Future house prices

[Mice!]

4 hours ago, ditchman said:

im just wondering if people in the cities and towns are going the revaluate their lives and going to move to the country

The thing is a lot of country properties are probably dearer than town properties. 

I know what you mean about wanting a garden, we're lucky we have a large garden so the kids can run riot while we weed mow bla bla bla.

It certainly can't be fun for those with just a yard who are stuck at home with the kids wanting to go out.

 

[AVB]

1 minute ago, Mice! said:

The thing is a lot of country properties are probably dearer than town properties. 

I know what you mean about wanting a garden, we're lucky we have a large garden so the kids can run riot while we weed mow bla bla bla.

It certainly can't be fun for those with just a yard who are stuck at home with the kids wanting to go out.

 

That’s not my experience. People in general want to be near schools, shops, transport. Yes a 5 acre mansion in the country is going to be larger than a terrace in the city but like for like city wins. 

[oowee]

I am lucky to have loads of space here but I still feel hemmed in. It's a pshycological feeling of restriction as much as reality. 

Car prices are another interesting one. The new vehicle market was already tough, add to which the stock of used cars being returned to manufacturers that cannot be sold with the auction houses closed. VW alone would sell £1bn of used cars to market each year thats a lot of cars stacking up. 

[London Best]

14 minutes ago, AVB said:

That’s not my experience. People in general want to be near schools, shops, transport. Yes a 5 acre mansion in the country is going to be larger than a terrace in the city but like for like city wins. 

I don’t have a 5 acre mansion, far from it, but I would not live in a city for a pension.

Edited April 10, 2020 by London Best

[blackbird]

22 minutes ago, oowee said:

I am lucky to have loads of space here but I still feel hemmed in. It's a pshycological feeling of restriction as much as reality. 

Car prices are another interesting one. The new vehicle market was already tough, add to which the stock of used cars being returned to manufacturers that cannot be sold with the auction houses closed. VW alone would sell £1bn of used cars to market each year thats a lot of cars stacking up. 

The big trump card car dealers have something like 90% of newer cars are on PCP & most people when that last massive final payment is due they don’t have the cash to pay it off then they start another PCP 

Edited April 10, 2020 by blackbird

[Mungler]

14 minutes ago, Raja Clavata said:

Sadly, that's true. Sadder still is that some will not only be in negative equity but also unable to meet their payments.

What I have learnt and seen of the housing market:

1. in the 2008 recession no one could borrow money to fund property purchases - strict lending criteria and banks holding on to / getting cash in to bolster their balance sheets meant funding was scarce. 

2. whilst people couldn’t raise mortgages, that just lead to pent up demand. With every year another generation is released into the market place looking for somewhere to live / rent and ultimately buy.

3. The rental market took off and started to fly

4. the 2012 Olympics made everyone feel a lot better about life and people started to spend again - interest rates remained low and lending products started to become better available.

5. with low interest rates, people are happy to borrow. If you want to live somewhere you either have to pay money to rent or pay money to fund a mortgage and if you met the lending criteria the mortgage was cheaper than the rent.

6. There is going to be a bigger divide between the haves and the have nots. There is going to be massive unemployment. Anyone with cash will have all sorts of opportunities to make money. 

7. interest rates and whether the banks sit on money will make all the difference. People are talking about inflation with all this money being pumped out by government. If there is inflation and that is met with an increase in interest rates, well a decent increase in interest rates will signal the end of absolutely everything. 

8. if this can end by the end of April then we ought to have something to get back to in the short term.

 

 

 

 

 

[Jim Neal]

9 minutes ago, Mungler said:

People are talking about inflation with all this money being pumped out by government. If there is inflation and that is met with an increase in interest rates, well a decent increase in interest rates will signal the end of absolutely everything.

Just to pull you up on that point...

The majority of the funding which the Government is promising to the country's working individuals and businesses is coming from what is, in effect, a ginormous overdraft facilitated to the Government by the Bank of England.  The interest rate on it is the BoE base rate.  Therefore they're using money already in existence rather than printing more.

This is precisely because they recognise that "just printing more money" means inflation and will end up with post-WW1 images of people collecting their wages in wheelbarrows, etc etc...

They're on the case, this isn't that same as the 2008 financial crisis although I'm suspecting many of us will feel the pinch regardless.

 

Edited April 10, 2020 by Jim Neal

[blackbird]

7 minutes ago, Mungler said:

What I have learnt and seen of the housing market:

1. in the 2008 recession no one could borrow money to fund property purchases - strict lending criteria and banks holding on to / getting cash in to bolster their balance sheets meant funding was scarce. 

2. whilst people couldn’t raise mortgages, that just lead to pent up demand. With every year another generation is released into the market place looking for somewhere to live / rent and ultimately buy.

3. The rental market took off and started to fly

4. the 2012 Olympics made everyone feel a lot better about life and people started to spend again - interest rates remained low and lending products started to become better available.

5. with low interest rates, people are happy to borrow. If you want to live somewhere you either have to pay money to rent or pay money to fund a mortgage and if you met the lending criteria the mortgage was cheaper than the rent.

