Will Corona virus cause a house price crash?

[crumblingcon]

38 minutes ago, Twenty Something said:

It’s not my first home, but it’ll be my first in a number of years. Reasons for now. Both in secure (nhs frontline) jobs, interest rates at record lows and going nowhere in my view north of 1% for some time, mortgage repayments £150 a month more than my rent, because we’re family planning and want the security owning gives, because where as you might get your crash, you at the same time might not. I can’t wait anymore. I won’t be mortgageable on a standard 25 year mainstream product. I want to own somewhere that in 20 years or so if all goes to plan will provide me a roof over my head to retire in, and will be brought and paid for. 

Ultimately, I don’t actually even care if the supposed worth of my house falls in the next year. I have no intention of selling in the next decade, if ever. Mortgage is about 25% of joint post tax income before I’ve done any overtime. It’ll take an economic collapse that will be world ending before I’m a distressed seller, and then house prices will be the least of anyone’s worries. 

High interest rates and long term mortgage product cutting are the only things that will give you your crash. Not gonna happen in the near to medium future. I don’t expect my view to be popular on here with people who’s argument to why buy now is because I’m an idiot, but time will tell, and I really at the end of the day just want somewhere to put down roots, not a 200% increase in my paper wealth. 

Well all sounds great, I wish you the best of luck ? 

Just seemed very odd that you suddenly turned up after all these years at the very moment of what most people(not you of course) would call the worst potential financial crisis in living memory and start posting positive housing market opinions and rubbishing those that are not.

[moonriver]

Looks like this could be why so many are checking out Rightmove during the last week....likely "bargain" hunting!

Bear story in Telegraph today....if they want to sell, this seller could be looking at £90,000 loss already.

https://www.telegraph.co.uk/property/uk/buyer-demanding-20pc-house-price-cut-property-market-reopens/

'Our buyer is demanding a 20pc house price cut': the property market reopens with a price war

With prices forecast to fall by as much as 23pc, big discounts are being requested – and some are waiting to snap up bargains..."

[crumblingcon]

13 minutes ago, moonriver said:

Looks like this could be why so many are checking out Rightmove during the last week....likely "bargain" hunting!

Bear story in Telegraph today....if they want to sell, this seller could be looking at £90,000 loss already.

https://www.telegraph.co.uk/property/uk/buyer-demanding-20pc-house-price-cut-property-market-reopens/

'Our buyer is demanding a 20pc house price cut': the property market reopens with a price war

With prices forecast to fall by as much as 23pc, big discounts are being requested – and some are waiting to snap up bargains..."

Here we go, the other thread I put up the other day "pent up demand FLOODING back to the market" are really doing what most of us thought they would be doing, looking for the now certain price cuts and bargains heading our way.

You just know most sellers mentality is "I am not giving it away" as they watch the more savvy investors knowing the best times to cut their loses in the early days by taking a cut and getting the hell out before the real rush to the exit starts

[crumblingcon]

Credit to the Daily Telegraph though over the last few months, they normally are very "supportive" shall say of the property market. But they really are making no friends with their subscribers as they have an as bearish outlook on the property market as you can get right now. The comments section are furious with them, with many threatening  to cancel their subscription ? 

Property values  really are  an emotive subject to many, just the reporting of the dangers is a crime in their eyes.

[Chunketh]

9 hours ago, crumblingcon said:

Buying your first home well into your 40's?

Best of luck ? 

But out of interest, again, you have left it all this time and you choose now, why?

Nervously considering this myself. My reasons are simple:

 

I want a place of my own, with my own choice of decor, with pets, hanging pictures wherever the hell I want and a garden.

I want a greater security of tenure.

I was foolish with cash in my younger years so was never in a position to buy. Yes i realise the irony of that given the topic, hence the nervousness. I dont want to undo all my good work in the last 6 years.

I don't have enough money in my pension pot to ensure my current standard of living in retirement if renting, if I buy it will be a lot more comfortable, with cash spare to continue to travel.

I hate the idea of paying for someone elses retirement.

 

This is a REALLY difficult decision (losing sleep) and I am still open to the idea of bailing on my current purchase and waiting 12-18 months to see what happens.

[Pop321]

18 hours ago, MARTINX9 said:

Irish prices plummeted from 2008-2010. And in many rural areas they never recovered.

For example my uncle's house in rural south west Ireland - a nice well maintained 3 bed detached bungalow in the middle of peaceful countryside - was valued at 120,000 euro in 2005 and was recently valued at 75,000 euro (pre COVID). Back in 2014 it was worth only around 50,000 euro.

