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House Price Indices Wed Sep 2nd


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17 hours ago, Doner Kebab said:

Unemployment up

I really hope you lose your job 

4 hours ago, Smiley George said:

One house he valued has gone under offer, at 15k over what he valued at and the vendor rang him up to gloat “see I would’ve lost money if I’d gone with you”.

He would have lost money though

4 hours ago, Smiley George said:

There are 5 houses in the chain he’s just become a part of. The EA’s response, “I’ll see you in 16 weeks when it collapses”

 

With that childish spiteful attitude no wonder he has difficulty in finding clients.

A more mature and business like response would be to say " I hope it goes through but should it not please give me a call and let us see if we can work together.

Unlikely to fall through as everyone will want to get it done to avoid stamp duty.

Sounds as thought it sold quickly so if it did fall though the probability is it will sell again. 

3 hours ago, Voice of Doom said:

“Two words: reality check. As strong as the property market is right now, it will not last.

“Demand is understandably strong after lockdown and the added bonus of the stamp duty holiday, but unemployment is rising by the day and the economic outlook is highly uncertain as the furlough scheme ends.

“In the final months of the year we will start to see a reversal in the current rate of house price growth, as the true impact of Covid-19 on the economy shows through.

The guardian predicts armageddon.  AGAIN zzzzzzzzzzzzzzzzzzzzzzzzz

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1 hour ago, adarmo said:

I think it a more appropriate analogy than a man falling from a building. That point he's on his way down, he can see it conning and everyone watching can also agree he ain't superman.

No obfuscation intended. Perhaps the broken clock is more suitable?

OK so mansplaining it is. The point is that the guy falling down infers merely from previous experience what is going to happen. As when someone says that there has been an imminent crash for 15 years. As for your stopped clock and placard nutter, it would be more apt to include an example that is not set up as pathological (broken) ie strawman.

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2 hours ago, adarmo said:

Dollar is on its way down now after the Fed latest statement. In other words uk has more room for stimulus, printy printy and NIRP, and letting inflation 'run hot'.

From a macro perspective I've not been this excited since 2007.

 

"Pound is becoming an emerging market currency, says BofA analyst" (https://www.ft.com/content/4fd04fd9-7209-4b7c-97a1-97466f226159) in June. Cable was $1.25 at the time and they said it could go to parity. It's currently $1.335, so it seems they've been wrong so far, but are the factors they mention not a worry?

If the UK has room for stimulus, why all the talk of tax increases?

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3 hours ago, captainb said:

And yet people here didnt buy at - 15% as they were waiting for - 30% etc. 

Quantum is key, people suggesting that houses must fall by 50,60,70% etc is so divorced from reality they might as well sign up for the next 25 years talking about sodding house prices now

This is an important point - don't waste a crisis!

I wish I'd been brave enough to buy more shares in March 2009, but I learned from that and I'm glad I was brave enough this time to buy in March 2020.  

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One consequence of lock down has been an increase in the break up of relationships. Nothing puts strain on a marriage/relationship like having to be in close proximity to your partner for an extended period, add onto that worries about the future and the stress of home schooling and you've got a combustible mix. I know 2 couples that have decided to divorce over lock-down and more that are looking rocky. Many are now living separately and have arranged to sell their shared homes, this means more demand in the housing market. This will effect the lower end of the market as single people tend to buy cheaper smaller houses this is where greater demand will be felt. On the other side of the equation more couples will be selling larger shared houses so that higher end of the market could be adversely affected. Discuss? 

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52 minutes ago, Smiley George said:

The other snippet of conversation from him was regarding a backlog of probates all going back to January, he had at least 5 waiting to come on, but solicitors simply aren’t processing them quickly enough - and this is pre-pandemic stuff.

