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Perfect Storm For Housing Market

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Don't know if anybody has noticed just how massive the overhang in stock is from the summer. The market, though dysfunctional, has been ticking along on low volumes. Sales weren't great, but during the April-July period I was counting around 20% of stock sold in my area; which indeed accorded with the RICs nationwide survey of 22% against a long term average of 30%+.

However, activity just seemed to fall off a cliff in August and in my area (Nottingham) that sales/stock ratio has fallen to around 10%. Activity always falls off a cliff in August, but as yet I have seen nothing to suggest the usual seasonal pick up in September. But I have noticed an awful lot of newbies joining the forlorn hope of properties to sell. And this could mean the end of a market ticking along on low volumes as old and new stocks collide.

I don't believe the general public are aware that the the market has suddenly turned sour. The poor Haliwide data has pretty much gone unreported and you can't help but notice the housing market boom headlines form the Express everytime you buy a newspaper. Obviously the vendors who have been stuck on the market, in some cases for years, know different.

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Don't know if anybody has noticed just how massive the overhang in stock is from the summer. The market, though dysfunctional, has been ticking along on low volumes. Sales weren't great, but during the April-July period I was counting around 20% of stock sold in my area; which indeed accorded with the RICs nationwide survey of 22% against a long term average of 30%+.

However, activity just seemed to fall off a cliff in August and in my area (Nottingham) that sales/stock ratio has fallen to around 10%. Activity always falls off a cliff in August, but as yet I have seen nothing to suggest the usual seasonal pick up in September. But I have noticed an awful lot of newbies joining the forlorn hope of properties to sell. And this could mean the end of a market ticking along on low volumes as old and new stocks collide.

I don't believe the general public are aware that the the market has suddenly turned sour. The poor Haliwide data has pretty much gone unreported and you can't help but notice the housing market boom headlines form the Express everytime you buy a newspaper. Obviously the vendors who have been stuck on the market, in some cases for years, know different.

Lets hope so.Will a Eurozone blow up tip UK sheeple into a price cutting panic? or will they just keep believing the Express?

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Most people dont have the time to monitor the news like some of us on here do, so what they catch is a hugely santised version designed to keep them all warm and fuzzy whilst they carry on in their bubble of obliviousness while the newspaper editors attempt to sell their BTL properties. :lol::lol::lol:

Corrected for you. :)

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Lets hope so.Will a Eurozone blow up tip UK sheeple into a price cutting panic? or will they just keep believing the Express?

There is defo lots of overhang from the summer in my area too. People will just have to keep their overpriced piles of bricks as people are realising that they cant actually afford them.

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There is defo lots of overhang from the summer in my area too. People will just have to keep their overpriced piles of bricks as people are realising that they cant actually afford them.

Of course they can "afford" them.....! :rolleyes:

All they need is a nice, big, fat

LIAR LOAN!!

. :D:ph34r:

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Yeah good point I wonder how many people know how many people in the media were using their media positions to ramp property making the sheeple viewer/reader believe they had to get a slice of the action becuase they saw it on TV in the Newspapers. :lol::lol:

I just came across a Mayfair 1 bed flat on Rightmove being sold by an estate agent 'Please note that the director of the vendor company selling the property is also a director of the agency etc.'

I think estate agents are the main culprits in keeping the market frozen.

Edited by _w_

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Lets hope so.Will a Eurozone blow up tip UK sheeple into a price cutting panic? or will they just keep believing the Express?

The only part of the perfect storm not present is rising interest rates. It is a sign of just how weak a property market there is currently that it is on the way down with 300yr record low interest rates. Invest at your peril. In short, all the figures show that allowing for wage rises, residential housing is now TWICE the price of 40 years ago. I don't believe people thought homes were cheap then! EG brighton house 1970 £10k, NOW £600K. Conclusion: at normal interest rates of 5-9% the house should be £300k today.

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Lets hope so.Will a Eurozone blow up tip UK sheeple into a price cutting panic? or will they just keep believing the Express?

