House price crash

[Speed1987]

28 minutes ago, Kosmin said:

Where did you get £27k from? Wouldn't that mean a 110% mortgage?

I think the buyers in this price range are often couples, with one or both having some equity, which significantly reduces the amount they need to borrow. If they are FTBs, they may have been saving for a long time, or they have had big windfalls (e.g. inheritance, gift). 

I expect there are a lot more households earning 60-80k, borrowing 200-400k to buy a 600k house, than households earning 120k+ borrowing 500k+ to buy a 600k house.

Pretty accurate, it's equity which allows them to buy.

[spyguy]

Jesus.

Did a great response, then tablet froze and content was lost.

In short - What analysts? Names please.

What report? Link.

Just wibble. At best, just Sunday paper fills. At worse, poof piece from a connected party.

Kids dont buy houses.

Covid isnt a plus for UK housing and the uk economy ffs.

[spyguy]

51 minutes ago, Kosmin said:

Where did you get £27k from? Wouldn't that mean a 110% mortgage?

I think the buyers in this price range are often couples, with one or both having some equity, which significantly reduces the amount they need to borrow. If they are FTBs, they may have been saving for a long time, or they have had big windfalls (e.g. inheritance, gift). 

I expect there are a lot more households earning 60-80k, borrowing 200-400k to buy a 600k house, than households earning 120k+ borrowing 500k+ to buy a 600k house.

Winchester depends on London flight, looking to exit before Quentin starts school at Mogadishu High.

Majority of people in London over last 20 years have been renting. Theres no equity.

London prices have been falling for at least 5 years.

Covid appears to have caused major ruptures to Londons economy - suddenly mass public transports is looking a negative for the forseeable future.

A household earning 60k-80k would only get a mortgage of 240k. Chuck in some car loans, student fees, other debt and that will fall under 200k.

 

 

[Si1]

5 minutes ago, spyguy said:

Jesus.

Did a great response, then tablet froze and content was lost.

In short - What analysts? Names please.

What report? Link.

Just wibble. At best, just Sunday paper fills. At worse, poof piece from a connected party.

Kids dont buy houses.

Covid isnt a plus for UK housing and the uk economy ffs.

Inman's company directorships are interesting - he's been involved in property companies in the past IIRC.

His analysis is a mass of contradictions. High inflation will cause house prices to go up but low inflation will support them with low IRs if it doesn't. Righty.

[Si1]

the million dollar question is inflation as that would push up funding rates - the most convincing eloquent authors on this are open that it isn't clear cut, on either side of the argument (Krugman, Bootle).

The question is whether current inflationary pressures are transient. Does all this money in peoples' pockets mean they will be spending like crazy for a couple of years pushing prices up or not?

• If yes then they'll rise IR some amount. Maybe not a lot.
• If no then they won't raise IRs but neither will house prices carry on booming because, as we said, that money won't be getting spent.

[Si1]

2 hours ago, Pop321 said:

 

Negative sentiment was around us in November and December and saved 20% off daft summer 2020 prices. Things are booming again but just wait for some bad news…the market dips and rises.

 

Is the market hotter now would you say than last summer?

[Kosmin]

7 minutes ago, spyguy said:

Winchester depends on London flight, looking to exit before Quentin starts school at Mogadishu High.

Majority of people in London over last 20 years have been renting. Theres no equity.

How small do you think the minority of owners leaving London is? How many transactions do you think there in Winchester? Maybe there are so few transactions in places like Winchester that the small number of London sellers with equity are significant.

14 minutes ago, spyguy said:

London prices have been falling for at least 5 years.

Transaction volumes have been falling too and most sellers with have owned for more than 5 years. Therefore most sellers will have a lot of equity.

If London prices (flat prices) do continue to fall, that will stop house prices rising too much. So I do expect this to become a factor at some point.

 

[Gush]

9 minutes ago, Si1 said:

Is the market hotter now would you say than last summer?

In my area If flats are excluded the number of listed is less than 2014 and its a slow death. Its hot for the tiny percentage who transact, for others, its no point to participate.

