The target housing supply in the UK is around 340,000 homes being built a year, only 240,000 are being built. We're facing high prices of the supplies needed to build homes so I really cannot see house prices declining. If September GDP growth is also negative, recession is confirmed then sure there may be more foreclosures but banks may then tighten their lending regulations which makes borrowing more difficult, as a result that could keep the prices high - My two cents :)
Okay, so £10K in London isn’t going to buy you a complete home. But this auction price for the leasehold of a lower ground floor of a Victorian house, is within budget. Situated on an attractive street on the north side of Leigham Vale, this has huge potential if you’ve got the stomach for a project. Subject to planning permission and building regulations, acquiring this leasehold of 90 years via auction could give you the option of building a self-contained one-bed home. Obviously, you’ve got to factor in the potential cost and time that a development of this sort will take, and it’s also possible that the leasehold will go for more than £10K. The location is strong though, with Streatham High road lying to the west and top public transport links, including a rail connection at Tulse Hill. Ive not had to look far
Thank you for this amazing video! Would you be making any videos about rental properties or covering information about things to keep in mind while searching for rental properties in the UK?
Great content with all the data to back your argument. I agree one can wait a couple of years but other asset classes are also not doing that great. So not sure if it's justified to wait. For your own residence does it really matter if you buy at 225k or 275k? After 30yrs it will probably be worth so much that 50k difference at this stage will not matter. 30yrs back if I bought a house at 60k vs 50k, in today's terms it doesn't even matter. Home ownership also has more intangible benefits which are dictated by our emotions. If you keep waiting for a dip, you will always be waiting. It is always a good time to buy a house as long as you can afford it. I personally go by 4% rule of renting vs buying. 3% interest rate and 1% maintenance. If 4% of the cost of house is less than renting than it's worth purchasing and also take advantage of appreciation that may happen over the years.
As I said in the video- I am not against the idea of owning a home but I’m not willing to pay sky high prices as dictated by the significant rise in growth of house prices. All investments represent future value of present cash flow. With a house that’s difficult to predict, the assumption that prices always go up is invalid.. just look at Japan and housing market there. I think you are also underestimating the growth potential Equity provides.. S&P avg return has been 10% before inflation is factored in, housing in the Uk, avg return has been 6%.. (assuming you treat the house you live in as an investment)..
@@TheNimbleNomad but you are going to pay the rent to live somewhere. You might as well pay for your own house. Difference between owning a house and renting is not much. So the money you are paying for rental living can be used for paying mortgage and appreciation is a byproduct. Calculation can be done for capital that's invested as minimum deposit required initially and loss of opportunity for this capital. Same goes for houses bought via buy to let. Somebody else is paying for your mortgage and you enjoy appreciation. Dont know much about Japan, but in UK housing has always gone up. Especially when there is more demand than supply. UK doesn't have plans to stop immigration, its birth rate isn't going down and economy is relatively resilient and will stay as a major economy for time to come. Hardly any factors to suggest that housing demand will slow in long term. Moreover when you look at 30yr horizon, current housing prices make minimal difference. I am not sure what capital you are blocking by buying a house that's stopping you from taking advantage of capital markets? Initial deposits appreciation concern you?
To be honest, I can afford one of these sky high prices at the moment on paper; but in reality considering we don’t know where everything we have to pay for (cost of living) will end up, this to me is making it a risk to move house. Finances are so tight that stretching could lead to consequences in a year or 2 of unsecured borrowing. What I’m trying to say it, the house prices as they are at the moment are well overpriced compared to wages, and they’re pricing most off the market or at least making people think not twice but 5x now. This wasn’t the case a few months back when credit was cheaper!
Gas price is going up meaning transportation and materials will go up , more demand and less supply. Property prices will increase every year! This completely different scenario to 2008. Inflation is going up so the cost of building house. Birth rate > house supply!
Even repossessions won’t bring the price down. There has been a queue of people for the last decade STILL trying to buy their first home. The massive shortage won’t be corrected until there are quadruple the number of properties available for sale. And that won’t happen even in a recession
Great video What would you advise somebody to do wanting to buy a property in Manchester to live in but has around £220,000 in property estate in Northeast England?
The data you are providing in terms of no growth in property in the 90s is missing is vital bit of data. Buy to let products we’re not available like they are today. More landlords than ever existing now so they will want to keep growing their portfolio each year.
