Property crash, just maybe it really is different this time

[Hancock]

35 minutes ago, Wight Flight said:

Abolish inheritance tax on everything but a house would be my suggestion.

Be a good start.

[spygirl]

On 13/12/2020 at 11:21, spygirl said:

Nope.

Theres multiple things at play.

The main one being mid aged boomer are now in 60s.

I'm not sure what the exact numbers but something like only 30% of houses have mortgages attached to them.

About 20%of household  are oaps. Another 20-30% are social housing/HB.

The number of people in prime house buying age (25-55) who are looking to buy a house AND have the earnings is tiny. In my local area I'd reckon you are talking 10s of FTBs. The other sales are just home buyers trading away their equity. Or worse, leveraging up to speculate on BTL.

Forget saying - well my house in gold or bitcoins or magic beans ....

I can point to a large number of Northern towns where the nominal price has not shifted for 15 years.

To put in context, these places did not recover their nominal late 80s prices til late 90s.

Basically, they double due to cretin Brown, then sat there, not selling for almost 20 years.

Transaction are at multi decades low.

Considering mortgages did not become mass market tilted 70s, sales are occuring at lowest numbers ever.

The only factor propping up stagnation prices are low rates. Those wont last. Interest cycle is built into market economies.

The Western business cycle has been fucked due to bent China entering World trade in late 90s, exporting dusinflation, which fucked over dafty economist's models.

China has now aged, constrained US eventually woke up, and will be exporting  inflation  now.

 

London/SE where the build of the 2002+ HPI occurred is fucked. Tge evonomy/jibs look like Middlesbrough in late 70s - mass loss of well paying jobs.

 

 

 

 

 

Ireland but same old same old -

http://www.davidmcwilliams.ie/we-are-at-the-end-of-a-slow-moving-housing-ponzi-scheme/

The problem is 1999->2008 (2010 for Ireland).

Teh way he banks works isthey print money. Over time, real estate has swallowed up more n more ofthat money.

In ye olde days in the uk, before BS demute, banks had an implicit earning limit on mortgages - 3x single, 2.4 dual.

This kept house prices tracking wages which tracked the economy.

Enter Brown, who freed the banks who promptly loaned themselves into oblivion.

Then, doubling down, let so many migrants in, wage never aligned to the economy.

In the last crash, a toppy market with houses 5x LTE , hit high IRs, which resulted in houses falling below 3x LTE

Boht UK and Ireland have strict lending limits now in place.

However theyve also gormlessly got every high levels of migration, most ofwhich is unskilled bennie dependent

So the poor worker has to pay for OAPs pensions, loads of dossers on bennie, and somehow pay for a house at 10x LTE.

Not going to happen. Not enough money.

Now the truer number of EUrs is coming out, the UK is going to go thru bennie reforms, which will see a large number of migiants go.

These are the ones whove been propping up IO BTL.

 

 

 

 

 

 

[spygirl]

Bank of England removes restrictions on bank dividends and share buybacks

Decision follows similar moves in Europe and the US

https://www.ft.com/content/fb4d5ff9-e2a3-48a4-abb5-3b0b5a14a757

You can expect mortgage rates to go up 1%-2%pretty quickly.

 

[Frank Hovis]

19 minutes ago, spygirl said:

Bank of England removes restrictions on bank dividends and share buybacks

Decision follows similar moves in Europe and the US

https://www.ft.com/content/fb4d5ff9-e2a3-48a4-abb5-3b0b5a14a757

You can expect mortgage rates to go up 1%-2%pretty quickly.

 

I don't see the connection.

This is a just return to the pre-loony lockdown normality.

Money is still very cheap for banks.

[Castlevania]

2 minutes ago, Frank Hovis said:

I don't see the connection.

This is a just return to the pre-loony lockdown normality.

Money is still very cheap for banks.

Share buybacks deplete capital, so reduces the amount of lending that a bank can do without reducing their capital ratio. 

[spygirl]

3 minutes ago, Frank Hovis said:

I don't see the connection.

This is a just return to the pre-loony lockdown normality.

Money is still very cheap for banks.

Banks have been unable to pay divi, buy back shares, or return money to outside parents (HSBC)

Having loads of money on their balance sheet and QE/ZIRP forced them to lend it out, at slightly higher rates.

Mortgages rates have been supressed, massively, by banks being restricted on what they could do with the money.

 

 

[Frank Hovis]

34 minutes ago, Castlevania said:

Share buybacks deplete capital, so reduces the amount of lending that a bank can do without reducing their capital ratio. 

