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UK property market at weakest since 2012 as Brexit takes toll – Rics

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Estate agents only have 42.1 homes for sale, on average, close to record lows.”

In the rental market, demand from tenants was holding steady, while the flow of rental homes on to the market continued to slow”

With the number of houses for sale decreasing and the number of houses for rent decreasing, either people are knocking down houses or there is a big glut of empty properties getting ready to be sold.

Or have I missed something?

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Remortgaging has reached its highest level in almost a decade, while the buy-to-let market has collapsed after tax changes, according to figures from UK Finance, the body for the banking and finance industry. Lending for buy to let plunged 20% year on year to £800,000 in October.

 

 

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This is getting close to the bit I love, and yes I am old enough to have seen it all before, "well I am not going to give it away" can be heard from the south east coast at Folkestone up to the far North east coast of Ullapool as wannabe sellers complain about losing 10% of the 100% capital profit they have already  made, greed always catches them out in the end as they wish they had taken the small loss when they had the chance

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Look at the charts in the report. Almost without exception the current month is worse than the long term average. Stock down. Prices down. Supply down. Enquiries down. Now BTL money is leaving (and eventually feeding into new listings) prices can only fall.

The greedy boomers in their big family houses will need to accept that just because one house in their street sold for £750k doesn't mean all the houses will sell for that. 

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2 hours ago, localhero1983 said:

This is getting close to the bit I love, and yes I am old enough to have seen it all before, "well I am not going to give it away" can be heard from the south east coast at Folkestone up to the far North east coast of Ullapool as wannabe sellers complain about losing 10% of the 100% capital profit they have already  made, greed always catches them out in the end as they wish they had taken the small loss when they had the chance

Heard that from a friend last week who has had their property on the market for over six months without a nibble.  Its in what is considered a good commuter town on the Surrey/Hampshire border on the Waterloo line.  I kept shtum.

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53 minutes ago, hurlerontheditch said:

the market is well and truly fked

unless people need to relocate and have to sell they wont reduce prices. lack of new places coming on the market is maintaining asking prices

That can temporarily hold prices up, so it's question of whether the downward pressures will remain in place longer than the refusal to sell holds for.

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It's not that easy to get mortgages these days . . . and when my sister downsized a couple of years ago, it only seemed to be cash buyers in the market. (South East.)

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1 hour ago, Riedquat said:

That can temporarily hold prices up, so it's question of whether the downward pressures will remain in place longer than the refusal to sell holds for.

Crashes always seem to be limited to about 30% overall in real terms. I think this is due to the downside limitations you cite. Anything bigger than that occurs over decadal timescales and is hugely masked by inflation and multiple legs down with inbetween recoveries.

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https://www.bbc.co.uk/news/business-46538831

BBC reporting on the RICS utterances...usual sort of thing.  They very much stress their view this is a temporary hiccup then ...off we go again up up up... all is right in the world when wealth is being transferred into the pockets of the owners of land and property and out of the pockets that of those that don't.

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44 minutes ago, copydude said:

It's not that easy to get mortgages these days . . . and when my sister downsized a couple of years ago, it only seemed to be cash buyers in the market. (South East.)

I don't agree It was fairly simple to get a 4-5x income mortgage when I applied two month ago. family friend has just brought with a mega mortgage (must be about 4x) and they are in late 30's and just sold their home (to a FTB with a substantial mortgage probably at a guess about 5x income)

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3 hours ago, hurlerontheditch said:

unless people need to relocate and have to sell they wont reduce prices.

I used to think this until we relocated without selling.  The peak for our house was about £375k last summer.  We tried to sell in a falling market for most of this year, initially asking £400k and then cut quite aggressively to £330k, but it was futile, the upper middle sector in Gloucestershire has been stalled by Brexit uncertainity + Bubble/HPC fear.  We had few viewings and no 'cheeky' offers so could not get any traction despite being very open to negotiation (small mortgage).
So now its rented (we paid off the mortgage from war chest savings to avoid the complication of involving a lender).  The rent heavily subsidises the current London flat and will cover the rent 100% when we switch to the S coast.

As prices crash the 'good news' for Landlords with low/no leverage is that gross yield rises .  Ours is about 4% now and will approach 6% if the market really tanks.  Why would we sell a solidly constructed 80s Bryant 4 bed into the bottom of the dip?
It will recover eventually.
I am not anti HPC (see below), but we have to be realistic - UK/World politics and economics favour people with low gearing, valuable real estate and substantial savings.
I appreciate a lot won't have the means to do what we have, but many do and will re-locate using similar tactics.  Some will even get re-location support from their employer (especially if they work in cyber security or anything else 'hot').