Interesting. Although being a landlord is more expensive now than it was 10 years ago. The government is trying to make it harder for people to own buy to let. Increasing mortgages and lower yields due to additional regulatory costs may result in these properties coming on the market. I know my data set for this is not comprehensive but the few landlords that I do know are trying to sell their properties on as they fear non payment due to the rising cost for their tenants in the winter
@@TheNimbleNomad I think the government made it harder for accidental landlords. Like boy meets girl then moves in with girl and by default he is now a landlord renting his flat out. Along the way breaks every law and doesn’t disclose the income. They want the property in the hands of professional landlords. People won’t default as much as they think. They will never be able to rent again after defaulting. Christmas might look a bit crap but hey, I grew up with second hand presents and it didn’t do me any harm.
Good after watching your video I have decided not to buy house in UK this year which I was suppose to buy.What are your views on Lloyds Bank for long term investing?
I think it’s a fine balance - not so much about not buying a house but rather making sure you don’t hold your savings in Cash.. Cash is not king as lot of people say it loses value over time. I haven’t personally reviewed Lloyds, but a lot of the UK stocks are selling at a significant discount at the moment.
Cheers for the vid. I am seriously considering a new build house based in Nottingham but the prices here have got to a point of extortion. You have just confirmed what I have been thinking about holding off a bit as it can’t carry on like this, it’s all getting a bit silly.
I’ve been on the market since 2019.. each time I put in what I think is fair it gets rejected. I’m not overpaying for an asset. Remove emotion from the process and buy / pay what you feel is right
If the bubble bursts like 2008 what happened to the stock market then? The data you have should show you it falls hard. And when a property bubble bursts lending gets very difficult as the banks panic. I’m sorry but you think your strategy is intelligent but it will cost you a lot if you sit on the fence and try and buy the bottom.
I’m not suggesting buying the bottom. But rather ensuring you get value for your money. The stock market did fall yes, but if you compare yields from the stock market vs the real estate market over the 10 year period when inflation adjusted. The stock market wins. I’m referring to the US stock market. Even the FTSE100 which is deemed to be a laggard has returned 94% from the bottom since 2009
@@TheNimbleNomad I agree with those figure as you seem to have done research. Again though. You only get the percentage return of what you put in the stock market. You put a deposit down and the rest is essentially leverage in property. So percentages might be less in real estate but it’s 5% say on £300k not £10k in in ftse. Plus rent each month. I think if you can make income per month fixed rate for 5 years then the that is the value in my book. Any capital appreciation is the icing on the cake.
How much of that income goes to servicing the debt? Also with near 4% mortgage rates (2.7% base rate by Feb 23)… landlords will be in a tough position. I think there is an argument to diversifying in asset classes. I plan to at some point myself.. just right now for me stocks are more appealing.
Investing money when you might need it soon is extremely risky, especially with the stock market being so volatile (s&p500 down 22% this year!). Don’t do this, keep it in cash if you need it soon!
I’m not advocating investing everything you own into the stock market. Although keeping cash is worse than investing - losing 10% per year in current inflationary economic environment
Common sense at last. I am 70 have seen this play out before. I have heard all the reasons why it is different this time and house prices will not collapse. Only 1 reason matters and that is affordability and at this moment it is off the chart fuelled by stupidly low interest rates FOMO and greed. All that is about to change and change quickly. Anyone who thinks that inflation at these levels will be cured by interest rates lower than 6% is in cloud cuckoo land. My first mortgage rate was 8%. It is all very well saying buy now because in 30 years you will be OK. Stupid talk...Nobody knows what the future will bring tomorrow....talk of 30 years is banal.
Thank you! I finally had a comment where someone actually speaks the same language as me! Interest rates in real terms will likely touch 6% next year, I live in a generation of people that have never imagine mortgages to be that high. The housing market in the UK will collapse on itself no matter what the demand outlook is. I already have people saying they would be better off had they not had mortgages in the current climate. Thank you for your lovely comment and the sense it speaks!
@@TheNimbleNomad @walkabout How do you think a big crash such as the one we face now will affect those 'anomaly areas' where there is so much demand now - where houses are snapped up in a few weeks after being listed. Do these areas just take longer to see the effects? can any areas remain unaffected?
