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https://www.theguardian.com/business/2020/aug/27/uk-housing-demand-soars-since-end-of-covid-lockdown

My interpretation is:  Government gives a massive handout to those wanting a bigger house in the countryside.   Where I live, houses had sat on the market for months and quite literally none had sold till the stamp duty handout.    What should have been the only silver lining of this plague, ie house price crash, has become anything but.  The mindset now will be that house prices must stay at today's magic high price so will be even stickier once the handout stops.    Banks encouraging landlords with non paying tenants to sell up might start a landslide but after nearly 20 years of expecting a crash for one really good reason or other I am now fully disillusioned (even though I am well housed in technical terms, just not where I need to be living though)

 

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Replace Housing with Haircuts and you get the same news article.  Lots of people couldn't during lockdown and are starting to.

It doesn't increase the total number of people doing it, and eventually a new balance is found.

VI piece to let the clever scumlords offload to the greater fool.

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Personally I see some inflection happening with the housing market around where I am in Berkshire. The price bracket of 450-600 that I look is seeing an increase of supply, and price reductions are common and don't translate into instant sale. I think the dire situation we are in will sink in pretty soon

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The article might be explaining how things are going well for sellers right now, but the question is, how long can it last? (ie how long can the government afford to keep feeding cash in, to help housing?).

I saw this tweet from Henry Pryor...(house buyer, often speaks on media)...

Quote

"Homes that are selling may be selling faster but the majority of homes on the market aren’t selling at all. Up to half of all homes put up for sale don’t sell. Agents I'm speaking to tell me they have more stock than last year & a lot of new stock launching in September."

 

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22 minutes ago, msi said:

VI piece to let the clever scumlords offload to the greater fool.

This mini boom doesn't help landlords at all. Landlords don't own the type or properties (4/5 bed houses) in the nice locations which are currently selling.

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1 minute ago, moonriver said:

The article might be explaining how things are going well for sellers right now, but the question is, how long can it last? (ie how long can the government afford to keep feeding cash in, to help housing?).

I saw this tweet from Henry Pryor...(house buyer, often speaks on media)...

"Homes that are selling may be selling faster but the majority of homes on the market aren’t selling at all. Up to half of all homes put up for sale don’t sell. Agents I'm speaking to tell me they have more stock than last year & a lot of new stock launching in September."

This is correct.

The market is completely divided. London is unsurprisingly doing terrible.

In the quality end of the market outside london there is a mini boom.

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The higher rungs of the fabled ladder may be trading property among themselves, but with the end of furlough, pay cuts etc, first time buyers look less likely than I can remember to be able to make a purchase. The current situation is like the first class in an aircraft thinking they will be safe during a crash because they're sitting on the upper deck.

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4 minutes ago, rantnrave said:

The higher rungs of the fabled ladder may be trading property among themselves, but with the end of furlough, pay cuts etc, first time buyers look less likely than I can remember to be able to make a purchase. The current situation is like the first class in an aircraft thinking they will be safe during a crash because they're sitting on the upper deck.

They fly in their own separate plane now and thus will be fine. There is no one property market - there are multiple completely unconnected markets.

 

There has been no property ladder in decades now. This idea that first time buyer support the market is nonsense.

Edited by Neitherland
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The funny thing about posting a clip from the big short is that the UK property market did not all collapse like a Jenga stack in 2007-2008.

There is no Jingle mail in the UK - it's not like the US market.

In 2007-2008 loads of areas and property types hardly experienced a fall at all.

Most UK property is owned outright.

In some good areas the average loan to value on property is tiny, the number of transactions is miniscule (there is no liquidity in property) and no forces sellers.

There is no mechanism for crashes in these areas. 

 

Edited by Neitherland
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1 minute ago, Neitherland said:

In some good areas the average loan to value on property is tiny, the number of transactions is miniscule (there is no liquidity in property) and no forces sellers.

Ok, can you name some?

