O/T housing market | Vital Football

O/T housing market

freundorfoe

freundorfoe

Vital 1st Team Regular
Interesting to see the predictions of what will happen to the housing market. My gut is that it'll potentially fall further than any of these predictions and they're perhaps trying not to create more panic around the economy.

housing market.jpg

There will presumably be more houses on the market due to deaths among elderly who are more likely to own properties as well as sales from newly unemployed who can't keep up with mortgage payments. Plus in London/other major cities a lot of people will have left/be leaving due to Brexit. Also I know a lot of Londoners have adjusted to the slower pace of lockdown life and are now considering moving out at the earliest opportunity and with it seeming like many more companies are going to allow more regular working from home even post social distancing there will be more opportunities to live out of town whilst keeping your job.

Considering this recession is likely to hit much harder than the last one I don't see how anyone can predict a 3-7% drop with such a quick recovery.

Are there any property experts or economists who can put a more positive spin on it for me?
 
Real Deal said:
Once all the house sales ( pre covid ) go through over the next few months it looks like house prices could drop around 15%.

I can't see it bouncing back for a while.

If I had money I would be buying the cheap houses for sure.
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Leverage the hell out of it. IMO the trick to real estate is buy and hold forever.
 
80deg16minW said:
Leverage the hell out of it. IMO the trick to real estate is buy and hold forever.
Click to expand...

It depends on demand. Some areas haven't recovered to their pre 2008 recession prices, whereas others have shot up.

Obviously in London supply will never outstrip demand, but if there's a shift away from the city and the demand drops a bit the prices might not bounce back that quickly.
 
Real Deal said:
Once all the house sales ( pre covid ) go through over the next few months it looks like house prices could drop around 15%.

I can't see it bouncing back for a while.

If I had money I would be buying the cheap houses for sure.
Click to expand...

I guess my concern is the drop might end up being larger when the effects are fully felt. Some close friends had an offer accepted pre lockdown and got mortgage approved post lockdown, they've now managed to get survey and searches but they've heard the area they're buying in is likely to have dropped around 11%. But if covid goes on for the rest of the year who's to say that's the bottom of the drop?

I'm tempted to look at property investment(s) with my siblings to mitigate the loss in value of where I live a bit, but worried we'll buy at a reduced rate only for values to drop further if this thing goes on for a long time.
 
If the cash flow works out positively and it looks like that will be maintained then it's a no brainer. Banks don't REALLY give a hoot about value unless the mortgage is at risk.

The overall trend is to move to cities with a projected increase of about 55% to 73% of the global population moving to cities between now and 2030.

The best cities attracting the most people. The primary infrastructure requirement is access to the internet with recreational facilities and transportation being 2nd.

Not necessarily London. The UK has the advantage of being small so services tend to be excellent everywhere.

If you believe that people will push outward when this is over then there are options.
 
freundorfoe said:
I guess my concern is the drop might end up being larger when the effects are fully felt. Some close friends had an offer accepted pre lockdown and got mortgage approved post lockdown, they've now managed to get survey and searches but they've heard the area they're buying in is likely to have dropped around 11%. But if covid goes on for the rest of the year who's to say that's the bottom of the drop?

I'm tempted to look at property investment(s) with my siblings to mitigate the loss in value of where I live a bit, but worried we'll buy at a reduced rate only for values to drop further if this thing goes on for a long time.
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Your a smart guy. Just do the research and you will be fine.

I have always kept an eye on the market around my area. A 2 bed terraced house that was worth £180,000 before covid has now dropped to £155,000.

I have seen lots of houses being abandoned since covid as well. People have obviously lost their homes. As ruthless as it is they are the houses to target.

1. People losing houses due to losing their jobs.
2. People dying.
3. People getting divorced/separating.

These would be the houses I target. I would get as much information from the estate agents as possible.

Wish I was in the golden generation with the boom of the pay rises. I would be a millionaire if I was.
 
City houses will be the ones to go for.

Many people will want to migrate out of cities and the work from home ethic will only get more impetus now! Commute will be now and then not daily is my guess. I.e a weekly gathering in the office to set targets discuss common issues then feck off home and deliver.
 
How will coronavirus affect house prices – and should I hold off buying a property?

Forecasts vary, but analysts can agree mostly agree on one thing: prices are going to fall. Some predict by -5pc, others -30pc


By Marianna Hunt and Melissa Lawford 19 May 2020 • 10:13am

241219_PROPERTY_1-xlarge_trans_NvBQzQNjv4Bqparamcrop_2_0_9998_10000_trans_NvBQzQNjv4BqnntzVh6i2V8vnWmVeYqabkaMYBMjspBErElm7j2lZzs.jpgimwidth=480

Homebuyers and sellers will be wondering whether they should hold off transacting

The property market has been given the green light to reopen in England as the Government announced it was lifting the seven week freeze on property viewings and home moves today.
The entire sector was put on ice at the end of March after the country went into lockdown. A total of 373,000 sales have been suspended, according to property portal Zoopla.
While home viewings are still not permitted in Wales, Scotland and Northern Ireland, in England the new rules will allow people to conduct non-essential house moves, view properties to rent or buy, visit estate agent offices and progress with their sales and purchases.
The Government has just issued detailed guidance for how house viewings and sales can be conducted in line with social distancing. These include a ban on open houses, restricting viewings to only members on one household, and asking sellers to vacate properties during viewings.
But things could change quickly again. The guidance notes it may become necessary to pause house moves again to halt the spread of the virus. The housing market will be dependent on how well-controlled the outbreak stays.

