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House Prices Aug 2020


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On 03/09/2020 at 15:32, spygirl said:

There isnt one.

Asking prices dropped April->July.

Theyve gone up a bit.

Theres very few houses being sold.

The August numbers are 3 months worth.

Wait for the September onwards figures.

Theyll be dire.

Banks are not lending.

https://www.mortgagesolutions.co.uk/news/2020/11/26/tsb-limits-self-employed-to-75-per-cent-ltv-as-santander-tightens-income-demands/

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12 hours ago, spygirl said:

What seems to be happening is, post MMR, he moetgage market spilit in two:

1) Banks that stuck rigidly, plus more, to MMR. HSBC is probably the best example. Fart in their lobby and its Computer says No

2) Banks that wiggled within the MMR rules. MMR allows a small amount of lending to be more than 4.5 household lending.

Typically, these were prepared to discount current spending less, allow some wiggle for 'future wage increases', typically allowing someone to borrow and extra 1x income. Or take self employed earnings on too much trust.

These tended to be smaller, challenger banks - TSB - or Spanish.

Now all these banks are discovering their inner HSBC.

My guess is that the number of their loans looking dodgy is going off the scale.

 

I await Leeds and Cumberland BS statement that their holiday let mortgage book is basically toast.

 

From Jan 2019

Share price was ~£18, down from £40.

£1.13p today. Not quite at the the record lows of ~70p.

 

chart.jsproto_large.chart?ID_SEDOL=BZ6ST

 

 

 

 

 

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7 hours ago, spygirl said:

What seems to be happening is, post MMR, he moetgage market spilit in two:

1) Banks that stuck rigidly, plus more, to MMR. HSBC is probably the best example. Fart in their lobby and its Computer says No

2) Banks that wiggled within the MMR rules. MMR allows a small amount of lending to be more than 4.5 household lending.

Typically, these were prepared to discount current spending less, allow some wiggle for 'future wage increases', typically allowing someone to borrow and extra 1x income. Or take self employed earnings on too much trust.

These tended to be smaller, challenger banks - TSB - or Spanish.

Now all these banks are discovering their inner HSBC.

My guess is that the number of their loans looking dodgy is going off the scale.

 

I await Leeds and Cumberland BS statement that their holiday let mortgage book is basically toast.

 

From Jan 2019

Share price was ~£18, down from £40.

£1.13p today. Not quite at the the record lows of ~70p.

 

chart.jsproto_large.chart?ID_SEDOL=BZ6ST

 

 

 

 

 

TSB owner Sabadell considers bank's future as BBVA deal scrapped

https://www.bbc.co.uk/news/business-55099372

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Wierd article popped up on my tablets Google news feed

https://www.yourmoney.com/mortgages/family-devastated-by-loss-of-33k-mortgage-deposit-due-to-covid/

In a survey by Butterfield Mortgages of more than 1,300 homeowners and would-be homebuyers, three in 10 said they had lost their exchange deposit as a consequence, due to the shutdown taking place after contracts had been exchanged.

Really??

I thought sales failing after exchanging contracts was v v v rare.

Quick Google

https://forums.moneysavingexpert.com/discussion/5404868/loss-of-deposits-after-exchange

You're asking IF. Well, it won't happen. It's not happened more than a few documented times in the life of this forum. Stop worrying.
If I'm wrong on that point, I apologise
.

 

https://forums.moneysavingexpert.com/discussion/1806123/vendors-pull-out-after-exchange-of-contract#topofpage

Our estate agent has never had someone pull out after exchange of contracts and is at a loss on what to do really. Anyone any experience of this? Where do we stand legally, are they contractually obliged to go ahead now, or will we have to sue to get costs back...what about compensation? The move was half-way down the country and involved one of us changing job...now we're set back for lord knows how long.

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18 hours ago, spygirl said:

TSB owner Sabadell considers bank's future as BBVA deal scrapped

https://www.bbc.co.uk/news/business-55099372

More of the same:

HSBC considers exit from US retail banking

Options narrow to improve performance at struggling North America business

https://www.ft.com/content/c6eb3f1a-9c84-47d9-a071-fa4f66c5113c

 

To have HPI you need lots of mortgages.

To have lots of mortgages you need lots of banks be going nuts.

Everywhere - UK, Europe, US, banks are shrinking - size and balance sheet.

Risk is very much - OFF.

There is not enough bank lending for all the stupid lending post 2002 to transact.

All the IO BTL and IO resi mortgage customers will be selling into a market where the minimum deposit is 20% and the LTV is well under 4. and tied to proven income.

 

 

 

 

 

 

 

 

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On 28/11/2020 at 11:14, spygirl said:

More of the same:

HSBC considers exit from US retail banking

Options narrow to improve performance at struggling North America business

https://www.ft.com/content/c6eb3f1a-9c84-47d9-a071-fa4f66c5113c

 

To have HPI you need lots of mortgages.

To have lots of mortgages you need lots of banks be going nuts.

Everywhere - UK, Europe, US, banks are shrinking - size and balance sheet.

Risk is very much - OFF.

There is not enough bank lending for all the stupid lending post 2002 to transact.