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Look @Neitherland I agree that the fate of the a UK property is not bonded to the monolith that is the avg house price.

There are multiple markets like you said. But still if you look at it from a statistical point of view, you have a distribution around the mean. If the mean goes down, then everything is more likely to go down. Some can still go up, and not all of them will go down by the headline of the avg number provided. If we get a - 10% headline, most will be between -15% and -5%, and on the extreme you can see a -30% and a +5% 

So I agree to some extent to what you are saying, but as well thinking a significant proportion would magically stay high should the bottom of the market collapse is wishful thinking. 

Edited by Freki
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Just had a quick look at Guildford. for the 400 - 600k bracket I mentionned earlier 

I have 124 properties showing up on Zoopla.

36 have had their price reduced. 25 in August and a further 5 in July. Not really screaming immediate confidence in the market over there. The highest discount so far is 10% so nothing terrible either. Why did I look at Guildford? Well, you have a news yesterday saying the highest increase in benefits claim in the country was in Guildford, up 150% !

If price start collapsing in Guildford, then people shopping for the list of places mentioned earlier will see a more attractive proposition in moving there than paying the increasing premium for say Wokingham. 

My 2 cents, very anecdotal but we are comparing anecdotes here so I don't have much issue with it

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25 minutes ago, Freki said:

Look @Neitherland I agree that the fate of the a UK property is not bonded to the monolith that is the avg house price.

There are multiple markets like you said. But still if you look at it from a statistical point of view, you have a distribution around the mean. If the mean goes down, then everything is more likely to go down. Some can still go up, and not all of them will go down by the headline of the avg number provided. If we get a - 10% headline, most will be between -15% and -5%, and on the extreme you can see a -30% and a +5% 

So I agree to some extent to what you are saying, but as well thinking a significant proportion would magically stay high should the bottom of the market collapse is wishful thinking. 

Agree but means aren't always very good perhaps you need to look at modal and median figures as well.

I just looked up Hertfordshire on Right Move with the values Min 0 Max £800k detached results 1006 total. You can probably right half off as impaired some way - bad area, not near a station, no schools etc

Your left with 500  you might just consider in a county of a million+ people and that is without the covid trend of moving out from London

They won't shoot up of course not but people will simply sit on them of they don't get the value they perceive them to be worth. Some will do deals but the scarcity alone creates a floor. Weirdly nearly 800 in the £1 million to £2 million bracket these will fall and there will be deals to be done. There just isn't the demand

 In 2018, there were 14,638 properties which went for a seven figure sum, according to Lloyds Bank. Thats across the whole of the UK

Many of these will be my property is my pension mob......

Edit: just saw your other post and agree - all properties will go down but it will be a very mixed bag

 

 

 

 

Edited by GregBowman
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6 minutes ago, Neitherland said:

This is correct.

The market is completely divided. London is unsurprisingly doing terrible.

In the quality end of the market outside london there is a mini boom.

I heard a discussion on LBC last night that greatly affects London. The presenter was shocked to realise how many people he had phoning in experiencing huge problems with their flats, due to needing to get this EWS1 form in order to sell, remortgage or even insure the building. The wait for one is years.

Also, a prospective buyer rang and said he had an offer in principle for a flat he wanted, but after spending £1000 on related costs, (he had to get a survey), the bank turned down his mortgage due to the owner not having (or any prospect of getting any time soon) one of these forms.

This article reckons there are around 3 million in this position, and the couple they quote were told it would be 2026 before they get the form signed off.

https://www.thisismoney.co.uk/money/markets/article-8616399/Red-tape-nightmare-stops-millions-selling-homes.html

...But in January, Government guidance was extended to buildings of all heights with any cladding, not just the type that caused the Grenfell fire in 2017. And blocks with no cladding are also caught by the rules. 

It means the number of flats requiring the issue of an EWS1 form has grown from 307,000 to three million.

