Corona property prices

[noTAGlove]

Looks desperate…

Without straying into BP territory, the sums up the current incumbent.

[Montello]

In an unexpected move in the Budget today, the Chancellor announced a cut in the top rate of capital gains tax (CGT), which applies to the disposals of residential property. From 6 April 2024, the higher rate will drop from 28% to 24%.

In the accompanying policy paper, the government explained that the change is “expected to incentivise earlier disposals of second homes, buy-to-let property and other residential property where accrued gains do not fully benefit from private residence relief (PRR). This will generate more transactions in the property market, benefitting those looking to move home or get onto the property ladder.”

So there we have it, government is actively trying to get landlords to sell up ... anyone care to guess how that will impact rents?

[noTAGlove]

So there we have it, government is actively trying to get landlords to sell up ... anyone care to guess how that will impact rents?

Presumably a renter buys the property from a BTLer making the supply/demand a wash.

The Tories are all about home ownership.

[Montello]

Presumably a renter buys the property from a BTLer making the supply/demand a wash.

The Tories are all about home ownership.

LOL ... if the tenant could afford the property they wouldn't be tenants ... the system is broken as you know ...

[Dave+63]

LOL ... if the tenant could afford the property they wouldn't be tenants ... the system is broken as you know ...

That’s not necessarily the case, most tenants are paying much higher rents than their mortgage payments would be, it’s just that they don’t have the money for the deposit and fees.

[Ruggertech]

That’s not necessarily the case, most tenants are paying much higher rents than their mortgage payments would be, it’s just that they don’t have the money for the deposit and fees.

Yep, know quite a few stuck in this cycle.

[Taxboy]

That’s not necessarily the case, most tenants are paying much higher rents than their mortgage payments would be, it’s just that they don’t have the money for the deposit and fees.

Doesn't that make it a vicious circle for potential buyers...they could afford mortgage repayments but because rental is higher they can't save sufficient for the deposit and fees

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[Montello]

That’s not necessarily the case, most tenants are paying much higher rents than their mortgage payments would be, it’s just that they don’t have the money for the deposit and fees.

Deposit and fees are part of the affordability equation ...

Here is a local example from my area (Kent):

Flat worth £250,000.

Typical rent would be £900 pcm

A 100% mortgage at 5% would be £1478pcm ...

If they could get a £50k deposit it would be £1182 pcm ... plus they have to maintain and insure the property now ... so perhaps £1,350pcm all in ...

Rent is still cheap compared to ownership on a day to day basis ...

[noTAGlove]

Deposit and fees are part of the affordability equation ...

Here is a local example from my area (Kent):

Flat worth £250,000.

Typical rent would be £900 pcm

A 100% mortgage at 5% would be £1478pcm ...

If they could get a £50k deposit it would be £1182 pcm ... plus they have to maintain and insure the property now ... so perhaps £1,350pcm all in ...

Rent is still cheap compared to ownership on a day to day basis ...

And the reason property prices will eventually fall 35%

You are doing my job for me now ;-)

[Hood]

Deposit and fees are part of the affordability equation ...

Here is a local example from my area (Kent):

Flat worth £250,000.

Typical rent would be £900 pcm

A 100% mortgage at 5% would be £1478pcm ...

If they could get a £50k deposit it would be £1182 pcm ... plus they have to maintain and insure the property now ... so perhaps £1,350pcm all in ...

Rent is still cheap compared to ownership on a day to day basis ...

You mean if you expect the renter to pay your whole mortgage then it's cheap.

[Montello]

And the reason property prices will eventually fall 35%

You are doing my job for me now ;-)

I fear not, the reason property is expensive is because there is a shortage, until that is addressed the 30% fall you have been forecasting will not occur … it’s still going up …

You mean if you expect the renter to pay your whole mortgage then it's cheap.

No I’m just demonstrating that the claim that it’s cheaper to buy than rent is incorrect.

