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

[Bus Stop Boxer]

KERRRRRRRRRR------SCHPLOTTTTTTTT

@Bobthebuilder

 

[No One]

13 hours ago, Bobthebuilder said:

Talk about missing the fucking point, @No One has been posting up un sold volume increases for months now.

[Bobthebuilder]

20 minutes ago, Bus Stop Boxer said:

KERRRRRRRRRR------SCHPLOTTTTTTTT

@Bobthebuilder

 

Right next door to what used to be Loaders the newsagents, now a Chinese nail bar. I was in the town last week, there's now 2 Turkish barbers in the town to add to the 3 kebab shops, also a new steak house has opened with new Turkish owners. The quaint little rural market town is starting to look like Hackney.

[spunko]

3 hours ago, MrXxxx said:

This 'article' typifies the average UK citizen:

https://www.msn.com/en-gb/money/other/house-prices-fall-again-as-mortgages-soar-by-500-a-month-now-boe-will-trigger-crash/ar-AA1g1tea?ocid=mailsignout&pc=U591&cvid=80c9256182d247ffbda87132b95dc1b2&ei=36

..opinion wise its 'all over the place', everyone else is to blame, and the BoE is 'Damned if they do, and damned if they don't'...do people really read/believe this $hite?!

At least the talking heads have stopped blaming Liz Truss' Disastrous Mini Budget®.

[Balding Badger]

Nationwide numbers are out:

- 0.8% MoM

- 5.3% YoY

Sales to first time buyers, home movers with mortgages and BTL all falling sharply over the last year. Only 'cash' buyers holding up (I find their definition of cash buyers misleading as it isn't people who have the ready money to buy a house but includes all those people who will have enough money upon sale of their existing house to buy another without a mortgage. Unsurprisingly the broader term suggests a far higher degree of liquidity than the truth).

Edited September 1, 2023 by Balding Badger
add small detail

[Heart's Ease]

 

 

[Frank Hovis]

43 minutes ago, Balding Badger said:

I find their definition of cash buyers misleading as it isn't people who have the ready money to buy a house but includes all those people who will have enough money upon sale of their existing house to buy another without a mortgage

 

Yes.

I don't think that anyone hearing the term cash buyer thinks anything other than a buyer who has a big pile of cash.

I suppose that technically that would include someone who has sold their existing house and, as they need to have sold it to buy the next one, then they have that cash albeit only realised in order to buy the next house.

I would grudgingly admit that they are right but it isn't how most people would view the term which would be as someone sufficiently rich over and above property wealth to buy a house by writing a cheque.

 

Edit: just seeing @Heart's Ease post above they are differentiating cash buyers from those requiring a mortagage so they are being clearer than I thought.

Edited September 1, 2023 by Frank Hovis

[Balding Badger]

30 minutes ago, Frank Hovis said:

 

Yes.

I don't think that anyone hearing the term cash buyer thinks anything other than a buyer who has a big pile of cash.

I suppose that technically that would include someone who has sold their existing house and, as they need to have sold it to buy the next one, then they have that cash albeit only realised in order to buy the next house.

I would grudgingly admit that they are right but it isn't how most people would view the term which would be as someone sufficiently rich over and above property wealth to buy a house by writing a cheque.

 

Edit: just seeing @Heart's Ease post above they are differentiating cash buyers from those requiring a mortagage so they are being clearer than I thought.

They are being clear but how many people look at the details? In the media there is a lot of talk of cash buyers, suggesting that huge numbers of people are sat on the sidelines ready to hoover up property on a whim. The truth is that most of these buyers first need to sell another property. If the number of first time buyers and home movers and buy to letters, all needing mortgages is declining at about 30% then forming the necessary chains is increasingly tricky. Cash buyer suggests a chain free, easy transaction.

A relative in law used to be an estate agent and it always annoyed me that they didn't appear to understand the distinction between a true cash buyer and their version of it (not that estate agents have a reputation for honesty that was somehow besmirched by this failing)! 

Anyway, just something that annoys me as I wish it was widely understood that it is misleading (and intended to mislead).

[crashmonitor]

1 hour ago, Balding Badger said:

Nationwide numbers are out:

- 0.8% MoM

- 5.3% YoY

Sales to first time buyers, home movers with mortgages and BTL all falling sharply over the last year. Only 'cash' buyers holding up (I find their definition of cash buyers misleading as it isn't people who have the ready money to buy a house but includes all those people who will have enough money upon sale of their existing house to buy another without a mortgage. Unsurprisingly the broader term suggests a far higher degree of liquidity than the truth).

