House prices predicted to fall by 10% in 2023

[MoHunter]

www.theguardian.com/money/2022/sep/28/uk-house-prices-predicted-fall-mortgage-interest-rate

Well that's a worry when we are close to exchange and completion on our next property!? 😭But I guess even in case of a reduction next year will likely recover again within a few years?
This will be our home for a good while, probably 10 years+ until children are grown. Sh*tting myself a bit but also desperate to move! Staying is not an option as I hate the town we live in.
Anyone else at a similar stage now worrying about this??

And people saying, "oh if you can lock in at a good rate", go for it. Jesus. Unless you're locking in for ten years - and good luck finding a decent rate for ten years right now - you're only locking in for 2/3 years of a 25 year mortgage term. That's... not the cure-all you seem to think it is.

As I mentioned in previous threads, this is a Sterling crisis. Good luck buying a house in a falling market when the entire economy is collapsing.

We need 8% deficit spending annually just to maintain GDP. Nothing about growth. The world is sending us money and we have absolutely nothing to give back.

I genuinely don’t think anyone here, or most people in the general public, know just how bad this is. It’s literally the global economy calling in our debt and not accepting our IOUs (the pound) as anything other than empty promises. They also see our governance as being clueless.

This will mean a massive drop in the standard of living for this country.

Exactly, @Liebig And it drives me bonkers that people on these boards are telling other people to go for it on mortgages right now.

The fall in house prices will be considerably more than 10%.

However, you need to take everything into account when making your decision and everyone's circumstances are different. Buying at peak market is clearly risky but possibly the pros outweigh the cons for you.

Yes, exactly. Very few people have grasped the enormity of this and how much the governments (actually successive governments) and the BOE have messed things up and how much the UK has been living beyond its means.

Delighted to hear this as it gives my daughter a chance of buying.

There was once a time when houses were considered homes not investments.

If she can afford the mortgage repayments that is.

Even the experts when asked cannot answer that question. The most they will say with certainty is that the basic rule of supply and demand remains constant.

Honestly, who knows. Experts predicted significant falls as covid took off. Look how right they got that.

Everything is just going up and up. My car, I've driven, added mileage, general wear and tear, and just sold for a higher price than when I bought it, and that's just 18mths ago.

There's all this "people" can't afford it. But, I know of no one in real life is doing other than complaining of feeling the pinch, and paying the increase. And I know a broad spectrum of people. People are still going on holiday, the cars are still being sold and bought, we're all whining about our £100 food shop being £140 all of a sudden, we notice, but at the end of the day, we're all just paying the extra £40.

Energy bills, £300 instead of £150. People are noticing, complaining...but again, paying the extra £150.

Is it because it hasn't fully taken hold yet?I have basic knowledge of economics, but can see what's happening around me, which is not utter devastation, home loss, plummeting standards of living. It's people moaning, but effectively just carrying on. It's more expensive, but they're affording it.

@TwinsAndTiramisu People aren't paying the higher energy bills and mortgage costs yet, are they? They'll only actually start paying them over the winter. That's literally the whole point. And I'm v glad that you're in a position to pay the extra £40 here and double the energy bill there, but there are so so so many people in this country who are not in that position. Look up figures on average savings per household if you want to understand how close to the line most people are. Lots of people are going to have to find hundreds of pounds a month just to cover mortgage increases - and that money won't then be spent anywhere else. You work out the knock-on effects of that.

I only wish we had moved last year - hindsight, eh?

If I lived in a house that was too small, but in the right town, I would probably reconsider.
But I do not want to spend another year, or two, or five here and watch my children grow up in a place that has nothing going for it.

I'd rather drop holidays and live in a nice town, in a nice house, than be miserable (which I am now).

But I do worry!!

@bellac11 ''I think they are categorised as the desperate surely?''

What?

So you routinely describe people who decide to move homes to take on a new job, find a better quality of life, expend their family, end a relationship that has run its course and start a happier life as ''the desperate''?

I would call them normal people going through standard life events...

Some will remember me on here for calling this cycle on here two years ago.
I warned those renewing to do so and fix for 10 years and that higher rates would be coming and existing mortgage products would be removed.

Many said that if they had listened to me they wouldn’t of had the ‘gains’ they had over the last two years. The central banks and government intervention over Covid and energy fiscal support just delayed and exasperated the catalyst of what would occurred due to the end of the disinflation cycle into an inflationary one. This was delayed itself through trillions of QE support from 2008.

Inflationary cycles can take years if not a decade, to correct. Vlocker did so in the 70’s but increasing rates over inflation to 20%. That can’t happen now. The pension funds showed that yesterday which was nearly a 2008 moment had the BoE not intervened and reverted back to QE.

