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TheCountOfNowhere

Property values collapse in April

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Best headline I've seen in many a year

 

https://www.mirror.co.uk/money/biggest-fall-house-prices-almost-12499664

 

"

Biggest fall in house prices for almost 8 years - as property values collapse in April

Just when people are meant to be buying again after the long winter, house prices fell hard in April, Halifax reports

"

 

The express is blaming the weather and the So-Called BBC luvies are crying into their bowls of avocados.

 

The Halifax large swings are symptomatic of an unstable low sales volume bubble.

 

The weather does not affect house prices, interest rate, availability of credit, hysteria and stupidity do.

 

 

 

And by value...they must mean PRICES.

 

There is no value.

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1 minute ago, sarahbell said:

Someone's just put his mum's house on the market as 10k over the previous peak price (Which had bigger gardens and a double garage)
Shocking. 

They can put it on for what they like but whether it sells is another matter. I’m seeing kite flying prices in my home town. They tend to stick. Occasionally, one will go for stupid money. This is a case in point. Look at the last sold...

http://www.rightmove.co.uk/property-for-sale/property-44079336.html

fliptastic 

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Volumes are at rock bottom.  No one can afford the stamp duty, removal costs etc.  Only area that is thriving is new build funded by HTB.  50% of new build purchases in my neck of the woods are HTB.  Plates cannot go on spinning.  The £10k hand out proposal to every 25 year old is to keep those bloody plates going.

My area, Probate sales, is quite buoyant but I think things will be different in 6 months time.   I’ll report back later in the year.  Neighbours are no longer circling like vultures any more.  Every beneficiary under the age of 65 is skint and usually up to their eyes in debt.

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3 minutes ago, Ina said:

Volumes are at rock bottom.  No one can afford the stamp duty, removal costs etc.  Only area that is thriving is new build funded by HTB.  50% of new build purchases in my neck of the woods are HTB.  Plates cannot go on spinning.  The £10k hand out proposal to every 25 year old is to keep those bloody plates going.

My area, Probate sales, is quite buoyant but I think things will be different in 6 months time.   I’ll report back later in the year.  Neighbours are no longer circling like vultures any more.  Every beneficiary under the age of 65 is skint and usually up to their eyes in debt.

Thing is, they have crashed employment and wages. It was what the captains of industry wished and thus it was delivered. The chickens are arrive home with their suitcases. 

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30 minutes ago, One percent said:

They can put it on for what they like but whether it sells is another matter. I’m seeing kite flying prices in my home town. They tend to stick. Occasionally, one will go for stupid money. This is a case in point. Look at the last sold...

http://www.rightmove.co.uk/property-for-sale/property-44079336.html

fliptastic 

I like the staircase.
 

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6 minutes ago, Kurt Barlow said:

I read this this morning.

https://www.nationwide.co.uk/about/house-price-index/headlines

Nationwide are stating that April saw a 0.2% rise in house prices.

Can someone explain the disparity between the two indexes? I assume they are representative across the UK?

1 answer is, they lend to different groups. NW tend to be middle class types in the south, Halifax any loon from oop North.

Another answer is, if House prices collapse 50%, NW will be bankrupt

Ponzi/Pyramid scams never end well so take your pick.

I vaguely recall the Halifax data is now processed externally, or was that the land registry.

They tend to converge eventually.

I'd take any house price index with a pinch of salt, but I'd keep an eye on @UKPropertyLion for monthy/quarterly updates on rightmove current asking prices, last month was a 1%+ fall for houses under £1 Million

Either way, house prices are now way beyond mental.

The 2018 asking price make the 2007 bank collapsing prices look sane.

And still people buy.

And still the BoE does nothing

And still the MPs wont act

Collapse is inevitable, be it a month, a year, a decade, it is unstoppable now.

 

Edited by TheCountOfNowhere

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9 minutes ago, TheCountOfNowhere said:

1 answer is, they lend to different groups. NW tend to be middle class types in the south, Halifax any loon from oop North.

Another answer is, if House prices collapse 50%, NW will be bankrupt

Ponzi/Pyramid scams never end well so take your pick.

I vaguely recall the Halifax data is now processed externally, or was that the land registry.

They tend to converge eventually.

I'd take any house price index with a pinch of salt, but I'd keep an eye on @UKPropertyLion for monthy/quarterly updates on rightmove current asking prices, last month was a 1%+ fall for houses under £1 Million

Either way, house prices are now way beyond mental.

