Are prices shooting up where you are?

[Focusanddetermination]

Just that really. I'm in a small Midlands town, have a high amount of activity and prices shooting up in the past few weeks even.

I thought people would be more hesitant with a looming recession, but it's almost the opposite.

@Smallgoon honestly I wouldn't be surprised if they cracked out "government funded deposits for first time buyers", or 200% 100 year mortgages like in Japan.

@BeijingBikini

Wow, I didn't realise 100yr mortgages were a thing!

@Focusanddetermination Congrats OP, hope it works out for you. Chain-free, FTBs are always an attractive prospect, so fingers crossed.

@Smallgoon yes apparently they pass down the family 😩

@ChocoTrio

Regarding the quanto/plainsailing/newbie thing - I've actually been having a little chuckle here and there throughout the day. Obviously doesn't make much sense when I explain to anyone else in rl - it's like one of those "you had to be there" hilarious kind of things. It's just so unexpected - and randomly weird!

Totally get what you mean. When I joined MN, I honestly didn't believe I'd encounter posters likes these, or even scenarios like these. Always had MN down as a web space used by mature adults. Clearly, that's not always the case.

Like, really, are they actually going to change the housing market with a few posts on a MN forum?! That's the big House Price Crash masterminded plan?! Really?!

I guess it's the sort of thing that 'bots' do during elections campaigns. Trying to whip up a storm, making exaggerated claims in the hope it makes people feel anxious, worried, nervous etc. I'm sure this same HPC collective are frequenting other forums too (reddit?) and doing the same. Sad.

And just the way it got caught out - so funny because it's ironic, as well as unexpected. Quanto was basically calling other people on here "thick" or "dumbs" - and then it's like Smallgoon turns around like "erm... actually, no we're not thickyin. Time to uncover your mask."

This was my thinking exactly. So quick to belittle and mock others as having a "GCSE level understanding of maths", and yet lacked the intellect to be able to sufficiently cover their own arse when masquerading as several different personas. You mentioned it earlier, but this really was the most '2020' thing ever.

Good thinking OP and best of luck with finding a new home!

As long you are sensible and not overly extended, you will be fine. Likely some prices may dip in the autumn but others will hold - if you are in it for a decade and need housing anyway it really wouldnt make a massive difference.

Great detective work @Smallgoon for the weekend entertainment!!

@Focusanddetermination

For a FTB having a 20% sounds solid. Like you said, you plan on staying there for 10 years or so, so you're in a good position to ride out any potential recession. It's a home and long-term investment in more ways than just one (something that the likes of Quanto/Newbie probably don't understand or appreciate).

*20% deposit

@Leafstar As long you are sensible and not overly extended, you will be fine.

This is key, and essentially the message that should be put across. Affordability is imperative. You may be able to afford now, but if you or a partner lost their job in 6 months, how tough would it be financially? It's the people that have possibly over-extended that should consider waiting.

Job losses will make it incredibly difficult for those with a 10-15% deposit, who decided to 'wait it out' for another 18 months, as banks will likely stop offering 90% mortgages. Why would they risk lending?

It's wrong of those on lower salaries and with a small deposit, to believe that they will benefit from a crash. They won't, only the cash rich will.

Those that have a significant buffer and have job security should crack on, if they're content with the purchase price. Quality of life should be a factor rather than encouraging everybody to be miserable for the next 24 months, so that the bargain will fall into their lap (the bargain which will likely not come..).

This blanket "don't buy, the apocalypse is coming!" attitude has no basis if it doesn't consider individual circumstances.

[quote Smallgoon]**@Leafstar* As long you are sensible and not overly extended, you will be fine.*

This is key, and essentially the message that should be put across. Affordability is imperative. You may be able to afford now, but if you or a partner lost their job in 6 months, how tough would it be financially? It's the people that have possibly over-extended that should consider waiting.

