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 pool of people wanting to buy your house will be smaller unless your EPC is A-C. Energy bills are a bigger concern for people than 12 months ago.

Thats right, and I dont need to buy it, therefore we are not part of the market, we are not "market makers"! Do you think that my stock portfolio is worth what I want it to be, of course not, it is worth what the market says it is worth, and as you obviously understand falling and rising markets it looks like we agree!

I am not immediately planning a move, but my EPC rating isn't what I would wish either.

Your stock portfolio? LOL

You seem to have missed my point.

Your daughter's pay increase may allow her to continue paying her mortgage (and everything else eg fuel, which has also gone up). As her mortgage is staying the same for the next 3 years, as she's only recently taken out a fixed rate mortage.

BUT potential buyers, with the exception of cash buyers (who have no incentive to overpay) can't afford as much as they did last year or even a few months ago - because interest rates have gone up.

And you know who else is also facing much higher interest rates? Millions of current homeowners and landlords whose fixed-rate mortgages are expiring over the next few months, and will find themselves facing much higher rates when they want to re-mortgage. For landlords in particular, they may simply not be able to get a mortgage at all if the amount of rent they can earn doesn't = 145% of the mortgage costs. So they really may have no choice but to sell. I've certainly seen a lot of properties that were obviously former BTL properties for sale in recent months.

So your daughter's pay increase is neither here nor there. I don't understand why this isn't obvious. As according to you, she has no intention of moving anyway!

@DeadHouseBounce im interested to know at what point you would buy a property - Ie how much of a reduction in the market before you will hit buy?

You seem really economically illiterate. Are you not aware that every previous fall in house prices has been preceded by a fall in sales volumes? Of course owners try to avoid selling at a less - of course they hold on for as long as they can - until it's obvious they have no choice?

Suggesting that 'each current owner has a floor price below which they are better off staying put' is idiotic - are you genuinely unaware of the concept of forced sellers? While no-one has to buy, some people do have to sell - landlords who can't remortgage, for example, or people whose remortgage costs have suddenly gone through the roof, so have no choice but to sell.

What you or some or some other owner does is irrelevant to that - you can't influence house prices by not selling, only by selling (or buying). If you're not selling, then your house price is theoretical only. It is only prices that are tested in the market that are real and counted and that show up in house price indices.

As has been pointed out to you repeatedly, but you refuse to acknowledge, is that for the vast majority of both buyers and sellers, a falling market is beneficial - it makes the next house cheaper for those trading up, so they save more than they lose. The only exceptions to this rule are for those at the top of the chain who are downsizing or selling up, or landlords - but these are the ones most likely to have have gained the most in unearned wealth from house price rises, so can bear the fall most easily. They are also often the most motivated sellers, e.g. those selling to move into nursing homes or probate sales are usually keen to sell, while for landlords, rises in interest rates making it impossible to remortgage, rising costs making the investment unviable etc make it more likely landlords may need to sell up quick (and much easier to do when it is purely a business transaction and emotions are not involved to the same extent).

Have I spoken to you before? Have you changed your username?

Hi @DeadHouseBounce - I see now that you've been banned, you've re-appeared as @Flowersandbutterflies . Welcome back.

Couple of points ... there's some things you may not be aware of about the real-life dilemmas, decisions and dealings of real-life owners of property.

First - when a fixed rate mortgage deal expires, you don't have to re-mortgage. The rate simply reverts to the standard variable rate for the remainder of the term of the existing mortgage. All these people with expiring mortgage deals already have mortgages.

Second - when the bank calculated the affordability of that mortgage product - guess what? They factored in that the initial fixed or tracker period would end after the period chosen. They will have considered the mortgagees income and LTV and will have decided that the product offered was affordable.

Third - Let's say I am a BTL landlord who bought a £450k house with a large mortgage just before interest rates went up. And let's say your beloved indexes show that comparable property has taken a 33% hit. Even if, purely on a cashflow basis, my net monthly income (rent) falls below my net monthly outgoings (mortgage, taxes plus other costs), what are my choices? Let's say I now have an adverse cashflow of £500 where I had previously had a positive cash inflow of £500 a month - a net change of £1000 month. (Quite a substantial change, that ... but I suppose it's technically possible on a £400k mortgage). Now then ... faced with selling up today at a 33% loss ... which equates to crystallising a loss of £150k (made up of the £50k lost deposit and £100k of negative equity), or alternatively waiting out and bleeding cash to the tune of £1k per month ... the breakeven point would be in 150 months' time. That's May 2035. Only after then would I be worse off having swallowed the monthly losses. That's 12 and a half years during which anything could happen. The housing market might recover ... or rents might increase ... or I might win the lottery, or inherit. Who knows? But there are very, very few people who would panic, and take the £150k hit now in preference to hanging on for another year, or two, or three. 5-10% reductions in prices I can see people taking a hit on. 20% plus ... no way. There's a reason people who have accumulated enough wealth to own houses got to where they are ... usually it's because they hold their nerve when times are tough, they take a risk when opportunities present themselves, and they don't give money away to others just because the internet has a couple of deluded posters who think it would benefit society (and them) if they did.

