Yup. They bought 2 yrs by furloughing all the unemployed in 2020, hence shielding housing via a fiscal bazooka. They cant repeat the same again. Peoples’ fixed rates will be irrelevant soon when they are unemployed, and 1 in 4 have no savings, so there goes that out the window.
“Fiscal Bazooka”! Love it. Yes, agreed. I was expecting a house price collapse before I even knew furlough and free money handouts was a thing.
It’s obvious really, no more cheap money means less demand means prices drop.
I just hope we don’t have another 2011 when ideology breaks down and we have riots again pretty sure that’s the last thing we all need.
I think we can all agree house prices have been due a major downturn for quite some time. The past year has been especially ridiculous
The layoffs are going to be blood curdling come December, there’s always a national scandal type headline just before Christmas. I’m predicting someone like HSBC laying off 25,000 staff as a pure example.
Good news, prices will be lower. Bad news, not as many houses for sale because of negative equity.
House prices are ridiculously high.
The housing market has to fail for the greater good.
This time around it might be worse than 08 because of the sky high energy bills and high fuel costs and general inflation..
These things we didn’t have in 08 .
The furlough just covered the cracks and gave out free money for 18 months..
Now they are trying to claw it back..
Hard times on the horizon folks..
And honestly no one in parliament gives a shyt
I’m not sure a genuine collapse in the housing market will benefit average young people trying to get on the ladder. The prices crashing because of substantially higher interest rates means it will be harder to get mortgages approved (you can say goodbye to 5% (or even higher) deposit mortgages for example) and importantly people will be downsizing… which means the top end of the market will get cooler but the bottom end will get hotter.
The only people who will actually benefit will be those with large cash reserves to buy cheap homes outright… say, buy-to-let landlords. Or those who are in the market for a mansion.
The only solution in which the wealthy don’t keep fucking the average person over is a freeze or small retraction in the housing market (even 10% would probably be fine) with a major increase in wages across the board. Prices crashing more than that will be a disaster for everyone unless the interest rates plummeted too (does not seem likely).
Well if it were possible to get a mortgage any more, maybe I’d buy one of those houses
Judging by the for sale signs popping up around me the people who are desperate to sell will have no choice but to drop the price. I counted atleast 15 on my estate and there basically all the same property so they’ll start to under cut each other.
Doesn’t do much if you cant get a mortgage a drop from 250k to 150k would mean fuck all if no body will risk giving you a mortgage. Or you need a huge deposit. And the amount of bankruptcies and iva are going to be huge so meny will be untouchable by the banks.
The bank will still rent to you but it will cost more than a mortgage and you will not own it so prepare to work till you die.
Dont get me wrong house prices need to drop. But I doubt it will be plain sailing as some may think.
Like most people looking to buy a house, I can either have a high price for the property or high mortgage rates – absolutely no one will want to suffer both.
Lost count of the number of times I’ve seen headlines about housing crashes over the last few years.
Will it happen now? Well there is a housing shortage, but with the cost of living crisis and high interest rates who knows? As the great bard Homer Simpson once said “bubbles can burst?:
God, just imagine. Your interest rate goes up to the point that you can’t afford any of the packages the bank are offering, then your house price drops below your mortgage amount. Then what? You lose your house, you still owe the bank say £10k or so but you have to rent, which costs you more than your mortgage would be.
That’d be a lot of people will nothing left to lose.
Looking forward to seeing the shocked faces when lot of FTB can’t get their dream 3 bed house for half price.
A market crash has lots of complicated moving pieces. It’s not as simple as “prices fall so I get a house cheap” – not for everyone.
And it still doesn’t fix the issue of rich people hoarding houses. Cash buyers just get a discounted house, because having liquid cash available means you won’t have to deal with any of the lending restrictions fallout
Girlfriend and i bought our first home in July, whats the worst case scenario we’re looking at here?
Good, maybe I’ll be able to get a reasonable mortgage.
£750,000 3 bed with a 1970 level % mortgage risk in two years. Good luck selling that.
Given it’s generally rising most the time it needs a downturn now and then. As long as you aren’t buying and selling in a short time frame it shouldn’t matter to most homeowners and good for those trying to buy a place
I wish my GF wasn’t 100% an idiot when it came to buying her flat. should have just waited, and it would have worked out better, but now a 40-year mortgage on an 80-year leasehold flat for 80k the bank says is worth 70 and will be worth 50 next year.
There are too many people willing to do this blindly following their parents who’ll end up bankrupting themselves.
If our house is still worth what it was before covid, I wont be disappointed
Too much unnatural demand and cheap money
Hooray, good news for affordablity and 1st time buyers
OMG, RISK! WEEWOO WEEWOO! SOUND THE ALARM!!!
Nah, just kidding. Couldn’t be happier tbh.
Far too much money printing over past ten years.
Interest rates far too low during same period.
Good, it can’t keep being propped up, it’ll be a bloodbath but it’s needed.
Just bought my first house this year for £230k. It does, quite selfishly, worry me and the amount of equity I’ll lose in my house. Guess I’ll see how it grows over the years.
I’m sick of reading about this – can the whole thing just collapse already rather than everyone just talking about it?
RHDI ( Real Household disposable Income)
It all boils down to the RHDI which stands for the Real Household disposable Income.
Which is used to measure the living standards of people living in a country.
The UK living standard in 2023 and 2024 are going to decrease by 4.3%.
4.3% may seem like a small number, but it’s the biggest fall since 1956 — which was when they started to track the living standards.
Its not predicted to increase for at least 2 years after that.
This long term decrease has happened before in 2008 but not as much.
In effect its like turning back time to 2013 to how the standard of living was back then.
