4.9% (Oct),
-3.3% (Sep)

From the Release: "A year ago, new sellers coming to the market could be forgiven for not foreseeing the strength of the downturn in market conditions and raising initial asking prices by a massive 3.2%. It could, therefore, be said that the New Year sellers of 2009, with customary spring optimism and time on their side, have shown considerable restraint by raising them a mere 1.2%. However, launching their properties onto the market at an average of £2,593 higher than the month before flies in the face of consumer sentiment. In the recent Rightmove Consumer Survey, 9 out of 10 potential homemovers clearly stated it was ‘a bad time to sell’. It also temporarily defies the expectation that prices have further to fall, though our analysis of this month’s other key statistics puts this rise into context and give further insights into the likely course of the housing market in 2009.

The smaller than usual February rise has led to a substantial fall in the annual rate, with initial asking prices now 9.1% below those of a year ago, compared to 7.3% the previous month. This is the largest decrease that Rightmove has ever recorded. We forecast that monthly changes in asking prices will return to negative territory over the coming months, resulting in an overall fall of 10% during 2009."

RICS House Price Balance
February
9th, 2009
Actual Forecast Previous Revised Form
-76.3% -74.2% -73.9% -73.5%

For January
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: HTML PDF

From the Release: "The seasonally adjusted balance of surveyors reporting falling rather than rising prices worsened from 73.9 to 76.3 in January.

The main factor that is depressing prices is still the large stock of property on estate agents books relative to the pool of able buyers.

On the activity side, new buyer enquiries increased for the third consecutive month and at the same pace as last month. Meanwhile, completed sales per surveyor (over the last three months) were broadly flat on the month (they fell fractionally from 10 to 9.9).

Although underlying activity remains weak, the turnaround in enquiries indicates that some level of buyer interest is returning to the market. This can partly be explained by recent sharp cuts in the base rate and the fall in house prices seen over the last year which has boosted affordability.

The average inventory of stock on surveyor’s books fell from 77.9 to 75.4 in January. Stock levels have been falling over the last year as vendors turn to rental market, opting to let their properties instead during the current climate. Stocks levels are now 10.4% down on year ago levels, marking the first annual decline since October 2007. At their peak in March 2008, stocks were up by 49.6%."

Rightmove House Price Index
January
18th, 2009
Actual Forecast Previous Revised Form
-1.9% -2.3% N/A

Monthly Change for January
Provided by: Rightmove
Official Release: PDF

HPI y/y: -7.3%, pr. -6.3% (Dec), -7.1% (Nov), -4.9% (Oct), -3.3% (Sep)

From the Release: "The rapid downturn and consequent fast-paced price falls continue this month, with a further fall of 1.9% in average asking prices. We forecast last month that prices were within 10% of the bottom of the market, so this substantial fall is consistent with the market bottoming out in the latter part of 2009. This is given further credence by a chronic lack of new supply both in the resale and new homes markets, which is at odds with both the 1990s UK housing downturn and the current experience of high unsold inventories in the US."

Miles Shipside, commercial director of Rightmove comments: “The speed with which prices have declined has been worrying, but it does mean we are potentially reaching the bottom sooner. One of the factors that will help to arrest price falls is a lack of property coming onto the market, resulting in lower inventory levels that align supply more closely with today’s restricted demand. The reticence of discretionary sellers to come to market and the relatively low number of forced sellers have seen new listing numbers plummet. Add to this the collapse in the supply of new homes from developers and a massive shift of unsold stock to the lettings market, and the result is a dramatic reduction in the over-supply that has been present since early 2008.”

RICS House Price Balance
January
12th, 2009
Actual Forecast Previous Revised Form
-73.5% -74.0% -75.8% -76.5%

For December
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: HTML PDF

From the Release: "The seasonally adjusted net balance of surveyors reporting falling rather than rising prices improved from 75.8 to 73.5 in December. This is the least negative level since February 2008.

The main factor that is depressing prices is the stilllarge stock of property on estate agents books relative to the pool of able buyers rather than any surge in distressed selling.

The ratio of completed sales to the stock of unsold property in the market - a guide to market slack and a lead indicator of future price changes fell slightly from 13.6% to 12.9%. This is the lowest reading since December 1992."

Rightmove House Price Index
December
14th, 2008
Actual Forecast Previous Revised Form
-2.3% -2.9% N/A

Monthly Change for December
Provided by: Rightmove
Official Release: PDF

HPI y/y: -6.3%, pr. -7.1% (Nov), -4.9% (Oct), -3.3% (Sep)

From the Release: "In spite of initiatives to keep more owners in their homes, Rightmove predicts 2009 will be the “Year of the Property Deal” as those in financial distress become the unwilling providers of a wider range of more affordable desirable homes.

