Have I mentioned house prices are going up?

[DimPrawn]

The word is, even the city bankers with million pound bonuses cannot compete with the rich foreigners (many of them Russians) who are relocating to London due to Britain being a top tax haven (yes you did read that correctly) for those non-domiciled here.

Who would have thought New Labour's No.1 beneficiary for their tax policies would be foreign billionaires?

Boomed! (if you are non-dom and very rich)

Tax doesn't have to be taxing if you have non-dom status from the Revenue and Customs.

[Bagpuss]

That was July though, August paints a different picture....

For the first time in a year London - the driving force behind the housing boom - sees a price drop. Is a crash in view?

We've seen evidence in recent months from Hometrack, the Royal Institution of Charted Surveyors, Nationwide and Halifax that the housing market is slowing down.

Now the property website Rightmove has revealed compelling evidence that rocketing prices are a thing of the past.

The last time prices rose by less than one per cent for four consecutive months was January of last year.

Rightmove's figures look at the asking price of homes on the market in England and Wales. They show that, overall, prices have risen by just 0.6 per cent this month. The biggest gains were in the north west where the market rose by two per cent. The biggest drop in prices was in the west midlands - a fall of 2.2 per cent.

The most striking finding is that prices have fallen in London for the first time in a year; the cost of properties in the capital dropped 0.1 per cent.

Agents are now saying that, given the turmoil in the markets and less money in the city, London's market is probably past its best - and this in turn will affect the rest of the market.
Some analysts point out that the market always slows in the summer, and that these figures are possibly quite normal for August. Indeed estate agents always expect a slower market in the summer. But what's significant this time is that prices have fallen in London - one of main driving forces behind national price rises.


Today's house price figures could mean interest rates stay on hold for the time being. Rightmove are saying we may at last see annual house price rises matching annual salary increases at around three to four per cent.


Doomed

[DimPrawn]

Are you saying London prices were rising at 19.1% in July and falling by 0.1% in Aug or that prices in August are only rising 19% and have fallen 0.1%?

I can't believe that prices can go for +19 rise to -0.1% in 4 weeks?

If so, by the end of the year, houses in London will be under a pound. I'll take all of Mayfair please. Stick a hotel on Parklane if you will.

[VectraMan]

Also interesting to note that with all the HIPS nonsense, it's been reported today a decrease in the number of properties for sale as sellers wait and see. Less supply = higher prices, so maybe that is having a temporary propping up effect.

[wendigo100]

Are you saying London prices were rising at 19.1% in July and falling by 0.1% in Aug or that prices in August are only rising 19% and have fallen 0.1%?

I can't believe that prices can go for +19 rise to -0.1% in 4 weeks?

If so, by the end of the year, houses in London will be under a pound. I'll take all of Mayfair please. Stick a hotel on Parklane if you will.

August was a funny month because that's when the American dodgy lending debacle was at it's highest.

[Bagpuss]

Are you saying London prices were rising at 19.1% in July and falling by 0.1% in Aug or that prices in August are only rising 19% and have fallen 0.1%?

I can't believe that prices can go for +19 rise to -0.1% in 4 weeks?

If so, by the end of the year, houses in London will be under a pound. I'll take all of Mayfair please. Stick a hotel on Parklane if you will.

They rose by 2% in July according to the notoriously inaccurate Department of Communities and Local Government (DCLG) survey, based on selling prices, including houses marketed months before, so more an indicator of May and June i.e before the last rate rise. In August they fell in London by 0.1% according to Rightmove, based on current asking prices. Righmove's data will be more accurate and up to date and factors in rate rises. The boom is over, in London anyway.

[sasguru]

Now we wait. The only problem is judging the bottom to buy again. I would say when the fall is around 30%, then pile back in and become a millionaire on the next cycle.

Boomed, I tell yer ...

[Sysman]

Also interesting to note that with all the HIPS nonsense, it's been reported today a decrease in the number of properties for sale as sellers wait and see. Less supply = higher prices, so maybe that is having a temporary propping up effect.

Just yesterday one of the Sunday papers was reporting that 4 bed houses were being put on the market as "3 beds plus study" to avoid HIPS.

That's probably going to come out in the stats as "price for 3 bed houses jumps".

[VectraMan]

Now we wait. The only problem is judging the bottom to buy again. I would say when the fall is around 30%, then pile back in and become a millionaire on the next cycle.

30% fall in about 2 years time would work out quite well for me. Yes please.

[alreadypacked]

Now we wait. The only problem is judging the bottom to buy again. I would say when the fall is around 30%, then pile back in and become a millionaire on the next cycle.

Boomed, I tell yer ...

I saw some program while in Ireland and they were saying the bottom of the cycle was an average 34% drop. Example's Norway, Spain, USA and previous UK drop. So 30% looks like a good point to start looking for something.

Punters in Ireland are already offering 25% below asking price for property. Currently, there is nothing selling over there but prices have not really fallen yet. Everyone is holding on, word on the street is banks are taking over property from defaulters and renting it back to them. Hoping to avoid a crash in property prices and negative equity.

This may work in the short term but Ireland has a large number of people involved in the construction industry. With zero sales and very low new property starts the construction industry have started to let people go. This will increase the number of defaulters in the BTL market when the unemployed migriant workers exit the country.

The UK market is not so exposed, the increase in interest rates, a reduction in money supply, an increase in unemployment or something else could trigger the fall but I am not seeing anything to trigger the fall yet.