I’m not a specialist - but usually when a specific asset class gets impacted. All areas will be impacted. The difference may be the degree to which this happens. In London the effect maybe higher compared to areas like Cornwall just because prices have been super inflated.. just looks at Asian reality indexes.. Seoul is the latest casualty..
Demand for houses is high mainly because prices have been going up and lots of people wanted a piece of the pie. If mortgage rates go up, and people simply cannot afford the mortgage and they do not meet the banks affordability criteria because they do not earn enough, then they cannot get a mortgage or buy a house. More people will live in each property, like they did in the 70s. If people are not going to buy a house, that means the demand has dropped, and prices with either come down or slow down in growth if inflation stays high. When real inflation adjusted prices drop and wages increase, more people will be able to afford a mortgage at higher interest rates. If interest rates eventually drop, prices will increase unless the government introduces new restrictive policies or higher taxes. And the cycle goes on.
I don’t think it’s a case of them coming down but rather the prices stagnating. It means as a buyer you could end up commanding the situation better.. just my view I don’t have a crystal ball
Hii dr…My brother went to Leeds Beckett university to study. He is looking for a house in the area around that university....If there is a house to buy in that area, please help us.🙏🏻🙏🏻If you have any contact, please inform us big help.!!! Thank you 🙏🏻🙏🏻
The target housing supply in the UK is around 340,000 homes being built a year, only 240,000 are being built. We're facing high prices of the supplies needed to build homes so I really cannot see house prices declining. If September GDP growth is also negative, recession is confirmed then sure there may be more foreclosures but banks may then tighten their lending regulations which makes borrowing more difficult, as a result that could keep the prices high - My two cents :)
Okay, so £10K in London isn’t going to buy you a complete home. But this auction price for the leasehold of a lower ground floor of a Victorian house, is within budget.
Situated on an attractive street on the north side of Leigham Vale, this has huge potential if you’ve got the stomach for a project.
Subject to planning permission and building regulations, acquiring this leasehold of 90 years via auction could give you the option of building a self-contained one-bed home.
Obviously, you’ve got to factor in the potential cost and time that a development of this sort will take, and it’s also possible that the leasehold will go for more than £10K.
The location is strong though, with Streatham High road lying to the west and top public transport links, including a rail connection at Tulse Hill.
Ive not had to look far
Bro your voice to the music in your intro is extremely lower, my speakers exploded on your intro, check those levels out!
Thank you for this amazing video! Would you be making any videos about rental properties or covering information about things to keep in mind while searching for rental properties in the UK?
Thanks I’ve already done one on that.. it was my second video actually!
Great content with all the data to back your argument. I agree one can wait a couple of years but other asset classes are also not doing that great. So not sure if it's justified to wait.
For your own residence does it really matter if you buy at 225k or 275k? After 30yrs it will probably be worth so much that 50k difference at this stage will not matter. 30yrs back if I bought a house at 60k vs 50k, in today's terms it doesn't even matter.
Home ownership also has more intangible benefits which are dictated by our emotions.
If you keep waiting for a dip, you will always be waiting. It is always a good time to buy a house as long as you can afford it.
I personally go by 4% rule of renting vs buying. 3% interest rate and 1% maintenance. If 4% of the cost of house is less than renting than it's worth purchasing and also take advantage of appreciation that may happen over the years.
As I said in the video- I am not against the idea of owning a home but I’m not willing to pay sky high prices as dictated by the significant rise in growth of house prices.
All investments represent future value of present cash flow. With a house that’s difficult to predict, the assumption that prices always go up is invalid.. just look at Japan and housing market there.
I think you are also underestimating the growth potential Equity provides.. S&P avg return has been 10% before inflation is factored in, housing in the Uk, avg return has been 6%.. (assuming you treat the house you live in as an investment)..
@@TheNimbleNomad but you are going to pay the rent to live somewhere. You might as well pay for your own house. Difference between owning a house and renting is not much. So the money you are paying for rental living can be used for paying mortgage and appreciation is a byproduct.
Calculation can be done for capital that's invested as minimum deposit required initially and loss of opportunity for this capital.
Same goes for houses bought via buy to let. Somebody else is paying for your mortgage and you enjoy appreciation.
