The great HPC is HERE

[NoHPCinTheUK]

And adjusted for inflation these numbers look even darker. 
 

Back in 2008 we were in deflation soon after LB went bankrupt. 
 

I am sure the Americans, Germans and Xi just decided to let the whole house of card collapse in order to build the next phase of economic growth. No more money for this Ponzi scheme and more money for the actual stuff that make you rich. 
 

Sorry it’s the economy and wages who should dictate how much an house is worth not the other way round.

Edited April 3 by NoHPCinTheUK

[fellow]

28 minutes ago, Orb said:

Is this a case of "when America sneezes..." etc?

Unlike in the UK, Americans can just hand the keys back to the bank when they are in negative equity.

When these losses are realised, all the other houses on the banks' balance sheets will be downvalued and they will become more reluctant to lend to each other due to increased risk of default. Then banking liquidity will start to dry up the contagion will spread to the UK.

We are one step closer to credit crunch 2.0.

[NoHPCinTheUK]

One of Blackstone’s major funds in negative cash-flow. 
 

https://www.ft.com/content/3b710a02-f5e0-4e21-bda4-58c7b88dd31b

[Data Dave]

 

Perms pretty much tell you everything you need to know about the US economy. 
Housing is the economy. 
The habits of US consumers will have more of a direct effect on people in the UK than any British politician will. 
 

 

[Lucky Larry]

45 minutes ago, Pmax2020 said:

There won’t be a crash-crash up here in Scotland. I’ve said that from day one. I think a lot of muppets overpaid in the covid years and they’ll keep that pain in years to come. 

That sounds like an emotional call based on what you hope for . Historically prices in Scotland are lower than England , we will revert to norm sooner rather than later imo. A change in Govt is usually when these things happen as they can both blame each other for the crash. 

[Frankie Teardrop]

4 minutes ago, Data Dave said:

Perms pretty much tell you everything you need to know about the US economy. 

[Data Dave]

2 minutes ago, Frankie Teardrop said:

Oh god 😆 im creasing! 🤣

[Data Dave]

The 30yr mortgage rate is pretty much the bench market for housing demand over there.

Lumber and copper are up along with perm (dont you dare!) mits

[Johnno1167]

45 minutes ago, Stewy said:

It's been going on for decades. Do Germany or USA have all the house porn TV shows that we do? No - because it's not in their mass national culture to support high HPI as it is in ours. 

Absolutely the US does.

[Dreamcasting]

1 hour ago, Pmax2020 said:

There won’t be a crash-crash up here in Scotland. I’ve said that from day one. I think a lot of muppets overpaid in the covid years and they’ll keep that pain in years to come. 

There's still some reasonably priced places in Scotland and the North and they're OK areas too. Rather than the higher priced areas massively crashing, we'll see the current reasonably priced areas increase year on year. Overall flat when taking the UK as a whole for the next 5 years at a minimum.

[tm_81]

1 hour ago, fellow said:

Unlike in the UK, Americans can just hand the keys back to the bank when they are in negative equity.

When these losses are realised, all the other houses on the banks' balance sheets will be downvalued and they will become more reluctant to lend to each other due to increased risk of default. Then banking liquidity will start to dry up the contagion will spread to the UK.

We are one step closer to credit crunch 2.0.

Not always true, only 12 states have non recourse laws, and with conditions in Texas ( so 11 and a half maybe ).

I am in Florida and my mortgage options are all recourse ( i.e. they would chase me for the remainder).

 

[Tony_Teacake]

In some states in America house prices have gone up by over 40% since the pandemic. They are now experiencing some juicy drops in some states but in others they are still going up just like we are seeing in England which skews the averages. Also in the US the property taxes are extortionate along with insurance.

For the commentators who say a crash is not going to happen where you live I believe you are going to be in for a big shock. All of the leading indicators are there now and we will see this crash happen in waves. We'll it is happened yet so where is this crash and these thing take time to play out as they don't happen overnight.

[bearishonhouses]

5 hours ago, fellow said:

Unlike in the UK, Americans can just hand the keys back to the bank when they are in negative equity.

