Property crash, just maybe it really is different this time

[HousePriceMania]

A feel good property story for a change 

 

https://www.telegraph.co.uk/property/uk/sleeping-car-cant-evict-rogue-tenant/

 

Buy-to-let landlords forced to sleep in cars as they cannot evict rogue tenants

Property owners become homeless as councils tell tenants to wait for bailiffs

[Phil]

1 minute ago, HousePriceMania said:

A feel good property story for a change 

 

https://www.telegraph.co.uk/property/uk/sleeping-car-cant-evict-rogue-tenant/

 

Buy-to-let landlords forced to sleep in cars as they cannot evict rogue tenants

Property owners become homeless as councils tell tenants to wait for bailiffs

Excellent.

[UmBongo]

Mortgage approvals down as a large chunk of current homebuyers are cash buyers, looks like we may be at the peak. (13 minutes) 

 

[spygirl]

12 hours ago, Boon said:

Thing is though credit won't go from very cheap to expensive overnight.

Sentiment also isn't going to from positive to negative overnight either, I also don't expect this to go away quickly either. 

There was the old trick in retail that if you can't sell something at £50, then if you put reduced from £100 people think it's better value.... I do think to start with dips will be bought, as interest rate rises will be still small. At the end of the year it might only be 1.5% - still enough for the banks to put out superficially cheap mortgages. Most people will not give a fuck about anything else apart from whether they can afford the monthly payment.

But if things keep on as they are, it could be quite painful when sentiment does change. Already it is possible to see listings I would describe as 'unlucky mate', houses bought at the start of the pandemic which are not worth the same. And I don't know if we are close to people simply realising that some of the new build flats are really liabilities more than assets:

https://www.mumsnet.com/Talk/property/4516536-Flat-not-selling-is-it-time-to-change-agents

This seems quite pleasant now in that there are no idiotic comments on there 'its a sellers market', 'it'll be worth more in future', I expect these type of things to become more common.

Mortgages are paid over a very long period - 25 years, or, if you are daft, 30,.

In relation to the term, 'overnight' in mortgage terms is 2 years.

Or in another way - mortgage costs can rise much faster than peoples income.

 

 

[spygirl]

8 hours ago, UmBongo said:

Mortgage approvals down as a large chunk of current homebuyers are cash buyers, looks like we may be at the peak. (13 minutes) 

 

Goo back to the start of this thread.

My comment on the SD holiday just bringing forward a few years sales of more expensive property still stands.

20/19/2020 saw the housing market back on its arse.

The Coof SD gave it a boost, at a time when sales had collapsed.

Now, property transaction are back to barely registering.

This is interesting as, if the FB rental comments are too believed - and I think they are true-ish - S24 has finally go thru to LL and the leveraged loons are selling up in large numbers. Or trying to.

 

 

 

 

[Boon]

2 hours ago, spygirl said:

Mortgages are paid over a very long period - 25 years, or, if you are daft, 30,.

In relation to the term, 'overnight' in mortgage terms is 2 years.

Or in another way - mortgage costs can rise much faster than peoples income.

 

 

Yes, sure - point is I don't think we have reached the biting point yet.

By May we could say that interest rates have gone up a massive 10 times, from 0.1% to 1%. 

But in real terms what that means for someone remortgaging?

https://www.barclays.co.uk/mortgages/remortgage/rates/

Probably going from a deal at c.1%, to a deal at c.2%.... that extra cost maybe £100-200, I don't think that's enough on its own. Maybe there will be some more caught in the trap of having to go on SVR which will be really painful, going from c.1% to c.4%, but really the only circumstance is having a job that pays less, or no job. 

If rates go to 2%, then it gets interesting, as then someone remortgaging goes from c.1% to c.3%. Then that cost is £200-400. Also at this type of rate there will be many more newbies caught in the SVR trap even if they have the same job, because the associated decline in prices may push them out of the LTV requirements.