[Dave+63]

I fear not, the reason property is expensive is because there is a shortage, until that is addressed the 30% fall you have been forecasting will not occur … it’s still going up …



No I’m just demonstrating that the claim that it’s cheaper to buy than rent is incorrect.

But you’ve not shown anything to back up those figures. I’m in East Sussex and whilst there are small one bed flats for £900 pcm, they aren’t £250k. Rental on anything costing that much would be £1300-£1500 pcm.

Notwithstanding the above, I’m broadly in agreement with you as I wasn’t really considering the recent interest rates.

[thenikjones]

And the reason property prices will eventually fall 35%

You are doing my job for me now ;-)

When, do you think?

Saying this is as analagous as predicting 10 of the last 2 recessions.

[Ivan Drago]

And the reason property prices will eventually fall 35%

You are doing my job for me now ;-)

Absolute fantasy land stuff.


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[noTAGlove]

Absolute fantasy land stuff.


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Maybe unlikely, but not quite fantasy.

You are clearly too young to remember 1989-1995 and have only ever seen rising house prices in your entire adult lifetime. Flats back then in desirable areas of the SE such as Guildford fell -50%+

I know, I lived there at the time.

[Montello]

But you’ve not shown anything to back up those figures. I’m in East Sussex and whilst there are small one bed flats for £900 pcm, they aren’t £250k. Rental on anything costing that much would be £1300-£1500 pcm.

Notwithstanding the above, I’m broadly in agreement with you as I wasn’t really considering the recent interest rates.

Regional variations I guess, rents maybe a bit cheaper around here.

I own a 3 bed semi worth about £450k that rents for £1400 pcm and a flat that fits the example I gave. I know I set below market rents but not that far off.

When, do you think?

Saying this is as analagous as predicting 10 of the last 2 recessions.

Pinning down a date for the much forecasted 30% correction has so far proven difficult …

[Suds]

LOL ... if the tenant could afford the property they wouldn't be tenants ... the system is broken as you know ...

You clearly don’t know the markets in any city…. Londoners for example pay more or as much as the cost of a mortgage but can’t get a mortgage because of the salary ‘multipliers’. Forget London even, I live in North Wales and it’s no different in many areas- £900.00 min for a privately rented 2 bed flat which can be bought comfortably for £90K.
I fully support 100% mortgages forfirst timebuyers but would accept the government underwriting 5% for say 5-10 years and if necessary the first time buyer having to save 5% deposit.

[uwtc]

Maybe unlikely, but not quite fantasy.

You are clearly too young to remember 1989-1995 and have only ever seen rising house prices in your entire adult lifetime. Flats back then in desirable areas of the SE such as Guildford fell -50%+

I know, I lived there at the time.

Are you predicting they fall 35% from here, or 35% from the next peak? Or the peak after that?

[noTAGlove]

Are you predicting they fall 35% from here, or 35% from the next peak? Or the peak after that?

Peak to trough over 6 years as per 1990s. We are currently 1.5 years in, but then again not that much happened early on in the 90s crash.

Currently being masked by high inflation which has silently and secretly knocked 15-20% off values.

[Montello]

You clearly don’t know the markets in any city…. Londoners for example pay more or as much as the cost of a mortgage but can’t get a mortgage because of the salary ‘multipliers’. Forget London even, I live in North Wales and it’s no different in many areas- £900.00 min for a privately rented 2 bed flat which can be bought comfortably for £90K.
I fully support 100% mortgages forfirst timebuyers but would accept the government underwriting 5% for say 5-10 years and if necessary the first time buyer having to save 5% deposit.

I’m speaking from my own first hand experience. Obviously there are regional differences.

You couldn’t buy anything round here for £90k.

Where can you buy a flat that would offer a 12% yield? If that was available investors would be queuing round the corner.

[dandanthewatchman]

Peak to trough over 6 years as per 1990s. We are currently 1.5 years in, but then again not that much happened early on in the 90s crash.

Currently being masked by high inflation which has silently and secretly knocked 15-20% off values.

Halifax report today states 5 consecutive months of house price rises.

