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housing market weirding


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3 hours ago, sammersmith said:

In the short term yes i'd agree. It's annoying as i had my eye on a few places that are now all SSTC. 

However, i don't see how this momentum can be maintained. The Stamp Duty reduction will either be extended or end in April. If extended, then the time urgency is lessened. If not extended then there will be mania in Feb/March and then a drop off in sales (similar to the introduction of the 3% additional rate in 2016).

What do they do after April to deliver a fresh burst of mania to pick up where the last left off? Nothing seems as mind - focusing for the masses as a Stamp Duty cut and, alas, they've already fired that weapon. 

They've extended all they will. HtB, stamp duty cut, furlough, its all got an end date that won't be pushed back. Like many have said, what's the problem with waiting until next spring? The only ramping going on will be "stamp duty holiday has ended, but this is traditionally the time when prospective homebuyers (hint: like you) are out enjoying buying overpriced property..."

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1 hour ago, Pop321 said:

It’s the roaring 20’s. Half price meals out, furlough aplenty, ice creams in the park on Wednesday whilst getting paid by the government, houses selling, Dow rallying its all good. The weather is great and even gold dropped a little today.... we have never had it so good. 

Next paragraph on the BBC website, something about Redundancies every day, furlough ending and many businesses weren’t in a great place anyway....it’s not important let’s focus on that 3% saving on house prices. Happy days. 

We all know what happened after the roaring 20’s.

I have been offered the flat I have wanted for years.... it owns the freehold of the other two flats. No thanks...well, not yet anyway?. I would rather sell mine than buy his. 

2 other approaches for a cheeky deal.... that 2 more than I have had in 5 years. 

I know two senior EA well and both feel as you do....that this doesn’t feel right. They don’t feel confident but are holding their breath and are expecting EVERYDAY for it to stop dead. 

Never felt so ominous; feels very much like people are having a go and enjoying themselves and burying their heads in the sand. 

I am keeping my powder dry....this could be a great opportunity for those watching the whole market. 

Feb 2021......boom. 

if you have ever been in a major car crash, a cut out job.  Everything goes silent and you have a ringing sensation then the reality manifests itself as pain and destruction a short while after ;) 

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1 hour ago, satsuma said:

To be fair the stamp duty holiday is an opportunity for folk to get into a house, no surprise there is a mini boom, the problem is there are hundreds of thousands of jobs gone and many businesses going to the wall.  Add to that the fact that houses in most places are silly money.  I’m sitting on my hands myself and will move next year once people are not even interested in housing 

One of those EA said to me that would a 3% reduction offer by the government for ovens create a surge in oven sales....good point. 

Effectively £485k houses were selling for £465k. Now they are being bumped up to £500k and selling for that price. And that was an EA view. Definitely trying to understand this surge. 

Lehman Bros went down in 2008 but it took 2/3 years for housing to follow. I think what happens is money runs to solid assets and property is considered fairly solid asset until the crunch. 

But then cash flow, liquidity suffers (eg lending criteria and redundancies) and housing catches up. 

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14 minutes ago, longgone said:

if you have ever been in a major car crash, a cut out job.  Everything goes silent and you have a ringing sensation then the reality manifests itself as pain and destruction a short while after ;) 

??

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34 minutes ago, Pop321 said:

One of those EA said to me that would a 3% reduction offer by the government for ovens create a surge in oven sales....good point. 

Effectively £485k houses were selling for £465k. Now they are being bumped up to £500k and selling for that price. And that was an EA view. Definitely trying to understand this surge. 

Lehman Bros went down in 2008 but it took 2/3 years for housing to follow. I think what happens is money runs to solid assets and property is considered fairly solid asset until the crunch. 

But then cash flow, liquidity suffers (eg lending criteria and redundancies) and housing catches up. 

The house opposite where we are about to move to just went SSTC in 10 days for £100,000 more than we had accepted back at the start of this year. In my area of London there is an absolute stampede going on, and at the price range we are in this is not being fuelled by a few grand saved in stamp duty, which let's face it is pennies in the grand scheme of things. It is in my view being fuelled by large numbers of people chasing small numbers of quality property - classic economics. The other property has an identical floor plan to ours, though is a little bit smarter in terms of decorative order.

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Partly could be people who feel ‘secure’ in their jobs (because they were not furloughed) thinking they are now bullet proof. No duty on half a mill? Yeah let’s ‘stretch ourselves’ - if a pandemic didn’t affect our jobs they must be golden.

As I posted on the thread about salaries post lockdown, they could be in for a very rude awakening if they are currently paid well. If they have to switch jobs (perhaps because of unforeseen redundancy, or maybe just a hostile new manager who makes life hell) and find their comfy salary is no longer available in the external market....

