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

[Rare Bear]

20 hours ago, Wight Flight said:

Girlfriend of mine, about 1992 so she would have been 24 or so moved from Marseille to Walthamstow and bought (on her own) a three bed terrace with garden. She worked for Societe Generale, but wasn't very senior.

I met her on a Club Med skiing holiday so she wasn't short of fun money either.

1994 was probably somewhere around rock bottom for prices in Walthamstow.

[Rare Bear]

7 hours ago, AWW said:

I looked at a Warner flat back in, I dunno, 2007 maybe. 2-bed, bit too far from the tube. It was £250k. What struck me was how crap the area was - and I was living in Brixton at the time. It's still a worse area than Brixton.

Was the Victoria line built just to connect two of the worst areas in London?

[One percent]

4 hours ago, spunko said:

I thought this was the case, now it's been confirmed by data analysis.

Lots of people with pricey homes are chancing their arms and trying to sell. But very few of them are selling.

 

The only ones that are selling are priced to sell. I've mentioned this one on here before, it's now gone SSTC:

https://www.rightmove.co.uk/properties/131977703#/?channel=RES_BUY

Over the road (literally) there is a house that is half the size of this now for sale for... £1.25m more: https://www.rightmove.co.uk/properties/147272894#/?channel=RES_BUY

Imagine having that brass neck.

My daughters are looking to buy.  Found a house and made an offer. It was on at x25 so they offered x10 (x being the 100k). Silly prat has really messed them around, pretending there were higher offers on the table etc. wanted nearer x75.   house next door (which is nicer) went sstc was on at x00. They've decided to walk away as this is nutter territory. Apparently he had an offer a couple of years back for more and is convinced it is worth that now.  He also apparently messed those buyers around too.  He’s having another open house this coming weekend. 

[Wight Flight]

30 minutes ago, One percent said:

My daughters are looking to buy.  Found a house and made an offer. It was on at x25 so they offered x10 (x being the 100k). Silly prat has really messed them around, pretending there were higher offers on the table etc. wanted nearer x75.   house next door (which is nicer) went sstc was on at x00. They've decided to walk away as this is nutter territory. Apparently he had an offer a couple of years back for more and is convinced it is worth that now.  He also apparently messed those buyers around too.  He’s having another open house this coming weekend. 

Are they buying in Belfast by any chance?

@JoeDavola

[One percent]

23 minutes ago, Wight Flight said:

Are they buying in Belfast by any chance?

@JoeDavola

Londonistan 

[spunko]

Corporate shills getting desperate now:

Britain must go it alone when it comes to interest rates, says ALEX BRUMMER

https://www.thisismoney.co.uk/money/comment/article-13372541/Britain-comes-rates-says-ALEX-BRUMMER.html

[AWW]

5 minutes ago, spunko said:

Corporate shills getting desperate now:

Britain must go it alone when it comes to interest rates, says ALEX BRUMMER

https://www.thisismoney.co.uk/money/comment/article-13372541/Britain-comes-rates-says-ALEX-BRUMMER.html

Surely they understand that they're fucked either way? Cut rates, £ tanks, more inflation, higher rates later. They really are deluded.

[Mandalorian]

50 minutes ago, AWW said:

Surely they understand that they're fucked either way? Cut rates, £ tanks, more inflation, higher rates later. They really are deluded.

Problem is, they don't.

Like most of the MSM, they will be putting their faith in Starmer et al.

[HousePriceMania]

I've seen it all now....this is genuine, someone sent me it a couple of hours ago, it's on a lamppost next to northampton General hospital....

 

let me know what he says...

 

 

[spygirl]

RAAC concrete house was meant to be our forever home

https://www.bbc.co.uk/news/articles/c1ej0017ez5o

 

I tis your forever home -youre not selling it .....

In nearby Bathgate, Jim Allan says the house he has lived in since 1968 is now "worthless".

His father bought the family's council home in 2003 and Jim took it on 12 years ago when his dad died.

Well.. it was costless, so whats he complaining about???

 

[One percent]

13 minutes ago, spygirl said:

RAAC concrete house was meant to be our forever home

https://www.bbc.co.uk/news/articles/c1ej0017ez5o

 

I tis your forever home -youre not selling it .....

In nearby Bathgate, Jim Allan says the house he has lived in since 1968 is now "worthless".

His father bought the family's council home in 2003 and Jim took it on 12 years ago when his dad died.

Well.. it was costless, so whats he complaining about???

 

But I thought that it was incredibly difficult to get a mortgage on those types of property  because the problems have been known about for decades. 

[spygirl]

12 hours ago, spunko said:

Corporate shills getting desperate now:

Britain must go it alone when it comes to interest rates, says ALEX BRUMMER

https://www.thisismoney.co.uk/money/comment/article-13372541/Britain-comes-rates-says-ALEX-BRUMMER.html

This is worth some comments

Britain has long looked across the Atlantic for guidance on interest rates. 

Of all the European economies, the UK, with its free-wheeling capitalism, open borders and financial sector dominated by US behemoths, finds separation from American cousins difficult.

