House Prices (what's next?)

homeless9

Hi People,

I know practically nothing about economics, house price movements etc.... so I'm curious to hear other peoples opinions. (I know crashytime will say everything will crash, so I don't need their comments and the ongoing arguments they bring).

Are we going up, down, staying as we are in terms of house prices? Things have grind to a halt with buying and selling so I guess we won't see the impact the virus has caused until we come out of lockdown?

Possibly as we come out of lockdown and gradually get back to normality I guess there will be a lot of hesitation. People will likely be more cautious with their spending.

Unemployment, Government spending, reduced incomes, low interest rates, construction grinding to a halt - less homes on market, value of the £ going down, inflation, are taxes going to go up after this due to the government paying out so much money to save the economy, could we even get to a point where the government is bust?, how are the banks - are they less prepared to lend, is this 3 month pause in mortgage payments going to cause them to struggle?, are the number of deaths per month in the UK now on average going to be much higher than past years - meaning more inheritance being passed down, maybe more houses on the market? - I'd assume death rates won't get too bad.

numbercruncher8

Nobody knows for sure. The only thing is that there are more things in favour of house prices decreasing rather than increasing, not least because things are very expensive relative to earnings.
It seems that the factors against are quite specific, but the factors for seem to be restricted to 'it increased after the last GFC', but there were a whole load of props used after that, not least the rapid decrease in interest rates. It seems impossible to increase on this scale this time around.
There also seems to be 'nothing bad happened after Brexit' but in my neck of the woods having a property as a BTL (in 2016 a viable investment against very low interest rates) has rapidly become less attractive due to taxation changes. The prospect of capital gains (another reason to own property) seems to have rapidly diminished as well.
In my own opinion, the easy money that is flowing around will find its way into property as well as other assets but with banks carrying a stack of this on their books, lending will be more cautious. There may be a short term dip in prices, but it won't last forever and overall prices will continue to advance by 1-2%, that's my guess.
That keeps the masses happy, without realising what is happening. But over a 10-year period the real falls will be substantial due to inflation.
The pain won't be just felt by homeowners though, I do feel that the measures needed to fight the virus and specifically keeping peoples incomes level will still be beyond what is pledged now. Assuming that we want to make inroads into this and that interest rates will have to rise sometime later to curb inflation, there will be tough times ahead.

hazyjo

This needs moving to: https://forums.moneysavingexpert.com/categories/debate-house-prices-the-economy

mystic_trev

hazyjo said:

This needs moving to: https://forums.moneysavingexpert.com/categories/debate-house-prices-the-economy

That Forum was closed on Friday.

hazyjo

mystic_trev said:

hazyjo said:

This needs moving to: https://forums.moneysavingexpert.com/categories/debate-house-prices-the-economy

That Forum was closed on Friday.

Thanks - I never use it so didn't know. Oh gawd, so that means they're all going to come here  

Actually, it does say at the bottom of the notice:

"Please do not post content intended for this board elsewhere in the forum – we appreciate your help and understanding during this exceptionally difficult time. It goes without saying, we hope to get back to full business as soon as possible!"

jstw

Down, at least by 10%. Interest rates are as low as they can go and will need to rise over the next few years, lenders will restrict lending to derisk (max 4.5 multiples and no 95% LTV), lower disposable incomes due to higher taxes, higher unemployment, and morbidly lower demand / more supply etc etc

Vestraun

We’re proceeding but have agreed a 15% reduction and have a substantial deposit. 

graphs

A good 20-30% reduction incoming. If you are buying now, pull out.

Vestraun

graphs said:

A good 20-30% reduction incoming. If you are buying now, pull out.

What makes you think that? We have agreed 15% off, but unsure if that’s enough now?

graphs

Vestraun said:

graphs said:

A good 20-30% reduction incoming. If you are buying now, pull out.

What makes you think that? We have agreed 15% off, but unsure if that’s enough now?

I'd say 15% is decent this early on in the crisis and if you really have to move now then go for it.

Thrugelmir

Is the Money Savers Arms still open? Better place for this discussion.