Mark Carney Brexit house price warning

[BlueKittens]

Is now a really bad time to sell/buy a house?

We’ve recently put our house on the market to move to a larger house in the same area. Basically because I’m unexpectedly pregnant with our second child. We could hang on in our current home but we’d be a bit squashed because DH works from home. We have seen a great property nearby which we’d need to take out a slightly bigger mortgage to buy (but we have good LTV). We live in one of the fastest moving housing markets in the country (comparatively- it feels quite slow recently!). House prices are high. House has been on over a week and have had 9 viewings. No offers yet but have second viewings booked in.

Thoughts please! I don’t mind if the comments are directly related to our situation or just general chit chat around Brexit and house prices.

Hmm... how unrealistic was 825k though? If the original realistic price was 700k its not really s big drop.
We are in the commuter belt had a 2 bed bungalow sell on the road for 650k, 4bed detached on bigger plot and nearly double the size started at 850k now at 750k and no takers... they paid 750k for it in 2007

@Alexalee whilst saving more and waiting another 6mo is appealing I've been here long enough now and whilst its lovely having £££ I feel my sanity is worth more than that! @Bluelady if I thought sellers would accept 10% off I'd be moved by now, but agents recoil in horror when I mention this and then the house sits unsold for weeks/months more

@StartingGrid Agents are professional bluffers. That is what sellers pay them for!

I certainly don't have any economic knowledge bar reading the papers, but IF there is a big drop I would have thought that those thinking they will pounce on a bargain are likely to find that there just isn't anything on the market to buy?

If people can't move further up the chain, surely there's not going to be anything much happening at the bottom of the chain for FTBs?

starting curious to know if you have ever tried calling a recoiling EA back a couple of months down the line when the property is still languishing and if so what was their reaction? May not get you that particular house, if the buyer is truly stubborn, but may inform their decisions if they are advising a prospective seller of a property suitable for you.

Whitney as long as there are active housebuilders there will be new stock coming on the market. A housebuilder sitting on a completed property is the ultimate forced seller. Not sure about elsewhere but where I am there are a lot of 4 and 5 bed new builds in production.

Howabout

Yes but those same house builders aren’t going to rush to build on their undeveloped plots - they may sell at a loss for handfuls of houses already in construction but what about the bigger picture?

As a FTB currently buying now with a history in economics people are seriously getting spooked by this. Personally it's an asset, the housing market goes in cycles and as long as you can stress test it and won't be trying to move again in the short term it's fine. No one knows what will happen, Mark carney is covering his own butt in case things go wrong and even if they do then it won't be the first market crash..

@hiddenmnetter they manage completion rates, slow down to a minimum and don’t further develop any of their land bank.

That's exactly what they did post 2008 serbska, but increasing interest rates, limited prospect of rising land values and rising construction costs in the medium term the economics of building out versus sitting on a land bank change.

The optimistic £825k wasn't wildly so at the time but it is now. I don't feel too sorry for them, it's a probate property so whatever they get is a bonus. Although I guess they've had to pay inheritance tax on the original valuation.

Whitney sadly they will be buying repossessions

The stock market is not at record highs!

For people aged under 40 who have struggled to afford a house, falling prices might sound like good news. But if such a slump is accompanied by rising unemployment and a credit squeeze, they will be in no position to benefit. Be careful what you wish for.

The Economist

A correction is not unlikely but not good news for anyone.

https://www.economist.com/finance-and-economics/2018/09/14/britains-housing-market-could-be-headed-for-disasterr*

FOR GODS SAKE MARK CARNEY IS DESCRIBING A STRESS TEST

doesn’t anyone know what a stress test is? Shame on the economist, who presumably do, for writing such sensationalist bullshit

glintsndglide read the article- they acknowledge it is a stress test

So why are you and others on the thread saying Mark Carney is predicting a 30% price crash?

They may have said it in the body of the text but it seems people either don’t understand what it means or can’t look past the sensationalist headline

Sorry not you tobeclear I mixed you up with another user

The good thing about price drops for those who own houses (provided not in negative equity), is that they provide the perfect time to move up the ladder. Yes your house is worth less but so is the one on the next rung - and, if the drop is the same in relative terms, then it is greater in absolute terms, the more expensive the house. So the next rung moves down closer towards you and you need less money to move up.

Were selling our house and buying one at about 35% more.

Not having second thoughts. Never going to move again (well not planning on it) and its still cheaper than renting so really it doesnt matter what its worth post brexit.

If your salary dropped as much as the house price, you’d be in trouble.

If your salary is fixed, then you’re just nearer to the next price bracket on rightmove assuming you have equity in the house.

OP if you are worried you may buy and lose value because of a crash, can you rent an office for your DH to work from and use the space that would free up?

Unemployment is at record lows and the stock market is at record highs.

Of course the stock market is at record highs. Near ZIRP makes any investment not cost effective, so they buy their own shares, effectively taking their corporations private.

Another thing is these low interests push house prices higher, it was the Gidiot's only economic policy. But at least he knew that higher interest rates would kill the weaker banks, meaning either millions of people losing money or the govt spending billions of our pounds bailing out the banks. Again. Although we already are doing so, with govt bonds being bought by the banks which are sold straight back to the govt.

Re. No FTB in their right mind would buy now...

1. I just moved to my first house, and although I think Brexit will have an impact on house prices, my main worry about waiting was getting a mortgage later. My situation (self employed freelancer) makes it difficult anyway, but I think it will only get harder after brexit - its not much good prices dropping if can't get a mortgage!

2. If I had to sell in 5 years and lost 30%, that would be about the same amount of money I would have spent renting...(probably crappy places that I could be kicked out of any time.)

3. . I'm in an area with stagnant prices and low supply. Not expecting to make a profit, but I think the areas which will be most affected will be those where the prices have been inflated.

4. . And low supply would only get worse if prices lowered. Even now, only one two-bed seems to come on the market every month. And the decently priced ones would go within a week.

@beibermylove out of interest did you fix and how long for? I could almost agree with 2) but tbh the point of sunk cost of rent vs mortgage paid over rhe term is only appealing if you still have the property at the end and aren't in neg equity... personally I don't have a 30% deposit to lose and I also wouldn't want to have to sell.

I do plan on a 5 year fix on an unnecessarily long term to overpay when I do buy because I'd hate to be stuck on SVR and not able to afford it... I think the Daily Fail sad face term is "mortgage prisoner"

@howabout I've never had the guts - was pretty much made to feel like I was a crank despite other agents telling me I should be looking at 10% over budget as a rule

Ah I thought reading this post would make me feel at ease not more anxious! We’re due to exchange on Monday and I’m seriously having doubts. It’s not the dream house, a house we said we’d stay in for 3-5 years, it’s a 2 bed end of terrace. I can’t see us having kids there as it is on the smaller side. We’re paying on the high side, although we did get 17k off asking price... just not sure I can see it going massively up in value buy as long as we can sell it for what we paid for I’ll be happy. If there is going to be a crash and it’s worth 50k less in 12 months then I’ll be kicking myself for putting us in that situation. I’m thinking of pulling out and waiting to see what will happen in 6 months. I know it’s rubbish for the current owners but they’ve made 300k on this as they bought it 20 years ago, we’ll be in minus if things go the way they’re predicted. What would you guys do?