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House Price Crash Forum

Nationwide Nov 2020


rantnrave
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Perhaps unsurprisingly Moneyweek's on the case too:

 

Contrary to many people’s expectations, Britain is firmly in the grip of another house-price boom.

[...]

Also, it’s worth noting that this is not a “narrow” market. It’s easy to assume that this is just about a small number of expensive homes swapping hands. (House price indices do attempt to factor that sort of thing in, by the way, but there’s only so much they can do.) But this is a widespread boom. It’s not just prices that are going up, it’s transactions too. In October, mortgage approvals hit their highest level since September 2007. In other words, the number of mortgages being approved has returned to levels we haven’t seen since before the big crash in 2008.

To add to that although there's been the the usual Winter offers slump what little has been coming on in my price range has been noticeably more expensive than this time last year. For example take the house I was sent yesterday: small, virtually no garden, dated interior, no off street parking but does have a great rural location (assuming you don't commute, there's no accidents on the connecting roads and it never snows). Previously that would have been priced below my floor, now it's near my limit.

And another thing, several houses around here are in the midst of loft extensions whilst others like my neighbours are having new kitchens, bathrooms, garages and general redecorating. One of my friends who's currently looking after his Mum near Manchester recently also happened to mention the same is going on there too.

Where is all the money coming from?

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Perhaps unsurprisingly Moneyweek's on the case too:

To add to that although there's been the the usual Winter offers slump what little has been coming on in my price range has been noticeably more expensive than this time last year. For example take the house I was sent yesterday: small, virtually no garden, dated interior, no off street parking but does have a great rural location (assuming you don't commute, there's no accidents on the connecting roads and it never snows). Previously that would have been priced below my floor, now it's near my limit.

And another thing, several houses around here are in the midst of loft extensions whilst others like my neighbours are having new kitchens, bathrooms, garages and general redecorating. One of my friends who's currently looking after his Mum near Manchester recently also happened to mention the same is going on there too.

Where is all the money coming from?

It matters not..

 

dollar-money-tree.jpg

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Perhaps unsurprisingly Moneyweek's on the case too:

To add to that although there's been the the usual Winter offers slump what little has been coming on in my price range has been noticeably more expensive than this time last year. For example take the house I was sent yesterday: small, virtually no garden, dated interior, no off street parking but does have a great rural location (assuming you don't commute, there's no accidents on the connecting roads and it never snows). Previously that would have been priced below my floor, now it's near my limit.

And another thing, several houses around here are in the midst of loft extensions whilst others like my neighbours are having new kitchens, bathrooms, garages and general redecorating. One of my friends who's currently looking after his Mum near Manchester recently also happened to mention the same is going on there too.

Where is all the money coming from?

Bounce back loans, if you’ve not had one of these free £50 grand bungs you’ve missed out.

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EAs are all over lobbying for the Stamp Duty cut extension:

Stamp Duty cut, Universal Credit extra £20, and (further extended) furlough all due to end in April.

This means (at least) 3 support mechanisms are due to expire on the same date. I can't see them extending the Stamp Duty cut whilst not extending UC and furlough. This would send a very odd message even for the Tories. A few seasoned Tories have already said the Stamp Duty cut was a mistake and I haven't heard the government boasting about cutting Stamp Duty as they have the other support mechanisms. 

It's also interesting that before the Stamp Duty cut the property VIs were banging on about extending HtB for non-FTBers. That's another support mechanism gone in April but everyone has suddenly gone quiet about that.  

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Stamp Duty cut, Universal Credit extra £20, and (further extended) furlough all due to end in April.

This means (at least) 3 support mechanisms are due to expire on the same date. I can't see them extending the Stamp Duty cut whilst not extending UC and furlough. This would send a very odd message even for the Tories. A few seasoned Tories have already said the Stamp Duty cut was a mistake and I haven't heard the government boasting about cutting Stamp Duty as they have the other support mechanisms. 

It's also interesting that before the Stamp Duty cut the property VIs were banging on about extending HtB for non-FTBers. That's another support mechanism gone in April but everyone has suddenly gone quiet about that.  

There's a significant political debate about whether the govt needed to reign in borrowing now or not. The Tories by and large think they do.

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Stamp Duty cut, Universal Credit extra £20, and (further extended) furlough all due to end in April.

This means (at least) 3 support mechanisms are due to expire on the same date. I can't see them extending the Stamp Duty cut whilst not extending UC and furlough. This would send a very odd message even for the Tories. A few seasoned Tories have already said the Stamp Duty cut was a mistake and I haven't heard the government boasting about cutting Stamp Duty as they have the other support mechanisms. 

