How far will house prices fall [volume 5]
Discussion
NickCQ said:
I must say, a stamp duty holiday seems politically tone deaf at the moment.
Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
Couldn't agree more. Let the pent up demand flow through the system and keep that trick in your pocket fro when the st properly starts hitting the fan in 6 - 12 months. If needs be play the stamp duty card then to try and get some spending happening.Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
NickCQ said:
I must say, a stamp duty holiday seems politically tone deaf at the moment.
Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
I agree. Back in lockdown with the market stalled & lots of cash being splashed by the government to keep various plates spinning, it might have made sense to encourage a bit more activity. But in September? I don't get it. If we end up in Maximum Recession a bit of stamp duty relief will hardly make much difference anyway.Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
DaveCWK said:
NickCQ said:
I must say, a stamp duty holiday seems politically tone deaf at the moment.
Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
I agree. Back in lockdown with the market stalled & lots of cash being splashed by the government to keep various plates spinning, it might have made sense to encourage a bit more activity. But in September? I don't get it. If we end up in Maximum Recession a bit of stamp duty relief will hardly make much difference anyway.Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
NickCQ said:
I must say, a stamp duty holiday seems politically tone deaf at the moment.
Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
And again as predicted the government steps in to sure up the property market.Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
Again people making the mistake that he government needs extra tax revenue. It doesn't since it will continue to print all the money it needs through further rounds of QE. It will then inflate away all of it's debts through a combination of low interest rates and inflation (financial repression):
https://www.investopedia.com/terms/f/financial-rep...
These measures will drive up asset prices including housing.
When most people look at property prices they like to quote the easily tangible stuff, e.g. people's jobs, wages v's property prices, number of sellers v's number of buyers. etc, etc. They tend to forget that there are far, far bigger forces at work - things that the average punter just does not understand, but really should.
It's certainly looking that way. Out of all the measures that could be used right now, the government looks to housing.
We saw a house we liked the look of on Saturday, put in a bid today - vendor wanting to leave the UK and looking to be exchanged in 2 months...I'm wondering whether they know something we don't. If there's going to be a stamp duty break (property is just over £500k), I'll definitely be pushing to wait for that though.
We saw a house we liked the look of on Saturday, put in a bid today - vendor wanting to leave the UK and looking to be exchanged in 2 months...I'm wondering whether they know something we don't. If there's going to be a stamp duty break (property is just over £500k), I'll definitely be pushing to wait for that though.
DaveCWK said:
NickCQ said:
I must say, a stamp duty holiday seems politically tone deaf at the moment.
Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
I agree. Back in lockdown with the market stalled & lots of cash being splashed by the government to keep various plates spinning, it might have made sense to encourage a bit more activity. But in September? I don't get it. If we end up in Maximum Recession a bit of stamp duty relief will hardly make much difference anyway.Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
Andy20vt said:
NickCQ said:
I must say, a stamp duty holiday seems politically tone deaf at the moment.
Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
And again as predicted the government steps in to sure up the property market.Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
Again people making the mistake that he government needs extra tax revenue. It doesn't since it will continue to print all the money it needs through further rounds of QE. It will then inflate away all of it's debts through a combination of low interest rates and inflation (financial repression):
https://www.investopedia.com/terms/f/financial-rep...
These measures will drive up asset prices including housing.
When most people look at property prices they like to quote the easily tangible stuff, e.g. people's jobs, wages v's property prices, number of sellers v's number of buyers. etc, etc. They tend to forget that there are far, far bigger forces at work - things that the average punter just does not understand, but really should.
Unfortunately for many, it seems that while wages for most professionals have rise accordingly, wages for unskilled/semi-skilled jobs haven't kept up, despite interventions like national miniumum wage. People should complain about low wages for the working classes as opposed to high house prices, which people on higher incomes can afford at current levels.
711 said:
I’m not sure that wages for many professionals have kept up though.
It might have for Partners and MDs, but many folks in the middle ranks that I know are still on similar levels to almost a decade ago
In law salaries have absolutely rocketed over the last ten years, particularly for juniors.It might have for Partners and MDs, but many folks in the middle ranks that I know are still on similar levels to almost a decade ago
SteadyAsSheGoes said:
This is the thing, the money supply (and debt) general tends to increase exponentially so it shouldn't really be a surprise when asset prices including property follow suit. It seem to be now capitalism works and doesn't seem to be a problem as long as wage infaltion follows suit.
Unfortunately for many, it seems that while wages for most professionals have rise accordingly, wages for unskilled/semi-skilled jobs haven't kept up, despite interventions like national miniumum wage. People should complain about low wages for the working classes as opposed to high house prices, which people on higher incomes can afford at current levels.
Agreed, however when it comes to house prices, people on low wages don't tend to buy houses in any case and they rarely have done, they tend to rent, which benefits people who own property. If we want to solve the issue, what we need is more good quality social housing. Unfortunately for many, it seems that while wages for most professionals have rise accordingly, wages for unskilled/semi-skilled jobs haven't kept up, despite interventions like national miniumum wage. People should complain about low wages for the working classes as opposed to high house prices, which people on higher incomes can afford at current levels.
