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

[JoeDavola]

5 minutes ago, Royston said:

Absolutely this.

And not just when it comes to property.

I'm seeing no evidence at all of this supposed "cost of living crisis" when it comes to people's spending habits and lifestyles. 

Well to be fair you tend not to “see” increasing poverty. If your a single person without savings/assets on an average wage trying to put a roof over your own head and pay for a car in 2024 then you are certainly feeling the squeeze.

[Hardhat]

What makes Belfast such a hot property market? Its certainly going the other way in SE England.

 

[Royston]

23 minutes ago, JoeDavola said:

Well to be fair you tend not to “see” increasing poverty. If your a single person without savings/assets on an average wage trying to put a roof over your own head and pay for a car in 2024 then you are certainly feeling the squeeze.

I do agree that the single, childless, full time working are getting hardest squeezed compared to wealthy high earners and the benefits classes, but I'm still not really seeing evidence of lifestyle spending being massively impacted.

[JoeDavola]

8 minutes ago, Hardhat said:

What makes Belfast such a hot property market? Its certainly going the other way in SE England.

I don't have an answer for this, perhaps BC will, but one thing I will say that Belfast's house prices whilst out of whack with local wages still probably seem very cheap compared to SE England. So the SE probably has the furthest to fall.

I think we're already at a point here however where a huge percentage of under 30's just can't afford to leave home especially if they're single. Well - they could perhaps but by doing so would never save any money ever and will be renting until their parents die and they get the money from their parents house.

I know several middle-class folk around 60-ish who had several kids who all ended up single and are over 25, some in good jobs some not, and they're all still at home.

A couple of my brothers mates (mid 30's) never established careers of any sorts and thus never went beyond min wage jobs - luckily they always found it easy to get girlfriends so could split the cost of renting between two wages but in both cases they're spending almost a grand a month now in rent as couples and neither couple owns a car between them so car ownership in low-earning couples seems less frequent than ever. Neither have kids. I don't see any evidence such people will be any less skint when they turn 40.

[JoeDavola]

8 minutes ago, Royston said:

I'm still not really seeing evidence of lifestyle spending being massively impacted

This is too vague a statement and doesn't really mean anything. What are you expecting to see, what do you mean by lifestyle. The fact that some people (myself included) are still buying a few £3 coffees a week?

All I can say is that how much poorer on £50K I feel than when I was on £40K 10 years ago in terms of what it would take for big purchases, houses, cars, the big holidays I used to take back then to America. I have far less spending power than I did.

Again, you do not "see" increasing poverty especially the kind of boiling of the frog year on year destruction of spending power that is happening in the UK. And there's still plenty of wealthy folk to fill the restraunts and the fancy hotels and will be for many years to come.

[Wight Flight]

13 minutes ago, Royston said:

I do agree that the single, childless, full time working are getting hardest squeezed compared to wealthy high earners and the benefits classes, but I'm still not really seeing evidence of lifestyle spending being massively impacted.

But you wouldn't see it.

Restaurants are busy. Maccy D is busy but the pubs and clubs where the single childless would have hung out are shutting at 8pm.

[JoeDavola]

2 minutes ago, Wight Flight said:

But you wouldn't see it.

Restaurants are busy. Maccy D is busy but the pubs and clubs where the single childless would have hung out are shutting at 8pm.

My Mum trots out the "I don't see too many people doing without" line basically every week.

However her and Dad won't even go to the supermarket near them as its too full of immigrants (and I suspect working class folk) for them, so instead they drive to the posh shopping centre in the posh part of Belfast and do their Sainsburys shop and Cafe Nero supping there.

And they comment how busy the cafe always is and how nobody looks to be doing without. Well of course they fucking aren't.

[Plan-b]

A decent drop in monthly asking prices compared to forecast released by the Halifax BS 

[spunko]

43 minutes ago, Hardhat said:

What makes Belfast such a hot property market? Its certainly going the other way in SE England.

 

Its simply the delayed effect, the same situation in West Wales, prices are bizarrely still going up. 

[spygirl]

FT -

UK house prices fall in March after 5 consecutive monthly increases

Economists had expected figure measured by Halifax to rise again

....

In a note to clients, Capital Economics said: “Looking ahead, we expect mortgage rates to remain higher than in January and February and hover at just under 5 per cent over the coming months, which will subdue demand and prevent further gains in house prices.”

[spygirl]

Having people leverage up to max at wub 2% - even with the IR stress test - means the move to a SVR of 6% plus means theres going to be a shock.

Even though IR were stress tested to 6%, people borrowed at sub 2% and  then consumed  the IR savings

[belfastchild]

2 hours ago, JoeDavola said:

What price point are these fixer uppers at are we taking sub-200k?
 

Everything from 120kish to 180kish. All have bids at or around 20% more than list. One of the houses we saw has already passed 2007 peak, thats just crazy.

