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

[apples]

10 hours ago, JoeDavola said:

Folks are just over two months...actually possibly closer to 3 months sale agreed on their place at this point; haven't found anywhere worth moving to that they didn't get outbid by a cash buyer.

Is their current place so desirable that their buyer hasn't told them to forget it yet?

Edited March 21 by apples

[JoeDavola]

51 minutes ago, apples said:

Is their current place so desirable that their buyer hasn't told them to forget it yet?

It is, but that’s because of how limited supply is in general and how rotten and/or horrendously expensive the family homes that do come on are.

[AlfredTheLittle]

2 hours ago, JoeDavola said:

 

So if you take both moves; the house they left and the attempts to leave this house - you're easily talking 5 years of either preparing to move house, trying to move house, and moving house. None of it was necessary. They had the perfect house 13 years ago and should have stayed there.

 

That's life, really. Anything we do is just passing time till we die, and using up resources.

[spygirl]

4 hours ago, JoeDavola said:

It is, but that’s because of how limited supply is in general and how rotten and/or horrendously expensive the family homes that do come on are.

https://www.onthemarket.com/details/14384573/?utm_source=home_co_uk&utm_medium=cpc&utm_campaign=home_feed

Offer 320k.

Sorted.

 

[spygirl]

Bank of England boss: 'We're on the way' to interest rate cuts

https://www.bbc.co.uk/news/business-68618436

 

'ngovwer Xtzzzle, Zebra again for tea soon.

 

*IF* Boe bae rates fall, defaults rate of mortgages will ensure mortgage rates remain the same or higher.

 

[spygirl]

More FB fun.

Rent has gone up £60 from first of April. The 35% of my tiny little house that I rent on the shared ownership crap- is nearly as much as the mortgage I pay on the 65%.

Absolute joke!!! Yet I can’t borrow anymore to pay for more of the bleeding house

[HousePriceMania]

Stolen from TOS

 

[Guest]

On 20/03/2024 at 19:16, sancho panza said:

I thought things were insane here but jsut check out some of these canada charts especially given they start in 08 not 00

worth noting the similarity timing wise with unwinding QE

https://wolfstreet.com/2024/03/18/the-most-splendid-housing-bubbles-in-canada-national-house-prices-flat-in-feb-16-from-peak-condos-drop-further-on-bank-of-canadas-5-massive-qt/

Canadian house price numbers look to me like the UK if it didn't have the north and midlands of England to bring the averages down.

England south of the Severn-Wash line even has a fairly similar population size to Canada (30 million vs 40 million). Basically the UK contains its own Canadian house price bubble, it just happens to be geographically concentrated in one region.

Edited March 22 by Guest

[MrXxxx]

Reading this article [https://www.thisismoney.co.uk/money/mortgageshome/article-13197809/How-Britons-struggling-mortgage-payments.html] got me thinking

QUOTE:

Last year's repossession figures did represent an 18 per cent increase compared with the 2022 figure. But according to UK Finance's Hopley, this was due to delays in the repossession process which were caused by the pandemic. Hopley says: 'The year 2022 saw artificially suppressed possession numbers, following the moratorium and issues relating to limited court capacity.'So the increase in those numbers last year does not signal a change in market conditions.'Rather, it is a timing issue as possessions which, under normal conditions, would and should have taken place in previous years, eventually went through that process.'Another important point to note, according to Hopley, is that the possessions last year do not relate to mortgage arrears that arose last year.Hopley adds: 'Given the substantial backlog, the cases that have been through the process over the last few years relate to mortgage arrears built up some years previously.'

 

So with defaults/arrears increasing [see below 1]:

 

and the governments mortgage charter specified 12 months grace period to be 'celebrated' at the beginning of July [2] are we about to see a dramatic uptick in repossession in Q3/Q4 2024 as banks/BS foreclose?

 

SOURCE 1: https://www.bankofengland.co.uk/statistics/mortgage-lenders-and-administrators/2023/2023-q3

SOURCE 2 [https://www.gov.uk/government/publications/mortgage-charter/mortgage-charter#the-charter]

 

Edited March 22 by MrXxxx

[Kendo]

A diary of a first time buyer going through the process - https://www.theguardian.com/money/2024/mar/22/diary-of-a-first-time-buyer-rent-property

Not sure how old the guy is but if he’s mid to late 20s, he’s done well to be on a salary of roughly £75k (since his initial mortgage offer was about 270k at 3.5 x salary) but certainly possible. But he rented for four years at over £2000 a month and managed yet has gone for a 40-year mortgage to make the payments more affordable at a bit over £1000 a month. Foolish decision there I feel.

[sleepwello'nights]

1 hour ago, Kendo said:

But he rented for four years at over £2000 a month and managed yet has gone for a 40-year mortgage to make the payments more affordable at a bit over £1000 a month. Foolish decision there I feel.

