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Guardian - 38% drop in housing transactions this year


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This is from the guardian and quotes Knight Frank. Of course, some will say this will result in a massive bounce due to pent up demand. They are right, pent up demand from people who want to sell houses - BTL landlords, Airbnb property owners, divorcees, probate sales, and the many unfortunate people who have worked hard to keep a roof over their heads, but lost their jobs and won’t get them back. On the demand side - firstly who in their right mind would buy a house when even the VIs are saying 10-20% drop in prices? Secondly the people who are coming into the bottom of the market are the hardest hit by the economic fallout of COVID. This market is completely toast:

 

Guardian article 38% drop in property transactions

Edited by HovelinHove
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My money is on a great deal of difficulty for sellers, I don't see how prices they had hoped for can possibly be achieved.

I can't see how buyers will find it easier to raise deposits for mortgages with there being every chance banks will raise the LTV rate. A price crash is high in my opinion..._

Edited by DiggerUK
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From the Guardian article:- "Miles Shipside, a director at Rightmove, said: “During this slow-motion period we do not expect significant price falls, as home sellers will not be prepared to cut their prices..."

Well Miles, these home sellers can certainly choose to pick a fight with Reality if they like, but Reality is one hell of a tenacious enemy.

 

Edited by Shrink Proof
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47 minutes ago, TheCountOfNowhere said:

"During this slow-motion period we do not expect significant price falls"

 

AND AFTER ?

Yes, due to reduced volumes we may see some nutty price rises, or huge falls...who knows, but afterwards, the carnage will begin. All the forced sellers will be queuing for the exit at the same time. there will be very few “forced buyers”, but at least 2-3 months worth of accumulated forced sellers by the time the lockdown ends, and there will be a lot. BTLers, AIRbnbers, probate, divorcees, people who’ve been laid off, old people wanting to move into old folks homes. Many of these will readily accept a 10-20% haircut to offload their houses. The banks know this which is why LTVs are going to be unaffordable to all but the cash holders...and the evil Blackstone.

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32 minutes ago, HovelinHove said:

Yes, due to reduced volumes we may see some nutty price rises, or huge falls...who knows, but afterwards, the carnage will begin. All the forced sellers will be queuing for the exit at the same time. there will be very few “forced buyers”, but at least 2-3 months worth of accumulated forced sellers by the time the lockdown ends, and there will be a lot. BTLers, AIRbnbers, probate, divorcees, people who’ve been laid off, old people wanting to move into old folks homes. Many of these will readily accept a 10-20% haircut to offload their houses. The banks know this which is why LTVs are going to be unaffordable to all but the cash holders...and the evil Blackstone.

The land owning tories have already thrown everything at this, was the very first thing they annouced ( Term funding ) IIRC.

They really dont want prices to fall.

It is gonig to get very very interesting now after a period of 8 years of ********.

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5 hours ago, HovelinHove said:

divorcees

I do not see how divorces are likely to reduce prices. Lock down is likely to trigger a spike in divorces, and more divorces mean more households. Yes, some divorces will lead to a property being put on the market, but every divorce turns on household into two so the increase in demand is greater than the increase in supply.

Edited by gp_
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29 minutes ago, gp_ said:

I do not see how divorces are likely to reduce prices. Lock down is likely to trigger a spike in divorces, and more divorces mean more households. Yes, some divorces will lead to a property being put on the market, but every divorce turns on household into two so the increase in demand is greater than the increase in supply.

2 divorced people have to sell up quickly, no buyers, any equity split, cant afford to buy anything, go into, rental an HMO, back home, move in with the bint they were ****ing on the side etc.

Over all, mass of divorces = lower prices

The couples I know in the UK have said the lockdown is actually bringing them closer together !!!

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45 minutes ago, TheCountOfNowhere said:

The couples I know in the UK have said the lockdown is actually bringing them closer together !!!

I assume these are childless couples?

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4 hours ago, Shrink Proof said:

From the Guardian article:- "Miles Shipside, a director at Rightmove, said: “During this slow-motion period we do not expect significant price falls, as home sellers will not be prepared to cut their prices..."

I know the sort of slow motion bit he means.......just like in car accidents where you know you are about to have impact and there's sod all you can do about it...time really does slow down!

 

 

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Knight Frank again, begging like skanky ho's for their beloved market to be continued to be propped up:

https://www.knightfrank.co.uk/research/article/2020-04-20-urgent-government-stimulus-required-to-reignite-housing-market

"Urgent government stimulus required to reignite housing market
The UK government’s response to the Covid-19 pandemic has utterly transformed the current economic and housing market landscape. Given the predicted economic contraction we forecast that the number of home sales in 2020 will decline by 526,000, a fall of 38% on 2019 transaction levels."

 

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On 20/04/2020 at 13:28, gp_ said:

I do not see how divorces are likely to reduce prices. Lock down is likely to trigger a spike in divorces, and more divorces mean more households. Yes, some divorces will lead to a property being put on the market, but every divorce turns on household into two so the increase in demand is greater than the increase in supply.

Unless they both kept their old singleton flats and rented them out, and the tenants have gone to EE/Mum/Cheaper Rent whatever, that is just more downward pressure IMO.

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A market freeze up is more normal. 

Banks would go bust if prices fell ( in America,  then contagion here)

So they just rent them out and wait, generally. 

Let's hope they do fall this time, but the establishment will not want that...

