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Rightmove HPI July 2020 - estate agents already celebrating


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July's Rightmove price index and report is published at midnight (Monday 20th July). I've already seen a number of tweets from VIs trailing the fact that it is 'good news' for the property market. It is perhaps unsurprising if it shows a significant uptick in asking prices:

-all that underlying pent up demand, and a corresponding lack of supply.

-the recent Stamp duty changes. These are simply leading to sellers attempting to charge even more, and buyers not actually benefiting from this despite what the government and MSM would like you to believe.

Clearly the property industry are going to attempt to make significant capital from this news. The question is will the MSM follow, and how will wider public sentiment be affected? I have been some what disheartened by comments from work colleagues since the recent SDLT revisions telling me what a great time it is for me to buy and that I have to act before March 31st 2021. These are pretty switched on people and are aghast when I tell them that I am now probably worse off then before these announcements... 

The fact that we are in and entering the worst worldwide economic downturn seems to not yet have resonated with a lot of my peers (I guess if you are not furloughed, or worse sadly, then not so much has tangibly changed yet - it is happening to 'other' people). Maybe the housing market is impervious to this, but I can't help thinking this is the calm (or estate agent / VI pumped golden period) before the ultimate shitstorm.  

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We going to see significant problems by the end of the year. What no one seems to be highlighting much in msm is the coming crisis in the backlog of non-covid NHS patients compounded by a 2nd covid spike and the usual winter pressure. 

Add into the mix the winding down of furlough and the subsequent wave of unemployment...and my prediction is an absolute bloodbath. M

This is nothing but a false dawn of misplaced optimism... These people don't even realise what's coming. 

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24 minutes ago, Julie Clot said:

Eye of the hurricane!!! But you never know with this government.  Maybe they have manipulated the housing market like the stock market.  Can't trust anyone anymore!!

Stockmarket still down 20% you melt.

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The thing is the last recession, the global financial crisis, the worst crisis in 80 years was really bad. House prices went down a bit and people were forced to think about cancelling their gym memberships.

This time we're in for the worst recession in 300 years. Dire predictions abound. It's looking like house prices may go down a bit (again) and this time aroung gym memberships may actually have to be cancelled. But not to worry everything will be fine in a few months.

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I won't be buying until after Christmas... That's when we'll know the full extent of the damage ... No use expecting a drop in house prices now when everyone is sitting at home getting fat on furlough ... when the jobs go and dads at back of DOLE queue, that's when house prices will adjust to reflect the economy... and i'm not encouraged by the stamp duty cut as most first time buyers buy a property under 200k so would pay minimal stamp duty... and with banks wanting 25%, that windfall won't make up the remaining deposit... ho hum

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1 hour ago, MarkD said:

The thing is the last recession, the global financial crisis, the worst crisis in 80 years was really bad. House prices went down a bit and people were forced to think about cancelling their gym memberships.

This time we're in for the worst recession in 300 years. Dire predictions abound. It's looking like house prices may go down a bit (again) and this time aroung gym memberships may actually have to be cancelled. But not to worry everything will be fine in a few months.

I keep hearing this, this is the worst recession for 300 years? On what basis? How is that comparison being made.

Surely, this cannot compare to, ww1,2 and spanish flu, chucked in the mix.

 

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1 hour ago, Julie Clot said:

You do know the FED is pumping trillions into it to prop it up? That's manipulation in my book.

Durrrr yeah I did know

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1 hour ago, Julie Clot said:

I won't be buying until after Christmas... That's when we'll know the full extent of the damage ... No use expecting a drop in house prices now when everyone is sitting at home getting fat on furlough ... when the jobs go and dads at back of DOLE queue, that's when house prices will adjust to reflect the economy... and i'm not encouraged by the stamp duty cut as most first time buyers buy a property under 200k so would pay minimal stamp duty... and with banks wanting 25%, that windfall won't make up the remaining deposit... ho hum

We may not even have  clear picture by then.

Outside from line NHS workers there are also going to be large scale public sector job cuts which will take longer to feed through - the private sector job losses will come sooner. Some of the bailout schemes like 100% business rates relief for retail, leisure and hospitality businesses carry on until next April. Only when the bailouts end will we see the true reality of the new normal.

Its not so much a case of when prices do come down if they do - and its not going to be a uniform impact across the UK - but whether you have a secure job to get a mortgage. Even if you think your own job is safe if jobs are going at your firm or public sector body you will have to declare your job is theoretically at risk to potential mortgage lenders which may make it harder to secure a mortgage.

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38 minutes ago, Speed1987 said:

I keep hearing this, this is the worst recession for 300 years? On what basis? How is that comparison being made.

Surely, this cannot compare to, ww1,2 and spanish flu, chucked in the mix.

 

Recessions are loss of GDP for 2 quarters in a row. Q2 alone will make it the worst recession in 300 years given that Q3 will also be lower than last year. The long term impact if that recession is the big question. It all depends on how much of the economy that was put in “deep freeze” comes back to life, and how much is lost or “scarring” as they call it. I think in the UK things will be very bad since so many people are happy working from home, so not spending money during the day so much, and not booking foreign holidays etc. 