Not trying to be your echo chamber but that was mentioned to me only yesterday. I live in an area full of ‘older’ home occupiers and my niece lives in a cul de sac with about 6 houses and 6 bungalows. 2 of the bungalows are empty due to deaths and she couldn’t understand why. I ‘mansplained’ to her getting probable etc takes a while. She knew this already and said both had been empty since before Christmas! 

Also one of those agents said they have viewed a load of deceased estates over the past few weeks but all at ‘early stages’ of emptying house etc before sales process 

There is definitely pent up demand after lockdown but I wonder if hidden away there maybe some pent up supply we have yet to see. And they may come on the market just as the peak of demand begins to fall? Wishful thinking but possible? 

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1 hour ago, shortbread said:

The price jump is inevitable, months of pent up demand + lowest ever rates + excessive liquidity in form of govt. grants and unsecured loans. So prospective buyers who held of their purchases are back. On top of this are new buyers with new found cheap/free capital thanks to Rishi. For most in the these troubling times the default asset purchase is property. 

People in stable employment saved *lots* during lockdown too

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Isn't chicken little the analogy?

Despite all the feeling that we've seen it all before, and it turned out all right, I do still believe this time will turn into a real crash. 

If it was england alone, the government might, just might have been able to contain it. 

But it's not just england. It's everyone and everywhere that's in real trouble. Alone, the government  might have been able to contain the slowdown from brexit and covid 19. 

But I can't help feeling we're going to blindsided by some or all of the backwash from troubles abroad:

Chinese aggression, Chinese shadow banking, swine flu, 52 million unemployed in usa, a bitter us election, us runaway debt, American bank foreclosures, the Italian banking situation, German and others' reluctance to share a common European debt, the whole euro no growth problem,  japan, the list goes on and on everywhere you look.

Something somewhere is going to come up and start the dominoes falling. Iran? 

It's beginning to feel like anything, the fluttering of a butterfly's wings, something totally irrelevant and insignificant, will puncture this irrational exuberance 

Maybe it's just me...

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3 hours ago, First time on the ladder said:

I'm a FTB, with a 40% deposit and desperate to buy. Don't want to buy at the very top end but certainly seems like there's no falls coming anytime soon. No doubt interest rates will rocket when they do.

Sigh

Hang on there....lower loan to value best rates, keep a close eye on your chosen area, don't rush into anything, probates take time to process and SD is only a way to keep the market looking keen and active....should make no difference to FTBers .....early next year will really see the clear picture... reality not fantasy.;)

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1 hour ago, nickb1 said:

OK so mansplaining it is. The point is that the guy falling down infers merely from previous experience what is going to happen. As when someone says that there has been an imminent crash for 15 years. As for your stopped clock and placard nutter, it would be more apt to include an example that is not set up as pathological (broken) ie strawman.

I would say the latter analogies have far more in common with some opinions on this site than a bloke falling off a building; that's not a got analogy at all really. 

You point to previous experience which is simplified as the government will step in to do incredible things just as it did in 2008. 

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5 minutes ago, adarmo said:

I would say the latter analogies have far more in common with some opinions on this site than a bloke falling off a building; that's not a got analogy at all really. 

You point to previous experience which is simplified as the government will step in to do incredible things just as it did in 2008. 

🤭

So not 'other things being equal' then?

Edited by Si1
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29 minutes ago, astrid said:

One consequence of lock down has been an increase in the break up of relationships... Many are now living separately and have arranged to sell their shared homes, this means more demand in the housing market. This will effect the lower end of the market as single people tend to buy cheaper smaller houses this is where greater demand will be felt. On the other side of the equation more couples will be selling larger shared houses so that higher end of the market could be adversely affected. Discuss? 

Is there actually data on this? Does it outweigh the number of couples moving in together? 

In any case, I'm not sure whether divorces, breakups and new relationships increase or decrease demand. It all depends on whether they rent/buy big/small properties or go to back to live with parents.