2 hours ago, JoeDavola said:

Also @belfastchild how come one house has 10 viewings before going on the website - are EA’s reaching out directly to buyers on their books before making listings public?

Yes, waiting lists of buyers. Lots of stuff not reaching the websites or simply being sold within a week of going on.
Most seem to be first time buyers.

Was out for the football last night, one of the lads I was talking to is buying a house locally with his girlfriend. They were living in dublin paying 2500 euro a month. 8-900 quid a month for a mortgage is nothing.
You would have difficulty renting a 3 bed in greater belfast for that now due to HB so better to stick 150k in a 3 bed doer upper.

[Royston]

59 minutes ago, Wight Flight said:

But you wouldn't see it.

Restaurants are busy. Maccy D is busy but the pubs and clubs where the single childless would have hung out are shutting at 8pm.

But is that due to a lack of lifestyle spending or a change in lifestyle habits and spending?

Traditional boozers might well be on the decline and possibly Traditional nightclubs and restaurants as well, but as you say other "Insta friendly" venues and eateries seem to be thriving.

[spunko]

3 minutes ago, belfastchild said:

Everything from 120kish to 180kish. All have bids at or around 20% more than list. One of the houses we saw has already passed 2007 peak, thats just crazy.

Yes, waiting lists of buyers. Lots of stuff not reaching the websites or simply being sold within a week of going on.
Most seem to be first time buyers.

Was out for the football last night, one of the lads I was talking to is buying a house locally with his girlfriend. They were living in dublin paying 2500 euro a month. 8-900 quid a month for a mortgage is nothing.
You would have difficulty renting a 3 bed in greater belfast for that now due to HB so better to stick 150k in a 3 bed doer upper.

That's interesting so can people from Republic of Ireland just move to N. Ireland willy nilly (and vice versa)?

Just now, Royston said:

But is that due to a lack of lifestyle spending or a change in lifestyle habits and spending?

Traditional boozers might well be on the decline and possibly Traditional nightclubs and restaurants as well, but as you say other "Insta friendly" venues and eateries seem to be thriving.

Err, not sure they're thriving...

https://www.dailymail.co.uk/news/article-13271613/Tom-Kerridge-food-industry-bust-Michelin-starred-restaurant-struggling.html

Quote

Speaking on The Rest Is Money podcast, Kerridge said he had closed his own big event company before Christmas and admitted his established Michelin-starred pub, the Hand and Flowers in Marlow, was only just eking out a tiny profit.

The chef said if he wasn't involved in a range of interrelated business around food, which includes books and TV, he'd now be 'absolutely terrified' if he was relying on a restaurant only.

 

[Royston]

1 minute ago, spunko said:

That's interesting so can people from Republic of Ireland just move to N. Ireland willy nilly (and vice versa)?

Err, not sure they're thriving...

https://www.dailymail.co.uk/news/article-13271613/Tom-Kerridge-food-industry-bust-Michelin-starred-restaurant-struggling.html

 

I've said previously it is a bizarre sector at the moment... for every overpriced pretentious eatery that's failing and closing there seems to be a new one that's opening up and having to turn customers away.

[belfastchild]

2 minutes ago, spunko said:

That's interesting so can people from Republic of Ireland just move to N. Ireland willy nilly (and vice versa)?

Yes, we are all Irish after all!

Besides they are both from Belfast and she wants to move close to her Ma and get married and have kids. Etc.

[JoeDavola]

10 minutes ago, belfastchild said:

Everything from 120kish to 180kish. All have bids at or around 20% more than list. One of the houses we saw has already passed 2007 peak, thats just crazy.

Yes, waiting lists of buyers. Lots of stuff not reaching the websites or simply being sold within a week of going on.
Most seem to be first time buyers.

Was out for the football last night, one of the lads I was talking to is buying a house locally with his girlfriend. They were living in dublin paying 2500 euro a month. 8-900 quid a month for a mortgage is nothing.
You would have difficulty renting a 3 bed in greater belfast for that now due to HB so better to stick 150k in a 3 bed doer upper.

Might have passed 2007 peak but I think if a crash was coming it would have come by now.

Looks like I'll need to start talking to EA's more then rather than just relying on the websites.

Agree £900 mortgage for a couple in full time employment is manageable even if they're on min wage. The couple I mentioned in their mid 30's that my brother knows are renting a terrace in the east for £800+ a month.

[spunko]

5 minutes ago, belfastchild said:

Yes, we are all Irish after all!

Besides they are both from Belfast and she wants to move close to her Ma and get married and have kids. Etc.

Has @JoeDavola considered moving to Republic of Ireland? Serious question. Weather might be better though maybe not by much unless you relocate to Waterford.

[JoeDavola]

Just now, spunko said:

Has @JoeDavola considered moving to Republic of Ireland? Serious question. Weather might be better though maybe not by much unless you relocate to Waterford.

Be no point, AFAIK its every bit as expensive there if not more so.

Part of the rush to NI is that its people fleeing even more unafforable places.

