Is a recession coming?

[morewineplease1]

Just that really.

What are people's thoughts on the property market and a recession?

I've seen a few threads on here and tbh, apart from arguing no one makes a clear or valid point.

(Please don't give me abuse, I'm just looking for people's thoughts - not to be told it's obvious). Thanks 😃

Will coronavirus affect house prices? It’s too early to say exactly what impact the outbreak will have on the property market, but this is likely to mirror the rest of the economy. In the short-term, house price growth will stagnate as there will be fewer transactions going through. But as we saw with Brexit, the UK property market is very robust, so it’s highly unlikely that prices will crash in the coming months. Knight Frank forecasts that UK prices will fall by 3% this year, but then bounce back by 5% in 2021, in line with its predictions around the economy as a whole shrinking.

Read more: www.which.co.uk/news/2020/04/how-will-the-coronavirus-affect-house-prices/ - Which?

Agree with those calling a depression.

Depends how long we wait for herd immunity or a vaccine for starters. Will we be stop/starting for up to 18 months? Will there be a second wave?

The ‘good’ news is if you are only in your 20s, the mortality stats say you’ll most likely be surviving the current drama so at least you’ll get to live through it all

Yes. Small businesses folding. I am guessing already soft play centres closing will never reopen. Independent cafes and restaurants. Even the big high street shops closing. Debenhams has been pushing it for a while. They are going into administration. M&S now only open for their food stores and cant see them staying open much longer. The government are trying to furlough people but most high street stores i fear are now doomed. Supermarkets are the only ones doing well out of this.

Don't understand the aggression of some posters. The OP is starting a sensible thread about economic issues. Scroll on by if you don't have a helpful contribution. This thread is so much more worthwhile than all the "my neighbour bought a cucumber, shall I report him?" drivel about at the moment. Re the housing market - it's worth noting that interest rates are very low at the moment, which may make mortgages more affordable for some.

The entire world is going to go through a huge depression, millions have already lost their jobs in the US.

Death, divorce and lay offs will free up some homes.
A nice home with a yard (for future waves, gardening outdoor exercise) will always be desirable.
Those that were struggling will undoubtably struggle more. Those that could manage working from home (even at reduced wages) or essential workers will continue to be okay.

it won't be noted or official til the next few quarters are recorded but yes, possibly even a depression.

Of course does make me laugh when people say" the tories have found the money to pay for this".as if we as a country had it all along.

NO we have borrowed an unprecedented amount because we have zero choice. Plunging us in to massive debt that will take years and years to pay off and take us in to recession .

Plunging us in to massive debt that will take years and years to pay off and take us in to recession

Tbf we had already tripled our national debt during the last recession and not yet paid that back so this has plunged us further into it.

Depression, not just recession.

A global depression is almost certain and off the top of my head what I think maybe coming down the line is ;

a savings tax. and/or savings account haircuts
savings deposit guarantee reduced to £60000
Inheritance tax increase
council tax increase
40% tax rate to 50%
pensions grab, maybe haircut on public sector pensions of 20% for higher payers
fuel duty increased and fall in oil price allows for more revenue rather than reducing the price
alcohol/tobacco duties increase
vat increase
capital gains tax on property sales
landlord tax
city and bonus tax - the rich have always threatened to go elsewhere - that elsewhere won't probably exist in the coming world.
Boris will retire - there will be some sort of cross-party national government.
luxuries and fripperies will become an increasing irrelevance and much more expensive
house prices will crash
communities and local support will be hugely strengthened
we will be poorer financially but happier

It will make pre-virus Corbyn tax and spending plans looking parsimonious in comparison but we either do this or risk social unrest and huge social divisions.

Not necessarily, it depends on how long it lasts and whether we can mitigate some aspects eg work from home and more jobs created in other industries eg PPE manufacturing.

If it lasts a few months and the government are able to support businesses and individuals we should be ok. We will have debt and a period of recession (retraction of the economy) but we can get back to work and pay off the debts, individually and nationally, in due course. House prices won’t be impacted too much. Some businesses are going under but would have anyway in a few years - Debenhams, Flybe and more to come.

Longer shutdown will result in more businesses failing and therefore jobs lost within the economy. This is harder to recover from quickly, the longer the shutdown the longer the recovery and therefore the deeper the recession or even depression.