Their crash proved then that high prices were nothing to do with the supply and demand for housing - but the supply of money. The supply of money collapsed in 2008-09 - but there were the same number of houses and people neeeding them!

Exactly.

My dad once said....if mortgages were banned (theoretically of course) what would happen to the demand of houses and what would happen to the price? 

Demand would remain but prices would fall. Ability to pay is key....at 18 we found our first house and I would have given everything I had for it, in fact we did.

Luckily that was 1986 and the very most I could give was massive savings from 2 years of cleaning jobs by my ‘to be’ wife and myself (almost 3 x income) and a mortgage 3.5 x income. A huge purchase price of £28k v income of about £4.5k. 

If they would have loaned me 50x income I probably would have taken it. luckily they wouldn’t otherwise prices at that time would have been sky high like now.

[stuckmojo]

52 minutes ago, crumblingcon said:

Credit to the Daily Telegraph though over the last few months, they normally are very "supportive" shall say of the property market. But they really are making no friends with their subscribers as they have an as bearish outlook on the property market as you can get right now. The comments section are furious with them, with many threatening  to cancel their subscription ? 

Property values  really are  an emotive subject to many, just the reporting of the dangers is a crime in their eyes.

Agreed. Pretty strong article there

 

[Pop321]

32 minutes ago, Chunketh said:

Nervously considering this myself. My reasons are simple:

I want a place of my own, with my own choice of decor, with pets, hanging pictures wherever the hell I want and a garden.

I want a greater security of tenure.

I was foolish with cash in my younger years so was never in a position to buy. Yes i realise the irony of that given the topic, hence the nervousness. I dont want to undo all my good work in the last 6 years.

I don't have enough money in my pension pot to ensure my current standard of living in retirement if renting, if I buy it will be a lot more comfortable, with cash spare to continue to travel.

I hate the idea of paying for someone elses retirement.

This is a REALLY difficult decision (losing sleep) and I am still open to the idea of bailing on my current purchase and waiting 12-18 months to see what happens.

Yeah, agree this is a tricky and difficult decision. I have lived through real house rises and falls and they are unpleasant. 

My genuine advice is that if the home is truly a home (and not a stepping stone) then you should consider it over the short and long term. I think you are doing this. 

The short term.
Realistically even if prices don’t fall there will be value out there....I made my pennies buying from people who needed to sell at 50% (and certainly often at 75%) of comparables.  A crash isn’t needed I often bought mine just during a ‘soft market’ but what happens is EA don’t drop prices in the windows nor does every house sell at a new lower price....what happens is sales slow and those that really need to move have to sell cheap. I can certainly see at the very least a ‘soft market’ for a while  

The longer term 
Comes down to owning v renting. In the long term finishing work and not having to pay rent or mortgage makes retirement a very different experience  

Key is I would not buy a stepping stone house at the moment. If you Know you will need to sell it to move on then that’s expensive and you could be in negative equity. A forever home (or one that would do forever) if different because in theory you should never NEED to sell unless a change of job, location, unemployment or interest rates rise hugely  (and they might in 5 years???‍♂️) 

Lots of threads on this and it would be hypocritical of me to say renting is good...but I did it in 1990 to 1992 ish and prices crashed...not like nowadays,  they absolutely really slumped then we bought our second house (having sold out first in 1989) and at 22 years old I was set for life. Pure luck  

Overall, At this exact stage I probably wouldn’t buy...I think I would wait a while to see the impact because I believe we have some adverse economic times ahead and you may find better value. But I could be wrong and it is your money. 

[Chunketh]

4 minutes ago, Pop321 said:

Yeah, agree this is a tricky and difficult decision. I have lived through real house rises and falls and they are unpleasant. 

My genuine advice is that if the home is truly a home (and not a stepping stone) then you should consider it over the short and long term. I think you are doing this. 

The short term.
Realistically even if prices don’t fall there will be value out there....I made my pennies buying from people who needed to sell at 50% (and certainly often at 75%) of comparables.  A crash isn’t needed I often bought mine just during a ‘soft market’ but what happens is EA don’t drop prices in the windows nor does every house sell at a new lower price....what happens is sales slow and those that really need to move have to sell cheap. I can certainly see at the very least a ‘soft market’ for a while  

The longer term 
Comes down to owning v renting. In the long term finishing work and not having to pay rent or mortgage makes retirement a very different experience  

Key is I would not buy a stepping stone house at the moment. If you Know you will need to sell it to move on then that’s expensive and you could be in negative equity. A forever home (or one that would do forever) if different because in theory you should never NEED to sell unless a change of job, location, unemployment or interest rates rise hugely  (and they might in 5 years???‍♂️) 

Lots of threads on this and it would be hypocritical of me to say renting is good...but I did it in 1990 to 1992 ish and prices crashed...not like nowadays,  they absolutely really slumped then we bought our second house (having sold out first in 1989) and at 22 years old I was set for life. Pure luck  

Overall, At this exact stage I probably wouldn’t buy...I think I would wait a while to see the impact because I believe we have some adverse economic times ahead and you may find better value. But I could be wrong and it is your money. 

