Has the market crashed?

Sarah1Mitty2

[Deleted User] said:

Sarah1Mitty2 said:

Articles like this really make people pause and consider their options I think,  New builds are going to drop in price because help to buy (or help to borrow as I have heard it referred to) has been cancelled.

But it can easily be restarted, if and when the politicians decide it will help them get votes. 

My bet is that 6 to 12 months before the next election we'll see a return of H2B, MIRAS and "whatever else it takes" to pump up the housing market. 

People won`t get involved in help to buy schemes when they see that higher interest rates lower prices, and there are going to be plenty of horror stories about people trapped in HTB properties as well making it even less appealing. If US rates are "higher for longer" it doesn`t really matter what the UK government does to be honest.

[Deleted User]

MobileSaver said:

fackers_2 said:

jimbog said:

fackers_2 said:

In my experience, I believe so.  I have been aggressively looking at houses, noting down listing prices then their reduced price etc. Our large search area is within the SW stretching as West as Bristol and East as Swindon. Almost all houses we are interested in are on for minimum 2 weeks before any change, in that there is almost always a price drop of around £20k-£30k

Is a ‘crash’ in asking prices is the same as a crash in house prices?

Overall from what I’m seeing, there’s already a drop of at least 5% happening - Off of the original listing price. 

So just to be clear - if I put my house on the market today with an asking price 10% above what I think it's really worth and then drop the price by 5% in two weeks time then in your view that's a "crash"?!?! Er, yeah, ok, keep taking those meds!

[Deleted User] said:

[Deleted User] said:

With the supply and demand aspect  it will be interesting to see what happens to this market. I dont expect prices to increase but I suspect that there will remain some demand for the very few properties available.

40% would be good, and keep in mind we are at the start of a long recession. ... We must keep the pressure up to make it less attractive.

House-building material costs have gone through the roof, labour costs are increasing and borrowing costs have increased significantly so I'd love to know where you think all these cheap new "40% off" houses are going to come from?!?!

Used houses require no new building materials. New ones, in London the average profit margin is 194%, and it's pretty high in many other areas. They can get away with it, which is what needs to change.

For reference average cost to build is around £180k for a 3 bedroom house, and most of the cost isn't materials.

[Deleted User]

GDB2222 said:

[Deleted User] said:

Noneforit999 said:

Exodi said:

[Deleted User] said:

As someone who would like to buy I'm holding off for now.

I think many will be doing the same.

You have many sellers, who have seen there houses absolutely balloon in value over the past couple of years (using my house as example I bought for £300k in mid 2019, and have seen similar houses for sale during this summer up for sale between £400k - £500k)... absolutely madness.

You have to wait for these sellers to come back to Earth which is not going to be quick. Take the OP - "it doesnt feel over priced compared to recent sales in the summer". This will be a common theme amongst current sellers, and if they're not willing to come back to Earth, they'll see demand disappear.

People just can not afford high energy bills, soaring food prices, increased fuel prices, with pay-rises that in most cases are real terms pay cuts, on top of ~£500 extra on a mortgage to buy someones now overpriced house.

I wouldn't dream of buying in the next few months.

What is going to be different in six months time though? Even if house prices drop say 10% in that time, unless you are a FTB then your existing house will have likely dropped a similar amount so you have less equity to roll onto a new house and unless mortgage rates drop substantially, its going to make little difference.

If you put moving off for several years then things may change (perhaps) but I don't see how 6-12 months is going to look much different from now.

More like six years time. Get the recession over with, election at the end of 2024, then time for the new government to make a little progress towards stabilising things.

The UK won't be right for at least a decade, probably much longer. Brexit isn't going away soon and the last 12 years have really racked up the debt - government, household, and social. We also have 2 million with long COVID, massive loss of productivity and massive increase in healthcare and benefits costs.

The long Covid figures may be a bit exaggerated. Only 16% of sufferers reported that it interfered with day to day activities a lot. Whilst acknowledging the personal issues, the economic impact for many of the remainder is probably quite small.

Those are the official government figures. Keep in mind that COVID is not over either. By interfered with day to day activities "a lot", in the terms used for disability assessments that means things like can't dress themselves, can't prepare food for themselves. It takes a lot less than that to hit productivity.

[Deleted User]

[Deleted User] said:

jimbog said:

[Deleted User] said:

brett19852010 said:

In my area a 40% crash is required to hit 2016 prices and a 20% crash to roll back to 2020 figures. 

With the supply and demand aspect  it will be interesting to see what happens to this market. I dont expect prices to increase but I suspect that there will remain some demand for the very few properties available.

The main problem is buy to let. As investments and pensions do poorly people look to becoming a landlord for income. We must keep the pressure up to make it less attractive.

Who are we pressurising? And how do we 'keep the pressure up'? 

Potential and existing landlords. Keep making the rules more and more in the tenant's favour, increase taxes on BTL and 2nd homes etc. At the moment it looks like a good investment and income stream, so the goal is to make it look unattractive.

