Property Crash

[Etiquetteworry]

I'm is there likely to be a huge crash in the property market? Looking at the news last night it seems we're heading for a recession. Am I mad to be looking for a more expensive house at present?

😆

@Smallgoon bank loan - nothing too unmanageable atm.

I think it is about timing - pay the loan off and I may miss the chance to get on with a reasonable LTV or take the risk, apply , see what they say and just budget like crazy once I've bought somewhere. I 'm hoping that the fact that I would be in my own place would be incentive enough to budget.

Currently renting (quite cheaply in London)

what are peoples thoughts about the housing market a week on?

Rightmove shows lots of properties increasing their price (according to property log).

Loads of activity round here - houses going under offer within a week of being out up for sale.

My only concern is not many that were under offer back in Feb/March seem to be completing.

@Serenada
I am seeing price drops,but I guess it depends which area you are looking

Here it's frantic for the cheaper houses in good condition, esp if done-up.
2-3beds get offers in one-two days, semis or terraced. Midlands area.

Flats are hardly shifting though, and more expensive houses too.

@ Catandhiskit

I wonder if people are downsizing to save in lieu of future cutbacks? Job insecurity, bonuses being cut, etc

@Shinesweetfreedom

I would say that a few bargains have turned up in the area I am looking at - one beds in London that have gone from £175,000 to £150,000 but only a few that are viable due to lease, etc.

Interesting times.

I'm buying and rather than pushing my budget I'm being conservative and keeping my mortgage low, I'm extending to get space, but buying smaller property than I could "afford". Not the time to entend myself too far as I'm buying with a single income.

@Oopsiedaisyy

Yes, I think a lot will stay cautious rather than take risks now.

I'm borrowing about 60% of what I could

that is quite a low LTV, no?

So, you have given yourself a lot of breathing space. I found a 95% mortgage online yesterday so some are still around and my finances mean I would need to borrow it all!

There are loads of threads about this on this forum.

Some areas are going to do better than others.

It's a weird one with property because there will generally be demand (shelter, Maslow's hierarchy of needs etc.) and we are told that supply is low.

Other posters have suggested that if a recession occurs (most likely it will) then it will probably expose that there is no actual shortage in property - just that there were too many 2nd/3rd homes or buy-to-let properties. There's an expectation a lot of buy-to-let homes will go onto the market and that may impact prices.

Anecdotally, I know of someone whose home sale to a buy-to-let landlord fell through because of covid adversely impacting their financial situation. So, it's hard to claim there won't be an impact - but it may be on the sales being slower rather than prices.

Most likely a buyers market?

Regarding another poster's comment about state employees being safest - maybe the NHS, yes. However, increased automation may make a lot of jobs redundant in the state sector too; this is inevitable in most industries anyway, it's just a matter of time and covid may just have accelerated the inevitable. Andrew Yang 'the numbers guy' talks about it quite a bit: Automation Will Dramatically Change The Workforce. Andrew Yang Has A Plan To Bridge The Gap

@ChocoTrip

Good post. what jobs do you think would be safe?

I am in the West Midlands. I put my house on the market last Wednesday, I've had 12 viewings and 2 offers so far (waiting time see if any more offer today as viewings over the weekend). I am shocked at the level of interest but moving forward the area I'm buying in is crazy too.

I think things will be ok until the autumn; at the moment there is a bounce-back from pent-up demand following 3 months of being closed down.

But once the economic impact really hits in 3-6 months (once people come off furlough & redundancies take place), I think 1st time buyers & younger people will be disproportionately affected by Covid-19.

So it will start with first time buyers being able to get on the ladder & work to from there over the years.

But as ever, some areas will be ok, others will struggle.

I think it's very likely house prices will be depressed overall. However as also there may be a shortage of houses particularly in very desirable areas, that could shelter prices in some streets or towns. Maybe people are reluctant to move if prices are falling quickly and the economy is falling apart as chains are more likely to fall over (someone can't get the mortgage they wanted, or someone gets cold feet because they think they are buying a house at too high a price).

Personally if I didnt have to move, i wouldn't move for a while - i would wait for a bit more certainty.

@serenada - generally, as I understand it, safer jobs will be those that AI is less skilful in automating - so, it'll be the kind of jobs that make humans "human". So, it will most likely be roles that have core skills in creativity and social/emotional intelligence; the kind of skills that enabled humans to survive as a species in the first place.

There are loads of articles about this: The ‘Oracle of A.I.’: These 4 kinds of jobs won’t be replaced by robots

Loads of industries that we now consider as "highbrow" may not be so desirable or advantageous in the future, because they can be automated. In other professions, however, AI will help make jobs more efficient. See: Automation could replace 1.5 million jobs, says ONS.

Andrew Yang "the numbers guy" has been proposing a Universal Basic Income to account for the fact that automation is likely to do more and more - and make a lot of current jobs redundant. It was viewed as absurd until Corona hit and everyone suddenly realises how fragile the current economic structure is. Andrew Yang’s $1,000-a-Month Idea May Have Seemed Absurd Before. Not Now.

Still, AI is only ever as good as its datasets and model. It can get things very wrong too. Example: Google apologizes after its Vision AI produced racist results

Some of the powers that be are already trying to regulate the industry and this is a fascinating paper by the European Parliament: European Civil Law Rules in Robotics.

Seems like it will be about finding the "just right" balance between "human" and "robot"...

Thanks @Choco - some good links there.

I have retrained in machine learning - it is still very much at an early stage in some areas, imo. I have worked on a couple of projects using ComputerVision (identifying animals), one on Tuberculosis antibiotic treatment - a statistics based project, one on Alzheimers brain scans identifying anomalies for further investigation and I attended a talk last year on a new service for hospitals that uses machien learning to automate the diagnosis of new scans. Once you realise that their classifier is built on hospital scans >1 million, and that all it does is identify one of five patterns (the fifth a referral for further investigation) you can see the potential for doing much of the routine work that is already semi automated anyway. It can just do it at scale.

I am sceptical about how much it will affect us job wise. I suspect that our jobs will change to monitoring, updating and checking systems more as we will need to stay in control of this.

I thought teaching was secure but it seems to me that teachers are increasingly being replaced by TAs at a lower rate of pay and I suspect that many professional roles will shift to more technician based roles overall.

@serenada - I agree that this is just the start of AI/ML/DL etc. I think that is the concern for some though - it is new, fast-changing and already having an impact.

Personally, I think there will be a big impact on jobs. It will most likely be a paradigm shift too. Like when we went from travelling by horses and carriages to motor vehicles and trains. Technology is likely to change things, but it maybe subtle and we won't really notice until we step back and reflect.

Yeah - I agree that there will still be a need for humans to monitor the technology. Self-service checkouts have supplanted many customer checkout jobs, but there is still one person hovering around to sort out any glitches etc.

Re: teaching. Not sure. You need to look into the history of the education system to understand why we even have the teaching system as we do. State education is a relatively new phenomenon if you look into the history; it came from the industrial revolution and the need to have a workforce with some basic education skills to do things like operate machinery and do book keeping etc. The education system is set up a bit like a factory system... Interesting video:

I thought that there is a struggle to retain teachers because of the red tape, stress and bureaucracy?

There are other ways to teach now - lots of online learning capabilities. It has been argued that corona has shown that for some parents, schools are a sort of childcare service that enables parents to go to work. I suspect that the government will discover that with technological advances they can save money in the education sector by not needing as many teaching staff as before...

It's all change.