Reply With QuoteAgreed, however the opposition are likely to make the rental market even worse for tenants ... not an easy outlook for young people who want / need to rent a property.Originally Posted by noTAGlove
I thought politics was BP territory?
“ Ford... you're turning into a penguin. Stop it.” HHGTTG
Agreed, however the opposition are likely to make the rental market even worse for tenants ... not an easy outlook for young people who want / need to rent a property.
Once in a lifetime high you say.
ZIRP is recent and lasted for a decade or more. For the 40-50+ years before that 5% interest rates and 7% mortgage rates were seen as normal, or even low.
My first mortgage in 1999 was 7% and that was low given preceeding year(s)/decade(s).
Are you young by any chance Gareth?
Last edited by noTAGlove; 23rd May 2023 at 18:18.
Difficult to disagree. As it stands, if the mandatory EPC 'C' rating goes ahead you'll see a significant reduction in rental stock. Further tax disincentives from a Labour government will make it even worse. My letting agent is saying its beyond a joke. No new rental properties coming on the market and those that are are going for bonkers rental money.
My comment was about inflation, not interest rates.
And you’re too kind as I’m a sprightly 55. My first mortgage was in 1990 and a few weeks before we entered the ERM and rates skyrocketed in a week up 15%…
Being a pedant, the rates went up to 15% for less than a day which prompted the UK to leave the ERM.
And make George Soros a very very rich man!
Fair enough, Gareth. You have seen the rough and the smooth.
Yes, that’s correct Dave.
I think the week started off at 8%, then 10% and peaked at 15% briefly before Nigel Lawson pulled the “eject” button.
Double figures for a few years though despite the 15% being a tad misleading. I remember my mortgage being three weeks wages not including the endowment.
Last edited by Ruggertech; 23rd May 2023 at 19:44.
Aye, and even further reduction in rental stock. The whole situation was entirely predictable and created by our lizard overlords.
EPC C delayed to 2028 but still making people sell up.
They are certainly acting like they don't want normal people to be private landlords. Lloyd's and other conglomerates are moving into the private rental sector. Is the plan to squeeze out the little guys so the corporate players can take monopoly control??
I find it hard to believe there is a cunning master plan more like just plain incompetence, even if well intended.
Every time you hear of a rental horror story it’s usually a poorly run housing association.
The typical private landlord has 3 properties so they care about keeping things in order.
Last edited by Montello; 23rd May 2023 at 22:10.
So inflation fell to 8.7%, less than expected.
Core inflation, the more important reading went up from 6.2 to 6.8%.
10 year yield spiked this morning and is now firmly at the level of the time of the Truss budget which unleashed chaos in the markets.
Things are starting to turn ugly. Just think of all the Government debt the banks bought during ZIRP, now costing them a fortune to liquidate, just like what caused SVB to collapse.
Don’t look at your pension investments because bond yields are collapsing.
Lock into 5% mortgage while you still can.
What a complete clusterfook by the BoE. They are going to bring the country to its knees. They can accept inflation or collapse asset prices.
seems to be a recurring theme of late, properties that disappeared from RM have now appeared, and some of them are at a more reasonable price but still out of my league.
i think the market is slowing - properties would sell within a week at the peak, now they are hanging around for longer and introducing price drops.
The market is definitely slowing, I think the message is finally dawning that this isn't an economic situation that is going to correct in a few months, it will take somewhat longer, with pain along the way.
Interesting how this is playing out. After the Truss budget and calm return to the markets, confidence in assets returned.
Lots of comments that interest rates are now coming down, including several on this forum, fuelled the FOMO that this was a temporary dip. Get back in, house prices are back on track to the moon.
Realisation is now setting in. Interest rates and mortgage rates will be much higher for much longer.
Writing is on the wall that asset prices will accelerate their correction, the speed dependent on how quickly the BoE plan to revert inflation to 2% and if it pushes the country into a recession.
Ignore Rightmove/Zoopla/ANother vested interests press releases and spin, and plan for 6% fixed rate mortgages coming to a property near you soon.
I sold all the bonds in my SIPP about 18 months ago. Got one call right for a change.
If you´re not over leveraged and in it for the long game, this is all likely good news isn´t it...after the correction a return to sensible and steady house price growth over the mid to long term rather than insane rapid price rises that tend to turn everyone into would be speculators, simply adding fuel to the fire...Plus landlords appear to get their pick of tenants in current circumstances..
