Only 300k redundancies, quick buy a house.

[Pop321]

https://www.bbc.co.uk/news/business-54058559

This is being picked up on several threads I know, but there is seemingly a huge disconnect between the news EVERYDAY which highlights issues in the real economy, business results, general outlook verses a crazy ‘mini boom’ in property. 

I understand the massive 3% saving (sarcasm alert) of SDLT means it’s worth fighting and paying 10% more for house. 

I understand being locked away means people can’t wait a few more months to see where the land lies before committing to the biggest purchase of their lives. 

I understand people borrowing now because they might be made redundant and not able to borrow in a few months. What’s the worst that can happen?   

I understand the government wanting to keep that house price plate spinning and keep everything going despite having a political opportunity to do otherwise (which most would understand due to an unprecedented pandemic)  

I understand it’s a great opportunity to buy shares and the US Dow is flying...when would be a better time than now? 

Actually no...I don’t really understand although you be fair I did predict a 1920’s mini boom after lockdown but I didn’t think so many would actually commit to buying a house. I also predicted a recession at the end of all this. 

All I know is my son is ready to buy a home but even he (an inexperienced first time buyer) thinks it’s probably a good idea to hang on at least a few months...let Brexit happen, see where the economy lies, assess if there is a second wave and try get a little more information on these unprecedented times before stepping in. 

Other than some perfectly understandable individual and unavoidable circumstances why are people piling in to buy right at this very moment? 

I am not suggesting everyone wait 2 or 3 years....just waiting and watching for a little while. There is potentially a great lifetime opportunity to buy a home just around the corner which should be more visible in perhaps 16/20 weeks time. Holding on for a little while, then seeing what is happening, seems to have very little downside. 

Why such a marked disconnect between house buying and the real economy? 

Edited September 8, 2020 by Pop321

[hayder]

lots of people hanging on for a few months shows that there'll still be a lot of demand come the new year.... adding fuel to the fire. 

All that will do is reinforce the almost religious belief in house price inflation.

Edited September 8, 2020 by hayder

[Switch625]

Current buyers train of thoughts;

1. That nice Mr. Sunak, what a lovely smile he has and he will save me thousands ... must buy now!
2. My family, neighbours, work colleagues have all made a fortune in property ... must buy now!
3. Experts are saying that house prices will rise ... must buy now!
4. Kirsty and Phil think it's a great idea to make a cheeky offer ... must buy now!
5. If prices carry on up I will be locked out forever ... must buy now!
6. If there's a crash the government will rescue homeowners ... must buy now!
7. There's no more toilet roll on the shelves ... must buy now!

Standard 'Bull Trap' mentality @Pop321

Edited September 8, 2020 by Switch625

[TheCountOfNowhere]

25 minutes ago, Pop321 said:

https://www.bbc.co.uk/news/business-54058559

This is being picked up on several threads I know, but there is seemingly a huge disconnect between the news EVERYDAY which highlights issues in the real economy, business results, general outlook verses a crazy ‘mini boom’ in property. 

I understand the massive 3% saving (sarcasm alert) of SDLT means it’s worth fighting and paying 10% more for house. 

I understand being locked away means people can’t wait a few more months to see where the land lies before committing to the biggest purchase of their lives. 

I understand people borrowing now because they might be made redundant and not able to borrow in a few months. What’s the worst that can happen?   

I understand the government wanting to keep that house price plate spinning and keep everything going despite having a political opportunity to do otherwise (which most would understand due to an unprecedented pandemic)  

I understand it’s a great opportunity to buy shares and the US Dow is flying...when would be a better time than now? 

Actually no...I don’t really understand although you be fair I did predict a 1920’s mini boom after lockdown but I didn’t think so many would actually commit to buying a house. I also predicted a recession at the end of all this. 

All I know is my son is ready to buy a home but even he (an inexperienced first time buyer) thinks it’s probably a good idea to hang on at least a few months...let Brexit happen, see where the economy lies, assess if there is a second wave and try get a little more information on these unprecedented times before stepping in. 

Other than some perfectly understandable individual and unavoidable circumstances why are people piling in to buy right at this very moment? 

I am not suggesting everyone wait 2 or 3 years....just waiting and watching for a little while. There is potentially a great lifetime opportunity to buy a home just around the corner which should be more visible in perhaps 16/20 weeks time. Holding on for a little while, then seeing what is happening, seems to have very little downside. 

Why such a marked disconnect between house buying and the real economy? 

I don't understand it either. No one i know is buying a house, people have lost jobs, had pay cuts, losing money etc. 

No one in their right mind would buy a house so im putting it down to btlers who took the free bounce back loans and have piled in. 

Pretty much nothing since 2008 has made sense, unless you look at it with the view that the government and bankers are crooks running and profitting from a pyramid scam. 

 

 

 

[rantnrave]

It never ceases to amaze me how much people's decisions are driven by short-term sentiment and feelings. In comparison, I must be some sort of Borg like emotionless entity.