No. But bank exposure to sovereign default and a consequent liquidity crisis would create a mortgage drought that would. And with the reduced chance of a another system wide bailout it could be very ugly indeed.

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Don't know if anybody has noticed just how massive the overhang in stock is from the summer. The market, though dysfunctional, has been ticking along on low volumes. Sales weren't great, but during the April-July period I was counting around 20% of stock sold in my area; which indeed accorded with the RICs nationwide survey of 22% against a long term average of 30%+.

However, activity just seemed to fall off a cliff in August and in my area (Nottingham) that sales/stock ratio has fallen to around 10%. Activity always falls off a cliff in August, but as yet I have seen nothing to suggest the usual seasonal pick up in September. But I have noticed an awful lot of newbies joining the forlorn hope of properties to sell. And this could mean the end of a market ticking along on low volumes as old and new stocks collide.

I don't believe the general public are aware that the the market has suddenly turned sour. The poor Haliwide data has pretty much gone unreported and you can't help but notice the housing market boom headlines form the Express everytime you buy a newspaper. Obviously the vendors who have been stuck on the market, in some cases for years, know different.

If you are right then there's two to three months until the trades go off the cliff (in combination with low house build), timed with the winter period when they can be a bit slack anyway. Look at the building suppliers and their newsflow for signs of this too - although they will want to keep things quiet as long of possible for "market" reasons.

Get the feeling there is a massive resistance to quotes - refurb, general tarting up, materials are up eyewatering amounts, to the point where the customer baulks or the trade doesnt even bother pitching unless there are decent margins 0 simply not worth the expenditure, time and risk.

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The only part of the perfect storm not present is rising interest rates. It is a sign of just how weak a property market there is currently that it is on the way down with 300yr record low interest rates. Invest at your peril. In short, all the figures show that allowing for wage rises, residential housing is now TWICE the price of 40 years ago. I don't believe people thought homes were cheap then! EG brighton house 1970 £10k, NOW £600K. Conclusion: at normal interest rates of 5-9% the house should be £300k today.

We no need no steenking interest rate rises for an HPC, if the money supply radically reduces in the way I describe above it'll have the same effect.

Edited by kenzdawg

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I am seeing what appears endless inventory. I rarely see a sold sign, but more and more for sale signs. All at insanely high prices.

The rumour on the street is there is a growing disconnect with what people are asking and what the few sales are actually selling at.

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The only part of the perfect storm not present is rising interest rates. It is a sign of just how weak a property market there is currently that it is on the way down with 300yr record low interest rates. Invest at your peril. In short, all the figures show that allowing for wage rises, residential housing is now TWICE the price of 40 years ago. I don't believe people thought homes were cheap then! EG brighton house 1970 £10k, NOW £600K. Conclusion: at normal interest rates of 5-9% the house should be £300k today.

If interest rates were rising then so would house prices.

You've got the correlation back to front. Most people do for some inexplicable reason.

Rates will only rise to dampen down excessive growth. When we have excessive growth house prices (all things being equal) will be rising, not falling.

The more likely outcome will be further QE (of some sort) and rates pegged lower for longer.

Rising rates will indicate the lows are in.

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If you are right then there's two to three months until the trades go off the cliff (in combination with low house build), timed with the winter period when they can be a bit slack anyway. Look at the building suppliers and their newsflow for signs of this too - although they will want to keep things quiet as long of possible for "market" reasons.

Get the feeling there is a massive resistance to quotes - refurb, general tarting up, materials are up eyewatering amounts, to the point where the customer baulks or the trade doesnt even bother pitching unless there are decent margins 0 simply not worth the expenditure, time and risk.

As the family is growing we've been considering extending (extra bedroom, extra bathroom and making the kitchen bigger).

We're at the very early stages but ballpark figure quotes are eye watering, like I thought you could build a house for less than that and my past experience is that once you actually get all the plans signed off and solid quotes done, it's usually going to cost more.

