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Do you genuinely believe we will see a HPC now ?


Do you genuinely believe we will see a HPC now ?  

158 members have voted

  1. 1. Do you genuinely believe we will see a HPC now ?

    • Yes
      109
    • No
      49


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4 hours ago, simon2 said:

 

But I do think a new low may disappoint people looking for bargains, the crappier properties I reckon will be around 20-30% off, the nicer ones 10%, which only really rewinds a bit. After that, some stupid scheme will kick in to provide a landing.

 

 Yep. If you want a recent new build rabbit hutch leasehold flat or similar then yes you’ll get your 30%+. If you actually want (and lucky enough to afford) that dream home in the leafy subs by the nice outstanding state school, then sorry, but 10% max! And don’t blink or you’ll miss your chance. I want the latter and with cash in bank im primed and ready but I also know anything more than 10% and I’ll be crushed in the rush for these houses. I need to buy and don’t want to miss out so guess I’ll buy the first bargain we love. 

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5 hours ago, Sour Mash said:

 

I seem to recall everyone being sure that you could never reflate a bubble once it burst, yet after an initial sharp 20% yoy fall, the housing market was rising again about a year later.

You'd have been hard pressed to lose money on buying a house at almost any point in the last two and a half decades. 

 

"I seem to recall everyone being sure that you could never reflate a bubble once it burst"

I think the fault lies with the choice of analogy or metaphor.

I'd say a better analogy is that of a patient. In the run up to 07-08, the patient was leading a very unhealthy lifestyle then experienced a health crisis. The patient didn't die (bubble bursting), he/she went into intensive care (emergency rates, cheap BoE money, etc) and stayed there till the current time. The "improvement" was drug-assisted.

So, this sick patient, sustained with various interventions, now faces another huge health issue, in this case one that is literally and metaphorically a disease. 

So, you're right: the bubble didn't burst in 07 but - switching to this alternative analogy - the patient got sick, never truly got better and is now in an awful lot of trouble in 2020 with much worse expected to come.

[Re-reading that, I do feel the need to say: honestly, I am fun at parties!]

 

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9 hours ago, Trump Invective said:

Come on folks, it's happening, at least for a year. It's very early days. Let's be patient, keep out of the market, and remain vigilant/alert (do nothing and watch the car crash) for a few weeks to see how things play out.

About time that it's our turn to be vigilant,  after all.

I think this is the right spirit. 

The one and only real estate agent I get a feed from sent me a newsletter this morning stating " We are all happy to be liberated to view property again. Prices are at pre-lockdown levels

Cue snort of derision from me. Do I look that stupid ? 

We need to be patient here. It will take 12 months until we have a complete picture of where house pricing is. Nobody is going to knock 30% off the selling price right now . And plenty of vendors- at this moment- will be insulted if that is the discounted offer made. 

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6 hours ago, Voice of Doom said:

"I seem to recall everyone being sure that you could never reflate a bubble once it burst"

I think the fault lies with the choice of analogy or metaphor.

I'd say a better analogy is that of a patient. In the run up to 07-08, the patient was leading a very unhealthy lifestyle then experienced a health crisis. The patient didn't die (bubble bursting), he/she went into intensive care (emergency rates, cheap BoE money, etc) and stayed there till the current time. The "improvement" was drug-assisted.

So, this sick patient, sustained with various interventions, now faces another huge health issue, in this case one that is literally and metaphorically a disease. 

So, you're right: the bubble didn't burst in 07 but - switching to this alternative analogy - the patient got sick, never truly got better and is now in an awful lot of trouble in 2020 with much worse expected to come.

[Re-reading that, I do feel the need to say: honestly, I am fun at parties!]

 

I think this hits the nail on the head. We didn’t see a proper crash in 2008 because of all the crazy measures we took. Heading into 2008 interest rates were nudging 6%. this had been the norm for years, in fact historically it was quite low. Then our obese, gout ridden economy had a heart attack, was rushed into ICU, revived and put on drugs etc. Since then rates have been close to zero. Debt exploded, both public and private and this stopped a 30-40% crash at the time, but stored up problems for later as the patient wasn’t forced to change his lifestyle. Instead he kept on cramming in the doughnuts and fish and chips.

This time there will not be massive cuts in rates. This time unemployment is going to explode. This time everyone is talking about a crash. This time the government has to spend money on the real economy. The housing market will lose 20-30% over the next 12 months.

