No collapse :(

[ExeC-UK]

4 hours ago, scottbeard said:

That said, I am surprised that even the most up-to-date indices like Nationwide only show prices down 5% from the peak.  I would have expected 10% by now, and 20-40% by the time it finishes.

Giving people 8% Pay rises per year will probably be one of the main reasons.

[ExeC-UK]

16 hours ago, Jinxed said:

 Long term base rate trend is Up, Up, Up, from now on, (regardless of pegs, new currencies, exchange rate mechanisms, etc) so we know that mortgage lending will shrink.

Base rates have almost peaked based on current information so trend from now on should be levelling out.

Assuming rates do not fly over 6% and upwards you can only assume the downward price curve will begin to level out also over the 12 months from IR peak.

If there was going to be a 40/50/60% crash that people on here predict, you would have seen it beging snowballing by now.

The crash people want will only end up being a correction

Edited August 18, 2023 by ExeC-UK

[Casual-observer]

3 minutes ago, ExeC-UK said:

Giving people 8% Pay rises per year will probably be one of the main reasons.

For those with a job, our sister company just made 2/3rd's of the staff redundant. 

The labour market is starting to crack 

[ExeC-UK]

1 minute ago, Casual-observer said:

For those with a job, our sister company just made 2/3rd's of the staff redundant. 

The labour market is starting to crack 

Thats a whole different debate about an issue that actually needs to unfold. Its currently not at any level that will make a fundamental difference currently.

[scottbeard]

19 minutes ago, Martin_JD said:

According to scottbeard it's unknowable until land register data comes in!

Yes - or some other actual data.

Or we can take your approach of "who needs evidence when you have anonymous posters who have no data to back up their views?"

8 minutes ago, ExeC-UK said:

Giving people 8% Pay rises per year will probably be one of the main reasons.

That's one of the main reasons for my wide "20-40%" range.  It's hard to be sure what the nominal falls will be when big real falls are already happening.

[Maghull Mike]

16 minutes ago, Casual-observer said:

For those with a job, our sister company just made 2/3rd's of the staff redundant. 

The labour market is starting to crack 

Doing what?

[ExeC-UK]

12 minutes ago, scottbeard said:

Yes - or some other actual data.

Or we can take your approach of "who needs evidence when you have anonymous posters who have no data to back up their views?"

That's one of the main reasons for my wide "20-40%" range.  It's hard to be sure what the nominal falls will be when big real falls are already happening.

I think 20-40% is fair, I wouldn't go that high but you never know.

In the midst of a barrage of unsettling news encompassing surging energy and food prices, escalating holiday costs, higher insurance premiums, and mortgage rate increases, its interesting that the housing market is showing remarkable resilience. Despite the deluge of discouraging information, house prices have only experienced slight declines over the last year.

This prompts the idea that as circumstances stabilise or optimism begins to shine through, it becomes evident that people might not attain the outcomes they had initially aspired for on here? and the cycle of the HPC forums will repeat again for another 12 years.

The poor will always get poorer, some people on here think they are winning a war which is a shame as theyre so blind to whats really going on.

Edited August 18, 2023 by ExeC-UK

[Dreamcasting]

31 minutes ago, ExeC-UK said:

Giving people 8% Pay rises per year will probably be one of the main reasons.

Yeah, like that's sustainable.

Companies don't have unlimited budgets to keep on dishing out such pay rises. In any case, most people aren't getting anywhere near an 8% pay rise.

[Quid Game]

5 hours ago, staintunerider said:

Utterly incredible some are still clutching the supply and demand straw, easily debunked, has been, no point in explaining it in detail(as it has been many times)to those who quite obviously don't want to get it because the truth lays waste to what isn't in reality even an argument.

In a nutshell.

Plentiful cheap credit got us here and when credit gets expensive and tighter the opposite will happen...just because the effects haven't really kicked in yet doesn't mean they won't.

So you’ve just explained the supply and demand argument? Plentiful cheap credit = increased demand for houses as people able to borrow more and spend more. Big increase in demand for housing = supply can’t keep up. Result = prices increased rapidly. 
 

Can you explain how the above can be easily debunked and is wrong? 

[ExeC-UK]

18 minutes ago, Dreamcasting said:

Yeah, like that's sustainable.

Companies don't have unlimited budgets to keep on dishing out such pay rises. In any case, most people aren't getting anywhere near an 8% pay rise.

You are stating an opinion, most people ARE getting an 8% rise. Anecdotally the majority of people I know have got between 6 and 10% this year. I myself have given my staff 10%.

Quote

ONS: Average weekly earnings across the whole of the economy grew by 7.8% on the regular pay measure in the year to June 2023.

https://www.incomesdataresearch.co.uk/resources/news/average-weekly-earnings

You can sustain wage rises if your costs & charges go up (inflation).

When companies charges & fees go up faster than their actual purchasing costs, companies will earn more, those companies will then pay more to keep the important staff on.

