Property crash, just maybe it really is different this time

[HousePriceMania]

22 hours ago, spygirl said:

Ah but whys he selling?

Is it a liked to move sale?

Or is it a have to sell move.

I'm seeing several of the latter as people I suspect have IO mortgage suddenly hofrom 2% to  7% and start facing down the fast approaching endd lf mortgage.

Why, Schools.

Have to sell to move.

In effect dont have to move but then they have to send their child to what they see as a shit school.

 

 

Edited June 19, 2023 by HousePriceMania

[MrXxxx]

This sounds like good news:

https://www.msn.com/en-gb/money/other/no-extra-help-for-households-struggling-with-mortgage-payments-says-pm/ar-AA1cJjvW?ocid=mailsignout&pc=U591&cvid=b679bdefb8a74a9d862c2f20ad1464bf&ei=12

...however our politicians nowadays are 'weathercocks', and so these strong words could change overnight, especially with an election looming in the near future.

[BoSon]

10 hours ago, Wight Flight said:

My guess is they will order banks to let people pay what they can afford and roll the difference on to the principle loan. Maybe a gov guarantee thrown in if this takes a loan into a low equity zone.

Banks will be happy, BofE can raise rates without too much bleating from homeowners. Pound strengthens, inflation drops, everything back to normal.

Until they try to reduce rates again.

So like having a credit card maxed out and only able to pay the minimum each month, so end up paying compound interest on the debt like an ever growing runaway train.

Surely the masses are well used to Martin Lewis's catchphrase of 'In full' when referring to paying off credit cards used for short term cashflow, but maybe too dumb to see the same applies to other types of finance that has the potential to be like the national debt where just servicing the interest payments becomes a hard task.

[BoSon]

40 minutes ago, MrXxxx said:

This sounds like good news:

https://www.msn.com/en-gb/money/other/no-extra-help-for-households-struggling-with-mortgage-payments-says-pm/ar-AA1cJjvW?ocid=mailsignout&pc=U591&cvid=b679bdefb8a74a9d862c2f20ad1464bf&ei=12

...however our politicians nowadays are 'weathercocks', and so these strong words could change overnight, especially with an election looming in the near future.

They're only interested in what gets the most voters onside:

 

Quote

 

The idea of the government providing help for mortgage customers is more nuanced than the furlough jobs scheme or recent Energy Price Guarantee.

While those were universal, less than 30% of UK households have a mortgage.

Providing support for them risks alienating older voters who own their homes outright, and younger people who cannot even afford to buy.

 

So it'll be hot air to make it appear they're doing something. Just more bullshine like how they're 'working very hard' to sort out immigration and all the other big issues people have been told to be concerned about.

As ever, see what they do not what they say, but all the measures will take years to implement and show any progress, so for the election it's more empty pledges.

 

 

[Frank Hovis]

3 minutes ago, BoSon said:

So like having a credit card maxed out and only able to pay the minimum each month, so end up paying compound interest on the debt like an ever growing runaway train.

Surely the masses are well used to Martin Lewis's catchphrase of 'In full' when referring to paying off credit cards used for short term cashflow, but maybe too dumb to see the same applies to other types of finance that has the potential to be like the national debt where just servicing the interest payments becomes a hard task.

 

Younger people who don't remember the late eighties / early nineties, or anything prior to that, will be inclined to see the current level of interest rates as an unusual and passing phase which will be followed by a return to the "new normal" of 1% base rates.

Therefore it makes sense to roll up the interest into the loan as when that new normal is regained the monthly payments, even including those rolled up, will be cheap.

Those of us who think that we are back to the normal however see this as a good way to lose all the equity in your house when the bank inevitably repossesses it and auctions it off at a cheap parice in order to clear the mortgage.

I would say that the majority on here regard those 1% rates as a horrendus aberration from economic normality but western governments and central banks were all in favour of them.

At present the level of inflation means that they aren't coning back any time soon but with the economic lunacy to which we have been subject to from Greenspan, Carney and Brown who is to say that they won't manage to force them back down to this level?

Those of us who were on ToS pre 2010 saw a house price crash as inevitable, unavoidable, but we didn's in our worst dreams think what governments might do.

I would like to think that they can't do it again but Japan is still pursuing the lwo interest rate policy despite a soaring national debt and Turkey's response to very high inflation has been to cut, admittedly high, interest rates.

