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

[Wight Flight]

4 minutes ago, JoeDavola said:

Do you know that they bought with a mortgage?

Yes. But i don't know how big.

But it makes no odds. Had they bought with cash they are now losing a lot of potential interest.

[Ash4781b]

so-called pushing again. They seemed to believe their own messages. 

”However, some borrowers had banked on rates going down consistently throughout the year.

Two more key factors have created the current bump in the road. 

• Firstly, the global economic outlook has not been as positive as many would have hoped. On Wednesday, the US central bank again said it would keep interest rates unchanged, because the rate of rising prices (inflation) had proved more persistent than expected.

• Secondly, lenders tend to move in a pack. A mortgage provider wants to set its rates to be competitive, but not too low to be suddenly inundated with custom and unable to cope with the demand.

The reality for home buyers and owners in pounds and pence is that, compared to someone getting a mortgage a year ago, it is a little more expensive.”

https://www.bbc.co.uk/news/articles/cv2xj1je97ro

 

[Noallegiance]

On 03/05/2024 at 14:34, sancho panza said:

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/

Interesting that this comes out a few days after I watched a video from Richard Werner who has done the only empirical study of the affect of central bank rate changes over time. The conclusion was that it does less than fuck all. I'm sure he will have put it more eloquently than that, but it's a fair layman's summary.

[spunko]

House prices stagnate as mortgage rates increase

BEAR FOOD

First-time buyers and homeowners looking to remortgage are still facing a "significant challenge" when it comes to finding affordable deals, the Halifax has said.

The lender's comments came as it said the average UK house price rose by 0.1% in April, with a typical home now valued at £288,949.

Halifax said house prices have been largely flat in the early part of 2024.

Mortgage rates have been rising in recent weeks, mainly due to expectations that the Bank of England will make fewer interest cuts this year.

The Bank's latest decision on interest rates will be announced on Thursday, with most analysts predicting they will be left unchanged at 5.25%.

Amanda Bryden, head of mortgages at Halifax, said the housing market was "finding its feet in an era of higher interest rates".

"While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability," she added, with activity and demand improving.

“However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals," Ms Brydon said.

"Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts."

https://www.bbc.co.uk/news/articles/cqenp5zpen6o

 

(Timely reminded that Halifax excludes BTL and cash purchases from their iffy figures)

[HousePriceMania]

 

[HousePriceMania]

23 minutes ago, spunko said:

House prices stagnate as mortgage rates increase

BEAR FOOD

First-time buyers and homeowners looking to remortgage are still facing a "significant challenge" when it comes to finding affordable deals, the Halifax has said.

The lender's comments came as it said the average UK house price rose by 0.1% in April, with a typical home now valued at £288,949.

Halifax said house prices have been largely flat in the early part of 2024.

Mortgage rates have been rising in recent weeks, mainly due to expectations that the Bank of England will make fewer interest cuts this year.

The Bank's latest decision on interest rates will be announced on Thursday, with most analysts predicting they will be left unchanged at 5.25%.

Amanda Bryden, head of mortgages at Halifax, said the housing market was "finding its feet in an era of higher interest rates".

"While borrowing costs remain more expensive than a few years ago, homebuyers are gaining confidence from a period of relative stability," she added, with activity and demand improving.

“However, we can’t overlook the fact that affordability constraints are still a significant challenge, for both new buyers and those rolling off fixed-term deals," Ms Brydon said.

"Mortgage rates have edged up again in recent weeks, primarily as a result of expectations around future Bank of England base rate changes, with markets now pricing in a slower pace of cuts."

https://www.bbc.co.uk/news/articles/cqenp5zpen6o

 

(Timely reminded that Halifax excludes BTL and cash purchases from their iffy figures)

There has only been a spring bounce in asking prices this year, not surprised as everyone who bought 2 years ago rush to sell to some idiot who just doesn't exist.

Amanda Bryden, head of mortgages at Halifax, said the housing market was "finding its feet in an era of higher interest rates".
 

Interesting, the housing market feet are well below the top of it's head.

[JoeDavola]

Well my folks found a house they liked.

They phoned and put an offer on.

And 5 minutes later they got a call saying that their own buyer had pulled out after being strung along for several months.

Of course they're devistated blah blah...my mate said they should have just continued bidding on the house anyway and just let on they had a buyer and put their gaff back on the market.