Thanks for the advice.

We are looking at a "forever" home. This wont be a stepping stone purchase and circumstances should not change in our material needs (no kids, not entertaining the idea of having them).

The purchase we are looking at stalled just before lockdown with the vendor withdrawing from their sale. I must admit, I was not expecting to have to make this decision and had assumed they would come back to us late this year / early next year being ready to go again. The surprise is that they have found something this fast and have an offer accepted. 

The place is in a decent location and needs no work, other than to change the decor to something more to our tastes. Its certainly not offensive or anything. They have also stated in advance that if we try and drop our bid (given the current climate) they will take it off the market.

With that in mind, we have said we are still good to go, knowing that its going to be at least a month before exchange is mentioned. In the meantime we are scouting about looking at other places that might be cheaper but need some work. One place that looks very probate has caught our eyes, it needs about 40k of work on it to bring it up to snuff but we might end up making a -20% offer on it and seeing what happens...

[moonriver]

Henry Pryor (negotiates on behalf of home buyers as a  job, appears on bbc as a "property expert") posted this on twitter today... sounds like a warning to sellers that he will now be negoating lower on behalf of his clients. (in line with the new reality of lower offers overall within housing now?)

"UPDATE… Things that don't count when working out what your home might be worth;

What it was worth at Christmas

What any forecaster/‘expert' suggests

What you might have accepted in March

What the estate agent hopes

What you’ve spent on it"

[neon tetra]

2 hours ago, Chunketh said:

Nervously considering this myself. My reasons are simple:

 

I want a place of my own, with my own choice of decor, with pets, hanging pictures wherever the hell I want and a garden.

I want a greater security of tenure.

I was foolish with cash in my younger years so was never in a position to buy. Yes i realise the irony of that given the topic, hence the nervousness. I dont want to undo all my good work in the last 6 years.

I don't have enough money in my pension pot to ensure my current standard of living in retirement if renting, if I buy it will be a lot more comfortable, with cash spare to continue to travel.

I hate the idea of paying for someone elses retirement.

 

This is a REALLY difficult decision (losing sleep) and I am still open to the idea of bailing on my current purchase and waiting 12-18 months to see what happens.

I am in the same situation. I have written the ‘bailing out from the deal’ email and am hovering over sending.

[Smiley George]

57 minutes ago, moonriver said:

Henry Pryor (negotiates on behalf of home buyers as a  job, appears on bbc as a "property expert") posted this on twitter today... sounds like a warning to sellers that he will now be negoating lower on behalf of his clients. (in line with the new reality of lower offers overall within housing now?)

"UPDATE… Things that don't count when working out what your home might be worth;

What it was worth at Christmas

What any forecaster/‘expert' suggests

What you might have accepted in March

What the estate agent hopes

What you’ve spent on it"

Excellent...someone get that on Mumsnet ASAP

[Warwick-Watcher]

7 hours ago, moonriver said:

Looks like this could be why so many are checking out Rightmove during the last week....likely "bargain" hunting!

Bear story in Telegraph today....if they want to sell, this seller could be looking at £90,000 loss already.

https://www.telegraph.co.uk/property/uk/buyer-demanding-20pc-house-price-cut-property-market-reopens/

'Our buyer is demanding a 20pc house price cut': the property market reopens with a price war

With prices forecast to fall by as much as 23pc, big discounts are being requested – and some are waiting to snap up bargains..."

This property in Camberwell was bought 18 months ago, "extensively" refurbished and is now on the market at over £500k more. That 6 foot side extension of the kitchen sure has made a difference in the asking price.

https://www.zoopla.co.uk/for-sale/details/54702947?search_identifier=42394e886516e38e6ba46b1c4c0b0de1

 

[crumblingcon]

THE LONG BIG WAIT!!

Is there anyone else now getting inpatient to find out the damage that's already happened to the housing market?

