Property crash, just maybe it really is different this time

[With a crooked smile]

8 hours ago, JoeDavola said:

Had a chat with the Halifax the other day and the cheapest 10 year fix with a large deposit about 60% is 3.55%.

Even if you fix for shorter periods the rates are still only 3.3-ish.

The only bad point about 10 year fixes and the reason I've never gone for one is the early exit fees can be horrible.  Worth checking out what the fees are if you want to bail say 4 years in.

I'm generally OK with 5 year fix. The 10 year fixes are temping tho rates wise if you know you are unlikely to want to or need to move over that time frame. 

[JoeDavola]

1 minute ago, With a crooked smile said:

The only bad point about 10 year fixes and the reason I've never gone for one is the early exit fees can be horrible.  Worth checking out what the fees are if you want to bail say 4 years in.

I'm generally OK with 5 year fix. The 10 year fixes are temping tho rates wise if you know you are unlikely to want to or need to move over that time frame. 

Good point hasn’t thought of that.

[wherebee]

6 hours ago, With a crooked smile said:

The only bad point about 10 year fixes and the reason I've never gone for one is the early exit fees can be horrible.  Worth checking out what the fees are if you want to bail say 4 years in.

I'm generally OK with 5 year fix. The 10 year fixes are temping tho rates wise if you know you are unlikely to want to or need to move over that time frame. 

I worked - a long time ago - with a woman who had got a ten year fix when rates were around 10%.  Her fix was 11%, from memory.  She watched rates come down and down and she was locked in paying over the odds by a LOT.  Deflationary times 1980s+

But - if the ten year fix now is 6%, what's the lowest that a variable will really be, ever?  3%?  4%?  So you might be giving up 2%ish but avoiding 12% rates.  Plus the benefit of knowing exactly what you'll be paying each month.  

If I was going for debt now, I'd get a 10 year fix.  The money printing is insane, inflation is just starting, and we either get complete societal collapse (in which case who gives a fuck about your mortgage) or interest rates will go up to 10%+.

[With a crooked smile]

1 hour ago, wherebee said:

I worked - a long time ago - with a woman who had got a ten year fix when rates were around 10%.  Her fix was 11%, from memory.  She watched rates come down and down and she was locked in paying over the odds by a LOT.  Deflationary times 1980s+

But - if the ten year fix now is 6%, what's the lowest that a variable will really be, ever?  3%?  4%?  So you might be giving up 2%ish but avoiding 12% rates.  Plus the benefit of knowing exactly what you'll be paying each month.  

If I was going for debt now, I'd get a 10 year fix.  The money printing is insane, inflation is just starting, and we either get complete societal collapse (in which case who gives a fuck about your mortgage) or interest rates will go up to 10%+.

They aren't anything like 6%. They are sub 3.

It's inflate away the debt time. It's what the government has been trying to do for years. 

https://www.theguardian.com/money/2022/jun/18/10-year-fixed-rate-uk-mortgages-value-loans-deals

[With a crooked smile]

Here we go, as I said, inflate away the debt more big wage rises. Affordability will gradually improve

https://www.bbc.co.uk/news/business-61941595

[haroldshand]

25 minutes ago, With a crooked smile said:

Here we go, as I said, inflate away the debt more big wage rises. Affordability will gradually improve

https://www.bbc.co.uk/news/business-61941595

It's not the news I want to hear but seriously good luck to them, it's the private sector and I cannot see a problem with them spending their money however they like. 

But I have to agree with you about the risk of debt being inflated away, we should have seen signs by now of a struggling housing market but there is not much to go on.

[Spiney Norman]

3 minutes ago, haroldshand said:

, we should have seen signs by now of a struggling housing market but there is not much to go on.

I'm begining to see the housing market struggle locally (West Midlands).

This time last year when houses came on the market there was a bidding war immediately with sealed bids everything was selling above asking prices in just two weeks.

This year is very different, not a lot coming on to the market but there appears to be little interest from buyers and houses just sit on rightmove for weeks and then the asking prices reduces and still no buyers.

[haroldshand]

12 minutes ago, Spiney Norman said:

I'm begining to see the housing market struggle locally (West Midlands).

This time last year when houses came on the market there was a bidding war immediately with sealed bids everything was selling above asking prices in just two weeks.

