Property crash, just maybe it really is different this time

[spygirl]

W/E FT. Properdee poof piece

 

UK homes sales boom in March after extension of stamp duty holiday

Tally hits fresh high as buyers take advantage of chancellor’s extra 6-month exemption

https://www.ft.com/content/43737eeb-ac52-4687-93dd-0f601f187db9

Property data company TwentyCi said 160,000 sales were agreed last month, representing the highest monthly tally since the company began collating records in 2017.

What does 'sales agreed' actualyl mean FFS?

Rest fo article continues in same wibble.

Comments, in order of recs:

The U.K. equivalent of don’t fight the Fed is the slightly less snappy don’t fight the British government on house prices. You will die old, poor and property-less before any British government will stop supporting the housing market in good times and bad. Whether it makes sense or not is irrelevant. Whether it is good for the country or the economy is irrelevant. Whether it eventually blows the economy to pieces in 20 years is irrelevant. They will do whatever it takes to prevent prices falling. So pile in and buy the biggest and most expensive house you can afford with the maximum leverage you can get as young as possible. Then do it two or three more times in your working lifetime. Always at maximum leverage. Your government expects it of you and will incentivise you accordingly. 

This is just not true.

UKGOV has no control over medium to long term IRs and fcredit, which drive housing.

Andthis, which isnot me. I agree v strongly:

What I see when I walk through our pretty little town, one of the nicest places to live in the country according to The Times, is that the majority of nice houses are owned by aging Boomers, who would be unable to afford their house at today's prices. A large part of them will move to a care home or die over the next 10 - 20 years, it's just a matter of time. Birth rates aren't high enough to keep the population growing or even stable, interest rates can't be reduced further, immigration is likely to go down as a result of Brexit and most immigrants aren't rich enough to pay these prices anyway. I don't see where all the people who could possibly support the bubble and push prices even higher will come from. Can the bubble really continue much longer? Not saying it will burst tomorrow, it may well continue for some time, but I'm reluctant to bet £500k on it, especially if I can put £20k into an ISA every year, which gives me a tax free income for the rest of my life and generates enough income to cover large parts of my rent. It's nice to own a house, but the price just isn't right at the moment.

Again,. a large (majority?) parts of the UK have a probate market not a housing market.

IR will turn. Then you are faced with any even smaller pool of buyers and even lesscredit.

 

 

[spygirl]

Id add, thats the property market is strangling economic growth in the South.

Not only Southern town face OO dying off in 10-20 years.

The companies face falling away as the medium to high skilled 45y+ employees retire and they cannot be replaced from the younger pool,. which is now all benefit scum.

 

[CVG]

Back to MMA, it can be quite instructive to check out reviews on Trust Pilot

https://uk.trustpilot.com/review/iamsold.co.uk?

[spygirl]

1 hour ago, CVG said:

Back to MMA, it can be quite instructive to check out reviews on Trust Pilot

https://uk.trustpilot.com/review/iamsold.co.uk?

MMoA!!!

iamsold, part of the iamproperty Group, is the largest residential auctioneer in the UK and pioneer of the Modern Method of Auction (MMoA). We work with a network of 2,500 Partner Agents as an expansion of their ...

How does it work ...

https://www.ashtonslegal.co.uk/insights/business-news/what-is-modern-method-of-auction-mmoa-and-how-does-it-work/

Easy.

You give them a large non returnable cash deposit for the auction .... and they keep it.

 

[sancho panza]

On 27/03/2021 at 10:12, Frank Hovis said:

Yes, though because the great majority of people in this country have a binary idea of investing - property or cash deposits - then if interest rates do ever return to normal levels - 5% on your building society passbook - then the price of those houses will tumble to meet that yield; bringing down the rest as well.

3% on £500k = 5% on £300k

Interesting to reread this this mroning I was discussing the hosuing market with my 14 yr old yesterday and explaining how generally people borrow up to the hilt,lulled as per @spygirl even  mroe recent FT commetns post,into levering to the hilt in the belief the BoE has got their back.

