Property crash, just maybe it really is different this time

[Democorruptcy]

Blimey, the 2yr SONIA swap rate is up again  today to 5.145%! The 5 year is 4.611%. The mortgage offers available earlier this week, will be vanishing like ice cubes in the sun.

https://www.chathamfinancial.com/technology/european-market-rates

 

[HousePriceMania]

1 minute ago, Democorruptcy said:

Blimey, the 2yr SONIA swap rate is up again  today to 5.145%! The 5 year is 4.611%. The mortgage offers available earlier this week, will be vanishing like ice cubes in the sun.

https://www.chathamfinancial.com/technology/european-market-rates

 

Still waiting for calls for the Sunake to be removed...

[JoeDavola]

So is this basically the banks saying that regardless of current IR's, they don't think it's going to be profitable medium term with all the inflation to just 'track' the IR rises, they need to price in further rises?

[HousePriceMania]

3 minutes ago, JoeDavola said:

So is this basically the banks saying that regardless of current IR's, they don't think it's going to be profitable medium term with all the inflation to just 'track' the IR rises, they need to price in further rises?

Looks like it.

They're still lending, just not to poor people.

[Democorruptcy]

1 minute ago, HousePriceMania said:

Still waiting for calls for the Sunake to be removed...

The thing that should be removed, is cash from UK banks. Banks are getting 4.5% on their deposits at the BoE, paid for by taxpayers, while banks are paying savers some awful rates. Somebody on social media go viral about starting a bank run.

[spygirl]

44 minutes ago, JoeDavola said:

So is this basically the banks saying that regardless of current IR's, they don't think it's going to be profitable medium term with all the inflation to just 'track' the IR rises, they need to price in further rises?

SONIA is what banks will lend to other banks act.

BoE bae rate sets a floor.

However, the banks will be rasising the fixed debt via bonds i..e not drawing down from BoE.

So Sonia is the absolute minium theyll lend at.

To that youve got to add costs - copliance etc etc.

Mini banks will lend is a 2y fix. You jus tcant get a vriable rate mortgage fro mthe get go.

Going by the 'Weve fucked up' mea culpa from BoE, youve got to expect anotehr 2% of riises left.

Its goign to be ainful if you carryign debt.

London is toast - the HTB is doomed.

IO BTL is beyond fucked.

 

 

[spygirl]

58 minutes ago, HousePriceMania said:

Still waiting for calls for the Sunake to be removed...

More the BoE, the entire eocnomic estatblishment and the BBC.

 

 

[JoeDavola]

8 minutes ago, spygirl said:

IO BTL is beyond fucked.

I actually know one IO owner occupier - friend of a friend - he must be absolutley shitting himself.

[spygirl]

5 minutes ago, JoeDavola said:

I actually know one IO owner occupier - friend of a friend - he must be absolutley shitting himself.

Well thats another thing.

Thereality of this mess is they didnt fix the lunacy of 2002-2007 massive credit boom.

Half the IO loans took out from ~2002 to MMR (2012ish) are still not sorted or resolved in any way.

The oribal terms are goign to start ending in the next few eyars (2000 + 25 = 2025 i.e. 2 years).

Ditto IO BTL.

The abks that have the IO loans on their books are shitting themselves.

AS it stands, the bank can send as many letters as it likes but as long oas the IO borrower pays th IR then thers nothign he bank can do - until the term ends.

 

 

 

[JoeDavola]

2 minutes ago, spygirl said:

Well thats another thing.

Thereality of this mess is they didnt fix the lunacy of 2002-2007 massive credit boom.

Half the IO loans took out from ~2002 to MMR (2012ish) are still not sorted or resolved in any way.

The oribal terms are goign to start ending in the next few eyars (2000 + 25 = 2025 i.e. 2 years).

Ditto IO BTL.

The abks that have the IO loans on their books are shitting themselves.

AS it stands, the bank can send as many letters as it likes but as long oas the IO borrower pays th IR then thers nothign he bank can do - until the term ends.

This person is still in negative equity I think - they bought during the boom before the 07-12 crash in NI. House still not worth in ££ now what it was in 2007.

Then spent a fortune on extensions and the like and just added it to the mortgage.

