How far will house prices fall [volume 5]

[ooid]

V6Alfisti said:

Totally agree, housing just doesn't work that way. I know some think my usual "it depends on street, area, type of property e.t.c" is a cop out catch all but it's just true.

Although it does look like only a very small proportion of E11 is going SSTC (10%) apart from the handful of properties you post, so that really does take the "every property is different" to an extreme I haven't seen to quite that level, normally you would see some other mix of SSTC but not in E11 if rightmove is right.

I do not know, must be the specifics of both location and houses. Here you go another E11, near Leyton. It's under offer, less than two weeks, and if you look at the previous sold price, 10 years ago, it's clearly doubled now.

https://www.zoopla.co.uk/for-sale/details/56265876...

Not too bad? with all these covid-19, brexit, bla bla...

[V6Alfisti]

ooid said:

I do not know, must be the specifics of both location and houses. Here you go another E11, near Leyton. It's under offer, less than two weeks, and if you look at the previous sold price, 10 years ago, it's clearly doubled now.

https://www.zoopla.co.uk/for-sale/details/56265876...

Not too bad? with all these covid-19, brexit, bla bla...

Indeed I don't think anyone is arguing that prices in E11 aren't higher than 2010 i.e general market but more specifically adjacent areas developed as part of the olympics and perhaps E11, I know little about it.

The point rather being that less than 10% of the whole of E11 has gone SSTC for property listed in the two weeks, which seems low. Although it is great to see every single home sold in E11 posted here i.e 8 of 115 listed.

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

Edited by V6Alfisti on Wednesday 30th September 19:11

[South tdf]

As promised my buyer exchanged and completed today on one of my properties. The agent mentioned the same buyer has at least 5 more for completion next month so he is certainly confident in the market.

[gibbon]

NickCQ said:

'If I told you I had a nine inch knob that would be boasting about the size of my knob so I won't'

Apologies, that does sounds nobby, i got caught in a petty debate and didnt know how to phrase it better.

[Ari]

rm163603 said:

Shame IO mortgages aren't available to owner occupiers anymore.

Yes they are.

[dmahon]

South tdf said:

As promised my buyer exchanged and completed today on one of my properties. The agent mentioned the same buyer has at least 5 more for completion next month so he is certainly confident in the market.

It could be me. You aren’t on the London / Essex border are you?

I’m currently buying a handful of BTLs with the following motivations:

- Diversify out of cash in case of bank crisis
- I don’t have the cajones to ride our huge swings in the stock market so risk selling out at the bottom as I did earlier this year. Plus stocks still feel too high.
- Pretty safe 4%+ yield on cash invested (looking to minimise hassle rather than yield)
- Buying for income and probably won’t sell so prices aren’t that relevant
- That said, after an initial dip all of the money printing and chasing yield just results in asset price inflation as shown post 2008
- Government throw everything at housing market to keep it high

I’ve been an Uber bear on property my whole life and accrued 10k posts on Housepricecrash.co.uk, but property seems like the only game in town and it’s as close as you get to a one way bet.

Cue crash in 5, 4, 3....

[richardxjr]

Ari said:

rm163603 said:

Shame IO mortgages aren't available to owner occupiers anymore.

Yes they are.

correct, am surprised! 5yr fixed 1.44% 40%LTV

[rm163603]

Ari said:

rm163603 said:

Shame IO mortgages aren't available to owner occupiers anymore.

Yes they are.

I stand corrected.

My (wrong) understanding was that these were stopped after the MMR.

It looks like you need a 'repayment vehicle' in place to demonstrate that you will be able to settle the principle.

I'm guessing that selling the property is a valid repayment vehicle if it's BTL but from what I read downsizing / selling isn't a valid 'vehicle' for O/O?

[Captain Raymond Holt]

rm163603 said:

It looks like you need a 'repayment vehicle' in place to demonstrate that you will be able to settle the principle.

That’s my understanding, I also don’t think (may be wrong) that you can just rely on house price increases, I think it has to be a proper repayment vehicle.

Edited by Captain Raymond Holt on Thursday 1st October 11:28

[number2]

Captain Raymond Holt said:

That’s my understanding, I also don’t think (may be wrong) that you can’t just rely on house price increases, I think it has to be a proper repayment vehicle.

Yes, not like the 'old days' when one could just lie .

[richardxjr]

Ah, I see!

[Sheepshanks]

dmahon said:

It could be me. You aren’t on the London / Essex border are you?

