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Property crash, just maybe it really is different this time


haroldshand

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Green Devil
5 hours ago, spygirl said:

Not really.

Everyone's just taking the BS and spin from EAs without any critical analysis.

https://www.fca.org.uk/data/mortgage-lending-statistics

2020 Q4 stats show money lend up ~10% from 2019 Q2 - dont get excited. Mortgage lending collapsed in 2019 to multi decade lows.

I can understand that there will be a bit of bump of transaction in second half of 20/21 Q1/Q2 - the stamp duty relief is worth a lot of money to expensive houses.

Locally, I see the number of expensive, detached houses double - but again, they were on multi decade lows. before.

Im now seeing a collapse in sales 

Now that could be explained y LAs all skiving.

Or it could be that all the money has gone, 2020 Q4 just bringing forward a couple fo years f sales.

If its the latter youll see sales collapse from Q2.

 

 

 

You must be on the moon! 

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1 minute ago, Green Devil said:

You must be on the moon! 

No.

Bank lending is not really going up.

To get the prices people are BSing about would see mortgage lending go up 20%_

AFAICT banks are sitting on their hands, only lending to the most solvent and low LTE of people.

Any blip or wrinkle in your credit - computer says No

https://www.mumsnet.com/Talk/property/4234464-House-fell-through-again

 

 

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UK mortgage lending jumps to record high in March

Sharp rise driven partly by rush of buyers ahead of expected end of stamp duty holiday

https://www.ft.com/content/1c753635-e062-4e00-bc66-72ae3a904934

47ed1e00-accc-11eb-b292-eb9ffa0284c6-sta

It's a more extreme version of the other stapduty spike, which saw  a fall off in sales afterwards.

The uptick from 2016ish, after 2008-2015 of record low mortgages, is HTBv2. Majority of those are stuck in houses at least 0% off what they paid for it.

The spike provides cover for dropping HTBv2 and going back to htbv1.

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Chewing Grass
12 minutes ago, spygirl said:

UK mortgage lending jumps to record high in March

Sharp rise driven partly by rush of buyers ahead of expected end of stamp duty holiday

https://www.ft.com/content/1c753635-e062-4e00-bc66-72ae3a904934

47ed1e00-accc-11eb-b292-eb9ffa0284c6-sta

It's a more extreme version of the other stapduty spike, which saw  a fall off in sales afterwards.

The uptick from 2016ish, after 2008-2015 of record low mortgages, is HTBv2. Majority of those are stuck in houses at least 0% off what they paid for it.

The spike provides cover for dropping HTBv2 and going back to htbv1.

That's odd, its reported differently here, peak was November last year and has been falling since, aah approvals is different to borrowing, fewer people, bigger loans.

573738350_Screenshotfrom2021-05-0417-35-49.thumb.png.f1056a1d52510963e17c0a281d0f202a.png

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6 minutes ago, Chewing Grass said:

That's odd, its reported differently here, peak was November last year and has been falling since, aah approvals is different to borrowing, fewer people, bigger loans.

573738350_Screenshotfrom2021-05-0417-35-49.thumb.png.f1056a1d52510963e17c0a281d0f202a.png

Yeah.

Theres a good 3 months between approval and drawing down the cash

The chart shows approvals already falling.

 

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Castlevania

I thought this article was good. It’s written from an American perspective which admittedly is a different market to the U.K. but there’s a fair bit of cross over. If you can’t be bothered to read it, basically the worst time to buy and the best time to sell is in a frenzy.

https://wolfstreet.com/2021/04/29/its-a-perfect-time-to-sell-a-home-to-fomo-driven-buyers/

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sancho panza

Jan figures in,this will contain the bulk -circa 90%+ of registrations I'd have thought.

AS we've discussed the price rises are all in the mix that's selling.Traditionally,this postcode would see far more terraces swap hands than anything else.It says a lot that there's nearly as many deatched sales as terraces and flats put together.

In the January's before 2008,130 was pretty much the bottom.53 this year with a few more to come maybe

Interesting that this is a postcode with 44,000 households......average hosuehild income £21k

image.png.6e2dec886e30f7aa00d172892b2a4c21.png

 

context:

image.png.22461d9344865f301ea6e678b5a27c62.png

https://www.postcodearea.co.uk/postaltowns/leicester/le2/

image.thumb.png.3f40faf230fe0bd01ad69eb47c2f8290.png

Edited by sancho panza
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sancho panza

More on this from Wolf ST.Nick Corbishley

Demand for flats is collapsing,some flats are moving at losses of 67% on purchase price,

https://wolfstreet.com/2021/04/30/bank-of-england-frets-about-banks-as-flammable-cladding-crisis-crushes-prices-at-low-end-of-housing-market/

The BoE is assessing if contagion from this scandal could spread to the broader housing market and cause a new financial crisis.