The 2018 asking price make the 2007 bank collapsing prices look sane.

And still people buy.

And still the BoE does nothing

And still the MPs wont act

Collapse is inevitable, be it a month, a year, a decade, it is unstoppable now.

 

Thanks - I guessed there was some sort of North -South Divide.

However I though the biggest falls in % terms and absolute terms was in London and the SE which would impact more heavily on the NW index.

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9 minutes ago, Kurt Barlow said:

Thanks - I guessed there was some sort of North -South Divide.

However I though the biggest falls in % terms and absolute terms was in London and the SE which would impact more heavily on the NW index.

I agree.

Which makes me wonder about the validity of the indexes.

"Money lenders say prices going up people must borrow more"

is basically what their indexes say and they are reported as gospel.

The @UkPropertyLion project is there to find the actual rightmove current asking price.

it is the ONLY index I will now trust, just because it's mine  :D

It will be interesting to see how it unfolds.

If we see 2 rate rises this year ( no laughing at the back ) and/or the BTLers throw in the towels and/or the prices have just become so ludicrous the pyramid falls in on itself then we should see some significant falls.

It's going to be an interesting year.

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1 minute ago, TheCountOfNowhere said:

I agree.

Which makes me wonder about the validity of the indexes.

"Money lenders say prices going up people must borrow more"

is basically what their indexes say and they are reported as gospel.

The @UkPropertyLion project is there to find the actual rightmove current asking price.

it is the ONLY index I will now trust, just because it's mine  :D

It will be interesting to see how it unfolds.

If we see 2 rate rises this year ( no laughing at the back ) and/or the BTLers throw in the towels and/or the prices have just become so ludicrous the pyramid falls in on itself then we should see some significant falls.

It's going to be an interesting year.

Quite. I have to keep Mrs B on track. Her default position is must buy a house - HP always go up. But now she has turned negative which is the position I prefer at least for the next couple of years.

 

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2 minutes ago, Kurt Barlow said:

Quite. I have to keep Mrs B on track. Her default position is must buy a house - HP always go up. But now she has turned negative which is the position I prefer at least for the next couple of years.

 

Looking at the insane prices, there is little point in buying a house now. 

IIIRC there was a report a few weeks ago saying renting was again better value than buying, there was only a small window when it wasnt.

IMHO Prices will either collapse soon or go down over decade as IRs edge up ( real or nominally, take you pick ) 

Either way if you're into pwopatee to make a massive profit you're not going to see a return on your money as the boomers have.

A collapse is a big risk for anyone buying now tho, best wait for a while till the froth comes off if you really want to buy.

I see it as, the bigger the house you buy/trade up to the more you will eventually pay for basic shelter.

Worse case scenario we're going to see a collapse in the £ and a sharp rate rise, people buying £600K houses that are worth 200 are in for a real shock if that happens.

I could have all been so much different if Osborne and Carney and done as they'd promised when they were trying to get elected, but here we are 10 years further on, 10 years older and several 100 thousand pounds worse off

Crazy times.

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I don't remember the 90s crash, how quickly can prices fall in a month, what kind of percentage was it then?

How frustrating that Property Bee and ToS are both redundant now we have a possible crash imminent finally.

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39 minutes ago, TheCountOfNowhere said:

1 answer is, they lend to different groups. NW tend to be middle class types in the south, Halifax any loon from oop North.

Another answer is, if House prices collapse 50%, NW will be bankrupt

Ponzi/Pyramid scams never end well so take your pick.

I vaguely recall the Halifax data is now processed externally, or was that the land registry.

They tend to converge eventually.

I'd take any house price index with a pinch of salt, but I'd keep an eye on @UKPropertyLion for monthy/quarterly updates on rightmove current asking prices, last month was a 1%+ fall for houses under £1 Million

Either way, house prices are now way beyond mental.

The 2018 asking price make the 2007 bank collapsing prices look sane.

And still people buy.

And still the BoE does nothing

And still the MPs wont act

Collapse is inevitable, be it a month, a year, a decade, it is unstoppable now.

 

I don't see collapse as inevitable because all of the major political parties would see allowing house price collapse as being a huge vote loser.*

I expect that inflation will be encouraged and interest rates suppressed so that the currency devalues by a few percent every year.  All house prices have to do is post below wage inflation increases each year and they will apparently hold steady whilst getting cheaper in real terms.

So I would suggest that the best financial (not necessarily life) strategy is to put your STR in something that rises with inflation so that the house you can afford becomes bigger every year.