However, Johnson has shown his hand and he might as well be Corbyn. He is going to spray money all over the place. He is not fiscally conservative...in fact he’s not really conservative at all, just a Brexiteer. This will probably lead to a sterling crisis In 2-3 years time, Followed by an outbreak of serious inflation, followed by a possible threat of sovereign default when we go begging to the IMF (if they have any money left). At that point prices could go up 100% and a house could be worth the same as a bunch of bananas.

Edited by HovelinHove
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1 hour ago, Society of fools said:

I think this is the right spirit. 

The one and only real estate agent I get a feed from sent me a newsletter this morning stating " We are all happy to be liberated to view property again. Prices are at pre-lockdown levels

Cue snort of derision from me. Do I look that stupid ? 

We need to be patient here. It will take 12 months until we have a complete picture of where house pricing is. Nobody is going to knock 30% off the selling price right now . And plenty of vendors- at this moment- will be insulted if that is the discounted offer made. 

Yes, this is the attitude to take. It will be easy to panic and see a house we like that is discounted by 15% and jump at it. I am holding off until at least January, when I feel the real pain will begin.

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7 hours ago, dirtysteve said:

 Yep. If you want a recent new build rabbit hutch leasehold flat or similar then yes you’ll get your 30%+. If you actually want (and lucky enough to afford) that dream home in the leafy subs by the nice outstanding state school, then sorry, but 10% max! And don’t blink or you’ll miss your chance. I want the latter and with cash in bank im primed and ready but I also know anything more than 10% and I’ll be crushed in the rush for these houses. I need to buy and don’t want to miss out so guess I’ll buy the first bargain we love. 

I think you really need to get your head around what is about to happen. I lived through the 90s crash which hit the South East really hard. I saw my parents 4 bed nice house in a leafy Sussex village, 10 min walk from a station and schools etc go from a valuation of 180k to 115k in the space of 18 months. Prices stayed there for 4 years. The market had been in a mania since the mid 80s more than doubling in that area, then pop, 35%. There wasn’t even really a recession in the South East during that period, barely noticed it. This will be worse, and here’s why.

We are about to see the biggest increase in unemployment in history, overnight, millions. Possibly 25-30% of the hospitality, retail and travel industry will be laid off in the next 3 months. Of course, most of those don’t buy nice leafy houses in the suburbs, but the estate agents that let rooms to them do, the solicitors, accountants and so on who do services for these businesses do. Then there is the issue of all these people not spending money, and the knock on that has. 

Like you I am cash in the bank and primed ready to go, but I am already marking houses in Rightmove that are in nice areas that are currently 30-40% above my cash range and I am going to watch and wait...see those who start advertising through multiple agents, dropping their prices every other week, or say those beautiful words VACANT POSSESSION. They will be there, and cash buyers will be king. You (and I) will still get 30% of the nice homes.

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I think if / when a second wave of covid 19 sweeps through no matter how mild this is really going to impact the economy and jobs and full lockdown may be reinstated. This is going to really stoke the HPC fire and tumbling prices will follow. If prices don't tumble its time to go live in a cave somewhere.

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1 hour ago, HovelinHove said:

I think you really need to get your head around what is about to happen. I lived through the 90s crash which hit the South East really hard. I saw my parents 4 bed nice house in a leafy Sussex village, 10 min walk from a station and schools etc go from a valuation of 180k to 115k in the space of 18 months. Prices stayed there for 4 years. The market had been in a mania since the mid 80s more than doubling in that area, then pop, 35%. There wasn’t even really a recession in the South East during that period, barely noticed it. 

Totally agree with this - if you haven’t lived through a crash it’s hard to get your head round how completely herd mentality changes . Most people get their views from headlines and if the headlines are all about prices falling and negative equity even nice houses will collapse in value. This is not a buy the dip market imo.


i bought my first house coming out of the crash of early nineties in the east end. I remember chatting to the agent about the houses on tredegar Square ( which are completely gorgeous and were way out of my league btw) - he said those are unsellable - nobody wants a big house because of the risk you’re taking on if the market continues to go down and the cost of running it etc. Look on houseprices.io and they were selling for 255k then and one sold for 3.9m recently. It’s just most peoples mindset gets really cautious when it’s really bad. 
 

people that buy after a 10% drop with a big mortgage will be the ones who are hurt most by this. Even if there’s a rebound in 3-4 years they’ll still be in negative equity when it comes to refinance . 

