Property crash, just maybe it really is different this time

[One percent]

3 minutes ago, Ash4781b said:

The three leveraged BTL options to cope with rising costs reported I have seen are either alone or a combination of 1. Sell up, 2.Raise the rents (models are suggesting very high percentage increases) 3. Subsidise with own /sourced funds 

 

I’m not selling, it’s my pension innit. 

[Stuey]

13 hours ago, F150 said:

prices in kobenhagen have crashed 10% since april

ITS GAME ON!

Can you buy with cash? 

[haroldshand]

17 hours ago, Bobthebuilder said:

This is why I dislike property types, the vast majority of them are just horrible people.

I find property speculation to be immoral, maybe after all these years I am just naïve, nice guys finish last and all that stuff.

That statement really is true.

I deal with a lot of people and touch wood(I am really doing that now) I have very few issues and have been blessed with well over 90% of customers who are great decent people. I can count the fingers on one hand the ones that gave me big problems  this last decade and everyone of them  was a greedy "property type". Some were even OK but I still got rid of a load of them last year because I just did not need those type of people and the sights I witnessed in my life.

I have seen tenants  in rented homes with literally nothing  in them who are paying out most of their wages on these shitholes and I have  gone home feeling low as fuck for the evening. That aspect of my life was not even 5% of my work but that was too much, having 100% skin in the game must make you are certain special type of evil.

I even had one of them in particular who liked me and always made this massive issue about the homeless charity work she did, never stopped going on about it and I have it dozens of times, simply a cover or massive guilty conscious IMO

[AWW]

We're in the denial stage round my way. Daughter started school recently and we have met the parents of one of her new friends twice. On both occasions, they mentioned that they'd just bought the house they're in and that, even in just a year, "prices have gone even crazier".

The reality is that they paid £300k more than any other house has sold for on the street before or since and that asking prices are down on last year and still being reduced, even on good houses.

[Bear Hug]

Crasy £300k asking price for a 2 bed terrace in Reading. It's small. How small?

Food having to be stored in the toilet small. 

 

[Democorruptcy]

47 minutes ago, Bear Hug said:

Crasy £300k asking price for a 2 bed terrace in Reading. It's small. How small?

Food having to be stored in the toilet small. 

 

They could be preppers? It's not because of a lack of space but @King Pendaprobably also has some in his and has to empty the bath of food, every time he wants to use it.

[King Penda]

10 minutes ago, Democorruptcy said:

They could be preppers? It's not because of a lack of space but @King Pendaprobably also has some in his and has to empty the bath of food, every time he wants to use it.

I thought about useing the space under it

[HousePriceMania]

14 hours ago, No One said:

361.. Numbers are beginning to increase again

property lion say the biggest weekly increase last week.  something like a net gain of 1616 properties

was around 500 per week over the summer.

It's taken 6 months for an extra 100,000 listings, so come spring time sales volumes will  be back to pre-pandemic levels, which were historically low anyway.

 

Will be interesting to see if this surge of listings foes parabolic.

[Axeman123]

2 hours ago, haroldshand said:

always made this massive issue about the homeless charity work she did, never stopped going on about it

More than likely just a part of the fantasy "entrepreuneur" persona promoted online, and a way to covertly show off/signal high social status.

[wherebee]

1 hour ago, King Penda said:

I thought about useing the space under it

I did that in my parents house.  Kept porn mags hidden behind a moveable piece of the siding.

 

[sancho panza]

3 hours ago, AWW said:

We're in the denial stage round my way. Daughter started school recently and we have met the parents of one of her new friends twice. On both occasions, they mentioned that they'd just bought the house they're in and that, even in just a year, "prices have gone even crazier".

The reality is that they paid £300k more than any other house has sold for on the street before or since and that asking prices are down on last year and still being reduced, even on good houses.

Delusion will be the overriding emotional disorder of the next few years.

I sometimes wonder at people when I hear those who've bought new builds talk in such a manner.The notion of 'new build premium' is well established ,proven by the fact that many observers quantify it in the region of 16%-see below

Key thing is that even a basic  google can provide plenty of financial/non financial reasons to be cautious on new build.