Feeling a lot like the 1989 to 1996 downturn where falls were never huge ( -5% was a typical headline YOY figure)but it was protracted. And seven years of this would be taking a sledge hammer to  real prices by 2029. I doubt it will be  as protracted this time with the third world invasion, a shortage of property and a Beirut style demand push.

Meanwhile 94.7/ 106.9( Cpi) equals MINUS 11.5% real  and counting. Minus 25% ( real) looks like a possible nadir, but it's anybody's guess, could be worse than that.

Edited September 1, 2023 by crashmonitor

[Democorruptcy]

23 minutes ago, Balding Badger said:

They are being clear but how many people look at the details? In the media there is a lot of talk of cash buyers, suggesting that huge numbers of people are sat on the sidelines ready to hoover up property on a whim. The truth is that most of these buyers first need to sell another property. If the number of first time buyers and home movers and buy to letters, all needing mortgages is declining at about 30% then forming the necessary chains is increasingly tricky. Cash buyer suggests a chain free, easy transaction.

A relative in law used to be an estate agent and it always annoyed me that they didn't appear to understand the distinction between a true cash buyer and their version of it (not that estate agents have a reputation for honesty that was somehow besmirched by this failing)! 

Anyway, just something that annoys me as I wish it was widely understood that it is misleading (and intended to mislead).

It's a deliberate ploy to try make true cash buyers think there are lots more of them about and that they shouldn't expect a discount for cash.

[Plan-b]

Heres the Financial Times take on the falls..

https://archive.li/WkiY8

[spygirl]

On 22/06/2023 at 16:14, spygirl said:

North London woman who spends more than £1500 every Christmas to buy 250 gifts for people she never meets

Every year Polly Arrowsmith delivers 250 presents to old age pensioners, people with mental health difficulties, residents of women’s refuges and asylum seekers.

https://www.mylondon.news/news/north-london-news/north-london-woman-who-spends-25717640

Hoarders struggling to get support as fire brigade warns of safety risk

Mental Health Awareness: 'Often hoarding comes with this huge sense of isolation and lonelines'

https://www.camdennewjournal.co.uk/article/hoarders-struggling-to-get-support-as-fire-brigade-warns-of-safety-risk

 

https://www.thesun.co.uk/fabulous/21298749/i-thought-sex-was-to-be-thrilling-it-wasnt/

“‘Do you think we should have sex?’ my boyfriend suddenly blurted out. I blushed furiously – it was the last thing I expected him to say.

It was January 1984 and we’d only been together for six weeks, after I’d invited him to come with me to a Meat Loaf concert. I had a spare ticket and, as we’d known each other from school, I knew he was a huge fan.

 

He was funny and kind – and I was smitten. Seeing how infatuated their 17- year-old daughter was, my pragmatic parents made an appointment with our GP for me to go on the Pill.

But even then, I didn’t think we’d have sex any time soon. We were both virgins and neither of us were in a hurry to take our relationship to the next level.

But that night, he’d come back to my family home after we’d been hanging out with his friends, and up in my bedroom he was suddenly keen to do it.

I didn’t feel ready – but when would I, I wondered? Plus, was it that big a deal? It seemed like everyone in sixth-form was doing it. So we did.

 

It was awkward, uncomfortable, even painful. Needless to say, I didn’t enjoy it. It was only slightly better when we tried it again an hour later.

 

https://www.telegraph.co.uk/money/consumer-affairs/cut-spending-christmas-presents-4000-just-200/

Polly Arrowsmith has spent years buying expensive Christmas gifts for family members, friends and their children.

Last year she paid more than £1,000 for presents that included a £650 designer dress for her sister. In the preceding years her budget was £3,000 to £4,000 for items such as games consoles, Chanel handbags and toys for more than 22 people.

But this Christmas will be different: she has spent only £200 and has narrowed her list to just a few people.

Arrowsmith, 55, says the rising cost of living was one of the reasons she decided to make the change. During the pandemic she lost her business and was forced to downsize from a house to a small flat, so she does not have the space to host her family anymore.

