House prices and recession

[Mumof22020]

Whats everyones thoughts on house prices are they likely to come down in price if theres a recession? The prices are crazy at the moment and with the cost of living going through the roof we're surely going to hit a recession.

@65honeybee

So would I... In theory! But it's easy to say that as a home owner with my mortgage paid off. If I was desperate to get on the ladder, or desperate for more space/ a better location etc then I can absolutely understand why, with such a shortage of housing, people feel pressure to pay the best price.

At the other end of the market, where you're talking about eg houses in desirable areas, near the coast or in lovely countryside, where people might wish to retire, I imagine property will continue to increase in price or hold its value because this demographic won't have young families to support and will be cash buyers; there's also a limited stock of houses in such areas which again makes them more valuable

Agree. I have total sympathy for people desperate to own their own house.

@65honeybee

So would I... In theory! But it's easy to say that as a home owner with my mortgage paid off. If I was desperate to get on the ladder, or desperate for more space/ a better location etc then I can absolutely understand why, with such a shortage of housing, people feel pressure to pay the best price.

At the other end of the market, where you're talking about eg houses in desirable areas, near the coast or in lovely countryside, where people might wish to retire, I imagine property will continue to increase in price or hold its value because this demographic won't have young families to support and will be cash buyers; there's also a limited stock of houses in such areas which again makes them more valuable

This is interesting- I would be wary of where in the countryside/coast to buy because of climate change as those areas are going to be at much higher risk of flooding in the next several years onwards. Insurance will start to get tricky and possibly not that far into the future, completely unavailable. They won't be so desirable when the property is uninsurable!

There are plenty of urban areas prone to flooding - look at the news over recent years! It's all about the specific area... I'd rather be up high in a rural or coastal location than near a river which has a history of bursting its banks in a city

Oh definitely! I'm in London and have friends who were effected by the flooding here in the past year. All I'm saying is it's something we've taken into consideration with planning our next move.

A house I lived in has just been put on the market, in the village I still live in, for 8 times what we sold it for 25 years ago. The people who have owned it in between have done a lot of work and spent a lot on it, but it still has no outside space and no allocated parking. Which on a per sq ft/m ratio makes our house worth a great deal more than a fancy estate agent's valuation last June. As it happens, I'm old and
cynical and tend to believe houses are worth what people will and can affod to pay for them. But QE has distorted valuations and WFH and remote work means that lots of people who do intellectual rather than hands on labour can work remotely. If they are really good, their employers won't care where they want to live. The changes also suggest that manufacturing in China or Vietnam is no longer also as advantageous because labour costs are equalising around the world. Not levelling out, but the balance is changing.

London house prices '50pc overvalued', sparking correction fears
Analysts warn that prices are likely to fall
By
Ben Gartside
21 March 2022 • 4:20pm

www.telegraph.co.uk/business/2022/03/21/london-house-prices-50pc-overvalued-sparking-correction-fears/

Possibly, @oiltrader. The DT have been predicting it for years: one day they'll call it right.

A broken clock is right twice a day

@Nothappyatwork

A broken clock is right twice a day

only needs to be right once

If I had a tenner for every time 'an analyst predicts.....'

Yeah @oiltrader, how stupid of you to listen to the S&P analyst, whose advice also coincides with what the BoE said would happen if interest rates went up by 2% (highly likely given that inflation just hit a 30 year high at 6.5%)! We’ve had enough of these experts.

I’d listen to @65honeybee or the formidable @Nothappyatwork, who once dated “a man who ran a private bank”. If that isn’t a sign of being “in the know” with how the world economy and financial markets work, I don’t know what is!

@ledbydonkeys for somebody who is so confident in their position you’re a) quite easily wound up and b) pretty keen to share I know that if I had the secret to the universe certainly wouldn’t be blabbing about it all over Mumsnet 🤣
It’s the shoeshine boy theory by the time the shoeshine boy knows it’s all over. Not heard of that one ?

