House prices

[Newbie1999]

Realistically, how much do you think house prices will fall over the next couple of years?

Don’t be fooled by the web address or header.
It’s just a branch of daily mail

I agree with PP - house prices aren't the problem here.

Pensions are where we are going to be really showing huge losses. I have a FSPP in my current role, but have a Personal Pension I can take 25% from without taxation this summer. I probably won't bother now...

@rebelwithallthecause well at least they are accurately reporting figures from CEBR as opposed to inaccurately identifying private individuals posting on this forum as Daily Mail reporters.

I still think there will be a lot of supply and demand. Sadly a lot of houses will be empty at the end of this and others will want to move as soon as lockdown is over because they have realised they hate their house/partners! I have never wanted to have two bathrooms so much in my life.

Currently the market has paused, I suspect there will be a surge once we are allowed to move into occupied properties from the chains that were almost ready to proceed pre lockdown and then a small fall. That’s just my optimistic opinion though

Very true @suggestionsplease1

The CEBR figures aren’t too scary.

I also agree with PP that with the market being paused there will be some surge to follow.

As with always there will be times when people have to move no matter the financial situation going on.

It really does depend on the area

Looking back at past recessions there were always bigger dips in more harder hit areas.
That will still be the case

Also looking back - there has always generally been some level of recovery that follows. Some areas just faster than others

If you’re in the SE you will probably be sheltered from the worst of it

Unfortunately certain areas in the north are likely to be hit harder

I think that more and more people are quite enjoying working from home, running at lunchtime and growing their own veg, and I predict that more people will continue to work from home, and move out of London to cheaper places on the coast/ or areas of outstanding beauty. Lots of people will also be very unhappy about cramming themselves onto busy tubes/trains again too. So I think there will be a drop in London prices as people move to cheaper more spacious places in the country.

IF the outlook for LONG TERM for interest rates is very very low then I think house prices may fall by modest amounts.

However there is a very real danger brewing up. If mortgages are priced off a very low base rate and people take up mortgages with rates of 1-2% then if interest rates were to rise in the future there would be carnage.

Someone told me that local estate agents are creating waiting lists for viewings for people who are desperate to move once this is over. I think there will be huge demand in the first place, but there may be an adjustment to what people are prepared to pay that will affect chains as buyers are asked to accept lower offers than before. House prices are really ridiculously high at the moment - even very ordinary ex-council houses near me are nudging a million and there's no way they're worth it. They are three-bedroom houses where the loft cannot be converted. (Obviously houses are worth what people are prepared to pay etc etc but that's a ridiculous amount of money.)

I read this thread terrified. We are ftb only bought 18 months ago on a five year fixed. We are later buying and i am so worried the rates are going to rocket just when we're due to remortgage!! I don't even know if the worry is justified because it's all a bit unknown!!

@Mingmoo we were in the unfortunate position of buying/selling before this all kicked off. In lieu of our open house the estate agent has been doing video viewings and as a result we have viewings lined up for when the lockdown ends so that sounds pretty in line with what you’ve heard.

I suggested we dropped the price on ours as we’ve found and had an offer accepted on our next house but the estate agent laughed and said they don’t think that’ll be necessary, here’s hoping they’re right!

50% would be great, give a bit of relief to banks of mums and dad's around the country.

So if I'm a FTB who was planning to buy in the next 6 months what should I do, do you think? Wait?. I'm worried now I won't even get a mortgage, I only have 10% deposit.

If a number of properties transacts at a figure over a period of time then I do not see how you can conclude the price is ridiculous - it is the market price.

You may conclude that paying that price is based on those buyers making a judgement call on factors that may well change in the next few years meaning those buyers are taking a risk which you may not feel is wise ( and you may well be right) but the price they have paid is logical based on their and others evalution of the risks at that time.

@SecondaryBurnzzz the thing is that a lot of those areas near scenic spots never did have a strong local economy and those who have jobs in manufacturing, retail, tourism are really going to suffer and not be able to pay their mortgages/rent. London is expected to be one of the stronger areas alongside the south east and scotland as a higher portion of the workforce work from home. As for people being able to move further out in favour of a garden and remote work being more common, this has been the case for the past few years. Interestingly, I once read a report that kensington and camden were the boroughs with the highest home workers (pre covid). It wasn't to be expected because those are such central areas , it takes maybe 20 minutes to get from those areas to the City so why work at home in a cramped house?! I can only surmise that the people who chose to live in such expensive central london areas do so because they like the area and have other reasons (living in kensington is not essential for working in central london, i think). I think the areas that will really suffer are the 'true commuter towns', the grey suburbs in zone 5-6 or in the outskirts to London, who have little to boast about other than a quick train link to London. I live in East Finchley in London and I love my local area (leafy suburb with nice shops and synagogues and an ethnic population). I would still want to live there even if I didn't need to commute to Central London (and I own a 2 bed flat, not a house!). tbh, places outside London that I would like to live in i.e. st albans are also quite expensive!

I once read a report that kensington and camden were the boroughs with the highest home workers (pre covid). It wasn't to be expected because those are such central areas , it takes maybe 20 minutes to get from those areas to the City so why work at home in a cramped house?!

I would argue that most of those home workers aren't living in cramped houses. Average prices in those boroughs are 1m plus & plenty of those owners & workers aren't doing a typical 9-5 M-F office job.

I think for most of the country a realistic drop will be 10-15%. I'm a mortgage adviser by trade living in Leicestershire, prices here have been steadily rising for 7+ years that I've been an adviser, but I've already had 3 movers cancel applications as they've decided to stay where they are. I'm also emailing all my previous customers details of their lender's mortgage payment application process so if they're in financial hardship, they can explore the options. But I think FTBs are going to be spooked and anyone wanting to upsize will struggle to sell and it'll be a buyers market for years to come

@StylishMummy what do you think will happen to LTV offers? And is it better to try and get a higher LTV offer with a lower deposit and existing debt or wait and pay off existing debt and risk the banks removing all the high LTV (95%) offers ?

@StylishMummy

Please consult your crystal ball

Personally, I think 95% rates will be reduced to only the 'springboard' mortgages which have a guarantor in place in the way of parents savings. Really 10% should be the minimum anyone puts down, to allow for price elasticity and prevent negative equity. I think anyone wanting to buy should wait 6-12 months wherever possible, but if you're keen on buying, make sure it's something you're happy to stay in for 5+ years

Thanks @StylishMummy

Do you think 90% mortgages will stick around? I agree with your advice but think it is a case of weighing up getting a mortgage with as high LTV as possible if you rent and have debt against clearing the debt, continue paying rent and risk losing a feasible LTV offer.

The av age of a FTB is now 33 so it stands to reason that they may want an extra bedroom to allow for a child

What have they been doing for at least the past 12 years?

Why didn’t they start off with a flat and work their way up.

I’m 33 now and onto 4th house
Started in a 1 bed flat when I was 20.

Didn’t earn a huge amount and was in SE but was still possible

Got through 2008 recession and managed to come out the other side and scale up slowly.

We are still only in a 3 bed now (divorce meant I lost half the equity in last house) but I’m at least one example where it’s been possible. I chose to do this rather than spend my savings on gap years and cars like friends did

Actually I’m 34 now

Some family members only just bought their first houses in the last 6 months.
One of which is late 30’s.

Has had to move to a cheaper area just so they can afford a house big enough for their family as previously was happy spending Thousands of £ each year on holidays.