To be honest you'll find a lot of the big blue chip companies can easily afford the rises & the small fry companies like ourselves will just increase our costs to cover the requirements of purchases & staffs needs.

Edited August 18, 2023 by ExeC-UK

[Casual-observer]

26 minutes ago, Maghull Mike said:

Doing what?

Software house

[Maghull Mike]

1 minute ago, Casual-observer said:

Software house

Are, like the Rag Trade, up & down like the Assyrian empire

[Dreamcasting]

5 minutes ago, ExeC-UK said:

You are stating an opinion, most people ARE getting an 8% rise. Anecdotally the majority of people I know have got between 6 and 10% this year. I myself have given my staff 10%.

You can sustain wage rises if your costs & charges go up (inflation).

Costs go up, companies earn more, those companies then end up paying more to keep the important staff on.

To be honest youll find a lot of the big blue chip companies can easily afford the rises.

It's not sustainable year on year. Wage rises are highly inflationary. They're funded by charging higher and higher prices and when customers are tapped out, they either go bust or they fire lots of staff.

We're in the early stages of job loss right now. This will only accelerate over the coming 12 months

[ExeC-UK]

1 minute ago, Dreamcasting said:

It's not sustainable year on year. Wage rises are highly inflationary. They're funded by charging higher and higher prices and when customers are tapped out, they either go bust or they fire lots of staff.

We're in the early stages of job loss right now. This will only accelerate over the coming 12 months

Wage price spirals are definitely possible and sustainable.

Within the context of my original post stating they help lower the impact of house price declines it is most definitely sustainable to the point of ensuring that happens.

Never-ending obviously not, but a few years of rises is easily possible.

[shavedchimp]

34 minutes ago, ExeC-UK said:

Despite the deluge of discouraging information, house prices have only experienced slight declines over the last year.
 

When the housing market is so central to an economy as it is in the UK, the truth of its health, or lack of, will always be distorted, hidden, sugar-coated, by the government, media and vested interests.

Even if a crash/correction/slide is happening it will not be admitted. That leaves persistent forensic data analysis to determine what's really going on. We must DYOR.

And let's not forget the lag. Mind the lag.

[Casual-observer]

3 minutes ago, Maghull Mike said:

Are, like the Rag Trade, up & down like the Assyrian empire

Not really, they've been around for years and it was down to unfortunate timing with a new product that won't sell in the current climate of climbing base rates. It wasn't a start-up that's gone bust. 

The prospective market they were targeting is simply dead, nothing to do with the product in fairness just the purse strings are closed.

Probably something they will relook at in the future.  

[ExeC-UK]

Just now, shavedchimp said:

When the housing market is so central to an economy as it is in the UK, the truth of its health, or lack of, will always be distorted, hidden, sugar-coated, by the government, media and vested interests.

Even if a crash/correction/slide is happening it will not be admitted. That leaves persistent forensic data analysis to determine what's really going on. We must DYOR.

And let's not forget the lag. Mind the lag.

House prices are accurately reported by indexes and LR.

Agree on the Lag, and the LAG will most likely report similar to 6 months previously, but thats all hindsight and we can only discuss what has already happened.

[Dreamcasting]

1 minute ago, ExeC-UK said:

Wage price spirals are definitely possible and sustainable.

Within the context of my original post stating they help lower the impact of house price declines it is most definitely sustainable to the point of ensuring that happens.

Never-ending obviously not, but a few years of rises is easily possible.

But we also have to remember that any pay rise is being offset by the higher prices people are having to pay for food, energy and general living costs. It's why the BOE are increasing rates and wage rises are the main factor they're looking at. Any spiral of ANY kind is always going to lead to a huge bust at the end of the day.

[ExeC-UK]

Just now, Dreamcasting said:

But we also have to remember that any pay rise is being offset by the higher prices people are having to pay for food, energy and general living costs. It's why the BOE are increasing rates and wage rises are the main factor they're looking at. Any spiral of ANY kind is always going to lead to a huge bust at the end of the day.

I disagree with some of your points and agree with some others, so Im gonna agree to disagree as Im not getting any work done 😂

[Unmoderated]

On 17/08/2023 at 07:29, scottbeard said:

But by placing a high weight on the experience of yourself and one guy at work you're doing the same thing: I'm OK, Steve from accounts is OK, therefore the effect of interest rates is negligible.

The primary impact of nterest rates isn't on people who already own a house, it's on people who are buying one.  They crunch the sums and go "hmm well we were going to bid £260k but we can't afford that at today's interest rates so we will bid £220k" etc etc At every level of the market save for the very top people will either be reducing their demand from bigger places to slightly smaller ones and/or reducing what they can afford to offer.

It's just maths.

While what you say is true, of course, it ignores the substitution of renting versus owning. 