[Noallegiance]

2 hours ago, Royston said:

Absolutely this.

And not just when it comes to property.

I'm seeing no evidence at all of this supposed "cost of living crisis" when it comes to people's spending habits and lifestyles. 

The financial system is such that this absolutely must be on tick.

We have two generations that know very little about saving and delayed gratification.

I've spent the last 15 years trying to understand that my entire life (I'm 44) has been lived inside a 'reality' that is detached from the economic and social norms of history.

I'm willing to suggest that not one in 100,000 people understands this. The collective mental distress to be witnessed when the ability to add to and service personal debt disappears will be unpleasant at best. Particularly for the majority of those aged under 50.

[JoeDavola]

1 hour ago, spunko said:

Its simply the delayed effect, the same situation in West Wales, prices are bizarrely still going up. 

I don't think it's just that; BC mentioned houses in the £120-£180K range - I'd assume in much of the SE it's simply impossible to get anything in that price range?

If IR's take another big leap from where they are now I can maybe see a drop in prices but I don't think they can raise interest rates much more than they have done without collapsing the whole country.

Of course I might be wrong and this might be the peak in NI but it feels like I've wrongly been calling the peak for 5 years.

[spunko]

3 minutes ago, JoeDavola said:

I don't think it's just that; BC mentioned houses in the £120-£180K range - I'd assume in much of the SE it's simply impossible to get anything in that price range?

If IR's take another big leap from where they are now I can maybe see a drop in prices but I don't think they can raise interest rates much more than they have done without collapsing the whole country.

Of course I might be wrong and this might be the peak in NI but it feels like I've wrongly been calling the peak for 5 years.

Yeah pretty much impossible to get anything except shared ownership or part buy/rent at that range, even 1 bedroom flats are about £200k.

A lot of the price rises in the west country and Wales are from first time buyers deciding they have no hope of buying a house in the city so they're moving to cheaper places. A lot of the people buying houses in west Wales are from Cardiff, particularly FTBers. And as we know they are the key to driving the market as it scales up, if FTBers disappear the entire chain collapses.

[Royston]

7 minutes ago, Noallegiance said:

The financial system is such that this absolutely must be on tick.

We have two generations that know very little about saving and delayed gratification.

I've spent the last 15 years trying to understand that my entire life (I'm 44) has been lived inside a 'reality' that is detached from the economic and social norms of history.

I'm willing to suggest that not one in 100,000 people understands this. The collective mental distress to be witnessed when the ability to add to and service personal debt disappears will be unpleasant at best. Particularly for the majority of those aged under 50.

I agree. 

Despite Interest Rates being where they currently are (ie close to historical norms) I think there's still a huge amount of credit fuelled spending.

Its as though we were still in zirp fantasy land.

[JoeDavola]

10 minutes ago, spunko said:

if FTBers disappear the entire chain collapses.

What I am seeing less of is people selling decent if not spectacular well maintained family homes to move "up the ladder" - cause that just isn't happeng....e.g. in the old days someone might move up from a 3 bed semi to a detached. I think the 'ladder' is mostly dead now until the boomers start dying off an people inherit say half a house worth's equity.

So you're just not seeing many normal traditional family homes coming on at all because many if not most of the folk in them couldn't afford them at todays prices never mind afford to move up the ladder. So its mostly run down fixer uppers where people have died.

The example I like to use is my folks having paid a total pf about £60K in mortgage debt over their life (plus a shit load of interest of course!), that they finished paying in about 2011 when they retired and the last house they bid on a couple months back they were bidding £340K. Crazy money relative to the wages they ever earned.

I think we're pretty close to the single-person FTB not being a thing any more, but there's enough couples out there with BOMAD help from both sides to prop things up for the forseeable.

Edited April 5 by JoeDavola

[Royston]

1 hour ago, JoeDavola said:

This is too vague a statement and doesn't really mean anything. What are you expecting to see, what do you mean by lifestyle. The fact that some people (myself included) are still buying a few £3 coffees a week?

All I can say is that how much poorer on £50K I feel than when I was on £40K 10 years ago in terms of what it would take for big purchases, houses, cars, the big holidays I used to take back then to America. I have far less spending power than I did.

Again, you do not "see" increasing poverty especially the kind of boiling of the frog year on year destruction of spending power that is happening in the UK. And there's still plenty of wealthy folk to fill the restraunts and the fancy hotels and will be for many years to come.

You undoubtedly do have reduced spending power but from reading your other posts and just from the fact you are a dosboder I think I can safely assume you're not a feckless debt junkie who's constantly succumbing to peer pressure, trying to keep up with the Joneses and constantly trying to portray some fake lifestyle on social media.

Being none of the above puts you in a very, very small minority of the population. 

Despite the rise in IR's and suppressed incomes I think plenty of people are still doing whatever it takes to maintain their lifestyle spending habits, be it working even longer hours or taking on more debt, or probably both.