Fucked.

Edited May 26, 2023 by JoeDavola

[HousePriceMania]

I am seeing some alarming data on UKPL.

The index shot up another £1,600 in a week, thats about 9K in a month.

The median price has gone up 5,000 in a month too, up 10K from the Jan low.

This does indicate a definite bias towards top end prices being listed.

Regionally wise though, this is the scary bit:

East midlands: +2% QOQ -1.29% YOY

London up 5% QOQ, 0.8% YOY

North East up 3% QOQ and 6.3% YOY !!!

North West up 4% QOQ and 8 % YOY !!!

Scotland: Up 14% QOQ and 20% YOY <<<<<< CRAZY 

South East: Up 7% QOQ, 0.4% YOY

South west up 7.5% QOQ, 0.1% YOY

Wales, up 4.6% QOQ, Down -0.2% yoy

West Mids, 3.9% QOQ,  3.3% YOY

Yorkshire 4.2% QOQ, 1.36% YOY

Overall: +1.8% MOM, +4.5% QOQ and -5.6% yoy  and -5.9% from peak.

Median: +1.5% MoM +4.6% QOQ and 0% YOY and -1.44% from peak
 

Available listings wise, they are still shooting up: +3% MOM, +9% QOQ +64% YoY.

many regions have double the listings from this time last year.  London being the exception, its gone up 17% but it didn't fall as much.

My only saving grace is that the shire data that I have shows Northamptonshire is falling again and listings continue to rise  

 

Dunno what to make of this, a last hurrah, a return to normal, total desperation, a resurgent market, delusion, more affordable housing that's the pay rises for some.

I was not expecting this and it doesn't look like ending any time soon looking at the rate of travel.

God help us all.

[Virgil Caine]

1 hour ago, JoeDavola said:

So is this basically the banks saying that regardless of current IR's, they don't think it's going to be profitable medium term with all the inflation to just 'track' the IR rises, they need to price in further rises?

Markets don’t believe the BOE claims about Short Term Bond Yield matching long term inflationary expectations. Basically the measly 0.25% BOE interest rate rise last month did not convince the markets which are expecting inflation over 5% in the next couple of years. The idea the BOE can run lower rates than the US FED over the medium term is essentially a nonstarter and the people on the Monetary Committee that believe this fantasy should be removed from their posts because they are clearly idiots.

Edited May 26, 2023 by Virgil Caine

[HousePriceMania]

14 minutes ago, JoeDavola said:

I actually know one IO owner occupier - friend of a friend - he must be absolutley shitting himself.

If you do some basic maths, you can borrow INFINITE money at 0% mortgage rates and still be able to service the debt.

At 8%, now so much.

[JoeDavola]

6 minutes ago, HousePriceMania said:

Dunno what to make of this, a last hurrah, a return to normal, total desperation, a resurgent market, delusion, more affordable housing that's the pay rises for some.

I was not expecting this and it doesn't look like ending any time soon looking at the rate of travel.

God help us all.

Boomers swapping houses with each other.

Inheritence money going all into housing; the UK are property obsessed so if you inherit £100K you have no loftier goal than throwing it into a slightly bigger house.

The real horror is where exactly an increasing amount of non-asset-owning low/medium earning workers are going to live? Seriously. It's gonna be HMO hell for life for more and more of them at this rate.

Edited May 26, 2023 by JoeDavola

[Bobthebuilder]

29 minutes ago, HousePriceMania said:

I am seeing some alarming data on UKPL.

The index shot up another £1,600 in a week, thats about 9K in a month.

The median price has gone up 5,000 in a month too, up 10K from the Jan low.

This does indicate a definite bias towards top end prices being listed.

Regionally wise though, this is the scary bit:

East midlands: +2% QOQ -1.29% YOY

London up 5% QOQ, 0.8% YOY

North East up 3% QOQ and 6.3% YOY !!!

North West up 4% QOQ and 8 % YOY !!!

Scotland: Up 14% QOQ and 20% YOY <<<<<< CRAZY 

South East: Up 7% QOQ, 0.4% YOY

South west up 7.5% QOQ, 0.1% YOY

Wales, up 4.6% QOQ, Down -0.2% yoy

West Mids, 3.9% QOQ,  3.3% YOY

Yorkshire 4.2% QOQ, 1.36% YOY

Overall: +1.8% MOM, +4.5% QOQ and -5.6% yoy  and -5.9% from peak.