This year is very different, not a lot coming on to the market but there appears to be little interest from buyers and houses just sit on rightmove for weeks and then the asking prices reduces and still no buyers.

I am looking at Cambs, Suffolk and a few other areas and through the eyes of the many BTL landlords I know and apart from the few slight alarm bells ringing everything is holding up.

Nationwide is out this week which should be interesting, but I suspect we are going to get yet another rise.

[With a crooked smile]

1 hour ago, haroldshand said:

It's not the news I want to hear but seriously good luck to them, it's the private sector and I cannot see a problem with them spending their money however they like. 

But I have to agree with you about the risk of debt being inflated away, we should have seen signs by now of a struggling housing market but there is not much to go on.

Wages increase- HMRCs income goes up. Gov gets more money to chuck at stuff. Either buying schemes or public sector wages. Or random shit like foreign aid..

[JoeDavola]

17 hours ago, wherebee said:

I worked - a long time ago - with a woman who had got a ten year fix when rates were around 10%.  Her fix was 11%, from memory.  She watched rates come down and down and she was locked in paying over the odds by a LOT.  Deflationary times 1980s+

But - if the ten year fix now is 6%, what's the lowest that a variable will really be, ever?  3%?  4%?  So you might be giving up 2%ish but avoiding 12% rates.  Plus the benefit of knowing exactly what you'll be paying each month.  

If I was going for debt now, I'd get a 10 year fix.  The money printing is insane, inflation is just starting, and we either get complete societal collapse (in which case who gives a fuck about your mortgage) or interest rates will go up to 10%+.

Yes I’m guessing that if I took out say £100k of mortgage debt now that £100k will be worth a great deal less by the end of the 10 year fix.

EDIT: I was quoted 3.55% for a 10 year fix.

Edited June 26, 2022 by JoeDavola

[HousePriceMania]

 

Must be bad 

[Noallegiance]

4 minutes ago, HousePriceMania said:

 

Must be bad 

, old people are remortgaging their paid-off/nearly paid-off houses before the prices put them in the negative equity that wouldn't have happened had they not remortgaged.....

Righto.

Are they forgetting that they still need to live somewhere? Or do they still think that prices will go up to cover it......which forgets about the 'equity release before the crash' thing......

Or am I the confused one?

[HousePriceMania]

2 minutes ago, Noallegiance said:

, old people are remortgaging their paid-off/nearly paid-off houses before the prices put them in the negative equity that wouldn't have happened had they not remortgaged.....

Righto.

Are they forgetting that they still need to live somewhere? Or do they still think that prices will go up to cover it......which forgets about the 'equity release before the crash' thing......

Or am I the confused one?

Probably not, but the 'CRASH' headline ought to scare a few boomers.  

[ste]

5 hours ago, Noallegiance said:

, old people are remortgaging their paid-off/nearly paid-off houses before the prices put them in the negative equity that wouldn't have happened had they not remortgaged.....

Righto.

Are they forgetting that they still need to live somewhere? Or do they still think that prices will go up to cover it......which forgets about the 'equity release before the crash' thing......

Or am I the confused one?

You are confused.

The government will merely bail them out. Or it will be the next PPI/Personal Injury type claim that pops up every few years where everyone gets compensation. 

[HousePriceMania]

A quote from mumsnet

 

[haroldshand]

8 hours ago, HousePriceMania said:

 

Must be bad 

Daily Express, well I be buggered

[Chewing Grass]

Just done my 3 digit postcode search and this popped up, I know its a mundane 60s semi in an upper working class area where people do not really earn enough to escape from so few houses appear on the market each year in the estate of about 160 houses. For reference the previous record holder of the two houses sold in 2021 was £279K for a 4 bed.

This was the place in 2018 and sold for £220,000.

 

Edited June 27, 2022 by Chewing Grass

[HousePriceMania]

Im starting to get the feeling things aint right with the worlds housing markets

 

[sancho panza]

On 26/06/2022 at 19:46, haroldshand said:

I am looking at Cambs, Suffolk and a few other areas and through the eyes of the many BTL landlords I know and apart from the few slight alarm bells ringing everything is holding up.

Nationwide is out this week which should be interesting, but I suspect we are going to get yet another rise.