I’m currently buying a handful of BTLs with the following motivations:

- Diversify out of cash in case of bank crisis
- I don’t have the cajones to ride our huge swings in the stock market so risk selling out at the bottom as I did earlier this year. Plus stocks still feel too high.
- Pretty safe 4%+ yield on cash invested (looking to minimise hassle rather than yield)
- Buying for income and probably won’t sell so prices aren’t that relevant
- That said, after an initial dip all of the money printing and chasing yield just results in asset price inflation as shown post 2008
- Government throw everything at housing market to keep it high

I’ve been an Uber bear on property my whole life and accrued 10k posts on Housepricecrash.co.uk, but property seems like the only game in town and it’s as close as you get to a one way bet.

Cue crash in 5, 4, 3....

I admire (am envious of) people who've got the cajones to do BTL. Perhaps I'm over-thinking it, but the thought of some random people using "my" house terrifies me. I know a couple of people who do it and it seems like there's always some problem or other to deal with.

[anonymous-user]

dmahon said:

I’m currently buying a handful of BTLs with the following motivations:

- Diversify out of cash in case of bank crisis
- I don’t have the cajones to ride our huge swings in the stock market so risk selling out at the bottom as I did earlier this year. Plus stocks still feel too high.
- Pretty safe 4%+ yield on cash invested (looking to minimise hassle rather than yield)
- Buying for income and probably won’t sell so prices aren’t that relevant
- That said, after an initial dip all of the money printing and chasing yield just results in asset price inflation as shown post 2008
- Government throw everything at housing market to keep it high

I’ve been an Uber bear on property my whole life and accrued 10k posts on Housepricecrash.co.uk, but property seems like the only game in town and it’s as close as you get to a one way bet.

Cue crash in 5, 4, 3....

Exactly the same as me except I am not worried about a possible banking crisis. I am more concerned about having cash in a savings account accruing no interest while the government devalue money by QE printing and helicopter money.

I dip in and out of HousePriceCrash and you can feel the despair that despite Brexit/Covid/Unemployment figures etc. prices are still rising. I must have been reading about the imminent crash on there for over 15 years.

I personally think having large sums of cash in the bank is a waste. Certainly have six months income stored away, but anything more than that is a waste. I think the more money the government print or lend through bounce back loans that will never be repaid the more will be put into property.

The FTSE 100 is at the same level it was 20 years ago, that doesn't sound like a great investment to me.

My mother has a decent amount in a Marcus account that she was planning on living on now she is retired. With rates so low she is now looking to buy a BTL with the money as the return is so much better and the capital remains (albeit invested in the property)

[dmahon]

Sheepshanks said:

dmahon said:

It could be me. You aren’t on the London / Essex border are you?

I’m currently buying a handful of BTLs with the following motivations:

- Diversify out of cash in case of bank crisis
- I don’t have the cajones to ride our huge swings in the stock market so risk selling out at the bottom as I did earlier this year. Plus stocks still feel too high.
- Pretty safe 4%+ yield on cash invested (looking to minimise hassle rather than yield)
- Buying for income and probably won’t sell so prices aren’t that relevant
- That said, after an initial dip all of the money printing and chasing yield just results in asset price inflation as shown post 2008
- Government throw everything at housing market to keep it high

I’ve been an Uber bear on property my whole life and accrued 10k posts on Housepricecrash.co.uk, but property seems like the only game in town and it’s as close as you get to a one way bet.

Cue crash in 5, 4, 3....

I admire (am envious of) people who've got the cajones to do BTL. Perhaps I'm over-thinking it, but the thought of some random people using "my" house terrifies me. I know a couple of people who do it and it seems like there's always some problem or other to deal with.

I have never wanted to do it and actually have a bit of an ethical objection. I’m just looking not to get shafted in the current environment. I’m praying it doesn’t bring lots of headaches as I’m jumping in with both feet, though buying nice family homes in nice areas to try to avoid some of the risks.

[kingston12]

Sheepshanks said:

I admire (am envious of) people who've got the cajones to do BTL. Perhaps I'm over-thinking it, but the thought of some random people using "my" house terrifies me. I know a couple of people who do it and it seems like there's always some problem or other to deal with.

Me too. I've dipped in before, but it was a product of the situation rather than an active investment. I wasn't too worried about other people living in 'my' house, but it wasn't nice knowing that you could just be called on at anytime to do the most minor of repairs etc.

My main issue is with capital value - if my own house were to drop 10% I wouldn't mind that much, but if one that I was holding purely for investment purposes did the same I'd be really annoyed - especially when you add in low yields and the hassle factor.

I appreciate that is the nature of investments, and I do agree that BTL probably looks like a good way of avoiding the massive inflation that it looks like we are going to face going forward.

