Property crash, just maybe it really is different this time (Part 2)

[Wight Flight]

2 hours ago, sancho panza said:

David Alexander, chief executive of DJ Alexander Ltd,

He isn't. Unless he is claiming a dissolved one man company from Bristol.

https://find-and-update.company-information.service.gov.uk/company/05634354

He runs a slightly iffY lettings business.

https://find-and-update.company-information.service.gov.uk/company/SC429588/filing-history

Why do people insist on calling themselves Chief Executive? Boils my piss.

 

[One percent]

3 minutes ago, Wight Flight said:

He isn't. Unless he is claiming a dissolved one man company from Bristol.

https://find-and-update.company-information.service.gov.uk/company/05634354

He runs a slightly iffY lettings business.

https://find-and-update.company-information.service.gov.uk/company/SC429588/filing-history

Why do people insist on calling themselves Chief Executive? Boils my piss.

 

Skimmers and scammers. The whole cuntry is run on skimmers and scammers.  

[sancho panza]

2 hours ago, AlfredTheLittle said:

This is the prop, no? 40 year mortgages and ultra high immigration, to try (and maybe even manage?) to keep house prices up.

In teh banking thread it's been noticeable that a lot of the BS's we've looked at,have expanded their balnce sheets into the crisis and done other things to clean up said balance sheet.

Possible reasons

1) bulk up or go bust.The bigger you are the more you have a chance of a govt hand out.

2) It was noticeable to my eye that a lot of the older loans were more likely to be marked stage 2(deterirorating) and hence pushing out newer loans that are inherently stage 1(performing) as they've only recently been stress tested,means that in a way it purefies the loan book as you're balance sheet has expanded and your stage 2 laons arent growing as a %age of your loan book

3) moving punters from 25 year debts they can't afford to 40 year debts they can pay is anotehr similar act of balance hseet cleansing.the net effect is to bascially push the laons going to stage 2 further out.The problem remains but it is hidden as a stage 1 loan for now.

 

I think we're getting to the stage of the credit cycle where sovereign debt risk is going to be the bear that breaks the camels back.

The banking system in the UK is built on an economy that hasn't run a a fiscal surplus since 1992 and has gone from £800bn national debt in 2008 to circa £2.5bn now.

The bankers are doing what bankers do,but what matters now is when the fiscal dam breaks because it will break the banking systme if it hasnt imploded already.

[sancho panza]

I think this is quite instructive from WOlf St.It makes the point that I've tried to make ref reading too much from a pricing perspective into a market suffering lower vol

first piece uses median price.

second sues case shiller which uses hosue pairing of a previously sold hosue(plus a few adjsutments)

Median price holding,case shiller starting to give way in some more frothy markets,still massively up on 08

https://wolfstreet.com/2023/08/22/home-sales-plunge-further-as-demand-vanished-at-these-prices-even-cash-buyers-pull-back-supply-keeps-rising/

 

 

Under the bonnet som going up,some going down

https://wolfstreet.com/2023/08/29/the-most-splendid-housing-bubbles-in-america-august-update-4th-yoy-price-drop-overall-10-of-20-cities-with-yoy-drops-selling-season-begins-to-fade/

Edited August 29, 2023 by sancho panza

[ashestoashes]

house sales down 20%, well they'll just have to save harder if they want to buy my house, I'm not reducing the price

[One percent]

https://www.bbc.co.uk/news/business-66652415
 

The number of houses sold in the UK this year is on track to be the lowest since 2012, according to property website, Zoopla.

Around one million sales are set to be completed this year, with transactions almost a fifth lower than in 2022.

The cost of mortgages and rents have risen sharply since banks started increasing rates on lending.

Houses bought with cash, where buyers are not relying on a mortgage, are expected to hold up relatively well.

Existing homeowners using a mortgage to buy a house typically account for a third of annual sales. 

According to Zoopla, those buyers are now more likely to wait until the outlook for rates becomes more favourable, despite property prices falling in some parts of the UK. 

The average rate on a two-year fixed mortgage deal is 6.74%, according to the financial information service Moneyfacts. The typical rate for a longer five-year deal is 6.22%.

[Stuey]

49 minutes ago, One percent said:

https://www.bbc.co.uk/news/business-66652415
 

 

Houses bought with cash, where buyers are not relying on a mortgage, are expected to hold up relatively well.

 

I think we've had a few cash buyers on here in the last 12 months, cough cough 

[Democorruptcy]

Using the RM filter "Added to Site" as 14 days, Inc SSTC is 98 not Inc SSTC is 97, only 1 sold means they aren't flying off the shelves. What's your area?

[AWW]

1 hour ago, One percent said:

Houses bought with cash, where buyers are not relying on a mortgage, are expected to hold up relatively well.

 

Just buy your house with cash and it won't lose any value.