I have paramedics I know at work who recently got into BTL(using I would suspect 80%+ leverage-I jest not.I jsut sit there in the crew room and keep my head down.Expereince has taught me you can't stop financially less literate people doing financially illiterate things-I mean look at the govt ffs....

I don't think the IR hikes have landed yet but they will.

https://www.whathouse.com/mortgages-and-homes/why-you-might-pay-a-premium-for-a-new-build-home/

What is a ‘new build premium’?

If you’re buying a new home, the builder will typically charge something called a ‘new build premium’. This means that you can expect to pay more for a new property than you would if you bought an older property of the same size/in the same area.

A builder will charge a premium for several reasons:

• The new home is ready to move into
• You benefit from a guarantee – typically 10 years or more
• Everything in the property is new and unused
• The property is likely to be more energy-efficient than older homes
• The property will ordinarily be built to a high specification.

How much is the new build premium?

A report in 2016 found that the average new home sold for 17% more than a comparable second-hand one. This was up from 15% ten years ago.

In 2018, the monthly house price index from LCPAca found that the average price of a new build home across England and Wales had reached £338,694, and that this was 15.8% higher than buying an existing property.

The research from Countrywide also found that, in recent years, house builders have achieved the largest new build premiums in the cheapest and most expensive housing markets. In addition, developments offering Help to Buy options tend to achieve above average premiums.

Smaller developments (those with less than 10 homes) tend to carry the largest premiums. Over the last five years, new homes in developments of fewer than 10 properties have carried an average premium of 20% compared to existing homes in the surrounding area. This compares to a 16% premium for sites with between 20 and 49 homes and a 14% premium for sites containing 100 homes or more.

Edited October 20, 2022 by sancho panza

[Funn3r]

14 hours ago, Phil said:

Fare effort. 

[sancho panza]

It would appear to me that the property market is heading towards illiquidity at a rapid pace

Chains appear to be collapsing at a fair old pace.Cash buyers will dominate in the not too dsitant if transaction levels don't pick up

We're up 300 in inventory in 10 days with inventroy incl SSTC static.

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

10/10/22  4885          10416             1822              1077          774            556         520           

17/10/22 5007           10366             1867               1110         801            572          521

20/10/22  5082          10369

Edited October 20, 2022 by sancho panza

[Talking Monkey]

23 minutes ago, sancho panza said:

Delusion will be the overriding emotional disorder of the next few years.

I sometimes wonder at people when I hear those who've bought new builds talk in such a manner.The notion of 'new build premium' is well established ,proven by the fact that many observers quantify it in the region of 16%-see below

Key thing is that even a basic  google can provide plenty of financial/non financial reasons to be cautious on new build.

I have paramedics I know at work who recently got into BTL(using I would suspect 80%+ leverage-I jest not.I jsut sit there in the crew room and keep my head down.Expereince has taught me you can't stop financially less literate people doing financially illiterate things-I mean look at the govt ffs....

I don't think the IR hikes have landed yet but they will.

https://www.whathouse.com/mortgages-and-homes/why-you-might-pay-a-premium-for-a-new-build-home/

What is a ‘new build premium’?

If you’re buying a new home, the builder will typically charge something called a ‘new build premium’. This means that you can expect to pay more for a new property than you would if you bought an older property of the same size/in the same area.

A builder will charge a premium for several reasons:

• The new home is ready to move into
• You benefit from a guarantee – typically 10 years or more
• Everything in the property is new and unused
• The property is likely to be more energy-efficient than older homes
• The property will ordinarily be built to a high specification.

How much is the new build premium?

A report in 2016 found that the average new home sold for 17% more than a comparable second-hand one. This was up from 15% ten years ago.

In 2018, the monthly house price index from LCPAca found that the average price of a new build home across England and Wales had reached £338,694, and that this was 15.8% higher than buying an existing property.

The research from Countrywide also found that, in recent years, house builders have achieved the largest new build premiums in the cheapest and most expensive housing markets. In addition, developments offering Help to Buy options tend to achieve above average premiums.