Relatively speaking there are hardly any sales happening now - why? Probably because people don't strictly have to move, if their place doesn't sell, interest costs are cheap and current sentiment from the masses says eventually it'll shift.

That could change with higher interest rates. More forced sellers and degraded sentiment might mean it is better to take the hit and sell now, rather than wait.

At present what I am seeing (London and some South East) is that the rises are taking the froth off the stamp duty rises. I genuinely do think sentiment will turn, but not at 1% base rate. But at 2% base rate... at this stage I do think for some of the new build flats it will be cheaper to rent than buy. 

 

 

 

[spygirl]

3 minutes ago, Boon said:

Yes, sure - point is I don't think we have reached the biting point yet.

By May we could say that interest rates have gone up a massive 10 times, from 0.1% to 1%. 

But in real terms what that means for someone remortgaging?

https://www.barclays.co.uk/mortgages/remortgage/rates/

Probably going from a deal at c.1%, to a deal at c.2%.... that extra cost maybe £100-200, I don't think that's enough on its own. Maybe there will be some more caught in the trap of having to go on SVR which will be really painful, going from c.1% to c.4%, but really the only circumstance is having a job that pays less, or no job. 

If rates go to 2%, then it gets interesting, as then someone remortgaging goes from c.1% to c.3%. Then that cost is £200-400. Also at this type of rate there will be many more newbies caught in the SVR trap even if they have the same job, because the associated decline in prices may push them out of the LTV requirements.

Relatively speaking there are hardly any sales happening now - why? Probably because people don't strictly have to move, if their place doesn't sell, interest costs are cheap and current sentiment from the masses says eventually it'll shift.

That could change with higher interest rates. More forced sellers and degraded sentiment might mean it is better to take the hit and sell now, rather than wait.

At present what I am seeing (London and some South East) is that the rises are taking the froth off the stamp duty rises. I genuinely do think sentiment will turn, but not at 1% base rate. But at 2% base rate... at this stage I do think for some of the new build flats it will be cheaper to rent than buy. 

 

 

 

Yu are lookign at it wrong.

In tiems of stress, its not just IRs that go up.

One, people tend to borrow up to their limit.

MMR says no more than 4.5 LTE/~30% of take home.

So thats what people borrow.

If rates go up - and theyll go up a few percentage points, from ~2% to ~6%-8% thats a tripling quadrupling of the IR bit.

On a large, long mortgage IR make up the bulk of repayments.

Then theres the rise in price. Energy alone is taking another 1k/y.

Then theres drop in income for the small number of loose their job.

So, yes, a small increase wont make much difference.

However, a largish increase plus the other factors *DO*.

 

 

 

 

 

[Boon]

We're just saying the same thing?

Small increases in interest rate don't make much difference, but a large increase does.

Absent any other factors such as props further increases in rates will push prices lower because people can borrow less and other people will be forced to sell.

There aren't too many different ways of looking at it.

I should add, what would be the start of lower prices, is it going to be people affording less, or people being forced to sell? It most likely will be a bit of both, but especially looking at London flats I think it will be skewed towards forced sellers. 

There must be quite a few people who could not sell in the market today and just chose to rent it out, especially the cladded stuff where no certificate is required to rent, but needed to sell. Or simply live in something they have outgrown for a while, saying they are waiting for the market to 'recover'. 

Those things work at low interest rates, but not higher ones. 

Edited March 30, 2022 by Boon

[HousePriceMania]

21 minutes ago, Boon said:

We're just saying the same thing?

Small increases in interest rate don't make much difference, but a large increase does.

Absent any other factors such as props further increases in rates will push prices lower because people can borrow less and other people will be forced to sell.

There aren't too many different ways of looking at it.

I should add, what would be the start of lower prices, is it going to be people affording less, or people being forced to sell? It most likely will be a bit of both, but especially looking at London flats I think it will be skewed towards forced sellers. 

