Property crash, just maybe it really is different this time

[Herby]

Viewed a house on Friday. There were 40 viewings, 9 offers over asking price. Estate agent said they have 400 people on their books. Small market town, around 12000 people, south east. Didn't get it.

This is around 80 square metres for £300k to £350k range, needing complete modernisation of around £100k.

Give it 6 months... 

Combination of living costs, mortgage rates going up, pretty stagnant income rises. 

[Don Coglione]

57 minutes ago, Ash4781b said:

Where’s the core thread on this? As it’s a bit outside of the property thread. Still just reading the article (screenshot) in the Metro paper from the train . I’ll be laughing all the way back.

https://www.kentonline.co.uk/ashford/news/fergus-wilson-ordered-to-pay-120k-after-failed-legal-challe-266894/

I had assumed the fat cunt had dropped dead years ago!

Edited May 11, 2022 by Don Coglione

[haroldshand]

17 minutes ago, Herby said:

Viewed a house on Friday. There were 40 viewings, 9 offers over asking price. Estate agent said they have 400 people on their books. Small market town, around 12000 people, south east. Didn't get it.

This is around 80 square metres for £300k to £350k range, needing complete modernisation of around £100k.

Give it 6 months... 

Combination of living costs, mortgage rates going up, pretty stagnant income rises. 

I am seeing the same right now, many people are quite obviously struggling, but there is also a huge section of society that have kept their powder dry and pecker hard and are doing just fine economically.

Will be surprised if we see any evidence in the short or even medium term of a house price correction 

3 minutes ago, Don Coglione said:

I had assumed the fat cunt had dropped dead years ago!

I would like to think this nasty piece of work was a one off but sadly from my experience far from it

[One percent]

2 minutes ago, haroldshand said:

I am seeing the same right now, many people are quite obviously struggling, but there is also a huge section of society that have kept their powder dry and pecker hard and are doing just fine economically.

Will be surprised if we see any evidence in the short or even medium term of a house price correction 

I would like to think this nasty piece of work was a one off but sadly from my experience far from it

OTOH, my feel is that there are loads of fur coat and no nicker types out there.  They won’t be able to weather the coming storm. 

[Boon]

2 minutes ago, haroldshand said:

 

Will be surprised if we see any evidence in the short or even medium term of a house price correction 

 

When you say house, you must mean 'house that is nice and well priced'. Or not in London. Then I could agree.

Plenty of flats I can see are stagnant, 1+ years listed, multiple price reduction, still 10%+ off historic peak prices and not selling.

However looking further afield in the cheaper areas I don't think its rip-off territory, in that someone working minimum wage could afford a property. It'll be crap of course but then so it should be. 

The national house price indices will hide lots of different trends. I can easily see the north being the biggest gainers, and the south being losers, but the way the media present it people will think all properties have been going up.

[nirvana]

6 minutes ago, One percent said:

OTOH, my feel is that there are loads of fur coat and no nicker types out there.

strange I was thinking of posting something about one of them earlier

it's quite a good look methinks.......obvs depends on the weather 

Edited May 11, 2022 by nirvana

[Herby]

4 minutes ago, One percent said:

OTOH, my feel is that there are loads of fur coat and no nicker types out there.  They won’t be able to weather the coming storm. 

Hard to know. Add in the 3DS, divorces may increase due to new divorce laws.

Debt is almost a given.

and if the stories about undertakers being overwhelmed are true, death would be the last one.

I'm seeing properties that have oil heating coming on the market around here in rural locations. So energy prices may be a factor especially for the elderly or limited income.

Then you have landlords selling at the peak, and additional EPC rules coming in next year alongside banning section 21.

Hopefully things will calm down towards the end of the year, especially with mainstream media and even broadsheet sentiment pieces..

 

[HousePriceMania]

They're listening... 

 

The times have lifted my work on twitter and written an article based on it. Their obutuarist wrote an article a few weeks ago saying rightmove share price was as safe as houses.  I posted to their journalist/Times a few times about the share price collapsing due to the market numbers meaning and saying I'd shorted it, which I had. Then they came out with this... 

 

a) it's good to know the media are listening, I suspected they were. 

 

B) bunch of thieving cunts imho 

 

 

[Herby]

4 minutes ago, HousePriceMania said:

They're listening... 

 

The times have lifted my work on twitter and written an article based on it. Their obutuarist wrote an article a few weeks ago saying rightmove share price was as safe as houses.  I posted to their journalist/Times a few times about the share price collapsing due to the market numbers meaning and saying I'd shorted it, which I had. Then they came out with this... 

 

a) it's good to know the media are listening, I suspected they were. 

 

B) bunch of thieving cunts imho 

 

 

I remember in my area in 2008 multiple estate agents closing down completely and reopening 5 or 6 years later. If that is the national pattern, would certainly affect Rightmove.

