Property crash, just maybe it really is different this time (Part 3)

[HousePriceMania]

I hope this "recovery" ends sharpish

 

 

[HousePriceMania]

12 hours ago, spygirl said:

Show me the numbers.

10y yield is same as it was in 22

https://www.marketwatch.com/investing/bond/tmbmkgb-10y?countrycode=bx

 

 

 

If they're coming off a 2 year fix there's a very good chance that their mortgage rate was agreed 3 months earlier, so 27 months ago.

Then people get to fix their mortgages 6 months before it rolls over now, so if they are acting early their rates would be from approx 30 months ago.

We're going to hear the squealing from people who took a 2 year fixed rate mortgage at all time low rates !!!

Fuck them, they are adults and made their own choice.

 

 

 

[AWW]

This article brought to you by Polly Filler via the BBC: https://www.bbc.co.uk/news/business-68574065

• Stock photo of disappointed-looking young couple? Check
• Real photo of soy-soaked middle class couple who can't afford the house they've bought? Check

''One adviser said the situation was adding extra stress to a huge financial commitment and making customers feel pressured to make a decision quickly"

I don't remember anyone articles during the last decade bemoaning the fact that you had to decide how much to bid on a house within minutes of viewing it if you wanted to have any chance of buying it.

New mortgage deals being pulled within days

IMAGE SOURCE, GETTY IMAGES

By Kevin Peachey

Cost of living correspondent

 

Mortgage deals are typically on offer for just 15 days before being pulled, despite homeowners and buyers having the widest choice for 16 years.

This is the shortest shelf-life in six months, according to financial information service Moneyfacts.

As a result, people have little time to decide when rates are volatile.

One adviser said the situation was adding extra stress to a huge financial commitment and making customers feel pressured to make a decision quickly.

[Ash4781b]

https://www.bbc.co.uk/news/uk-england-cornwall-68546662
 

just looking at the plots here. The photos look crazy. Trying to understand the issue think it’s that they can’t do the affordable homes. Although I thought that was standard! I remember once enquiring about some on a local development to be told they started at £330k for the 2 beds! Presumably some went to housing associations etc 

 

@Frank Hovis

Edited March 18 by Ash4781b

[Ash4781b]

36 minutes ago, AWW said:

This article brought to you by Polly Filler via the BBC: https://www.bbc.co.uk/news/business-68574065

• Stock photo of disappointed-looking young couple? Check
• Real photo of soy-soaked middle class couple who can't afford the house they've bought? Check

''One adviser said the situation was adding extra stress to a huge financial commitment and making customers feel pressured to make a decision quickly"

I don't remember anyone articles during the last decade bemoaning the fact that you had to decide how much to bid on a house within minutes of viewing it if you wanted to have any chance of buying it.

New mortgage deals being pulled within days

 

IMAGE SOURCE, GETTY IMAGES

By Kevin Peachey

Cost of living correspondent

 

Mortgage deals are typically on offer for just 15 days before being pulled, despite homeowners and buyers having the widest choice for 16 years.

This is the shortest shelf-life in six months, according to financial information service Moneyfacts.

As a result, people have little time to decide when rates are volatile.

One adviser said the situation was adding extra stress to a huge financial commitment and making customers feel pressured to make a decision quickly.

I thought that was how it always worked. Deals get pulled, new deals come in etc. 

[Boon]

I can't quite get that article. Rates change all the time, and it wouldn't be news at all if a more expensive rate was pulled after 1 day and a cheaper one put in its place.

OK so the rate on their mortgage is going up, so their solution is to move to a more expensive place which requires renovation and therefore spending more money?

It's not that they can't afford it, but rather they can't afford the life they used to live.

People like these honestly see the extra expense of a mortgage coming back to normal rates as some kind of theft or injustice.

I can imagine most of the media hacks are a bit like those people. Not in the upper earners, but they have overleveraged to try and pretend that they are.

[Frank Hovis]

13 minutes ago, Ash4781b said:

https://www.bbc.co.uk/news/uk-england-cornwall-68546662
 

just looking at the plots here. The photos look crazy. Trying to understand the issue think it’s that they can’t do the affordable homes. Although I thought that was standard! I remember once enquiring about some on a local development to be told they started at £330k for the 2 beds! Presumably some went to housing associations etc 

 

@Frank Hovis

 

Yes, just seen that myself.

What an absolute dogs breakfast.

All developers try it on with "viability" issues after obtaining planning to try to reduce the number of affordable homes they have to build because these are at near zero profit to them.  These affordable homes go to panels of HAs who usually take it in turns to buy them as they come up.  RentPlus are a bunch of, not nice people, who try to nab them for a profit so my initial reaction was well done Cornwall Council in telling them to bog off.