In a mad world where "market forces" are viewed as a bad thing by even Conservative governments when it comes to the housing market I would suggest to all those rubbing their hands at the thought of being able to buy a decent home at a reasonable price because the government can't possibly stop house prices falling now:

 

[mh9000]

3 hours ago, JoeDavola said:

Anedotal but was over in East Belfast for Fathers Day and all I saw were "Sale Agreed" signs all over the shop on these pokey wee semi's that are 30%+ more expensive than they were pre-pandemic.

Had to laugh as one of them I passed had the word "Stunning" underneath the EA's sign just in case you didn't spot that it was stunning. You were likey to miss this on account of it not being stunning at all.

Left with the impression that the IR rises don't seem to be making much of a difference in East Belfast yet.

It does take a few months (more like 12-18 months) for IR rises to feed through into mortgages and economy, even the BoE admit only about 1/3rd of the effect has been felt from last year’s increases, and they’re still increasing as of last meeting. 
 

www.ft.com/content/f9f9c58d-3ab4-4736-a5eb-fa709a4d3924

Edited June 19, 2023 by mh9000
Link to article

[spygirl]

24 minutes ago, Frank Hovis said:

 

Younger people who don't remember the late eighties / early nineties, or anything prior to that, will be inclined to see the current level of interest rates as an unusual and passing phase which will be followed by a return to the "new normal" of 1% base rates.

Therefore it makes sense to roll up the interest into the loan as when that new normal is regained the monthly payments, even including those rolled up, will be cheap.

Those of us who think that we are back to the normal however see this as a good way to lose all the equity in your house when the bank inevitably repossesses it and auctions it off at a cheap parice in order to clear the mortgage.

I would say that the majority on here regard those 1% rates as a horrendus aberration from economic normality but western governments and central banks were all in favour of them.

At present the level of inflation means that they aren't coning back any time soon but with the economic lunacy to which we have been subject to from Greenspan, Carney and Brown who is to say that they won't manage to force them back down to this level?

Those of us who were on ToS pre 2010 saw a house price crash as inevitable, unavoidable, but we didn's in our worst dreams think what governments might do.

I would like to think that they can't do it again but Japan is still pursuing the lwo interest rate policy despite a soaring national debt and Turkey's response to very high inflation has been to cut, admittedly high, interest rates.

In a mad world where "market forces" are viewed as a bad thing by even Conservative governments when it comes to the housing market I would suggest to all those rubbing their hands at the thought of being able to buy a decent home at a reasonable price because the government can't possibly stop house prices falling now:

 

Younger .....

Forwhtwaver reason I dont really have a good, sequencial memory until 17ish, when I started to notice and rememer stuff.

Before then, stuff happened. Some of it remember, some of it I dont.

However, Ive apretty good memory of events since 17. 

I do need online nubmers to get actual nubmers to things.

My point - Lets draw the line at 18 in 1989.

That person would be 52.

Nothing young about them.

Any Brit under 45 would have been 19 when the UK finally left the last property slow down (1999ish).

They have not expereinceced a proper board based austerity.

They have experince what can only be described as inter genrationa lslavery, where they are made to pay high to and live in OAPs BTLs.

Theyve never exiervced a hard slow down - both the 2000 and 2008 were 'spent out'  by Brown. That spending out is now comign home to roost.

Maybe we need a Death of Deano' thread?

https://www.thesun.co.uk/money/8016831/young-couple-get-the-last-laugh-buying-170k-home-at-19-after-broker-thought-they-were-joking/

 

https://youngcardriver.com/finance/car-loans/

 

 

[Frank Hovis]

7 minutes ago, spygirl said:

Maybe we need a Death of Deano' thread?

 

I thought that Deano meme was vastly out of date the first time I saw it.  He was working shifts in Dixons or somesuch and yet still had a three bed newbuild house with a newish prestige car on the drive.

Not these days you don't.

[spygirl]

7 minutes ago, Frank Hovis said:

 

I thought that Deano meme was vastly out of date the first time I saw it.  He was working shifts in Dixons or somesuch and yet still had a three bed newbuild house with a newish prestige car on the drive.

Not these days you don't.

https://unherd.com/2023/04/the-political-power-of-deano/

[Dave Bloke]

13 hours ago, One percent said:

Well looks like they are going to shove another prop under the housing market. Twats. 
 

https://www.bbc.co.uk/news/business-65922072

Help for people struggling with their mortgages is being kept "under review", cabinet minister Michael Gove has said.

according to economists any "help" will be inflationary causing a death spiral for the economy, the more they help, the more interest rates will have to rise to balance the "help" money printing

[Wight Flight]

Just now, Dave Bloke said:

according to economists any "help" will be inflationary causing a death spiral for the economy, the more they help, the more interest rates will have to rise to balance the "help" money printing

Oh well.

