Property crash, just maybe it really is different this time

[haroldshand]

On 02/10/2022 at 10:32, spunko said:

Seems to be in the denial stage still with many sellers. Put the house on at £600k, no offers or interest. EA convinces the seller to reduce it to £500k but it's okay because you're putting "Guide Price £500 - £600k" so it doesnt count as a reduction apparently

I witnessed this a lot in the last real property crash in the early 1990's, the "I am not giving it away" mentality as their reductions were always less the everyone else's who were more realistic and who also waited month after month and even a couple of years to get that sucker buyer that never came. usually because of their greed and penny pinching they lost far more than if they had taken that initial big reduction in the early days.

This is a great subject for me right now as I have a customer in a west Cambs Village who is the most money obsessed person I know and who also has a big house on the market. He is already getting into bickering matches with Estate Agents who are "not doing their job" etc and you just know he will expect the top of peak ever prices plus. I just know in my head he will not sell now because he will never risk losing a penny when realistically he will lose £10,000's, greedy c***

[HousePriceMania]

Another MP comes out screaming for support for the poor old mortgage owners

 

[Axeman123]

14 minutes ago, HousePriceMania said:

Another MP comes out screaming

That probably strengthens Kwarteng's position for now, Torys tend to unite against outside attacks.

[HousePriceMania]

5 minutes ago, Axeman123 said:

That probably strengthens Kwarteng's position for now, Torys tend to unite against outside attacks.

Labour are all over it!!!

[sancho panza]

Mon 3 Oct,another steady as she goes increase inventryo for Leicestershire at 4674,mainly it would appear as deals collapse.Introduces a bias in buyers to wait out,which then becomes a self fulfilling prohecy.It was ever thus.Be interesting to watch this theme if it strengthens over the next weeks.If I was a buyer at the mo,I'd drag it out to see what happens or jsut plain pull out

 

Rightmove inventory - aord of warning the individual categories don't add up to the total,presuming due to some being in two categories

 

Leicestershire county

Date         Inventory    Inv incl SSTC     detached    semi     terraced      flats     bungalows

14/8/22      3950

2/9/22        4210

12/9/22     4354

19/9/22     4501

26/9/22    4585          10359                                

3/10/22    4674          10361             1776              1030         727             532          485

[sancho panza]

1 hour ago, haroldshand said:

I witnessed this a lot in the last real property crash in the early 1990's, the "I am not giving it away" mentality as their reductions were always less the everyone else's who were more realistic and who also waited month after month and even a couple of years to get that sucker buyer that never came. usually because of their greed and penny pinching they lost far more than if they had taken that initial big reduction in the early days.

This is a great subject for me right now as I have a customer in a west Cambs Village who is the most money obsessed person I know and who also has a big house on the market. He is already getting into bickering matches with Estate Agents who are "not doing their job" etc and you just know he will expect the top of peak ever prices plus. I just know in my head he will not sell now because he will never risk losing a penny when realistically he will lose £10,000's, greedy c***

I think a customer like this would be a curse if you're an EA,lot of hard work and possible abuse as you fail to produce a buyer at the reuqired level of the ponzi the seller wishes to exit the market at.Even more hard work as they chase the market down.

However,it's probably good business to have some trophy houses on your books.

[sancho panza]

3 hours ago, Boon said:

I think you are right:

https://forums.moneysavingexpert.com/discussion/6391405/natwest-broker-rates-going-up-from-tomorrow-3rd-oct

It seems as if all providers have stuck on some real hefty increases. Last week it could have been an emergency rise any way, doesn't look that way now.

Although I also think this might mean that even if there is a 100bps rise in November the rates won't change much, only the SVR

It's also about margin as well.Why would the bank give you the laon at say 3.5% when it knows it can get 5.5% if it jsut rejects you and reoffers it out there.

[HousePriceMania]

 

[HousePriceMania]

[Ash4781b]

10 hours ago, Boon said:

I think you are right:

https://forums.moneysavingexpert.com/discussion/6391405/natwest-broker-rates-going-up-from-tomorrow-3rd-oct

It seems as if all providers have stuck on some real hefty increases. Last week it could have been an emergency rise any way, doesn't look that way now.

Although I also think this might mean that even if there is a 100bps rise in November the rates won't change much, only the SVR

“In recent days, major lenders such as NatWest, Nationwide and Virgin Money have increased their rates.

NatWest did so on Sunday, a highly unusual day of the week to make a change, according to brokers, signalling the speed at which the market is changing.”

https://www.bbc.co.uk/news/business-63119047

I did wonder when I looked at moneyfacts the other day how fast things must be moving. Not in the sector. No surprise there were many more voices about these increases this morning. A real shock to the housing market this one. 

[HousePriceMania]

1 hour ago, Ash4781b said:

“In recent days, major lenders such as NatWest, Nationwide and Virgin Money have increased their rates.