As a result we are actually considering moving now (thought we'd probably be here forever!) as I reckon the cost of trading up, even with all the fees and stamp duty, etc could be a fair bit less and of course no shag and hassle of building work for weeks or months.

One house we quite like the look of has been on nearly a year and the price has now dropped nearly £100,000. Fek !

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Well from our bearish perspectives 2010 was a stinker, defying all the expectations. So personally I went in to 2011 thinking its this year or never, all the ingredients seemed in place including the prospect of interest rates inching up mid year. By about May I sensed we wern't going to get a decent drop or interest rate rises, when the consensus on here seemed to be for 10% down by years end I predicted 3% down, obviously I will be happy to be proved wrong.

I like to think the market is just recommencing a downward trajectory and we will get a bit of cheer by the years end.

But when I see the thread title Perfect Storm for Housing Market, now I just think Oh, another one ?

If we get a big liquidity freeze up again, the crash is back on.

If we dont, well remember we are up against further QE, the prospect of NIRP and a govt which has endorsed low interest rates as a long term strategy, a ruling political party which is partly sponsored by property developers, and around 250,000 new entrants to the country each year to contend with, just add in to the mix that the media portray HPI as something to celebrate, then ask yourself if you are quite sure if you know which way the wind from the perfect storm will be blowing. Bit brutal of me I know but it ain't over till its over and it ain't over yet, Im watching like a hawk from the sidelines. Only thing I would add is no i'm not buying right now i'm still clinging to whatever optimism I have left.

Edited by bricor mortis

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Well .....//....

Only thing I would add is no i'm not buying right now i'm still clinging to whatever optimism I have left.

Oh GO ON!!!! Take out a great big fat

LIAR LOAN

and hype up the prices for everyone else in the area where you want to live....

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Well from our bearish perspectives 2010 was a stinker, defying all the expectations. So personally I went in to 2011 thinking its this year or never, all the ingredients seemed in place including the prospect of interest rates inching up mid year. By about May I sensed we wern't going to get a decent drop or interest rate rises, when the consensus on here seemed to be for 10% down by years end I predicted 3% down, obviously I will be happy to be proved wrong.

I like to think the market is just recommencing a downward trajectory and we will get a bit of cheer by the years end.

But when I see the thread title Perfect Storm for Housing Market, now I just think Oh, another one ?

If we get a big liquidity freeze up again, the crash is back on.

If we dont, well remember we are up against further QE, the prospect of NIRP and a govt which has endorsed low interest rates as a long term strategy, a ruling political party which is partly sponsored by property developers, and around 250,000 new entrants to the country each year to contend with, just add in to the mix that the media portray HPI as something to celebrate, then ask yourself if you are quite sure if you know which way the wind from the perfect storm will be blowing. Bit brutal of me I know but it ain't over till its over and it ain't over yet, Im watching like a hawk from the sidelines. Only thing I would add is no i'm not buying right now i'm still clinging to whatever optimism I have left.

Good post Mr Mortis. Common sense says crash but that assumes that the government will behave responsibly. Fail.

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Well from our bearish perspectives 2010 was a stinker, defying all the expectations. So personally I went in to 2011 thinking its this year or never, all the ingredients seemed in place including the prospect of interest rates inching up mid year. By about May I sensed we wern't going to get a decent drop or interest rate rises, when the consensus on here seemed to be for 10% down by years end I predicted 3% down, obviously I will be happy to be proved wrong.

I like to think the market is just recommencing a downward trajectory and we will get a bit of cheer by the years end.

But when I see the thread title Perfect Storm for Housing Market, now I just think Oh, another one ?

If we get a big liquidity freeze up again, the crash is back on.

