Property crash, just maybe it really is different this time

[Guest]

41 minutes ago, AlfredTheLittle said:

8% of households have gross income above £100k. That's a huge amount.

In that case the top 8th percentile house should cost about £300k, perhaps a little less to account for the riskiness of dual income mortgages.

Now to take a big sip of coffee and head over to the ONS to check out the average UK house price which presumably will be a lot less than £300k to reflect where the middle 2/3rds of household incomes are landing, maybe half that?

Uh oh.

Edited June 9, 2023 by Guest

[onlyme]

3 hours ago, JoeDavola said:

I think we're in massive denial on this site.

I have no doubt the money is real and the sale is real.

Cash buyers might be rare, but there seems to be a lot of them in NI for anywhere that you'd ever want to live.

Even when my mate was looking at £300K houses well outside of Belfast about 2-3 years ago, he was oubid by cash buyers on two occasions.

Can't find it now but there was a regional price change map on Twitter, followed the historical pattern, London / SE and SW showing falls - 1.6% (meaningless number as will be well out of date) with areas up North still showing above 2.5% increases. Suspect NI will just see the effects ripple out a later time., unless there's something like a massive south to North Ireland tansfer of money from somewhere like the Dublin market driven by other factors.

[Austin Allegro]

On 07/06/2023 at 12:41, JohnnyB said:

Absolutely crazy

But also they're quoting over 35 years - is that an error, as I'm guessing that due to our love of easy round numbers there's very few 36/37 years, so it's saying 1/5 are 40 years minimum in reality?

 

I do think sadly that one or both parties will start to push some sort of help-pay-mortgage-payments scheme. Once nights start to get darker in the autumn and the Truss anniversary comes rounds, 50% of the 2 year fixes will have rolled on to higher rates. Already the banks have been given the order to "support" those in difficultly rather than send the bailiffs round. Sad mortgage family face will be a PR disaster if people lose their houses in any volume.

Ironically my hope is that Big Finance and the IMF are now aware of how ropey the UK situation is and torpedo any stupid plans like they did with the Truss budget (irrespective of whether that was justified or not).

People on Mumsnet etc have already been saying they just can't afford the increases in their mortgage, it's not a question of cutting back as they can't/won't do that. IMO it will be like the profit-gouging with utilities - the  government will announce a 'help for homeowners' scheme in conjunction with the banks, with the aim of eventual part private/part state ownership of most peoples' homes. There is no way on God's green earth they will allow mass evictions, because nobody would benefit - who are the banks going to sell the homes to?

[Covid19 and life to go]

1 hour ago, JoeDavola said:

100% - and as you rightfully point out buying property also includes very expensive extensions/renovations.

Of the figure of 60% having no savings I increasingly wonder not only how those folks lives are going to turn out in the long term but where exaclty they're supposed to live now if housing is increasingly a cash only game?

 

1 minute ago, Austin Allegro said:

People on Mumsnet etc have already been saying they just can't afford the increases in their mortgage, it's not a question of cutting back as they can't/won't do that. IMO it will be like the profit-gouging with utilities - the  government will announce a 'help for homeowners' scheme in conjunction with the banks, with the aim of eventual part private/part state ownership of most peoples' homes. There is no way on God's green earth they will allow mass evictions, because nobody would benefit - who are the banks going to sell the homes to?

Nice one I think you answered that scenario.

Long term for these people and everyone else..  shut your whining and get back to your windowless shoebox and get peddling on that exercise bike.  Our elite yachts aren't going to be built by themselves and now the oils ran out we need the energy generation.  Don't forget to grab your ration of bugs on your way 'home' too.

[HousePriceMania]

[Wight Flight]

8 minutes ago, Austin Allegro said:

who are the banks going to sell the homes to?

Renters ?

[Austin Allegro]

 

15 minutes ago, Covid19 and life to go said:

 

Nice one I think you answered that scenario.

Long term for these people and everyone else..  shut your whining and get back to your windowless shoebox and get peddling on that exercise bike.  Our elite yachts aren't going to be built by themselves and now the oils ran out we need the energy generation.  Don't forget to grab your ration of bugs on your way 'home' too.

Which was basically the economic model for most people until very recently in history.

Take a sitcom like 'On the Buses' which ran until the mid 1970s, that had a middle aged married couple (Arthur and Olive), their mother, and a middle aged man (Stan) all living in a two-up-two-down terraced house; or 'Til Death Us Do Part' which had a working man and his wife (Alf and Else), two young adults (Rita and the Scouse Git) and a baby all in one of those tiny houses where the front door opens on to the street. There was nothing unusual about that at the time, the programmes were popular because they reflected how most people lived.