I see now reason for an immediate drop,we'll need to see how IR rises hit and what effect wage rises have as per @With a crooked smile says,it's possible that thesis comes through.Unlikely when combined with moentary/fiscal policy issues but still possible.

[With a crooked smile]

Just now, sancho panza said:

I see now reason for an immediate drop,we'll need to see how IR rises hit and what effect wage rises have as per @With a crooked smile says,it's possible that thesis comes through.Unlikely when combined with moentary/fiscal policy issues but still possible.

I think ToS got many people to think a crash would happen over night and you could be quids in anticipating that. Unfortunately it's more complicated I doubt prices would collapse over night. If a property loses value for a period of 12 months you need somewhere to live during that period so rental loss also needs to be taken into consideration. 

[haroldshand]

1 hour ago, With a crooked smile said:

I think ToS got many people to think a crash would happen over night and you could be quids in anticipating that. Unfortunately it's more complicated I doubt prices would collapse over night. If a property loses value for a period of 12 months you need somewhere to live during that period so rental loss also needs to be taken into consideration. 

I am of the same opinion, it's far more complicated than ToS would of had you believe and dozens were posting just that several years ago for them to then vanish into banishment City. If people think Plan A is that homeowners struggle, rush to the exit in numbers, house prices fall in value and then you move in after buying a bargain then many are probably going to be disappointed, though that scenario is possible.

Cost of living crisis is a real thing and is playing out now with Post coming October IMO having the potential to showing some real dark and miserable times, but I have no idea how the housing market is going to react and I am not 100% certain it's going to be a season of major falls in prices.

Shall we just say people are funny and often have weird odd priorities with housing being one of them, one of my Sisters for example would rather lose a limb than be seen  living with the "dregs of society"

Edited June 28, 2022 by haroldshand

[With a crooked smile]

58 minutes ago, haroldshand said:

I am of the same opinion, it's far more complicated than ToS would of had you believe and dozens were posting just that several years ago for them to then vanish into banishment City. If people think Plan A is that homeowners struggle, rush to the exit in numbers, house prices fall in value and then you move in after buying a bargain then many are probably going to be disappointed, though that scenario is possible.

Cost of living crisis is a real thing and is playing out now with Post coming October IMO having the potential to showing some real dark and miserable times, but I have no idea how the housing market is going to react and I am not 100% certain it's going to be a season of major falls in prices.

Shall we just say people are funny and often have weird odd priorities with housing being one of them, one of my Sisters for example would rather lose a limb than be seen  living with the "dregs of society"

I'd be amazed if there were no good value options later in the year spring next when cost of living kicks in. 

Will never be at the level that someone like @HousePriceMania would buy at.

[Axeman123]

13 minutes ago, With a crooked smile said:

I'd be amazed if there were no good value options later in the year spring next when cost of living kicks in.

The thing is, someone doesn't need to buy an index of house prices but just one. Individual properties could plummet while indexes hold up on low transactions.

Anyone inheriting an elderly relatives neglected house while struggling to keep up the faux-rich lifestyle many people have taken for granted since QE etc is going to be very eager to sell. 

[With a crooked smile]

9 minutes ago, Axeman123 said:

The thing is, someone doesn't need to buy an index of house prices but just one. Individual properties could plummet while indexes hold up on low transactions.

Anyone inheriting an elderly relatives neglected house while struggling to keep up the faux-rich lifestyle many people have taken for granted since QE etc is going to be very eager to sell. 

This is very true. I've always maintained that during recessions the house price falls were often essential bad that the data indicates. My view is that many of the houses sold where repossessions where the owners hadn't spent any money on the property in years and the market value would always have been lower than the same property in the same street that was in ordinary condition. 

[Bobthebuilder]

19 minutes ago, With a crooked smile said:

This is very true. I've always maintained that during recessions the house price falls were often essential bad that the data indicates. My view is that many of the houses sold where repossessions where the owners hadn't spent any money on the property in years and the market value would always have been lower than the same property in the same street that was in ordinary condition. 

This is something that is overlooked in the 1989-1997 downturn. I was looking for my first flat in 1996, I probably looked at 35 flats before buying one. The one I bought was the best of the bunch but still required an awful lot of work.

My current place that I bought in 2012 was a probate and also needed loads of work.

When I look at places for sale these days, they seem to be expensive even if requiring extensive renovations. This is where the market will fall the most this time.

Same as it ever was.