Median: +1.5% MoM +4.6% QOQ and 0% YOY and -1.44% from peak
 

Available listings wise, they are still shooting up: +3% MOM, +9% QOQ +64% YoY.

many regions have double the listings from this time last year.  London being the exception, its gone up 17% but it didn't fall as much.

My only saving grace is that the shire data that I have shows Northamptonshire is falling again and listings continue to rise  

 

Dunno what to make of this, a last hurrah, a return to normal, total desperation, a resurgent market, delusion, more affordable housing that's the pay rises for some.

I was not expecting this and it doesn't look like ending any time soon looking at the rate of travel.

God help us all.

Is this data sold prices or asking prices?

[HousePriceMania]

10 minutes ago, Bobthebuilder said:

Is this data sold prices or asking prices?

Current asking prices from RM.

About 400,000 listings at present

[HousePriceMania]

34 minutes ago, JoeDavola said:

Boomers swapping houses with each other.

Inheritence money going all into housing; the UK are property obsessed so if you inherit £100K you have no loftier goal than throwing it into a slightly bigger house.

The real horror is where exactly an increasing amount of non-asset-owning low/medium earning workers are going to live? Seriously. It's gonna be HMO hell for life for more and more of them at this rate.

I think RM said themselves that the top end was skewing things.

I don't believe for one minute that anything much is selling.

How is your parents sale going ?

42 minutes ago, Virgil Caine said:

Markets don’t believe the BOE claims about Short Term Bond Yield matching long term inflationary expectations. Basically the measly 0.25% BOE interest rate rise last month did not convince the markets which are expecting inflation over 5% in the next couple of years. The idea the BOE can run lower rates than the US FED over the medium term is essentially a nonstarter and the people on the Monetary Committee that believe this fantasy should be removed from their posts because they are clearly idiots.

I think one of them left this month, the Argentinian one.

[JoeDavola]

6 minutes ago, HousePriceMania said:

How is your parents sale going ?

Well to recap, the only reason my parents found a buyer the people moving up the ladder to thier house have a cash buyer for theirs. A fucking cash buyer for a house that's about 5-6 times local average salary.

Anyway, my folks have been sale agreed for a month and still haven't even found one property worth viewing yet. I can't blame them as it's mostly shit out there. I fear their buyer is in for a long wait. I also expect their EA is going to get quite angry with my folks over the next month or two since this is the third time in as many years they've sale agreed without completing.

Edited May 26, 2023 by JoeDavola

[Bobthebuilder]

7 minutes ago, HousePriceMania said:

Current asking prices from RM.

About 400,000 listings at present

In my Dorset search area a lot of expensive big country houses and farms have been listed recently. Its unusual to see places above £1.5 mill, lots being listed at the moment from £2.5 to £3.5 mill, and a few farms, one recently at £14 mill.

That must be skewing the Dorset figures some what.

[Wight Flight]

1 hour ago, JoeDavola said:

Well to recap, the only reason my parents found a buyer the people moving up the ladder to thier house have a cash buyer for theirs. A fucking cash buyer for a house that's about 5-6 times local average salary.

Anyway, my folks have been sale agreed for a month and still haven't even found one property worth viewing yet. I can't blame them as it's mostly shit out there. I fear their buyer is in for a long wait. I also expect their EA is going to get quite angry with my folks over the next month or two since this is the third time in as many years they've sale agreed without completing.

Sooner or later the EA is going to invoke the clause that says that, as they have found a willing and able buyer, their fees are due.

 

[HousePriceMania]

1 hour ago, Bobthebuilder said:

In my Dorset search area a lot of expensive big country houses and farms have been listed recently. Its unusual to see places above £1.5 mill, lots being listed at the moment from £2.5 to £3.5 mill, and a few farms, one recently at £14 mill.

That must be skewing the Dorset figures some what.

If I get my Dorset data....

