How far will house prices fall [volume 5]

[MG CHRIS]

I started my first steps to get on the market after the hold on racing this year I decided to park the racing to one side pay of my car and get rid of the unit im renting. Tbh covid has helped me save a st load of money last couple of months. I contact a mortgage advisor and at present with my last 3 months wages I can borrow £110k plus whatever deposit I can get on top. But they will change that figure when my bonuses pick back up the next couple of months, ive already hit over 300 quid in bonuses last week and the 1 day I worked this week. Considering we have a waiting list of over 3 weeks that is set to stay solid on that front.
That is on a 24.5k wage so not anything special I have found a house I could quiet easily move in straight away however im a little cautious atm and would like to build up a bit more in savings after wiping out 8k paying off my car. I would like to get back up to 25k in savings before biting the bullet.
In my network one person has just moved into a 4 bed 280k house they were due to move in 29th march but due to lockdown the building contractor couldn't get the house signed off so they had to wait till beginning of june to move. Lucky both have good secure jobs with net 70k coming in. 2 of my work mates are looking to get a property this year and a couple others outside have re-prioritised things and are on route to do similar.
I have noticed loads of houses coming on to the market in the area the biggest trend is around the nearest uni Pontypridd which has masses of ex uni digs up for sale.

[cml24]

711 said:

princeperch said:

https://www.rightmove.co.uk/property-for-sale/prop...

I linked to this a week or so ago when it came on and see it's now sold stc. Previous ceiling for the road was £9xx fully renovated.

I think this shows how the market differs by area.

A good friend of mine is trying to buy a decent family house in the Guildford area and coming up against a *very* firm market indeed with good houses near decent schools going above market.

Another colleague/friend is trying to sell a perfectly decent zone 1 flat in Westminster/ City and finding it quite heavy going to get a decent price, although plenty of lowballs.

Is this the escape from London lockdown effect?

Doesn't bode well for me, looking to buy a house nearby! Fortunately not trying to sell a zone 1 property to fund it at least.

[Flooble]

survivalist said:

I suppose it depends on whether you believe that the new normal will involve fewer trips to the office. If so, those struggling to buy in the SE could potentially move further afield where their money goes further knowing that they could only be required to be in the office twice a week? Plenty of my colleagues do exactly that.

You can sense that my employer would desperately like everyone back in the office full time (for whatever reason) but is facing massive resistance. It's possibly going to come down to brinkmanship.

As an employer can you mandate everyone coming into the office with the schools still shut? Mandating those without kids having to come in, is a great way to make divisions in your workforce. Most employers which are vaguely reasonable with sickness policies are also going to have a lot of "vulnerable" people who want to keep "shielding". I use speech marks to differentiate the genuinely vulnerable from those who have suddenly developed a hitherto unmentioned condition or relative.

So as the employer do you try and force it? Given that current government guidance (staggered start times, spaced out desks, limited use of meeting rooms etc.) makes being in the office less productive than being at home, to try and force it at the moment culturally you need to be pretty far over to "our staff must be in the office". Any firm that is ambivalent about home working will I feel take the easy option of continuing with primarily WFH.

On the flip side, as an employee, how hard would you fight to not come in?

Somewhere a balance will be found, where that is no-one knows yet. But I suspect it's likely to fall on the side of limited time in the office.

However, buying a house in Yorkshire when your office is in London would be a bold move at this point. It would be very easy to get caught out with senior management announcing "right, everyone back in".

[caymanbill]

The market in an around Oxford seems crazy at the moment. Both our selling and buying EAs say they have never been as busy.

We sold our place in less than a week, had 5 solid offers. People seem keen to move right now and don’t seem to be overly concerned about the dire economic forecast.

[kingston12]

711 said:

I think this shows how the market differs by area.

A good friend of mine is trying to buy a decent family house in the Guildford area and coming up against a *very* firm market indeed with good houses near decent schools going above market.

Another colleague/friend is trying to sell a perfectly decent zone 1 flat in Westminster/ City and finding it quite heavy going to get a decent price, although plenty of lowballs.

Is this the escape from London lockdown effect?

I’d have thought areas like Guildford might be negatively affected by that as well. Clearly there will be people moving out of London to get more space, but Guildford is still priced at a premium because of its fast commute.

Perhaps that is the second stage, with people living in Guildford more happy with the amount of space they have and prepared to wait until WFH arrangements are confirmed before deciding whether to move further out.

