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Hope for some, heartbreak for others as house prices go through the roof


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https://www.theguardian.com/money/2020/sep/05/hope-and-heartbreak-as-uk-house-prices-go-through-roof

UK house prices have hit a record highsince the lifting of lockdown, after the fastest monthly growth in property values in August since 2004, fuelled by the release of pent-up demand and the government’s stamp duty cut.

Despite Britain plunging into the deepest recession in modern history in the second quarter, estate agents report a surge in interest from those with the financial security to move, and from those whose priorities have been changed by Covid-19. There are, however, winners and losers in this rapidly moving market, as Covid-19 creates a period of boom and bust.

 

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Or, just bear with me here as a thought experiment, banks ARE lending and houses ARE selling.

This would go a long way towards explaining all the house sales and mortgage approvals. :D 

Also, the entire article is critical and bearish. 

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16 minutes ago, PeanutButter said:

Or, just bear with me here as a thought experiment, banks ARE lending and houses ARE selling.

This would go a long way towards explaining all the house sales and mortgage approvals. :D 

Also, the entire article is critical and bearish. 

I think we need to wait until after the winter and see what the new normal means - post furlough ending and once the post lockdown move hysteria has died down.

Maybe the boom will reverse - or grow even more. And then the end of the stamp duty cut in March - does Rishi carry it on? Its clearly going to be tougher for first time buyers given the mortgage LTV/deposit restrictions and lower income multiples.

Edited by MARTINX9
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There is a Welsh article which is similiar themed...

https://www.walesonline.co.uk/news/wales-news/places-wales-people-moving-after-18873525

Quote

It's fair to say the housing market in Wales is back up and running with a bang.

 

 
What I did find interesting though was a comment from somone trying to sell, ...
cymruambyth56...

There is no doubt a surge in demand, ( mainly pent up) but this talk of higher prices doesn't seem to translate into reality.

It is possible to ask a lot more for a property than it is valued at, however, it is only worth what buyers are prepared to pay for it.

I have had a house on the market for two months and potential buyers are offering well below the asking price.

This is in a good sought after area where demand is high, but only if the price is heavily discounted.

I am of the opinion that a lot of these claimed price rises are simply agents talking up the market as usual, in the knowledge that there is a downturn around the corner.

Buyers are aware of this and are trying it on with the prices.

Don't be fooled by the hype, in the real world it is totally different.

There may be some properties that are selling above their valuation, but these would be few and far between.

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10 minutes ago, moonriver said:

There is a Welsh article which is similiar themed...

https://www.walesonline.co.uk/news/wales-news/places-wales-people-moving-after-18873525

 
What I did find interesting though was a comment from somone trying to sell, ...
cymruambyth56...

There is no doubt a surge in demand, ( mainly pent up) but this talk of higher prices doesn't seem to translate into reality.

It is possible to ask a lot more for a property than it is valued at, however, it is only worth what buyers are prepared to pay for it.

I have had a house on the market for two months and potential buyers are offering well below the asking price.

This is in a good sought after area where demand is high, but only if the price is heavily discounted.

I am of the opinion that a lot of these claimed price rises are simply agents talking up the market as usual, in the knowledge that there is a downturn around the corner.

Buyers are aware of this and are trying it on with the prices.

Don't be fooled by the hype, in the real world it is totally different.

There may be some properties that are selling above their valuation, but these would be few and far between.

No stamp duty hols in Wales at the moment I believe.

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1 hour ago, PeanutButter said:

Or, just bear with me here as a thought experiment, banks ARE lending and houses ARE selling.

This would go a long way towards explaining all the house sales and mortgage approvals. :D 

Also, the entire article is critical and bearish. 

Ha. Dont talk logic. Its all a conspiracy... 

Back in the real world yes houses are selling (not all chains are collapsing..) and banks are lending (see number of mortgage approvals). 

Will these conditions still exist in jan next year.. My bet is prices will come down 10% or so. But you know what? People will still buy and sell.. And also shockingly banks will still lend. 

Prices can fall or rise moderate amounts in the real world. Not everything has to be an extreme crash or surge 

Edited by captainb
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3 minutes ago, rantnrave said:

No stamp duty hols in Wales at the moment I believe.

For one home owners the threshold was raised from £180k to £250k, so not much savings.

And 2nd home owners got no stamp duty holiday at all, and also have to pay a 3% surcharge. 😄

https://www.landc.co.uk/insight/2020/07/scotland-and-wales-follow-england-and-ni-stamp-duty-holiday/

Quote

Land Transaction Tax (LTT) in Wales

Homebuyers in Wales will also see the threshold at which LTT becomes payable rise to £250,000, with this change due to come into effect on 27th July. Currently, no stamp duty is payable on properties costing up to £180,000. The changes will result in a maximum saving of £2,450 for someone buying a property costing £250,000. The higher threshold will remain in place until 31st March 2021, which is when the stamp duty measures in England, Northern Ireland, and Scotland will also finish.

If you’re buying an additional property in Wales

Whereas in England, Northern Ireland and Scotland, homebuyers purchasing additional properties will benefit from the temporary higher stamp duty thresholds, those in Wales won’t.

LTT thresholds in Wales will remain unchanged for those buying additional properties, and buyers will also have to pay the extra 3% surcharge. For example, someone buying a second home in Wales costing £200,000 will continue to pay LTT at 3% on the first £180,000, and 6.5%, on the remaining £20,000 whereas someone purchasing a property which will be their only residence won’t have to pay any LTT, assuming the transaction completes on or after 27th July and before 31th March next year.

 

 

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Banks are keeping their hands in their pockets.

To get a surge in sales would require people with liquid assets to transfer them to housing.

S24, rightly, is seeing 'investors' exit housing position.