I was explaining how it will take a much smaller rate rise this time to significantly change alter price expectations.

On 01/04/2021 at 18:13, Hancock said:

Seeing loads of houses going up for sale via "modern auction method". 

Which seems like a way of generating vastly more profit from each sale for the agent. Imagine having to transfer £12,000 to an estate agent for the privilege of paying £280,000 for this 3 bed terrace. 
https://www.rightmove.co.uk/properties/103872689#/

So the buyer pays a significant deposit that they'll lose if they change their mind or cant get the mortgage, which takes away any bargaining power once a surveyor finds any problems.

Really does seem like a lose lose situation for the buyer, as the houses aren't cheaper than what's currently on the market and buyer can turn down all bids!

Anyone know if the seller also has to pay the agents commission?

 

I'm not sure this wil last much.the clause dicatating being able to close within 56 days will effectively stop anyone in a chain bidding and aslo anyone who understadnds getting a mortgage can be time consuming.

They might get a few saps to bid currently but there aren't many people with that sort of ready cash to lose.The whole set up doesn't seem very pragmatic
 

Also worth noting that there's alaready a viable auction market.

 

[sancho panza]

22 hours ago, spygirl said:

Id add, thats the property market is strangling economic growth in the South.

Not only Southern town face OO dying off in 10-20 years.

The companies face falling away as the medium to high skilled 45y+ employees retire and they cannot be replaced from the younger pool,. which is now all benefit scum.

 

Has to be an issue.AS a business you need to be near a pool of labour if you need one and retirement vilages ain't it.Any long term WFH changes(and there will be some) will mean these hosues need to find an equilibrium.

Looking at the US,the high tax areas eg NYC and Cali are losing people already and their cash marekts ie rentals are showing the signs of those changes.

If I was a London BTLer I'd be bailing out asap.

[spygirl]

6 minutes ago, sancho panza said:

Interesting to reread this this mroning I was discussing the hosuing market with my 14 yr old yesterday and explaining how generally people borrow up to the hilt,lulled as per @spygirl even  mroe recent FT commetns post,into levering to the hilt in the belief the BoE has got their back.

I was explaining how it will take a much smaller rate rise this time to significantly change alter price expectations.

I'm not sure this wil last much.the clause dicatating being able to close within 56 days will effectively stop anyone in a chain bidding and aslo anyone who understadnds getting a mortgage can be time consuming.

They might get a few saps to bid currently but there aren't many people with that sort of ready cash to lose.The whole set up doesn't seem very pragmatic
 

Also worth noting that there's alaready a viable auction market.

 

That worked in days of medium to high wage inflation - 5% to 10% increase meant any over eager debt would be beaten down in 5-10 years. Beans n toast, no foreign  holidays for a few years, as the boomers drone about it.

Doesnt work in the world of zilch wage increase and IO mortgages - hence all the mortgage prisoner from 2002-2010ish.

People with IO mortgages coming up to 20 years vintage who are *still* under water and fucked.

IO mortgages were mainyl took out by people who dont understand compundign interest.

The UK has ~10-15y of ~80k/y IO mortgages ending.

That an entire month worth of sales that are needed to clear the fuckup of 2002-2010.

Then youve got all the IO BTL too.

 

 

 

[spygirl]

1 hour ago, sancho panza said:

Has to be an issue.AS a business you need to be near a pool of labour if you need one and retirement vilages ain't it.Any long term WFH changes(and there will be some) will mean these hosues need to find an equilibrium.

Looking at the US,the high tax areas eg NYC and Cali are losing people already and their cash marekts ie rentals are showing the signs of those changes.

If I was a London BTLer I'd be bailing out asap.

I visit loads of towns.

The number where the main commercial drag is now shit half empty retirement flats is eye opening.

~20 years ago, these would have housed ~1k/2k finsec/office workers, on a good wedge, spending.