[menousername]

caymanbill said:

The market in an around Oxford seems crazy at the moment. Both our selling and buying EAs say they have never been as busy.

We sold our place in less than a week, had 5 solid offers. People seem keen to move right now and don’t seem to be overly concerned about the dire economic forecast.

Same people probably out signing up to new car deals too- they are not acting rationally.

Having said that - i am in the SE and the usual solid family 3 bedders are not selling in an area where they usually would. Nothing on RM seems to be happening

[Flooble]

menousername said:

Same people probably out signing up to new car deals too- they are not acting rationally.

Having said that - i am in the SE and the usual solid family 3 bedders are not selling in an area where they usually would. Nothing on RM seems to be happening

Or is it highly rational? Take out the biggest mortgage and car loan you can on your current salary, knowing that you will have several months of forbearance and/or payment protection insurance. Wait until next year and you may well be unemployed or have had a big pay cut.

[p1stonhead]

Flooble said:

menousername said:

Same people probably out signing up to new car deals too- they are not acting rationally.

Having said that - i am in the SE and the usual solid family 3 bedders are not selling in an area where they usually would. Nothing on RM seems to be happening

Or is it highly rational? Take out the biggest mortgage and car loan you can on your current salary, knowing that you will have several months of forbearance and/or payment protection insurance. Wait until next year and you may well be unemployed or have had a big pay cut.

This. Banks don’t actually want to repossess houses. They give a lot of leeway generally.

If you have a few months emergency fund after buying, I’d be going for it too probably if I didn’t already own.

[JagLover]

Carbon Sasquatch said:

red_slr said:

Dont count your chickens just yet with work / income. I dont think anyone knows just how far down the rabbit hole we are going to go and maybe we are already as deep as its going to get but my gut feeling is we are only about 10% of the way down!

10% of what metric ?
Increased unemployment ? Income levels ? GDP shrinkage ? House prices ? Time ?

Well exactly

It is hard to get up to date stats but I think the current number of unemployed is 2.8m.

That number will clearly increase, but if, say, it increases to 4m once furlough is withdrawn we are clearly far more than 10% of the way to the trough.

[anonymous-user]

I have an employee suddenly trying to a buy a house. It's quite painful, as I'm having to drop subtle hints about the fragility of the role, without breaking moral too much. But this only served to increase the determination to proceed ....

People still see property as a one way bet, even in a crashing employment market.

[Earthdweller]

Flooble said:

Or is it highly rational? Take out the biggest mortgage and car loan you can on your current salary, knowing that you will have several months of forbearance and/or payment protection insurance. Wait until next year and you may well be unemployed or have had a big pay cut.

Then what happens next ?

You’re unemployed or earning far less, how to you pay you big new mortgage and car loan ?

Or am I missing something ?

[p1stonhead]

Earthdweller said:

Flooble said:

Or is it highly rational? Take out the biggest mortgage and car loan you can on your current salary, knowing that you will have several months of forbearance and/or payment protection insurance. Wait until next year and you may well be unemployed or have had a big pay cut.

Then what happens next ?

You’re unemployed or earning far less, how to you pay you big new mortgage and car loan ?

Or am I missing something ?

Would they be in any different position if they were renting?

Mortgages tend to be cheaper than renting a similar property.

You are st out of luck either way if you lose your job.

[wisbech]

Mr Macawber. Something will turn up

[Flooble]

Earthdweller said:

Flooble said:

Or is it highly rational? Take out the biggest mortgage and car loan you can on your current salary, knowing that you will have several months of forbearance and/or payment protection insurance. Wait until next year and you may well be unemployed or have had a big pay cut.

Then what happens next ?

You’re unemployed or earning far less, how to you pay you big new mortgage and car loan ?

Or am I missing something ?

Interest rates are so low a pay cut is largely irrelevant as you can't get a mortgage that has a repayment anywhere near your monthly income. Mortgage firms are back to lending 3.5 - 4x salary, despite rates being ~1% instead of ~8%. If you are on £45K and take out the biggest mortgage anyone is likely to allow (£200K) you will have repayments of ~£800 a month (against net pay of ~£2800 a month). A pay cut to £30K would see your net pay drop to ~£2000 a month, so the repayments would still be manageable - a little painful but then that's to be expected with 1/3 of your salary removed!

Having a car loan too would cut the mortgage you'd be allowed so the position ends up the same - manageable.

