[Finance] Housing Market

[Eric the meek]

Good call from the people who voted prices will increase. They have gone up 20% in the last 2 years

What are you seeing on the front line? I'm hearing from estate agents there is still a supply-demand imbalance with not enough property for sale to satisfy demand.

As a mortgage broker, do you see the same thing, or are you a bit further down the path, in that buyers need to have found a place they want first before they contact you?

 

[Simster]

It is becoming apparent that all the while we are not building enough new housing stock and all the while older generations are not incentivised to downsize, prices will continue to climb. Stuff like pandemics and downturn in the economy arguably have very little impact on this relentless rise.

I think the pandemic impact has surprised everyone. During 2020 and half of 2021, younger people stayed at home and pocketed their furlough and used that time to pay off debts, or save a deposit. Meanwhile others who might have moved clearly decided it wasn't a good time to do so, which suppressed supply.

 

[Uncle Spielberg]

What are you seeing on the front line? I'm hearing from estate agents there is still a supply-demand imbalance with not enough property for sale to satisfy demand.

As a mortgage broker, do you see the same thing, or are you a bit further down the path, in that buyers need to have found a place they want first before they contact you?

Desperate lack of property. Covid has changed what people want but I think things will calm down now, also the stamp duty holiday which was not needed really artificially inflated the market

 

[Deleted member 2719]

It is becoming apparent that all the while we are not building enough new housing stock and all the while older generations are not incentivised to downsize, prices will continue to climb. Stuff like pandemics and downturn in the economy arguably have very little impact on this relentless rise.

I think the pandemic impact has surprised everyone. During 2020 and half of 2021, younger people stayed at home and pocketed their furlough and used that time to pay off debts, or save a deposit. Meanwhile others who might have moved clearly decided it wasn't a good time to do so, which suppressed supply.

How would you incentivise them

 

[Rowdey]

Up here in South Londinium, we're buying 'up' and would have loved prices to take a 10/20% hit.. Still, sold 2 bed garden flat for £530k.. guess the kids will be with us forever at this rate...

 

[Biscuit]

Desperate lack of property. Covid has changed what people want but I think things will calm down now, also the stamp duty holiday which was not needed really artificially inflated the market

That stamp duty holiday was a Godsend for me; it allowed me to get my dream home. If I had stamp duty on top I couldn't have afforded it. It was a once in a lifetime opportunity for us.

So while it artificially inflated the market, I'd be interested to know how much by. Because I suspect people moving out of town for bigger properties due to COVID/lack of properties on the market had a much bigger impact.

 

[Poojah]

It’s quite fascinating seeing this thread bumped two years on. In March 2020 I was slap bang in the middle of buying a house after years of searching and trying to convince the missus to move as we needed more space.

Honestly, I didn’t know what to do. I could only see property prices falling. Simple economics in my mind, we were heading for the mother of all recessions and recessions = property market crashes, don’t they? I bought my first house as a 22 year old in November 2007, and then spent much of the next 10 years in negative equity thanks to the 2008 economic crisis.

It was also complicated by the fact that the house we were buying needed work, and we were keeping our original home to live in while we did that (thanks to some mortgage magic from NSC’s very own [MENTION=3887]Uncle Spielberg[/MENTION]). So it was a double whammy - if the market crashed we’d lose out on both properties.

I’m not sure what possessed me but I decided to go ahead, on the proviso I could get something knocked off the purchase price. Our originally accepted offer was about 3.5% under the asking price, and so I asked for another 3.5% to be knocked off. Bloke said no, and put it back on the market. The problem he had was that there were very few alternative buyers around at that time. It was April by this point, and the mortgage market had completely shut down. We could only proceed because our mortgage had already been agreed.

So I held firm, and a couple of weeks later the guy rang me to ask if my revised offer of 7% under asking price was still on the table. I said yes, and a few weeks later with the UK still in the throes of lockdown #1 we completed. Now, we’ve done a bit of work on the house (nothing major, mostly a bit of a refresh) and a few weeks back we had the house valued at a full 25% more than we paid for it. In the space of two years - that’s just nuts.

On the back of that, we’ve only just got round to selling our old house. Legals are going through now, but we agreed a sale for full asking price which is 15% higher than the valuation we had in February 2020. So, somehow, against all conventional logic what I thought might have been the most reckless financial decision of my life turned out to be the best.

I feel more relieved than smug if I’m honest. Any smugness that creeps in is quickly tempered by the realisation that my kids will want to buy a house of their own in 10-15 years, and as things stand that’s going to be very, very difficult for them.

Something has to change. I’m lucky; I’ve had a tough paper round but also a great degree of financial good fortune in recent years. Without it I wouldn’t be in the position I’m in. I wouldn’t like to be a first time buyer right now, and I really do feel for young people. With the cost of living rising in every conceivable way, getting out of the rent trap is going to be so, so tough for a lot of talented, hard working people.

 

[Live by the sea]

Put our 2 bedroom house on the market a few weeks ago for 300k, huge amount of interest mainly from young first time buyers, sold for £335k, absolutely ridiculous amount.

May Sound a lot for a 2 bed in Saltdean but look at what you can get for that money in more central areas of Brighton/ Hove . A small 2 bed flat if you are lucky !

 

[Live by the sea]

Up here in South Londinium, we're buying 'up' and would have loved prices to take a 10/20% hit.. Still, sold 2 bed garden flat for £530k.. guess the kids will be with us forever at this rate...

Good time to move out of south London I would have thought and put some distance between you and the gangs !

 

[Half Time Pies]

I’ve consistently said that house prices will rise.

Supply and demand, simple.

