Property crash, just maybe it really is different this time

[Ghostly]

1 hour ago, eek said:

I saw earlier today the beginning of a campaign to remove affordability checks on fixed term mortgages because there is zero chance of interests rates rising during the period the rate is fixed.

What happens if interest rates are x% when the fixed term finishes is a question I can't be arsed to raise. 

All other costs of course will remain the same 😄

@Chewing Grass - so 20% falls to kick in from Q2 2022?

[Option5]

Young people can buy houses if they 'don't go out drinking', says 22-year-old Stockport landlord

Josh hopes to retire at 30

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/young-people-can-buy-houses-21558111

Trainee mortgage advisor 

Mortgaged up and remortgaging as "values" rise. What could possibly go wrong?

[Phil]

4 minutes ago, Option5 said:

Young people can buy houses if they 'don't go out drinking', says 22-year-old Stockport landlord

Josh hopes to retire at 30

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/young-people-can-buy-houses-21558111

Trainee mortgage advisor 

Mortgaged up and remortgaging as "values" rise. What could possibly go wrong?

I can't bring this thread down with profanities, so won't. But. He looks a bit of a soy boy, and probably hasn't got any friends anyway, and looks like the prospects of a girlfriend ( assumed) is close to zero.  just saying. 

[Ghostly]

49 minutes ago, Option5 said:

Young people can buy houses if they 'don't go out drinking', says 22-year-old Stockport landlord

Josh hopes to retire at 30

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/young-people-can-buy-houses-21558111

Trainee mortgage advisor 

Mortgaged up and remortgaging as "values" rise. What could possibly go wrong?

If you buy any old shithole then he is right. The outside of his gaff doesn’t look too promising.

I used to work with a lad who was a bit like this guy and had saved £50k by the age of 25 because he didn’t drink.

[Noallegiance]

48 minutes ago, Phil said:

I can't bring this thread down with profanities, so won't. But. He looks a bit of a soy boy, and probably hasn't got any friends anyway, and looks like the prospects of a girlfriend ( assumed) is close to zero.  just saying. 

These days you're guilty of assuming both his preference and his gender.

Tut tut.

[Boon]

Just seems like there is something missing here.

If he had £11k deposit and was earning £14k, how could you buy a £115k house?

Either his parents topped him up or guaranteed the mortgage somehow, but these little details are omitted otherwise it wouldn't be much of a story.

However, fair play for doing works himself but if someone was buying crpyto with the same asset allocation with the caveat 'so long as prices keep going up I'll be OK' they would be ridiculed in the press. 

I had the same enthusiasm as him when I was his age but sadly I learned that the world finds a way to piss on your chips. But maybe that's only me. 

It amazes me that nowhere in the media really wants to point out the risks. If there was a massive crash it wouldn't be so easy as 'going slowly with savings', not if all his other houses contain the same levels of leverage.

[Phil]

29 minutes ago, Noallegiance said:

These days you're guilty of assuming both his preference and his gender.

Tut tut.

Guilty malord.

[HousePriceMania]

2 hours ago, Option5 said:

Young people can buy houses if they 'don't go out drinking', says 22-year-old Stockport landlord

Josh hopes to retire at 30

https://www.manchestereveningnews.co.uk/news/greater-manchester-news/young-people-can-buy-houses-21558111

Trainee mortgage advisor 

Mortgaged up and remortgaging as "values" rise. What could possibly go wrong?

Young people can buy house...if they get someone else to pay for it for them

What a dickhead

[sancho panza]

On 12/09/2021 at 17:52, Hancock said:

Apart from after the 2007/8 crash and around just before they introduced Help to Sell, they've never entertained offers.

But why would they when the Tory party has their back.

Yep.And they haev the cheek to call tehmselves the party of capitalism when they bail out failed financial insittuions.

On 13/09/2021 at 10:05, Noallegiance said:

Shame...

Chaos for landlords as property sales fall apart (msn.com)

you really should have psoted some of that.Quality.

'A down valuation occurs when a surveyor, acting on behalf of a bank or building society, values a property below the price agreed with the seller. It can mean lenders withdraw or greatly reduce mortgage offers.

While landlords run this risk too, they have been dealt a second blow. In the buy-to-let market surveyors also assess a property’s rental potential, and a dispute over income can tip the scales on affordability.

Mr Stewart said: “Landlords can be hit with a double whammy when their lender’s valuer does not agree with them as to what they are planning to pay for the property and what level of rental income they are expecting.”