Now its ~100 OAPS whinging about everything.

The economic fall out is v noticeable.

 

Edited April 4, 2021 by spygirl

[sancho panza]

10 minutes ago, spygirl said:

That worked in days of medium to high wage inflation - 5% to 10% increase meant any over eager debt would be beaten down in 5-10 years. Beans n toast, no foreign  holidays for a few years, as the boomers drone about it.

Doesnt work in the world of zilch wage increase and IO mortgages - hence all the mortgage prisoner from 2002-2010ish.

People with IO mortgages coming up to 20 years vintage who are *still* under water and fucked.

IO mortgages were mainyl took out by people who dont understand compundign interest.

The UK has ~10-15y of ~80k/y IO mortgages ending.

That an entire month worth of sales that are needed to clear the fuckup of 2002-2010.

Then youve got all the IO BTL too.

 

 

 

I think this will be a classic debt deflation end to the market ie demand drop rathr than IR rises.SImeple reality is that furlough being extended tells us there's a huge unemployment hike looming when it ends.

Just looking at ransactions for 2020 on RM and it looks liiek 2020 will be well down on 2019 overall.EA's msut be hurting.Got to be some job losses looming.

[spygirl]

1 hour ago, sancho panza said:

I think this will be a classic debt deflation end to the market ie demand drop rathr than IR rises.SImeple reality is that furlough being extended tells us there's a huge unemployment hike looming when it ends.

Just looking at ransactions for 2020 on RM and it looks liiek 2020 will be well down on 2019 overall.EA's msut be hurting.Got to be some job losses looming.

I think the 2020 are going to be way down - 20% - from 2019.

And 2109 was hardly a banner year. Banging along multi decade lows.

The late 2020/early 2021 sales are just 2021 sales brought forward.

Agree on furlough. Its going to be grim when that ends.

Pointless as well, most furloguh jobs are low paid service/non esential  ones that come and go anyway.

 

 

 

[Hancock]

2 hours ago, sancho panza said:

Interesting to reread this this mroning I was discussing the hosuing market with my 14 yr old yesterday and explaining how generally people borrow up to the hilt,lulled as per @spygirl even  mroe recent FT commetns post,into levering to the hilt in the belief the BoE has got their back.

I was explaining how it will take a much smaller rate rise this time to significantly change alter price expectations.

I'm not sure this wil last much.the clause dicatating being able to close within 56 days will effectively stop anyone in a chain bidding and aslo anyone who understadnds getting a mortgage can be time consuming.

They might get a few saps to bid currently but there aren't many people with that sort of ready cash to lose.The whole set up doesn't seem very pragmatic
 

Also worth noting that there's alaready a viable auction market.

 

I can buy one of these houses with cash, but i'd want a significant discount off so called market rate and the terms to be on my side, and not to have to pay 4.2% on top off the agreed price to the agent sticking it on RM and claiming its an auction!

Sadly as i get none of these i'll leave this kind of trading to England's "expert property investors" aka cunts!

[Hancock]

2 hours ago, sancho panza said:

I think this will be a classic debt deflation end to the market ie demand drop rathr than IR rises

Supply of houses coming onto the market has also dropped, without forced sellers the kind of drops that would happen in a capitalist economy will sadly not happen ... IMHO only interest rate rises will see to that.

I remember the schoolteacher guy from HPC who made the fantastic pdf document of how section 24 was going to bring prices crashing; with all the minor changes to the mortgage market, more regulations for buytolet and the global banking system over the past decade that was also going to reign in lending and bring prices to reality.

Yet none of them have, hence the only thing that will imho is the blunt instrument of interest rate rises.

Can see a small correction coming prior to September when SDLT holiday ends and high unemployment becomes reality, as so many fools have salivated at this mirage of the SDLT saving and jumped in meaning demands been brought forward.

Edited April 4, 2021 by Hancock

[Lightscribe]

35 minutes ago, Hancock said:

Supply of houses coming onto the market has also dropped, without forced sellers the kind of drops that would happen in a capitalist economy will sadly not happen ... IMHO only interest rate rises will see to that.