While servicing a debt has become more expensive, rent rises are at record levels. I see this as one of the issues in the HPC argument. While prices are falling there's the support from wage inflation and rental increases (to name but two). 

Annual rental increases are now 5.3% on average. 

I accept people have other options like living with friends or family etc. 

Has there been a change in the multiples banks are lending? It seems that many would still borrow the maximum even in today's market? While £1K a month is certainly more affordable than £1,400 a month I'm sure there are people out there who will still take the £1,400 mortgage just to get a foot on the ladder. If no crash is evidently forthcoming.... why wait? If rates are coming down again (I think they will next year) then why not rush ahead of that and avoid renting for another 12 months to boot....

[Flat Bear]

2 hours ago, ExeC-UK said:

Base rates have almost peaked based on current information so trend from now on should be levelling out.

Assuming rates do not fly over 6% and upwards you can only assume the downward price curve will begin to level out also over the 12 months from IR peak.

If there was going to be a 40/50/60% crash that people on here predict, you would have seen it beging snowballing by now.

The crash people want will only end up being a correction

It sounds as if you have some vested interest. I believe you have come to the wrong conclusion.

Base rates have almost peaked based on current information so trend from now on should be levelling out.

I do not believe this to be the case at all. Do you still believe the BOE line of inflation being temporary and rates will "come back to normal" (ie less than 1%) within a year or two? If you do believe this then you would ofcourse be correct and there not be any "crash" or fall in house prices. I do not believe this to be the case.

As I have said many times before we will not see any real falls in house prices until the BOE base rate gets to the magic 6% which I still believe will be in Dec 2023 or January 2024. From there on we will start to see falls and, as I believe, the base rate is forced up towards 10% then falls will increase. Whether they are Real falls and nominal falls being much less depends on the inflation figures, the higher the inflation the bigger the real falls but the smaller the nominal falls.

You say there is no evidence of any falls in prices so far and I accept there has not been any obvious signs over the last 12 months BUT by the same token we have not seen any rises in prices. From my own reading of the situation and figures from various national sources it would suggest prices have actually fallen by a couple of percentage points nominally which is not really enough to write home about.

My own prediction, which has stayed the same for over a year, is that we will see nominal falls nationally of around 5% year on year at the end of 2023 early 2024. We will the see nominal falls throughout 2024 and early 2025 before a period of stagnation. I would guess at a total peak to trough fall in nominal prices to be in the region of 25% by 2026. This may not be enough to constitute a "crash" as such but definately a large correction. Real house prices I believe will have fallen by at least 50% by 2027/28 which does equate to a "crash" in my books.

2 hours ago, Casual-observer said:

For those with a job, our sister company just made 2/3rd's of the staff redundant. 

The labour market is starting to crack 

There is definately a slowdown. Most people are still unaware but we should see upticks in unemployment and falls in economic activity in the official data over the coming months.

[staintunerider]

https://wolfstreet.com/2023/08/17/san-francisco-house-prices-plunged-faster-29-in-16-months-of-this-housing-bust-than-in-the-first-16-months-of-housing-bust-1/

 

"Housing market downturns are slow-moving. Prices don’t plunge overnight, as you’ve come to expect from cryptos. Housing market downturns take years to play out. "

We're just at the beginning of this here in the UK.....

[scottbeard]

29 minutes ago, Unmoderated said:

While what you say is true, of course, it ignores the substitution of renting versus owning. 

While servicing a debt has become more expensive, rent rises are at record levels.

Now that is true - rents are rising.

But whilst rising rents might encourage someone to buy it doesn't give them any more money to do so.

If houses cost £280k and interest rates are 1%, and yet someone has chosen to rent, if both interest rates rise to 5% AND their rent goes up they might be more inclined to buy but if they couldn't afford £280k before they certainly can't now.

[Flat Bear]

29 minutes ago, Unmoderated said:

Annual rental increases are now 5.3% on average. 

So are you trying to tell us that rents have come down?

With the lower measure of inflation CPI figure dropping right down to 6.8% this would still mean rents have FALLEN by 1.5% in real terms over the pat year.

[Unmoderated]

4 minutes ago, scottbeard said:

Now that is true - rents are rising.

But whilst rising rents might encourage someone to buy it doesn't give them any more money to do so.

If houses cost £280k and interest rates are 1%, and yet someone has chosen to rent, if both interest rates rise to 5% AND their rent goes up they might be more inclined to buy but if they couldn't afford £280k before they certainly can't now.

True, they don't have more money to do so, but along my same line of thought is that 24 months ago people borrowing their max income multiple would have been very affordable. In the absence of restrictions they could have afforded (and I'm sure many would have) borrowed an even higher value. 

Rates going up will mean fewer wanting to max out but I can't help but think that to many would be FTBers with no experience of paying a cheap rate mortgage a 4X income to mortgage would still be affordable, it would just be more expensive. 

I'm not arguing against a price adjustment, merely pointing out that there is some level of support.