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In that time, house prices peaked in 88.... the decline was massive, going from average of £150,000 to £100,000 over a few years.

No doubt that some unfashionable places halved in value, or simply could not sell at all.

But over the same period interest rates went from 7.38% (May, 1988) to 14.88% (October, 1989).

I don't think there will be much change in mentality. House prices run on a huge lag: at first peoples circumstances barely change and they think it'll be over soon. Then we get the 'I'm not giving it away' bit and houses sit on the market for ages. Then we get the realisation, race to the exit, forced sellers and a few years of stagnation.

We're at the start of it, that is for sure. We were at the start pre-covid IMO, the virus has just sped things up a little. But it will still take time to play out. With no government intervention things are going down, the question is how far.

I just feel interest rates acts as the amplifier (or dampener). If rates went to 20% in 1989, the scale of falls would have been much harder. If interest rates went unchanged, it would have been shallower. 

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I voted "no".

For a while I had been optmistic about a crash but then I started analysing what was actually going on around me and I concluded it probably won't happen.

I think maybe they will fall a bit in real terms, but will stay flat in actual terms.

Family and friends seem to be doing perfectly well at the moment, thanks.

A school teacher friend is at home on full pay, finishes her work in 3 hours a day and is now making a lot more money out of private tuition.

Friends that work at B&Q are busier than ever.

I have a colleague in a shared house who shares with 3 others.  They are all working from home and sunbathing a lot - loving it and becoming much better friends.

A family member that has made several million out of buy to let and has virtually no mortgages tells me he is also wanting a crash so he can pile in.

A neighbour who works for a hedge fund says they are making fortunes on volatility.

A friend who is a prison officer is on his usual money but his landlord actually cancelled a rent increase for him due to COVID!

A 29 year old mate with his own online business is doing better than usual.  He bought a flat to let in December.  I asked him if he regretted it now.  He laughed.  He gets £1100pcm rent and the mortgage is fixed at £250pcm for 5 years.  He plans on having it forever.

So then I look at the letter I got from Santander telling me that the savings rate on my account is changing to 0.01%!  Suddenly property looks damn good.

The govt won't want a big housing market crash.  I heard the briefing the other day where they emphasised the importance of the housing market.  All they have to do is tweak stamp duty down slightly and off it will go again.  I am not holding my breath.

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3 hours ago, HovelinHove said:

I think you really need to get your head around what is about to happen. I lived through the 90s crash which hit the South East really hard. I saw my parents 4 bed nice house in a leafy Sussex village, 10 min walk from a station and schools etc go from a valuation of 180k to 115k in the space of 18 months. Prices stayed there for 4 years. The market had been in a mania since the mid 80s more than doubling in that area, then pop, 35%. There wasn’t even really a recession in the South East during that period, barely noticed it. This will be worse, and here’s why.

We are about to see the biggest increase in unemployment in history, overnight, millions. Possibly 25-30% of the hospitality, retail and travel industry will be laid off in the next 3 months. Of course, most of those don’t buy nice leafy houses in the suburbs, but the estate agents that let rooms to them do, the solicitors, accountants and so on who do services for these businesses do. Then there is the issue of all these people not spending money, and the knock on that has. 

Like you I am cash in the bank and primed ready to go, but I am already marking houses in Rightmove that are in nice areas that are currently 30-40% above my cash range and I am going to watch and wait...see those who start advertising through multiple agents, dropping their prices every other week, or say those beautiful words VACANT POSSESSION. They will be there, and cash buyers will be king. You (and I) will still get 30% of the nice homes.

Let’s hope you’re right. I’d be happy to wait and see but I have a less patient wife lol. Trying to decide where to keep/invest my deposit whilst we wait is my other big stress right now but that’s a whole different topic. 

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2 hours ago, Patfig said:

I think if / when a second wave of covid 19 sweeps through no matter how mild this is really going to impact the economy and jobs and full lockdown may be reinstated. This is going to really stoke the HPC fire and tumbling prices will follow. If prices don't tumble its time to go live in a cave somewhere.

Agree. Any reverse back into tighter lockdown and it's going to be game over.

