House prices over the coming months?
Discussion
BlackST said:
FrankAbagnale said:
Interestingly, I was talking to a chum who runs agencies in prime central London and they are 70% down on sales commissions than the same time in 2014. He said that the market has completely stalled above £1.5m and offers accepted over £2m are generally around 20-25% less than guide prices. In Oxfordshire where I am the market up to £1m is still OK (although a few price reductions creeping in) but above £2m we are also seeing sales agreed at 20% less than Guide Prices.
Won't some of that be to do with Russians and the exchange rate being bad in their favour? Weren't they buying alot in London in the past few years and recently have slowed down on spending in this country?Edited by FrankAbagnale on Tuesday 31st May 11:55
Edited by FrankAbagnale on Tuesday 31st May 11:56
It costs a lot more in tax for a foreigner to make a purchase than it used to and ways to avoid the taxes are being marginalised.
Some of the posts are a bit moot.
Look on any betting site that shows odds on UK and the EU. We WILL stay in the EU.
House prices over the next 5 years WILL rise (with possible exception to the super properties i.e. £10m+ in London).
Interest rates WILL rise but no more than 1-2% over the next 5 years.
Conclusion - if you're buying anything under £1m in the SE UK that you love and believe is good value - get it bought.
The alternative is wasting money renting in a place you cannot make your home.
Look on any betting site that shows odds on UK and the EU. We WILL stay in the EU.
House prices over the next 5 years WILL rise (with possible exception to the super properties i.e. £10m+ in London).
Interest rates WILL rise but no more than 1-2% over the next 5 years.
Conclusion - if you're buying anything under £1m in the SE UK that you love and believe is good value - get it bought.
The alternative is wasting money renting in a place you cannot make your home.
CAPP0 said:
Sheepshanks said:
wiggy001 said:
An estate agent (*) has just valued our property and reckons prices in our area (just inside the SE M25) have risen 26% since November.
We bought our place in 2009 for £250k and have so far had 2 valuations for £380k and £400k. Evidence of sold prices seems to back this up too.
So they've increased approx. the same percentage in the last 6mths as they did over the previous 6 years?We bought our place in 2009 for £250k and have so far had 2 valuations for £380k and £400k. Evidence of sold prices seems to back this up too.
Sold my place for £295 in 2012, which should be worth £350-400 now. One on the same road one has just gone for £495 which is unbelievable for a fairly ordinary 4 bed det.
Know of another 4B/det worth £450 18 months ago, agent said stick it on for £600 and see what happens.
mike74 said:
Can't believe how wide of the mark some people are when they suggest interest rate rises would "be a bad thing" for anyone looking to buy right now... interest rates rising would be like a gift from heaven for anyone looking to buy right now, all the over-leveraged debt junkies that bought property they can barely afford because rates are so low would suddenly find themselves unable to keep up their mortgage repayments and the market would have a large influx of rather 'motivated' vendors, resulting in a good selection of keenly priced properties.
Where are those desperate sellers going to live?mike74 said:
Who really gives a s
t? It's their stupid fault for getting into the mess they will find themselves in.
Mortgage debt as a % of household income is at low levels, many will be able to absorb THE rate hike when it comes, although I suspect you'd need to rewrite some of the BOE mandate before it leaps to the fantasy levels some seem to want. And if that's what you want don't you think hyper rate rises will be passed on to renters by their shiesty BTL landlords? Doesn't that really kick the poorer in society in the sponge? t? It's their stupid fault for getting into the mess they will find themselves in.So back on topic, as is said the bookies have it as a dead cert. You could do well trading off uncertainty in the current market. Obviously it's area dependent, but in th SE demand outstrips supply (generally) and developer land bank is massive (good luck unf
king that).fastgerman said:
Some of the posts are a bit moot.
Look on any betting site that shows odds on UK and the EU. We WILL stay in the EU.
House prices over the next 5 years WILL rise (with possible exception to the super properties i.e. £10m+ in London).
Interest rates WILL rise but no more than 1-2% over the next 5 years.
Conclusion - if you're buying anything under £1m in the SE UK that you love and believe is good value - get it bought.
The alternative is wasting money renting in a place you cannot make your home.
Are you Nostradamus?Look on any betting site that shows odds on UK and the EU. We WILL stay in the EU.
House prices over the next 5 years WILL rise (with possible exception to the super properties i.e. £10m+ in London).
Interest rates WILL rise but no more than 1-2% over the next 5 years.
Conclusion - if you're buying anything under £1m in the SE UK that you love and believe is good value - get it bought.
The alternative is wasting money renting in a place you cannot make your home.
I live in the SE, outside of London but on a main line in. House prices are still on the up near me, mine has gone up 5% since November. I know this as I sold it then but the buyer pulled out, back on the market last week and had 2 offers in within days, for £20k more than in November. However, there is definitely less property coming to the market as it has taken us months for a suitable place to come up. Following Rightmove closely and a number of reductions is increasing, probably to do with too high asking prices rather than falling prices, but hard to tell.
