How far will house prices fall [volume 4]
Discussion
z4RRSchris99 said:
Sheepshanks said:
z4RRSchris99 said:
If the market crashes ill be jobless.
...then making bets on that happening seems a bit rash.ill go do something else for a few years untill there is life back in it, but the crash is coming.
The govt have run out of room to reduce rates and it won't take much for things to reverse just as quickly as they went up.
Then people will realise they're left holding the parcel when the music stops.
The govt will have other ideas but the point of crash is getting ever closer.
What is the view of the collective on when values in the lower half (say everything up to £1M) of the market in London will see a correction? Have lenders been savy enough that it will be when(if) supply catches up with demand, or transport links in improve sufficiently for demand to fall?
I ask only because I think London to desirably commuter area values are probably more closely linked than London to where we are at the moment (Maidstone) and we're considering a move to Sevenoaks which is a fairly sizeable jump in value (£250k-400k).
I ask only because I think London to desirably commuter area values are probably more closely linked than London to where we are at the moment (Maidstone) and we're considering a move to Sevenoaks which is a fairly sizeable jump in value (£250k-400k).
anonymous said:
[redacted]
Have you updated your house build thread?!!Is that other house you posted above the one that caught fire?
Per your comments, my house is in North Hampshire/Surrey Borders. I have always thought its value is just underpinned by the value of SW London victorian terraces rather than a multiple of local wages (15 mins walk to station, direct to Waterloo in 50 mins, 4k sqft, half acre garden - i.e. people decide to sell and move further out for space/schools).
If London corrects, I dont see anything else underpinning my house value.
Chris - apologies, developer not agent, and thanks for answering my question. I don't see rate rises doing much fast damage as when they rise it'll be exceptionally slowly (1% per year for 3 years maximum - next recession will be here by then). Slow enough that wages will broadly keep up.
Jonny - the government don't need to play charades for very long. Just long enough to see out a recession, so 3 or 4 years of miras would hold it up nicely. Please don't think I view governments of any colour as competent however, just that blipping hpi is a well worn path, and they only need moderate the worst of the drops rather than prevent any back tracking at all.
Jonny - the government don't need to play charades for very long. Just long enough to see out a recession, so 3 or 4 years of miras would hold it up nicely. Please don't think I view governments of any colour as competent however, just that blipping hpi is a well worn path, and they only need moderate the worst of the drops rather than prevent any back tracking at all.
3.4 mill for that? Good god...
Bristol staring to slow a little in line with time of year, viewings up this week (1/2 term) as expected, anything on the money still moves just fine, some agents still adding 3% since the last one sold are finding it hard, but twas ever thus. Projects (even those that make no financial sense) in mega demand when the ask is right, going over the top is easy with multiple offers, as ever start too high and they sit.
now clocks are back we'll expect our first val "with a view to Jan 2 marketing" next week. No idea why stats from this time of year are of any interest, Jan will be roaring as ever.
Bristol staring to slow a little in line with time of year, viewings up this week (1/2 term) as expected, anything on the money still moves just fine, some agents still adding 3% since the last one sold are finding it hard, but twas ever thus. Projects (even those that make no financial sense) in mega demand when the ask is right, going over the top is easy with multiple offers, as ever start too high and they sit.
now clocks are back we'll expect our first val "with a view to Jan 2 marketing" next week. No idea why stats from this time of year are of any interest, Jan will be roaring as ever.
Why are people still assuming we return to a 'normal' level of base rate? Its a new paradigm, a generational shift, that may well change, but on current market and world conditions thats the best bet.
As for when they rise, again, it will be far later than people think. I keep saying it, but look at cpi. We dont have anywhere near the target inflation the government want so why the hell would we raise rates? The only reason for raises in real terms is property price growth getting out of hand, they are tackling that through stricter lending.
Rates will stay low. Position yourself for that imho.
As for when they rise, again, it will be far later than people think. I keep saying it, but look at cpi. We dont have anywhere near the target inflation the government want so why the hell would we raise rates? The only reason for raises in real terms is property price growth getting out of hand, they are tackling that through stricter lending.
Rates will stay low. Position yourself for that imho.
Lots of people making the mistake of looking at this as one market - even in London, it is an oversimplification to look at the market as one.