I'm also amazed by how little people follow external news these days, outside of the biases Facebook selects for them. Many people were generally clueless about Covid-19 well into mid-March, despite the MSM coverage it was receiving.

[Chunketh]

35 minutes ago, Pop321 said:

Other than some perfectly understandable individual and unavoidable circumstances why are people piling in to buy right at this very moment? 

 

Personally...I am running out of time (46). Having said that, and having had a purchase from Jan fall through in August, I am now biding my time. I was looking to clear the mortgage in just under 15 years, so in essence this waiting period is just adding time to my retirement date. I don't like that, but making a big mistake right now might set me back 5 years anyway.

We are still viewing (occasionally) but I am now thinking that hanging on until at least spring is the smart move. 

Random thoughts:

With the current LTV state we can still afford to buy but it severely limits funds available for things like extensions and renovations. If the worst were to happen work wise right now I would be in a very strong position with enough funds to last me at least 3 years. However, if we bought a house and spent a heap of cash on doing it up I would be in a very weak position. That is a pretty compelling reason not to buy in itself.

If we hang on another 6-12 months that situation fixes itself with more savings. So even if there isn't a crash, we are in arguably a better buying position with more stock/options to consider, while maintaining the emergency reserve that just makes things so much less worrisome. 

Edited September 8, 2020 by Chunketh
added point

[Houdini]

5 minutes ago, rantnrave said:

I'm also amazed by how little people follow external news these days, outside of the biases Facebook selects for them. Many people were generally clueless about Covid-19 well into mid-March, despite the MSM coverage it was receiving.

I'm actually not that surprised that people don't follow the news, in a world of on demand music and TV it's very possible to do so.

Plus it's usually just depressing.

[winkie]

7 minutes ago, rantnrave said:

It never ceases to amaze me how much people's decisions are driven by short-term sentiment and feelings. In comparison, I must be some sort of Borg like emotionless entity.

I'm also amazed by how little people follow external news these days, outside of the biases Facebook selects for them. Many people were generally clueless about Covid-19 well into mid-March, despite the MSM coverage it was receiving.

....didn't believe it would be a problem, didn't think it would affect them....not that difference to the housing market, interest rates, unemployment rates and lending rates.....something will have to give......in denial that land and buildings will do anything else but keep rising above inflation, above wage increases and will reach the moon......mindset that to buy a house will be fully and utterly protected, be all and end all.  

[nickb1]

1 hour ago, Pop321 said:

Other than some perfectly understandable individual and unavoidable circumstances why are people piling in to buy right at this very moment? 

It's unsurprising that there were large numbers of transactions when the COVID restrictions were lifted - but are transactions over the entire year up or down? I think the predictable short term upturn in transactions is being spinned, in combination with the SDLT bung which to some extent will counteract lower availability of high LTV mortgages. The overall picture of the current "temperature" of the market is necessarily unclear because of the delay to LR data.  The spin, benefitting a powerful consortium of aligned vested interests across government, finance, landowners and developers, is the most salient and clear feature of the picture right now. 

Edited September 8, 2020 by nickb1

[rantnrave]

21 minutes ago, winkie said:

....didn't believe it would be a problem, didn't think it would affect them....not that difference to the housing market, interest rates, unemployment rates and lending rates.....something will have to give......in denial that land and buildings will do anything else but keep rising above inflation, above wage increases and will reach the moon......mindset that to buy a house will be fully and utterly protected, be all and end all.  

"Well, house prices may be falling in other places, but they're certainly not falling round here..."

[msi]

To use my Titanic analogy,  the bulkheads are straining to hold the water and are ready to break. 

On deck, the ship is lopsided, but the captain and those nice Rich people are telling us everything is under control. The crowd think is it's all gonna be ok and keep on partying. 

Helpfully, the Captain and Rich folks are making room on the dance floor by going 'out for a stroll'....near the lifeboats'

 

In my area of interest (post code area sized), there were just 3 sales in July - all discounted from asking price.  All offers on RM are   discounted after 30 days, nothing is moving unless its 'off the books'

[richmondtw]

1 hour ago, Pop321 said:

All I know is my son is ready to buy a home but even he (an inexperienced first time buyer) thinks it’s probably a good idea to hang on at least a few months...let Brexit happen, see where the economy lies, assess if there is a second wave and try get a little more information on these unprecedented times before stepping in. 

That is your son's choice.  It is not what everyone else wants to do or has to do. We all have different circumstances, motivations, mindsets.  

There are plenty of people who could have bought 2008 - 2012 but did not and decided to wait and see because they thought property prices would go down.  

If they had bought then they would be 30-40% through the mortgage term and would have a home with equity in. 

1 hour ago, Pop321 said:

Other than some perfectly understandable individual and unavoidable circumstances why are people piling in to buy right at this very moment? 

 Maybe because they are no bothered of the value goes up or down and do not see a home as purely a financial investment but see it as a home to live in long term. 

 

31 minutes ago, rantnrave said:

It never ceases to amaze me how much people's decisions are driven by short-term sentiment and feelings. In comparison, I must be some sort of Borg like emotionless entity.

