Before lockdown I was considering a buy to let, - I am also considering moving. Just wondering what people's thoughts are on how property prices will pan out over the next 6 - 12 - 24 months? Is a downturn inevitable, given the expected recession? (Also given that thousands of new properties have been created over the last couple of years, decreasing demand), or do you think demand it just still too high etc, that it won't waver... or?
I think property has to go down although I read an article yesterday explaining why it would go up? But in all honesty it must drop considering what's coming, mass unemployment, redundancy etc.
As for buy to let that was finished before the pandemic, the government have removed all the perks,also now is not a good time to be a landlord trust me I know, plenty of tenants unable/not paying/very little help available.
Obviously in uncertain times people may wish to invest in tangible assets rather than crazy stocks but I don't think its enough to save property.
I would sit it out for a while as we are not at the bottom yet and no one really knows where will end up.
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I have been tiring of BTL and had a property for sale that went on the market 2 weeks before lockdown.
I suspect prices are going south so I am renovating it now to re let.
The agent I work with is speculating that prices will hold up short term due to lack of supply but then likely will soften.
He believes that due to the 3Ds there will be new supply in the months to come and some increased demand for rental.
3D = Death, Divorce and Debts
It is true that political change has made BTL less attractive and more admin but with low borrowing rates it is undeniable that you can get nice leveraged long term investment if you think that long term property will hold up.
Given such poor returns in the bond markets I have seen more people being interested in property as a defensive investment so who knows the market may hold up better than we think. Equities seem to be holding up (based on what I don’t know ...)
I have just started to talk to a couple of Estate Agents to do valuations on my Dad's property who died about 6 weeks ago.
I haven't got probate yet but thought I would start the ball rolling.
I took a look at this thread as I thought I might get some idea of how things are in the market, good to see that no one here has much of an idea either
We have 2 properties for sale, one was due to exchange/complete as lockdown hit. We have been on hold for 2 months and today have agreed a £10k reduction if completion happens in a week. We will see if it happens.
Personally there will always be demand at the lower end of the market, the cheaper your house is the more likely it will sell, the top end houses have a limited number of purchasers and in these times I would bet they are dwindling.
All depends on the value of your house and how much your upgrade house is. If yours is worth £250k and youre going into a £350k house, it wont make much difference. If youre going into a £500k house I don't think there will be many takers right now especially in Leicester (lived there a while back) and you may be able to squeeze a better price, supply and demand and all that jazz.
All depends on the numbers buddy
There’s brand new 600k houses going up around me (Leicester) and they’re getting snapped up like there’s no tomorrowOriginally Posted by Estoril-5
I think one persons view is as much of a guess as the next and any one of us isn’t any more expert in this than others. This is a completely different situation to 2008 so I don’t think history is a good indicator either.
If I was investing, personally, I’d wait to see how things pan out in 6-months before jumping in as I don’t think the market has had time to make any reaction yet, so it’s probably worth waiting until JRS payments cease and the economy as a whole reacts to this crisis.
Agree with the above though...being a buy-to-let landlord isn’t great any more with the extra stamp duty, zero mortgage relief and the risk you take with the increased rights of tenants.
Last edited by Christian; 18th May 2020 at 10:48.
Location, location, location and price.
Absolutely.
I’d also say that with less mortgages being agreed there will obviously be less sales/moves - so less properties on the market overall.
It could well be a time for those who are stable/safe in their income with the ability to get a decent amount of low interest credit to take advantage.
Some people will be prepared to sell cheaper. Some people might have to sell, but others will just delay their planned house moves. Dependent on how many there are in each of those camps will help predict how big a decrease we might see.
All things being equal, I really don’t see there being a long term reduction in house prices, and I expect things to recover and go beyond current price prices quite easily within the next 3-5 years.
If you are able to take advantage of the current uncertainty then there is no time like the present.
It's just a matter of time...