I for one will be caressing my very lucky to have job with a tenderness. I know I’m worth the money they pay me, and great value compared to US colleagues but externally it looks like I’d struggle to get half of what I’m on.

 

Edited by Frugal Git
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5 hours ago, Hullabaloo82 said:

In a professional context I have cause to speak to a lot of surveyors at this time of year (and no I'm not giving any more details of why).

One told me the market has "gone crazy". Another has come out and said they think the report they provided in the immediate aftermath of lockdown was overly pessimistic and basically wrong (unprecedented). From my own perspective my property sailed through its valuation for remortgage purposes (pushing for a better rate) a few weeks ago. 

I don't understand it, I barely believe it, but I think the Tories have done just enough to avoid a crash. Sentiment really seems "bullish" at the moment. In normal times I would assume the news about employment would have a big impact today but I've just accepted we're in bizarro world now. Going to stop spending so much of my time thinking and worrying about this stuff to be honest. 

Yeah I work with surveyors too - getting some mighty odd feedback... ultimately this won't last. Watch the banks... the noises I'm getting from industry contacts are increasingly alarming. They are moving slowly but surely into a very dangerous place. 

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26 minutes ago, gruffydd said:

Yeah I work with surveyors too - getting some mighty odd feedback... ultimately this won't last. Watch the banks... the noises I'm getting from industry contacts are increasingly alarming. They are moving slowly but surely into a very dangerous place. 

Thanks for the update. It seems we know London may well take the biggest hit but the other cities less so?

It seems that the current increase is across the country, cities and countryside. 

 

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7 hours ago, Pop321 said:

 

But then cash flow, liquidity suffers (eg lending criteria and redundancies) and housing catches up. 

Liquidity is not solvency.

That is where we are now. Furlough, bounceback loans etc it is all liquidity. SOLVENCY is the reality that will hit when the props reduce and the winter post lockdown economy is laid bare.

 

 

 

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10 hours ago, Trump Invective said:

They've extended all they will. HtB, stamp duty cut, furlough, its all got an end date that won't be pushed back. Like many have said, what's the problem with waiting until next spring? The only ramping going on will be "stamp duty holiday has ended, but this is traditionally the time when prospective homebuyers (hint: like you) are out enjoying buying overpriced property..."

In reality people have to make offers and have had them accepted by end of January at the latest to make the SD deadline. I think most of the activity will be in the run up to Christmas. Apparently in the mail today it said that mortgage applications for second homes are up 30% YoY. These people will become tax fodder in the future. Also all these YoY figures regarding activity are comparing apples with oranges. Normally July and August are dead, but an entire years worth of property buying has been condensed into a few months due to COVID and Sunak.

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2 hours ago, qejunkie said:

Liquidity is not solvency.

That is where we are now. Furlough, bounceback loans etc it is all liquidity. SOLVENCY is the reality that will hit when the props reduce and the winter post lockdown economy is laid bare.

 

Yep.

I have seen a guy with £3m net assets go bankrupt due to cash flow. He expected to get those net assets back after the fire sale but with costs and a poor market where only an idiot would sell his properties was all auctioned off at a ‘bargain’.

He walked away with nothing. I on the other hand bought a flat he had owned for £122k at auction he had paid £220k for. I had even offered £150k pre auction which was refused by the official receiver and made the purchase all the sweeter. There were sharks getting bigger and even better deals than me. 

To avoid all this he should have sold a couple himself when the writing was in the wall....instead he bought more. Hmmm, that’s sounds familiar with lots of people buying at the moment whilst they can.

Cash flow....job, rent, mortgage, rates, gas, food...suddenly £300 cash becomes more important than £3m assets. 

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8 hours ago, househunter123 said:

Thanks for the update. It seems we know London may well take the biggest hit but the other cities less so?

It seems that the current increase is across the country, cities and countryside. 

 

People think in lines rather than systems... if London gets a hit it filters out... there has been system disruption right through the economy so heaven really knows right now - suspect some movement from cities but then is that realistic? The economic fundamentals in most regions of the UK are dire once you leave London/SE! 

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Just now, Sausage said:

I'm seeing the sudden flurry of new listings going SSTC easing off. I'm wondering if the pool of people determined to buy after lockdown has dried up.... Allowing true price discovery to commence?

Yes it has quietened this last week - definitely agree. Plus EAs / surveyors I know are quieter. Took until this week, mind. 