NatWest did so on Sunday, a highly unusual day of the week to make a change, according to brokers, signalling the speed at which the market is changing.”

https://www.bbc.co.uk/news/business-63119047

I did wonder when I looked at moneyfacts the other day how fast things must be moving. Not in the sector. No surprise there were many more voices about these increases this morning. A real shock to the housing market this one. 

The squealing from the housing piggies is quite something

 

They all want the fed to pivot God help us if they do 

[AWW]

I can't see this one being a long, slow, drawn-out decline like the one in the first half of the 90s. Things are going to unravel extremely quickly. Living expenses are increasing at a far greater rate. IR hikes are also happening at an unprecedented rate. 

BBR went from 10, to 12, then to 15% on Black Wednesday. A 50% increase.

Look at what's happening now though. Dec '21, a 150% increase. Feb this year, doubled. Then another 50% in March. And we've tripled since then. Market pricing in another 50% in Nov. It's Black Wednesday every month at the moment. UK resi is going to be utter carnage by this time next year.

Last week, there was a widely-circulated prediction of a 10-15% fall in UK house prices next year. But we're already there in London if you pay even cursory attention to asking prices.

I was chatting to my sister-in-law just weeks ago - it was the August Bank Holiday - about the fact that we'd had our S21 and blown through the notice period. "Why don't you just buy somewhere, anywhere, just for now?" I replied that I'd be mad to do that, as house prices were about to get slaughtered.  She replied, "It's just never going to happen". She's a homeowner with a small mortgage, just upsized, and has an AirBnB flat which I think just about washes its face. Not even a chance of being in negative equity, but pretty much all her wealth is in bricks and mortar. Now, she's convinced that we're on the verge of house price armageddon.

Five weeks! That's how long it has taken for a complete about-face on the outlook for the housing market.

I've told her to sell the AirBnB and stick the cash in an ISA. She hasn't taken my advice. Yet.

[Boon]

To be fair the chances of a pivot seem a bit higher this week. What if the central banks accept higher inflation?

If rates topped around 3% for some years that might mean mortgage rates around 5%. If the new accepted rate of inflation was higher than this you would again get the YOLOing into property. Sure prices would have to fall in the next year in certain overpriced places but wages would also be inflating so prices would resume growth again once a bottom was hit.

I just don't forsee the Cons breaking the housing market, as they don't benefit. Making an example of a few people is quite handy to prevent the whole thing from turning speculative again, but as you can see from the u-turn today it is only gonna take a moderate amount of pressure to get them to fold. Papers covering stories about people being repo'd is not easy to ignore.

[HousePriceMania]

11 minutes ago, Boon said:

To be fair the chances of a pivot seem a bit higher this week. What if the central banks accept higher inflation?

If rates topped around 3% for some years that might mean mortgage rates around 5%. If the new accepted rate of inflation was higher than this you would again get the YOLOing into property. Sure prices would have to fall in the next year in certain overpriced places but wages would also be inflating so prices would resume growth again once a bottom was hit.

I just don't forsee the Cons breaking the housing market, as they don't benefit. Making an example of a few people is quite handy to prevent the whole thing from turning speculative again, but as you can see from the u-turn today it is only gonna take a moderate amount of pressure to get them to fold. Papers covering stories about people being repo'd is not easy to ignore.

The pivot as you call it seems to be fully on economic collapse. 

 

[Inque]

Interesting ones to watch maybe new developments - I’ve been looking at a couple and just seen previously sold/reserved house back on for sale, just as the help to buy scheme is going to close to new applications.

 

[No One]

On 30/09/2022 at 17:35, No One said:

354 +9 in 3 days

344 -10 in 3 days

[Bus Stop Boxer]

11 hours ago, HousePriceMania said:

Another MP comes out screaming for support for the poor old mortgage owners

 

It took Quasi being outright (wrongly) blamed for mortgage hikes, for him to actually tell the British people the truth

IE The Fed.

Whereas Truss said with a straight face it was Putins fault on TV this weekend just gone.

I also heard that she has rowed back on the green levy suspension. Quelle  sur-fucking-prise.

How can anyone have a shred of faith in this shitshow?

David Starkey nailed it tonight, on Mark Steyns excellent show, 25 years of Blair, and now Truss is getting the blame.

With comments like the Putin one, and the green sell out, she fucking deserves all she gets.

Are there even 5 straight talking politicians left in this stink hole of a country?

Edited October 3, 2022 by Bus Stop Boxer

[Chewing Grass]

5 minutes ago, Bus Stop Boxer said:

It took Quasi being outright (wrongly) blamed for mortgage hikes, for him to actually tell the British people the truth

IE The Fed.

Whereas Truss said with a straight face it was Putins fault on TV this weekend just gone.

I also heard that she has rowed back on the green levy suspension. Quelle  sur-fucking-prise.

How can anyone have a shred of faith in this shitshow?

David Starkey nailed it tonight, on Mark Steyns excellent show, 25 years of Blair, and now Truss is getting the blame.

With comments like the Putin one, and the green sell out, she fucking deserves all she gets.

