So will the prices start going down soon?

[Notmyyearthisyear]

Because right now they seem to increase by at the rate of 10% a month!!! Every time I look, and I look every day, I can afford less than the day before 🤣🤣 Surely this cannot continue…

@Opal8

Re: boomers. They will die. They wont be downsizing. So the next 10-15 years will see more larger family homes come onto the market. None of us love forever!

I think that you're confusing death and divorce.

I think the whole Boomers dieing off point won't affect house prices as thought. It's more about wealth transfer. They aren't sitting on loads of unoccupied houses, so no additional housing stock will be freed up, just comparatively larger houses/wealth.

It's no secret that Boomers have had it better than any previous our likely future generation, and I read a piece recently talking about the fact that it will be current Millenials who inherit it all & become the new wealthiest generation as a result.

Prices might even increase as Millenials bid against each other for those large 4/5 bed detached desirable ex-boomer houses, funded with large inheritances...

@ZVGN

🤣🤣

Apologies XVGN

@FurierTransform

I think the whole Boomers dieing off point won't affect house prices as thought. It's more about wealth transfer. They aren't sitting on loads of unoccupied houses, so no additional housing stock will be freed up, just comparatively larger houses/wealth.

It's no secret that Boomers have had it better than any previous our likely future generation, and I read a piece recently talking about the fact that it will be current Millenials who inherit it all & become the new wealthiest generation as a result.

Prices might even increase as Millenials bid against each other for those large 4/5 bed detached desirable ex-boomer houses, funded with large inheritances...

I think that's a bit of a fallacy. A lot of wealth will need to be spent on care needs as this generation ages. Also, most will have several children so split money between and IHT may be payable. It won't be as simple as a wealth transfer except for in the case of a fortunate minority.

I do agree that there are factors that are likely to make prices stagnate/ fall in real terms or possibly fall significantly depending on the International system, markets, etc

Salaries in my sector have increased by 30% we’ve seen people who were already on 90,000 a year working from home go contracting for £1000 a day outside by our 35 which we thought was going to bring the market to it’s knees. Even if these best souls don’t need to buy a house themselves they’ll be feeding money into the market via their children or their grandchildren one way or another

@Bringsexyback please do tell us which sector you are working in ;-)

IT - I strongly advise anybody to get into data analytics as fast as possible to ride that particular wave. AWS is not particularly difficult to learn. Program managers- admittedly with 5+ years experience commanding £1000 a day plus expenses outside of IR 35 which means they’re basically not paying full tax on it.

Once I've googled what AWS means I'll be straight onto it! And I'm not even sure I'm joking...

People have very short memories and this last decade hasn’t helped with the amount of vested interest of the UK economy tied up in the housing market (construction, house builders, estate agents, solicitors etc)

The government hasn’t helped that (a good proportion landlords themselves) through incentives, breaks, props.

Most will remember the fall in 2008 and some areas only recovered a decade or so later.
Less will remember the 90’s and spikes in interest rates and people handing keys back through the letter box of the bank.
Even less will remember what happened in the 70’s when house prices continued to stagnate when inflation was around for nigh on a decade.

We have now changed from a 40 year disinflation cycle into an inflationary one. Inflation will compound and interest rates will rise aggressively. I’ve previously spoke about this happening several years ago.

House prices are linked to debt and salaries. They have gone way out of kilter and that has to correct to mean. We will see the biggest unwinding of that now in living memory. Most have never experienced an inflationary cycle, currently most just think it’s a minor inconvenience paying higher energy costs. Inflation has already built up at the supply end and is only just coming out at the consumer end now. That will then cause stagflation and recession which will kill off house prices, due to the affordability of debt,

Supply will come from BTL and landlords leaving the market (over 2.5m in the UK with multiple properties each) as it will no longer be a feasible investment.

@Lightscribe

Supply will come from BTL and landlords leaving the market (over 2.5m in the UK with multiple properties each) as it will no longer be a feasible investment.

That’s not increasing supply. Supply means more houses, more physical dwellings. And that’s gone backwards in the last two years rather than improved. On rental, the latest rental increase figures show that it’s a great time to be a landlord.

@Lightscribe

People have very short memories and this last decade hasn’t helped with the amount of vested interest of the UK economy tied up in the housing market (construction, house builders, estate agents, solicitors etc)

The government hasn’t helped that (a good proportion landlords themselves) through incentives, breaks, props.

Most will remember the fall in 2008 and some areas only recovered a decade or so later.
Less will remember the 90’s and spikes in interest rates and people handing keys back through the letter box of the bank.
Even less will remember what happened in the 70’s when house prices continued to stagnate when inflation was around for nigh on a decade.

We have now changed from a 40 year disinflation cycle into an inflationary one. Inflation will compound and interest rates will rise aggressively. I’ve previously spoke about this happening several years ago.

House prices are linked to debt and salaries. They have gone way out of kilter and that has to correct to mean. We will see the biggest unwinding of that now in living memory. Most have never experienced an inflationary cycle, currently most just think it’s a minor inconvenience paying higher energy costs. Inflation has already built up at the supply end and is only just coming out at the consumer end now. That will then cause stagflation and recession which will kill off house prices, due to the affordability of debt,

Is that wishful thinking because you missed the boat to buy. Many people have been arguing this for the last two decades waiting to buy but only allowed them to be priced themselves out of the market. What you have been guessing for a while cannot happen unless there is millions more house built in a short space of time. Where do I even start on why that’s not going to happen.

One of the programs with Phil and Kirsty in it. Phil said to a couple, one option is to buy in an up and coming city and rent it out. Use the drive of the local market to then afford to get on the property market where you want to live.

