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Property crash, just maybe it really is different this time

haroldshand

By haroldshand
in Property Prices & Economy

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Ina
Ina

Massive feedback from my colleagues in New Build and Residential Property is that we are on the cusp of a serious turn in the market.  Everyone is extremely twitchy.  Estate Agents are very nervous.  

Democorruptcy
Democorruptcy

When you are looking at a property on RM they have an example mortgage payment with Nationwide at the bottom. I noticed the rate 3.8%, just for fun I clicked through on one to Nationwide and was quote

Ina
Ina

My lovely colleagues in our Residential Conveyancing team are suddenly very twitchy having noticed a recent sea change.  Our FD is more so.   In Probate granny houses with the usual artex, swirly carp

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Democorruptcy

Democorruptcy

Posted
Posted
On 15/10/2022 at 17:44, Long time lurking said:

 

Market expectations for BoE rate rises earlier this morning were a peak of 5.36% by May.

Nov 102.01 (3.25%)

Dec 76.43 (4%)

Feb 66.07 (4.5% or 4.75%)

However.... going into this 11am Jeremy Hunt announcement, gilt yields and interest swap rates are well down.

 

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Long time lurking

Long time lurking

Posted
Posted
6 minutes ago, Democorruptcy said:

However.... going into this 11am Jeremy Hunt announcement, gilt yields and interest swap rates are well down.

 

Like Stuey said it`s the talk ,they expect the BOE to do the walking and follow/catch up to the US on 3rd of the 11th 

 

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spygirl

spygirl

Posted
Posted

My pension transfer value has plunged from £740k to £340k: What's happened, and is my early retirement dream over? Steve Webb replies

https://www.thisismoney.co.uk/money/pensions/article-11315527/Why-pension-transfer-value-plunged-740k-340k.html?ico=mol_desktop_home-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fhome%2Findex.html&_ga=2.247093892.1875925012.1665996253-1238480363.1645187822

A *LOT* of DB pensions were being cashed in and spent on properdee..

With higher Gilts yields and more hurdles to transfer out, that source of cash is over.

 

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Stuey

Stuey

Posted
Posted
29 minutes ago, spygirl said:

My pension transfer value has plunged from £740k to £340k: What's happened, and is my early retirement dream over? Steve Webb replies

https://www.thisismoney.co.uk/money/pensions/article-11315527/Why-pension-transfer-value-plunged-740k-340k.html?ico=mol_desktop_home-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fhome%2Findex.html&_ga=2.247093892.1875925012.1665996253-1238480363.1645187822

A *LOT* of DB pensions were being cashed in and spent on properdee..

With higher Gilts yields and more hurdles to transfer out, that source of cash is over.

 

Seems you are safer with houses IMO. 

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HousePriceMania

HousePriceMania

Posted
Posted
32 minutes ago, spygirl said:

My pension transfer value has plunged from £740k to £340k: What's happened, and is my early retirement dream over? Steve Webb replies

https://www.thisismoney.co.uk/money/pensions/article-11315527/Why-pension-transfer-value-plunged-740k-340k.html?ico=mol_desktop_home-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fhome%2Findex.html&_ga=2.247093892.1875925012.1665996253-1238480363.1645187822

A *LOT* of DB pensions were being cashed in and spent on properdee..

With higher Gilts yields and more hurdles to transfer out, that source of cash is over.

 

:ph34r:

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spygirl

spygirl

Posted
Posted
31 minutes ago, Stuey said:

Seems you are safer with houses IMO. 

Nah - the pension fund value just represents the safe no risk yield required to meet your pension/y promise

With Gilts yielding sub 2% then youd need a pot of 300k to give you ~6k

With Gilts touching 5% that pot halves.

If you pulled a DB pension in 2018ish and kept all as cash (you cant do this) then bought  Gits today then youd have doubled you pension pay out.

 

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spygirl

spygirl

Posted
Posted

In terms of buying property - property is highly correlated to interest rates.

Each 300k of house in 2020 at sub 2% mortgage is now worth 200k at 5%.

 

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kibuc

kibuc

Posted
Posted

Quite a few reductions in my neck of wood, and some failing sales as well.

One 5-bedder down the road was listed at £970k-ish for a long time, dropped to £925k and went STC shortly after, then remained that way for weeks. On Friday it disappeared from RM and came back as a new listing on Monday at £900k. I guess someone's mortgage offer may have been taken off the table.

I like how the description starts with "In need of some love!". At least there's a conservatory!

20 of 20

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HousePriceMania

HousePriceMania

Posted
Posted
52 minutes ago, spygirl said:

In terms of buying property - property is highly correlated to interest rates.

Each 300k of house in 2020 at sub 2% mortgage is now worth 200k at 5%.

 

Why do you think the scumbag tories are trying to get bond rates/mortgage rates down !!!

meanwhile, savings are destroyed

They need to think old people with no mortgage want to have no money for food.