Notwithstanding the above, I want a crash so my lads, and all the other twenty somethings who want to, can buy something like a 3 bed semi for 3.5x like I did.

Edited by hotblack42
correction to "I am not anti HPC"

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1 hour ago, copydude said:

It's not that easy to get mortgages these days . . . and when my sister downsized a couple of years ago, it only seemed to be cash buyers in the market. (South East.)

I have an AIP of 5x times my earning, and pretty easy I would say.

Credit is still available and that too very cheap.

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46 minutes ago, hotblack42 said:

I used to think this until we relocated without selling.  The peak for our house was about £375k last summer.  We tried to sell in a falling market for most of this year, initially asking £400k and then cut quite aggressively to £330k, but it was futile, the upper middle sector in Gloucestershire has been stalled by Brexit uncertainity + Bubble/HPC fear.  

How about MMR rules and BTL taxation affecting the sale price (post implementation), rather than emotional reasons?

Edited by maffo in oxford

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10 minutes ago, maffo in oxford said:

How about MMR rules and BTL taxation affecting the sale price (post implementation), rather than emotional reasons?

Witch! Burn him!

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16 minutes ago, maffo in oxford said:

How about MMR rules and BTL taxation affecting the sale price (post implementation), rather than emotional reasons?

this

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1 hour ago, hotblack42 said:

I used to think this until we relocated without selling.  The peak for our house was about £375k last summer.  We tried to sell in a falling market for most of this year, initially asking £400k and then cut quite aggressively to £330k, but it was futile, the upper middle sector in Gloucestershire has been stalled by Brexit uncertainity + Bubble/HPC fear.  We had few viewings and no 'cheeky' offers so could not get any traction despite being very open to negotiation (small mortgage).
So now its rented (we paid off the mortgage from war chest savings to avoid the complication of involving a lender).  The rent heavily subsidises the current London flat and will cover the rent 100% when we switch to the S coast.

As prices crash the 'good news' for Landlords with low/no leverage is that gross yield rises .  Ours is about 4% now and will approach 6% if the market really tanks.  Why would we sell a solidly constructed 80s Bryant 4 bed into the bottom of the dip?
It will recover eventually.
I am not anti HPC (see below), but we have to be realistic - UK/World politics and economics favour people with low gearing, valuable real estate and substantial savings.
I appreciate a lot won't have the means to do what we have, but many do and will re-locate using similar tactics.  Some will even get re-location support from their employer (especially if they work in cyber security or anything else 'hot').

Notwithstanding the above, I want a crash so my lads, and all the other twenty somethings who want to, can buy something like a 3 bed semi for 3.5x like I did.

Interesting post, it does highlight the fact that people are going to do what is best for them in their individual circumstances, even while wanting a crash overall. Each person will make the best of their situation.

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1 hour ago, hotblack42 said:

I used to think this until we relocated without selling.  The peak for our house was about £375k last summer.  We tried to sell in a falling market for most of this year, initially asking £400k and then cut quite aggressively to £330k, but it was futile, the upper middle sector in Gloucestershire has been stalled by Brexit uncertainity + Bubble/HPC fear.  We had few viewings and no 'cheeky' offers so could not get any traction despite being very open to negotiation (small mortgage).
So now its rented (we paid off the mortgage from war chest savings to avoid the complication of involving a lender).  The rent heavily subsidises the current London flat and will cover the rent 100% when we switch to the S coast.

As prices crash the 'good news' for Landlords with low/no leverage is that gross yield rises .  Ours is about 4% now and will approach 6% if the market really tanks.  Why would we sell a solidly constructed 80s Bryant 4 bed into the bottom of the dip?
It will recover eventually.
I am not anti HPC (see below), but we have to be realistic - UK/World politics and economics favour people with low gearing, valuable real estate and substantial savings.
I appreciate a lot won't have the means to do what we have, but many do and will re-locate using similar tactics.  Some will even get re-location support from their employer (especially if they work in cyber security or anything else 'hot').

Notwithstanding the above, I want a crash so my lads, and all the other twenty somethings who want to, can buy something like a 3 bed semi for 3.5x like I did.

I would be very interested to know the rental price you are achieving and whether you used an agent and what the gross yield is. 

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5 hours ago, hotblack42 said:

As prices crash the 'good news' for Landlords with low/no leverage is that gross yield rises .  Ours is about 4% now and will approach 6% if the market really tanks.

And the more your ‘investment’ falls in value, the higher the yield.  

Genius!

Do you have a name for this investment strategy?

Edited by BorrowToLeech

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  • 294 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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