Arrowsmith, a marketing director from north London, is among millions of people who are cutting back on Christmas. One in four people is spending less on gifts this season, according to a survey by Barclaycard; 29pc are saving money on gifts for family and friends and 23pc are cutting back on festive parties.

From TOS -

https://12ft.io/proxy?q=https%3A%2F%2Finews.co.uk%2Finews-lifestyle%2Fmoney%2Ftaking-out-75k-loan-cost-me-house-2578035%3Ffbclid%3DIwAR3KDE_Mt3_2X9oa0XOCzEBptCXQeCJ5FmU5HHX94fd3SeIZG8jrCA4VcBY

Up until 2017, many things had gone right for Polly Arrowsmith. She had built a successful marketing business, owned her own home in north London and rented out a number of properties in Manchester.

But things started to go wrong for her six years ago, when her ex-partner reported Arrowsmith, who is 56 and lives in London, to HMRC and the Serious Fraud Office.

She had already bought her partner out of the business that they had created, buying up his shares over a four-year period. But when the taxman investigated this, they treated her new shares as income and billed her for hundreds of thousands of pounds worth of tax.

 

 

“There was nothing in the fraud allegations, and I actually got a written apology from the SFO,” said Arrowsmith.

“But the problem came from HMRC, and we couldn’t afford the massive bill. We were trying not to go into administration and do a deal, but it all went horribly wrong.”

Arrowsmith finished work on a Friday evening, was told on the Monday that she had lost the business and never went back to the office again. “It was so sudden,” she said.

Then she decided to take out a loan to help make ends meet.

 

 

 

She had a mortgage worth more than £1m, and needed help to pay her bills, so took out a £75,000 bridging loan – a short-term deal, usually secured against a property.

“Hindsight is a wonderful thing, but it felt like the right thing to do,” she said. “I paid off some small debts, paid my mortgage and did up the property a bit in case we had to sell.”

The loan was levied against her £1.8m property in north London, which meant that the lender could take away her property if she couldn’t repay.

She was then hit with another tax bill. Arrowsmith said that after her ex-partner’s allegations, she had been treated as individual that was at risk of tax evasion, and HMRC ruled that a historic pension transfer had resulted in a tax liability worth £28,000.

Because of this, bankruptcy notices were applied to all of Arrowsmith’s properties. This means that she was unable to sell any of her assets.

“, when it came to paying back that small £75,000 bridging loan, I was stuck,” she said. “I had millions of pounds of equity in my own property and my rental houses, but I couldn’t access any of it to pay off the debt.”

By this point, the three-month term on the bridging loan had expired.

 

 

 

The lender began to charge 4 per cent a month interest, which means the debt grew rapidly thanks to cumulative interest – when you pay interest not only on the loan but on the interest you owe, too. This way a £75,000 loan would grow to nearly £200,000 in two years.

It was also charging £1,500 a pop for a monthly review of the debt.

Arrowsmith said: “It was all pretty horrific. I fought the bankruptcy notices for two-and-a-half years. I couldn’t sort out any of the debts I owed, and the money was compounding quickly.

“I tried to strike a deal with the lender that a friend could buy them out of the loan, but they wouldn’t go for it. I paid off what I could over the course of this time – £40,000 here, £25,000 another time – but it didn’t help.”

In the end, the company took possession of Arrowsmith’s home and sold it. She ended up paying back more like £200,000, rather than the £75,000 she had taken as a loan.

She says she was also given less than 24 hours to move out of the property.

Arrowsmith, who also owed suppliers from the business, ended up losing all but one of her other properties to pay back the debt, and is only just closing the bankruptcy process now.

 

 

 

“People often think it’s an easy option, but bankruptcy isn’t easy at all,” said Arrowsmith. “I’m also trying to destigmatise it – there is so much shame in it but I try to make sure I tell people what happened, as a way to normalise it.”

Arrowsmith, who has been seeing a psychiatrist to help her deal with the stress of the last few years, would also warn against taking out a bridging loan unless you have a “guaranteed out”.

She said: “They are high-risk products. I really would advise anyone against it, unless you absolutely have the means to pay it off.”

As the mortgage crisis continues to bite, Arrowsmith, who is living with a friend, is also now dealing with her last remaining property – a buy-to-let flat in north London.

She was on a fixed deal that cost 4 per cent, or £900 a month, but the fixed period ran out and the loan automatically switched to a standard variable rate of 8.79 per cent. Her options are to take a two-year deal at 6.6 per cent, which will cost £1,650 a month, or a five-year deal at 6 per cent, which will cost £1,500 a month.