Supply side, there is still good quality money willing to invest in prime London developments, though demand side, there is some softening of demand. Chris is right to point out that the volume of units in prime and just off prime completing in the next 18 months, coupled with political uncertainties on policy towards overseas investors, will certainly take the heat out of the top end of the market but he over-eggs the pudding by talking of a 'crash' in that sector.
More generally, London still sees huge supply-side limitations in new build, with a tacit acknowledgement by GLA that current London housing targets are not going to be met. Support to brownfield site development will be so much re-arranging of deck-chairs on the titanic.
Family homes in the Inner suburbs are already stalling a bit as mansion tax and interest rate concerns take hold (try shifting something in Clapham/Battersea/Balham/Fulham/Shepherds Bush for anywhere between £1.5-2m at the moment) though, further down the chain, this is keeping prices buoyant as supply is restricted.
Finally, we continue to see the rise of PRS as an industrialised model (Tottenham, for example) as well as an increasing number of funds looking to buy and operate existing stock. We should not underestimate the extent to which this will create a new paradigm in the value of residential stock in certain areas.
Supply side, there is still good quality money willing to invest in prime London developments, though demand side, there is some softening of demand. Chris is right to point out that the volume of units in prime and just off prime completing in the next 18 months, coupled with political uncertainties on policy towards overseas investors, will certainly take the heat out of the top end of the market but he over-eggs the pudding by talking of a 'crash' in that sector.
More generally, London still sees huge supply-side limitations in new build, with a tacit acknowledgement by GLA that current London housing targets are not going to be met. Support to brownfield site development will be so much re-arranging of deck-chairs on the titanic.
Family homes in the Inner suburbs are already stalling a bit as mansion tax and interest rate concerns take hold (try shifting something in Clapham/Battersea/Balham/Fulham/Shepherds Bush for anywhere between £1.5-2m at the moment) though, further down the chain, this is keeping prices buoyant as supply is restricted.
Finally, we continue to see the rise of PRS as an industrialised model (Tottenham, for example) as well as an increasing number of funds looking to buy and operate existing stock. We should not underestimate the extent to which this will create a new paradigm in the value of residential stock in certain areas.
you make a good point about under supply, not meeting londons housing targets etc but unless councils start building every site will be sold for max profit, which means 90% overseas investors. I do not see any 'homes for real people' being built in z1/2/ bit of 3 ever again.
Greenwich would have been a great site for building homes for Londoners. but the 15,000 homes going up there in the next 4 years are all out of the reach of any normal Londoner. I consider myself to be doing pretty well at 27, but wouldn't dream of spending £400k on a 1 bed.
PRS is working, were doing a 500 unit scheme at the moment in the sticks, but again there is a stigma in the uk about not owning your own home. The Stratford one East Village is doing v well.
Greenwich would have been a great site for building homes for Londoners. but the 15,000 homes going up there in the next 4 years are all out of the reach of any normal Londoner. I consider myself to be doing pretty well at 27, but wouldn't dream of spending £400k on a 1 bed.
PRS is working, were doing a 500 unit scheme at the moment in the sticks, but again there is a stigma in the uk about not owning your own home. The Stratford one East Village is doing v well.
Just my thoughts but why is everyone saying rates wil go up? They have been low for 5 years even when infllation was high.
Could interest be an old fashioned thing of the past? Think about it. An older person has £80k saved up and for someone safely storing it, providing them with fscs guarantees, giving them a bank card and online access THE BANK gives them money? Seems ridiculous. Surely that should be something that you pay for?
Then, you can complain to the bank, take them to the ombudsman and expect a local branch to go in and vent your anger every once in a while! The bank can't really cross sell anymore either.
Interest for taking no risk, for doing nothing could be a thing of the past. People don't need interest, they still save anyway.
Sweden has reduced its rate, the ECB rate is on the floor.
Who is to say rates won't go lower or even negative?
Could interest be an old fashioned thing of the past? Think about it. An older person has £80k saved up and for someone safely storing it, providing them with fscs guarantees, giving them a bank card and online access THE BANK gives them money? Seems ridiculous. Surely that should be something that you pay for?
Then, you can complain to the bank, take them to the ombudsman and expect a local branch to go in and vent your anger every once in a while! The bank can't really cross sell anymore either.
Interest for taking no risk, for doing nothing could be a thing of the past. People don't need interest, they still save anyway.
Sweden has reduced its rate, the ECB rate is on the floor.
Who is to say rates won't go lower or even negative?