[Pop321]

43 minutes ago, Si1 said:

Is the market hotter now would you say than last summer?

May, June was a bit hotter….July not as hot. 😉

[househunter123]

Well as a potential FTB, prices here in the East Midlands definitely higher and no sign of reducing. Looking at the 210k mark or below.

 I can't even get a viewing for the last few properties in July/August.  Get a call from agents day before my allocated viewing saying that house is now sold, or get a call the same day as the house goes on RM/Zoopla saying all appointments taken. I give up. 

[Dweller]

13 hours ago, househunter123 said:

According to the guys at HSBC, everything is in place for prices to come down in a decade at the earliest. It does sound convincing this.

"Analysts at HSBC have such a long list of reasons for a prolonged period of property price growth there is barely space here to discuss them all."

 

https://www.theguardian.com/business/2021/aug/14/sorry-kids-house-prices-arent-going-to-stop-going-through-the-roof

 

 

It would be bad enough if property prices had gone up 8% the past year but we are seeing £40,000 - £60,000 being  added to £220,000 properties (area Wales down to Cornwall) in the past 6 months. I honestly don't get it! I have said many times on this  forum that when we foolishly put our property on the market in October 2019 the EA said that properties over £230,000 had been difficult to sell since 2016. Yet here we are now with  £220,000 properties on the market for £280,000 and selling . So is this sustainable? It is hard to see how . 

[Dorkins]

15 hours ago, markyh said:

Rubbish, you look at this in FTB terms, 90% of buyers will be trading up and transfer a big chunk of equity. As I have said many times since 2016, we bought a £501k house On a 20 year mortgage , on a £5k pcm net income, but put down a £200k deposit built up from 1996. So our mortgage payments are £1600, the remaining £3400 is more than the vast majority of the nation take home as a family in the first place. Everything is relative. They answer is the buyers in Winchester are considerably richer than yawl. 

This is a circular argument. House prices are high because existing homeowners have lots of equity when they move, and existing homeowners have lots of equity when they move because house prices are high.

[Si1]

17 minutes ago, Dweller said:

It would be bad enough if property prices had gone up 8% the past year but we are seeing £40,000 - £60,000 being  added to £220,000 properties (area Wales down to Cornwall) in the past 6 months. I honestly don't get it! I have said many times on this  forum that when we foolishly put our property on the market in October 2019 the EA said that properties over £230,000 had been difficult to sell since 2016. Yet here we are now with  £220,000 properties on the market for £280,000 and selling . So is this sustainable? It is hard to see how . 

Yeah a lot of house type-, and locality- specific froth could come off without it being a crash

[andrewwk]

3 hours ago, spyguy said:

Jesus.

Did a great response, then tablet froze and content was lost.

In short - What analysts? Names please.

What report? Link.

Just wibble. At best, just Sunday paper fills. At worse, poof piece from a connected party.

Kids dont buy houses.

Covid isnt a plus for UK housing and the uk economy ffs.

^this

[Pop321]

2 hours ago, Dweller said:

It would be bad enough if property prices had gone up 8% the past year but we are seeing £40,000 - £60,000 being  added to £220,000 properties (area Wales down to Cornwall) in the past 6 months. I honestly don't get it! I have said many times on this  forum that when we foolishly put our property on the market in October 2019 the EA said that properties over £230,000 had been difficult to sell since 2016. Yet here we are now with  £220,000 properties on the market for £280,000 and selling . So is this sustainable? It is hard to see how . 

You are right in what you say, I have seen exactly this £280k on £220k houses locally too.

The trap many fall into is believing it’s all real and here to stay, when in fact the only ones for whom it is real are those who are daft enough to buy. When the market settles (and by that I do not mean the market falls…I mean when it settles) then those houses that were £220k may indeed be then ‘worth’ £240k. However, the £280k ones are seen as outliers when those who bought are either stuck or are left to regret over paying. That’s fine if it’s a leather jacket or a newly released electronic game…but a huge mistake when it’s a house.

My thoughts above aren’t to try tell people who have bought they have been wrong but to try and give reassurance to those on the edges and can’t buy. To try offer balance to some bullish comments and short term memories.