It's also interesting that before the Stamp Duty cut the property VIs were banging on about extending HtB for non-FTBers. That's another support mechanism gone in April but everyone has suddenly gone quiet about that.  

Massive decision in terms of HPI/HPC which will firmly nail this governments colours to the mast when it comes to who they're 'for' in this country.

The squealing from the VI's is only going to get louder and louder as we approach March, it's fairly disgusting how they come up for air to shout for more help, and then stick their nose straight back in the trough.

I still think there are still significant challenges in this current market which are being masked by all this triumphalism and talk of record mortgage approvals, how many of those actually end up in a completed house purchase would be interesting to see over the next few months.

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Where is all the money coming from?

There does seem to be a real divide between those who have done OK during this crisis and those who haven't. Anecdotally, I've got a couple of friends (not me - we've just about kept our heads above water) who have commented that they have never been so flush with cash, with limited spending opportunities (no holiday for most, zero entertainment spend), but income remaining the same. Some got lucky with furlough and have had basically a year off on full (or near full) pay, whereas others have had to work just as hard - or harder - for the same money, or got nothing at all.

I'm not too surprised at any home improvement boom  - either DIY (something to do on furlough), or extra cash around burning a hole in your pocket, or just the realisation that your house needs some work after spending so much time in it. Having said that, home improvements have been booming round our way for years now, which I put down to stamp duty/cost of moving, making an extension an attractive alternative, and lack of decent properties at a reasonable price.

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Massive decision in terms of HPI/HPC which will firmly nail this governments colours to the mast when it comes to who they're 'for' in this country.

The squealing from the VI's is only going to get louder and louder as we approach March, it's fairly disgusting how they come up for air to shout for more help, and then stick their nose straight back in the trough.

I still think there are still significant challenges in this current market which are being masked by all this triumphalism and talk of record mortgage approvals, how many of those actually end up in a completed house purchase would be interesting to see over the next few months.

Can't see them getting rid of all of them (the £20 UC boost will go - that's not really helping the housing market), but if they do remove the housing specific props they'll replace them with something else. Count on it.

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There does seem to be a real divide between those who have done OK during this crisis and those who haven't. Anecdotally, I've got a couple of friends (not me - we've just about kept our heads above water) who have commented that they have never been so flush with cash, with limited spending opportunities (no holiday for most, zero entertainment spend), but income remaining the same. Some got lucky with furlough and have had basically a year off on full (or near full) pay, whereas others have had to work just as hard - or harder - for the same money, or got nothing at all.

I think you're probably right. Despite all the talk of thousands of (low paid) jobs disappearing as retail outlets etc go under furlough does seem to have worked wonders for those around the middle parts of the earning spectrum. Keep your job, have lots off time off and get paid for it!

The (probably stupid) question though then becomes will those beneficiaries ultimately have to pay for this or will it once again fall on those just starting out as well as those non-workshy who are on lower incomes?

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I think you're probably right. Despite all the talk of thousands of (low paid) jobs disappearing as retail outlets etc go under furlough does seem to have worked wonders for those around the middle parts of the earning spectrum. Keep your job, have lots off time off and get paid for it!

The (probably stupid) question though then becomes will those beneficiaries ultimately have to pay for this or will it once again fall on those just starting out as well as those non-workshy who are on lower incomes?

The problem with Furlough is people who think they will glide back into their old jobs when it ends.  They are in for a sudden 'surprise' shock.  Redundancies take time to work through, but hours reductions, pay rationalisaton, and grade changes can be instant.

 

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Where is all the money coming from?

Maybe this £280bn the government plucked off its magic money tree and spent into the economy has something to do with it?

I'm fairly convinced that a lot of people have been quietly filling their boots during all this. Bounceback loans with no intention of being paid back (or that will eventually just be added to mortgages on very low rates), SEISS payments to people who've worked right through, people taking on a second job whilst furloughed, mortgage holidays, credit card and loan holidays. Dodgy PPE contracts, furlough fraud. 

You name it, the options to stack the cash during the pandemic have been plentiful (and that's before we've even talked about the fact that WFH professionals have been saving hundreds of pounds a month in commuting costs) particularly if you have zero principals and aren't afraid of debt. There's been no holidays, entertainment is limited..... houses and Amazon is basically where people's money is going and there's a lot of it about now. 

I'm still dubious about how solid rhis all is and am half expecting it to collapse like a house of cards come January but, assuming BoZo the clown can get us a deal and vacvibe roll out is successful, to be honest all bets are off. 

