To just be so upset about house prices

[spuddy56]

We started looking in December after scrimping and saving for years and its got more and more out of reach with every passing week since then. We've had two sales fall through due to downvaluations, so not only did we need the huge deposit we had saved up for years, we needed 10k on top of that which is impossible for us. We are paying rent and have no family help. We viewed a tiny house that we love and has been on the market since beginning of April with no offers but the seller won't budge on the price. Based on one year of sold prices in the area its about 40k too much, even taking into account the 10% rises over the last 12 months. Theres just no way a mortgage company would lend that much. Been to view another one and it's tiny, has had no offers and is worth a lot less but agents don't think they will go lower. We've had to adjust our expectations down and down despite being what we thought were healthy earners. How are first time buyers managing to buy right now without help?! I'm so so upset at not having somewhere to settle and call a permanent home.

Construction always sees the fireg throws of a recession and comes out again first. The trade is battening down its hatches so outside of politics not much will start on site for the next year at least. And of course covid has created havoc too.

That's interesting. Do you think there is a recession coming then?

Elon Musk rescinded all new job offers because he has a "super bad feeling about the economy". A lot of tech companies are reducing headcount. Tech is my area, so I'm interested to hear it's impacting construction too.

Indeed. They have closed the HTB scheme a few months early.

Obviously not meant to help anyone buy at all but anyway.

I expect they are trying to cook up a new scheme but they are rather stuck with rising interest rates, falling salaries and increasing levels of inflation.

I am not in construction but I think a recession is inevitable. I expect we are in recession now (obviously not by the official measures but in terms of shrinkage of the economy).

It's very easy to tell people to move north or whatever, but very difficult to do when it means leaving family, friends jobs and so on. It assumes jobs at the same wage are readily available. It also has a knock on effect to the locals living there who then become priced out of their local housing market.

* I think it's the help to buy equity loan thing that is due to end. I'm sure the government with either reinstate it or come up with another money making scheme to replace it. Help to buy schemes are great for the developers and in the case of the equity loan, also for the government as they get the benefit of rise in prices when it's repaid. If HelpToBuy schemes were ever meant to help the people, they would not be aimed at new build only or involve profit going back to the government.

I agree that HTB was to increase developer profits and engineer an increase in house prices, so long term the government benefits from an increase in the value of the property. I wonder if the government are betting that house prices won't go up anymore and don't want to "invest" in depreciating assets.

There have been reports of those using HTB now struggling to pay back the equity loans due to cost of living and internet rate rises. I wonder if there will be forbearance from the government, or if they will force sales to get their return on investment?

@rainingsnoring

I have the same suspicion. I think a recession is defined as 2 quarters of contraction, so we won't know until Autumn.

I know the car sales industry is making headcount cuts, as a friend has just been made redundant and he says it's industry wide. Another friend is a recruiter and she says it's suddenly gone from boom to bust and they are really quiet, almost overnight. I appreciate these two examples are both anecdotal.

I'd be interested in hearing from anyone in the hospitality industry. I went out on Saturday and it was dead. It was busy until a few weeks ago.

That help to buy scheme was crap. Ds is 28 and wants to buy.

HTB had only 3 houses in my large city. All in really really awful areas and 3 bed family houses. All brand new. They are about the only things that have been on Rightmove for months. Everything else lasts about a day.

@TwinklingFairyLights 'I agree that HTB was to increase developer profits and engineer an increase in house prices, so long term the government benefits from an increase in the value of the property. I wonder if the government are betting that house prices won't go up anymore and don't want to "invest" in depreciating assets.

There have been reports of those using HTB now struggling to pay back the equity loans due to cost of living and internet rate rises. I wonder if there will be forbearance from the government, or if they will force sales to get their return on investment?'

I agree with this. I suspect the scheme has closed early because of these concerns. I also wonder what the government will do. I suspect the forced sales option.

Unfortunately, I think it is inevitable that redundancies will increase significantly. Elon Musk might be a lot of things but I think his 'super bad feeling' is accurate here. It is horrible to think about a recession and the consequences but I think it is inevitable, sadly.

Help to Buy was brilliant for us but it was all about timing. We used it in 2013, and remortgaged to pay off the loan in 2018 so never paid a penny interest. 20% of the property value had increased by £8k.

Now, if we were selling after 9 years, we would be paying £800 a year interest and we would owe £25k more than we borrowed.

Why/how would they force sales? None of the loan itself is due to be paid back for 25 years unless selling, only interest. So how are people "struggling" to pay them back?