The idea that we can all live in large executive homes on new estates with new cars etc is a very recent one.

[HousePriceMania]

I genuinely dont see how the Covid 30% price rises + another 10% drop is not going to happen now, it feels baked in.

We could in theory see 50% real term falls across the UK over the next 2/3 years.

 

[HousePriceMania]

48 minutes ago, Austin Allegro said:

 

Which was basically the economic model for most people until very recently in history.

Take a sitcom like 'On the Buses' which ran until the mid 1970s, that had a middle aged married couple (Arthur and Olive), their mother, and a middle aged man (Stan) all living in a two-up-two-down terraced house; or 'Til Death Us Do Part' which had a working man and his wife (Alf and Else), two young adults (Rita and the Scouse Git) and a baby all in one of those tiny houses where the front door opens on to the street. There was nothing unusual about that at the time, the programmes were popular because they reflected how most people lived.

The idea that we can all live in large executive homes on new estates with new cars etc is a very recent one.

I can see that happening in the 1 bed flats/HMOs that top earning people can now afford 

[One percent]

House price crash? Not round here. Have a look at the delusional pricing on this. It’s even got another house slapped on the back where your garden should be.  
 

https://www.rightmove.co.uk/properties/135751343#/?channel=RES_NEW

[Boon]

https://www.standard.co.uk/insider/mortgage-rise-turmoil-homeowners-b1086551.html

Another sob story. However I cannot reconcile the numbers at all, what interest rates get a fixed rate going from £400 to £2000? The only thing that fits is an I/O deal going to a repayment but that seems far fetched.

Funnily enough the newspaper is careless enough with the doxxing and the listing is here:

https://www.purplebricks.co.uk/property-for-sale/1-bedroom-apartment-london-728874?

So here, they have already moved and it rented for 202 days last year. So the real reason they are selling alongside the mortgage is that Airbnb only allows 90 days now.

It is so fucking funny that the article skips over this and even the guy says "designed to stop rich investors taking advantage, but preventing normal people like us from trying to pay the bills", just oblivious to the fact that they are one of these rich investors! If they reduced the price, the thing would sell. But that seems beyond them.

[sancho panza]

Leicestershire update.We're over 11,000 inventory inlc sstc

Over the last 10 months available inventory is up 69%

Not enough bids and sales pressure backing up.Some serious structural dislocation ongoing imho

Worth noting Inventory inlc sstc is only up 8.7% since october 22

 

Leicestershire county

                                     Available                                 Inventory

Date                            Inventory                                incl SSTC    

14/8/22                       3950

10/10/22                    4885                                             10416             

14/11/22                    5417                                             10188

25/1/23                      5664                                                9295

15/2/23                      6007                                                 9597

22/3/23                     6168                                                10002            

20/4/23                     6399                                               10494

14/5/23                      6624                                               10958

9/6/23                        6706                                               11332

 

 

Edited June 9, 2023 by sancho panza

[Axeman123]

24 minutes ago, Boon said:

https://www.standard.co.uk/insider/mortgage-rise-turmoil-homeowners-b1086551.html

IMO you have shortchanged people by not including the headline:

Quote

‘Our mortgage went from £400 a month to over £2,000 — we’re in hell’

 

[sancho panza]

48 minutes ago, Boon said:

https://www.standard.co.uk/insider/mortgage-rise-turmoil-homeowners-b1086551.html

Another sob story. However I cannot reconcile the numbers at all, what interest rates get a fixed rate going from £400 to £2000? The only thing that fits is an I/O deal going to a repayment but that seems far fetched.

Funnily enough the newspaper is careless enough with the doxxing and the listing is here:

https://www.purplebricks.co.uk/property-for-sale/1-bedroom-apartment-london-728874?

So here, they have already moved and it rented for 202 days last year. So the real reason they are selling alongside the mortgage is that Airbnb only allows 90 days now.

It is so fucking funny that the article skips over this and even the guy says "designed to stop rich investors taking advantage, but preventing normal people like us from trying to pay the bills", just oblivious to the fact that they are one of these rich investors! If they reduced the price, the thing would sell. But that seems beyond them.