By Nick Corbishley for WOLF STREET:

The Bank of England is now fretting about the impact the UK’s flammable-cladding crisis could have on broader home prices in the UK and what that means for banks. New data shows that affected properties — and there are up to 1.3 million of these flats — sell for as little as one third of what the owner had paid.

The BoE is concerned about the banks that sit on loans backed by those properties and is assessing whether contagion from this scandal could spread to the broader housing market and cause a new financial crisis.

The BoE’s Prudential Regulation Authority (PRA) has surveyed mortgage-lenders on their exposure to leasehold flats with fire risks. And it is asking lenders for regular updates.

With banks refusing to offer mortgages on apartments in these buildings, and with cash buyers demanding crippling discounts, even selling the unit is not really an option.

In the wake of the fire at the Grenfell Tower of June 2017, which resulted in the deaths of 72 people, up to 1.3 million leaseholders in the UK discovered that the buildings in which they own their flats may have also been rigged with flammable cladding and insulation materials.

The “freehold” — the building and the land — belongs to somebody else, usually the developer, a financial entity the developer sold it to, or a large landowner such as the Queen or the Duke of Westminster. They are able to extract annual rent on those assets.

Under leasehold law, owners of the flats are liable for the costs. Over the past 12 months, apartments in many multi-occupancy buildings, even those of four stories or fewer, have required a so-called external wall system (EWS1) form in order to qualify for a mortgage. But many of the buildings are still waiting for inspection, leaving their occupants trapped in financial limbo, in buildings that may also be a firetrap.

Up to 1.3 million flats, including in thousands of recently built structures, are currently unmortgageable. These properties are at the low end of the housing ladder. And they are all but impossible to sell, without plunging their current leaseholders into a deep loss. That this low end of the housing market is beginning to seize up as lenders refuse to offer mortgages on any multi-occupancy buildings that pose even the slightest fire risk is threatening to disrupt the entire property market.

Now attention is turning to the potential impact this could have on the wider financial system. A study by the Leasehold Knowledge Partnership (LKP), cited by The Times, has found that of the flats in buildings with fire risks that had gone to auction since December 2019, about 80% failed to sell at all, or sold at discounts of up to 67% from the price the owner had originally paid.

For example, a one-bedroom flat in Manchester failed to sell last month despite being listed for half the £330,000 its owner had paid in 2017. In another example, a two-bedroom flat at The Decks, an award-winning design with flammable cladding, sold at auction for £52,000 last year, 62% lower than the price its owners had paid (£134,450) in 2008.

In many cases, the additional debt will sink leaseholders deep into negative equity, meaning they will still not be able to sell their apartment without incurring a significant loss even after the cladding and insulation have finally been removed.

The scale of the crisis is big, but it’s still unclear how big. For the moment, the rest of the UK’s housing market is buoyant, with average prices rising 7.1% compared to a year ago. But the bottom layer of the housing market is seizing up as lenders refuse to offer mortgages on any multi-occupancy buildings that pose this type of fire risk.

Yet even as all of this is happening, new data suggests that three-quarters of cladding systems being installed on new medium-rise buildings completed in 2019 and 2020 still used combustible materials. The government had proposed banning the use of such materials in these buildings but hasn’t actually followed through with legislation. The data – from an analysis by non-combustible insulation manufacturer Rockwool of figures from construction database Glenigan – also shows that 112 other potentially high-risk buildings had been built with combustible rainscreen systems during the same period. By Nick Corbishley, for WOLF STREET.

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Noallegiance
8 hours ago, sancho panza said:

More on this from Wolf ST.Nick Corbishley

Demand for flats is collapsing,some flats are moving at losses of 67% on purchase price,

https://wolfstreet.com/2021/04/30/bank-of-england-frets-about-banks-as-flammable-cladding-crisis-crushes-prices-at-low-end-of-housing-market/

The BoE is assessing if contagion from this scandal could spread to the broader housing market and cause a new financial crisis.

By Nick Corbishley for WOLF STREET:

The Bank of England is now fretting about the impact the UK’s flammable-cladding crisis could have on broader home prices in the UK and what that means for banks. New data shows that affected properties — and there are up to 1.3 million of these flats — sell for as little as one third of what the owner had paid.

The BoE is concerned about the banks that sit on loans backed by those properties and is assessing whether contagion from this scandal could spread to the broader housing market and cause a new financial crisis.

The BoE’s Prudential Regulation Authority (PRA) has surveyed mortgage-lenders on their exposure to leasehold flats with fire risks. And it is asking lenders for regular updates.

With banks refusing to offer mortgages on apartments in these buildings, and with cash buyers demanding crippling discounts, even selling the unit is not really an option.