Job losses will make it incredibly difficult for those with a 10-15% deposit, who decided to 'wait it out' for another 18 months, as banks will likely stop offering 90% mortgages. Why would they risk lending?

It's wrong of those on lower salaries and with a small deposit, to believe that they will benefit from a crash. They won't, only the cash rich will.

Those that have a significant buffer and have job security should crack on, if they're content with the purchase price. Quality of life should be a factor rather than encouraging everybody to be miserable for the next 24 months, so that the bargain will fall into their lap (the bargain which will likely not come..).

This blanket "don't buy, the apocalypse is coming!" attitude has no basis if it doesn't consider individual circumstances.[/quote]
I agree totally, me and my partner both work.

If one of us lost our jobs, we have enough income buffer to pay the mortgage and bills.

However if we were renting, we would be paying 50% more, to live in the same area. We would have to use whatever benefits there are to keep us going, for rent. For us its actually a worse situation to be in, particularly as our area is in high demand and rental property doesn't stay on the market long.

A school friend of ours rents in the local area and their qaulity of life is clearly impacted. Every few years the landlord asks them to move out, it can be very unsecure. Especially when you have children.

@Smallgoon

Ahhh the troll *@plainsailing01 has returned, or shall I call you @thequantofmontecarlo* because you are the same person, right?

I did wonder if you were.. I'd noticed how similarly you post, how you both target the same people (those that don't believe there is a drastic crash coming), and how both use the same put-downs etc... A quick google search, and voila!

www.mumsnet.com/Talk/_chat/3901085-What-do-people-think-about-Glassdoor

I guess the mask dropped in the above thread right...? Did you get your logins muddled up...?

Quick! Time for a sneaky name-change to disguise the fact that you have multiple user names to troll!

Sad really, I thought only 12 years olds did this sort of thing, guess I was wrong.

So which is it? A £1m boat, or FTB waiting for a crash? Keen to know which alter ego is real and which is invented...

@marysuzairn @TheGuruishere So now you know!

@Smallgoon

You know, I reflected on this (yesterday it just made me chuckle here and there, but today I've sobered up a bit and had a thought).

As an alternative to the HPC theory - maybe it was actually someone quite young. Like you said, it's something a 12 year old would do.

Young and very good at maths with career ambitions to become a Quant (hence the whole putting that particular job title on a pedestal - in both the Quanto and Newbie personas). Probably, done their A-levels that included A in Maths and A in Further Maths and/or now at university and maybe has been accepted on a graduate scheme with a bank to become a Quant. It explains how they had so much time to masquerade as various personas. The giveaway was the lack of apparent life experience and wisdom that a house is a home, not just a financial investment. Quanto/Newbie were logical but had a distinct naivety about quality of life.

Sure, try not to be foolish about buying at something that will lead to negative equity or that may be repossessed if you can't keep up on repayments. But ultimately, people buy somewhere nice to live and make it their home - a safe space, home sweet home etc. Things like amenities, schools, transport link and everything come into play too.

Personally, I think that the first step of even finding a house you like and want to commit to is really hard. It's a major decision and can be life-changing - and not just in terms of finances either. Your home is like the centre of your world and it's important.

Anyway, I'm done talking about this now, but thought I'd share my theory lol

My theory is that pregnancy can have a huge effect on the way some people feel/behave. It makes some people sad, perhaps it makes others very angry/irrational/weird...

I wish @newbie111 well with their pregnancy. I guess boredom can take hold, particularly if they are now on mat leave. But that's not really an excuse to troll others.

@ChocoTrio They may well be 'quite young' - that could be plausible. Who knows what part of their posts are actually true, or which persona is real. Perhaps they do in fact own a 1.4m boat!

I was following this thread a few days ago, went away and I think I must have missed something! I haven't read the last few pages of the thread so will catch up later.

