Property prices thread

[Sheilbh]

But the thing I keep thinking is a 20% fall gets us to where we were in 2019 - when housing was still very expensive.

In a way it might be the worst of all scenarios - enough of a fall to harm people who bought in the mean time, but not enough to really help people trying to buy.

FWIW I've heard from a couple of people that there might be a glut of formerly rental properties on their way to the market - partly because tax changes over the last few years make buy-to-let far less attractive but also because of new rules on a minimum EPC rating for the rental market (moving the minimum EPC from E to C in 2025) which leaves landlords with the choice of paying to improve their properties or shift it to buyers. Almost makes me wonder if I should hang on - but I think that would be a bad and rash decision

[Josquius]

So 2025 is the time to buy? 

[Tamas]

But the thing I keep thinking is a 20% fall gets us to where we were in 2019 - when housing was still very expensive.

In a way it might be the worst of all scenarios - enough of a fall to harm people who bought in the mean time, but not enough to really help people trying to buy.

FWIW I've heard from a couple of people that there might be a glut of formerly rental properties on their way to the market - partly because tax changes over the last few years make buy-to-let far less attractive but also because of new rules on a minimum EPC rating for the rental market (moving the minimum EPC from E to C in 2025) which leaves landlords with the choice of paying to improve their properties or shift it to buyers. Almost makes me wonder if I should hang on - but I think that would be a bad and rash decision

In my experience rental properties are in general in a pretty sorry state. Like ours, we are ok with it (it not too bad compared to the crap I have seen), because its just the two of us and we don't intend to stay here for too long, but if we bought it, we would not leave a single bloody thing untouched in fixing it up to civilised standards.


Otherwise yeah, one of my big problems with the "it's all going to be fine" estate agent crowd is that we just had two years of crazy price increases fueled by some very specific circumstances, a couple of which (near-zero interest rates and the flushing of British and world economies with a buttload of liquidity) have not just been stopped but actively reversed to the other direction (ok maybe the liquidity bit not as much as it should have). Going back to levels before the pandemic mania should be the base case in my opinion, with the open question of things falling more.

But, then again, this is the UK property market.

In our neck of the woods, it does seem like more and more adverts are letting go ok the pandemic highs as their asking prices, but it is painfully slow (like decreasing 5-15 k every month from prices 400k+), meanwhile buying power must have noticeably reduced due to the rate hikes. That Charlie guy called it a Mexican standoff a couple of months ago and I think it is largely still ongoing.

[Gups]

But the thing I keep thinking is a 20% fall gets us to where we were in 2019 - when housing was still very expensive.

Again, you aren't taking general inflation into account.

[Josquius]

But the thing I keep thinking is a 20% fall gets us to where we were in 2019 - when housing was still very expensive.

Again, you aren't taking general inflation into account.

A valid point if we are thinking in the abstract of the value of a house.

Though most peoples wages have not kept pace with inflation.

[Tamas]

But the thing I keep thinking is a 20% fall gets us to where we were in 2019 - when housing was still very expensive.

Again, you aren't taking general inflation into account.

Do you mean its more likely going to be an overall 20%-10% fall?

[Gups]

But the thing I keep thinking is a 20% fall gets us to where we were in 2019 - when housing was still very expensive.

Again, you aren't taking general inflation into account.

Do you mean its more likely going to be an overall 20%-10% fall?

On the (pretty big) assumption that prices fall back to 2019, yes.

[Barrister]

Just a general observation (as I am not an expert on UK housing prices) - property prices tend to be very "sticky" coming down.  People have mortgages, and in general unwilling to sell for less than their home's perceived value.

So rather than a decrease in price what can happen is just a prolonged period of declining sales and flatlining values, while inflation slowly lowers the value of the property.

Of course sometimes prices just crash, also, but that more tends to come as a result of foreclosure or people just walking away from their property because they are so far underwater.

[Zanza]

In Germany they expect prices to fall by about 7% to the late 2021 level. After growing property prices for more than a decade. Hardly a crash, more like a speed bump...

[crazy canuck]

We just had the lowest number of sales since 2009.  Prices are down to around 2020 levels but not as low as the pre-pandemic levels. Rental units are hard to get, and the population continues to grow - something's gotta give.

[Sheilbh]

Also the reason I keep thinking it's not likely to be a bubble that bursts is rents which are increasing at the fastest rate in years and really crazy right now. I get that due to tax changes and regulatory changes landlords might be renting out less/selling properties which is removing them from the rental market but I think we just have a really chronic shortage of supply.

This story is grim - but I've heard similar. What's striking is this isn't just central London and Oxford and Manchester - it's basically happening in all of our cities (and I see similar stories/problems in Dublin and in some North American cities too):
https://www.bbc.co.uk/news/uk-64625435

We saw it start in zone 1 and 2, now it's out to zone 5; similarly initially London and Oxford, now Bristol, Leeds, Nottingham etc.

[Tamas]

I'd guess rent hikes are the result of rate hikes (which cut into BTL profit margins unless they push them on to renters) and the same rate hikes and the tax changes prompting landlords to remove themselves from the market.

Also I have seen news and comments rents are also past their peak, for example: https://propertyindustryeye.com/rents-beginning-to-stabilise-as-supply-rises/

[Josquius]

We are talking a lot about buying a property here but thinking on Sheilbhs post of a ex rental sell off and what I've seen locally... It does seem to be getting ever harder to find somewhere to rent.
This is becoming a big problem. Not everyone can afford to buy and renting is pretty vital for worker mobility.
Logically it's evidence we need the government building more social housing again but we all know how slowly these things go and how reluctant governments are to actually do things.

[Grey Fox]

Reaganomics are a failure in every western country they've been use. On every point.

[Zanza]

Scarcity of rental offerings is becoming a significant problem in Germany as well. Our population grew by 1.1 million persons last year to an all-time high and housing stock grew at most by 300.000 units.

And due to high interest rates and high prices for construction, new projects have totally cratered. New mortgages are down massively and big investors stopped all projects.