Some people are just far more risk averse than others.    Some people have great ideas but would never take the risk of starting their own company for instance and are far more comfortable working for someone else.  

Nothing at all wrong with that are all different and thank goodness for that.

31 minutes ago, rantnrave said:

I'm also amazed by how little people follow external news these days, outside of the biases Facebook selects for them.

Ah yes the millennials are incapable of really looking into the deeper aspects of any issue news all they do is read a headline then follow others like sheep 

Sadly they have no interest in what is really going on and thinking never consider that there may be an alternative view to the one they are force fed on social media.  

[Pop321]

Thanks.....it seems I am not the only one then.

Nickb1 (and now msi) have a point...I might be overplaying the buoyancy in the market and to be fair where we are the market was really strong but over the past few weeks it has turned to ‘mixed’. Houses were flying away in a few days despite being 5% over priced but new listings are sitting and many reduced to pre C19 price and are still sitting. 

Mindful of ‘echo chambers’ but I am getting the same bewilderment in the real world from people interested and uninterested in property. 

To be really balanced I would say that some need to take a view and may decide to buy now believing the support will never end....I may disagree but I get that. So I do caveat with ‘those who have a choice’ and ‘not saying wait 2/3 years’ because I am trying to avoid the longer debate of houses prices.

It’s really about who buys in August when in reality we aren’t even sure the worst of the pandemic is over. He who dares Rodney....😉

Edited September 8, 2020 by Pop321

[winkie]

40 minutes ago, rantnrave said:

"Well, house prices may be falling in other places, but they're certainly not falling round here..."

A lag, fundamental changes that are being implemented take time to fall into place or be noticed..... actions today = consequences  tomorrow.

As many have said before, offer a loan for a £million means buyers can and will buy a home for a £million.....that and the use of existing free equity gained, used or gifted built up over the years of HPI that are providing todays large necessary deposits for some (because earned income is no longer enough)......New CGT polices is one way of suppressing high property  inflation......SD holiday is a temporary way to boost turnover, a catch up of the lost months in lockdown......enabling equity to be released, money supply, cash flow into the economy. 

As the growing inequality gap is such that very many more will be priced out of owning because they have no access to hand me down gifts and work no longer pays.

 

Edited September 8, 2020 by winkie

[longgone]

when  i go on my daily 8m walk i do make a point of looking at the for sale boards, and have noticed two on one road say under offer now back on to for sale.  at least 2 other roads i have noticed the same. 

VI`s are spinning delayed sales as new interest  

no one`s interested in flats i don`t think that`s coming back at all. 30-40% off coming off  

[GeneCernan]

Three reasons IMHO

Firstly, people believe that house prices only ever go up so they remain confident in buying

Secondly, banks will lend them the money, so they can buy

Thirdly, "Look at the size of my house, I must be really wealthy" so they want to buy.

[winkie]

5 minutes ago, longgone said:

when  i go on my daily 8m walk i do make a point of looking at the for sale boards, and have noticed two on one road say under offer now back on to for sale.  at least 2 other roads i have noticed the same. 

VI`s are spinning delayed sales as new interest  

no one`s interested in flats i don`t think that`s coming back at all. 30-40% off coming off  

Can't sell the flat, won't be moving anywhere.......AST changes would radically change the way easy money can be made from property......

[Chunketh]

4 minutes ago, longgone said:

no one`s interested in flats i don`t think that`s coming back at all. 30-40% off coming off  

I normally filter them out so dont see the drops.

I just looked...omg! Anything on longer than 2 weeks is discounted.

[longgone]

1 minute ago, Chunketh said:

I normally filter them out so dont see the drops.

I just looked...omg! Anything on longer than 2 weeks is discounted.

from zone 3 on wards the deluded agents seem to just price up flats roughly the same where ever they are 🤣

until you are about 20 miles outside of London 

[winkie]

One way to boost the price of flats is for foreign buyers to snap them all up.....as a great and safe investment......lock up and leave it to make money.

[Chunketh]

2 minutes ago, longgone said:

from zone 3 on wards the deluded agents seem to just price up flats roughly the same where ever they are 🤣

until you are about 20 miles outside of London 

This is in Didsbury. Home of the insane house price.

[longgone]

Just now, Chunketh said:

This is in Didsbury. Home of the insane house price.

only been once back in 2004 🤣

[hurlerontheditch]

1 minute ago, winkie said:

One way to boost the price of flats is for foreign buyers to snap them all up.....as a great and safe investment......lock up and leave it to make money.

no joke

 

I remember when I lived in an apartment, the next door one was empty for 20 months. was owned by residents of HK. after the tenants moved out it was empty for nearly two years

[longgone]

There is a one bed for sale from a low rise converted office block that sold for £385k back in 2016 its come up for sale 385k now 🤣

next year this will be 250k if they are lucky.  

[winkie]

5 minutes ago, longgone said:

There is a one bed for sale from a low rise converted office block that sold for £385k back in 2016 its come up for sale 385k now 🤣

next year this will be 250k if they are lucky.  

Just think what could buy with £385k of smackeroonies.