Corona property prices

[ryanb741]

Seems like deflation, not inflation may soon be the issue that drags down property prices (and all prices!).

At least mortgage repayments will be low.

https://www.telegraph.co.uk/business...e-real-danger/

[murkeywaters]

And yes I am gleeful. The housing market needs a massive correction. Clear out the deadwood. Let the property market get back to multiples where my grown up children can buy a home, rather than an glorified pension invenstment for the middle class.

It may be difficult at the moment, but get through it and this will all be hugely benefical to your normal homebuyers in the long run.

I’m going through this thread and every post of yours reads of bitterness rather than sensible debate, most recent threads of gloat have you foaming at the mouth with excitement so my conclusion was property is a nasty thorn in your side so there must be a reason for so much angst - and there it is, your grown up kids can’t afford a house!

Could I ask, did they go to university or have an extended education?

I ask as with student debt and starting reasonably well paid jobs later in life is normally the cause of struggling to get on the property ladder, I have seen it lots of times and quite often the people that get out to work early in life don’t have such problems.

[noTAGlove]

So tempted to sell up in the next few months to take advantage of the inflated house prices, move down to a project that will render me mortgage free and in cash, use the cash to insulate the crap out of the house, install a heat source pump and cover the property in solar panels, I can then sit by and watch the rest of the UK stressing over interest rates and fuel bills.

But I’ll probably stay where I’am!!

Did you catch the peak or a little sad you didn’t?

[murkeywaters]

Did you catch the peak or a little sad you didn’t?

Happily stayed where I’am although I was tempted take the top money, problem is the area and street I live is very nice with lovely neighbours so it’s tough to move, incidentally my neighbour who just turned 30 is in a £500k house, he got that through hard work from a young age flipping properties.

Property prices dropping is what I’m waiting for too believe it or not, once we have significant decreases and it looks to be levelling off I’ll go back in to buying projects/restorations to flip.

So back to the question, have your grown up children been to University or are they struggling with area property prices like London?

[redmonaco]

I find it disappointing that so many threads degenerate in to personal attacks and insults.

I'd like to think that we are all aware that there are a myriad of different circumstances that people find themselves in. Higher education or starting early in the workplace don't necessarily mean higher earnings. I'd also like to think that the majrity of people would like a fair society that takes into account the differences in peoples abilities or desires regarding making money. A fair society should be one that can provide housing, health and education at an affordable price for all. After all, an unsettled or disgruntled society could produce an environment unsuitable or unsafe for those that have a good deal more than the average.

Ultimately it is government that has let down a large proportion of the populace by removing rent controls in the 1980s and selling off (and not replacing!!) the social housing that was built in the 50s-70s.

A watch forum that has an interest in very expensive items is not the ideal place for a discussion on social issues though IMO...!!

[noTAGlove]

I find it disappointing that so many threads degenerate in to personal attacks and insults.

I don’t believe this thread has.

I don’t believe I have personally attacked anyone, for example.

People may disagree with my views, and I with theirs, but I find this thread very civil.

[murkeywaters]

I don’t believe this thread has.

I don’t believe I have personally attacked anyone, for example.

People may disagree with my views, and I with theirs, but I find this thread very civil.

I agree, no personal attacks on my behalf just real world debate, but as to fairness of society that’s just a pipe dream, we live in a country where both the rich and poor take advantage of their situation but not wanting to drag politics into the G&D I thinks it’s best I leave that there.

[Montello]

I find it disappointing that so many threads degenerate in to personal attacks and insults.

I'd like to think that we are all aware that there are a myriad of different circumstances that people find themselves in. Higher education or starting early in the workplace don't necessarily mean higher earnings. I'd also like to think that the majrity of people would like a fair society that takes into account the differences in peoples abilities or desires regarding making money. A fair society should be one that can provide housing, health and education at an affordable price for all. After all, an unsettled or disgruntled society could produce an environment unsuitable or unsafe for those that have a good deal more than the average.