[Bear Hug]

2 minutes ago, AWW said:

 

Just buy your house with cash and it won't lose any value.

Interesting coping strategy. Presumably there are unmortgageable wrecks which require cash buyers. If prices fall for previously mortgageable houses which cannot be bought due high mortgage rates, the cash buyers would rather buy those instead. Hence the prices on the unmortgageable houses would fall as well. If @Stuey hasn't gone all in at the top of the market, he would agree )

[Stuey]

3 minutes ago, Bear Hug said:

Interesting coping strategy. Presumably there are unmortgageable wrecks which require cash buyers. If prices fall for previously mortgageable houses which cannot be bought due high mortgage rates, the cash buyers would rather buy those instead. Hence the prices on the unmortgageable houses would fall as well. If @Stuey hasn't gone all in at the top of the market, he would agree )

It's been fairly flat here for 20 years. 

I preempted the London exodus...

[spygirl]

On 30/06/2023 at 09:54, spygirl said:

Mortgage applications steady despite rate rises, says Nationwide

https://www.bbc.co.uk/news/business-66063591

Liar liar pants on fire.

Next 6 months are goign to see the lowest mortgage approvals. Ever.

The number of mortgage applications has not declined yet despite interest rates rising to the highest level in 15 years, Nationwide has said.

However, the building society said the sharp increase in borrowing costs was likely to cause a "significant drag" on activity in the housing market.

Nationwide's latest data revealed house prices dropped 3.5% in the year to June, the largest fall since 2009.

The Bank of England has raised interest rates in an attempt to slow inflation.

The Bank's base rate, which usually dictates the borrowing costs of lenders, is at 5%.

Rob Gardner, Nationwide's chief economist, told the BBC's Today programme that mortgage repayments were now taking up almost 40% of people's average take home pay compared to 30% previously.

He does say 'applications' rather than approval/sold.

UK house sales set for slowest year since 2012, says Zoopla

Research by property portal points to impact of higher borrowing costs on prospective homebuyers

https://www.ft.com/content/ec4d1bb5-7a94-451c-bf12-02e97394146d

Zoopla are a bodug number org.

However the raw aprovals/sales cant be argued with.

Some 1mn houses are set to be sold in England, Scotland, Wales and Northern Ireland this year, down one-fifth on 2022 and the lowest figure since 2012, according to research by property portal Zoopla

 

Nubmer of people buying house./getting fiannce are going to mutli deacdelwoest ever on record.

Just at a time when all the thickos IO BTL need to sell up.

nd the idiots whove fixed for sub 5y at 2^ find they arerefiancing at 7%.

And when all the resi IO mortgage of 2002-MMR start hitting term.

 

[No One]

14 hours ago, Bobthebuilder said:

Great graph, if that was a share it would be a stock market traders dream.

Thank you, very kind. The chart I started making over a year ago was to try to identify the relationship between IR and Volume in my local market to see if there is a correlation and to maybe assist me in buying a house at the trough.

 

Basically the higher the volume and lower the sales the more room for negotiation I have.

 

 

[AWW]

Nice London flats anecdata.

3BR flat in my old block. Last sold for £520k 2016. LL evicted tenants last autumn to sell. Went on at 700... then 650... 600... 550... taken off. Sat empty all that time. Now available to rent for £2250 a month.

We were paying £1600 for an identical flat and the tenant now in our old flat pays £1700.

I'd love to know the thought process behind all that.

[AlfredTheLittle]

2 minutes ago, AWW said:

Nice London flats anecdata.

3BR flat in my old block. Last sold for £520k 2016. LL evicted tenants last autumn to sell. Went on at 700... then 650... 600... 550... taken off. Sat empty all that time. Now available to rent for £2250 a month.

We were paying £1600 for an identical flat and the tenant now in our old flat pays £1700.

I'd love to know the thought process behind all that.

Possible that the landlord is paying over £2,000 interest per month (80% of £520k x 6%)

[AWW]

1 minute ago, AlfredTheLittle said:

Possible that the landlord is paying over £2,000 interest per month (80% of £520k x 6%)

Agree. But nobody is going to pay that much rent for that flat and it's only going to drop further in value. Take a small loss now or a big one later?

[MrXxxx]

 

[No One]

24 minutes ago, AWW said:

Nice London flats anecdata.

3BR flat in my old block. Last sold for £520k 2016. LL evicted tenants last autumn to sell. Went on at 700... then 650... 600... 550... taken off. Sat empty all that time. Now available to rent for £2250 a month.

We were paying £1600 for an identical flat and the tenant now in our old flat pays £1700.

I'd love to know the thought process behind all that.

So your old flat you rented, the owner tried to get mad gainz, failed, put it on back to rent, massive void, and barely on for more than you rented it for...

[AWW]

25 minutes ago, No One said:

So your old flat you rented, the owner tried to get mad gainz, failed, put it on back to rent, massive void, and barely on for more than you rented it for...