Sweden is in deflation and their rates reflect this. The EU is looking to go the same way. The UK is fortunately experiencing a bit of growth so not in the same boat, though I would also revise my previously inaccurate statements that rates will kick off here! They might go up half percent next year or after but not expecting any large rises. The point is we're all used to and have geared up our borrowing to near zero rates so it wouldn't take a lot to kill the market.
fido said:
The point is we're all used to and have geared up our borrowing to near zero rates so it wouldn't take a lot to kill the market.
I think thats right for the last decade or so. Prior to that, I think people were generally a little more reserved and a bit more aware. It seems now that if you don't borrow all you can, and simply live within your means, you're a mug.ClaphamGT3 said:
Finally, we continue to see the rise of PRS as an industrialised model (Tottenham, for example) as well as an increasing number of funds looking to buy and operate existing stock. We should not underestimate the extent to which this will create a new paradigm in the value of residential stock in certain areas.
I'm very cynical about institutional PRS, and the way it has emerged out of RSLs with the support of sovereign wealth funds. Not to disagree with you that it will probably be a far larger part of Britain's housing mix, but it's definitely another nail in the coffin for the idea of the 'property owning democracy'.Pork said:
fido said:
The point is we're all used to and have geared up our borrowing to near zero rates so it wouldn't take a lot to kill the market.
I think thats right for the last decade or so. Prior to that, I think people were generally a little more reserved and a bit more aware. It seems now that if you don't borrow all you can, and simply live within your means, you're a mug.Living within your means means that you have been missing out recently.
Strange world.
Magog said:
ClaphamGT3 said:
Finally, we continue to see the rise of PRS as an industrialised model (Tottenham, for example) as well as an increasing number of funds looking to buy and operate existing stock. We should not underestimate the extent to which this will create a new paradigm in the value of residential stock in certain areas.
I'm very cynical about institutional PRS, and the way it has emerged out of RSLs with the support of sovereign wealth funds. Not to disagree with you that it will probably be a far larger part of Britain's housing mix, but it's definitely another nail in the coffin for the idea of the 'property owning democracy'.Sheepshanks said:
I don't think it's been mentioned here but I saw it reported the other day that 20% of homes in the UK are now owned by private landlords and the Government forecasts that to increase to 33%.
Out of total housing stock what % is mortgage free?Part of the reason for me raising this is during. 2014 I know two people in their early 30's who have lost relatives and have found themselves in the position of inheriting money to the point they are or will be mortgage and debt free both in houses which they will not be upgrading from (they had stretched to the forever home).
What both are doing is now buying buy to let's both 2 each with the idea that these are paid off by rental income over the next 25 years - one already has one child and planning a second the other not yet got any kids but would love to have two. So you can see the idea here to give the houses to then in 25 years time debt free so they are set up for a great start in life.
Welshbeef said:
Sheepshanks said:
I don't think it's been mentioned here but I saw it reported the other day that 20% of homes in the UK are now owned by private landlords and the Government forecasts that to increase to 33%.
Out of total housing stock what % is mortgage free? This isn't the same article and while the numbers are different it's an earlier snapshot with a prediction. It's not inconsistent with a figure of over 60% now, but then it's not in close agreement either.
http://www.dailymail.co.uk/news/article-2206964/Ma...
Somebody in the right line of work is bound to know.
http://www.dailymail.co.uk/news/article-2206964/Ma...
Somebody in the right line of work is bound to know.
turbobloke said:
An article I read last year claimed that just under two-thirds of households were mortgage-free. The numbers may well have changed since then.
So a third are mortgaged - anywhere between a day to go on the mortgage to just starting off a 25/30/35 year mortgage. Do we have any info on the weighted average remaining age/length of the total UK mortgage book. Quick question: in my job I alone am PM'ing my part on about 11 new 50+ storey towers in Canary Wharf alone targeted at the high end market - probably around ~5,000 flats total.
They are a mixture of pre-planning and construction - and there are more being lined up based on the enquirers we are getting from developers.
At what point will there not be the demand for these? I'm interested because at the moment it's my main line of project work (and one I am struggling to keep on top of given the sheer volume of work).
They are a mixture of pre-planning and construction - and there are more being lined up based on the enquirers we are getting from developers.
At what point will there not be the demand for these? I'm interested because at the moment it's my main line of project work (and one I am struggling to keep on top of given the sheer volume of work).
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