If we dont, well remember we are up against further QE, the prospect of NIRP and a govt which has endorsed low interest rates as a long term strategy, a ruling political party which is partly sponsored by property developers, and around 250,000 new entrants to the country each year to contend with, just add in to the mix that the media portray HPI as something to celebrate, then ask yourself if you are quite sure if you know which way the wind from the perfect storm will be blowing. Bit brutal of me I know but it ain't over till its over and it ain't over yet, Im watching like a hawk from the sidelines. Only thing I would add is no i'm not buying right now i'm still clinging to whatever optimism I have left.

Agree my title was a bit tongue in cheek sensationalism. Also good point about QE. I'm not sure, though, if it is a liquidity issue that has caused sales to suddenly fall off a cliff. I think there is also an insolvency issue preventing certain vendors from correctly pricing and causing the market impasse.

Edit. I also recognise that with low interest rates the aforementioned zombie debtors/vendors can be accommodated and we are nowhere near the situation we were at in 2008/9 with double digit nominal falls.

But whilst inventories grow something will have to give for those that have to sell namely relocators and estate properties. On low volumes these sales were just about being accommodated, but on no volumes then prices will have to give.

Edited by crashmonitor

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Oh GO ON!!!! Take out a great big fat

LIAR LOAN

and hype up the prices for everyone else in the area where you want to live....

No thanks Mrs... I will buy with cash and humility...when it suits me to.

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I am seeing what appears endless inventory. I rarely see a sold sign, but more and more for sale signs. All at insanely high prices.

The rumour on the street is there is a growing disconnect with what people are asking and what the few sales are actually selling at.

Personally I'm seeing lots of sold signs. Then back on for sale again!

Not sure if it's breaks in chains or just banks refusing mortgages perhaps.

There's one I watching in a posh neighbourhood just to see if it goes the same way, it's definately not a first home and I want to know how bad the market is all the way up. Just gone as sold, let's see.

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What I'm hearing is that trades people are changing the way they do business simply becuase they are being burnt by homeowners looking to sell.

These would be sellers are getting trades in to quote for work and then select those who only want paying after the work is done.

When the bill is due, the homeowners are stalling to pay but at some point tell the trades you will get your money when we sell the house!

So those trades I know are now changing the way they work, they are getting some or all of the money up front depending on how big the job is. If its a couple of grandsworth of work or less, its money up front, anything bigger is paid in installments up front.Cant blame them afterall if you cant lay your hands on a few grand of cash one has to ask can they pay the bill?

As a result alot of work is no longer being undertaken becuase homeowners looking to sell dont have the money to pay as most of their "lifestyle" is maxed out on credit cards.

Was this directly from a tradesman? What trade? First I've heard of it :lol:

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Well from our bearish perspectives 2010 was a stinker, defying all the expectations.

Probably too higher expectations, but overall the correction continues.

RPI from Jan 2010 217.9 / 234.7 = .928 (TO ADJUST FOR PRICES)

HPI from Jan 2010 (Halifax) 223.5 (August 2011) / 245.0 (January 2010 )= .91 (OR A 9% NOMINAL FALL)

.91x.928 =.8448 or a 16% real fall

SURPRISING INDEED THAT WE HAVE HAD A 16% REAL CORRECTION DURING A SUPPOSED ROUGH PATCH FROM JAN 2010 AGAINST AN OVERALL COLLAPSE OF 28% INFLATION ADJUSTED SINCE AUGUST 2007.

Edited by crashmonitor

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Lots and lots of stock round me - mostly at silly prices. However, some of it is selling (and not just STC). One uninformed muppet with some inheritance buys a family sized home and then a whole chain of others trading similar properties at stupid prices gets completed. It just takes one sucker to keep the plates spinning and we have not yet run out of suckers.

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On the development I'm looking to buy in, we're looking at 16 houses on the market, eight taken off the market and only five sales (one of which is a repo).

A few sales at the lower end of the market, but virtually nothing in the £250k+ four/five bedroom scale.

I reckon most of the stock here needs 10-20% reductions.

There's one house that has now been reduced to its 2004 sale price (£230k down from £275k). It still isn't shifting.

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  • 337 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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