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


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17 minutes ago, GregBowman said:

Yes and no they are probably behind the lobbying for the planning laws to change - they will flip into flats at vast profit or rental estates

The Mercers, the Duke of Westminster and the Crown own vast swathes of this in London 800 year old concerns they will pivot as they have to and continue to sail on oblivious - highly leveraged VC backed companies are a different matter.

I agree. The prime locations will always be in demand. The business parks in no mans land though.......

The planning laws do allow for offices to be converted but i suspect the big developers will be lobbying harder. 

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17 minutes ago, GregBowman said:

Yes and no they are probably behind the lobbying for the planning laws to change - they will flip into flats at vast profit or rental estates

The Mercers, the Duke of Westminster and the Crown own vast swathes of this in London 800 year old concerns they will pivot as they have to and continue to sail on oblivious - highly leveraged VC backed companies are a different matter.

You mean vast losses.

Lets take the easiest to convert, old town houses in the west end central london that have been turned into offices at some point - St James etc.

The reason they are offices and were converted in the first place is the rent achieved from the office space is (was) orders of magnitude higher than residential. 

If you then take purpose built offices you have the same issue but also the cost of conversion (or even demolition and rebuild) thrown in

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15 minutes ago, captainb said:

You mean vast losses.

Lets take the easiest to convert, old town houses in the west end central london that have been turned into offices at some point - St James etc.

The reason they are offices and were converted in the first place is the rent achieved from the office space is (was) orders of magnitude higher than residential. 

If you then take purpose built offices you have the same issue but also the cost of conversion (or even demolition and rebuild) thrown in

They think in multi generational terms - their pockets are deep. Its harder money but as I say they will thrive again soon enough

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19 minutes ago, adarmo said:

I agree. The prime locations will always be in demand. The business parks in no mans land though.......

The planning laws do allow for offices to be converted but i suspect the big developers will be lobbying harder. 

Its horrible but that old phrase Location,Location Location comes to mind.

They were in at the beginning and have cemented their advantage ever since

Business Parks as you say will struggle

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11 hours ago, dances with sheeple said:

Very debatable IMO, depends on the person and many other factors, the main reason it won`t be encouraged long term for the masses is that it leaves a massive gap in the "Commuter Economy". think of all those train/bus fares, VAT on fuel, sandwiches, meals out with workmates, drinks after work, hotel stays, etc. etc. The last thing the PTB want is the masses getting a taste for being in one place and spending less!

People will still spend as much as they earn just on different things.

We were encouraging staff to work at least one day a week from home before the pandemic and in future will be upping that to a minimum of three days a week home working. 

 

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1 hour ago, Confusion of VIs said:

People will still spend as much as they earn just on different things.

We were encouraging staff to work at least one day a week from home before the pandemic and in future will be upping that to a minimum of three days a week home working. 

 

Though it is unclear what this means in the very long term for salaries - unknowns include how the labour market power is could now be diluted further (an employee in one place now competes with a larger group of people in some cases), unknowns include what corporates will spend the "extra money" they might have on with them not paying large commercial rents, and then inflation/deflation/social change in other ways will interact with as ever ... so over 10 to 15 years I am not sure if this will raise or lower people's disposable income as a proportion of their wages ...

But what I can see is that - for many people (not everyone) - WFH more really could involve higher quality of life.

Ad that to the lower physical risk of not leaving the building you live in every day ... hmmm ... there are lots of secondary industries that depend on the commuter lifestyle ... this is going to be very painful for some ... even if the "pendulum" swings back.

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1 hour ago, Aidan Ap Word said:

Though it is unclear what this means in the very long term for salaries - unknowns include how the labour market power is could now be diluted further (an employee in one place now competes with a larger group of people in some cases), unknowns include what corporates will spend the "extra money" they might have on with them not paying large commercial rents, and then inflation/deflation/social change in other ways will interact with as ever ... so over 10 to 15 years I am not sure if this will raise or lower people's disposable income as a proportion of their wages ...

But what I can see is that - for many people (not everyone) - WFH more really could involve higher quality of life.

Ad that to the lower physical risk of not leaving the building you live in every day ... hmmm ... there are lots of secondary industries that depend on the commuter lifestyle ... this is going to be very painful for some ... even if the "pendulum" swings back.

It is not going to swing back all the way, probably it will move to a position that would have taken another 10yrs to reach without the pandemic. 

The realisation that many jobs can be done from anywhere is going to initiate huge changes, how that will end up I have no idea, but jobs moving to lower cost areas/countries is a pretty obvious part of it. 

