Asking prices for UK homes rose 6.4% in the year to June the strongest growth in over a year, says property website Rightmove.
Apparently "the mini-boom in prices continues to be led by the south of the country" where the average annual rise has now reached 9.4%.
Sounds impressive, eh? Well, perhaps - until you look under the bonnet...
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Property website Rightmove purports to measure average asking prices for UK property. But it doesn't really. At best it measures how optimistic or unrealistic - sellers and estate agents are feeling.
The latest reading covers properties placed on the Rightmove website by estate agents between May 7th and June 10th. The group claims to have measured 178,158 asking prices, which it reckons is around about 70% of the new properties put on the market.
But the problem with the Rightmove survey is that it only includes the prices of houses and flats that have been put on the market that month. The survey doesn't include properties that have previously been put on the site, and are still sitting there unsold even if the asking price has been dropped.
We all know that the price a vendor hopes for and the price the buyer eventually pays are two very different things, particularly in today's uncertain market. So Rightmove is probably the most optimistic house price measure you can possibly get.
But even upbeat Rightmove has bad news for anyone living outside of London and the South East. The average annual rise in asking prices in the north and middle of England was just 2.7%. With inflation at 2.2%, that means prices have barely changed in real terms on last year. Wales has actually seen asking prices fall by 0.8%.
And a new house price index, also focusing on asking prices, paints an even bleaker picture than the Rightmove survey.
According to property website home.co.uk, average asking prices in England and Wales have fallen by 1.9% over the past year. The North East has suffered the worst, with asking prices down a full 4.6% on 2005.
That sounds much weaker than many of the other surveys but home.co.uk claims to have the best statistical toolbox of all the house price indices. The company takes into account the asking prices of around 670,000 UK property prices more than any other house price survey. It also excludes properties valued at over £1m, and those valued at under £20,000, to avoid skewing the data.
Interestingly, the people at home.co.uk say that the results of their index were very similar to Rightmove's up until December 2004. After that, the two started to diverge, with home.co.uk recording lower prices.
This makes sense. The housing market slowdown began in earnest in around about mid-2004. So by December, all those people who'd been hoping for a quick summer sale would have started to realise that their homes weren't going to shift without some movement on the price.
So 2005 saw a great deal of asking price-cutting, which would have been reflected in the home.co.uk report, but not in Rightmove's. And judging by the fact that the two reports still show very different results, it would seem that people are still having to cut asking prices to get their houses sold.
It's also interesting to see that both surveys show that the property slowdown is now taking hold in the rest of the UK. When we did an informal survey of the property market in Money Morning in the middle of last year, we found that readers in the north of England were generally still bullish on property, even while those in the south were talking about price falls of up to 20%. But it seems now that the massive oversupply of 'luxury' city centre bachelor pads might finally be starting to take its toll in the boom towns of the north.
But that's OK - after all, there's a mini-boom' in the south of England now, as Rightmove puts it. And where London goes, the rest of the property market follows, right?
Well, that's usually the case. But the home.co.uk survey also puts the London-led recovery' scenario that most pundits have been proclaiming into doubt. The company reckons prices in Greater London are actually down 0.9% on the year, and separate figures show that while prices in Central London have ticked up, fuelled mainly by wealthy foreign investors (for more on this, see: What's propping up UK property markets?), Greater London has been largely unaffected.
If you're interested in the arcane ways in which house price statistics are calculated (and why wouldn't you be?), home.co.uk has an excellent section on its website explaining the differences between all the different types of house price statistic, from Nationwide to the Office of the Deputy Prime Minister take a look at it here: A guide to house price indices
The home.co.uk report also has this rather pithy quote on the front, which all those considering overstretching themselves to buy a house should bear in mind: "House prices are a matter of opinion whereas debt is real."
Which high-profile property bear said this? None other than Bank of England Governor Mervyn King.
Turning to the stock markets...
The FTSE 100 rallied on Monday, but ended well below the day's best levels. The index gained 28 points to close at 5,626. Miners were again prominent among the losers, with Rio Tinto down 1% to £26.88. Meanwhile insurer Royal & Sun Alliance rose 3% to 126.5p on news it will cut 1,550 jobs as part of plans to save a further £130m by mid-2008. 1,000 posts are expected to go from the group's UK operations. For a full market report, see: London market close
Over in continental Europe, the Paris Cac 40 gained 34 points to 4,729, while the German Dax rose 63 to close at 5,439.
Across the Atlantic, US stocks were hammered again, on news that housebuilders are more pessimistic about conditions in the housing market than at any time in the last 11 years. The Dow Jones Industrial Average fell 72 to 10,942, while the S&P 500 fell 11 to 1,240. The tech-heavy Nasdaq fell 19 to 2,110.
The slump on Wall Street hung over traders in Asia. The Nikkei 225 fell 211 points to 14,648, with exporters once again among the main losers on fears that the Federal Reserve will keep raising US interest rates.
This morning, oil was edging higher in New York, trading at around $69.05 a barrel. But Brent crude was lower, trading at around $66.
Meanwhile, spot gold was trading at around $570.50 an ounce, after falling as far as $560.50 an ounce overnight. Silver edged lower, falling to $9.94 an ounce.
And in the UK this morning, more bad news on the jobs front as insurer Old Mutual said it plans to cut 800 posts following its purchase of Swedish peer Skandia. About 600 cuts will come from the UK.
And our two recommended articles for today...
Is now a good time to buy into Japan?
- Japan is firmly in recovery mode, says MoneyWeek editor Merryn Somerset Webb. So why have Japanese stock markets suffered so badly in the global sell-off? The bears say it's because of fears that a US consumer slowdown will hurt the Japanese economy - but does Japan really rely on the US that much? To find out, and to learn whether the recent plunge was justified, or if it represents a good buying opportunity, click here: Is now a good time to buy into Japan?
Why higher interest rates won't save the dollar
- The US dollar is living on borrowed time. The prospect of rising US interest rates has lead many commentators to believe the dollar can maintain its strength, but the country's massive economic imbalances mean further dollar falls are inevitable, say Andrew Selsby and John Robson of RH Asset Management. To find out which assets could benefit, click here: Why higher interest rates won't save the dollar
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