@Nothappyatwork, I know, they're getting very aerated about it! I'll eat my words if house prices do indeed drop 20% by Christmas but no doubt we'll see a slow down in increase instead. Not that there's any sign of even a slow down where I live... it's firmly a sellers' market with property regularly going for more than the asking price.

Crikey, that S&P report is brutal. And they're one of the very few financial analysts it's worth listening to... Almost all the other reports are done by estate agencies. Knight Frank merrily insisting that prices will go up endlessly etc etc. S&P are rather more independent.

House prices will jump £20k this year as boom lasts another 12 months

www.telegraph.co.uk/property/house-prices/house-prices-will-jump-20k-year-boom-lasts-another-12-months/

Just stirring the pot! I think Lightscribe's theory is more likely given everything that's happening with the economy.

I don't think property in London is ever going to be under or over valued. London is such a financial capital hub and is the obvious European pivot between the US and Asia. English is the most important second language globally. Anyone who wants to buy or sell anything, from Buenas Aires to Beijing has a smattering of English.

@XingMing

I don't think property in London is ever going to be under or over valued. London is such a financial capital hub and is the obvious European pivot between the US and Asia. English is the most important second language globally. Anyone who wants to buy or sell anything, from Buenas Aires to Beijing has a smattering of English.

That's true but it may change now. London has become well known as the place for wealthy foreigners with ill gotten gains to launder their dirty money. The politicians have turned a blind eye because they want their money invested in the UK economy. There is a whole network of lawyers, accountants and bankers who assist. However, things have just changed with the extremely public sanctions on wealthy Russians. This may well have an effect on foreign investment going forwards.

@Nothappyatwork Oh darling. You’re clearly not the sharpest tool in the shed are you? You clearly don’t understand when you’re the punchline to a joke 🤣🤣🤣

@rainingsnoring the thing is there is always another rule for the mega rich. They will find loopholes and the London playground will remain for the rich. I highly doubt the Russians are worried and they probably are trading through other overseas accounts without the sanctions causing too much of an issue for them. The tax incentives are just too great for the rich and London allows them to park their cash without too much trouble.

'Even a broken clock is right twice a day', ain't that the truth!

People have been saying this for the whole of my adult life. I first bought in 2001 and have kept that property until 2012 when it had doubled in value.

I bought again in 2008 and sold in 2012 for very slightly more but basically house prices stagnated but interest rates were low so we paid ££££ off.

The house I bought in 2012 has also doubled in value and low interest rates means the mortgage has been easier to pay off.

Things might stagnate and there will be overall winners and losers but long term prices are only going one way.

@ledbydonkeys - if you ever had a valid point nobody’s listening any more. I wouldn’t know anything about tools or sheds im sharp enough to have gardeners that trim my bush … darling

@bracebrace

People have been saying this for the whole of my adult life. I first bought in 2001 and have kept that property until 2012 when it had doubled in value.

I bought again in 2008 and sold in 2012 for very slightly more but basically house prices stagnated but interest rates were low so we paid ££££ off.

The house I bought in 2012 has also doubled in value and low interest rates means the mortgage has been easier to pay off.

Things might stagnate and there will be overall winners and losers but long term prices are only going one way.

If you first bought in 2001 (I did too), then you have never witnessed an inflationary cycle. That’s why in you’re experience 2008 didn’t really effect you as it did others.

The 80’a and 90’s were different due to recessions and legacy high interest rates from the 70’s which was the last inflationary cycle like we are coming into now.

This disinflation period has lasted 40 years and QE had only been part of that in the west (excluding Japan) since 2008.

@bracebrace I know; I'm glad I didn't listen to some of the self-styled 'experts' who tried to warn me off buying. Property is and always has been a great long term investment (not saying it should be; it should first and foremost be a home) but that's the reality in the U.K. where people are desperate for the security of home ownership and where there's a scarcity of housing. I wonder whether some people get so aerated precisely because not all of us listen to their doom and gloom and realise that in the long term, property is a really good bet

@bracebrace I first bought a long time before you btw