The below is however the big issue.  The HAs don't want the maintenance responsibility for the big retaining wall as they will lose money, and the builder has put the affordable housing where this wall is.

He told the BBC that in November 2023 the affordable housing operators backed out, after delays, and realising the "magnitude" of possible maintenance to the large wall.

I don't actually see the developers as being particularly at fault here, unforeseen problems have arisen and the Council has gone deaf rather than working with them.

As it stands the development vehicle for these homes is going to go inevitably go bust if nothing happens because of interest costs mounting, and possibly the developers themselves.  The only sensible option is to allow the developer to sell them to RentPlus as that's the only offer on the table, irksome as that course of action may be.

All rather pigheaded by the Council there IMHO.

 

Edit:  typically affordable homes will be sold at minimal profit.  They will be on the smaller plots in the less desirable areas but even so the developer makes very little, if anything, on them, all the profit is on the open markets sales.

Edited March 18 by Frank Hovis

[HousePriceMania]

Rightmove....2007

Ignore the original post, was from 2011....
 

 

Edited March 18 by HousePriceMania

[Axeman123]

16 hours ago, One percent said:

How does over 80 percent stake in the property become 17 percent?  From the article 

AIUI they bought 17%, some idiot from the lender maybe fucked up one time and told them (maybe in writing, or maybe not) the inverse (ie the 83%). Maybe they weren't even told the wrong number, but thought "that doesn't sound right, we only borrowed 55k!" and hallucinated what they thought was fair. Now even though they can't justfy it as equitable the borrower is trying to hold the lender to that "error" in a really shark-like manner. The 17% they actually paid for their stake has still done really well as an investment, so it is just greed wanting the rest.

Fuck everyone involved tbh, but especially the borrower playing hard done by because they didn't get all the free money in the world.

[Axeman123]

1 hour ago, AWW said:

''One adviser said the situation was adding extra stress to a huge financial commitment and making customers feel pressured to make a decision quickly"

I don't remember anyone articles during the last decade bemoaning the fact that you had to decide how much to bid on a house within minutes of viewing it if you wanted to have any chance of buying it.

Indeed. For the media:

Time pressure to make a financial commitment with lifetime impacts when bidding a house up = 

Time pressure to make a financial commitment with a typical 2-5yr impact when choosing a mortgage = 

Massive double standard of course. Mustn't startle the precious.

 

[Axeman123]

55 minutes ago, Ash4781b said:

I thought that was how it always worked. Deals get pulled, new deals come in etc. 

The deals are going up not down now though!

Just like the different types of time pressure, anything that drives prices higher is "good" (and allegedly "helps" buyers, and anything that drives them lower is "bad" (and allegedly "hurts" them.

[spunko]

8 hours ago, Frank Hovis said:

 

Yes, just seen that myself.

What an absolute dogs breakfast.

All developers try it on with "viability" issues after obtaining planning to try to reduce the number of affordable homes they have to build because these are at near zero profit to them.  These affordable homes go to panels of HAs who usually take it in turns to buy them as they come up.  RentPlus are a bunch of, not nice people, who try to nab them for a profit so my initial reaction was well done Cornwall Council in telling them to bog off.

The below is however the big issue.  The HAs don't want the maintenance responsibility for the big retaining wall as they will lose money, and the builder has put the affordable housing where this wall is.

He told the BBC that in November 2023 the affordable housing operators backed out, after delays, and realising the "magnitude" of possible maintenance to the large wall.

I don't actually see the developers as being particularly at fault here, unforeseen problems have arisen and the Council has gone deaf rather than working with them.

As it stands the development vehicle for these homes is going to go inevitably go bust if nothing happens because of interest costs mounting, and possibly the developers themselves.  The only sensible option is to allow the developer to sell them to RentPlus as that's the only offer on the table, irksome as that course of action may be.

All rather pigheaded by the Council there IMHO.

 

Edit:  typically affordable homes will be sold at minimal profit.  They will be on the smaller plots in the less desirable areas but even so the developer makes very little, if anything, on them, all the profit is on the open markets sales.

There's another ruse going round to be aware of. It's quite clever, and has happened in the village near me.

A housebuilder with a quaint sounding name like Kentish Abodes promises to build only "affordable" homes for "local people" on a plot of land. They put in an application for, say, 20 houses, and all of them are claimed to for "local people". As this is what people around here claim they want to see more of getting built, it doesn't get widely opposed and outline planning permission gets granted.

The kicker is that there's nothing to stop the housebuilder from flogging on the plot to Redrow who then remove the local/affordable requirements. Once permission has been granted, its very hard to revoke it, even if they change the terms.

So be very wary if you see this, it's becoming more common apparently.