 

33 minutes ago, spygirl said:

Banks have been unable to pay divi, buy back shares, or return money to outside parents (HSBC)

Having loads of money on their balance sheet and QE/ZIRP forced them to lend it out, at slightly higher rates.

Mortgages rates have been supressed, massively, by banks being restricted on what they could do with the money.

 

 

 

I agree with both in principle but all that is happening is a reversion to pre-Lockdown rules for banks and there was no serious capital depletion resulting in climbing mortgage rates then.

I don't see what has actually changed beyond coming out of a very strange fifteen months.

[spygirl]

2 minutes ago, Frank Hovis said:

 

 

I agree with both in principle but all that is happening is a reversion to pre-Lockdown rules for banks and there was no serious capital depletion resulting in climbing mortgage rates then.

I don't see what has actually changed beyond coming out of a very strange fifteen months.

No, this is a game changer.

Banks not being to anything with their money has mortgages very very cheap.

They had nowhere else for it to.

Easily proved, one way or another. Just watch rates.

 

 

[Frank Hovis]

7 minutes ago, spygirl said:

No, this is a game changer.

Banks not being to anything with their money has mortgages very very cheap.

They had nowhere else for it to.

Easily proved, one way or another. Just watch rates.

 

 

Well yes easily proven either way but I don't see that as the trigger.

Vast amounts of BtL mortgages going bad however would be.

[BoSon]

I suppose this is what they mean by levelling up.

https://www.bbc.co.uk/news/business-57834048

Quote

North West England leads housing boom with prices up 15%

 

Meanwhile Cornwall Council refuses to acknowledge their is a housing emergency as renters are kicked out to get more money from staycationers, putting the newly homeless up in 'temporary' shacks that make prison vans look airy.

https://www.cornwalllive.com/news/cornwall-news/cornwall-council-chairman-accused-not-5646732
 

Quote

 

Cllr Martin asked the Conservative chairman: “Do you consider the housing situation in Cornwall to be sufficiently urgent to allow this motion to be discussed today?”

Cllr Giles responded: “I am referring this matter to Cabinet. I understand how important this is, I really do. It will be referred to Cabinet and will be reported back in six months.”

 

It's ok they'll review it in 6 months. i.e. well after holiday season when the scum landlords will allow the underclass in to their properties over winter before repeating the same tactic next year.

 

[HousePriceMania]

1 hour ago, BoSon said:

I suppose this is what they mean by levelling up.

https://www.bbc.co.uk/news/business-57834048

 

Meanwhile Cornwall Council refuses to acknowledge their is a housing emergency as renters are kicked out to get more money from staycationers, putting the newly homeless up in 'temporary' shacks that make prison vans look airy.

https://www.cornwalllive.com/news/cornwall-news/cornwall-council-chairman-accused-not-5646732
 

It's ok they'll review it in 6 months. i.e. well after holiday season when the scum landlords will allow the underclass in to their properties over winter before repeating the same tactic next year.

 

Have a read at the comments on that artical on the BBc...not much support for this.

[HousePriceMania]

On 13/07/2021 at 09:51, spygirl said:

No, this is a game changer.

Banks not being to anything with their money has mortgages very very cheap.

They had nowhere else for it to.

Easily proved, one way or another. Just watch rates.

 

 

Rates are suppressed by the criminal term finding scam and how low a rate a bank is willing to offer to get some idiot to hand them 60% equity/money for a house, makes there balance sheets look rosy.

Cant help thinking the UK/world is about to implode.

[Frank Hovis]

1 hour ago, BoSon said:

I suppose this is what they mean by levelling up.

https://www.bbc.co.uk/news/business-57834048

 

Meanwhile Cornwall Council refuses to acknowledge their is a housing emergency as renters are kicked out to get more money from staycationers, putting the newly homeless up in 'temporary' shacks that make prison vans look airy.

https://www.cornwalllive.com/news/cornwall-news/cornwall-council-chairman-accused-not-5646732
 

It's ok they'll review it in 6 months. i.e. well after holiday season when the scum landlords will allow the underclass in to their properties over winter before repeating the same tactic next year.

 

I heard that on the news and thought it was the right decision because unlike the climate nonsense the council can actually take a lot of action about housing and owns half of the pre-unitary council housing and companies.

However I assumed, and the report did nothing to correct that impression, that it would happen this week or next.

Not in six months time!

As you say that's silly; the crisis is now, this summer.  People have lost their rentals and the temporary accommodation they were using is now booked by tourists.

 

By January it will be a lot less as so many winter lets and temporary accommodation will be available.

[BoSon]

1 hour ago, HousePriceMania said:

Have a read at the comments on that artical on the BBc...not much support for this.