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On 20/04/2020 at 13:28, gp_ said:

I do not see how divorces are likely to reduce prices. Lock down is likely to trigger a spike in divorces, and more divorces mean more households. Yes, some divorces will lead to a property being put on the market, but every divorce turns on household into two so the increase in demand is greater than the increase in supply.

The number of divorced couples who can afford two detached family houses not huge. The first challenge will be can they keep the house for whoever is looking after the kids. But more likely it creates demand for one 3 bed semi and one flat. But supply of one detached family house. Scale to fit if the couple were in a cheaper place to start.

This is one way of looking at how different parts of the market will respond differently. The £2500 cap will hurt those on higher salaries more than those on average salaries, those either self employed or ltd companies who were fudging their tax will be hit more, if the local economy relied on bars, restaurants and travel it will be worse.

So former air BnBs in Edinburgh, student rentals (fewer international students will mean the city blocks need to discount to get UK students who often live in terraces or tenements) Cornwall/Wales/Lakes/Highlands? A suburb populated by pensioners, NHS and Civil Service staff might not drop as much though. 

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1 hour ago, 24gray24 said:

A market freeze up is more normal. 

Banks would go bust if prices fell ( in America,  then contagion here)

So they just rent them out and wait, generally. 

Let's hope they do fall this time, but the establishment will not want that...

A proper citizens income may be the only solution.  Just print money and give everyone an income every month, so they can pay mortgages and continue to take out new ones.

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The government has no money. So where do you think they're going to get the money for your citizens income from? 

You;  plus double for graft/ bureaucracy. 

It's one of those slogans from the old communists, who were always trying to bankrupt the country with encouragement  from Russia.  They thought they were bringing in a socialist paradise by Giving money to themselves till the country went bust. The actual result was we got thatcher. 

So, no thanks to the citizens income. It's just a skivers charter designed to bankrupt the country.  I'd rather stand on my own 2 feet. 

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58 minutes ago, 24gray24 said:

The government has no money. So where do you think they're going to get the money for your citizens income from? 

You;  plus double for graft/ bureaucracy. 

It's one of those slogans from the old communists, who were always trying to bankrupt the country with encouragement  from Russia.  They thought they were bringing in a socialist paradise by Giving money to themselves till the country went bust. The actual result was we got thatcher. 

So, no thanks to the citizens income. It's just a skivers charter designed to bankrupt the country.  I'd rather stand on my own 2 feet. 

And indeed the DWRC (Democracy Wrecking Remain Crew) tried so hard to tie the country up in legal and parliamentary knots, that they got Boris. I quite like him personally, but the irony of their hard fought battles in every painful aspect of our lives, and then they got Boris, was an absolute delight.

Useful idiots in both yours and my examples, that were actually useless idiots in the end.

I agree with your disdain for the Skiver's Charter. The ability to stand on your own two feet is something that should be encouraged, and any Citizen's Income will just result in zombie companies, zombie households, and then a zombie government. Of course if they split out the population into citizens (the doers) and civilians (the skivers), I might warm to the idea. An unexpected bonus in appreciation for hard work is always nice.

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18 hours ago, highcontrast said:

Knight Frank again, begging like skanky ho's for their beloved market to be continued to be propped up:

https://www.knightfrank.co.uk/research/article/2020-04-20-urgent-government-stimulus-required-to-reignite-housing-market

"Urgent government stimulus required to reignite housing market
The UK government’s response to the Covid-19 pandemic has utterly transformed the current economic and housing market landscape. Given the predicted economic contraction we forecast that the number of home sales in 2020 will decline by 526,000, a fall of 38% on 2019 transaction levels."

 

Im not sure what this situation has to do with Knight Frank. Surely they facilitate the sale of houses. What they mean is "please enable us to continue selling at inflated prices" for some reason - a reason that I cannot fathom. Surely selling is selling, at whatever price.

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22 minutes ago, Trump Invective said:

Im not sure what this situation has to do with Knight Frank. Surely they facilitate the sale of houses. What they mean is "please enable us to continue selling at inflated prices" for some reason - a reason that I cannot fathom. Surely selling is selling, at whatever price.

They think that 0 x 1% x £300k is greater than 1 x 1% x £100k. They're used house salesmen, arithmetic (and many other qualities) is lacking.

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From the Knight Frank pleading:

 

"This decrease in activity will be multiplied across the economy. We estimate that there will be a loss of £7.9bn in DIY and renovation spend and £395 million on removals companies. These are just two items and there will be a wider economic impact, including the loss of employment and general mobility. This drop in economic activity will have a huge impact on the exchequer with the loss of £4.4bn in stamp duty accompanied by a decline of at least £1.6bn in VAT and significant declines in personal and business tax revenue. "

I thought these guys were anti stamp duy?

 

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1 hour ago, Ghostly said:

Because we don't have any of those? ?

I've wondered for a while how people would react to voting rights only for net tax payers (I probably wouldn't be one).

Ah, yes, I see what I did. Wasn't clear dear chap, obviously we do indeed have zombie households and companies and have done for years. I meant we would then have a zombie government as well as those two. It could be argued that we, and many countries, have been zombiefied for quite a while, but something like this feels like it would just tip us over the edge.

I thought it quite amusing to consider citizens as the only ones able to vote (Starship Troopers needs rewatching), and yes that would probably have something to do with being a net taxpayer. That wouldn't be a good deal for democracy itself, as Labour would get absolutely no votes at all (fundamentally a good thing), but that would leave the Conservatives with absolute power and I'm not sure that would be a good thing either.

A party of the working (actual working) class would be useful I think to break this little quandry.

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  • 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%



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