UK house prices in 2023 - THIS is what is going to happen...
Вставка
- Опубліковано 10 жов 2024
- 📰 Read our press features: ctatax.uk.com/... 📰
🏡 See if you are eligible for a Stamp Duty Refund from HMRC: sdltrefunds.co.uk
✅ SDLT Refunds is a division of Cornerstone Tax
Website: www.ctatax.uk.com
Email: newbusiness@ctatax.uk.com
Phone: 03333 050954
David's personal Linkedin: / david-hannah-b88732b
Instagram: / cornerstone_tax
Twitter: / cornerstone_tax
Read our latest feature in Sky News: news.sky.com/story/huge-difference-in-pay-growth-between-public-and-private-sector-12615118?postid=5259926#liveblog-body
Great content, analysis from an expert really helps.
Hi Jax,
thank-you for your comment! We appreciate the feedback and support.
James
It's simple math. I don't see why it's hard for so many. A 1% interest rate reduces affordability by 10%, and we have below-inflation wage rises (further reduction in affordability). When I checked a local deal 270k for 3 bed. Calculated Mortgage charges. 10% not available. They want a 50k salary minimum and offer a 20% deposit mortgage at 6%. Monthly costs exceed 1300 GBP monthly. I can RENT a 3 bed for 1300 a month. When 6 months ago the mortgages would cost me 600-700 a month on the same property. I call this a BAD deal.
Do the math. 30-50% correction by 2025. Morgan Stanley already said 20-30% correction which is too conservative IMHO, but probably accurate 30-50% if we adjust it from inflation. I will be the predator getting deals on defaults from late 2023 from the greedy overleveraged.
The FED just announced a head strong mandate for tackling inflation, they will keep hiking until employment inflation is broken.
The agreed status is mid 5's for a base rate which is likely 6.5% for the mortgage. Immigration etc kind of irrelevant if these are immigrants on below-average wages. But good for keeping the rental market up. Also, inflation was never beaten by having a base rate below CPI data. It means rates can go as high as 7-8% and Jerome admitted the FED keeps increasing the estimated peak on base last night. BoE won't follow through? Then it will devalue GBP against USD and we fall further into inflation.
From what I can see, including in my family. Most are having delusional confirmation bias that there won't be a large crash because it would be too much to handle.
Hi there - wow what a great comment! Interesting read, thanks for your thoughts. James
@@CornerstoneTax Thanks! Well 8 months out it appears I'm right on the mid 5's. But I believe a risk of going to 6.25% on base rate.
Your prediction is totally wrong the property market will totally collapse in prices between 25 and 35 percentage between February 2023 and May 2023
Hey, Imtiaz,
thank-you for your thoughts here, we really appreciate all input on this!
Do you think it will rebound in 2024?
James
No will take 5 years
@@ImtiazAhmed-wi8zu I think people are deluded I think it will be at least 35% percent
In think that's unlikely honestly. I think we will dip 10% and then gradual recovery until peak in 2026. It is my opinion that the UK is a gradually failing society. The presenter makes the good point that it's still better than other shit hole places so I guess everything is relative 😂
@@justsomeguy1141 Some of the absolute rubbish on the market asking £650/700k could easily fall £200k plus. Always look at sold prices not asking prices
As you say, this is your prediction. I have sold one house at near the top price and now I am going to rent out my ex-rental and buy another, once house prices come down (and they are coming down). I think you are too optimistic. I remember the market dying overnight in and around 2006. I believe confidence has left the market. 10% price reduction is going to be common and possibly 20% to 30% reductions in certain areas.
Hi there,
thank-you for your comment, we appreciate it!
Wow 30%! That's quite a drop
James
You mean December 2007
Thanks for this. I'm currently in the process of buying as a FTB. Completely in bits as I don't know if I'm doing the right thing and should just drop out and wait. This opinion gives me some confidence. Most stressful and awful experience of my life I think =(
Prices are already 5%-10% down I think from the highs. I am waiting till next spring when I think prices will be another 10% down. From peak to low they'll fall about 30% and will not start rising for a very long time. We're heading into one of the biggest recessions ever and we've just become a lot poorer. Big falls ahoy, just my opinion.