When these losses are realised, all the other houses on the banks' balance sheets will be downvalued and they will become more reluctant to lend to each other due to increased risk of default. Then banking liquidity will start to dry up the contagion will spread to the UK.

We are one step closer to credit crunch 2.0.

This assertion is not true.  There are some states in which lenders cannot pursue borrowers for a shortfall, but in most states, they can.  Also, the situation is not that different in the UK since, in practice, mortgage lenders do not actually pursue borrowers for the  negative equity - because borrowers typically have negligible other assets.

[Aidan Ap Word]

Meanwhile about 1 hr south of London - in some areas the Land Registry data is catching up with reality ... that's 567k to 404k ...

Graph specific to a randomly chosen (recently transacted) property in this postcode (hence the red line ... but the blue one is the LR).

Here if you need the detail: https://nethouseprices.com/house-prices/street-details-sale/12A8BAB69FC72125E0634804A8C08CC1/8 HERNE DOWN, CROWBOROUGH, TN6 3BA/2024

Edited April 3 by Aidan Ap Word

[canbuywontbuy]

8 hours ago, Fromage Frais said:

Same as here

What you can buy when rates a 1.X% is more than when rates are 6/7%

The price has rebased but the vendors do not realise and fight the tide.  The fed has not helped by not being nasty enough so people have hope and hold on for dear life.

Some maybe lucky a millionaire who does not care may buy their standard family home..... but a loan forget it.

I still sigh as another right move notification in my area...... a fixed upper 1970s house of 150m2....... 400k in 2018.......listed for 550k so really 600k+ when brought up to standard.

1400 to rent max 3% return + the bills needed.

Instant access savings still around 4.5-5%

You can get a 5 year fix @4% atm which with a 45% deposit (250k )  and 30year repayment you would still have the same 1400 a month to pay.

That same 250 in the bank would give you 12k plus in interest or £1000

No logic at all ..... holding on/buying is predicated on rates going sub 3% fast

No bargains (aka market price) unless probate or auction zzzz

Really good summary.  As you say, that meagre 3% return would get beat down with repairs as well, plus the intangible hassle of it all compared to money earning interest in the bank.

[Pmax2020]

10 hours ago, Lucky Larry said:

That sounds like an emotional call based on what you hope for . Historically prices in Scotland are lower than England , we will revert to norm sooner rather than later imo. A change in Govt is usually when these things happen as they can both blame each other for the crash. 

It’s the polar opposite of an emotional call - it’s 15 years of staring at monthly sold price data. Religiously. 

The 2008 crash in Scotland was catastrophic for particular types of properties at the lower end of the market, as well as the yuppy ‘executive’ newer build estates. Yes all properties essentially took a dip, but I’ve watched as it’s taken those full 15 years for cheap 80k flats to get back to that figure from 50-60k, and for those 2006 450k houses to get back to those values too. 

I’m of the opinion that, sadly, a large proportion of home owners in the UK won years ago. They’ve got 100k of equity, 250k, god even 500k of collateral, purely as a result of HPI. 

These unearned but unequivocally riches aren’t going anywhere unfortunately. They feed back into the more desirable homes on the market. The more prestigious streets and post codes. 

Sure, we may well see a 5-10% fall in some parts of Scotland. The south of England could fall markedly. Generally though, there are still large parts of the UK where house prices are very affordable. 

[winkie]

Yes, that is what happened in the early 90s crash....... anecdotally know of people that we not pursued for mortgage arrears causing them to be in negative equity......reason mortgage became unaffordable huge base rate increases.😉

[Pmax2020]

I’ve been on this forum for 4 years but have wanted there to be a tangible fall in prices for a lot longer. 

The daft people that paid 350-450k for a new build on the outskirts of a bang average town in Scotland should be worried. They are in bubble estates! They’d of known that because the houses they bought were only selling for 200-300k 5/6 years ago. 

Those people should be concerned but the majority of transactions I’ve seen in Scotland, even with this recent boom, they are reasonable and often justifiable when compared to wages.

My mortgage rate doubled in 2022, meaning the payment was £520 instead of a projected £400. 

Mortgages and their rates are not a big concern to folk who weren’t dafties when they bought their houses. Even if they bought more recently.