Incidentally has anyone noticed that social housing these days, particularly schemes in Manchester, Sheffield etc, seems to be of far better design and quality (better use of space and light) than the utter st put up by Persimmon, Wimpey, Bellway etc, etc. in the private buyers market?
Andy20vt said:
Incidentally has anyone noticed that social housing these days, particularly schemes in Manchester, Sheffield etc, seems to be of far better design and quality (better use of space and light) than the utter st put up by Persimmon, Wimpey, Bellway etc, etc. in the private buyers market?
You are not wrong there. It's easy to forget given how badly so many 60's concrete estates have aged, but we do have a bit of a tradition in this country of architecturally interesting social housing with utopian design ideals. When you were trading up from a Victorian slum dwelling it must have seemed pretty good.NickCQ said:
Andy20vt said:
Incidentally has anyone noticed that social housing these days, particularly schemes in Manchester, Sheffield etc, seems to be of far better design and quality (better use of space and light) than the utter st put up by Persimmon, Wimpey, Bellway etc, etc. in the private buyers market?
You are not wrong there. It's easy to forget given how badly so many 60's concrete estates have aged, but we do have a bit of a tradition in this country of architecturally interesting social housing with utopian design ideals. When you were trading up from a Victorian slum dwelling it must have seemed pretty good.NickCQ said:
I must say, a stamp duty holiday seems politically tone deaf at the moment.
Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
Indeed, it may also look like they are helping the market (assuming it happens) but it will all come down to timing.Given the facts that (i) we need a huge amount of tax revenue over the next few years and (ii) the housing market appears to be a bright spot of the economy for now, it doesn't make sense as a place to give a tax break.
Having a quick read of property experts commentary the picture is really mixed i.e
1) It has already paused the market as people put chains on hold, lots of concern about long this pause will be and it's timing with when furlough ends
2) It clearly doesn't really help anyone looking over the £500k mark i.e large swathes of London
3) It was apparently there to help the flow of large properties getting onto the market, so the older generation can sell up and move into smaller properties with less of a penalty
4) There is a view that prices of properties above that £500k mark will suffer, particularly if within 10% ....as people will be asking for £500k. In the same way there is a barrier to some of buying a place over £925k/£1m given the quick ramp up in stamp duty (£10k per £100k)
5) General view that it won't help estate agents, as they are more greatly benefited by volume rather than a few % on a house price
6) Some saying it will help the sub £500k, others saying it makes little difference as it's quite a marginal bung, particularly as there is fear of job losses, a few grand saved in stamp duty doesn't cover the loss of a job
7) It seems to be a smaller incentive than I imagined, lots of people are calling for a higher limit or to change the higher bracket stamp duty back to what it was (given it has killed mobility/volume).
7) The point you mention about the loss of tax revenue - some find the timing odd
8) Some are saying this feels like the gov are trying to show they are supporting housing, but not really doing very much of any substance
Just a bit meh, unless it gets the older generation out of the larger family homes (thus increasing supply), but again time will tell how all of this plays out.
Edited by V6Alfisti on Tuesday 7th July 08:25
Leeds market seems to be supporting the notion of a city exodus. Suburbs doing well it seems and beyond there also, city centre not so well.
In the South, my parents have seen continued interest near the Hamble river and possibly the start of the London migrants now WFH swapping city life for a 890 min commute and living by the river. However, they have already seen some Covid effects in losing a potential buyer who is on furlough from air traffic control. A lot of high earners in that area feeling a little on edge about their future and not an easy position to swap a £100k job for another when its quite the speciality.
Similarly, where my folks are looking to buy (Barton-On-Sea) has seen a few chains fall over due to job losses. I was surprised chatting to an estate agent down there to find that the case, assuming the area that it is is dominated by the retired, but then even in their case, somewhere along the chain will most likely be a non-retiree buying.
I still remain of the view though that right now its such an artificial economy that the impacts of this are not going to be apparent for another 6 - 12 months. Personally I cannot see any "bounce back" for a huge tranche of non-essential retail, hospitality, travel, commercial property etc and the number of people working in those sectors is massive. I remain bearish for that reason.
In the South, my parents have seen continued interest near the Hamble river and possibly the start of the London migrants now WFH swapping city life for a 890 min commute and living by the river. However, they have already seen some Covid effects in losing a potential buyer who is on furlough from air traffic control. A lot of high earners in that area feeling a little on edge about their future and not an easy position to swap a £100k job for another when its quite the speciality.
Similarly, where my folks are looking to buy (Barton-On-Sea) has seen a few chains fall over due to job losses. I was surprised chatting to an estate agent down there to find that the case, assuming the area that it is is dominated by the retired, but then even in their case, somewhere along the chain will most likely be a non-retiree buying.
I still remain of the view though that right now its such an artificial economy that the impacts of this are not going to be apparent for another 6 - 12 months. Personally I cannot see any "bounce back" for a huge tranche of non-essential retail, hospitality, travel, commercial property etc and the number of people working in those sectors is massive. I remain bearish for that reason.
711 said:
PrinceRupert said:
In law salaries have absolutely rocketed over the last ten years, particularly for juniors.
Shame that I am not in law :-)PrinceRupert said:
711 said:
PrinceRupert said:
In law salaries have absolutely rocketed over the last ten years, particularly for juniors.
Shame that I am not in law :-)Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff