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Collapse of the UK housing market
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- Lemon Quarter
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Re: Collapse of the UK housing market
Well I know of one old biddy that is no longer with us. He was on his own in a large 4 or 5 bed house. It's a quite dated house and probably needs a good makeover. It's on a large plot so would be ideal as a complete modernisation and extend.
I assume it will eventually house more that one person once probate is sorted. I also know of others divorcing, so will be needing two houses not one. There was an article on how stamp duty is clogging up downsizers. The costs involved out way the bill savings.
There are lots of pressures on the housing stock and all the extra people arriving won't want to be stuck in hotels much longer especially if they meet someone and have kids.
I also read that Leeds council is getting 18k off its waiting list by declaring them sufficiently housed. I'm not sure what that actually means in real life. If you have a mates sofa to sleep on?
I assume it will eventually house more that one person once probate is sorted. I also know of others divorcing, so will be needing two houses not one. There was an article on how stamp duty is clogging up downsizers. The costs involved out way the bill savings.
There are lots of pressures on the housing stock and all the extra people arriving won't want to be stuck in hotels much longer especially if they meet someone and have kids.
I also read that Leeds council is getting 18k off its waiting list by declaring them sufficiently housed. I'm not sure what that actually means in real life. If you have a mates sofa to sleep on?
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- Lemon Quarter
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Re: Collapse of the UK housing market
servodude wrote:Mike4 wrote:
And I dunnit without mentioning that apocryphal stork anywhere!!
What you do with your margarine is your business
I thought it was butter that was used in Last Tango?
Re: Collapse of the UK housing market
Lanark wrote:scrumpyjack wrote:-54% of homeowners do not have a mortgage
Those tend to be retired people who do not move house very often.
Just 31% of house buyers are using cash. In the south east it's less than 20%.
Older people buying for cash are often downsizing to release some equity. This can tilt the market so that large houses fall in value while 2 bed apartments are still rising.
Personally, I highly doubt retirees buy with cash. Rather, retirees finishing up their mortgage payments.
Last edited by ZacSc on February 28th, 2024, 9:29 am, edited 1 time in total.
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- Lemon Quarter
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Re: Collapse of the UK housing market
ZacSc wrote:Lanark wrote:Those tend to be retired people who do not move house very often.
Just 31% of house buyers are using cash. In the south east it's less than 20%.
Older people buying for cash are often downsizing to release some equity. This can tilt the market so that large houses fall in value while 2 bed apartments are still rising.
Personally, I highly doubt retirees buy with cash. Rather, retirees finishing up their mortgage payments.
If someone has paid off the mortgage on their 4 bed house and then decided to downsize to a smaller place, why would they need another mortgage?
Re: Collapse of the UK housing market
Lanark wrote:ZacSc wrote:Personally, I highly doubt retirees buy with cash. Rather, retirees finishing up their mortgage payments.
If someone has paid off the mortgage on their 4 bed house and then decided to downsize to a smaller place, why would they need another mortgage?
Okay. This is a case where after selling 1 house, you can buy another residence with cash.
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- Lemon Quarter
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Re: Collapse of the UK housing market
ZacSc wrote:Lanark wrote:If someone has paid off the mortgage on their 4 bed house and then decided to downsize to a smaller place, why would they need another mortgage?
Okay. This is a case where after selling 1 house, you can buy another residence with cash.
Not unusual, we still have the family home (still have one of the kids at home) but have no mortgage, my wife is retired but I have two more years. Once I retire we will sell it and move (hopefully last time ever) to somewhere with a garage, a garden and no stairs, that will be a cash purchase.
As a interesting note my grandfather purchased the first house he ever owned (he only ever owned two) as a cash purchase, but WWII was good for house buyers re prices.
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- Lemon Half
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Re: Collapse of the UK housing market
I'm semi-retired, own my home outright and still have five mortgages.
Nothing is ever simple is it?!
Nothing is ever simple is it?!
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- Lemon Half
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Re: Collapse of the UK housing market
Mike4 wrote:I'm semi-retired, own my home outright and still have five mortgages.
Nothing is ever simple is it?!
