The UK Housing Market, Post Corona March 2020

domtheone

Distinguished Member
Placing caps or disincentives on who can buy property harms the seller. Why shouldn't they sell to whoever offers the best price?
In a normal market, we shouldnt.

The UK housing market is far from normal though.

And plenty has been done to harm the buyer over the years so its about tome the balance was addresses (i say that as an owner, albeit first time buyer lol).

Anyways, we’ve been here a thousand times. Always a standoff. It’s like Labour and Tory. Will never agree.
 

Gaslight

Well-known Member
In a normal market, we shouldnt.

The UK housing market is far from normal though.

And plenty has been done to harm the buyer over the years so its about tome the balance was addresses (i say that as an owner, albeit first time buyer lol).

Anyways, we’ve been here a thousand times. Always a standoff. It’s like Labour and Tory. Will never agree.
Only when one walks in the others shoes, will they ever learn, and then understand empathy.
 
Quite the opposite, if property prices fall it will be the ideal time to snap up a few bargains.
Depends entirely on ones position. But yes agreed there are winners in every market. Friends of mine has a business where they target paying 50% of market value. And they are doing well.
 

Marth308

Member
So the UK lenders are withdrawing new loans, one reason being the risk. This will mean than once we come out of lock-down prices will plummet since people can't can't get the money to buy first time or move. If they reopen lending before the end of the lock down it may mitigate the risk, we shall have to wait and see.
 

chopples

Distinguished Member
Prices will drop but unlikely to plummet imo. insufficient housing stock for first time buyers along with a willingness of those on the ladder to just sit tight with what they have will see to that.

Back in 2008 the housing market was directly impacted by the financial crisis (because that was where all the monies for mortgages etc came from) even then prices ”only” dropped 15-20% over the next couple of years. The concern is though the amount of time it would take for prices to get back to pre-pandemic levels.
 

Ekko Star

Distinguished Member
Prices will plummet. Businesses are failing, unemployment will rocket and people will hardly have any money if this lockdown continues.

Moving houses is hardly going to be at the top of anyones agenda for a long while. Very little appetite to take on big mortgages after this and rental market will also struggle.

If you got the money and want to play it long then a crash however, is also a good time to invest.
 

domtheone

Distinguished Member
If you got the money and want to play it long then a crash however, is also a good time to invest.
If only most didn't "play", then all this needn't be a problem.

There was a time when I house was to live in, not how much profit one can make on it.
 

chopples

Distinguished Member
Moving houses is hardly going to be at the top of anyones agenda for a long while.
Nobody buying and nobody selling will result in a stall rather than a crash. But I would expect some with multiple properties to offload which will bring the prices down a bit
 

chopples

Distinguished Member
I think some are underestimating the impact of the 2008 financial crisis on the property market

back in 2007 and you are looking to buy a home.

Cant borrow enough? Don’t worry we will give you 4.5times your salary
Not sure if you can afford? Don’t worry get an interest only, deal with it later. It’s still better than renting
No deposit? Easy, 100% here, heck I give you 110% do a bit of debt consolidation, get that new kitchen
Bad credit? Here you go 7% for you, best take the 110% LTV to pay that 10k broker fee

Remo, 40k in debt 50k equity, easy get 50k pay me 10k for sorting it and clear your debts

Right to Buy, same deal borrow 10k above purchase price to pay costs, yeah you own your house but you also lose any Tenant protections rights so better keep up those repayments.

valuations where driveby’s just to check it had 4 walls and a roof

wannabe Sarah Beeneys everywhere

Frankly it was all a bit silly

Practically overnight it changed and the effect was seismic

Lenders removed their products, only a fraction brought in new ones, 20% deposits became mandatory and borrowing was only 2.5x your salary. As an example our legal firm went from completing 200 transactions a day with 500 on a month end to 30 a day, 80 on a month end,the arse well and truly fell out of it all.

effect, approx 15% reduction in prices the first year with an additional 5% the next. the market then stalled due to nobody doing anything, then it was slow growth taking over 5 years to get back to pre 2008 levels

plus points, all the shady sub prime lenders folded as did the brokers who ripped off clients who didn’t know better.
 

Ekko Star

Distinguished Member
Nobody buying and nobody selling will result in a stall rather than a crash. But I would expect some with multiple properties to offload which will bring the prices down a bit
If you can't pay your mortgage or rent you will soon be out on your ear. High unemployment, fewer jobs, less pay.

It's primarily new and first time owners that create the movement in the market and if the lenders aren't lending to them there's no movement.

Stagnation in a recession like that only results in a downwards spiral and all the economic indicators are already pointing towards that we are headed for a very long and very hard recession. You would have to be a huge optimist to think otherwise.

The 2007/8 financial crash is no parallel as this lockdown and global pandemic are more like the effects of a world war. There is no on/off switch where you can shut down economies and expect to switch them on again expecting all to be the same where it left off.

The economic damage currently being done is enormous and will have far longer lasting consequences.
 

chopples

Distinguished Member
If you can't pay your mortgage or rent you will soon be out on your ear. High unemployment, fewer jobs, less pay.

It's primarily new and first time owners that create the movement in the market and if the lenders aren't lending to them there's no movement.

Stagnation in a recession like that only results in a downwards spiral and all the economic indicators are already pointing towards that we are headed for a very long and very hard recession. You would have to be a huge optimist to think otherwise.

The 2007/8 financial crash is no parallel as this lockdown and global pandemic are more like the effects of a world war. There is no on/off switch where you can shut down economies and expect to switch them on again expecting all to be the same where it left off.

The economic damage currently being done is enormous and will have far longer lasting consequences.
Repossessions post 2008 was very high due to lenders providing mortgages to those not suited to have them. Difference circumstance but same effect. As you say 1st time buyers drive the market but as I said earlier inactivity typically leads to a stall not a crash. Prices will fall due to lenders trying to shift stock and the buy to let guys trying to reduce exposure, once this has played out I would think there would be very little movement.