Opportunities will come….they always do.  

[Dweller]

2 hours ago, Si1 said:

Yeah a lot of house type-, and locality- specific froth could come off without it being a crash

Wow so £40,000 - £60,000 is nothing, apparently some places property has gone up 37% YOY . 

I hate to show just how stupid I am, but if all these places have seen such HUGE price increases the past year then why are the property indices showing 8- 10%  ? That's a lot of froth isn't it....

https://www.dailymail.co.uk/property/article-9364115/Which-areas-seen-biggest-house-price-rises-pandemic.html

[Speed1987]

4 hours ago, househunter123 said:

Well as a potential FTB, prices here in the East Midlands definitely higher and no sign of reducing. Looking at the 210k mark or below.

 I can't even get a viewing for the last few properties in July/August.  Get a call from agents day before my allocated viewing saying that house is now sold, or get a call the same day as the house goes on RM/Zoopla saying all appointments taken. I give up. 

Birmingham is still pretty bad also, houses still seem to be selling within days. Prices still rising, its crazy...

Hardly anything to rent either, there are just two 3 bed houses to rent within my local area.

Pressure is high, alot of people moving from London and buying outright.

HS2 and common wealth games infrastructure upgrades is only making it worse. 

I would just jump in head first, this may continue until the end of next year, if we have another lockdown... things may get even worse.

Edited August 15, 2021 by Speed1987

[Speed1987]

1 hour ago, Pop321 said:

You are right in what you say, I have seen exactly this £280k on £220k houses locally too.

The trap many fall into is believing it’s all real and here to stay, when in fact the only ones for whom it is real are those who are daft enough to buy. When the market settles (and by that I do not mean the market falls…I mean when it settles) then those houses that were £220k may indeed be then ‘worth’ £240k. However, the £280k ones are seen as outliers when those who bought are either stuck or are left to regret over paying. That’s fine if it’s a leather jacket or a newly released electronic game…but a huge mistake when it’s a house.

My thoughts above aren’t to try tell people who have bought they have been wrong but to try and give reassurance to those on the edges and can’t buy. To try offer balance to some bullish comments and short term memories.

Opportunities will come….they always do.  

They may feel that way, but often people who overpay, will not sell for several years.

The more who overpay within one area, which is particularly desirable, the better for those who already own there.

As those who over pay are reluctant to sell, it reduces the supply, therefore new sellers can command a higher price.

💰 💰 💰

In effect,  the overpayers pull up the price of the current stock.

Edited August 15, 2021 by Speed1987

[Si1]

59 minutes ago, Dweller said:

Wow so £40,000 - £60,000 is nothing, apparently some places property has gone up 37% YOY . 

I hate to show just how stupid I am, but if all these places have seen such HUGE price increases the past year then why are the property indices showing 8- 10%  ? That's a lot of froth isn't it....

https://www.dailymail.co.uk/property/article-9364115/Which-areas-seen-biggest-house-price-rises-pandemic.html

Yeah could be froth. I hope. Chill out dude I'm on your side.

[70PC]

Affordability goes to infinity at zero interest rates. Mortgage offers are not zero yet but surprisingly close. Buying a house in Winchester for £600k makes complete sense at zero interest, even if you only earn £1 an hour. 

[petetong]

9 hours ago, Si1 said:

Evidence? Principles?

Such as?

Really?

??

Evidence the last decade or so: https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

Ever increasing population for one and the various props by the governments another.

I'd love them to crash by a massive amount but just can't see it. Explain to me why it will ?

[petetong]

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Edited August 15, 2021 by petetong
Duplicate ...

[petetong]

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Edited August 15, 2021 by petetong
Duplicate

[andrewwk]

1 minute ago, petetong said:

Evidence the last decade or so: https://www.bankofengland.co.uk/boeapps/database/Bank-Rate.asp

Ever increasing population for one and the various props by the governments another.

I'd love them to crash by a massive amount but just can't see it. Explain to me why it will ?

because it's all gone pete ...

[petetong]

1 minute ago, andrewwk said:

because it's all gone pete ...

exactly 🤣