6. There is going to be a bigger divide between the haves and the have nots. There is going to be massive unemployment. Anyone with cash will have all sorts of opportunities to make money. 

7. interest rates and whether the banks sit on money will make all the difference. People are talking about inflation with all this money being pumped out by government. If there is inflation and that is met with an increase in interest rates, well a decent increase in interest rates will signal the end of absolutely everything. 

8. if this can end by the end of April then we ought to have something to get back to in the short term.

 

 

 

 

 

Is your name Mark Carney  ?

[Mungler]

I get to watch what goes through a conveyancing department.

Unless there is a serious dent in population and save for the current pandemic we haven’t had anything put a proper dent on population for over 70 years then over the long term property prices can only go up.

People have to live somewhere. If people have jobs, can get mortgages and interest rates are low, then they’ll smash into the housing market. 

When the government spoke to business and told the banks to get lending the government had no interest and no security loans in mind and the banks had other ideas and applied their standard lending criteria and charges; they also didn’t trust the government to cough them the money back in the future. 

I think how this goes will depend on whether the banks play ball and my guess is no - they have shareholders to answer to and why would they want to do something as daft as lend a ton of money at a point where property prices are going to take a sharp dive.

[AVB]

14 minutes ago, Mungler said:

I get to watch what goes through a conveyancing department.

Unless there is a serious dent in population and save for the current pandemic we haven’t had anything put a proper dent on population for over 70 years then over the long term property prices can only go up.

People have to live somewhere. If people have jobs, can get mortgages and interest rates are low, then they’ll smash into the housing market. 

When the government spoke to business and told the banks to get lending the government had no interest and no security loans in mind and the banks had other ideas and applied their standard lending criteria and charges; they also didn’t trust the government to cough them the money back in the future. 

I think how this goes will depend on whether the banks play ball and my guess is no - they have shareholders to answer to and why would they want to do something as daft as lend a ton of money at a point where property prices are going to take a sharp dive.

The good thing is that the government are becoming more vocal on the need to balance getting the economy going versus restricting virus spread. But it won’t do anything until there is a groundswell of public opinion that drives it. The public, fuelled by media wanted a lockdown and until the same happens to open it up it won’t happen. 

Three months until the Banks go bang.  

[henry d]

1 hour ago, AVB said:

Yes I will just be grateful for having a roof over my head. Even if you can afford to move the problem will be finding sellers especially as so many will be in massive negative equity. 

Plenty of 2 bed bungalows.

Gallows humour...

[oowee]

3 minutes ago, AVB said:

 

Three months until the Banks go bang.  

Three months of lock down or 1 month followed by on and off for a while? 

[Mungler]

7 minutes ago, AVB said:

Three months until the Banks go bang.  

I had a dream 2 nights ago that our Bank went bust. We’re still an old fashioned unlimited liability partnership - it’s amazing what the sub conscious worries about.

[henry d]

1 minute ago, Mungler said:

I had a dream 2 nights ago that our Bank went bust. We’re still an old fashioned unlimited liability partnership - it’s amazing what the sub conscious worries about.

Mine was how poor my plant germination was... horses and courses

[blackbird]

My old man always told me forget bricks & mortar son buy bog rolls, either he knew this virus was on the way or he thought I was full of ****.

[AVB]

16 minutes ago, oowee said:

Three months of lock down or 1 month followed by on and off for a while? 

Hard to say. Three months without a real return to some sense of normality. People buying and selling and borrowing. 

 

11 minutes ago, henry d said:

Mine was how poor my plant germination was... horses and courses

Mine was how to deal with randy woodpecker. 

[Lloyd90]

1 hour ago, AVB said:

Yes I will just be grateful for having a roof over my head. Even if you can afford to move the problem will be finding sellers especially as so many will be in massive negative equity. 

Yes... if my house goes into negative equity then I just won’t sell it until it goes up again. 
 

We have put on a 5 year mortgage at a previously mega low rate ... bet it’s even lower now but who could have guessed it. 
 

I will remain in employment as will my parents and our lodgers pay 60% of the mortgage so we are fairly secure. They also have secure jobs that will carry on. 
 

 

[AVB]

5 minutes ago, Lloyd90 said:

Yes... if my house goes into negative equity then I just won’t sell it until it goes up again. 
 

We have put on a 5 year mortgage at a previously mega low rate ... bet it’s even lower now but who could have guessed it. 
 

I will remain in employment as will my parents and our lodgers pay 60% of the mortgage so we are fairly secure. They also have secure jobs that will carry on. 
 

 

Nothings secure. You might think it is but it really isn’t. Got a state funded job. Well wait until there are not enough tax payers to fund the services. It is a real reality. 

[Lloyd90]

22 minutes ago, AVB said:

Nothings secure. You might think it is but it really isn’t. Got a state funded job. Well wait until there are not enough tax payers to fund the services. It is a real reality. 

 

Yes well what I mean is that I am about as secure as I could possibly hope to be. 

Thanks to putting in a lot of extra work and studying, enrolling onto an advanced course and spending 6 months flat out training, I have just become qualified in one of the top priority services that the local authority have to provide. 