I have been fine for months now and just making the best of lockdown, but last few days I just want to know while at the same time knowing while the property market is still shut down things are getting even better/worse

Must be patient ? 

[Orb]

6 minutes ago, crumblingcon said:

THE LONG BIG WAIT!!

Is there anyone else now getting inpatient to find out the damage that's already happened to the housing market?

I have been fine for months now and just making the best of lockdown, but last few days I just want to know while at the same time knowing while the property market is still shut down things are getting even better/worse

Must be patient ? 

It was ten years ago the first flicker of a thought came to my mind: "I wouldn't mind a house of my own". So I looked at my savings, looked at house prices (huge shock), looked at historic house prices. I thought "what goes up must come down", so began waiting, and waiting, and waiting...

... one more year is nothing. I have the patience of a saint. I do believe our time is almost upon us, and there will be some significant nominal falls. Just be patient. 

[crumblingcon]

17 minutes ago, Orb said:

It was ten years ago the first flicker of a thought came to my mind: "I wouldn't mind a house of my own". So I looked at my savings, looked at house prices (huge shock), looked at historic house prices. I thought "what goes up must come down", so began waiting, and waiting, and waiting...

... one more year is nothing. I have the patience of a saint. I do believe our time is almost upon us, and there will be some significant nominal falls. Just be patient. 

I have been fine for several years now, not an ounce of concern. Worked on  my business, traveled  and got a triathlon obsession. But now I know Dads bought my Xmas present and it's in the loft, I am struggling not to peek a look now

[vik]

Just saw this on zoopla and remembered lots of discussion on the "prestigious" pan peninsula. It seems odd that there is such a large reduction in real terms and actual (£50k in 7 years) https://www.zoopla.co.uk/for-sale/details/54936201

[highcontrast]

Really not sure where this belongs, so i'll plonk it here:

Rightmove warns over first-time house buyers

https://www.marketwatch.com/story/rightmove-warns-over-first-time-house-buyers-2020-05-20

"...

The recovery in the English housing market could be slowed unless first-time buyers are offered mortgages with lower deposits in the wake of the coronavirus crisis, the UK's leading online property portal has warned

Rightmove PLC said Wednesday that a first-time buyers' deposit of 10% now averages 24,189 pounds ($29,387), jumping to GBP36,284 if a 15% deposit is needed.

At the start of the U.K.'s coronavirus crisis many lenders temporarily withdrew or capped high loan-to-value mortgages as it became difficult to carry out physical valuations. Moneyfacts Group, a financial-information company, warned that the number of mortgage deals available to choose from dropped from 5,222 before lockdown to just 2,566 at the start of May, with higher deposit deals bearing the brunt of the loss. Lenders have since begun to restore loan offers and loosen conditions as the lockdown eases.

"If lenders are able to offer more attractive lower deposit mortgages it would help sustain the recovery in activity," said Miles Shipside, Rightmove founder and housing market analyst. "If it can be done responsibly, with strict affordability criteria, then a return to more mortgage offers of 90% loan-to-value, or even 95%, could make a huge difference to someone having enough money now for a deposit or having to save up for another few years," he added"

Seriously Miles? Desperate pleading to keep the game carrying on...Miles mate...the game is up!

No mention that lower house prices would mean smaller deposits anyway? Unless I missed that bit? My eyes ain't what they used to be.

*******************************************

p.s. "The recovery in the English housing market could be slowed unless first-time buyers are offered mortgages with lower deposits in the wake of the coronavirus crisis, the UK's leading online property portal has warned"

The crash hasn't even properly started yet Miles old buddy! Mwuhahaha!

 

Edited May 20, 2020 by highcontrast

[NoHPCinTheUK]

Music has stopped, these people should start to realize it. 

[Warwick-Watcher]

36 minutes ago, highcontrast said:

Really not sure where this belongs, so i'll plonk it here:

Rightmove warns over first-time house buyers

https://www.marketwatch.com/story/rightmove-warns-over-first-time-house-buyers-2020-05-20

"...

The recovery in the English housing market could be slowed unless first-time buyers are offered mortgages with lower deposits in the wake of the coronavirus crisis, the UK's leading online property portal has warned

Rightmove PLC said Wednesday that a first-time buyers' deposit of 10% now averages 24,189 pounds ($29,387), jumping to GBP36,284 if a 15% deposit is needed.

At the start of the U.K.'s coronavirus crisis many lenders temporarily withdrew or capped high loan-to-value mortgages as it became difficult to carry out physical valuations. Moneyfacts Group, a financial-information company, warned that the number of mortgage deals available to choose from dropped from 5,222 before lockdown to just 2,566 at the start of May, with higher deposit deals bearing the brunt of the loss. Lenders have since begun to restore loan offers and loosen conditions as the lockdown eases.