There is a current view, echoed by Bank of England Governor Andrew Bailey, that the UK and Europe are on different tracks than the US.

Inflation in the US is demand-led. The Federal Reserve, the US central bank, had no choice but to hold its key interest rate at the 5.25 per cent to 5.5 per cent range last night, given the stubbornness of inflation and economic strength with housing and labour markets robust.

In contrast, cost of living pressures are easing in Britain as supply-side constraints, caused by war in Ukraine, offer room for lowering interest rates, which would underpin output in the UK.

Guidance??? US Fed sets short term IR. You can try lowering but then your currency will fall.

This has been the case sicne late 70s, financial liberation n all that.

If you dotn want to be controlled by the Fed then youve got to go Swiss - strong currency, spending surplus etc etc.

 

UK free wheeling captism????? Not at current level of gov spend.

UK n Europe on different trends. Nope.

I be lookign at Turkey for guidance of IR for UK n Europe

Cause of UK inflation are same as US - money. In the UKS case youve got too many on indexed bennies n pensions.

 

3 minutes ago, One percent said:

But I thought that it was incredibly difficult to get a mortgage on those types of property  because the problems have been known about for decades. 

Yep.

Always fallen on non standard constructions.

Concrete councils houses  - run a mile.

Theyve never paid for a survey and/or had a mortgage.

[spygirl]

10 hours ago, HousePriceMania said:

I've seen it all now....this is genuine, someone sent me it a couple of hours ago, it's on a lamppost next to northampton General hospital....

 

let me know what he says...

 

 

Sign of financial stress.

Theres loads of novel We buy your house ads after 2007.

Other sign to look out for is cars parked up by road with For Sale on them.

 

 

 

Just now, spygirl said:

Sign of financial stress.

Theres loads of novel We buy your house ads after 2007.

Other sign to look out for is cars parked up by road with For Sale on them.

 

 

 

Theyve smelt blood in the water.

Dipping their toes in.

 

[sancho panza]

17 hours ago, AWW said:

Surely they understand that they're fucked either way? Cut rates, £ tanks, more inflation, higher rates later. They really are deluded.

Shaun Richards-one of teh few economsits who's called this very well over the last ten years-had a great post on this a week or two back

In the old days pre 08 bubble,IRs were way higher than inflation.I use RPI here as that was what theyw ere using in 2000.As a for instance in sep 2000 RPI was 3.3%, base rate was 6% and mortgage rate for variable mrotgage rate was 5.87%

cutting rates too early would create an even bigger problem down the line as you allude.

https://notayesmanseconomics.wordpress.com/2024/04/22/the-bank-of-england-sets-out-a-road-map-for-uk-interest-rates-to-fall-to-4/

What Next?

The crucial moment in the speech came here.

.For me the balance of domestic risks to the outlook for UK inflation, relative to the February MPR forecasts, is now tilted to the downside, with a scenario where inflation stays close to the 2% target over the whole forecast period at least as likely.

So with inflation forecasted to be close to 2% then an interest-rate of 5.25% is 3.25% over that. Putting it another way if you wish to bear down on inflation the rule of thumb is that you put interest-rates 2% above it. So we have an upper tier for future UK Bank Rate of 4% to 4.25% and remember that if you are on target you do not really need  to bear down on inflation so minds will shift to an interest-rate beginning with a 3. There are consequences from such thinking but let us stay for the moment with the speech.

https://www.statista.com/statistics/285203/percentage-change-of-the-retail-price-index-rpi-in-the-uk/

https://www.statista.com/statistics/386301/uk-average-mortgage-interest-rates/

Edited May 3 by sancho panza

[JoeDavola]

Some reports from the ground in NI:

https://www.reddit.com/r/northernireland/comments/1cjdzt3/housing_market/

The TLDR seems to be that at the bottom of the market cash buyers (i.e. BTL) and OO's are getting into bidding wars.

Mid market at this point is outright unaffordable at todays interest rates IMO for even a high-ish earner by NI sandards without BOMAD help e.g. a £60K earner buying a £250K house alone will be a struggle IMO. Median full time NI salary is £33K.

I was chatting to my boot mender yesterday and he was saying how relieved he was to get his daughter sorted with a house, but then when he told me the details geting her sored involved him at the age of 60 taking out a big loan as part of giving her about £40K BOMAD help on a £170K house.

Edited May 4 by JoeDavola

[Cosmic]

1 hour ago, JoeDavola said:

 him at the age of 60 taking out a big loan as part of giving her about £40K BOMAD help on a £170K house.

What did he do with the rest of it? 

[JoeDavola]

15 minutes ago, Cosmic said:

What did he do with the rest of it? 

Very funny - yes I know the ballers on DOSBODS have £40K in gold down the back of the sofa but most 60 year olds consider a 40K loan to be very significant.

[spunko]

50 minutes ago, JoeDavola said:

Very funny - yes I know the ballers on DOSBODS have £40K in gold down the back of the sofa but most 60 year olds consider a 40K loan to be very significant.

I saw a comment on the Daily Mail the other day, with a scary amount of upvotes, that said 'this was a rich country' and that people 'will jsut go out and buy houses in cash' if prices drop too far. They even made the claim that "a lot" of people have 200 grand in cash sitting around.

