Crystal ball request - will the markets improve or worsen?

[Destiny123]

I listed my house in June, about to change agents next week as bit sold with 1x price drop.

I don't need to move till Sept 2027 when my relocation expenses expires, but equally a long commute a few days a week is less ideal too

Don't know whether to delist and try again in the better weather or whether things are only going to get worse so better with big mger price drops now.. any thoughts pls

Even Lloyds now reporting year on year fall. Once the main lenders start doing this you know there is a problem...

Yes. I really meant infamous in the foreboding sense. Probably not the best use of the word. He called (and dated) the 2008 slide (only went down 19% due to massive international action on interest rates) about 6 years ahead. And about 5 years ago he called for the UK market to start sliding, and NOT recover, in 2026 (by 35% over the next four years). Although it could be argued that the real terms slide began 3 or 4 years ago.

His reasoning is that the Industrial Revolution has now ended and been replaced by the Digital Revolution. There is no longer the need for urban based housing that the Industrial Revolution demanded.

As a FTB who needs a mortgage, I’m not jumping for joy about the price falls - higher than usual interest rates (which will increase) and job insecurity in a worsening economy isn’t the best combination. If you’re buying outright and are generally financially fine then it’s different.

How much of a price fall would you need to make you jump for joy though ? So far I agree thats its minimal - but it could become significant. Your making a mistake assuming current borrowing rates are higher than normal - they are really not - the average mortgage borrowing cost over the last 40 years is 5 to 7%.
I think sometimes people also miss that its not just the nominal price fall that is beneficial - its also the fact that the nominal fall is actually much bigger if your buying with a mortgage. For example its not just that you save 100k on the initial buying price - you also save more than the same again on interest payments over the term of the mortgage (assuming a 30 year term at average rate of 5.5%)...
So a 100k saving on a purchase, by 30 year term at historic average prices, is actually more like a £210k saving overall..

I wonder if you are at least partially muddling him with Charlie Lamdin of movinghomewithCharlie.
Fred Harrison did call the 2008 crash and has also been predicting a crash starting in 2026 for some time. He has done a huge amount of work on economic cycles and is a great student of history as well as economics. I've heard several of his podcasts with Peter Smith (all available on Youtube) and haven't heard him make an specific percentage fall predictions. He has said recently that he doesn't see housing prices recovering in real terms because he thinks the economic focus will now change. Charlie Lamdin predicted an average 35% decline over 3 or 4 years back in 2022 or 2023.

MHWC? Wash your mouth out with soap!!! 😂Yes, I'm familiar with both.

But because house prices are far higher relative to incomes than they were when rates were last 5%+, large rises in rates make a big difference to affordability. People are now used to very low rates, as the central banks never raised them following the GFC. This has obviously had a very negative effect on many things. The pp makes a very good point about job insecurity and the worsening economy. This is the backdrop which makes large falls in the next few years likely.

😂
Yes, one particular poster used to get very upset if he was ever mentioned!

Well, something needs to happen.
The SD freeze and <1% interest rates were a total anomaly. The 2020/21 housing bubble participants are the people - one assumes - that are currently desperately trying to offload their houses which they can no longer afford at 6% - who feel they cannot lower their prices.
Unfortunately, they will have to at some point. I've noticed the houses near me that are realistically priced do sell very quickly. Others have been on the market for 3 + years.
Historically, IR hover around 5% and that is normal.
I'm hoping to be mortgage free next year 🙏 but my young adult dc are still at home...it could be good for the eldest who has a job thats currently safe from AI.
They will have a decent deposit in 2 years.
I remember in the 90s, housing being repossessed in large numbers...it happened to my cousin and one of our neighbours...I can still see their furniture on the pavement 😕
I hope it doesn't come tp that again.
It wouldn't be so good for us as we'd want to downsize.

Estate agent just want clients to sign on dotted line, knowing price will have to drop.

“Will the markets improve or worsen?”

The answer is “yes”.

In what world will anyone with brain choose to be landlord with Renter Rights Act, and recent increase in taxation for rental income??

I'm a FTB, but am a cash buyer (inheritance), but I'm not paying over odds for property in a falling market.

Yes, but that would only really work for two similar properties at around the same price, maybe, the cluttered house still may have a better garden or get the sun all day or any number of things and still be the better buy because most people will happily pay for a painter in a house they want, the criticism I am making is the endless stream of advice saying that "staging" will sell an overpriced house, it won"t.

Better to have a higher interest on a smaller sum borrowed though
If you are a ftb I would urge patience, the falls will come, the last 5 year fixes under 2% will now be rolling over onto 5%+. Many who stretched to the max at low interest rates will simply not be able to afford their new payments

The banks will extend the mortgage term? Can"t see the mass repos of past crashes happening now, but of course new buyers will have a lot less to spend so prices need to come down by a lot.

They will only extend so far. Retirement age is a big cut off for most lenders
And extending term doesn't make anywhere near as much difference with high rates as it did with low

The market where we are cant get any worse. The estate agent says there's only handfuls of searches per month on rightmove and thats for all their properties not just ours. Its annoying because we've found a lovely property we want.

Why don't you just do obvious thing??

If that's the case, why aren't the estate agents advising lower asking prices across the board before they bankrupt themselves?! Clearly, the prices that buyers can pay have fallen far below sellers's/agent's expectations.

I assure you it can
Affordability has fallen through the floor, prices have to follow, and haven't yet
To match Affordability even since March you would need to drop over 10% to what buyers can borrow

I figure I may as well keep saving aggressively whilst renting at the same time prices are going to keep on falling. But I know the houses in my price range aren’t going to drop from £160k to £100k in the space of the next twelve months. It’s really worrying not being 100% sure what to do for the best. Nothing I’ve read has convinced me the economy will improve but I want to get out of renting and ideally don’t want my purchase to keep on depreciating as soon as I buy. But that’s what’s going to happen, in my view.

You might find the odd house that does drop that much, many are well overpriced and you could find a desperate seller who just has to get rid, maybe a landlord who can"t make the sums work anymore?

Agreed. It can get much worse unless sellers and estate agents wise up!