Has The Crash Started....

[jiltedjen]

6 months of this and sentiment should be killed dead.

the gov needs a big dampening of house prices prior to the election so they can improve home ownership levels (kill off BTL scum). They also need a last minute house price bubble to bride what's lefts of the thinning boomers ranks.

it's much easier to create a bubble from a very depressed level, than create a bubble on top of a bubble, on top of another bubble.

The Tories know exactly what they are doing. BTL should be toast by mid 2018, which will mean even more BTL crackdowns coming.

I also expect larger gifted deposits for FTB around 2018.

[Neverwhere]

Oops wrong thread.

That wasn't another chicken was it?

[Fully Detached]

That wasn't another chicken was it?

Well the thread title didn't explicitly state it was related to house prices, did it?

[Neverwhere]

Well the thread title didn't explicitly state it was related to house prices, did it?

[Hullabaloo82]

I think this pretty accurately mirrors my own views on this. Yet another clever bit of sleight of hand from GO.

I'm expecting 1 and 2 bed places to fall significantly and quickly now across the country as BTLers rush to put them on the market. I'm fully expecting those same properties to bounce back again in the 3 or 4 years time as another credit boom begins to accommodate all the new prospective FTBs (as happened in 2013/14). Larger places will be less volatile and retain much more of their value during the crash as they're not chasing the same market.

Essentially, GO will upset the small army of Tory voting amateur landlords, most of whom are knocking on a bit anyway, and replace them with young, aspirational types whose egos will have been massaged a bit by having got on to the property ladder (by hook or by crook) and who will be feeling pretty flush by 2020. The beauty being that many of the BTLers next port of call is UKIP so no danger of strengthening Labour's position.

I also suspect that the initial wave of HTB will become more of an issue within the next couple of years, particularly if Brexit happens and interest rates need to go up to support the £. The wave of defaulters and cheap property going to auction subsequently might serve as a nice sop to the real portfolio landlords for whom an extra 3% on stamp duty is no biggie providing they're getting a good deal and who the Tories actually care about and rely upon for financial support (as opposed to their useful idiot Daily Mail reading counterparts who thought they'd been invited along to the party but are now having the door slammed unceremoniously in their face).

[Hullabaloo82]

Sorry previous post was meant to include a quote of JiltedJen's earier post, quote function had a little blip there.

[Cosmic Apple]

Larger places will be less volatile and retain much more of their value during the crash as they're not chasing the same market.

Sorry but how does that add up exactly? Are MMR restrained '2nd steppers' REALLY going to keep on paying the bubble prices on their next step when they see their equity in their existing homes dwindle significantly? I don't think so. They'll see 20% down on their existing home and want the same off the next step up, and MMR will ensure that they can't afford to do anything else.

If the bottom of the pyramid moves then so does the rest of it.

[spunko2010]

The "Daily Mail readers" stereotype seems a bit overdone. Whenever I go on that site about an article related to HPI the most-voted comments are nearly always negative.

[Venger]

I think this pretty accurately mirrors my own views on this. Yet another clever bit of sleight of hand from GO.

I'm expecting 1 and 2 bed places to fall significantly and quickly now across the country as BTLers rush to put them on the market. I'm fully expecting those same properties to bounce back again in the 3 or 4 years time as another credit boom begins to accommodate all the new prospective FTBs (as happened in 2013/14). Larger places will be less volatile and retain much more of their value during the crash as they're not chasing the same market.

Essentially, GO will upset the small army of Tory voting amateur landlords, most of whom are knocking on a bit anyway, and replace them with young, aspirational types whose egos will have been massaged a bit by having got on to the property ladder (by hook or by crook) and who will be feeling pretty flush by 2020. The beauty being that many of the BTLers next port of call is UKIP so no danger of strengthening Labour's position.

I also suspect that the initial wave of HTB will become more of an issue within the next couple of years, particularly if Brexit happens and interest rates need to go up to support the £. The wave of defaulters and cheap property going to auction subsequently might serve as a nice sop to the real portfolio landlords for whom an extra 3% on stamp duty is no biggie providing they're getting a good deal and who the Tories actually care about and rely upon for financial support (as opposed to their useful idiot Daily Mail reading counterparts who thought they'd been invited along to the party but are now having the door slammed unceremoniously in their face).

It might be politically difficult to see HTBers fail in any number (if that's what you're suggesting) - and despite not liking the ego-rushers into HTB myself at high prices - I wouldn't like to see any of them to lose their homes via repo. They got the homes they wanted, all they have to do it pay them down. The debt levels overall don't seem so bad. IMO far more BTLers say HTB as a signal that Gov supports the market, and way more debt taken on that BTL side last few years. Into the grinder they go.

