Ponty
pfm Member
Makes sense. It’s down to affordability. As people receive pay rises, increased rents suck this up. As pay rises slow, so to do rent increases.
Housing market
- Thread starter matt j
- Start date
Makes sense. It’s down to affordability. As people receive pay rises, increased rents suck this up. As pay rises slow, so to do rent increases.
Amazed it's still heading north. Hearing increasing number of stories of people losing their jobs (at the top end) - another potential factor.
Ponty
pfm Member
Those folk more likely to be owner occupiers?
mandryka
pfm Member
Here are the details. If mortgages remain high the demand for rentals will increase because less people will become first time buyers. In London, it's clear that people are being priced out of inner London, and moving to suburbs.
With portfolios.
I think there are two big factors preventing such a reset, as Ponty said, loads of people would be in the shit. Secondly the demand is still there, even with with rates as they are people are still beg, borrow and stealing to get on the ladder.
I can't now see there ever being some kind of catastrophic housing market event- a cooling off, sure- but short of a huge global conflict or some other horrific event in which case house purchasing will be bottom of anyone's agenda.
Mike Reed
pfm Member
It was only (only?) 30+ years ago that a helluva lot of people landed in deep do-dos. Hard to believe now, when a 3 bed terraced house cost around £40K (in Thanet), how people had to have their properties repossessed; I saw many cases of this. Although the Lawson scrappage of MIRAS for domestic properties in mid '88/'89 (?) put a stop to a little boom, I can't remember the reasons why the sky fell in on bricks and mortar for nearly 5 years.
I think we're in different times, too many property barons amongst the donors for anything catastrophic to happen IMO.
Minio
Kind of Sort of Not really...
This is admirable stuff until you realise that the number of homeless compared to the population in Finland is actually quite high.
Being homeless in Finland is a more problematic issue to experience, due to the severe climate.
I hope they actually do eradicate it.
Ponty
pfm Member
Banks took a straightforward position back then though. Forbearance wasn’t even invented. Pay the mortgage or we take the house. That’s what folk sign up for. It kept prices in check.
Minio
Kind of Sort of Not really...
You've put your finger on it Mike. Scrappage of MIRAS dampened house buying enthusiasm and interest rates peaked around 1990.
Mike Reed
pfm Member
Yes, maybe it was a combination of things. Actually, now I remember, it wasn't so much the MIRAS thing but his stopping cohabiting property owners (pooling their resources to buy, regardless of actual relationship) getting 2 lots of interest relief. Killed one golden goose at a stroke.
My property was on the market in 1990 but I had to wait until 1996 to sell at a greatly reduced figure. I bought again later that year, managing to just squeeze under the £60K tax threshold for a detached 3 bedder in a nice area.
Funny, but at the time; any time, that is, things appear normal. With hindsight, they most certainly don't. Maybe just me but I think this is par for whatever property period course one lives through.
Ponty
pfm Member
Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ”There are likely to be ups and downs in mortgage pricing in the weeks and months ahead but ultimately borrowers will have to get used to paying more for their mortgages as the days of rock-bottom rates have long gone.”
UK house prices fall as mortgage costs bite, says Nationwide
The Nationwide says the average cost of a home was down 4% on the peak seen in the summer of 2022.
www.bbc.co.uk
I agree. I sold my first house at the end of the 90s, at the end of a very slack decade for property prices. It then doubled in 2 years. I said, in about 2001, when I was renting a place and the value of the house opposite went up by more than my salary (I remember, it sold twice, second time around was 30-35k more) "This can't carry on, it has to stop, there will be a crash". It didn't. It carried on until 2008, we all remember. Now yes, there was a stagnation between 2008 and about 2015-16, same as in the 90s, but no sustained crash. We have now had 8 years of exploding prices. Same happened 1980ish to 1990, same happened 2000-2008, latest is 2016 to, well, 2024, 25?
Minio
Kind of Sort of Not really...
The end of the 90's was a good time to buy.
Prices have quadrupled since.
Nationwide stops lending on some flood-risk properties. Just the start.
https://www.theguardian.com/busines...e-stops-lending-on-some-flood-risk-properties
https://www.theguardian.com/busines...e-stops-lending-on-some-flood-risk-properties
Ponty
pfm Member
Don’t blame them. Most should never have been built in the first place. Our council want to concrete over floodplains. Genius idea.
nmtjb
pfm Member
It doesn't mention new homes? Most river flooding appears to happen in older towns, and often in historic centres, built long before climate change and at a time when the surrounding countryside and wider catchments hadn't been denuded by decades of insensitive and inappropriate farming practices.
I've been involved in the delivery of 1000's of new homes, mostly across the south east and haven't heard of any that have been affected by fluvial flooding, and only a few incidents of localised SW flooding, the main event being caused by the adjacent farmer blocking up a main drainage ditch.
I've been involved in the delivery of 1000's of new homes, mostly across the south east and haven't heard of any that have been affected by fluvial flooding, and only a few incidents of localised SW flooding, the main event being caused by the adjacent farmer blocking up a main drainage ditch.
An alternative view from Gary's economics as to why the rich will keep getting richer as they buy assets from everyone else, house prices and the stock market will rise and interest rates will go down:Mark Harris, chief executive of mortgage broker SPF Private Clients, said: ”There are likely to be ups and downs in mortgage pricing in the weeks and months ahead but ultimately borrowers will have to get used to paying more for their mortgages as the days of rock-bottom rates have long gone.”
UK house prices fall as mortgage costs bite, says Nationwide
The Nationwide says the average cost of a home was down 4% on the peak seen in the summer of 2022.www.bbc.co.uk
And as a consequence this shift in wealth will continue to make the poor and then middle class poorer as the service economy is reduced as money is spent on assets. Pretty scary really. He does end with saying what people have been saying for years and years; the way out of this is to tax the rich more to redistribute the wealth and enable more public spending (MMT not considered or ignored for the purposes of getting the message out there).
Mike Reed
pfm Member
Are you working on an algorithm to predict the next property valuation event, Steve? They really crashes in the early nineties but started picking up around '95 in the southern sticks. Funny thing is, I don't recall a plummet; just a slight correction maybe, after the 2008 fiasco.
Just heard on the news (Nationwide) that April saw a 0.4% drop on March, which was again lower than previously. Peanuts, but if a trend, compounding will take effect; new rises in 2 and 5 year fixes by many lenders are only going to tighten thing up.
I've been wondering, if, as reported, f.t. buyers are holding off/moving back home/whatever, who do the lenders lend to? I'm a saver, but if they're not lending out, will they want my money to such an extent. I know they make £££ on other markets, but still.......