In the 90s when we had apparently had people handing keys back although and I am actually remember anybody losing their house and I’ve came from quite poor background, evictions were straightforward enough and people thought they ought to just do as the banks said.

I have personal experience of not paying my mortgage for a year during my divorce and then when I started repaying it they bent over backwards to come up with a solution, Bank will literally prepared to do anything to avoid repossession

I think there will be a correction. There are so few houses on the market ATM because of the incredibly unusual circumstances that things are artificially inflated.

If interest rates rise much there'll be a crash. My first house was a repossession, a time of high interest rates. I paid about 60% of the value of the mortgage on it. Friends who bought just before me (those who managed to keep their houses) were in negative equity for a decade.

People don't seem to realise that the difference between 1% and 2% on your mortgage rare is double on your interest payments. The difference between 1% and 4%?! If that happens there'll be lots of people who can't keep up and the market will be flooded.

There's no way the housing supply will increase at anything like the rate it would need to for it to cause prices to drop.

I expect the rate of increase may slow, and prices may even level off for a while. I think some people confuse that with prices falling and they're perhaps the ones who wait in vain for a crash to jump in and buy, only to find they're left behind

I did have a price drop for my first house - bought in 2006 and sold in 2009 for about £6k less than I'd paid for it. I had enough equity not to be in negative equity. But that's really just a quirk of timing, my life changed completely in that time so if I hadn't needed to sell then it wouldn't have made a difference?

@gattofantastico

There's no way the housing supply will increase at anything like the rate it would need to for it to cause prices to drop.

I expect the rate of increase may slow, and prices may even level off for a while. I think some people confuse that with prices falling and they're perhaps the ones who wait in vain for a crash to jump in and buy, only to find they're left behind

When we talk about supply we are talking about the amount of homes for sale on RM - not the number of new homes.

Anyway, you may not have been around in the 1990's so a brief summary from the Guardian:

www.theguardian.com/money/2017/aug/29/house-price-crash-price-dublin-economy

"The biggest numerical fall in house prices in recent history was between 1989 and 1993, when they dropped 20% – or rather more than the 13% fall after the 2007-08 financial crisis. Neither did they recover so swiftly.

It is memories of the early 1990s that should restrain anyone’s glee at the prospect of a property crash. Many of those who had taken out big mortgages could no longer afford the repayments. About 250,000 homes were repossessed between 1989 and 1993, wrecking countless lives. A much greater number were haunted by negative equity, trapped in homes they couldn’t sell."

And that 20% was a UK average. Where houses had really over-inflated they went down 30/40/50%.

Is that wishful thinking because you missed the boat to buy. Many people have been arguing this for the last two decades waiting to buy but only allowed them to be priced themselves out of the market. What you have been guessing for a while cannot happen unless there is millions more house built in a short space of time. Where do I even start on why that’s not going to happen.

Yeah, that’s right. @Lightscribe’s well-reasoned post, showing genuine economic insight as opposed to “oh prices will ALWAYS go up because, er, they always go up” is just wishful thinking.

She made up the bits about historic inflation and its effect on asset prices as well. Out of pure sour grapes. Yes.

lenders are starting to offer mortgages over 50 yrs and 7 x salary. That indicates to me they expect house prices to rise.

No, it indicates that they are desperate to keep on lending. Which is how they make their money, remember? If anything is a red flag, suggesting that we’re on for a correction, it is this.

Macroeconomics and global monetary policy isn’t wishful thinking, it supersedes politics and governments. Inflation is a good thing for governments due to the record debt levels that get inflated away.

It doesn’t matter to me on a personal level, I’m mortgage free and own outright. My only exposure to the downturn is through investments of which I hold ‘value’ high dividend stocks (oil, energy, potash, gold, silver mining etc) to try to keep ahead the inflation coming. I’m just very critical of what’s happened to this country basing the economy around house prices and how exposed we are as a nation to debt. The tide will go out and we’ll see who’s swimming naked.

Gen X also stand to inherit (care home fees not withstanding) and are in a pretty good position, having bought late 90s / into the noughties in many cases. I suspect many of them will pass that inherited boomer wealth straight onto their own children, so a good number of current gen z will get a massive leg up that their parents no longer need.

Basically the sooner you get a house the better off you are your children will be. Don’t try to time the market, there will always be peaks and troughs but over decades it rises.

@Iamthewombat

Is that wishful thinking because you missed the boat to buy. Many people have been arguing this for the last two decades waiting to buy but only allowed them to be priced themselves out of the market. What you have been guessing for a while cannot happen unless there is millions more house built in a short space of time. Where do I even start on why that’s not going to happen.

Yeah, that’s right. @Lightscribe’s well-reasoned post, showing genuine economic insight as opposed to “oh prices will ALWAYS go up because, er, they always go up” is just wishful thinking.

She made up the bits about historic inflation and its effect on asset prices as well. Out of pure sour grapes. Yes.

You can pull numbers out of anywhere to make any point you like. Doesn’t mean it makes sense. No one has been able to say so far where this magic supply of extra houses is coming from to warrant a crash. Are people going to move into a tent in the garden and sell their houses.

@MyNameIsAngelicaSchuyler

Gen X also stand to inherit (care home fees not withstanding) and are in a pretty good position, having bought late 90s / into the noughties in many cases. I suspect many of them will pass that inherited boomer wealth straight onto their own children, so a good number of current gen z will get a massive leg up that their parents no longer need.

Basically the sooner you get a house the better off you are your children will be. Don’t try to time the market, there will always be peaks and troughs but over decades it rises.

Exactly. Trying to time the market, waiting for the big crash, is a fools game. Getting on the ladder, no matter how low the first rung, is better than waiting.