Despite the headwinds, she is positive for the future.

“I’ve always been quite resilient, and I’ve been so lucky that I’ve been supported so much by friends and family,” said Arrowsmith. “I’ve come to the conclusion that whatever happens, I will be ok. There are times when I think I’m a failure and feel very down, but I’m not. I know that I can rebuild.”

[Plan-b]

19 minutes ago, spygirl said:

From TOS -

https://12ft.io/proxy?q=https%3A%2F%2Finews.co.uk%2Finews-lifestyle%2Fmoney%2Ftaking-out-75k-loan-cost-me-house-2578035%3Ffbclid%3DIwAR3KDE_Mt3_2X9oa0XOCzEBptCXQeCJ5FmU5HHX94fd3SeIZG8jrCA4VcBY

Up until 2017, many things had gone right for Polly Arrowsmith. She had built a successful marketing business, owned her own home in north London and rented out a number of properties in Manchester.

But things started to go wrong for her six years ago, when her ex-partner reported Arrowsmith, who is 56 and lives in London, to HMRC and the Serious Fraud Office.

She had already bought her partner out of the business that they had created, buying up his shares over a four-year period. But when the taxman investigated this, they treated her new shares as income and billed her for hundreds of thousands of pounds worth of tax.

 

 

“There was nothing in the fraud allegations, and I actually got a written apology from the SFO,” said Arrowsmith.

“But the problem came from HMRC, and we couldn’t afford the massive bill. We were trying not to go into administration and do a deal, but it all went horribly wrong.”

Arrowsmith finished work on a Friday evening, was told on the Monday that she had lost the business and never went back to the office again. “It was so sudden,” she said.

Then she decided to take out a loan to help make ends meet.

 

 

 

She had a mortgage worth more than £1m, and needed help to pay her bills, so took out a £75,000 bridging loan – a short-term deal, usually secured against a property.

“Hindsight is a wonderful thing, but it felt like the right thing to do,” she said. “I paid off some small debts, paid my mortgage and did up the property a bit in case we had to sell.”

The loan was levied against her £1.8m property in north London, which meant that the lender could take away her property if she couldn’t repay.

She was then hit with another tax bill. Arrowsmith said that after her ex-partner’s allegations, she had been treated as individual that was at risk of tax evasion, and HMRC ruled that a historic pension transfer had resulted in a tax liability worth £28,000.

Because of this, bankruptcy notices were applied to all of Arrowsmith’s properties. This means that she was unable to sell any of her assets.

“, when it came to paying back that small £75,000 bridging loan, I was stuck,” she said. “I had millions of pounds of equity in my own property and my rental houses, but I couldn’t access any of it to pay off the debt.”

By this point, the three-month term on the bridging loan had expired.

 

 

 

The lender began to charge 4 per cent a month interest, which means the debt grew rapidly thanks to cumulative interest – when you pay interest not only on the loan but on the interest you owe, too. This way a £75,000 loan would grow to nearly £200,000 in two years.

It was also charging £1,500 a pop for a monthly review of the debt.

Arrowsmith said: “It was all pretty horrific. I fought the bankruptcy notices for two-and-a-half years. I couldn’t sort out any of the debts I owed, and the money was compounding quickly.

“I tried to strike a deal with the lender that a friend could buy them out of the loan, but they wouldn’t go for it. I paid off what I could over the course of this time – £40,000 here, £25,000 another time – but it didn’t help.”

In the end, the company took possession of Arrowsmith’s home and sold it. She ended up paying back more like £200,000, rather than the £75,000 she had taken as a loan.

She says she was also given less than 24 hours to move out of the property.

Arrowsmith, who also owed suppliers from the business, ended up losing all but one of her other properties to pay back the debt, and is only just closing the bankruptcy process now.

 

 

 

“People often think it’s an easy option, but bankruptcy isn’t easy at all,” said Arrowsmith. “I’m also trying to destigmatise it – there is so much shame in it but I try to make sure I tell people what happened, as a way to normalise it.”

Arrowsmith, who has been seeing a psychiatrist to help her deal with the stress of the last few years, would also warn against taking out a bridging loan unless you have a “guaranteed out”.