Ultimately it is government that has let down a large proportion of the populace by removing rent controls in the 1980s and selling off (and not replacing!!) the social housing that was built in the 50s-70s.

A watch forum that has an interest in very expensive items is not the ideal place for a discussion on social issues though IMO...!!

I think us landlords are getting enough stick in mainstream media that some stick on a watch forum is water off a ducks back.

I don’t see why watch enthusiasts, or landlords, can’t have a social conscience or have moderate or left leaning political views.

I presented some data and views in post #1950 but seems that didn’t generate much response.

You are half right highlighting the failings in social housing as detailed in post #1950. Rent control however would be a disaster for tenants, when governments try price controls the only thing guaranteed is a shortage of supply.

I think we all want a fair society but may have different views on what fair means. I think all should have the same opportunities to build a lifestyle to their liking. That means access to education and opportunities to work and succeed. I also want a society where there is a safety net to catch and support people unable to support themselves through no fault of their own.

Property in the UK is a massive challenge for young people. That’s a political failing as highlighted in #1950, directing frustration at landlords is missing the target.


… and by the way below is the latest data. It’s obviously 2 months behind. This line needs to get to £200k for the 30% prediction to be correct. Long way to go.

[Halitosis]

What is that chart plotting Montello - average house price in UK?

[Montello]

What is that chart plotting Montello - average house price in UK?

Yes. See footer note on graph.

[murkeywaters]

Property in the UK is a massive challenge for young people. That’s a political failing as highlighted in #1950, directing frustration at landlords is missing the target.

It is a challenge for young people but landlords do have to shoulder a lot of responsibility for house price increases, the old saying is the housing market cannot move without first time buyers, so every chain needs that person at the start with no chain below them, this kept lower cost property reasonably low as first timers could only borrow so much.

The big change came when BTL become a popular future pension plan, first time buyers were now in competition with people using their homes as leverage and punting the mortgage payments with rent - and more importantly taking the first slot in the chain.

Obviously all this demand pumped prices so I get why people blame landlords, that said I believe if you have opportunities that help out or improve your life financially then all the best to you, sometimes life is too short to have a moral high ground so take your chances as they come.

[Montello]

It is a challenge for young people but landlords do have to shoulder a lot of responsibility for house price increases, the old saying is the housing market cannot move without first time buyers, so every chain needs that person at the start with no chain below them, this kept lower cost property reasonably low as first timers could only borrow so much.

The big change came when BTL become a popular future pension plan, first time buyers were now in competition with people using their homes as leverage and punting the mortgage payments with rent - and more importantly taking the first slot in the chain.

Obviously all this demand pumped prices so I get why people blame landlords, that said I believe if you have opportunities that help out or improve your life financially then all the best to you, sometimes life is too short to have a moral high ground so take your chances as they come.

Undeniably a factor, but as the data shows a minor one.

The major change is the complete collapse of local authority house building and general lack of house building in the face of growing population.

Which is why prices still hold up. Supply and demand.

[dougair]

We had an offer on a holiday place accepted about 18 months ago. Problems with the title led us to pull out…talk about dodging a bullet! We’d have needed a holiday let mortgage and we’re going to fix for 2 years at about 3%…makes me sick to think of the mess we could be in right now!

[noTAGlove]

New listings for flats in my area do not paint a happy picture.

I genuinely feel sorry for those who after over 7 years, are selling for less than they bought it for in 2016. This would have been knocking on £500k in the post-Covid mini bubble.

And that before anyone makes a 95% offer if they are very, very lucky. This unfortunately is the stuff that will wipe out the over-leveraged with multiple properties bought that last 7 years in and around London.

With moving fees and and no chance of an asking price offer, the sellers are probably looking at a £50k loss.

And the downturn has barely begun.

Not a looker from the outside but tidy on the inside and a fantastic location, only a stones throw from Surbiton station (16 mins fast train to London Waterloo) and lots of nice bars and restaurants on the doorstep. In a very safe and desirable part of Greater London.

[gunner]

New listings for flats in my area do not paint a happy picture.