Maybe I was unclear - this isn't our old flat - it's an old neighbour's flat. But yes, that's a fair synopsis except for the bit about the rent barely increasing. LL is now asking an unobtainable rent.

In our case, our LL served us with S21 for reasons unknown. I had assumed he wanted to sell.  We stayed put until we found a house we liked, which took four months. Then there was a couple of months void before a new tenant moved in. I got chatting with the new tenant when I was visiting an old neighbour, which is how I found out that the rent increased from £1600 agreed in 2016 to £1700 7 years later.

Edited August 30, 2023 by AWW

[No One]

2 minutes ago, AWW said:

Maybe I was unclear - this isn't our old flat - it's an old neighbour's flat. But yes, that's a fair synopsis except for the bit about the rent barely increasing. LL is now asking an unobtainable rent.

In our case, our LL served us with S21 for reasons unknown. I had assumed he wanted to sell.  We stayed put until we found a house we liked, which took four months. Then there was a couple of months void before a new tenant moved in. I got chatting with the new tenant when I was visiting an old neighbour, which is how I found out that the rent increased from £1600 agreed in 2016 to £1700 7 years later.

Thats 100 pcm extra after voids, what an absolute retard

It's like that guy, Eric Pebble or Count [can't remember which] used to say, rents are set by the capacity to pay not but IR.

[No One]

38 minutes ago, MrXxxx said:

 

I'm not sure I agree with the analysis that HP will only -10%. I may be biased but if IR's go from 0.1% to 5.25% and they continue to rise, something will have to break.

[One percent]

2 hours ago, AWW said:

 

Just buy your house with cash and it won't lose any value.

How do you work that one out?  

[Plan-b]

5 minutes ago, No One said:

I'm not sure I agree with the analysis that HP will only -10%. I may be biased but if IR's go from 0.1% to 5.25% and they continue to rise, something will have to break.

The guy has made a good summary and applied lots facts and figures and it all seems very logical.

The problem is he's trying to apply logic to the UK housing market, an entity that has defied logic many times in the past but particularly for the last 25 years.

He has failed to apply the 'Human Factor' that is people are stupid self centred short term and irrational when it comes to houses.

So based on that and given what has been discussed in various threads on this site/tos I'm going with midlands price falls of 25 to 30%.

So from there going south it will be greater and going north it will be less in falls, obviously there will be local anomalies to this all over the country.

[MrXxxx]

39 minutes ago, No One said:

I'm not sure I agree with the analysis that HP will only -10%. I may be biased but if IR's go from 0.1% to 5.25% and they continue to rise, something will have to break.

I would have previously agreed with this BUT what has to be remembered is that a) only a third of the population will be affected by raising mortgage rates; a third are mortgage free [so rates make little difference], and the other third are rental [two thirds in the private RS] so can 'downsize' easily by sharing/HMOing and/or 'challenging' any rental increase with their LL [who won't want a void in troubled times/high rates], and b) these will be spaced out across the next 2-5 years depending on if they have fixed. Assuming someone fixes today on a five year fix, then it is likely that 'we' would have gone through the 'rough of it' by the time they need to re-fix, and so the rate is unlikely to be higher

[sancho panza]

4 hours ago, One percent said:

https://www.bbc.co.uk/news/business-66652415
 

The number of houses sold in the UK this year is on track to be the lowest since 2012, according to property website, Zoopla.

Around one million sales are set to be completed this year, with transactions almost a fifth lower than in 2022.

The cost of mortgages and rents have risen sharply since banks started increasing rates on lending.

Houses bought with cash, where buyers are not relying on a mortgage, are expected to hold up relatively well.

Existing homeowners using a mortgage to buy a house typically account for a third of annual sales. 

According to Zoopla, those buyers are now more likely to wait until the outlook for rates becomes more favourable, despite property prices falling in some parts of the UK. 

The average rate on a two-year fixed mortgage deal is 6.74%, according to the financial information service Moneyfacts. The typical rate for a longer five-year deal is 6.22%.

The key issue I'd appreciate anyone with knwoledge explaining is roughly what rpoprotion of thsoe sales are mrotgage driven.

Cash buyers are many and for them,whetehr the marklet is high or low isnt really an issue.Youre swapping a hosue for a hosue.ie not marginal buyer who sets the marginal price

Say we have 1.2mn transactions ,600k cash buyers or mortgage <20%LTV,then =50%

Say we drop to 900k and 600k are cash/<20% LTV then =66.6% but drop in number of marginal buyers would be proportionately huge.

Intersting below to see FTBers nearly halve to 191k in 08.It took help to buy and Zirp to get them back up above 300k in 2014

the puzzle is coming together for me.

https://www.whatmortgage.co.uk/news/first-time-buyer-numbers-soar-to-highest-level-for-two-decades/