Housing market move given Brexit and interest rise

ukcarper

Crashy_Time wrote: »

Everything is fine then???!

I'd say as far as mortgage borrowing is concerned yes things are no worse than previously. I can understand why you want prices to fall, in fact I think it would have been better for the majority if prices had not increased so much. But if interest rates do rise it will be slowly, a doubling of bank rate will not double mortgage rates and people will cope better than you imagine.

Crashy_Time

ukcarper wrote: »

I'd say as far as mortgage borrowing is concerned yes things are no worse than previously. I can understand why you want prices to fall, in fact I think it would have been better for the majority if prices had not increased so much. But if interest rates do rise it will be slowly, a doubling of bank rate will not double mortgage rates and people will cope better than you imagine.

People clinging on paying their mortgage will do nothing for the sentiment needed for enough people to keep bidding up the housing market with debt, that sentiment is already dead in the water.

chappers

Crashy_Time wrote: »

People clinging on paying their mortgage will do nothing for the sentiment needed for enough people to keep bidding up the housing market with debt, that sentiment is already dead in the water.

But it will have an effect on the supply to the market.
The suggested interest rate rises won't affect the market anywhere near as much as a supply issue.
The effect on the housing market will be one of the primary factors at the forefront of the BoEs mind when implementing rate rises.

Crashy_Time

chappers wrote: »

But it will have an effect on the supply to the market.
The suggested interest rate rises won't affect the market anywhere near as much as a supply issue.
The effect on the housing market will be one of the primary factors at the forefront of the BoEs mind when implementing rate rises.

Unless the U.S start raising first, then they will just have to follow. Actually if they don`t start reducing house prices JC will be P.M and the country will have much bigger problems on it`s hands re. bond markets, rates etc. IMO. However there is plenty of supply when the BTL sell-off gets under way and people go home/don`t come due to Brexit changing the "vibe" in the UK.

qwert_yuiop

GreatApe wrote: »

There is one very simple fact the crash cheerleaders are missing.
Why the hell would landlords sell after a crash ???

If prices fell 50% that would mean a property with a rental return of 5% today would have a rental return of 10% post crash. Which landlord is stupid enough to sell a 10% rental return property and put that into a 1% return savings account?

The crash wishers have it completely wrong. If prices doubled a hell of a lot of landlords would sell out and bank the profit. If prices half then few landlords would sell and many more would buy investment properties becoming landlords in the process.

The return is on the initial price paid. A crash makes no difference to their return on investment, provided rent doesn't change. Who knows what effect a general loss of confidence would have on rents?

chappers

Crashy_Time wrote: »

Unless the U.S start raising first, then they will just have to follow. Actually if they don`t start reducing house prices JC will be P.M and the country will have much bigger problems on it`s hands re. bond markets, rates etc. IMO. However there is plenty of supply when the BTL sell-off gets under way and people go home/don`t come due to Brexit changing the "vibe" in the UK.

The US have already begun raising as have the UK slightly BoE isn't the only rate, particularly where borrowing is concerned.
Again why do you think JC will be PM in a buoyant housing market can you please explain?
We already have an issue with the bond market, the last gilt auction only made .07 over the auction requirement, the position of the pound is having a big effect on non currency hedged foreign investment. That is why the BoE is trying to buy up these foreign owned gilts.
There isn't going to be a huge BTL sell off, I expect a significant cooling of investors entering the market, especially those that I call the hobbyists.

Crashy_Time

chappers wrote: »

The US have already begun raising as have the UK slightly BoE isn't the only rate, particularly where borrowing is concerned.
Again why do you think JC will be PM in a buoyant housing market can you please explain?
We already have an issue with the bond market, the last gilt auction only made .07 over the auction requirement, the position of the pound is having a big effect on non currency hedged foreign investment. That is why the BoE is trying to buy up these foreign owned gilts.
There isn't going to be a huge BTL sell off, I expect a significant cooling of investors entering the market, especially those that I call the hobbyists.

I explained in another post, a "buoyant" housing market, in other words a bubble, no longer works for a large number of people, why do you think TM did so badly in the last election?

theEnd

I think prices are already falling significantly. At least where I am in SW London.

It's difficult to see what the future is right now. Brexit will almost certainly affect demand and jobs in London. There also seems to be a massive amount of new housing coming online in the next year or two.

Less concerned about rates. I doubt the BoE will feel any need to protect the pound. If prices fall faster, they won't raise rates much.

chappers

Crashy_Time wrote: »

I explained in another post, a "buoyant" housing market, in other words a bubble, no longer works for a large number of people, why do you think TM did so badly in the last election?

But that doesn't mean they are going to vote for Corbyn.
TM ran a crap campaign compared to JC and whilst it was a bit of a disaster losing an overall majority, the whole election was a bit of a misnomer, the Tories lost seats despite having their highest share of the vote since 1983.
The state of the housing market was nothing to do with it.

Crashy_Time

chappers wrote: »

But that doesn't mean they are going to vote for Corbyn.
TM ran a crap campaign compared to JC and whilst it was a bit of a disaster losing an overall majority, the whole election was a bit of a misnomer, the Tories lost seats despite having their highest share of the vote since 1983.
The state of the housing market was nothing to do with it.[/QUOTE]


It was about the state of society in general, and the unfairness that many people now perceive, not just housing, but housing is a glaring example of where things have just broken down for ordinary (especially younger) people. We were told people wouldn`t vote for Trump/Brexit and that Corbyn was "unelectable" though, so are you going to bet against him?