Has Britain's house price crash been cancelled – or is it still coming this autumn?

[Hope_Prevails]

Hello,

A long time reader of this forum and deciding to post today in bewilderment at what is going on.

I am based in a town on the commuter belt at a short distance from London.  

I finally thought house price falls had arrived only to find total madness has ensued here after Rishi Sunak's stamp duty cut.

Anything half decent is getting snapped up and bid up as well.  One house was sold within hours of being posted online, such is frenzy which does not look like abating any time soon.

Even properties over the stamp duty threshold are being snapped up like their is famine of housing stock.

There is talk of folk from london selling up and buying here, as well as cash buyers looking to flip houses, who knows.

I thought banks were being more stringent with mortgages but there is zero sign of that here.

To be honest I do not know what to make of it.  

I know furlough is ending and central london and other commercial property sectors are suffering, but the govt seems to always pull out another trick to boost the market.

 

 

[fatspanner]

I don't know what to make of the market at the moment. I'm definitely holding off until early/mid 2021 to let the madness start to unravel. I save most of the properties I get sent from Rightmove to get an idea of what is happening and everything is selling. One thing I have noticed though is the number of properties coming to market is starting to fall quite dramatically. I'll continue to increase my deposit in the meantime. 

[desertorchid]

2 hours ago, Hope_Prevails said:

Hello,

A long time reader of this forum and deciding to post today in bewilderment at what is going on.

I am based in a town on the commuter belt at a short distance from London.  

I finally thought house price falls had arrived only to find total madness has ensued here after Rishi Sunak's stamp duty cut.

Anything half decent is getting snapped up and bid up as well.  One house was sold within hours of being posted online, such is frenzy which does not look like abating any time soon.

Even properties over the stamp duty threshold are being snapped up like their is famine of housing stock.

There is talk of folk from london selling up and buying here, as well as cash buyers looking to flip houses, who knows.

I thought banks were being more stringent with mortgages but there is zero sign of that here.

To be honest I do not know what to make of it.  

I know furlough is ending and central london and other commercial property sectors are suffering, but the govt seems to always pull out another trick to boost the market.

 

 

Cheerleaders of the stamp duty cut have conveniently forgotten how 'flipping' houses is a scourge of the housing market when prices are upwards causing rapidly rising prices, in fact one of the main reasons stamp duty is needed and at significant levels in some cases as a deterrent. This is why the holiday must end in mMarch, but as many do I have my doubts.

[Hope_Prevails]

We have reached August, I was expecting to see the brakes being applied in this month, the next few weeks will be interesting.

I have spoken to a couple of banks and they have mentioned in phone calls their stringent lending requirements.

Am I right in thinking estate agents are accepting offers and listing as sstc without requiring a new mortgage agreement post furlough?

Meaning they go sstc and then banks turn round and say no?  Is this wishful thinking to explain the mad rush, folk rushing ahead with purchases based on old pre furlough agreements which will be rejected?

[househunter123]

Hi all. Put in an offer for several different houses over the last few week in various areas in the Leicester area but none got accepted and estate agents don't reveal how close I was to the final price. Is this normal? How can I gage the prices of homes that suggest 'in excess of' or 'in region of' etc..

 There doesn't seem to be any slowdown in the housing market here especially since I'm on the lower side of house prices and first time buyer myself, but with no chain. Offered around 2% below asking price and about 4% above on one but not having much luck....

 

Decent houses with very little work are being sold,  often within a week but I don't have the patience to do a house up as a project.

 

Any reduction will be region specific me thinks and many Londoners will sell up and move away thus increasing demand  elsehwhere especially in cheaper areas.

 

[Switch625]

BBC headline; New homes to get 'automatic' permission in England planning shake-up

https://www.bbc.co.uk/news/uk-53625960

New homes and hospitals will be granted "automatic" permission to be built as part of sweeping planning reforms in England, the housing secretary says. - Impressive headline

Robert Jenrick announced a "permission in principle" will be given to developments on land designated "for renewal" to speed-up building. - so not everywhere then, it's limited to England and areas of outstanding natural beauty and the green belt will be protected.

Mr Jenrick ... insisted: "We are cutting red tape, but not standards." - Pull the other one! last week the government's own independent report warned that the quality of homes not delivered through the planning system was worse than those that had been properly regulated.

My thought - This has all the hallmarks of an Ireland style property crash where entire estates of unwanted and unneeded poor quality homes thrown up in haste were later knocked down after the last recession. Could we actually be entering the end game for property inflation?

[Switch625]

 

9 hours ago, househunter123 said:

Decent houses with very little work are being sold,  often within a week

I personally would avoid the former as these will be highly sought after even in a downturn and likely to hold their price relative to other property.

9 hours ago, househunter123 said:

I don't have the patience to do a house up as a project.

The best deals will be in the later category as few people have the patience or skills to renovate. My advice is get your hands dirty and skill yourself up.

9 hours ago, househunter123 said:

Any reduction will be region specific me thinks

I completely agree with you, price falls will be region specific that is clear in the data from previous crashes.