Edited May 7 by JoeDavola

[nirvana]

me granny used to live around the corner from here lol

https://www.allsop.co.uk/lot-overview/vacant-freehold-mid-terrace-building-in-sunderland/r240509-134

[nirvana]

one for penda @King Penda

https://www.allsop.co.uk/lot-overview/vacant-freehold-semi-detached-house-in-stokeontrent/r240509-226

[JoeDavola]

5 hours ago, JoeDavola said:

Well my folks found a house they liked.

They phoned and put an offer on.

And 5 minutes later they got a call saying that their own buyer had pulled out after being strung along for several months.

Of course they're devistated blah blah...my mate said they should have just continued bidding on the house anyway and just let on they had a buyer and put their gaff back on the market.

I will add that my mate who is even more suspicious than I am of EA's says he think's there a small chance the EA is playing games with them and will phone them back in a day or two to let them know that the buyers will complete if they give them a hard date right now. We will see.

[belfastchild]

9 hours ago, JoeDavola said:

I will add that my mate who is even more suspicious than I am of EA's says he think's there a small chance the EA is playing games with them and will phone them back in a day or two to let them know that the buyers will complete if they give them a hard date right now. We will see.

Recently Ive found the EAs over here very hit and miss. Theres ones now we avoid completely, usually the fixed fee or no fee up front people. Big difference in different EA office of the same 'chain'.
Very surprised your folks havent been blacklisted altogether by this stage with no option but to go the purplebricks or whatever route. The ones a lot of people avoid after one or two experiences.

[Onsamui]

10 hours ago, JoeDavola said:

I will add that my mate who is even more suspicious than I am of EA's says he think's there a small chance the EA is playing games with them and will phone them back in a day or two to let them know that the buyers will complete if they give them a hard date right now. We will see.

Hi Joe, we got thoroughly shaken down by an underhand EA, or should I say an EA's member of staff. It was a very nasty sale, (show me one that is not) and this woman was giving both parties differing exchange and completion dates, our buyer nearly lost her mortgage offer due to her. The buyer turned up on our door step one day in bits and we compared notes. The EA was unblievably evil, so we just bypassed the EA and did our exchange/completion timings ourselves.  The sad thing was that the EA had told me the new owners needed non of the gardening equipment at all. I was leaving everything for the upkeep of a wood and gardens and cleared the lot on the say of the EA. A lot of monies worth.  Years' ago when my gran died she left my dad her house, he gave it to us three kids.  Nothing was moving and we all wanted our inheritance for different things, i.e., I was buying a small holiday home business in Cornwall.  In the end the agent 'took it off our hands', what fools we were. The trafford centre was build over my gran's property.

[JoeDavola]

38 minutes ago, belfastchild said:

Very surprised your folks havent been blacklisted altogether by this stage with no option but to go the purplebricks or whatever route.

If there's EA's you've found particularly bad feel free to PM me.

Yes I'm shocked the EA still wants to work with them at all, but they genuinely can't see why anyone has a right to have a problem with what they're doing.

I said to Mum yesterday that if they relisted it yet again then the EA was bound to warn at least some buyers that the sellers have fallen through with multiple other buyers over several years, but she couldn't see why an EA would ever do that. Yet when my mate was moving a few years back the EA did exactly that with him "don't bother bidding on this these fuckers never find somewhere to move to your chain will never complete" was basically what he was told so he stayed away.

But anyway we'll see - I still think the EA might be toying with them. If they've genuinely lost their buyer I wish they'd just take the fucking house off the market and get on with their lives but no Dad wants to relist it right away all over again, I think it's a wee pastime for him and he's probably hoping it sells again for even more than last time which it could well do.

Edited May 8 by JoeDavola

[spygirl]

R4 Today.

Deliveroo presenter on properdee ..

'In mid 90s a house cost ~3.6 salary. Today its 8 x'

Well, thats ZIRP for you.

Netx, we have <girl> from North Shields.

Goes off into how she went to London, then came back home.

Now the only interesting thing is shes 25. If she went to London she jacked it after a very short time.

Claims to have to be paying rent from savings FFS.

Fuck that.

You want to employ someone in London then you pay £££££.

Glad to see shes binned that fuckwittery sooner rather than alter.

Also tallies what Im hearing - London is losing  its pool of young people willing to be paid shit.

Anyhow, switch Willy Wanker, Heato nestate agent, where <gitl> is looking to but.

'Yes, traditional area, with lots of terraces.

2 eyars ago you could buy a terrace for 100l. Now they are going for 150k ....'

OK .... Heaton is bastard to grep for.

https://www.home.co.uk/guides/house_prices_report.htm?location=ne6&all=1

Standard Northern price history/

terraces dible from 200 to 2005.

Then roughly stay there for 20 years.