Smaller developments (those with less than 10 homes) tend to carry the largest premiums. Over the last five years, new homes in developments of fewer than 10 properties have carried an average premium of 20% compared to existing homes in the surrounding area. This compares to a 16% premium for sites with between 20 and 49 homes and a 14% premium for sites containing 100 homes or more.

That delusion will go on for years and years, property speculation and hoarding as an avenue to riches is so ingrained. 

[sancho panza]

There appear to be some signs of stress at the top end of the market near me.

for sale for £1.5mn or rent for £3500pcm which equates to a 2.8% yield.I think it's msot definitely overpriced as a rental given the bills that will come with it.A more reasonable(an dare I say it,liquid) asking price would be circa 1.5% aka £1875.I'd still offer £1500 as there won't be many bidders.

I never understand why vendors like this don't just cut the asking sale price ? But if the bottom of the market isn't liquid,then the top will be even worse

Sale details

https://www.rightmove.co.uk/property-for-sale/map.html?locationIdentifier=REGION^13180&numberOfPropertiesPerPage=499&radius=3.0&propertyTypes=&includeSSTC=false&viewType=MAP&mustHave=&dontShow=&furnishTypes=&viewport=-1.07425%2C-1.00146%2C52.6185%2C52.6375&keywords=

rental

https://www.rightmove.co.uk/properties/127832615#/?channel=RES_LET

 

Interstingly,using a 100% 2% mortgage,interest would be £30,000 per annum.At the new 5.4% that £81,000.Suggesting that target sale price might be in the region of £555,555 if new mortgage rates assert tehmselves(which I suspect they will.

My worry(if I was the owner) was that factoring in the new,post ukraine fuel bills being higher,means cost of carry may impact sale price pontetnially.

Glad I haven't got a big pad to sell at the minute.The buyer pool is shrinking by the day

[sancho panza]

3 minutes ago, Talking Monkey said:

That delusion will go on for years and years, property speculation and hoarding as an avenue to riches is so ingrained. 

Indeed,history shows us that people cling to delusions but history also shows us that eventually the repricing of risk will overpower people's commitments to their delusions ie wehn people are looking at feeding their kids or paying their mortgage.they will feed their kids and damn the mortgage.

I also know that past expereince has shown me that many people will try and sell their delusions to clsoe family members/friends for a bail out and that the cost of that bailout could render the close family /friends into the same boat as the person they're trying to save.

Desperate times are coming.

[Boon]

7 minutes ago, sancho panza said:

There appear to be some signs of stress at the top end of the market near me.

for sale for £1.5mn or rent for £3500pcm which equates to a 2.8% yield.I think it's msot definitely overpriced as a rental given the bills that will come with it.A more reasonable(an dare I say it,liquid) asking price would be circa 1.5% aka £1875.I'd still offer £1500 as there won't be many bidders.

I never understand why vendors like this don't just cut the asking sale price ? But if the bottom of the market isn't liquid,then the top will be even worse

Sale details

https://www.rightmove.co.uk/property-for-sale/map.html?locationIdentifier=REGION^13180&numberOfPropertiesPerPage=499&radius=3.0&propertyTypes=&includeSSTC=false&viewType=MAP&mustHave=&dontShow=&furnishTypes=&viewport=-1.07425%2C-1.00146%2C52.6185%2C52.6375&keywords=

rental

https://www.rightmove.co.uk/properties/127832615#/?channel=RES_LET

 

Interstingly,using a 100% 2% mortgage,interest would be £30,000 per annum.At the new 5.4% that £81,000.Suggesting that target sale price might be in the region of £555,555 if new mortgage rates assert tehmselves(which I suspect they will.

My worry(if I was the owner) was that factoring in the new,post ukraine fuel bills being higher,means cost of carry may impact sale price pontetnially.

