UK house prices post biggest fall since October 2008 - Halifax data today Weds 7th Dec

[jimmyjammy001]

Just a quick note for anyone looking to buy, in particular first time buyers who run the extreme risk of running into negative equity if buying with a low deposit

UK house prices post biggest fall since October 2008

Also its important to note that "Property prices are up more than £12,000 compared to this time last year, and well above pre-pandemic levels (+£46,403 vs March 2020). "

I suspect there will be bigger falls yet still to come as well

The Halifax HPI is based on their lending at point of mortgage approval, not price paid data, so it reflects more recent offers and will already be showing the impact of the mini budget.

The UK HPI is a better indicator as it’s based on price at registration of sale and will work to a similar schedule as you described.

Locally, there's more on the market, and there are starting to be price reductions. Anything stupid is being marked down. A lot are being sold by people who thought they were riding the air BnB crest in Cornwall who are finding themselves crunched between construction costs and resistance to holiday cottage rental greed. Now they can't find a cleaner to flip their investment for £12 an hour, I think a lot of the marginal houses will revert to long term lets. I do hope so.

People benefit from low prices (all other things being equal) when trading up, or if they're FTB.
They benefit from high prices, again, all other things being equal, if selling an inherited property when not also buying a more valuable property, or when trading down.

Our next move will be to trade down a bit in size. We no longer need four bedrooms; for two/10 nights a year, it''s cheaper to pay our guest's B&B. But we like the house.

Glee over others' relative misfortunes is always distasteful, arguably more so when prices are rising than falling. Nobody servicing their loans will suffer even in severe negative equity because they are still living in their home and still repaying a debt they chose to take on. Those who cannot have to adjust, since they chose to stretch themselves. Betting on asset values is exactly that, betting. It has risks and done because the return is seen to be sufficiently high. The risk is also high, so it's a choice with consequences.

Low residential land values are a benefit to all, and building upwards will be the main solution if we continue to live in cities. Sadly the standard and efficiency of our home building has fallen far behind most of the world. We cannot build as well or as quickly or as cheaply. Focussing on solutions to this somehow isn't on any agenda, so the next best thing by a very long way is falling house prices. Quite simply, after the free money of the last 14 years, the chickens have come home to roost. Even now, interest rates are well below inflation so 6% is effectively over -4%, loans should be at least 13% to make any economic sense.

I think this is a good thing although the real impact won't come through yet. Prices are stupid & benefit very few.

The data will be based on sold prices, and there is always a lag of several months. Any sales coming through in the current data will predate the mini-budget and rate rises by a few months. (I understand the land registry has a sizeable backlog.)

We bought in July. Will be devastating for us if there's a crash. We didn't have any choice but to overpay.

Did you fix? will the property still by suitable in 5-10 yrs time?

I think property will stagnate for some time. Before covid it was stagnating in parts of London post Brexit.

I think the best way of riding it out is future proofing. I would now skip the flat stage & go straight for the house (unless I was 20 &/or happy to stay in a flat). I did read that 3 bed homes will likely keep their value the most as they will be attractive to families & down-sizers. Big houses are less attractive due to higher energy & maintenance costs.

We’re putting out house in the market in the spring. We’re expecting it to be up to 10- 15% less than at the height, which was this spring. We’ve been here 20 years so have a lot of equity and think the prices have risen ridiculously. We’re downsizing too so will lose out but if it means that prices steady a little, that’s ok with us.

We've a 2 year fix. We'll be fine, just squeezed into a too small house longer than we'd hoped. Oh well, it's better than renting.

@Nsenene yes renting is shit in this country.

Yes, it's noticeable how many holiday lets have come on the market down here since the summer. Anything that helps the rental market is very welcome - I remember a Spotlight feature where landlords were saying they were getting 80+ applications for rental properties while friends were being evicted so their landlords could let via Air BnB. I loathe Air BnB.

@maryso your reply is exactly what I'm talking about!
'Glee over others' relative misfortunes is always distasteful, arguably more so when prices are rising than falling. Nobody servicing their loans will suffer even in severe negative equity because they are still living in their home and still repaying a debt they chose to take on. Those who cannot have to adjust, since they chose to stretch themselves. Betting on asset values is exactly that, betting. It has risks and done because the return is seen to be sufficiently high. The risk is also high, so it's a choice with consequences."

The vast majority of people are not 'betting on asset values' they've bought a home to live in. Everyone needs somewhere to live it's not like buying crypto. Nor are the majority of people in a position to have influenced the government's QE strategy after the 2008 financial crisis so all this 'chickens have come home to roost' stuff is just, as I say, distasteful. I'd say that to anyone who sneers at people that can't afford to buy a home but funnily enough I don't see that on these boards.

It's pretty ironic the way that the BBC and other media bang on endlessly about price rises in a cost-of-living-crisis, but fail to celebrate the single most important price reduction (a saving!).

There’s no fall happening here in Trafford! Whether it’s the grammar schools or the burgeoning Hong Kong population (coming over here with money), nice three bed terraces and semis are still going to best and final bids, up to 5-8% over asking.

I hate how overpriced the property market has become. And don't mind losing some of the "equity' in my house in the slightest. I bought it to be a home not a money making machine

But It is distasteful to celebrate without realising how rotten this is for people who have bought recently and will be facing negative equity. Particularly at a time when there are also likely to be job losses. These are people who may have scrimped and saved for ages to get away from private renting.

But isn't that because it's not actually becoming any more affordable with higher interest rates?

It's a good question, but the answer depends on lots of factors - how far price falls, how much interest rate increases, how long interest rates remain high, what term you take out for the mortgage, etc. But combined with wage increases (even if not as high as inflation), generally the mortgage will be more affordable for most.

As an indication, I was paying up to 15% years ago and more like 6% average for the duration of my mortgage, but it was entirely affordable because prices were more sensible in those days.

I was lucky and I want my kids and others to have the same luck as me.

Don't worry about it. In the long term, property always increases in value.

Well, that's good news for most people, isn't it?

Not for anyone who has bought in the last decade.

It’s not possible to go straight to the house stage in London where 1 bed flats normally sell for 450k plus & terraced houses for a million plus.

When you can - then that'll be the bottom of the crash.