Sacrifices it will have to be then.

Shame.

[spunko]

One of the best panic porn headlines so far:

Average two-year fixed mortgage rates officially hit SIX PER CENT: Rishi Sunak bats away calls to help crippled homeowners amid fears fresh BoE interest rate hike this week could spark house price crash and recession

 

https://www.dailymail.co.uk/news/article-12209789/Rishi-Sunak-bats-away-calls-help-crippled-mortgage-payers.html

[spygirl]

Mortgage rates: Average two-year fix now above 6%

https://www.bbc.co.uk/news/business-65931132

Last time mortgage SVRS weer this high ....  2007ish.

 

Just now, spunko said:

One of the best panic porn headlines so far:

Average two-year fixed mortgage rates officially hit SIX PER CENT: Rishi Sunak bats away calls to help crippled homeowners amid fears fresh BoE interest rate hike this week could spark house price crash and recession

 

https://www.dailymail.co.uk/news/article-12209789/Rishi-Sunak-bats-away-calls-help-crippled-mortgage-payers.html

Snap!
Doom cycle!

[Dave Bloke]

2 minutes ago, spunko said:

One of the best panic porn headlines so far:

Average two-year fixed mortgage rates officially hit SIX PER CENT: Rishi Sunak bats away calls to help crippled homeowners amid fears fresh BoE interest rate hike this week could spark house price crash and recession

Pishi must know he's going to lose the next election? The best bet is to get Starma in asap.

[spunko]

16 minutes ago, spygirl said:

https://unherd.com/2023/04/the-political-power-of-deano/

Interesting article, but the author in his quest to argue why Deano holds the keys to Tory victory, fails to address the elephant in the room: Deano doesn't vote.

Boomers who don't want Deano's slavebox Barratt home next door to them, do vote. And these are the people who are mightily pissed off with the level of Tory housebuilding going on lately. 

[spygirl]

United Kingdom BBA Mortgage Rate

[spunko]

Never heard of Ingleby Barwick before but WTF. Just looked it up on Google Maps. How can you build an entire city out of Persimmon and Barratt homes? Mental. I thought Kings Hill down here was bad, but Ingleby Barwick is about 5x the size.

[spygirl]

Just now, spunko said:

Never heard of Ingleby Barwick before but WTF. Just looked it up on Google Maps. How can you build an entire city out of Persimmon and Barratt homes? Mental. I thought Kings Hill down here was bad, but Ingleby Barwick is about 5x the size.

I dont think even stuey was daft enough to buy there.

 

[Boon]

The media are basically the same as the overleveraged people struggling, by and large 30-something southeners.

Expect the column inches dedicated to this to keep on coming and coming. Stuff like payment holidays or deferred payments aren't gonna be enough, they want actual free money, because 'it's not their fault'.

I can't imagine any paper or person wants to write about the moral hazard of it all. Any kind of free money would result in a BTFD frenzy, because if there is a backstop now, that sets an unwritten precedent for the future.

Most of the boomers and other people have no backbone, pretending to have no opinion, but secretly wanting it to pass because it'll benefit them.

You would hope that this topic is nipped in the bud but I doubt it. It's gonna be amusing but I can honestly envisage a middle class protest coming. Maybe those 'Don't Pay' organisers have gotten bored and need a new project.

https://dontpay.uk/articles/a-thousand-new-beginnings/

Edited June 19, 2023 by Boon

[HousePriceMania]

Now, about that house price crash...

 

2 year at 5% now.

12 months ago you could get a 0.85% 2 year fixed rate mortgage.

[eta-carinae]

1 hour ago, Frank Hovis said:

 

Younger people who don't remember the late eighties / early nineties, or anything prior to that, will be inclined to see the current level of interest rates as an unusual and passing phase which will be followed by a return to the "new normal" of 1% base rates.

Therefore it makes sense to roll up the interest into the loan as when that new normal is regained the monthly payments, even including those rolled up, will be cheap.

Those of us who think that we are back to the normal however see this as a good way to lose all the equity in your house when the bank inevitably repossesses it and auctions it off at a cheap parice in order to clear the mortgage.

I would say that the majority on here regard those 1% rates as a horrendus aberration from economic normality but western governments and central banks were all in favour of them.

At present the level of inflation means that they aren't coning back any time soon but with the economic lunacy to which we have been subject to from Greenspan, Carney and Brown who is to say that they won't manage to force them back down to this level?