The Royal Institute of Chartered Surveyors has also released pan-industry guidance giving further advice on the points of human contact during the process of house moving. These include keeping agents present for viewings wherever possible, and wearing appropriate PPE.
The property market freeze has brought a far more extreme plummet in sales than was seen after the financial crash. Since lockdown began, newly agreed transactions have dropped by 92pc, said Richard Donnell, director of research at Zoopla. Even as the restrictions lift, falls will be sustained in the coming months.
The Bank of England is anticipating Britain's sharpest economic downturn since 1706. Its latest Financial Stability Report says this would be consistent with a 16pc drop in house prices.
Other forecasts vary wildly. Knight Frank has just downgraded its expectation of a 3pc fall over the remainder of 2020 to a 7pc drop. Savills has said there will be short-term falls of 5pc to 10pc, while the Centre for Economics and Business Research (CEBR) has calculated a 13pc fall.
At the top end is Lloyds Banking Group’s worst case scenario forecast of 30.2pc falls over the next three years, while Deutsche Bank expects falls of as much as 23pc.
Estate agents are certainly gloomy: in the Rics's first monthly survey of price expectations after lockdown started, it recorded its largest drop since 1998.
RICS price expectations have plunged
Line chart with 2 lines.
And they are typically a reliable indicator of the future of values
View as data table, RICS price expectations have plunged
The chart has 1 X axis displaying categories.
The chart has 2 Y axes displaying RICS price expectation, advanced three months and Year-on-year % price change.



Year-on-year % price changeRICS price expectations have plungedAnd they are typically a reliable indicator of the future of valuesRICS price expectation advanced three months

RICS price expectation, advanced three months
End of interactive chart.


“We are particularly pessimistic,” said Alastair Neame, the economist who wrote the CEBR report. He argued that prices will fall steeply because disposable incomes are forecast to drop by 5pc. As people purchase homes with lending, this number gets multiplied up when it comes to its relation to house prices, said Mr Neame. This will be compounded by the fact that lenders are already becoming far more risk averse.
But other analysts are more sanguine. Donnell, of Zoopla, argued that prices should hold up as 75pc of those in the middle of a deal intend to continue with it.
“While the effect on sales volumes has been dramatic, there has so far been little evidence of a fall in house prices, largely due to a fundamental lack of activity," Nick Whitten of JLL added. "Forced sellers would normally drive down prices in a crisis, but due to Government job protection schemes and the availability of mortgage holidays there are very few potential distressed vendors."
So what should buyers and sellers do for now?
Should I still look to buy a house after the lockdown?
Buying into a falling market brings risks of getting into negative equity. In short, owning a property that is worth than what you borrowed to pay for it. This is a particular problem for buyers with high loan-to-value mortgages.
However, if you are buying with a long-term view, it could be a good time to negotiate. “It’s a fantastic opportunity for a good deal,” said James Hyman of Cluttons. “Anyone with a property still on the market is going to be a motivated seller, and you’re going to have no immediate competition.”
Developers who are struggling to sell their properties might be open to discounts in particular, said Chris Sykes, of mortgage broker Private Finance. Record low interest rates of 0.1pc will help those getting on the ladder for the first time, he added.
But there will likely be limited stock after the lockdown. Many sellers will want to sit tight to wait out the market.
Should I still sell my house?
If your property is already on the market, it may be advisable wait until the Government or the property industry issues guidelines on how to conduct socially distanced house viewings before inviting buyers into your property.
The new guidance may include a requirement to sign a declaration that you do not have coronavirus symptoms. You will likely need to clean your home before and after each viewing and provide your own PPE.
Similarly, if you are preparing to bring your property to the market, there will be new guidance for inspections.
Though house viewings will be possible again, they will be complex. It is advisable to ask your agent to prepare virtual marketing material for your property, which will reduce the number of physical viewings necessary to secure a buyer.
Be wary that analysts are expecting house prices to fall. However, stock levels will also be incredibly low. The number of new listings in the first three weeks of April was 90pc less than in the same period in 2019, according to The Guild of Property Professionals. Some agents are also anticipating a degree of pent-up demand.
 