In the wake of the fire at the Grenfell Tower of June 2017, which resulted in the deaths of 72 people, up to 1.3 million leaseholders in the UK discovered that the buildings in which they own their flats may have also been rigged with flammable cladding and insulation materials.

The “freehold” — the building and the land — belongs to somebody else, usually the developer, a financial entity the developer sold it to, or a large landowner such as the Queen or the Duke of Westminster. They are able to extract annual rent on those assets.

Under leasehold law, owners of the flats are liable for the costs. Over the past 12 months, apartments in many multi-occupancy buildings, even those of four stories or fewer, have required a so-called external wall system (EWS1) form in order to qualify for a mortgage. But many of the buildings are still waiting for inspection, leaving their occupants trapped in financial limbo, in buildings that may also be a firetrap.

Up to 1.3 million flats, including in thousands of recently built structures, are currently unmortgageable. These properties are at the low end of the housing ladder. And they are all but impossible to sell, without plunging their current leaseholders into a deep loss. That this low end of the housing market is beginning to seize up as lenders refuse to offer mortgages on any multi-occupancy buildings that pose even the slightest fire risk is threatening to disrupt the entire property market.

Now attention is turning to the potential impact this could have on the wider financial system. A study by the Leasehold Knowledge Partnership (LKP), cited by The Times, has found that of the flats in buildings with fire risks that had gone to auction since December 2019, about 80% failed to sell at all, or sold at discounts of up to 67% from the price the owner had originally paid.

For example, a one-bedroom flat in Manchester failed to sell last month despite being listed for half the £330,000 its owner had paid in 2017. In another example, a two-bedroom flat at The Decks, an award-winning design with flammable cladding, sold at auction for £52,000 last year, 62% lower than the price its owners had paid (£134,450) in 2008.

In many cases, the additional debt will sink leaseholders deep into negative equity, meaning they will still not be able to sell their apartment without incurring a significant loss even after the cladding and insulation have finally been removed.

The scale of the crisis is big, but it’s still unclear how big. For the moment, the rest of the UK’s housing market is buoyant, with average prices rising 7.1% compared to a year ago. But the bottom layer of the housing market is seizing up as lenders refuse to offer mortgages on any multi-occupancy buildings that pose this type of fire risk.

Yet even as all of this is happening, new data suggests that three-quarters of cladding systems being installed on new medium-rise buildings completed in 2019 and 2020 still used combustible materials. The government had proposed banning the use of such materials in these buildings but hasn’t actually followed through with legislation. The data – from an analysis by non-combustible insulation manufacturer Rockwool of figures from construction database Glenigan – also shows that 112 other potentially high-risk buildings had been built with combustible rainscreen systems during the same period. By Nick Corbishley, for WOLF STREET.

Blimey.

Imagine a pincer movement on property prices falling from the bottom end first and then the top end as liquidity dries up as well.

Unusual circumstance indeed.

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There's one of those cladded flats on the market in my city: £240k 'cash buyers only'. Not much less than the usual asking price if it was was mortgageable. 

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@spygirl

https://www.thisismoney.co.uk/money/mortgageshome/article-9549653/First-time-buyer-mortgage-rejections-spike-Heres-boost-chances-accepted.html

 

 

Why were first-time buyers denied a mortgage? 
Reason for mortgage application getting rejected March  2020 March 2021 
Poor credit history 19% 41% 
I didn't have a large enough deposit  19%  39% 
Me/my partner was not on the electoral roll  13%  39% 
The lender made an administrative error  14%  35% 
I was self-employed, have irregular income or a contract worker  12%  33% 
I haven't always lived in the UK  14%  31% 
I'd taken out a payday loan  12%  29% 
I'd made too many credit applications  14%  27% 
I had a large amount of debt  20%  26% 
Me/my partner were not earning enough  18%  25% 
Source: Aldermore Bank 

 

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27 minutes ago, spunko said:

@spygirl

https://www.thisismoney.co.uk/money/mortgageshome/article-9549653/First-time-buyer-mortgage-rejections-spike-Heres-boost-chances-accepted.html

 

 

Why were first-time buyers denied a mortgage? 
Source: Aldermore Bank 
Reason for mortgage application getting rejected March  2020 March 2021 
Poor credit history 19% 41% 
I didn't have a large enough deposit  19%  39% 
Me/my partner was not on the electoral roll  13%  39% 
The lender made an administrative error  14%  35% 
I was self-employed, have irregular income or a contract worker  12%  33% 
I haven't always lived in the UK  14%  31% 
I'd taken out a payday loan  12%  29% 
I'd made too many credit applications  14%  27% 
I had a large amount of debt  20%  26% 
Me/my partner were not earning enough  18%  25% 

 

A combination of no pot to piss in andor foreign then.