I think I would do the same in his position. He is making a saving of £1000 a month as opposed to renting. If he is able to use the saving to build up a reserve to tide him over in the event of unforseen circumstances initially and then subsequently uses it to overpay the mortgage in the future. It seems eminently sensible to me. 

[Kendo]

2 minutes ago, sleepwello'nights said:

I think I would do the same in his position. He is making a saving of £1000 a month as opposed to renting. If he is able to use the saving to build up a reserve to tide him over in the event of unforseen circumstances initially and then subsequently uses it to overpay the mortgage in the future. It seems eminently sensible to me. 

I agree it depends on his attitude and what he does with those savings. I think I’d be more inclined to find a middle point - cut the mortgage term from the maximum 40 years and hopefully find you can still save more than if renting. I’m slightly surprised by the mortgage interest rate he achieved in Oct 2023 (4.54%) given he only had around a 10% deposit. I thought rates were higher then at that LTV but might be wrong.

[Wight Flight]

3 hours ago, Kendo said:

A diary of a first time buyer going through the process - https://www.theguardian.com/money/2024/mar/22/diary-of-a-first-time-buyer-rent-property

Not sure how old the guy is but if he’s mid to late 20s, he’s done well to be on a salary of roughly £75k (since his initial mortgage offer was about 270k at 3.5 x salary) but certainly possible. But he rented for four years at over £2000 a month and managed yet has gone for a 40-year mortgage to make the payments more affordable at a bit over £1000 a month. Foolish decision there I feel.

If he was renting at £2k a month and buying for £270k has he downsized from a nice 4 bedder to a 2 bed semi?

not really comparing apples with apples.

[Kendo]

30 minutes ago, Wight Flight said:

If he was renting at £2k a month and buying for £270k has he downsized from a nice 4 bedder to a 2 bed semi?

not really comparing apples with apples.

Don’t think so. The article suggests he was renting in West London, probably a flat on his own but not clear. I assume West London as the first two flats he put offers in on were in Acton. He then looked at moving to Greenwich, also expensive. Finally ended up buying a new-build flat with a 999 lease in Maidenhead, farther west out of London.

[AWW]

1 hour ago, Wight Flight said:

If he was renting at £2k a month and buying for £270k has he downsized from a nice 4 bedder to a 2 bed semi?

not really comparing apples with apples.

It didn't say where he was, but his search started in Acton so let's assume he was somewhere round there, which would put him in a 2-bed flat most likely.

Now he's moved to Maidenhead, which is well outside the M25 and about 30 miles to London. I hope he doesn't have to commute in, because his life is going to be shit.

In his position, I'd have rented somewhere in Maidenhead and saved until I could afford somewhere I actually wanted to live.

[AWW]

I'm looking forward to the follow-up article in two years' time: "I want to move back to London but I'm stuck in negative equity."

Micheál thought he was setting himself up for life when he invested in a property in the south east. For years, he suffered the misery of renting, but was able to save a good deposit and, by compromising on location, was able to achieve his dream of owning a flat in Maidenhead. It cost Micheál £35,000 to move into the flat after paying his deposit, legal fees and moving costs. He spent £10,000 on decorating and soft furnishings. However, in 2026, Micheál's flat is worth 20% less than when he bought it, and he accepted a lower salary when taking a local job in order to avoid an expensive and time-consuming commute to his old job in the capital. "I did the responsible thing and feel I'm being punished for it" said Micheál when we blah blah blah

[JoeDavola]

This is the second time in as many weeks where I've seen a house listed, thought hmm it's far from perfect but it's a reasonable price, then looked at it the following day and the listing price has gone up by 20%.

I may well just be going senile and hallucinating 2020 prices.

[spygirl]

12 hours ago, Kendo said:

A diary of a first time buyer going through the process - https://www.theguardian.com/money/2024/mar/22/diary-of-a-first-time-buyer-rent-property

Not sure how old the guy is but if he’s mid to late 20s, he’s done well to be on a salary of roughly £75k (since his initial mortgage offer was about 270k at 3.5 x salary) but certainly possible. But he rented for four years at over £2000 a month and managed yet has gone for a 40-year mortgage to make the payments more affordable at a bit over £1000 a month. Foolish decision there I feel.

If shes single then he needs to be have been in a shared house or with famaily FFS.

Get his rent below 1k/m over 4y and hed have 50k deposit.

 

[spygirl]

6 hours ago, AWW said:

I'm looking forward to the follow-up article in two years' time: "I want to move back to London but I'm stuck in negative equity."