Glad to be of help.

Toodlepip.

Sorry to disappoint. I am most definitely not @DeadHouseBounce - I can type in a single font, for one thing.

Don't assume that everyone who disagrees with you is the same person, Mark. More than one person can disagree with you, you know. Shock horror. That does tend to happen when what you post is economically illiterate.

Strange for a landlord that you don't read any of the press giving numerous examples of landlords who have indeed recently decided to sell up because being a landlord is no longer profitable. The Telegraph has one of these articles pretty much daily these days. The idea that you're 'crystallising a 150K loss' is ludicrous - most landlords didn't just buy at the peak. In most parts of the UK, if you sell up now, you won't actually have lost anything - because price falls of 20% would only take you back to where prices where 2 years ago. So you may not have cashed in on temporary price rises, but you haven't actually lost anything either.

The reality is that if you own lots of property as a landlord and don't own it through a limited company, you will have found your tax rate increasing, your mortgage rate massively increasing, the amount you can claim against capital gains tax about to be reduced, prices due to fall by an estimate of 10% (not sure where your 33% comes from?), S21 about to be abolished, and facing heavy costs to bring your property up to required standards on energy efficiency. Why wouldn't you sell? Only a mug would stay in the game.

Are you a mug, Mark?

You don't need to answer. I think we all know.

@Mark19735
@DeadHouseBounce and @Flowersandbutterflies are clearly two different posters. The writing styles are totally different. But, if it makes you feel better to think that only one person disagrees with you, carry on.
You do indeed keep making nonsensical points that demonstrate how little economic understanding you have.

First- the key issue is not whether a home owner needs to 'remortgage' or whether they carry onto the SVR. The key issue is that their repayments will have risen significantly (as will other bills due to inflation) so they may now be unaffordable.
You may not grasp the potential tsunami of mortgage holders who are in trouble but it looks as if the government, lenders and BOE do:
www.ft.com/content/456b41ec-ae6f-48c5-b4e2-d35c877799e8

'Some of the UK’s largest banks have agreed measures with the government to help struggling borrowers as they brace for a surge in late mortgage payments'

Second- if you seriously think that all lenders stress test adequately, you are very naive. What happened in 2007? Admittedly, the tests became more stringent but not all lenders will have taken the extremely rapid rise in rates and the high inflation because this has never happened before. In addition, circumstances change and not always favourably, particularly in a recession.

Third- this seems to come down to your constant assumption that every property owner has £££ to play with and that they can keep up repayments whatever the circumstances, in your example, for long 12 years. This is clearly nonsensical. There are lots of property owners who are asset rich but cash poor. There are always forced sellers.
Generally, in a rising market, sellers tend to hold the upper hand. In a falling market (as now), buyers tend to hold the upper hand. You need to remove your own personal feelings, your own house, etc from the equation because a) your house is irrelevant as it is not on the market, b) people have a variety of personal circumstances and yours are not representative or everyone else.

'There's a reason people who have accumulated enough wealth to own houses got to where they are ... usually it's because they hold their nerve when times are tough, they take a risk when opportunities present themselves'
I expect many will eat these and similar words over the next few years. People who have accumulated housing wealth have, generally speaking, either done so because of their date of birth and other conducive circumstances or because of inheritance or gifts from family or because they are the gambling sort. You seem to think that the latter group have become rich because they 'hold their nerve'. Actually, they have (mainly) become rich because of cheap money. Their gambles paid off because the banks have pumped trillions of money into the system and help interest rates at zero/ negative values. Things have now changed.

I don't think he is a landlord at all @Flowersandbutterflies ; a genuine landlord would have at least some grasp of basic economic facts.

"Hey left hand sock puppet - what do you think?"

"Same as you, right hand sock puppet. Aren't we clever?"

Instead of banging on about how economically literate you are, perhaps try reading the post. Reading for comprehension, not reading for faux rage and clickbait.

Never said I was a landlord. What I actually said was "Let's say I am a BTL landlord" ... it's called setting up a strawman.

Then check the holes in your own arguments, @Flowersandbutterflies . If someone bought a long long time ago and has locked in HPI gains, then a) their LTV is really, really good and they've got access to mortgages you could only dream of, and b) their mortgage is tiny compared to the potential rental income. They aren't going to be the forced sellers you are slavering over. The people whose misfortune you are hoping to feast on are people who get made redundant or divorced, or suffer life-altering injuries. Not an asset-rich property owner who bought in a decade ago.

