Property crash, just maybe it really is different this time

[HousePriceMania]

Is this bad for housing bubbles ?

[No One]

On 17/05/2023 at 12:45, JoeDavola said:

Honest question, does anyone actually like the all-grey decor you see in modern renovations like this:

Source: https://www.propertypal.com/37-ardenlee-parade-belfast/833060

The floor has a nice gloss, and even though its gray it's a clean design. Certainly beats the decrepit 90s starter home furniture in the house I rented from 2015-19

[Axeman123]

1 hour ago, MrXxxx said:

I am sure those with vested interests will be along in a moment to tell us the property market is fine!

eg: Why the house price crash everyone predicted hasn’t happened

Quote

Experts predicted 2023 would bring disaster for the housing market. Amid soaring inflation and interest rates, some analysts warned prices would fall by as much as 20pc.

Yet, in welcome news for millions of homeowners, prices are not falling at the rate economists feared they would – and may never do so. Property values are declining gently, rather than crashing, and the problems with negative equity and forced sales that characterised previous downturns have not yet materialised.

A major crash has so-far been avoided as buyer demand has increased amid a housing shortage, and rules brought in after the financial crisis have meant homeowners were better prepared for price falls.

Economists predicted price discounts as large as 10pc, 15pc and even 20pc last year, pricking the ears of buyers keen to capitalise on a downward turning market.

But since their peak in August 2022, house prices have fallen by just 4.6pc. Now, some experts believe a house price crash could be avoided altogether as inflation falls, soaring rents push people towards homeownership, and interest rates – while higher and less comfortable – are not enough to push homeowners to sell.

Nationwide has predicted a peak-to-trough fall in house prices of between 5pc and 6pc, saying the UK housing market can expect a “soft landing” provided the labour market does not deteriorate, inflation keeps coming down and interest rates do not rise further.

The building society’s chief economist, Robert Gardiner, said: “We’ve always argued a soft landing was the most likely path. To get a more significant correction, you’d need to see more forced selling, which is not likely because rates today are still lower compared with the rates borrowers have been stressed to.

“First-time buyers have also been surprisingly resilient. Though demand is weaker than it was, first-time buyers are still a high share of overall lender activity.”

Nationwide has forecasted a further 1.4pc price drop at most, a far cry from the 20pc falls in prices seen back in the great house price crash of the early 1990s...

loads more cope at the link, including this BS gem

Quote

Mr Donnell of Zoopla said while the Bank of England’s 2015 regulations for lenders did what they said on the tin – avoiding a housing bubble – they have also prevented many from buying.

He explained: “We’ve stopped a boom and bust market at the cost of young home ownership, particularly in the south.

https://uk.finance.yahoo.com/news/why-house-price-crash-everyone-091922760.html

[Phil]

1 hour ago, HousePriceMania said:

By proxy....the landlords will be struggling

 

 

Unless it's bought outright, along with thier own as well as the pension. 

[Option5]

12 minutes ago, Axeman123 said:

A major crash has so-far been avoided as buyer demand has increased amid a housing shortage, and rules brought in after the financial crisis have meant homeowners were better prepared for price falls.

That would be the affordability rules where people prove they can afford higher interest rates because they have minimum financial obligations other than the mortgage. Get the house then go out and get a couple of Audi's on lease.

[JoeDavola]

The thing is, the people in 'denial' about the housing prices falling are so for being proven correct, or rather they aren't being proven wrong.

In that transactions aren't happening at significantly lower prices, and it looks to me where I am that prices are staying level or actually going up - saw a semi with an extension behind where I grew up go on for £350K last week the highest price I've seen for that kinda house since the '07 peak....in the late 90's the house I was in one street ahead which was almost as good a house was £80K.

The cost of even a £300K mortgage at today's IR fuck me I don't wanna even do the sums....actually it's £1650 at 4.4% which maybe is achievable if we assume that one wage nowadays goes completely on house payments/maintenance. Still a depressing state of affairs, and if that family ever loses a wage they're fucked.

There's a really harsh dynamic coming in to play between the home owners, the non-home owners, and the banks, where once again the non-homeowners seem to be in the weakest position:

1. Banks put up the cost of borrowing, if you don't like that tough shit the only alternative is to be a rent slave for life...

2. ...but the amount of houses available for rent is 50% lower than it was in 2015, so there's a queue of people chasing every rental which drives rents up and means that the quality of rentals continues to drop cause they can rent any old shit, you don't like that tough shit the only other possiblity is to buy a house...

