2021...how far will prices fall?

[Pmax2020]

3 people i know in the city all sold their flats during the last 3/4 months for about 20-30% more than they paid circa 2015 - so I think there is enough room for people to cut loses and sell to someone who will naïvely think they are getting a good deal.

For me its the increase in reductions and evidence of sales falling through that offer enough hope of HPC. There are 3 properties near me in particular that are all very desirable, they were listed below historic sold prices, 'sold' but then came back on the market a month or so later. This wouldn't of been possible previously and doesnt bode well for winter/spring.

[Fromage Frais]

 

I am looking at the chaos now, and I am starting to think 5-10% is definitely on the cards and possibly quite quickly. Lockdown 3 will finish things off I think. So many chains set up in November and December are going to collapse. Rishi will allow some sort of SD extension, maybe allowing a 6 month grace for all those who have exchanged contracts, but so many people are in deep trouble now, it won’t help. 

While I agree that lots of people are wanting to escape the cities, lots of people also want electric luxury cars, it’s about ability to buy...if you can’t sell your grotty flat in the city because no one is buying, then you can’t buy in the country. My gut feeling is that the wealthy cash buyer types have made their move already, and now it is just the wannabes...and they can want all they like, but if they can’t sell up, they in’t going nowhere.

Yep

I know i work in hospitality so my views are coloured somewhat.

But the summer was fundamentally different I was locked down and looked at the lovely weather and  was chomping at the bit to get open.

Christmas has been crap pubs have been the safest place to be as nobody is there there.... After is the quiet time.

The news and stop start has made Christmas a disaster and i would think for many shops also in T4 areas.

I will furlough most of my staff as I have enough money to do so and they have worked for me for years the newer ones I will let go as I did not need them to come into work over this period.

Note that HMRC can come and fine you double up to 6 years after and you are personally responsible.... so do not be an over generous mug and furlough anyone if you dont have the cash six years from now they will have the money and likely other jobs.... you will have the fine.

Lets get real this is not going to go away now and myself and others will not reopen until in T1/equivalent once we close.

If there is not a multi month lockdown we are going to be relying on the vaccine to bring it down and if that does not catastrophe.
 

So lockdown it will be will to prevent "mutations" during the vaccines roll out.

Double figure unemployment maybe even before April and then financial crisis as soon as normality resumes.
 

[Unmoderated]

 

Anything before six figure Bitcoin is to early, we didn't buy in at three figures, ride two bear markets, to only sell out at low five figures. $100k at least by December 2021. 

Then we really become HPC anti-christ,  Joined 2004 already a homeowner from 1996, ignored the doommongers, STR in 2007, bought again in 2009, traded up again in 2016 (brexit dip).  Now looking mortgage free with six figure spare capital in 2021. Which means............. yep a good chance of ruining some FTB dreams buy buying "unleveraged" BTL outright for cash so no Section 24 issues (once we have a 50% crash of course).  And that's just selling 50% of the BTC. Need the other 50% for life in the Citadel after 2025. 

Fair play! I'm in my thirties so not quite able to get into the property market until recently - possibly could've done it in 2009 but thought (like many) further falls likely. 

[HovelinHove]

 

Yep

I know i work in hospitality so my views are coloured somewhat.

But the summer was fundamentally different I was locked down and looked at the lovely weather and  was chomping at the bit to get open.

Christmas has been crap pubs have been the safest place to be as nobody is there there.... After is the quiet time.

The news and stop start has made Christmas a disaster and i would think for many shops also in T4 areas.

I will furlough most of my staff as I have enough money to do so and they have worked for me for years the newer ones I will let go as I did not need them to come into work over this period.

Note that HMRC can come and fine you double up to 6 years after and you are personally responsible.... so do not be an over generous mug and furlough anyone if you dont have the cash six years from now they will have the money and likely other jobs.... you will have the fine.

Lets get real this is not going to go away now and myself and others will not reopen until in T1/equivalent once we close.

If there is not a multi month lockdown we are going to be relying on the vaccine to bring it down and if that does not catastrophe.
 

So lockdown it will be will to prevent "mutations" during the vaccines roll out.

Double figure unemployment maybe even before April and then financial crisis as soon as normality resumes.
 

Your staff are lucky. I suspect that after Christmas many will close up for good, and those that don't will do what you are doing and waiting till we know for sure that no more lockdowns are coming. I was going to buy just after Christmas, but no chance now as everything will be chaos, and try getting anyone to do anything for you. My landlord can't kick me out without 6 months notice, so I am going to sit things out for a while then maybe buy once the SD holiday thing is clear, and the direction of travel is more certain.

[markyh]

 

Fair play! I'm in my thirties so not quite able to get into the property market until recently - possibly could've done it in 2009 but thought (like many) further falls likely. 

Ouch, i did buy in Q1 2009, after STR in 2007, but was just out of my 30's by 09 with a new wife and toddler child, so my motivations where grab the 08/09 dip while it was 30% off.  Sometimes being pushed a bit in life helps. 

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

I'm almost beyond caring right now with all the **** going on - but down 14% in second quarter... down 40% by year end. 

Again it's a bit like controlling Covid in the medical sense... huge complexity - when it comes to the economic consequences it is just so complex... from consumer confidence to huge issues re borders, logistics and so on. 

