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Has Coronavirus officially killed the housing market?


Post-Covid, what 3 changes are you going to try to make? (max 3)  

119 members have voted

  1. 1. Post-Covid, what 3 changes are you going to try to make? (max 3)

    • Work from home more
    • Walk more (drive less)
    • Avoid Chinese goods
    • Shop locally
    • Quit working (bennies)
    • Retire earlier
    • Leave the UK
    • Come back to UK
    • Cook more own food
    • Eat out more
    • See family more
    • See family less!
    • More time on hobbies
    • Worry less
    • Get divorced
    • None of the above

This poll is closed to new votes


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11 minutes ago, Democorruptcy said:

Is it cheap rent? Are you making an offer?

The furlough money was up to 2.5k and bounceback loans up to £50k, maybe not enough for your price bracket direct, so less potential buyers and needs a chain of up.

 

We don't rent the main part of the house but the bit that we do is probably costing me about 30% less than a comparable alternative. But I cant afford to make an offer, sadly :)

I thought that most buyers in this price bracket would pay cash, but the EA told the LL that there's plenty of people out there who will buy such places with a mortgage. I imagine what's putting those people off is the fact that if they were to lose their job, they'd have a bloody great hole in their monthly finances.

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Anyone that had a 20% deposit before prices halved

I've just spent a while browsing the 118 forums since my previous post.  Tenants not paying, tenants already fucked off, not a registered business, mortgage company doesnt want to know, how will

I can hardly bear to go in the place. Obviously can't at the moment anyway, as marooned in the US. Makes my own father's death at home, in his own bed look like a lottery win. I have told the story be

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2 minutes ago, Democorruptcy said:

Slight problem with that one

"once the government’s temporary cut in stamp duty ends"

Is when the shit will hit the fan.

C-19 is the only clear trigger I have seen in 15 years, and I am including the financial crash in 207/08, every government/BOE gimmick now is just a short term delaying tactic , and they will try

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43 minutes ago, haroldshand said:

Is when the shit will hit the fan.

C-19 is the only clear trigger I have seen in 15 years, and I am including the financial crash in 207/08, every government/BOE gimmick now is just a short term delaying tactic , and they will try

That article is just an early shot in the campaign to make the £500k free stamp duty permanent. It was never going to be temporary. Bojo was already talking about it in 2019, pre-covid.

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1 hour ago, Democorruptcy said:

That article is just an early shot in the campaign to make the £500k free stamp duty permanent. It was never going to be temporary. Bojo was already talking about it in 2019, pre-covid.

Perhaps but don't forget ukgov had record stamp duty receipts prior to covid 19 , even with the housing market in a slowdown 

They won't give it to lightly...

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23 minutes ago, spunko said:

Perhaps but don't forget ukgov had record stamp duty receipts prior to covid 19 , even with the housing market in a slowdown 

They won't give it to lightly...

High house prices have to be maintained, whatever happens. That's the line in the sand, the last ditch. We learned that in '08. If house prices collapse, the UK economy collapses.

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But, eventually, once all the resources of the state (and it's line of credit) have been exhausted holding house prices up, the economy will collapse under the burden of financing it and then the economy will collapse anyway. Had they let it go between 2002 and 2006 they probably would have got away with it. After that, at some point, the problem got too big and now we are just left with bad choices. Politicians just want to get elected so leave the collapse for someone else to oversee if they can. The only question is, can they delay it again or is there just too much going on now and in the coming months for them to pull it off?

I have been saying for several months that if they can avoid a crash this year and next then I don't see one until the entire system collapses under the weight of debt. They have already managed to delay it with the stamp duty holiday (reducing the government's income and adding more to the nation's debts), how many more tricks will they be able to pull out of the hat if unemployment surges and other indicators suggest they need to leave off the money creation a bit?

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2 hours ago, spunko said:

Perhaps but don't forget ukgov had record stamp duty receipts prior to covid 19 , even with the housing market in a slowdown 

They won't give it to lightly...

I don't know how much was generated from the band that's now free. However it's pushed prices up, so more will be over £500k than before.

They threw £12bn at the 1st phase of HTB, then £10bn at the 2nd and it's been extended again since. That's no incentive to do anything that might bring house prices down.

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8 hours ago, Balding Badger said:

 

I have been saying for several months that if they can avoid a crash this year and next then I don't see one until the entire system collapses under the weight of debt. They have already managed to delay it with the stamp duty holiday (reducing the government's income and adding more to the nation's debts), how many more tricks will they be able to pull out of the hat if unemployment surges and other indicators suggest they need to leave off the money creation a bit?

