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I think there's at least a limited crash happening in London flats and maybe other inner city property.

I realise there may not be a market wide crash. And in fact some places (green spacious commutable to cities) are booming.

What form is it taking? What form will it take?

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I think there's at least a limited crash happening in London flats and maybe other inner city property.

I realise there may not be a market wide crash. And in fact some places (green spacious commutable to cities) are booming.

What form is it taking? What form will it take?

House prices only go up. 

 

House prices heading for 3x the prices that collapsed the banking system

If people are still buying at these prices they'll buy at any price. 

They'll start buying up the slightly less expensive flats in London soon enough 

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This tells me London flats are falling, there's fear there

I live in Outer London.

FWIW: The flyer that came through from the local EA last week pretty much echoed that sentiment: "Houses rising, sellers market; Flats falling, buyers market."

Small 3 bed semi's on OK'ish roads are all listed as "Offers over £750k". Clearly every 30-something couple with a couple of kids is minted in the UK. No idea how long this madness can go on (20+ years and counting at present..)

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There is a core of people out there who are still secure in their work and the bsttle for hearts and minds is well and truly being won by the rampers still. 

Estate agent came to value my house yesterday; someone we know in a personal capacity also, so spesks more candidly to us (I think). His view is basically that transaction numbers will drop off again as the more insecurely employed will just sit where they are and try to ride it out meaning that there'll be very little on the market so prices will probably continue to creep up. 

Fundamentally it's down to the old HPC mantra that you have to have forced sales in order to actually see peices fall as transactions drying up, whilst not indicative of a healthy market all in all, tends to send prices in the opposite direction and there seems to be little appetite from anyone to actually repossess houses. 

We were quoted what seemed to me an absurd price range for our property (some £35k - £60k higher than my estimate) and he seems genuinely keen for the instruction (it is a nice gaff, to be fair, unusual so sits outside of the normal market in a way). 

I find myself in the same frame of mind as i have been since 2015; sceptical, slightly incredulous, expecting (and moderately fearful of, to be honest) the crash but I think I will yet again be proved wrong to be honest. If Boris is successfully able to prop up the bottom rung of the market with his dodgy loans and other lenders follow suite of Nationwide and shy away from repos i think the rest of the ladder takes care of itself, tbh. 

For houses that is; flats are ******ed. 

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Fundamentally it's down to the old HPC mantra that you have to have forced sales in order to actually see peices fall as transactions drying up, whilst not indicative of a healthy market all in all, tends to send prices in the opposite direction and there seems to be little appetite from anyone to actually repossess houses. 

 

I think that theory is going to be tested.

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The crash will not be sudden simply because of the british house price mentality. Currently, all the house prices have increased by 100K since the stamp duty holiday was announced. It was so sudden I am shocked. Detached houses usually listing at 500k are now at 650K. What this does is normalises the price to the buyer psychologically and they get used to seeing those prices everywhere

The moment the prices start coming down due to the fact that nobody really wants to pay those prices in a recession, a reduction of 50K makes it look like  bargain and these fools pile in and start buying. 😡

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Anecdotally I think flats are falling in Oxford too. Overall prices in the city have broadly flatlined since the Brexit vote outcome apparently arrested all growth in June 2016 (the mean fluctuating typically between around £400-415k, with a few outliers above and below).

According to the land registry data it seems that this apparently static pricing conceals a small uptick (on average) in house prices and a slight downward trend in flat prices; with the latter peaking at around £281-291k average mostly between Aug 2016 to Nov 2017, while in June 2020 it hit its lowest value (£255k) since May 2015, with the most recent month (Jul) being £266k. Obviously there's a fair amount of noise in these data but peak to current that's a drop of £24k or about 8.5%, while from the same sample periods for all property types we have a peak of around £405-420k and a current value of £405k; so a drop of around £15k or about 3.5% peak to current.

If I could be arsed some averaged monthly data might give a more relaible picture, but it certainly seems that the general trend in flat prices is down; if certainly not in proper crash territory yet.

Also, on the annual percentage growth in July flats are the only property type that are showing a fall of 1.2%, while overall there's growth of 1.7%.

Finally when looking at the in July 2020 indicies for each property type based on Jan 2015 prices, houses are all very similar with semis having seen the most growth with an index of 118.3 / 18.3% growth while flats are lowest at around 109.4 / 9.4% growth.

I suspect this discrepency between property types is down flats previously being artifically over-valued thanks to the BTL boom and now falling thanks to the de-incetivisation of BTL; which will hopefully continue as the staggered withdrawal of S24 relief continues, with the next hit due in April.

Since my circumstances have recently changed I've begun looking at flats again (as it's all I could hope to "afford" on my own :( ) and it seems that the amount of sub-£200k flats in the city is greater than when I last looked.

I'm hoping continued pressure on BTL from legislative changes, plus potentially reduced demand due to the economic fallout from a harsh winter of Brexit truths and Corona misery will further batter prices; along with the (planned at least) cessation of the stamp duty holiday in March.

 

Edited by ftb_fml
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So if folk are getting less money for their flats, how are they paying more to move up to houses?

They were getting more a few months ago.

And the houses were costing less then too.

Edited by Si1
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The crash will not be sudden simply because of the british house price mentality. Currently, all the house prices have increased by 100K since the stamp duty holiday was announced. It was so sudden I am shocked. Detached houses usually listing at 500k are now at 650K. What this does is normalises the price to the buyer psychologically and they get used to seeing those prices everywhere

The moment the prices start coming down due to the fact that nobody really wants to pay those prices in a recession, a reduction of 50K makes it look like  bargain and these fools pile in and start buying. 😡

Its not so much mentality just logic. 

