Jump to content
House Price Crash Forum

Estate Agents worried about effect of Covid19 on housing market


Recommended Posts

Yes - don't worry about it killing off people - particularly our elderly relative - we can't have the housing market killed off can we!

Of course where do you invest your cash where its least likely to disappear - housing, stock market, 0.5% in your local building society? 

Link to post
Share on other sites

Emergency interest rates are not a bullish sign. They are a VERY BEARISH sign. They highlight lack of control of the situation. Housing will cráter this time, as it has done in any important epidemic (currently looking for data to justify this).

Link to post
Share on other sites
13 minutes ago, Burbujista said:

Emergency interest rates are not a bullish sign. They are a VERY BEARISH sign. They highlight lack of control of the situation. Housing will cráter this time, as it has done in any important epidemic (currently looking for data to justify this).

Was right move and the land registry house price index around from 1918-1920? There probably is no data?

It was post WWI too so may not provide reliable data as so many young men had died on the battlefield in the previous 4 years and most people lived in poverty anyway and could no way afford to buy a home.

Link to post
Share on other sites
40 minutes ago, MARTINX9 said:

Was right move and the land registry house price index around from 1918-1920? There probably is no data?

It was post WWI too so may not provide reliable data as so many young men had died on the battlefield in the previous 4 years and most people lived in poverty anyway and could no way afford to buy a home.

No... the biggest problem with a house during a world war is quite an obvious one, they are potential targets for bombing, especially in “normally considered attractive areas”.

At the same time... men did not earn well, but during war households do get more incomes, because women took the essential high paid jobs that men had before being committed to the war effort (not only trenches, but also planning, logistics, medical, cartographic mapping, training, etc.). In fact women were paid better than men. from a magazine about the topic of soldiers wages:

“In World War One, when a serviceman's basic wage was one shilling a day (5 pence), soldiers found it unfair that women war workers in munitions factories earned much more on piecework than they did, and could afford to take them out for a drink, rather than the other way about”

Because of this there were several consequences after war:

- Women right movements were consolidated (obviously a good thing) and they were keen on working (as they saw they were as capable as men) and demanded more competitive wages.

- People has learned some skills that were transferable to civil life. Having  received training almost for free and got in a few years the experience of 20 under normal circumstances, workers of low income moved up the social ladder.

 

Wars are deflationary for housing while they are being lost or labelled and inflationary by the end of the war (if you are winning, specially with air superiority, and with air-superiority I include all kinds of bombing, not only aircrafts, as they were not properly developed in WWI). The US in WWI would still be affected by there fear, as when they entered, they didn’t know at the time how far the war would be extended in terms of territory.

However... check the difference between the behaviours after WWI and WWII (attached), house prices don’t go up until 1921. That period shows the effect of the Spanish Flu.

 

source: https://www.dallasfed.org/-/media/documents/institute/wpapers/2014/0208.pdf#page109

E11D9D1E-4F53-45B7-A2B8-458CB59EE9DE.jpeg

Link to post
Share on other sites

Don't worry TPTB have responded to the crisis with a package of measures to protect home owners...slashed interest rates, bank funding rule changes, Term Funding Scheme boost, mortgage payment holidays etc.  Their priorities are clear.

Link to post
Share on other sites
3 hours ago, Burbujista said:

No... the biggest problem with a house during a world war is quite an obvious one, they are potential targets for bombing, especially in “normally considered attractive areas”.

At the same time... men did not earn well, but during war households do get more incomes, because women took the essential high paid jobs that men had before being committed to the war effort (not only trenches, but also planning, logistics, medical, cartographic mapping, training, etc.). In fact women were paid better than men. from a magazine about the topic of soldiers wages:

“In World War One, when a serviceman's basic wage was one shilling a day (5 pence), soldiers found it unfair that women war workers in munitions factories earned much more on piecework than they did, and could afford to take them out for a drink, rather than the other way about”

Because of this there were several consequences after war:

- Women right movements were consolidated (obviously a good thing) and they were keen on working (as they saw they were as capable as men) and demanded more competitive wages.

- People has learned some skills that were transferable to civil life. Having  received training almost for free and got in a few years the experience of 20 under normal circumstances, workers of low income moved up the social ladder.

 

Wars are deflationary for housing while they are being lost or labelled and inflationary by the end of the war (if you are winning, specially with air superiority, and with air-superiority I include all kinds of bombing, not only aircrafts, as they were not properly developed in WWI). The US in WWI would still be affected by there fear, as when they entered, they didn’t know at the time how far the war would be extended in terms of territory.

However... check the difference between the behaviours after WWI and WWII (attached), house prices don’t go up until 1921. That period shows the effect of the Spanish Flu.

 

source: https://www.dallasfed.org/-/media/documents/institute/wpapers/2014/0208.pdf#page109

E11D9D1E-4F53-45B7-A2B8-458CB59EE9DE.jpeg

Looks to me like Spanish flu might have knocked off 7% from real house prices for a little while?

Also, surprising how much US House prices rose through the great depression, a result of financial stimulus I wonder?

Link to post
Share on other sites
3 hours ago, Si1 said:

Looks to me like Spanish flu might have knocked off 7% from real house prices for a little while?

Also, surprising how much US House prices rose through the great depression, a result of financial stimulus I wonder?

From 25-ish to 16-ish isn’t not 7%, it’s -39%. And it wasn’t coming from an overvalued situation.

Link to post
Share on other sites
3 hours ago, Si1 said:

Looks to me like Spanish flu might have knocked off 7% from real house prices for a little while?

Also, surprising how much US House prices rose through the great depression, a result of financial stimulus I wonder?

Also... the plot is inflation adjusted from what I recall. In the great depression there was a deep deflationary time, so in the plot that generates an uptrend.