HTB; don't mind a bit of forbearance there - deals for HTBers if other costs rise. To do that, my expectations it's just a sliver of cost, from mad-gainz the banks & Gov can make from wider HPC, squeezing BTLers, and fresh lending, in volume, with healthy transaction levels for decades, to generations ahead. If needs be keep HTBers on lower rates, and freeze the cost of the 'help' bit for repayment.

For you to be so hard BTL (or portfolio landlords) that it reads to me you see a situation where they move in and against the HTBers.... Bit bleak imo and tells me how you see the market. Wilson types might have done it, but I doubt corporate companies got any interest buying up HTB stock from owners in a bind, 'cheap'.

--------------------

I say this as someone facing the scenario detailed above. I own a small 2 bed house and need to trade up to a family home. The prospect of a 25% reduction in value before I can sell my current place doesn't have me jumping for joy; the idea of riding out the storm on a fixed rate mortgage in a bigger place for 5 years until the market gets back to square one (which, let's face it, we all know it will in the event of a crash) is much more appealing than being stuck in a smaller place unable to add to the family.

That's the trouble; this isn't as clear cut as some of you like to think. The victims in an HPC won't just be wealthy baby boomers and usurious banks.

As for younger people who haven't had the chance to buy; yes I don't doubt that some of them would find it easier to get on the ladder at those prices. That's not what the meme says though. It talks about "upgrading".

As for 'people like me' expecting protection from suffering, believe it or not it's not beyond my wit to stress test my decisions. In my particular circumstances, given that I won't be trying to go for something that costs double but instead aiming for a more realistic 50% to a three bed place with scope to expand, I won't be wiped out, but my choices will be severely limited by the maximum 90% LTV on offer which limits where I can buy regardless of how affordable it is in income terms. This doesn't mean we won't be able to get somewhere bigger but it does mean we'll be priced out of the area we know and love, have a longer commute, access to poorer performing schools and be further away from our support network of family and friends. Not saying there's a moral aspect to this or I think it's wrong that this would happen but, by the same token, don't expect me to go marching down the road playing "When the Saints" on a little trumpet New Orleans style at the prospect.

My interest in this site, and the wider topic of house prices and the economy in general, is not driven by fear that I'm about to be found out for the "feckless, debt junky" you no doubt think I am. I'm a big boy now, I can stand on my own two feet. I just want to try and understand what might happen in the future so I can respond appropriately.

Neverwhere: If you want to be seen as 'a big boy' you should probably hold off from implying that you should be thought of as some kind of 'victim'.

Also, would be interested to know your definition of 'suffer' here. My wife and I's major motivating factor in buying our place was our desire to start a family. I was 31 by the time we bought our first place, my wife 29. Exactly how much longer should we have left it before looking to do something about it? Most rental houses in our area were either too expensive or not of a sufficient standard to bring up a child, not to mention the insecurity of being a tenant in 21st century Britain. We couldn't get near a housing association or Council place so our only option was essentially to save up and buy somewhere. Neither of us are trust fund kids, so we had to work incredibly hard and make a lot of sacrifices to scrape up even the paltry 10% deposit we did manage, but manage it we did.

Neverwhere: And everyone else dealing with that reality right now, who have no hope for a home of their own without a HPC, despite also working hard and making sacrifices?

Edited May 2, 2016 by Venger

[winkie]

Won't get far anymore without help!

https://www.youtube.com/watch?v=pb52aHbVqQQ

[Venger]

[...] I'm fully expecting those same properties to bounce back again in the 3 or 4 years time as another credit boom begins to accommodate all the new prospective FTBs (as happened in 2013/14). Larger places will be less volatile and retain much more of their value during the crash as they're not chasing the same market.

So more expensive value larger homes, secure against HPC? Also slight crash, back to HPI?

I say this as someone facing the scenario detailed above. I own a small 2 bed house and need to trade up to a family home. The prospect of a 25% reduction in value before I can sell my current place doesn't have me jumping for joy; the idea of riding out the storm on a fixed rate mortgage in a bigger place for 5 years until the market gets back to square one (which, let's face it, we all know it will in the event of a crash) is much more appealing than being stuck in a smaller place unable to add to the family.

That's the trouble; this isn't as clear cut as some of you like to think. The victims in an HPC won't just be wealthy baby boomers and usurious banks.

