Property prices thread

[Sheilbh]

Meanwhile in the rental market:
https://www.bbc.co.uk/news/business-65103937


Rental cost for a room in a shared flat/house is nos over £700 in every London borough. Across London it's now over £1,000 - for a room

Trends in other cities like Manchester, Leeds, Glasgow etc are big increases too.

[Josquius]

Have to say as much as news reports are fairly doom /hopeful for the market being in decline I'm seeing tonnes of sold signs locally.

[Tamas]

Have to say as much as news reports are fairly doom /hopeful for the market being in decline I'm seeing tonnes of sold signs locally.

I mean, the question is how much they are selling for, isn't it?

[Josquius]

Have to say as much as news reports are fairly doom /hopeful for the market being in decline I'm seeing tonnes of sold signs locally.

I mean, the question is how much they are selling for, isn't it?

A big part of the problem I thought was people not buying expecting prices to plummet.

But regardless. House across the street from me just gone up for sale for 40% or so more than I paid at the start of lockdown.

[Tamas]

Well for sold prices to fall people need to buy.

But yeah. Via people I watch/follow I happened on a weekly youtube "show" for estate agents going through statistics. Average asking prices just seem to have stopped rising this year, but the number that has not stopped rising is the number of price changes each week, just keeps going up and is noticeably above the 2017-19 average.

Other statistics like number of sales completed seem right now to be around that 2017-19 average, except maybe deals which fallen through.

I'd say the whole Mexican standoff thing is still largely ongoing, at least around these parts.

Saw on Reddit a guy complaining who I suspect is rather representative. He is trying to sell his London flat to buy a house outside of it. Not getting lot of views and no offers. He is fully aware of how much harder it is to get a big enough mortgage but he has reached the point where he is unable to further decrease his asking price, because he is unable to make the house sellers budge on theirs, so if he decreases his sale price further he won't have enough to buy something that is worth selling his flat for.

I imagine this will break to the downside as there's going to be a slow but constant trickle of people having to sell (divorce, death, remortgage looming) will bring the average price down and make the penny drop for other people as well to understand no they won't get something better if they hold out, but it sure is painfully slow.

[Tamas]

Escalating turbulence in Britain's mortgage market as banks hike rates
The turbulence in the UK's mortgage market is escalating as lenders lift the rates on their loans, putting a squeeze on households looking to remortgage this year.

The jump in wholesale borrowing costs, as the City anticipates the Bank of England will continue to lift Base Rate this year, is causing ructions across the market.

On Friday, TSB withdrew its 10-year fixed mortgages with just a couple of hours notice, and also lifted its two and five-year fixed rates by as much as 0.8 per cent, Mortgage Solutions reports.

According to The Times today, the country's third- largest lender, Santander, made changes over the weekend, while Coventry Building Society is expected to increase all its two, three and five-year deals tomorrow.

"Santander, made changes over the weekend & TSB withdrew all its 10y fixed-rate deals on Frid with just 2.5 hours' notice.
Coventry Building Society will inc all its 2,3 & 5y deals tomorrow.
Other lenders have all increased fixed-rate deals by up to 0.85% points" @thetimes

[crazy canuck]

Just for fun I looked up Edmonton housing prices.

As you can see there was a pretty steep increase from 2000 to 2008, with prices roughly tripling in that time.

But really prices have been remarkably stable ever since.  I know I bought my house in 2011 and it's worth about the same now as when I bought it.  There was a bit of an upward blip the last couple of years (almost certainly covid-related) but that's come down again.

Is it because Alberta's economy has been steady, but no big oil booms over the last dozen years?  Or because we're still pretty good at building houses (Edmonton is in the middle of the prairie and lots of available land still)?  Because I know if you look at other major cities in Canada prices have been steadily increasing this entire time.

My guess is that the same graph for Vancouver would be a steep dip in 08 with increases year over year after 2009.  I would also guess that is because Vancouver has been infamous for the amount of time it takes to get new developments approved and, significantly, for the developers who could afford to do so, it made sense to keep land back for future development. 

In a relatively stable price environment it does not make much economic sense for developers to hold onto undeveloped land.

[Barrister]

Couldn't find an exact match, but this one is pretty close and prepared by the same people (CREA) so it's mostly doing an apples-to-apples comparison.  Unfortunately this one only goes back 10 years.

[crazy canuck]

Thanks

[Josquius]

An affordable central London property with absolutely zero catch to get on the property staircase with.

https://www.theguardian.com/society/2023/jul/30/step-to-riches-disused-stairwell-in-london-could-be-yours-for-just-20000?CMP=Share_AndroidApp_Other

[Josquius]

Doom

https://inews.co.uk/inews-lifestyle/money/property-and-mortgages/landlord-dream-nightmare-only-beginning-2743368#:~:text=Experts%20have%20said%20the%20rising,seen%20the%20worst%20of%20this.