Government action will be able to temper this to an extent - their borrowing and low cost loans (low interest rates) will stimulate the economy and reduce the impact. Paying off the loans will require tightening the belt or increased taxation down the line which will dampen down economic growth. Although the low pound is beneficial for exporting goods and services. It’s a tricky balancing act.

House prices could be impacted depending on the numbers of unemployed/insolvent businesses by the end of the shutdown. But this will be matched with less houses being sold as people hold tight and hope for prices to rise again, as I’m sure they will.

It’s also possible there will be more homes for sale due to deaths, although these are not first time buyer properties usually. The people able to take advantage of this will be cash buyers and those lucky enough to have kept their job/business, but also not in (too much) negative equity if they are selling. Banks may be cautious about lending however. Recessions tends to benefit those with already deep pockets sadly.

@rwalker debt itself won’t plunge a country into recession. In fact the debt is to prevent/reduce the extent of the recession. If the economy grows quickly after the shutdown it will pay off the debt more quickly, the payouts should enable businesses to bounce back quicker to achieve this. But inevitably there will be some increased tax and decreased expenditure for a time.

There will still be some bounce back in the coming 2 years or so

Nobody has mentioned the B word yet but brexit will compound the misery...But mostly just for the UK.

While the rest of the world is getting back on its feet, we'll be taking another kick to the gut while we're already on the floor.

@disneydatknee supermarkets aren’t the only ones doing well. Loads of online based retailers seem to be booming, despite mumsnetters telling us it’s immoral to order clothes etc. There’s also also the supply chain within food and other retail. Utilities will be doing ok as we are home more, although less business usage. Plus all the public sector key workers of course. A lot of other companies will look to adapt their business model or diversify eg gin distilleries making hand sanitiser.

It is funny so many were rude to the OP when there are lots of people who don’t have a good understanding themselves. I’ve only got a decent understanding of the basics because of studying for professional exams, and a bit from general TV watching, managing my own finances etc.

Work (property surveyors) reckon it will be 2022 befoe house prices are back to early 2019 levels.

Almost certainly, but it may not be as bad as some are predicting if we get back to normalish by June.

20 years of austerity coming to pay off the UK debt

I think people forgot the economic situation before covid. The housing market figures for Jan weren't great & whilst the issue of getting ftbs on the ladder has been helped by the government intervention there is a big problem with 2nd steppers trying to move up the ladder. Also the economy had only started to show some positive green shoots about a 1-2 yrs ago so it 10 yrs to recover from 08.
There is an issue with trying to pay for the deficit by taking more from income tax payers, they are ever shrinking & younger. Younger people who already face wage stagnation, higher education costs, higher living costs, unlikely to see a state pension, etc

It really depends, if you have stable jobs in unaffected sectors and have money 'left over' at the end of the month at the moment, in likliehood you will be able to absorb an increase in living costs and be okay; especially if your mortgage isn't the maximum you could have borrowed so you have some breathing room. Our mortgage is half of what we could have borrowed, which despite people asking at the time why when you could have had a bigger house, I'm thankful for. If you're looking to sell your house you are better waiting, which for some people ie if you're divorcing isn't ideal, and for the unemployed it's unlikely that lots of jobs are going to miraculously spring up. Public services will suffer which affects us all to differing extents, and we will probably lose a lot of shops, restaurants and bars, unfortunately. Everyone's experience will be different, but for many (if not most) it's going to be hard.

You've never lived through a recession? The last one started in 2008.

Oh and lest we forget the planet was burning like never before this kicked off. We keep hearing of once in a century storms that happen with ever more frequency. Well, this is a once in a century pandemic. We need to embrace the fragility of our mortality and that of our loved ones like never before. If you have enough then that's more then enough. Be kind that costs nothing but is priceless.

The OP is starting a sensible thread about economic issues.
The OP asked if there was a recession coming, while a large proportion of people are at home not working, either having been made redundant or having their wages subsidised by the government. No shops, hairdressers, hotels, cafes, leisure activities are open for people to spend money. No concerts, festivals, sports events, weddings, parties are happening....which also generate money. Airlines have grounded their entire fleets and no one is going on holiday. The DWP received 10 times their normal applications for UC last month.
These are clues that I didnt really have to "research"

@Marieo I think those who are lucky enough to hang onto jobs will likely see higher income tax & perhaps other taxes as a vast % of them will be public sector.