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I was going to start a new thread with this article, but I suppose it's more of the same thing and and there are a couple of threads already that I can slip this one in, yet more evidence from the type of people who we need to be fearful, concerned, sneaky and manipulative. Yet another article in the Daily Telegraph trying it's best to work on peoples greed over peoples lives

https://www.telegraph.co.uk/politics/2020/05/15/finally-dawning-nation-lockdown-will-make-poorer/

Seriously, I am personally in two minds over lockdown, I can see two sides to the story, but make no mistake when the Daily Telegraph rubbishes lockdown it is done in a self serving way masked by "their concern for hard working people with money and assets", they don't give a s*** about peoples lives and if it was factual that far more lives could be saved through lockdown they would still try their hardest to lift it.

I am honestly loving the articles coming out of the newspaper in the last few months, they are the type of people mirroring the type of people at the top  that have created such an unequal heavily in debt nation, if they scowl  I smile. In the past decade I have witnessed these people using the fear of falling house prices as weapon so often, from by elections, Brexit, government policies, it's always the same trick.

They just seem to be getting frustrated now and these articles are becoming more and more unbelievable and are just not working

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The poll is roughly 75% of the opinion that a house price crash is now on, so am I right in thinking that this website is probably now being frequented  by about 15-20% trolls? ?  

The remaining being genuine believers that a crash is not on

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This thread is a bit too uk focussed. 

We're heading into a global recession, and what happens to interest rates and bank lending could be heavily influenced by events abroad. 

Eg if interest rates and/or bank solvency issues crop up in usa then we will follow their lead. Our interest rates could go up and banklending go down whatever the UK govt wants.

I'm not sure there's any country left who can bail everyone out this time, as China did last time in 2008. So I'm thinking it could be full blown retail apocalypse globally, or something equally grim.   House prices  could be swept away as collateral damage (literally). 

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Crash - IBIWISI - I'll believe it when I see it.  Humour aside the rate of unemployment is the hidden sauce here no matter what anyone says.  I have to say though that over the last week I have seen 2 properties listed in an area I'm interested in advertised at almost 10% -15% down from what properties in the area has sold for in the recent past (3 to 6 months ago) - I actually thought the price listing was a mistake or a click bait whereupon by the time you do a viewing and have funds to make an offer the estate agent would then turnaround and tell you that the property is oversubscribed and the price last offered (or being considered by vendor) is 10% -15% up from what's listed. I have also seen (in the same week and same area) a handful of properties come on that are listed with prices that align with the recent past so these 2 stick out as such an anomaly.

Above is just my account of things.  At this time no clue where my job will be by 3rd or 4th quarter and beyond anyway summary is:

I don't know what to expect as too many govt interventions have happened that I know nothing so IBIWISI but not expecting a house price crash (yes I know that as I have seen those 2 properties I mention I should feel the tide may be turning lol well just shows I don't know what to believe till the trend is stark blind mainstream)

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Also no one has some crystal ball that predicts the next outcome 100% regarding the virus and effect over the next 12 - 18 months (or beyond) on the economy - hang on stay with me for a moment:

  1. What if as the economy opens we do not get a 2nd spike or 3rd spike or N spike and the govt (nations etc) find a way to manage the situation if it does happen without needing a 2nd lock down?
  2. What if the current hit to industries and economies - bad as they are - become manageable and by 4th quarter and beyond the world (UK, Europe etc  etc) begin to learn how to live with the virus and that we have to manage this new reality by having the economy function as best it can irrespective (we accept its here to stay and learn to live with it)?
  3. What if over time as we start learning how to live with this virus (i.e this new normal) businesses, industries etc will start to recover in a 'new normal'  i.e. okay travel may never be the same in terms of numbers but people can still travel, go on holidays again not same number but work kicks back in full throttle (reduced staff maybe), other industries, services spring up to mop up some of the unemployed or people retrain and become productive elsewhere (oh by the way that fruit picking job we shun - ain't so bad to do anyway as necessity is the mother of invention etc etc) yes work from home is mainstream and / or if you can go to work with business providing a safe rotation formula or way for us to be productive in this new normal then we go to work etc?
  4. What if points 1 - 3 replicates across the world - yes there will be a contraction of course (the 2008 final crash happened and another will happen and another etc and the world is still ticking along) but in this new normal - maybe it it is one we have to get used to and things will go on in this new normal however we establish it
  5. What if???

