Record agreed sales but asking prices down.

[Bruce Banner]

https://news.sky.com/story/coronavirus-julys-37bn-house-buying-boom-is-busiest-month-of-sales-in-a-decade-12050810

More than £37bn worth of property sales were agreed in July - the busiest month for home buying for 10 years, according to property website Rightmove.....

It was London that pulled the national asking price down, with average prices falling by around 2%.

[user not found]

18 minutes ago, Bruce Banner said:

https://news.sky.com/story/coronavirus-julys-37bn-house-buying-boom-is-busiest-month-of-sales-in-a-decade-12050810

 

 

I wonder what total sales for the year looks like, i.e. has bumper July made up for zero in may and June?

[spyguy]

7 minutes ago, Sausage said:

I wonder what total sales for the year looks like, i.e. has bumper July made up for zero in may and June?

Ahh .. I see youve fallen for the EA ********.

Just wait til the numbers of actual sales comes in.

Banks are not lending.

 

[adarmo]

Last time I looked it was the flats in London that were falling with everything else rising. Makes sense, if you're stuck in a tiny slave box in London for six months and no longer need to be in London for work or want to be in London as the social scene has been muted then you'd give it legs. 

There's people squished into tine 800sqft flats earning a lot more than me and I'm quite happy out in Berkshire in a detached place with a nice garden, log burner and walking distance of a decent highstreet. Just over an hour to London if anyone wanted to relocate and catch up with their old friends from time to time. 

Might be a game changer but I think in the medium term not. London isn't and never was for me but there's always the next year of graduates super keen on chasing the money. Poor things. 

[user not found]

4 minutes ago, adarmo said:

Last time I looked it was the flats in London that were falling with everything else rising. Makes sense, if you're stuck in a tiny slave box in London for six months and no longer need to be in London for work or want to be in London as the social scene has been muted then you'd give it legs. 

There's people squished into tine 800sqft flats earning a lot more than me and I'm quite happy out in Berkshire in a detached place with a nice garden, log burner and walking distance of a decent highstreet. Just over an hour to London if anyone wanted to relocate and catch up with their old friends from time to time. 

Might be a game changer but I think in the medium term not. London isn't and never was for me but there's always the next year of graduates super keen on chasing the money. Poor things. 

Ha ha I'd forgotten about those £1m flats in SW8... Bet the owners are feeling a bit sick!

[adarmo]

23 minutes ago, spyguy said:

Ahh .. I see youve fallen for the EA ********.

Just wait til the numbers of actual sales comes in.

Banks are not lending.

 

They were in Q1

https://www.fca.org.uk/data/mortgage-lending-statistics/commentary-mortgage-lending-statistics-june-2020

Interestingly the high LTV mortgages made up a larger % of total lending in Q1 2020 than in Q1 2019. 

Loads of interesting stuff here. around 45% of mortgages are over 4 times single or over 3 times joint income. 

Arrears are over £1bn lower year on year but did increase from Q4 2019 to Q1 2020. 

Bottom line though is that the total lending keeps gong up so they're stamping more money into a fixed number (in the short term) of housing. 

[winkie]

4 minutes ago, Sausage said:

Ha ha I'd forgotten about those £1m flats in SW8... Bet the owners are feeling a bit sick!

Who says worth £1m?.........some might say would have to pay them to live in one.?

[adarmo]

Just now, Sausage said:

Ha ha I'd forgotten about those £1m flats in SW8... Bet the owners are feeling a bit sick!

It's a fickle market. An ex girlfriend of mine bought a flat in 2009 (I think) in Crystal Palace for £200k. Sold it a few years ago for £500k. Much more volatile market there.

Anyone I know that bought in London has been isolating with mummy and daddy in the shires. Those that were renting have just relocated out of London as many were sharing places and at least one of their housemates got the chop. 

So ironically those with access to the royal bank of mum and dad are stuck living at home with a depreciating asset against whcih a massive liability is secured. Those that don't get £100k gifts from mummy and daddy are still living it up somewhere else. 

Have to say though, I'm fairly bullish on property right now (not that I do anything about it other than sit in my house and pay my mortgage) but London, especially flats, has never looked like a good deal. Ground rent, service charges, poorly constructed and opposite a ghetto, yours for £500k! Many do go for it though, reminds me of a phrase used by the former chairman of Lloyds of London when commenting on the Lloyds names who has signed up to unlimited liability accounts. "If God had not wanted them fleeced he would not have made them sheep". 

[winkie]

They say they are not making anymore land.......so they build up into the sky.

As a nation we do not go for living in high-rise buildings........we love our open space and rose gardens.?

[PeanutButter]

My friends are moving into their holiday home this week. Bought during lockdown.

Banks are lending to the right sort of people.

