House Prices

[LGBirmingham]

House prices still seem to be rising? Does anyone else think this?

Interesting difference of opinion @XVGN

No wonder we all can’t agree on this forum when there is such conflicting opinions out there even amongst financial experts. Time will tell I guess.

Rates will drop as soon as inflation is around 2% which is likely to be sometime second half next year.

None of that helps someone struggling with their mortgage debt in the here and now, they wont have the property to retire in if they cant manage their mortgage debt! You can leave a tenancy but you can`t leave a mortgage debt, people believed that they were taking on massive debt on the understanding that rates would be low forever, they were wrong. People should investigate stock/bond markets as a way to provide income in later life, as well as thinking about how to create other streams of income, assuming that having a mortgage means you are set for life (especially if you borrowed in the last few years) is very short-sighted.

No, their data is flawed, they are a vested interest and need to make the data look as "good" as possible, this is a better take on the numbers they use...

https://twitter.com/UkPropertyLion

The three Ps if you are thinking about buying a property......Plumplot, PropertyLog and Property Lion, and dont listen to "experts", they work for the big banks/mortgage lenders.

It’s a supply and demand issue , prices will go up - depending on your situation that’s either a good thing or a bad thing

Demand has fallen off a cliff though, prices were driven up by cheap lending, they have a long way to fall before they can start rising again, unless interest rates are cut back to zero, and I don`t think that will be happening any time soon.

https://eu.usatoday.com/videos/news/2023/12/12/us-cpi-report-what-it-means-for-markets-and-the-fed/71892883007/

Demand hasn't fallen, estate agents have more registered interested buyers, there are less desirable properties on the market though.

Buyers are being picky (understandably so).

Local market here still seeing the decent houses going for offers over. It's a mixed bag, but demand is definitely there.

Interest rates are also not that high it's possible to mortgage at 4.29% that is not high enough to make the market crash. Even at 6% outside of the southeast it's perfectly possible to have a manageable payment on a starter home.

Also with inflation and wage rises being fairly constant the value of the debt is falling.

Demand has definitely fallen, particularly demand from proceedable buyers. Sale completions are significantly down, properties are taking much longer to go under offer and even the most positive index, Rightmove HPI, shows that initial asking prices are down (they ignore all the multiple reductions on their site).
Of course better properties in areas where housing is relatively affordable compared to incomes will still sell if priced realistically.

When you says that agents have registered 'more' interested buyers, what to do actually mean? More than what/when? Is this from a published, whole market survey of estate agents?

Good news, London/SE bubble money has helped fuel bubbles all over the UK, the sooner that equity evaporates the better IMO.

🤣

I seem to remember you making predictions like those you've made in this thread - based on really dubious sources with a clear agenda - many years ago and being equally wrong then.

Many of the comments betray a significant lack of grasp of economics, but are quite amusing due to their sheer obsessiveness and outlandishness (if the unpleasant nature of you wishing for other people to lose their homes or end up in negative equity is ignored, of course).

Where is this "local area" you speak of?

Today's episode of escape to the country was based in Cornwall, filmed in June 23, they stated the the average house price in Cornwall had dropped by £18k between Nov 22 and May 23

I know there's similar drops where I am in dorset, properties are going up for auction very cheap and then still not selling on the day, then another auction 2 months later same happens. These are properties which would have been snapped up a year ago.

(when a property programme tells you the prices are dropping it must be bad, Phil Spencer would never allow that)

It really depends on the type of property and area. The house across the road from me was just subject to a bidding war and went for 15% over asking price.

The fact is that property prices have fallen in real terms because if inflation and higher interest rates but all credible projections are that in mist places there will not be nominal price falls now, just slower growth than there has been for the last few years and sub-inflation for another year or two. Hardly a "crash". The fact is that less than 1/3 of UK properties are mortgaged so interest rates don't have the effect they had in decades past.

One anecdote doesn't prove anything, I'm afraid. Presumably your neighbours were smart and priced it below what the market will support. It's true to say that some areas (NW/NE, I think, generally) have held up better than others, SE particularly.
I guess it depends what you mean by 'credible' projections. The ones published in the main stream media by large estate agents, Zoopla, etc, who will obviously verge on the v optimistic side, still project 5-10% nominal falls in 2024. It isn't just a case of interest rates, the effect of which works its way through much more slowly now; it's the macro economic picture over the next few years and beyond which is relevant here.

I would strongly disagree, it looks to me like the falls nominally may accelerate next year.

https://uk.finance.yahoo.com/news/uk-mortgages-interest-rates-110042051.html

It will be interesting to see if the 'big crash' plays out - at the moment reductions of 5-10% or average prices reducing by £18k in areas certainly don't shout 'crash', and it could well be that in another year or two house prices increase slightly again.

It looks less and less likely that there will be a "big crash" but rather a moderate correction to house prices that got artificially inflated during the stamp duty holiday and the Covid push towards people moving quickly from urban to more rural areas with more space. Prices reducing by 5-10% is not a crash and an 18k reduction is not very significant in areas where house prices are high.

Btw this thread is almost full @LGBirmingham will you start another one as clearly lots of interest in this topic?

Demand has most definitely fallen, look at any stats for sales volumes to see that.

Can you explain the economics please, you seem to know what you are talking about. All my previous predictions were based on interest rates rising, and so far we have mortgage approvals down, sales well down and prices falling, all predicted and all just obvious economics. The "supply and demand" lie is also being proved to be basically nonsense, just mortgage advertising, again all predicted by myself and many others.

Fantastic news, people`s minds are definitely being focussed away from overpaying on basic shelter now.

Not at all in real world terms, demand is definitely rising from the data and experts I've read/seen. Location dependant of course though!

Yes exactly this. Certain sources have been predicting a significant crash since 2021, each quarter they say ''it's coming''... in fact they continued to rise, and now are correcting slightly. I do not think 5-10% is significant (but needed to be honest, as I said before, Covid prices went crazy!)

Will see what 2024 brings.

Where is the big crash you have been forecasting @CrashyTime ?

Before the name change you were saying the same thing as DeadHouseBounce.

Is your location here? How much have sales risen by?

https://www.plumplot.co.uk/house-prices-by-county.html

See the Plumplot link for the sales crash, and see the link upthread about 40% drop in mortgage lending, that is how crashes start, property is the most illiquid asset there is, prices wont crash overnight, but you already know this obviously? I sometimes wonder who you are trying to influence with some of your posts, the average buyer just needs to go to any lender now to know that prices need to come down, why keep up the pretence that economic reality hasnt changed? Its not just you, others are doing it as well, saying "Demand is strong" over and over again when obviously demand isnt strong, very strange and childish behaviour IMO.