Nationwide Building Society House Price Index May 2018

[Martin@AS Financial]

Key Points

- Annual house price growth slowed to 2.4%

- Prices fell 0.2% month-on-month

- Shift in housing stock towards private renting and flats



Full report here:

https://www.nationwide.co.uk/-/media...8/May_2018.pdf

[Platypus]

A friend of mine who watches this kind of thing closely told me last night he's quite convinced that a 'major correction' is due because houses are just 'over-priced'. Factors that might contribute to a correction are of course the 'B' word of which I shall not speak, BTL owners selling up due to rule changes, and just that housing is so un-affordable. I did some light reading last night and I see grumbles about low valuations and this being a sign that the banks are starting to low-ball valuations in order to protect themselves and that this shows that they think a correction is coming.

Any views?

I'm thinking of finally getting out of rented accom next year, and a house price crash would be very handy for me :-)

[PurpleGorilla]

Burn baby burn.

[TwoWolves]

A friend of mine who watches this kind of thing closely told me last night he's quite convinced that a 'major correction' is due because houses are just 'over-priced'. Factors that might contribute to a correction are of course the 'B' word of which I shall not speak, BTL owners selling up due to rule changes, and just that housing is so un-affordable. I did some light reading last night and I see grumbles about low valuations and this being a sign that the banks are starting to low-ball valuations in order to protect themselves and that this shows that they think a correction is coming.

Any views?

I'm thinking of finally getting out of rented accom next year, and a house price crash would be very handy for me :-)

It looks that way but nothing to do with the 'B' word. Same thing building in the US and other frothy property zones.

There was always going to be a limit with incomes static, regardless of increased demand.

Banks are also bracing for a series of sovereign defaults, mostly EM but maybe some in the EZ and the final nail in the coffin is the bond markets where the yield curve is inflecting.

[ChimpMaster]

Relax. There isn't a crash coming.

• Rental demand is very strong - even more so if you have the right kind of units.
• Inflation and Interest rates will remain low. You can fix a mortgage for 10 years at 2.54%. That's stability.
• Employment is still robust, even given the retail doom.
• Wages are going up. At least for the general public. Not us poor IT lot though.
• House prices might not go up much for now, and in places they will come down - which is natural seeing how much they have gone up (London for example). But this isn't a crash. But yes there is a limit how much anything can go up. 300% rises in the past 10 years in the SE, more in London, less up North. So what if prices come down 20%, which BTW was the largest fall in recent history, between 1989 and 1993.
• If you view property as an investment, where else are you going to put your money?

S24 tax changes are a destabilising factor, I agree, but the larger investors are working to minimise the hit, or can absorb the hit. Smaller LLs might sell or might not even be impacted. A stagnating market is the most likely result.

[Martin@AS Financial]

Some interesting perspectives above.

From a personal point of view I am seeing very few down valuations on purchase transactions. Banks don't seem to be overly worried as this can be evidenced by the wide availability of 95% loan to value mortgages. Back in 2008, these along with 90% deals were withdrawn pretty quickly.

Remortgages on the other hand are proving to be slightly more troublesome with surveyors who are not afraid to knock large sums off a clients estimated valuation.

[DimPrawn]

Relax. There isn't a crash coming.

• Rental demand is very strong - even more so if you have the right kind of units.
• Inflation and Interest rates will remain low. You can fix a mortgage for 10 years at 2.54%. That's stability.
• Employment is still robust, even given the retail doom.
• Wages are going up. At least for the general public. Not us poor IT lot though.
• House prices might not go up much for now, and in places they will come down - which is natural seeing how much they have gone up (London for example). But this isn't a crash. But yes there is a limit how much anything can go up. 300% rises in the past 10 years in the SE, more in London, less up North. So what if prices come down 20%, which BTW was the largest fall in recent history, between 1989 and 1993.
• If you view property as an investment, where else are you going to put your money?

S24 tax changes are a destabilising factor, I agree, but the larger investors are working to minimise the hit, or can absorb the hit. Smaller LLs might sell or might not even be impacted. A stagnating market is the most likely result.

Yep, nothing says crash to me. The fact the banks are starting to push lifetime interest only mortgages too.

Can't be many more months before we see self certified, 125% LTV interest only lifetime mortgages, where the Tories lend you half out of tax payers money, and the price of a Swindon bedsit above a kebab shop breaks the mythical £1m mark.

[jamesbrown]

Depends where you are. Parts of London are tanking. My part of the SE is pretty close to the London market and nothing is moving and there’s a much higher number of reductions than I’ve seen in recent years. BTL is getting hammered in student towns because unis have been increasing supply dramatically, and many amateur landlords are selling up.

Very different picture in cheaper areas oop norf, for example.

Can’t really envisage a major, nationwide, crash until money becomes much more expensive or unemployment increases a lot, neither of which are likely. More likely to be a slow and steady decline in real terms before the next crash.

[DimPrawn]

Depends where you are. Parts of London are tanking. My part of the SE is pretty close to the London market and nothing is moving and there’s a much higher number of reductions than I’ve seen in recent years. BTL is getting hammered in student towns because unis have been increasing supply dramatically, and many amateur landlords are selling up.

Very different picture in cheaper areas oop norf, for example.

Can’t really envisage a major, nationwide, crash until money becomes much more expensive or unemployment increases a lot, neither of which are likely. More likely to be a slow and steady decline in real terms before the next crash.

Well, slow and steady until Korbyn steps in, then down to zero within days.

[jamesbrown]

Well, slow and steady until Korbyn steps in, then down to zero within days.

I laugh, but we both know that’s exactly what’ll happen.