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Stamp duty threshold change is not impacting the mortgage market

https://propertyindustryeye.com/stamp-duty-threshold-change-is-not-impacting-the-mortgage-market/

Despite many agents reporting a huge increase in business, one month on from the £500,000 stamp duty threshold announcement, data from online mortgage broker Trussle has found that the cut has not had an immediate impact on the UK mortgage market.

Despite reports that the SDLT change has fuelled a rise in property searches, the announcement doesn’t appear to be increasing activity further, and some groups of buyers face being locked out of the property market due to a number of industry factors.

Trussle has found that the situation is increasingly challenging for those unable to gather more than a 10% deposit – a bracket of house hunters typically dominated by first time buyers.

While there have been reports of lenders returning to the market with 90% loan-to-value (LTV) mortgage products, the overall number of high LTV mortgages in fact decreased during July.

In addition, lenders are implementing stricter criteria to those with lower deposits who at the same time are also having to cope with rising house prices. As a result, a significant portion of home buyers are finding the home ownership journey challenging and inaccessible.

In contrast, data from Trussle shows that mortgage applications for buyers with more than a 10% deposit have remained consistent with levels that the broker has seen previous to Coronavirus.

As such, while there have been reports of surges in properties viewed through online portals, Trussle’s data demonstrates little evidence of a spike in new mortgage activity resulting from the cut in stamp duty.

Furthermore, there’s no sign that the cut to stamp duty is incentivising buyers to increase the price they are willing to pay for property.

The cut to stamp duty could save buyers up to £15,000 on properties worth up to £500,000. This means that the savings from the holiday could allow buyers to look at larger or more expensive properties.

However, Trussle found that, since the announcement, those with larger deposits have not significantly increased the prices of the properties they are searching for.

While the reasons for this remain unclear, this does suggest buyers are approaching the market with caution and are hesitant to take on more debt than absolutely necessary during uncertain times.

In more positive news, Trussle has seen a 30% decrease in application times for both first time buyers and next time buyers with a deposit of more than 10%,when comparing the month before and the month following the stamp duty holiday announcement.

Miles Robinson, Head of Mortgages at Trussle, comments:

“There’s been a lot of focus recently on how the stamp duty holiday could be prompting a ‘mini-boom’ in the market. While this is promising, our data suggests that actually the cut is having a minimal impact on buyers’ behaviour and we’re perhaps just seeing a level of pent up demand following the lockdown.

“We are continuing to see an increase in remortgages from existing homeowners. This may be an indication that many are choosing to stay put and remortgage on their current property, rather than move to another house, despite the stamp duty holiday.

“What is perhaps more worrying, and where we hope the industry focuses  its attention, is the diminishing support for those with lower deposits, who are most likely to be first-time buyers. This is a demographic who have traditionally relied on competitive products from lenders to step onto the property ladder.”

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32 minutes ago, rantnrave said:

Miles Robinson, Head of Mortgages at Trussle, comments:

“There’s been a lot of focus recently on how the stamp duty holiday could be prompting a ‘mini-boom’ in the market. While this is promising, our data suggests that actually the cut is having a minimal impact on buyers’ behaviour and we’re perhaps just seeing a level of pent up demand following the lockdown.

 

It's like Ive said before - lazy reporting. You have two ingredients.

1: Housing market trends

2: The news

Journalists and VIs just mix the two to create "property news". Election going on? That's affecting the housing market. Boris gets in? Oh yeah, thats affected the housing market

Brexit looming all of last year? Apparently that creates uncertainty suppressing the housing market.

Cut to mid-2020, the most uncertain time any of us can remember? There's a "mini boom" (a term that doesnt make sense because we don't know whether the boom is sustained yet - its only been one month. Ic could be mini, maxi, midi, whatever), apparently caused by stamp duty changes. Uncertainty is somehow irrelevant now.

The press just erroneously links short term issues with wider trends to create news. All that really matters is affordability and desirability.

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1 hour ago, Sausage said:

I'm seeing the sudden flurry of new listings going SSTC easing off. I'm wondering if the pool of people determined to buy after lockdown has dried up.... Allowing true price discovery to commence?

Yes. Don’t forget, there are people that sold at Boris bounce in Feb that needed to deploy post lockdown. They are now housed. 

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2 hours ago, gruffydd said:

Yes it has quietened this last week - definitely agree. Plus EAs / surveyors I know are quieter. Took until this week, mind. 

Agree, as well as an increase in new listings, it is only this week I have noticed an increase in reductions being listed.

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6 hours ago, moonriver said:

Agree, as well as an increase in new listings, it is only this week I have noticed an increase in reductions being listed.

It was only the last 7 days I noticed signs of distress too - first forced sales - actually new the properties - they had bounced back on the market - one after sale less than 12 months ago. 

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