I practised what I preach here by putting the maximum into index-linked NSI bonds on every issue (usuually both 3 and 5 years at £15k, so £30k each time) from IIRC about 2005 (may have been 2008, guessing) - 2014 and rolling them over on maturity.  This was a period of relatively high inflation whilst house prices stagnated so the houses became relatively cheaper compared to the index-linked bonds until I cashed in and bought when inflation tailed off in 2013/14.  I didn't work it out exactly but I expect I made at least 20 - 25% (the early ones were RPI + 1%) so compared to someone who had been accunulating cash to buy I bought the house for >20% less than they would have needed to save.

 

* Though I woudl be delighted if they do; several of the houses on the Dream House thread would become vey much within my price range, though sadly not my dream castle on a peninsula at £7m!

 

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1 minute ago, spunko2010 said:

I don't remember the 90s crash, how quickly can prices fall in a month, what kind of percentage was it then?

How frustrating that Property Bee and ToS are both redundant now we have a possible crash imminent finally.

The 90s "crash" was actually a long slow drawn out process.  Prices began to fall in 1988 with the withdrawal of MIRAS for multiple occupiers and within four years a friend's flat (three bed in Clapham) was sold for £60k having been bought for £90k.  This was a motivated sale but asking prices generally held up for years because people had this idea that their property was "worth" such and such because it was in 1988.   The stagnation continued for years with the real bargains being in 1994-96 when all those pinning their hopes on a bounce had capitulated and accepted that the lower prices were now the market prices.

The lesson that I draw from this is: ignore any considerations of "missing the boat"; it doesn't happen.  This is an oil tanker which is moored up for years and years.

If this is the genuine start of big falls (and per my above post, I doubt that) then there is absolutely no need to hurry, the best buying point may well be eight years' into the future like last time.

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Just now, Frank Hovis said:

The 90s "crash" was actually a long slow drawn out process.  Prices began to fall in 1988 with the withdrawal of MIRAS for multiple occupiers and within four years a friend's flat (three bed in Clapham) was sold for £60k having been bought for £90k.  This was a motivated sale but asking prices generally held up for years because people had this idea that their property was "worth" such and such because it was in 1988.   The stagnation continued for years with the real bargains being in 1994-96 when all those pinning their hopes on a bounce had capitulated and accepted that the lower prices were now the market prices.

The lesson that I draw from this is: ignore any considerations of "missing the boat"; it doesn't happen.  This is an oil tanker which is moored up for years and years.

If this is the genuine start of big falls (and per my above post, I doubt that) then there is absolutely no need to hurry, the best buying point may well be eight years' into the future like last time.

Thanks, i thought it would take a while.

I'll be keeping an eye on this one, not because I want it - it's ghastly - but because it adds a whole new meaning to barefaced cheek.

http://www.rightmove.co.uk/property-for-sale/property-70266611.html

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5 minutes ago, spunko2010 said:

Thanks, i thought it would take a while.

I'll be keeping an eye on this one, not because I want it - it's ghastly - but because it adds a whole new meaning to barefaced cheek.

http://www.rightmove.co.uk/property-for-sale/property-70266611.html

Would a Property Bee section work?  Multiple individual threads for overpriced houses to track each price change and if they eventually sell because links just link to the current price.

That one at £1m is not just kite flying, it's a yacht taking off.

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19 minutes ago, Frank Hovis said:

I don't see collapse as inevitable because all of the major political parties would see allowing house price collapse as being a huge vote loser.*

And a political donor loser. The banks won't want it. The building companies won't want it. 

They'll roll out Help to Buy 3 or some such fuckwittery.

Edit :- Only high interest rates enforced from abroad one way or another would bring a collapse, because the government couldn't counter that so easily.

Edited by swiss_democracy_for_all

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2 minutes ago, swiss_democracy_for_all said:

And a political donor loser. The banks won't want it. The building companies won't want it. 

They'll roll out Help to Buy 3 or some such fuckwittery.

Edit :- Only high interest rates enforced from abroad one way or another would bring a collapse, because the government couldn't counter that so easily.

They could refuse to follow US rates up this time, let the currency sink so that fuel and food prices rise steadily with the inevitable higher inflation and this high inflation then masks the real terms falls in house prices so that they still appear to be marginally increasing when viewed in nominal terms.

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44 minutes ago, spunko2010 said:

I don't remember the 90s crash, how quickly can prices fall in a month, what kind of percentage was it then?