This HPI+++ is your own market view. I see it as better for banks and Gov and economy for crash and then level prices for decades.

You can't be so sure about tiny crash only on FTB/HTB type properties (with larger homes unaffected), seeing quick HPI++++ bounce back (with investors buying up distressed homes of the Help To Buy FTBs cheap?), and also want to be thought of as a 'victim' if it's a steeper crash affecting mid-to-higher end homes as well. Take ownership of your own decisions. Some deserve to discover it's a brutal market given their own totally self-focused outlooks.

[Hullabaloo82]

Just calling it as I see it. Not the only one who feels that way either by the looks of it.

Don't really want another flame war to be honest but I resent the constant accusations of self absorption and fecklessness. As I mentioned on the other thread, hpc won't wipe me out nor am I campaigning against it. Just trying to give an alternative viewpoint.

Personally I would hope for a more long term, sustainable solution than the current crude electioneers which will see us right back to square one again in a few years. Just my opinion of course; not an advocate of 'hpi forever', just saying what I think will happen.

Same with the htbs; not making a moral judgment it's just that's what I can see happening. I'm guessing I'm a little closer to that generation than some of you. A lot of my peers bought with htb and frankly aren't really prepared for the risks of an interest rate rise. I see this as a potential problem.

As for larger places I said 'less volatile', not 'conpletely immune'.

[Bland Unsight]

Don't really want another flame war to be honest but I resent the constant accusations of self absorption and fecklessness. As I mentioned on the other thread, hpc won't wipe me out nor am I campaigning against it. Just trying to give an alternative viewpoint.

Check your irony meter, you appear to have a malfunction.

As the forum does not have a viewpoint, you cannot give an alternative viewpoint. You'll stumble into fewer flame wars if you just post your own opinions on their own merits and set aside fantasies about being the voice of reason "alternative viewpoint" the forum has been longing for, for so long. It ain't about you.

[Venger]

Just calling it as I see it. Not the only one who feels that way either by the looks of it.

Don't really want another flame war to be honest but I resent the constant accusations of self absorption and fecklessness. As I mentioned on the other thread, hpc won't wipe me out nor am I campaigning against it. Just trying to give an alternative viewpoint.

Personally I would hope for a more long term, sustainable solution than the current crude electioneers which will see us right back to square one again in a few years. Just my opinion of course; not an advocate of 'hpi forever', just saying what I think will happen.

Same with the htbs; not making a moral judgment it's just that's what I can see happening. I'm guessing I'm a little closer to that generation than some of you. A lot of my peers bought with htb and frankly aren't really prepared for the risks of an interest rate rise. I see this as a potential problem.

As for larger places I said 'less volatile', not 'conpletely immune'.

Which seems to include BTLers/portfolio landlords, buying up HTB1 buyers homes 'cheap' into a HPC, and world all nice again, with HPI bounce back quick.

If HTB1 lose out in number, their homes.... to BTLers. Obviously I don't excuse anyone for their own buying decisions, but HTB1ers tended to be younger people (£170K-£190K average debt), and been a siltation of continued bubble because of BTLers going hard in at high prices last few years.

No; wipeout of the BTLers and their own homes to sell, to make the banks whole on the BTLers overall debt, into a HPC. And a crash at the boomer level homes. All the £Trillions in equity held on that side, that so few people can afford to upsize to. £400K-£1m+ homes. The houses you see as less volatile to HPC. Fresh profitable lending from the banks. BTL recoiled from for decades/ever.

[frederico]

No hpi++, just won't happen, IF prices crash we'll see a decade of benign house prices at least, until those financial advisors start bending the rules again.

However if we follow Japan's example, it'll be 20 years and counting.

[TheCountOfNowhere]

Just calling it as I see it. Not the only one who feels that way either by the looks of it.

Don't really want another flame war to be honest but I resent the constant accusations of self absorption and fecklessness. As I mentioned on the other thread, hpc won't wipe me out nor am I campaigning against it. Just trying to give an alternative viewpoint.

Personally I would hope for a more long term, sustainable solution than the current crude electioneers which will see us right back to square one again in a few years. Just my opinion of course; not an advocate of 'hpi forever', just saying what I think will happen.

Same with the htbs; not making a moral judgment it's just that's what I can see happening. I'm guessing I'm a little closer to that generation than some of you. A lot of my peers bought with htb and frankly aren't really prepared for the risks of an interest rate rise. I see this as a potential problem.

As for larger places I said 'less volatile', not 'conpletely immune'.