This month’s 2.3% fall now means prospective buyers have seen sellers’ initial asking prices tumble by 5.3% in the space of just two months. The need to sell quickly will not only be the driving force for those coming to market just before Christmas, but also the predominant factor driving many sales next year.

Initial asking prices are now an average of 10.2% below the peak they hit in May of this year. Rightmove predicts average asking prices will bottom out a further 10% down by the end of 2009. Estate agents have reported to Rightmove that sales are actually being achieved at prices roughly 25% below those seen at the peak of the market. There are local markets that significantly differ from the average, with extreme exceptions where sought after properties have held their gains or over supply, driven by forced sellers of similar property styles, have led to peak-to-trough falls of as much as 50%."

RICS House Price Balance
December
8th, 2008
Actual Forecast Previous Revised Form
-76.5% -83.0% -81.0% -81.8%

For November
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: HTML PDF

British housing prices continued to fall in November, though the RICS house price balance improved to -76.5 from -81.0. That was the highest level since February and indicates to some easing in the rate of decline though still points to a very depressed housing market. Completed sales per surveyor fell to 10.6 from 10.9, a fresh low for the series that began in 1978. Sales are down 55% on the year as the UK economy fell into recession amid a tightening of credit domestically and globally.  

From the Release: The RICS UK Housing Market Survey for November shows a continued improvement in the price balance, although it still remains very depressed in a historical context. The level of transactions edged down a little further but lead activity indicators such as buyer enquiries have now turned positive. The (seasonally adjusted) net balance of surveyors reporting falling rather than rising prices improved from 81.0 to 76.5 in November. This is the highest level since February 2008.

The main factor that is depressing prices is the large stock of property on estate agents' books relative to the pool of able buyers rather than any surge in distressed selling. Indeed, new instructions to sell property continued to remain broadly stable. However, it is not insignificant that since May, the number of regions in the survey where new instructions have been rising has been trending upwards."

Rightmove House Price Index
November
16th, 2008
Actual Forecast Previous Revised Form
-2.9% 1.0% N/A

Monthly Change for November
Provided by: Rightmove
Previous Release: PDF

HPI y/y: -7.1%, pr. -4.9% (Oct), -3.3% (Sep)

November house prices in the UK were down 2.9% on the month, and a record 7.1% in annual terms. The monthly drop was the biggest since December of 2007. The government has attempted to try and stimulate lending by supporting the banking system and slashing interest rates, but prices may have to come down further in order for potential buyers to start buying property. The Bank of England has cut rates to 3%, which is a 63-year low, and is expected to continue cutting rates in order to head off this period of recession. The Pound's value has been steadily plummeting since it became clear the Bank was going to follow this path, and should continue to be pressured as long as interest rates keep going down.

From the Release: "This is the biggest fall that Rightmove has ever measured in November; new sellers are now asking 7.1% less when they come onto the market compared to a year ago. However, with agents reporting that sales are being agreed at around 20% below peak asking prices, quicker sales would be achieved if sellers started at an asking price closer to where they are highly likely to end up.

Miles Shipside, commercial director at Rightmove comments: “Some sellers could avoid months of disillusionment and despair if they started marketing at an asking price a lot closer to where the evidence indicates they are likely to end up. While average asking prices have fallen by 7.1% over the past year, in most parts of the country you should look to at least double that discount to achieve a sale. Not all will be willing or able to consider it, especially those struggling with negative equity. However, those that do will increase their chances of selling more quickly and could cut out the months of asking price reductions to get to the ‘buyer friendly’ price that they could have started with.""

RICS House Price Balance
November
10th, 2008
Actual Forecast Previous Revised Form
-82.0% -86.0% -84.2% N/A

For October
Provided by: Royal Institute of Chartered Surveyors (RICS)
Official Release: Press Release
Official Release: PDF

On a year-to-year basis, house prices declined less than expected in October, but remained pressured due to the large inventory of unsold homes according the RICS. Also, completed sales per surveyor in the last three months fell to the lowest level (10.9) since records began in 1978. Housing indicators in general point to futher decline in prices and activity, but on the bright side some housing indicators such as new buyer enquiries are pointing to a deceleration in the drop of activity during Q2 and Q3. In the near term though, the housing market is stuck in this anemic gear and will need until at least the summer of next year for the interest rate cuts to take effect.

From the Rlease: "The RICS Housing Market Survey for October shows a modest improvement in the price balance, although it remains at a historically low level.