"If lenders are able to offer more attractive lower deposit mortgages it would help sustain the recovery in activity," said Miles Shipside, Rightmove founder and housing market analyst. "If it can be done responsibly, with strict affordability criteria, then a return to more mortgage offers of 90% loan-to-value, or even 95%, could make a huge difference to someone having enough money now for a deposit or having to save up for another few years," he added"

Seriously Miles? Desperate pleading to keep the game carrying on...Miles mate...the game is up!

No mention that lower house prices would mean smaller deposits anyway? Unless I missed that bit? My eyes ain't what they used to be.

*******************************************

p.s. "The recovery in the English housing market could be slowed unless first-time buyers are offered mortgages with lower deposits in the wake of the coronavirus crisis, the UK's leading online property portal has warned"

The crash hasn't even properly started yet Miles old buddy! Mwuhahaha!

 

Oh for the days of Northern Rock lending 115% of the property value so you could buy stuff to fill it as well as the property itself.

Why not just nationalise houses and allocate them under a socialist plan - N family members = house with N+1 bedrooms. 

[crumblingcon]

16 hours ago, Ghostly said:

The recovery in the English housing market could be slowed unless first-time buyers are offered mortgages with lower deposits in the wake of the coronavirus crisis, the UK's leading online property portal has warned

Rightmove PLC said Wednesday that a first-time buyers' deposit of 10% now averages 24,189 pounds ($29,387), jumping to GBP36,284 if a 15% deposit is needed.

How many people look at themselves in the mirror on a regular basis and ask "Is it me that's gone mad".

Of course larger mortgages smaller deposits will be begged for and you could partially let that one go, but the next step is yet again propping up this market using taxpayers money. 

I cannot find a public loo that remains open within 50 miles, libraries closing, community & youth clubs vanishing, cut after cut in local services that could make so many more lives bearable. But ask for £Billions to prop up an over valued property market and just go down a fill your wheelbarrows.

We are at saturation point now, it is at last going to give, but I am going to bet that they will at least try to have one more go at spinning this one last plate.

[dpg50000]

22 minutes ago, crumblingcon said:

How many people look at themselves in the mirror on a regular basis and ask "Is it me that's gone mad".

Of course larger mortgages smaller deposits will be begged for and you could partially let that one go, but the next step is yet again propping up this market using taxpayers money. 

I cannot find a public loo that remains open within 50 miles, libraries closing, community & youth clubs vanishing, cut after cut in local services that could make so many more lives bearable. But ask for £Billions to prop up an over valued property market and just go down a fill your wheelbarrows.

We are at saturation point now, it is at last going to give, but I am going to bet that they will at least try to have one more go at spinning this one last plate.

 

This. I do a lot of walking, and it's beyond the pale how few public facilities there are for those caught short. As for the rest, yes, it's all about shoving people towards paid for privately provided services.

[crumblingcon]

18 hours ago, Neapolitan said:

Music has stopped, these people should start to realize it. 

They won't, nobody will, not until we get those first three or four monthly data reports from Nationwide or LR showing -2 to -4% monthly falls on the trot. I am also going to predict that in those early months we could get at least one big shocker that jolts the vested interests, so expect some serious panic/whingeing  where they will demand something is done to "help those poor FTB's" etc 

[captainb]

1 minute ago, crumblingcon said:

They won't, nobody will, not until we get those first three or four monthly data reports from Nationwide or LR showing -2 to -4% monthly falls on the trot. I am also going to predict that in those early months we could get at least one big shocker that jolts the vested interests, so expect some serious panic/whingeing  where they will demand something is done to "help those poor FTB's" etc 

Mortgage holiday about to be extended from 3 months to 6.

If it is logically you are looking at 2021 before there are any distressed sellers coming in. 

For people to sell before coming 'distressed' you would have to believe those monthly falls will continue not just go down for 6 months and come back next year. As if you believe the latter why sell now?

Now.. if your looking at Nine Elms 2 bed flats for £800k plus. I can see some real carnage this year. 

[Twenty Something]

Just logged into my Rightmove account. I've been keeping an eye on my area incase my purchase falls through and I need start again. The latest two properties I had saved from last week (added 13/05 and 15/05) have both now gone Sold STC. Of course I don't know what price was accepted, but the fact that they have gone within about a week of the market re-opening suggests that the demand is still very much there. No sign of any crash here.