FabulousSophie

And more at kite flying prices, too.

+1.5% MoM

I don't know if I am imagining it or not, but I think I am seeing more houses in the south coming on to the market at kite flying prices.

I think it will be something more subtle, like unrealised growth of -0.5%.

According to today's Telegraph not all BTL is running for the exits and there is a novel source of BTL buyers: https://www.telegraph.co.uk/personal-banking/mortgages/renters-turn-landlord-get-foot-property-ladder/

Correction: Don't be so cynical! The bank is monitoring the data, and if it shows monthly increases in retail sales have become permanent, it will then consider raising interest rates accordingly.

Don't be so cynical! The bank is monitoring the data, and it shows monthly increases in retail sales have become permanent, it will then consider raising interest rates accordingly.

Jeremy Hunt was probably one of them.

This is a great explanation, thanks. Now I understand it, it seems even more ridiculous that sellers feel justified in demanding ludicrous prices that buyers cannot afford.

Here is the latest Money Week article on property, published today. Quite a bit on BTL, plus comments from landlords underneath. https://moneyweek.com/lets-hope-the-gentle-slowdown-in-house-prices-continues-for-a-long-time/

In what way will no future rate rises affect the course of the housing market?

This is the chart I was looking at, from which I tried to measure the peak to trough periods:

So the thinking is that this bust will be quite unlike any previous busts, and It will follow a completely different pattern, timeframe, and depth? I suppose in previous busts, all regions were hit simultaneously by higher interest rates, so the bubble probably burst more or less in syn everywhere, with less of a ripple effect. This time, rising interest rates are not responsible for busting the bubble, but instead it seems to be collapsing under the weight of its own contradictions, with a little help from new mortgage rules and S24. That may account for the delayed and elongated ripple out from central London.

If the national (year on year) figures take another 6 to 12 months to turn negative, by precedent, Prime Central London may start recovering before that even happens. That would mean that this bust has taken as long as 4 years from its inception to ripple into the national figures. Did the previous busts in 1975, 1980, 1990 and 2007 begin in central London as much as 4 years earlier than it reeached the national figures, or was the ripple from London in those busts greatly accelerated in comparison to today's bust?

PS I should clarify that the first stages of London's bust began in Q3 2015 and it is therefore virtually 3 years old there already. So by historical precedent it should now be over or almost bottoming there. The national figures are clearly highly delayed but may follow the same timeframe. Perhaps London will actually start to recover before the nationwide bust begins?

I have just had a look at the Nationwide's house price chart going back to 1975. As far as I can measure the peak to trough periods for the various previous busts are as follows: Q1 1975 - Q3 1977 2.75 years Q1 1980 - Q3 1982 1.75 years Q1 1990 - Q2 1996 5.25 years Q3 2007 - Q3 2012 . 5 years Q3 2015 - ? If this current bust begin in Q3 2015, it is already almost 3 years old. If historical patterns are followed, it should now therefore either be over or nearing its bottom (U shaped).

It looks like this debt deflation housing bust may indeed follow a different pattern to previous busts, which were caused by interest rate rises. So far this bust seems to be more drawn out than those busts, which if I remember correctly, did not take this long to peak, plateau, decline and ripple out. How long did previous busts take from peak to trough?

Previous housing busts have been precipitated by rising interest rates, which could mean they have followed a different pattern. This time interest rates have barely risen, but there are other drags on the market instead. So how could this bust differ in its pattern?

I have noticed on other comments boards that as soon as someone starts saying house prices are now falling month on month, the property bulls (or vested interests) just extend the timeframe. When year on year prices actually go negative, I expect they will argue that prices are still rising because the 5 year on 5 year figures are positive. Some will no doubt try to do it all the way to century on century figures ?

If we are now living in an environment where most sellers refuse to lower their asking prices and most buyers cannot afford those asking prices( ie stalemate), the best thing to come out of it is a lack of transactions that will decimate high street estate agents. They helped make their bed, and they can now lie in it.

At 0.1% or 0.2% monthly falls, will it take as long as another couple of years to go negative, year on year?

An article in the Telegraph today claiming the BTL market is thriving. The comments underneath are mostly from landlords. https://www.telegraph.co.uk/money/consumer-affairs/thik-buy-to-let-dead-three-reasons-wrong/#comments

I think part of the mistake that BTL investors make is seeing the transaction more as buying a yield, rather than buying a house or flat. This means that if a purchase can earn a certain yield, they don't really care what they are buying physically. They will pay big prices for problem properties that owner occupiers would shun, unless they were going very very cheap. Tenants of course care much less, because they don't own these places, but all the rubbish properties suddenly have a value way beyond their physical desirability.

Which do you think the authorities will choose, a clear out crash or a very long stagnation? If a choice is indeed possible, I get the impression our modern day officials will always opt for long stagnation over crash. Above all else, they would like to avoid any sudden blows to their popularity. They probably feel that a long stagnation can be addressed by the dark arts of PR manipulation to maintain their popularity for long enough, whereas a short crash cannot.

How about this one with an agricultural occupancy restriction? I always wonder where the farm workers with mega-incomes are to afford houses like this. https://www.zoopla.co.uk/for-sale/details/47190832?search_identifier=33671ba3caa6297c1d6ca53d9d8f1cb9