...there are fewer than 300 chartered fire engineers who can carry out an EWS1 survey — which means just one engineer for every 10,000 flats needing a survey.

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7 minutes ago, moonriver said:

I heard a discussion on LBC last night that greatly affects London. The presenter was shocked to realise how many people he had phoning in experiencing huge problems with their flats, due to needing to get this EWS1 form in order to sell, remortgage or even insure the building. The wait for one is years.

 

Heard the same segment bit of an eye opener for me

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Just now, GregBowman said:

Heard the same segment bit of an eye opener for me

Do you think the government will....

1) let this continue as it is, resulting in millions of non sellable flats?

2) drop the requirements of either getting the EWS or letting someone less qualified issue one?

3) pump (what would be huge) money into it, to pay for new cladding and fire proof materials?

I am not sure, but I think option 2 could have liability issues should any fires occur.

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1 hour ago, Neitherland said:

They fly in their own separate plane now and thus will be fine. There is no one property market - there are multiple completely unconnected markets.

 

There has been no property ladder in decades now. This idea that first time buyer support the market is nonsense.

Yes, the gap between different tiers of houses/flats  has grown so wide as to create a perma price gap for buyers.  Those on the bottom rungs cant move up much if at all and as such not selling down to a FHBuyer which would have happened more frequently a couple of decades ago. 

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1 hour ago, Freki said:

Look @Neitherland I agree that the fate of the a UK property is not bonded to the monolith that is the avg house price.

There are multiple markets like you said. But still if you look at it from a statistical point of view, you have a distribution around the mean. If the mean goes down, then everything is more likely to go down. Some can still go up, and not all of them will go down by the headline of the avg number provided. If we get a - 10% headline, most will be between -15% and -5%, and on the extreme you can see a -30% and a +5% 

So I agree to some extent to what you are saying, but as well thinking a significant proportion would magically stay high should the bottom of the market collapse is wishful thinking. 

As i have said before on here i work for a data company which has one tiny little division which produces one of the famous mortgage company house price indexes.

Theoretically the statistical method is okay - but in practice the house price sale volumes are so small now the actual numbers from the index are useless in giving you any information on the house you want to buy.

It all broke in 2007 onwards - volumes dropped to 60k ish a month. There is 23 million on residential properties in the UK and they are all different and in completely different areas.

Indexes tell you nothing.

 

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1 hour ago, Freki said:

Just had a quick look at Guildford. for the 400 - 600k bracket I mentionned earlier 

I have 124 properties showing up on Zoopla.

36 have had their price reduced. 25 in August and a further 5 in July. Not really screaming immediate confidence in the market over there. The highest discount so far is 10% so nothing terrible either. Why did I look at Guildford? Well, you have a news yesterday saying the highest increase in benefits claim in the country was in Guildford, up 150% !

If price start collapsing in Guildford, then people shopping for the list of places mentioned earlier will see a more attractive proposition in moving there than paying the increasing premium for say Wokingham. 

My 2 cents, very anecdotal but we are comparing anecdotes here so I don't have much issue with it

Did these sellers put an extra 10% on their prices vs end of last year? which is what happened around my area.  And that was at the beginning of March but nothing sold until the stamp duty cut, magic wand.

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1 hour ago, Neitherland said:

The funny thing about posting a clip from the big short is that the UK property market did not all collapse like a Jenga stack in 2007-2008.

There is no Jingle mail in the UK - it's not like the US market.

In 2007-2008 loads of areas and property types hardly experienced a fall at all.

Most UK property is owned outright.

In some good areas the average loan to value on property is tiny, the number of transactions is miniscule (there is no liquidity in property) and no forces sellers.

There is no mechanism for crashes in these areas. 

 

The areas in the USA which crashed the most did not have legal Jingle Mail.  ''Two states with among the highest foreclosure rates, Florida and Nevada, are full recourse.''  ( a cut and paste)

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  • 415 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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