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Nationwide building society expects house prices to fall 13.8 per cent this year


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Posted (edited)

Nationwide building society expects house prices to fall 13.8 per cent this year

 

https://www.thisismoney.co.uk/money/news/article-8372271/Homes-face-14-price-slump-says-Nationwide.html

 

Oh dear, how sad....

 

I'd like to give credit to TOS for this article, maybe their/our time has come.

 

Edited by TheCountOfNowhere
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A friend of the wife is a died in the wool "never lose with bricks and mortar" type, who has annoyingly been proven right to date. Couple of years ago they "helped' their daughter buy a one bedroom fl

It will be interesting to see if/when reality hits. There will be a long period of denial I think. The last crash in Northern Ireland  took 5 years from top to bottom, bottoming in 2012. I t

You never know who has to sell till they do. I know off a few households that look plum from outside who, at closer look, are rapidly running out of financial runway.

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Posted (edited)

It will be interesting to see if/when reality hits.

There will be a long period of denial I think. The last crash in Northern Ireland  took 5 years from top to bottom, bottoming in 2012.

I think if prices do 'drop' it'll be years of people refusing to sell their house "for less than it's worth".

I'm concerned about my parents being able to sell their place; they have reached an age where they should downsize to a small bungalow. However despite there being one identical house in the street that hasn't sold for 6 months before the lock-down happened (and still hasn't sold), they wouldn't consider putting theirs on for any less.

Dad actually said to me last week that he expects a reduction in prices in certain areas but not in his house because <insert rationale here>. So I think basically they're stuck with a house that's un-sellable.

I think that's the attitude a lot of folk are going to take.

Edited by JoeDavola
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Will be interesting. As posted earlier, my landlord has accepted an offer. With the news, and the probable outcome of the survey, if I was the buyer I would reduce the offer by £100k.

He doesn't need to sell, and I doubt he will give it away.

Guess I will find out soon enough.

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10 minutes ago, Long time lurking said:

From the link in the OP 

tells you all you need to know 

 

It is also preparing for a surge in the number of customers looking for equity release products and retirement interest-only mortgages.

Well .... not quite. NW is clinging to RIO now as it's one of the few products it can see.

Its traditional market of low risk southern mortgages has gone. NW cannot compete with HSBC, who are hoovering the few high earner left in the south.

Its lost its appetite for the next rung down as it has so many HTB mortgages on its book going tits up. The HTB market was only NW n HBOS.

RIO is just converting those IO mortgages NW sold in Londonn/SE from 2002ish, who are now in their late 50s and have no ability to pay back the loan.

NW are fucked.

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31 minutes ago, Wight Flight said:

Will be interesting. As posted earlier, my landlord has accepted an offer. With the news, and the probable outcome of the survey, if I was the buyer I would reduce the offer by £100k.

He doesn't need to sell, and I doubt he will give it away.

Guess I will find out soon enough.

You never know who has to sell till they do.

I know off a few households that look plum from outside who, at closer look, are rapidly running out of financial runway.

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2 hours ago, spygirl said:

It is also preparing for a surge in the number of customers looking for equity release products and retirement interest-only mortgages.

Well .... not quite. NW is clinging to RIO now as it's one of the few products it can see.

Its traditional market of low risk southern mortgages has gone. NW cannot compete with HSBC, who are hoovering the few high earner left in the south.

Its lost its appetite for the next rung down as it has so many HTB mortgages on its book going tits up. The HTB market was only NW n HBOS.

RIO is just converting those IO mortgages NW sold in Londonn/SE from 2002ish, who are now in their late 50s and have no ability to pay back the loan.

NW are fucked.

Heart warming tale of mutuality where the mutual prices it's members out of homes.

I'm amazed they've lasted this long tbh.The ones that really grate though are the BTL mrotgages these daft idiots have written.Look at the books of the Coventry/Earl Shilton/Hinckly&Rugby.....................net interest margin really low.

 

have hsbc really cleanred up down siouth?

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1 hour ago, sancho panza said:

Heart warming tale of mutuality where the mutual prices it's members out of homes.

I'm amazed they've lasted this long tbh.The ones that really grate though are the BTL mrotgages these daft idiots have written.Look at the books of the Coventry/Earl Shilton/Hinckly&Rugby.....................net interest margin really low.

 

have hsbc really cleanred up down siouth?