We did buy a house as FTBs at the bottom of the market last time in 2010 (mostly by luck of timing). This was great as we were able to buy a bigger house second time around as the first house kept up with the price rises. I would add a couple of caveats though:

1 - mortgages were not freely available. They required 25% deposits and were difficult to get. Many people struggled. This was a big change as previously 100% and interest only mortgages were common (remember the Northern Rock one at 120%!).

2 - there wasn't much choice as many people didn't sell unless they had to (needing bigger/smaller houses, moving areas, divorce, death). There were a quite few repossessions unfortunately (I haven't seen that many since).

One of my OH's friends just bought his first house. As he is renting (and his rent is rising) and he is looking to stay in the same house in the longer term, I don't think he made the wrong decision, even though prices will probably fall (at least for a little while - this seems to be the pattern, with prices rising in the longer term and having periodic falls, then rising again). The only thing I would say is try and buy something big enough to stay in for five/ten years and don't overextend yourself. If you can, try and overpay the mortgage. On the second house, I was pretty sure we'd bought at the top of the market as it had gone up so much, but made sure we wanted to stay for a while and didn't overextend ourselves. It turns out we didn't as it's been rising ever since.

@WantToSleepNow There are a few in this thread that have said the same thing... waiting for a crash will not benefit all, only those that are cash rich. So advising everybody to 'wait it out' is bad advice imo. I'm also more inclined to take advice from those like you, who have experience of buying/selling during a downturn/in general etc.

@Smallgoon It's a hard choice. Both have pros and cons. Another thing I thought of is higher rents, they are much higher than when we were renting prior to buying. Lower rents meant we were able to save up more for a deposit. So I'm not sure that my OH's friend would lose too much if/when prices fall, as he may have to wait a couple of years to buy otherwise and his rent is rising.

I'd probably wait if I was looking to buy a bigger house as long as space wasn't too tight, but not necessarily as a FTB. Although sometimes you need to move anyway and can't wait for other reasons, as it may mean waiting for years and that isn't practical. It's so hard to know, I was sure we had reached the top of the market a couple of years ago, we hadn't. Due to the economic climate, there probably will be a fall in prices as in 2009/10, but as long as you can stay put for 5-10 years, if there is a fall, it will have time to even out.

Yes it is down to the individual's circumstances.

As I've said numerous times on this thread, if you can fix for 10 years and overpay or buy outright treating a house as a home not as an investment then by all means.

This is not the time however to over-leverage yourself in debt if you may have job insecurity come the end of the year.

Nothing has changed. Furlough will end, infections are still rising the economic damage has already been done but the effects are still to come. This isn't a prediction, this is a fact.

I've owned properties since the 1990's when interest rates were 15%. Through the dot com crash and through the GFC of 2008. Negative equity was real to a lot of people including my friends and family.

I own property now, which I will be selling this year, my circumstances are different as I'm mortgage free so will be buying outright.

@WantToSleepNow In regards to rising rent we may see a reversal of this, as many AirBnBs are coming to the market looking for long term renters and forcing rents down against the BTL landlords.
The nations 2.5 million BTL landlords in turn will be facing many voids/evictions with job losses and the full force of the tax implications of section 24 may mean many will sell up considering 60% are 55 years and older.

COVID was a catalyst and the global recession was inevitable regardless eventually. The negative inversion of the US treasury yields has predated every recession and they inverted last year. I prepared for this with a diversified stocks and shares ISA with a strong weight in gold/silver and miners. This has now more than doubled, that alone should give a warning signal to wear the smart money is going.

Houses prices are dictated by the banks willingness to lend, and are fundamentally linked to earnings. The national average house price can't go to £500k because the national average wage is £29,600.

I addition to my above point, even in my pension Legal and General and suspended their property funds (no-one can buy/sell to avoid volatility)

Luckily I haven't had an allocation for years. But it highlights the point, don't listen to the froth of Estate agents websites or tabloid newspapers, but look at what the actual financial sector with skin in the game is doing.

www.legalandgeneral.com/investments/investment-content/property-fund-suspension-notice/

I think you're a doomonger. People expecting prices to fall are going to not be happy

@marysuzairn we are in the worst recession in 300 years. Banks are not lending to a lot of FTB with small deposits.

