Market slowdown coming? Wwyd?

lookstraightahead

GDB2222 said:

There are two conflicting trends at the moment. Interest rates are rising and there’s more rises in the pipeline. That’s a really big negative for house prices.  

At the same time, inflation will eventually feed through to higher salaries, which is positive for house prices.

 It’s hard to tell which will prevail. Given the uncertainty, it is a big risk to sell without having a purchase lined up. It could work out really well, but it could be a disaster.

How long could it take for inflation to feed through to higher salaries though?

GDB2222

Gycraig said:

GDB2222 said:

There are two conflicting trends at the moment. Interest rates are rising and there’s more rises in the pipeline. That’s a really big negative for house prices.  

At the same time, inflation will eventually feed through to higher salaries, which is positive for house prices.

 It’s hard to tell which will prevail. Given the uncertainty, it is a big risk to sell without having a purchase lined up. It could work out really well, but it could be a disaster.

Will it actually “feed through to higher wages though” no one I know has had more than a 1-3 percent pay increase, the pay increases people are getting barely cover the cost of the extra electric etc. 

Thrugelmir said:

GDB2222 said:

At the same time, inflation will eventually feed through to higher salaries, which is positive for house prices.

Many organisations haven't recovered from the financial impacts of the pandemic. Increased pay needs to be earnt through output and increased productivity. The causes of inflation, i.e. energy, is a burden to everyone. 

That’s very interesting. So, we may have salaries lagging behind inflation.

As far as interest rates are concerned, the best indicator of what is going to happen is the bond market. The Bank of England publishes the rates and the latest figures are here.

https://www.bankofengland.co.uk/statistics/yield-curves

That looks like short term rates are going up to nearly 3%. Mortgage rates are obviously higher, so 3.5-4% maybe. That could have a big effect on property values!

RelievedSheff

lookstraightahead said:

GDB2222 said:

There are two conflicting trends at the moment. Interest rates are rising and there’s more rises in the pipeline. That’s a really big negative for house prices.  

At the same time, inflation will eventually feed through to higher salaries, which is positive for house prices.

 It’s hard to tell which will prevail. Given the uncertainty, it is a big risk to sell without having a purchase lined up. It could work out really well, but it could be a disaster.

How long could it take for inflation to feed through to higher salaries though?

I guess that depends on your employer.

We received an almost 5% pay increase at the beginning of January with another pay review due at the end of next month.

Having worked here for 22 years now, we have always received a pay rise in January which is inline with the current rate of inflation and the June pay rise is generally a bit of a catch up rise if inflation has risen further.

GDB2222

This is from the BOE website, showing forward interest rates.

jimbog

Thrugelmir said:

Sarah1Mitty2 said:

nick1234 said:

With rates rising today and inflation predicted to go 10%+ there is no way prices will keep rising, being chain free puts you in a very strong position in a Competitive market and if you pull out the sale you could have similar issues in the future eg your house selling and the new purchase falling through.  

Getting into a cheap rental seems a no brainer

Don`t you think they are exaggerating a bit though, trying to paint in more gloomy than it is, for what reason I`m not really sure?

Do you see any end to the conflict in the Ukraine or the lockdowns in China ? 

I can see the end of the lockdowns in China in the next couple of months

Thrugelmir

jimbog said:

Thrugelmir said:

Sarah1Mitty2 said:

nick1234 said:

With rates rising today and inflation predicted to go 10%+ there is no way prices will keep rising, being chain free puts you in a very strong position in a Competitive market and if you pull out the sale you could have similar issues in the future eg your house selling and the new purchase falling through.  

Getting into a cheap rental seems a no brainer

Don`t you think they are exaggerating a bit though, trying to paint in more gloomy than it is, for what reason I`m not really sure?

Do you see any end to the conflict in the Ukraine or the lockdowns in China ? 

I can see the end of the lockdowns in China in the next couple of months

That's still a huge amount of lost output that the West is dependent upon. Shortages will ripple on as a consequence maintaining the pressure on prices . 

Sarah1Mitty2

Thrugelmir said:

Sarah1Mitty2 said:

nick1234 said:

With rates rising today and inflation predicted to go 10%+ there is no way prices will keep rising, being chain free puts you in a very strong position in a Competitive market and if you pull out the sale you could have similar issues in the future eg your house selling and the new purchase falling through.  

Getting into a cheap rental seems a no brainer

Don`t you think they are exaggerating a bit though, trying to paint in more gloomy than it is, for what reason I`m not really sure?

Do you see any end to the conflict in the Ukraine or the lockdowns in China ? 

To both yes, neither situations benefit China or Russia really long term?

GDB2222

Sarah1Mitty2 said:

Thrugelmir said:

Sarah1Mitty2 said:

nick1234 said:

With rates rising today and inflation predicted to go 10%+ there is no way prices will keep rising, being chain free puts you in a very strong position in a Competitive market and if you pull out the sale you could have similar issues in the future eg your house selling and the new purchase falling through.  

Getting into a cheap rental seems a no brainer

Don`t you think they are exaggerating a bit though, trying to paint in more gloomy than it is, for what reason I`m not really sure?

Do you see any end to the conflict in the Ukraine or the lockdowns in China ? 

To both yes, neither situations benefit China or Russia really long term?

The Chinese are still keen on their zero Covid policy, and Covid has become much more transmissible, making it harder to control. As it is now endemic in the rest of the world, they are likely to keep getting new outbreaks. 

As to Russia, they are not going to give up, I fear. 

nicknameless

Sarah1Mitty2 said:

Thrugelmir said:

Sarah1Mitty2 said:

nick1234 said:

With rates rising today and inflation predicted to go 10%+ there is no way prices will keep rising, being chain free puts you in a very strong position in a Competitive market and if you pull out the sale you could have similar issues in the future eg your house selling and the new purchase falling through.  

Getting into a cheap rental seems a no brainer

Don`t you think they are exaggerating a bit though, trying to paint in more gloomy than it is, for what reason I`m not really sure?

Do you see any end to the conflict in the Ukraine or the lockdowns in China ? 

To both yes, neither situations benefit China or Russia really long term?

It's tough to see how China can maintain it's zero covid policy.  Omicron won't let it unless it miraculously disappears.  However, if they got rid of it now that doesn't mean a return to normal service as the implications in a population of 2 billion without any natural immunity are not pretty in the short term.

GDB2222

China has been very busy vaccinating people. 

http://en.nhc.gov.cn/2022-02/21/c_85855.htm

So it might not be disastrous if they changed policy on zero Covid.