Sales fall off the cliff in 2007. And pretty remain flatlined.

 

[Caravan Monster]

Last few weeks I'm seeing locally several 'forever' family homes that have been in the same ownership since the eighties or nineties and £100k+ of 'improvements' in the last decade or so put up for sale, all in the £1M+ range. Also surprised to see a small letting portfolio that I know and would have presumed to have been paid off and destined to be passed on within the family, start to be unloaded - good condition historic homes in desirable villages, not shithole hmos in stabby migrantville. Feels like something is afoot.

[onlyme]

22 hours ago, spygirl said:

R4 Today.

Deliveroo presenter on properdee ..

'In mid 90s a house cost ~3.6 salary. Today its 8 x'

Well, thats ZIRP for you.

Netx, we have <girl> from North Shields.

Goes off into how she went to London, then came back home.

Now the only interesting thing is shes 25. If she went to London she jacked it after a very short time.

Claims to have to be paying rent from savings FFS.

Fuck that.

You want to employ someone in London then you pay £££££.

 

 

Daughter's wage was marginal with rapidly rising cost of living, only non London resident (ie living with family) grad starter), indication that rent cost already a blocker for most moving to London in the first place. Any novelty value for living in the smoke already worn off.  Definitely an economically bad situation as you will not get best match of pool of skills to jobs and the natural draw of London is slipping - no longer bszzing place that was OK to live in, now many more negatives.

Edited May 9 by onlyme

[wherebee]

28 minutes ago, Caravan Monster said:

Last few weeks I'm seeing locally several 'forever' family homes that have been in the same ownership since the eighties or nineties and £100k+ of 'improvements' in the last decade or so put up for sale, all in the £1M+ range. Also surprised to see a small letting portfolio that I know and would have presumed to have been paid off and destined to be passed on within the family, start to be unloaded - good condition historic homes in desirable villages, not shithole hmos in stabby migrantville. Feels like something is afoot.

dead vaxx sheep?  I'm predicting a lot of sales 20+ years ahead of expected as the jabs kill people 50-80 in increasing numbers.

[Caravan Monster]

16 minutes ago, wherebee said:

dead vaxx sheep?  I'm predicting a lot of sales 20+ years ahead of expected as the jabs kill people 50-80 in increasing numbers.

I did hear the owner of the rental houses, who is a builder that was in good shape for a man in his early sixties, had his health mysteriously get fucked up in 2022 and cannot continue in his former occupation.

[HousePriceMania]

1 hour ago, Caravan Monster said:

I did hear the owner of the rental houses, who is a builder that was in good shape for a man in his early sixties, had his health mysteriously get fucked up in 2022 and cannot continue in his former occupation.

Did he have a heart attack when this happened....

[Frank Hovis]

Maybe it's the time of year but I have seen lots of sale boards go up in the last two weeks.

At one fairly big block of flats there are so many that they look like the bunting has gone out, given their location I would expect them to be mainly holiday lets suggesting that last year was poor for bookings and this year is no better so they're trying to cash in.

Meanwhile new build flat developments have stalled on at least two sites and gone into bankruptcy in respect of the massive Hayle one, my reading is that they were relying upon "off plan" sales which haven't happened given the glut of flats already on the market.

 

Newquay probably has the most blocks of holiday flats in Cornwall so a quick check on Rightmove is required.

Flats for sale - 110

Houses for sale (all types bar park homes) - 231

Park homes - 11

I would say that sales mix is more that of a city than a coastal town.

https://www.rightmove.co.uk/property-for-sale/find.html?searchType=SALE&locationIdentifier=REGION^997&insId=1&radius=0.0&minPrice=&maxPrice=&minBedrooms=&maxBedrooms=&displayPropertyType=flats&maxDaysSinceAdded=&_includeSSTC=on&sortByPriceDescending=&primaryDisplayPropertyType=&secondaryDisplayPropertyType=&oldDisplayPropertyType=&oldPrimaryDisplayPropertyType=&newHome=&auction=false

 

This is the most expensive flat at £1.35m.

The development isn't finished as this Photoshop image reveals:

 

It's also small IMO and one of the bedrooms is right by the next door flat's bathroom.

 

£1.35m.

No wonder that it hasn't sold.

https://www.rightmove.co.uk/properties/86247639#/?channel=RES_BUY

Edited May 9 by Frank Hovis

[sancho panza]

7 hours ago, Caravan Monster said:

Last few weeks I'm seeing locally several 'forever' family homes that have been in the same ownership since the eighties or nineties and £100k+ of 'improvements' in the last decade or so put up for sale, all in the £1M+ range. Also surprised to see a small letting portfolio that I know and would have presumed to have been paid off and destined to be passed on within the family, start to be unloaded - good condition historic homes in desirable villages, not shithole hmos in stabby migrantville. Feels like something is afoot.

