House prices

[Twiglets1]

Hi Guys, we got to the end of the last thread so need another one on this controversial topic!

And to respond to @CrashyTime I don't say "demand is strong" over and over again. In fact, I rarely comment on demand at all. My posts are more focussed on house prices and interest rates/mortgage rates.

And I don't deny economic "reality", I just don't exaggerate how bad the house price correction is likely to be. I have a running bet with @XVGN that property prices generally will fall about 5% in 2023 and another 5% in 2024 so I do believe prices are falling in most areas. Just nothing like the 30-35% crash predicted by some!

I'll save you ducking and weaving ...

Nevertheless, some people don't want to say what area they live in and shouldn't be hassled to do so on an anonymous forum, I don't believe I have ever divulged my town for example so I can relate.

If people wish to retain anonymity on here that should be respected.

No gracious apology? I didn't ask for a town. And I never asked for a post code.

You said You never replied about your postal area, so we cannot comment what your house prices are doing. They are almost certainly down.

If someone said that to me I would find it intrusive so no apology.

Ducking and weaving. I think that you indirectly accused me of asking for a post code. I never did and you don't have the grace to acknowledge your misleading post. Nevermind.

I'm not ducking and weaving, that's all in your mind.

"UK house prices expected to rise over second half of year, says Zoopla
Larger number of homes for sale will help push up prices by 2%, says property portal"

https://www.theguardian.com/money/article/2024/jul/30/uk-house-prices-rise-zoopla-homes-for-sale

Mmmm. Supply increases so prices increase? Things have changed since I studied economics.

If supply increases people relax more about finding a new place, more likely to list, more likely to buy.
It would ease the stress (I know several people who have struggled to find anywhere after selling as it’s a nightmare).

@SaturdayGiraffe
Yes I think you're right.

It doesn’t surprise me house prices are rising currently due to supply and demand.
It will be interesting with Labour promising to add 1.5m homes , that I could foresee blunt rises possibly.

Supply is pretty high now @SaturdayGiraffe but perhaps that's not the case in your area/ for the type of place you are looking for. Demand is down, as expected and has just fallen between May and June.

pbs.twimg.com/media/GSiUNdqXQAAq5xs?format=png&name=medium

I don’t know what uk property lion is. Rightmove and Zoopla are the biggest advertisers.
There’s a lot of flats for sale but if you read the site you’ll come across many people saying there is a shortage of what they’re looking for, usually family homes.

That’s 1.5 million over 5 years, so not even keeping up with immigration levels.

You don't need a house for every person though -

There are nearly 30 million houses/ dwellings and 29 million households

Enough for one home per household and a few spare

@midgetastic ’You don't need a house for every person though’
We need 250,000 a year for the existing population to expand, and to replace a lot of the end of life houses and substandard houses. Also many more single households nowadays. We need to be building 500,000 units a year for a few years.

There are more houses than households

We could just manage the stock we have better and fairer

Property lion track all listings on Rightmove so keep abreast of the numbers. As I said, listings overall up considerably but there isn't a regional breakdown so it will vary. In my area, for example, there are considerably more properties of all sorts available than in 2022. The thing that is stopping many of these from selling is that the asking prices are higher than people can/ are prepared to pay.

It's not as straightforward as just building more houses. It's houses in the right areas and of the right types. However, it's mainly available credit (depending on salaries, employment and what banks are willing to lend) that actually drives the house prices.
Many people don't seem to understand what supply and demand means in this context.

@rainingsnoring the available funds bit is really interesting isn't it. It's no coincidence that when most households had one primary salary you could afford a house on one salary, whereas now, both people have to work, to afford a house because in most homes, both adults work.

If we got to a situation where only one person in a household worked, house prices would have to come down.

I was just going to say that to @midgetastic . There’s no benefit having spare capacity in areas where there is a) no work and b) no demand.

Unless this and future governments can attract employers to these regions ( maybe by reduced corporation taxes or employer contributions) then those regions will remain in their ‘forever recession’ situations.

Yes, exactly. Prices would undoubtedly come down a lot if this happened and have risen to unaffordable levels because of the opposite situation; deregulation and increased lending. It's all a total mess now but I don't think things will go 'well' for the housing market over the next few years, at least not in real terms.

Totally agree. Johnson's 'levelling up' hasn't exactly happened, apart from in the odd urban area in the North. I hope Rayner's housing consultation will be much more effective but I have little hope! I think she is more motivated to do something useful than the Tory crew but doubt it will happen for various reasons.

Nationwide now reporting 2.1% increase.

It's nice to see that the BBC are now incorporating some of the limitations I had explained to them.

"The statistics do not include buyers who purchase homes with cash, or buy-to-let deals. Cash buyers account for about a third of housing sales."

I'm just waiting on Ofcom to see if they think that it is right that the BBC continually advertise unofficial stats from third parties instead of official stats from the government.

Market here is ramping up again with the last interest rate cut; buyers now feeling more secure & also realising the market didn't suddenly plummet and isn't likely to.

We’re now officially at the deflation stage with the US yield curve uninversion imminent. Yields are dropping like a stone.

https://x.com/ceteraim/status/1819426501088965078?s=46

This isn’t a ‘soft landing’.

The reason why yields are dropping is because the US is heading into recession not because inflation is over.

The Fed will most likely emergency cut from here quite steeply. That does not mean swap rates will follow. Days of 2% mortgages have gone, 4%+ is around the best you’ll get from here which is still unaffordable for many at current prices. Like this article points out:

https://inews.co.uk/news/housing/mortgage-crisis-not-over-interest-rates-cut-3203350#:~:text=“The%20bottom%20line%20is%20that,seen%20between%202020%20and%202023

Recessions mean job losses and that credit dries up. It’s been the longest yield inversion in history and we’re only now just about to find out what’s coming the other side. The stock market in official correction territory already this week should give you some idea.