 

 

 

...

 

 

 

 

[Cosmic]

6 minutes ago, spunko said:

I saw a comment on the Daily Mail the other day, with a scary amount of upvotes, that said 'this was a rich country' and that people 'will jsut go out and buy houses in cash' if prices drop too far. They even made the claim that "a lot" of people have 200 grand in cash sitting around.

 

 

 

...

 

 

 

 

We can't all be Joe 😀

[JoeDavola]

2 minutes ago, spunko said:

I saw a comment on the Daily Mail the other day, with a scary amount of upvotes, that said 'this was a rich country' and that people 'will jsut go out and buy houses in cash' if prices drop too far. They even made the claim that "a lot" of people have 200 grand in cash sitting around.

Its just the kind of boomer that reads the daily mail innit. The DM is recreational anger for wealthy boomers who enjoy feeling hard done by, as is GB news.

The only way I can think of levelling the playing field might be if a lot of the boomer wealth all went on medical care and care home fees over the next 20 years but even then that money ultimately flows to someone, just hopefully someone who is less likely to want to spend it on a UK BTL empire.

[JoeDavola]

1 minute ago, Cosmic said:

We can't all be Joe 😀

I was actually going to refer to my own situation, it's not to be envied I've just natrually always lived like a student really not spending much.

[Cosmic]

3 minutes ago, JoeDavola said:

I was actually going to refer to my own situation, it's not to be envied I've just natrually always lived like a student really not spending much.

While not student levels I've not increased my 'lifestyle' since I was on 15k... Hell proportionally I spend far less on electronics and games now (subscriptions to multiple MMO accounts add up!). No drink, no smokes, no drugs, essential clothing only and wear it for as long as sensible. 

I've been thinking a fair bit about it recently... New hire who is on more than I was until 5 years ago, moaning about being able to afford a new tyre on his car. Now ok it's a one series, but it's not hugely costly, he still lives with his parents... I know what he's taking home, I'd love to run through what he's spending because I bet it's 75% crap, like most people's spending. I know he's trying to save for a house, aiming for that 5% deposit on a 200k house... If I ran his budget for him he'd have most of it by now. In his situation he should be aiming for 10% by 18months. But I guess he sees it like a lot of people will, why a 10% deposit when 5% is the minimum and I can spend the rest? 

[belfastchild]

2 hours ago, JoeDavola said:

Mid market at this point is outright unaffordable at todays interest rates IMO for even a high-ish earner by NI sandards without BOMAD help e.g. a £60K earner buying a £250K house alone will be a struggle IMO. Median full time NI salary is £33K.

Average house price in NI is 177k. 250k is not mid market.

[Butthead]

6 minutes ago, Cosmic said:

While not student levels I've not increased my 'lifestyle' since I was on 15k... Hell proportionally I spend far less on electronics and games now (subscriptions to multiple MMO accounts add up!). No drink, no smokes, no drugs, essential clothing only and wear it for as long as sensible. 

I've been thinking a fair bit about it recently... New hire who is on more than I was until 5 years ago, moaning about being able to afford a new tyre on his car. Now ok it's a one series, but it's not hugely costly, he still lives with his parents... I know what he's taking home, I'd love to run through what he's spending because I bet it's 75% crap, like most people's spending. I know he's trying to save for a house, aiming for that 5% deposit on a 200k house... If I ran his budget for him he'd have most of it by now. In his situation he should be aiming for 10% by 18months. But I guess he sees it like a lot of people will, why a 10% deposit when 5% is the minimum and I can spend the rest? 

I think lifestyle factors have a big part to play in all the things we talk about here; home purchase options, investing, retiring early etc. I've changed my mind on spending and what constitutes crap a lot in recent years.

As an example, right now the sun is shining and it is 10am on the Saturday of a long weekend. I'm sitting on DOSBODS, which is free. Someone else might be out having breakfast with friends (£20) before wandering into town (£20 on coffee/snacks and unnecessary impulse purchases) and then heading down to the area with all the bars for a few drinks in the afternoon sun (£40). Add in a taxi home and they'd burn through at least £100 today, while I won't. But I definitely don't think I'm winning.

Everyone needs to find balance, everyone needs to spend some money frivolously i.e. "on crap".

[JoeDavola]

8 minutes ago, belfastchild said:

Average house price in NI is 177k. 250k is not mid market.

I am perhaps being Belfast-centric....the idea being flat/terrace as 'starter home' and a decent 3 bed semi as a second step up - I'd call a 3 bed semi mid-market though maybe I'm just over-estimating what the average house is like based on the money I and the people know have and were brought up in.

£250K certainly isn't the higher end of the market IMO. And that's without taking into account a better than average semi i.e. a 4 bedder or somewhere designated a 'desirable' area which I'm pretty sure are going to be £500K within a few years:

Mid terrace approaching a quarter of a million:

Mid-terrace in Sydenham which is (or was) as working class as they get in terms of areas now not a kick in the arse off that £177K average, but maybe this actually does represent the average house more than a semi?