..to think a lot of large houses will come on to the market?

[Whatarisk]

AIBU to assume that larger more expensive houses will start to appear on the property market?

My house is currently up for sale. We’d like to upsize. DH doesn’t think the property market will be affected much and if anything, people in larger houses will be put off listing their home. I think the opposite will be true.

Our jobs are relatively secure (in the sense that v few can be 100% confident of total job security right now) and I’m of the opinion that we sell ours, move in with my parents and hope something comes up. There are no properties that we are interested in currently but I’d rather sell before the market dips too much.

Interested in people’s views.

A couple of months after lockdown has eased will show what exactly is happening atm no one can say.

I’m happy to take a bet that house prices will fall On the basis that we will be in a recession or a depression. The question is how far.

But sadly for all those who imagine a house price fall will help them, affordability will not improve as banks will have to be more cautious.

@PersonaNonGarter

“affordability will not improve as banks will have to be more cautious”

Yep and when affordability falls, house prices follow.

Well, it depends if affordability falls for everyone - btl investors and overseas buy to leavers, for example.
I think the difference this time may be that btl is no longer that attractive, and even less so now perhaps, given that government was already thinking of taking steps to end no fault evictions, and has recently taken corona steps to delay evictions as well. As for overseas buy to leave investors, as below, geopolitics may change and perhaps the government will act on that as well. So yes, prices may not be that resilient this time.

Isn't it true that many of the Chinese investors were mortgaging to buy property here? They are not buying off the books in cash but are subject to the same variables as domestic buyers. If they need equity at short notice there is no indication they can get it - unlike traditional landlords who were seen to have multiple assets they could cash in and use to support the housing market.

I really think that like the 2008 fiasco where good debts were bundled up with poor rated debts, we have changed the rules inthe housing market and the players in it - this has an effect whenever there is a major incident such as covid.

@Girlinterruption2020 they have mortgages in their own countries.. I am originally from Singapore and i know that amongst my parents' friends, most have bought flats in London. They are very high earning though and are not going to be in any financial distress. They are richer than my parents and my dad could pay in cash so I can quite imagine they probably did so. They are the kind who own 1-2 flats in London so not highly leveraged. If someone bought 20 flats on high leverage, that could get quite ugly

@Girlinterruption2020 also tax rates in Asia are far lower. Therefore it is way easier to accumulate cash savings than in western countries For example, singapore's top tax rate is 22% and hK is even lower. China's domesticsavings rate is reportedly 50%. I would not be surprised if those foreign investors have lots of liquid savings.

I am not disputing a price drop however. I even predict a 40% price drop. Cos you don't need everyone to go bust, you just need a few repossessions and that would already set the price trend.

@Desiring

Thanks. 1-2 flats, as you say for rich earners is manageable, it’s the people who have 20-50 flats, all rented out, with mortgages on them that I would be concerned about. Many of the existing tenants will rethink their plans under the new reality of wfh so why be on London now?

@Desiringonlychild
‘you just need a few repossessions and that would already set the price trend.’

Exactly. And I do think, in the past, there was enough of a counterbalance provided by ‘secure’ money to offset problematic circumstances. Now, I don’t think there is and the banks know this and will be quick to offload those mortgages in favour of secure potential home owners.

@Girlinterruption2020 it would depend on the original reason they moved to London. For me DH grew up in london, i studied in London, met DH here... London is my home. It also has the kind of facilities I need to raise a child-synagogue and Chinese language weekend schools.

My MIL has worked from home for the past 30 years (if she sold her london house, she could retire as her house is worth a lot of money ). She has no pension and has to work for the foreseeable future.But she would never sell and hence would never leave London.

What I am interested in-do people primarily move to London for the jobs? Without the jobs, is there no incentive to stay in London?

@Girlinterruption2020 Most of the foreign investors have mortgages. Again, these myths about foreign investors buying up property on cash is based on the very few who are wealthy. The reality is a lot of middle class foreign investors buy £500k or cheaper properties in London purely as a hedge against high inflation, political instability etc. in their countries. For example, several friends of mine who work in HK moved serious money from HK to London after selling property etc just before the HK riots.

Some really interesting points raised in recent pages of this thread.

Update: we ‘sold’ the flat on Tuesday at only 5k under asking. Time will tell if it goes through but the buyer is intending for it to be a rental property.

@thequantofmontecarlo

'Again, these myths about foreign investors buying up property on cash is based on the very few who are wealthy.'

That is my thinking, too - that the market is not being underpinned by old money or secure money as such but as you say, mortgagees who will shift to wherever there is more growth/less damage during an incident like this. They are not people who can carry a £500,000 house if it isn't earning for them.

@Desiringonlychild

What I am interested in-do people primarily move to London for the jobs? Without the jobs, is there no incentive to stay in London?

The original Londoners will stay if they can. And by that, I don't mean your cockneys - I mean all of the people that are born and raised in London and who only make sense here. Someone up thread talked about synagogues - there are old, established minority communities (many more than we realise) that have developed over the years and only make sense in their location - it can't really be transplanted somewhere else.

I also think that we have remembered that community plays a much greater part in well being than material goods and many people will be reluctant to keep up the pace after this now that they have seen how relaxed their children are, how quiet the roads are, etc

@Girlinterruption2020 then perhaps the best buys in London would be in places with established minority communities. For example, in my NW London neighborhood, there is an eruv (41 pairs of narrow poles connected 5.5m above the ground by clear nylon fishing wire) enclosing the entire area which creates an artificial enclosure and extension of the home. There are several in London, and 1 in Borehamwood. To erect something like that takes years(lots of wrangling and negotiation with the council) and for observant Jews, it makes such a difference in their quality of life. Without the eruv, they wouldn't be able to carry stuff outside the house on a Saturday, push a stroller, push a wheelchair, carry keys or even carry a drink on a hot day. This is a nightmare for anyone with young children.

So yes that is something wfh wouldnt affect. But with a wfh work environment, I expect that some of the more scuzzy parts of London would seem far less attractive.

@Desiring

Can I ask you more about the eruv? I don't understand it fully - is it that on Sabbath it allows you to do things that are prohibited? Or is t more to do with Orthodox restrictions?

@Girlinterruption2020 it is an orthodox restriction. I am liberal and therefore don't abide by it. However most Jews in UK are orthodox.

You are not allowed to carry things outside your home on the Sabbath. The eruv temporarily extends the boundaries of your home(private domain) to your entire neighborhood (public domain). Eruvs are often very large. I think the northwest eruv stretches from Hendon and Finchley to possibly Edgware.

So with an eruv, you can take a nice walk with the kids, pushing a stroller and walk to the park. Without the eruv, you would be confined to your home (no internet, no telly) with your children.

Thanks @Desiring