Now, @rainingsnoring you do make some valid points about the folly of being a landlord these days. I completely agree with you on most of that ... but that's not what this thread is about. I'd perhaps be looking to cash out near the top if I were in that position ... but then I'm not a BTL landlord ...

This thread was originally about a big monthly fall in asking prices and the insinuation that this would rapidly convert into falls in actual sales prices (not yet seen ... albeit quite likely) and then contagion into a succession of many further monthly falls in sales prices (not proven ... and my contention is this is unlikely). It's OK to disagree about future performance of any asset class - remember the usual disclaimer "Performance quoted represents past performance and does not guarantee future results". That's just as true on the way down as it is on the way up. What's not OK is for you and your alter ego sock puppets to insult those that do disagree with you.

Seriously though, who are you @Flowersandbutterflies
You quoted me like we had spoken before but I don’t recognise the username. What was your previous username and why bother changing it?

@Twiglets1 - ? You can see the post I was replying to.

I've literally quoted it.

I am also NOT DHB!😇

Not wanting to mansplain here, but I think @Twiglets1 was referring to your opening gambit of "You seem to have missed my point."

You've not posted on this thread before, @Flowersandbutterflies . In fact, the account you are currently using only became active at 10:00 this morning ... started a thread about video box sets, gave out a few compliments and clapbacks, then waded in on this one. Exactly where @DeadHouseBounce left off ... mysterious, eh?

Now, @DeadHouseBounce did appear to be a little bit intoxicated towards the end somewhat, and had a post deleted by the admins. Hasn't posted since. Maybe the person behind that account sobered up and found out how to type using just the one font. But maybe they forgot that the content and tone of a post also provides a clue to the account holder's thought process, and maybe, just maybe, leading with "You seem to have missed my point" is a giveaway?

@rainingsnoring - what do you think?

Remember to switch between firefox, edge and chrome when posting to back each other up ...

Keep up the good work though ... I'm nearly persuaded. This internet sentiment laugh is a brilliant ploy, and I'm sure hundreds of thousands of others just like me will also sell our houses at fire sale prices offering you and your ilk deep discounts to 2022 valuations, move into rentals, and wait to 'jump back in' when prices have fallen even further in 2023. Lol. Can't wait for my 5 bed palace for a 3 bed price ...

Yes, exactly.
How can I have missed your point @Flowersandbutterflies if I’ve never spoken to you before?
If you’ve changed your username just say who you were when I talked to you

@Mark19735 - your internet sleuthing is rubbish. I've been on MN since 2004. And you?

I wasn't replying to a post from DeadHouseBounce so not sure what your train of thought was there. Go back and look at what I posted and then come back and apologise.

So how many properties are in your 'portfolio', @Mark19735 ? Such a grand word for such a tiny little thing. 😂

It's really not difficult. Look at the post I was replying to.

Jesus.

Don't you mean housepricecrash?

You're even getting your forums confused now ...

word of advice ... stay off the sauce when you're playing online. You just make yourself look silly. Oh ... and I'm guessing you don't have admin privileges on here, like you do on the other forum, right? Must be really irritating that ...

I don't get why posters are getting so defensive. If you have lived somewhere for more than 3 years at this point you would have built a lot of equity because of the boom. One of my houses now on paper is worth 240k I bought it for 133.5 k in 2016. Even if it drops back to 133.5k or even 100k I don't care because my house is paid off. I want to upsize at some point the house will fall much further than mine will so everything will even out. If you use houses as a pension plan or as a way to make money that's your problem . I have investments outside of housing.

You're the one on the sauce, as they're clearly not the same person as DHB.

In fact, you're the one who's sounding more and more like him/her. 🤔

P.S. troll hunting is against talk guidelines.

@Mark19735 cut the trolling hunting, for goodness sakes. Or if you must, at least be better at it.
As it happens, there is one poster on here (not you) who changes name regularly; their writing style is unusual and they repeat the same things. It is not me/ @DeadHouseBounce or @Flowersandbutterflies

There are clearly, shock horror, several people who disagree with your opinions. Why is that so hard for you to believe?

I think you have misunderstood things from your last paragraph.
The Halifax data is not about asking prices but relating to mortgage data that Halifax have collected and relates to proposed sale prices. Bear in mind that this data is several months out of date and that these sales may not even have completed.
www.reuters.com/world/uk/uk-house-prices-show-biggest-drop-since-2008-halifax-2022-12-07/
Actual sale prices are already falling and, as you know, I think they will continue to do so.

@Twiglets1 , @Flowersandbutterflies replied to a post on 26th Dec. It's in the posting history.

For the hard of thinking who can't look at full quotes, here's F&B's post from Boxing Day, which @Twiglets1 responded to, and which F&B then responded back to today. So, Twiglets has previously spoken with F&B, no name change since that exchange.