I genuinely feel sorry for those who after over 7 years, are selling for less than they bought it for in 2016.

If it was a home, and a forced sale, then yes, sympathy. If it was speculation, not so much....

Of course, that is also just an example that suits your narrative. Several flats in the same area being listed for more than their last sale price.

For example: https://www.zoopla.co.uk/for-sale/de...f-a9ee09fa55af

[noTAGlove]

If it was a home, and a forced sale, then yes, sympathy. If it was speculation, not so much....

Yes, fully agree and you have said it better than me.

[noTAGlove]

Of course, that is also just an example that suits your narrative. Several flats in the same area being listed for more than their last sale price.

For example: https://www.zoopla.co.uk/for-sale/de...f-a9ee09fa55af

The sale price in 2017 has no ambiguity, while the sale price in 2023 is just asking.

Good luck with the seller achieving the asking price.

A 90% offer would leave the seller well underwater. Would not even breakeven at 95%.

Comparing slightly higher list prices with actual sold prices is not reflective that the value has been retained.

I will keep a keen eye over the summer to see the trend.

[gunner]

The sale price in 2017 has no ambiguity, while the sale price in 2023 is just asking.

Good luck with the seller achieving the asking price.

A 90% offer would leave the seller well underwater. Would not even breakeven at 95%.

Comparing slightly higher list prices with actual sold prices is not reflective that the value has been retained.

I will keep a keen eye over the summer to see the trend.

I'm simply showing the same figures that you did, a historic sale price and a current asking price. Of course the end result can be different, in both directions.

[noTAGlove]

I'm simply showing the same figures that you did, a historic sale price and a current asking price. Of course the end result can be different, in both directions.

Yes, but when you notice a property where the asking price is lower than the previous sale price, you can guarantee a loss (unless their is a bidding war and it goes for offers over - unlikely!)

Just on asking prices alone flats in the area are 10-15% lower than Covid bubble when asking price = sale price.

Chuck in people making offers below asking and I reckon 20%+ price drops are the norm.

Ok, one type of property in one type of town. But everything is based on research or anecdotal evidence until LR figures confirm the sale price.

[Dave+63]

In 2006 we bought a property in Spain for €330,000. We sold it in 2009, a year after we moved back to the UK, for €180,000.

It was painful at the time but life goes on and we are still getting by. It’s only numbers at the end of the day; as long as you manage to keep a roof over your head and some food in your belly, the actual value of your house is irrelevant unless you absolutely have to sell it.

[Halitosis]

Or it could be owners looking to upsize and the price difference between this and a larger property should be less in a depressed market than they might have otherwise had to finance.

Assumes all property types move at the same rate of course

[noTAGlove]

Todays inflation print stuck at 8.7%.

Worryingly, core inflation accelerated from 6.8% to 7.1%.

I reckon that seals a 50 bps rise in interest rates from 4.5 to 5% tomorrow. Buckle up.

[noTAGlove]

Wife was out with friends last night, one of them moving from Kingston area to retire to the Malvern Hills. They needed to release £300k of equity to make the retirement numbers work. Husband had been through a serious illness hence the drive to retire early.

House was on the market for months, but they had agreed a price around 15% less than the peak, but this was months ago. They were supposed to exchange today. Their buyers (who were the start of the chain) pulled out yesterday.

[murkeywaters]

Property down the road from me went on the market for £1.1m (and no my house is not the same!) it sold very quickly which surprised me but that lasted a week and the for sale sign is back up, even if you secured a deal for a cool £1m and dropped £500k cash into the house a £500k+ mortgage is quite crippling if you were arranging in this market..

[Wallasey Runner]

Little bit of activity on the viewing front in the last few days. A couple came round Friday and asked if they could come back on Saturday for a second viewing with one of their dads as he was a builder and they wanted his opinion on a few changes they would consider making.

That was followed by a viewing this morning which I did as the estate agent is shut on a Sunday. A couple who also brought dad along, very positive, stayed for over an hour, chatting to one of the neighbours, took loads of photos, which he asked permission to do. Gave him my mobile number so if he wants to come back or wants any additional info he doesn’t need to go through the estate agent.

Still waiting for any kind of offer, but at least some activity raises the spirits a little.

[Rodder]

I think us landlords are getting enough stick in mainstream media that some stick on a watch forum is water off a ducks back.

I don’t see why watch enthusiasts, or landlords, can’t have a social conscience or have moderate or left leaning political views.

I presented some data and views in post #1950 but seems that didn’t generate much response.

You are half right highlighting the failings in social housing as detailed in post #1950. Rent control however would be a disaster for tenants, when governments try price controls the only thing guaranteed is a shortage of supply.

I think we all want a fair society but may have different views on what fair means. I think all should have the same opportunities to build a lifestyle to their liking. That means access to education and opportunities to work and succeed. I also want a society where there is a safety net to catch and support people unable to support themselves through no fault of their own.

Property in the UK is a massive challenge for young people. That’s a political failing as highlighted in #1950, directing frustration at landlords is missing the target.


… and by the way below is the latest data. It’s obviously 2 months behind. This line needs to get to £200k for the 30% prediction to be correct. Long way to go.

We have 1 BTL and we’re thinking of getting out. There’s literally no money to be made and it’s a real stress.


Sent from my iPhone using Tapatalk

[Passenger]

Little bit of activity on the viewing front in the last few days. A couple came round Friday and asked if they could come back on Saturday for a second viewing with one of their dads as he was a builder and they wanted his opinion on a few changes they would consider making.

That was followed by a viewing this morning which I did as the estate agent is shut on a Sunday. A couple who also brought dad along, very positive, stayed for over an hour, chatting to one of the neighbours, took loads of photos, which he asked permission to do. Gave him my mobile number so if he wants to come back or wants any additional info he doesn’t need to go through the estate agent.

Still waiting for any kind of offer, but at least some activity raises the spirits a little.

Sounds like potentially decent prospects there, good luck.

[noTAGlove]

Yep, good luck.

If you don’t mind me asking WR, is this your main residence or something different?

[Estoril-5]

Just browsing through RM sold prices, latest data March 2023 and it seems that houses even up until then were selling at a premium even though Truss & Kwartengs budget made IR's jump six month prior.

Is this a case of people just soldering on as they are partway through a sale (and may have secured a good rate) or something else?

[redmonaco]

Undeniably a factor, but as the data shows a minor one.

The major change is the complete collapse of local authority house building and general lack of house building in the face of growing population.

Which is why prices still hold up. Supply and demand.

Also the government meddling with "Help" for buyers. ie Deposit schemes and government guarantees plus Stamp Duty holidays. All these things did was to increase prices ...

[redmonaco]

Wife was out with friends last night, one of them moving from Kingston area to retire to the Malvern Hills. They needed to release £300k of equity to make the retirement numbers work. Husband had been through a serious illness hence the drive to retire early.

House was on the market for months, but they had agreed a price around 15% less than the peak, but this was months ago. They were supposed to exchange today. Their buyers (who were the start of the chain) pulled out yesterday.

Wouldn't have thought they would have too much problem as I'd think property prices are a good 40% cheaper in the Malvern hills area compared to Kingston?

Beautiful part of the world BTW :0)

[dougair]

https://www.theguardian.com/business...wth-in-prices?

[Wallasey Runner]

Yep, good luck.

If you don’t mind me asking WR, is this your main residence or something different?

Apologies, only just seen this. It was basically the family home for the last 26 years, but following the MILs passing we have moved into her bungalow following probate and are selling the family home. We will have to pay half the bungalows value to the wife’s sister to cover her half of the inheritance.

The positive is that we have fully moved now and the old house sits empty, so nothing to do when it sells.

The number of viewings has increased recently and we now have two separate couples racing to sell their houses so that they can put an offer in. After a year of not a lot, this feels like progress.