The UK’s population has increased by 10m since 1997. Additional housing supply (social and private) has barely touched that. Planning authorities and nimbies opposing countless proposals.

Actually its much more complicated than population growth outstripping supply. That model completely ignores the role of finance and particularly the availability of cheap credit, its also ignores the determination of successive UK governments to keep prices inflated (for example banking bailouts, quantitive easing, stamp duty holidays, help buy scheme) and prevent the housing market from tanking.

 

[Live by the sea]

Similar here really - been in the same house 20-odd years and won't be moving, however have two kids who will at some point want to get their own places - both currently rent similar-sized flats, one pays £350 a month (Scottish Borders) and the other pays £1,100 (Burgess Hill) - the regional disparity is immense. A decent fall would help one of them out (or reduce the amount we'll need to help them out in reality) once that time comes.

Isn’t that just supply and demand , very little demand in Scotland outside of Edinburgh and a handful of other parts in Scotland . That’s why housing is so much cheaper there as well as rent .

 

[Simster]

How would you incentivise them

I don't know, but it's not really my job to think of a solution.

 

[Eric the meek]

Desperate lack of property. Covid has changed what people want but I think things will calm down now, also the stamp duty holiday which was not needed really artificially inflated the market

A desperate lack of property obviously points to rising prices, and prices have just risen again in January.

Maybe the demand-supply imbalance is so great, that removal of the stamp duty holiday didn't affect the direction of house prices.

 

[Berty23]

It is really interesting what is happening. House prices continually rising is nuts. I can’t compute how people can afford to live with some of the mortgages they have. I guess there is excess demand because money is so cheap to borrow. If interest rates went up then suddenly people can’t afford nearly as much. We are in this weird existence now where governments can’t put interest rates up so we all keep borrowing more. Can it go on forever? It feels like close to a pyramid scheme but at least you get a house out of it.

Personally I would like to see people buying properties as investments smashed for tax because this inflated the market. This is not just me saying it as someone bitter. My old man has some houses and makes loads from rent so this is my inheritance but it is ridiculous that people with money buy property and get others to pay the mortgage for them and get huge capital gains. The rich get richer. I am not a socialist but it is nuts.

 

[Weststander]

Actually its much more complicated than population growth outstripping supply. That model completely ignores the role of finance and particularly the availability of cheap credit, its also ignores the determination of successive UK governments to keep prices inflated (for example banking bailouts, quantitive easing, stamp duty holidays, help buy scheme) and prevent the housing marking from tanking.

At local authority level I see The Planning Inspectorate set mandatory targets for new housing, specified by year of delivery.

Some councils play ball.

Others, pandering to the votes of nimbies, make life incredibly hard for all developers and I’ve seen that include not for profit social housing providers wanting to build modestly on brown field sites. Some of the tactics/incompetence defies belief.

Shelter carried out analysis of objectors. Tending to be middle or old age, in a private home, on above average income.

Not a care in the world for the homeless, sofa surfers or folk in their 30’s having to live with parents.

 

[Wrong-Direction]

Partner and I were hoping to buy our first property this year, I really don't want to get mugged off though with the prices going up. A bit selfish but I'm still hoping the crash will come once people can't afford all the other increases, depressing sigh

Sent from my SM-A326B using Tapatalk

 

[Mellor 3 Ward 4]

Think COVID has made many people realise the daily commute into London is farcical when modern technology means you can do whatever from home.

Hence why not buy a place in lovely West Sussex, probably close enough to a Station when you have to have that ballsaching Monthly Meeting in person, the rest of the time you can do your stuff from home, possibly still in your dressing gown.

Oh and you will have trousered enough from your lovely South London property to have cash purchased your Storrington/Pulborough/Billingshurst des res.

Basically summed up perfectly.

Sell your 2up/2down in Tooting/Peckham etc. for 750k and buy a 4/5 bed house in Horsham/H Heath etc.for the same money - plenty of room for a nice study/office instead of working on the kitchen table.

Work From Home has not only changed the way of work it's also changed the way of home life and where to live too.

1/2 hour from the coast, 50 minutes from London on the train, in the countryside in two minutes, no wonder there is constant pressure to build.

Add in the population growth of 10 million in 20 years and that's why prices will continue to rise - although I do see a slow down in price rises over the next 12/24 months.

 

[mikeyjh]

House prices have shot up ridiculously in the last few years. My energy bills have literally doubled in the last 12 months and when we tried to see if there was a better tariff (on EDF standard now), Uswitch said don't bother until April. Food prices are going up. Fuel - don't get me started.

Hard to see where and how this all ends. Except in the shitter.

Quite - The squeeze on people, particularly in SE England for low and average earners is going to be really tough.....

 

[dazzer6666]

£1100 a month for a flat in BH ? Wow my little flat in Newport road 25 years ago was £350 a month !

Its not even like BH has much going for it nowadays except a deserted town centre and high costs to go with it.

Feel so sorry for the kids of today will have such a nightmare getting on the property ladder

Agree - but that's only half the story - took them quite a while to get anywhere as flats were being let as soon as they came on the market. When they viewed the one they were in, they basically had to make a decision there and then otherwise they'd have had no chance of getting it. It was the 7th or 8th they'd looked at, the rest all went the same day they viewed.

 

[dazzer6666]

Isn’t that just supply and demand , very little demand in Scotland outside of Edinburgh and a handful of other parts in Scotland . That’s why housing is so much cheaper there as well as rent .

Well obviously - I was just highlighting the disparity. It's awful for kids down here - in my daughters case her Borders salary would be exactly the same if she was in Brighton (in fact it might even be slightly lower).