NoHPCinTheUK Posted January 21 Share Posted January 21 Mark these words: Volumes are crashing, I’ve seen mortgage agreements are down 40% this Jan. Recent spikes in house prices are what it is called and echo-bubble. The final piece of the puzzle will be when banks will realise that all these BTLs commercial loans are worth, maybe, 40% less than their book value. That’s the panic stage. Quote Link to comment Share on other sites More sharing options...
NoHPCinTheUK Posted January 21 Author Share Posted January 21 All these BTLs loans…if Banks were to pack them into a MBS product, they will struggle to sell it on the open market without a fat discount . Quote Link to comment Share on other sites More sharing options...
Pmax2020 Posted January 21 Share Posted January 21 It’s really hard to say, but I think prices falling 5-10% this year is likely. My search area, +10 miles, 250-475k, 3 bed. Exc. new builds and flats, and RM gives you 315 results. The median listing duration is 65 days. A quarter have been on 120 days, 10% have been listed for over 6 months. Crucially though, that 25% band of properties with the longest listing duration already contains some very, very reasonable prices. So why aren’t they selling? Its because the general consensus among potential buyers is that prices will fall.. Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted January 21 Share Posted January 21 (edited) 10 minutes ago, Pmax2020 said: It’s really hard to say, but I think prices falling 5-10% this year is likely. My search area, +10 miles, 250-475k, 3 bed. Exc. new builds and flats, and RM gives you 315 results. The median listing duration is 65 days. A quarter have been on 120 days, 10% have been listed for over 6 months. Crucially though, that 25% band of properties with the longest listing duration already contains some very, very reasonable prices. So why aren’t they selling? Its because the general consensus among potential buyers is that prices will fall.. No. It's because they are still unaffordable. If people have the finances and wages to buy they will. Should the consensus eventually be that house prices will fall you will know about it. That will be the time when we do actually have a full on crash and transactions go almost to zero. We are nowhere near to that stage. You will start seeing angry threads on Reddit and mumsnet from very frustrated sellers when we reach it. The media will also be peddling doom porn to the public about how bad it is to buy a house. The headlines will go something like this: "Why property is now the worst investment you can make" "Experts say property will never go up again in our lifetimes". "Mortgage holder who bought in 2022 now in 50% negative equity" And so on. Whilst they will be doing that the establishment will be buying up all the cheap property behind the scenes from the forced sellers and the fearful ones. THAT IS WHEN YOU SHOULD BE LOOKING TO BUY Edited January 21 by The Angry Capitalist Quote Link to comment Share on other sites More sharing options...
fellow Posted January 21 Share Posted January 21 25 minutes ago, NoHPCinTheUK said: Mark these words: Volumes are crashing, I’ve seen mortgage agreements are down 40% this Jan. Recent spikes in house prices are what it is called and echo-bubble. The final piece of the puzzle will be when banks will realise that all these BTLs commercial loans are worth, maybe, 40% less than their book value. That’s the panic stage. Down 40% on Decemer's figures? Where have you seen that? Quote Link to comment Share on other sites More sharing options...
Pmax2020 Posted January 21 Share Posted January 21 Can’t argue with what you say. My fear though is wage inflation, coupled with fake news about mortgage rates and energy costs coming down, will embolden another swathe of nutters to go big again this year. I’m sticking to 5-10% falls this year, with some howlers in there for people that bought with stupid bids in recent years. In the sold prices I looked at last week, there was a 40k loss on a 360k property that was only owned for 18 months. There will be plenty more of that… Quote Link to comment Share on other sites More sharing options...
winkie Posted January 21 Share Posted January 21 Period of low capital growth in property, higher fees and taxes, the people that rent feeling the pinch from the cost of living, more difficulty in paying rents....councils/austerity LHA rates not keeping up.......high loan to value and interest only business loans, costing more. Time for change......pop. Quote Link to comment Share on other sites More sharing options...