I suspect they've had to tkae a bridging loan

428x12=5136 @1.5%=£342k loan

briding laon @8% = £2280pcm

Obviously room for manouvre with the figures.but this seems entirely in keeping with what theyd escribe

https://www.mortgagestrategy.co.uk/news/bridging-lending-sees-68-spike-in-q1-apex/

Bridging lending sees 68% spike in Q1 – Apex

By David Burrows 9^th June 2023 9:28 am

Apex Bridging reveals a huge spike in bridging lending during the first quarter of this year, primarily driven by chain breaks following the market turbulence caused by last September’s mini budget. 

The analysis by the bridging finance specialist shows that £278.8m was lent via bridging loans during the first quarter of 2023, a 68% increase versus the previous quarter and by far the highest quarterly sum seen over the last two years. 

Bridging lending previously peaked in third quarter 20022 at £214.7m, before the market uncertainty caused by September’s mini budget caused many to reassess their position within the market.

This saw total bridging lending fall by 23% during the final quarter of that year but, now that the dust has settled, this downward trend has reversed significantly. 

While investment purchases were the key factor behind bridging loans during the final quarter of 2022, it was chain breaks driving the sector in Q1 of this, accounting for a quarter of all lending.

This highlights the tougher market conditions facing many buyers and sellers who are now having to adapt with higher borrowing costs and cooling house prices. 

 

Edited June 9, 2023 by sancho panza

[Formerly]

3 hours ago, HousePriceMania said:

I'd suggest we're closer to the denial label unfortunately.

[BoSon]

8 minutes ago, Formerly said:

I'd suggest we're closer to the denial label unfortunately.

Dunno, looks accurate to me:

https://www.thisismoney.co.uk/money/mortgageshome/article-12168341/Asking-prices-22-higher-homes-sold-estate-agents-overvalue.html?ico=mol_desktop_home-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fhome%2Findex.html

 

Like the Big Dipper at Blackpool Pleasure Beach, or perhaps it'll turn into The Big One.

[Formerly]

21 minutes ago, BoSon said:

Dunno, looks accurate to me:

https://www.thisismoney.co.uk/money/mortgageshome/article-12168341/Asking-prices-22-higher-homes-sold-estate-agents-overvalue.html?ico=mol_desktop_home-newtab&molReferrerUrl=https%3A%2F%2Fwww.dailymail.co.uk%2Fhome%2Findex.html

 

Like the Big Dipper at Blackpool Pleasure Beach, or perhaps it'll turn into The Big One.

Hmmm. Maybe. I hope so!

[sancho panza]

22 minutes ago, Formerly said:

Hmmm. Maybe. I hope so!

This mess has taken twenty years to get this insane.It'll unwind over time but bears are normally faster than bulls to the turn.

In a decade they'll look and wonder what on eatht the regulators were doing during the ballooning of nationwides IO BTL mortgage book

My mian interest is the impact of LTV changes on mortgage books and stage 2 growth resulting.Default rates(stage 3) are really subdued at the mintue,no sign of panic yet

Have we had this yet?

https://www.theguardian.com/business/live/2023/jun/09/mortgages-hsbc-deals-nationwide-raises-rates-north-sea-vodafone-business-live

 

Edited June 9, 2023 by sancho panza

[sancho panza]

@spygirl you were talking cre tother day

[spygirl]

1 hour ago, Axeman123 said:

IMO you have shortchanged people by not including the headline:

 

Thats would have to be one of the last resi IO loans.

Which is why they are on the SVR.

 

 

[sancho panza]

Edited June 9, 2023 by sancho panza

[spygirl]

1 hour ago, sancho panza said:

@spygirl you were talking cre tother day

Commercial contracts tend to be on longish rentals - 5y+.

You are goign to see recution in demand/increase in supply of ~20% each year, over the next 5 years.

 

[HousePriceMania]

3 hours ago, Formerly said:

I'd suggest we're closer to the denial label unfortunately.

I've sat and watch the return to normal since Feb so I'm going with us entering the fear phase.

 

5 hours ago, One percent said:

House price crash? Not round here. Have a look at the delusional pricing on this. It’s even got another house slapped on the back where your garden should be.  
 

https://www.rightmove.co.uk/properties/135751343#/?channel=RES_NEW

No sure we can base any findings on your street 

[One percent]

7 minutes ago, HousePriceMania said:

I've sat and watch the return to normal since Feb so I'm going with us entering the fear phase.

 

No sure we can base any findings on your street 

It’s not built yet. 

[HousePriceMania]

Actually heard this in the pub yesterday..."good luck selling, the market is very slow"...

No mate, the prices are untenably high.