[HousePriceMania]

5 minutes ago, Herby said:

I remember in my area in 2008 multiple estate agents closing down completely and reopening 5 or 6 years later. If that is the national pattern, would certainly affect Rightmove.

The number of listings are down 50%, the prices are insane because the agents are making up numbers to get houses on their books. 

It won't end well and if, as you say, agents shut down, even if its branches shutting, theur revenues will fall. 

Time will tell. 

Trying to get some credit from the times for the article, they've more or less lifted my work, fuckers

[haroldshand]

1 hour ago, nirvana said:

strange I was thinking of posting something about one of them earlier

it's quite a good look methinks.......obvs depends on the weather 

I am actually Googling to find out what it means

[PatronizingGit]

On 21/05/2021 at 07:56, spygirl said:

NW on radio. Results day!

Missed the wibble ,so loot at results

https://www.nationwide.co.uk/about/corporate-information/results-and-accounts#xtab:2020-2021

Financial highlights

•Underlying profit improved to £790m (2020: £469m), driven by improved income andmargin, and statutory profit increased to £823m (2020: £466m)

•Well capitalised with higher UK leverage ratio of 5.4% (2020: 4.7%) and higher CET1ratio of 36.4% (2020: 31.9%)

•Managed costs down by £94m to £2,218m (2020: £2,312m)

•Set aside £190m (2020: £209m) for loans that may not be repaid in light of uncertainoutlook, although arrears remain low

•Member financial benefit of £265m (2020: £735m), below our £400m target, mainlyreflecting lower savings rates

Trading highlights

•Gross lending of £29.6bn (2020: £30.9bn) and net lending of £1.9bn (2020: £2.8bn);our market share was broadly flat, with growth in buy to let offsetting lower primelending

•Deposits up £10.6bn (2020: £5.7bn) reflecting some members retaining higher balancesduring lockdown

•Maintained market share of 10% of all current account

One - theres something happening at NW. I cant work out what and I dont know anyone to ask. Theyve been laying off people and shutting branches at a rapid clip.

Saying, that NW are one of the last large mortgage lenders standing.

Their net lending is falling. This is not a market where mortgage cash is expanding at 10% - its falling. People are paying off mortgages from ~25 year ago, they are not lending anywhere at previous  numbers - even more harsh when you consider how much houses have gone up in NW stamping grounds over the last 25 years.

Id also point out that NW are one of the few big banks that touches HTB.

So, in terms of a houses are going !!UP!!!!! Buy now!!! Or lose out.

These figures tell a different story.

 

 

 

 

 

I seem to recall that after emerging largely unscathed from the GFC, yet having to pay into the various FSCS funds to part cover the failed banks, nationwide went balls deep into BTL. 

IMO if they go under it will be entirely due to the moral hazard created by the handling of the last GFC. Criminal irresponsibility went unpunished and the profits were privatized.

[apples]

https://www.telegraph.co.uk/property/uk/should-sell-house-prices-peak/

Should I sell my home now if house prices are at their peak?

 

Quote

Those with houses on the market are racing to accept offers before prices fall

The power balance in the housing market is turning. Sellers who last year received multiple bids and offers 20pc higher than they asked are now rushing to shift homes before prices fall.

A race to lock in sales ahead of a widely expected slowdown  has meant more sellers agreed a price last month than in April 2021: when the frenzied market was midway through a stamp duty holiday rush.

Rapidly rising mortgage rates and the cost of living crisis have poured cold water on demand. So is this the last hurrah of the housing market boom? “Yes, definitely,” according to Karl Thompson, of the Centre for Economics and Business Research, a consultancy. 

Here’s why it could be the best time to sell your home.

 

The highest price you will get

A busy market so far this year has been driven by buyers racing to lock in cheap mortgages before interest rates rise. Mr Thompson said he thinks the housing market has peaked.

Six months ago, the average rate for a two-year fixed-rate mortgage with a 25pc deposit was 1.29pc. In April, it was 2.35pc. This was the sharpest increase in rates over any six-month period since the end of 2003, according to Pantheon Macroeconomics, a research group.

Rates will rise further in May. The Bank of England last week raised the Bank Rate to a 13-year high of 1pc and more are on the way. Rising mortgage costs, which will hit buyers just as they are grappling with the cost of living crisis, will quickly depress demand.

From April to June, CEBR has forecast prices will flatline before falling between July to September, by around 2pc. In the last three months of the year, the fall will be 3pc.

Because annual house price growth at the start of 2022 was so high, home values will still be 5.4pc higher year-on-year by the end of December, but over 2023, they will fall by 2.9pc.

CEBR’s forecasts are based on the Bank Rate hitting1.5pc by the end of this year. But as inflation forecasts continue to increase, larger increases could be in the pipeline. Capital Economics, another consultancy, expects the Bank Rate to be double this, at 3pc, in 2023.