Recently read an article that it will take months for real estate market to recover from the crisis caused by the virus. The forecast is true about Spanish real estate market but I believe that in other countries we will se the same tendency.Moving to Spain is especially preferrable after Brexit https://virtoproperty.com/info/movin...n-after-brexit in case you live somewhere in Great Britain.
Last edited by Owren; 17th June 2020 at 01:42. Reason: additional info
The problem is looking at the prices things are coming on for here there doesn't seem to be any uncertainty just unreasonable amounts of optimism.
At least 15 houses have come on here in the last two weeks and only two have been listed with not outrageous asking prices. Both not in our end of the market. We've been sent a fair amount of reduced property alert emails by Rightmove but these have all been at the lower end of the market sadly and no ability to see what it was before to gauge percentages as an overall indication.
Have got tried using home.co.uk? Once I have seen something on Rightmove I will find it on home.co.uk where you can see how long it’s been listed for including a price history.
I too haven’t seen any reduction on prices, and desirable stuff is going under offer very quickly. Unless you were desperate to sell, I’m not sure why you would list your property now at a reduced price. I did see one that was listed at the end of March for 999k and now dropped to 930k which is a quicker / bigger drop than usual.
When I have spoken to agents about properties, there have been a fair few that have come back on the market which have fallen through due to one link falling through (due to corona). I would think the discounts available for cash or at least chain free buyers are more than ever.
That would be nice, but it doesn't appear that many appear to look at it that way!
Completely agree. This positivity in the market is insane, people haven't yet felt the pain of what is going to come.
I dislike being negative, but it's insane to think of anything but a difficult market in the future.
I pulled out of a purchase of a new build in March, when I had company shares suspended from sale, so I was stuck short of my deposit. It was the right decision to make then, but it's only looking like a better one.
I can't get close to what I was able to borrow 4 months ago, so how the market is going to be held up, when lending is being restricted. Those saying otherwise are kidding themselves, if the money isn't available, the market will contract - it can't all be held up by BTL etc.
I think I'll be sitting tight for a few months yet.
The mortgage advisers at work are incredibly busy - loads of new enquiries from new clients and lots of existing clients wanting to move/extend/buy more. We figure that there are all the people who wanted to buy in March, April and May joining in with the people who want to buy in June. Prices aren’t dropping at all and we also figure that they won’t for a while at least . . . . The furlough scheme is potentially one long unemployment delay scheme and won’t start unfolding until at least August (when employers have to start paying NI and pension contributions, then September when 10% of wages are added, followed by October when its increased to 20%). Its only then that we’ll start to see the true picture of the job market.
I think if you’re going to move your equity should be as much a consideration as house prices. If you have 30k deposit and are buying for 300k, a 10% drop in house prices and all of a sudden you’ve lost all your equity. You have 100k deposit and you’re fine. So moving up the market right now is a little risky. Waiting and you may move up cheaper - you’re 150k house dropping 10% means the 300k house you want to buy also drops 10%.
All that said, with the government financial stimulation package being unprecedented, we may see all this influx of money help house prices remain stable, even rise in some areas. I read the other day that personal debt reduced by around 7.5b in March and April as people couldn’t spend it. A record drop apparently. I also read somewhere else that in April alone there was 23b in people bank accounts ready to be spent when lockdown ended.
So who knows - I think everyone needs to look at their own situation and see what’s right for them, right now.
I have the cash ready for a second property to use as a combination holiday let/investment and bolt hole for us when its not in use, and have done for about a year. Very very glad I didn't pull the trigger on anything now, I'd be sitting on a property I cant use, cant rent out, and paying one and a half times or double council tax on. I'll certainly be waiting the rest of this year out and I'd advise anyone else to also unless they absolutely have to move or buy for unavoidable reasons. I can only see a drop in prices coming, perhaps not an actual crash, but definitely no rise.
Of course, if the majority of people who are looking to buy wait, it will create a self fulfilling prophecy because people who have to sell will have to drop prices.