What is happening in the mortgage market?
Interest rates are now at very low levels, meaning in theory that those on expensive deals could slash their bill by remortgaging.
Lenders have not lowered the interest rates on their fixed deals following the Bank Rate cut and some have even increased them for new customers.
Some homeowners will prefer to opt for the more expensive fixed-rate option because of concerns that interest rates will bounce back quickly.
There are now far fewer mortgages available. As lockdown was announced, banks withdrew more than 1,500 products from sale in two weeks – equivalent to 30pc of the total mortgage market, according to data company Moneyfacts.
The offering has started to increase again. The rise of virtual valuations has meant that Virgin Money and Clydesdale Bank will now lend up to 75pc of a property's value and Nationwide will lend up to 85pc. Now that the market is reopening, physical valuations will no longer be a barrier to lending and mortgages for buyers with smaller deposits could become more available again.
However, as the recession looms, there are also signs that lenders could become more risk averse in the future and will further withdraw lending for buyers with small deposits.



I’m downsizing. Should I be concerned about having a lot of cash in my bank account?
With financial uncertainty in the air, some downsizers may feel nervous seeing a large lump of cash arrive in their bank account.
However these funds are protected, up to the value of £85,000 per person (or £170,000 for a joint account), thanks to the Financial Services Compensation Scheme, which refunds customers if their bank or building society goes bust. Those who have recently sold a home or received an inheritance have even more protection. They can be covered for up to £1m for six months.
After this point, sellers should safeguard their cash by spreading it across multiple banks, as the £85,000 limit applies per institution.
 
thanks Ex - up to 30% seems a more reasoned view than 5% with a bounce back next year but it's all guesswork at this stage
 
freundorfoe said:
thanks Ex - up to 30% seems a more reasoned view than 5% with a bounce back next year but it's all guesswork at this stage
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I'm not yet even considering the property market for the rest of this year as it's all in an artificial reality, the same happened for around the first 12 months of the credit crunch, so a lack of transactions and general activity will cause those who need/desperate to sell to discount. If you don't need to sell, don't go into the market until this is over and peoples person health confidence returns.

Personally, I have no expectations for a return to more optimistic macro forecasts until Q2 next year.

Anecdotally, a friend who is moving from london and has a short chain in place is now being asked to discount his sale price by 15% to get the chain completed, but he's just told me everyone has agreed on 10% and all are being funded by mortgages and they haven't asked for new valuations, they have set a completion date for 9th June.

I'll let you know if it happens.
 
Looks like gov are going to get all banks/building societies to provide a further 3 months relief of no repayments if you want it.

It's a smart move and will help underpin the market as activity starts picking up.
 
Coronavirus: Housing market rebounds as sales increase by 137%

Carol Lewis, Deputy Property Editor
Wednesday June 10 2020, 12.01am, The Times
Housing market
Home interiors
Real Estate

More homes were sold last week than this time last year
PHIL NOBLE/REUTERS
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The property market has bounced back from a freeze over the coronavirus peak thanks to a build-up in demand and homeowners realising the shortcomings of their properties while cooped up during lockdown.

More homes were sold last week than this time last year and buyer demand is 54 per cent stronger than it was before the market was frozen on March 27.

Richard Donnell, director of research at Zoopla, the property portal, said that sales had risen by 137 per cent since the market reopened on May 13.

“The rebound in housing demand is not solely explained by a return of pent-up demand,” he said. “Covid has brought a whole new group of would-be buyers into the housing market. Activity has grown across all pricing levels, but the higher the value of a home, the greater the increase in supply and sales as people look to trade up. New sales in London are lagging as buyers look at commuting and moving to the regions.”


The data was backed by analysis from TwentyCi, a market statistics company, which reported that 24,341 homes were sold subject to contract last week, compared with 22,880 this time a year ago.

Asking prices are 6 per cent above the level this time last year, according to Zoopla. In the week the market was frozen the average asking price was £245,000; in the week it opened last month it was £280,000, according to TwentyCi. Anecdotal evidence suggests, however, that buyers are chipping prices down by 5 to 10 per cent.
Deals agreed have been particularly strong at the top end of the market. Those priced at more than £1 million have doubled in the past week to 664, compared with 494 a year ago. However, the largest number of sales last week — 8,956 properties sold subject to contract, compared with 7,744 this time last year — was for homes valued between £250,000 and £500,000.


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Lucian Cook, director of research at Savills, estate agency, says: “That resurgence in sales at the top end tallies with our own numbers, Savills sales rose by 108 per cent last week and were particularly across the home counties where they went up by 148 per cent. This is a rebound far beyond what we expected.”
Mr Donnell sounded a note of caution, however. “The charts are off the scale but I do think this is a one-off surge in demand, a temporary jump,” he said. “No one truly knows what the economic impact [of Covid-19] is going to be. The housing market is purely an extension of the economy and I am very cautious about the second half of the year.”
One of Britain’s biggest housebuilders has said that sales will be “severely constrained” until the lockdown is lifted. Bellway has reported a 69 per cent drop in its weekly net reservation rate between March 23, when the lockdown started, and the end of last month.
The Centre for Economic and Business Research revised its house price forecast up from a fall of 13 per cent this year to one of 8.7 per cent.
Analysts have said the government’s furlough scheme and mortgage holidays are “softening the blow”. When they end it is feared that the market will be hit by unemployment and affordability concerns, leading homeowners to sell and driving prices down.
 
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