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58 minutes ago, Young Turk said:

 

"Pound is becoming an emerging market currency, says BofA analyst" (https://www.ft.com/content/4fd04fd9-7209-4b7c-97a1-97466f226159) in June. Cable was $1.25 at the time and they said it could go to parity. It's currently $1.335, so it seems they've been wrong so far, but are the factors they mention not a worry?

If the UK has room for stimulus, why all the talk of tax increases?

The two aren't mutually exclusive. Besides, stimulus has already taken place and will be on going. Tax rises are only being talked about, but there have been tax cuts already (vat). 

It's also possible to do some good tax changes for instance taxing unearned income at levels equivalent to earned income, equalizing paye and contractors and self employed for instance. 

Inheritance tax would be another good one.

Dare i say it even a land value tax. 

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3 minutes ago, adarmo said:

The two aren't mutually exclusive. Besides, stimulus has already taken place and will be on going. Tax rises are only being talked about, but there have been tax cuts already (vat). 

I don't know what stimulus might be introduced, but furlough is being withdrawn. The VAT and SDLT cuts are temporary (i.e. unless they change course, they will be increased next year).

6 minutes ago, adarmo said:

It's also possible to do some good tax changes for instance taxing unearned income at levels equivalent to earned income, equalizing paye and contractors and self employed for instance. 

Inheritance tax would be another good one.

Dare i say it even a land value tax. 

I'd class all of these as political risk to high house prices and they seem like the biggest risks to me. It increasingly seems like the Tories have reached a point where they realise they have more to gain electorally from helping the young/renters than helping old/wealthy/landlords/housebuilders. So even if economic factors can support high prices, the Tories have an incentive to support policies which lower prices. I would have thought this makes small falls (at least in real terms) a likely scenario.

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19 minutes ago, Si1 said:

🤭

So not 'other things being equal' then?

You're not even making sense. Analogies are not analysis so what would that have to do with it?

It's not my fault the housing market has refused to crash and hand you a mansion for buttons but i totally understand you being bitter about it. 

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5 minutes ago, Young Turk said:

I don't know what stimulus might be introduced, but furlough is being withdrawn. The VAT and SDLT cuts are temporary (i.e. unless they change course, they will be increased next year).

I'd class all of these as political risk to high house prices and they seem like the biggest risks to me. It increasingly seems like the Tories have reached a point where they realise they have more to gain electorally from helping the young/renters than helping old/wealthy/landlords/housebuilders. So even if economic factors can support high prices, the Tories have an incentive to support policies which lower prices. I would have thought this makes small falls (at least in real terms) a likely scenario.

 Sure, just saying that although they are talking about tax increases so far they've done the opposite. I Would expect perhaps a change to sdlt to make moving more easy, perhaps taxing the difference in sold and bought prices since a tax on mobility is a bit insane!

I disagree with your political analysis. The sad reality is there are still more homeowners than tenants, of those not owning a big portion are council or social tenants who may have less inclination to own... maybe not. 

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6 hours ago, definitelynotanagent said:

I think a lot of people think that the govt will do whatever it takes to keep house prices high, including helicopter money. If you believe that to be the case, in that scenario, it might not be so stupid to buy a house, as opposed to sitting on a pile of cash and paying rent.

 

 

The government clearly will do whatever it takes:

- Banks stand to make enormous losses if the market crashes and people default.  That will cause panic and crash credit issuance.

- Mortgage lending is THE major credit pump into the consumer economy.  Let the credit spigots slow appreciably and you have an economic crash just from that, even if all the other factors were OK (which they most certainly aren't).

- People with houses LOVE the idea of their 'value' going up and get very upset when they see it crashing ... especially if their job is looking shaky and the general economy is bad.

 

As long as people can access cheap credit to buy houses, even at stupidly high prices,  they will continue to do so!  Has no-one being paying attention for the last decade and more?

 

 

Edited by Sour Mash
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21 minutes ago, Sour Mash said:

The government clearly will do whatever it takes:

- Banks stand to make enormous losses if the market crashes and people default.  That will cause panic and crash credit issuance.