There must be quite a few people who could not sell in the market today and just chose to rent it out, especially the cladded stuff where no certificate is required to rent, but needed to sell. Or simply live in something they have outgrown for a while, saying they are waiting for the market to 'recover'. 

Those things work at low interest rates, but not higher ones. 

A 0.75% cut and some QE pushed prices up 25%

 

[Boon]

Don't forget stamp duty cut as well.... 

A lot of those price rises had FOMO behind it, people cashing out their gains and brought years of purchases forward into a short period where they had to complete (otherwise no discount). Lots of demand, not much supply, price spikes. 

The reverse is happening now, in that we may have +0.75% and QT but unless it brings years of sales forward into a short period where they have to complete, the fall in price is not going to be symmetrical.

[HousePriceMania]

Another tale of joy

 

 

[Boon]

An interesting thread from the regular people's forums:

https://forums.moneysavingexpert.com/discussion/6346115/has-anyone-broke-even-or-profited-from-selling-their-new-build-flat-in-london/

One real noticeable trend online and real life is that most people will be quiet when the going is bad.

There must be a lot of flat owners in London that bought 2016 onward in poor positions, but are reassuring themselves that the market will recover, or becoming accidental landlords.

I do think they will be taking the pain first.

[Xtal]

40 minutes ago, HousePriceMania said:

Another tale of joy

 

 

Oh dear! I assume as savvy investors, they will have priced this risk into their investments.

Edited March 30, 2022 by Xtal

[HousePriceMania]

16 minutes ago, Xtal said:

Oh dear! I assume as savvy investors, they will have priced this risk into their investments.

There is no risk, you cannot lose on pwopatee

[spygirl]

Set years to MAX

https://tradingeconomics.com/united-kingdom/mortgage-approvals

Back to trading along multi decade lows.

 

[HousePriceMania]

2 hours ago, spygirl said:

Set years to MAX

https://tradingeconomics.com/united-kingdom/mortgage-approvals

Back to trading along multi decade lows.

 

Wait till end of this year, sunaks fucked everything 

[Chewing Grass]

2 hours ago, spygirl said:

Set years to MAX

https://tradingeconomics.com/united-kingdom/mortgage-approvals

Back to trading along multi decade lows.

 

Was looking around my estate and neck of the woods, nobody can afford to move anymore, the only houses that really come up for sale are the ones a corpse has been removed from.

Obviously that does not cover new-builds or flats.

[spygirl]

2 minutes ago, Chewing Grass said:

Was looking around my estate and neck of the woods, nobody can afford to move anymore, the only houses that really come up for sale are the ones a corpse has been removed from.

Obviously that does not cover new-builds or flats.

In February 2022, there were 43,081 deaths registered in England,

Mortgage approvals are going to match deaths soon.

Chuck in Debt n Divorce and we've got a market clearing problem.

Back to my fav topic - Why cant I see the number of house buying mortgages approved by postcode - just the first bit YO22?

 

 

 

 

[Herby]

I'm hoping this happens because I put an offer in on a house a couple of days ago and it got refused because of there were 97 viewings. in Hampshire. I'm pissed off because I'm a single buyer competing against couples. I'm still going over offers. I want to move out of rented. I can't see this impacting the market for at least 7 months. Certainly respect that a lot of people here are in their own places, or are comfortable in their current mortgage situations, and God (or whatever non-denominational deity or belief system 😂🤷🏼‍♂️) speed to them. 

 

[HousePriceMania]

 

Buy now before NW goes bust

[HousePriceMania]

 

[haroldshand]

https://www.thisismoney.co.uk/money/mortgageshome/article-10671395/House-prices-14-3-says-Nationwide-highest-level-2004.html

People can analyse and predict and suggest all the reasons in the world why house prices should have collapsed. lets face it many have been doing so for two decades now.