I've also been saying that for several years, we won't ever see a ''typical'' recession again, including this time... they'll just keep printin' and zirpin' to paper over recessions until the whole fiat money based system completely collapses in on itself.

 

As for the second bit... they'll ''look through'' those indicators.

 

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41 minutes ago, Royston said:

As for the second bit... they'll ''look through'' those indicators.

 

I agree, but eventually collapse of the pound or very high (even if not strictly hyper-) inflation become indicators that can't be looked through no matter how hard they try.

A similar battle between political pain avoidance and reality reasserting itself is mirroring this in the current argument about extending furlough. The furlough scheme was a sensible, although imperfect idea, to help people and the economy at a moment of critical threat. Now that the shape of the new reality is forming some politicians want to continue the scheme to maintain people in jobs from the economy of February 2020 when many of those jobs aren't viable because the changes brought by the virus means the economy has undergone a massive structural change. At the moment the government are holding firm, with the Bank of England's support and pointing out that not all jobs can be saved and that people shouldn't be maintained in jobs that realistically won't come back. The pressure is building though from media, opposition, industries and some of the public. If they cave in then it will avert some short term pain but hasten and worsen the ultimate collapse. It will be an interesting test for a government that doesn't seem too resolute in the face of pressure.

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I was talking to someone this morning who told me if a couple who are trading up. She's a legal secretary, he owns a chain of 5 barber shops. The house is £450,000 and they have a deposit if £250,000.

She was furloughed so the lender demanded a letter to say that she had a job to go back to. In addition, they wanted not only the usual three years accounts from the barber shop owner but also all sorts of projections. This from a couple with a serious deposit, neither of whom have had a day without work since leaving school.

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19 hours ago, Austin Allegro said:

High house prices have to be maintained, whatever happens. That's the line in the sand, the last ditch. We learned that in '08. If house prices collapse, the UK economy collapses.

That goes without saying, and for the first time in all these years C-19 is the first and only trigger I have predicted that will cause price to fall and maybe even crash.

Many of those home working or  on furlough and just dead men/women walking right now, i suspect 5 million unemployed by end of next year.  Immigrants are returning home, the good ones that is and the ones that worked hard, never claimed benefits and provided companies with cheap/slave labour, the crap and dross of society will of course be remaining for me to raise their kids.

Time is running  out, but I grant you if furlough ends and the whole county sigh and all go back to their normal lives with their old jobs and on the same pay then I will agree that there is a chance house prices will hold up

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Satch Report – House Prices Soar In Corona Depression – An Estate Agent Rights

We are going into a depression, financial Armageddon. The media and government do not want to talk about this but we are going into the deepest depression for 200 years. There will be millions of new unemployed by Christmas and many more millions fearful of becoming unemployed. There is 20 years of GDP growth predicated on house price inflation. Even slum terraces in Burnley change hands for £60,000. While in the South East, £250,000 ie 10 times the average UK wage of £24,492 per annum, will only buy you a one-bedroom flat. Trillions of pounds of wealth invested in UK property. In the UK wealth, property and the economy are so intertwined that the Housing Market is the UK Economy and must be protected at any cost.

How do the government stop house prices falling? Well first look at what could cause house prices to fall or soften or rise negatively or stagnate or pause … or even crash.

Lots of supply. We have a shortage of homes and always will have a shortage as we have massive immigration … 300,000 or so that is non-EU immigration and that will not change. So we need an additional 100,000 properties every year just to stand still and we only build that many in a good year. There will never be a surplus of houses that would cause prices to fall.

People can’t afford to pay their mortgage. This could be caused by interest rate rises or more likely the loss of income either by becoming unemployed or there being no work for the self employed … due to the high number of unemployed; a vicious spiral, I digress. Lots of people trying to sell at the same time because they can’t afford the mortgage would cause prices to fall. Now in many cases the mortgage payment is less than the equivalent rent … so just add the missed payments as a charge on the property to be recovered when it is sold. This will keep the number coming to market low and prices high. And the problem of finding rental homes for families with young kids who had to sell because they could not pay the mortgage disappears.

Forced Sales. There will always be people who have to sell for one reason or another. The threes Ds being common reasons; Divorce, Debt and Death. So there will always be someone who has to sell and if cash is tight, mortgages difficult to get then prices will f … f … rise negatively (could not bring myself to use the f word) as the number of people who can actually buy (i.e. spend money) will be restricted in the up coming depression. But with restricted supply there may be lots trying to grab a bargain and so keep prices inflated with mini-bidding wars amongst the elite.