29 comments
Yup. They bought 2 yrs by furloughing all the unemployed in 2020, hence shielding housing via a fiscal bazooka. They cant repeat the same again. Peoples’ fixed rates will be irrelevant soon when they are unemployed, and 1 in 4 have no savings, so there goes that out the window.
“Fiscal Bazooka”! Love it. Yes, agreed. I was expecting a house price collapse before I even knew furlough and free money handouts was a thing.
It’s obvious really, no more cheap money means less demand means prices drop.
I just hope we don’t have another 2011 when ideology breaks down and we have riots again pretty sure that’s the last thing we all need.
I think we can all agree house prices have been due a major downturn for quite some time. The past year has been especially ridiculous
The layoffs are going to be blood curdling come December, there’s always a national scandal type headline just before Christmas. I’m predicting someone like HSBC laying off 25,000 staff as a pure example.
Good news, prices will be lower. Bad news, not as many houses for sale because of negative equity.
House prices are ridiculously high.
The housing market has to fail for the greater good.
This time around it might be worse than 08 because of the sky high energy bills and high fuel costs and general inflation..
These things we didn’t have in 08 .
The furlough just covered the cracks and gave out free money for 18 months..
Now they are trying to claw it back..
Hard times on the horizon folks..
And honestly no one in parliament gives a shyt
I’m not sure a genuine collapse in the housing market will benefit average young people trying to get on the ladder. The prices crashing because of substantially higher interest rates means it will be harder to get mortgages approved (you can say goodbye to 5% (or even higher) deposit mortgages for example) and importantly people will be downsizing… which means the top end of the market will get cooler but the bottom end will get hotter.
The only people who will actually benefit will be those with large cash reserves to buy cheap homes outright… say, buy-to-let landlords. Or those who are in the market for a mansion.
The only solution in which the wealthy don’t keep fucking the average person over is a freeze or small retraction in the housing market (even 10% would probably be fine) with a major increase in wages across the board. Prices crashing more than that will be a disaster for everyone unless the interest rates plummeted too (does not seem likely).
Well if it were possible to get a mortgage any more, maybe I’d buy one of those houses
Judging by the for sale signs popping up around me the people who are desperate to sell will have no choice but to drop the price. I counted atleast 15 on my estate and there basically all the same property so they’ll start to under cut each other.
Doesn’t do much if you cant get a mortgage a drop from 250k to 150k would mean fuck all if no body will risk giving you a mortgage. Or you need a huge deposit. And the amount of bankruptcies and iva are going to be huge so meny will be untouchable by the banks.
The bank will still rent to you but it will cost more than a mortgage and you will not own it so prepare to work till you die.
Dont get me wrong house prices need to drop. But I doubt it will be plain sailing as some may think.
Like most people looking to buy a house, I can either have a high price for the property or high mortgage rates – absolutely no one will want to suffer both.
Lost count of the number of times I’ve seen headlines about housing crashes over the last few years.
Will it happen now? Well there is a housing shortage, but with the cost of living crisis and high interest rates who knows? As the great bard Homer Simpson once said “bubbles can burst?:
God, just imagine. Your interest rate goes up to the point that you can’t afford any of the packages the bank are offering, then your house price drops below your mortgage amount. Then what? You lose your house, you still owe the bank say £10k or so but you have to rent, which costs you more than your mortgage would be.
That’d be a lot of people will nothing left to lose.
Looking forward to seeing the shocked faces when lot of FTB can’t get their dream 3 bed house for half price.
A market crash has lots of complicated moving pieces. It’s not as simple as “prices fall so I get a house cheap” – not for everyone.
And it still doesn’t fix the issue of rich people hoarding houses. Cash buyers just get a discounted house, because having liquid cash available means you won’t have to deal with any of the lending restrictions fallout
Girlfriend and i bought our first home in July, whats the worst case scenario we’re looking at here?
Good, maybe I’ll be able to get a reasonable mortgage.
£750,000 3 bed with a 1970 level % mortgage risk in two years. Good luck selling that.
Given it’s generally rising most the time it needs a downturn now and then. As long as you aren’t buying and selling in a short time frame it shouldn’t matter to most homeowners and good for those trying to buy a place
I wish my GF wasn’t 100% an idiot when it came to buying her flat. should have just waited, and it would have worked out better, but now a 40-year mortgage on an 80-year leasehold flat for 80k the bank says is worth 70 and will be worth 50 next year.
There are too many people willing to do this blindly following their parents who’ll end up bankrupting themselves.
If our house is still worth what it was before covid, I wont be disappointed
Too much unnatural demand and cheap money
Hooray, good news for affordablity and 1st time buyers
OMG, RISK! WEEWOO WEEWOO! SOUND THE ALARM!!!
Nah, just kidding. Couldn’t be happier tbh.
Far too much money printing over past ten years.
Interest rates far too low during same period.
Good, it can’t keep being propped up, it’ll be a bloodbath but it’s needed.
Just bought my first house this year for £230k. It does, quite selfishly, worry me and the amount of equity I’ll lose in my house. Guess I’ll see how it grows over the years.
I’m sick of reading about this – can the whole thing just collapse already rather than everyone just talking about it?
RHDI ( Real Household disposable Income)
It all boils down to the RHDI which stands for the Real Household disposable Income.
Which is used to measure the living standards of people living in a country.
The UK living standard in 2023 and 2024 are going to decrease by 4.3%.
4.3% may seem like a small number, but it’s the biggest fall since 1956 — which was when they started to track the living standards.
Its not predicted to increase for at least 2 years after that.
This long term decrease has happened before in 2008 but not as much.
In effect its like turning back time to 2013 to how the standard of living was back then.
Losing 8 years of the economy growth.