All the IO BTL and IO resi mortgage customers will be selling into a market where the minimum deposit is 20% and the LTV is well under 4. and tied to proven income.

 

great news as I'll be a FTB soon

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UK mortgage approvals hit 13-year high Valentina Romei in London A “mad stampede” to buy a home before the end of a property tax reprieve drove UK mortgage approvals to the highest level since 2007.

https://www.ft.com/content/36ccbc6c-eaa3-35f0-81f6-649c492b0881

Experts expect applications to remain high until the government’s stamp duty holiday, which began in July, ends in March 2021.

uk-mortgage-approvals-rise-to-new-record

 

 

 

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id guess they are going to see record undrawn mortgages.

Theres ~3 months left til stamp duty  holiday ends.

The chances of completing a sale in 3 months is very very low.

The mortgage/house sales are going to collapse in Q2 21

 

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On 30/11/2020 at 12:42, spygirl said:

Theres ~3 months left til stamp duty  holiday ends.

The chances of completing a sale in 3 months is very very low.

The mortgage/house sales are going to collapse in Q2 21

 

My siblings and I are selling our late parents' house. 11 more weeks to  wait until probate is granted so the solicitors tell us and hopefully exchange and completion shortly after. I hope our buyer doesn't end up having to pay stamp duty. 

I may be looking to buy next year so it's handy to know what may happen with stamp duty. 

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UnconventionalWisdom
5 hours ago, UmBongo said:

My siblings and I are selling our late parents' house. 11 more weeks to  wait until probate is granted so the solicitors tell us and hopefully exchange and completion shortly after. I hope our buyer doesn't end up having to pay stamp duty. 

I may be looking to buy next year so it's handy to know what may happen with stamp duty. 

Probate has taken a stupidly long time. We are into month 4/5. Normal times it is meant to be 4 weeks.

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On 30/11/2020 at 14:21, Noallegiance said:

Nah they'll just extend again.

I'm not so sure now. They can't afford it. After the crisis in 2009 they were quick to put vat back to normal is I remember. I think SDLT will return to normal in March. 

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  • 5 months later...
Vendetta
On 09/10/2020 at 19:14, Vendetta said:

I’ve said it before and I’ll say it again ....

’Crack-up Boom’

We are 20 years in to a ‘Crack up Boom’ .... which will continue to exponentially manifest itself over the next 10-15 years ......resulting in monetary collapse....

I said it last October..... and I’ll say it again.....

‘Crack-up Boom’.....

 

14469EAC-7B2D-45DF-A5AD-7F8647AD4C58.jpeg

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Hancock
2 hours ago, Vendetta said:

I said it last October..... and I’ll say it again.....

‘Crack-up Boom’.....

 

14469EAC-7B2D-45DF-A5AD-7F8647AD4C58.jpeg

You're quoting a mortgage broker, he is bound to say that.

SDLT holiday is ending soon, and so is furlough (so long as the dont use India variant to drag it out)

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  • 2 weeks later...
With a crooked smile
Posted (edited)
On 03/09/2020 at 18:44, AlfredTheLittle said:

If you're earning over £100k you could fairly easily save a £50k deposit and borrow £300k.

Yes and no. I suspect a lot of people like me don't earn 100k in a way that all lenders will consider 'income'. 

For me it's roughly 60k basic, 25k on target commission, 20k shares (may go up, may go down and they are in USD which also fluctuates). 

Sometimes there are spiffs and accumulators good luck getting them included. 

Generally lenders won't include RSUs despite them being common for people that work at Amazon, Facebook, Google ect. 

I hear the lenders in the US are more willing to consider this sort of income but it blows a lot of lenders minds here. 

Edited by With a crooked smile
Changed spliffs to spiffs lol
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  • 2 weeks later...
Green Devil
1 hour ago, Vendetta said:

https://www.bbc.co.uk/news/business-57313700
 

I will say it again.....

’crack up boom’......

This will end with a complete dislocation of society and a financial reset as FIAT totally collapses on a global scale. 

4972ED4A-5428-4F7A-BD9B-2E18B6AE8DBA.jpeg

Absolutely. Ive given up ever moving to a detached in the UK. The prices have just gone totally bonkers. My next move will be overseas. 

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Frank Hovis
18 minutes ago, Green Devil said:

Absolutely. Ive given up ever moving to a detached in the UK. The prices have just gone totally bonkers. My next move will be overseas. 

Or: this the last push up that makes them unsupportable.

I've posted my theory of a two tier market but just to rattle through it again:

Expensive top tier house prices have nothing to do with salaries or interest rates; they are being bought by swapping the vast equity earned through previous HPI.  This is a market apart and IMO it will take twenty years of equity release, care home fees, and inheritance being split between more than one child before these revert to any kind of normality.

This tier starts around £300k in Cornwall or maybe did; I have seen houses that were £325k all day a year ago sell for £425k over the last couple of months. So maybe £400k start now.

Below this you have a tier of houses that are purchased or rented out of salary and these are first, second, or third time buys.  These are absolutely dependent upon salary levels and interest rates.

Mass job losses triggered by the end of furlough will hit this market badly.  I don't however see interest rates going up any time soon.