Dont know much about Japan, but in UK housing has always gone up. Especially when there is more demand than supply. UK doesn't have plans to stop immigration, its birth rate isn't going down and economy is relatively resilient and will stay as a major economy for time to come. Hardly any factors to suggest that housing demand will slow in long term. Moreover when you look at 30yr horizon, current housing prices make minimal difference.
I am not sure what capital you are blocking by buying a house that's stopping you from taking advantage of capital markets? Initial deposits appreciation concern you?
I’ve done a comparison between invested capital whilst renting and buying a home. Link is in the video cards - you may want to check out..
To be honest, I can afford one of these sky high prices at the moment on paper; but in reality considering we don’t know where everything we have to pay for (cost of living) will end up, this to me is making it a risk to move house. Finances are so tight that stretching could lead to consequences in a year or 2 of unsecured borrowing.
What I’m trying to say it, the house prices as they are at the moment are well overpriced compared to wages, and they’re pricing most off the market or at least making people think not twice but 5x now. This wasn’t the case a few months back when credit was cheaper!
That’s exactly what the media is NOW starting to say..
www.ft.com/content/64487d95-f58c-4131-b27e-e7a3b68dfdce
Gas price is going up meaning transportation and materials will go up , more demand and less supply. Property prices will increase every year! This completely different scenario to 2008. Inflation is going up so the cost of building house. Birth rate > house supply!
Please make more videos about property please 🙏🌹
Even repossessions won’t bring the price down. There has been a queue of people for the last decade STILL trying to buy their first home. The massive shortage won’t be corrected until there are quadruple the number of properties available for sale. And that won’t happen even in a recession
Think again
Great video
What would you advise somebody to do wanting to buy a property in Manchester to live in but has around £220,000 in property estate in Northeast England?
Underwater mortgage = negative equity
God bless America❤️ please I have 3000$ and I want to invest it or start up a business with it please I need ideas fast please🇺🇸
The data you are providing in terms of no growth in property in the 90s is missing is vital bit of data. Buy to let products we’re not available like they are today. More landlords than ever existing now so they will want to keep growing their portfolio each year.
Interesting.
Although being a landlord is more expensive now than it was 10 years ago. The government is trying to make it harder for people to own buy to let. Increasing mortgages and lower yields due to additional regulatory costs may result in these properties coming on the market.
I know my data set for this is not comprehensive but the few landlords that I do know are trying to sell their properties on as they fear non payment due to the rising cost for their tenants in the winter
@@TheNimbleNomad I think the government made it harder for accidental landlords. Like boy meets girl then moves in with girl and by default he is now a landlord renting his flat out. Along the way breaks every law and doesn’t disclose the income. They want the property in the hands of professional landlords. People won’t default as much as they think. They will never be able to rent again after defaulting. Christmas might look a bit crap but hey, I grew up with second hand presents and it didn’t do me any harm.
I think its a terrible time to be buying a house in the UK. The prices will drop, just like they are in Canada right now.
Good after watching your video I have decided not to buy house in UK this year which I was suppose to buy.What are your views on Lloyds Bank for long term investing?
I think it’s a fine balance - not so much about not buying a house but rather making sure you don’t hold your savings in Cash.. Cash is not king as lot of people say it loses value over time.
I haven’t personally reviewed Lloyds, but a lot of the UK stocks are selling at a significant discount at the moment.
@@TheNimbleNomad Thank you so much Arjun 🙏
Cheers for the vid. I am seriously considering a new build house based in Nottingham but the prices here have got to a point of extortion.
You have just confirmed what I have been thinking about holding off a bit as it can’t carry on like this, it’s all getting a bit silly.
Thanks!
I've been trying to buy a house for a year now and all the time I've been outbid by cash buyers (not sure by how much). I give up
I’ve been on the market since 2019.. each time I put in what I think is fair it gets rejected. I’m not overpaying for an asset.
Remove emotion from the process and buy / pay what you feel is right
If the bubble bursts like 2008 what happened to the stock market then? The data you have should show you it falls hard. And when a property bubble bursts lending gets very difficult as the banks panic. I’m sorry but you think your strategy is intelligent but it will cost you a lot if you sit on the fence and try and buy the bottom.
I’m not suggesting buying the bottom. But rather ensuring you get value for your money.