 

FYI - I'm not even mentioning a vaccine or cure here as that muddies the waters. Just plain we have to live with this until forever and if a vaccine or cure comes fantastic (OR if the virus subsides over time) but until then a new normal has to happen

Edited by magneticworld
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5 hours ago, 24gray24 said:

This thread is a bit too uk focussed. 

 

I think we should worry about ourselves. Don't let the politicians get away with blaming everything on 'global crisis'.It nearly worked for Brown.

 

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16 minutes ago, magneticworld said:

What if as the economy opens we do not get a 2nd spike or 3rd spike or N spike and the govt (nations etc) find a way to manage the situation if it does happen without needing a 2nd lock down?

I think if we start having more spikes then we will very soon develop a "we will just have to live with it and all the consequences" attitude. The UK or any country for that matter can only shut it's economy down for so long

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6 minutes ago, Bruce Banner said:

I think that the recession caused by Covid 19 is likely to cause an HPC. If we get a no deal Brexit on top of that I'd say it's a certainty.

What is an HPC? 40% drop over a year?

I suspect the combination, yes. On its own I'm not sure covid19 would do it, but in combination it's too much for the govt to handle.

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1 hour ago, magneticworld said:

Also no one has some crystal ball that predicts the next outcome 100% regarding the virus and effect over the next 12 - 18 months (or beyond) on the economy - hang on stay with me for a moment:

  1. What if as the economy opens we do not get a 2nd spike or 3rd spike or N spike and the govt (nations etc) find a way to manage the situation if it does happen without needing a 2nd lock down?
  2. What if the current hit to industries and economies - bad as they are - become manageable and by 4th quarter and beyond the world (UK, Europe etc  etc) begin to learn how to live with the virus and that we have to manage this new reality by having the economy function as best it can irrespective (we accept its here to stay and learn to live with it)?
  3. What if over time as we start learning how to live with this virus (i.e this new normal) businesses, industries etc will start to recover in a 'new normal'  i.e. okay travel may never be the same in terms of numbers but people can still travel, go on holidays again not same number but work kicks back in full throttle (reduced staff maybe), other industries, services spring up to mop up some of the unemployed or people retrain and become productive elsewhere (oh by the way that fruit picking job we shun - ain't so bad to do anyway as necessity is the mother of invention etc etc) yes work from home is mainstream and / or if you can go to work with business providing a safe rotation formula or way for us to be productive in this new normal then we go to work etc?
  4. What if points 1 - 3 replicates across the world - yes there will be a contraction of course (the 2008 final crash happened and another will happen and another etc and the world is still ticking along) but in this new normal - maybe it it is one we have to get used to and things will go on in this new normal however we establish it
  5. What if???

 

FYI - I'm not even mentioning a vaccine or cure here as that muddies the waters. Just plain we have to live with this until forever and if a vaccine or cure comes fantastic (OR if the virus subsides over time) but until then a new normal has to happen

It doesn’t matter if all those things come true, the damage is done buddy. 2 quarters of GDP falling off a cliff is enough to nuke our debt ridden economy for a decade. Keep taking the happy pills though.

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2 hours ago, Warlord said:

I think we should worry about ourselves. Don't let the politicians get away with blaming everything on 'global crisis'.It nearly worked for Brown.

 

They've already spent the money. It's gone to their chums in finance, landlords, construction etc.

Now we have to spend 10 years in a global recession with no government money to spare. 

I fear it will be the worst recession of our lifetimes...

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2 minutes ago, 24gray24 said:

They've already spent the money. It's gone to their chums in finance, landlords, construction etc.

Now we have to spend 10 years in a global recession with no government money to spare. 

I fear it will be the worst recession of our lifetimes...

 

1 hour ago, HovelinHove said:

It doesn’t matter if all those things come true, the damage is done buddy. 2 quarters of GDP falling off a cliff is enough to nuke our debt ridden economy for a decade. Keep taking the happy pills though.

Agree with both. We're in terrible shape as a country if you look at the public finances we can't weather a recession never mind what is likely to be a big one with collapsing GDP,.  You would think the politicians would learn the lesson and do the right thing during the ''good; times and give ourselves a rainy day fund but they absolutely refuse to do what it takes i.e cut government spending and stop running a huge deficit.  The tories had 10 years to do this and failed.  Labour wouldn't  have done  any better.  It's a collective failure of leadership and stunning hubris.

 

 

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  • 429 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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