Are there even 5 straight talking politicians left in this stink hole of a country?

Truss is a slightly more polished version of that abomination of a press secretary The White House' has.

[HousePriceMania]

6 minutes ago, Bus Stop Boxer said:

It took Quasi being outright (wrongly) blamed for mortgage hikes, for him to actually tell the British people the truth

IE The Fed.

Whereas Truss said with a straight face it was Putins fault on TV this weekend just gone.

I also heard that she has rowed back on the green levy suspension. Quelle  sur-fucking-prise.

How can anyone have a shred of faith in this shitshow?

David Starkey nailed it tonight, on Mark Steyns excellent show, 25 years of Blair, and now Truss is getting the blame.

With comments like the Putin one, and the green sell out, she fucking deserves all she gets.

Are there even 5 straight talking politicians left in this stink hole of a country?

If you can find 1 I'd be surprised 

[spygirl]

19 hours ago, HousePriceMania said:

Another MP comes out screaming for support for the poor old mortgage owners

 

He needs to take it up with both the Fed and inflation, those are the ones causing the rises.

Still, at least the LibDems didnt come up with a gormless load of green power incentives that are now a a major cause of UK inflations ....

 

[spygirl]

10 hours ago, AWW said:

I can't see this one being a long, slow, drawn-out decline like the one in the first half of the 90s. Things are going to unravel extremely quickly. Living expenses are increasing at a far greater rate. IR hikes are also happening at an unprecedented rate. 

BBR went from 10, to 12, then to 15% on Black Wednesday. A 50% increase.

Look at what's happening now though. Dec '21, a 150% increase. Feb this year, doubled. Then another 50% in March. And we've tripled since then. Market pricing in another 50% in Nov. It's Black Wednesday every month at the moment. UK resi is going to be utter carnage by this time next year.

Last week, there was a widely-circulated prediction of a 10-15% fall in UK house prices next year. But we're already there in London if you pay even cursory attention to asking prices.

I was chatting to my sister-in-law just weeks ago - it was the August Bank Holiday - about the fact that we'd had our S21 and blown through the notice period. "Why don't you just buy somewhere, anywhere, just for now?" I replied that I'd be mad to do that, as house prices were about to get slaughtered.  She replied, "It's just never going to happen". She's a homeowner with a small mortgage, just upsized, and has an AirBnB flat which I think just about washes its face. Not even a chance of being in negative equity, but pretty much all her wealth is in bricks and mortar. Now, she's convinced that we're on the verge of house price armageddon.

Five weeks! That's how long it has taken for a complete about-face on the outlook for the housing market.

I've told her to sell the AirBnB and stick the cash in an ISA. She hasn't taken my advice. Yet.

Wimmin!

Fickle creatures.

Dont give them the vote ..

[spygirl]

With low IRs and an expansive banking sector, all sorts of properdee fuckwittery seems possible.

However ..

UK lenders return to market with mortgage rates near 6%

Banks and building societies offer pricier deals after week of turmoil for UK gilts

https://www.ft.com/content/20e649d8-4dd1-4e64-9075-cd0eef9f8fe4

Thats about 2x the average over the last 10 years.

And 6x last years lowest ever mortgages!

Its also right at the the top of BoE mortgage IR stress testing.

 

 

[Boon]

9 hours ago, Inque said:

Interesting ones to watch maybe new developments - I’ve been looking at a couple and just seen previously sold/reserved house back on for sale, just as the help to buy scheme is going to close to new applications.

 

TBH I can't see what chance they have at selling without the prop. Shared ownership perhaps, or the odd idiot coming along and paying way over the odds. Or maybe a big business nearby.

Example being there is a one near me, typical 2-bed, 2-bath shitbox that has is almost completed.

The price movements in the last year means that the current asking price is about £100k over that of a similar new build that is a few years old, about £100k over a 2-bed house, and something like £50-75k above a 3-bed house. Service charge of close to £3k.

As far as I can tell what they are doing is releasing the flats in small batches of 15 so they can get the '80% reserved/first phase almost sold out' banner out. I also think there would be massive amount of incentives available - obviously they ain't gonna publish that so it don't become standard. If they could sell this flat for £500k I reckon they could give away £50k of freebies and still be laughing. The buyer would think they have a great deal, while still overpaying.

[Wight Flight]

I have noticed that we have finally got price discovery in the housing market.

Again I look at rents, because those numbers can't be manipulated by banking shennanigans.

The sweet spot here seems to be about £1,200 per month. Anything over that struggles to find a long term tenant paying out of income, despite there being 2,500 families currently seeking a home. £1,200 is the peak of what people can afford.

if you take that £1,200 and extrapolate it into a OO or BTL mortgage at today's 6% rate it doesn't suggest anything other than prices can only go one way.

[Dave Bloke]

1 hour ago, Boon said:

As far as I can tell what they are doing is releasing the flats in small batches of 15 so they can get the '80% reserved/first phase almost sold out' banner out.

Doh, don't they put that banner out before the first contract is signed?