She said: “They are high-risk products. I really would advise anyone against it, unless you absolutely have the means to pay it off.”

As the mortgage crisis continues to bite, Arrowsmith, who is living with a friend, is also now dealing with her last remaining property – a buy-to-let flat in north London.

She was on a fixed deal that cost 4 per cent, or £900 a month, but the fixed period ran out and the loan automatically switched to a standard variable rate of 8.79 per cent. Her options are to take a two-year deal at 6.6 per cent, which will cost £1,650 a month, or a five-year deal at 6 per cent, which will cost £1,500 a month.

Despite the headwinds, she is positive for the future.

“I’ve always been quite resilient, and I’ve been so lucky that I’ve been supported so much by friends and family,” said Arrowsmith. “I’ve come to the conclusion that whatever happens, I will be ok. There are times when I think I’m a failure and feel very down, but I’m not. I know that I can rebuild.”

Many years ago these times where called "the quickening"

 “It was so sudden,” she said.

 

[Noallegiance]

33 minutes ago, crashmonitor said:

Feeling a lot like the 1989 to 1996 downturn where falls were never huge ( -5% was a typical headline YOY figure)but it was protracted. And seven years of this would be taking a sledge hammer to  real prices by 2029. I doubt it will be  as protracted this time with the third world invasion, a shortage of property and a Beirut style demand push.

The dynamic of more people is all very well, but as credit dries up/becomes expensive alongside the rest of life becoming expensive, who will actually be able to buy?

Demand doesn't matter if there is no tool via which to satisfy such demand.

I can demand a widget for £10. If I ain't got £10 in any shape or form my demand means nothing.

[spygirl]

12 minutes ago, Noallegiance said:

The dynamic of more people is all very well, but as credit dries up/becomes expensive alongside the rest of life becoming expensive, who will actually be able to buy?

Demand doesn't matter if there is no tool via which to satisfy such demand.

I can demand a widget for £10. If I ain't got £10 in any shape or form my demand means nothing.

I worked with someone who was repod in 93ish - dvirose, negative equity. Misery.

He n his then GF had paid 80k for some crappy new build estate in M4.

The repo sold for ~20k/30k.

Back then HPE had hit ~6.  Fell to sub 3 - there was a lot of wage rises 88-93.

Today HPE in London/SE is ~10-15.

Theres a whole new scale of brutal at play now.

 

 

 

[Boon]

That Arrowsmith lady just seems to be a professional bullshitter. Maybe she just likes seeing her picture in the paper, but none of the stories are actually newsworthy.

From a couple months ago, so why are the figures so different now if she is a bankrupt?

It won't be the last we have heard from her. Suspect there will be more stories of supposed hardship.

Polly Arrowsmith, 56, lives in a one-bed flat in Islington, north London and has 15 years left on her £320,000 mortgage. She was paying 2.79 per cent until, two months ago, her four-year-fixed rate deal came to an end and she moved onto her lender’s standard variable rate of 8.25 per cent.

“It was unbelievable. My monthly mortgage payments rose from around £1,400 a month to £3,105 a month,” she says.

 

[spygirl]

22 minutes ago, Boon said:

That Arrowsmith lady just seems to be a professional bullshitter. Maybe she just likes seeing her picture in the paper, but none of the stories are actually newsworthy.

From a couple months ago, so why are the figures so different now if she is a bankrupt?

It won't be the last we have heard from her. Suspect there will be more stories of supposed hardship.

Polly Arrowsmith, 56, lives in a one-bed flat in Islington, north London and has 15 years left on her £320,000 mortgage. She was paying 2.79 per cent until, two months ago, her four-year-fixed rate deal came to an end and she moved onto her lender’s standard variable rate of 8.25 per cent.

“It was unbelievable. My monthly mortgage payments rose from around £1,400 a month to £3,105 a month,” she says.

 

The media have loads of properpee rentaquotes o ntheir books ,usually their friends or ex journos.

A quick gogle shows Penny has an opinion or advice on everything.

 

 

[spygirl]

1 hour ago, Plan-b said:

Many years ago these times where called "the quickening"

 “It was so sudden,” she said.

 

Large parts of Lodn have been fallin for 5+y.

Chuck i nthe HTB high rise disaters, and now higher IRs.

Its a clusterfuck.

Buying at 15x single income -as thats where dual income 4x HTB have been buying.

40k salary - 600k HTB.

