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…

@Bringsexyback

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

Not when they’re aiming to become the biggest landlords anyway, that’s not just here but blackrock and pension funds in the US too. The small BTL landlords will be pushed out due to taxes (as we are already seeing) and exiting the market. As interest rates rise and more and more default due to cost and living and unable to service massive loans (a lot still are on interest only also) then the banks will repossess at recession corrected prices.

www.bbc.co.uk/news/articles/cjkdyy9xgn3o.amp

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

Correct. Every timeI read a thread about housing affordability on here there will be people who have failed their lender’s affordability check, or whose children have failed, and are campaigning for rules to be changed such that anyone who can show that they have paid rent of £x consistently for a year, or whatever, should be allowed to bypass the affordability checks. Because £x is more than the mortgage would be.

Forgetting, of course, that mortgage interest rates at the moment are rock bottom cheap, far below historic averages, and that a move towards 5%, say, would render the mortgage unaffordable.

Barmy lending to people who can’t really afford a mortgage caused the last crash, and yet here we are again 14 years later, campaigning for more ill-advised mortgage lending and with banks finding ways to keep on doing it (the 30+ year mortgage).

I am also seeing a lot more probate property coming onto the market than usual. That's the result of the pandemic as a lot more elderly & vulnerable people died in a shorter space of time.

Probate property in my area are generally over priced & the family are less likely to reduce. I saw a beautiful 1930's probate semi which needed a full refurbishment. The family weren't willing to reduce the price so I decided not to proceed. There were houses which had been modernised for a similar price in the area. So factoring the cost of the refurbishment & any issues found, it wouldn't have been worth it. It's still on for sale almost a year after being listed.

@sst1234

No one has been able to say so far where this magic supply of extra houses is coming from to warrant a crash.

We did. It's easy to remember - the 3 D's - death, debt and divorce.
And yes, it last happened 1989-93. No magic supply was required.

[quote XVGN]@sst1234

No one has been able to say so far where this magic supply of extra houses is coming from to warrant a crash.

We did. It's easy to remember - the 3 D's - death, debt and divorce.
And yes, it last happened 1989-93. No magic supply was required.[/quote]
Yes but the population has increased massively since the 80s/90s but the housing supply hasn't. Better to get on the ladder now if you can afford it.

We also had more of a safety net and less people during the 90s my cousin was made homeless recently when the landlord wanted her house back and they literally didn’t even have a bed-and-breakfast for her, like nothing she was sat in the council housing department‘s office until 5 to 5 when a social worker was screaming down the phone at the housing officer that if it meant they needed to pay £200 a night to put her at the Hyatt then that’s what they had to do because they were not going home until they found her room.

I can’t see Boris agreeing to do anything policy wise that would have people quite literally queueing round the door at the local housing department.

BIL is an estate agent in London and says that a huge part of the market is fuelled by Russian capital at the top… not sure how war/assets freeze would affect that? And whether that would filter down?

[quote XVGN]@sst1234

No one has been able to say so far where this magic supply of extra houses is coming from to warrant a crash.

We did. It's easy to remember - the 3 D's - death, debt and divorce.
And yes, it last happened 1989-93. No magic supply was required.[/quote]
Debt and divorce still mean people need somewhere to live. Death, even during Covid doesn’t begin to even out the population increase and general increased life expectancy since the 80s. It’s wishful thinking and misleading to keep going on about a property crash. Stabilization will happen but a crash doesn’t make sense when there is an acute supply problem of housing.

It's not just supply & demand though. Prices have escalated due to low interest rates. Where I am in London prices haven't really changed since Brexit as affordability is stretched. I think we will see more stagnation as opposed to a big crash but the days of making 200k in 2 yrs are gone for most. I think anyone buying now needs to think carefully & future proof as much as possible.

@swirlsy

It's not just supply & demand though. Prices have escalated due to low interest rates. Where I am in London prices haven't really changed since Brexit as affordability is stretched. I think we will see more stagnation as opposed to a big crash but the days of making 200k in 2 yrs are gone for most. I think anyone buying now needs to think carefully & future proof as much as possible.

Definitely agree with this. Hopefully we will go back to where houses are homes and not just investments/ways to cash in.

@GraceJonesBiggestFan

BIL is an estate agent in London and says that a huge part of the market is fuelled by Russian capital at the top… not sure how war/assets freeze would affect that? And whether that would filter down?

That may play a part, but far more pressing is the reversal of the Chinese property market and implosion of Evergrande.

Lots of developers in the cities (like London) have Chinese funding and lots are pulling out/retracting, which means construction gets halted and projects cancelled.

Most still not getting the supply/demand memo. London (and large city populations) went down over the pandemic (as people went home, not eligible for furlough etc)
Hotels have taken the role of emergency accommodation and are being compensated by the government. Economic migration makes up renters (short term work plans etc) rather than buyers.

People are having fewer children due to careers and settling down later in life. The demand for 4/5 bed homes will evaporate within a generation due to inflation, interest rates, cost of living, property/carbon taxes, energy costs etc.
Supply will be driven by private landlords exiting the market due to costs.