[Wight Flight]

1 hour ago, spunko said:

There's another ruse going round to be aware of. It's quite clever, and has happened in the village near me.

A housebuilder with a quaint sounding name like Kentish Abodes promises to build only "affordable" homes for "local people" on a plot of land. They put in an application for, say, 20 houses, and all of them are claimed to for "local people". As this is what people around here claim they want to see more of getting built, it doesn't get widely opposed and outline planning permission gets granted.

The kicker is that there's nothing to stop the housebuilder from flogging on the plot to Redrow who then remove the local/affordable requirements. Once permission has been granted, its very hard to revoke it, even if they change the terms.

So be very wary if you see this, it's becoming more common apparently.

Does it really matter just as long as millions of houses get built?

 

[spunko]

5 minutes ago, Wight Flight said:

Does it really matter just as long as millions of houses get built?

 

You have to be trolling if you still believe it's simply an issue of not enough houses being built.

Edited March 18 by spunko

[Wight Flight]

5 minutes ago, spunko said:

You have to be trolling if you still believe it's simply an issue of not enough houses being built.

Not quite.

i would like a period of six months where anyone that thought they could have space or land to build another house could register it. With the proviso that it is low density builds.

We have, i believe, about 20m dwelling s in the UK.

Every time the population grows by 1% we draw 2m of those registered sites out of a hat at random and build on them, no planning required and no objections entertained.

The only way to stop the destruction caused by immigration is to take it to the doorsteps of those that don't think it will ever affect them.

[spunko]

16 minutes ago, Wight Flight said:

Not quite.

i would like a period of six months where anyone that thought they could have space or land to build another house could register it. With the proviso that it is low density builds.

We have, i believe, about 20m dwelling s in the UK.

Every time the population grows by 1% we draw 2m of those registered sites out of a hat at random and build on them, no planning required and no objections entertained.

The only way to stop the destruction caused by immigration is to take it to the doorsteps of those that don't think it will ever affect them.

I'd argue that everyone is adversely affected by hyper immigration, they just choose to believe it doesn't affect them. And they still would choose to believe that if the plan you mention was enacted.

 

[Wight Flight]

3 minutes ago, spunko said:

I'd argue that everyone is adversely affected by hyper immigration, they just choose to believe it doesn't affect them. And they still would choose to believe that if the plan you mention was enacted.

 

If it pissed off the nimbys I wouldn't really care.

 

[One percent]

2 hours ago, spunko said:

There's another ruse going round to be aware of. It's quite clever, and has happened in the village near me.

A housebuilder with a quaint sounding name like Kentish Abodes promises to build only "affordable" homes for "local people" on a plot of land. They put in an application for, say, 20 houses, and all of them are claimed to for "local people". As this is what people around here claim they want to see more of getting built, it doesn't get widely opposed and outline planning permission gets granted.

The kicker is that there's nothing to stop the housebuilder from flogging on the plot to Redrow who then remove the local/affordable requirements. Once permission has been granted, its very hard to revoke it, even if they change the terms.

So be very wary if you see this, it's becoming more common apparently.

One would think it would be like any other contract in that the terms are written and agreed, on both sides. Silly me.  

[roundhouse]

4 hours ago, spunko said:

There's another ruse going round to be aware of. It's quite clever, and has happened in the village near me.

A housebuilder with a quaint sounding name like Kentish Abodes promises to build only "affordable" homes for "local people" on a plot of land. They put in an application for, say, 20 houses, and all of them are claimed to for "local people". As this is what people around here claim they want to see more of getting built, it doesn't get widely opposed and outline planning permission gets granted.

The kicker is that there's nothing to stop the housebuilder from flogging on the plot to Redrow who then remove the local/affordable requirements. Once permission has been granted, its very hard to revoke it, even if they change the terms.

So be very wary if you see this, it's becoming more common apparently.

I did wonder if that was the intention with the Calstock/Cornwall development as earlier emails. That the local/affordable housing was deliberately built above the retaining wall knowing the social housing agencies wouldn't want that responsibility, hence oops oh well they'll have to go to open market then instead. 

[apples]

13 hours ago, spunko said:

A housebuilder with a quaint sounding name like Kentish Abodes promises to build only "affordable" homes for "local people" on a plot of land. They put in an application for, say, 20 houses, and all of them are claimed to for "local people". As this is what people around here claim they want to see more of getting built, it doesn't get widely opposed and outline planning permission gets granted.