I remember the schoolteacher guy from HPC who made the fantastic pdf document of how section 24 was going to bring prices crashing; with all the minor changes to the mortgage market, more regulations for buytolet and the global banking system over the past decade that was also going to reign in lending and bring prices to reality.

Yet none of them have, hence the only thing that will imho is the blunt instrument of interest rate rises.

Can see a small correction coming prior to September when SDLT holiday ends and high unemployment becomes reality, as so many fools have salivated at this mirage of a saving and jumped in thus meaning demands been brought forward.

Yes Bland Unsight or similar I think. Sound reasoning behind his posts too. But sound reasoning has no place in today’s economy.

Key thing he missed however was that the reason for gidiots BTL tax changes was not to slow HPI and make more affordable homes for the masses. In reality it was just designed to push the have-a-go’s out and leave the gig only open to the big boys and his tory donating house builder chums. 

Allowing the market to self-plateau and become more affordable was never the intention, hence the government so desperately propping up the £7 trillion house of cards on HPI forever.

As you say, the only thing that would change this is when wider economic implications take it out of the governments hands i.e. banks not lending and interest rates rising.

The people that didn’t understand this waiting for a house price collapse for over a decade have been the ones to lose out thinking that sense would prevail. I myself sold in 2007, but would have re-bought in 2012/13 if I was in the position to (I have no mortgage currently anyway).

Unfortunately it’s the financially aware that have needed to move in the last 5 years who are between a rock and a hard place (in the south anyway). Every person and their dog knows the market is hopelessly out of kilter to affordability and knows where it’s heading on the back of the global economic fallout thats coming. It’s a now a waiting game, but a painfully slow and excruciating one all the while life is put on hold. 

Edited April 4, 2021 by Lightscribe

[spygirl]

36 minutes ago, Hancock said:

Supply of houses coming onto the market has also dropped, without forced sellers the kind of drops that would happen in a capitalist economy will sadly not happen ... IMHO only interest rate rises will see to that.

I remember the schoolteacher guy from HPC who made the fantastic pdf document of how section 24 was going to bring prices crashing; with all the minor changes to the mortgage market, more regulations for buytolet and the global banking system over the past decade that was also going to reign in lending and bring prices to reality.

Yet none of them have, hence the only thing that will imho is the blunt instrument of interest rate rises.

Can see a small correction coming prior to September when SDLT holiday ends and high unemployment becomes reality, as so many fools have salivated at this mirage of the SDLT saving and jumped in meaning demands been brought forward.

Thea was blandunsight.

Her point was that S24 destroys highly leveraged IO BTL.

She didnt mention much about prices - just that IO BTLers are fucked

https://www.housepricecrash.co.uk/forum/index.php?/topic/205887-a-goodbye-to-all-that-buy-to-let/

S24 has only just completed full deployment.

It says a lot about how gormless IO BTL are that they did not work out how S24 works ~6 years ago when it was announced.

The IO BTL that I see in the Northern places I follow are taking ~30% hits for each house.

London/Se had nominally buoyancy demand, mainly by tax payer funded inwork benefits for migrants.

Covid and Brexit have killedthat.

 

 

 

[Hancock]

1 minute ago, Lightscribe said:

Yes Bland Unsight or similar I think. Sound reasoning behind his posts too. But sound reasoning has no place in today’s economy.

Key thing he missed however was that the reason for gidiots BTL tax changes was not to slow HPI and make more affordable homes for the masses. In reality it was just designed to push the have-a-go’s out and leave the gig only open to the big boys and his tory donating house builder chums. 

Allowing the market to self-plateau and become more affordable was never on the cards, hence the government so desperately propping up the £7 trillion house of cards on HPI forever.

As you say, the only thing that would change this is when wider economic implications take it out of the governments hands i.e. banks not lending and interest rates rising.

