Best of the Week
Most Popular
1.Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - Jeff_Berwick
2.Fragile Stock Market Bull in a China Shop -James_Quinn
3.Sheffield Leafy Suburbs Tree Felling's Triggering House Prices CRASH! - Nadeem_Walayat
4.Bank of England Hikes UK Interest Rates 100%, Reversing BREXIT PANIC Cut! - Nadeem_Walayat
5.Government Finances and Gold - Cautionary Tale told in Four Charts - Michael_J_Kosares
6.Gold Stocks Winter Rally - Zeal_LLC
7.The Stock Market- From Here to Infinity? - Plunger
8.Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - MarketsToday
9.Electronic Gold: The Deep State’s Corrupt Threat to Human Prosperity and Freedom - Stewart_Dougherty
10.Finally, The Fall Of The House Of Saud - Jim_Willie_CB
Last 7 days
Gold Mining Stocks Fundamentals Q3 2017 - 17th Nov 17
The Social Security Inflation Lag Calendar - Partial Indexing - 17th Nov 17
Mystery of Inflation and Gold - 17th Nov 17
Stock Market Ready To Pull The Rug Out From Under You! - 17th Nov 17
Crude Oil – Gold Link in November 2017 - 17th Nov 17
Play Free Online Games and Save Money Free Virtual Online Games - 17th Nov 17
Stock Market Crash Omens & Predictions: Another Day Another Lie - 16th Nov 17
Deepening Crisis In Hyper-inflationary Venezuela and Zimbabwe - 16th Nov 17
Announcing Free Trader's Workshop: Battle-Tested Tools to Boost Your Trading Confidence - 16th Nov 17
Instructions to Stop a Dispossession Home Sale and How to Purchase Astutely at Abandonment Home - 16th Nov 17
Trump’s Asia Tour: From Old Conflicts to New Prospects - 16th Nov 17
Bonds And Stocks Will Crash Together In The Next Crisis (Meanwhile, Bond Yields Are Going Up) - 16th Nov 17
A Generational Reset That Will Redistribute Wealth to the Bottom 60% Is Near - 16th Nov 17
Ethereum (ETH/USD) – bullish breakout of large symmetrical triangle looks to be getting closer - 16th Nov 17
Gold’s Long-term Analogies - 16th Nov 17
Does Stripping Streets of ALL of their Trees Impact House Prices (Sheffield Example)? - 15th Nov 17
The Trump Administration’s IP Battle Against China - 15th Nov 17
5 Ways Bitcoin can Improve its Odds of Becoming the Future of Money - 15th Nov 17
These Headlines Say Gold is Building a Base for Something Big - 15th Nov 17
Protect Your Savings With Gold: ECB Propose End To Deposit Protection - 14th Nov 17
Gold on the Ledge, Trend Forecast - 14th Nov 17
The Unbearable Slowness Of Fourth Turnings - 14th Nov 17
Silver Sign’s Confirmation & More - 14th Nov 17
Could This Be The End for Tesla? - 14th Nov 17
Harry Dent’s Fourth Cycle: More Evidence of Stock Market Downturn - 14th Nov 17
Why Having Good Credit Is Important If You Want to Invest - 14th Nov 17
The Bitcoin Bubble Explained in 4 Charts - 13th Nov 17
How the US Has Secretly Subsidized China to Produce Eco-Unfriendly Solar Panels - 13th Nov 17
The Increasingly Unstable Middle East Must Be On Every Investor’s Radar - 13th Nov 17
Stock Market Critical Supports are Being Challenged - 13th Nov 17
The One Chart All Investors Should See Before 2018 - 13th Nov 17
Short-Term Stock Market Uncertainty Following Recent Rally, Will Stocks Continue Higher? - 13th Nov 17
Is Hillary Just the “Fall Guy” for the Intel Agencies and their Moneybags Bosses? - 12th Nov 17
Stock Market Correction Phase - 12th Nov 17
Finally, The Fall Of The House Of Saud - 12th Nov 17
Bitcoin War Begins – Bitcoin Cash Rises 50% While Bitcoin Drops $1,000 In 24 Hours - 11th Nov 17
E-franc, E-krona... E-volution? - 11th Nov 17
Gold Investment Stalled - 11th Nov 17
Smart Ways to Get Loans Online - 11th Nov 17
What Can Pot Teach Us About Economics and Government? - 10th Nov 17
Can Stocks and Bonds go Down at the Same Time? - 10th Nov 17
Gold Market 2017 Will We See a Replay of 2015 and 2016? - 10th Nov 17
Oil markets turn bullish with shift to backwardation - 10th Nov 17
The Strange Behavior of Gold Investors from Monday to Thursday - 10th Nov 17
Where to Start Your Cryptocurrency Company - 10th Nov 17