The Universal Solution. Whenever in the past the housing market has been in trouble and prices have been under threat the government has always acted. Those words come to mind, the ones that Ronald Regan said everyone should fear ‘I’m from the government and I’m here to help.’ Well the government have ‘helped’ with two dozen ‘Help To Buy’ schemes and I can imagine the white boards in Whitehall are covered with ideas for more ‘help’ schemes in this time of what may become to be known as the Corona Depression or the Crowned Depression. Destined to be the only depression in history where government intervention kept house prices on the up and up. They will probably do this by inventing more and more Help To Buy schemes using taxpayer monies. These schemes which are really Help-Not-To-Have-To-Sell-And-Keep-Prices-Rising work against anyone who is not on the ladder and these people are of course taxpayers whereas many Home Owners are retired. Looking at these ‘help’ schemes and you can see Regan was right; they work against the very people who bear the brunt of the actual costs of funding these schemes.

So the stage is set, with the storm fast approaching that is in reality a massive tsunami the like of which we have not seen for 200 years when there was the First Great Depression … will HMS House Price survive? Probably, especially with HMS Quantitative Easing and HMS Rampant Inflation ready to be deployed. So what combination of rises and or falls will we have? Rises in nominal prices and falls in real prices? Falls in both nominal and real prices? The right answer is of course whichever combination transfers more wealth from the poor to the rich and benefits the one percent and their future plans for the plebs and proles.

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11 hours ago, satch said:

Whenever in the past the housing market has been in trouble and prices have been under threat the government has always acted.

This is completely not true. 

I think I have previously told my story of 1991 where my house I put on the market for quite realistic 90K eventually sold after more than a year of giant stress for 55K. And I was grateful to sell at all as I thought maybe I never would. 

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6 minutes ago, Funn3r said:

This is completely not true. 

I think I have previously told my story of 1991 where my house I put on the market for quite realistic 90K eventually sold after more than a year of giant stress for 55K. And I was grateful to sell at all as I thought maybe I never would. 

I benefited at that time, as an FTB, due to the conditions you have layed out.

It was the last time it was allowed to happen in such a way.

My belief in this happening again, has probably cost me hundreds of thousands of pounds, due to perma bear leanings.

That's as someone who spent 1987 to 2014 in around London and the S.E.

Nominal house prices will only crash again when the gubmint are clean out of ammo. It will not be for the lack of trying.

Maybe that time is approaching, i dont know.

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13 hours ago, satch said:

Satch Report – House Prices Soar In Corona Depression – An Estate Agent Rights

 

We are going into a depression, financial Armageddon. The media and government do not want to talk about this but we are going into the deepest depression for 200 years. There will be millions of new unemployed by Christmas and many more millions fearful of becoming unemployed. There is 20 years of GDP growth predicated on house price inflation. Even slum terraces in Burnley change hands for £60,000. While in the South East, £250,000 ie 10 times the average UK wage of £24,492 per annum, will only buy you a one-bedroom flat. Trillions of pounds of wealth invested in UK property. In the UK wealth, property and the economy are so intertwined that the Housing Market is the UK Economy and must be protected at any cost.

 

How do the government stop house prices falling? Well first look at what could cause house prices to fall or soften or rise negatively or stagnate or pause … or even crash.

 

Lots of supply. We have a shortage of homes and always will have a shortage as we have massive immigration … 300,000 or so that is non-EU immigration and that will not change. So we need an additional 100,000 properties every year just to stand still and we only build that many in a good year. There will never be a surplus of houses that would cause prices to fall.

 

People can’t afford to pay their mortgage. This could be caused by interest rate rises or more likely the loss of income either by becoming unemployed or there being no work for the self employed … due to the high number of unemployed; a vicious spiral, I digress. Lots of people trying to sell at the same time because they can’t afford the mortgage would cause prices to fall. Now in many cases the mortgage payment is less than the equivalent rent … so just add the missed payments as a charge on the property to be recovered when it is sold. This will keep the number coming to market low and prices high. And the problem of finding rental homes for families with young kids who had to sell because they could not pay the mortgage disappears.