Glad I haven't got a big pad to sell at the minute.The buyer pool is shrinking by the day

Funnily enough in Reading there appears to be a dump today of some big HMOs:

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=STATION^7610&radius=1.0&propertyTypes=&maxDaysSinceAdded=1&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

These yields are quite funny to look at, once you start adjusting for expenses, tax, voids, managing agents, why bother? I can only presume these are marketed at businesses that might like to pay up front, can run it effeciently (both in operations terms and tax) and have it as a hedge on depreciating currency. But I don't think they would be going for old buildings.

The Leicester one I think will be in a permanent bubble. Looking at the sparesness of furnishings it seems like a house a footballer might live in, so there is a possibility the owner is ambivalent to whether it sells or rents.

[HousePriceMania]

16 minutes ago, sancho panza said:

There appear to be some signs of stress at the top end of the market near me.

for sale for £1.5mn or rent for £3500pcm which equates to a 2.8% yield.I think it's msot definitely overpriced as a rental given the bills that will come with it.A more reasonable(an dare I say it,liquid) asking price would be circa 1.5% aka £1875.I'd still offer £1500 as there won't be many bidders.

I never understand why vendors like this don't just cut the asking sale price ? But if the bottom of the market isn't liquid,then the top will be even worse

Sale details

https://www.rightmove.co.uk/property-for-sale/map.html?locationIdentifier=REGION^13180&numberOfPropertiesPerPage=499&radius=3.0&propertyTypes=&includeSSTC=false&viewType=MAP&mustHave=&dontShow=&furnishTypes=&viewport=-1.07425%2C-1.00146%2C52.6185%2C52.6375&keywords=

rental

https://www.rightmove.co.uk/properties/127832615#/?channel=RES_LET

 

Interstingly,using a 100% 2% mortgage,interest would be £30,000 per annum.At the new 5.4% that £81,000.Suggesting that target sale price might be in the region of £555,555 if new mortgage rates assert tehmselves(which I suspect they will.

My worry(if I was the owner) was that factoring in the new,post ukraine fuel bills being higher,means cost of carry may impact sale price pontetnially.

Glad I haven't got a big pad to sell at the minute.The buyer pool is shrinking by the day

for sale for £1.5mn or rent for  £3500pcm, so £500K worth of mortgage 

[HousePriceMania]

Just now, HousePriceMania said:

for sale for £1.5mn or rent for  £3500pcm, so £500K worth of mortgage 

5% savings on 1.5m is 6250  per months.  So you'd be mad to buy it

[Talking Monkey]

11 minutes ago, sancho panza said:

Indeed,history shows us that people cling to delusions but history also shows us that eventually the repricing of risk will overpower people's commitments to their delusions ie wehn people are looking at feeding their kids or paying their mortgage.they will feed their kids and damn the mortgage.

I also know that past expereince has shown me that many people will try and sell their delusions to clsoe family members/friends for a bail out and that the cost of that bailout could render the close family /friends into the same boat as the person they're trying to save.

Desperate times are coming.

That last part is spot on there'll be a lot of that coming down the line. People with perfectly fine finances getting dragged down by family members. 

[HousePriceMania]

Didnt take long for Jeremy cHunt to make his mark.

 

 

[HousePriceMania]

If you dont get this, you are probably an estate agent

 

[Axeman123]

20 minutes ago, HousePriceMania said:

Didnt take long for Jeremy cHunt to make his mark.

 

 

I think they were just saying they don't expect to reach the 5% base currently priced in, which none of us were expecting them to anyway. Obviously algos will only respond to headines and keywords, so this could still be intended to show the market approves of Hunt and perhaps see some slightly lower mortgage deals.

Another interpretation would be the fed are preparing to pivot (stop laughing at the back) and the BoE (plus other international CBs) are positioning for it.

 

[HousePriceMania]

1 minute ago, Axeman123 said:

I think they were just saying they don't expect to reach the 5% base currently priced in, which none of us were expecting them to anyway. Obviously algos will only respond to headines and keywords, so this could still be intended to show the market approves of Hunt and perhaps see some slightly lower mortgage deals.

Another interpretation would be the fed are preparing to pivot (stop laughing at the back) and the BoE (plus other international CBs) are positioning for it.

 

More talk to rig the market.

[Phil]

2 hours ago, Funn3r said:

excellant.