Micheál thought he was setting himself up for life when he invested in a property in the south east. For years, he suffered the misery of renting, but was able to save a good deposit and, by compromising on location, was able to achieve his dream of owning a flat in Maidenhead. It cost Micheál £35,000 to move into the flat after paying his deposit, legal fees and moving costs. He spent £10,000 on decorating and soft furnishings. However, in 2026, Micheál's flat is worth 20% less than when he bought it, and he accepted a lower salary when taking a local job in order to avoid an expensive and time-consuming commute to his old job in the capital. "I did the responsible thing and feel I'm being punished for it" said Micheál when we blah blah blah

dream of owning a flat in Maidenhead.

I have much different dreams.

This is HTB writ large.

And prob some EUro trash thinking - UK property, deal ... £££££££££

Loads of Frogs n Eyeites playing the same stupid game.

However, in 2026, Micheál's flat is worth 20%

In your dreams. Try 40%

when taking a local job in order to avoid an expensive and time-consuming commute to his old job in the capital

I dont understand this.

Dull as fuck  as Mhead is, it does have one massive plus at the mo -

There are 24h trains to CW -

https://www.traintickets.com/train-times/maidenhead-to-canary-wharf-elizabeth-line/?/

50mins fastest to CW, not that youd want to go there.

40min to Tot court Rd.

 

 

[Boon]

Think the real sob stories would have been in the people that bought a few years ago. He already got £40k off, but I bet that these new builds in 2019 would have been in the £350k bracket.

Assuming he had £25k in 2022 he must have saved more even with his eye-watering rent and maybe his salary has increased since the initial mortgage application. 

With no dependents and positive cashflow even if he makes a mistake now at least he can afford it.

I see a few people that are fucked really though, think people who bought new build 2016-2020, so the very top end price. In London, a 20% decline (and counting) can be almost 6 figures, so they are basically stuck as the market has gone against them doubly - flats have declined since the 2019, yet the starter home has held value or increased. Also in the meantime they have had kids, so stuck with extra expenses living in unsuitable accomodation trying to sell a flat for an unrealistic price because they need that to move to somewhere else.

[AWW]

8 hours ago, spygirl said:

I dont understand this.

Dull as fuck  as Mhead is, it does have one massive plus at the mo -

There are 24h trains to CW -

https://www.traintickets.com/train-times/maidenhead-to-canary-wharf-elizabeth-line/?/

50mins fastest to CW, not that youd want to go there.

40min to Tot court Rd.

 

 

It was a joke Spy, and I didn't think to look at the train timetables. Thanks for keeping us all correct 👍👍

That said, 50 mins on a train each way is too long for me. Half hour tops, and even then I'd rather cycle.

[AWW]

6 hours ago, Boon said:

Think the real sob stories would have been in the people that bought a few years ago. He already got £40k off, but I bet that these new builds in 2019 would have been in the £350k bracket.

Assuming he had £25k in 2022 he must have saved more even with his eye-watering rent and maybe his salary has increased since the initial mortgage application. 

With no dependents and positive cashflow even if he makes a mistake now at least he can afford it.

I see a few people that are fucked really though, think people who bought new build 2016-2020, so the very top end price. In London, a 20% decline (and counting) can be almost 6 figures, so they are basically stuck as the market has gone against them doubly - flats have declined since the 2019, yet the starter home has held value or increased. Also in the meantime they have had kids, so stuck with extra expenses living in unsuitable accomodation trying to sell a flat for an unrealistic price because they need that to move to somewhere else.

I know a few at the school gate who have paid 1 to 1.5m for a family home in the area during the last couple of years. They will be at least a couple of hundred k down on it by now, though nobody talks about values, only mortgage costs, which have gone up a lot, one monthly has more than doubled from just under 3k to over 6k. They can afford it, but they can't afford much else.

[Long time lurking]

 

[Option5]

19 hours ago, AWW said:

I know a few at the school gate who have paid 1 to 1.5m for a family home in the area during the last couple of years. They will be at least a couple of hundred k down on it by now, though nobody talks about values, only mortgage costs, which have gone up a lot, one monthly has more than doubled from just under 3k to over 6k. They can afford it, but they can't afford much else.

So the big Audi SUV goes at the end of the lease, lots of unloaded lease cars means values dropping. Lease costs go up to cover the losses. It's a vicious circus.

Get ready to own a house at a realistic price and you can park your cheap top of the range ex lease car on the driveway. (Because the stupid truck won't fit in the garage).

[AWW]

3 hours ago, Option5 said:

So the big Audi SUV goes at the end of the lease, lots of unloaded lease cars means values dropping. Lease costs go up to cover the losses. It's a vicious circus.

Get ready to own a house at a realistic price and you can park your cheap top of the range ex lease car on the driveway. (Because the stupid truck won't fit in the garage).

I thought more people were hanging onto their cars at the end of their lease now, because the same monthlies that funded an Audi SUV will now put a Dacia hatchback on the drive? So actually reduced supply of 3-5 year old cars and firmer values.