Market Oracle FREE Newsletter

Forex Trading Free Week

UK House Prices Soar to New All Time High, London Bubble, Nationwide Data

Housing-Market / UK Housing Jul 02, 2014 - 02:32 PM GMT

By: Nadeem_Walayat

Housing-Market

The Nationwide released their latest UK house price data for June 2014 that showed a 1% rise on the month lifting the annual rate to 11.8% and taking average UK house prices to a new all time high of £188,903. All UK regions saw a rise in house prices with the South East continuing to outperform and London's bubble market hitting an raging hout annual price rise of 26%.


The Nationwide's chief economist, Robert Gardner, commented:

“House prices recorded their fourteenth successive monthly increase in June, rising by 1%. As a result, the annual pace of price growth picked up to 11.8% from 11.1% the previous month.

“In seasonally adjusted terms house prices reached their 2007 peak in Q2, just as UK economic output is likely to have surpassed the high water mark reached before the financial crisis.

“While all regions recorded annual price gains for the fourth quarter in a row, there is still significant variation across the UK, with the South of England continuing to record the strongest rates of growth. In particular, London continued to outperform, with prices up by almost 26% in Q2 compared to the same period of 2013.

“The price of a typical property in London reached the £400,000 mark for the first time, with prices in the capital now around 30% above their 2007 highs and more than twice the level prevailing in the rest of the UK when London is excluded. In the UK as a whole, prices are less than 1% above their pre-crisis peak. Excluding London they are 0.4% below peak.

“The annual pace of growth in the capital will probably start to slow in the quarters ahead, given the high base for comparison from Q3 2013 onwards and given anecdotal evidence from surveyors and estate agents that activity may be starting to moderate.

London House Prices Bubble

The London house pries bubble continues to inflate at the rate of 26% per annum.

Robert Gardener comments:

“The price of a typical UK house rose by 2.9% in Q2, after allowing for seasonal effects. Prices were up 11.5% compared with the same quarter of 2013.

“Annual house price growth accelerated to 26% in London, far outpacing the rest of country, and the highest growth rate since Q3 1987. Prices in the capital are now 30% above their 2007 peak, with the price of a typical London property now in excess of £400,000.

“Scotland saw the weakest growth, with prices up 5.4% year-on-year in Q2. Northern Ireland saw an 8.4% rise in prices, although they remain around half the level they were at their peak. Annual price growth in Wales picked up to 9.3%, from 5.2% last quarter.

“Amongst the English regions, the South continued to outperform the North. Outside of London, the Outer Metropolitan area was again the strongest performing region, with annual price growth of 16.4%, whilst Yorkshire & Humberside was the weakest English region, with prices up 7.0% over the year. Prices in the Southern regions are now above their 2007 peak, whilst those in the North remain below.”

Meanwhile the more widely followed Halifax house prices index continues to trend towards breaking to its new all time high before the end of this year.

UK House Prices Five Year Forecast

The most recent house prices data out of the Halifax is inline with expectations for a forecast 55% rise by the end of 2018 as illustrated below -

UK House Prices Forecast 2014 to 2018 - Conclusion

This forecast is based on the non seasonally adjusted Halifax House prices index that I have been tracking for over 25 years. The current house prices index for November 2013 is 174,671, with the starting point for the house prices forecast being my interim forecast as of July 2013 and its existing trend forecast into Mid 2014 of 187,000. Therefore this house prices forecast seeks to extend the existing forecast from Mid 2014 into the end of 2018 i.e. for 5 full years forward.

My concluding UK house prices forecast is for the Halifax NSA house prices index to target a trend to an average price of £270,600 by the end of 2018 which represents a 55% price rise on the most recent Halifax house prices data £174,671, that will make the the great bear market of 2008-2009 appear as a mere blip on the charts as the following forecast trend trajectory chart illustrates:

Current State of the UK House Prices Forecast

The updated graph reflects the latest Halifax house prices data (NSA) released for May 2014 at £185,747 which is set against the forecast index level for May 2014 of £185,544 which illustrates that house prices over the past 6 months have shown little deviation from the forecast trend and therefore the long-term trend forecast remains on track to achieve a 55% increase by the end of 2018.

