'Selling' September House Prices
A simple way to gain exposure to the UK housing market.
It is August 2010 – the UK housing market appears to have turned a corner, but you believe it is going to fall further over the next year. Our price for the September 2011 monthly survey (in £1000s) is 167.2-169.7.
As you believe house prices will start to fall, you decide to ‘sell’ £1000 per point at 167.2.
Over the next few months, the housing market takes a turn for the worse, and the Halifax house price survey figures start to drop. In June, Halifax gives the average UK house price at £163,049, and on 25 July 2011 our quote for September is 160.0-162.0. You are unsure whether the fall will continue and decide to play it safe, ‘buying’ £1000 per point at 162.0 to close.
The result
Profit on deal
| Opening level | 167.2 |
| Closing level | 162.0 |
| Difference | 5.2 |
Profit: 5.2 x £1000 per point = £5200
Remember of course that if the market had moved against you, you may have lost more than your initial deposit.