Looks Like I Was Wrong on Second Dip - Or Was I?

Some pretty important things have happened in the microcosmic world of UK house prices since my last post. Well, they aren't actually important in the traditional sense of the world but they are important to this blog's stream.

Two indices have come out for a start, both Halifax and Financial Times both said that UK house prices had risen in September; Halifax by 1.6% on the month, and FT by 0.6%. This creates the impression that the Land Registry fall in August was a blip, that UK house prices are continuing to rise and that this will be shown by the Land Registry index again in September.

It is easy for me to argue with the Halifax index; they have commercial interests, benefit from positive sentiment and their index is based on mortgage approvals, not sale prices. I can't however argue with the FT index; it is compiled by the impartial Acadametrics, and based on sales registered at the Land Registry, which are collected and compiled almost in real time.

However, still nothing has changed; transactions are still shockingly low and it is only the fact that supply is lower keeping up prices. Whether it is next month or next year, there will be a second dip in UK house prices - mark my words.

UK House Prices: The Second Dip Begins

Well, the second dip that UK housing market bears (pessimists, people who believe we are in a bear market amid a downturn), including the writers on this blog, have been warning about is here.

The month of August left the bulls (those who believe we are in a bull market, heading upwards, optimists) with nothing to cling to; both the indicators that had turned positive and stirred optimism turned back negative in August.

The Land Registy index -- the most trusted index of house prices in England and Wales -- said that the average UK house price fell by 0.1% in August. Not much of a fall, but coupled with a fall in mortgage approvals in the same month it is a clear sign that the dead cat has stopped bouncing as far as I'm concerned.

The Bank of England revealed that mortgage approvals fell from 52,404 in July, to 52,317 in August. Again, not much of a fall but the BOE itself acknowledged that the current level of mortgage approvals is "well below a level consistent with rising house prices".

To be fair, when prices first started rising after months of falls I said it was an anomaly, a one-off inexplicable rise because of the shortage of data available, so I suppose I should say that this could be a one-off fall in the same vain.

However, when I said that about the rises it was because the other data didn't support house price rises, so now, because the data still indicates a market where prices are falling, and because prices never stopped falling in most of the country, I believe that this fall represents the first of many.