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.

Poor old Notkevinturvey. Having to resort to cheap digs.

Anyone claiming to be able to predict with any accuracy the trajectory of house prices needs to be able to answer these two questions with a “yes” to not being laughed out of the room as a bullshit merchant.

Have you spent the last decade leveraged to the hilt as a property owner?

Have you just now sold up, and moved into rented accommodation.

You are funny. So the governor of the Bank of England doesn’t get to form a view unless he had a massive risky mortgage for ten years and has recently sold? Never mind how much he knows about money supply, credit, inflation and levels of indebtedness. No, he is, in your words, a ‘bullshit merchant’. The chief economist of Nationwide was on TV this week opining that the housing market will cool later this year. That will be because he is good at interpreting evidence, since that’s what he does for a living. You should contact him and tell him that unless he sells his house immediately, nobody should take any notice of him.

www.theguardian.com/money/2022/jun/14/uk-pay-falling-inflation-energy-bills-unemployment?CMP=ShareiOSAppOther

"The Dow Jones was down more than 875 points, or 2.8%, and the tech-heavy Nasdaq composite crumpled 4.7% as investors continued to sour on once high-flying tech stocks."

@Nothappyatwork - you should give them a call and tell them about your £45 million project.

@spuddy56 only you can say - if house prices did crash by 20 percent, which is the absolutely doomsday scenario,
you'd presumably still have a fixed rate. Is the mortgage less or more than your current rent?

How would you feel, if you were 'stuck' in that house for 5 years?

We moved around brexit because we decided that if we were stuck in the new property for ever it was such a trade up that we'd all still be happier.

So come on then, ‘fess up, have you now sold your house so as to benefit from the crash?

If you were as expert as you claim then it’d be remarkable if you haven’t, given what you say is coming.

I do hope you’re not all mouth and no trousers…

That’s be a perfectly sensible viewpoint, one that I’d agree with, but no, the poster to whom I was responding is claiming that right now is the peak, and the therefore prices will now have a sustained drop. This sort of boastful certainty deserves to be poked fun at.

I suspect they are a renter “talking their own book” as it were.

@TwinklingFairyLights Or I could let them know about the other 30 million one that’s just kicked off yesterday in Birmingham (Goldman Sachs) those well known charlatans that love to play fast with other peoples money, absolutely enormous investment in the city right. These micro wins will be the bigger picture not US companies who were all on paper turnover in the first place.

@Nothappyatwork

Go for it, I'm sure they would value your input 🤣

The people who are about to be offered 90 K plus jobs will value my input and reassurance that it’s not all bloody doom and gloom.

So come on then, ‘fess up, have you now sold your house so as to benefit from the crash?

This is what makes you so comical. Your conviction that you’ve found a killer comeback to anyone who doesn’t share your view that prices will rise forever and that bad economic news will make no difference. A bit like a kid learning a rude word. It’s rather quaint.

Do you only believe forecasts for warm weather if the presenter delivers the forecast wearing a bathing suit? How about wet weather? Should the presenter wear a sou’wester? To prove that they are committed?

Can you understand that it is possible to form an opinion based on evidence without immediately taking action to somehow prove that you have put your money where your mouth is?

Do you think that the governor of the Bank of England has sold his house and has moved into rented accommodation in case nobody believes what he says about inflation and money supply? What about all the other commentators from regulators, financial institutions and industry bodies? Are you going to contact them and tell them that they are ‘bullshit merchants’?

I don’t advise it. You must know that over-emotional people with no evidence base to support their claims tend not to be taken seriously.

Of course, you could surprise us all by answering the question I asked upthread, and which you dodged in favour of chucking insults to disguise your lack of understanding. In your view, how could prices continue to rise against a backdrop of high inflation, associated interest rate increases, soaring utility bills and the scaling back of the QE programme which will restrict credit?

Well they could, if the govt intervenes to prop up the first time buyer part of the market. Nothing is impossible - we have a Tory govt for whom home ownership Is a cornerstone policy.

B of E may not raise IRs that far due to other recessionary pressures.

I definitely believe this government would try and prop up the market. Over the last 12 years the Tories have enacted various policies to try and ensure prices don't fall. I'm less sure that they'll be able to pull it off.

@Nothappyatwork

You haven't let us know what Elon Musk said when you contacted him to tell him he has no idea how to run a business. Pray tell 🤣

Yep. I think the coffers are empty. The only thing left is to try and inflate debts away.

(Goldman Sachs) those well known charlatans that love to play fast with other peoples money.

More accurate than you realise. Ever heard of Lehman Brothers?

@Nothappyatwork

You haven't let us know what Elon Musk said when you contacted him to tell him he has no idea how to run a business. Pray tell 🤣

so smug and contradictory on the one hand apparently Goldman Sachs have absolutely no idea what they are doing this established businesses centuries years old with the best analytical minds working in their actuary departments across the world.

But Elon musk who has been bankrupt how many times and had how many failed businesses behind him he’s the font of all knowledge.

yes chortle chortle it’s hilarious you go and give yourself another big pat on the back.