HSBC can afford to lend at about 1% less than the rest of the UK mortgage providers.

And they offer 5 year, low rate, no fee fixes.

I've a HSBC 5 year fix at 1.90% 

If you've a good job, 40% deposit than youd  be moron to go anywhere else.

This is all Chinky savings come out of their ears.

NW have to struggle to get the cash to lend.

The BoEs Term funding scheme covered a lot of banks who were struggling to raise money.

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Taking the contrarian view, Wonder if there is actually a chance there could be a short boom in prices - i mentioned before I'm doing farm work and the other Brits there are a mix of self employed (ie likely tax dodgers) not getting any furlough money and youngsters getting furlough money but trying to make as much as possible by adding another income to that for a mortgage deposit to get out of renting.

 

Savings rate going to levels unseen in decades. Could be a lot of renters looking to buy (assuming they keep their jobs - thats a big if)

 

 

Perhaps not a likely scenario but thought i'd put it out there.

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13 minutes ago, PatronizingGit said:

Taking the contrarian view, Wonder if there is actually a chance there could be a short boom in prices - i mentioned before I'm doing farm work and the other Brits there are a mix of self employed (ie likely tax dodgers) not getting any furlough money and youngsters getting furlough money but trying to make as much as possible by adding another income to that for a mortgage deposit to get out of renting.

 

Savings rate going to levels unseen in decades. Could be a lot of renters looking to buy (assuming they keep their jobs - thats a big if)

 

 

Perhaps not a likely scenario but thought i'd put it out there.

Bless.

Thats the US not the UK.

To say the US welfare net is a but sparse for a middle income person is a bit of a over exaggeration.

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11 hours ago, spygirl said:

Bless.

Thats the US not the UK.

To say the US welfare net is a but sparse for a middle income person is a bit of a over exaggeration.

US social safety isn't normally that good. 
But, at this time, they're handing out unemployment checks of close to $1000 / week.  Several of my stateside friends tell me they're getting more for staying home than they ever got from employment.
It's $52,000 a year.  That's slightly more than the average wage.

  https://www.cnbc.com/2020/05/18/you-have-to-pay-taxes-on-unemployment-what-you-need-to-know.html

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Whee!

Quote

House price forecasts

Bank of England: Fall of 16% 

Nationwide: Fall of 13.8% 

Cebr: Fall of 13%

Savills: 5 to 10% fall on thin sales

Liberum: Fall of 7% in real prices

Lloyds Banking Group: 5 to 10% fall 

EY's Howard Archer: Fall of 5%

Knight Frank: Fall of 7%

 

 

My only caveat is that there is likely to be a huge lag in these being reflected in the market because sellers have an emotional attachment to their house "values".  ("It's worth a million a tell ya!").

The 1998 crash didn't fully work its way through into a full volume house market at those lower values until 1995/96.

Though this does mean that I'm going to have to start tracking the sort of house I want (ability to launch into creek / estuary from the bottom of the garden) so that I will spot when the reduction has been fully reflected in the asking price.

 

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Just now, goldbug9999 said:

BTW @Frank Hovis did you say you were some sort of accountant ?? xD

it was obviously a typo.

That's the one I remember well as I knew friends who had crippled themselves in order to buy somewhere, anywhere, because house prices had been shooting up for the previous decade.

At that time those of us without the financial bacing of the BOMAD had no chance of buying but, rather than predicting falls, were openly envious.

"Wow - they own their own studio flat in Croydon at 21."   Much like today tbh.

And then it crashed but it was still a phoney war because these recent buyers could not afford to take a loss and many others were not prepared to drop their valuations.

Whilst I say 95/96 was the genuine low with the market in full operation the process of the fall in prices crystallising into sales below purchase price took, for my friends, four to five years.

This was time it took for them to get onto decent salaries and save some money such that they could then afford to pay the shortfall between the house proceeds and the mortgage that they had upon it.

I bought, fairly reluctantly tbh, in 1996.

 

I'm not saying that the timeline will be exactly replicated but the same underlying processes will be at work meaning that the coming onto market of houses at the new reduced values will be slow and the people looking to bag an early bargain will be many which will stop the falls becoming fully refelected for some time.

My vague timescale for buying somehwere with water frontage was 5 / 6 years and if these falls transpire then I may bring it in to 3 / 4 years.

Rushing to bag an early "bargain" will mean paying more than you need to pay.

 

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