As house prices momentum is accelerating this suggests that UK house prices could trend slightly above the forecast trend trajectory over the summer months which would match the Nationwide's acceleration to 11.8%.

UK Housing Market Forecast 2014-2018 Ebook - FREE DOWNLOAD

The housing market ebook of over 300 pages comprises four main parts :

1. U.S. Housing Market Analysis and Trend Forecast 2013-2016 - 27 pages

The US housing market analysis and concluding trend forecast at the start of 2013 acted as a good lead exercise for the subsequent more in-depth analysis of the UK housing market.

2. U.K. Housing Market Analysis and House Prices Forecast 2014-2018 - 107 pages

The second part comprises the bulk of analysis that concludes in several detailed trend forecasts including that for UK house prices from 2014 to 2018 and their implications for the outcome of the next General Election (May 2015) as well as the Scottish Referendum.

3. Housing Market Guides - 138 Pages

Over 1/3rd of the ebook comprises of extensive guides that cover virtually every aspect of the process of buying, selling and owning properties, including many value increasing home improvements continuing on in how to save on running and repair costs with timely maintenance tasks and even guides on which value losing home improvements should be avoided.

  • What Can You Afford to Buy?
  • Home Buyers Guide
  • Home Sellers Guide
  • Top 15 Value Increasing Home Improvements
  • Home Improvements to Avoid
  • Home Winter Weather Proofing 22 Point Survey

These guides will further be supplemented from Mid 2014 onwards by a series of online videos and regularly updated calculators such as the Home Buying Profit and Loss Calculator, which will seek to give calculations on whether to buy or rent based on personal individual circumstances, that will be updated to include the latest expected trend trajectories for future house price inflation i.e. you will have your own personal house price forecast.

4. Historic Analysis 2007 to 2012 - 40 pages

A selection of 10 historic articles of analysis to illustrate the process of analysis during key stages of the housing markets trend from the euphoric bubble high, to a state of denial as house prices entered a literal free fall, to the depths of depression and then emergence of the embryonic bull market during 2012 that gave birth to the bull market proper of 2013.

FREE DOWNLOAD (Only requirement is a valid email address)

Source and comments: http://www.marketoracle.co.uk/Article46294.html

By Nadeem Walayat

http://www.marketoracle.co.uk

Copyright © 2005-2014 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved.

Nadeem Walayat has over 25 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.

Housing Markets Forecast 2014-2018The Stocks Stealth Bull Market 2013 and Beyond EbookThe Stocks Stealth Bull Market Update 2011 EbookThe Interest Rate Mega-Trend EbookThe Inflation Mega-trend Ebook

Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication that presents in-depth analysis from over 1000 experienced analysts on a range of views of the probable direction of the financial markets, thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Nadeem Walayat Archive

© 2005-2017 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

zahlen2k
02 Jul 14, 23:08
Buying in London

Hi Nadeem,

Really appreciated your articles spelling out the truth about the market over the last few years, especially since its free!

I heeded your advice on the property market and started looking mid 2013, however I found it difficult to find somethign I liked and was fairly vlued (everything was already 30% above the peak where I live in zone 4).

When you say London is in a bubble, do you think as someone looking to lock down a residential home is it still worth buying now? I.e. do you anticipate london to continue to soar over the next few years? Or is it worth waiting for the correction you mentioned may come in 2016?

Thanks alot

Zahir


Andy
15 Jul 14, 21:04
Impossible to buy in London

I've recently started working as a middle manager for an investment bank (if you can't beat them, join them) and earn a salary which will put me in the top 5% of salaried London income earners yet I can't afford a 3 bed house in even the worst areas - i.e. Peckham, New Cross, etc.

I don't expect sympathy but think it's indicative of a broken market. If a top 5% income earner can't even afford a small house in a bad area, then who can afford to live in the city? Prices will fall, and fall hard again, but it's a question of when and I can't see it happening for a few years unfortunately. Alternatively we'll see massive wage inflation, but I think this is unlikely with the globalisation of jobs/importing of cheap labour into the city.


Nadeem_Walayat
16 Jul 14, 01:01
London bubble

Hi

I expect the london bubble to continue inflating for at least the next 2 years.

As I have mentioned before the forieng investors will eventually be the losers not because of price falls but because of the fall in sterling. But all that is a few years in the future.

Best

NW


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife