How far will house prices fall [volume 5]

How far will house prices fall [volume 5]

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PrinceRupert

11,574 posts

84 months

Tuesday 7th July 2020
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Andy20vt said:
Perhaps for some, for others it suits and will probably suit more going forward as flexible working is embraced going forward. A senior marketing person we know lives in Norfolk and works for a business based in Bristol. She's in the office roughly twice a month, been doing this for years and things seem to run fine for her and the business she works for.
Of course, different strokes for different folks. We will see. I don't see a mass migration away from London being likely.

SteadyAsSheGoes

5,983 posts

212 months

Tuesday 7th July 2020
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I've not worked from home previous to the pandemic, but have been for all the time since it came about, I've not been to the office once. I've not even done many phone calls, mainly email. Luckily, not long before the home working started I had a wall put up in the house to form an upstairs office space.

I have to say that it was a novelty at first and I enjoyed it, but in recent weeks I'm feeling like I miss the routine of going out to work and the social interaction of the workplace. Plus going out into town for lunch, maybe the pub on a Friday, going to the gym, etc. Just feeling a bit boxed in with the other half and our 8 month old now.

I had a 45 minute drive south commute, I actually miss it now as I like driving and it was the only meaningful amount that I really did, I have to invent reasons to go out in the car now...

So, I'd quite like things to go back to normal now, I don't think I'd want to work at home permanently out of choice to be honest. My employer has informed us that long term the plan is for everyone to be back in the office.

AyBee

10,522 posts

201 months

Tuesday 7th July 2020
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C4ME said:
Anybody selling up now and moving on the basis that WFH is here for good is making a brave move IMO.
Depends how far you're moving. I think the majority of companies will allow more flexibility going forward for those who have proved they can work from home (which I assume excludes those of us on here!).

Shnozz

27,419 posts

270 months

Tuesday 7th July 2020
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PrinceRupert said:
Andy20vt said:
Haha, no chip, just different strokes for different folks. As outdoor people who loved the sea, surfing, beaches, seafood and nature we got tired of living close to London. Different people have different priorities though.
Sure, but a massive commute into London seems like a bad compromise, imho - even if it is only two or three days a week. If I could earn what I earn and live somewhere else, I'd probably move back to Edinburgh - but I can't, and (at least at this stage of my life) an exhausting commute would not be worth it. A former colleague used to fly from Edinburgh to London and back every week, two or three days in London in hotels and the others and the weekend in Edinburgh. Exhausting.
This is what I don't get. I am a 2 hour flight South and enjoying life in Spain. My main clients are in London, Leeds and Dublin. It's a short, cheap commute when I need to be "in person". Likewise, my partner is Danish and its a cheap short hop to Copenhagen.

If you are a few hours away from work, planning on WFH predominantly, why would you pick to commute 4 hours to Devon and Cornwall, or Scotland or wherever. Unless you have a physical need for someone to be in those places, or family based there, I can't see why I would base myself hours from the core work location and remain in another part of the UK.

kingston12

5,473 posts

156 months

Tuesday 7th July 2020
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PrinceRupert said:
Andy20vt said:
You can but it depends on what you value in life I guess. If you desire to live your life is some non-de-script identikit suburb and you're happy with it then that's great. We've been there done that and it wasn't for us. If you desire something more from life then really though, the costs are not a huge amount more.

Put it this way, when you are old and grey what will you regret more, spending an extra £100 a week or so on commuting, or putting up with living in a congested, soulless suburban st hole, within earshot of the M25 and the Heathrow/Gatwick flight path.
Your chip is showing biglaugh My house is not a 'non-de-script' identikit suburb, and we like where we are.
It's an interesting one. I've lived in the suburbs for years, and have also enjoyed it as a reasonable combination of everything. I often used to consider moving, but only because of the lack of affordability here.

Like a lot of people, I've thought about it again through all of this - the commute is likely to be less important, a lot of the things locally and in central London that made the area attractive might not be as good going forward, and there is likely to be a rebalancing of prices away from London as a result.

Despite that, I''ve come to the conclusion that I won't do it. I love the countryside and coast for a day trip or short break, but I'm invariably totally bored after a week, so living there might not be the best option for me! Plus the WFH thing isn't locked in yet - there's no way I'd want to move to a 2 hour each way commute if I still had to do it 2-3 times per week!