If you lose your job entirely you will likely have at least a year before the bank starts repossession proceedings and that is assuming you did not bother to take out unemployment insurance. If you have a bit of savings you can probably stretch the year to two years by making payments here and there. Again, with interest rates so low the amount you'd have to pay to stave off repossession would be tiny. The total interest over the entire 25 years on that £200K loan is only £25000!

[hutchst]

Flooble said:

You can sense that my employer would desperately like everyone back in the office full time (for whatever reason) but is facing massive resistance. It's possibly going to come down to brinkmanship.

As an employer can you mandate everyone coming into the office with the schools still shut? Mandating those without kids having to come in, is a great way to make divisions in your workforce. Most employers which are vaguely reasonable with sickness policies are also going to have a lot of "vulnerable" people who want to keep "shielding". I use speech marks to differentiate the genuinely vulnerable from those who have suddenly developed a hitherto unmentioned condition or relative.

So as the employer do you try and force it? Given that current government guidance (staggered start times, spaced out desks, limited use of meeting rooms etc.) makes being in the office less productive than being at home, to try and force it at the moment culturally you need to be pretty far over to "our staff must be in the office". Any firm that is ambivalent about home working will I feel take the easy option of continuing with primarily WFH.

On the flip side, as an employee, how hard would you fight to not come in?

Somewhere a balance will be found, where that is no-one knows yet. But I suspect it's likely to fall on the side of limited time in the office.

However, buying a house in Yorkshire when your office is in London would be a bold move at this point. It would be very easy to get caught out with senior management announcing "right, everyone back in".

No employer can force you to come to work. But there is no obligation to pay you if you don't. If you're shielding you're probably entitled to sick pay in accordance with your contract. Your own opinion of how productive you are working from home rather than at the office is rather less important than your employer's opinion.

And ultimately the home worker v office worker debate will be resolved by the pay cheque, with home workers earning significantly less.

From my own experience the sluggish return to full office working is driven more by logistics than productivity. As just one small example of the problems faced by city employers, getting people up and down in lifts in city centre tower blocks is a huge issue with any form of distancing. Trying to get into a 20 person lift car that is only currently carrying 4 people is a nightmare to get down from upper levels, and tempers get frayed very quickly once a lift has stopped a dozen or more times at your floor but you still can't get in.

[BMW A6]

hutchst said:

Trying to get into a 20 person lift car that is only currently carrying 4 people is a nightmare to get down from upper levels, and tempers get frayed very quickly once a lift has stopped a dozen or more times at your floor but you still can't get in.

Perfect opportunity to use the stairs and lose some weight you fat bastids.

[spikeyhead]

wisbech said:

Mr Macawber. Something will turn up

I'm half way through reading David Copperfield.

[hutchst]

BMW A6 said:

Perfect opportunity to use the stairs and lose some weight you fat bastids.

My office is on the 30th floor

and the escape stairs are alarmed

[spikeyhead]

hutchst said:

BMW A6 said:

Perfect opportunity to use the stairs and lose some weight you fat bastids.

My office is on the 30th floor

and the escape stairs are alarmed

Fit a few zip lines to make getting out easier

[tim0409]

We are in a real quandary at the moment; we built our house 10 years ago in a beautiful coastal conservation village 20 miles from Edinburgh. We had to pay quite a bit for the land, and I did the vast majority of the building work (assisted by my wife) and were lucky to end up will a lovely house.

Unfortunately our plans for a family didn't work out, so we don't really need a four bedroom house. Just before lockdown we decided to put in on the market with a view to moving to rental accommodation for 6-12 months whilst I found another project (ideally a bit of land), with a safeguard of reserving a plot/house on a new build estate (£320k) in a decent area nearby; this was more my wife's idea!

We had the home report carried out the day before lockdown, and the value came back at £490k, which was quite a bit more than we anticipated as there aren't any comparable properties in the village. We held off until the property market opened up, and since then we have had a lot of interest and the agent thinks we could achieve circa £515k with a closing date. All good so far, but we are now wondering if we had made the correct decision to put it on the market...

Upside to selling -

Selling at what is likely to be the top of the market (although the area has always held firm)
Pay off all debt
Great position to buy land when it comes up
Afford to do more of things we want to do.


Upside for staying put -

During lockdown (working from home) we have really enjoyed the house, and since getting a dog we have made the most of the local beaches etc.
Building another house will be stressful
On reflection, a new build estate doesn't really appeal to me.
Renting would be expensive in the short term.


In fairness to the agent and the viewers we really need to make a decision in the next 48 hours....