 

Prices are cooling

Simon English, a buying agent in London and the Home Counties, said a property being sold off market in West Sussex was worth £3.5m in January and his clients walked away. However, last week the sellers said they were happy to drop to £3m.

"I can negotiate a little more now. Twelve months ago it was almost impossible," he said. "After lockdown, people were bidding on everything and paying anything. They are a lot more discerning now, they are more cautious. If you’re thinking of selling in the foreseeable future, you want to sell now."

More people are selling

The number of homes being sold is rising. Appraisals done by Knight Frank in April were 3pc higher than the five-year average (excluding 2020) – a marked shift compared with the severe shortage of sellable homes in 2021. Mr Thompson said: "A lot of people are waking up to the fact that this is probably the best time to sell."

 

Mr English added: "There has been a noticeable increase in the number of available properties since the interest rate rise. That’s partly because it is traditional time to sell a home. But there are several houses around the £1.5m mark that I was told weren’t coming up for sale until the autumn which have now listed."

Charles Probert, of Knight Frank’s Hereford & Worcester office, said more sellers would come to market over the next few months. They are keen to lock in deals quickly before mortgage costs rise and hit how much their buyers can borrow.

The median time from instruction to an offer being accepted is now just 56.5 days in April, according to Knight Frank – the shortest length since June 2021.

Mr Thompson added: "Supply is now significantly higher than it was a few months ago, and in a lot of regions – Wales, the North East, the North West, the Midlands, London and the South West – supply is now moving faster than demand."

 

Downsizing versus upsizing

Those who want to downsize could make the ideal move as they would be selling at the peak market and would likely buy in cash – and be unaffected by higher mortgage costs, allowing them to negotiate harder on price.

Sellers who are upsizing, however, will be stretching themselves financially just as mortgage rates are increasing and house prices are expected to fall.

Movers with larger deposits will be protected from falling into negative equity. But buyers have been racing to lock in long-term mortgage deals to protect from having to remortgage in an even higher interest rate environment further down the line.

Mr Thompson said: "The squeeze that is coming will be significant. That is increasingly clear. And it may last longer than we are expecting."

Should I buy my home now if house prices are at their peak?

[spygirl]

14 hours ago, spygirl said:

Oh come on Spunky - 

Maria Ivanova was desperate to find a larger home for her family of three. She and husband Pawel Szweda, 43, owned a two-bedroom flat in Greenwich, London, where they lived with their daughter, Julia, seven.

He appears to be a sous chef.

banks not going to see that money - or them - when property falls.

 

There is a very serious point about my comment.

When the BBC and rest of the media started reporting on HTB fuckups, a large number of 'I cant sell my flat in London .... Its inflammable ...' were EUers - lots of 25-35 French and Italians.

A quick google -

https://www.bbc.co.uk/news/stories-51412328

Adam, 44, moved to the UK from Poland in 2000. He bought a 25% share of the flat in Zenith House, Colindale, from housing association Notting Hill Genesis (NHG) in 2015. He and his wife, also Polish, had their first child, a son, two years ago.

Soon after the birth, Adam's wife began experiencing postnatal depression, which was made all the more difficult by the fact that her parents back in Poland had been diagnosed with cancer.

...

Adam's wife has now moved back to Poland with their son. "It's so hard for us," he says. "I just want to be together with my family. If I could afford it, I'd find a job in Poland and pay the mortgage here."

As it is, three-quarters of his income goes on the mortgage, rent and bills, and out of the little that remains he has to pay for flights every second weekend to see his family. "Otherwise my boy will start drawing him and my wife without a dad," he says.

 

Now must of the flats will be HTB - theres no way a Polish sous chef is paying for all that flat.

When all these London shut flats drop to under 5x earnings, from their current 16x+, who do you think is going to pick up the can?

You can dont lend huge sums to foreign   people living in the  country.

All this shit HTB lending is concentrated Nationwide and HBOS.

It doesnt take a genius to work out what will happen -

Prices will plummet, foreign people will leave, prices will plummet even more as the foreign people made up a hefty chunk of London flat buyers, repeat.

 

 

 

[spygirl]

10 hours ago, PatronizingGit said:

I seem to recall that after emerging largely unscathed from the GFC, yet having to pay into the various FSCS funds to part cover the failed banks, nationwide went balls deep into BTL. 

IMO if they go under it will be entirely due to the moral hazard created by the handling of the last GFC. Criminal irresponsibility went unpunished and the profits were privatized.

Before 2000, NW business model was simple - they only lent mortgages to the well off people mainly living in London/SE.

They asked for a large (for then) deposit and did extra work to filter out fur coat no knickers type.

If you jumped the hurdle then you could borrow a lot of money reactively cheaply.