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1 hour ago, Julie Clot said:

I won't be buying until after Christmas... That's when we'll know the full extent of the damage ... No use expecting a drop in house prices now when everyone is sitting at home getting fat on furlough ... when the jobs go and dads at back of DOLE queue, that's when house prices will adjust to reflect the economy... and i'm not encouraged by the stamp duty cut as most first time buyers buy a property under 200k so would pay minimal stamp duty... and with banks wanting 25%, that windfall won't make up the remaining deposit... ho hum

I think its best to wait till February when it will become too late for the stamp duty holiday (although it will probably be extended). Any seller left without a buyer will be very lonely. I think by then we will start to see the double digit YoY falls, and panic will set in. Even if Sunak extends the holiday, as I believe he will, it won’t matter as all the demand has been bought forward to now...hence the current jump in activity and prices.

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38 minutes ago, Speed1987 said:

I keep hearing this, this is the worst recession for 300 years? On what basis? How is that comparison being made.

Surely, this cannot compare to, ww1,2 and spanish flu, chucked in the mix.

 

Total_economic_output_in_England_since_1

GDP is a blunt tool that doesn't care whether it's tanks and ammo or cars and house furnishings being made, just the material value of products and services sold. It also doesn't take into consideration destruction of we already own, like in the Blitz. If in the wartime GDP dropped less than 20% like it did this year then life in the UK was, according to this way of measuring things, better in 1940 than in 2020.

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39 minutes ago, Speed1987 said:

I keep hearing this, this is the worst recession for 300 years? On what basis? How is that comparison being made.

Surely, this cannot compare to, ww1,2 and spanish flu, chucked in the mix.

 

Recessions are measured by drops in GDP. 

The UK is forecast to see a GDP drop this year which is equivalent to if not exceed that of the Great Frost of 1709 when year on year GDP fell by 13%. It was the coldest recorded winter for 500 years.

https://www.washingtonpost.com/world/2020/06/11/amid-pandemics-protests-is-britain-facing-its-worst-economy-since-great-frost-1709/

1709 was 311 years ago - 67 years before the US declaration of independence and 36 years before Bonnie Prince Charlie arrived in Scotland.

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44 minutes ago, Speed1987 said:

I keep hearing this, this is the worst recession for 300 years? On what basis? How is that comparison being made.

Surely, this cannot compare to, ww1,2 and spanish flu, chucked in the mix.

 

No not really IMO, but average Joe wasn`t a debt machine back then though, with debt payments to about a dozen companies just to get through the day, if average Joe goes pop now then a lot of the "economy" goes with him/her.

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So people are arguing that in the 1940s people didn't have debt, surely they did...

I can assume that people didn't have as much debt, in terms of volume, surely most of its relative. 

House prices have increased due to cheap credit, I get that argument, so the supply of money has been increased to erode debt.

Surely, this event then, will cause house prices to rise, even more so, long term. Even if there is a slight dip in some areas, this is going one way HPI.

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2 hours ago, squeezed said:

Total_economic_output_in_England_since_1

GDP is a blunt tool that doesn't care whether it's tanks and ammo or cars and house furnishings being made, just the material value of products and services sold. It also doesn't take into consideration destruction of we already own, like in the Blitz. If in the wartime GDP dropped less than 20% like it did this year then life in the UK was, according to this way of measuring things, better in 1940 than in 2020.

Looking at the charts, theres only one way to interpret this historically, those who have taken on debt, to buy houses have always done significantly better. Due to an increased money supply & inflation, what makes people think this is about to change?

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48 minutes ago, Speed1987 said:

Looking at the charts, theres only one way to interpret this historically, those who have taken on debt, to buy houses have always done significantly better. Due to an increased money supply & inflation, what makes people think this is about to change?

Global meltdown mainly. 

Plus what is profitable on the way up ( ie borrowed  money) becomes a disaster on the way down ( you can't pay debts when you lose your job) .

As for history, I don't think you're right. I get the impression that people who borrowed money in say 1919, or 1868, saw house prices going down at the same time as jobs and wages went into recession. Thats a bad situation to find youself in if you're up to your eyeballs in debt. 

 

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1 hour ago, Speed1987 said:

I can assume that people didn't have as much debt, in terms of volume, surely most of its relative. 

The effects of inflation are great at masking debts but not so good at hiding the debt to income ratio. Currently this is over 140% per household (https://data.oecd.org/united-kingdom.htm), including an average credit card debt of almost £8,000 per household, with 48% of households having less than £1,500 in savings (https://themoneycharity.org.uk/media/Feb-2019-Money-Statistics.pdf). 

22 minutes ago, 24gray24 said:

Thats a bad situation to find youself in if you're up to your eyeballs in debt. 

A sizeable proportion of people in this country will be very hard up in under a month if one of the household looses their job.

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  • 418 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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