Those of us who were on ToS pre 2010 saw a house price crash as inevitable, unavoidable, but we didn's in our worst dreams think what governments might do.

I would like to think that they can't do it again but Japan is still pursuing the lwo interest rate policy despite a soaring national debt and Turkey's response to very high inflation has been to cut, admittedly high, interest rates.

In a mad world where "market forces" are viewed as a bad thing by even Conservative governments when it comes to the housing market I would suggest to all those rubbing their hands at the thought of being able to buy a decent home at a reasonable price because the government can't possibly stop house prices falling now:

 

I have been referring to them as "emergency rates" since I first heard that word used in 2008. It's incredible we were still there 15 years later.

But also, I don't see why the government should use my money to bail out those too stupid/naive/arrogant to do even the most basic research before loading up on 100,000s of debt. They weren't going to share their gainz with me, were they?

[Bus Stop Boxer]

 

[spygirl]

https://www.mumsnet.com/talk/property/4813815-5-mortgage-rates?utm_campaign=thread&utm_medium=share

Lightscribe · 17/06/2023 13:44

We have a huge problem bubbling in this country. The government has done two things in particular that will continue to detrimentally affect the UK in particular.

The first is frozen tax thresholds until 2028. Lots will be continually pushed into the higher tax brackets (and won’t know to offset tax in a pension). People are lobbying for higher pay rises, but some will actually be worse off, taking into account loss of government benefits and higher tax. You’re better off for example earning £99k than £130k.

The second is giving inflationary uplifts to the non-productive majority of the country (54% does not pay tax). Triple locks, heating allowances, index linked public sector pensions, universal credit inflationary uplifts all come out of the public purse. The government are desperately trying to reduce inflation and they can’t because it proving sticky. Just as many Uber Eats drivers are on the road and holidays are being booked out.

The monetary tool of raising interest rates is to lessen inflation by cooling demand. All that’s being achieved at the moment is stuffing up the tax paying younger generation families, they are the ones with big mortgages, high LTVs and most outgoings.

Others have said on here that inflation is a result of Covid, war and climate change?? Nope, they are just catalysts. It’s a direct result of printing trillions and injecting it into the economy, like ice repeatedly pointed out for years in my comments on here (even before Covid).

The US treasury 2 year yield is still rising. Interest rates are still going to have to rise from here and the UK is behind the US.

 

[One percent]

1 minute ago, spygirl said:

https://www.mumsnet.com/talk/property/4813815-5-mortgage-rates?utm_campaign=thread&utm_medium=share

Lightscribe · 17/06/2023 13:44

We have a huge problem bubbling in this country. The government has done two things in particular that will continue to detrimentally affect the UK in particular.

The first is frozen tax thresholds until 2028. Lots will be continually pushed into the higher tax brackets (and won’t know to offset tax in a pension). People are lobbying for higher pay rises, but some will actually be worse off, taking into account loss of government benefits and higher tax. You’re better off for example earning £99k than £130k.

The second is giving inflationary uplifts to the non-productive majority of the country (54% does not pay tax). Triple locks, heating allowances, index linked public sector pensions, universal credit inflationary uplifts all come out of the public purse. The government are desperately trying to reduce inflation and they can’t because it proving sticky. Just as many Uber Eats drivers are on the road and holidays are being booked out.

The monetary tool of raising interest rates is to lessen inflation by cooling demand. All that’s being achieved at the moment is stuffing up the tax paying younger generation families, they are the ones with big mortgages, high LTVs and most outgoings.

Others have said on here that inflation is a result of Covid, war and climate change?? Nope, they are just catalysts. It’s a direct result of printing trillions and injecting it into the economy, like ice repeatedly pointed out for years in my comments on here (even before Covid).

The US treasury 2 year yield is still rising. Interest rates are still going to have to rise from here and the UK is behind the US.

 

I advised my kids to not enter the housing market as it was going to crash. So far I’ve been proved wrong. I hope I’m correct going forward. A government who bails these over extended fools out should be shot for treason.  

[Rare Bear]

7 hours ago, JoeDavola said:

Anedotal but was over in East Belfast for Fathers Day and all I saw were "Sale Agreed" signs all over the shop on these pokey wee semi's that are 30%+ more expensive than they were pre-pandemic.

Had to laugh as one of them I passed had the word "Stunning" underneath the EA's sign just in case you didn't spot that it was stunning. You were likey to miss this on account of it not being stunning at all.

Left with the impression that the IR rises don't seem to be making much of a difference in East Belfast yet.

But the sale isn't a sale until the money's been paid. And that applies to everything, not only houses.