Property prices thread

[Sheilbh]

That's really good. It's really not that high for a 86% year to year drop.

5 years fixed?

I'd imagine so - pretty similar to what I've been able to find for 5 year fixed but I'm slightly higher, but at a slightly higher LTV so that's the trade off I suppose.

[Josquius]

Lots more reporting lately in the press, eg
https://www.bbc.co.uk/news/business-65090846

And anecdotally locally, that renting  just keeps getting harder.

It's really weird and I can't wrap my head around why.
It being locally could be just the covid musical chairs but if it was the case in London it'd be getting easier which... It isn't.

[Tamas]

Well allegedly landlords are exiting the market since its a far less profitable business now. And with asking prices still stuck to the ceiling, it's not like renters can just switch to being owners, so rental supply is down while demand is unchanged, perhaps even increased as first time buyers find themselves locked out with this combination of rates and prices.

But as I heard the rental market will follow the properry market eventually.

One issues is that there is apparently easily a 6 months lag on property price data so it's not easy for prospective sellers or buyers to see the true state of the market.

[Sheilbh]

The tax benefits on renting have gone plus landlords are being required to bring their properties up to a certain standard environmentally.

Plus there's more demand than there is supply. It's not all financial magic and estate agents. Which I think is why even though mortgage rates have gone up, the cost of a mortgage is still, on average, lower than renting.

[Josquius]

So where have all these "missing houses" gone?
Left empty and for sale?
Have flat shares been cut down to have people renting more space?

[Sheilbh]

We don't have many vacant properties:


And we're pretty good at flatshares and other means of making sure that we have very little living space per capita:


It's not a con, it's not just financial flim-flam. It's decades of not building enough housing to keep pace with a growing population. It's the story of modern Britain:

Me sowing: Haha fuck yeah!!! Yes!!

Me reaping: Well this fucking sucks. What the fuck.

[Josquius]

Yeah this has been a problem for a long time. But it undoubtedly has suddenly gotten much worse in the past year or two. Something is happening to make it harder to find somewhere to rent.

[Tamas]

the cost of a mortgage is still, on average, lower than renting.

Assuming the minimum 10% deposit I very much doubt that is still true.

[Sheilbh]

Vancouver and now, Toronto have been killing the numbers for many years but since 2021, every other big city has joined in on the fun.

I bought my house in 2012 for ~200k, In 2019 I could have sold it for ~350k. In 2021-22 it accelerated to at min 500k.

That's definitely a feature here too. Loads of people working in cities moving to other, smaller cities or towns or country immediately after covid.

Bristol's always been relatively expensive but I have friends who live there and bought years ago. They were saying properties are still going so quickly that they often don't even get put up online.

Assuming the minimum 10% deposit I very much doubt that is still true.

I suppose it depends where you put the cost of the deposit. It's not normally included. The deposit is part of the cost of buying so in theory it should sit with the mortgage cost, but it's actually saved by renters so feels like in practice it should be on that side of the calculation.

But it's true - been that way for a while:


There's lots of regional variation - biggest in Scotland where homeowners pay over 20% less than renters for an equivalent property. Only exception is the East of England:

Yeah this has been a problem for a long time. But it undoubtedly has suddenly gotten much worse in the past year or two. Something is happening to make it harder to find somewhere to rent.

I'm not sure on renting specifically but I think part of it is displacement post-covid, with WFH for middle class workers as a new norm. The last two years have seen a huge rise in the average property price - except in London. That's odd compared to previous increases where London normally leads the way. This time London's way behind, the biggest increases were initially in the South-East but now, I think, highest in the North-East, North-West and Yorkshire.

I think part of what's driven the last two years has been government juicing demand, but I think also that demand is being moved around and distributed slightly differently than pre-pandemic. I think there's also been a shift in the space people want because they're expecting to WFH so it may be that everyone is now looking for 1 room more than they used to?

I also think the unresolved cladding issue probably has an impact because there's tranches of inner city flats that were once quite attractive, but no longer what people want (they want space, outdoors etc). They're currently unmortgageable so people are either basically trapped until the cladding is fixed or there's flats that basically can't be sold. I think the last estimate is 10,000 buildings with millions of inhabitants that have basically been removed from the market (for sales). That might be resolved on the legal side with Gove forcing developers to cover the cost of fixing cladding for many buildings but it'll take time to feed through.

[Josquius]

I think part of what's driven the last two years has been government juicing demand, but I think also that demand is being moved around and distributed slightly differently than pre-pandemic.

Yes, I mentioned this one as a possibility but logically you'd expect London to have become easier if that was the case but evidence suggests otherwise.

I think there's also been a shift in the space people want because they're expecting to WFH so it may be that everyone is now looking for 1 room more than they used to?

This could be more it. What I was saying about share houses dropping in popularity. As well as needing a WFH office I imagine the experience of being cooped up during lockdown also has people wanting bigger places, which puts those who would normally go for this in a tough position.
You'd still think there should be something left at the bottom due to this switch though- I've seen nothing to suggest whilst 3 room is harder to get, 1 room is easier.

I also think the unresolved cladding issue probably has an impact because there's tranches of inner city flats that were once quite attractive, but no longer what people want (they want space, outdoors etc). They're currently unmortgageable so people are either basically trapped until the cladding is fixed or there's flats that basically can't be sold. I think the last estimate is 10,000 buildings with millions of inhabitants that have basically been removed from the market (for sales). That might be resolved on the legal side with Gove forcing developers to cover the cost of fixing cladding for many buildings but it'll take time to feed through.

The much talked about leasehold reform should help a lot with these too.

[Tamas]

K house prices in biggest fall since 2009
UK house prices are falling at the fastest annual rate since the aftermath of the financial crisis, new data from Nationwide shows.

Nationwide reports that UK house prices fell for the seventh month running in March, as the aftermath from the disastrous mini-budget continued to hammer the housing market.

This month, they fell by 3.1% compared to a year ago, which is the largest annual decline since July 2009, Nationwide Building Society said.

Across the UK, prices fell by 0.8% month on month, leaving the average UK house price at £257,122.

All regions of the UK saw a slowing in price growth in Q1, with most seeing small year-on-year falls. West Midlands was the strongest performing region, while Scotland remained the weakest.

In the relevant UK Housing Reddit, downvoters are out with a vengeance trying to make all negative comments on the housing markets disappear. Anxiety of owners is clearly growing. 

[Tamas]

Bunch of conflicting data today.

Despite Nationwide reporting something like a 0.6% decrease in prices since last month, Halifax is reporting a 0.8% increase in the same period: https://www.theguardian.com/business/2023/apr/06/house-prices-rise-unexpectedly-third-month-in-a-row-halifax

Meanwhile, Zoopla complied March-on-March data which shows supply up 56% and demand down 43%, but spins it saying it is all excellent because they are both slightly up compared to 2019: https://www.zoopla.co.uk/discover/property-news/zoopla-house-price-index-march-2023/

Which is a fair comment of course considering the anomaly that was 2020-21, but also dishonest because if we dismiss 2020-22 as irrelevant then surely asking prices also should be based on 2022 tops.

[Josquius]

Nationwide and Halifax covering different sides of the market on average?

[Tamas]

Nationwide and Halifax covering different sides of the market on average?

That must be it. The zoopla article mentions that the cheaper parts of the country such as Scotland etc continue to see strong demand and its the previously most heavily overpriced regions whicb have seen the fall in demand. So I guess depending on market share things can get skewed.

[Josquius]

Curious. Is this the covid reshuffle continuing or something else I ponder?