 

 

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  • 2 weeks later...
Austin Allegro
On 10/05/2021 at 18:55, JoeDavola said:

Flats still reaching new highs in NI, albeit not as mental fast as the rotten old houses.

Houses here in East Anglia gone insane, selling on spec for full asking price on the same day they go on Rightmove.

£325k for a sh*tty 2/3 bed bungalow that looks like something out of Neighbours c.1986 is fairly common.

But...EA told me it was slowing down a bit now as it was too late to beat the Stamp Duty hike.

Another EA told me, when I viewed one of the said Neighbours bungalows, 'we've had a LOT of interest in this one!' So much so that they lowered the price by £10 grand the next day...

Edited by Austin Allegro
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48 minutes ago, Austin Allegro said:

Houses here in East Anglia gone insane, selling on spec for full asking price on the same day they go on Rightmove.

£325k for a sh*tty 2/3 bed bungalow that looks like something out of Neighbours c.1986 is fairly common.

But...EA told me it was slowing down a bit now as it was too late to beat the Stamp Duty hike.

Another EA told me, when I viewed one of the said Neighbours bungalows, 'we've had a LOT of interest in this one!' So much so that they lowered the price by £10 grand the next day...

To safely beat the SD ended youd need to have properly 'sold' by Feb.

 

 

 

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Guy I work with bought his house in 2018 for 430k.  Clearly spent a bit on it looking at the photos online but I would say no more than 50k.  Been up for a couple of months for £850k, just been reduced to £800k.

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sancho panza

was chatting with a barber the other day-not my hair, and he said he'd had bugger all support from the govt.Some for rent and rates but nothing like he could have earned.

How many million is that that have left the hosuing market?

 

 

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sancho panza
On 10/05/2021 at 10:28, spunko said:

@spygirl

https://www.thisismoney.co.uk/money/mortgageshome/article-9549653/First-time-buyer-mortgage-rejections-spike-Heres-boost-chances-accepted.html

 

 

Why were first-time buyers denied a mortgage? 
Source: Aldermore Bank 
Reason for mortgage application getting rejected March  2020 March 2021 
Poor credit history 19% 41% 
I didn't have a large enough deposit  19%  39% 
Me/my partner was not on the electoral roll  13%  39% 
The lender made an administrative error  14%  35% 
I was self-employed, have irregular income or a contract worker  12%  33% 
I haven't always lived in the UK  14%  31% 
I'd taken out a payday loan  12%  29% 
I'd made too many credit applications  14%  27% 
I had a large amount of debt  20%  26% 
Me/my partner were not earning enough  18%  25% 

 

1+2 +5 Possibly explains why so few transactiosn are at the lower end of the market.

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On 10/05/2021 at 10:28, spunko said:

@spygirl

https://www.thisismoney.co.uk/money/mortgageshome/article-9549653/First-time-buyer-mortgage-rejections-spike-Heres-boost-chances-accepted.html

 

 

Why were first-time buyers denied a mortgage? 
Source: Aldermore Bank 
Reason for mortgage application getting rejected March  2020 March 2021 
Poor credit history 19% 41% 
I didn't have a large enough deposit  19%  39% 
Me/my partner was not on the electoral roll  13%  39% 
The lender made an administrative error  14%  35% 
I was self-employed, have irregular income or a contract worker  12%  33% 
I haven't always lived in the UK  14%  31% 
I'd taken out a payday loan  12%  29% 
I'd made too many credit applications  14%  27% 
I had a large amount of debt  20%  26% 
Me/my partner were not earning enough  18%  25% 

 

Thats good old Boris's levelling up in action. What a fucken cunt he is, i bet Blair wishes he could be as much of a Blairite as this absolute clown and his YTS sidekick.

Edited by Hancock
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11 hours ago, sancho panza said:

was chatting with a barber the other day-not my hair, and he said he'd had bugger all support from the govt.Some for rent and rates but nothing like he could have earned.

How many million is that that have left the hosuing market?

 

 

I was chatting to some agency staff who've worked at the place for years ... they merely got sent home with no notice ... a quick google search estimates 1.5 million agency workers in Britain.

Edited by Hancock
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11 hours ago, sancho panza said:

was chatting with a barber the other day-not my hair, and he said he'd had bugger all support from the govt.Some for rent and rates but nothing like he could have earned.

How many million is that that have left the hosuing market?

 

 

Most hairdressers/ barbers seemed to be self employed, renting the chair.

Thast fine for maximising TCs and earnings.

However .. come covid and as they are neither employees - no furlough, or business  owners - no business payout - they are fucked.

They'll also fall foul of IR35

 

 

 

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