[rantnrave]

Even EAs are saying the current boom wont last

House price growth predicted to reach record highs but not for long

https://propertyindustryeye.com/busiest-month-for-ten-years-as-home-buying-supersedes-summer-holidays-rightmove/#comments

 

James Wilson

August 17, 2020 at 08:31 #2

It should come as no surprise that there is a stampede of sellers.   These smart people can see the train crash coming and are getting out at the top.    I was taught an old motto many years ago to “sell when they’re yelling, buy when their crying”.    The Government and partnership with Daily Express has managed to manufacture a brief window of “yelling”.   Those getting out now will look like heros in Q1 when unemployment is 3 million, furlough is over, mortgage holidays are over, BREXIT reality has sunk in, and interest rates can’t bail the market out any more.

 

[msi]

53 minutes ago, rantnrave said:

  The Government and partnership with Daily Express has managed to manufacture a brief window of “yelling”. 

 

..and there you have everything wrong with the Tories and the Right Wing in the UK. 

[Pebbles]

1 hour ago, PeanutButter said:

My friends are moving into their holiday home this week. Bought during lockdown.

Banks are lending to the right sort of people.

Indeed no shortage of money out there or indeed people happy to borrow it.

[captainb]

2 hours ago, spyguy said:

Ahh .. I see youve fallen for the EA ********.

Just wait til the numbers of actual sales comes in.

Banks are not lending.

 

In the real world banks are lending. 

Fairly steady of return of products post lockdown when they were removed when surveyors and their own staff couldn't work. 

[nickb1]

4 minutes ago, captainb said:

Fairly steady of return of products post lockdown

What;'s the evidence exactly? From what I have read there is no return of 95% mortgages and little return of 90% ones, Crucial for FTBs, chains and therefore the whole market. As I posted on the news blog the available evidence says prices have been falling accordingly. Round the corner we have unemployment and then Brexit.

 

[captainb]

2 hours ago, nickb1 said:

What;'s the evidence exactly? From what I have read there is no return of 95% mortgages and little return of 90% ones, Crucial for FTBs, chains and therefore the whole market. As I posted on the news blog the available evidence says prices have been falling accordingly. Round the corner we have unemployment and then Brexit.

 

If you go on Uswitch, select first time buyer looking to borrow 95% you get 32 available products. You might have to edit the filters 

For 90% first time buyer you have 226 products. 

People often post on here "banks are not lending" or "buy to let is dead". Seldom is it based in reality. 

 

https://www.uswitch.com/mortgages/95-ltv/?utf8=✓&sort_by=&category=first-time-buyer&property_value=168421.05&loan_amount=160000&ltv_val=95&mortgage_period=25&mortgage_type=any&initial_period=-1&repayment_method=capital_repayment&sort_by=monthly&cb=1

https://www.uswitch.com/mortgages/90-ltv/

 

[rantnrave]

6 hours ago, rantnrave said:

Even EAs are saying the current boom wont last

House price growth predicted to reach record highs but not for long

https://propertyindustryeye.com/busiest-month-for-ten-years-as-home-buying-supersedes-summer-holidays-rightmove/#comments

 

James Wilson

August 17, 2020 at 08:31 #2

It should come as no surprise that there is a stampede of sellers.   These smart people can see the train crash coming and are getting out at the top.    I was taught an old motto many years ago to “sell when they’re yelling, buy when their crying”.    The Government and partnership with Daily Express has managed to manufacture a brief window of “yelling”.   Those getting out now will look like heros in Q1 when unemployment is 3 million, furlough is over, mortgage holidays are over, BREXIT reality has sunk in, and interest rates can’t bail the market out any more.

 

Another comment from an estate agent along similar lines:

Alan Murray

August 17, 2020 at 13:26 #3

We are in the middle of a bubble created by the Chancellor’s decision about Stamp Duty. Clearly taken by him without any look at  historical events when similar situations have been taken before.

Clearly the policy should have been brought in at Budget time when the economy will be suffering from the end of the furlough scheme and increasing job losses. But loose talk meant it was brought in early and is now going to cause people huge problems in the medium term.

What on earth is going to happen to prices in April 2021 if we remain on the road we are on now? Come on Rishi read the history books you have just over six months to stop a meltdown in the housing market.

[blackhole]

2 hours ago, captainb said:

If you go on Uswitch, select first time buyer looking to borrow 95% you get 32 available products. You might have to edit the filters 

For 90% first time buyer you have 226 products. 

People often post on here "banks are not lending" or "buy to let is dead". Seldom is it based in reality. 

 

https://www.uswitch.com/mortgages/95-ltv/?utf8=✓&sort_by=&category=first-time-buyer&property_value=168421.05&loan_amount=160000&ltv_val=95&mortgage_period=25&mortgage_type=any&initial_period=-1&repayment_method=capital_repayment&sort_by=monthly&cb=1

https://www.uswitch.com/mortgages/90-ltv/

 

https://tradingeconomics.com/united-kingdom/mortgage-approvals oh but it is tightening up... doesnt really matter how many products there are if they cannot get the approvals up.  

Also as noted those getting approvals arent necessarily getting big mortgages either.

On a side note; the rich self-employed types I talk to are foreseeing a big storm ahead whilst the permanent types seem to be in denial.