5% fall - 30k off.

Ouch.

 

 

 

[sancho panza]

22 hours ago, MrXxxx said:

This 'article' typifies the average UK citizen:

https://www.msn.com/en-gb/money/other/house-prices-fall-again-as-mortgages-soar-by-500-a-month-now-boe-will-trigger-crash/ar-AA1g1tea?ocid=mailsignout&pc=U591&cvid=80c9256182d247ffbda87132b95dc1b2&ei=36

..opinion wise its 'all over the place', everyone else is to blame, and the BoE is 'Damned if they do, and damned if they don't'...do people really read/believe this $hite?!

Intersitng stat on purchases with mroitgages dropping 28%.Thas a lot of marginal buyers.

 

'While cash buyer sales hold steady, there has been a 28 percent drop in the number of people buying with a mortgage as interest rates soar.

Separate figures published today by the Bank of England also show the mortgage crunch intensifying.

More than 1.6million homeowners whose fixed-rate mortgage deals are set to expire this year face a sharp increase in repayments.

Nearly a million homeowners face paying £500 more interest every month.

Many simply cannot afford it as the cost-of-living crisis pushes up prices across the board at a time when people are paying the highest tax rates in 70 years.

Zoopla executive director Richard Donnell reckons mortgage rates need to fall below five percent before people are ready to start moving homes again.

He predicts house prices will fall 22 percent in total by 2026.'

2 hours ago, Frank Hovis said:

 

Yes.

I don't think that anyone hearing the term cash buyer thinks anything other than a buyer who has a big pile of cash.

I suppose that technically that would include someone who has sold their existing house and, as they need to have sold it to buy the next one, then they have that cash albeit only realised in order to buy the next house.

I would grudgingly admit that they are right but it isn't how most people would view the term which would be as someone sufficiently rich over and above property wealth to buy a house by writing a cheque.

 

Edit: just seeing @Heart's Ease post above they are differentiating cash buyers from those requiring a mortagage so they are being clearer than I thought.

As I udnerstand it, foregin buyers collateralizing abroad will show as cash buyers as there will be no charge on the property.

In places like London,that could be a fair chunk of marginal demand in the upper echelons of the market

Edited September 1, 2023 by sancho panza

[sancho panza]

1 hour ago, Noallegiance said:

The dynamic of more people is all very well, but as credit dries up/becomes expensive alongside the rest of life becoming expensive, who will actually be able to buy?

Demand doesn't matter if there is no tool via which to satisfy such demand.

I can demand a widget for £10. If I ain't got £10 in any shape or form my demand means nothing.

This.Big issue is what will happen to loan creation if the banks start taking losses.Banks create laon money out of thin air and can only do so while they -on paper admittedly-have the cpaitla base to do so.

When banks start taking losses via repo,then it hammers their capital base.

This is where we get to Fsihers debt deflation theory.Bank of England going to be dusting theirs off

At the same time though,we could be seeing rising food prices.

As @spygirl says below.could get really brutal for the elveraged.

https://en.wikipedia.org/wiki/Debt_deflation

Assuming, accordingly, that, at some point in time, a state of over-indebtedness exists, this will tend to lead to liquidation, through the alarm either of debtors or creditors or both. Then we may deduce the following chain of consequences in nine links:

1. Debt liquidation leads to distress selling and to
2. Contraction of the money supply, as bank loans are paid off, and to a slowing down of velocity of circulation. This contraction of the money supply and its velocity, precipitated by distress selling, causes
3. A fall in the level of prices, in other words, a swelling of the dollar. Assuming, as above stated, that this fall of prices is not interfered with by reflation or otherwise, there must be
4. A still greater fall in the net worths of business, precipitating bankruptcies and
5. A like fall in profits, which in a "capitalistic," that is, a private-profit society, leads the concerns which are running at a loss to make
6. A reduction in output, in trade and in employment of labor. These losses, bankruptcies and unemployment, lead to
7. pessimism and loss of confidence, which in turn lead to
8. Hoarding and slowing down still more the velocity of circulation.

   The above eight changes cause

9. Complicated disturbances in the rates of interest, in particular, a fall in the nominal, or money, rates and a rise in the real, or commodity, rates of interest.