I don't see how prices can not fall though I accept that it probably would not fall at such a huge percentage that people who had no hope of buying could suddenly buy. But someone who waits could get a better property on their budget. A lot of property wealth is also leaving London which could be interesting for potential London buyers. Maybe the £800k house would be £600-700k, i find that worth waiting for but of course 700K is still a lot for a house and not everyone can affor dit.

I think that prices will drop....I mean we're heading for mass redundancies and a major recession (you dont need to be part of the PCP or CPR or whatever they are), but the big question is where are you going to live in the meantime. Am a bit tired of renting at the age of 40 with a kid, so we'll risk it. Hopefully, we're buying our forever home and so long as we can pay it off before retirement, then its value will only matter to our kid if and when he gets to sell it.

Have to say that am a bit surprised at everyone else desperately paying over the odds for two-bed flats. At a push, I can see myself living in one of them for a long time, but everyone else, really? So I have no idea why prices are going up like crazy at the moment. BUt who knows.

@marysuzairn

I think you're a doomonger. People expecting prices to fall are going to not be happy

I've provided several credible sources and links to the economic implications going into next year throughout this thread. You call me a doommonger but provide no evidence in support of your view.

I really couldn't care what happens to property prices as I am mortgage free and will be buying outright. I am merely stating that if your job security is uncertain, then taking on massive amounts of debt is irresponsible given the economic fallout.

And your view is load yourself up to the eyeballs in debt and worry about it later?

90% mortgages are now easily available and they're printing so much money that prices won't fall.

Why do you think everything is being snapped up quickly if it's so obvious that prices will fall? Things are going above asking

I've stated time and time again on this thread, the Nationwide annual average house price went negative last month. I always said that pent up demand with needs for gardens/divorce/deaths will create a flurry of transactions and that the government will put in more props.

The government does not want negative growth. HPI means that people feel richer and will spend in the economy. If house prices drop, people stop going out and naturally conserve money more. The government need people to spend spend spend to save the economy (hence the freebies, reduction VAT in restaurants etc). The stamp duty intervention was entirely to prop the market up for this year through the economic shitstorm.

However it makes no odds to the first time buyer below £300k. Lots of people above that range can buy and sell, and make the most of the stamp duty saving. That combined with the flurry of backlog of lockdown transactions will be enough to stop that annual statistic from turning negative for the rest of the year.

Money can't be printed and forgotten about and pretend it didn't happen. The government is borrowing and t needs to be paid back. Theres a difference between the national debt and deficit. If you aren't aware then I suggest some research is in order. It means more taxes for those in work and inflation.

@marysuzairn - because people have gone hysterical for some reason and I say that as someone trying to buy. It really does feel like mass hysteria

@Lightscribe - agreed but in theory, fixing your interest rate for say 10 years with high inflation is not such a bad thing when it comes to debt. The problem, of course, is that everything else is also expensive but inflation is pretty good at eating away at the debt (assuming that your interest rates are fixed)

@Greenhats10 before stamp duty holiday, people who wanted to buy big flats in the desirable areas of London were disadvantaged in the sense that while it was probably their first home, they could not benefit from stamp duty exemption as it was only for properties up to £500k.

I haven't really done the math for this but I could be wrong but surely a better strategy (pre stamp duty holiday) would be to buy something small and modest in your desired London area for £400-500k, get the stamp duty exemption for the first 300K, save up a bigger deposit and then buy the big London house after a few years whilst paying down equity for the London flat (given that you would have to pay stamp duty for it anyway). Now that there is a stamp duty holiday, this doesn't really feature. In a sense you can buy what you want without being restricted to £500k and below properties.