It also recorded a further fall in the level of transactions.

Significantly, however, lead activity indicators (new buyer enquiries and sales expectations) both picked up further during the month.

The (seasonally adjusted) net balance of surveyors reporting falling rather than rising prices improved slightly from -84.5 to - 81.8 in October.

The price balance has been fluctuating around the low -80s level since July.

The main factor that is depressing prices is the large stock of property on estate agents books relative to the pool of able buyers, rather than any surge in distressed selling.

Indeed, new instructions to sell property continue to fall in aggregate."

Rightmove House Price Index
October
19th, 2008
Actual Forecast Previous Revised Form
1.0% -1.0% N/A

Monthly Change for October
Provided by: Rightmove
Official Release: PDF 

HPI y/y: -4.9%, pr. -3.3% 

From the Release: "The downward trend in asking prices continues, with new sellers now marketing at 4.9% less than 12 months ago, the largest year-on-year fall ever recorded by Rightmove. At the same time, “property vultures” are circling, looking harder and longer for a good deal.

Old habits associated with ten years of a rising market remain however despite a severe downturn in property sales volumes. New sellers increased their asking prices by 1% compared to last month, though the price rise was far less pronounced than the October norm of circa 2% seen in more buoyant years. This continued the tradition of an autumn bounce in asking prices as, in spite of financial mayhem, some sellers are tempted to think their own residence is more desirable than its competition. Estate agents are also competing for scarce additional stock on the off chance it will sell and boost revenues before Christmas. However, all should note that for the first time, this month sees all regions of the country slipping into negative territory compared to a year ago."

RICS House Price Balance
October
13th, 2008
Actual Forecast Previous Revised Form
-84.2% -85.0% -81.0% N/A

For September
Provided by: Royal Institute of Chartered Surveyors (RICS)
Current Release: Press Release
Current Release: PDF

The RICS house price balance deteriorated to show -84.2% of surveyors saying house prices fell in September. Also, the indicators sales per surveyor figure fell to 11.5, the lowest since the survey was introduced in 1978. Transactions are being hampered by weak lending by reluctant banks, which are in the midst of the financial crisis. Yesterday, the UK government unveiled a plan to inject capital into banks in exchange for shares in order to boost lending. The government hopes to see mortgage lending return to its levels in 2007, which saw an average of 104,000 mortgages approved. This past August, banks approved a meager 32,000 home loans. With the economy stalling, those wanting to purchase homes may be in a weaker position, so it remains to be seen how effective the plan is. So far it has been met with warm reception from stock markets.

From the Release: "The RICS Housing Market Survey for September shows both a renewed deterioration in the net price balance and a further drop in the level of transactions.However some comfort may be drawn from the slightly more positive tone to a number of lead indicators of activity. The (seasonally adjusted) net balance of surveyors reporting falling rather than rising prices edged lower from -81.8 to -84.2 in September, but it is still above the readings posted in the second quarter (which were below -90 on two occasions). There is still little evidence suggesting that the weakness of the price balance is being driven by distressed selling. Completed sales per surveyor (over the last three months) fell to 11.5 per surveyor, which is a new low for the survey (the series was first introduced in 1978)."

Rightmove House Price Index
September
21st, 2008
Actual Forecast Previous Revised Form
-1.0% -2.3% N/A

Monthly Change for September
Provided by: Rightmove

HPI y/y: -3.3% pr. -4.8%

RICS House Price Balance
September
8th, 2008
Actual Forecast Previous Revised Form
-81.0% -85.0% -83.1% -83.9%

For August
Provided by: Royal Institute of Chartered Surveyors (RICS)
Previous Release: Press Release
Previous Release: PDF

The RICS House Price Balance showed that the number of real-estate agents and surveyors saying prices fell exceeded those reporting gains by 81% in August. That compares to 83.1% in July. The average sales per respondent in the past 3 months fell to 12.7, the least since the survey began in 1978. There's no way to sugar coat the fact that the UK housing market continues to slump and prices drop. The index measure the breadth of price declines not the depth. The Halifax Bank of Scotland House Price Index showed prices down 1.8% in August and 10.9% lower on the year. Mortgage lending has been anemic, and consumer confidence has dropped to record lows as the economy heads towards a possible recession.

The GBP/USD and GBP/JPY have seen significant falls in August. The GBP/USD slid from 2.00 to 1.75 or almost 2,500 pips in the month alone. Traders are pricing in the weak economy and the chances that the Bank of England will be forces to lower rates. As growth slows, inflation should follow. If inflation slows then the MPC may have to ease rates to jump start the housing sector and wary consumers.