On the upside, if enough people do decide to move to the sticks, the rebalancing effect might make prices a bit more reasonable for those of us who want to stay.

kingston12

5,473 posts

156 months

Tuesday 7th July 2020
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Shnozz said:
PrinceRupert said:
Andy20vt said:
Haha, no chip, just different strokes for different folks. As outdoor people who loved the sea, surfing, beaches, seafood and nature we got tired of living close to London. Different people have different priorities though.
Sure, but a massive commute into London seems like a bad compromise, imho - even if it is only two or three days a week. If I could earn what I earn and live somewhere else, I'd probably move back to Edinburgh - but I can't, and (at least at this stage of my life) an exhausting commute would not be worth it. A former colleague used to fly from Edinburgh to London and back every week, two or three days in London in hotels and the others and the weekend in Edinburgh. Exhausting.
This is what I don't get. I am a 2 hour flight South and enjoying life in Spain. My main clients are in London, Leeds and Dublin. It's a short, cheap commute when I need to be "in person". Likewise, my partner is Danish and its a cheap short hop to Copenhagen.

If you are a few hours away from work, planning on WFH predominantly, why would you pick to commute 4 hours to Devon and Cornwall, or Scotland or wherever. Unless you have a physical need for someone to be in those places, or family based there, I can't see why I would base myself hours from the core work location and remain in another part of the UK.
As Andy20vt put it - different strokes.

I agree with you, I'd never want to live in Devon or Cornwall (as much as I love visiting that part of the world), but I can understand why others would. It's worst of both worlds for some, best of both worlds for others.

Do you live in Spain full time? What would you estimate the door to door time is from your place there to a London client office?

matrignano

4,345 posts

209 months

Tuesday 7th July 2020
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Shnozz said:
This is what I don't get. I am a 2 hour flight South and enjoying life in Spain. My main clients are in London, Leeds and Dublin. It's a short, cheap commute when I need to be "in person". Likewise, my partner is Danish and its a cheap short hop to Copenhagen.

If you are a few hours away from work, planning on WFH predominantly, why would you pick to commute 4 hours to Devon and Cornwall, or Scotland or wherever. Unless you have a physical need for someone to be in those places, or family based there, I can't see why I would base myself hours from the core work location and remain in another part of the UK.
If you live abroad and work in the UK, I think tax becomes problematic (for you and your employer).

Vanden Saab

13,891 posts

73 months

Tuesday 7th July 2020
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Andy20vt said:
untakenname said:
The collapse of Flybe has caused massive issues for people commuting into London from Devon, trains twice the price and takes triple as long end to end.
Only really for people living within a stones throw of Exeter airport. For the rest of us in other areas it makes little to no difference. From Barnstaple to London Paddington is near as damn it 4 hrs on the faster services. Add in 1/2hr for some local stuff either end and it's 5hrs home to office.

For us to do the same via Flybe would be a 1hr drive to Exeter, allow another hour to park up, security, wait at gate etc. Flight time of 1hr (including taxying etc.), plus then approx another hour to disembark and get from London City into central London. That's 4 hrs so really not that different to the time taken by train. Plus you can easily work on the train, so that's 4 hrs solid work done each way instead of almost none on the flight.
Meh... drive to Tiverton from Barnstaple then catch the train to London and you are there in under 3 hours...

ooid

4,049 posts

99 months

Tuesday 7th July 2020
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kingston12 said:
As Andy20vt put it - different strokes.

I agree with you, I'd never want to live in Devon or Cornwall (as much as I love visiting that part of the world), but I can understand why others would. It's worst of both worlds for some, best of both worlds for others.

Do you live in Spain full time? What would you estimate the door to door time is from your place there to a London client office?
Cornwall is quite bleak in winter times. I've met so many former Londoners there, after 12-18 months, they all realize that part-time surfer and online consultation business from home was not a good decision. laugh If you can afford a second/weekend home, that's great but full-time down there is not ideal.

Back in 2007, I used to work for a massive company, 1000 people in London office. One of the partners (German), who used to commute every week to his family in Berlin. He was renting a small flat in Battersea, partly it was paid by the firm. He decided that His wife and two kids should stay and live in Berlin, as it was more affordable and sort of keeping their traditional "German" education for their kids. Back in the time, I thought he was mad, but now I completely understand his logic. If I would ever have a kid and if we can't afford private or not academic enough to go to Grammer School, I would probably move somewhere else rather than being educated here.


AyBee

10,522 posts

201 months

Tuesday 7th July 2020
quotequote all
ooid said:
kingston12 said:
As Andy20vt put it - different strokes.

I agree with you, I'd never want to live in Devon or Cornwall (as much as I love visiting that part of the world), but I can understand why others would. It's worst of both worlds for some, best of both worlds for others.

Do you live in Spain full time? What would you estimate the door to door time is from your place there to a London client office?
Cornwall is quite bleak in winter times. I've met so many former Londoners there, after 12-18 months, they all realize that part-time surfer and online consultation business from home was not a good decision. laugh If you can afford a second/weekend home, that's great but full-time down there is not ideal.

Back in 2007, I used to work for a massive company, 1000 people in London office. One of the partners (German), who used to commute every week to his family in Berlin. He was renting a small flat in Battersea, partly it was paid by the firm. He decided that His wife and two kids should stay and live in Berlin, as it was more affordable and sort of keeping their traditional "German" education for their kids. Back in the time, I thought he was mad, but now I completely understand his logic. If I would ever have a kid and if we can't afford private or not academic enough to go to Grammer School, I would probably move somewhere else rather than being educated here.
Just make sure you teach them Grammar and they'll be fine getting into that school wink

PrinceRupert

11,574 posts

84 months

Tuesday 7th July 2020
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matrignano said:
If you live abroad and work in the UK, I think tax becomes problematic (for you and your employer).
Yup - we got an e-mail recently saying that the firm would not support anyone working abroad during lockdown, and they have to come back to the UK, for tax reasons.

skwdenyer

16,178 posts

239 months

Tuesday 7th July 2020
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Helicopter123 said:
What I find fascinating is that the government response to the largest economic meltdown in 300 years appears to be support the property market which has been page 1 of the playbook since Thatcher. It really is a rigged market, with landlords and homeowners being constantly bailed out.

I can see properties in the suburbs just under £500k being snapped up quite quickly if the rumours are true.

City centre living will always appeal the the young.
Rigged market is right; we should let the lot collapse, allow the market to sort out what happens next. I get that the stakes are high, but the effects are just abysmal - the widening inequality in our society simply *has* to be addressed.

stongle

5,910 posts

161 months

Tuesday 7th July 2020
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skwdenyer said:
Rigged market is right; we should let the lot collapse, allow the market to sort out what happens next. I get that the stakes are high, but the effects are just abysmal - the widening inequality in our society simply *has* to be addressed.
Doesn't really work when the rise in house prices is fuelling the feelgood factor into large consumer purchases. Unless you have a ready to rock inflattionary tool, it will do more harm than good.

You need to have set in place the framework for solid wage inflation and fiscal investment before you pull the rug from house prices.

Its unlikely to ever work, we are too far down the leverage yellow brick road now anyway, the main central banks have to be well over 30trillion, and thats before we look at shadow banking.

Pit Pony

8,265 posts

120 months

Tuesday 7th July 2020
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AyBee said:
ooid said:
kingston12 said:
As Andy20vt put it - different strokes.

I agree with you, I'd never want to live in Devon or Cornwall (as much as I love visiting that part of the world), but I can understand why others would. It's worst of both worlds for some, best of both worlds for others.

Do you live in Spain full time? What would you estimate the door to door time is from your place there to a London client office?
Cornwall is quite bleak in winter times. I've met so many former Londoners there, after 12-18 months, they all realize that part-time surfer and online consultation business from home was not a good decision. laugh If you can afford a second/weekend home, that's great but full-time down there is not ideal.

Back in 2007, I used to work for a massive company, 1000 people in London office. One of the partners (German), who used to commute every week to his family in Berlin. He was renting a small flat in Battersea, partly it was paid by the firm. He decided that His wife and two kids should stay and live in Berlin, as it was more affordable and sort of keeping their traditional "German" education for their kids. Back in the time, I thought he was mad, but now I completely understand his logic. If I would ever have a kid and if we can't afford private or not academic enough to go to Grammer School, I would probably move somewhere else rather than being educated here.
Just make sure you teach them Grammar and they'll be fine getting into that school wink
My kids both got 3 x A*s in STEM subjects attending the the local comprehensive in a Liverpool Suburb, (not 1/2 a mile from Stevie Gerrards house), so I reckon you've just got to pick the right northern town, and hope that they make the best of what they have.

skwdenyer

16,178 posts

239 months

Wednesday 8th July 2020
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stongle said:
skwdenyer said:
Rigged market is right; we should let the lot collapse, allow the market to sort out what happens next. I get that the stakes are high, but the effects are just abysmal - the widening inequality in our society simply *has* to be addressed.
Doesn't really work when the rise in house prices is fuelling the feelgood factor into large consumer purchases. Unless you have a ready to rock inflattionary tool, it will do more harm than good.

You need to have set in place the framework for solid wage inflation and fiscal investment before you pull the rug from house prices.

Its unlikely to ever work, we are too far down the leverage yellow brick road now anyway, the main central banks have to be well over 30trillion, and thats before we look at shadow banking.
Hmm. Successive Conservative governments over the last 10+ years have presided over wage stagnation, slashed investment, not to mention the small issue of Brexit (regardless of which side of the Leave/Remain divided you are/were, the lack of a coherent plan is staggering). As a slate of policy priorities, it is a busted flush. You're right, the *only* thing maintaining any illusion of wealth and prosperity have been house prices, but that only at the expense of massive handouts (which any sane government would have instead used to, I don't know, invest in the country).

One doesn't have to be have been, say, pro-Corbyn to understand that this lot have been a disaster for the fundamentals of the economy.

This idea that house prices must continue to rise is pretty mad. Look at the FTB gearing:



That's just nonsense when wages are stagnant. High house prices also act as a mechanism for transferring wealth from the young to the old, from the poor to the rich, and from those that don’t own their own home to those that do. The antithesis of a modern, dynamic economy.

Frankly, I frequently feel as if I'm living through the last days of the Roman Empire. Our core strength is consumption; our comically lopsided economy is made up 80% of services which by their nature are oftentimes dependent upon capping wage growth; our key exports are those same (easily replaced) services; our key export market for those services is a trading bloc we look increasingly likely to crash out of without so much as a basic deal; yet we're concerned that above all we must maintain house prices.

The late Douglas Adams wrote one of his characters as living in a beachside house called "Outside The Asylum" in reference to the character's conclusion that all of humanity was most decidedly insane.

Note that I don't knock *individuals* who want to try to better themselves within this (broken) system; but that's the problem. Achievement of personal wealth ambitions are tied to behaviours which are almost by definition contrary to the long-term interests of the nation.

stongle

5,910 posts

161 months

Wednesday 8th July 2020
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skwdenyer said:
Hmm. Successive Conservative governments over the last 10+ years have presided over wage stagnation, slashed investment, not to mention the small issue of Brexit (regardless of which side of the Leave/Remain divided you are/were, the lack of a coherent plan is staggering). As a slate of policy priorities, it is a busted flush. You're right, the *only* thing maintaining any illusion of wealth and prosperity have been house prices, but that only at the expense of massive handouts (which any sane government would have instead used to, I don't know, invest in the country).

One doesn't have to be have been, say, pro-Corbyn to understand that this lot have been a disaster for the fundamentals of the economy.

This idea that house prices must continue to rise is pretty mad. Look at the FTB gearing:



That's just nonsense when wages are stagnant. High house prices also act as a mechanism for transferring wealth from the young to the old, from the poor to the rich, and from those that don’t own their own home to those that do. The antithesis of a modern, dynamic economy.

Frankly, I frequently feel as if I'm living through the last days of the Roman Empire. Our core strength is consumption; our comically lopsided economy is made up 80% of services which by their nature are oftentimes dependent upon capping wage growth; our key exports are those same (easily replaced) services; our key export market for those services is a trading bloc we look increasingly likely to crash out of without so much as a basic deal; yet we're concerned that above all we must maintain house prices.

The late Douglas Adams wrote one of his characters as living in a beachside house called "Outside The Asylum" in reference to the character's conclusion that all of humanity was most decidedly insane.

Note that I don't knock *individuals* who want to try to better themselves within this (broken) system; but that's the problem. Achievement of personal wealth ambitions are tied to behaviours which are almost by definition contrary to the long-term interests of the nation.
C'mon, under labour governments FTB mortgage costs more than doubled... you cannot blame the tories for that (it was a Labour government from 97-2010, then coalition). And reducing interest rates / loose monetary policy isn't a current handout, its borrowing from the future. Its not a new thing relying on consumption to replace poor wage inflation, its decades old.

It would'nt have mattered Labour or Tories really, every western economy was deploying the same policies. Interestingly, its likely that it was too successful here (it's had limited success in the EU and thats their own Financial Stability report talking). Our negative or unintended consequence was we created an access or opportunity divide (no capital no access to leverage, the Eurozone's problem was zombification).