You seem to ignore the fundamentals of supply and demand and that the majority of home owners are actually mortgage free. Not exactly the ingredients for a 35% crash.


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[Suds]

I’m speaking from my own first hand experience. Obviously there are regional differences.

You couldn’t buy anything round here for £90k.

Where can you buy a flat that would offer a 12% yield? If that was available investors would be queuing round the corner.

Bangor, Gwynedd. University city where students double the population during term time and and a surprisingly substantial percentage of foreign students and interns living all year round.

[Montello]

Bangor, Gwynedd. University city where students double the population during term time and and a surprisingly substantial percentage of foreign students and interns living all year round.

Well I’m sure plenty are investing there … how’s the capital growth?

Yields round here are 3-4%

[Suds]

Well I’m sure plenty are investing there … how’s the capital growth?

Yields round here are 3-4%

Sorry, I don’t keep in touch at that level as I’m not an investor. Although it has always struck me that isn’t necessarily a huge/comparitive difference between rentals and property values in that a property worth double won’t necessarily attract double the rental so I guess that’s where you balance the CG?

[noTAGlove]

Halifax report today states 5 consecutive months of house price rises

Haha. Ignore that vested interest brainwashing sh1te.

Follow the land registry and even that lags by 9 months.

[noTAGlove]

how’s the capital growth?

Tee hee.

Everyone knows a landlord is in the game for modest yields, risk of voids, boiler repairs, fixing roofs and the risk of a sh1t tenant who doesn’t pay, wrecks the house and has to have the bailiffs evict him/her 12 months later. Who needs capital growth.

Used to pass through Bangor on my way to the Llyn Peninsula for summer holidays in my youth. Had all the glamour of Cumbernauld.

Plus, the local girls were RAF.

[Montello]

Haha. Ignore that vested interest brainwashing sh1te.

Follow the land registry and even that lags by 9 months.

I’m pretty sure you have been predicting a 30% crash for much longer than 9 months … yet the market continues to creep up.

How long before you accept you got it wrong?

[noTAGlove]

I’m pretty sure you have been predicting a 30% crash for much longer than 9 months … yet the market continues to creep up.

How long before you accept you got it wrong?

Oh cmon stay with me. Give me another 4.5 years and i will revisit the question

[dandanthewatchman]

Haha. Ignore that vested interest brainwashing sh1te.

Follow the land registry and even that lags by 9 months.

I’m in the property industry and don’t need LR data to know what’s going on. Nor the Halifax data. The dynamics of the market are such that there will be very few bank led forced sales and as soon as something is 15% off accepted market value there is a wall of money ready to step in at that level.

You seem to have what I consider an irrational belief or even wish for a market crash. You entitled to that opinion but there will be nothing like that across the market.


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[noTAGlove]

I’m in the property industry and don’t need LR data to know what’s going on. Nor the Halifax data. The dynamics of the market are such that there will be very few bank led forced sales and as soon as something is 15% off accepted market value there is a wall of money ready to step in at that level.

You seem to have what I consider an irrational belief or even wish for a market crash. You entitled to that opinion but there will be nothing like that across the market.


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You know what happens when the last bear turns bull.

[Dave+63]

You know what happens when the last bear turns bull.

Lots of bullshit?

[Montello]

Oh cmon stay with me. Give me another 4.5 years and i will revisit the question

This topic is in it's 4th year, I have not looked back but I suspect you have been predicting a 30% price crash/fall for at least 3 of those ...

Still the market continues to creep forwards.

On this graph the worst performance is following the GFC with a 15% dip ... never have we seen the a 30% decline you continue to forecast.

https://www.ons.gov.uk/economy/infla...x/december2023

I know you are wishing the market down so your kids can buy a house but until the supply increases it isn't going to happen.

Last year 178,000 houses were completed against a government target of 300,000. The slow down of house building in the current market is well documented so supply is getting worse not better.

I know you also like to blame landlords for this situation but the segment is minor and hasn't changed in decades; in fact it is a declining sector due to government policy and despite that the needle on prices hasn't shifted, and tenants are paying the price ...