I on the other hand will either pull up a deckchair and watch whilst Rome Burns whilst utterly unaffected by it sipping Pina coladas.

Alternatively ill up my output as required to again make sure I am utterly unaffected by it either way. I don’t exactly break into a sweat on a regular basis to earn while above the average wage, so hardly going to be any hardship. I don’t see how a vast majority of people will lose here.
Turnover being vanity, profit being sanity most people actually uninterested in the on paper gains or losses of their property until they are realised, they just crack on with living their lives honestly. I cannot recommend it more highly to you.

OP, The right time to buy a house is when it suits you. Crashy the person who is referred to on the other websites forum has been literally running around telling everybody this is it society is about to collapse house prices will plummet for 20 years. During that time I have paid off an entire mortgage.

It hasn’t and it won’t and it can’t because there’s literally no alternative than to pass the buck to find the greater fool. There’s literally no Plan B here. So it will continue.

I thought that she was being deliberately ironic about Goldman Sachs. Looking back at her email, I realise that she wasn’t.

I a

I am inclined to agree that the right time is when it suits. Yes of course prices can go down. But there are other factors that make ownership versus renting attractive other than getting on the "ladder". Rent is very high atm, landlords selling up, 10 year fix mortgages are currently the same rate as 5 (just done mine with Nationwide). People have pets, or need to put in a wetroom for mobility.

I don't think it was meant in irony. 😮

So much to work with. I’m spoilt for choice.

You told us earlier that you, your friends and your neighbours sailed through the credit crunch with ‘no comprehension’. Clearly. You must have missed the fact that its best analytical minds had no idea of the risks associated with CDOs and had to borrow (I think) $10 Billion from the US TARP (troubled assets relief programme, the US version of our bank bailouts).

I’m struggling to see how ‘turnover being vanity profit being sanity’ applies to house prices, but whatever makes you happy. I’ve been a chartered accountant for 25 years.

It hasn’t and it won’t and it can’t because there’s literally no alternative than to pass the buck to find the greater fool. There’s literally no Plan B here. So it will continue

I think that ‘it’ means, interchangeably, ‘the property market faltering’ and ‘eternally rising prices’. I explained the ‘greater fool’ theory to you upthread. It hasn’t really sunk in, has it? Not if you think that’s what is going to sustain a perpetually rising market. You’d have been popular in the Netherlands in the 17th century. With tulip bulb sellers.

For sure the government and central banks are and will try to prop up everything in a failing system but they have now run out of road and that is the difference between now and 2008. I don't think they will be able to save the financial system even though they desperately want to do so.

They can't use QE because it will increase inflation. They can't reduce interest rates and will need to raise them at least somewhat further for the same reason. These clever monetary tools are out.

The government may well try to introduce some new scheme for first time buyers (note Johnson's lates attempt with the HA properties). However, it is pretty clear that the government and banks are very concerned about recession and falling house prices now. Who will be keen to invest/loan money for something that they believe is likely to fall in value shortly? Why has the Help to Buy scheme been closed early, I wonder?

@Nothappyatwork - I have to say I find your comments about sipping pina coladas, etc pretty smug at the same time as you accuse someone else of being smug. Frankly, none of us (and none of the 'experts') know exactly how this will play out at this stage. We do know, however, that a multitude of worldwide signs are flashing red at present so the forecast ahead is very worrying and that many people will be in serious trouble. That's not something to feel smug about.

@Nothappyatwork

No one has said that house prices will drop by 50% in the next 3 months. The points that some posters are trying to make but don't seem to be explaining it clearly enough for you to understand (including me) are:

1/ there are a number of headwinds facing the economy in general and these could have a stabilising or even negative effect on house prices

2/ your £45 million project doesn't count for anything in the scheme of things

3/ you might not like Elon Musk but he is the richest man on the planet, so he has demonstrated some financial nouse along the way

4/ educated professionals with specialist knowledge don't agree on what is going to happen with the economy and house prices. The only thing they agree on is that there are plenty of warning lights flashing at the moment but no one actually knows how it will play out

5/ the government would love house prices to remain at their current levels and even continue increasing but they may be out of tricks

6/ buying a house is a personal thing and it really depends on OPs circumstances and how well she can hedge against a potential price drop if she buys now. If she's buying to make a quick buck then maybe not the right time to buy. If she's not going to need to sell for 10 odd years, it's a better proposition.

apparently Goldman Sachs have absolutely no idea what they are doing this established businesses centuries years old with the best analytical minds working in their actuary departments across the world.

en.wikipedia.org/wiki/Lehman_Brothers

'apparently Goldman Sachs have absolutely no idea what they are doing this established businesses centuries years old with the best analytical minds working in their actuary departments across the world'
You have a lot of faith in investment bankers.

I wonder if you have seen the CEO of JP Morgan's comments:

www.cnbc.com/2022/06/01/jamie-dimon-says-brace-yourself-for-an-economic-hurricane-caused-by-the-fed-and-ukraine-war.html