[MX6]

dmahon said:

I’m currently buying a handful of BTLs with the following motivations:

- Diversify out of cash in case of bank crisis
- I don’t have the cajones to ride our huge swings in the stock market so risk selling out at the bottom as I did earlier this year. Plus stocks still feel too high.
- Pretty safe 4%+ yield on cash invested (looking to minimise hassle rather than yield)
- Buying for income and probably won’t sell so prices aren’t that relevant
- That said, after an initial dip all of the money printing and chasing yield just results in asset price inflation as shown post 2008
- Government throw everything at housing market to keep it high

I’ve been an Uber bear on property my whole life and accrued 10k posts on Housepricecrash.co.uk, but property seems like the only game in town and it’s as close as you get to a one way bet.

Cue crash in 5, 4, 3....

Interesting. I'm guessing there'll be at least some others in the same position as you, looking to put money into property as a likely safer investment than the alternatives. Must be a factor in rising prices.

I've some sympathy for the housepricecrash crowd, the property game does look something like a ponzi scheme depending on your perspective/how you choose to look at it. Indeed the whole capitalist system can look that way when you start thinking about financial instruments like derivatives and all the rest of it. I guess the big difference between housing and other types of investments is that we do all need somewhere to live, and with the inflating money supply it seems there is probably a limit to how far prices could realisitically fall given that people are looking for long term appreciating assets to invest their money in. There could well be some kind of significant price correction at some point if factors such as covid, unemployment, etc. start to be problematic, but for now it's greater fool theory still at work. My thinking is that, since I'm in a decent size family house in a place I am satified with, if a crash wipes out my equity and more, meaning I can't realistically move, I've no problem sitting it out and living in it for the long term (provided I stay employed). Plus I can't see interest rates going up by any meaningful amount in the medium term. I'd be a lot more wary if I were a prospective FTB looking to stretch myself to the max to buy a flat or something in the near future though...

[anonymous-user]

MX6 said:

Interesting. I'm guessing there'll be at least some others in the same position as you, looking to put money into property as a likely safer investment than the alternatives. Must be a factor in rising prices.

I've some sympathy for the housepricecrash crowd, the property game does look something like a ponzi scheme depending on your perspective/how you choose to look at it. Indeed the whole capitalist system can look that way when you start thinking about financial instruments like derivatives and all the rest of it. I guess the big difference between housing and other types of investments is that we do all need somewhere to live, and with the inflating money supply it seems there is probably a limit to how far prices could realisitically fall given that people are looking for long term appreciating assets to invest their money in. There could well be some kind of significant price correction at some point if factors such as covid, unemployment, etc. start to be problematic, but for now it's greater fool theory still at work. My thinking is that, since I'm in a decent size family house in a place I am satified with, if a crash wipes out my equity and more, meaning I can't realistically move, I've no problem sitting it out and living in it for the long term (provided I stay employed). Plus I can't see interest rates going up by any meaningful amount in the medium term. I'd be a lot more wary if I were a prospective FTB looking to stretch myself to the max to buy a flat or something in the near future though...

I think thats the issue I have with the HPC crowd, people with BTL's etc obviously have an interest in price movements as the properties are just an investment but I think ordinary folk just get caught up in the doom mongering and start looking at places as investments and trying to avoid some form of failure if the price changes negatively post purchase when they shuld be in your position where in reality the only time the price matters is if you choose to sell

I'd say 95% of home owners don't consider the price of their place unless they want to move or want to borrow to extend/improve, whereas you have people renting for x+ years to try and save 10-15% if it drops

[Shnozz]

anonymous said:

[redacted]

Whilst that should be the case, I’m not sure I agree. The value of ones house and increased equity brought about by asset inflation rather than payment erosion seems to not only be of interest to property owners, but also a massive driver in consumer confidence spending outside of property.

Whilst it should be only of benefit to those whose next step is downsizing, you only need to read the glee of people who (even though they aren’t actively looking to move) are regularly checking to see their house is worth more than the week/month before to the point of near obsession. We joke about how it’s a dinner party hot topic it’s so stereotypical in a preoccupation on the topic.

[okgo]

Shnozz said:

Whilst that should be the case, I’m not sure I agree. The value of ones house and increased equity brought about by asset inflation rather than payment erosion seems to not only be of interest to property owners, but also a massive driver in consumer confidence spending outside of property.

Whilst it should be only of benefit to those whose next step is downsizing, you only need to read the glee of people who (even though they aren’t actively looking to move) are regularly checking to see their house is worth more than the week/month before to the point of near obsession. We joke about how it’s a dinner party hot topic it’s so stereotypical in a preoccupation on the topic.

It's also likely regional, I can't see that it's likely to be the topic of conversation in Darlington that it is in Clapham. And I'd probably say that given a large proportion of the UK people live in the SE where property can/does go up and almost act like a second salary, coupled with the fact that most people do have a 'move out' of London etc in mind at some point generally so their interest in the asset that will be fuelling that is heightened means it is probably on the minds of a lot more than 5% of people!

[richardxjr]

Eventual downsizing must be a big part of many peoples' retirement financing plans!