9 hours ago, househunter123 said:

many Londoners will sell up

I think the headline I saw was 15% are considering this. That's not a very high figure, but the London city workers I know are all saying that things have changed and they won't be going in as often.

9 hours ago, househunter123 said:

thus increasing demand  elsehwhere especially in cheaper areas.

Knowing London and the catchment area quite well, people in that area do have a bit of a problem, the mortgages they took on were huge. Potential sellers may well struggle to find a greater fool buyer at a price that will clear their mortgage and allow for sufficient deposit for their next move.

[househunter123]

8 minutes ago, Switch625 said:

 

The best deals will be in the later category as few people have the patience or skills to renovate. My advice is get your hands dirty and skill yourself up.

I completely agree with you, price falls will be region specific that is clear in the data from previous crashes.

Thanks for that. I'm also very familiar with the capital and still have friends and family there and several thinking of moving away too. 

You might be right about taking on project though despite being the most averse to that sort of stuff. I just can't see myself do that but let's see how the next few months pan out. 

 

 

[24gray24]

On 29/07/2020 at 00:12, Pmax2020 said:

I guess that makes me that 20 post troll!

Im happy to provide screengrabs of zoopla favourites, all listed in March, that all sold in recent weeks. 70-80% of those I kept an eye on in a hope of demonstrating to friends that the crash was now on.

Here’s a simpler test however... punch Edinburgh, Glasgow, Dundee and Perth into rightmove property search, choose last 14 days, and a total of 1422 properties appear. Now check the ‘include STC/under offer’ box and that tally rises to 1930!!!! 508 properties or 26% of those have ‘sold’ within just 2 weeks. 
 

I want a crash but all I currently see is the Scottish market picking up exactly where it left off in Feb.

Transactions are running at about 40% of normal volumes. 

This means they are going through quicker than usual. And still seem to be at pre covid levels. 

I can't see that lasting long with mortgage conditions getting tighter ( and slower to process)

The only explanation I can offer is it must be cash buyers, who spent lock down looking at properties and who are all now buying at once after finally being able to view them. Ie it's 3 months worth of cash buyers all coming through at once. 

I don't think this surge will last long, and when it is through, other sellers will see nothing is moving and go back to reducing prices by stages.

 

 

[househunter123]

10 minutes ago, 24gray24 said:

Transactions are running at about 40% of normal volumes. 

This means they are going through quicker than usual. And still seem to be at pre covid levels. 

I can't see that lasting long with mortgage conditions getting tighter ( and slower to process)

The only explanation I can offer is it must be cash buyers, who spent lock down looking at properties and who are all now buying at once after finally being able to view them. Ie it's 3 months worth of cash buyers all coming through at once. 

I don't think this surge will last long, and when it is through, other sellers will see nothing is moving and go back to reducing prices by stages.

 

 

I'm a cash buyer. No chain from my side. 

Vendors/sellers are looking at the final price on even if that means accepting the offer of £5000 more than a cash buyer estate agents say. Unless they've already got their mortgage in principle, ready to go.

[24gray24]

21 minutes ago, househunter123 said:

I'm a cash buyer. No chain from my side. 

Vendors/sellers are looking at the final price on even if that means accepting the offer of £5000 more than a cash buyer estate agents say. Unless they've already got their mortgage in principle, ready to go.

You're in grave danger from estate agents ( who also only have 40% of normal business coming in); and of being "the last fool" buying at these prices.  

I'd wait until January 2022 before making any offers if I were you. 

[24gray24]

I saw another explanation of the sudden surge  on another thread: 

It could be people trying to buy a house before they lose their job. Ie they still have a job, but are worried they might lose it, so are rushing to buy a house while they can. 

(This is insane of course, as they might then find themselves unemployed and stuck with a huge mortgage as well, instead of being unemployed but debt free and with a deposit in the bank; and able to move to another town easily). 

Edited August 2, 2020 by 24gray24
Clarify alternative

[stuckmojo]

10 minutes ago, 24gray24 said:

I saw another explanation of the sudden surge  on another thread: 

It could be people trying to buy a house before they lose their job. Ie they still have a job, but are worried they might lose it, so are rushing to buy a house while they can. 

(This is insane of course, as they might then find themselves unemployed and stuck with a huge mortgage as well, instead of being unemployed but debt free and with a deposit in the bank; and able to move to another town easily). 

I can believe that. I am aware of a few houses falling through very late in the process as the buyer lost their income. This is now, not early into COVID. 

[househunter123]

1 hour ago, 24gray24 said:

You're in grave danger from estate agents ( who also only have 40% of normal business coming in); and of being "the last fool" buying at these prices.  

I'd wait until January 2022 before making any offers if I were you. 

That's too long to wait for me , it's a place to live not investment on my side but there are no shortages of people of queuing up to view and end up buying. Many from London as with sellers (direct with purple bricks) and EAs saying viewer before you from London, etc...

Also, I don't feel comfortable with holding cash either. One EA also asked for proof of funds and seemed keen to pass on my information to vendor. And then said sorry, too low.