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We seem to have had a bit of a Mexican standoff for a good 2-years now with pretty stagnant prices where I am in London. I think there’s been low supply and less buying because people were originally waiting to see what happened with Brexit.
It was looking to buy I’d hold off.
If I manage a quick sale on mine I’ll be delighted but I’m expecting to re let.
Property on the market pre-corona for £400k with two agents selling (was overpriced). Checked today and one of them has reduced to £350k. Id still be surprised if someone pays that, I think £320k would be good considering its location, pretty sure its a leasehold because the house is on the land of a block of flats (ground masters lodge or something), also it doesn't have its own parking space outside, you have to park in the communal outdoor carpark and walk it to you front door, plus you cant alter any part of the outside as the garden is not yours, its communal ground.
Update: second agent has just dropped price to £350k too.
Last edited by Estoril-5; 21st May 2020 at 10:51. Reason: update
Go in somewhere in the high 2's you never know.
I'd love you to be correct as we are in the same situation. But I'm just starting to see properties coming onto the market after a 6 week lull and the prices are no different to before all this.
Yes it's an asking price but if you are looking in the same sort of places we are, low stock, popular second/holiday rental area, I have a horrible feeling we aren't going to see much change.
We had an offer rejected just a few k shy of the asking price in December and part of me is very glad I still have the capital liquid as work is a tad slow but I still see it as a (yet another, we've had no luck at all in this search, if you discount bad luck) frustrated opportunity. If you had asked me in Jan if I thought we would get what we wanted I've had said yes eventually but now I'm not so sure.
Hi David, I guess people who already own holiday properties hope I'm wrong, and people who don't, you and me, hope I'm right. I have no idea yet, and I think it's far too soon to know if today's asking prices will hold or not.
I fear you could be right regarding properties in holiday let hotspots in particular not dropping far or at all. I've been following that market in certain parts of West and South Wales and some properties sit there for a few years as the owners aren't in a hurry to sell unlike someone selling their residential property to buy a new one, especially if they are getting good rental income in the meantime.
But we haven't yet seen the full or even partial extent of the recession that is coming, people are currently furloughed rather than laid off in many cases, most companies are hanging in there but its going to be dreadfull for many. As I say, cant say if there will be a price drop, but I just cant see that a rise is possible for a long time.
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I would suspect in the short term ( next few years) people will be wanting to holiday at home and would expect prices to stay stable or a small increase.
Still cant see an increase, perhaps I dont want to if I'm honest with myself, but yes, what you are saying makes a lot of sense.
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I sold in October and I'm living with family. Was actively viewing houses every weekend up until Corona kicked in. We've now firmly decided to stay out of the market this year and revisit next year. Not an ideal situation but my opinion is prices will fall although I'm not going to be bold enough to guess by how much. That being said I think most property owners would welcome a 5% drop as a walk in the park compared to what we'll probably see.
A lot of banks are cutting products entirely for people with 15% or less deposit which will take some demand out. People are dying and probates will be up (one of our neighbours died weeks ago and still isn't buried, she's in the queue). Valuers are actively down valuing properties (see Devonian's thread) and although you can view properties now I would seriously question the sanity of anyone going to view them although I do understand the motivations of some vendors.
Typically you would still expect 'Death, Divorce and Debt' sales but even divorce will have to wait for most people. The only properties I'm seeing uploaded are from online agents who pay their reps a commission for new instructions.
I have certainly see quite a few new listings from standard agents in the last week in the area I'm looking (London). I'm due to exchange on my current place in the next couple of weeks, if something perfect had come on (even at pre-corona prices) I would have tried to keep my buyer waiting while I could progress a purchase, but I haven't found anything suitable yet so I will sell and rent for a while and see what happens.
I have read various reports and articles with varying predictions. There is talk of 'pent up' demand which could keep prices stable for a while. In reality I think there is too much uncertainty and too many chains that will fall through which will result in an initial softening of prices. I also think the market will be stagnant for a while and the bigger drops in price will happen towards the end of 2020 when reality has hit for more people.