 

Forced Sales. There will always be people who have to sell for one reason or another. The threes Ds being common reasons; Divorce, Debt and Death. So there will always be someone who has to sell and if cash is tight, mortgages difficult to get then prices will f … f … rise negatively (could not bring myself to use the f word) as the number of people who can actually buy (i.e. spend money) will be restricted in the up coming depression. But with restricted supply there may be lots trying to grab a bargain and so keep prices inflated with mini-bidding wars amongst the elite.

 

The Universal Solution. Whenever in the past the housing market has been in trouble and prices have been under threat the government has always acted. Those words come to mind, the ones that Ronald Regan said everyone should fear ‘I’m from the government and I’m here to help.’ Well the government have ‘helped’ with two dozen ‘Help To Buy’ schemes and I can imagine the white boards in Whitehall are covered with ideas for more ‘help’ schemes in this time of what may become to be known as the Corona Depression or the Crowned Depression. Destined to be the only depression in history where government intervention kept house prices on the up and up. They will probably do this by inventing more and more Help To Buy schemes using taxpayer monies. These schemes which are really Help-Not-To-Have-To-Sell-And-Keep-Prices-Rising work against anyone who is not on the ladder and these people are of course taxpayers whereas many Home Owners are retired. Looking at these ‘help’ schemes and you can see Regan was right; they work against the very people who bear the brunt of the actual costs of funding these schemes.

 

So the stage is set, with the storm fast approaching that is in reality a massive tsunami the like of which we have not seen for 200 years when there was the First Great Depression … will HMS House Price survive? Probably, especially with HMS Quantitative Easing and HMS Rampant Inflation ready to be deployed. So what combination of rises and or falls will we have? Rises in nominal prices and falls in real prices? Falls in both nominal and real prices? The right answer is of course whichever combination transfers more wealth from the poor to the rich and benefits the one percent and their future plans for the plebs and proles.

 

All good points, Satch. Some other reasons for EAs to be cheerful and to look forward to soaring prices is the cheap availability of grey paint, Live, Laugh, Love signs and twigs in vases, the right combination of which can add ££££s to the value of a home. There's no need to give it away!

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2 hours ago, Funn3r said:

This is completely not true. 

I think I have previously told my story of 1991 where my house I put on the market for quite realistic 90K eventually sold after more than a year of giant stress for 55K. And I was grateful to sell at all as I thought maybe I never would. 

Before 1997 it wasn’t true, but since then it has been hasn’t it?

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1 minute ago, assetrichcashpoor said:

Before 1997 it wasn’t true, but since then it has been hasn’t it?

Bubbles are always unassailable and immune from any downturn. Get in now or be priced out forever. The government will always cover people's backs. Until they dont. 

Do homeowners form as strong a portion of the voterbase as they did in 1997? Are there now significantly more renters? Are there many renters who are demanding higher house prices?

All it takes to crash a housing boom is for it to run out of first-time buyers. Once that happens it's good night Irene. How's it going for those FTBs will they be flush with cash after their furlough runs out? 

 

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I watch a small area on Rightmove, have PaTMa installed to make it easier. The nonsense is beginning to fade now. Reductions are commonplace as the initial and then second asking prices are over the top. Who knows if the third "Offers over" price will really be the sticking point or if reality will force further reductions. For some it already has.

My sister in law is an EA and after having been telling everyone that they had never been busier in June she is now saying that nothing is selling. I'm always sceptical of whatever message she is putting out but from what I can see there a lot of people wanting to sell and lowering their prices to try and make that happen. Maybe they are fearful of what is coming? Where is fear on that timeline of bubbles - Just after the 'return to normal'. Seems about right to me.

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20 hours ago, Balding Badger said:

I watch a small area on Rightmove, have PaTMa installed to make it easier. The nonsense is beginning to fade now. Reductions are commonplace as the initial and then second asking prices are over the top. Who knows if the third "Offers over" price will really be the sticking point or if reality will force further reductions. For some it already has.

My sister in law is an EA and after having been telling everyone that they had never been busier in June she is now saying that nothing is selling. I'm always sceptical of whatever message she is putting out but from what I can see there a lot of people wanting to sell and lowering their prices to try and make that happen. Maybe they are fearful of what is coming? Where is fear on that timeline of bubbles - Just after the 'return to normal'. Seems about right to me.

Is PaTMa showing you lots of re-availables?

It is with me. Avg 4-6 a day.

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In my area there were quite a few properties for sale.  Two higher priced "sold" and are now back on the market.

 

I have noticed that hardly any further properties are coming on the market.  I suspect everyone is waiting to see what happens towards the end of the year.  The rush seems to be over for now.

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