3. ...and there is limited supply of houses on sale, many falling to bits and all for mental prices...you don't like that well tough shit we're not dropping our price and your 'choice' in this market is to be homeless or fight for the right to rent one of the shitholes described in step 2 with ever rising rents, and keep paying that rent every month against incresing purchase costs and increasing cost of borrowing.

Edited May 24, 2023 by JoeDavola

[JoeDavola]

....just checked the streets where the house I sale agreed on about a year ago ago as the rate increases started but then pulled out of...looks to me like prices are up another 5-10% since then although supply has collapsed.

Edited May 24, 2023 by JoeDavola

[Yadda yadda yadda]

7 minutes ago, JoeDavola said:

The thing is, the people in 'denial' about the housing prices falling are so for being proven correct, or rather they aren't being proven wrong.

In that transactions aren't happening at significantly lower prices, and it looks to me where I am that prices are staying level or actually going up - saw a semi with an extension behind where I grew up go on for £350K last week the highest price I've seen for that kinda house since the '07 peak....in the late 90's the house I was in one street ahead which was almost as good a house was £80K.

The cost of even a £300K mortgage at today's IR fuck me I don't wanna even do the sums....actually it's £1650 at 4.4% which maybe is achievable if we assume that one wage nowadays goes completely on house payments/maintenance. Still a depressing state of affairs, and if that family ever loses a wage they're fucked.

There's a really harsh dynamic coming in to play between the home owners, the non-home owners, and the banks, where once again the non-homeowners seem to be in the weakest position:

1. Banks put up the cost of borrowing, if you don't like that tough shit the only alternative is to be a rent slave for life...

2. ...but the amount of houses available for rent is 50% lower than it was in 2015, so there's a queue of people chasing every rental which drives rents up and means that the quality of rentals continues to drop cause they can rent any old shit, you don't like that tough shit the only other possiblity is to buy a house...

3. ...and there is limited supply of houses on sale, many falling to bits and all for mental prices...you don't like that well tough shit we're not dropping our price and your 'choice' in this market is to be homeless or fight for the right to rent one of the shitholes described in step 2 with ever rising rents.

Patience. It is like turning an oil tanker. It is finally turning but will take time. I've got a feeling they're trying to turn it in the Suez canal though, mad bastards.

Can anyone get a mortgage for 4.4%? I thought they were higher than that. They're definitely going higher with Government two year rates at 4.38% today. Under 4% yesterday.

[JoeDavola]

1 minute ago, Yadda yadda yadda said:

Can anyone get a mortgage for 4.4%? I thought they were higher than that. They're definitely going higher with Government two year rates at 4.38% today. Under 4% yesterday.

It's the example IR that the property poral site uses here in NI, so I'm assuming so?

[AlfredTheLittle]

31 minutes ago, JoeDavola said:

 

The cost of even a £300K mortgage at today's IR fuck me I don't wanna even do the sums....actually it's £1650 at 4.4% which maybe is achievable if we assume that one wage nowadays goes completely on house payments/maintenance. Still a depressing state of affairs, and if that family ever loses a wage they're fucked.

 

I have it very roughly as £500 per month for each £100,000 borrowed. So £300,000 is £18,000 a year post tax (plus bills of course). Unfortunately, round where I am people think they can afford £1,500 per month, and to be fair they can because that's what they already pay in rent, so anything below £300k gets snapped up.

[Yadda yadda yadda]

23 minutes ago, JoeDavola said:

It's the example IR that the property poral site uses here in NI, so I'm assuming so?

Actually you can, from the Nationwide fixed for 5 years. I thought that loan to value would bump the rate up further but forgot they had compressed the difference between LTV bands. I expect you need to be on a stonking wage though. Also rates are going up.

Edited May 24, 2023 by Yadda yadda yadda

[JoeDavola]

3 minutes ago, AlfredTheLittle said:

I have it very roughly as £500 per month for each £100,000 borrowed. So £300,000 is £18,000 a year post tax (plus bills of course). Unfortunately, round where I am people think they can afford £1,500 per month, and to be fair they can because that's what they already pay in rent, so anything below £300k gets snapped up.

Explains why anything half decent is now over £300k - being bought by two decent wages with 30 + year mortgage plus inheritence/BOMAD.

Just gotta pray no big maintenance bills come in.