Two new on today and both from local agents but at optimistic prices. Even pre-corona they would have been too much. Also some emails from agents asking if we're still looking and reminding us they're open. I have a friend who is a property photographer and he's dead at the minute but some people are asking him about virtual tours.
We're also looking in London although just -- we're a few minutes inside the M25.
I think that’s the nature of the market. When valuing, no agent is going to suggest a figure even 5% below the ‘pre-Covid’ amount because they’ll be scared the vendor will have had a higher valuation by another agent. In reality stuff will come on overvalued and transactions will take place in a few months at lower prices.
I think the only bargains to be had now will be for things that have already been on for a long time and the vendors are either very keen to, or need to sell.
This is all just my opinion of course.
I wonder about all the uni towns and cities. There just has to be a reduction in foreign students in the short term (this September) and the longer term as more goes online.
I’m pretty sure that the number of new builds each year for the last several years (decades probably) has been less than the increase in households through organic population growth as well as immigration. Whether immigration will reduce (or even go net emigration) post-Brexit is an interesting question. I doubt that building will catch up with increasing demand any time soon.
Last edited by David_D; 18th May 2020 at 11:43.
I was about to complete a sale on a property I’ve been letting out for 3 years or so, but the buyer pulled out citing Covid just before lockdown started.
It’s sitting empty at the moment, and of course I’m having to pay the expenses on it, but it’s still for sale and apparently there are a number of buyers lined up to view it shortly.
I’ll give it a month and see if that translates into any offers, otherwise I’ll just let it out again until this all blows over.
Houses have not been ‘cheap’ for a couple of decades, and the long term price trend only ever goes one way.
Having been involved in buy to let’s for over 25 years both personally and professionally, I’ll echo the sentiment that no one knows. They can’t know as what’s happened in the last two months is unprecedented in our lifetime. So we can only go on what we know and what we think . . . .
We know that property enquiries are going to be busy, starting now and especially out of lockdown. Why? Various reasons including the time of year, people having to move and also a lot of the people who would have viewed property in March, April and now May backing up. So short term demand could show a strong market which might be misleading.
We also know that Surveyors and lenders will be cautious (they’ve said as much) as they won’t know how this is going to play out. Lenders have been restricting LTV’s and some are restricting borrowing for furloughed staff and want to have proof that self employed people are still earning.
We also know that demand will be strong as there also seems to be a shortage of property, hence why so much building is going on.
What we don’t know is the true cost of this virus to employment, incomes and the economy as a whole. Whilst the furlough scheme is in place until October things are going to be unreflective of reality, as it’s a bit false.
We also don’t know whether property prices can hold up based on ‘borrowing affordability’. If people are going to earn less going forward (less commission, bonuses, overtime, pay rises, net profits, work etc) 4.5 times £30,000 income is a lot less than if it was £40,000. That market will automatically reduce if that happens. So whilst demand could remain strong, if it’s not affordable in the first place, demand is less relevant. Supply would have to become cheaper.
Personally If I needed to buy/move I’d just get on with it. If I didn’t and was uncertain I’d wait and see how it goes in the next couple of months.
The main positive is we will come back from this, that I’m sure of. It might be a hard time for a while but we’ll get there.
On the affordability point, property has been unaffordable for years yet that hasn’t stopped prices marching forward.
Not for the people that have been buying though and it’s those that, if their incomes drop what they can borrow will drop, this pushing prices down. Property prices dropped in 2008 For various reasons, one of them because income multiples reduced on borrowings as lenders tightened up. If incomes dropped it will do the same.
House prices will follow the same trend they have done for the past 50 years - there will be a short term dip, as is the case in any recession, but this will stabilise and long term prices will rise.