What makes you say that? 
Do many people you know still like the idea of becoming a BTL landlord? 
From what I see, it's becoming less and less appealing. 

[Deleted User]

Sarah1Mitty2 said:

[Deleted User] said:

Sarah1Mitty2 said:

Articles like this really make people pause and consider their options I think,  New builds are going to drop in price because help to buy (or help to borrow as I have heard it referred to) has been cancelled.

But it can easily be restarted, if and when the politicians decide it will help them get votes. 

My bet is that 6 to 12 months before the next election we'll see a return of H2B, MIRAS and "whatever else it takes" to pump up the housing market. 

People won`t get involved in help to buy schemes when they see that higher interest rates lower prices, and there are going to be plenty of horror stories about people trapped in HTB properties as well making it even less appealing. If US rates are "higher for longer" it doesn`t really matter what the UK government does to be honest.

They won't be trapped (by negative equity), if the UK government pushes up house prices again. 

[Deleted User]

Sarah1Mitty2 said:

[Deleted User] said:

Sarah1Mitty2 said:

Articles like this really make people pause and consider their options I think,  New builds are going to drop in price because help to buy (or help to borrow as I have heard it referred to) has been cancelled.

But it can easily be restarted, if and when the politicians decide it will help them get votes. 

My bet is that 6 to 12 months before the next election we'll see a return of H2B, MIRAS and "whatever else it takes" to pump up the housing market. 

People won`t get involved in help to buy schemes when they see that higher interest rates lower prices, and there are going to be plenty of horror stories about people trapped in HTB properties as well making it even less appealing. If US rates are "higher for longer" it doesn`t really matter what the UK government does to be honest.

I think you under-estimate the British public's desire to own their own home - at almost any cost. 

[Deleted User]

Sarah1Mitty2 said:

[Deleted User] said:

Sarah1Mitty2 said:

Articles like this really make people pause and consider their options I think,  New builds are going to drop in price because help to buy (or help to borrow as I have heard it referred to) has been cancelled.

But it can easily be restarted, if and when the politicians decide it will help them get votes. 

My bet is that 6 to 12 months before the next election we'll see a return of H2B, MIRAS and "whatever else it takes" to pump up the housing market. 

People won`t get involved in help to buy schemes when they see that higher interest rates lower prices, and there are going to be plenty of horror stories about people trapped in HTB properties as well making it even less appealing. If US rates are "higher for longer" it doesn`t really matter what the UK government does to be honest.

I think the UK government will just decide to trash the pound. 
It's the least painful option for a Tory government. 
The people hit hardest by consumer price inflation tend not to vote Tory anyway, whereas home owners do. 

I think that's why the last UK Chancellor went over to the USA - to try and beg the Fed to drop rates. 
But the Fed just ignored the UK govt, because why wouldn't they? The UK is pretty insignificant to the USA. 

The Fed is more willing to fight inflation than the UK govt is. 
The Fed is willing to take a hit on US asset prices. 

[Deleted User]

[Deleted User] said:

[Deleted User] said:

In my area a 40% crash is required to hit 2016 prices and a 20% crash to roll back to 2020 figures. 

With the supply and demand aspect  it will be interesting to see what happens to this market. I dont expect prices to increase but I suspect that there will remain some demand for the very few properties available.

40% would be good, and keep in mind we are at the start of a long recession. The main problem is buy to let. As investments and pensions do poorly people look to becoming a landlord for income. We must keep the pressure up to make it less attractive.

I'm not sure this makes sense from a logical perspective - but I agree it has been a popular attitude in the UK. 

But how many people still have this attitude in the UK? 
I think any small time investors getting into BTL in the last 5 years or so, definitely represent the 'dumb money' crowd. 

[Deleted User]

MobileSaver said:

House-building material costs have gone through the roof, labour costs are increasing and borrowing costs have increased significantly so I'd love to know where you think all these cheap new "40% off" houses are going to come from?!?!

Which materials are those? 
I think a lot of commodity prices have come down now.
But whether this has worked it's way into the end user prices, I don't know. 

Sarah1Mitty2

[Deleted User] said:

Sarah1Mitty2 said:

[Deleted User] said:

Sarah1Mitty2 said:

Articles like this really make people pause and consider their options I think,  New builds are going to drop in price because help to buy (or help to borrow as I have heard it referred to) has been cancelled.

But it can easily be restarted, if and when the politicians decide it will help them get votes. 

My bet is that 6 to 12 months before the next election we'll see a return of H2B, MIRAS and "whatever else it takes" to pump up the housing market. 

People won`t get involved in help to buy schemes when they see that higher interest rates lower prices, and there are going to be plenty of horror stories about people trapped in HTB properties as well making it even less appealing. If US rates are "higher for longer" it doesn`t really matter what the UK government does to be honest.

I think you under-estimate the British public's desire to own their own home - at almost any cost. 

I think you overestimate the UK governments ability to influence things, they can do a lot of tinkering when rates are low, different story now though.