Shares gap up and gap down quickly as transaction costs are so low. £5 a trade and 0.5% stamp unless you are an institution then normally no stamp. Takes about 0.5seconds to do as well. 

Think shares will fall then recover in 6m time? Wack the sell in and buy back. 

Housing transaction costs and effort are vast. If you think a fall is coming followed by a recovery.. Why sell? Makes any move up or down typically slow and steady. 

People aren't randomly accepting 30% less for their London flat as they are wfh till 1st Jan 2021. Maybe march. Changes and falls need to be perceived to be permanent before that happens 

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Jeez look it's inevitable there will be a significant fall, because nobody will have any dosh! We were saying patience months ago - it's only been 3 months since lockdown and everyone has had their wages paid. The government can pump but the balloon has popped. Just because crazy people are buying at crazy prices - that's irrelevant. There is no market normality at the moment. Sit it out. Chill.

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The crash will not be sudden simply because of the british house price mentality. Currently, all the house prices have increased by 100K since the stamp duty holiday was announced. It was so sudden I am shocked. Detached houses usually listing at 500k are now at 650K. What this does is normalises the price to the buyer psychologically and they get used to seeing those prices everywhere

The moment the prices start coming down due to the fact that nobody really wants to pay those prices in a recession, a reduction of 50K makes it look like  bargain and these fools pile in and start buying. 😡

I think this theory is about to be tested too.

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The crash will not be sudden simply because of the british house price mentality. Currently, all the house prices have increased by 100K since the stamp duty holiday was announced. It was so sudden I am shocked. Detached houses usually listing at 500k are now at 650K. What this does is normalises the price to the buyer psychologically and they get used to seeing those prices everywhere

The moment the prices start coming down due to the fact that nobody really wants to pay those prices in a recession, a reduction of 50K makes it look like  bargain and these fools pile in and start buying. 😡

That's exactly what I've seen.  Prices up 100K+ in 3 months.  Everything sold.  Everyone buying before they miss out.

It's properly distressing/depressing.

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They were getting more a few months ago.

And the houses were costing less then too.

There is no sense to the housing market, hasn't been since 2002.

I've seen everything in Northants go SSTC for prices that no one can afford, who's buying ?

Are the BoE agents buying now, is that what it's come to ?

I personally no longer think it's worth considering buying until inflation really hits and interest rates are past 4%

Edited by TheCountOfNowhere
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There is no sense to the housing market, hasn't been since 2002.

I've seen everything in Northants go SSTC for prices that no one can afford, who's buying ?

Are the BoE agents buying now, is that what it's come to ?

I personally no longer think it's worth considering buying until inflation really hits and interest rates are past 4%

4% interest rates? Lol buddy 🤣 Interest rates are a thing of the past. 

There are many people out there with money. Lots of it. Those people are buying the houses and keeping them propped up high. The fact that you or the majority of people don't have anywhere near the amount of money they have is insignificant. The housing market doesn't care.

 

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4% interest rates? Lol buddy 🤣 Interest rates are a thing of the past. 

There are many people out there with money. Lots of it. Those people are buying the houses and keeping them propped up high. The fact that you or the majority of people don't have anywhere near the amount of money they have is insignificant. The housing market doesn't care.

 

image.png.a288cd73c8d8f37ff004f76293faeb53.png

Yeah, sure they are.  That's the graph for Turkey. 

Soon as a currency collapses the sky is the limit for IRs.

We are not living in normal times on any level.  Inflation is coming, massive inflation and with the massive inflation will come the massive IRs.

It is unstoppable now.  

Real or nominally, house prices are going to be toast.

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I live in Outer London.

FWIW: The flyer that came through from the local EA last week pretty much echoed that sentiment: "Houses rising, sellers market; Flats falling, buyers market."

Small 3 bed semi's on OK'ish roads are all listed as "Offers over £750k". Clearly every 30-something couple with a couple of kids is minted in the UK. No idea how long this madness can go on (20+ years and counting at present..)

yeah, those damn houses are flying off the shelves....

 

 

image.thumb.png.65c89e916242826fae1b06e3c4c32160.pngLast ye

 

last year crazies were paying that for 1 bed flats in tootin.

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There are many people out there with money debt. Lots of it. Those people are buying the houses and keeping them propped up high. The fact that you or the majority of people don't have anywhere near the amount of money debt they have is insignificant. The housing market doesn't care and will eat them alive.

Corrected for you.

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image.png.a288cd73c8d8f37ff004f76293faeb53.png

Yeah, sure they are.  That's the graph for Turkey. 

Soon as a currency collapses the sky is the limit for IRs.

We are not living in normal times on any level.  Inflation is coming, massive inflation and with the massive inflation will come the massive IRs.

It is unstoppable now.  

Real or nominally, house prices are going to be toast.

Turkey as the forward comparison. That is new. 

West will be nill rates for another 5 years at least after this mess. Before there was a chance the USA would lead higher not anymore

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image.png.a288cd73c8d8f37ff004f76293faeb53.png

Yeah, sure they are.  That's the graph for Turkey. 

Soon as a currency collapses the sky is the limit for IRs.

We are not living in normal times on any level.  Inflation is coming, massive inflation and with the massive inflation will come the massive IRs.

It is unstoppable now.  

Real or nominally, house prices are going to be toast.

The world doesn't follow Turkey, of all places. Think Japan

No. Inflation may come, and all that means is higher living costs and/or poorer quality of life.

Edited by Dreamcasting
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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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