Surveyors can easily shave tens of thousands of pounds from a property’s agreed price and it has been known for some valuations to be £300,000 lower than expected.

One landlord recently offered £225,000 on a two-bedroom flat in Rugby, Warwicks, only to have it down valued by £55,000.

She said: “I offered £225,000, which I know was £10,000 less than the seller paid for the property three years ago and the offer was accepted.

“Despite this, the lender’s valuer said the flat was only worth £170,000. It’s ridiculous and the seller isn’t even making any money on the sale.”'

[sancho panza]

Jeremey grantham in Moneyweek a few weeks back.

https://moneyweek.com/investments/investment-strategy/investment-gurus/603787/the-us-is-in-one-of-the-greatest-bubbles-in

 

There will be “hell to pay” in the UK property market

“One day there is going to be hell to pay.” That’s Jeremy Grantham’s verdict on the UK property market. Why? Two reasons. First, it is overpriced, and second because while it is possible to get reasonably long fixed-rate mortgages (Nationwide has a five-year deal at just under 1%), in general, “you guys have floating rates, like Canada, Australia, and New Zealand. That means that when rates rise a large number of borrowers will see their monthly payments shoot up.

“Some of those borrowers will turn into forced sellers; given that markets are priced at the margin, prices will crash. In the US it won’t be so bad: we have fixed rates. So, yes, our market will crash and it will be painful, but not nearly as painful as it will be in Britain.” 

What can we do? When it comes to mortgages, “go and get the longest one you can”, says Grantham. If the ten-year offering seems a little more expensive than you would like, “pay up a little” and get it anyway. You may feel as though you are overpaying for a while but that won’t make you wrong. “Everybody feels stupid at the top of the bull market, basically.” Everyone feels they should have taken more risk – leveraged their assets a bit more. 

What usually happens however is that they capitulate and do just that “just in time to get wiped out... The market, in its own way, must have a lot of fun.” However this is not just about the UK. Housing in most of the world is about as bubbly as it has ever been. In the US, prices as a multiple of family income are now higher than they were in the great housing bubble of 2006 and 2007. 

That “in itself is quite amazing”. And remember that when that bubble deflated it took $8trn of “perceived wealth” (“perceived” because the house itself doesn’t change just because its price rises) down with it. The same day of reckoning will come to global markets again. The only thing in the UK’s favour is how slow it is at building houses. Last time round the markets that really cracked – Spain, Ireland and the US – were the ones that built and built. Those that did not (the UK, Australia, and Canada) were not hit so hard. 

However, there is little doubt in Grantham’s mind that we won’t escape so lightly this time. With prices up by 13.2% in the year to June (the data is from the Office for National Statistics – see chart) housing inflation is at a 17-year high. When the crash comes to the UK, says Grantham, it will be a “humdinger”.

[Hancock]

50 minutes ago, sancho panza said:

Yep.And they haev the cheek to call tehmselves the party of capitalism when they bail out failed financial insittuions.

It was the way they created Funding for Lending, then casually came up with its partner Help to Buy 1 + 2 + London version.

At a time when prices were correcting.

As your other article shows there will come a time to pay the piper, and i hope its before the next election.

[Hancock]

1 hour ago, HousePriceMania said:

Young people can buy house...if they get someone else to pay for it for them

What a dickhead

Not just any house, a fucken shit house that not so long ago they'd struggle to give away.

[leonardratso]

1 hour ago, Hancock said:

Not just any house, a fucken shit house that not so long ago they'd struggle to give away.

dih not this old shite again, hes a bit late to the table there, i hope he gets his virgin face ripped off by the bank.

[Hancock]

22 minutes ago, leonardratso said:

dih not this old shite again, hes a bit late to the table there, i hope he gets his virgin face ripped off by the bank.

He'd certainly not get a table at the Property118 Oil Barons Ball with such a shite house.

Edited September 14, 2021 by Hancock

[HousePriceMania]

 

[HousePriceMania]

Missed this snippet of info...£9000 fall in a month.  Biggest of record I believe.

Miss

[HousePriceMania]

And some figures from ToS

 

If that happens this month, most regions will see a yoy fall.

UK Property Lion say an -6% fall for east of England last month but nothing like these numbers.

Scotland is already yoy on -ve.

[HousePriceMania]

18 hours ago, sancho panza said:

Jeremey grantham in Moneyweek a few weeks back.

https://moneyweek.com/investments/investment-strategy/investment-gurus/603787/the-us-is-in-one-of-the-greatest-bubbles-in

 

There will be “hell to pay” in the UK property market

“One day there is going to be hell to pay.” That’s Jeremy Grantham’s verdict on the UK property market. Why? Two reasons. First, it is overpriced, and second because while it is possible to get reasonably long fixed-rate mortgages (Nationwide has a five-year deal at just under 1%), in general, “you guys have floating rates, like Canada, Australia, and New Zealand. That means that when rates rise a large number of borrowers will see their monthly payments shoot up.

“Some of those borrowers will turn into forced sellers; given that markets are priced at the margin, prices will crash. In the US it won’t be so bad: we have fixed rates. So, yes, our market will crash and it will be painful, but not nearly as painful as it will be in Britain.” 

What can we do? When it comes to mortgages, “go and get the longest one you can”, says Grantham. If the ten-year offering seems a little more expensive than you would like, “pay up a little” and get it anyway. You may feel as though you are overpaying for a while but that won’t make you wrong. “Everybody feels stupid at the top of the bull market, basically.” Everyone feels they should have taken more risk – leveraged their assets a bit more. 

What usually happens however is that they capitulate and do just that “just in time to get wiped out... The market, in its own way, must have a lot of fun.” However this is not just about the UK. Housing in most of the world is about as bubbly as it has ever been. In the US, prices as a multiple of family income are now higher than they were in the great housing bubble of 2006 and 2007. 

That “in itself is quite amazing”. And remember that when that bubble deflated it took $8trn of “perceived wealth” (“perceived” because the house itself doesn’t change just because its price rises) down with it. The same day of reckoning will come to global markets again. The only thing in the UK’s favour is how slow it is at building houses. Last time round the markets that really cracked – Spain, Ireland and the US – were the ones that built and built. Those that did not (the UK, Australia, and Canada) were not hit so hard. 

However, there is little doubt in Grantham’s mind that we won’t escape so lightly this time. With prices up by 13.2% in the year to June (the data is from the Office for National Statistics – see chart) housing inflation is at a 17-year high. When the crash comes to the UK, says Grantham, it will be a “humdinger”.

Welcome to hell...

 

[Bobthebuilder]

There is a small, rural, idyllic Dorset village that I have kept an eye on for 20 years. You know the type, thatched with cob walls, millionaires trophy chocolate box holiday home. I could never afford one, even with a 50% crash.

Now, you do not see these up for sale very often. I have noticed over the years that they tend to be sold when something is starting to shout WARNING, I saw this in 2008.

2 houses listed as of today, one reduced the other just added.

I can still dream.

[RWJ]

I rented a new build 'apartment' for a couple of years 10 years ago.  The flats were mainly bought by amateur investors, with the one I was in owned by a chap in London who hadn't even set eyes on the place.   3 blocks of 6 flats.  I remember thinking at the time there's no way this is worth £135,000, which is what they sold for.  I was paying £500 a month rent.

Anyway, this week I noticed 2 of them on Rightmove for £80,000.  That's a hell of a drop in a decade. 

[No One]

It's starting.

[Phil]

15 minutes ago, No One said:

It's starting.

I hope it is.

[Bobthebuilder]

59 minutes ago, No One said:

It's starting.

Yes, agree.

I think it has.

[Boon]

You could argue that the ingredients are in place, and have been for a long time. 

But IMO you need forced sales to really kick the whole thing off. Those sales decrease sentiment, which then entices more people to sell, which reduces the success rates of those selling, which leads to price cuts, which then leads to reduced sentiment, and so on.

In the last crash (90s, not GFC) there were some properties that literally could not be given away; I could easily see modern flats with high service charges in cheap areas going that way. 

Higher food and energy prices are about as good as an interest rate rise; if they can be sustained and the real interest rate rise comes, it can really start.

[sancho panza]

On 13/09/2021 at 09:14, HousePriceMania said:

I was just about to post something that might be related to that...someone pointed out to me on Friday that if you use rightmove for an area then say there are 100 places up for sale, if you include SSTC, there are 300.

It's like chains are stuck and not moving.

I was given two examples:

 

Northamptonshire: Over 3x more properties (6,552) are sstc than are for sale (2,117).

Yorkshire: 1,561 properties. If I do include sold stc that goes up to 4,438 

 

 

Just checked leicesterhsire 3385 versus 9996.Breath taking.Never seen anything like that before