I fail to see how a few new entrants into the UK will prop up the property market. Prices are linked to affordability and always have been. Early 2022 prices are not sustainable by a long way with today's interest rates and cost of living crises. The BoE won't reduce interest rates when inflation is so high and even if inflation comes down, rates will be kept high to limit a resurgence in inflation. I think the FED's rates will be 5% next year and the BoE will follow or risk crashing our currency.
If you think house prices will rise next year then you need to look more closely at the numbers. My prediction is 30% price falls followed by a period of price stagnation. Just my view and thanks for yours 🙂
Jamo, if you can wait then wait, I think the biggest falls will happen in the spring next year. Do not overpay or get into a bidding war if there is one and don't fall for any estate agent fast talk.
Good luck and always get professional financial advice. This is just my layman opinion.
@@nsoul4296 So I actually dropped out of the sale today. So relieved. My plan is to wait another year and just save up even more deposit. Hopefully rates/prices will come down and I can get a better deal...If not then I just keep saving. I can save about £50k a year so totally makes sense for me just to wait this one out as that amount extra for my deposit will make a huge difference. I am not in any desperate need for my own place or anything either, just would be nice to own a home at some point 😂
@@jamo6758 I don't know your circumstances but it was probably a good call to make. If it was me, i would stick my savings in a high interest fixed rate savings account and wait 12 months. In 12 months sellers will have captiulated and the new market reality will be in full effect. Shocking times ahead and house price falls are a near mathematical certainty and a few new entrants to the UK won't make a jot of difference to supporting a massive house price bubble.
Good luck and always get professional advice with any financial decision.
Good assessment for the 2023 market. Would love to hear the other viewers thesis for their outcomes and see the comments backed up with real evidence to support their claims.
Thanks for your comment! Still awaiting other views :) James
Not a chance they will continue to increase; mathematical impossibility.
Hi, what do % do you think they will increase by this time next year? James
Property prices will fall. As for interest rates they will go up. Next year will be difficult for everyone. As for the Chinese government they have limited the amount of money you can take out of 🇨🇳 China. 30k is the limit. You won't buy a garage with that let alone a house.
Sadly you will be way off with your predictions.
Hi, thanks for your comment. As a %, what do you think they will drop?
@Cornerstone Tax around 30% drop or more 🤔. We will be going into uncharted waters sadly next year. The likes of early 1990's.
Nonsense ... House prices are correlated to borrowing costs, ie Interest Rates, we dont have 10 million people in tents waiting to buy a house, the supply argument is invalid, we have a lack of supply at affordable prices... which will reach equilibrium as we see 35% declines over 2023. ImHo.
Hi DJ, thanks for your comment.
Well, only time will tell! We'll do another review next year :)
James
I am looking for a flat for my son who is studying. Cash purchase. Flat prices in the city he lives are being prices 5-8% below valuation and still static market. The point not fully discussed is interest rate rises are going to be along with energy cost spikes and tax hikes. You had none of these 3 components in 2008 when the market dropped.
Hi Neil,
thanks for your comment, and best of luck with the search! Are you finding properties have been on the market for a long time?
James
Be careful about flats. The cladding and EWS1 nightmare can potentially impact any type of flat
I am so sorry that UK does not have a stable Housing market. I dream a housing market without speculation, with enough homes, rent/mortgage does not exceed 1/4 of income....
Yes, sadly homes are out of reach for many! What should be done to solve the issue? James
Property prices can not fall below cost of materials to build. Cost of materials are not going down.
Yes, wood went through the roof in 2020!
Price of materials is coming down fast, and already went down significantly for lumber, the delay on to retail will take in to 2023 to feel the affects.
The main problem with “foreign demand” for those “have the right to live here”, is that every single shilling is carried by the taxpayers, even the younger taxpayers struggling to earn enough buying their first home:
Such a “model” of high demand high cost on the expenses of average Joe is not and cannot be sustainable.
The government is accepting an increase of one problem (42.000 ++ living free, demanding place to live, so far) on the burdens of those struggling, to avoid another problem - the natural burst of the financial bubble in the house private mortgages markets.