It's ahrd to get a grip on any real data and the data that is worth having is old by the time we get it.

But ive jsut had a flick through Leicesterhire on RMV and first page of new listings is 14 reductions to 11 the same using property log.

couple of examples,

1)Im unsure whether this was jsut originally badly overpriced but they are cutting to find the bid which is very busniesslike imho

no 2) is top end nice area,I suspcet would have got that first up price a year or two back psot coof

no 3) again some assertive efforts to find the bid

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61309&sortType=6&propertyTypes=&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

 

[spygirl]

7 hours ago, onlyme said:

Daughter's wage was marginal with rapidly rising cost of living, only non London resident (ie living with family) grad starter), indication that rent cost already a blocker for most moving to London in the first place. Any novelty value for living in the smoke already worn off.  Definitely an economically bad situation as you will not get best match of pool of skills to jobs and the natural draw of London is slipping - no longer bszzing place that was OK to live in, now many more negatives.

London's gone.

See Death of London thread.

 

The finsec continues to shrink since 07 - not so m ay jobs, little in way of entry / mid level jobs that pay £££££

London filling up with 3rd worlders on bennies, which has driven up rents.

The old trick of getting a few years experience and doing a 2nd t up your income no longer works - too many migrants taking the low end jobs.

Hepa places to live are no stuffed full of 3rd worlders, so the young Brits have to compete with UKGOV benefits for OxBongobongo 10 kids.

The less London offers possible jobs for the young, the more London working economy will shrink.

 

[sancho panza]

 

drip drip.....

https://uk.finance.yahoo.com/news/mortgage-holders-hoping-relief-payments-124406847.html

Homeowners hoping for some relief for their mortgage payments have been dealt a blow by the base rate being left on hold, experts have said.

The Bank of England decided to keep the rate unchanged at 5.25% on Thursday, although governor Andrew Bailey said he is “optimistic that things are moving in the right direction”.

Around 1.6 million fixed-rate mortgages are due to end or have already ended at some point in 2024, according to trade association UK Finance.

Mortgage rates have also been edging up in recent weeks.

Figures released by financial information website Moneyfacts on Thursday morning showed the average two-year fixed-rate homeowner mortgage on the market is 5.93%. The average five-year fix is 5.51%.

[spygirl]

https://www.bbc.co.uk/news/business-68978591

Paul Day, 62, from Felixstowe, says his mortgage is set to go up by £225 a month when his five-year fixed deal expires at the end of May.

Mr Day, who is retired, currently pays £1,027 a month, but when his fixed rate of 1.89% ends, he will move on to his lender's standard variable rate of 7.99%.

"It's been a scary three months waiting for interest rates to go down and I'm getting closer and closer to my deadline, which is the 31st of May, and they're not," he says.

He is choosing to go on to a variable rate, because he doesn't want to be "stuck" on another fixed.

"I think things should settle down within the next six months. So it's a gamble," he says.

"I have got a pension to fall back on, but unfortunately when you're taking money out of your pension it never gets put back," he says, adding that "there'll be more evenings in and fewer takeaways".

Id like to know how much money he owes and for how long.

Or wether hes got his numbers right.

 

 

 

[Caravan Monster]

51 minutes ago, sancho panza said:

It's ahrd to get a grip on any real data and the data that is worth having is old by the time we get it.

But ive jsut had a flick through Leicesterhire on RMV and first page of new listings is 14 reductions to 11 the same using property log.

couple of examples,

1)Im unsure whether this was jsut originally badly overpriced but they are cutting to find the bid which is very busniesslike imho

no 2) is top end nice area,I suspcet would have got that first up price a year or two back psot coof

no 3) again some assertive efforts to find the bid

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION^61309&sortType=6&propertyTypes=&includeSSTC=false&mustHave=&dontShow=&furnishTypes=&keywords=

 

That's maybe half an hour up the road from the area I'm talking about. I know the owners of all the examples mentioned to some extent and am quite confident that none have mortgages on them. Perhaps the owners are gambling it's all downhill from here in terms of nominal values and have decided to sweep up their winnings and clear off on retirement. I heard of another similar house today which was even more surprising as it was clearly intended to be kept in the family and the owners had been making high end improvements intended for their own use over recent years . Maybe there's something else going on, time will tell.