— (Fisher 1933)

1 hour ago, crashmonitor said:

Feeling a lot like the 1989 to 1996 downturn where falls were never huge ( -5% was a typical headline YOY figure)but it was protracted. And seven years of this would be taking a sledge hammer to  real prices by 2029. I doubt it will be  as protracted this time with the third world invasion, a shortage of property and a Beirut style demand push.

Meanwhile 94.7/ 106.9( Cpi) equals MINUS 11.5% real  and counting. Minus 25% ( real) looks like a possible nadir, but it's anybody's guess, could be worse than that.

I think it';s going to be a couple of years before we see any significant falls.Not a popular view on here maybe but the losses need to work through the banking system and as yet,we're not seeing a huge rise in stage 3.The presusre will build for sure,but they'll be pushback from the banks and people who can affford to stay put /not sell.

I remember last time round thinking we'd see big drops relatively quickly.Lesson learned.

I'm looking to short the banks at the approiate moment.Im nowhere near ready.Could be worng ovbiosuly

[sancho panza]

36 minutes ago, spygirl said:

Large parts of Lodn have been fallin for 5+y.

Chuck i nthe HTB high rise disaters, and now higher IRs.

Its a clusterfuck.

Buying at 15x single income -as thats where dual income 4x HTB have been buying.

40k salary - 600k HTB.

5% fall - 30k off.

Ouch.

 

 

 

Some psotcodes have been drifting for longer.Low voluem high volatility warnign but still

 

 

BUT marginal areas still rocketing,telling in itself

[sancho panza]

More BS from the NW but an itnersting stat or two deeper down

msut say this is getting very real for some people espceially highly leveraged LL's as per my previous anecodte ref BTLer with 25 going under.

Selling into a falling market is gonna be tough

https://uk.finance.yahoo.com/news/property-prices-falling-faster-expected-100057234.html

But Kundan Bhaduri, director of Hatton Garden-based property developer and portfolio landlord The Kushman Group, said: “This latest data from the Nationwide paints a bleak picture of the UK property market.

“The London property market, in particular, is currently at a critical juncture, with experts warning of a potential crash that could result in a 20 per cent drop in property values if mortgage rates remain high.

“Despite 14 interest rate increases by the Bank of England, property prices in the capital have remained relatively resilient. One major concern is the nearly one million fixed-rate mortgages, including around 100,000 in London, that need refinancing before the end of the year.”

Mortgage experts today also warned of a “mass exodus” of London landlords that could push prices down further still. It came as data showed that those renewing buy-to-let mortgages in the capital this winter could be an average of £6,384 worse off each year.

Research from mortgage insight platform Dashly, based on 1,000 fixed-rate deals set to expire between next month and April 2024, found that even if landlords switch to the best available rate, their monthly payments could almost double from £662 to £1,194 as average rates rise 2.24 per cent to 5.42 per cent. That is likely to leave many with little option but to sell.

[spygirl]

22 minutes ago, sancho panza said:

Some psotcodes have been drifting for longer.Low voluem high volatility warnign but still

 

 

BUT marginal areas still rocketing,telling in itself

Its not going to take long before nomial prices are back to under 2004 - 

 

https://www.home.co.uk/guides/house_prices_report.htm?location=scarborough&startmonth=06&startyear=2005&endmonth=06&endyear=2023

Weve had, what, 30%? inflation since?

Real prices are probably wll under already.

 

Sales, which had slowlyrecovered are now down to multi decade/all time low. Again.

Its not outside the boundaries of possibilities that nominal prices could go back to the mid 90s too.

The demographics challenges the area faces are massive - 1/3 of houses OAPs, 1/3 on benefits, 1/3 working, mainly low paid.

Theers just not enough people woring, with high enough incomes to soak up the probates and IO BTLs.

 

 

 

 

[spygirl]

5 minutes ago, sancho panza said:

 

“The London property market, in particular, is currently at a critical juncture, with experts warning of a potential crash that could result in a 20 per cent drop in property values if mortgage rates remain high.

 

Mortgage rates are very much average to low.

Edited September 1, 2023 by spygirl

[One percent]

2 hours ago, spygirl said:

From TOS -

https://12ft.io/proxy?q=https%3A%2F%2Finews.co.uk%2Finews-lifestyle%2Fmoney%2Ftaking-out-75k-loan-cost-me-house-2578035%3Ffbclid%3DIwAR3KDE_Mt3_2X9oa0XOCzEBptCXQeCJ5FmU5HHX94fd3SeIZG8jrCA4VcBY

Up until 2017, many things had gone right for Polly Arrowsmith. She had built a successful marketing business, owned her own home in north London and rented out a number of properties in Manchester.