None of the loan itself is due to be paid back for 25 years unless selling, only interest.

This is incorrect. Buyers have to start paying the loan back after 5 years.

Not one person on this thread has said, “I’ve heard that the market is cooling and thus prices will crash because that’s what cooling down means”.

That hasn’t stopped you mentioning this supposed fallacy at least three times, though. Why? Are you also trying to talk up the market, like the bloke with the million quid house who thinks that the OP should just earn more and make more sacrifices? Or are you suggesting that anyone who doesn’t agree with you is thick and can’t understand English?

Not only that, they are also ‘uncool’. Bad, bad detractors from the ‘house prices will rise forever’ doctrine. Heretics.

What ISNT cool to do though is indicate that house prices are about to reduce - or to borrow a popular word - “crash”.

Sorry, I meant interest payable after 5 years.

There have been reports about some buyers struggling to make the interest payments on the HTB loans.

I don't know what happens if the buyer defaults on the HTB interest payments hence speculating over forbearance or forced sales.

@DashboardConfessional

www.telegraph.co.uk/property/uk/help-buy-nightmare-costs-will-surge-42pc-may-forced-sell-house/

Tech is absolutely not slowing down, we are partway through a £45 million digital transformation and we’re not even in the cloud yet which is where we need to be. I’ve just hired two contractors on £950 a day they will be with us for a least the next 18 months. Ideally in my team I would have a cyber security expert and a couple of data analysts I can’t get hold of either skill sets.

on a personal level I can’t get hold of a builder to even quote for my extension never mind commence work. I need some work doing on my roof I finally got two quotes today with a view to them started in four weeks this is for a quite urgent job with slates looking like they could fall off at any moment.

Tech is absolutely not slowing down,

Give Elon a call and tell him he's wrong then.

Back to the OP as to how I was able to buy a house quite simply I had to buy 40 minutes away from work and negotiate two days a week in the office. Once where over a certain critical point within the project that will drop down to one day a week which is literally just a showing your face exercise. As an organisation our global plan is to reduce Real Estate as the leases become up for renewal we will take less and less space so there will be no return to the office for us.

Elon Musk lights his fags with £45m. Are you suggesting that your small team and relatively small project are a bellwether for the entire tech industry?

Elon always has and always will be a maverick, somebody who just does whatever they want outside of the norm. Even a broken clock is right twice a day.

Elon always has and always will be a maverick, somebody who just does whatever they want outside of the norm. Even a broken clock is right twice a day.

It isn't just Elon though. Your tale about your project is a relatively insignificant anecdote.

we would and could employ at least another three people on 100 K plus salaries tomorrow if we were able to find those people with the relevant skill sets. That to me says that there is enough work to keep the permanent staff busy in addition to the two outside of IR35 contractors that we’ve just brought on.

So that’s at least 500 grand in salaries that’s in the budget for our organisation on our piddling little £45m project that’s so insignificant. I’m confident some big interesting ones are probably pumping out bigger numbers than that.

I do think we are in danger of talking ourselves into recession, nothings changed in my world and yet I am reluctant to spend money which becomes a self fulfilling prophecy.

How are any of these anecdotes about your personal circumstances relevant?

Little luxurious will be cut back on with food and energy prices increasing.

It will have an impact on service providers, small cafes, beauty salons, they're increasing prices to keep up at a time when people are starting to struggle especially in lower income areas, jobs will be lost.

@Nothappyatwork

what skill sets are you looking for? Programmers?

Yes I do. Lots of redundancies are already being made in the industry. 2008 was the same, I can remember discussing with friends the issues we were having and yet they were completely oblivious of issues in theirs. From memory we were seeing a downturn about half a year before others were plagued with it.

Have no idea of the size it might be, however there isn't a left up in material costs on the horizon so sites certainly arent aa actve. People working on sites will move across to smaller work like extensions to a degree but the industry is starting to stagnate. Normally when one sector fails, another thrives but at the moment there are no requirements for offices, town centre regeneration as the High streets are failing and the government have zero funds due to covide debts so very few publicly funded projects.

Our clients are putting projects on hold, re considering them in some cases pushing for more accommodation to overcome the additional costs and will eventually head back into planning. And they will all be negotiating less affordable housing too on the basis of viability.

As I say, demand is still outstripping supply so its unlikely in my opinion for house prices to drop, probably okve jobs are starting to be lost some plateau for a while.