That doesn’t mean a physical increase of properties, just the demand decreasing and supply increasing to banks/institutions, Build to rent sector etc.

That means the number of houses available on Rightmove will increase (as housing won’t be considered as desirable investment to keep up with inflation) and people won’t be able to afford the repayments/affordability thresholds as banks will have stricter lending requirements.

The ageing population issue is a massive one often overlooked imo. In order to fund it we need more taxes etc so I can't see how prices can keep escalating as I think CGT tax increases or a wealth tax is likely, the gov doesn't really have any other route.

True. When I lived in a city, I remember a lot of new build low-rise flats being bought as job lots by Chinese investors.

I am surprised they have risen as quickly as they did post lockdown 1. I bought my current property between lockdown 1 and 2 and before the housing market boom took off, but benefitted from the stamp duty reduction due to various delays in the conveyancing process.

I had to move at that time it was not an option to post phone it a few months. I had no choice but to move down the property ladder, (grateful I am still on it though, but at bottom end). And I really thought I was going to end up with negative equity within a few months, instead of that it went the other way, which of course I am pleased about but it does make climbing the property ladder harder. And for the foreseeable future there is no prospect of moving.

I can also see the frustration for those struggling to get on it at all.

@sst1234

Debt and divorce still mean people need somewhere to live. Death, even during Covid doesn’t begin to even out the population increase and general increased life expectancy since the 80s. It’s wishful thinking and misleading to keep going on about a property crash. Stabilization will happen but a crash doesn’t make sense when there is an acute supply problem of housing.

It's a good question. Most people selling will still end up owning a home. It'll be a cheaper/smaller home or in a cheaper area. People anticipating a 10% fall in prices will be happy to sell at a 5% discount just to get clear. People will start chasing prices downward. Be near the exit to avoid the crush.

And then at the top of the pyramid will be the smaller percentage of homeowners not rebuying. They will be moving to HMO's, friends sofa's, Mum and Dad's, or coffins.

Every time you see a headline talking about cost of living crisis, just read that as Debt that cannot be afforded.

On a personal level, a crash would be great for my adult kids who are desperate to buy and won't affect dh and me - we're oldies, have been in the market for decades and will have no need to move from our home. On a national level, it would be a disaster.

And I really thought I was going to end up with negative equity within a few months, instead of that it went the other way, which of course I am pleased about but it does make climbing the property ladder harder
Yes it's much harder to move up in a rising market which many don't understand.

@swirlsy why do you think people don't understand that?
A booming or busting market isn't a good thing- sharp rises and falls may work in some people's favour in a very individual short term manner but it's a disastrous way for the housing market to operate. What we need is for prices to stabilise. People who think prices rising at ridiculous rates is a good think are as deluded as those who are hoping for a crash

Debt as I say it’s extremely difficult to evict somebody could take up to 2 years.

Divorce people are already just having to live under the same roof where they like it or not post split.

Death well by that point you’re not gonna care are you, however what I am also seeing locally is that the five bedroom houses which you’re absolutely right are expensive to run are being snapped up again by Landlord‘s and filled with single young men, you could rent out a four bedroom property to a family for about £12-1400 a month or you could rent out a room for £500 each per month. And they probably put one in the living room as well.

A friend of mine is living in supported accommodation whereby servicemen who are medically discharged live in nice big old properties the landlord receives £900 a month per room for these people. The disadvantage of course is that they could potentially trash the place at a moments notice they’re not particularly mentally stable however the finance appears to outweigh the risk.

At the start of covid the house next door but 2 from my mum's house sold for £105k.
It has now been put on the market for offers over £205k.
Yes they have put in new kitchen/bathroom etc.
But no driveway.
This is a small 3 bed semi in an area that is not desirable,
but is starting to improve.

@Alrightqueenie

I am also seeing a lot more probate property coming onto the market than usual. That's the result of the pandemic as a lot more elderly & vulnerable people died in a shorter space of time.

Probate property in my area are generally over priced & the family are less likely to reduce. I saw a beautiful 1930's probate semi which needed a full refurbishment. The family weren't willing to reduce the price so I decided not to proceed. There were houses which had been modernised for a similar price in the area. So factoring the cost of the refurbishment & any issues found, it wouldn't have been worth it. It's still on for sale almost a year after being listed.

The same is happening near me (West London). I viewed a probate property in May 2021 which needed a minimum of £100k just to make it a decent space to live in; it would need at least £150k to get it properly up to modern standards and really nice. Properties in a decent condition go for £700k.

The price was originally set at £650k, and it's still £650k, which is the same price as places which need decorative work only. It's still on the market now, nearly a year later, however as the family clearly don't need to sell, they seem happy to wait to the get full asking.

I see this happening with a lot of probate properties, so it's a fallacy to rely on those types of property coming to market for prices to reduce.

@gattofantastico multiple posts on MNs. Even the concept of the property ladder is pretty outdated for many who bought recently.

Moving up the ladder is easier for many when prices are falling.

Which is why my advice is to future proof as much as possible.

Currently people will also be desperately trying to buy before their mortgage offer expires as banks are pulling the better deals.