NW was one of the few banks that did not lend to most of its staff - too poor.

NW survived 2008 as it had avoided BTL and liar loans.

After 2008, it no longer had much new business so the new CEO decided to roll with the pigs and take up all the shit lending. NW loan book went from print to junk in 2008-MMR year.

 

 

[Democorruptcy]

I remember when 2007 prices looked high. Here's one £59,950 in 1998, jumped to £145k in 2007.

Guess the price it's just come on for now before you look here

[haroldshand]

16 hours ago, apples said:

https://www.telegraph.co.uk/property/uk/should-sell-house-prices-peak/

Should I sell my home now if house prices are at their peak?

 

Should I buy my home now if house prices are at their peak?

Nobody is racing around here, I will be the first to notice if there is a rush to the exit and it's not even close yet

[HousePriceMania]

1 hour ago, Democorruptcy said:

I remember when 2007 prices looked high. Here's one £59,950 in 1998, jumped to £145k in 2007.

Guess the price it's just come on for now before you look here

That's some gain.

 

I've done my bit for potential buyers
 

 

[Democorruptcy]

14 minutes ago, HousePriceMania said:

That's some gain.

 

I've done my bit for potential buyers
 

 

What have you used to calculate the 'in line with inflation' figure?

[Boon]

Using inflation I think doesn't really produce a 'fair value' figure as it misses out that underlying demand for different properties has changed and a snapshot of price at one time reflects market conditions which may be different now.

For instance there are flats in cities like Leicester built around mid-2000s and they are still below that price. But you wouldn't take an extrapolated inflation figure and claim that these are massively undervalued today. 

Here it seems that the property in question has gone from residential to business, much like family homes suddenly got a boost in 'value' when converted to HMO. 

Question I always ask if it's so good why sell? They are obviously waiting for a dumbo with more money than sense to come along and pay near what they are asking.

Sadly there seems to be no shortage. With interest rates being low people may assume that'll be their financing cost forever.

[JohnnyB]

17 hours ago, apples said:

https://www.telegraph.co.uk/property/uk/should-sell-house-prices-peak/

Should I sell my home now if house prices are at their peak?

 

Should I buy my home now if house prices are at their peak?

Economic illiterates confidently declare the market will fall by 2% for a few months before getting back on track.

One this bubble turns there's no going back. Interest rates will soon be 5x the 0.5 level people were taking mortgages at, and that might not be the end of it.

A huge amount of buyers have supercharged prices to get capital gains - BTL is the obvious one, but most of the heralded "cash buyers" have taken loans in their home countries to leverage up, and will disappear as soon as prices stop rising.

The media is too corrupted to call it a speculative bubble, and economic bubbles don't deflate they violently pop.

[HousePriceMania]

2 hours ago, Democorruptcy said:

What have you used to calculate the 'in line with inflation' figure?

https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

1 hour ago, JohnnyB said:

Economic illiterates confidently declare the market will fall by 2% for a few months before getting back on track.

One this bubble turns there's no going back. Interest rates will soon be 5x the 0.5 level people were taking mortgages at, and that might not be the end of it.

A huge amount of buyers have supercharged prices to get capital gains - BTL is the obvious one, but most of the heralded "cash buyers" have taken loans in their home countries to leverage up, and will disappear as soon as prices stop rising.

The media is too corrupted to call it a speculative bubble, and economic bubbles don't deflate they violently pop.

Leverage is a two way system.

[Wight Flight]

Mrs Flight heard something from the Queen's speech suggesting that if you had paid £1,100 rent for a year banks would have to give you a mortgage of £750 per month.

Anyone else hear anything about this?

[Boon]

I think that was a soundbite on Twitter, not really the same thing though as if the rent goes up you have the freedom to leave. Not so with the mortgage. 

For example:

https://forums.moneysavingexpert.com/discussion/6357498/shared-ownership-flat-is-sublet

Forgetting that this is sublet, I mentioned that there were plenty of people in this position (can't sell flat, therefore rent it out while 'waiting for market to recover'.

Anyone with high leverage, reverting from a cheap deal onto SVR is gonna be fucked really. Quick worked example of someone that borrowed £300k on a £400k flat a few years ago. Less to no chance of remortgage today (LTV, reduced lender appetite for new build).

5% SVR means £15,000 interest alone. Maybe stretch it out to 35 years? Still £1,515 a month. Adding service charge, agents fees, provisions for voids/repair means break-even could be £2,000/month. 

But £400k flats in London don't rent for £2k a month. Those with that money have a good choice. 

At 7% SVR the game will be up for quite a few people. Likely that leveraged going to that from a low rate will have mortgage going from £1k to £2k a month.

[Democorruptcy]

1 hour ago, HousePriceMania said:

https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator

You are trusting the BoE for your inflation figures!