 

Edited August 17, 2020 by blackhole

[captainb]

2 minutes ago, blackhole said:

https://tradingeconomics.com/united-kingdom/mortgage-approvals oh but it is tightening up... doesnt really matter how many products there are if they cannot get the approvals up.  

Also as noted those getting approvals arent necessarily getting big mortgages either.

 

Agreed; although the link you posted showed mortgage approvals in june were significantly ahead of expectations. 

Estate agents could do viewings late may.. So getting a mortgage by end of june after doing all the viewings, picking, bidding etc is certainly possible but not everyone will get it done that quickly - nor start viewings on the first day they could.

Will be intetesting to see the july and aug figures when available.

What is clear though is the banks are not just refusing to lend as infered. 

[Will!]

Good write up on this in FT Alphaville.

Markets Now Monday 17th August 2020 (Registration but not subscription required.)

[blackhole]

4 hours ago, captainb said:

Agreed; although the link you posted showed mortgage approvals in june were significantly ahead of expectations. 

Estate agents could do viewings late may.. So getting a mortgage by end of june after doing all the viewings, picking, bidding etc is certainly possible but not everyone will get it done that quickly - nor start viewings on the first day they could.

Will be intetesting to see the july and aug figures when available.

What is clear though is the banks are not just refusing to lend as infered. 

Well ofcourse there's going to be a bounce back of approvals; the key is will it ever get to post-2008 levels?  

As posted elsewhere i'm now seeing a divergence of opinions between those who deal with commercials (e.g. actual business owners typically) vs those who I know in PAYE / "perm" jobs.  One party is starting to openly talk about the s**t-storm on the way unprompted, the other is going on holiday at any given chance as if nothing is going to change.

As a result of this divergence I don't actually read much into the latest sales figures or even recent bounce back; seems many are still in the denial phase of what is to come.

As of July 31st 9m+ people were still on the furlough scheme.  

It's all about post October AFAIC.

(FYI as a reminder I no longer have any skin in the game - if the UK decides to ramp it up all the way to the moon, I officially have an excuse to leave... and i've already started prepping corp structure outside of the UK).

Edited August 17, 2020 by blackhole

[blackhole]

8 minutes ago, Will! said:

Good write up on this in FT Alphaville.

Markets Now Monday 17th August 2020 (Registration but not subscription required.)

Ha, my wife spotted the very same thing (top of the line stuff all of a sudden appearing on the market for the first time).  Tick tock.  As just posted the smart money is prepping / heading for the doors.

[Voice of Doom]

48 minutes ago, blackhole said:

As posted elsewhere i'm now seeing a divergence of opinions between those who deal with commercials (e.g. actual business owners typically) vs those who I know in PAYE / "perm" jobs.  One party is starting to openly talk about the s**t-storm on the way unprompted, the other is going on holiday at any given chance as if nothing is going to change.

As a result of this divergence I don't actually read much into the latest sales figures or even recent bounce back; seems many are still in the denial phase of what is to come.

As of July 31st 9m+ people were still on the furlough scheme.  

It's all about post October AFAIC.

(FYI as a reminder I no longer have any skin in the game - if the UK decides to ramp it up all the way to the moon, I officially have an excuse to leave... and i've already started prepping corp structure outside of the UK).

Good observations.

Perm workers I know who have never really faced a recession seem fairly unconcerned.

I see things panning out in at least 2 broad phases: jobs directly affected by Covid going first; jobs going (or hours cut) in sectors affected by general loss of demand because of said job losses. If the savings rate continues to go up as people are fearful of the near-future then that's further loss of demand. And so it spreads. Otherwise unaffected sectors brought within the ambit of Covid.

Late autumn, as you say, will be very interesting.

 

[househunter123]

1 hour ago, Will! said:

Good write up on this in FT Alphaville.

Markets Now Monday 17th August 2020 (Registration but not subscription required.)

https://outline.com/dk9wKG

 

use the above link for direct access. Outline .com bypasses the registration content. But it's a  very long article. And got lost reading it!

[HovelinHove]

I just renewed my lease for 6 months. I had an offer accepted, but found an excuse to bail. This market is nuts and I want nothing to do with it. Sunak will extend the SD holiday indefinitely, but it will be too late. All the demand will have been bought forward to a time when the demand was already there after months of lockdown and an exodus from London. What this will do is create a visually much worse crash at the back end of this year, early next year as chains start collapsing due to job losses etc. Unless he is prepared to underwrite all mortgages with tax payer money, then it’s just a matter of time. If he does that, I will buy a house quit my job and do what everyone else is doing...become a professional Netflix watcher.

I also think the real story is being overlooked here. 2% drop in London...people are scrambling to leave, and If this accelerates, it won’t be long before 2% becomes 5%, and then people won’t have enough to transfer to the sticks, so will start reducing offers. London always leads the way down, and despite the Sunak put, London is still down. Also once the weather turns, the countryside will lose its appeal real fast.

I knew this was coming, and just like I knew that, I know what is coming next.