Not addressing your point, but ever since I knew a Korean (i.e. both ethnically Korean and born in Korea) couple who bought a house designated for "local people" in a rural English village despite having no obvious connections to the place, I've regarded "local people" promises as being worthless

I used to attend meetings about development when I lived there, and there were always boomer parents bleating about how there weren't enough homes for their grown-up children to live in the village. That was why their grown-up children had to live at the other end of the country, not because they'd gone where the jobs were / wanted to get away from bleating boomer parents

[Wight Flight]

2 hours ago, apples said:

Not addressing your point, but ever since I knew a Korean (i.e. both ethnically Korean and born in Korea) couple who bought a house designated for "local people" in a rural English village despite having no obvious connections to the place, I've regarded "local people" promises as being worthless

I used to attend meetings about development when I lived there, and there were always boomer parents bleating about how there weren't enough homes for their grown-up children to live in the village. That was why their grown-up children had to live at the other end of the country, not because they'd gone where the jobs were / wanted to get away from bleating boomer parents

The Surrey place I lived did a survey asking if there was any need for affordable local housing. Obviously they only asked the local home owners, who voted a resounding no. Clearly the boomers didn't think their kids deserved somewhere nearby to live. 

[HousePriceMania]

I think everyone's housing market is different in reality but for us, we have definitely experienced a crash.

We were close to paying £500,000 for a do-er-up-er at the start of 2023, it was approx 1500 sq ft, so around £330 per sq ft, probably nearer £400 after doing it up.

Roll forward 12 or so months and we are  now looking at this sort of house at 2000 sq ft for less money and no huge renovation costs. 

https://www.rightmove.co.uk/properties/144933683#/?channel=RES_BUY

That's £225 per sq ft and below our target price per sq ft. 

In real terms, that's 50% lower for us.

There are a lot of empty properties now round us, their asking prices are always around the £250 per sq ft mark, whereas the owner occupier ones, nearer £400.

This is a slightly different area than we are now looking at but you can see that we've dodged a bullet !!!  We're just waiting for something like this to come up now where we need to be going forward.

If our child had got into a different school we might have bought this one.

It's funny how life goes.

 

Edited March 19 by HousePriceMania

[HousePriceMania]

Unashamedly ( like a banker supporting Labour MP ) nicked from TOS

 

The buy-to-let we bought in 2007 is still in negative equity: How do we get out?

https://www.thisismoney.co.uk/money/mortgageshome/article-13210077/The-buy-let-bought-2007-negative-equity-DAVID-HOLLINGWORTH-replies.html?

My wife and I purchased a buy-to-let property in 2007 and it has turned out to be the worst financial decision of our lives. We bought it for £155,000 with a £35,000 deposit, leaving us with a £120,000 mortgage. But the recession hit shortly after, and its value plummeted to £75,000. The mortgage was initially interest-only but three years ago we moved to a repayment mortgage to try and reduce the debt. We have never missed a payment. This property continues to drain all our finances and I cannot express to you the negative impact this has had on our lives. It has given us many sleepless nights. The mortgage rate has recently gone up to 8.74 per cent (£949.07 per month) which is no longer sustainable for us. As we are in negative equity, we can't switch to another bank.

We also pay around £150 in management and agent fees, and the rent we make from the property is £500 per month. We've considered handing back the keys to the bank but as we still have a mortgage on the home we live in, we are concerned about the impact on our credit file. That mortgage has an outstanding balance of £94,000 and is currently on a 1.94 per cent rate (£702.84 per month). The deal ends in July. It is 25 per cent loan-to-value. Should we refinance our own home to try and get the LTV down on the other nightmare mortgage? Could we repay small lump sums to try and clear it? 

Edited March 19 by HousePriceMania

[spunko]

8 hours ago, Wight Flight said:

The Surrey place I lived did a survey asking if there was any need for affordable local housing. Obviously they only asked the local home owners, who voted a resounding no. Clearly the boomers didn't think their kids deserved somewhere nearby to live. 

Perhaps they were more clued up than you give them credit? Affordable housing in the SE is a by-word for "scummy London boroughs, move your problem tenants here".

It's all fun and games supporting "affordable housing" until you have a mentally ill new neighbour living next door cutting his wrists on the lawn.

[Kendo]

Here’s a blog on some research from the US, which argues that rising interest rates have locked a lot of people into being unable to sell, putting more upward pressure on home prices than the downward pressure from lower demand / credit owing to higher interest rates.

https://calculatedrisk.substack.com/p/the-lock-in-effect-of-rising-mortgage

The conclusion reads:

This paper finds that for every percentage point that market mortgage rates exceed the origination interest rate, the probability of sale is decreased by 18.1%. This mortgage rate lock-in led to a 57% reduction in home sales with fixed-rate mortgages in 2023Q4 and prevented 1.33 million sales between 2022Q2 and 2023Q4. The supply reduction increased home prices by 5.7%, outweighing the direct impact of elevated rates, which decreased prices by 3.3%. These findings underscore how mortgage rate lock-in restricts mobility, results in people not living in homes they would prefer, inflates prices, and worsens affordability.