NoHPCinTheUK Posted January 21 Author Share Posted January 21 (edited) Nutters will still have to get a mortgage. And computer will say no. Nutters on both side of the equation are going to realise that “hope” and “last year sold price” and “immigration” are not words their mortgage provider uses to close the deals. Look carefully at new builds, developers do not have the emotional attachment to a property that a private seller has. They have to pay bills at the end of the month, wages, balance the books. Look carefully at what they will do in the next 6 months. The idea that they will sit on thousands of properties, waiting for IRs to go down for another 12/18 months is completely non-sense. This is what they’ve been doing for the last 24 months. The spring bounce will be when developers will start flooding the market with properties at 20/30% of the current listed prices. Edited January 21 by NoHPCinTheUK Quote Link to comment Share on other sites More sharing options...
Quid Game Posted January 21 Share Posted January 21 5 minutes ago, NoHPCinTheUK said: Nutters will still have to get a mortgage. And computer will say no. Nutters on both side of the equation are going to realise that “hope” and “last year sold price” and “immigration” are not words their mortgage provider uses to close the deals. Look carefully at new builds, developers do not have the emotional attachment to a property that a private seller has. They have to pay bills at the end of the month, wages, balance the books. Look carefully at what they will do in the next 6 months. The idea that they will sit on thousands of properties, waiting for IRs to go down for another 12/18 months is completely non-sense. This is what they’ve been doing for the last 24 months. The spring bounce will be when developers will start flooding the market with properties at 20/30% of the current listed prices. So today is the day the bubble pops? What is your timescale to the bottom? How much down and by what index? Quote Link to comment Share on other sites More sharing options...
70PC Posted January 21 Share Posted January 21 7 minutes ago, NoHPCinTheUK said: Nutters will still have to get a mortgage. And computer will say no. Nutters on both side of the equation are going to realise that “hope” and “last year sold price” and “immigration” are not words their mortgage provider uses to close the deals. Look carefully at new builds, developers do not have the emotional attachment to a property that a private seller has. They have to pay bills at the end of the month, wages, balance the books. Look carefully at what they will do in the next 6 months. The idea that they will sit on thousands of properties, waiting for IRs to go down for another 12/18 months is completely non-sense. This is what they’ve been doing for the last 24 months. The spring bounce will be when developers will start flooding the market with properties at 20/30% of the current listed prices. That makes sense. There are rate bills to pay on finished properties, maintenance, security etc. Capital is tied up earning no interest on a depreciating asset. Holding out on price with gimmicks like £10k cash back is not going to work. Quote Link to comment Share on other sites More sharing options...
NoHPCinTheUK Posted January 21 Author Share Posted January 21 (edited) 7 minutes ago, Quid Game said: So today is the day the bubble pops? What is your timescale to the bottom? How much down and by what index? You can find my post from 2 y ago. I predicted a 40% fall from peak prices. I didn’t take into account a potential spike in unemployment anyway. I’m not giving you any prediction on the bottom, as it will be a regional factor. London will probably reach the bottom in the next 24 months esp in prime post-codes. Mortgage rates for FTBs are still at 6%. Someone with a pristine credit score might get a better deal, but the average FTB will have to work with those numbers. There’s a reason why the mortgage market just crashed in volumes, the bottom of the pyramid is just priced out at the moment. £500k flats “ideal for a first time buyer” here in London just won’t sell. The money to purchase them isn’t simply there anymore. Edited January 21 by NoHPCinTheUK Quote Link to comment Share on other sites More sharing options...
Quid Game Posted January 21 Share Posted January 21 2 minutes ago, NoHPCinTheUK said: You can find my post from 2 y ago. I predicted a 40% fall from peak prices. I didn’t take into account a potential spike in unemployment anyway. I’m not giving you any prediction on the bottom, as it will be a regional factor. London will probably reach the bottom in the next 24 months esp in prime post-codes. Mortgage rates for FTBs are still at 6%. Someone with a pristine credit score might get a better deal, but the average FTB will have to work with those numbers. There’s a reason why the mortgage market just crashed in volumes, the bottom of the pyramid is just priced out at the moment. So I’m a bit confused. If two years ago you predicted a 40% fall which clearly hasn’t happened, why is today now the start of the bubble as you call it popping? Quote Link to comment Share on other sites More sharing options...