I am working for one of the largest logistics firms in the world right now. I've been working for food companies, I've been working in eCommerce. Next year will be the great unwinding... where Brexit meets Covid... this isn't simply about interest rates and lending anymore. 

I've been hoping for a price crash for a while now but - to be honest, it's the least of our concerns right now. 2021 will be incredibly difficult - the real economic consequences will start to be felt. 

When will the vaccines be rolled out in their entirety? Perhaps by this time next year, if we're lucky... or perhaps mutations will push us into 2022 and beyond - and there will be issues re availability due to production issues and the longevity of immunity. God help us all. 

Edited December 23, 2020 by gruffydd

[shlomo]

 

Ouch, i did buy in Q1 2009, after STR in 2007, but was just out of my 30's by 09 with a new wife and toddler child, so my motivations where grab the 08/09 dip while it was 30% off.  Sometimes being pushed a bit in life helps. 

[Unmoderated]

 

Ouch, i did buy in Q1 2009, after STR in 2007, but was just out of my 30's by 09 with a new wife and toddler child, so my motivations where grab the 08/09 dip while it was 30% off.  Sometimes being pushed a bit in life helps. 

This is one bit of advice I'd give anyone - especially my former self!

As Dave Nike once said - just do it!

[shlomo]

 

This is one bit of advice I'd give anyone - especially my former self!

As Dave Nike once said - just do it!

This is what he meant..

[coypondboy]

Think Flat prices will plummett as the extent of fire safety issues becomes more apparent.  The poor dr on bbc news today is just one of hundreds of thousands facing problems in the coming years.

[jiltedjen]

I would say 20% real inflation this year, probably 30% real inflation in 2021

houses probably up about 20% in 2021 so below inflation, a real terms fall of 10% but up in £ terms

that allows prices to fall without tanking the UK PLC 

[Unmoderated]

 

This is what he meant..

Happy wife, happy life. 

[satsuma]

I think we will see prices drop just 20% or 30% due to the vast amount of money printed already.  So not bad news but a bit of a drop.  However, there will be inflation in the next years so I would say in real terms even a small drop will be substantial when you factor in inflation.  We could see today’s values erode by 30% due to inflation alone, add to that any drop in prices this year.  Factor in the tax raid on second homes and BTL no longer looks so good.

[micawber]

If transaction volumes remain low then I see prices increasing by 5% as the good stuff gets traded between the elites. If something happens that increases transaction volumes then prices will fall by 10%. I don't see anything that will increase transaction volumes next year.

[househunter123]

https://www.theguardian.com/money/2020/dec/29/islington-london-records-uk-highest-house-price-growth-2020

 

Islington records UK's highest house price growth of 2020 at 13.4%

London boroughs take nine of top 20 places, with Leeds and Wolverhampton second and third.

 

Confusing ? I thought London was declining with people moving out? Or just applied to flats ? 

Edited December 29, 2020 by househunter123

[Giraffe]

Commodity inflation. That's the only thing that will stop the house price madness. And it looks like it is finally coming. 

[micawber]

 

https://www.theguardian.com/money/2020/dec/29/islington-london-records-uk-highest-house-price-growth-2020

 

Islington records UK's highest house price growth of 2020 at 13.4%

London boroughs take nine of top 20 places, with Leeds and Wolverhampton second and third.

 

Confusing ? I thought London was declining with people moving out? Or just applied to flats ? 

I'd respectfully suggest that the report is meaningless. Here's the land registry data for the N1 postoce that includes Islington as well as Hackney, Kings Cross, etc. The volumes are too low to have any real meaning.

[Voice of Doom]

I saw that Guardian piece too and thought the same thing. Thanks for doing the digging!

[househunter123]

https://www.bbc.co.uk/news/business-55483432

 

Though rising unemployment levels are an obvious threat to property values, demand should remain relatively strong as it still costs less to own than to rent and money is about as cheap as it gets."

He predicted that during 2021, people will continue to change their living arrangements as companies adapt their remote working policies on a more formal basis.

"However, housing market activity is likely to slow in the coming quarters, perhaps sharply, if the labour market weakens as most analysts expect, especially once the stamp duty holiday expires at the end of March," he warned.

Mr Franks agreed. "After a strong first quarter of 2021, prices are likely to cool in the wake of the Stamp Duty deadline but could then start to increase again towards the end of the year," he said.

------------------

And another one today. So many conflicting points in these articles.

[Voice of Doom]

And talking of Guardian articles, here's another. It compiles 2021 predictions:

Forecasts for UK house prices in 2021

Halifax: down 2%-5%

Rightmove: up 4%

Rics: no forecast

Savills: 0% change

Knight Frank: up 1%

Chestertons: up 1.5%

Zoopla: up 1%

https://www.theguardian.com/money/2020/dec/30/uk-property-market-2021-stamp-duty-price-rises?CMP=share_btn_link

This stood out for me:

"The uncertainty in the economy is now so great that the Royal Institution of Chartered Surveyors said it could not with any confidence issue a house price forecast."

I note the huge range of forecasts from posters above as well. My own thoughts are that prices will be down - certainly around London where I'm looking - but I've no idea of the figure. Too many known unknowns (vaccine roll out/gov intervention/scale of job losses) as well as the usual unknown unknowns (which this pandemic would have been when doing predictions in December 2019).

Let's hope some of you more optimististic HPC posters are right and any drops wil need to be accompanied by an "ouch" sound effect.