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AWW

AWW

Posted
Posted

https://www.rightmove.co.uk/news/house-price-index/

  • The average price of property coming to the market rises by 0.9% (+£3,398) in the month to a new record of £371,158:
    • This 0.9% rise is a softening from the five-year average rise in October of 1.2%
    • There is little sign of downwards price pressure on existing properties for sale. The number of homes seeing a reduction in the month creeps up by 2% to 23%

No, the number of homes seeing a reduction increased by 10%. The reduction rate increased by 2%.

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Boon

Boon

Posted
Posted

Don't more properties with a price reduction on it create downward price pressure?

Ergo I have some saved where a block of flats has multiple properties for sale; a price drop on one of course has an effect on another.

At least where I look there is no real sense of desperation yet. Anyone putting property on today will still price it as if it were 6 months ago, and I can understand that..... you still have people will cheap finance if a current mortgage can be ported, and there still can be cash-rich gamblers. 

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Frank Hovis

Frank Hovis

Posted
Posted
3 minutes ago, HousePriceMania said:

They're not going to stop....

 

 

 

it's not a few...it's everyone.

 

Are those proposals actually unreasonable?

If you simply can't pay your mortgage then you lose your house but this isn't about that; it is about banks examining individual circumstances to see if there are short term problems that can be overcome.

I don't know the rules but I would say that it is unreasonable for a bank to sieze and auction off your house if you miss a single mortgage payment.

Or if, say, the mortgage value was 40% of the house that they could again sieze it if, for instance, six months' payments were missed when these could easily be rolled up into the mortgage balance without jeopardising the bank's security.

I want a crash as much as anyone but I don't want to see people's lives ruined when there is a short term issue that can easily be overcome.

He isn't suggesting either a bail out or the government guaranteeing mortgages and so being on the hook for them; to both of which I would be strongly opposed.

 

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HousePriceMania

HousePriceMania

Posted
Posted
24 minutes ago, Frank Hovis said:

 

Are those proposals actually unreasonable?

If you simply can't pay your mortgage then you lose your house but this isn't about that; it is about banks examining individual circumstances to see if there are short term problems that can be overcome.

I don't know the rules but I would say that it is unreasonable for a bank to sieze and auction off your house if you miss a single mortgage payment.

Or if, say, the mortgage value was 40% of the house that they could again sieze it if, for instance, six months' payments were missed when these could easily be rolled up into the mortgage balance without jeopardising the bank's security.

I want a crash as much as anyone but I don't want to see people's lives ruined when there is a short term issue that can easily be overcome.

He isn't suggesting either a bail out or the government guaranteeing mortgages and so being on the hook for them; to both of which I would be strongly opposed.

 

12% inflation

6% mortgage rates

4% savings rates

2.25% interest rates

Interest rates should be above inflation, so 15%

Savings rates should be 16%

Mortgage rates should be 18%

HOW MUCH HELP DO THESE PEOPLE WANT ?

yes, it's unreasonable to rob savers and help people who willingly took on debt,

Will Mr Hunt be getting £3.8M worth of help ?

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Frank Hovis

Frank Hovis

Posted
Posted
1 minute ago, HousePriceMania said:

12% inflation

6% mortgage rates

4% savings rates

2.25% interest rates

Interest rates should be above inflation, so 15%

Savings rates should be 16%

Mortgage rates should be 18%

HOW MUCH HELP DO THESE PEOPLE WANT ?

yes, it's unreasonable to rob savers and help people who willingly took on debt,

Will Mr Hunt be getting £3.8M worth of help ?

 

I specifically addressed Martin Lewis's tweet and I think that entirely reasonable.

That is not incompatible with my wanting base rates of 7 - 8%; I want a crash, which will mean people losing their homes as they can't pay their mortgages, but I don't want people losing their houses because of the banks / building societies grabbing their houses purely because they can as happened in the early 90s.

Some of them were utterly ruthless even in cases where there was never any realistic probability of their losing the loan balance they just marched in and took, and auctioned, the house.

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HousePriceMania

HousePriceMania

Posted
Posted
6 minutes ago, Frank Hovis said:

 

I specifically addressed Martin Lewis's tweet and I think that entirely reasonable.

That is not incompatible with my wanting base rates of 7 - 8%; I want a crash, which will mean people losing their homes as they can't pay their mortgages, but I don't want people losing their houses because of the banks / building societies grabbing their houses purely because they can as happened in the early 90s.

Some of them were utterly ruthless even in cases where there was never any realistic probability of their losing the loan balance they just marched in and took, and auctioned, the house.

I agree with that, but lets be honest Frank, it's just another prop.  he's Sunake's mate and he's preparing the ground for the mother of all bail outs.

Robbing the workers/poor/savers to make sure they banks keep pushing as much debt as possible and the establishment keep collecting it.

 

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