How far will house prices fall [volume 4]
Discussion
Derek Chevalier said:
Mr Moley said:
Blue62 said:
gibbon said:
UK PMI number really low today, worst since June 2009, its a measure of construction industry confidence. Is very much not a good sign, is also telling the 80% of the survey results were taken pre brexit.
That's interesting, it's a very mixed picture but it looks as though commercial property will be taking a hit, with London most affected. Can we expect house construction costs to start falling due to reduced demand, or will it be offset by increased labour costs and imported materials due to a weak pound?London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
p1stonhead said:
Derek Chevalier said:
Mr Moley said:
Blue62 said:
gibbon said:
UK PMI number really low today, worst since June 2009, its a measure of construction industry confidence. Is very much not a good sign, is also telling the 80% of the survey results were taken pre brexit.
That's interesting, it's a very mixed picture but it looks as though commercial property will be taking a hit, with London most affected. Can we expect house construction costs to start falling due to reduced demand, or will it be offset by increased labour costs and imported materials due to a weak pound?London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
Derek Chevalier said:
p1stonhead said:
Derek Chevalier said:
Mr Moley said:
Blue62 said:
gibbon said:
UK PMI number really low today, worst since June 2009, its a measure of construction industry confidence. Is very much not a good sign, is also telling the 80% of the survey results were taken pre brexit.
That's interesting, it's a very mixed picture but it looks as though commercial property will be taking a hit, with London most affected. Can we expect house construction costs to start falling due to reduced demand, or will it be offset by increased labour costs and imported materials due to a weak pound?London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
Derek Chevalier said:
p1stonhead said:
Derek Chevalier said:
Mr Moley said:
Blue62 said:
gibbon said:
UK PMI number really low today, worst since June 2009, its a measure of construction industry confidence. Is very much not a good sign, is also telling the 80% of the survey results were taken pre brexit.
That's interesting, it's a very mixed picture but it looks as though commercial property will be taking a hit, with London most affected. Can we expect house construction costs to start falling due to reduced demand, or will it be offset by increased labour costs and imported materials due to a weak pound?London is generally better insulated with the exception of the City office market, which is extremely volatile. It will be secondary property that is hardest hit.
As for house construction costs they will rocket, if sale prices and volumes fall then the developers will stop developing. This is why you've seen the housebuilders' shares hit so hard in the last 10 days
Why would labour costs come down?
Mr Moley said:
Because the cost of the materials will go up
Why would labour costs come down?
I wouldn't expect labour costs to drop dramatically, but a reason for a drop would be that the supply/demand ratio will even up a bit more.Why would labour costs come down?
Currently, there is a real labour shortage in certain trades, which has seen some decent price increases over the last 2 years. If developers start mothballing developments then the demand will drop, which means contractors will need to get a bit sharper with their pencil when quoting, or find themselves short on work.
Spiritual_Beggar said:
Mr Moley said:
Because the cost of the materials will go up
Why would labour costs come down?
I wouldn't expect labour costs to drop dramatically, but a reason for a drop would be that the supply/demand ratio will even up a bit more.Why would labour costs come down?
Currently, there is a real labour shortage in certain trades, which has seen some decent price increases over the last 2 years. If developers start mothballing developments then the demand will drop, which means contractors will need to get a bit sharper with their pencil when quoting, or find themselves short on work.
Spiritual_Beggar said:
If developers start mothballing developments...
A development near us has just had a revised site plan issued with only two of the planned four roads now shown as being available. The lots for sale must then become even harder to sell as they now come with the looming doom of dirty and noisy house building starting up again next door when you're all settled in once the market returns. thelittleegg said:
Just had a blanket e-mail from an agent who I'm registered with, they're doing an 'open house' on a load of properties this Saturday. Desperately trying to whip up some enthusiasm I guess, it's not a sales technique I've experienced from an estate agent before.
Edinburgh estate agents do this. It's quite useful if you're looking for a flat in a particular area, you can see 4 or 5 on a Sunday afternoon without much hassle.From 24th June......
Sarnie said:
First lender email received this afternoon;
"On Tuesday 28 June we’re increasing rates on all our 5 year products.
All 5 year deals:
• 60% LTV products increased by 0.15%
• 65% LTV products increased by 0.30%
• 75% LTV products increased by 0.20%"
Wonder if this is the first of many.....
You owe me walm......."On Tuesday 28 June we’re increasing rates on all our 5 year products.
All 5 year deals:
• 60% LTV products increased by 0.15%
• 65% LTV products increased by 0.30%
• 75% LTV products increased by 0.20%"
Wonder if this is the first of many.....
SrMoreno said:
thelittleegg said:
Just had a blanket e-mail from an agent who I'm registered with, they're doing an 'open house' on a load of properties this Saturday. Desperately trying to whip up some enthusiasm I guess, it's not a sales technique I've experienced from an estate agent before.
Edinburgh estate agents do this. It's quite useful if you're looking for a flat in a particular area, you can see 4 or 5 on a Sunday afternoon without much hassle.Jockman said:
From 24th June......
Ah! Thanks - I did have a look but didn't go that far back.Sarnie said:
First lender email received this afternoon;
"On Tuesday 28 June we’re increasing rates on all our 5 year products.
All 5 year deals:
• 60% LTV products increased by 0.15%
• 65% LTV products increased by 0.30%
• 75% LTV products increased by 0.20%"
Wonder if this is the first of many.....
You owe me walm......."On Tuesday 28 June we’re increasing rates on all our 5 year products.
All 5 year deals:
• 60% LTV products increased by 0.15%
• 65% LTV products increased by 0.30%
• 75% LTV products increased by 0.20%"
Wonder if this is the first of many.....
I guess all of those would be offset by a 25bps drop in BOEBR but it highlights the problem that the banks will just use any drop to widen their spread.
walm said:
Ah! Thanks - I did have a look but didn't go that far back.
I guess all of those would be offset by a 25bps drop in BOEBR but it highlights the problem that the banks will just use any drop to widen their spread.
Indeed, as I don't think anyone seriously thinks that a 0.25% base drop can change peoples sentiment about taking on hundreds of thousands of pounds worth of debt on over valued property.I guess all of those would be offset by a 25bps drop in BOEBR but it highlights the problem that the banks will just use any drop to widen their spread.
A 0.25% drop will make a big difference on a 1.99% mortgage.
The governement has shown it will do everything it can, including measures we havent even thought of to prop up property prices.
Can you imagine if they put interest rates up to 7%?! I cant see ot ever happening again - it simply cant.
The govt jave got us into a sticky mess where rates need to keep coming down to keep things going. Eventually i feel rates will go negative to keep the roundabout spinning
The governement has shown it will do everything it can, including measures we havent even thought of to prop up property prices.
Can you imagine if they put interest rates up to 7%?! I cant see ot ever happening again - it simply cant.
The govt jave got us into a sticky mess where rates need to keep coming down to keep things going. Eventually i feel rates will go negative to keep the roundabout spinning
jonah35 said:
A 0.25% drop will make a big difference on a 1.99% mortgage.
Only if it is variable.SVR might not move - banks could widen the spread.
On new mortgages, again the spread might just widen.
So if HSBC was doing a 149bps over base offer on new loans, they might just change that to 174bps.
And while it obviously takes a nice 13% chunk off your current (interest) payments, you still need to stress test at what 4-5%?
I personally wouldn't assume that a temporary shift down 25bps would hold for the 25 year life.
(i.e. if you want to know a LIFETIME cost/risk of the mortgage you don't just use the abnormally low rates you can get now.)
Obviously it won't HURT but I believe the positive impact will be de minimis.
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