This latest round of tax changes that has damaged the holiday rental sector is just the next phase of poor policy decisions that will damage the UK holiday industry and hurts people running business in those sectors as there was no warning and no tapering of the changes.

Local authorities used to own 31% of UK housing stock ... and were significant builders ... today it is 0.

[noTAGlove]

This topic is in it's 4th year, I have not looked back but I suspect you have been predicting a 30% price crash/fall for at least 3 of those ...

Since the Truss budget, so nearly 18 months.

[Montello]

Since the Truss budget, so nearly 18 months.

Really, I suspect longer than that .... if I get a dull moment I will check ... ;-)

Anyway, given your forecast has not occurred, even close, do you now accept it was wrong or are you going to put a new date on it, or are you sticking with the "maybe one day far in the future"?

[Griswold]

This topic is in it's 4th year, I have not looked back but I suspect you have been predicting a 30% price crash/fall for at least 3 of those ...

Still the market continues to creep forwards.

On this graph the worst performance is following the GFC with a 15% dip ... never have we seen the a 30% decline you continue to forecast.

https://www.ons.gov.uk/economy/infla...x/december2023

I know you are wishing the market down so your kids can buy a house but until the supply increases it isn't going to happen.

Last year 178,000 houses were completed against a government target of 300,000. The slow down of house building in the current market is well documented so supply is getting worse not better.

I know you also like to blame landlords for this situation but the segment is minor and hasn't changed in decades; in fact it is a declining sector due to government policy and despite that the needle on prices hasn't shifted, and tenants are paying the price ...

This latest round of tax changes that has damaged the holiday rental sector is just the next phase of poor policy decisions that will damage the UK holiday industry and hurts people running business in those sectors as there was no warning and no tapering of the changes.

Local authorities used to own 31% of UK housing stock ... and were significant builders ... today it is 0.

We can blame Thatcher for that. Why would councils build houses knowing that they'll have to sell them at less than market rates in a very short timeframe.

[Montello]

We can blame Thatcher for that. Why would councils build houses knowing that they'll have to sell them at less than market rates in a very short timeframe.

Indeed, dreadful policy long term, give away your assets for votes ... works until you run out of assets ... just make sure you retire before you run out of assets ...

[Ivan Drago]

Maybe unlikely, but not quite fantasy.

You are clearly too young to remember 1989-1995 and have only ever seen rising house prices in your entire adult lifetime. Flats back then in desirable areas of the SE such as Guildford fell -50%+

I know, I lived there at the time.

Flats aren’t houses and flats in London don’t represent the UK.

No chance on earth house prices fall 35% across the board.

Zero chance.


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[noTAGlove]

Flats aren’t houses and flats in London don’t represent the UK.

No chance on earth house prices fall 35% across the board.

Zero chance.


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And of course opinions are like arseholes, everyone has got one, including me.

G&D would be a very boring place if we all agreed on everything.

Back in 2008 and days before the GFC, financial markets were still be talked up and ramped. Then look what happened over the following 5 years.

[Montello]

Back in 2008 and days before the GFC, financial markets were still be talked up and ramped. Then look what happened over the following 5 years.

I'm not sure that is a valid analogy ... the property situation in the UK seems to me one of a simple imbalance between supply and demand of a physical asset that is expensive to produce ...

[jwg663]

We can blame Thatcher for that. Why would councils build houses knowing that they'll have to sell them at less than market rates in a very short timeframe.

Indeed, dreadful policy long term, give away your assets for votes ... works until you run out of assets ... just make sure you retire before you run out of assets ...

My recollection is that local authorities couldn't use the monies from discounted sales to build more social housing as the legislation was framed to prevent that. (It's very Thatcherite: why sell council houses & use the money raised to build more council houses when you want people to own their own homes & not pay rent to the council?) The finance for new social housing had to come from other sources. As houses were sold, rent income declined making new projects less feasible.