It’s a model doomed to brake. Most likely it will very soon start with violent looting in numbers never seen before in Britain. The government cannot put police forces into solving it (most of these are imbeciles recruited straight from the streets, for managers happy to jail critical journalism), so average Joe will have to wake up:
The turmoils coming will be of scales never seen before, and markets will certainly crash.
There is a limit of what average Joe can take, and it’s out of his limits accepting being driven into poverty by carrying the costs of foreigners invading.
Hi EB, thank-you for your comment.
So what are your thoughts on a crash, or will it increase? If you were to put a % on UK property change in 2023, do you think there will be one?
James
@@CornerstoneTax
If going back in history, some 150 years, and trying to track the ups and downs in “the price” to buy something to live in, surely the relative proportion of income used have very much varied.
To me it seems an unneeded modern problem having young families with double income struggling to have a fair share of heated area under a roof.
I have to avoid the temptations of pointing to close to slavery conditions in the late 1880s, the building of a better society in 50s to 70s, or the short shock boost with Thatcher:
The main problem is that it doesn’t gain politicians doing anything to have low, or to lower prices on houses: The amounts struggling to get into the housing marked is smaller than the amount struggling to stay - parts of politicians, at least those stupid enough to work hard to support the top elite - wants “the price” higher than the mortgage, as otherwise they are in a loss.
The same goes for the financial institutions, especially banks. The last 40 years we have seen these people crushed a couple of times, but the expenses was picked up by average Joe and his tax.
The situation today is something never seen ever in history:
- average Joe is on the brink of what’s possible to carry:
- 35 % of UK government budget is spent on welfare
- 21 % in working age is disabled in the UK
- 20-25 % is leaving in poverty, and this number is growing fast
- the ruling elite, as Truss and Kwasi proved almost crushing the pension funds, is as dumb as it possible gets, and totally just puppets (same for Johnsen, Sunak and the other side of the isles)
- the ruling elite the House of Commons keeps all gates at the borders open (quite ironically, as if Brexit never happened), as the lowest bidders to salary always is some new foreigner, keeping the wages down and the elite with champagne
- There is an energy war going on pushing all prices up, including those of fertilizer which then again will bring crops down
- there are coming 1000 immigrants every day when the weather is calm
- there are coming an unknown amount of people in debts of their traffickers straight into modern slavery every day the weather is calm
- the growing groups of different cultures grows their incompatibilities
- the Police state grows, as is a symptom of nations with dysfunctional societies out of control
- the health care system is struggling, nurses breaking
- the schools system is struggling, teachers breaking
So, in a ship in a storm with too few able seamen, no captain, and no one able to steer, and no one able to take bearings: What can possibly go wrong?
Being the “why’s” obvious and numerous, the situation is that there is actually very little needed that can set of major problems in the UK, and that will find its ways to the disturb the financial markets, including a crash ending in mortgages being way higher than prices.
A fair price for housing is half of what’s seen know. The inflation will unavoidably rise due to the energy crisis, and people will have to choose what bill to pay: As the risks rise, banks will - as they always do - tie in, and mortgages will fail. No matter what other turmoils happens, we will see the same as in 1989-92, with at least 35 % drop in prices within March next year.
If turmoils really goes off, the prices will go “normal” as those struggling today, a family with double income will set the price - as those will be the only able to pay - at half price of today.
Hong lingers are not that rich, many are poor
Who’s gonna pay for a three bedroom house for 300k
When wages are roughly 30k
This guy is old & doesn’t understand the market
Hi Chris,
thanks for the comment.
David has been in the market for the last 40 years, and has seen multiple booms and busts, also our last 2 years of video predictions have been correct.
James
Thanks and wishing you nice weekend ✌️
You too! James
I afraid you are completely over estimated the buying power from Hongkonger.
Hi, thanks for your comment. How so? James
Wrong, wrong, worng...you might predict something correctly but it was quite easy right? most of us predicted the same anyway...till now.
Prices will fall sharply and you will not convince people who has at least minimum market knowledge.
Uk market is tend to be stable???? Return to "modern growth" ? What on earth you are talking about?? - of course it's within your interests to say that! So well done!