Also I read the forecasters reckon the UK´ll now narrowly avoid a recession this year...though a lotta folks won´t notice the difference depending where they sit on the income line...Do you believe the BOE´d go the extra yard and push into recession, if they can possibly avoid that outcome? Albeit their inflation mandate...Seems to me their interest rate lever really doesn´t impact prices of imported food, goods, energy etc anyway..I´m just not quite sure they´re prepared to tank- recession the economy when it´s underlying frailties are so exposed...interesting times, glad I hedged- diversified late last year... invested in more US property, not more in UK.
Last edited by Passenger; 25th May 2023 at 12:35.
Well I guess I got my answer, leastways from Jeremy Hunt. He is of the view a recession will be worth it to get inflation down. Though I'm left wondering what happens then if rates continue to go up, the Country slides into recession, but inflation proves stubbornly resistant, sticky...won't the BOE with the Chancellor's ergo Govt. approval, have engineered the dreaded stagflation which they've all said must be avoided...pain today, pain tomorrow...not exactly a potential vote winner.
Interested in others pov's and thoughts...anyone.
Since this is primarily about economics, hope it's OK to discuss, not looking to set anyone off.
Last edited by Passenger; 26th May 2023 at 08:59.
If I were Chancellor, I'd be conscious that the GE is only a couple of years away, and being sunk if that coincided with a recession. Need to be sharp and swift, to get the country growing again. There'll be pain, but cut out the deadwood to get light to the green-shoots. Purge inflation in 6 months hard, then focus on growth. That's the only chance they have at the GE IMHO.
I am sure someone will be along to shortly to say I have overstepped the mark on the level of politics i have introduced. But, that is not the intention, and how else do I get my point across.
Go for broke eh, do or die...I am impressed by your confidence it might be only a 6 month recession.
Mad really, Hunty was only last week iirc celebrating the news we'd avoid recession by the skin of our teeth...Here we are talking about the possibility of one, like it's a good thing...strange days, somewhat topsy turvey times, huh.
Last edited by Passenger; 26th May 2023 at 14:24.
To be fair Jeremy Hunt (my local MP) has less time that you suggest to turn things around if winning the next General Election is the end game.........which, of course it is for any incumbent party. The next General Election has to be held before 28th January 2025, so 20 months from now. But in reality I cannot see the Government going to the country any later than Q3 2024 (or early Q4 '24) if that is when they feel they have some kind of a winning mandate/platform to stay in power.
Without getting overtly political, my own view is that if there was an election right now the Conservatives would just not win. I am not saying that Lab (or any co-party alliance) would win outright, but I just don't see any roadmap for the Conservatives to stay in power currently. And I'll say it again, the BoE just don't have a clue here. Their only mechanism for stemming inflation is a) to increase interest rates b) to raise interest rates and c) to put up interest rates which all drive the housing market/mortgage markets - And none of those will really work at all and will, unfortunately (maybe) tip us into recession as efficiencies in business are hit, confidence wanes further and there are consequently huge drops in HMRC returns which affect public spending at the cost of national debt/borrowing....
So what can they do? Well as we happen to talking about it now in this thread it is, I believe, only the economy and whatever can be done to put that in a far better place than it is now. If a party headed by the ex Chancellor (in tandem with his current one) cannot achieve this then the door to Downing Street is left wide open to the Labour party and their "super abacus" economical outlook (OK, that was a tad political.....but with a sense humour twist!) for the country.
I do think we will see more tough times and really hard decisions for the rest of '23 but come Q1/2 of '24 I would "hope" (or expect/demand actually!) some better news for us all.
Last edited by Gareth-W; 26th May 2023 at 17:14. Reason: typo
I don't think you can have any reasonable discussion about property without touching on politics ... seems this thread is managing to keep things sensible.
I fear we are in a bit of a fix and I don't see any immediate recovery so I expect property prices to just stabilise whilst their true value gets eaten up by inflation just like all our other assets.
I don't think any politician has a magic bullet and they will just meddle whilst the economy does it's own thing ...
In the mean time my aunts bungalow is still festering on the market; has been there for 6 months and had it's price cut 10% ... still no offers. Rental market on the other hand is fizzing ...
The Chancellor’s announcement about beating inflation (at the cost of a recession) happens to coincide with the announcement that Germany is in recession so presumably Germany would be used as a comparator? Trouble is, the housing market may well be affected adversely because people fear losing their income during a recession, no matter how brief.