I think that we will see this starting by the end of the year and the government will have to decide whether to try to hold back the tide or go with it.

Going with it would mean stopping wasting resources trying to prop up prices. 

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7 minutes ago, Confusion of VIs said:

It is not going to swing back all the way, probably it will move to a position that would have taken another 10yrs to reach without the pandemic. 

The realisation that many jobs can be done from anywhere is going to initiate huge changes, how that will end up I have no idea, but jobs moving to lower cost areas/countries is a pretty obvious part of it. 

I think that we will see this starting by the end of the year and the government will have to decide whether to try to hold back the tide or go with it.

Going with it would mean stopping wasting resources trying to prop up prices. 

It will of course have huge implications for public services and tax raising capacity.

Over 20% of the business rates raised in England to fund local public services like fire, elderly social care, roads, childrens services etc comes from business properties in just five central London boroughs mostly in the City and West End - 10% from just one (Westminster). There are over 340 English councils reliant on that cash!

If those rates aren''t being paid to the same level as before who funds those local services? 

Edited by MARTINX9
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Barratt NHS 5% Deposit Scheme

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To show our gratitude all NHS workers will be offered a 5% contribution towards their deposit, up to £15,000.

Whatever next.

Anecdotally hearing that house sales in the Scottish Highlands have been very buoyant the last few weeks, a lot of this down to English buyers selling up down south and then buying the much cheaper houses there in cash.

For that area at least the price crash seems to be on hold.

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18 hours ago, Martin_JD said:

total immersion of debt?  Nothing wrong with a mortgage as long as you can afford it - which the vast majority of borrowers can.  It's not about "winning".  It's about living your life.  If you're happy renting forever then go for it.  How long have you been waiting for a crash for now?

Many can only afford their mortgage with emergency rates, and are also in debt for more than their house. You seem annoyed that I am drawing attention to this?

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18 hours ago, adarmo said:

I don't think it's that debatable. There's plenty of studies demonstrating this, if only because people aren't wasting time and money on a pointless commute. 

The PTB don't have a say in where i our my team work and have actively discouraged it with high business rates and even talk of taxing parking spaces. 

Commercial real estate should be very afraid. 

Sorry but I think it is, not least because it has never been done on a big scale before. Many people`s home situation will not be suitable for home working for a multitude of reasons, an office is a work space - purposely designed to get work done in, a random home with flatmates/children/lack of space/partner/noisy neighbours etc. etc. generally isn`t. The majority of jobs key to keeping society ticking over can`t be done from home anyway, and at the moment "working from home" for a lot of people just means - Keep well, be ready to come back when possible, do some admin and catch up on some training or something online, the government will pay most of your wages for a couple of months - this won`t translate into a job that is still there when government support ends and we hit a recession?

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12 minutes ago, dances with sheeple said:

Many can only afford their mortgage with emergency rates, and are also in debt for more than their house. You seem annoyed that I am drawing attention to this?

Nah not annoyed, just a bit baffled with your logic really. 

Banks and other lenders are now required to 'stress test' all mortgage applications to make sure that the applicants do not borrow more than they could comfortably afford, in case the interest rate increases in the future.  I have first hand experience of this and I can tell you the lenders i've dealt with are surprisingly rigorous with their checks. 

How long have you been waiting for a crash BTW?

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8 hours ago, winkie said:

Why shouldn't it be encouraged.....think of the savings of office rents in expensive places employers would save, could they not then use the savings made more productively, perhaps employing more productive people.......many changes yet to come, nothing stays the same.;)

For the reason I outlined, and the point you made about rents! if it is such a good idea why do you think it wasn`t encouraged before?!

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8 minutes ago, dances with sheeple said:

For the reason I outlined, and the point you made about rents! if it is such a good idea why do you think it wasn`t encouraged before?!

Maybe because broadband and application not so good, maybe complacency, the love of miro management, lack of trust in workforce..... sometimes forced change are the only way things actually do change......no looking back.?

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22 minutes ago, Martin_JD said:

Nah not annoyed, just a bit baffled with your logic really. 

Banks and other lenders are now required to 'stress test' all mortgage applications to make sure that the applicants do not borrow more than they could comfortably afford, in case the interest rate increases in the future.  I have first hand experience of this and I can tell you the lenders i've dealt with are surprisingly rigorous with their checks. 

How long have you been waiting for a crash BTW?

So you are saying that debt and lack of savings are not a problem in the UK?