A yes or no was all that was required not an essay on why your not a ####

[Money Frugality]

The hysteria of HPI seems to have gained a foothold up here (W Yorkshire) in terms of asking prices. Despite the indices showing flat prices since 2007 several properties are coming up for 40%+ more than sold in 2011 and 'Offers Over' is getting more common on places that meet my criteria.

Still, maybe these are just the 3y+ on the market kite flyers in the making. Time will tell

As Jen said, kite flying with a expiry date.. No ones paying 250k for a sh*t detached in W Yorks when cheaper similarly spaced houses are available in the masses down there.

Drop that on top of not as many decent paying jobs as the south or even Manchester and on top of the struggling rental market (houses over 800pcm sat there for months, only really student areas with demand, yields are sh*t.. No investors) and you'll see they're quite simply.. Idiots.

[TheCountOfNowhere]

Foxton today

Open

137.75

Something is happening.

Either believe it or dont.

[spunko2010]

Countrywide and Savills also down.

[crashmonitor]

As Jen said, kite flying with a expiry date.. No ones paying 250k for a sh*t detached in W Yorks when cheaper similarly spaced houses are available in the masses down there.

Drop that on top of not as many decent paying jobs as the south or even Manchester and on top of the struggling rental market (houses over 800pcm sat there for months, only really student areas with demand, yields are sh*t.. No investors) and you'll see they're quite simply.. Idiots.

Agreed, when you actually dig into land registry data it is surprising how few houses have achieved where you think the market is at by reference to asking prices. Volumes are tiny (some roads have zero sales in the last decade), actual selling prices way off asking and any houses that appear to have achieved a new peak have often been substantially improved.

Haliwide claims new peak prices for most of the country, land registry for the southern half of the country only with nothing north of Nottingham showing above 2007 peak. Tend to agree with land registry for areas like W Yorkshire...the volumes are tiny, stuff is quite a bit off 2007 prices still and we have been on a bit of a 12 year slump that we are still struggling to pull out of. Boom up north, not at present.

[Venger]

Agreed, when you actually dig into land registry data it is surprising how few houses have achieved where you think the market is at by reference to asking prices. Volumes are tiny (some roads have zero sales in the last decade), actual selling prices way off asking and any houses that appear to have achieved a new peak have often been substantially improved.

Haliwide claims new peak prices for most of the country, land registry for the southern half of the country only with nothing north of Nottingham showing above 2007 peak. Tend to agree with land registry for areas like W Yorkshire...the volumes are tiny, stuff is quite a bit off 2007 prices still and we have been on a bit of a 12 year slump that we are still struggling to pull out of. Boom up north, not at present.

You always make it sound like such great value, and that you're waiting for prices to take off.

[crashmonitor]

You always make it sound like such great value, and that you're waiting for prices to take off.

It's all terrible value if you compare it to historical prices pre Tony Blair whence prices tripled in short order between about 1997-2004. Prices only look reasonable in the north because prices are absolutely wacko in the south or by reference to where prices have been since about 2004.

Edited May 3, 2016 by crashmonitor

[iamnumerate]

Agreed, when you actually dig into land registry data it is surprising how few houses have achieved where you think the market is at by reference to asking prices. Volumes are tiny (some roads have zero sales in the last decade), actual selling prices way off asking and any houses that appear to have achieved a new peak have often been substantially improved.

Haliwide claims new peak prices for most of the country, land registry for the southern half of the country only with nothing north of Nottingham showing above 2007 peak. Tend to agree with land registry for areas like W Yorkshire...the volumes are tiny, stuff is quite a bit off 2007 prices still and we have been on a bit of a 12 year slump that we are still struggling to pull out of. Boom up north, not at present.

The transaction costs are quite high, so what do you expect? 20 years it would have cost about £3K for someone in my road to sell their house and move to another one. Now it would be £15k

[skewiff]

http://www.express.co.uk/finance/personalfinance/666609/Top-London-house-prices-tumble-AGAIN-sparking-fears-of-crash

This popped up when I googled house price crash to find this site. 2 hours old.

I know its a rubbish paper ...

[TheCountOfNowhere]

http://www.express.co.uk/finance/personalfinance/666609/Top-London-house-prices-tumble-AGAIN-sparking-fears-of-crash

This popped up when I googled house price crash to find this site. 2 hours old.

I know its a rubbish paper ...

It is a rubbish paper...but it IS a well read one.....theyve ramped on the way up and now thye have changed tact.

The paper is rubbish but the meaning behind their change of tact is significant.