One mentions the benefit of house prices rising is that you get to realise the gains when you retire and downsize.

Doesn't mention that to be able to do that most downsizing is in the form of a coffin and the kids get the benefit through inheritance.

[BoSon]

49 minutes ago, Frank Hovis said:

I heard that on the news and thought it was the right decision because unlike the climate nonsense the council can actually take a lot of action about housing and owns half of the pre-unitary council housing and companies.

However I assumed, and the report did nothing to correct that impression, that it would happen this week or next.

Not in six months time!

As you say that's silly; the crisis is now, this summer.  People have lost their rentals and the temporary accommodation they were using is now booked by tourists.

 

By January it will be a lot less as so many winter lets and temporary accommodation will be available.

Not sure what the councils can realistically do that won't take years to make enough of a difference or requires central government approval.

Levy on private residences suitable for tennants but short let via airb&b?

Restrictions on buying properties if not local for enough years?

More truly affordable housing while ensuring they actually get buiilt?

It's a nationwide issue that the government only seems to be addressing by making it easier to borrow the ever increasing purchase prices, not reducing the incentive to use property as an investment. BTL hasn't been killed off as there are always tax loopholes. Not suprising when many MPs are landlords and property investors.

Like China with their one child policy (though that has now become two or three), maybe the UK needs a one house policy.

I suppose this is how some countries end up with many of the poorest living in shanty town slums while the rest ignore the problem thinking it'll never happen to them, like walking past the homeless thinking they'll all blaggers.

[Frank Hovis]

1 minute ago, BoSon said:

Not sure what the councils can realistically do that won't take years to make enough of a difference or requires central government approval.

Levy on private residences suitable for tennants but short let via airb&b?

Restrictions on buying properties if not local for enough years?

More truly affordable housing while ensuring they actually get buiilt?

It's a nationwide issue that the government only seems to be addressing by making it easier to borrow the ever increasing purchase prices, not reducing the incentive to use property as an investment. BTL hasn't been killed off as there are always tax loopholes. Not suprising when many MPs are landlords and property investors.

Like China with their one child policy (though that has now become two or three), maybe the UK needs a one house policy.

I suppose this is how some countries end up with many of the poorest living in shanty town slums while the rest ignore the problem thinking it'll never happen to them, like walking past the homeless thinking they'll all blaggers.

Short term buy five hundred mobile homes, put them on council land and put services in.

I agree that everything else is a lot slower but, per the Rent Crisis in Cornwall and similar thread, IMO waiting six months to do anything will wreck people's lives as they will end up miles from work, family, friends, schools.

The last report on dealing with some urgent homeless, about a month ago, admitted that some had to be given accommodation in Plymouth.

Fine if you were previously based in Saltash just over the river; not so much if you lived at Sennen in the far west.

All the long term problems are there but this is a huge short-lived boost to those; causing a genuine and urgent crisis as of now July 2021.

[spygirl]

5 hours ago, BoSon said:

Not sure what the councils can realistically do that won't take years to make enough of a difference or requires central government approval.

Levy on private residences suitable for tennants but short let via airb&b?

Restrictions on buying properties if not local for enough years?

More truly affordable housing while ensuring they actually get buiilt?

It's a nationwide issue that the government only seems to be addressing by making it easier to borrow the ever increasing purchase prices, not reducing the incentive to use property as an investment. BTL hasn't been killed off as there are always tax loopholes. Not suprising when many MPs are landlords and property investors.

Like China with their one child policy (though that has now become two or three), maybe the UK needs a one house policy.

I suppose this is how some countries end up with many of the poorest living in shanty town slums while the rest ignore the problem thinking it'll never happen to them, like walking past the homeless thinking they'll all blaggers.

Mandate full occupancy of council accommodation.

 

[spygirl]

Mortgages refused for self-employed who took Covid grants

https://www.bbc.co.uk/news/business-57843756

One, theres a *lot* of self employed. Its running about 1/3 of the private sector.

Two, self employed are - or were - very active in in BTL.

 

[spygirl]

Surprisingly, thats a woman.

Unless the BBC have fucked up the headline, I cant work thsi out -

"I almost feel like I am being treated like a bankrupt, in some way, that I am being penalised for something that wasn't my fault," said hospitality worker Lisa Harding.

Ms Harding, 49, is a first time buyer with a 10% deposit. She said she is unable to get a mortgage because she was previously furloughed from her job in the hospitality industry.

She has now returned to her permanent, full-time job, but has still been turned down by lenders.

