Property crash, just maybe it really is different this time

[Formerly]

21 minutes ago, Bus Stop Boxer said:

Mate has pointed out that this is an odd week in the month to tweak rates. Is it?

Unscheduled?

No, although I thought it was meant to be first Thurs of month. Had to check schedule to see why there were no rises earlier in March.

[spygirl]

21 hours ago, Pip321 said:

I think this illustrates that when we talk about ‘house prices’ that really there isn’t a consistent measure across the UK for where we really are.

Mention if Darlo too, with high demand and Dorset with falling demand. 

I live in a very affluent and pretty area in North Yorkshire. House prices are high(ish) and I expect them to fall. However perhaps they will just stop rising and inflation will do its job.

However Darlington may creep up, Dorset down and certainly London is in trouble. 

So I think for me it’s a variable answer depending on the growth we have seen in the local areas and the falls will be as variable as the rises.

I am overall a bear but in the cold quiet Jan 2021 my son bought. With a little help and guidance from me he got an ex rental which had been renovated improved and extended but had crappy laminate floors, no light shades and felt totally unloved in its presentation. He paid £248k and similar houses were maybe £235k in 2018 but £300k in the summer 2020 madness. 

We looked at the price worked it back with normal inflation ie 2.5% ish and infact it hadn’t really gone up much more than inflation for 20 years. Indeed this particular house had fallen when allowing for inflation, its renovation and extension since it had been bought in 2016.  Too many people buy with less due process than when they buy a TV….we researched and to be fair to say I know the local market is an understatement  

However, some sale prices for ones with log burners and blue grey kitchens were really daft prices. Same house type, unextended on an awful angled plot sold for £325k in 2020…but it’s kitchen was nice and it had those nice grey blinds 🤦🏻‍♂️. Seriously who does that?

Back to point. I think ‘some’ prices will fall. Some won’t. It depends what and where.  So people should buy reasonably are carefully. Like they would with an important purchase like a TV 😆🤦🏻‍♂️

I put my  ragbag of theory and speculation at the start of this thread.

IIRC from TOS you are/were FINSEC Harrogatey/Skiptony, starting employment in 1987ish?

I think your view/thinking may be distortedby the industry you work in.

Peoples view of housing is based on several  freakish, one-off conditions -  mortgages becoming mass market product (mid 70s),  boomers hitting 25-30 (late 70s/early 80s), financial deregulation (early 80s), Finsec big bang (1986).

You saw a peak of people take out mortgages, just as when there was a wave of capital.

The Finsec also used to employ a *huge* number of people, all very well paid for their skill level (normally just a gcse pass), and stuffed with cheap mortgages and pensions.

I used to go to towns, up n down the UK. Typically, the top 1, 2 even 3 employers in medium to large towns used to be the Finsec - back offices, retail banks, life insurers etc etc.

And all the supporting services they used.

Even little stuff like retail  have been massively reduce since 2008 -

https://www.dailymail.co.uk/news/article-10618807/Britains-vanishing-High-Street-banks-Maps-number-banks-plunged-5-154.html

 

Mix that with MMR, where there is limited discretion on lending - poof, areas where banks would lend high multiples just because they always had, poof!, housing is now tied to local earnings- ls than ~5 times.

 

Edited March 18, 2022 by spygirl

[spygirl]

On my FInsec stuffed full of lazy duffers .... heres a story from todays FT -

Ex-FCA chief Bailey ‘fell asleep’ in pensions mis-selling meeting

BoE governor’s ‘head dropped and had his eyes closed’ during steelworkers hearing

 

https://www.ft.com/content/f8f154c2-2e8c-4127-9420-dce26a760502

Andrew Bailey, when head of the Financial Conduct Authority, fell asleep during a meeting about what would become one of the UK’s biggest pension mis-selling scandals, according to people in attendance who were pressing the regulator to take faster action to protect those affected.

Just as well hes well away from anything financial now ....

 

[spygirl]

Outgoing chief executive hails record results

https://www.thebusinessdesk.com/yorkshire/news/2090835-building-society-builds-record-results?utm_source=newsletter&utm_medium=email&utm_campaign=Yorkshire_18th_Mar_2022_Daily

Skipton Building Society’s outgoing chief executive has said its record results are a testament to the strength of its business model and its “ability to move at pace in spotting and seizing opportunities”.

Announcing its results for 2021 Skipton Building Society noted that group profit before tax had increased by 129% to £271.8m and was ahead of pre-pandemic levels of both 2019 and 2018.

The UK’s fourth largest building society noted that 2021 had marked the 25th anniversary of it owning estate agency Connells and seen it acquire Countrywide and create the UK’s largest estate agency and over the course of the year had repaid £124.8m of the £253.0m which was loaned to the business as part of the acquisition deal.