The U.K. recorded the largest monthly increase in core inflation in the world with the exception of Argentina and South Sudan. Jeepers.
But but "the party of fiscal responsibility", oh and let's not forget Corbyn...
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
See another virtually World Beating performance, I guess we can add smashing core inflation to our list of special talents like doing pomp so well and marching in time. chuckle.
Last edited by Passenger; 27th May 2023 at 10:35.
Flat prices in my vastly overpriced part of this green and pleasant land (Kingston) now down to 2015/16 prices, by the time you have negotiated 10% off the current ask price.
And that is before anything has significantly kicked off in terms of house price falls.
Not exactly much capital appreciation for the BTLers. In fact a significant loss when you add in SDLT and other fees.
Good time to buy then!
Yep I can vouch for this however that's nothing to do with interest rates. The pandemic drove prices down as people sold up to move out to the sticks. Still a fair chunk up vs the price when it was sold just under 10 years agoFlat prices in my vastly overpriced part of this green and pleasant land (Kingston) now down to 2015/16 prices, by the time you have negotiated 10% off the current ask price.
And that is before anything has significantly kicked off in terms of house price falls.
Not exactly much capital appreciation for the BTLers. In fact a significant loss when you add in SDLT and other fees.
Last edited by ryanb741; 6th June 2023 at 19:13.
If that really is the case, then there is a whole heap more pain to come when 6% mortgage rates start to sink in.
Must have caught it on a bad day.
https://kingston.nub.news/news/local...y-finds-185377
If that was really true the government would simply reverse this as it would lead to widespread ruin. The interest rate situation is simply an artificial construct to constrain demand. We will I think see 6% rates within 6 months but I'd imagine these are transitory and rates will head lower later. If not, then kaboom!
Widespread inflation causes much more financial ruin. Wacks those on fixed income, just like the vast majority of pensioners who do vote for a certain political party.
No chance of reversing it this time just to save those who over leveraged on a couple of hundred thousand flats and houses. Caveat Empor.
Ah, yes, transitory. Where have I heard that before.
That would read 100% if you bought a similar priced house, however small.
Yeah I don't doubt it.
BOE's independent of Gov., they do the rate setting. No disrespect meant R but when it comes to forecasting I take your un's with a fistful of salt.
Well finally accepted on offer on my Aunt's bungalow.
Started out at £500k then £475 then £450. Sale agreed at £425.
6 months ago the probate valuation was £475 so the £500 was hopeful ... translates to an 11% drop in 6 months.
The charities were keen to accept the offer.
Well done, pleased for you. I’m still no further with mine, been listed since last August. Started at £360k and currently down to £290k.
Nice one well done...that seems a reasonable outcome given the conditions, mood.
Are your Estate Agents offering advice, comment on the market outlook. Generally speaking the market cools when the Summer sun come out fwiw.
Thanks, yes they are pretty proactive. They are saying that the more expensive properties are slow moving, first time buyers buying smaller properties tend to be where there is movement.
Part of the problem is choice, it certainly is a buyers market. We also have a new development of over 300 new houses near by on the old Cadbury’s site and of course they offer all the deals etc, so I’m guessing they are consuming a fair chunk of the house buying people.
I would say your assessment of the Cadbury development is probably on the money.
There are two major builders on the site, both offering all kinds of deals including buying peoples houses and making it very easy for them to move in. They are even offering cash back deals against the year one mortgage payments.
It does mean that people are effectively buying their fixtures and fittings and white goods on their mortgage. The problem for these people is further down the road if they try to sell. They can’t compete if the developer is still selling, so have to take a bath in order to get shut.
Bugger it's on your doorstep as well...makes for an absurdly competitive micro market.
GLWTS
BBC News - House prices in first annual fall for 11 years, says the Halifax
https://www.bbc.co.uk/news/business-65825576
"Once is happenstance. Twice is coincidence. The third time it's enemy action."
'Populism, the last refuge of a Tory scoundrel'.
2 nice houses came up for sale in the my village for 750k and 700k about 3 months ago, I thought they would hang about for a bit but both sold within 3-4 weeks.
One on my road went on the market recently for similar money to what I paid for mine in July 22. For sale sign up within a week.
I have spoken with 2 agents today ... FWIW they both accepted it is a buyers market. First time for a long time ...
Round our way (North Kent Coast) quite a lot of AirBNB landlords are bailing out apparently ... which is a good thing.
They'd probably be able to sweeten the deals too.
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