House market - how low will it go?

[TheGreenBastard]

Shocking is the level of ignorance in basic statistics regarding the country you live in, assuming it is the UK. The boomers, the largest demographic by far in the UK is pulling out of the workforce. There are less workers in the UK that there was yesterday, a pattern that'll continue for the next 2-3 years.

CURRENT UK POPULATION — age discrimination


And none of that is taking into consideration the falling fertility rate...

Overview of the UK population - Office for National Statistics

Same story everywhere, more of a pressing concern in some EU countries, Germany in particular.

So now you're applying a slow bleed (ageing population) to an acute crisis (corvid-19).

[WTFH]

Is that the one on the A3?

I went through that by accident because I wasn't paying attention and had missed the turn off at Milford. Took a while before I realised but did have fun through the tunnel.

That's the one.
Use the paddles and drop from 8th down to 4th, then apply a touch of welly.

[Whorty]

Property prices are (mostly*) driven by supply and demand. In the short term there is zero demand and zero supply, so prices will remain static.

Mid term, only those people forced/very keen to sell will increase the supply side; much as has been the case for the past 2-3 years. Demand over this period has been about the same hence why property prices have been relatively static.

Long term, property prices will rise. Basic economics. We have a finite amount of land and ability to build new properties (supply) yet the population is increasing (demand). This will continue to push property values up in the long term.

It's really not rocket science.

If you need to sell, you may take a hit. If you don't, you'll be fine. Just hang in there.

* Lender valuers also play a part of property prices.

[scooterscot]

Overview of the UK population - Office for National Statistics

Same story everywhere, more of a pressing concern in some EU countries, Germany in particular.

So now you're applying a slow bleed (ageing population) to an acute crisis (corvid-19).

Not really - we half inch a gazillion skilled monied migrants from Syria - din't you see the Daily wail memo?

[scooterscot]

Property prices are (mostly*) driven by supply and demand. In the short term there is zero demand and zero supply, so prices will remain static.

Mid term, only those people forced/very keen to sell will increase the supply side; much as has been the case for the past 2-3 years. Demand over this period has been about the same hence why property prices have been relatively static.

Long term, property prices will rise. Basic economics. We have a finite amount of land and ability to build new properties (supply) yet the population is increasing (demand). This will continue to push property values up in the long term.

It's really not rocket science.

If you need to sell, you may take a hit. If you don't, you'll be fine. Just hang in there.

* Lender valuers also play a part of property prices.

[pjt]

People needed a house in early 2009 too, but I'm not sure what that has to do with asset prices and leverage. The market's going down, obviously. For now, there are neither buyers nor sellers, so everything is on hold until the lockdown is over and the decline in prices will be proportional to the length of the lockdown. So, yeah, BAU.... for now.

I have no plan to sell any of my BTL's ever. They are a constant source of near passive income. If anything lower prices are good news its means I'll be able to buy up some more.

[rogerfederer]

Gotcha, but what are the options. Wouldn't this be the same for whatever product you are on, not just the 5 year fixed people? Are you saying the people on more flexible products will be able to manage this event as it unfolds rather than being tied in?

That's the clincher:
5 year mortgages do not require the stringent checks of 1, 2 and 3 year mortgages. I'm not joking. If someone can't get a 2 year mortgage there is a likelihood they can get a 5 year mortgage - or at least they could until last month.

The increase in duration also means if they bail out early the early cancellation charges are higher. The banks weren't stupid.

[jamesbrown]

I have no plan to sell any of my BTL's ever. They are a constant source of near passive income. If anything lower prices are good news its means I'll be able to buy up some more.

If you aren't leveraged and rents don't decline, you should be fine. Rents generally decline with prices though. But if you aren't leveraged, not a big problem. The problem is mainly for those that are highly leveraged themselves (e.g., AirBnB numpties) or those caught up in the resulting panic, such as those who need to move and have Help to Buy, shared ownership or other high LTVs.

[eek]

That's the clincher:
5 year mortgages do not require the stringent checks of 1, 2 and 3 year mortgages. I'm not joking. If someone can't get a 2 year mortgage there is a likelihood they can get a 5 year mortgage - or at least they could until last month.

The increase in duration also means if they bail out early the early cancellation charges are higher. The banks weren't stupid.

Um, what evidence do you have to prove that? the affordability criteria is the same

[rogerfederer]

Um, what evidence do you have to prove that? the affordability criteria is the same

Numerous friends in the banking and mortgage broker industry who highlighted 2 years ago that it was a ticking timebomb.

The evidence provided to the mortgage provider for a 5 year mortgage is less stringent, as is the affordability criteria. It's now closed, of course, but the fact brokers were worried - yet still punting the onwards - worried them and me.

I'll contact a couple and get a list of reasons now.