But this is the reality and house prices are still rocketing upwards in value regardless of what has happened in the world, Brexit, covid, Ukraine, nothing is holding the march upwards.

For the record I am still edging towards falls in prices, but that can alter rapidly on one good post or media article from someone

[mh9000]

Aren't the headlines based on the land registry so lagging behind a few months? i.e. pre-rate increases? Although I agree they won't have had much of an impact yet anyway.

I think it will only be higher mortgage rates that can reduce the number of buyers/demand and still haven't seen that yet. 

Question to me is how long before we see that and what is the point at which it tips that there are less buyers? 5% ?

If I'm putting off buying I could be in for a long wait.

Does vary a lot by local area and price bracket/type of house but at the minute everywhere I've looked for the past 6 months had at least 20 viewings and was sold STC within a week after I looked. Whether it will go through is another thing.

 

[spygirl]

7 minutes ago, mh9000 said:

Aren't the headlines based on the land registry so lagging behind a few months? i.e. pre-rate increases? Although I agree they won't have had much of an impact yet anyway.

I think it will only be higher mortgage rates that can reduce the number of buyers/demand and still haven't seen that yet. 

Question to me is how long before we see that and what is the point at which it tips that there are less buyers? 5% ?

If I'm putting off buying I could be in for a long wait.

Does vary a lot by local area and price bracket/type of house but at the minute everywhere I've looked for the past 6 months had at least 20 viewings and was sold STC within a week after I looked. Whether it will go through is another thing.

 

The are based on whatever the board/management tell the 'economist'/statty to come up with.

The then 'adjust' later when the final data is in.

What you get is NW saying, with great hoohaa - Prices up 5% this year.

Then adjusting to 0.5% later quietly.

 

[sancho panza]

20 hours ago, spygirl said:

Set years to MAX

https://tradingeconomics.com/united-kingdom/mortgage-approvals

Back to trading along multi decade lows.

 

Longer term picture is interesting showing how much more liquid market was pre 08.ALso though,would be interesting to adjust the approvals data for population growth which would give accurate picture for context

9 hours ago, Herby said:

I'm hoping this happens because I put an offer in on a house a couple of days ago and it got refused because of there were 97 viewings. in Hampshire. I'm pissed off because I'm a single buyer competing against couples. I'm still going over offers. I want to move out of rented. I can't see this impacting the market for at least 7 months. Certainly respect that a lot of people here are in their own places, or are comfortable in their current mortgage situations, and God (or whatever non-denominational deity or belief system 😂🤷🏼‍♂️) speed to them. 

 

We've had discussion ref 10 year fixes before if you can get one,it's one way of hedging high prices further out.If a market is that hot where you're facing 97 other viewers then persoanlly I'd steer well clear and look for something less congested ...dyor natch

We're staying renting for the foreseeable although admittedly we have a very different position to mnay as we rent on a 2.5%-3% gross yield enabling us to live a very nice life although the council tax is £3300 and looking to go up.

Longer term,ideally prefer to buy but jsut trying to work out where?UK or no etc?

24 minutes ago, haroldshand said:

https://www.thisismoney.co.uk/money/mortgageshome/article-10671395/House-prices-14-3-says-Nationwide-highest-level-2004.html

People can analyse and predict and suggest all the reasons in the world why house prices should have collapsed. lets face it many have been doing so for two decades now.

But this is the reality and house prices are still rocketing upwards in value regardless of what has happened in the world, Brexit, covid, Ukraine, nothing is holding the march upwards.

For the record I am still edging towards falls in prices, but that can alter rapidly on one good post or media article from someone

My main interest in hosue prices as I've been so bad at calling the top since 002/03 is whetehr we get some shortable price action in the builders and banks.I'm still waiting.Although the underlying lack of transactions per 100,000 population gives a background structural weakness,the price action is classic Dow theory higher prices on lower vol.

Builders shares show unrelaible tops

but hsitorically warned northern rock was looming