"I feel unfairly penalised. Furlough has been brilliant in that it has protected my job. But I didn't expect to come out of the other side - with a deposit, no debt, a perfect credit rating, all of the things that should make me an ideal first time buyer - only to find out that banks just will not lend to me at all," Ms Harding told the BBC.

49yo, working in hospitality with only a 10% is far from a perfect FTB FFS.

Two of the UK's biggest high street lenders, NatWest and the Royal Bank of Scotland, are refusing mortgage applications from people who took the government's self-employment income support scheme (SEISS) grant.

..

Self-employed people are also being asked to stump up larger deposits. Metro Bank, for example, said any customers who have taken out an SEISS grant will need a deposit of 20% or more. At Santander a deposit of 25% is the minimum for those who are self-employed.

Most of the lenders the BBC contacted, including Lloyds, Yorkshire Building Society, TSB and Virgin Money, said they will not accept mortgage applications from people currently on furlough. They also do not include furloughed income as part of their affordability assessment.

...

The 28-year-old has been saving to buy his first home with his wife Emily in Derby. The couple's prospective monthly mortgage payments would be a third less than what they are currently paying each month in rent.

But his bank, NatWest, told him he wasn't eligible for a mortgage because he'd taken out the grant when theatres were forced to close.

"The mortgage system needs to change to reflect evidence of successful recurring rent payments, and we also feel it's wrong that the self-employed are scrutinised more than the employed," Mr Ellis explained.

The couple say they have, with difficulty, managed to secure a mortgage in principle with another lender.

 

Err. no. Bless, hes only 28. Banks know ful lwell when push comes to shvoe that self-employed get kicked out of contracts.

Almost 60% of self-employed borrowers said they felt penalised by lenders because they worked for themselves when applying for a mortgage, according to a survey carried out by the Association of Independent Professionals and the Self-employed (IPSE).

More than two-thirds of freelancers (70%) who had got a mortgage said some lenders would not consider them at all because they are self-employed.

Because you are much higher risk FFS. What so hard to understand???

Self employed, contractors etc *CANNOT * Borrow at he same multiples and deposit as employed people its that easy.

You need a higher deposit and might pay a higher APR from a specialist lender.

Its always been the case FFS.

[BoSon]

12 hours ago, spygirl said:

Mandate full occupancy of council accommodation.

 

Mandate full occupancy of all accommodation. Any left empty for more than 30 days that aren't undergoing substantials work or are inhabitable are added to the council's version of airb&b for social housing allowing short term use.

[spygirl]

11 minutes ago, BoSon said:

Mandate full occupancy of all accommodation. Any left empty for more than 30 days that aren't undergoing substantials work or are inhabitable are added to the council's version of airb&b for social housing allowing short term use.

No, private property is private property and that must be respected.

Publicly owned/funded property is different.

 

 

[BoSon]

4 minutes ago, spygirl said:

No, private property is private property and that must be respected.

Publicly owned/funded property is different.

 

 

Only those with it respect the notion. The rest are looking through the estate agent window like kids salivating at a sweet shop.

[No One]

2 hours ago, spygirl said:

No, private property is private property and that must be respected.

Publicly owned/funded property is different.

 

 

Tax empty property with higher CT, i.e 1.5CT to encourage "accidental LL" or second homes or LL in general to have the property rented out and not turned into AirBnBs or as appreciating "assets" like we see in Zone 1 with the Chinese.

Homes are for living in, not for speculation and preferably not for rentier economic extraction

[Hancock]

1 minute ago, No One said:

Homes are for living in, not for speculation and preferably not for rentier economic extraction

If only, the reality is they're for extracting other peoples wages.

Posted this on other house price topic -

Boris does another speech on "levelling up". 

https://twitter.com/i/broadcasts/1OyKAEDolRbKb

DT does article about young being priced out of the southern property market.

https://www.telegraph.co.uk/property/uk/want-buy-first-home-south-england-now-impossible/

Property in the south of England is now almost entirely shut off to first-time buyers who do not have extra support, thanks to the pandemic house price boom.

First-time buyers cannot get mortgages to cover the cost of purchasing an average priced home in the South West, South East, east of England and London if they have only a 10pc deposit, according to analysis by data firm TwentyCi.

In the south of England, properties cost on average 5.78 times salaries, known as the loan-to-income ratio. Tighter mortgage rules that came in after the financial crisis mean few banks will loan worth more than 4.5 times a buyer’s salary.

This means that in areas where the loan-to-income ratio exceeds 4.5, it is effectively impossible for a first-time buyer to purchase without a deposit larger than 10pc. In these places, entry-level purchasers either need massive savings, support from Government schemes or help from the so-called "Bank of Mum and Dad".