The people that didn’t understand this waiting for a house price collapse for over a decade have been the ones to lose out thinking that sense would prevail. I myself sold in 2007, but would have re-bought in 2012/13 if I was in the position to (I have no mortgage currently anyway).

 

That was the one Bland Unsight, and what a complete bellend he was.

I've been one of the ones waiting for a crash since 2001-2007, then 2011 onwards when i came back to Blighty. From 96-00 prices had already gone through the roof.

Would have bought in early 2014 but HTB put prices up overnight, and the joys of an ongoing custody battle at that time meant i had other things to deal with.

Ive cash to buy and if i leave it another 12 months think i will get a house for maybe 20% less than local market asking prices. Not that i see prices falling 20% in this timeframe but merely on the basis i only need to buy 1 house and i've cash to buy the occasional cheap house that comes onto the market.

Emigrating is still on the cards, getting the fuck out this damp, cold communist shithole is my preference.

[spygirl]

47 minutes ago, Hancock said:

Supply of houses coming onto the market has also dropped, without forced sellers the kind of drops that would happen in a capitalist economy will sadly not happen ... IMHO only interest rate rises will see to that.

I remember the schoolteacher guy from HPC who made the fantastic pdf document of how section 24 was going to bring prices crashing; with all the minor changes to the mortgage market, more regulations for buytolet and the global banking system over the past decade that was also going to reign in lending and bring prices to reality.

Yet none of them have, hence the only thing that will imho is the blunt instrument of interest rate rises.

Can see a small correction coming prior to September when SDLT holiday ends and high unemployment becomes reality, as so many fools have salivated at this mirage of the SDLT saving and jumped in meaning demands been brought forward.

IRs are only one bit of the 3 Ds - Debt, Divorce Debt.

ask yourself - Has Covid made any of the 3 better or worse?

Low supply is just the home owning population bracing themselves.

 

1 minute ago, Hancock said:

That was the one Bland Unsight, and what a complete bellend he was.

I've been one of the ones waiting for a crash since 2001-2007, then 2011 onwards when i came back to Blighty. From 96-00 prices had already gone through the roof.

Would have bought in early 2014 but HTB put prices up overnight, and the joys of an ongoing custody battle at that time meant i had other things to deal with.

Ive cash to buy and if i leave it another 12 months think i will get a house for maybe 20% less than local market asking prices. Not that i see prices falling 20% in this timeframe but merely on the basis i only need to buy 1 house and i've cash to buy the occasional cheap house that comes onto the market.

Emigrating is still on the cards, getting the fuck out this damp, cold communist shithole is my preference.

Prices in my local area have not gone anywhere since ~2004.

Thats 15 years with nothing to show.

A ~30% real reductions.

 

[Hancock]

4 minutes ago, spygirl said:

Thea was blandunsight.

Her point was that S24 destroys highly leveraged IO BTL.

She didnt mention much about prices - just that IO BTLers are fucked

 

Bland was and presumably still is a male, i heard him on a podcast, by shouty Scottish bloke who went by the name of Rabbit or Bunny. (my memory is fucked).

The HPC narrative was BTL were the reason prices are mental and this is going to force them out the market thus bringing down house prices.

[spygirl]

1 minute ago, Hancock said:

Bland was and presumably still is a male, i heard him on a podcast, by shouty Scottish bloke who went by the name of Rabbit or Bunny. (my memory is fucked).

The HPC narrative was BTL were the reason prices are mental and this is going to force them out the market thus bringing down house prices.

Prices are mental because the UK banking sector tripled/quadrupled its balance sheet from ~200ush to 2007/8, when it blew up.

IO BTL, IO mortgages, self cert, 125% mortgages ... all park n parcel of Browns massive credit boom.

Prices havent crashed; transactions have.

Just not viable to continue. Prices will fall.

 

 

 

 

[Hancock]

19 minutes ago, spygirl said:

Just not viable to continue. Prices will fall.