70PC Posted January 21 Share Posted January 21 "Developers exhibiting at this year’s New Home Show are offering discounts on house deposits to boost the property market in the face of the rising cost of living. Southern Housing is marketing new ‘Shared Ownership’ properties with a £1,000 cashback towards buying." https://www.times-series.co.uk/news/24055944.london-new-home-show-discounts-business-design-centre/ Quote Link to comment Share on other sites More sharing options...
NoHPCinTheUK Posted January 21 Author Share Posted January 21 31 minutes ago, fellow said: Down 40% on Decemer's figures? Where have you seen that? I saw this number being quoted in a video someone posted in another thread. Quote Link to comment Share on other sites More sharing options...
NoHPCinTheUK Posted January 21 Author Share Posted January 21 Just now, Quid Game said: So I’m a bit confused. If two years ago you predicted a 40% fall which clearly hasn’t happened, why is today now the start of the bubble as you call it popping? You’re playing with my words, and you’re not confused you’re trying to confuse the audience. I didn’t say that 2 years ago the market will bottom in 24 months. I said I think London prime post-codes will see the bottom in 2026 because it’s where the largest volumes of sales in the country are. Regions where volumes are below the national average will reach it much later. This is the difference between a post-code with 100 transaction per month and another with just 10. I hope you’re less “confused” now. Quote Link to comment Share on other sites More sharing options...
hotblack42 Posted January 21 Share Posted January 21 40 minutes ago, Pmax2020 said: My fear though is wage inflation, coupled with fake news about mortgage rates and energy costs coming down, will embolden another swathe of nutters to go big again this year. Or.. house prices stagnate, deflating in real terms, slowly but relentlessly for more than a decade. By that time only middle aged & older adults will have any memory of house prices booming & will be realising they could be retired or dead by the time that happened again. Younger adults will buy expecting only shelter not ‘profit’. The western world permanently falls out of love with property & realises what a ridiculous diversion of time, money & energy being besotted with it was. This has always been my greatest objection - the fetishisation of houses in the first world. The root of excessive HPI. A man can dream.. Quote Link to comment Share on other sites More sharing options...
Quid Game Posted January 21 Share Posted January 21 17 minutes ago, NoHPCinTheUK said: You’re playing with my words, and you’re not confused you’re trying to confuse the audience. I didn’t say that 2 years ago the market will bottom in 24 months. I said I think London prime post-codes will see the bottom in 2026 because it’s where the largest volumes of sales in the country are. Regions where volumes are below the national average will reach it much later. This is the difference between a post-code with 100 transaction per month and another with just 10. I hope you’re less “confused” now. But from the ONS data I can find, London doesn’t have anywhere near the largest volumes of sales - it’s dwarfed by the south east as an example (table 1a). https://cy.ons.gov.uk/file?uri=/peoplepopulationandcommunity/housing/datasets/numberofresidentialpropertysalesfornationalandsubnationalgeographiesquarterlyrollingyearhpssadataset06/current/hpssadataset6numberofresidentialpropertysalesforadministrativegeographies.xls Where have you got your assertion that prime London is where the largest volumes of sales are? The northwest has a larger volume too. Are these areas going to see the crash first then? Still very much confused as what you are posting as fact doesn’t seem to hold up to any scrutiny unless you can post the sources? I imagine that if you are just looking at zones 1 - 3 the volumes are going to be even smaller than the ONS data as it decreases the area size. Quote Link to comment Share on other sites More sharing options...