[Ruggertech]

Here you go.

https://www.barclays.co.uk/savings/i...iny-day-saver/

Quick update and PSA.
I had £5475 in my Rainyday Saver account and received a message from Barclays suggesting I put the £475 in a Blue Rewards saver account. This pays 3.04% interest p.a. (reduced to I think 0.75% on months you withdraw from it).
Like the Rainyday account it took literally a couple of minutes to set up and then transfer the money on the app.
Every month now the interest on the Rainyday account I'll transfer to the Blue Rewards account.

[Montello]

Oh look more actual data to May, it’s going up again. Still no sign of a 30% drop.

[Estoril-5]

Oh look more actual data to May, it’s going up again. Still no sign of a 30% drop.

This surprised me (increasing ave house price) as it was more than 6 months on from Truss and Kwarteng and the start of increasing interest rates, I would have thought that effects of that would have filtered through by then.

In real world anecdote - I saw a lovely house that was renovated for sale at £525k, it wasn't overpriced but wasn't amazing value either, sold for £515k in April of this year, i was suprised at that (and the chart supports that). Interesting to see the volume of sales further into the year and if that remains or not

[Passenger]

Interesting data thanks, values seem to be holding up pretty well I´d say.

[noTAGlove]

A really interesting video which fully explains why BTL is pretty much fooked.

James Shack is a Chartered IFA so has no skin in the game, but his clients do.

The maths he goes through tells a lot.

https://youtu.be/NtVk3ERt66w?si=22ORycm4K2E78Auc

[Gareth-W]

Interesting data thanks, values seem to be holding up pretty well I´d say.

Mirrors what I am seeing locally after selling my own house (at the exact price I wanted and in just 2 weeks) but then struggling to buy a new one.....so far.

[Montello]

A really interesting video which fully explains why BTL is pretty much fooked.

James Shack is a Chartered IFA so has no skin in the game, but his clients do.

The maths he goes through tells a lot.

https://youtu.be/NtVk3ERt66w?si=22ORycm4K2E78Auc

Some BTLs will be in big trouble.

About half are not mortgaged so for those it’s a different discussion.

New BTLs with a mortgage are a non starter as far as I can see.

His video highlights the trouble that the government have caused for the sector and how this will translate into pain for tenants as landlords continue to exit. None of which will have any significant impact on the market. Bad time to be a tenant.

Shack is one of the good YouTubers, note however most money managers are a bit anti BTL as they prefer their clients let them manage their capital rather than see it tied up in investment properties.

[noTAGlove]

Some BTLs will be in big trouble.

About half are not mortgaged so for those it’s a different discussion.

New BTLs with a mortgage are a non starter as far as I can see.

His video highlights the trouble that the government have caused for the sector and how this will translate into pain for tenants as landlords continue to exit. None of which will have any significant impact on the market. Bad time to be a tenant.

Shack is one of the good YouTubers, note however most money managers are a bit anti BTL as they prefer their clients let them manage their capital rather than see it tied up in investment properties.

As BTLers are taxed on mortgage interest payments, as those interest payments go up with higher rates, so does the tax bill, even though they make less profit.

That seems a particularly tough one to stomach.

[jwillans]

Indeed, and reflects why I'm considering covering my BTL in York into an AirBnb.

A really interesting video which fully explains why BTL is pretty much fooked.

James Shack is a Chartered IFA so has no skin in the game, but his clients do.

The maths he goes through tells a lot.

https://youtu.be/NtVk3ERt66w?si=22ORycm4K2E78Auc

[jwillans]

Indeed, and reflects why I'm considering moving my BTL in York into an AirBnb.

[noTAGlove]

Indeed, and reflects why I'm considering covering my BTL in York into an AirBnb.

I hope nobody else has had that idea.

[Montello]

As BTLers are taxed on mortgage interest payments, as those interest payments go up with higher rates, so does the tax bill, even though they make less profit.

That seems a particularly tough one to stomach.

It’s seems a bizarre political stunt to target the privately owned rental properties in such a way when AirBNB and BTLs inside a Ltd. Company can avoid this all.

Whilst it may hurt a few landlords they will just exit leaving a right mess for tenants.