 

It hasnt been viable to continue since this vile shitbag govt came to power in 2010.

Remember in 2009 when Gidiot said you cant run an economy on house price inflation and endless debt or words to that effect, changed his tune by 2013 though.

But like a broken clock, one time you and I will be correct.

Edited April 4, 2021 by Hancock

[spygirl]

31 minutes ago, Hancock said:

It hasnt been viable to continue since this vile shitbag govt came to power in 2010.

Remember in 2009 when Gidiot said you cant run an economy on house price inflation and endless debt or words to that effect, changed his tune by 2013 though.

But like a broken clock, one time you and I will be correct.

To give him credit, hes not wrong.

The housign debt created since 2010 is fa far lower than the debt from 2000-2010.

Letting th BoE regulated mortgages via MMR killed the housimg market as this standalone 'wealth'creator.

 

 

[Noallegiance]

I'm confused. I hear some folk saying house prices will scream higher as a result of money printing, and others say they'll fall quite hard due to deflation.

I know who I want to be correct, but who actually is correct?

 

[Wight Flight]

4 hours ago, Noallegiance said:

I'm confused. I hear some folk saying house prices will scream higher as a result of money printing, and others say they'll fall quite hard due to deflation.

I know who I want to be correct, but who actually is correct?

 

Both.

The trickier question is when.

[sancho panza]

13 hours ago, spygirl said:

I think the 2020 are going to be way down - 20% - from 2019.

And 2109 was hardly a banner year. Banging along multi decade lows.

The late 2020/early 2021 sales are just 2021 sales brought forward.

Agree on furlough. Its going to be grim when that ends.

Pointless as well, most furloguh jobs are low paid service/non esential  ones that come and go anyway.

 

 

 

Leicester prices doubled between 2002 and 2006.There after they've gone from £180k to £260k as per Nov last year.more likely a reasonable average about £230-£240k,on declining vol.The structural risks are huge fi you're leveraged and buying into Britain's inner cities like Londinium/Brimingham.Times are changing.

I've never worked out how the Haliwide measure gets house prices rising at the rate it does when reality is mmuch more mundane.

[sancho panza]

9 hours ago, Noallegiance said:

I'm confused. I hear some folk saying house prices will scream higher as a result of money printing, and others say they'll fall quite hard due to deflation.

I know who I want to be correct, but who actually is correct?

 

Long term,it depends on the scale of teh printing.

South Africa where Mrs P comes from is a case in point.Her friends and family were always telling her how House prices have only gone up to there in the last twnety years.

We looked at a  ZAR 3.3mn place in 2016 that had been bought for ZAR 1.3mn(and had some serious cash spent on it) back in time.I did the calcs and in dollar terms the guy had lost money.

So,hypotehtically,prices could scream higher,but if they do they may be outpaced by food and fuel rises in which case place your bets.I've gone for food and fuel trumping house prices.

I think the msot likely outcome is a deflationary event but the West wills top short of hyperinfaltion,so maybe we'll see interest rates and crimp prices back to 3 times salary?If slary moves up then so will hosue prices.

I'm in no rush to buy in the UK at these prices.

 

[Green Devil]

11 hours ago, Hancock said:

That was the one Bland Unsight, and what a complete bellend he was.

I've been one of the ones waiting for a crash since 2001-2007, then 2011 onwards when i came back to Blighty. From 96-00 prices had already gone through the roof.

Would have bought in early 2014 but HTB put prices up overnight, and the joys of an ongoing custody battle at that time meant i had other things to deal with.

Ive cash to buy and if i leave it another 12 months think i will get a house for maybe 20% less than local market asking prices. Not that i see prices falling 20% in this timeframe but merely on the basis i only need to buy 1 house and i've cash to buy the occasional cheap house that comes onto the market.

Emigrating is still on the cards, getting the fuck out this damp, cold communist shithole is my preference.

When y0u start looking at the prices of housing abroad you start to really think what a Shitty little island we are on!