CAPP0 said:
Sheepshanks said:
wiggy001 said:
An estate agent (*) has just valued our property and reckons prices in our area (just inside the SE M25) have risen 26% since November.
We bought our place in 2009 for £250k and have so far had 2 valuations for £380k and £400k. Evidence of sold prices seems to back this up too.
So they've increased approx. the same percentage in the last 6mths as they did over the previous 6 years?We bought our place in 2009 for £250k and have so far had 2 valuations for £380k and £400k. Evidence of sold prices seems to back this up too.
wiggy001 said:
CAPP0 said:
Sheepshanks said:
wiggy001 said:
An estate agent (*) has just valued our property and reckons prices in our area (just inside the SE M25) have risen 26% since November.
We bought our place in 2009 for £250k and have so far had 2 valuations for £380k and £400k. Evidence of sold prices seems to back this up too.
So they've increased approx. the same percentage in the last 6mths as they did over the previous 6 years?We bought our place in 2009 for £250k and have so far had 2 valuations for £380k and £400k. Evidence of sold prices seems to back this up too.
mike74 said:
Who really gives a st? It's their stupid fault for getting into the mess they will find themselves in.
Why will they get into a mess, lending factors have taken into account a rise of 1-2%, and we won't see more than that. t? It's their stupid fault for getting into the mess they will find themselves in.The ones that will really suffer are the lenders, they are having the best time ever at the moment, lending at 2-3% (if you want it fixed for even 5 years), which means they are making 1.5-2%, back when it was 5% base rate they most mortgages they were making .5 or .75% on. So if we do go up to 2% base rate we will probably see a .5% or maybe a 1% increase.
On a £300k mortgage that would take it from around £1360 a month to £1435 or £1475 a month, an increase of between £75 and £115 a month.
Someone who has been given a £300k mortgage will be able to swallow that even if they have to cut out some of the other things they spend their money on each month.
Of course there will be one or two who may be finding it hard already, but your idea that we will see an influx of £400k houses suddenly available for £250k again is nonsense.
Even if that did happen what we would more likely see is more bigger houses coming onto the rental market and these owners looking at renting something smaller themselves.
gizlaroc said:
The ones that will really suffer are the lenders, they are having the best time ever at the moment, lending at 2-3% (if you want it fixed for even 5 years), which means they are making 1.5-2%, back when it was 5% base rate they most mortgages they were making .5 or .75% on. So if we do go up to 2% base rate we will probably see a .5% or maybe a 1% increase.
How do you know what profit they are making on a 5 year fix?Derek Chevalier said:
gizlaroc said:
The ones that will really suffer are the lenders, they are having the best time ever at the moment, lending at 2-3% (if you want it fixed for even 5 years), which means they are making 1.5-2%, back when it was 5% base rate they most mortgages they were making .5 or .75% on. So if we do go up to 2% base rate we will probably see a .5% or maybe a 1% increase.
How do you know what profit they are making on a 5 year fix?stongle said:
The BOE doesn't give mortgages so how you get from .5% to 1.5-2% profit in a bank is a way off. I'm a bit out of date, but gilt repo (secured lending) was around .5% on open. After you've taken the credit, or capital & market risk costs and maturity transformation costs (interest rate hedging regardless of deposit modelling) a mortgage book is making nowhere that sort of return. That might be the revenue stream, but not profit. The level of understanding taught or understood about basic finance and functions of banks in this country is criminal; we're letting the general populace vote on the Eurozone, a mainly economic question - you couldn't make it up if you tried.
Making was the wrong term to use, I meant they are adding on a another point of interest or more with actually no rise in risk, if anything their risk has lowered. BOE base rates and LIBOR are very much linked, the BOE very much manipulate the market for risk free lending, (although not much of that in the grand scheme of things) but then lenders who lend with risk will spread bet that risk, if there is a chance of 1 in 100 defaulting on the loan (and they do tend to know) as long as they add on 1% they are back in the same position as if they lent risk free. At the moment long term LIBOR is at under 1%, (and what is LIBOR? Base rate + Risk) but most mortgages rates are sitting at 2.5% currently, is there a 2% risk of mortgages going into default? No, we are currently sitting at around 0.19% on defaults and repossessions for 2015, which means if they add 1.5% they are doing pretty well.
At the moment we are seeing rates far exceeding the risk, we never saw those sort of add on points when we were at 5% base rate, they simply wouldn't have got away with it, and that was my point, an increase of base rate, even up to 2% will not see people defaulting on their mortgagees, many think that a 1.5% increase in base rate will not see the same increase in mortgage rates, and LIBOR rates will not suddenly shoot up either, if they get to a 5% base rate then that may of course soon change everything!
Edit: Of course I realise a profit has to be made, just saying the profits with lower base/libor rates seem to be greater than when rates are higher.