God knows what state the io btl market is in - all I'm hearing is non paying or vanished tenants. 

You need someone smart enough to have access to a few 100k of cash. And stupid enough to think UK property is a good place for it.

That's a big ask.

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3 hours ago, spyguy said:

Gormless grecian article that bears no resemblance to reality.

Banks arnt lending;houses arnt selling.

That’s nonsense. When we are in Scotland prices are still insane. We put an offer in on an old period property last week, 15% above the asking and we were still out bid.

Im desperate for a crash but there’s very little sign of it here in Scotland. The odd reduced property yes, but I cannot find any bargains to of sold in recent months. Prices are still very strong thanks to record low rates and probably in part due to people like my wife and I save a packet on a commute in to work... 

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1 hour ago, Pmax2020 said:

That’s nonsense. When we are in Scotland prices are still insane. We put an offer in on an old period property last week, 15% above the asking and we were still out bid.

Im desperate for a crash but there’s very little sign of it here in Scotland. The odd reduced property yes, but I cannot find any bargains to of sold in recent months. Prices are still very strong thanks to record low rates and probably in part due to people like my wife and I save a packet on a commute in to work... 

It takes about 2-3 months for sales to make the LR.

Until then, interested parties are just making stuff up.

The fastest data is mortgage approvals/ mortgage drawdowns.

Those are still low. Even though 3 months of sales were compressed in the August numbers.

The interesting stats are sales n prices.

 

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5 hours ago, MARTINX9 said:

I think we need to wait until after the winter and see what the new normal means - post furlough ending and once the post lockdown move hysteria has died down.

Maybe the boom will reverse - or grow even more. And then the end of the stamp duty cut in March - does Rishi carry it on? Its clearly going to be tougher for first time buyers given the mortgage LTV/deposit restrictions and lower income multiples.

This +10

Easy to speculate, or to get excited about sanity returning to the housing market. I know I'm as guilty as the next person. But things may get even worse if a working vaccine is found and things return to the old "normal" in the New Year. Whichever way the market turns, it's going to be interesting. Which apparently can be a curse.

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This so called boom is going to wipe out so many FTBs, it will be heart breaking for them.

I know many of these buyers, absolutely clueless to what is happening around them, you have to remind yourself this  to understand why four months of delayed viewings and a sprinkle of stamp duty relief is having such an affect.

On the face of it nothing has changed to these buyers, they neither know or understand any different, they're lambs to the slaughter.

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7 hours ago, PeanutButter said:

Or, just bear with me here as a thought experiment, banks ARE lending and houses ARE selling.

This would go a long way towards explaining all the house sales and mortgage approvals. :D 

Also, the entire article is critical and bearish. 

A Rightmove 'Sale' does not equal a Completion.

It's all very well if a Bank/BS offers a mortgage, but if the same Bank/BS doesn't offer one to the buyer of the transaction concerned, there is no transaction. FTBs will either be getting HTB at 5% down, or BoMaD at 15%. The former doesn't support chains and the latter is numerically limited. 

Mortgage approvals in July were a normal number ~60k, August may be slightly higher, but there is a lot that didn't happen in April-June to catch up, and if the FTBs don't happen, chains fall apart even amongst the approvals made.

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2 hours ago, spyguy said:

It takes about 2-3 months for sales to make the LR.

Until then, interested parties are just making stuff up.

The fastest data is mortgage approvals/ mortgage drawdowns.

Those are still low. Even though 3 months of sales were compressed in the August numbers.

The interesting stats are sales n prices.

 

Is there data available on the actual mortgage drawdowns, that would be interesting as approvals are one thing, but if the weak link fails, not that enlightening. 

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2 hours ago, spyguy said:

It takes about 2-3 months for sales to make the LR.

Until then, interested parties are just making stuff up.

The fastest data is mortgage approvals/ mortgage drawdowns.

Those are still low. Even though 3 months of sales were compressed in the August numbers.

The interesting stats are sales n prices.

 

It doesn’t take 2-3 months in scotland. Sold prices appear in rightmove around 6 weeks after the end of each month, though admittedly Julys are late this month. 
 

Alternatively you can get most sold prices within 4 weeks by just going on registers of Scotland website. 

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45 minutes ago, Tulip_mania said:

A Rightmove 'Sale' does not equal a Completion.

It's all very well if a Bank/BS offers a mortgage, but if the same Bank/BS doesn't offer one to the buyer of the transaction concerned, there is no transaction. FTBs will either be getting HTB at 5% down, or BoMaD at 15%. The former doesn't support chains and the latter is numerically limited. 

Mortgage approvals in July were a normal number ~60k, August may be slightly higher, but there is a lot that didn't happen in April-June to catch up, and if the FTBs don't happen, chains fall apart even amongst the approvals made.

Thanks for explaining house sales to me. 😑

The statement I was replying to was that houses aren’t selling and banks aren’t lending.

They are selling, they are having offers that are accepted and going off the market. That means they are sold, subject to contract. The statement wasn’t ‘houses aren’t staying sold’ or ‘transactions are falling through at record rates’. 

I agree with you that banks are lending, and that mortgages are being sold at normal levels. 

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19 hours ago, spyguy said:

Banks arnt lending;houses arnt selling.

Yes they are 

17 hours ago, captainb said:

Ha. Dont talk logic. Its all a conspiracy... 

Back in the real world yes houses are selling (not all chains are collapsing..) and banks are lending (see number of mortgage approvals). 

Will these conditions still exist in jan next year.. My bet is prices will come down 10% or so. But you know what? People will still buy and sell.. And also shockingly banks will still lend. 

Prices can fall or rise moderate amounts in the real world. Not everything has to be an extreme crash or surge 

100% correct and sensible post

 

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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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