Duck n cover ...

 

[HousePriceMania]

I wonder what the UK version of this graph looks like

[Boon]

Using the regular peoples forums, the people that say it is a good time to buy will be permanently high. For the past decade at least they have been proven right.

Even the chumps who forked out for London flats who might be sitting on a loss now will talk up the pros of security of tenure and firmly believe that the price of their property will go up, because that's what they always do, innit.

Most people are not even aware of concepts such as interest rates or inflation, merely what it means they can afford at this minute.

Would be interesting to see the graph for previous recessions if it ever existed, but I bet the approval rate would have dipped, but only when it was too late.

 

[With a crooked smile]

12 hours ago, spygirl said:

housing is now tied to local earnings- ls than ~5 times.

Or in reality 10x one person's income.

Most people buy as a couple, the mortgage companies multiply the whole lot by 4.5-5.

It's never going back to 3.5-4x single income.

[spygirl]

1 hour ago, With a crooked smile said:

Or in reality 10x one person's income.

Most people buy as a couple, the mortgage companies multiply the whole lot by 4.5-5.

It's never going back to 3.5-4x single income.

It's only rarely been lower than 4x.

Its not going to  remain close to 10x.

MMR, high rates and demographics will see to it.

Seriously, try applying for a mirtgage with a credit wrinkle.

The gush if credit has died; not coming back.

 

[tank]

10 hours ago, HousePriceMania said:

I wonder what the UK version of this graph looks like

We all know the answer to that question.

Housing is the UK economy and the 'thrill' of 'owning' is never likely to go away.

The US economy is Wall Street.

Edited March 18, 2022 by tank

[Wight Flight]

3 hours ago, With a crooked smile said:

Or in reality 10x one person's income.

Most people buy as a couple, the mortgage companies multiply the whole lot by 4.5-5.

It's never going back to 3.5-4x single income.

That's fine - just so long as we don't want a certain part of society to breed.

[spygirl]

9 hours ago, tank said:

We all know the answer to that question.

Housing is the UK economy and the 'thrill' of 'owning' is never likely to go away.

The US economy is Wall Street.

Housing is *NOT* the UK economy.

UK Pop is up ~10m-15m since 2000.

Yet mortgage sales are bumping along lowest numbers on record.

The number of peoples jobs connected to housing is tiny.

 

[Frank Hovis]

On 19/03/2022 at 08:53, spygirl said:

Housing is *NOT* the UK economy.

UK Pop is up ~10m-15m since 2000.

Yet mortgage sales are bumping along lowest numbers on record.

The number of peoples jobs connected to housing is tiny.

 

 

The political view, and I have also heard genuine (not Phil and Kirsty) housing experts say this, is that it is viewed as a major part of the country's wealth and therefore its economy.

And the way GDP includes imputed rents from owner occupiers means that as house prices and rents go up then so does GDP.

Currency strength is measured by the ratio of national debt to GDP, currently about 150% IIRC, so if house prices go up another 20% then GDP shoots up and the economy is a lot stronger.

 

It is all, of course, an utter nonsense but that is how the economic numbers actually work.

Stupidly high house prices and rents boost GDP despite making real people poorer because their housing costs have gone up.

 

Conclusion: most economists are utter berks.

[HousePriceMania]

On 20/03/2022 at 09:50, Frank Hovis said:

 

 

Conclusion: most economists are utter berks BTL owners.

 

[Wight Flight]

Interesting one. 22% drop, but still probably kite flying at the new price. Totally mad at the original price.

https://www.rightmove.co.uk/properties/110514044#/?channel=RES_BUY

Looks like greedy inheritors to me.

 

[Frank Hovis]

21 minutes ago, Wight Flight said:

Interesting one. 22% drop, but still probably kite flying at the new price. Totally mad at the original price.

https://www.rightmove.co.uk/properties/110514044#/?channel=RES_BUY

Looks like greedy inheritors to me.

 

 

That looks cheap at £330k; I've seen similar two bed bungalows up for £425k down here. And this year rather than the peaks of last summer.

It's primarily the older people who have the money to buy and they will pay a premium for a bungalow.

As you aren't yet elderly you see a bungalow as being a second choice but the market wouldn't agree with you.

[HousePriceMania]

 

https://propertyindustryeye.com/urgent-action-needed-as-property-fall-throughs-top-50000-this-year-so-far/#comments

 

Urgent action needed as property ‘fall-throughs’ top 50,000 this year so far

 

The urgent actions should be....DROP THE FUCKING PRICE

[Wight Flight]

39 minutes ago, Frank Hovis said:

 

That looks cheap at £330k; I've seen similar two bed bungalows up for £425k down here. And this year rather than the peaks of last summer.