Also, whilst the EU makes up a fair portion of services exports, its not the majority - around 25%, and the actual regulatory access requests show a larger flight of firms INTO the UK than have restructured for passpirting out. Its a bit of a fugazi. At last count over 1000 EU firms are taking up TARs in the UK. Of course that's as many firms expect some form of Singapore on Thames regime - but that was the risk of a hardline negotiating position (both sides).

The problem always comes back to chronic under fiscal investment, and that has been a huge failure under Labour (and until Starmer rewrites their manifesto was true in the last election), and the Tories. To make it partisan really isnt going to address the problem.

Until the government pumps half a trillion into UK infrastructure and education (and arguably you need low rates to pay that back anyway), we will not get off the crack of expansive monetary policy. If this doesn't happen, then we are probably screwed as a nation. The problem is best demonstrated by BREXIT. On oneside you have remain crying over fear of loss and digital negative outcomes (based on historical observation - all EU benefits evaporate overnight) and on the other hand you have a lot of misty eyed historians harking back to the good old days before we joined the EU. The fact is both are wrong, the real problem is how do we address opportunity inequality. BREXIT only works if the government figures out the only way to deal with increased trade friction, is to offer businesses and firms other reasons to invest here - infratsructure and highly skilled workforce. If you do that, you have increased freedom on Corporation Tax, which by and large should be low anyway.

Oh, and in the intervening period where I live; houses are selling at record highs. The price per square foot has just been broken on our road, and houses are shifting. This could be pent up demand, but I'm not sure everyone is buying the doom and gloom and some are looking for reason to spend.

hutchst

3,696 posts

95 months

Wednesday 8th July 2020
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Why start at 1995? Go back to 1980 and see what we were paying then, with mortgage interest rates at 15%.

anonymous-user

53 months

Wednesday 8th July 2020
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soxboy said:
Andy20vt said:
PrinceRupert said:
If you can work three days a week at home from Devon, you can do it from the London suburbs as well, and therefore only commute 4 hours a week, or less, depending where you live. Plus, as someone said, commuting costs are presumably massive - and that is entirely lost money, not mortgage repayments building equity.
You can but it depends on what you value in life I guess. If you desire to live your life is some non-de-script identikit suburb and you're happy with it then that's great. We've been there done that and it wasn't for us. If you desire something more from life then really though, the costs are not a huge amount more.

Put it this way, when you are old and grey what will you regret more, spending an extra £100 a week or so on commuting, or putting up with living in a congested, soulless suburban st hole, within earshot of the M25 and the Heathrow/Gatwick flight path.
And to add more background to the examples I mentioned earlier, all 3 are in their 40s with family. 2 of the 3 had lived in London in their 20s and built up their careers and done 'the London thing', then moved out when the kids started needing schooling. They both got jobs 'in the north' in the same fields as that there London, however the growth in London salaries, the improved travel times and the increased acceptance that WFH wasn't just a doss has meant that getting back to having a 'London job' has become more viable.

The guy who commutes from York, yes his season ticket is £1,500 per month, but he gets to work on the train, his house that would be £2m in London is £700,000 up here and his salary is probably 3x the amount.

It's not ideal for some, all down to personal preferences and priorities.
Obviously I am biased living in the suburbs in Zone 4 but for me it really is the best of both worlds and I can see people in Zones 2/3 giving up their flats and getting houses in Zones 4 & 5.

The stuff I can see taking an absolute hammering is stuff like this https://www.rightmove.co.uk/property-for-sale/prop...

Rochester and the other Medway towns have been expanding at a rate fulfilling the 'commuter' vibe, these flats are right by the station, getting thrown up, but they aren't THAT close to London and neither is Rochester/Chatham a hugely inviting prospect I can see them being very tough to shift

NickCQ

5,392 posts

95 months

Wednesday 8th July 2020
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Mortgage payment as a % of pay isn't really the issue given low interest rates. The issue is deposit requirement versus pay, or number of years of saving and % of income needed to be saved to put down 5-10%.

This was briefly papered over prior to 2007 with 100%+ LTV mortgages but we know how that turned out.

kingston12

5,473 posts

156 months

Wednesday 8th July 2020
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anonymous said:
[redacted]
It’s interesting that the advert isn’t trumpeting ‘HELP TO BUY AVAILABLE’ in the first line. It’s HTB that has driven the building of all of this dross, and if it isn’t available for some reason I’d expect an instant crash in those prices down to the prevailing market rates.

The prices I think are even more at risk are similar new developments in London suburbs where the prices have pushed above the £600k ceiling, but the developers are still asking for huge increase over prevailing prices as if the discount was still there.
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