But things started to go wrong for her six years ago, when her ex-partner reported Arrowsmith, who is 56 and lives in London, to HMRC and the Serious Fraud Office.

She had already bought her partner out of the business that they had created, buying up his shares over a four-year period. But when the taxman investigated this, they treated her new shares as income and billed her for hundreds of thousands of pounds worth of tax.

 

 

“There was nothing in the fraud allegations, and I actually got a written apology from the SFO,” said Arrowsmith.

“But the problem came from HMRC, and we couldn’t afford the massive bill. We were trying not to go into administration and do a deal, but it all went horribly wrong.”

Arrowsmith finished work on a Friday evening, was told on the Monday that she had lost the business and never went back to the office again. “It was so sudden,” she said.

Then she decided to take out a loan to help make ends meet.

 

 

 

She had a mortgage worth more than £1m, and needed help to pay her bills, so took out a £75,000 bridging loan – a short-term deal, usually secured against a property.

“Hindsight is a wonderful thing, but it felt like the right thing to do,” she said. “I paid off some small debts, paid my mortgage and did up the property a bit in case we had to sell.”

The loan was levied against her £1.8m property in north London, which meant that the lender could take away her property if she couldn’t repay.

She was then hit with another tax bill. Arrowsmith said that after her ex-partner’s allegations, she had been treated as individual that was at risk of tax evasion, and HMRC ruled that a historic pension transfer had resulted in a tax liability worth £28,000.

Because of this, bankruptcy notices were applied to all of Arrowsmith’s properties. This means that she was unable to sell any of her assets.

“, when it came to paying back that small £75,000 bridging loan, I was stuck,” she said. “I had millions of pounds of equity in my own property and my rental houses, but I couldn’t access any of it to pay off the debt.”

By this point, the three-month term on the bridging loan had expired.

 

 

 

The lender began to charge 4 per cent a month interest, which means the debt grew rapidly thanks to cumulative interest – when you pay interest not only on the loan but on the interest you owe, too. This way a £75,000 loan would grow to nearly £200,000 in two years.

It was also charging £1,500 a pop for a monthly review of the debt.

Arrowsmith said: “It was all pretty horrific. I fought the bankruptcy notices for two-and-a-half years. I couldn’t sort out any of the debts I owed, and the money was compounding quickly.

“I tried to strike a deal with the lender that a friend could buy them out of the loan, but they wouldn’t go for it. I paid off what I could over the course of this time – £40,000 here, £25,000 another time – but it didn’t help.”

In the end, the company took possession of Arrowsmith’s home and sold it. She ended up paying back more like £200,000, rather than the £75,000 she had taken as a loan.

She says she was also given less than 24 hours to move out of the property.

Arrowsmith, who also owed suppliers from the business, ended up losing all but one of her other properties to pay back the debt, and is only just closing the bankruptcy process now.

 

 

 

“People often think it’s an easy option, but bankruptcy isn’t easy at all,” said Arrowsmith. “I’m also trying to destigmatise it – there is so much shame in it but I try to make sure I tell people what happened, as a way to normalise it.”

Arrowsmith, who has been seeing a psychiatrist to help her deal with the stress of the last few years, would also warn against taking out a bridging loan unless you have a “guaranteed out”.

She said: “They are high-risk products. I really would advise anyone against it, unless you absolutely have the means to pay it off.”

As the mortgage crisis continues to bite, Arrowsmith, who is living with a friend, is also now dealing with her last remaining property – a buy-to-let flat in north London.

She was on a fixed deal that cost 4 per cent, or £900 a month, but the fixed period ran out and the loan automatically switched to a standard variable rate of 8.79 per cent. Her options are to take a two-year deal at 6.6 per cent, which will cost £1,650 a month, or a five-year deal at 6 per cent, which will cost £1,500 a month.

Despite the headwinds, she is positive for the future.

“I’ve always been quite resilient, and I’ve been so lucky that I’ve been supported so much by friends and family,” said Arrowsmith. “I’ve come to the conclusion that whatever happens, I will be ok. There are times when I think I’m a failure and feel very down, but I’m not. I know that I can rebuild.”

Nutter. Just look at her picture