It's primarily the older people who have the money to buy and they will pay a premium for a bungalow.

As you aren't yet elderly you see a bungalow as being a second choice but the market wouldn't agree with you.

I have factored that in. However, the ad is a bit misleading. A gentle stroll to the beach / pond / shops does rather depend if you call a one in 7 hill gentle. Quite a hilly hike to the bus route as well.

It might suit someone that can drive. An older person on foot would be in trouble if their mobility reduced.

Also the outside space is north facing. It will almost never get any sun.

[Frank Hovis]

8 minutes ago, Wight Flight said:

I have factored that in. However, the ad is a bit misleading. A gentle stroll to the beach / pond / shops does rather depend if you call a one in 7 hill gentle. Quite a hilly hike to the bus route as well.

It might suit someone that can drive. An older person on foot would be in trouble if their mobility reduced.

Also the outside space is north facing. It will almost never get any sun.

 

Ah, that makes a difference though where I am it is slopes in and out so people who struggle with walking just drive or get a cab.

My parents deliberately bought somewhere where the walking around and into town was all fairly gentle slopes.

The north facing side probably will get the sun through the summer as you need to factor in how low is the bungalow compared to a normal house; when the sun is high in the sky the bungalow casts very little shadow.

[HousePriceMania]

 

 

 

 

 

[haroldshand]

On 22/03/2022 at 10:54, Frank Hovis said:

 

That looks cheap at £330k; I've seen similar two bed bungalows up for £425k down here. And this year rather than the peaks of last summer.

It's primarily the older people who have the money to buy and they will pay a premium for a bungalow.

As you aren't yet elderly you see a bungalow as being a second choice but the market wouldn't agree with you.

I think once you get past your 70's from what I have seen the holding onto money becomes less important and seeing out your remaining years in comfort becomes a priority, and so many pensioners have money burning a hole in their pockets.

That said, the under 45's views on property affordability is rapidly changing this year especially  with them having new priorities such as eating and heating and a few more essentials. I am afraid I am going to have to yet again reverse my house inflation predictions and go for a fall in the medium term at least which should tell you one thing.....

Never take any notice of my house price predictions because I have changed my mind three times now in 3 years

[HousePriceMania]

 

[haroldshand]

On 22/03/2022 at 11:28, HousePriceMania said:

 

https://propertyindustryeye.com/urgent-action-needed-as-property-fall-throughs-top-50000-this-year-so-far/#comments

 

Urgent action needed as property ‘fall-throughs’ top 50,000 this year so far

 

The urgent actions should be....DROP THE FUCKING PRICE

You seem to be on a one man crusade here hoping for a property crash Dude 

Just one question ..

Which one are you?

(a)  Thinking there will be a property crash

(b) Wanting/praying for a property crash 

(c) Both of the above.

Personally I have had you down as a (b) for a long time?

 

For the record I think you might be in luck at last and soon  to get your property crash, but then again I have an abysmal record on predicting house price crashes 

[HousePriceMania]

1 hour ago, haroldshand said:

You seem to be on a one man crusade here hoping for a property crash Dude 

Just one question ..

Which one are you?

(a)  Thinking there will be a property crash

(b) Wanting/praying for a property crash 

(c) Both of the above.

Personally I have had you down as a (b) for a long time?

 

For the record I think you might be in luck at last and soon  to get your property crash, but then again I have an abysmal record on predicting house price crashes 

You seem to be on a three man crusade to have a go at me.

Just one question.,..

Which are you ?

a) Thick estate agent

b) Desperate BTLer hoping no one will draw peoples attention to the housing bubble ?

c) Both of the above ?

Personally I have had you down as a (b) for a long time?

 

[haroldshand]

1 hour ago, HousePriceMania said:

You seem to be on a three man crusade to have a go at me.

Just one question.,..

Which are you ?

a) Thick estate agent

b) Desperate BTLer hoping no one will draw peoples attention to the housing bubble ?

c) Both of the above ?

Personally I have had you down as a (b) for a long time?

 

Gosh 

Have we even conversed before?

Try and chill out a little and don't get so defensive, I think there are enough posters on here that will tell you I am no pro high house price inflation fan, but I am a realist and know there is a big difference between wanting something to happen and a blind prayer.

[Don Coglione]

1 hour ago, haroldshand said:

Gosh 

Have we even conversed before?

Try and chill out a little and don't get so defensive, I think there are enough posters on here that will tell you I am no pro high house price inflation fan, but I am a realist and know there is a big difference between wanting something to happen and a blind prayer.

He's been praying and preaching for 14 years...