 

If I get the chop then there will be a very long list of people going before me ... and if that's the case then the entire local authority will be gone. 

If that happens then the entire country will be down the pan by that point. 

 

What will happen to all our mortgages if the banks go pop? Normally they are just sold to another bank or their creditor ... but if one falls, or its as bad as you suggest then they could all go pop. My mortgage far exceeds any savings or stocks that I have ... 

[nobbyathome]

Working for a major central London courier company Its been the busiest month in the company’s history most of the square mile working is from home now and we have taken all the lap tops chairs desks etc to there homes in Kent Essex and Surrey after all this is over I think about 25% will look to stay working from home as it cuts down commuting and costs if that works for business in central London I can see more people moving to the countryside to do the same so house prices will maybe take a dip for a bit but will soon recover and in my opinion can only go up on the flip side I know a lot of people that have been furloughed and I can see there will be no places for them at work in a few months time so redundancy will be rife that will hit the housing market

[scouser]

O , the joys of capatilisalim worked my plums  off in factory off 35 yr,s  got a pay off , paid what I owed everybody, only peoples greed  makes this visous circle. Bigger house, bigger car,  fancy holidays     GREED.

[Raja Clavata]

10 hours ago, Mungler said:

What I have learnt and seen of the housing market:

1. in the 2008 recession no one could borrow money to fund property purchases - strict lending criteria and banks holding on to / getting cash in to bolster their balance sheets meant funding was scarce. 

2. whilst people couldn’t raise mortgages, that just lead to pent up demand. With every year another generation is released into the market place looking for somewhere to live / rent and ultimately buy.

3. The rental market took off and started to fly

4. the 2012 Olympics made everyone feel a lot better about life and people started to spend again - interest rates remained low and lending products started to become better available.

5. with low interest rates, people are happy to borrow. If you want to live somewhere you either have to pay money to rent or pay money to fund a mortgage and if you met the lending criteria the mortgage was cheaper than the rent.

6. There is going to be a bigger divide between the haves and the have nots. There is going to be massive unemployment. Anyone with cash will have all sorts of opportunities to make money. 

7. interest rates and whether the banks sit on money will make all the difference. People are talking about inflation with all this money being pumped out by government. If there is inflation and that is met with an increase in interest rates, well a decent increase in interest rates will signal the end of absolutely everything. 

8. if this can end by the end of April then we ought to have something to get back to in the short term.

 

 

 

 

 

Sounds about right to me. Picking up on 6. This mass unemployment gig was already a problem governments were facing as AI & ML matures, this whole episode just brought it forward. I don't think anyone has the solution to this. Maybe we need an AI to solve it for us 😉 

Regarding interest rates and the banks sitting on money, I'm sure I've already heard some banks have raised the interest rates on their variable rate mortgages. There needs to be proper government intervention on this, which in part goes against recent trends but is a necessary must.

WRT 8 - let's hope so, if and when it happens I'll happily buy you a pint in the pub over the road from your work gaff, or the micro pub if you prefer.

I hope you, yours, Matt & Co are all doing OK!

[Mungler]

13 minutes ago, Raja Clavata said:

WRT 8 - let's hope so, if and when it happens I'll happily buy you a pint in the pub over the road from your work gaff, or the micro pub if you prefer.

I hope you, yours, Matt & Co are all doing OK!

All good here, to the extent that we’re in the same boat as everyone else 😆

I am just hoping that everyone gets the message and stays in for this weekend - whether you think the government has gone about this the right way or not, having come this far with a quarantine we have to see it through. If everyone does as they should, we could see life start to return to a state of normal(ish) at the end of April.

Hope all is well with you and yours squire !

[Raja Clavata]

Just now, Mungler said:

All good here, to the extent that we’re in the same boat as everyone else 😆

I am just hoping that everyone gets the message and stays in for this weekend - whether you think the government has gone about this the right way or not, having come this far with a quarantine we have to see it through. If everyone does as they should, we could see life start to return to a state of normal(ish) at the end of April.

Hope all is well with you and yours squire !

All good here too, although my work has gone from about 12 to 14 hours of real work a week to at least that every day.

End of April sounds feasible, would be good if they started outlining how we do actually emerge from all this, as it's give everyone some hope and collective focus, but I guess they are currently still in firefighting mode...

Stay well.

[Vince Green]

My Property/Landlords forums are predicting a seven to ten year slump in the market. The initial result of the lockdown will be a lot of houses coming on the market from people who have been forced to sell up. Plus lots of tenants being evicted for arrears.

That will cause a big drop in prices and a fall in confidence that will last years before it heals. Seven years is always quoted as the boom/bust cycle for these things so it seems feasible.

Just to give you some idea of how serious the financial downturn is already, I was just checking this about an hour ago. Bloomburg's Global Stocks indicator is down 18% since the start of the year, and its still going down. That's not insignificant, that's a crash already

House building projects are already mothballed

All the evidence is that the majority of people prefer to live in towns rather than the country. They regard the country as a less desirable place to live. That's why property prices and rents are higher in towns.

Country properties are much harder to sell and much slower to find tenants when renting out 

Edited April 11, 2020 by Vince Green