Hi Adam,
this was just meant as a friendly video explaining out thoughts on the market, so we've been correct for the last 2 years, sorry to hear it's caused some upset!
James
I would say this government is clue less. The tenant demand is unbelievable. And the constant bashing of small landlords is going to cause a massive shortfall of houses to rent
Stephen@
The government is kicking the problem of a collapse in the house markets down the road of future, as a burst of the balloon will negatively influence banks and hence the financial sector, including businesses. The solution is to cripple landlords, and fill up with immigrants: Everything that decreases the amount of homes available, and increases the demand helps them.
I truly believe they will fail, and that turmoils in amounts never seen before will happen any day: Too much of what is carried by too few taxpayers is on the brink of collapse, and the taxpayers themselves are under very hard pressure. Very little disturbance is needed to set something major off.
Hi Stephen,
are you a landlord? How many people are you noticing contacting for rooms or entire houses/flats?
Regards,
James
@@CornerstoneTax Hi james i have 2 buy to lets . But my son is renting And he was lucky to get a nice flat Even through he is on good money he couldnt get a mortgage
@@CornerstoneTax im just upset the fact they are reducing the allowance for capital gain. I think it was a very dumb thing to do. I think it will cause a fair few landlords to pack it in
True. So many people need to rent because they don’t have the “right credit score” and small landlords are selling their rental properties due to the changes on rental legislation making it hard to be profitable. Then . Who is buying those houses?
Banks? Corporations?
In other words it's a fantastic time for investors to buy property to rip off renters.
Hi Graham,
thanks for your comment.
Have you or a member of your family been personally affected by this? And if so, under what circumstances?
You may have noticed that someone is proposing 100% mortgages for renters! Do you think this would be a good idea?
Regards,
James
20-30% drop by 2024
Wow! Another 2008?
James
Definitely, it cannot go up; absolutely mathematical impossibility to rise further. They will decline at least 30%. Demand has very little to do with the actual prices - WHY? Because they are all based on debt. If the average income is £50k & you can only borrow *4 that amount; then demand can be all it wants; but the average price needs to be around £200k.
@@CornerstoneTax Absolutely; 2008 would have been much worse & the correction was postponed until the next occurrence; they did something they never did before - slashed interest rates to 0%. House prices have already started to decline.
There is a category you didn't mention. UK citz who left and live permanently overseas who have bought rental properties in the UK as investments. Not all overseas investors are from China or HK which is the usual narrative...altho i do accept they may be a large part of that demographic.
Hi Martin, thanks for your comment.
interesting! We may include this in an upcoming video...
James
We need more domestic buyers.
We do! thanks for your comment
I’d say your living in a bubble of crazy. It’s gunna crash! No doubt. Foreign buyers buy on strength of growth not dropping or else they’d wait. Also down sizers have to sell to someone
Still no sign of the crash! When do you expect it to happen?
@@CornerstoneTax I’m in U.K. it’s not really booming
@@SeniorNI Yup, sadly a strange time to be in the country. Where have you come from? Did you purchase property in the end?
James
Hilarious.. Another talking up the market.. No talk of cost of living rise , job uncertainty, unemployment ...the switch from seller to buyer market .. 30% correction all day long..
Hi,
we are not talking up the market, just giving our predictions.
Regards,
James
Blah, Blah, Blah. Affordability down approx. 30%. House prices are going down, period.
Hi Martyn, thanks for your comment.
By what percentage do you think they'll go down?
James
@@CornerstoneTax depends where the house is. Wherever went up most over the last couple of years will drop the most, probably 20-25% in those areas. In the north of England where prices went up the least, probably15 -20%. It will take time though, rising rates usually take 12 to 18 months to feed through and affect prices. Also, I'm talking nominal price drops not real price drops. Inflation has no bearing, that's just more nonsense from vested interests to cloud the issue.
This is total nonsense
Hi Nicky, thanks for your comment.
How do you think the UK 2023 market will pan out?