14stFlyer Posted January 21 Share Posted January 21 6 minutes ago, hotblack42 said: Younger adults will buy expecting only shelter not ‘profit’. The western world permanently falls out of love with property & realises what a ridiculous diversion of time, money & energy being besotted with it was. This has always been my greatest objection - the fetishisation of houses in the first world. The root of excessive HPI. A man can dream.. I think your dream will be a reality pretty soon Mr Desiato. However, by soon I mean years away to change these attitudes rather than months or days Data from last year’s global demographics is coming through and, as well as the expected fall in population in China (over 2 million people in one year!), and population crises in Russia and Europe, we also have confirmed more deaths than births and a falling indigenous population in the U.K. (and not directly CoVid related). Add this to the growing anti-net immigration rhetoric and I think it is safe to say that the pressures on housing are going to ease big time in the next decade. Quote Link to comment Share on other sites More sharing options...
staintunerider Posted January 21 Share Posted January 21 43 minutes ago, 14stFlyer said: I think your dream will be a reality pretty soon Mr Desiato. However, by soon I mean years away to change these attitudes rather than months or days Data from last year’s global demographics is coming through and, as well as the expected fall in population in China (over 2 million people in one year!), and population crises in Russia and Europe, we also have confirmed more deaths than births and a falling indigenous population in the U.K. (and not directly CoVid related). Add this to the growing anti-net immigration rhetoric and I think it is safe to say that the pressures on housing are going to ease big time in the next decade. Having seen the last crash and it's run up....I can assure you attitudes will change almost overnight...as soon as the values start to plummet and it becomes clear the game has changed mindsets will change rapidly.... This time housing is a bust other than as shelter.....it will I am sure this time shed it's ponzi/pyramid scheme skin, there will be some other get rich quick game somehow somewhere.....housing likely won;t return to what we have seen for decades from here on in.... There will be some serious repercussions for a lot of folk who have borrowed up to the eyeballs and overpaid back when money was cheap or near free.....this will change not only their attitudes and prob ruin a good lot of them....others will take note of their plight and take that message to heart... This is the story of the 90's and the story of the rest of this decade and probably the decade beyond! Quote Link to comment Share on other sites More sharing options...
staintunerider Posted January 21 Share Posted January 21 (edited) 2 hours ago, NoHPCinTheUK said: Mark these words: Volumes are crashing, I’ve seen mortgage agreements are down 40% this Jan. Recent spikes in house prices are what it is called and echo-bubble. The final piece of the puzzle will be when banks will realise that all these BTLs commercial loans are worth, maybe, 40% less than their book value. That’s the panic stage. agree but those banks will mark them to book not to market like SVB....fortunately for the banks the borrower is on the hook and hamster wheel, the lender only has to crystalise the loss when the borrower falls off the hamster wheel.... They are not going to get a shed load of redemption requests like SVB.... On paper yes they will technically be insolvent but they have all their little hamsters keeping the lights and show going! The paper reality will be IGNORED that's for sure! The BTL'ers who get in trouble will risk their primary residence as well, the banks will go after them like a shot if they default....if it suits the lender they will push the BTL borrower into whatever situation suits the lender....there have been examples of this before on HPC....where a borrower has lost the entire portfolio because the lender wanted the loans off their books.... I do agree the BTL element is the most troubling, Spyguy knows a lot on this component, perhaps he would like to add to the discussion? Those BTL hamsters are likely not as reliable as the owner occupier hamsters when all is said and done... Edited January 21 by staintunerider Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted January 21 Share Posted January 21 (edited) 2 hours ago, Pmax2020 said: My fear though is wage inflation, coupled with fake news about mortgage rates and energy costs coming down, will embolden another swathe of nutters to go big again this year. We will only get wage inflation in the unionized industries, monopolized industries and with state workers. This is why you see railway industry asking for pay rises because they have the power to do so due to both a monopoly and being semi-nationalized. You have also seen it with Ford in the USA getting mega pay rises too due to union power. That will finish Ford in my opinion. Those pay rises will result in higher purchase price for their vehicles. Costs always get passed onto customers. However, I can't see consumers paying $40,000 + for a Ford Focus or any other basic Ford vehicle especially with the type of economic environment we are going into. Low wage workers (which is many in the UK) such as restaurant staff, pub staff, call centre staff, tourism based work, supermarket staff & delivery driver workers (Tesco & Evri etc) will not have the power to get higher wages. You can only get true wage increases via an increase in productivity. I am sure you are also aware that the establishment is flooding immigrants into the country (or allowing it to happen by turning a blind eye). That will keep wages very low. If you get any other way it is only nominally and results in the currency seriously going down the toilet. See Argentina for reference. Edited January 21 by The Angry Capitalist Quote Link to comment Share on other sites More sharing options...