The stock market did fall yes, but if you compare yields from the stock market vs the real estate market over the 10 year period when inflation adjusted. The stock market wins. I’m referring to the US stock market. Even the FTSE100 which is deemed to be a laggard has returned 94% from the bottom since 2009
@@TheNimbleNomad I agree with those figure as you seem to have done research. Again though. You only get the percentage return of what you put in the stock market. You put a deposit down and the rest is essentially leverage in property. So percentages might be less in real estate but it’s 5% say on £300k not £10k in in ftse. Plus rent each month. I think if you can make income per month fixed rate for 5 years then the that is the value in my book. Any capital appreciation is the icing on the cake.
How much of that income goes to servicing the debt? Also with near 4% mortgage rates (2.7% base rate by Feb 23)… landlords will be in a tough position.
I think there is an argument to diversifying in asset classes. I plan to at some point myself.. just right now for me stocks are more appealing.
Investing money when you might need it soon is extremely risky, especially with the stock market being so volatile (s&p500 down 22% this year!). Don’t do this, keep it in cash if you need it soon!
I’m not advocating investing everything you own into the stock market. Although keeping cash is worse than investing - losing 10% per year in current inflationary economic environment
Common sense at last. I am 70 have seen this play out before. I have heard all the reasons why it is different this time and house prices will not collapse. Only 1 reason matters and that is affordability and at this moment it is off the chart fuelled by stupidly low interest rates FOMO and greed. All that is about to change and change quickly. Anyone who thinks that inflation at these levels will be cured by interest rates lower than 6% is in cloud cuckoo land. My first mortgage rate was 8%. It is all very well saying buy now because in 30 years you will be OK. Stupid talk...Nobody knows what the future will bring tomorrow....talk of 30 years is banal.
Thank you! I finally had a comment where someone actually speaks the same language as me!
Interest rates in real terms will likely touch 6% next year, I live in a generation of people that have never imagine mortgages to be that high. The housing market in the UK will collapse on itself no matter what the demand outlook is.
I already have people saying they would be better off had they not had mortgages in the current climate. Thank you for your lovely comment and the sense it speaks!
@@TheNimbleNomad @walkabout How do you think a big crash such as the one we face now will affect those 'anomaly areas' where there is so much demand now - where houses are snapped up in a few weeks after being listed. Do these areas just take longer to see the effects? can any areas remain unaffected?
I’m not a specialist - but usually when a specific asset class gets impacted. All areas will be impacted. The difference may be the degree to which this happens.
In London the effect maybe higher compared to areas like Cornwall just because prices have been super inflated.. just looks at Asian reality indexes.. Seoul is the latest casualty..
How about the fact that there is a shortage of housing in UK? Does that play a part?
That’s been the case since 1970s. It is a factor but house prices have fallen during the period since then.
@@TheNimbleNomad housing shortage is a myth
@@aldozilli1293 Why?
Demand for houses is high mainly because prices have been going up and lots of people wanted a piece of the pie.
If mortgage rates go up, and people simply cannot afford the mortgage and they do not meet the banks affordability criteria because they do not earn enough, then they cannot get a mortgage or buy a house.
More people will live in each property, like they did in the 70s.
If people are not going to buy a house, that means the demand has dropped, and prices with either come down or slow down in growth if inflation stays high.
When real inflation adjusted prices drop and wages increase, more people will be able to afford a mortgage at higher interest rates.
If interest rates eventually drop, prices will increase unless the government introduces new restrictive policies or higher taxes.
And the cycle goes on.
Do you think the property prices will come down in the next 2-3 years?
I don’t think it’s a case of them coming down but rather the prices stagnating. It means as a buyer you could end up commanding the situation better.. just my view I don’t have a crystal ball
What do you think interest rate end of next year reach 6%?
Quite likely - that’s been my prediction for a while. It may be before that.
Hii dr…My brother went to Leeds Beckett university to study. He is looking for a house in the area around that university....If there is a house to buy in that area, please help us.🙏🏻🙏🏻If you have any contact, please inform us big help.!!! Thank you 🙏🏻🙏🏻
Video starts at 2:00
From your accent its visible that ur root is from Indian. Why can't you say your name properly. Its aaaarjun or Arjun.
Bitte
He might be born in the UK so the accent is natural, it didn't matter how he is pronouncing his name, concentrate on the message he is giving