What all this means is that what you are seeing now is just the tip of the iceberg. Base rates are projected to get to 6% in 2023, but could well go higher. Mortgage rates will front run that. Things break at those levels as our economy and debt levels are no longer equipped to deal with it.

I expect the full correction in the housing market to take 18 months to 2 years from here.

Whats needed is not tax cuts and spending, it’s moving the tax allowance up and massive reforms in public sector, pensions and welfare budget. Austerity is never popular, but it’s the only option.

Skirting around the issue (like what was tried with the mini-budget) doesn’t fool the market and will have disastrous consequences for our economy.

@dancemonke Do you think it's a case of it just hasn't happened yet then? Because the rise in energy DDs are their new estimated annual usage, divided by 12, so wouldn't that be factoring next year already? The food bills and cars are already the higher price.

And I don't mean this to be antagonistic at all, so please take it in the factual way I mean it:

Yes, we are fortunate not to have to think of selling (anything) to cover rising costs. We are a pretty average family. I literally don't know one family (most friends are similar set up to us) who will be selling their home or even a car. because of inflated bills. They just have less disposable income. Lifestyle changing as opposed to Life changing.

Those who literally can not afford £40, must be worse off than us. So we're not talking the average family, which leaves the low family incomes. In a lot of these cases, the housing there is local authority subsidised, or covered entirely by Universal credit etc, so there's no loss of house there.

I suppose there is a third category, who are people like my family, but who have massively over stretched and living beyond their means, so the slightest increase of anything means they are broke. Surely that's not cost of living, but individual greed and they'll just have to live to their means now? That's not the norm though?

I completely agree when you look online, there's lots and lots of people being affected. The news always finds someone who looks utterly dishevelled and has clearly been chosen for effect, when reporting this, much like when they report on the football, they look for a rowdy face painted fan to interview, as opposed to the thousands of normal representative others walking past. This is kind of what I mean. Media and online reports of all these people. But actually in the real world, everyone seems to be moaning, but then just paying the extra.

Same forecast for America and Spain. Houses falling there too in 2023. Pretty sure the panic is going to make people to make even worse decisions.

If you stay your current house is going down too, unless you are making a huge jump in value the potential loss is probably fairly similar. And yes they’ve gone up 10% in the last couple of years so you’re only dropping back a bit and will probably be back where you started well before your kids leave home.

Yes, it matters when you come to remortgage, due to the LTV %.

We've just bought- we missed out on the stamp duty holiday. Have paid close to a million pounds for our house but we're likely to be here for the next 10 years and although the way the world is going is worrying, I'm not going to get bogged down in the doom and gloom of everything. Right now, we're okay. So long as you can pay your bills and put food on the table, don't worry about things. As someone upthread said, things are cyclical and will even out over time.

Also, where I am, house prices are NOT dropping but more houses are coming on the market.

We bought in 2006 and could sell now for almost three times what we paid for it - and we thought it was expensive at the time!

houses are ridiculously overpriced. My children won’t be able to afford to live where they grew up even if they wanted to. It’s all kinds of wrong.

Because of when we bought I am very comfortable with taking a hit to make a better future for my kids but I do appreciate we have lived through many crazy years of rises whilst sitting on our arses doing nothing.

We bought our first home in 2006, by 2007 we were probably in negative equity. But it was a long term home so it didn't matter. We sold that and moved in May this year, doubled our mortgage, and were aware we were probably buying at the top of the market again. But we were buying a long term home again. We are fixed for 5 years, and can afford more than we pay anyway at the moment. And I expect to be earning more in 5 years. So not feeling too worried about it. But it's not nice to think your house may be worth less than you paid for it.

I agree. I am very angry with Truss and Co.

I'm seeing this the government have no more tricks they can't bail out people with massive mortgages. There's no money left our economy is screwed I hope the UK can come back from this.

@TwinsAndTiramisu I totally accept that is where you are - but what I'm saying is that the financial reality hasn't hit for people yet. A lot of people are still in their mortgage fix / energy fix etc - so there will be a timelag. But when it comes, I would be astonished if you don't see a substantial shift amongst people you know. People's mortgages haven't gone up yet, but when they do, they'll suddenly have £500 a month less, so they don't go out to dinner/holiday/etc - so suddenly all those jobs are under threat, but that also takes a little while to feed through. What you're calling disposable income is what pays a lot of people's salaries - so if people stop "disposing" of it, the party stops pretty fast. And there are a lot of people on these threads still suggesting people take out big mortgages at what is likely to be the peak of the housing market for a very long time. Also do have a look at average salaries in the UK. If you're entirely relaxed about £40 here and £40 there, I would be surprised if you are actually entirely average.

Nineties crash really only affected the well off. It did not affect me or those around me at all.