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Maybe this £280bn the government plucked off its magic money tree and spent into the economy has something to do with it?

I'm fairly convinced that a lot of people have been quietly filling their boots during all this. Bounceback loans with no intention of being paid back (or that will eventually just be added to mortgages on very low rates), SEISS payments to people who've worked right through, people taking on a second job whilst furloughed, mortgage holidays, credit card and loan holidays. Dodgy PPE contracts, furlough fraud. 

You name it, the options to stack the cash during the pandemic have been plentiful (and that's before we've even talked about the fact that WFH professionals have been saving hundreds of pounds a month in commuting costs) particularly if you have zero principals and aren't afraid of debt. There's been no holidays, entertainment is limited..... houses and Amazon is basically where people's money is going and there's a lot of it about now. 

I'm still dubious about how solid rhis all is and am half expecting it to collapse like a house of cards come January but, assuming BoZo the clown can get us a deal and vacvibe roll out is successful, to be honest all bets are off. 

Yep. 

If you have kept your job since march and looking at the figures most have so far. 

All that would have happened is you have more cash than you ever would have expected to. 

Can see why a new kitchen appeals. 

 

Ye olde bounce back loan bonus maybe a nice cash purchase of a BTL up North. Interesting that houses in the 60 to 80k have risen the most in % terms. 

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Yep. 

If you have kept your job since march and looking at the figures most have so far. 

All that would have happened is you have more cash than you ever would have expected to. 

Can see why a new kitchen appeals. 

 

Ye olde bounce back loan bonus maybe a nice cash purchase of a BTL up North. Interesting that houses in the 60 to 80k have risen the most in % terms. 

Not only have most kept their jobs but most professionals and tradespeople (i.e. the people who actually buy houses). It's all well and good bleating about how job losses will impact the market but how many of the 25k at Arcadia and Debenhams were in the market for a house anyway? The ones who might have been already own and will walk off with a nice redundancy cheque to spend on a btl to be let out to one of the newly redundant ex colleagues at the LHA rate paid for by HB (i.e. the rest of us) and probably waltz off into another job. 

I'm not even sure that brexit will budge it now. I am actually in the process of putting my house on the market and suddenly the silly money we were quoted by the estate agent last month doesn't seem so silly. Hoping for a quick sale as people are apparrently desperare to conplete pre March 31 so we'll see what happens.  

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Not only have most kept their jobs but most professionals and tradespeople (i.e. the people who actually buy houses). It's all well and good bleating about how job losses will impact the market but how many of the 25k at Arcadia and Debenhams were in the market for a house anyway?

I think that's exactly right, so far at least. Most white collar jobs, people are just working from home and pocketing any savings, which can be quite substantial (commuting and the annual family holiday could easily be 5k+). The people who have been hit hardest are those who can least afford it, as so often the case. It will be interesting to see what happens next year when furlough is wound up and wider hits to the economy become more apparent.

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Stamp Duty cut, Universal Credit extra £20, and (further extended) furlough all due to end in April.

This means (at least) 3 support mechanisms are due to expire on the same date. I can't see them extending the Stamp Duty cut whilst not extending UC and furlough. This would send a very odd message even for the Tories. A few seasoned Tories have already said the Stamp Duty cut was a mistake and I haven't heard the government boasting about cutting Stamp Duty as they have the other support mechanisms. 

It's also interesting that before the Stamp Duty cut the property VIs were banging on about extending HtB for non-FTBers. That's another support mechanism gone in April but everyone has suddenly gone quiet about that.  

Well put. Also add increasingly loud rumours that CGT will be hiked considerably within a year or two and BTLers will pre-empt by getting the hell ooot.

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The Telegraph said that Treasury advisors were of the mind to extend the SD holiday due to the carnage of chain collapses all over the place. What I can see is a different situation where Sunak says that all transactions with contracts exchanged by say the end February will be exempt of SD provided they complete by say the end of May. Fixing dates and insuring that there is no doubt about the SD tax break would be fairer than the lottery that people are going into now with surveyors and solicitors at peak capacity, and more acceptable to those who hate this SD holiday than extending it for another year.

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I have dipped in and out of this website for over 15 years now and not much has changed.    The logic behind a house price crash is sound, it is just the lengths the government will go to avoid this were not appreciated.

Here we are, in the middle of a global pandemic,  hundreds of thousands of jobs have been lost, 25K jobs lost today alone with Arcadia and Debenhams, Brexit in under 5 weeks and......

House prices increasing at their highest rate in six years.

For those that still hold the faith it is coming, what exactly do you think will be the trigger?

 

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