How frustrating that Property Bee and ToS are both redundant now we have a possible crash imminent finally.

I know several people who lost a substantial sum of money in the 90s crash.  I know people who lost a substantial sum in the 2007 crash too.

The current madness will eclipse both of those tho.

Dont forget @UkPropertyLion is up and running and the tool is available to anyone who wants to give it a try.

It's a bulk data processing tool rather than a browser plug in but it does it work  and then some !!!

We're trying to work out how to make it a bit more user friendly but that'll probably mean an actual indepedent website, which RM migth get peeved about.

but I miss PB and it looks like, from the website, it;s dead in the water.

46 minutes ago, Frank Hovis said:

I don't see collapse as inevitable because all of the major political parties would see allowing house price collapse as being a huge vote loser.*

I expect that inflation will be encouraged and interest rates suppressed so that the currency devalues by a few percent every year.  All house prices have to do is post below wage inflation increases each year and they will apparently hold steady whilst getting cheaper in real terms.

So I would suggest that the best financial (not necessarily life) strategy is to put your STR in something that rises with inflation so that the house you can afford becomes bigger every year.

I practised what I preach here by putting the maximum into index-linked NSI bonds on every issue (usuually both 3 and 5 years at £15k, so £30k each time) from IIRC about 2005 (may have been 2008, guessing) - 2014 and rolling them over on maturity.  This was a period of relatively high inflation whilst house prices stagnated so the houses became relatively cheaper compared to the index-linked bonds until I cashed in and bought when inflation tailed off in 2013/14.  I didn't work it out exactly but I expect I made at least 20 - 25% (the early ones were RPI + 1%) so compared to someone who had been accunulating cash to buy I bought the house for >20% less than they would have needed to save.

 

* Though I woudl be delighted if they do; several of the houses on the Dream House thread would become vey much within my price range, though sadly not my dream castle on a peninsula at £7m!

 

That's what's basically happened.

 

23 minutes ago, Frank Hovis said:

They could refuse to follow US rates up this time, let the currency sink so that fuel and food prices rise steadily with the inevitable higher inflation and this high inflation then masks the real terms falls in house prices so that they still appear to be marginally increasing when viewed in nominal terms.

And the people currently at food banks will do what ?

 

 

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31 minutes ago, swiss_democracy_for_all said:

And a political donor loser. The banks won't want it. The building companies won't want it. 

They'll roll out Help to Buy 3 or some such fuckwittery.

Edit :- Only high interest rates enforced from abroad one way or another would bring a collapse, because the government couldn't counter that so easily.

If you can only sell 1 house a month the banks and EAs will collapse. They need volumes, lower prices and higher IRs to make real profits. Prices are just too high.  It's that simple.

All bubbles collapse.  This one is no different from any other.

44 minutes ago, Frank Hovis said:

The 90s "crash" was actually a long slow drawn out process.  Prices began to fall in 1988 with the withdrawal of MIRAS for multiple occupiers and within four years a friend's flat (three bed in Clapham) was sold for £60k having been bought for £90k.  This was a motivated sale but asking prices generally held up for years because people had this idea that their property was "worth" such and such because it was in 1988.   The stagnation continued for years with the real bargains being in 1994-96 when all those pinning their hopes on a bounce had capitulated and accepted that the lower prices were now the market prices.

The lesson that I draw from this is: ignore any considerations of "missing the boat"; it doesn't happen.  This is an oil tanker which is moored up for years and years.

If this is the genuine start of big falls (and per my above post, I doubt that) then there is absolutely no need to hurry, the best buying point may well be eight years' into the future like last time.

The banks repo'd in the 90s crash, that helped forced down prices relatively quickly.


The tories and the bankers didnt have any qualms about it then.

The only reason the bankers /government refused to do this in 2008 was the fact they were bankrupt !!!!!

To sel those properties off at the market value then was to collapse the banking system

Given wages have hardly moved, bottom prices wont be too far off a 50% collapse in 2007 prices, nominally or in real terms.

This seems unthinkable to debt owners and the people who have seen the period between 1998 and 2008 then 2014 and 2018 as a one way bet.

 

 

Edited by TheCountOfNowhere

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5 minutes ago, TheCountOfNowhere said:

 

And the people currently at food banks will do what ?

 

 

Increase in number with some levy forced upon the supermarkets to increase the volumes going through the foodbanks.

 

Well done with the tracking tool.

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