I would echo the nobody knows about prices but add the fact the country needs money
property is easy to tax, because they know where it is and who owns it, i'd expect second property taxes to really start cranking up on the logic anyone who has a second property can afford it
tenants rights are getting stronger
unemployment is going up
i can't see the rent part of universal credit going up
if i had a guess at prices, as long as interest rates are low, people can afford to stay where they are so the number of sales will be low, and i suspect it'll just stay in the logic, this is what its worth...
but inflation will spike with brexit and they won't be able to use interest rates to control it without crashing the housing market, we maybe facing a new period of low interest rates, high inflation which will end up lowering the prices in real terms
Has there ever been a period commensurate with the typical mortgage term (20-25 years) when house prices in the UK have done anything other than rise?
If the "housepricecrash" fanatics couldn't get a result from the "credit crunch" of a decade ago, they ain't gonna get one from the current carry-on, when money is going to remain cheaper than its ever been.
I don’t think anyone is suggesting they will fall for the length of a typical mortgage, however no one wants to be in negativity equity, even if it’s temporarily.
Then you shouldn't buy any asset. Nothing goes up in a straight line.
I understand that property is an ‘asset’ but it’s also a home. Wanting to own your own home and not wanting to buy just before a recession or fall in prices isn’t an unfair position. I have said earlier in the thread I would pay the ‘pre-corona’ price for the perfect property as I know it will recover in price in a few years.
No, hence why I don't understand why people get in such a twist about it.
A house near me went on for sale for £350k well before corona, it dropped after a short while to £340k which was slightly overpriced but I guess there was some fat in there for negotiating etc. It was a fixer upper done to a good contemporary standard, no chain etc. Was reduced this week for £320k. At that price I think its priced to sell, must be a desperate seller.
I think well see some prices that will return to acceptable and some that believe their asking is what it is worth.
If house prices fall that doesn't bother me as my house will drop in value and the house I move up should be cheaper, its all about the level of debt ill have rather than what I think my house is worth.
I am surprised at the number of houses popping up on Rightmove etc this week.
question to those in the know, could a 45 year old get a 30 year mortgage so potentially paying off the mortgage when they are 75?
Couldn't comment on those numbers particularly, but lending on terms past "normal" retirement age i.e. 65 is increasingly common, as it is widely accepted that in years to come, 65 will not be the "normal" retirement age.
I recently got a new mortgage with Halifax and they won't lend beyond 70 but obviously will beyond 65
From what I have seen, new houses are coming on to the market at pre-Covid asking prices. I suspect prices will drop in the coming 3-6 months, deals are there to be had with sellers who need to sell and similarly there will be buyers that need to move.
If I was looking to buy a BTL, I would be waiting to see what comes up and would still move if the deal was right.
I spoke to another friend of joins looking to buy in the same boat, again said they would pay the current value for the right house and ride it out as they expect to own it for 5+ years.
I’m contradicting what I have said before; but I think the drop might me lower then I first thought and transactions just won’t happen. There will of course be some bargains, right place right time and all that.
I can't imagine any landlords will change their plans based on this.
From 2024, the allowance is going to be 3k from the current 12.3k. (6k in 2023, so below numbers are 1/3 less if doing a transaction in 2023)
Even for a 45% tax payer that is an additional tax due of £4k. (at 20% rate it is £1800)
Can't imagine any landlord would change their portfolio decisions based on this alone. Also, only matters if they sell a property of course.
(Done in haste, so hopefully my sums are correct)
I didn’t see this in the news and I can’t find any coverage. Links?
Edits. Found it now. That slipped through the net.
https://www.ii.co.uk/analysis-commen...anges-ii526051
That CGT tax change is going to push a load of people into CGT complications that don’t currently have to complete a tax return.
Another blow to landlords who seem to be subject to death by 1000 cuts … when the PRS continues to shrink and rents keep going up as a result life will get continually harder for renters.
This, you don't let the tax tail wag the investment dog., That said the CGT changes are another Govt. action which'll deter would be entrepreneurs and investors...genius!
Isn't unemployment predicted to double next year...also aren't the figures, quite uhm 'massaged' anyway...
Last edited by Passenger; 21st November 2022 at 11:31.
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