Edited by gizlaroc on Thursday 2nd June 15:20
gizlaroc said:
stongle said:
The BOE doesn't give mortgages so how you get from .5% to 1.5-2% profit in a bank is a way off. I'm a bit out of date, but gilt repo (secured lending) was around .5% on open. After you've taken the credit, or capital & market risk costs and maturity transformation costs (interest rate hedging regardless of deposit modelling) a mortgage book is making nowhere that sort of return. That might be the revenue stream, but not profit. The level of understanding taught or understood about basic finance and functions of banks in this country is criminal; we're letting the general populace vote on the Eurozone, a mainly economic question - you couldn't make it up if you tried.
Making was the wrong term to use, I meant they are adding on a another point of interest or more with actually no rise in risk, if anything their risk has lowered. BOE base rates and LIBOR are very much linked, the BOE very much manipulate the market for risk free lending, (although not much of that in the grand scheme of things) but then lenders who lend with risk will spread bet that risk, if there is a chance of 1 in 100 defaulting on the loan (and they do tend to know) as long as they add on 1% they are back in the same position as if they lent risk free. At the moment long term LIBOR is at under 1%, (and what is LIBOR? Base rate + Risk) but most mortgages rates are sitting at 2.5% currently, is there a 1.5% risk of mortgages going into default? No, we are currently sitting at around 0.19% on defaults and repossessions for 2015, which means if they add 1.5% they are doing pretty well.
At the moment we are seeing rates far exceeding the risk, we never saw those sort of add on points when we were at 5% base rate, they simply wouldn't have got away with it, and that was my point, an increase of base rate, even up to 2% will not see people defaulting on their mortgagees, many think that a 1.5% increase in base rate will not see the same increase in mortgage rates, and LIBOR rates will not suddenly shoot up either, if they get to a 5% base rate then that may of course soon change everything!
Derek Chevalier said:
Surely they will be using swaps for fixed rate loans and therefore need to look at what the swap market is pricing?
Yeah, but it all effects each other, maybe the rates at 2.5% and 3% are based on future thoughts of what the market is going to do when calculating swap rates? gizlaroc said:
Making was the wrong term to use, I meant they are adding on a another point of interest or more with actually no rise in risk, if anything their risk has lowered.
BOE base rates and LIBOR are very much linked, the BOE very much manipulate the market for risk free lending, (although not much of that in the grand scheme of things) but then lenders who lend with risk will spread bet that risk, if there is a chance of 1 in 100 defaulting on the loan (and they do tend to know) as long as they add on 1% they are back in the same position as if they lent risk free. At the moment long term LIBOR is at under 1%, (and what is LIBOR? Base rate + Risk) but most mortgages rates are sitting at 2.5% currently, is there a 2% risk of mortgages going into default? No, we are currently sitting at around 0.19% on defaults and repossessions for 2015, which means if they add 1.5% they are doing pretty well.
At the moment we are seeing rates far exceeding the risk, we never saw those sort of add on points when we were at 5% base rate, they simply wouldn't have got away with it, and that was my point, an increase of base rate, even up to 2% will not see people defaulting on their mortgagees, many think that a 1.5% increase in base rate will not see the same increase in mortgage rates, and LIBOR rates will not suddenly shoot up either, if they get to a 5% base rate then that may of course soon change everything!
Edit: Of course I realise a profit has to be made, just saying the profits with lower base/libor rates seem to be greater than when rates are higher.
Your ignoring huge swathes of associated costs. Mainly of which have been imposed post GFC. Deposit taking in some banks costs 10bps+, depositor protection or bank levy applies.mas does tier 1 capital cost, liquidity hedging and associated clearing and margin costs, securitisation expense, haircuts mandatory or credit driven and finally operating costs.BOE base rates and LIBOR are very much linked, the BOE very much manipulate the market for risk free lending, (although not much of that in the grand scheme of things) but then lenders who lend with risk will spread bet that risk, if there is a chance of 1 in 100 defaulting on the loan (and they do tend to know) as long as they add on 1% they are back in the same position as if they lent risk free. At the moment long term LIBOR is at under 1%, (and what is LIBOR? Base rate + Risk) but most mortgages rates are sitting at 2.5% currently, is there a 2% risk of mortgages going into default? No, we are currently sitting at around 0.19% on defaults and repossessions for 2015, which means if they add 1.5% they are doing pretty well.
At the moment we are seeing rates far exceeding the risk, we never saw those sort of add on points when we were at 5% base rate, they simply wouldn't have got away with it, and that was my point, an increase of base rate, even up to 2% will not see people defaulting on their mortgagees, many think that a 1.5% increase in base rate will not see the same increase in mortgage rates, and LIBOR rates will not suddenly shoot up either, if they get to a 5% base rate then that may of course soon change everything!
Edit: Of course I realise a profit has to be made, just saying the profits with lower base/libor rates seem to be greater than when rates are higher.
Edited by gizlaroc on Thursday 2nd June 15:20
If we get hyper rate rises the bank spread will be greater, given the correct regulatory driven pricing of risk.
That all said,mid agree that the argument for rate rises above 1-2 % is super tenuous at best. Mortgages as a % of overall income show this to be easily absorbed without significant defaults.
Supply and demand are still probably the best barometers of house price inflation unless you are at the bottom or top end of the U.K. Market.
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