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7 minutes ago, winkie said:

Maybe because broadband and application not so good, maybe complacency, the love of miro management, lack of trust in workforce..... sometimes forced change are the only way things actually do change......no looking back.?

Maybe, but they have been talking about home working for the masses since at least 1995, and I doubt that the  love of micro-management, need for proper management, and lack of trust in a workforce basically  now sitting in their slippers has disappeared just because of a ten week lock down?

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18 hours ago, captainb said:

Debt junkies as you put it have always won for hundreds of years. It hasnt ended capitalism yet. 

How do you think the railways were built? How do you think standard oil dug the oil out of ground? Ford make his factories? Even Musk build his cars.. Its not all done in equity. 

Debt finance if serviceable is not something to run away from. If your appetite for risk is so low you dont want it fair enough but its not new and you should accept you are in a firm minority. 

What has a few big thinkers taking on debt to fund their vision got to do with the masses being addicted to debt? Zero that`s what. When they built the railways the average person lived on a jam piece and a couple of bowls of soup a day and probably had never left their county let alone country. Stop trying to equate a bankers debt bubble with great projects of the past.

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9 minutes ago, dances with sheeple said:

Maybe, but they have been talking about home working for the masses since at least 1995, and I doubt that the  love of micro-management, need for proper management, and lack of trust in a workforce basically  now sitting in their slippers has disappeared just because of a ten week lock down?

We can all talk about all sorts of things......talking is not doing.?

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4 hours ago, Confusion of VIs said:

It is not going to swing back all the way, probably it will move to a position that would have taken another 10yrs to reach without the pandemic. 

The realisation that many jobs can be done from anywhere is going to initiate huge changes, how that will end up I have no idea, but jobs moving to lower cost areas/countries is a pretty obvious part of it. 

I think that we will see this starting by the end of the year and the government will have to decide whether to try to hold back the tide or go with it.

Going with it would mean stopping wasting resources trying to prop up prices. 

If the middle classes, Bankers, accountants, Architects, IT, keep pushing the WFH mantra. 

Then, your comment alluding to outsourcing becomes a real prospect. Why pay a UK based worker, £££k when companies can pay a foreign accountant, to complete their accounts.

It's a dangerous game and is gonna ruin these jobs, once that line is passed, they're screwed.

Edited by Speed1987
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26 minutes ago, winkie said:

We can all talk about all sorts of things......talking is not doing.?

We also need to think. Do you really think that homeworking has not been possible for quite few people before now? All the internet and phone apps in the world won`t help a company if it can`t make a profit, they can either facilitate that profit or they can facilitate a load of pointless over-communication about things. Managers are managers for a reason, and companies choose managers for a reason, most companies would like most of their employees under the eye of a manager in real time real life 3D IMO. Of course there are motivated individuals and small teams with the right work ethic and goals of the company as their goals etc. but this is really not the majority of the workforce IMO.

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18 hours ago, dances with sheeple said:

What has a few big thinkers taking on debt to fund their vision got to do with the masses being addicted to debt? Zero that`s what. When they built the railways the average person lived on a jam piece and a couple of bowls of soup a day and probably had never left their county let alone country. Stop trying to equate a bankers debt bubble with great projects of the past.

Yes your right i picked the only examples of people who have ever borrowed for assets. Nobody else ever has throughout history aside from those examples. 

There is no relevance whatsoever in borrowing to purchase an asset such as a house rather than paying rent indefinitely. 

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19 hours ago, dances with sheeple said:

Sorry but I think it is, not least because it has never been done on a big scale before. Many people`s home situation will not be suitable for home working for a multitude of reasons, an office is a work space - purposely designed to get work done in, a random home with flatmates/children/lack of space/partner/noisy neighbours etc. etc. generally isn`t. The majority of jobs key to keeping society ticking over can`t be done from home anyway, and at the moment "working from home" for a lot of people just means - Keep well, be ready to come back when possible, do some admin and catch up on some training or something online, the government will pay most of your wages for a couple of months - this won`t translate into a job that is still there when government support ends and we hit a recession?

I take your point on kids and space at home to work. Whole booming industry in building offices in gardens right now. But true, we have some guys itching to get back to work just to have a quiet working space. 

If those jobs are required for society then they still need to be done or society would collapse which it hasn't. The people furloughed will have a tougher time no doubt. 

But lime i said, overwhelmingly there are many studies concluding it is more productive. The single biggest 'location' in my company is remote and I'd imagine many other software companies are the same so i would say it's been done on a huge scale already in some companies. But yes not for everyone. 

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