- Mortgage lending is THE major credit pump into the consumer economy.  Let the credit spigots slow appreciably and you have an economic crash just from that, even if all the other factors were OK (which they most certainly aren't).

- People with houses LOVE the idea of their 'value' going up and get very upset when they see it crashing ... especially if their job is looking shaky and the general economy is bad.

 

As long as people can access cheap credit to buy houses, even at stupidly high prices,  they will continue to do so!  Has no-one being paying attention for the last decade and more?

 

 

Exactly this! 

Just because fundamentals "should" crash the market, it doesn't necessarily mean it will happen, and definitely not assured that nominal values will crash.

People make the choice to buy for lots of different reasons, anf if enough of them decide to buy at high prices, then prices will rise and keep rising.

Who was it that said that the market could be irrational for longer than you could stay solvent? The same thing could definitely be true for the housing market, except it'd have to be modified to be "the housing market can remain irrational for longer than you have time to wait, if you intend to pay your mortgage off before retirement"

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33 minutes ago, Sour Mash said:

The government clearly will do whatever it takes:

- Banks stand to make enormous losses if the market crashes and people default.  That will cause panic and crash credit issuance.

- Mortgage lending is THE major credit pump into the consumer economy.  Let the credit spigots slow appreciably and you have an economic crash just from that, even if all the other factors were OK (which they most certainly aren't).

- People with houses LOVE the idea of their 'value' going up and get very upset when they see it crashing ... especially if their job is looking shaky and the general economy is bad.

 

As long as people can access cheap credit to buy houses, even at stupidly high prices,  they will continue to do so!  Has no-one being paying attention for the last decade and more?

Tis true that....a house could be a million if the lenders will lend the buyers will buy....;)

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Look, everyone knows its a mega bubble. You cant keep supporting it without running out of serviceable debt/goodwill/political capital AT SOME POINT.

We're in fantasy land. That's it. Fantasy. Without further intervention, house prices are going nowhere but down from here. Not next month, not the month after, but soon. and for the rest of our lives.

See you in April folks, I'm out until All Fool's Day (three months after Brexit). Im going to check in here on that day, then leave it until the end of June (3 months after the end of Stamp Duty). Catch up with yous all. Then 3 months after that (End September).

If people think house prices are going to be anywhere near current levels without additional support, of course they're bonkers.

If there's additional support, then that's another admittal that these prices are bonkers.

I love this site, it actually helps to know there are people out there discussing the insanity, whatever side of the debate you're on. But we must all know this situation is insanity. It's wrong. It's theft of young people's futures. It's theft of middle aged people's futures. It's essentially the wrong way to govern a country. We all know this.

Life is too short to stay involved for now, folks (I've got a book to write with a deadline - sounds cushy number, but unfortunately it isnt) - see you on the other side.

Peace out, good luck, keep it real, keep safe, stay cool. Seriously, this is the best site on the internet. It's not as funny as Property118, but we can work on that.

 

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11 minutes ago, definitelynotanagent said:

Exactly this! 

Just because fundamentals "should" crash the market, it doesn't necessarily mean it will happen, and definitely not assured that nominal values will crash.

People make the choice to buy for lots of different reasons, anf if enough of them decide to buy at high prices, then prices will rise and keep rising.

Who was it that said that the market could be irrational for longer than you could stay solvent? The same thing could definitely be true for the housing market, except it'd have to be modified to be "the housing market can remain irrational for longer than you have time to wait, if you intend to pay your mortgage off before retirement"

 

I can't believe that people still think that the housing market (or pretty much any asset class) is driven by 'fundamentals' any more.  It's driven by cheap, easy credit and government support.  It decoupled from reality a LONG time ago.

When the market eventually does 're-couple' with the fundamentals, it's going to be as a result of a massive systemic crash which isn't going to leave anyone feeling good about putting a large amount of investment into a house purchase.

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  • 433 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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