Good old politicians…

[noTAGlove]

It’s seems a bizarre political stunt to target the privately owned rental properties in such a way when AirBNB and BTLs inside a Ltd. Company can avoid this all.

The crackdown on AirBNB will come. And I reckon soon rather than later.

As more landlords leave traditional rental and change to holiday lets, it will only speed up Government intervention.

AirBNB is saturated, so good luck to those jumping ship into an already saturated market.

Government intervention was meant to squeeze landlords a little to try and rebalance the property market. What nobody foresaw is interest rates increasing from ZIRP to 5%+ in over one year.

The policy was fine when interest rates were low, as those landlords still piling into BTLs in 2022 can testify.

Even with tax on mortgage interest payments, the numbers still worked for BTL landlords as long as interest rates remained low.

It is not politician meddling that has screwed some landlords. If it was, nobody would have been piling into BTL in 2022, including some on this forum. The tax and other regulations have been published for a while now, and yet when interest rates were low BTL was still a viable investment even with the planned Government changes to tax/regulation.

You can’t blame the politicians for the moral hazard of a poor investment decision. And you really can’t blame them for not for-seeing such a rapid rise in interest rates which has significantly impacted the rental market.

As James Shack said, he feels no sympathy for landlords, as they are no different than any other investor. Moral hazard needs to play out, just as it does with some of my poor equity investment decisions.

[Dave+63]

As BTLers are taxed on mortgage interest payments, as those interest payments go up with higher rates, so does the tax bill, even though they make less profit.

That seems a particularly tough one to stomach.

I’ve not looked into it but I’d be surprised if that’s correct.

Landlords are taxed on their income without being able to offset mortgage interest, they are not being taxed on mortgage interest specifically.

As the interest rates rise, their profits may decrease but their gross income remains the same so their tax bill doesn’t increase.

I could be wrong but I can’t see the government taxing a cost directly which your statement would appear to imply.

[noTAGlove]

I’ve not looked into it but I’d be surprised if that’s correct.

Landlords are taxed on their income without being able to offset mortgage interest, they are not being taxed on mortgage interest specifically.

As the interest rates rise, their profits may decrease but their gross income remains the same so their tax bill doesn’t increase.

I could be wrong but I can’t see the government taxing a cost directly which your statement would appear to imply.

Watch the video. It is all explained by a true life worked example.

There is 20% mortgage interest tax credit, but that won’t fully offset high rate tax payers.

[jwillans]

I could be wrong but I can’t see the government taxing a cost directly which your statement would appear to imply.

Unfortunately this is exactly what the government are doing. They are taxing revenue rather than profit. As indicated in the linked video, this can mean in some cases landlords are making a profit on their investment, but the tax cost results in having to pay a tax cost that exceeds the profits - and having to make the difference out of their own pocket. Tax on revenue versus profit is unprecedented in any other business as far as I understand.

[noTAGlove]

Unfortunately this is exactly what the government are doing. They are taxing revenue rather than profit. As indicated in the linked video, this can mean in some cases landlords are making a profit on their investment, but the tax cost results in having to pay a tax cost that exceeds the profits - and having to make the difference out of their own pocket. Tax on revenue versus profit is unprecedented in any other business as far as I understand.

Since this was all announced in 2017 and phased through 2021, why didn’t the leveraged landlords get out while the writing was all the wall? Why were Landlords still buying massive amount of BTLs in 2022?

They saw the new regulations coming, after all, so could be prepared for them.

Most landlords just chose to roll with the punches. Their investment was safe and highly profitable even under the new system of tax on revenue rather than profit. And there is always capital appreciation which hadn’t really failed over the last 25 years of investment.

Nobody should blame the Government. They gave landlords ample warning of the future taxation regime, whether you agree with with the tax regime, or not.

What screwed leveraged landlords is high interest rate in combination with Government policy. If low interest rates had remained then leveraged landlords would still be profitable under the new tax regime.

Moral investment hazard, pure and simple.

For these reasons no BTLer should bleat about the Government, even if the taxation stance is unprecedented in investing industry.