Edited May 24, 2023 by JoeDavola

[HousePriceMania]

37 minutes ago, AlfredTheLittle said:

I have it very roughly as £500 per month

More like 650 now.

and now, £660.

it's been a long day for debt junkies.

[Wight Flight]

Anyone fancy signing this petition?

Quote

The Government should allow all mortgage contributions towards an individual's main residence / family home to be made through salary sacrifice, prior to tax and national insurance deductions (similar to pension contributions).

https://petition.parliament.uk/petitions/633889

[onlyme]

6 hours ago, Wight Flight said:

Part of the reason for that could be that renters will pay much higher interest rates than home owners on any debt.

Even if not taking additional debt incomes already stretched, inflation really has kicked them in the nuts, a hell of a lot already marginal affordability before the inflationary pulse.

[AWW]

2 hours ago, JoeDavola said:

The thing is, the people in 'denial' about the housing prices falling are so for being proven correct, or rather they aren't being proven wrong.

I like to use blocks of flats to judge it - because a n-bedroom flat in a block will be very similar to another n-bedroom flat in the same block. Here's one near me - I know the block reasonably well as I have friends there. Numbers 7 and 8 are on the same floor, same aspect, same size, so that's leafy London flats going nowhere since 2016, and that's before the impact of higher borrowing costs is even factored in.

As ever, there is no one housing market.

[JoeDavola]

5 minutes ago, AWW said:

I like to use blocks of flats to judge it - because a n-bedroom flat in a block will be very similar to another n-bedroom flat in the same block. Here's one near me - I know the block reasonably well as I have friends there. Numbers 7 and 8 are on the same floor, same aspect, same size, so that's leafy London flats going nowhere since 2016, and that's before the impact of higher borrowing costs is even factored in.

As ever, there is no one housing market.

Hilarious that in GB they actually show the old selling prices - we don't have that info in NI.

Really hits home how fucked the young are.

£75K in 1996 money is £140K. So that flat is three times as expensive in real terms.

The young should be out rioting.

[HousePriceMania]

£670.

[HousePriceMania]

Remember when people used to say inflation was good for people with mortgages, they'll just clear their debt ?
 

Seems not.

[JoeDavola]

2 hours ago, AWW said:

I like to use blocks of flats to judge it - because a n-bedroom flat in a block will be very similar to another n-bedroom flat in the same block. Here's one near me - I know the block reasonably well as I have friends there. Numbers 7 and 8 are on the same floor, same aspect, same size, so that's leafy London flats going nowhere since 2016, and that's before the impact of higher borrowing costs is even factored in.

As ever, there is no one housing market.

Can I double check which site this is where you can see the historic prices - is this rightmove?

[Bobthebuilder]

52 minutes ago, JoeDavola said:

Can I double check which site this is where you can see the historic prices - is this rightmove?

Rightmove sometimes have historic prices, back to about 2000 I believe,

[Yadda yadda yadda]

5 hours ago, Wight Flight said:

Anyone fancy signing this petition?

https://petition.parliament.uk/petitions/633889

Map view on that shows the geographic spread you would expect.

[mh9000]

1 hour ago, JoeDavola said:

Can I double check which site this is where you can see the historic prices - is this rightmove?

Houseprices.io is pretty good, based off land registry data I believe, same as rightmove’s historic prices.

Edit: that one was rightmove though

Edited May 24, 2023 by mh9000

[One percent]

13 minutes ago, mh9000 said:

Houseprices.io is pretty good, based off land registry data I believe, same as rightmove’s historic prices.

Edit: that one was rightmove though

Estate agents seem to be able to hide the last sold price on rightmove. I really don’t know why they bother as a quick flick through normally shows it. If I was interested in a property, I’d download the land registry details before I even went to have a look.  It’s only a few quid and will give you the last sold price. 

[Plan-b]

5 hours ago, JoeDavola said:

Hilarious that in GB they actually show the old selling prices - we don't have that info in NI.

Really hits home how fucked the young are.

£75K in 1996 money is £140K. So that flat is three times as expensive in real terms.

The young should be out rioting.

Try this browser extension I can't guarantee if it works for you but it's worth a try...

https://www.patma.co.uk/page/property-tools-browser-extensions/

Its capable of showing some true hilarity heres my long time favourite  

..

 

Edit: I didnt bother with the sign up to get the information shown above.

Edited May 24, 2023 by Plan-b