ADVERTISING

TwentyCi measured the average price of an entry level property in each region against the median income. In inner London, a first-time buyer with a 10pc deposit would need to borrow 7.7 times their salary to purchase a typical £350,000 property.

Even in the South West, where the average entry-level property is worth around half that at £165,000, a first-time buyer would need to borrow five times their salary.

By contrast, in the North East and Scotland, the most affordable locations, first-time buyers with a 10pc deposit would only need to borrow 2.3 times their salaries.

Colin Bradshaw, of TwentyCi, said: “For people in the South of England it is now impossible without additional funds over and above an average mortgage and a 10pc deposit.”

An acute shortage of supply in the wake of the pandemic has pushed prices further out of the range of affordability. Outside London, the whole of England and Wales has between 1.7 and two months’ worth of property supply left to sell. This is half the historic norm. 

The number of new listings for sale was down 4.5pc compared to 2019, while the numbers of agreed sales and exchanges were up 33pc and 17.5pc respectively.

The massive imbalance between demand and supply means that the average asking price in the UK halfway through 2021 was £391,000, up from £361,000 in the same period in 2019 – a jump of 8.3pc.

The lack of homes for sale, combined with a slowdown in demand as the stamp duty holiday tapers will likely bring transactions back in line with pre-Covid levels, said TwentyCi.

 

[eek]

6 hours ago, spygirl said:

Surprisingly, thats a woman.

Unless the BBC have fucked up the headline, I cant work thsi out -

"I almost feel like I am being treated like a bankrupt, in some way, that I am being penalised for something that wasn't my fault," said hospitality worker Lisa Harding.

Ms Harding, 49, is a first time buyer with a 10% deposit. She said she is unable to get a mortgage because she was previously furloughed from her job in the hospitality industry.

She has now returned to her permanent, full-time job, but has still been turned down by lenders.

"I feel unfairly penalised. Furlough has been brilliant in that it has protected my job. But I didn't expect to come out of the other side - with a deposit, no debt, a perfect credit rating, all of the things that should make me an ideal first time buyer - only to find out that banks just will not lend to me at all," Ms Harding told the BBC.

49yo, working in hospitality with only a 10% is far from a perfect FTB FFS.

Two of the UK's biggest high street lenders, NatWest and the Royal Bank of Scotland, are refusing mortgage applications from people who took the government's self-employment income support scheme (SEISS) grant.

..

Self-employed people are also being asked to stump up larger deposits. Metro Bank, for example, said any customers who have taken out an SEISS grant will need a deposit of 20% or more. At Santander a deposit of 25% is the minimum for those who are self-employed.

Most of the lenders the BBC contacted, including Lloyds, Yorkshire Building Society, TSB and Virgin Money, said they will not accept mortgage applications from people currently on furlough. They also do not include furloughed income as part of their affordability assessment.

...

The 28-year-old has been saving to buy his first home with his wife Emily in Derby. The couple's prospective monthly mortgage payments would be a third less than what they are currently paying each month in rent.

But his bank, NatWest, told him he wasn't eligible for a mortgage because he'd taken out the grant when theatres were forced to close.

"The mortgage system needs to change to reflect evidence of successful recurring rent payments, and we also feel it's wrong that the self-employed are scrutinised more than the employed," Mr Ellis explained.

The couple say they have, with difficulty, managed to secure a mortgage in principle with another lender.

 

Err. no. Bless, hes only 28. Banks know ful lwell when push comes to shvoe that self-employed get kicked out of contracts.

Almost 60% of self-employed borrowers said they felt penalised by lenders because they worked for themselves when applying for a mortgage, according to a survey carried out by the Association of Independent Professionals and the Self-employed (IPSE).

More than two-thirds of freelancers (70%) who had got a mortgage said some lenders would not consider them at all because they are self-employed.

Because you are much higher risk FFS. What so hard to understand???

Self employed, contractors etc *CANNOT * Borrow at he same multiples and deposit as employed people its that easy.

You need a higher deposit and might pay a higher APR from a specialist lender.

Its always been the case FFS.

Depends what type of contractor you are.

Using a decent specialist broker your average IT contractor will get better rates via the broker than the general public will get going direct.

1 hour ago, No One said:

Tax empty property with higher CT, i.e 1.5CT to encourage "accidental LL" or second homes or LL in general to have the property rented out and not turned into AirBnBs or as appreciating "assets" like we see in Zone 1 with the Chinese.

Homes are for living in, not for speculation and preferably not for rentier economic extraction

That's been ruled illegal for second homes. The national parks would love the right to charge extra but they can't.