'The landlord dream has turned into a nightmare — and it's only the beginning'
The rising costs of mortgages for landlords and a shrinking rental property market has a knock-on effect on the cost of rent


The owners of more than 11,500 rental properties were behind on their mortgage payments over the last three months as rising mortgage rates continue to cripple landlords' finances.

Data from UK Finance, the banking trade body, found that there were 11,540 buy-to-let mortgages in arrears of 2.5 per cent or more of their overall loan in the third quarter of 2023, up 29 per cent on the three months before.

Like all mortgage holders, landlords who do not own their properties outright have been hit — or will potentially be hit — by higher mortgage rates. Experts have said the rising costs are having a drastic effect on landlords' personal finances and resulting in an exodus from the rental market.

"This is a staggering rise in arrears and sadly unsurprising. Worryingly, we have not seen the worst of this. Landlords rely on rent to cover their mortgage payments, and many will not have the personal resources to cope," said Ranald Mitchell from Charwin Private Clients.

"Falling into arrears like this has a huge impact on their ability to remortgage for years to come, and it will have far-reaching consequences for their credit profiles. What was once a dream has turned into a nightmare for many."

Since December 2021, the Bank of England has gradually increased the base rate from 0.1 per cent to 5.25 per cent today in a bid to fight high inflation. This feeds through to the interest rate you are awarded on your savings and that which you pay on your mortgage.

The average two-year buy-to-let mortgage now costs 6.22 per cent, compared to 2.9 per cent two years ago and 3.05 per cent five years ago, according to the data company Moneyfacts.

If a landlord with a £300,000 mortgage was remortgaging after five years today, they would see their monthly costs jump to £1,555 from £762. If they were coming off a two-year deal, their monthly costs would rise to £1,555 from £725.

According to the estate agent Hamptons, landlords in the UK are now paying 40 per cent more — or a combined £4.3bn — in interest payments than last year.

For many, the numbers simply no longer add up. Around a quarter of landlords are planning to sell a property over the next 12 months, according to a survey from Simply Business, and almost one in 10 said they had sold a property in the last 12 months. Some 43 per cent said the decision to sell up was based on higher mortgage rates.

On the other end of the spectrum, just 3 per cent of landlords were planning to buy a new rental property.

The rising costs of mortgages for landlords and a shrinking rental property market has a knock-on effect on the cost of rent. According to Hamptons, the average cost of rent in Great Britain increased by 11.7 per cent to £1,325 a month in the year to September.

Graham Cox, from the Self-Employed Mortgage Broker, said: "The current rent levels are completely unsustainable. It means that landlords are experiencing void periods when tenants jump shop, move in with family and friends or into cheaper accommodation where available."

High mortgage rates are the latest in a string of changes to the buy-to-let sector that has made it harder for landlords to make money from their rental properties.

In 2016, the amount of income tax relief landlords could claim was restricted, meaning they had to pay tax on a larger portion of the rent they received. Landlords also used to be able to take 10 per cent off their rental income for "wear and tear", but now they can only claim for any actual costs that they incur.

Expanding a rental portfolio has also become more expensive, as most buy-to-let owners now pay an extra 3 per cent in stamp duty. The stamp duty bill on a £300,000 house rose from £2,500 to £11,500.

"The buy-to-let sector has been hit harder than any of late. As if the taxation changes weren't bad enough, we now have higher interest rates causing untold pain," said Craig Fish, director at Lodestone Mortgages and Protection.

"Historically, landlords would have had surplus funds to weather this storm, but those reserves are now depleted and so mortgages go unpaid. The worst is yet to come, and it seems there is no solution. I predict a horrible ending."

Tiny violins everyone?

[HVC]

I'm less disdainful of landlords then I am of airbnb assholes. I mean rentals have to come from somewhere. Not all of them are slum lords. But yes, fuck the bad land lords.

[Josquius]

I'm less disdainful of landlords then I am of airbnb assholes. I mean rentals have to come from somewhere. Not all of them are slum lords. But yes, fuck the bad land lords.

Sure. I'm fine with land lords being a thing that exists. Rentals are needed.
What I really hate though is buy to let. People who get a loan specifically to buy a property to rent out, having renters pay off their mortgage with a bit of profit.

[Tamas]

Also notice the title of this news thread: https://www.theguardian.com/business/live/2023/nov/13/uk-house-asking-prices-fall-economy-growth-slowdown-stock-markets-business-live

I remember earlier this year regularly being annoyed by the Guardian for posting rise in asking prices as "property prices" rising. When it comes to fall they are quick to point out it's asking prices. What a racket.

[Tamas]

BTW on asking prices, some people are definitely still trying... the exact mirror image of the house we bought in July (minus the extension and modifications that ours has) a couple of streets away has been posted with an asking price above the asking price ours had and 5% above what we actually paid for ours.