[fellow]

11 hours ago, tm_81 said:

Not always true, only 12 states have non recourse laws, and with conditions in Texas ( so 11 and a half maybe ).

I am in Florida and my mortgage options are all recourse ( i.e. they would chase me for the remainder).

 

 

7 hours ago, bearishonhouses said:

This assertion is not true.  There are some states in which lenders cannot pursue borrowers for a shortfall, but in most states, they can.  Also, the situation is not that different in the UK since, in practice, mortgage lenders do not actually pursue borrowers for the  negative equity - because borrowers typically have negligible other assets.

Well we will still see defaults and bank losses regardless.

[scottbeard]

2 minutes ago, fellow said:

Well we will still see defaults and bank losses regardless.

Remember not every default results in a bank loss though, only ones in negative equity

[ExeC-UK]

13 hours ago, dpg50000 said:

Stop interrupting the adults. Go and brush your teeth, it must be nearly your bedtime.

Can you jog on or post something relevant. Having you pop up replying to stewie every time is just as draining to read. You literally contribute nothing usefull to this forum, just comments about other people or calling people idiots.

You seem to post about people being younger and clueless on here so why not lead by example and act your age.

Believe it or not people have polar opposite opinions to yourself. Its a discussion forum, not an echo chamber for HPC Extemists.

Edited April 4 by ExeC-UK

[yodigo]

14 hours ago, Stewy said:

It's been going on for decades. Do Germany or USA have all the house porn TV shows that we do? No - because it's not in their mass national culture to support high HPI as it is in ours. 

USA certainly does.

https://en.wikipedia.org/wiki/Love_It_or_List_It

https://en.wikipedia.org/wiki/Property_Brothers

Edited April 4 by yodigo

[sell2rent]

1 hour ago, Pmax2020 said:

I’ve been on this forum for 4 years but have wanted there to be a tangible fall in prices for a lot longer. 

The daft people that paid 350-450k for a new build on the outskirts of a bang average town in Scotland should be worried. They are in bubble estates! They’d of known that because the houses they bought were only selling for 200-300k 5/6 years ago. 

Those people should be concerned but the majority of transactions I’ve seen in Scotland, even with this recent boom, they are reasonable and often justifiable when compared to wages.

My mortgage rate doubled in 2022, meaning the payment was £520 instead of a projected £400. 

Mortgages and their rates are not a big concern to folk who weren’t dafties when they bought their houses. Even if they bought more recently.

I can’t see much to convince me back in yet. It depends on area and circumstances and of course different people make a market. Scotland is also different in good and bad ways. I remember having to wait ages from 2006-2011 to get my clear buy signal again. I was too early/wrong. In those times there is obviously a lot of doubt and uncertainty and my belief this market can be timed is open to challenge. I wish I had understood that our currency would take the biggest hit last time and the effect of bail outs, but it was still best to wait. A 5 year fixed rate mortgage with a secure income is not a bad place to be in Scotland though! Good luck!

[Englaender]

16 hours ago, Pmax2020 said:

There won’t be a crash-crash up here in Scotland. I’ve said that from day one. I think a lot of muppets overpaid in the covid years and they’ll keep that pain in years to come. 

I feel the same about Birmingham. Housing is still relatively cheap in a number of areas compared to other major cities and plenty of it is still being bought up by cash-rich Chinese investors / HK relocators and BTL slumlords. The effect of the rule change about EPCs for rental properties was evident pretty much instantly as the latter started buying again.

Even the financially (no, I did not say morally) bankrupt Birmingham City Council are buying places on the open market to refurb and house people.

Prices in some areas are definitely slipping slightly, but in the areas they should really be dropping, there are still a number of buyers stubbornly keeping prices high and ready to jump in if they drop further.
I hope I'm wrong, but I don't think I am.

[The Angry Capitalist]

6 hours ago, winkie said:

Yes, that is what happened in the early 90s crash....... anecdotally know of people that we not pursued for mortgage arrears causing them to be in negative equity......reason mortgage became unaffordable huge base rate increases.😉

A 40 year trend of lowering rates from 1980 to 2020.

Now we are in the opposite cycle which will last at least 10 years.