James
So.... Basically your whole argument is that foreign investors will buy houses instead of first time buyers and so save the UK market from crashing? Foreign investors made up 1% of all property ownership across the UK in 2021 while first time buyers made up 50% of all purchases.... So you're predicting foreign investment is going to increase by 5000% then...50 times what it is now? That'd mean that every other house sold in the UK would be to foreign investment, of the 4 houses for sale in my village street 2 would be bought by Chinese investors.... Really? The daily mail is going to go spare with all that immigration! I honestly do hope the housing market doesn't crash, and I can see why you don't want it to as it'd ruin your business, but you are talking complete rubbish in this video that I fear will come back to haunt you! Because if this is truly what your analysis shows you, then no one should be trusting you with their business.
Hi,
Actually listen to what I’m saying- the market is way more diverse than everyone realises. If one type of buyer (owner occupier) goes south -then investors move in because the former owner-occupier still needs a place to live.
The market size - those needing homes - doesn’t actually change just how they source their needs -buy or rent…and with respect foreign buyers, whether owner occupiers or investors, already make up significantly more than 1% of the UK market. In the latter case of course there’s no need for immigration so there’s no need for the Daily Mail to go nuts.
In the former there are several million people worldwide with a right to live here and we’re already seeing signs of them arriving.
Regards,
David
@@CornerstoneTax mmmm.... Not sure where you're sourcing your figures, but they're wrong.
CFPD figures show that less than 250,000 properties in England and Wales were registered to overseas buyers in 2021. That's very clearly roughly only 1 per cent of total housing stock, so it'll have zero impact.
Yes, it's a reasonable diverse market and yes people always need somewhere to live - whether renting or buying, but that has little impact on house prices. It's affordability that drives prices as many many studies have shown.
People can only buy or rent what they can afford, regardless of how much they might need it. For example, if you ask most people whether they'd like to buy and live in a mansion, most will say yes.... But does that mean demand for mansions has suddenly rocketed and prices are about to go through the roof? Of course not, because most can't afford a mansion, no matter how much they might want it.
Demand drives the market and that's made up of the need to have something and the ability to afford it. If either of those elements is missing demand collapses.
So it's not just need that drives the uk housing market, it's affordability. You can see it in action historically. As interest rates fall, giving people more spending money, house prices rise..... And visa versa. Right now it's not only interest rates, but also food, energy and general inflation that's hammering people's spending power. The result is they can afford far far less and house prices will fall accordingly. This is why we're currently seeing an exit of UK investors in UK property - they're getting out while they still can.
If you're banking on foreign investors filling that affordability void and rushing in to save us.... Well you're nuts, as official figures show they're only a tiny 1% of the market, however much you might hope they were larger.
Look, I really do hope I'm wrong, but hope it's not an investment strategy.
So it's now 6 months on and it's Q2 2023 - house prices have fallen on every indices, the base rate is 5% and mortgage rates are higher than they were after the truss budget. London has been hit the hardest as always, and investors across the country are pulling out of the market..... Your predictions of loads of overseas investors rushing in to prop up the market,have so far failed to materialise....but hey, who knows? Let's see what the next 6 months bring.
So it's now "a full year come Xmas" and amazingly last week foreign investors rushed and pushed up house prices giving "5-8%" growth....yeah no! Very predictable none of that happened and house prices continued to fall as investors pulled out and others were priced out. Literally no one could have predicted that a year ago....
Even though our economy is going through a complete turndown & the country is in terminal decline. Millions of people from around the world are still aiming to make a new home here. Also as the Ukrainian war intensifies and millions of Ukrainians are now going without heating or Clean water. Britain's offer to give them refugee status & shelter them for up to 3 years will be very tempting. Can you imagine the condemnation any government would receive, if after 3 years these refugees were rounded up and sent home? Therefore, unless we start building hundreds of thousands of new homes every year there will always be a shortage of houses in the UK for the foreseeable future.
Hi, excellent opinion on the topic! Thank-you for your comment, we appreciate it.
Regards,
James
oh and the Brexit madness
True madness!
This was 3 weeks ago, this looks like your completely wrong.
Prices are already down 10%.
I won’t be following your financial advice.
Hi there, we are not financial advisers.
Where are you getting the 10% down figure, please? They have risen.
James