Boats?
BJ
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- Lemon Quarter
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Re: Collapse of the UK housing market
Lanark wrote:ZacSc wrote:Personally, I highly doubt retirees buy with cash. Rather, retirees finishing up their mortgage payments.
If someone has paid off the mortgage on their 4 bed house and then decided to downsize to a smaller place, why would they need another mortgage?
It could be various reasons. Buying the smaller property and spending time doing it up before moving in or just wanting to get their desired property before selling their main. It might be just to keep their lump in a tax free wrapper. It's probably about flexibility for most.
It also might be timed with taking a tax free lump from the pension.
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- Lemon Slice
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Re: Collapse of the UK housing market
The latest Gov figures released for up to Mar-2024
https://www.gov.uk/government/statistic ... march-2024
1.8% YoY
Regional variations show that London, as I've alluded to, continues to do poorly, with -3.4% YoY
England +1%
Wales +1.3%
NI +4.0%
Scotland +6.7%!
Overall, no collapse, but a slow and gradual repricing of real house prices that started back in 2022 and, imo, has several years to still run.
https://www.gov.uk/government/statistic ... march-2024
1.8% YoY
Regional variations show that London, as I've alluded to, continues to do poorly, with -3.4% YoY
England +1%
Wales +1.3%
NI +4.0%
Scotland +6.7%!
Overall, no collapse, but a slow and gradual repricing of real house prices that started back in 2022 and, imo, has several years to still run.
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- Lemon Half
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Re: Collapse of the UK housing market
vand wrote:The latest Gov figures released for up to Mar-2024
https://www.gov.uk/government/statistic ... march-2024
1.8% YoY
Regional variations show that London, as I've alluded to, continues to do poorly, with -3.4% YoY
England +1%
Wales +1.3%
NI +4.0%
Scotland +6.7%!
Overall, no collapse, but a slow and gradual repricing of real house prices that started back in 2022 and, imo, has several years to still run.
Yes, entirely predictable and to be expected.
Asset prices including houses are inversely affected by base rates/borrowing costs, obviously.
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- Lemon Half
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Re: Collapse of the UK housing market
Mike4 wrote:vand wrote:The latest Gov figures released for up to Mar-2024
https://www.gov.uk/government/statistic ... march-2024
1.8% YoY
Regional variations show that London, as I've alluded to, continues to do poorly, with -3.4% YoY
England +1%
Wales +1.3%
NI +4.0%
Scotland +6.7%!
Overall, no collapse, but a slow and gradual repricing of real house prices that started back in 2022 and, imo, has several years to still run.
Yes, entirely predictable and to be expected.
Asset prices including houses are inversely affected by base rates/borrowing costs, obviously.
Asset prices, including long term ones like property, are more affected by term rates, not base rate (obviously).
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- Lemon Half
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Re: Collapse of the UK housing market
dealtn wrote:Mike4 wrote:
Yes, entirely predictable and to be expected.
Asset prices including houses are inversely affected by base rates/borrowing costs, obviously.
Asset prices, including long term ones like property, are more affected by term rates, not base rate (obviously).
I stand corrected.
Asset prices, including long term ones like property, are more affected by borrowing costs (obviously).
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- Lemon Quarter
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Re: Collapse of the UK housing market
Mike4 wrote:dealtn wrote:
Asset prices, including long term ones like property, are more affected by term rates, not base rate (obviously).
I stand corrected.
Asset prices, including long term ones like property, are more affected by borrowing costs (obviously).
I'm not sure even this is the primary driver of prices. Borrowing costs affect a subset of the property market for whom borrowing costs are the marginal consideration. But long-term yields affect the value of all property whether someone is aware of it or not. If LT gilt yields are 8% why would you buy property at a yield of 2.5%? If the high gilt yield persisted it would drive yields closer to each other (i.e. property values would fall). As the past four decades have shown us, the converse is also true: if LT yields fall property is not immune and you get the same outsize price growth as other assets experience. It's not borrowing costs primarily driving this (though they are correlated and a factor) but relative valuation (i.e. affordability and expected return factors).
GS
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