August 2022, which was the bubble mania peak

 

Dorset

avPrice

£498,459.00

number listings:

4241

This week

Dorset:   avPrice: £507398,    number listings: 7113


So nearly twice as many properties and the prices have gone  up £10K, to an even higher mania peak.

Welcome back to Normal.

14 minutes ago, Wight Flight said:

Sooner or later the EA is going to invoke the clause that says that, as they have found a willing and able buyer, their fees are due.

 

Is that really a thing ?

Edited May 26, 2023 by HousePriceMania

[Wight Flight]

21 minutes ago, HousePriceMania said:

Is that really a thing ?

Yep.

https://www.theguardian.com/money/2018/aug/20/estate-agents-fees-pull-out-house-sale-contracts-commission

[Democorruptcy]

3 hours ago, HousePriceMania said:

I am seeing some alarming data on UKPL.

The index shot up another £1,600 in a week, thats about 9K in a month.

The median price has gone up 5,000 in a month too, up 10K from the Jan low.

This does indicate a definite bias towards top end prices being listed.

Regionally wise though, this is the scary bit:

East midlands: +2% QOQ -1.29% YOY

London up 5% QOQ, 0.8% YOY

North East up 3% QOQ and 6.3% YOY !!!

North West up 4% QOQ and 8 % YOY !!!

Scotland: Up 14% QOQ and 20% YOY <<<<<< CRAZY 

South East: Up 7% QOQ, 0.4% YOY

South west up 7.5% QOQ, 0.1% YOY

Wales, up 4.6% QOQ, Down -0.2% yoy

West Mids, 3.9% QOQ,  3.3% YOY

Yorkshire 4.2% QOQ, 1.36% YOY

Overall: +1.8% MOM, +4.5% QOQ and -5.6% yoy  and -5.9% from peak.

Median: +1.5% MoM +4.6% QOQ and 0% YOY and -1.44% from peak
 

Available listings wise, they are still shooting up: +3% MOM, +9% QOQ +64% YoY.

many regions have double the listings from this time last year.  London being the exception, its gone up 17% but it didn't fall as much.

My only saving grace is that the shire data that I have shows Northamptonshire is falling again and listings continue to rise  

 

Dunno what to make of this, a last hurrah, a return to normal, total desperation, a resurgent market, delusion, more affordable housing that's the pay rises for some.

I was not expecting this and it doesn't look like ending any time soon looking at the rate of travel.

God help us all.

That mirrors what I've seen from the areas I look at, Scotland is hottest.

I'm not surprised sentiment had picked up. I called the bottom in mortgage approvals. There was panic around Truss time about mortgage rates but more recently rates had been dropping and the general expectation was for inflation to fall and rates to be cut. The mortgage bailout (AKA energy cap) helped people through what seemed the worst period.

Plus a lot of people have had decent pay rises, that they can leverage up. Where is the pain for the public sector? Without any, they alone can keep the housing market ticking over.

However now could be an inflexion point. Inflation hasn't dropped as much as expected and Hunt today is supporting the BoE to do more rate rises, even if it results in a recession. The back to normal, might be going to take longer? Of course taxpayers paying bankers the base rate on their deposits at the BoE, won't discourage bankers from lobbying for higher interest rates.

[JoeDavola]

Interesting case of a house near my folks.

Couple moved in a couple of years back, spent a bloody fortune on the house. Major double extension, totally renovated. Very decent sized house, but in quite a run down looking area immediately around it.

Anyway they're selling it now, looking £350K for it which is just breathtaking for that particular area. All time high really. And why would you spend all that money on a house just to move out two years later.

Seems the amount you need to spend to go from a 3 bed to an actual 4 bed house (i.e. 4 useable bedrooms) is over £100K for that 4th bedroom now.

According to them it's quite young people buying and selling these houses, though I don't know what to belive. Apparently the people buying their house are only about 30 with a couple of kids - it's either BOMAD or there must be people earning far more money than the average wages for this country buying these houses.

Like my Dad's earnings inflation-adjusted peaked at say £40K, and was a single income household but the people buying the same house now have a joint income of over £100K, perhaps well over? It does seem to be the barrier to entry these days to aspire to anything that isn't claustrophobic.

Edited May 26, 2023 by JoeDavola

[JoeDavola]