 

Headline figures are meaningless; I suggest tracking the price of two bed properties in your area over the next year to see when this lower tier of "bought from salary" houses turns from a seller's market to a buyer's.

Then wait a bit more for the repo fire sales at auction to start coming through.

Though if your heart is set on a decent sized three bed detached in a nice area then yes maybe look elsewhere.

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Green Devil
17 minutes ago, Frank Hovis said:

Or: this the last push up that makes them unsupportable.

I've posted my theory of a two tier market but just to rattle through it again:

Expensive top tier house prices have nothing to do with salaries or interest rates; they are being bought by swapping the vast equity earned through previous HPI.  This is a market apart and IMO it will take twenty years of equity release, care home fees, and inheritance being split between more than one child before these revert to any kind of normality.

This tier starts around £300k in Cornwall or maybe did; I have seen houses that were £325k all day a year ago sell for £425k over the last couple of months. So maybe £400k start now.

Below this you have a tier of houses that are purchased or rented out of salary and these are first, second, or third time buys.  These are absolutely dependent upon salary levels and interest rates.

Mass job losses triggered by the end of furlough will hit this market badly.  I don't however see interest rates going up any time soon.

 

Headline figures are meaningless; I suggest tracking the price of two bed properties in your area over the next year to see when this lower tier of "bought from salary" houses turns from a seller's market to a buyer's.

Then wait a bit more for the repo fire sales at auction to start coming through.

Though if your heart is set on a decent sized three bed detached in a nice area then yes maybe look elsewhere.

Agreed. I am very surprised that the detached house with large garden is now a luxury for even me, im certainly not a pleb at the bottom of the pay stack! But spending 600k plus on place that was 300k a few years ago, is just delusional. Perhaps im out of touch of the cost of things, i see so many new range rovers around these days, that it makes you think how do they afford all this shit? but then think, ah its on loan for £300 a month.. same with houses, its not yours it comes with a 40 year £2000 a month loan at Zero interest rates.. And leverage in the crypto market has a bad name.

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Frank Hovis
38 minutes ago, Green Devil said:

Agreed. I am very surprised that the detached house with large garden is now a luxury for even me, im certainly not a pleb at the bottom of the pay stack! But spending 600k plus on place that was 300k a few years ago, is just delusional. Perhaps im out of touch of the cost of things, i see so many new range rovers around these days, that it makes you think how do they afford all this shit? but then think, ah its on loan for £300 a month.. same with houses, its not yours it comes with a 40 year £2000 a month loan at Zero interest rates.. And leverage in the crypto market has a bad name.

 

With the houses it's more that however feckless or inured you are to debt the great majority of people could simply not buy, out of salary, the house in which they are living owing to two decades of HPI.

That of course has to correct across the board; though it does not have to imminently correct.

Range Rovers - yes I was in a car park recently where there were several each trying to outbling the other.  When you know that they are all on PCP and therefore owned by chavs rather than old money it becomes simply funny.

 

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spygirl
1 hour ago, Frank Hovis said:

Or: this the last push up that makes them unsupportable.

I've posted my theory of a two tier market but just to rattle through it again:

Expensive top tier house prices have nothing to do with salaries or interest rates; they are being bought by swapping the vast equity earned through previous HPI.  This is a market apart and IMO it will take twenty years of equity release, care home fees, and inheritance being split between more than one child before these revert to any kind of normality.

.

Less than 10 for my area. Could even be a lot less than 5.

Each OAP that exist the housing market puts another house in the market.

Those houses take ages to clear.

Cornwall/SW has an influx of London money - and London has been falling/sale slowing.

Scabby in the main doesnt have that cash influx. so house have to be cleared locally.

Id also add that the NW 10% figure is suspect. They are spinning a very shot period of limit sales. That number will be marked down later, bu the BBC never report the updates.

 

 

 

 

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spygirl

Saw this and thought of this thread.

Eurozone inflation tops ECB target for first time since 2018

Rate hits 2 per cent, complicating policymakers’ decision on stimulus efforts

https://www.ft.com/content/1b075b3a-f307-44e0-b3a4-b1f3f267bea7

Well, after ~10 years of trying, looks like the ECB have achieved their wish.

What that old Chinese curse?

May your every wish be granted.

 

 

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Frank Hovis
Posted (edited)

Fred Harrison has re-emerged; and he usually talks sense.

First the bad news:

If Harrison's 18-year property forecast is to be believed, it would mean we are right at the beginning of the boom phase.

 

And then the good:

'House prices will peak in 2026 followed by a recession that will eclipse what happened in 2008.

'Then, everyone will be shocked, and people will wonder why they were not warned.

 

https://www.dailymail.co.uk/money/mortgageshome/article-9601221/The-18-year-property-cycle-tips-house-price-boom-crash-2026.html

 

Moving this onto my personal timeline:

The start of the last big crash was 1998 with a bottom reached in 2006.

The start of this crash will be 2026 with the bottom reached 2034.

I was intending to move up to a significantly bigger house in the years 2032 - 2034 which looks to be perfect.

 

Cheers Fred, made my day :)

Edited by Frank Hovis
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