I appreciate the pandemic will have a far greater effect on society and my comments are only in the case of the property market.

There will no doubt be a drop but I have read things like 50% of a value of a house, which I just cannot see, people could not sell at such a loss as it would likely leave them in negative equity
 

Ekko Star

Distinguished Member
Repossessions post 2008 was very high due to lenders providing mortgages to those not suited to have them. Difference circumstance but same effect. As you say 1st time buyers drive the market but as I said earlier inactivity typically leads to a stall not a crash. Prices will fall due to lenders trying to shift stock and the buy to let guys trying to reduce exposure, once this has played out I would think there would be very little movement.

I appreciate the pandemic will have a far greater effect on society and my comments are only in the case of the property market.

There will no doubt be a drop but I have read things like 50% of a value of a house, which I just cannot see, people could not sell at such a loss as it would likely leave them in negative equity
Firstly, this is not the financial crash of 2008.

We are in a global pandemic which is taking a huge toll of human life and quite frankly an unthinkable and unheard of economic one. Record levels of Government borrowing which is likely to cripple us for generations. This is recognised globally as a multi-facted economic disaster and the scars will be very different.

Secondly, it's not a case of if you would ever want to sell a property with negative equity. If you can't afford the mortgage, you have no option but to bail out.

To restart the economy you would need huge liquidity which is why the Government is taking on so much debt and QE measures just to see us through the next few months. We would need even more liquidity after that to prevent a total collapse. Property is very much on the back burner.
 

chopples

Distinguished Member
Firstly, this is not the financial crash of 2008.
I never said it was mate, I am just trying to explain why it's not as simple to say everyone is skint so property will fall, I also agree there will be an impact, I only disagree over the extent of the impact on property prices. I could well be proven wrong, time will tell, if everyone agreed then the world would be a boring place :smashin:

I was just drawing on past experiences with 2008 as the reason prices stopped dropping then was due to inactivity rather than financial upturn


Cheers
 

domtheone

Distinguished Member
If the goverment wasn’t bailing millions out, and the banks not providing mortgage holidays etc, then i could well see a sharp drop in prices.

Since thats not the case, just a minor blip.

As a FTB with a very small mortgage, from my own pont of view, 5% fall or 50% fall means little. If, by a miracle, it’s 50, i’ll probably look to trade up (too good an opportunity not to), if its 5%, meh, who cares.
 

winka45

Well-known Member
I just got a valuation on my dads old house a few days before the lock down, need to sell it as it's been empty a year and a half and when it gets to 2 years the council tax goes up to 200%:(

Looks like I'll be taking rock bottom for it if I can even sell it
 

Rasczak

Distinguished Member
I just got a valuation on my dads old house a few days before the lock down, need to sell it as it's been empty a year and a half and when it gets to 2 years the council tax goes up to 200%:(

Looks like I'll be taking rock bottom for it if I can even sell it
Why not rent it out?
 

Miss Mandy

Moderator
I just got a valuation on my dads old house a few days before the lock down, need to sell it as it's been empty a year and a half and when it gets to 2 years the council tax goes up to 200%:(

Looks like I'll be taking rock bottom for it if I can even sell it
Is renting it out an option?
It looks like it's going to be tough to sell for a while.
 

IronGiant

Moderator
I guess some people don't remember when many houses really went into negative equity at the beginning of the 90's. :)
 

chopples

Distinguished Member
I guess some people don't remember when many houses really went into negative equity at the beginning of the 90's. :)
Yep high interest rates with a high proportion of 100% LTV mortgages contributed to that, I believe approx a quarter of all first time buyer mortgages was at this level. A bit before my time...
 

domtheone

Distinguished Member
I guess some people don't remember when many houses really went into negative equity at the beginning of the 90's. :)
tbh, i don't really:blush:

With the amount that the UK has invested in forever rising prices/keeping prices high, not to mention the financial tools available now (Neg interest rates/QE etc) i just cant see a monster crash happening. I just cant.

A lot of MP’s own more than 1 house too.:D That should be enough to convince some that the’ll move heaven and earth to prevent a crash.
 

Queens Pawn

Active Member
I guess some people don't remember when many houses really went into negative equity at the beginning of the 90's. :)
yes I remember. For many years afterwards people saw houses as a risk.
The Conservatives lost a lot of support from the repossessed.

There are so many vested interests to keep house prices rising.
 

winka45

Well-known Member
@Rasczak @Miss Mandy

It would probably cost me 6k plus to modernise (gas central heating as it's still solid fuel) , sort damp get the fire checks etc so would take me ages to recoup the money which I can't really afford at the moment, plus all the rentals in our estate tend to only last 5 or six months then stand empty for a few years, so would hate to waste the money only for it to sit empty with me still paying council tax.

Also I live 2 doors away and everytime something went wrong I'd have them knocking on my door and just dont want the hassle or responsibility.

Thanks for the replies though:thumbsup:
 

Ekko Star

Distinguished Member
The BoE has signalled to the major retail banks to withhold dividend payouts and hold onto the cash.

The message is liquidity and cash is king.

There are also noises coming out that a fifth of the SME's in this country will run out of cash within the next 4 weeks.

The Business Interruption Loan Scheme also asks Directors of Ltd companies signing personal guarantees before a loan is granted. Meaning your liability will be tied to your personal assets.
 
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djcla

Distinguished Member
im in the process of selling and buying a house but in my opinion if prices drop it wont be by much and they will go up again after a few years. No one really knows how it will play out but any drop i imagine will effect both the one im selling and the one im buying, so is it so much of an issue ?
 

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