wighty Posted January 21 Share Posted January 21 2 hours ago, The Angry Capitalist said: No. It's because they are still unaffordable. If people have the finances and wages to buy they will. Should the consensus eventually be that house prices will fall you will know about it. That will be the time when we do actually have a full on crash and transactions go almost to zero. We are nowhere near to that stage. You will start seeing angry threads on Reddit and mumsnet from very frustrated sellers when we reach it. The media will also be peddling doom porn to the public about how bad it is to buy a house. The headlines will go something like this: "Why property is now the worst investment you can make" "Experts say property will never go up again in our lifetimes". "Mortgage holder who bought in 2022 now in 50% negative equity" And so on. Whilst they will be doing that the establishment will be buying up all the cheap property behind the scenes from the forced sellers and the fearful ones. THAT IS WHEN YOU SHOULD BE LOOKING TO BUY THAT IS WHEN YOU SHOULD BE LOOKING TO BUY Unless you mean a property investment, if you don't have home where do you live in the meantime?. Quote Link to comment Share on other sites More sharing options...
staintunerider Posted January 21 Share Posted January 21 (edited) 9 minutes ago, The Angry Capitalist said: We will only get wage inflation in the unionized industries, monopolized industries and with state workers. This is why you see railway industry asking for pay rises because they have the power to do so due to both a monopoly and being semi-nationalized. You have also seen it with Ford in the USA getting mega pay rises too due to union power. That will finish Ford in my opinion. Those pay rises will result in higher purchase price for their vehicles. Costs always get passed onto customers. However, I cant see consumers paying $40,000 + for a Ford Focus or any other basic Ford vehicle especially with the type of economic environment we are going into. Low wage workers (which is many in the UK) such as restaurant staff, pub staff, call centre staff, tourism based work, supermarket staff & delivery driver workers (Tesco & Evri etc) will not have the power to get higher wages. You can only get true wage increases via an increase in productivity. I am sure you are also aware that the establishment is flooding immigrants into the country (or allowing it to happen by turning a blind eye). That will keep wages very low. If you get any other way it is only nominally and results in the currency seriously going down the toilet. See Argentina for reference. PCP allowed manufacturers to raise the costs of vehicles and the over complexity of these vehicles to ridiculous levels combined with a whole new era in car sales..... Based on what you say I guess this is over now...the expensive and complex vehicles will go for pennies on the dollar in the used markets and perhaps a new era of less expensive and less complex cars will now be produced... looks like it's already starting Edited January 21 by staintunerider Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted January 21 Share Posted January 21 1 minute ago, staintunerider said: PCP allowed manufacturers to raise the costs of vehicles and the over complexity of these vehicles to ridiculous levels combined with a whole new era in car sales..... Based on what you say I guess this is over now...the expensive and complex vehicles will go for pennies on the dollar in the used markets and perhaps a new era of less expensive and less complex cars will now be produced.... Looks like it's already starting! Pretty much, yes. The car companies that will do well in the future will be the ones that can produce well made cars and sell for less than £25,000. Quote Link to comment Share on other sites More sharing options...
The Angry Capitalist Posted January 21 Share Posted January 21 2 minutes ago, wighty said: THAT IS WHEN YOU SHOULD BE LOOKING TO BUY Unless you mean a property investment, if you don't have home where do you live in the meantime?. Rent. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.