[Passenger]

https://www.theguardian.com/money/20...-for-10-months

An increase in buyer demand and stronger house sales during March have combined to push the average UK home’s asking price up by a further £5,279 to almost £370,000, as the market picks up after a “muted 2023”.

According to the UK’s biggest property website, Rightmove, this month’s 1.5% price growth is notably higher than the historical March average of 1%, and is the biggest monthly increase for 10 months.

Rightmove said estate agents were reporting a significant increase in buyer demand this month as more people were “seeing a window of opportunity to buy”.

The website said the average UK asking price now stood at £368,118, a significant increase, but was still £4,776 below the May 2023 peak as the market continued its recovery after a “muted 2023”.

Obviously it's going to be a mixed picture, pinch of salt, one swallow doesn't make a summer etc...but I'm pleasantly surprised at the apparent resilience of the ''market'', though you have to acknowledge/ marvel even at the news from last week that over a third of FTB's are doing so with help from parents, and that figures up from about a quarter... owning your own home still resolutely the only game in town...Thoughts anyone?

Also any predictions on what the BOE might decide to do- do not, in 3 days time?

[barneygumble]

Presumably a renter buys the property from a BTLer making the supply/demand a wash.

I don't have stats to back this up, but it seems to me that rental properties are typically occupied at a higher density than owner-occupied properties, i.e. more people live in the average rental property than in the average OO property. You might have two couples sharing a 2 bed rental apartment. A single person buys that apartment and now you have a net increase of 3 people looking for somewhere to live.

[noTAGlove]

Nobody told the London rental market that it is only ever onwards and upwards.

https://www.standard.co.uk/homesandp...-b1144821.html

[redmonaco]

with net immigration running at 700k+ and councils paying housing benefit with gay abandon I doubt we will see a crash this time. There may be a stagnation. Last proper corrections were in 1990s and around early 2000s. The UK has changed beyond recognition over the last 15 years with population growing by at least 10million during that time and looks like there is no going back...

[thenikjones]

Nobody told the London rental market that it is only ever onwards and upwards.

https://www.standard.co.uk/homesandp...-b1144821.html

Conversely, a 10% fall after a 31% increase is still a hell of a lot better than my recent pay rises and what you get on money in savings.

[noTAGlove]

Conversely, a 10% fall after a 31% increase is still a hell of a lot better than my recent pay rises and what you get on money in savings.

About the same as general inflation then.

[Montello]

with net immigration running at 700k+ and councils paying housing benefit with gay abandon I doubt we will see a crash this time. There may be a stagnation. Last proper corrections were in 1990s and around early 2000s. The UK has changed beyond recognition over the last 15 years with population growing by at least 10million during that time and looks like there is no going back...

This is the crux of the problem, just 178,000 new homes build last year ... you can see the shortage is getting worse rather than better... demand will continue to outstrip supply for the foreseeable future ...

The word I am getting from agents (even after I apply my BS filter) is the markets is picking up pace again ...

[mondie]

One economist who has a strong track record on predictions, Gary Stevenson, says that all assets will resume their upward growth as interest rates drop. Rising inequality since Covid means the rich are sitting on piles of cash and just waiting it out. He sees the housing market going to new levels, perhaps the sentiment on rates is enough already to get house prices edging up again.

[Passenger]

One economist who has a strong track record on predictions, Gary Stevenson, says that all assets will resume their upward growth as interest rates drop. Rising inequality since Covid means the rich are sitting on piles of cash and just waiting it out. He sees the housing market going to new levels, perhaps the sentiment on rates is enough already to get house prices edging up again.

This makes a lot of sense to me.

[Hood]

One economist who has a strong track record on predictions, Gary Stevenson, says that all assets will resume their upward growth as interest rates drop. Rising inequality since Covid means the rich are sitting on piles of cash and just waiting it out. He sees the housing market going to new levels, perhaps the sentiment on rates is enough already to get house prices edging up again.

Whilst that sounds good for your own property it's not really helpful for your kids trying to get on the ladder.
Would probably need to sell my own place and downsize in order to give them money for a decent deposit.
Robbing Peter to pay Paul.