Link to post
Share on other sites
6 minutes ago, Burbujista said:

From 25-ish to 16-ish isn’t not 7%, it’s -39%. And it wasn’t coming from an overvalued situation.

You're right. I had a brainstorm ;)

Link to post
Share on other sites
20 hours ago, Burbujista said:

From 25-ish to 16-ish isn’t not 7%, it’s -39%. And it wasn’t coming from an overvalued situation.

Exactly, there is absolutely no point in trying to compare then to now IMO, totally different financial worlds, especially for the little punters who basically live on debt for the most part.

Link to post
Share on other sites
8 hours ago, dances with sheeple said:

Exactly, there is absolutely no point in trying to compare then to now IMO, totally different financial worlds, especially for the little punters who basically live on debt for the most part.

I disagree... it sets a lower bound for the magnitude of the drop.

Link to post
Share on other sites
20 minutes ago, Burbujista said:

I disagree... it sets a lower bound for the magnitude of the drop.

Not sure what you mean, my point was that back in WW1 a stock market crash didn`t have the same effect on Joe Smith who would have gone to the front as it would on a stockbroker or wealthy person, maybe if his boss went bust the factory would close or something, but today people run on debt and their pensions, BTL`s and cheap mortgages all rely on cheap money, plus as you say the bubble is much bigger and more inclusive at all levels of society, BTL for example was like a drug addiction for some people at one stage.

Link to post
Share on other sites
7 hours ago, dances with sheeple said:

Not sure what you mean, my point was that back in WW1 a stock market crash didn`t have the same effect on Joe Smith who would have gone to the front as it would on a stockbroker or wealthy person, maybe if his boss went bust the factory would close or something, but today people run on debt and their pensions, BTL`s and cheap mortgages all rely on cheap money, plus as you say the bubble is much bigger and more inclusive at all levels of society, BTL for example was like a drug addiction for some people at one stage.

“a stock market crash” is not just a drop in share prices... it highlights a fundamental decrease of business perspective. However, why are you taking about the stock market? I didn’t make any reference to that at all.

Back in pre-WWI housing system... most people were tenants. The market was driven by landlords and/or the gentry. High levels of ownership are a post-WWII thing. However... the fundamental value for the landlords is rents, which depend on the income made by tenants... I just don’t understand your approach to my line of thought. The graph is not a stock market chart, it’s real house prices!

Link to post
Share on other sites
On 13/03/2020 at 08:44, iamnumerate said:

IIRC there was a lot more house building relative to population after WWI.

True. "Homes for heroes".  Estates built around the country to replace slum dwellings. 

Good quality - the original council house and still standing today. 

 

Link to post
Share on other sites
2 hours ago, Ah-so said:

True. "Homes for heroes".  Estates built around the country to replace slum dwellings. 

Good quality - the original council house and still standing today. 

 

Sadly in those reducing house prices was a vote winner - now I am not sure if it would be.

We lost a lot of family in WWI - most of the people I know who get council housing today - certainly didn't - not unless the British army was recruiting from South America - which seems rather unfair considering - they were homes for heroes.

Link to post
Share on other sites
On 11/03/2020 at 12:59, Wayward said:

Don't worry TPTB have responded to the crisis with a package of measures to protect home owners...slashed interest rates, bank funding rule changes, Term Funding Scheme boost, mortgage payment holidays etc.  Their priorities are clear.

And for the 10 million private renters - absolutely nothing!

Link to post
Share on other sites
On 13/03/2020 at 07:05, Burbujista said:

“a stock market crash” is not just a drop in share prices... it highlights a fundamental decrease of business perspective. However, why are you taking about the stock market? I didn’t make any reference to that at all.

Back in pre-WWI housing system... most people were tenants. The market was driven by landlords and/or the gentry. High levels of ownership are a post-WWII thing. However... the fundamental value for the landlords is rents, which depend on the income made by tenants... I just don’t understand your approach to my line of thought. The graph is not a stock market chart, it’s real house prices!

Exactly, so as I said more and more people are directly or indirectly linked to the debt markets and the stock markets, so when the market crashed decades ago it affected the pool of people that were "investors" more than average Joe (who`s life ticked along at a frugal sort of level whatever happened in "high finance") Today if a boomer`s pension takes a 40% hit he or she is likely to start thinking about getting rid of property at prices more realistic for selling maybe, and on it goes like a feed back loop.

Link to post
Share on other sites
On 3/14/2020 at 1:57 PM, MARTINX9 said:

And for the 10 million private renters - absolutely nothing!

Nothing is stopping a renter from obtaining a mortgage and getting all those perks you seem angry about? Newsflash, you could always get a mortgage payment holiday. That is not a new concept. 

Link to post
Share on other sites
16 hours ago, MonsieurCopperCrutch said:

Nothing is stopping a renter from obtaining a mortgage and getting all those perks you seem angry about? Newsflash, you could always get a mortgage payment holiday. That is not a new concept. 

Apart from the fact that renters aren't a systemic economic risk to everyone else

Link to post
Share on other sites

I am regularly...and i mean REGULARLY popping my head around the door of the lettings agent that represents my LL and asking the Gals at the desks how business is (obviously I know them from previous house visits).

I try to wear as broad a smile as possible.

Their morale seems to have dropped of late!

 

I cant see that there will be many viewings anywhere over the summer.

Link to post
Share on other sites
On 14/03/2020 at 13:57, MARTINX9 said:

And for the 10 million private renters - absolutely nothing!

A mortgage holiday is just a loan - I would imagine renters can get a loan if needed.

Sadly of course a lot of renters would be expected to eat their capital first while  homeowners would only have substantial savings after the mortgage is paid off.

Link to post
Share on other sites

Archived

This topic is now archived and is closed to further replies.

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 415 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.