 

On a side note, areas with a high Asian population keep their values well. Across the country. All my points are from anecdotal observations though.

[Hope_Prevails]

Yes, I am in the same position, I cannot keep kicking the can down the road and wait till 2022 to buy a house.

I am amazed there is no outcry from first time buyers about their being done over with this stamp duty cut which clearly is making it even more difficult for them to buy a house.  

 

[Wayward]

1 hour ago, Hope_Prevails said:

Yes, I am in the same position, I cannot keep kicking the can down the road and wait till 2022 to buy a house.

I am amazed there is no outcry from first time buyers about their being done over with this stamp duty cut which clearly is making it even more difficult for them to buy a house.  

 

This is a great mystery.  Young people and FTBers have been been given a shafting of historic proportions over last 6-7 years or so.  The docility of this cohort is extraordinary.

[sammersmith]

1 hour ago, Wayward said:

Young people and FTBers have been been given a shafting of historic proportions over last 6-7 years or so

The few young people i've spoken to about housing are actually looking forward to the day when they can become landlords and buy their first house, buy second, hang on to first and rent it out. Rinse and repeat. This is the generation raised on HUTH. 

They don't want higher taxes for 2nd home owners / LL as they believe it will impact them later.

Edited August 2, 2020 by sammersmith

[Orb]

2 hours ago, Hope_Prevails said:

I am amazed there is no outcry from first time buyers about their being done over with this stamp duty cut which clearly is making it even more difficult for them to buy a house.  

 

I just don't think they understand, and can't see they've been shafted. I've come to understand that people generally aren't critical thinkers, and are VERY easily manipulated. The prime understanding is that people operate on two fundamentally linked mechanisms: fear and desire, and that's it. The chancellor opens the gate at the bottom left corner of the field, the sheep run to it. He closes it and opens the gate at the other corner, the sheep run to it. I don't know why my amazement never ceases at this. 

[Bob8]

1 hour ago, sammersmith said:

The few young people i've spoken to about housing are actually looking forward to the day when they can become landlords and buy their first house, buy second, hang on to first and rent it out. Rinse and repeat. This is the generation raised on HUTH. 

They don't want higher taxes for 2nd home owners / LL as they believe it will impact them later.

Is that most? I would imagine most are just less expecting of being able to buy one home. Might you occupy a more refined environ?

[sammersmith]

53 minutes ago, Bob8 said:

I would imagine most are just less expecting of being able to buy one home.

You might think that, and I did think that as well. Having a modest first home is still expected, but now the expectation is that they would hold onto that first home and turn it into a side hustle when they buy their 2nd home.

54 minutes ago, Bob8 said:

Might you occupy a more refined environ?

I don't think so. These are just regular people at work. Most likely a 2:1 from a regional university and then on to a grad scheme at £25-30K. Not on life altering salaries and probably have experience of been screwed over in rentals. 

[definitelynotanagent]

11 hours ago, 24gray24 said:

Transactions are running at about 40% of normal volumes. 

This means they are going through quicker than usual. And still seem to be at pre covid levels. 

I can't see that lasting long with mortgage conditions getting tighter ( and slower to process)

The only explanation I can offer is it must be cash buyers, who spent lock down looking at properties and who are all now buying at once after finally being able to view them. Ie it's 3 months worth of cash buyers all coming through at once. 

I don't think this surge will last long, and when it is through, other sellers will see nothing is moving and go back to reducing prices by stages.

We've just sold (stc), and we had offers from FTB with mortgage agreed in principle, and a BTL with mortgage agreed in principle.

The lending criteria has not changed for us either - the new mortgage is about 2.3x joint income (up from 1), and the only thing that was giving us grief was school fees. Without them, we'd be able to borrow eye-watering sums (but we'd have to work until we drop).

[Hope_Prevails]

I was just thinking that Labour have been utterly shambolic in all of this. 

They are the ones who should be making a song and dance about the stamp duty cut working against everyone by raising prices, especially for first time buyers.

Instead they are banging on about "furlough ad infinitum" as some kind of solution - which it is not.

[MARTINX9]

10 minutes ago, Hope_Prevails said:

I was just thinking that Labour have been utterly shambolic in all of this. 

They are the ones who should be making a song and dance about the stamp duty cut working against everyone by raising prices, especially for first time buyers.

Instead they are banging on about "furlough ad infinitum" as some kind of solution - which it is not.

Labour is run by the millionaire property owning classes of Camden and Islington. They profess to care about the housing crisis but will do little or nothing to solve it - and arguably back policies which would make things even worse.

Even Corbyn backed help to buy and Labour's final 2010 budget introduced a stamp duty holiday for FTBs.

Edited August 2, 2020 by MARTINX9

[sammersmith]

28 minutes ago, Hope_Prevails said:

I was just thinking that Labour have been utterly shambolic in all of this. 

I would be the last person to defend Labour, but the shadow housing minister did refer to the Stamp Duty holiday as a "bung to landlords". 

[Confusion of VIs]

That's a strange thing to say, far more of a bung to everyone  else.